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October 10, 2024

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MISO Extends Seasonal Auction Discussions

MISO will give stakeholders an additional two months to question its plan for four seasonal capacity auctions with separate reserve margins and a capacity accreditation based on a generating unit’s performance during tight conditions.

Richard Doying, the RTO’s executive vice president of market and grid strategy, said Sept. 20 that staff will now file the proposal with FERC in late November or early December. The filing was originally scheduled to be made at the end of September.

“We do nonetheless realize the importance of moving on this quickly,” Doying told stakeholders during a special call. “We believe that two months will be adequate to address any questions you may have.”

Doying said the extra time will be used to make sure stakeholders fully understand all the elements of the proposal.

The Resource Adequacy Subcommittee voted earlier in September to pause the new capacity paradigm for a year. MISO leadership has said it would give stakeholders more time to debate the filing, but not enough that the delay would risk implementation in the 2023-24 planning year. (See MISO Backs Divisive Seasonal Capacity Design.)

Some stakeholders said MISO mischaracterized the vote as a simple ask for more time to comprehend the proposal, when members had made it clear they disagreed with the plan. MISO should have focused on researched validation for the proposal, they said.

Doying said he was fully aware MISO was not granting all the stakeholder asks that were on the ballot.

“We believe it would be unwise and risky to delay beyond the 2023-24 timeline. … I certainly will acknowledge and take full ownership that this does not grant everything that the stakeholders requested,” he said.

Multiple stakeholders said the grid operator has not addressed members’ discomfort with the proposal.

Cleco Cajun’s Tia Elliott said widespread acceptance of the proposal is unlikely given that staff only unveiled a final proposal in August.

“There are fundamental issues here that have not been addressed,” Power System Engineering’s Tom Butz said. He argued MISO doesn’t yet have a method to measure whether an auction’s season will be reliable.

“I am being very firm that there are fatal flaws with this that will not be helped by having a lower accreditation,” he added.

Travis Stewart with the Coalition of Midwest Power Producers also said stakeholders would like to see a study proving that the design will improve capacity supply.

Entergy’s Wyatt Ellertson said there’s too much uncertainty about the seasonal auctions’ impacts.

“I think if we have [cost of new entry] auction prices in multiple zones, that’s not going to help anyone,” he said, asking staff to devise some “guardrails” so members don’t suffer “enormous financial penalties.”

WPPI Energy’s Steve Leovy said MISO could have already filed its four-season auction had it isolated the accreditation for a separate filing. Members are generally on board with a four-season auction but have concerns with stricter accreditation, he said.

Doying said leadership may consider “transition mechanisms” that could help “smooth” the changeover to a new capacity construct. MISO will hold more talks on the plan over the next 60 days.

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Tensions Boil over MISO South Attitudes on Long-range Transmission Planning

Divisions between MISO South regulatory staff and stakeholders deepened last week over the RTO’s long-range transmission plan.

MISO’s southern entities clashed with environmentalists and transmission owners over cost allocation and the future resource assumptions behind the long-range plan. Stakeholders are increasingly accusing Entergy (NYSE:ETR) and its regulators of trying to impede the planning process for anti-competitive reasons. (See MISO Stakeholders Blame Entergy for Long-range Transmission Impasse.)

Separate but Equal Allocations 

Under increased pressure from stakeholders who say it hasn’t done enough regional planning, MISO called for separate but equal allocation methods for its South and Midwest regions.

MISO on Thursday prescribed using 2011’s Multi-Value Project (MVP) cost allocation for both regions, eschewing Entergy and South regulators’ ask for distinct allocations. (See MISO Stakeholders: Separate Allocations Isolate Regions.)

However, MISO said the recovery of project costs will likely be confined to separate portfolios. Some stakeholders said confining the costs of projects to a subregion ignores that project benefits could cross boundaries and disincentivizes ever building more transfer capability between the regions.

