Page 574 – RTO Insider

December 2, 2021June 14, 2023

NY Predicts 200K+ New Clean Energy Jobs by 2030

A study commissioned by New York officials predicts that clean energy employment in the state will increase by at least 211,000 jobs this decade and by nearly 350,000 by midcentury.

Philip Jordan, E3 | NYDPS

The preliminary results from the report by the Climate Action Council’s Just Transition Working Group also finds that 10 new jobs will be created for every job displaced through 2030 by the state’s move away from fossil fuels. The growth subsectors include electricity distribution and transmission, onshore and offshore wind, solar, battery storage, and the building and transportation sectors.

“That’s really enormous job growth … a rate that’s more than double the annual growth rate from 2016 through 2020,” Philip Jordan of Energy and Environmental Economics (E3), which conducted the study, told the council Tuesday.

Drilling into Data

Following a growth rate of 15% from 2016 to 2019, energy efficiency jobs declined by nearly 5% with the advent of the pandemic but have been rebounding since the low point of the second quarter last year, according to the state’s 2021 Clean Energy Industry Report recently released by the New York State Energy Research and Development Authority (NYSERDA).

Carl Mas, NYSERDA | NYDPS

At the end of 2020, there were approximately 157,700 clean energy workers in New York, and clean energy jobs comprised roughly 2% of all jobs in the state, but less than 1% of jobs lost in the economic downturn, said Carl Mas, director of energy and environmental analysis at NYSERDA.

Clean energy employment in New York a year ago was still about 12% higher compared to the 2015 baseline, Mas said.

Displacement of jobs could total 77,000 by midcentury, and the jobs study is intended to provide data to help officials develop workforce training and identify opportunities across the state, especially disadvantaged communities, Mas said.

One CAC member was surprised that the job growth isn’t greater between 2030 and 2050.

Robert Howarth, Cornell University | NYDPS

“There’s a pretty rapid increase until 2030, and then I would expect all sorts of actions need to be taken afterward, that they would increase it more,” said Robert Howarth, professor of ecology and environmental biology at Cornell University.

The large job growth early on stems from the inputs given to the team, Mas said.

To hit the state’s goal of 70% renewable electricity by 2030 requires “a massive level of investment in order to ramp up, and when we think about jobs, interestingly it’s not the absolute amount of capacity; it’s the annual scale of change that’s driving jobs each year,” Mas said.

Howarth also said that projected declines in gas station employment could be lowered by encouraging the creation of 440 fast-charge stations, which probably would feature cafes and convenience stores that would maintain the retail jobs.

Mas agreed and said that the scale of investments is starting faster than probably most analysts had expected five years ago.

“Because of that, we’re driving job creation sooner and then sustaining those jobs over time as we retrofit more homes and as we build and deploy more solar panels,” Mas said.

IPPNY CEO Gavin Donohue | NYDPS

Gavin Donohue, president and CEO of the Independent Power Producers of New York, asked if there was anything being done about non-energy manufacturing and job loss as a result of increased energy costs. The study talks about nuclear jobs being lost, but no licenses come up for renewal before 2029, he said.

The anomaly comes from the base year including the closure of the Indian Point nuclear station, Mas said.

“I understand that … though we’re talking about a decrease of use of natural gas as a state, but I didn’t see a job impact and changes in other industries like agriculture or farming,” Donohue said. “There has to be an impact in those sectors if we’re having impacts in other sectors, so that’s the question maybe we can answer later, but it’s an omission on the study’s part.”

Moving Forward

NYSERDA CEO Doreen Harris | NYDPS

NYSERDA on Tuesday finalized contracts with Clean Path New York and with Hydro Quebec Energy Services for the Champlain Hudson Power Express and filed them for comment and approval with the Public Service Commission, council Co-chair and NYSERDA CEO Doreen Harris announced.

“All told these are the largest transmission projects contracted for in New York state in the last 50 years and will reduce the city’s fossil fuel use for electricity by more than 80% in 2030 when combined with their other clean energy investments,” Harris said. (See Two Transmission Projects Selected to Bring Low-carbon Power to NYC.)

The two separate projects total 2,550 MW and will bring solar, wind and hydropower south to New York City.

The CAC will meet in December to vote on a final draft scoping plan for achieving the goals laid out in the Climate Leadership and Community Protection Act, which will be discussed over the course of 2022 before implementation the following year.

NYSERDA will bring forward benefit-cost analysis at the next meeting, and will also be exploring a sensitivity around higher adoption rates for ground source and district heat pumps, Mas said.

NYCAC-Meeting-2021-11-30-(NYDPS)-Content.jpg

The New York State Climate Action Council met virtually Nov. 30 to discuss a report on clean energy jobs growth this decade and through 2050. | NYDPS

Not every home and apartment in New York could adopt a ground-source system, so there would be a role for district heating that may be sourced by water or ground or other resources, Mas said.

