Page 592 – RTO Insider

October 31, 2021December 10, 2023

New Jersey Wind Port Draws Offshore Heavy Hitters

New Jersey’s plan to create a wind port that will serve as a marshalling and manufacturing hub for the East Coast has gotten a boost from applications by several prominent offshore wind players seeking to rent space in the facility, among them Siemens Gamesa Renewable Energy (OTCMKTS:GCTAY), Vestas-American Wind Technology (OTCMKTS:VWDRY) and Beacon Wind.

The three companies submitted some of the 16 nonbinding offers to become tenants at the New Jersey Wind Port, construction on which began Sept. 9 on the Delaware River in Lower Alloways Creek, the New Jersey Economic Development Authority (NJEDA) said. Other bidders include two developers awarded approval for offshore wind projects in June by the state Board of Public Utilities: Danish developer Ørsted (OTCMKTS:DNNGY) and Atlantic Shores Offshore Wind, a joint venture between Shell New Energies and EDF Renewables.

GE Renewables US also was among the companies that submitted proposals for space at the wind port, some of whom submitted multiple proposals, NJEDA said in a release announcing the submissions.

NJEDA said the applications by the six companies “confirms the offshore wind industry’s strong and sustained interest in partnering with the state” to create an “internationally recognized offshore wind hub that will drive economic growth and job creation in South Jersey and throughout the Garden State.”

Spain-based Siemens, with annual revenue of $11 billion, has developed onshore and offshore wind projects around the world, and a company presentation on its website says it is in the top three companies in both onshore and offshore wind markets. Vestas says it has manufactured, installed and serviced wind turbines across the globe, and has made turbines generating more than 140 GW in 85 countries. A 50-50 joint venture between Equinor (NYSE:EQNR) and BP (NYSE:BP) is developing the 1,230-MW Beacon Wind off Long Island and the 1,260-MW Empire Wind project in the New York Bight.

Tough Competition

Yet the success of the state’s wind port venture is far from assured. New Jersey faces fierce competition from other states that also see the sector as a source of investment, jobs and economic growth. Virginia, Massachusetts, Maryland and New York are all trying to position themselves as East Coast providers to the new industry.

Siemens, for example, announced last week that it would invest $200 million to establish a new plant for offshore wind blades at the Portsmouth Marine Terminal in Virginia. The plant will be a “finishing” facility, where blades manufactured elsewhere are painted and assembled prior to installation. (See Virginia Builds out OSW Supply Chain with Turbine Blade Plant.)

New Jersey Gov. Phil Murphy sees offshore wind generating 23% of the state’s energy by 2050, by which time he wants the state to use 100% clean energy. So far, the state has awarded three offshore wind projects — Ørsted’s Ocean Wind 1 and 2 and Atlantic Shores — for a total of 3,758 MW. The state plans to award a total of 7,500 MW by 2035.

State officials hope that the wind port, with an opening date of 2023-2024, will give the state a “first mover advantage” in the effort to serve not only the state’s offshore wind facilities but those of other states as well. Plans for the port, for which the state has so far committed $250 million, include a 30-acre marshalling area, manufacturing space and a heavy-lift wharf. The port is scheduled to open in 2023. (See NJ Breaks Ground On Offshore Wind Hub.)

The four parcels for which NJEDA accepted submissions account for about 110 acres of the 200 available. The agency expects the successful bidders to be picked next year, with tenants occupying the space in 2024.

A complementary project, a factory that builds monopiles — the tubes driven into the ocean floor for the turbines — is under construction at the nearby port of Paulsboro.

“The interest we are seeing in the New Jersey Wind Port demonstrates that we do not have to choose between addressing climate change and creating jobs,” said Jane Cohen, executive director of the governor’s Office of Climate Action and the Green Economy. “Through this project and Gov. Murphy’s other efforts to combat climate change, we can drive economic growth, strengthen our workforce and create family sustaining jobs for all New Jerseyans who want to be in involved in the green economy.”

State or Regional Hub?

Ørsted and Atlantic Shores Offshore Wind each committed to using the port as part of their offshore wind application approved by the BPU. Ørsted agreed in its contract to establish a nacelle assembly facility at the port with GE. And Atlantic Shores said it would partner with Vestas on a nacelle manufacturing facility at the port. (See New Jersey Shoots for Key East Coast Wind Role.)

The two developers, along with Beacon Wind, submitted offers for land that is being purpose-built for offshore wind marshalling, staging and final assembly of turbines.

Paul Patterson, an energy analyst at Glenrock Associates, said it is unclear whether New Jersey will emerge as a regional leader in the offshore wind supply chain — or if any state will. Several states are essentially creating their own markets by awarding offshore wind contracts and incentivizing the participants to use state facilities created to serve the new ventures, he said.