MISO proposed to recover the cost of long-range projects from members using the MVP’s 100% uniform, “postage stamp” rate from load if the projects either support state or federal energy policies; address NERC issues and show reliability benefits across multiple zones; and demonstrate multiple types of economic value across multiple pricing zones with at least an overall 1:1 benefit-to-cost ratio over the first 20 years of service. The long-range projects must have at least a 100-kV rating and $20 million cost minimum.

Entergy and MISO South regulators, on the other hand, wanted a different allocation that assigns costs directly to project beneficiaries from either increased reliability, economic gains or attained policy goals. They also asked for a 1.25:1 benefit-to-cost ratio and 230-kV minimum voltage thresholds.

“The idea is to keep the project type criteria the same across the footprint,” MISO Director of Economic and Policy Planning Jeremiah Doner said at a cost allocation working group meeting Thursday. “We did say we were open to exploring reasonable regional differences … but we see a number of challenges with implementing the MISO South proposal.”

Doner said the proposal would essentially have the RTO performing two separate planning processes. He also said the proposal’s measure of reliability benefits only through the avoided costs of future reliability projects was too narrow and “doesn’t capture a broad type of reliability benefits.”

“It would really add another layer of complexity and difficulty to the transmission planning processes,” Doner said. “It wouldn’t result in a ‘roughly commensurate, beneficiaries pay’ allocation.”

Doner also said there isn’t precedent at FERC for allowing separate cost allocations in a single RTO.

Some stakeholders want MISO to consider applying Entergy and MISO South regulators’ proposal throughout the entire footprint for long-term projects, forgoing the MVP-style allocation.

The Union of Concerned Scientists’ Sam Gomberg countered that that would severely stall any project development.

“I really see a vote for this as an end to systemwide transmission investments. It’s overly restrictive to what we’re going to be able to do to actually get steel into the ground,” Gomberg said.

“When you look at the cost allocation from Entergy — which that’s what this is — it makes it harder for projects to get built,” agreed Simon Mahan, executive director of the Southern Renewable Energy Association.

Mahan said that if someone proposed to reinforce the grid so the February blackouts in MISO South didn’t happen again, those transmission projects probably would not get approved under the narrow benefit definition. He also pointed out Entergy has never built a market efficiency project since joining the RTO. He questioned how the proposal would help MISO South supply reliable power as the resource mix evolves, weather events intensify and existing facilities age out.

“I just don’t see how this proposal will make reliability better here in the South,” he said. “We’ve still got people down here without power three weeks after Hurricane Ida.”

Otter Tail Power’s Stacy Hebert said the MVP portfolio has been shown to benefit MISO South and its cost allocation has withstood challenges at the U.S. Supreme Court level. She said a Midwest-South split between cost allocations begs the question why have the Midwest and South under the same RTO at all.

“We’re one RTO and should be treated as such,” Ameren’s Jeff Dodd said simply.  

“I would implore, beg or ask kindly that you not create a regional seam,” Missouri Public Service Commission economist Adam McKinnie agreed.

But Texas Public Utility Commission Market Economist Werner Roth said MISO’s stance was a flip-flop from its earlier position that it would be open to unique cost allocations between Midwest and South.

“It honestly feels like MISO … gave us this shiny object to look at for a few months,” he said.

MISO Executive Director of System Planning Aubrey Johnson said that after speaking with FERC staff and counsel, the RTO discovered different cost allocations pose “a higher hurdle” for commission acceptance.

Mississippi Public Service Commission attorney David Carr said the state was “disappointed” with MISO’s response to a different cost allocation for South and demanded a list of names at FERC that MISO staff have spoken to. Johnson said he couldn’t do that.

“I’m as frustrated with anyone about the mixed messages, but I think people are missing the bigger picture,” Xcel Energy’s Drew Siebenaler said. He said MISO shouldn’t allocate the costs of regionally beneficial projects differently based solely on physical location.

Lauren Azar, attorney for the Sustainable FERC Project, said MISO South’s proposal “would create a number of free riders and is inappropriate.”