“So we will be exploring that to give us some better insights into the technical feasibility and also some of those cost tradeoffs,” he said. “While it may be more expensive to invest in these upfront, we also will see system benefits through a smaller grid.”

December 2, 2021

NV Energy Gets Green Light for $100M EV Charger Plan

The Public Utilities Commission of Nevada has approved NV Energy’s $100 million plan for a network of electric vehicle charging sites throughout the state.

The commission voted 3-0 Tuesday to approve the proposal, called the Economic Recovery Transportation Electrification Plan (ERTAP). The plan is a requirement of Senate Bill 448 from the state legislature’s 2021 session.

NV Energy asked the commission to find that ERTAP satisfies the requirements of SB 448 and approve the utility’s proposed tariffs and rate schedules to implement the plan.

The three-year plan, which will start in 2022, will bring approximately 1,822 EV chargers to 120 sites throughout Nevada. (See NV Energy Proposes ‘Strategic Network’ of EV Chargers.)

The plan includes five programs as specified by SB 448.

Under the interstate corridor charging depot program, EV charging stations are planned for five sites, at locations yet to be determined, along Interstates 15 and 80 as well as U.S. 95.

An outdoor recreation and tourism program will add EV charging at ski resorts, casinos, convention centers, sports venues and other sites.

An urban charging depot program will bring an estimated 18 charging sites with a total of 180 charging ports to the Reno and Las Vegas areas.

The other two programs within ERTAP are a public agency EV charging program and a transit, school bus and transportation electrification custom program.

About half of the investments in the $100 million plan will be in or on behalf of historically underserved communities.

Environmental groups reacted positively to the plan’s approval.

Angie Dykema, the Southwest Energy Efficiency Project’s Nevada representative, said the plan may help lower Nevadans’ electric bills as widespread EV deployment brings more value to the electric grid.

“People will benefit from this plan even if they don’t drive,” Dykema said in a release.

Cameron Dyer, managing senior staff attorney for Western Resource Advocates, called the plan “a smart investment in Nevada’s future.” A recent study found that moving from gas-powered cars to EVs could bring $20 billion in economic benefits to the state, he said.

“This transition will also reduce air pollution, improve public health, protect the climate and make the electricity system more efficient,” Dyer said. “NV Energy’s investment in electric vehicle charging infrastructure is an important step to get more electric vehicles on our roads.”

December 2, 2021November 28, 2023

Vermont Climate Council Adopts ‘Initial Climate Action Plan’

In a 19-4 vote Wednesday, the Vermont Climate Council adopted what it is calling an “Initial Climate Action Plan,” with the expectation that it will update the plan next year.

Council members struggled with an aggressive timeline set by the 2020 Global Warming Solutions Act (GWSA) to bring its first action plan for Vermont to fruition by Dec. 1. In addition to noting that the plan does not fully meet the law’s objectives, the council acknowledged that the development process hindered its ability to ensure a just transition for all Vermonters as required.

“This Initial Climate Action Plan represents one of the first public processes in the state of Vermont to acknowledge and try purposefully to incorporate equity and the principles of a just transition in both its development and outcome — but we know we fell short,” the council said in an introductory letter to the plan.

Council Member Abbie Corse, of the Corse Farm Dairy, said after the vote that she does not believe the council had succeeded with the plan.

“I’m not fully comfortable voting yes for this plan, but [I voted yes] because I believe in the heart, the soul and the work and effort that was put forward by those people who have shown up day after day to try to make this happen,” she said.

The plan, according to Council Member Sue Minter, is “aspirational,” and she said that worries her. Minter is executive director of Capstone Community Action.

“Part of what worries me is the cost to already energy- and income-burdened Vermonters that this transition will incur,” she said. “But if we don’t set aspirational goals and trajectories, we won’t get there, and we need to keep moving and we need to get started.”

Council Member Jared Duval, executive director of Energy Action Network, expressed confidence in the plan.

“If the recommendations of the Climate Council as outlined in this plan are followed, not only do I think we can meet our legal requirements to reduce climate pollution, I am also confident that we can strengthen the Vermont economy while saving Vermonters money and helping to equitably transition away from dependence on imported high-cost and price-volatile fossil fuels,” he said.

The plan, he added, represents the “first serious attempt” by Vermont to “act at the scale and pace necessary” to address climate change in an equitable manner.

Council members will have the opportunity to provide dissenting statements for inclusion in the plan in the coming week. And this month, the council will meet to discuss public engagement on the new plan and how to relate actions in the plan to American Rescue Plan Act funding.

Major Initiatives

The plan’s recommendations focus on the following segments:

- - emissions reductions;
  - building resilience and adaptation in Vermont’s natural and working lands;
  - building resilience and adaptation in Vermont’s communities and built environment;
  - enhancing carbon sequestration and storage; and
  - cross-cutting pathways.

In total, the segments identify 26 pathways, 64 strategies and 230 steps for meeting the state’s emission-reduction requirements, according to the council.

