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October 8, 2024

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OMS Registers its Concern over Supply Insecurity

MINNEAPOLIS — The Organization of MISO States emphasized the footprint’s deteriorating resource adequacy during its annual meeting, with President Marcus Hawkins saying MISO’s increasing maximum generation warnings and emergencies can’t be ignored.

“We had almost no max gen events before 2016,” Hawkins said during Thursday’s meeting. “I think we had one in the decade before 2016, and now I’ve lost track. It used to be 20 and now it’s 30 or 40.”

“It used to be really simple. You count up all the capacity, you build a reserve margin — about 15% — and you call it a day,” John Moura, NERC’s director of reliability assessment and system analysis, said during one panel.

Now, he said, intermittent resources have necessitated distinct needs for voltage, frequency response and fuel backups.

“It’s not the same as it is before,” Moura said, adding that there’s no longer a “two-month, three-month” stash of coal sitting outside of generators.

“I can’t give the thumbs up, the thumbs down, the thumbs sideways about simply a reserve margin,” he said.

Moura also acknowledged that grid operators face loss-of-load risks outside of the summer months and must take action. “I worry that the stakeholder processes are a little slow and might take just small bites out of the apple instead of a big chomp,” he said.

“The fleet is changing faster than the academic treatment of the risk,” MISO President Clair Moeller said. He said stakeholders’ agreement on resource adequacy measures is only second in difficulty to reaching consensus on cost-allocation issues.

Moeller said coal generation’s share of the resource fleet has dropped from 70% to 37% share in the span of a few years. He said the risks posed by baseload generation retirements are worsened by more common extreme weather events. Regional transmission operators must do a better job of factoring weather risks into resource planning, he added.

“Winter Storm Uri was an unmitigated disaster,” Moeller said. “The poorest among us don’t have any resources to respond to that kind of catastrophe. They deserve our best efforts …  People and their livelihoods are depending on us, so we need to bring our A-game.”

Moeller said MISO may need some temporary “scaffolding” to prop up existing resources until they can safely retire as the footprint undergoes decarbonization.

“There might have to be — and don’t throw me out of the room here — some price support for coal. At least until we can get to the future,” he said. “Losing 53 MW of coal before its time blows a fair-sized hole into the resource stack. …The transition period is a risky period. We’re maybe too focused on the endpoint versus how to get there safely.”

Moeller said the RTO’s most aggressive electrification estimates for the next 20 years indicate the footprint will need to add more than $400 billion in new generation and about $100 billion in new transmission to handle fresh demand and new flow patterns. Moeller said he suspected MISO will need some new ratemaking rules to recover fixed costs for new infrastructure.

Julie-Fedorchak-addresses-attendees-2021-10-29-(RTO-Insider-LLC)-Alt-FI.jpgOutgoing OMS President Julie Fedorchak addresses attendees. | © RTO Insider LLC

“I think we need to be careful in promising low costs when talking about this transition. It’s a risky proposition,” North Dakota commissioner Julie Fedorchak added. She said she is “salty” over the enduring assumption that natural gas could provide a low-cost reliability bulwark during the transition; prices have recently doubled. She said when the natural gas building frenzy began, all forecasts pointed to $2-$3/MMBtu natural gas “for the next 20-40 years.”

In a less-than-comforting fireside chat for attendees, FERC Commissioner James Danly said that resource insecurity is an “actuarial” reality.

“The cold, grim reality of the markets not ensuring reliability is not going to play out pleasantly,” he said.

Danly said dispatchable generation needs to be compensated and markets need to make sure they aren’t “lopsided against” the most dependable resources.

Arcadia Power’s Max Minzner reminded attendees that any prolonged generation outages have historically given FERC more authority over electric grid reliability. He pointed to the 2003 blackout as an example.

“The closer we get to having a problem, the closer we get to federal action,” he warned.

Aaron Bloom, with nonprofit Energy Systems Integration Group, said MISO should put emphasis on linking generation in the interconnection queue to the system as quickly as possible.

MISO Makes Case for Regional Resource Assessment 

Richard Doying, MISO’s executive vice president of markets, reserved meeting time to boost support for the RTO’s first regional resource assessment, due out next month.  

Richard-Doying-2021-10-29-(RTO-Insider-LLC)-FI.jpgMISO’s Richard Doying | © RTO Insider LLC

Stakeholders have pushed back on the need, saying information contained in the report could be misused in state dockets to challenge utilities’ integrated resource plans. (See LSEs, Southern Regulators Pan MISO Resource Assessment.)

“We have to ask that question, will the pool five years out, 10 years out, 20 years out be able to provide the services, flexibility, availability of resources to reliably serve load,” Doying said.

He said MISO is currently projecting a capacity shortfall, but he said he is not “unduly” worried. Doying said not all of the footprint’s resource additions have been announced and the RTO’s utilities are “prudent planners.”

Doying said MISO has a duty to publicly share its resource-planning expectations. “There is a paucity of public information out there.”

Doying said MISO will not suggest what utilities and regulators should do with MISO’s regional insights.

“It’s not to recommend anything, but hopefully it makes you ask some questions,” Doying told OMS members.

He said the pace of change in the portfolios that members have laid out so far is head-spinning.

“The announcements for renewables seem to change weekly, it seems, every time we put together a spreadsheet,” Doying said. “The goals are constantly changing.”

The Novelty of Face-to-Face Interaction

Despite the sobering topics, the annual meeting marked the first in-person event in two years for many stakeholders. Several panelists remarked how refreshing it was to speak face-to-face.

Outgoing OMS President Fedorchak thanked the organization for being among the first to venture back into in-person meetings. She said the pandemic has given many a renewed appreciation for in-room discussions.

Hawkins said the meeting was “conveniently recycled” from its scrapped 2020 plans.

OMS members elected Indiana Utility Regulatory Commissioner Sarah Freeman as their 2022 president. Michigan regulator Dan Scripps will step in as vice president.