“I also think very few projects would be approved under the MISO South cost allocation,” Azar said. She said FERC’s Order 1000 dictates one allocation method per project type, so it shouldn’t come as a surprise that FERC would frown upon a special MISO South allocation.

Azar said it’s disingenuous to assume that a project’s physical location is demonstrative of the benefits it provides. She said the interconnectedness of the grid disproves that, with grid disturbances in Winnipeg felt as far south as Florida. Two allocations would effectively extend MISO South’s transition period, where it was exempted from regional cost allocation for the five years after it joined the RTO in 2013.

“MISO North is going to continue to be the full payer of the region’s reliability,” she said.

New Orleans-based clean energy consultant Andy Kowalczyk said he would like a list of the state regulators and Southern utilities that support Entergy and MISO South regulators’ allocation proposal. He said MISO South is not a “homogenous” bloc that’s uniformly on board with the plan, noting the New Orleans City Council’s recent letter to MISO pleading with it for transmission solutions. (See related story, Facing City Council Inquiry, Entergy Says it Could Sell New Orleans Utility Arm.)

“We shouldn’t be following something that results in no projects,” Kowalczyk said.

MISO could advance $30 billion or more in transmission expansion for board approval in March; so far it’s only set to propose projects located in MISO Midwest. (See MISO Targets March Approval for Long-term Tx Projects.)

Loud Row over Future Fleet Assumptions

A virtual workshop Friday on the long-range transmission plan devolved into a shouting match between Mississippi PSC consultant Bill Booth and other stakeholders. Booth was questioning MISO’s renewable penetration forecasts and their weighting in MISO South at length when several stakeholders interrupted him to tell him the matter was already settled.

Johnson said the estimates were built years ago into Future I of MISO’s transmission planning futures, and it was decided months ago that the RTO would use an unweighted Future I to identify the first possible solutions under the long-range transmission plan.

MISO will next move to the more progressive Futures II and III to identify more possible transmission projects. Some stakeholders pointed out that Future I contains the tamest of all MISO’s renewable predictions and is built on members’ own carbon-cutting plans, making it difficult to question.

“I want to commend MISO for their patience here. I also want to call out what is clearly an effort by Bill Booth to obfuscate and drive this conversation off the rails … and ultimately drive as many holes in the process as possible,” UCS’ Gomberg said. “I think it’s pretty obvious what is happening here. I would request MISO please take more control over this meeting.” He also asked that stakeholders refrain from “stupid” questions. Seconds later, he apologized for use of the adjective.

Multiple stakeholders said Booth should discuss his lingering concerns about the planning futures with MISO staff outside of the meeting instead of dominating several meetings in a row with repeat queries.

“I don’t think the purpose here is to hear out a minority of stakeholders a majority of the time. … There’s one group of stakeholders that is taking up all the oxygen in the room,” Kowalczyk said.

WEC Energy Group’s Chris Plante said he construed Gomberg’s and Kowalczyk’s comments as “threatening” and asked MISO to conduct a review of them pursuant to the Stakeholder Governance Guide.

Reliability Subcommittee Chair Ray McCausland offered his services as a neutral facilitator of the next long-range transmission workshop in October.

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LaFleur Elected Chair of ISO-NE Board

The ISO-NE Board of Directors announced Friday that Cheryl LaFleur was elected as its next chair, replacing Kathleen Abernathy, who is retiring this month.

LaFleur, whose term will begin this Friday, joined the board in 2019 after serving for more than nine years as a FERC commissioner.

“I’m honored to take on this role at such a pivotal time in New England’s transition to a clean energy future,” LaFleur said. “I look forward to working with my colleagues on the board, the ISO-NE team, and government and industry leaders to help move the region forward.”

In addition to Abernathy, who has been chair since 2019, Philip Shapiro is also retiring. He served as chair from 2014 to 2019.

