Page 596 – RTO Insider

October 26, 2021November 28, 2023

Global Companies Scale Toward 24-7 Clean Energy

U.S. companies with global operations are buying more renewable energy and partnering with international organizations to bring policymakers, regulators and supply chains into the commitment to fully decarbonize their activities by 2030.

Elements of a carbon-free energy system include local procurement, new installations and the creation of supply chains in different parts of the world, but it also includes creating demand, Kanika Chawla, program manager at Sustainable Energy for All, said Monday.

Chawla made her remarks on the first day of the week-long Verge 21 conference hosted by GreenBiz.

Policy and regulation should create a level of certainty for new technologies and act as “a nudge” for both markets and governments, Chawla said.

Even before the world woke up to the existential threat from climate change, “the General Assembly agreed that there needed to be a dialogue on energy … which actually ended up happening in 2021 because of COVID,” Chawla said. (See UN Hosts Energy Dialogue During General Assembly.)

She highlighted the 24/7 Carbon-free Energy (CFE) compact to match every hour of electricity consumption with carbon-free energy resources. The compact, Chawla said, is “a way for government, the private sector, financial institutions, procurers, energy companies as well as distribution companies — really the whole ecosystem — to come together and make a commitment that by 2030 we’re going to have a decarbonization of the electricity system.”

CFE signatories Iron Mountain, Microsoft and Google are demonstrating how to make 24/7 clean energy work, Chawla said. The compact has 20 other signatories; Chawla said Sustainable Energy for All will announce an additional 20 at the 2021 United Nations Climate Change Conference (COP26).

COP26 is scheduled to be held in Glasgow, Scotland, between Oct. 31 and Nov. 12.

Small Steps at First

Google is advocating for effective public policies to drive decarbonization of electricity grids across the world, said Devon Swezey, the company’s global energy markets and policy lead.

“We think that policy is really essential to enabling 24/7 carbon-free energy for everyone, and that’s why recently we partnered with Sustainable Energy for All and other partners, including Iron Mountain, to launch the 24/7 CFE compact,” Swezey said.

Google has been carbon neutral since 2007, initially through the purchase of carbon offsets, Swezey said. In 2010, it was one of the first companies to purchase renewable energy directly through a power purchase agreement, and in 2017, it met an earlier goal to match 100% of its global annual electricity consumption with renewable energy purchases, he said.

“First, we are innovating in the way we purchase clean energy, and this includes signing a first-of-its-kind agreement with AES Corp.’s (NYSE: AES) renewable energy development business in PJM, which will combine a portfolio of different clean energy technologies to collectively guarantee that by 2024 we will be operating on 90% hourly carbon-free energy around the clock,” Swezey said.

Second, Google is working to accelerate technology innovation, which includes developing a next-generation geothermal power project with clean energy startup Furbo Energy. The project will deliver around-the-clock clean electricity to the power grid that serves data centers in Nevada.

“We’re also developing a carbon-aware computing platform to make our own electricity demand more flexible and better align it to times of day or places where the grid is cleanest, and we think the planned flexibility can go a long way in helping us achieve the goal,” Swezey said.

People know the environmental and economic costs of climate change, but the business perspective may differ, said panel moderator Bob Keefe, executive director of environmental engineering cooperative E2.

“Tell us why it is important to your companies to do this, either from an efficiency standpoint or bottom-line standpoint,” Keefe said. “How do you bring suppliers along, and what should they be pushing for?”

An important area is the development of data that can add a very granular level to identifying where investments are going to have the greatest grid-scale, society-wide decarbonization impact, said Avi Allison, program manager for energy and sustainability at Microsoft.

“I think 24/7 commitments can be one step in the journey towards decarbonization,” Allison said. “I don’t view them as a sufficient step or even a strictly necessary step, but they are helpful for driving clear procurement for now, and I think we need better tools to help us better target those investments.”

“To kickstart a virtuous cycle,” the three priorities are tracking clean energy production on an hourly basis; identifying the grid-specific emission rate at the time when the production is happening; and developing scalable products that can help others to achieve similar commitments and drive toward grid-scale decarbonization, Allison said.

Business services firm Iron Mountain runs 18 large data centers around the world and sees itself as a critical piece of its clients’ energy supply chain, said Chris Pennington, the company’s director of energy and sustainability.

“We use that scale that we have as a large energy buyer to help make as much of a positive impact from an environmental standpoint as we can, and then pass the benefits of that through to our clients who are using the energy inside our facilities,” Pennington said. “That’s … a bit of the reason why we adopted this 24/7 carbon-free energy commitment, because we think that this is the energy that our clients will be wanting to buy on their own going forward.”

October 26, 2021

AEP to Sell Kentucky Operations to Algonquin

American Electric Power (NASDAQ:AEP) said Tuesday it has entered into an agreement to sell its Kentucky operations to Algonquin Power & Utilities (NYSE:AQN) for $2.85 billion.