“The question that comes to my mind is, will these hubs simply be serving the projects that are associated with that specific state policy?” Patterson said. “Or will the hub be used by other projects that are being sponsored by other states up and down the Eastern Seaboard?”

Preparing the Grid for Offshore Wind

NJEDA’s announcement came as Ørsted and PSEG (NYSE:PEG), which owns a 25% share of Ocean Wind 1, revealed plans to upgrade the grid in preparation for the additional energy coming from the offshore wind projects. The companies announced Thursday that they had submitted several proposals for offshore transmission, collectively named Coastal Wind Link, that are designed to deliver thousands of megawatts of offshore wind energy into New Jersey, PSEG said in a statement.

The companies said they submitted the proposals as part of FERC Order 1000’s state agreement approach, under which the BPU requested that PJM integrate the state’s OSW goals into the RTO’s Regional Transmission Expansion Plan process. New Jersey was the first state do so. (See New Jersey Seeks OSW Transmission Ideas.)

The BPU is looking for suggestions on issues including how to upgrade the existing grid to allow for integration of wind energy, how to extend the onshore grid to bring it closer to offshore wind generators and what upgrades are needed on interconnections between offshore substations to create an offshore grid, or “backbone.”

PSEG and Ørsted said their proposals “encompass individual and networked solutions and would ensure that New Jersey has a clear path to connect to the offshore wind energy coming online during the next decade while minimizing environmental impacts along New Jersey’s coastline.”

October 31, 2021June 14, 2023

Overheard at OPSI 2021 Annual Meeting

The future of the electrical grid, the challenges of modernizing transmission systems and the adoption of new market rules to address PJM’s changing generation mix were front and center during last week’s annual meeting of the Organization of PJM States Inc. (OPSI).

Held virtually for the second year in a row because of safeguards concerning the COVID-19 pandemic, the two-day conference featured panel discussions with PJM officials and stakeholders on work being done to advance the grid of the future while maintaining reliability and stable markets and meeting state decarbonization goals.

Delaware Public Service Commissioner and OPSI President Harold Gray said state regulatory commissioners are facing major challenges that need to be addressed.

“Every OPSI commissioner is going to need to reconcile their state’s policies with a changing grid of the future and decarbonization drivers,” Gray said.

Resilience and Reliability in Transmission Planning

Michael Richard, Md. PUC | OPSI

Beth Trombold, vice chair of the Public Utilities Commission of Ohio, and Maryland Public Service Commissioner Michael T. Richard served as moderators of a panel discussing possible changes to PJM’s transmission planning, interconnection and cost allocation processes to better accommodate renewable generation.

Richard focused on comments made by stakeholders in the FERC Advance Notice of Proposed Rulemaking filed in October. (See FERC Tx Inquiry: Consensus on Need for Change, Discord over Solutions.) He said the ANOPR provided an opportunity for stakeholders to work together to “reimagine” what the grid of future may look like while discussing issues like transmission planning and oversight and wait times for projects in the development queue.

Ken Seiler, PJM | OPSI

Richard asked the panelists what they hope the FERC commissioners will remember or take away from their comments filed in the ANOPR.

A major focus of PJM’s comments was around the idea that resilience and reliability have to be “foundational and core to everything that we do,” said Ken Seiler, vice president of planning for PJM.

The RTO solicited ideas from stakeholders to find the “major areas of focus,” Seiler said, with members singling out continued interconnection changes as a significant work effort. The RTO’s current interconnection queue is composed of 93% renewable resources, Seiler said, and stakeholder efforts are aiming to generate better cost certainty for interconnection customers while moving projects through the queue faster and more efficiently.

Sharon Segner, LS Power | OPSI

“It’s absolutely critical that we reform this process to generate much more cost certainty for the interconnection customers and certainly move projects through the queue much, much quicker,” Seiler said.

Sharon Segner, vice president of LS Power, said the “historic link” between regional planning and regional cost allocation and competition should be “revisited,” calling for a national bright-line test to be applied and for all transmission lines 100 kV and above to be regionally planned. She also suggested transmission lines below 100 kV but that have regional benefits to two or more utilities should also receive regional planning.

“The grid of the future must be regionally planned and planned by independent entities,” Segner said.

Reliability in Operations

David Ober, IURC | OPSI

Indiana Utility Regulatory Commissioner David Ober served as moderator of a panel discussing new products that may be necessary to ensure reliability with the changing generation mix in PJM.