“Kathleen and Phil’s leadership during a period of unprecedented change in the energy industry has put New England on the path to a cleaner, more reliable grid. We are grateful to them both for their service in multiple roles on the board, their warmth and humanity, and their invaluable contributions to our organization and the region,” ISO-NE CEO Gordon van Welie said. “With her wealth of knowledge and experience, Cheryl is the perfect leader to build upon this foundation. We feel very fortunate that she has committed to help us, and the region, navigate the opportunities and challenges presented by the clean energy transition.”

The board has also announced the following committee assignments for the upcoming term:

  • Audit and Finance Committee: Michael Curran (chair), Steve Corneli and Catherine Flax
  • Compensation and Human Resources Committee: Roberto Denis (chair), Caren Anders, LaFleur and Vickie VanZandt
  • Information Technology and Cyber Security Committee: Mark Vannoy (chair), Brook Colangelo, Curran and VanZandt
  • Joint Nominating Committee: Colangelo (chair), Anders, Corneli, Curran, Denis, Vannoy and VanZandt
  • Markets Committee: Barney Rush (chair), Corneli, Curran, Flax and Vannoy
  • Nominating and Governance Committee: Colangelo (chair), LaFleur, Rush, Vannoy
  • System Planning and Reliability Committee: VanZandt (chair), Anders, Colangelo and Denis

With the elections of Anders, Corneli and Flax, plus the re-election of Curran, the board will have 11 members for one year. It will return to 10 when VanZandt retires in 2022. (See related story, ISO-NE Elects 2021 Board of Directors Slate.)

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NERC Standards Committee Briefs: Sept. 23, 2021

In a short meeting on Thursday, NERC’s Standards Committee agreed to appoint teams to draft standard authorization requests (SAR) for four upcoming standards projects.

Committee members voted to approve the NERC-recommended candidates for chair and vice-chair, along with members for the following:

Troy Brumfield, regulatory compliance manager at American Transmission Company, expressed concern about the relatively small team for Project 2020-02; NERC recommended only seven members, including the chair and vice chair. While NERC’s Manager of Standards Development Latrice Harkness reminded members that NERC has had SAR drafting teams with only seven members before, Brumfield, worried about a potential lack of diversity on the team, moved that the committee ask NERC to solicit industry for more nominees before moving ahead with the project.

“Maybe [we], as Standards Committee members and participants, could kind of dig into our companies a little bit and see if there’s any interest because … with five members on this drafting team, I think we might be lacking … what we need in terms of building a well-rounded SAR,” Brumfield said.

Chair Amy Casuscelli persuaded Brumfield to modify his motion to include accepting NERC’s nominees while sending out another solicitation; this compromise passed with no objections.

Charter Revisions Endorsed

Members then agreed to endorse revisions to the Standards Committee’s charter, the current version of which has been in place since 2019. The changes suggested by the committee’s Executive Committee include:

  • provisions for the departure of a committee member, other than formal resignation;
  • participation by the chair and vice chair in the Standing Committees Coordination Group, a recently formalized conference of heads of NERC’s standing committees;
  • training for new members;
  • process for filling vacancies in the Executive Committee; and
  • process for establishing subcommittees, working groups and task forces that is consistent with the Reliability and Security Committee.

With the endorsement of the committee, NERC staff will submit the revised charter to NERC’s Board of Trustees at its next meeting in November.

Casuscelli, Bennett’s Leadership Extended

Casuscelli, as well as vice chair Todd Bennett of Associated Electric Cooperative, gained the support of members for another two-year term, to begin Jan. 1, 2022, and end on Dec. 31, 2023.

Bennett and Casuscelli were both first elected in 2019 and began their terms the following January. (See NERC Standards Committee Briefs: 9-18-19.) Previously, Casuscelli served as vice chair for the 2018-19 term.

“This is certainly not the easiest thing I’ve ever done, but it’s also very rewarding, and it’s very educational, and so I appreciate your confidence in me,” Casuscelli said. “I also appreciate Todd very much as my vice chair; he’s been my voice of reason for the last couple of years, and I think we have a great partnership, and I’m happy to see that continue.”