Kentucky Power serves about 165,000 customers in 20 eastern counties and is easily the smallest of AEP’s seven operating companies. AEP Kentucky Transco is a regulated transmission business operating exclusively in the state.

Algonquin’s regulated utility business, Liberty Utilities, will acquire both subsidiaries. The sale is expected to close in the second quarter of 2022, pending regulatory approvals.

AEP said it expects to net approximately $1.45 billion in cash after taxes and transaction fees. Its CEO, Nick Akins, said the sale strengthens the Columbus, Ohio-based company’s “ability to invest in projects that will support a resilient, cleaner energy system.”

The transaction’s proceeds will be used to eliminate AEP’s forecasted equity needs in 2022 as the company invests in regulated renewables, transmission and other projects, the company said.

Kentucky Power owns 1,075 MW of generation, including Big Sandy, a 295-MW gas-fired facility that burned coal as late as 2015. It also operates and owns 50% of the 1.56-GW coal-fired Mitchell plant.

The sale must be approved by Kentucky regulators and FERC and is also subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and from the Committee on Foreign Investment in the United States.

AEP said in April it was conducting a strategic review of its Kentucky operations. It held a competitive process as part of the review. (See AEP’s Akins Lambasts FERC’s RTO Adder Proposal in Earnings Call.)

October 26, 2021January 26, 2024

Michigan Senate OKs Transmission ROFR for Incumbent TOs

LANSING, Mich. — Michigan’s Senate on Tuesday voted 28-6 to grant incumbent transmission owners the right of first refusal (ROFR) to build and operate new transmission lines in the state — legislation that could particularly boost the fortunes of ITC Holdings and American Transmission Co.

There were no comments during the floor vote on the Transmission Infrastructure Planning Act (TIPA) (SB 103). The bill, which was opposed by the most conservative Republican members, now goes to the House of Representatives, which under the state constitution must wait at least five days before acting.

The bill would apply to “regionally cost-shared” transmission projects, such as those resulting from MISO’s Transmission Expansion Plan. It takes advantage of the exception under FERC Order 1000 that allows states to create a ROFR. The order prohibited such rights in tariffs filed with the commission in a bid to create competition, although some incumbents have recently urged FERC to reverse the prohibition in the commission’s Advance Notice of Proposed Rulemaking proceeding. (See FERC Tx Inquiry: Consensus on Need for Change, Discord over Solutions.)

ITC Holdings

Sen. Wayne Schmidt (R), who co-sponsored the bill with Sen. Curtis Hertel (D), told RTO Insider that Michigan “will need more transmission, with growing electrification, especially with electric vehicles.” The legislation would give the state “a more organized way” to develop additional transmission, he said.

Schmidt also said it could assure a more orderly system in building transmission lines, avoiding a “patchwork system.” It can take five to 10 years to get transmission lines built and operating, he said.

The bill was reported from the Senate Energy and Technology Committee on an 8-2 vote Oct. 6, with all of the panel’s Democrats and all but two Republicans in support. The opponents did not explain their opposition and have not responded to several requests for comment.

The minutes of the committee’s Sept. 21 meeting show the bill was supported by the state’s three biggest transmission operators: ITC, ATC and Xcel Energy (NASDAQ:XEL). ITC CEO Linda Apsey and ITC Michigan President Simon Whitelocke testified on behalf of the bill.

Whitelocke told RTO Insider the bill was supported by “over a dozen entities across Michigan,” including General Motors; Johnson Controls; the Michigan Forest Products Council; IBEW locals 876, 17 and 223; Utility Line Contractors; and the Michigan Chamber of Commerce, in addition to ATC and Xcel.

“SB 103 will ensure that utilities with a proven track record in the state are allowed to construct any future high-voltage transmission projects,” Whitelocke said in a statement. “Adopting a TIPA provision preserves Michigan’s right to decide who builds, owns and operates these systems and where they should be built. This provides benefits in terms of efficiency, planning, development, operation and maintenance of the grid, while protecting landowner interests and meeting the needs of energy consumers.”

ITC-Michigan-Tx-Map-(ITC-Holdings)-Content.jpg

ITC Holdings’ ITC Transmission and Michigan Electric Transmission Co. serve most of Michigan’s Lower Peninsula through a network of about 8,700 circuit miles. The companies have made $5.5 billion in capital investments in the state since 2003. | ITC Holdings

ITC Transmission and Michigan Electric Transmission Co. serve most of the state’s Lower Peninsula with a network of about 8,700 circuit miles. The companies have made $5.5 billion in capital investments in the state since 2003. ITC is a unit of Fortis (NYSE:FTS).

ATC, which provides transmission in the Upper Peninsula, and Xcel, which has about 110 miles of transmission line in the state serving about 9,000 electric customers, did not respond to requests for comment.