Emanuel Bernabeu, director of PJM’s applied innovation and analytics department, said the energy industry has endured multiple transitions that have all disrupted markets in the past. But the new transition to renewable resources is “special” and unique, including the physics of generation that is evolving from spinning processes to inverters and controllers. He also noted the variable behavior of renewable resources, their economics with high capital investments and zero marginal costs, and the “new balance” between centralized generation and renewable resources.

PJM is currently conducting renewable integration studies to analyze and better understand operational and market impacts of the renewable transition, Bernabeu said, as a strong foundation on simulation scenarios is “going to be critical” into the future to understand reliability issues.

Emanuel Bernabeu, PJM | OPSI

“We don’t have a list set in stone on what exactly are those products that we need to develop,” Bernabeu said. “We think we have some idea, but as always we’re going to work with stakeholders, states, academia and research institutes to really form and shape what these new products ought to be going forward in the future.”

Marji Philips, vice president of wholesale market policy for LS Power, said PJM will need to maintain existing generation resources if the accelerated drive to electrify different sectors of the economy continues. Philips said there’s a “good chance” an even greater amount of investment will be needed to maintain grid reliability.

A need for products to support the changing grid requires a “reconsideration” of the capacity market to also ensure reliability and resource adequacy, Philips said, while products are needed that are flexible and able to respond quickly to dispatch instructions, fuel secure and can continuously operate “beyond a few hours” while providing reserves.

Marji Philips, LS Power | OPSI

“Enhancing existing market rules to incent market participants to invest in resources with needed reliability attributes will result in the right outcome for both investors and consumers,” Philips said.

Paul Sotkiewicz of E-Cubed Policy Associates stressed the importance for stakeholders to understand when looking at the changing generation mix, there isn’t a need to get “reliability value” out of zero-carbon-emitting resources if it’s not feasible for them to reach complete reliability.

Sotkiewicz said he worries that if reliability issues aren’t thought through carefully, the transition to more renewable resources could lead to serious economic and emergency events like ones seen recently in CAISO and ERCOT. He said the industry won’t “get a second chance” to make a transition to renewables if the public perception about their reliability is damaged.

“We have to worry about costs, but we also have to be realistic about reliability,” Sotkiewicz said. “If we don’t get the reliability piece right, it doesn’t matter what the costs are because the costs of lost load are going to be far greater.”

The Evolving Markets

Joe DeLosa, NJBPU | OPSI

Joe DeLosa, bureau chief of federal and regional policy for the New Jersey Board of Public Utilities, moderated a panel on how capacity market rules need to be revised to accommodate renewable resources.

DeLosa said related issues are taking center stage in PJM with the newly created Resource Adequacy Senior Task Force endorsed at the October Markets and Reliability Committee meeting. (See “Resource Adequacy Charter Approved,” PJM MRC/MC Briefs: Oct. 20, 2021.) He said the OPSI board recently developed its own Competitive Policy Achievement Staff Working Group to continue stakeholder dialogue on capacity market rules.

Adam Keech, PJM’s vice president of market design and economics, said the decarbonization issue is “full of challenges” in the markets. Keech said that it’s important to remember that the capacity market is “not the only tool” that exists to tackle the complexities of decarbonizing the energy sector.

Adam Keech, PJM | OPSI

“In continuing to think about solutions in terms of the combined effect of the capacity and energy markets, I think it’s critical to make sure that we do decarbonization in the least cost and the best and most efficient sense that we can,” Keech said.

Kathleen Spees, principal at The Brattle Group, spoke about options for the creation of a regional clean energy or capacity market. Spees said a “wide variety” of state clean energy policies exist in PJM, ranging from states with accelerated decarbonization goals to states with no plans for decarbonization.

A regional clean energy marketplace can “add value” to all the states and customers in the region, Spees said, harnessing competition to achieve sustainability goals. She said the value of the energy market is to amplify the capability of the competitive marketplace to “offer low-cost solutions” to customers and have a regional scope of reliability.

Kathleen Spees, The Brattle Group | OPSI

“It’s becoming more and more clear that we need to take the regional scope and footprint into account in order to help all the states achieve their policies cost effectively,” Spees said.

Pete Fuller, principal of Autumn Lane Energy Consulting, said discussions of changes to capacity market rules need to include all of PJM’s markets. The decarbonization of the grid on a “very wide scale” presents new challenges for markets, and PJM and stakeholders need to think beyond winter and summer peaks and begin thinking about “minute-by-minute” situations on the grid, he said.

“When we move to that kind of a system, the old planning paradigms and the old operational paradigms no longer necessarily hold,” Fuller said.

October 31, 2021June 14, 2023

New York Writing Ending to Tale of Two Grids

New York City is set to replace its dirty power plants with clean energy from up the Hudson River and in the ocean, with an estimated $26 billion in state-sponsored projects about evenly divided between the two.