Major initiatives recommended in the plan include:

- - adopting California’s Advanced Clean Cars II regulations beginning no later than model year 2026;
  - adopting California’s Advanced Clean Trucks Rule, Low NO_x Omnibus Rule and Phase II GHG Rule for Truck Trailers beginning no later than model year 2025;
  - joining the Transportation and Climate Initiative Program (TCI-P) when regional market viability exists (See Vt. Climate Council Adjusts Course on TCI-P.);
  - developing and implementing a multiyear, statewide Weatherization at Scale initiative to weatherize 90,000 homes by 2030;
  - instituting a rental property efficiency standard and setting a target for number of units to bring into compliance by 2030;
  - adopting legislation by May 2022 authorizing the Public Utility Commission to administer a Clean Heat Standard (See Vt. Climate Council Puts Clean Heat Standard on the Table.);
  - adopting a carbon-reduction policy directing the PUC to identify, review and research as needed design parameters for a 100% carbon-free or renewable electric portfolio standard no later than 2030 (See Negotiations Stall in GlobalFoundries’ Bid for Vt. Utility Status.);
  - adopting a Refrigerant Management Program to mitigate emissions from the industrial processes sector;
  - adopting rules to reduce emissions of high global warming potential gases in GlobalFoundries’ semiconductor manufacturing processes — pending the outcome of the company’s request for utility status (21-1107-PET); and
  - considering incentives for renewable energy generation siting in the built environment and penalties for siting renewables on intact ecosystems, forests and natural lands.

Sharp Criticism

Council members appointed by Gov. Phil Scott criticized the plan in a statement on Wednesday, saying it is “overly broad.”

“Climate change is real and accelerating,” the group said in the statement. “That said, no member of the administration supports the overzealous process established by the legislature in the GWSA nor each and every action in the Climate Action Plan issued today.”

Scott vetoed the GWSA in 2020, but the legislature overrode him. The council includes eight administration appointees and 15 legislative appointees. The four votes against adoption of the plan came from administration appointees.

“As the governor noted in his initial veto message, the act rightly should have committed to the executive branch the development and implementation of specific initiatives, programs and strategies to carry out legislative policy,” the group said. “Rather, the legislature created an unelected body, unaccountable to the voters, a majority of which are its own appointees to take on this executive function.”

The GWSA directs the Vermont Agency of Natural Resources to adopt rules that are consistent with the action plan by the end of next year to achieve the act’s 2025 emission-reduction requirements. If those rules are not adopted or emission reductions are not achieved, the GWSA allows anyone to sue the ANR secretary.

Many of the plan’s recommendations also will require legislative action to move them forward.

In its statement, the group highlighted the recommendation to join TCI-P as an effort that it argued would not have a successful outcome.

“We dissent from the majority decision to recommend that the General Assembly spend time and resources during the coming session to pass legislation so that Vermont is ‘ready to act swiftly and join TCI-P as a participating jurisdiction,’” the group said. Given the recent withdrawal of three states from the TCI-P, the council members believe the recommendation would “needlessly foreclose the consideration of alternatives to TCI that may prove more conducive.”

In the plan, the council emphasized the need for legislative action that authorizes a cap-and-invest-style program, “whether it’s TCI-P or a comparable approach.”

The council committed to identifying actions that can mitigate any gap in emissions reductions that would have been realized by TCI-P, with a target to adopt alternatives by June 2022.

Climate Advocates Respond

A group of climate advocates, which included Council Member Johanna Miller, energy and climate program director at the Vermont Natural Resources Council, applauded the council’s efforts in a statement.

Adopting the plan “is an important milestone,” Miller said. “At the same time, there is even more difficult work ahead to turn this plan into the bold, just climate action the intensifying climate crisis demands.”

While Ben Edgerly Walsh, climate and energy program director for Vermont Public Interest Research Group, said the plan “falls short in some ways,” he acknowledged that its “adoption lays the foundation for Vermont to finally treat this crisis with the seriousness it demands.”

Renewable Energy Vermont is encouraged that the council acknowledged the need to move to 100% renewable energy standard, but Executive Director Peter Sterling said “further action is needed.”

“Meeting Vermont’s energy and climate targets must be consistent with the principles of additionality laid out in both the Paris accords and the Global Warming Solutions Act,” he said in a statement. “And that should require 100% of Vermont’s electricity coming from renewable resources by 2030 with much higher requirements for newly built renewables than we have today, including at least 25% of that energy coming from clean, reliable and resilience-creating in-state renewable energy sources.”

December 2, 2021November 5, 2023

EJ Comm. Wants CARB GHG Plan to Cover Pesticides

Environmental groups have been urging the California Air Resources Board to include pesticide reduction strategies in its 2022 climate change scoping plan, and they now have the backing of CARB’s Environmental Justice Advisory Committee (EJAC).