The Michigan Chemistry Council and the conservative Mackinac Center for Public Policy testified against the bill.

The Chemistry Council acknowledges “there remain barriers to transmission planning and development and particularly with the implementation of FERC Order 1000,” Executive Director John Dulmes told RTO Insider. “But our members have long advocated for greater energy competition, and we don’t believe the answer is a state ROFR law that eliminates the benefits of competitive transmission development. We are hopeful that the FERC ANOPR will yield constructive reforms for the benefit of ratepayers across Michigan and the nation.”

The council said it supports House Bills 4806 and 4807, which it said would allow any MISO-qualified transmission developer to exercise eminent domain for competitive transmission projects. “We believe it only makes sense to open up this authority for all qualified developers, as was done in 2004 when the new independent transmission companies (like ITC and ATC) were spun off of the incumbent utilities,” the council said in its written testimony.

Transmission lines built and operated under the legislation would remain subject to the state Public Service Commission’s rules on cost accountability. If the PSC successfully files a complaint against a line or a line owner with FERC, the bill stipulates the company will need reimburse the state commission for up to $25,000 in legal costs.

PSC spokesman Matt Helms said the commission is neutral on the bill.

At one of the first Senate committee meetings on the bill, Mike Byrne, COO of the commission, said the state would need additional generation and therefore transmission as the economy becomes more electrified. He also said more transmission would provide resilience in the grid during extreme weather events such as the massive rainstorms that caused outages in the state in August.

Several other Midwestern states, including Iowa and Minnesota, have similar legislation, Sen. Schmidt said. However, Iowa’s law is the subject of a legal challenge filed in November 2020 by LS Power Midcontinent and Southwest Transmission, based in St. Louis. LS Power is challenging the law on procedural grounds, saying the ROFR provisions were improperly included in an omnibus budget bill. ITC’s Iowa-based Midwest unit and Des Moines-based Mid-American Energy have filed to intervene to protect their ROFR rights.

In 2020, the 8th U.S. Circuit Court of Appeals upheld Minnesota’s ROFR law, affirming a lower court’s 2018 decision. (See Courts Uphold Minn. ROFR, MISO Cost Allocation.)

CMS Energy, Michigan’s largest utility, is neutral on the bill, spokeswoman Katie Carey said. DTE Energy did not respond to a request for comment. The two utilities sold their transmission assets to ITC and no longer own transmission in the state.

According to the Michigan Campaign Finance Database, Schmidt has received $6,500 in campaign contributions from ITC Holdings PAC, and Hertel received $2,500 since 2018, the year of their last elections. Both senators are term-limited and cannot seek re-election next year.

October 26, 2021November 29, 2023

Massachusetts Regulators Approve New LNG Facility

As Massachusetts begins to measure progress on net-zero emissions, the state’s Energy Facilities Siting Board approved a new liquefied natural gas facility in Charlton on Friday.

The board determined in its final decision that “there is a need for additional natural gas facilities … to meet reliability, economic efficiency and environmental objectives” in the state.

Alternatives to building an LNG facility in the area, such as expanding interstate natural gas pipelines, trucking gas from other facilities or using oil and propane to heat homes, are more harmful to the environment, said Andre Gibeau, attorney with the EFSB. (See Mass. Considers Approval of LNG Facility in Environmental Justice Community.)

“Even with the mandatory goal of achieving a net-zero carbon profile in 2050, the commonwealth’s 2050 climate roadmap acknowledges that natural gas will continue to have a role,” Gibeau said at the combined EFSB and Department of Public Utilities hearing on the LNG facility.

Developed by the Northeast Energy Center, the facility will provide 168,500 gallons/day of natural gas liquefaction capacity and 850,000 gallons of storage capacity for National Grid (NYSE: NGG).

The facility has double the liquefaction and storage capacity of that needed to fulfill firm commitments to National Grid, and Northeast Energy “intends to market the facility’s remaining production and storage capacity,” Gibeau said.

Northeast Energy is also interested in selling the LNG to heavy transportation markets, such as trucking or ocean vessels if technology allows, to displace the use of oil.

The Mystic Generating Station, the power station with the highest natural gas capacity in the state, is slated to retire in 2024, so the new facility in Charlton has “significant importance in the market as we see it today,” Gibeau said.

October 26, 2021November 29, 2023

NERC Provides Lesson Learned Report on Pandemic Response

In a Lessons Learned report published Monday, NERC reviewed the electric industry’s response to the COVID-19 pandemic and provided possible paths for the future based on the experience.

More than 45 million cases of the novel coronavirus have been reported to the Centers for Disease Control and Prevention (CDC) since January 2020, and more than 730,000 deaths. NERC first indicated it was working on a report about the industry’s pandemic response more than a year ago, but the idea dates back to the earliest stages of the outbreak, when utilities began to adjust their business practices to reduce the risk of losing critical personnel while still providing full service to customers. (See NERC Planning Lessons Learned on COVID-19 Response.)