Casuscelli also updated members on the committee’s meeting schedule for next year, including four in-person meetings scheduled in March, June, September and December. The June and December meetings are to be held at NERC’s headquarters in Atlanta, while venues have not been chosen for the other two. Casuscelli said the schedule is “very near final,” though the in-person aspect is more “tentative and fluid at this point.”

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California Governor Signs Climate, Wildfire, Energy Bills

California Gov. Gavin Newsom signed two dozen bills dealing with climate change, renewable energy and wildfire prevention on Thursday as he stood amid the smoke of the KNP Complex of wildfires burning in Sequoia National Park.

Newsom also touted billions in spending associated with the bills and this summer’s budget plan, which he signed in July. The governor and lawmakers have continued discussing specifics of the 2021-22 spending plan, most of which were included in a budget trailer bill, Senate Bill 170, that Newsom signed Thursday.

“Today’s signing represents about a $15 billion commitment to climate resiliency,” Newsom said during his announcement and press conference in the national park. “It’s an unprecedented investment by any state in U.S. history.”

Previous allocations and Thursday’s updates devote $1.5 billion to reduce the risk of wildfires by improving the health of forests and wildlands, including projects to create strategic fuel breaks, reduce forest fuels and harden at-risk communities against wildfires.

Newsom stood before a historic Sequoia National Park sign wrapped in foil to prevent it from burning in the KNP Complex.  | Calif. Governor’s OfficeThe budget and corresponding legislation allocate $5.2 billion toward drought response and water resilience, including for emergency drought relief projects, drinking water and wastewater infrastructure programs, and sustainable groundwater management.

“Climate change is making droughts more common and more severe,” a statement by the governor’s office said.

The spending package includes $3.7 billion over three years to bolster the state’s resilience against “multi-faceted climate risks, including extreme heat and sea level rise” and $1.1 billion over two years to support sustainable agriculture practices that reduce methane emissions from livestock and greenhouse gas emissions from agricultural equipment.

The state’s decision to spend a history-making $3.9 billion to boost adoption of zero-emission vehicles was also part of the spending spree, funded with billions of dollars in unexpected surplus revenue. The state plans to spend $2 billion for medium- and heavy-duty ZEV incentives and infrastructure and $1.2 billion to promote consumer adoption of zero-emission passenger vehicles. (See Calif. Earmarks $3.9B for ZEVs Through 2024.)

24 Bills Signed

Newsom signed a spate of policy-making measures Thursday in addition to the budget trailer bill.

The governor signed Assembly Bill 525, by Assemblyman David Chiu, instructing the California Energy Commission (CEC) to develop planning goals for offshore wind generation for 2030 and 2045 and to coordinate with state agencies to develop a strategic plan for OSW development, to be submitted to the legislature by June 2023. (See OSW, GHG Bills Go to California Governor.)

The Biden administration announced in May it plans to offer leases for the state’s first offshore wind areas — a 399-square-mile block off Morro Bay in Central California that could support 3 GW of wind generation and the Humboldt Call Area off Northern California, large enough for an additional 1.6 GW. (See BOEM to Offer Leases for Calif. Offshore Wind.)

Newsom signed SB 596, ordering the California Air Resources Board (CARB) to develop a strategy for decarbonizing cement production by July 2023 and to set a goal of achieving net-zero greenhouse gas emissions no later than Dec. 31, 2045.

“California is now the leader in driving decarbonization of the cement industry — a crucial material in the built environment, but one that accounts for 7% of all global greenhouse gas emissions and is one of the most challenging industries to decarbonize,” Sen. Josh Becker, the bill’s author, said in a statement Thursday. (See Challenges Loom for Decarbonizing Concrete.)