The advisory committee voted on Nov. 9 to support a letter regarding pesticide use from Californians for Pesticide Reform and seven other groups.

As many as 59 organizations have signed onto letters to CARB or the governor this year asking that pesticide use be addressed in the 2022 scoping plan. The plan, which is updated every five years, is a roadmap for achieving the state’s greenhouse gas reduction goals.

And the groups made similar requests regarding pesticides during development of the 2017 scoping plan.

“Many of us have been calling for inclusion of pesticide reduction strategies in the state’s scoping plan since 2017, only to be told by CARB that there is insufficient research and/or that pesticides contribute only a negligible amount to GHG emissions when compared with other sources,” the groups said in their letter to EJAC.

The groups agreed that more research is needed on the subject of pesticides and greenhouse gases, and called for the state to fund studies on the topic.

But enough is known now to add pesticide reduction strategies to the scoping plan, they said. The groups have also asked CARB to add the Department of Pesticide Regulation to the list of 17 departments or agencies serving as collaborators on the scoping plan.

Pesticides’ Role Debated

EJAC was scheduled to hear an update from CARB staff on Nov. 16 regarding pesticides and the scoping plan, but the item was postponed. A CARB spokesperson did not respond to a request for comment on the letter the committee voted to support.

But CARB staff discussed pesticides during a July 20 scoping plan workshop focused on natural and working lands.

During the workshop, EJAC member Martha Dina Arguello asked how the impact of pesticides on greenhouse gas emissions would be addressed.

“I’m strongly concerned about excluding pesticides from the whole framing around the natural and working lands,” said Arguello, who is executive director of Physicians for Social Responsibility – Los Angeles.

Nicole Dolney, manager of CARB’s Emission Inventory and Economic Analysis Branch, said the agency is aware of two pesticides — methyl bromide and sulfuryl fluoride — that are greenhouse gases.

She said the use of methyl bromide is being phased out under the Montreal Protocol and emissions from the pesticide are “very small.” Sulfuryl fluoride is being tracked as part of the short-lived climate pollutants inventory, she added.

At least one study has found that use of sulfuryl fluoride is increasing as the pesticide replaces methyl bromide. The researchers, who describe sulfuryl fluoride as a potent greenhouse gas, found that the increase was mainly because of fumigation of buildings in North America. But postharvest treatment of crops also contributed, they said.

Matthew Botill, assistant chief of CARB’s Industrial Strategies Division, acknowledged the number of comments received on pesticides during the scoping plan process. Botill said pesticides weren’t directly included in modeling work discussed during the workshop.

“We are interested in looking at what those potential effects of pesticides are on greenhouse gas emissions,” Botill said.

GHG Contributions

In their letter to EJAC, the environmental groups outlined ways in which pesticides may contribute to greenhouse gas emissions.

The groups pointed to volatile organic compounds contained in pesticides, which react with sunlight and nitrogen oxides to form tropospheric ozone. Tropospheric, or ground-level ozone, is a greenhouse gas that is also harmful to health, according to the University Corporation for Atmospheric Research.

Soil fumigants, which account for about 20% of pesticides used in California, can increase nitrous oxide emissions, the groups said in their letter. In 2019, nitrous oxide accounted for about 7% of the nation’s greenhouse gas emissions from human activities, including agriculture, according to the U.S. Environmental Protection Agency.

In California, demographic data show “a pronounced racial disparity” in the amount of pesticide use in counties with the largest share of Latino residents, the letter said, with the greatest impact on the San Joaquin Valley.

In addition, the groups argue that organic farming naturally sequesters carbon and other GHGs to a greater extent than farming that uses chemicals.

“It is critical that the scoping plan include measures supporting rapid transition of chemical-reliant farming to organic farming that focuses on building soil and plant health,” the groups said.

December 2, 2021

MISO Modifies Stakeholder Meeting Schedule

MISO has scrapped its plan for a meeting schedule that would have packed all major stakeholder meetings into a single week eight times per year.

Instead, the grid operator will stagger eight meetings of its main stakeholder committees across the year, alternating between in-person and virtual formats. The modified schedule still will have MISO holding fewer stakeholder meetings throughout the year.

The RTO said in September that it planned to squeeze all stakeholder meetings of its main parent entities into eight separate weeks over the year, creating “superweeks” consisting of all-day meetings. The new calendar was to take effect next year. (See MISO Wants Abridged Stakeholder Meeting Schedule.)

MISO defines its main parent entities as the Market Subcommittee (MSC), Resource Adequacy Subcommittee (RASC), Reliability Subcommittee, Planning Advisory Committee, and Regional Expansion Criteria and Benefits Working Group, which makes cost-allocation decisions. The committees currently meet monthly in separate weeks dubbed as planning week, markets week and reliability week.

The grid operator’s head of stakeholder relations, Bob Kuzman, said the new schedule will allow MISO to preserve its markets week and planning week.