Last year NERC noted that the arrival of a pandemic had exposed vulnerabilities that many utilities’ business continuity plans had not anticipated. (See Pandemic Poses Long-term Reliability Challenges.) The Lesson Learned: Pandemic Response report covers common elements of these plans and adjustments that NERC believes the experience of the pandemic has shown to be useful.

In the report, NERC noted that many utilities took similar steps in the early stages of the pandemic: for example, reducing staff presence in corporate offices in favor of promoting remote work arrangements and limiting staffing in generating plants and transmission/distribution control centers to essential workers.

To keep these workers safe utilities set up various forms of “reverse quarantine” — isolating a known healthy population from a presumed-infectious population, as opposed to traditional quarantines which require isolating the infected to protect the rest of the populace.

Utilities relied on these “generic actions” at first because little was known about the nature of the new virus, including how it spread and which populations were most vulnerable. As a result, and mindful of their responsibility for providing stable electric service, organizations erred on the side of caution by attempting to “cover a wide range of circumstances.”

As the pandemic went on, registered entities refined their initial approaches based on experience and recommendations from the CDC. Actions became more varied as entities had to exercise their own judgment and adjust their response in real time. Differences could be minor — for example, the software used for remote work and teleconferencing — or more significant, such as the procedures for sequestering and separating employees, and the degree of sanitizing and movement required upon discovery of an infected worker.

In its recommendations, NERC recognized that “the particulars of a pandemic response plan have to be in generic terms” as scientists come to terms with the new outbreak. However, the agency said this does not mean that utilities’ pre-COVID response plans are fine as is; new continuity plans that take into account the experiences of the last year can ensure better reliability when the next outbreak occurs.

NERC said the “main transportable experience” was the proficiency many organizations and their employees gained with remote work tools and processes. While these tools were widely deployed as a health measure, NERC noted that entities reported “many cases of reduced overall costs” and efficiency savings, due to lowered electricity and water costs in less populated offices. The organization said many entities are considering keeping these arrangements in some form even after coming out of their emergency postures.

NERC’s report noted that social distancing is not always possible during maintenance and construction activities, and that entities may need to review their practices so that essential system reliability work can continue safely during future pandemics. Entities should also review their methods of communication with neighbors to ensure crews from different utilities working in the same area can maintain a safe separation.

Milestones and procedures for ending remote work and social distancing should also be considered carefully ahead of time and communicated to employees to avoid confusion. This includes the conditions under which employees should return to the office, along with whether to continue reopening when those criteria are no longer met — for example, in the event of a surge in infections.

Finally, entities must consider “the psychological and mental health needs of employees … so they can concentrate on business related matters and remain productive,” NERC said. Since different workers may have varying levels of comfort with resuming in-person work, employers may also consider allowing staff to choose between varying levels of remote or face-to-face engagement.

In addition, NERC reminded entities of the resource it produced in 2020 along with the Department of Energy, FERC, and the North American Transmission Forum on pandemic response, which “has been updated as additional tactics have been incorporated.” (See NERC, FERC Release Pandemic Response Resource.)

October 26, 2021December 5, 2023

Net-zero Pledges Top Issue to Watch at COP26, Researcher Says

With net-zero emissions a “precondition” for limiting global warming, the 26th Conference of the Parties is going to be “a reality check for global ambition on climate,” according to Joseph Majkut with the Center for Strategic and International Studies (CSIS).

The countries that have considered or committed to net-zero emissions targets cover 72% of global emissions, but their actions would only limit warming to about 2.5 degrees Celsius, said Majkut, who is director of the CSIS energy security and climate change program.

“In terms of the Paris agreement target, we’re operating behind the ball,” he said during a CSIS press call on Monday.

Paris agreement signatories agreed to limit global warming to below 2 degrees, but Majkut says there is “tension” among G20 nations as well as between developed and developing countries over how far below 2 degrees the world can or should go.

Heat-trapping greenhouse gases in the atmosphere reached a new record last year, according to the World Meteorological Organization’s (WMO) Greenhouse Gas Bulletin released on Monday.

The bulletin “contains a stark, scientific message for climate change negotiators at COP26,” WMO Secretary-General Petteri Taalas said in a statement. “At the current rate of increase in GHG concentrations, we will see a temperature increase by the end of this century far in excess of the Paris agreement targets of 1.5 to 2 degrees Celsius above pre-industrial levels.”

Concentration of carbon dioxide reached 413.2 parts/million in 2020 and is 149% of the pre-industrial level, the bulletin said.

The big factors at play at COP26 will be the extent to which countries are willing to make further commitments toward achieving net-zero emissions this century, and how quickly they are willing to realize those commitments, according to Majkut.