BOEM Director Amanda Lefton | ACE-NY

And more projects are coming offshore, as the Bureau of Ocean Energy Management will auction new lease areas in the New York Bight in early 2022, Director Amanda Lefton said Thursday.

“Our path includes up to seven new offshore lease sales by 2025, including those in the Gulf of Maine, the New York Bight, the central Atlantic offshore the Carolinas, in California, Oregon and maybe even the Gulf of Mexico,” Lefton said at the Alliance for Clean Energy New York (ACE-NY) Fall Conference.

This is the first time BOEM has released a roadmap of regions under consideration for lease as well as potential timeframes, Lefton said.

“By providing clear direction on our path, we’re trying to remove the guesswork and inspire confidence among industry ocean users and other stakeholders,” she said.

Transmission Focus

State agencies have approved two separate projects totaling 2,550 MW to bring solar, wind and hydropower south to the city, as well as offshore wind projects totaling 4,300 MW. (See Two Transmission Projects Selected to Bring Low-carbon Power to NYC.)

The one-two punch in New York is meant to solve the transmission bottlenecks limiting power flows to the city, ending the familiar tale of two grids that leaves renewable and nuclear energy predominantly serving the upstate areas where it is generated.

Clockwise from top left: Luke Falk, energyRe; Susanne DesRoches, NYC Mayor’s Office; Shashank Sane, Invenergy; Anne Reynolds, ACE-NY; Nathanael Greene, NRDC; and Noah Ginsburg, Solar One. | ACE-NY

New York has struggled with land-based transmission planning, but “it’s just super complicated” to get several different states and several different RTOs together to plan for offshore transmission, ACE-NY Executive Director Anne Reynolds said.

“What’s going to be really critical is thinking about a planned approach, and we really have key challenges,” Lefton said. “We have interconnection, the availability of onshore transmission … something that’s been incredibly clear is that we need a strong collaborative effort between states and the federal government.” (See NY Grid Study Pushes Meshed OSW Tx, Coordination.)

New York is unique by its nature, but the region needs to come together to ensure that there are adequate points of interconnection, she said.

“The biggest takeaway on what states can do is to partner to really try and be proactive about solving some of these transmission issues rather than reactive,” Lefton said.

The $11 billion, 174-mile, 1,300-MW Clean Path New York project under the Hudson River would allow a greater flow of energy between upstate and downstate, said Shashank Sane, executive vice president of transmission at Invenergy, one of the project’s developers. Primarily intended to deliver clean energy into New York City, the project would also help ensure reliability for the state’s grid, he said.

Powering NYC with Renewables

The state is set to connect 9 GW of offshore wind into New York City by 2035, said Nathanael Greene, senior renewable energy advocate at the Natural Resources Defense Council.

“For context, the summer peak load in [the city] is about 11.5 GW, so if we connected about 6 GW of offshore wind, you can see that would make a real big contribution,” Greene said.

But the solar industry faces a lot of headwinds, noted Noah Ginsburg, director of Here Comes Solar at Solar One, which works in the city. Half of a statewide community solar program was taken up by natural gas systems that essentially exploited a loophole in the program with some financing from the New York Green Bank, he said, and the Public Service Commission has approved utilities statewide to impose a new fee on net-metered solar customers starting in January.

“The combination of those two things is really going to impede growth in the solar industry,” Ginsburg said. “It’s as if New York has decided it’s buying a Tesla, so [it has] stopped changing the oil on its Honda Civic.”

“We have a unique situation in New York City,” said Susanne DesRoches, deputy director for energy and infrastructure in the mayor’s Office of Climate and Sustainability. “Not only are we constrained by existing transmission, but we also have a very old and polluting fleet that essentially we’re required to have by reliability rules.”

The challenge is to ensure a reliable and resilient clean energy transition while bringing on renewable energy resources and taking those old power plants offline, she said.

“We’re expecting to see days over 90 degrees [Fahrenheit] triple in New York City. We’ve had some historic rainfall events just in the last few months tragically killing 13 New York City residents … so we have to pivot very quickly to new and clean resources and make sure we’re making those resources resilient to what’s coming,” DesRoches said.

The mayor’s office is very concerned that about 1.5 million New York City residents spend more on energy than the state target of 6% of a person’s income, she said.

October 31, 2021June 14, 2023

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.

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Outgoing 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.

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MISO’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.

October 31, 2021June 14, 2023

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.

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Wisconsin 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.

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MISO 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.

October 31, 2021December 5, 2023

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.

October 31, 2021

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.

October 31, 2021

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.”

October 31, 2021October 27, 2023

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.jpg

The 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.

October 31, 2021January 1, 2024

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.