“We heard your feedback, and we made a lot of changes to the proposal,” he told stakeholders during Wednesday’s RASC teleconference. “We heard that superweeks were going to provide too much information for stakeholders to digest.”

In response, the RASC and MSC only approved the first five months of their 2022 meeting dates. The committees usually set a full calendar year of meetings during their December meetings.

RASC Chair Chris Plante said committee chairs will still have to make sure their workplans and goals will be able to fit into the new calendar.

Speaking on behalf of his company, WEC Energy Group, Plante said he was willing to give the new meeting frequency a try.

MISO client relations staff had framed the new meeting schedule as a transition to in-person meetings after two years of pandemic-induced isolation.

Kuzman said MISO will review the schedule with stakeholders in May to gauge its effectiveness. “This allows the face-to-face meetings as we get back to an in-person schedule.”

He also said the new schedule will give staff subject matter experts respite between meetings to ready discussion points and meaningfully tweak proposals based on stakeholders’ suggestions.

“MISO can get a little bit better prepared for the meetings, with better material and better answers to stakeholders’ questions,” Kuzman said.

The RTO had said the meetings’ monthly pace was leaving staff in a cycle of preparing and delivering presentations, sometimes reciting information from identical slides across different committees.

The grid operator’s first vision for pared-down in-person meetings proved unpopular with stakeholders.

In November, Plante said MISO should have consulted with stakeholder committee chairs to determine whether the groups could cover 12 months of agenda items across just eight meetings a year.

Plante also said there was probably a better way of limiting COVID-19 exposure between stakeholders and MISO staff. MISO said fewer in-person meetings might lessen the chances that someone contracts the coronavirus.

“I would have much rather seen us maintain the monthly meetings with an in-person meeting every other month,” Plante said during a Nov. 4 MSC meeting.

“We were not approached about whether this would have been a good thing,” MSC Chair Megan Wisersky said. “I’m concerned there wasn’t enough stakeholder discussion outside of the Advisory Committee.”

Wisersky also questioned whether the schedule should be provisional, adding that, “sometimes when MISO suggests something is temporary, it often becomes permanent.”

Multiple stakeholders have also said change will relieve the pressure on staff to appear monthly and present market changes.

Wisersky, speaking as a representative of Madison Gas and Electric and not as a subcommittee chair, said she hoped MISO wasn’t using the COVID-19 pandemic as a “guise” to disrupt the stakeholder process.

“It’s not practical for us to block off an entire week for MISO meetings,” WPPI Energy economist Valy Goepfrich said.

Kuzman has asked stakeholders to be patient while the RTO navigates a return to in-person meetings.

“We’ve all been separate.” Kuzman said. “We miss the coffee talk; we miss the lunch talk.”

December 2, 2021

MISO Market Subcommittee Briefs: Dec. 1, 2021

Stakeholders Surprised at Integrated Roadmap Changes

MISO plans to revise its Integrated Roadmap process, the ongoing five-year workplan that prioritizes and tracks progress on market improvements.

The grid operator is doing away with a stakeholder ranking of improvements. Additionally, it will now accept suggestions for improvements on RTO operations year-round instead of imposing an annual deadline. MISO usually closes a submission window late in the year and begins prioritizing issues early the following year.

Stakeholders attending Wednesday’s Market Subcommittee meeting said they weren’t notified that MISO would change the process so dramatically. They said staff should have approached them during earlier subcommittee meetings to discuss the change before their announcement.

MISO’s head of stakeholder relations, Bob Kuzman, said executives will deliver a more in-depth briefing on the changes during next week’s Board Week.

Low Numbers for New Member Interface

MISO customers are slowly migrating to the new market user interface. Only 24 of 294 customers have fully migrated to the new system, with another 86 in the process.

“We are making very slow progress towards the migration,” said Arijit Bhowmik, MISO director of real-time applications.

The RTO’s revamp of is market interface ― where participants submit bids and offers ― is part of its market platform replacement.

MISO will retire its legacy system on Jan. 18. It began a four-month parallel operations phase on Sept. 8.

MISO’s short-term reserve product, which is set to go live on Tuesday, relies on the new market user interface. Short-term reserves are meant to supply energy within 30 minutes.

MISO: Member Privacy Trumps Zonal Data Sharing

In responding to stakeholders’ requests for access to seven-day load forecasts in their local balancing authority or resource zones, staff said they could publish weekly load forecasting data, but only on a subregional basis.

MISO’s Congcong Wang said the RTO has a few local BAs that rely on just one or two suppliers. Divulging load data for those areas would display confidential information, she said.

Wang said staff can share its load data broken down to MISO South and the North and Central portions of MISO Midwest.

Some customers have asked for access to seven-day load forecasting data at the local BA or local resource-zone levels. (See “Tx Customers Ask for Additional Load-forecasting Data,” MISO Market Subcommittee Briefs: Oct. 7, 2021.)