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MISO Regulators Adopt Civil Tone on Contentious Planning Issues

MINNEAPOLIS — Adopting a “Minnesota nice” mantra, MISO executives and state regulators engaged in a civil debate over the potential billions of investment in the RTO’s long-range transmission plan.

The discussions during Thursday’s annual meeting of the Organization of MISO States was a departure from MISO’s recently thorny workshops. The grid operator plans to hold a discussion on stakeholder decorum during the December Advisory Committee meeting. (See Tensions Boil over MISO South Attitudes on Long-range Transmission Planning.)

Mississippi Public Service Commissioner Brent Bailey said the potential map of transmission projects is “daunting, depending on how cost allocation goes.” MISO has said its system could require $30 billion worth of project approvals under the most conservative of the three 20-year planning futures. The other more aggressive planning futures could result in another $100 billion worth of transmission projects, including multistate HVDC lines.

“I certainly don’t want to miss the economic opportunities that this transmission may provide,” Bailey said. “But at the same time, we have to make sure we’re not penalizing anyone.”

Entergy and its southern regulators have been vocal about not wanting to share in transmission costs from the footprint’s midwestern region. Both the Mississippi and Louisiana commissions have threatened to initiate an exodus from MISO if it burdens the South with midwestern costs. (See La. Regulators Threaten MISO Departure over Tx Costs; Mississippi PSC Audit Questions MISO Membership.)

The RTO has proposed a separate but equal postage-stamp rate to allocate costs for MISO Midwest and MISO South.

Arkansas Public Service Commissioner Kimberly O’Guinn said MISO can’t assume that transmission is beneficial on a footprint-wide basis because its subregional transfer limit naturally constricts benefits.

MISO President Clair Moeller said the grid operator might have been able to prevent load shedding in MISO South during February’s winter storm if it had expanded transmission links between the region and the Midwest. He said the RTO must examine the reliability benefits of new or upgraded subregional transfer routes.

Tyler-Huebner-Sarah-Freeman-2021-10-29-(RTO-Insider-LLC)-Alt-FI.jpgWisconsin Public Service Commissioner Tyler Huebner and Indiana Utility Regulatory Commissioner Sarah Freeman | © RTO Insider LLC

Wisconsin Public Service Commissioner Tyler Huebner said the economic losses Texas suffered during the storm’s rolling blackouts ironically could have funded the transmission needed to prevent it.

Reed Smith partner and former FERC Commissioner Colette Honorable said transmission planning is imperative.

“We’ve got to scale up to move these massive amounts of wind and solar,” she told attendees.  

Indiana Utility Regulatory Commissioner Sarah Freeman said transmission projects, while they should be a last-resort solution after exploring all local fixes, are integral to moving renewable power and replacing “toxic” generation positioned near vulnerable communities.

O’Guinn said Arkansas must be particularly careful with transmission costs because scores of residential ratepayers are at the poverty level.

Freeman, using a pun, asked a “Clair-ifying” question of Moeller as to whether MISO runs the risk of overbuilding the system with its long-range plan.

Moeller said the $30 billion in projects proposed from MISO’s first 20-year planning future are indisputable. The future accounts for utilities’ integrated resource plans and an 85% probability of their publicly stated retirement announcements and decarbonization goals.

“Today’s economic project is tomorrow’s reliability project,” he said.   

Clair-Moeller-2021-10-29-(RTO-Insider-LLC)-FI.jpgMISO President Clair Moeller speaks on the importance of long-range transmission planning. | © RTO Insider LLC

Moeller said 2011’s $6 billion Multi-Value Project (MVP) portfolio delivered its expected benefits and then some. He said no one within MISO envisioned that an MVP project would be able to supply SPP with hundreds of megawatts to keep the neighboring RTO from disaster during last winter’s cold snap.

“The appetites that we see for the fleet transition are much faster,” Moeller said of today’s environment.

“Not every RTO, as I understand it, is even planning for the future,” Huebner said. “How much worse would we be if we didn’t have MISO’s futures in front of us during this sea change?”

FERC NOPR Gets Unfriendly Reception 

Multiple regulatory and utility staff said FERC’s advanced notice of proposed rulemaking (ANOPR) to improve regional transmission planning, cost allocation, and grid operators’ generator interconnection processes is a clear encroachment on states’ jurisdiction. (See FERC Goes Back to the Drawing Board on Tx Planning, Cost Allocation.)

Xcel Energy’s Terri Eaton said she was reminded of the “command and control” aspect of FERC’s Order 1000 in the new NOPR.

“I think we’re past an era of a bright line, and into the era — to borrow a phrase from middle school math — of the Venn diagram. And I think we all need to get comfortable with that,” Acadia Power’s Max Minzner said of jurisdictional issues for transmission planning and resource adequacy.

Minzer, former general counsel for FERC, said as new technologies come into fashion, the energy industry’s spheres of influence over decision making grow and shrink.

“I will concede that the lines are blurred more than they have ever been, and we need to work with that,” Honorable said.

FERC Commissioner James Danly said that ultimate transmission-building and siting decisions should lie with the states, not federal authority. He said states should only veto projects that other states have signed on to when they believe they are totally unnecessary.

“One would hope that one would employ that sparingly if these are good projects,” Danly said.

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COP26 Opens as G20 Finalizes Climate Communiqué

As the U.N. Climate Change Conference (COP26) leadership launched its international gathering on Sunday in Glasgow, environmental advocates were watching what commitments the G20 in Rome would make to limit global warming.

Leaders of the world’s 20 largest economies agreed in a climate communiqué to limit global warming to 1.5 degrees Celsius “with immediate action and mid-term commitments,” Italian Prime Minister Mario Draghi said during the group’s closing press conference Sunday.

For the first time, Draghi said, the G20 countries recognized the scientific validity of a 1.5-degree target and indicated that carbon neutrality should be met by 2050. In addition, he said, the G20 agreed to phase out global public funding and support for non-abated coal-fired plants after the end of this year.