“It’s important … that net-zero goals don’t become an excuse to punt on near-term progress,” he said. In a world governed by net-zero commitments, he added, climate outcomes will be tied to how quickly large emitters are able to reduce their current GHG emissions.

The conference opens in Glasgow on Sunday, and President Biden will attend Nov. 1-2.

Whether his presence will have a positive influence on global climate ambition is not clear because Biden “is standing on slightly shaky ground,” Majkut said. Biden needs to be able to demonstrate at the conference that his Build Back Better Act has the necessary provisions and support to achieve his pledge to reduce emissions 50% by 2030.

But the act “is getting winnowed away in Congress,” Majkut said.

More to Watch

Sectoral approaches to emission reductions will be on the rise at COP26, according to Majkut.

The U.S. and the European Union, for example, are leading an effort to reduce emissions from methane 30% from 2020 levels within the decade, particularly in oil and gas production. Big producers, including Saudi Arabia, have signaled their support for the Global Methane Pledge announced in September, but other countries, such as Russia, are reluctant to participate, he said.

The pledge will launch formally during the conference.

Majkut also expects coalitions backed by private companies to make announcements during the conference about reducing emissions from hard-to-abate sectors, such as steel, shipping or aviation.

“The extent to which those groups are able to ensure long-run emissions reductions … depends on how large those coalitions can be built,” he said. “And voluntary actions from the private sector are not necessarily as robust as government commitments.”

In addition, Majkut said, climate finance could govern COP26 discussions as they relate to phasing out traditional coal technologies, one of the largest emitting sectors.

Commitments to phase out coal are a central goal of the conference, but it’s a challenge for developing countries.

“They’ve made very clear that that’s a hard thing to do without a significant amount of financial support from developed countries,” Majkut said. Developed countries promised $100 billion a year in Paris to developing countries, and they have missed that target.

“Developing countries are asking for more,” he said. “It’s not clear to the extent to which the developed countries are able to make firm commitments for climate finance.”

October 25, 2021November 28, 2023

Texas PUC Nears Market Redesign’s Finish Line

Texas regulators are wasting little time in redesigning the ERCOT market as they rush to meet a self-imposed deadline to release a new blueprint by Dec. 19.

The state’s Public Utility Commission staff is expected to release a strawman on the new market design this week. Stakeholders have until Nov. 12 to comment on the draft design, with further discussion possible during two PUC work sessions Nov. 4 and Dec. 9 (52737).

That compares with the years of work that went into constructing the ERCOT market in the late 1990s and the ISO’s nodal redesign that was implemented in 2010.

“We’ve got to choose a path to go down relatively soon,” PUC Chair Peter Lake said during a commission work session Thursday. “We don’t have luxury of years of study.”

The commissioners appear to have consensus on reforming the operating reserve demand curve and emergency response service (ERS) and continuing ERCOT’s development of fast-responding regulation service and contingency reserve service products.

However, Lake’s push for a load-serving entity reliability obligation met with resistance from all three of the other commissioners over the proposal’s uncertain costs and its effects on ERCOT’s competitive retail market. The LSE obligation addresses resource adequacy concerns by introducing a formal reliability standard and a mechanism to ensure sufficient resources meet this standard. (See Study Suggests Texas LSEs Can Provide Reliability.)

Jimmy Glotfelty, among those who helped design the ERCOT market 25 years ago, called the LSE obligation a “massive market change.” He shared the fears of some that the obligation would result in the state’s largest retailers consolidating their positions.

“I don’t want to go to four generation retailers that have monopolies in the state,” Glotfelty said. “If [the LSE obligation] is detrimental to customers and retail competition, it’s going to be really hard to get over that hump. I want to have a robust retail market, and I don’t yet have any assurances this will incent new generation.”

Lori Cobos, who led the consumer-focused Office of Public Utility Counsel before being appointed to the PUC, asked that ERCOT’s Independent Market Monitor protect the market should the LSE obligation lead to fewer retailers.

“We’ve spent a lot of time working … stabilizing the ERCOT market. Part of that stability is protecting the crown jewel of our retail market,” she said. “I want to ensure all this hard work we’ve put [in] is not destroyed at the back end because we’re looking for reliability in all the wrong places.”

Doug Lewin, president of Stoic Energy and a proponent of demand response and energy efficiency measures, echoed Glotfelty’s comments that the proposed changes “are massive departures from Texas’ competitive market.”

“As noted by all of the commissioners, they could have negative impacts on competition and increase the already significant market power of the largest ‘gentailers’,” Lewin said.

“Gentailer” has become a common expression within the ERCOT market for large power providers such as Vistra and NRG Energy that have both generation and retail affiliates. Their retailers, TXU Energy and Reliant Energy, respectively, already control 70% of the market.