Most RTOs make load forecasting data for the coming week available to their members, though the level of detail varies.

December 2, 2021December 15, 2023

FERC Accepts CAISO Hybrid Rules

FERC on Tuesday approved the second round of CAISO’s tariff changes for co-located and hybrid resources, the result of a two-year stakeholder initiative meant to accelerate the pairing of renewable generation with storage to ensure California has adequate resources during its clean energy transition. (ER21-2853).

The changes include a contested provision exempting hybrid resources from CAISO’s resource adequacy availability incentive mechanism (RAAIM), which CAISO said would reduce the risk of double penalizing the resources by assessing their performance based on historical output.

FERC agreed with the change, saying it had approved CAISO’s RAAIM exemption in October 2015 for variable energy resources under the same rationale.

“The use of a qualifying capacity methodology that discounts qualifying capacity by taking into account historical performance could lead to effectively penalizing a variable energy resource for a second time under the RAAIM framework,” FERC said. “We find that CAISO has adequately explained why hybrid resources, if subject to RAAIM, would face a similar risk of a double penalty here, and therefore that an exemption is also warranted for them.”

Middle River Power, a private equity firm that manages six natural gas plants and other generating assets in California, argued it was unreasonable to exempt hybrid resources from RAAIM. Hybrids combining solar or wind and battery storage represent “a significant portion of future resources that will be providing resource adequacy capacity to the CAISO” and should be subject to the same market rules as other RA resources, it said.

“Middle River argues that CAISO’s characterization that resource adequacy values for variable energy resources are determined by their historical performance is inapt,” FERC said. “Middle River explains that ELCC [effective load carrying capability] studies apply aggregate variable energy resource generation profiles, based on historical output (determined by historical weather), to a forecast of weather in future years. Middle River states that asserting that a variable energy resource’s qualifying capacity value is affected by its historical performance overstates the role an individual resource’s performance plays in setting its ELCC-based qualifying capacity value.”

FERC said it was unpersuaded by Middle River’s argument “that the Commission should re-examine the premise underlying the proposed exemption for hybrid resources given that variable energy resources’ qualifying capacity values are no longer based on the historical performance of an individual resource.”

‘Bleeding to Death’

Commissioner James Danly concurred with Chair Richard Glick and commissioners Allison Clements and Mark Christie in the decision.

“I agree that [CAISO] proposed a just and reasonable method by which hybrid and co-located resources can participate in the markets [it] administers,” Danly said. “Enhanced participation of these resources is critical because CAISO faces serious reliability and resource adequacy problems.”

The ISO has encountered strained grid conditions during the last two summers, including the rolling blackouts of August 2020, and expects another difficult summer in 2022. Extreme weather, wildfires and the switch from fossil fuels to clean energy without sufficient storage have been partly to blame.

Danly said he wondered whether exempting hybrid resources from RAAIM made sense in such circumstances.

“RAAIM is designed to improve resource performance, so exempting another entire class of resources from it appears to be problematic on its face, especially in a region suffering an ongoing reliability crisis,” he wrote. “But our Federal Power Act standard of review is whether a proposal is just and reasonable, not whether there is a better idea.”

He said he was persuaded that there was a risk of double penalties under RAAIM for hybrid resources if historical outage data was included in the capacity-factor calculation.

“So, while I agree with approving this proposal, I remain concerned that CAISO continues to use Band-Aids to address its ongoing reliability challenges rather than the emergency surgery that is actually required,” Danly said. “Each Band-Aid may mark a modest incremental improvement, but the patient is still bleeding to death.

“Today’s order is a perfect example,” he said. “CAISO almost certainly can find ways to incorporate hybrids and variable resources into its markets without RAAIM exemptions or other potentially discriminatory measures.”

Reporting Requirements

Danly said he supported FERC’s decision to require CAISO to provide an update next year on whether the RAIMM exemption is discriminatory.

Additional tariff changes accepted Tuesday included CAISO’s requirement that hybrid and co-located resources provide additional data on weather and state-of-charge, as well as a requirement that each hybrid resource and co-located intermittent resource provide its “high sustainable limit” via telemetry every 12 seconds.

“CAISO explains that this parameter is a real-time estimate of the instantaneous maximum output capability of a variable energy resource or the variable component of a hybrid resource, based on the resource’s physical properties and weather conditions,” FERC said.

FERC approved CAISO’s first set of tariff changes dealing primarily with co-located resources in November 2020. (See FERC Accepts CAISO Co-located Resources Plan.)

CAISO intends to begin a stakeholder initiative on the evolution of hybrid resources starting next year.

December 2, 2021November 26, 2023

Two More Directors Appointed to ERCOT Board

The Texas Public Utility Commission on Wednesday announced Bob Flexon and John Swainson as the two latest additions to ERCOT’s Board of Directors, leaving the body just two members short.