What the G20 signals in terms of clear language around climate priorities will be “very important” for the COP26 process, Vanessa Pérez-Cirera, deputy leader of the World Wildlife Fund International’s global climate and energy practice, said in a press conference in Glasgow on Sunday.

“The G20 has responsibility over 80% of the world’s greenhouse gas emissions while hosting 60% of the population,” Perez-Cirera said. “That means that the carbon intensity of the G20 world is the highest.”

Where the G20 stands on climate will determine how far COP26 can go on gaps in ambition and finance.

Closing the ambition gap will require countries to commit to actions that hold warming at 1.5 degrees.

“We’re on track to a 2.7-degree world,” Pérez-Cirera said.

And closing the finance gap means countries that previously committed to providing $100 billion/year to support developing countries must demonstrate how they will achieve that goal.

“That’s a crucial role, not only because public finance is critical to mobilize action in the developing world, but it’s also a symbol within the negotiations that developed nations are willing to do more and willing to do their part and stick to their commitments,” she said.

The climate communiqué reaffirmed the $100 billion/year commitment for dealing with climate change and made a commitment to scale up financing for adaptation.

Further commitments from the G20 are needed to close what Pérez-Cirera called the “rulebook gap.”

The Paris Agreement rulebook is meant to set out how signatories will pledge to reduce emissions and report their progress, but it is incomplete.

“We know already that it is unlikely that this COP will meet these three gaps, but it is crucial that the G20 sends a signal that it is willing to embark on a new world economy, an economy that is not based on fossil fuel subsidies,” Pérez-Cirera said.

U.N. Secretary-General António Guterres expressed disappointment in the G20 outcome on climate in a tweet Sunday.

“While I welcome the G20’s recommitment to global solutions, I leave Rome with my hopes unfulfilled — but at least they are not buried,” he said.

COP26 Opens

The success of COP26 will depend on the areas of ambition, finance and rules, outgoing COP President Carolina Schmidt, of Chile, said in an opening ceremony speech Sunday.

Before passing the presidency to Alok Sharma, minister of state for the U.K. Cabinet Office, Schmidt appealed to G20 leaders to fulfill their commitments.

“Multilateral processes are not easy; neither are they speedy, but agreements are crucial,” she said.

In accepting the presidency, Sharma committed to promoting transparency and inclusivity and acknowledged the importance of the Glasgow conference.

“We know that this COP26 is our last best hope to keep 1.5 degrees in reach,” he said. “I know that we have an unprecedented negotiation agenda ahead of us, but I believe that this international system can deliver. It must deliver.”

Mexico’s Patricia Espinosa, executive secretary of the U.N. Framework Convention on Climate Change, welcomed Sharma and congratulated everyone involved in the COP process for their perseverance during the pandemic. Officials had postponed COP26, which was due to take place in Glasgow last November.

“We have kept the process going, and we have not let the pandemic stand in the way of addressing the most critical issue facing this generation and those to come,” Espinosa said.

The Paris Agreement, she said, has everything the world needs to mitigate climate change, but it needs “full implementation.”

“Parties must finalize outstanding work under the agreement that has remained unfinished for far too long,” she said. “Every day that goes by without being able to implement the Paris Agreement in full is a wasted day, the accumulation of which has real-world repercussions for people throughout the world, especially the most vulnerable.”

While a recent U.N. report showed that global GHG emissions continue to rise, it also said that emissions are projected to decrease by 2030 for the nations providing a new and updated emissions reduction plan this year.

“But the truth is that we need even more ambitions and all nations on board, especially the highest emitters in the G20,” Espinosa said.

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NYISO to Resume In-person Meetings Nov. 17

NYISO plans to bring most employees back to its headquarters building Nov. 1 and resume holding in-person stakeholder meetings on Nov. 17, CEO Rich Dewey told the ISO’s Management Committee on Wednesday.

The ISO made the decision based on state and federal guidance regarding COVID-19 protocols, Dewey said.

“The ISO intends to hold the Nov. 17 Management Committee meeting in person and still provide a remote option for individuals that want to participate in that manner, but that would be our first in-person meeting since the pandemic started back in early March of 2020,” he said.

All employees and visitors will be required to demonstrate proof of vaccination. Dewey recommended that stakeholders take advantage of New York’s Excelsior Pass to gain admittance if they don’t want to carry vaccination cards.

“If the situation changes with respect to the pandemic, or we take a left-hand turn in terms of health conditions and that sort of thing, we’ll adjust,” he said. “But at this point our plan is full speed ahead for Nov. 17.”

While masks are advisable and encouraged, NYISO will not require visitors to wear them.

NYISO is taking that stance based on guidance from the CDC and the New York Health and Essential Rights Act, which recommends only voluntary wearing of masks if every attendee in a meeting or space is vaccinated, Dewey said.

OKs 2022 Draft Budget 

The Management Committee unanimously recommended that NYISO’s Board of Directors approve the ISO’s draft 2022 budget Rate Schedule 1 revenue requirement totaling $169.2 million, which is allocated across a forecast of 150 million MWh for a charge of $1.128/MWh, up about 1% compared with the 2021 budget.

“NYISO kicked off a lessons learned process on the project prioritization process at yesterday’s BPWG meeting with two more meetings on deck for this year, Nov. 12 and Dec. 8,” said Alan Ackerman of Customized Energy Solutions, chair of the Budget and Priorities Working Group, who presented the budget.

“In January, we will look to work through that feedback with NYISO so any process changes can be implemented in next year’s process,” Ackerman said.

Comparatively, the 2021 budget was $167.4 million, allocated across 147.3 million MWh for a Rate Schedule 1 charge of $1.137/MWh.

NYISO’s projected 2022 throughput represents a 2.7 million MWh increase, or up about 1.8% compared with the 2021 budget.

Dewey thanked Ackerman and stakeholders for helping make this year’s budget planning “a fully collaborative, very useful and productive process.”