PUC Chair Peter Lake explains his memo on the ERCOT market’s redesign. | Texas PUC

“There will be lots of unintended consequences if the PUC doesn’t thoroughly vet and understand these proposals before adopting any of them,” Lewin said. “No one knows yet what any of the proposed market overhauls would cost.”

As he pointed out, several of the proposals add extra costs to renewable energy in favor of dispatchable thermal energy. Lake has suggested imposing a firming requirement of up to 60% of a generator’s nameplate capacity.

“Many of these proposals likely won’t increase reliability but would certainly raise energy costs for Texans and Texas businesses.”

Those costs are expected to be passed on to consumers. Prices on the state’s Power to Choose website, where customers can search for electric providers, are up 50% from a year ago to an average of 12 cents/kWh.

Cobos warned that the LSE obligation could turn into a “potentially litigated process.”

“All I’m asking is that for the next couple of months we take a look at the LSE obligation,” Lake said. “I don’t know how we can say we are doing our job without taking a serious, serious look at this.”

Lake initiated the discussion with a pre-meeting memo calling for the commission’s focus on “refining the concepts that will bring reliability to our grid.” He noted his list of recommendations was a starting point “and by no means an exhaustive list.”

“This is my version of what an LSE obligation could look at,” Lake said. “It’s a draft of a draft of a draft. The only thing I’m certain of is I got a lot of this wrong.”

Commissioner Will McAdams said he had significant questions about the LSE obligation proposal’s effect on the market and that those questions “must be answered before any type of endorsement from the PUC.”

The commission agreed it will need further analysis from The Brattle Group and other outside consultants in the few weeks that remain before Dec. 19.

“We have to have breathing room to study firming requirements now for down the road,” McAdams said, pointing to the wave of intermittent resources poised to hit the ERCOT market in the next few years.

The commission also discussed whether it could increase ERCOT’s budget for the ERS’ winter period and whether it could direct the grid operator to deploy the service before an energy emergency alert. The ISO is scheduled to send out a request for winter ERS bids on Nov. 8.

ERCOT staff said they would need a rule change to eliminate the ERS $50 million budget cap. The ISO procures the service over four contract periods during the ERS year, which runs from December to November.

PUC staff said they would review the rules and work with ERCOT legal and bring back a response this week.

Weatherization Rules in Effect

The PUC approved a two-step plan to ensure generation plants and transmission facilities are properly protected against a repeat of February’s severe winter storm that nearly toppled the ERCOT grid (51840).

Under the new rules, generators must implement winter weather readiness recommendations from a post-event analysis of a 2011 winter weather event and fix any “known, acute issues” from last winter. The generation owners are required to file a notarized attestation from their highest-ranking executive that the resource has met its required actions by Dec. 1. (See “Weatherization Rule Published,” PUC Workshop Takes First Stab at Market Changes.)

“This is a good first step to ensure the physical resilience of the grid is vastly improved over last winter,” Lake said.

Generators will be allowed to submit a “good cause exemption” if they fail to comply. However, the PUC and ERCOT will have to sign off on the exemptions.

The rules also direct ERCOT to inspect generators before the end of the year. Staff plans to inspect nearly 300 units, focusing on those responsible for the 80% of lost megawatts from the February storm. (See ERCOT’s Jones Looks Ahead, not Behind.)

Transmission service providers must comply with similar requirements, using a FERC/NERC report on the 2011 event as a baseline.

Stronger year-round weatherization standards are scheduled to be implemented next year once a comprehensive weather study is completed by the state’s climatologist and ERCOT staff. That study is expected in February.

Securitization Orders Finalized

The commission made several minor changes during a brief open meeting on Oct. 13 before approving a pair of orders granting ERCOT’s requests for debt-obligation orders that would allow the grid operator to securitize $2.9 billion in market debt as a result of high charges incurred during February’s storm. (See Texas PUC Finances Market Debt over Lt. Gov.’s Objections.)

ERCOT said last week it will begin issuing bonds and collecting default charges from market participants in November to finance $800 million owed to the market by cooperatives and municipalities (52321).

The grid operator won’t begin issuing bonds for the $2.1 billion uplift balance to the market until the first quarter of 2022, staff told the Board of Directors on Friday. ERCOT has proposed that the bonds be issued through a special purpose entity (52322).

October 25, 2021June 14, 2023

Stakeholder Soapbox: Canadian Hydropower, a Clean and Renewable Source of Energy

By Annie Levasseur

Annie Levasseur | École de Technologie Supérieur

Canadian hydropower is one of the lowest-emission energy generating options on the planet. This statement is not based on interpretation or extrapolation. It is based on science rigorously developed over decades by independent researchers, including myself. Science that is regularly updated as through my own study published this year.

RTO Insider recently published an inflammatory article in which the claim is made that “scientists say Canadian hydropower is not clean” and that Canadian hydropower’s carbon emissions levels compare unfavorably to those of natural gas and even coal-based generation. (See Scientists, First Nations Say Hydropower is Not Clean Energy.)