The CEC recently began looking more seriously at decarbonizing building materials as part of the state’s GHG reduction strategy. Cement production accounted for 1.8% of GHG emissions in 2017, according to CARB. (See CEC Targets ‘Embodied Carbon’ in Buildings.)

Newsom also signed the following measures:

  • AB 322, by Assemblymember Rudy Salas, requires the CEC to consider bioenergy projects for biomass conversion in its investment planning process for the Electric Program Investment Charge (EPIC) program.
  • SB 27, by Sen. Nancy Skinner, creates the California Carbon Sequestration and Climate Resilience Project Registry to maintain a list of eligible but unfunded projects, “which then may be funded by public or private entities in order to mitigate California’s greenhouse gas emissions and improve climate resilience,” a Senate analysis of the bill said.
  • SB 23, by Sen. Henry Stern, orders the CEC to submit to lawmakers an assessment by Dec. 31, 2023, of “firm zero-carbon resources that support a clean, reliable, and resilient electrical grid and will help achieve the existing statutory goal of ensuring renewable energy and zero-carbon resources supply 100% of all retail sales of electricity to California customers” by the end of 2045, a Senate analysis said.
  • SB 109, by Sen. Bill Dodd, creates the Office of Wildfire Technology Research and Development at the California Department of Forestry and Fire Protection (Cal Fire) to evaluate emerging firefighting technology.
  • AB 697, by Assemblymember Ed Chau, allows the state to plan and implement forest restoration projects on national forest lands through an expanded Good Neighbor Authority Program.
  • AB 9, by Assemblymember Jim Wood, establishes new state entities and officials charged with preventing wildfires. It creates the Regional Forest and Fire Capacity Program in the state Department of Conservation, establishes the position of deputy director of Community Wildfire Preparedness and Mitigation in the Office of the State Fire Marshal and transfers some fire safety duties from Cal Fire, which has its hands full fighting fires, to the fire marshal’s office.
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ISO-NE Elects 2021 Board of Directors Slate

ISO-NE announced the election of its four-person 2021 Board of Directors slate on Thursday, which will expand the board to 11 members for one year. 

Incumbent Michael Curran and newcomers Caren Anders, Steve Corneli and Catherine Flax comprised the slate elected to serve three-year terms starting Oct. 1. The new members will replace the retiring Kathleen Abernathy, the current chair, and Philip Shapiro.

The slate was nominated by the Joint Nominating Committee (JNC), a panel comprising seven current board members, NEPOOL’s six sector leaders and Massachusetts Department of Public Utilities Chair Matthew Nelson, representing the New England Conference of Public Utilities Commissioners. The NEPOOL Participants Committee also voted on the slate, which reached the required 70% support for endorsement.

“Caren, Steve and Catherine bring a wealth of diverse experience and knowledge to the ISO New England Board of Directors,” ISO-NE CEO Gordon van Welie said. “This experience and knowledge will be a benefit to all of New England as the region moves towards the clean, reliable grid of the future.”

While the election of the four-person slate pushes the board to 11 members, it will return to 10 when Vickie VanZandt retires in 2022. (See “Five Advance to Next Interview Round for Board Positions,” NEPOOL Participants Committee Briefs: May 6, 2021.)

Shapiro, according to the minutes from a July 21 executive session of the PC, said that the “exceptional quality” of the new candidates for the board and the significant turnover in membership looming in the next several years both made the effort of choosing three new candidates “extraordinarily challenging” for the JNC. As a result, waivers to the Participants Agreement to accommodate a four-person slate were approved by the PC.

Anders, Corneli, Flax Join; Curran Re-elected

A transmission expert, Anders, an executive adviser for Quanta Technology, works with utility clients. Her career includes leading Duke Energy’s transmission organization, overseeing 2,100 employees responsible for serving seven million customers. Before joining Duke, Anders served as vice president of transmission and substations at Exelon. She holds a bachelor of science degree in mechanical engineering from the University of Pennsylvania and an M.B.A. in finance from Drexel University.