Grid Planning Concerns

New York officials in September selected two projects — Clean Path NY and Champlain Hudson Power Express — under the Tier 4 renewable energy solicitation issued by the New York State Energy Research Development and Authority (NYSERDA). (See Two Transmission Projects Selected to Bring Low-carbon Power to NYC.)

One stakeholder said that it’s clear that commencing service of the two Tier 4 projects would require thousands of megawatts of steam units in New York City and the lower Hudson Valley to shut down with no replacements in order for ISO markets to remain competitive for generators. He asked for assurances that the ISO will work to facilitate an efficient and appropriate exit of the steam units.

“We are committed,” Dewey said. “And I can assure you that we will take all deliberate and meaningful steps to make sure that we maintain reliability.”

Expressing a commitment to maintain the efficacy of the market signals, Dewey said that markets are a “very useful, powerful and necessary tool to attract and retain the kind of resources that we need to promote reliability, and also from a cost-effective standpoint for consumers, are the most efficient means to do that.”

Another stakeholder asked why NYISO was not involved in the NYSERDA and E3 study to help the New York State Climate Action Council shape its scoping plan to reach the environmental goals outlined in the state’s Climate Leadership and Community Protection Act (CLCPA). (See New Analysis Sets Low-carbon Focus for NY Climate Plan.)

“We have good communication with NYSERDA on a regular basis … and I think that we’re very open and transparent in terms of sharing the results of the studies that we have,” Dewey said.

In addition, the scoping plan will be shaped into a final plan over the coming year, so NYISO and stakeholders will have plenty of opportunity to weigh in, said NYISO Executive Vice President Emilie Nelson.

CSR-related and Other Tariff Revisions

The Management Committee also recommended the Board of Directors approve tariff revisions related to implementation of co-located energy storage resources (CSR) injection and withdrawal scheduling limit constraints that accommodate CSR-generator specific operating parameters.

“In particular, as we were working to implement the CSR model, we recognized that there are unique situations where scheduling limits could actually be going up against other operating parameters,” said Zachary Stines, manager of energy market design.

FERC in March accepted the ISO’s rules allowing an energy storage resource to participate in the wholesale markets with wind or solar as a CSR, and NYISO has since been working on the market software. (See FERC Approves NYISO Co-located Storage Model.)

Language will be added to the applicable manuals (likely the Day-Ahead Scheduling Manual, Ancillary Services Manual and the Transmission and Dispatch Operations Manual) describing how the scheduling limits will interact with unit-specific constraints, such as ramp, upper operating limit and lower operating limit.

If approved by the board in November, NYISO will file the tariff changes with FERC and request a flexible effective date that is prior to year-end, Stines said.

The MC also approved tariff revisions related to implementing a revised approach to the current transmission constraint pricing logic.

The project seeks to develop enhancements to the current transmission constraint pricing logic to better align transmission demand force with the severity of transmission constraints, said Kanchan Upadhyay, energy market design specialist.

The proposal includes establishing a revised six-step transmission demand curve for facilities currently assigned a non-zero constraint reliability margin value.

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Supreme Court to Hear Challenge on EPA Climate Authority

The U.S. Supreme Court said Friday it will consider challenges to EPA’s authority to regulate greenhouse gas emissions under the Clean Air Act.

The court granted certiorari in challenges by coal mining companies and states led by West Virginia, Montana and Arizona that asked the court to examine Section 111 of the CAA, which was added in 1970 (42 U.S.C. Section 7411). The law directs EPA to regulate any new and existing stationary sources of air pollutants that contribute significantly to air pollution and endanger public health or welfare.

Section 111(d) empowers EPA to impose standards “for any existing source” based on limits “achievable through the application of the best system of emission reduction” that has been “adequately demonstrated.”

In January, the D.C. Circuit Court of Appeals rejected the Trump administration’s Affordable Clean Energy (ACE) rule for regulating power plants’ greenhouse gas emissions. The 2-1 ruling said EPA’s rulemaking under Trump and its repeal of the Obama administration’s Clean Power Plan (CPP) “hinged on a fundamental misconstruction” of the CAA. The court also said the ACE rule’s delayed enforcement deadlines were arbitrary and capricious, vacating the rule and remanding it to EPA for further action. (See DC Circuit Rejects Trump ACE Rule.)

The court consolidated four challenges and said it would hear one hour of oral arguments on the following questions:

  • whether Congress gave EPA the power to issue rules “capable of reshaping the nation’s electricity grids and unilaterally decarbonizing virtually any sector of the economy — without any limits on what the agency can require so long as it considers cost, non-air impacts and energy requirements” (West Virginia, et al. v. EPA, et al., 20-1530);
  • whether EPA has authority to develop industry-wide systems such as cap-and-trade programs or is limited to standards based on technology and methods that can be applied to individual sources (North American Coal Corp. v. EPA, 20-1531);
  • whether EPA can issue “regulations for existing stationary sources that require states to apply binding nationwide ‘performance standards’ at a generation-sector-wide level, instead of at the individual source level, and whether those regulations deprive states of all implementation and decision-making power in creating their Section 111(d) plans” (North Dakota v. EPA, 20-1780); and
  • whether 42 U.S.C. Section 7411(d) clearly authorizes EPA to decide such matters of vast economic and political significance as whether and how to restructure the nation’s energy system (Westmoreland Mining Holdings v. EPA, 20-1778).

The CPP sought to cut power sector carbon emissions by 32% by 2030, compared with 2005 levels, through “generation shifting”: substituting coal-fired generation with natural gas and renewables. The Supreme Court stayed the plan in 2016, and the Trump administration withdrew it and replaced it with the proposed ACE rule in 2019. EPA predicted that the ACE Rule would reduce CO2 emissions by less than 1% from baseline emission projections by 2035.