This is completely inconsistent with the preponderance of scientific evidence.

The study of greenhouse gas emissions from Québec hydroelectric reservoirs began in the early ‘90s, and these studies show that emissions peak immediately after reservoir creation and decline to natural lake levels within about ten years.

Greenhouse gas emissions from any energy source is expressed in gCO₂-eq/kWh, which represents the amount of GHG emitted per unit of energy produced. For hydropower, the intensity varies according to multiple factors, such as temperature, the density of vegetation flooded, powerhouse energy output, etc. Biological and climatic conditions that prevail in a cold boreal climate such as Québec result in a mean value of 34 gCO₂-eq/kWh for Hydro-Québec’s generating fleet (Levasseur et al., 2021). This is low compared to coal power plants, with mean values higher than 875 gCO₂-eq/kWh.

Additionally, reporter E. Hayes points to scientific studies to support her claims but she does so erroneously. For example, she is using a specific high value of emissions taken from Scherer and Pfister (2016) that is the result of modelling data from the Hertwich (2013) model without any model validation and calibration with field data. Comparing Churchill Falls, situated in cold Canadian boreal zone, to natural gas is incorrect. Bastien et al. 2009 has clearly showed that GHG emissions from that reservoir were very low and similar to surrounding lakes. Similar field values are also observed on Caniapiscau and Laforge reservoirs (Québec) sharing similar biological, climatic and geological characteristics (Tremblay et al., 2005). The reporter should get her facts right.

We are faced with a global climate crisis. Our society must reduce its carbon footprint and move toward lower-emitting sources. Hydropower generated in Québec is one of those sources. Misinformation will not help us make the right decisions on climate change, but taking bold actions like collaborating across the border to bring clean sustainably developed energy will.

Annie Levasseur is Professor, École de technologie supérieure, Montréal, Canada and Chairholder of the Canada Research Chair on Measuring the Impact of Human Activities on Climate Change.

Levasseur and her co-authors said their study earlier this year “did not receive any specific grant from funding agencies in the public, commercial or not-for-profit sector.

“The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported” in the paper, they added.

References

Hertwich, E.G., 2013. Addressing Biogenic Greenhouse Gas Emissions from Hydropower in LCA. Environmental Science and Technology, 47, 9604-9611. Dx.doi.org/10.1021/es401820p.

Bastien, J., A. Tremblay & L. LeDrew, 2009. Greenhouse Gases Fluxes from Smallwood Reservoir and natural water bodies in Labrador, Newfoundland, Canada. Verh. Internat. Verein. Limnol. Vol 30, Part 6, p. 858-861.

Levasseur, A., S. Mercier-Blais, Y.T. Prairie, A. Tremblay & C. Trpin, 2021. Improving the accuracy of electricity carbon footprint: estimation of hydroelectric reservoir greenhouse gas emissions. Renewable & Sustainable Energy Reviews, 136. https://doi.org/10.1016/j.rser.2020.110433.

Tremblay, A., L. Varfalvy, C. Roehm & M. Garneau, (Eds.), 2005. Greenhouse Gas Emissions: Fluxes and Processes, Hydroelectric Reservoirs and Natural Environments. Environmental Science Series, Springer, Berlin, Heidelberg, New York, 732 pages

October 25, 2021November 29, 2023

FERC OKs SoCal Edison Battery Settlement

FERC approved an uncontested settlement between Southern California Edison (NYSE:EIX) and a coalition of clean-energy developers and trade associations that reduces potential costs and smooths the way for interconnecting battery storage resources on the utility’s distribution system (ER19-2505).

The parties reached the agreement over SCE’s Wholesale Distribution Access Tariff (WDAT) in July after two years of negotiations, which resulted in a 60% reduction in the utility’s proposed wires charges for standalone energy storage, the Solar Energy Industries Association said in a statement.

“By securing this reduced charge, we’ve helped preserve the regulatory intent of FERC orders 841 and 2222, which pave the way for distribution resources to have fair access to wholesale markets,” SEIA Director of Regulatory Affairs Gizelle Wray said in a statement. “SEIA will continue its work to ensure that utilities don’t attempt to add more unnecessary and onerous fees for market participants to use their wires.”

FERC Administrative Law Judge Stephanie Nagel wrote in her certification of the settlement that it “represents the first tariffed rates, terms and conditions for inbound charging distribution service applicable to energy storage resources interconnected at the distribution-system level and participating in the wholesale market. However, trial staff asserts that this does not constitute an issue of first impression because the establishment of rates, terms and conditions for such service has been approved by the commission in the past.”