Flexon was Dynegy’s CEO before its 2018 merger with Vistra and was previously CFO for UGI Utilities and NRG Energy. (See Vistra-Dynegy Merger Closes After FERC Nod.) He currently chairs Pacific Gas and Electric’s board of directors and sits on several other governance groups. He gives the board just its second independent director with a background in the electric industry, alongside previous appointee Zin Smati.

John Swainson | Travelport

Swainson is executive chairman of Travelport, a business-to-business marketplace for travel information, and an executive partner at Siris Capital, a technology-focused private equity firm. He was president of the Dell Software Group until its sale in 2016.

Flexon and Swainson were chosen by the ERCOT Board Selection Committee, a three-person group appointed by Texas’ political leadership. The committee has been working with a search firm to fill the board’s eight independent director slots, as directed by legislation passed earlier this year.

Senate Bill 2 replaced the previous board’s five unaffiliated directors and eight market segment representatives with eight independent directors chosen by the selection committee. The ERCOT CEO, the PUC chair and the Texas Office of Public Utility Counsel’s CEO sit on the body as non-voting members.

One of the first five appointees, Elaine Mendoza, abruptly resigned Nov. 19 over an apparent conflict of interest. (See Twitter Blows up over ERCOT Communications.)

December 2, 2021December 7, 2023

Texas PUC Pushes 44% Reduction in ERCOT Offer Cap

Texas regulators are expected to consider an order Thursday that will lower
ERCOT’s high systemwide offer cap (HCAP) to $5,000/MWh from $9,000/MWh, a 44% reduction (52631).

The Public Utility Commission’s four members reached consensus during an open meeting Tuesday on $5,000 as the operating reserve demand curve’s (ORDC) top-line number. The ORDC is designed to accurately reflect shortage conditions by increasing power prices through an adder when operating reserves dip below 2 GW. It’s also seen as a price signal to investors that additional generation is needed in the market.

Commissioner Will McAdams offered up $5,000/MWh as an “appropriate level,” saying the ORDC should be designed to stabilize the existing fleet and ensure the real-time market operates effectively.

The ORDC “provides revenues with the right price incentives to behaving as they should … so they are online when the likelihood of scarcity is growing,” he said. “We should use it to stabilize current market conditions.”

Commissioner Lori Cobos agreed, saying the ORDC will help stabilize the existing generation but also “hopefully drive incremental generation.”

“I don’t want to minimize the importance of changes to the ORDC,” she said. “These have been highly contested, debated issues in the past. It is by no means low-hanging fruit.”

McAdams is also proposing to raise the ORDC’s minimum contingency level from 2 GW to 3 GW, saying it will give ERCOT “breathing room” before hitting emergency conditions.

“All of these changes we are considering are expensive, but expensive is relative to the problems,” Commissioner Jimmy Glotfelty said. “It’s warranted based on what all Texans have experienced. It’s the right policy to move forward.”

The HCAP was lowered to the low systemwide offer cap of $2,000/MWh after February’s winter storm, when it exceeded a threshold for too many hours at the limit as the ERCOT system struggled to meet soaring demand. By rule, the HCAP is set to revert to $9,000/MWh on Jan. 1.

“The overall objective is to reduce the HCAP before it resets in January to make sure people in Texas are not exposed to high prices when the calendar rolls over,” PUC Chair Peter Lake said.

PUC Increases Gas Coordination

Facing Wednesday’s statutory deadline to issue orders addressing the storm’s damaging aftereffects, the PUC approved a proposal to increase coordination between the electric and gas industries during an energy emergency (52345).

The rule requires critical natural gas facilities to share “critical customer” information to electric utilities, who then must incorporate the information into their load-shed and power-restoration plans by prioritizing natural gas. It applies statewide. ERCOT manages about 90% of the state’s grid, but staff have assured SPP and MISO that the rule will not conflict with their FERC jurisdiction.

“We want it to be clear they need to be collecting this information and implementing it to the extent they can, but it’s not going to impede their FERC obligations,” the commission’s David Smeltzer said.

The Texas Railroad Commission (RRC), which provides oversight of the state’s natural gas and oil industries, also passed a companion rule Tuesday that requires gas companies prepared to operate during an energy emergency to file necessary forms with regulators.

Those companies that tell the RRC they aren’t prepared to operate during an emergency will have to explain why they can’t and pay a $150 fee. The rule tightens the commission’s original proposal, which would have allowed facilities to opt-out of weatherization requirements by simply paying the $150.

“These requirements represent a fundamental change in the relationship between the natural gas industry and the electric generation industry,” Lake said. “For the first time ever, the electric transmission and distribution utilities will know the locations of the facilities which are critical to keeping natural gas flowing to the power plants that keep our lights on.”

Lake noted that more than 700 gas facilities have identified themselves as critical, up from the 10 or 15 before the storm.