The petitioners in the West Virginia case said the D.C. Circuit “deviated from the text-based reading that the statute [and] purported to find grounds for EPA to dictate huge shifts in most sectors of the economy, even though nothing in the statute approaches the clear language Congress must use to assign such vast policymaking authority.”

If it is not reversed, the petitioners said, the ruling would allow EPA to “set standards on a regional or even national level, forcing dramatic changes in how and where electricity is produced, as well as transforming any other sector of the economy where stationary sources emit greenhouse gases.”

The D.C. Circuit said Section 111 acts as “a catch-all” to prevent gaps in regulations controlling stationary source emissions. Section 111(b)(1)(A) says the EPA administrator “shall” regulate any category of sources that, “in his judgment … causes, or contributes significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare.”

The D.C. Circuit heard arguments on challenges to the CPP in 2016 but never ruled on it after Trump’s EPA said it planned to withdraw it. (See Supreme Court Blocks Clean Power Plan.) The Trump administration said the rule violated the CAA because it endorsed generation shifting and emissions trading among permissible emission-control measures.

The Biden administration argued the court should reject the West Virginia challenge because the CPP “is no longer in effect and EPA does not intend to resurrect it.”

“EPA instead intends to issue a new Section 7411(d) rule after taking into account all relevant considerations, including changes to the electricity sector that have occurred during the last several years,” it said. “Petitioners urge this court to grant review now to help guide the upcoming rulemaking, but that is little more than a request for an impermissible advisory opinion. Any further judicial clarification of the scope of EPA’s authority under Section 7411(d) would more appropriately occur at the conclusion of the upcoming rulemaking, when the courts can review a concrete and considered EPA rule, rather than speculate as to the regulatory approaches the agency might take.”

Gabe Tabak, counsel for the American Clean Power Association, tweeted that the Supreme Court “would affect almost all of administrative law” if it answers no to the question raised in the Westmoreland Mining challenge: whether the CAA authorizes EPA to restructure the nation’s energy system.

ClearView Energy Partners said “the court’s eventual ruling will almost certainly shape any rule under” Section 111(d) because a proposed $150 billion Clean Electricity Performance Program — which would have offered incentives for utilities to reduce carbon emissions and penalize laggards — was stripped this month from legislation that Democrats hope to pass through the reconciliation process. (See related story, Biden, Democrats Unveil $1.75T Build Back Better Framework.)

West Virginia Attorney General Patrick Morrisey tweeted that he was “fired up” that the court took the case. “Biden’s policies would destroy America’s energy independence while giving China & Russia a big boost in their energy production efforts,” he said.   

Before the court announced it would hear the challenges, EPA Administrator Michael Regan said that EPA “has ample …  statutory authority [and] legal obligations to move forward as quickly as possible to tackle the climate crisis.

“EPA will move forward with a very aggressive agenda and complement to whatever Congress eventually passes,” he added, during an Oct. 28 interview with The Washington Post. “…I will push the envelope. I will move forward as quickly as possible, as aggressively as possible, using the authorities that Congress has given us.”

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SPP MMU Releases Summer Market Reports

SPP’s Market Monitoring Unit (MMU) last week released its quarterly reports for its RTO and Western Energy Imbalance Service markets, saying it is evaluating rule changes in the latter to address limited ramp offerings.

The MMU said in its WEIS report that the lack of offered ramp “presents a significant problem,” and it expressed concern with the fledgling market’s outcomes that resulted in volatile price spikes, including a 174% jump from May to June. WEIS only began operations in February.

While prices scaled back down the following two months, the Monitor said that was not unusual in an energy imbalance-only market. Market participants are not required to offer capacity, few resources are in the market, and limited ramp and capacity is made available. That results in higher-priced resources setting price.

Registered-resource-capacity-(SPP-MMU)-Content.jpgThe WEIS market’s registered resource capacity | SPP MMU

“It is typical for most energy markets to see an increase in prices when demand increases, especially during summer months,” the MMU said. “Price volatility also means that many market participants are hesitant to offer incremental megawatts due to fear of unrecovered costs.”

Demand was up 16% in June and 14% in July. The market has 6.2 GW of capacity from full participation resources and an additional 1.7 GW from partial participation resources.

The Monitor’s RTO market report revealed average day-ahead prices were up 64% when compared to summer 2021, $33.30/MWh from $20.32/MWh. Average real-time prices were $30.68 this summer, a 56% increase from last summer’s $19.69/MWh.

The price increase was driven by natural gas prices, which reached $3.77/MMBtu at the Panhandle Eastern hub. The hub’s prices haven’t been that high since November 2014, with the exception of February during the winter storm. Gas prices were at $1.65/MMBtu during 2020’s summer months.

The MMU said generation outages this summer were comparable to 2019’s, following a one-year decrease in 2020 “due to the lingering effects of deferred maintenance” because of the COVID-19 pandemic.

The Monitor’s staff will hold a webinar Nov. 9 to discuss the RTO report.

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FERC Accepts Latest CAISO Storage, DER Rules

FERC last week approved CAISO’s proposed tariff changes resulting from the fourth phase of the ISO’s energy storage and distributed energy resources (ESDER) stakeholder initiative, a five-year effort to promote participation by storage, DERs and demand response in its markets (ER21-2779).

CAISO presented its ESDER Phase 4 changes to stakeholders in August 2020. Following a yearlong vetting process and approval by its Board of Governors, the ISO filed three proposed tariff revisions with FERC on Aug. 27, all of which the commission accepted on Oct. 26. (See CAISO Finalizes ESDER Phase 4 Proposal.)

One change applies market power mitigation to energy storage. Another creates biddable state-of-charge parameters for storage resources, and a third enables DR resources to specify maximum daily run times.

CAISO said it needs time to implement the changes as it makes “substantial software enhancements,” but it expects to do so by Dec. 1.

Energy storage has been exempted from CAISO’s market power mitigation rules so far, but batteries are becoming a vital part of California’s resource mix as it shifts to more renewables. Storage is expected to play a growing role in providing essential power during hot summer evenings as solar wanes but demand remains high, the so-called net peak. (See CAISO Sees ‘Explosive’ Growth in Storage in July.)