The case began in March 2018, when SCE, California’s second largest utility, filed proposed revisions to its WDAT intended to accommodate storage interconnection on its distribution system. The filing included only an “as-available charging distribution service to account for the needs of energy storage resources” and a “provision that SCE would, when necessary to maintain distribution system reliability, curtail charging demand for energy storage resources ahead of retail and wholesale distribution load,” Nagel wrote.

As-available battery charging is allowed when a utility has enough capacity to serve its retail and wholesale customers at the same time.

FERC rejected SCE’s proposed approach, saying the utility had failed to show it was just and reasonable and not unduly discriminatory. It urged SCE to come up with a plan to give storage resources the same curtailment priority as the utility’s other wholesale loads.

In response, “SCE elected to provide free as-available charging distribution service to customers on a case-by-case, off-tariff basis,” Nagel wrote. “However, as a result of the rapidly growing demand for storage and the consequent increased demand for interconnection requests received by SCE for inbound charging distribution service, SCE again filed proposed amendments to its WDAT in July 2019.”

SCE proposed to offer both an as-available charging distribution service and a firm-charging distribution service, which is available absent a grid emergency, under different rate plans.

FERC accepted the plan in January 2020 but suspended the proposed WDAT amendments and rates, subject to refund, and established settlement procedures.

In addition to SCE and SEIA, parties to the proceeding included the California Public Utilities Commission, the Energy Storage Alliance, Calpine, NextEra Energy Resources, Tesla and 10 others. They reached a settlement with SCE under which “more customers are eligible for exemption from the charges applicable to the as-available charging distribution service, and therefore the settlement provides value to more customers,” Nagel wrote. “The settlement rates are meaningfully reduced from SCE’s as-filed rates for both the as-available and firm-charging distribution services.”

The settlement also provides for customers taking firm-charging distribution service to be subject to either a monthly demand charge or the actual cost of facilities, whichever is higher. The parties agreed to the “higher-of” method, the judge said.

Higher-of pricing methods have been approved by the commission in past proceedings, Nagel wrote.

“Therefore, trial staff finds the settled as-available and firm-charging distribution service rates and the higher-of pricing terms fair, reasonable and in the public interest,” she said.

October 25, 2021June 14, 2023

DOE Panel Discusses Grid Operations Under Order 2222

Coordinating grid operations with distributed energy resource aggregations as directed in FERC Order 2222 demands a bottom-up approach in order to avoid wholesale market inefficiencies, a panel of experts said on Thursday.

The U.S. Department of Energy last week hosted a meeting of its Electric Advisory Committee, with back-to-back sessions focused on transmission and distribution coordination and operational coordination.

Paul De Martini, Newport Consulting | DOE

“Ultimately, if the idea is to do value stacking — as the industry has been discussing for many years, trying to use distributed resources to provide a range of services — then you really need to contemplate what the implication is for each service at each tier, in between each tier and what that’s going to look like,” said Paul De Martini, managing partner of Newport Consulting.

“For each service there’s a different set of actors, a different set of devices operating in a different set of operating mechanisms, whether autonomous or direct physical control, and perhaps a price-based formation that’s potentially influencing that same device, so how do we think about those combinations? How do we think about those architectural issues?”

Integrating DERs into decarbonization modeling involves integrating “market layers,” from local to retail to wholesale, said Lynne Kiesling, research professor at the University of Colorado Denver.

One thing that connects the layers is co-optimization models, she said.

Robert Cummings, Red Yucca Power Consulting | DOE

“We do a lot of top-down optimal power flow modeling, and perhaps if we think more in terms of co-optimization, that might be a framework for incorporating the perspectives and opportunity cost to the customer and their devices,” Kiesling said.

“The challenge is again that if you don’t reconcile the bottom-up issues, you can’t quite get to the optimization,” De Martini said. “You get stuck at the conceptual level. So yes it’s possible, but you really need to think through that lower level to see where the overlaps are.”

It’s “heartening” to see people promoting a bottom-up approach, said Robert Cummings, president of Red Yucca Power Consulting. “One of our ruling principles was you had to use security-constrained dispatch at all times for aggregated functions, and I think that’s something that’s so easy to ignore when you start talking from top-down in a market, so it’s important that that gets put forward.”

Donnie Bielak, PJM | DOE

PJM may need a lot of flexibility on Order 2222, considering that its jurisdiction is 13 states and D.C., said Donnie Bielak, manager of reliability engineering for the RTO.

“Each of the individual distribution companies is probably going to want to have a different level of involvement with the DER integrations, and they’re also going to have different tariffs on file, and have different agreements with their state commissions,” Bielak said.

There are going to be times when the distribution system simply cannot handle injections from DERs, and that is going to be identified by the utility, Bielak said.

“The utility really is driving this section of the coordination; they are the ones doing the reliability analysis; they’re doing the planning of the distribution systems; so, between them and the market agent communicating with the individual DERs, they need to collectively come up with market offer parameters and outage reporting and submit that to PJM,” Bielak said.