During the RRC’s open meeting, Chair Wayne Christian took aim at the criticism the agency has faced in recent weeks. The Houston Chronicle has urged the RRC’s three commissioners to resign for “[misleading] Texans about the causes of the deadly blackouts” caused by the storm.

Despite FERC’s and NERC’s joint report that fingered the lack of natural gas and other fuel supplies as the main culprit behind the widespread outages, Christian said laying the blame on gas producers was “pure hyperbole.” (See FERC, NERC Release Final Texas Storm Report.)

The PUC also approved a rule requiring ERCOT market participants to update and file emergency operations plans with the commission and to participate in drills to test the plan once the State Operations Center is activated (51841).

The rule is a result of legislation passed by Texas lawmakers earlier this year. Stakeholders have a Jan. 4 deadline to file comments on the proposal.

December 1, 2021November 26, 2023

SEEM Members Seek to Quash Rehearing Requests

Members of the recently approved Southeast Energy Exchange Market (SEEM) on Monday called for FERC to reject the rehearing requested by the market’s critics earlier this month (ER21-1111, et al.).

The commission received two requests for rehearing on Nov. 12. One was filed by an ad hoc group of environmental and clean energy organizations calling themselves the Public Interest Organizations (PIOs), and the other by a separate group calling itself the Clean Energy Coalition. (See SEEM Opponents File Rehearing Requests.) Both groups urged FERC to reconsider its de facto approval of the SEEM agreement, which took effect Oct. 12 under Section 205 of the Federal Power Act after commissioners split 2-2 on approval. (See SEEM to Move Ahead, Minus FERC Approval.)

In their filing, SEEM members — a collection of utilities including Southern Co. (NYSE:SO), Dominion Energy South Carolina (NYSE:D), LG&E and KU (NYSE:PPL), the Tennessee Valley Authority, and Duke Energy (NYSE:DUK) — said the opponents’ request should be denied for several reasons.

The first issue the utilities raised was the timing of the rehearing requests, which they said by itself should be enough to quash the petitions. Under the FPA, any parties “aggrieved” by a FERC order may apply for rehearing within 30 days of its issuance. While the opponents filed their requests Nov. 12, which was 30 days after the commission’s announcement that the agreement had taken effect, the SEEM members asserted that this was actually two days after the deadline.

In their filing, the members argued that the “date of issuance” is not when the commission announced the decision, but when it failed to issue an order. Members cited FPA Section 205(g), which states that “the failure to issue an order accepting or denying [a] change … shall be considered to be an order issued by the commission accepting the change.” Under this wording, they said, the date that FERC failed to issue an order should be considered “no later than Oct. 11” — 60 days after the members filed their answer to FERC’s second deficiency letter. (See SEEM Members Push for FERC’s Decision on Market Proposal.)

SEEM members acknowledged some discrepancies between FERC’s announcement of the SEEM approval and the statements of commissioners: Commissioner Allison Clements suggested in a statement explaining her vote that the “statutory deadline” for FERC action in the proceeding was Oct. 8, while FERC’s notice said the deadline was Oct. 11. However, they emphasized that none of the previous filings in this case have stated any deadline after Oct. 11, which means that the 30-day deadline for rehearing requests expired Nov. 10, two days before the PIOs and CEC filed theirs.

Additional Claims Dismissed

Along with arguing to deny the rehearing requests on timing grounds, SEEM members dismissed the “substantive issues” raised in the requests as “largely moot” in light of last week’s filing in which they offered to implement a series of modifications intended to provide greater transparency. (See SEEM Members Embrace Market Changes.)

The issues dismissed by the utilities include concerns of the PIOs and CEC over the market’s use of the Mobile-Sierra doctrine, which presumes that any freely negotiated wholesale energy contract is just and reasonable. FERC Chairman Richard Glick also cited this as a reason for opposing the market. (See FERC’s Christie Accuses Glick, Clements of Prejudice for RTOs.) But SEEM members said this should no longer be a problem because they voluntarily offered in last week’s filing to make the “just and reasonable standard” the default for most SEEM rules.

Also dismissed by SEEM members were opponents’ fears about “the potential for exercise of market power” and monopolistic behavior by members. These concerns too should be negated by the “significant additional transparency measures” incorporated in last week’s filing, the utilities said.

The members did engage with the PIOs’ and CEC’s claim that the commission “has not engaged in reasoned decision-making” and that the commission’s approval of the SEEM agreement without an accompanying order or explanation “cannot be just and reasonable.” Calling this argument “odd,” the utilities asserted that the mechanism in the FPA by which SEEM took effect is intended by Congress for just such an occasion when commissioners are unable to agree on a course of action.

“In every such case there will not be a written opinion of the commission explaining the reasons the [decision] is just and reasonable,” members said. “Rather, it is just and reasonable because Congress said it is, subject to review on rehearing and by an appellate court, if pursued.”

FERC has 30 days to act on the merits of the rehearing request. If it fails to do so, the petitioners may appeal to the D.C. Circuit Court of Appeals.