CAISO “currently has over 1,000 MW of energy storage resources in its markets and anticipates close to 2,000 MW by the end of the year,” FERC said. “In addition, CAISO states that energy storage resources are operating differently in CAISO markets than they have in the past: Whereas they generally provided regulation to maintain system frequency rather than energy previously, CAISO has observed that energy storage resources have increasingly been charging and discharging in response to energy prices and tend to discharge most of their energy during the net demand peak.”

FERC agreed that the situation called for new oversight. “As energy storage resources play an increasingly significant role on the CAISO system, it is imperative that CAISO ensure competitive participation by these resources and have a mechanism to mitigate any potential exercise of market power,” it said.

The biddable state-of-charge parameters came from storage operators requesting additional means to manage battery participation in the real-time market.

“CAISO explains that while the day-ahead market optimizes resources across the entire operating day, the real-time market dispatches resources based on system supply-and-demand conditions and prices available in a shorter temporal horizon,” FERC said. “CAISO explains that while dispatching an energy storage resource to meet real-time load may be economically efficient in the short term, it can affect the resource’s ability to meet its day-ahead schedule over the remainder of the day.”

DR resources need to be able to specify maximum daily run times so they’re not overused, CAISO said.

“Demand response providers currently do not have any optional master file or bidding parameters that allow them to manage daily run time maximums, and they instead rely on careful bidding and scheduling strategies to avoid being dispatched outside their constraints,” FERC said. “CAISO states that without a maximum daily run parameter, demand response resources may receive too many dispatches in an operating day, preventing them from providing demand response when needed.”

Commenters generally supported the revisions, though CAISO’s Department of Market Monitoring expressed concerns with some elements, including “that demand response resources providing resource adequacy could use the maximum daily run-time parameter to limit resource availability.” It said CAISO should “monitor the effects of implementing these changes” and make changes as needed.

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BPA: Building EMS Talent Requires Long-Term Investment

Utilities must invest sustained effort into hiring and training talented energy management system (EMS) engineers or risk being left with critical vacancies, attendees at a NERC online conference heard Thursday.

Speaking to NERC’s Monitoring and Situational Awareness technical conference, Stacen Tyskiewicz, manager of the EMS group at Bonneville Power Administration (BPA), likened the chances of finding a suitable EMS engineer to “buying the winning lottery ticket,” citing the range of skills needed.

EMS engineers are charged with supporting the systems used by utilities to monitor, control and optimize the grid, with responsibilities including analysis, engineering, design, implementation and operations and maintenance. The job also requires an understanding of programming, cybersecurity and other matters that may be required in a rapidly changing environment.

Stacen-Tyskiewicz-(NERC)-Content.jpgStacen Tyskiewicz, Bonneville Power Administration | NERC

“Engineering, programing, cybersecurity operations — all those are … different disciplines entirely. So, we’re looking for this highly specialized job [with a] very small talent pool to choose from,” Tyskiewicz said. “And even if you’re lucky enough to find somebody who knows all of those things, then you’ll most likely have to teach them about your EMS vendor and about any unique requirements of your service territory.”

Even if candidates with the right intersection of skills can be found, working to keep the lights on for millions of customers poses a special set of challenges, and managers can’t tell how a candidate will react to that pressure until they are put in the situation.

“My first time being on the dispatch floor by myself, my mentor was out of town … and I had to go down on the dispatch floor to answer a question,” Tyskiewicz said. “And [my colleague] asked me when something would be ready, and I told him, and he slammed his fist on the desk and screamed, ‘The lights will be out in Seattle by then!’ So that kind of pressure is not something that, in general, electrical engineers or programmers are used to dealing with.”

Short- and Long-term Solutions

With utilities around the country competing for such a scarce resource, how can one entity lure the talent it needs? In the short term, Tyskiewicz advised, there are several strategies that can help.

First, an entity can try to meet its needs with multiple hires instead of trying to get all the needed skills in one employee: for example, by pairing an electrical engineer with a programmer. This solution is more complicated from a payroll perspective and Tyskiewicz admitted she had not tried it herself but said she has heard of it being successful.

Another option is to “pilfer from your [EMS] vendor” by hiring their engineers, though if the vendor finds out a customer is doing this it could strain the relationship. Utilities may also attempt to outsource the problem to an outside consulting firm if a suitable partner can be found. However, this too is usually more expensive than hiring the right talent directly.

Yet another choice is to entice recently retired EMS engineers, or those who are on the verge of retiring, to come back or stay until the entity can build up enough fresh talent. This requires trading on the “dedication [and] devotion to keeping the lights on” that experienced staff will likely have.

Longer-term solutions can include hiring electrical engineers with some of the needed skills and training them on the job; this can be done through outside channels, such as job fairs and industry conferences, or within the organization. Utilities may also try to lighten the workload on existing EMS engineers by removing as much work as possible that can be done by others, allowing them to focus on the areas where they are needed most. Hiring more non-engineers, such as cybersecurity specialists, programmers and technical writers, can help with this.

At BPA, Tyskiewicz said, the most productive solution turned out to be to “grow your own” by establishing a robust EMS staffing strategy with firm support from management. Like every approach, getting executives to buy into the strategy took time and work. But in the end the effort paid off, as BPA’s leaders understood the risks of operating without sufficient EMS engineering talent and the investment needed beyond the initial hire.

Growing a sufficient internal EMS talent pool means establishing strong internal training programs, but even more important is fostering a culture where current professionals with 30 or more years’ experience can pass their knowledge on to the new generation.

“These engineers enjoy their job, they learn, and they just end up collecting a tremendous amount of wisdom,” Tyskiewicz said. “And that wisdom is not something you can put in a flowchart; it’s not something you can put in a document or even in a video recording. You need to have them [ready] for those situations that only pop up but once every five or 10 years. And they’re not going to know how to do that if they don’t have somebody to talk to who’s done it before.”

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Biden, Democrats Unveil $1.75T Build Back Better Framework

Hours before he was set to leave the U.S. to go to the U.N.’s 26th Conference of the Parties (COP26) on climate change in Glasgow, Scotland, President Biden rolled out a new framework for a whittled-down budget reconciliation package that includes $555 billion in clean-energy funding.

Weighing in at close to 1,700 pages, the revised Build Back Better Act (H.R. 5376) comes with a $1.75 trillion price tag, half of the $3.5 trillion budget that House Democrats sent to the Senate in August. (See House Democrats Reach Deal, Pass $3.5T Budget Plan.) It is also missing some of the flagship energy provisions Biden and the Democrats had pushed for in the original, most notably the Clean Electricity Performance Program, which would have provided $150 billion in incentives to utilities that hit yearly targets for adding clean energy to the grid.

The announcement from the White House said the revised framework was the result of “input from all sides” and good-faith negotiations with Sen. Joe Manchin (D-W.Va.) and Sen. Kyrsten Sinema (D-Ariz.), the two moderate Democrats whose support will be crucial for getting the package through the Senate. On Monday, Manchin told reporters he was not committed to voting for the package, saying its cost was higher than advertised because of accounting gimmickry.

“President Biden is confident this is a framework that can pass both houses of Congress, and he looks forward to signing it into law,” the White House said in a statement. The president also called on both houses of Congress to pass both the budget reconciliation package and the bipartisan infrastructure bill “as quickly as possible.”

But a hearing on the bill before the House Rules Committee on Thursday afternoon quickly turned adversarial, as Republicans attacked it as a “tax and spend” measure and the hearing itself as a rush job. Rep. Tom Cole (R-Okla.), the committee’s ranking member, said he had found out about the hearing “the same way most did: on Twitter,” and he moved for the session to be adjourned, arguing that the bill had not been analyzed by the Congressional Budget Office.

The motion was quickly voted down, but other Republicans piled on, with Rep. Cathy McMorris Rodgers (R-Wash.), ranking member of the House Energy and Commerce Committee, calling provisions to increase taxes on natural gas a “heat your home tax” and electric vehicle tax credits as “handouts to the rich.”

Rules Committee Chair Jim McGovern (D-Mass.) countered that congressional committees had already spent 165 hours marking up the bill. Thursday’s hearing was a discussion, he said, “about the details of a very important bill. … We can talk about the good and what people have problems with, and there are still opportunities for change.”

Speaking at an afternoon press conference, House Speaker Nancy Pelosi (D-Calif.) also stressed that “we won’t have anything, regardless of whatever input we have in the bill, unless it is agreed to by the Senate. … The text is there for you to review, for you to complain about, for you to add to or subtract from whatever it is, and we’ll see what consensus emerges from that.”

As outlined in a White House overview of the framework, specific clean energy spending includes:

      • $320 billion for 10-year, expanded tax credits for a range of clean energy technologies, including residential and utility-scale solar, storage, transmission, electric vehicles and manufacturing.
      • $105 billion in resilience investments to address extreme weather — hurricanes, droughts and wildfires — and “legacy” pollution in low-income and disadvantaged communities. Part of that money here would go to a Civilian Climate Corps that would provide jobs focused on mitigating the impacts of climate change and maintaining public lands.
      • $110 billion for investments and incentives to develop new clean energy technologies, manufacturing and supply chains.
      • $20 billion for federal clean energy procurement, to incentivize “government to be [the] purchaser of next-gen technologies, including long-duration storage, small modular reactors and clean construction materials.”

The balance of the bill covers health care, education and other social spending, such as six years of funding for universal, free pre-school for all 3- and 4-year-olds, a one-year extension of the expanded child tax credit and a new hearing benefit for Medicare.

The International Stage

Passage of the Build Back Better Act, and the companion bipartisan infrastructure bill, is seen as critical for Biden as he heads to Europe first for the G-20 Summit this weekend in Rome and then COP26, where world leaders will be presenting their carbon-reduction commitments Nov. 1-2. Biden committed earlier this year to reducing the nation’s emissions at a minimum 50% over 2005 levels by 2030. Heading to Glasgow with at least the possibility of the two bills getting to his desk would demonstrate on the international stage that the U.S. is ready to make good on its aggressive goals.

Speaking prior to his departure, Biden fleshed out more of the clean energy spending still in the bill. Funding to replace some of the country’s 480,000 diesel school buses with EVs survived the cut, as did support for a nationwide network of 500,000 EV chargers.

Looking to the global marketplace, Biden said, “We’re going to get off the sidelines on manufacturing solar panels and wind farms and electric vehicles with targeted manufacturing credits. You manufacture, you get a credit for doing it. These will help grow the supply chains in communities too often left behind.”

He also said the bill was “fiscally responsible” and would decrease the federal deficit and reduce inflationary pressures on the economy.

Enthusiastic Endorsement from Progressives

The immediate response from House and Senate Democrats was mostly positive, as were statements of support from industry trade associations.

While Sen. Manchin had yet to comment late Thursday afternoon, Sen. Sinema sent a semi-positive signal via Twitter. “After months of productive, good-faith negotiations with [Biden] and the White House, we have made significant progress on the proposed budget reconciliation package,” she said. “I look forward to getting this done, expanding economic opportunities and helping everyday families get ahead.”

The House Progressive Caucus also looked to be getting behind the cut-down version. In a clip posted to Twitter, Rep. Pramila Jayapal (D-Wash.) said a meeting of the caucus had “enthusiastically endorsed a resolution that approves, in principle, the framework that the president laid out today. We are really proud of the president and of our Progressive Caucus and our progressive allies for getting so many of our big priorities into the framework.”

Rep. Frank Pallone (D-N.J.), chair of the House Energy and Commerce Committee, highlighted the bill’s “new Greenhouse Gas Reduction Fund [that] will accelerate innovation, prioritize the needs of environmental justice communities and ensure the communities we represent are better protected from the rising tide of extreme weather. Rebates for homeowners to electrify and make their houses more efficient, combined with resources to create a 21st century electric grid, will allow us to get more renewable energy online and powering our neighborhoods.”

A statement from Jason Burwen, interim CEO of the Energy Storage Association, focused on the bill’s “investment tax credit for standalone energy storage, [which] is critical to accelerating the pace of storage deployment on the electric grid. Combined with new manufacturing incentives available for batteries and federal procurement of next-generation long-duration storage, the Build Back Better Framework will supercharge efforts to rapidly transition to clean energy while building a robust energy storage supply chain here at home.”

Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, linked the bill’s clean energy tax credits to job creation. “Solar is a job-creator, and the long-term tax incentives for solar, storage and domestic manufacturing will put us on a path to decarbonize the electric grid, reach the president’s 2035 clean energy target and create hundreds of thousands of quality career opportunities in every community.”

Gregory Wetstone, president and CEO of the American Council on Renewable Energy, spoke to the urgency of passing substantive climate legislation but also raised concerns about the negotiations still to come. “Potential unintended consequences around last-minute additions to otherwise unrelated pieces of the legislation … may work at cross-purposes with the mission-critical climate objectives at the heart of this bill.”

Ditto Cleantech

Comments from the business community were more mixed.

Echoing Republican criticisms, the U.S. Chamber of Commerce was concerned about the Democrats’ push to get the bill passed before the organization had time to review its details. While continuing to support the bipartisan infrastructure bill, Neil Bradley, executive vice president and chief policy officer, said, “It is the height of irresponsibility for Congress to rush through such a large and complicated bill with no clear understanding of the real-world impact of the policies that are being proposed. Congress should slow down and make sure they get the policy right.”

But cleantech businesses said the bill would support the development and commercial deployment of key technologies.

Jon Power, president of CleanCapital, a cleantech investment firm, said the bill’s investments in innovation “will provide businesses, schools, nonprofits and municipalities with affordable renewable energy [and] will rapidly speed up the clean energy transition and unleash significant private sector funds.”

Similarly, Tim Latimer, CEO of geothermal developer Fervo Energy, said the bill’s clean energy provisions “will catalyze widespread buildout of utility-scale geothermal energy and accelerate national progress toward a fully decarbonized electricity sector.”

The bill’s sections on the tax credit for carbon-capture technologies, known as the 45Q credit, got high marks from the Carbon Capture Coalition, in particular its option for direct payment. If enacted with the bipartisan infrastructure bill, “this package would provide the most transformative and far-reaching policy support in the world for economywide deployment of carbon management technologies that are essential to meeting midcentury climate goals,” said Madelyn Morrison, the coalition’s external affairs manager.

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FERC’s Christie Promotes State Perspectives at OPSI Conference

As someone who spent close to two decades as a state regulator, FERC Commissioner Mark Christie said he can’t help but look at federal administrative issues through a local lens.

Christie, who joined the commission in January after 17 years with the Virginia State Corporation Commission (SCC), told attendees of the Organization of PJM States Inc.’s (OPSI) virtual annual meeting this week that his tenure as a state regulator and past OPSI president taught him “how much I do not know” about regulatory issues.

No one understands better the challenges, problems and opportunities of utility regulation on a local basis than state commissioners, Christie said, calling it a “practical perspective” that has allowed him to realize each state has different challenges on reliability issues, costs of projects and market development.

Christie said in his keynote address that it’s important as a FERC commissioner to be sensitive to the differences between states and regions of the country.

“Utility regulators in each state know more than I’ll ever know or anybody here at FERC will ever know,” Christie said. “That’s exactly how federalism works.”

Federal vs. Local Control

Harold-Gray-(OPSI)-Content.jpgHarold Gray, OPSI | OPSI

Delaware Public Service Commissioner and current OPSI President Harold Gray asked Christie his impression of the infrastructure legislation pending in Congress and if any new rules and regulations in it could create bigger challenges for FERC.

Christie said the “devil’s always in the details” in understanding the impact of legislation, and he still wasn’t sure how the bill will ultimately pan out. He said his time in Virginia taught him to expect the unexpected when it came to legislation, but that whatever passes must be implemented regardless of whether regulators think it’s a good idea or not.

One idea Christie said he’s “not a fan” of is the concept of the federal bureaucracy overriding state transmission siting. He said there’s been a big push lately among some lawmakers and stakeholders to give the federal government override authority because of a perceived notion that states are standing in the way of building new transmission and developing the grid of the future.

“The state regulators are not the obstacle to siting large regional transmission lines,” Christie said.

As an example, Christie cited the “very controversial” Trans-Allegheny Interstate Line (TrAIL) project, a 165-mile, 500-kV transmission line that crossed Pennsylvania, West Virginia and Virginia beginning in 2008. He said TrAIL remains the largest regional line in PJM’s portfolio.

Christie said he remembers sitting in meetings across Virginia as residents expressed their displeasure with the project, but the developers were ultimately able to make their case for its need.

“Need was proven in the TrAIL case, and it got built,” Christie said. “If you can prove need, I’m optimistic that they will get built. But you’ve got to go into a state regulator and prove that need.”

Christie said he hears rhetoric from Congress members and other interested stakeholders that all it takes is one state official to “kill a vitally needed power line,” but he disagrees: It takes a commission to decide after having a quasi-judicial proceeding where evidence is presented.

Federal siting authority could also prove to be detrimental, creating massive political backlash to the federal government stepping in to decide local issues, he said.

The TrAIL project wasn’t a greenfield line requiring eminent domain, but instead used existing rights of way, and it still created controversy. Greenfield projects approved by a federal agency could prove to be even more controversial, he said.

“You seriously think that there’s not going to be a huge political blowback having a federal official just order something to be built?” Christie asked.