Principal and owner of Strategies for Clean Energy Innovation, Corneli focuses on the efficient deployment of clean resources for a range of clients including think tanks, distributed energy technology companies and clean energy and environmental advocates. Before his consultant work, Corneli served as senior vice president of policy, strategy and sustainability at NRG Energy. He has also worked as a consumer advocate within the Minnesota Attorney General’s Office for seven years. Corneli holds a bachelor of arts from St. John’s College in Santa Fe, N.M., and an M.P.A. from the University of Minnesota’s Humphrey Institute, with a concentration in energy, environment, and technology policy.

This year, Corneli participated as a speaker during a wholesale market design technical forum organized by New England states. He said any successful energy market designed for rapid decarbonization would need to find efficient portfolios of complementary clean energy resources. (See NE States Considering Different Market Models.)

Flax is president of private investing at X Machina Capital Strategies, focusing on investments related to energy transition in the oil and gas arena. She is an economist who has worked as a senior executive in several investment banks’ energy, power and commodities businesses. Flax also served as global head of commodity finance at J.P. Morgan and managing director and head of commodities, Americas, at BNP Paribas during her career. She has also served on a range of industry and corporate boards and advisory boards. Flax holds a bachelor of science in economics and finance from Texas A&M University, and a master’s in economics from Brown University.

Curran joined the RTO’s board in 2019 after serving as chair of the MISO Board of Directors. Curran spent most of his career in the financial services and investment community, including the Boston Stock Exchange, where he was chair and CEO. Before joining the stock exchange, Curran was managing director and chief operating officer of Kemper Funds and International Mutual Funds for Zurich Scudder Investments. He is a graduate of Dickinson College.

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FERC, NERC Share Findings on February Winter Storm

FERC and NERC staff on Thursday presented a series of recommendations to prevent a recurrence of the February winter storm that led to unprecedented outages in the Midwest and left hundreds dead and caused billions of dollars in damages in Texas (AD21-18).

The joint inquiry team put much of the blame on a lack of gas supply that took more than 61 GW of power offline, calling for the electric and natural gas industries to strengthen their winter preparedness and coordination to prevent a recurrence.

FERC Chairman Richard Glick | © RTO Insider LLC“This subject literally is a matter of life and death,” FERC Chair Richard Glick said during the commission’s open meeting. Noting that state officials have acknowledged more than 200 Texans died during the storm and that a “significant percentage” died because of a lack of energy, he said, “In this day and age, we had people who froze to death because of power outages. That’s beyond unacceptable.”

Glick hearkened back to the 2011 winter weather event in Texas, which led to similar winterization recommendations.

“That recommendation was watered down to guidelines that few generators followed,” he said. “The biggest single reason [for the outages] was the vast majority of generators hadn’t winterized their facilities. I guarantee you that this time, FERC will not permit these recommendations to be ignored or watered down.”

NERC CEO Jim Robb joined Glick for a press conference after the meeting.

“I want to share [Glick’s] commitment … that this is not going to be a paper report that’s just going to sit on someone’s shelf and be valued because of the length of it and the weight of it,” he said. “We’re really going to be committed to putting this into action.”

Robb did throw a shoutout to ERCOT’s operators, who brought the grid back from the brink of collapse as they scrambled to meet record winter demand while dealing with a massive loss of generation. (See ERCOT: Grid was ‘Seconds and Minutes’ from Total Collapse.)

“I think it is impressive that the operator managed to not let the entire Texas grid collapse. That’s not much comfort to those without power for six or seven days, but I think there’s something to celebrate there,”  he said.

ERCOT had to make do without an average of 34 GW of generation Feb. 15-17, according to the inquiry, equivalent to nearly half of its all-time winter peak of 69.9 GW before it began to lose generation.

The study team said the storm led to the largest controlled firm load-shed event in U.S. history and the third largest loss of load, trailing only the August 2003 Northeastern blackout and the August 1996 West Coast blackout. More than 1,000 generating units in the Midwest experienced either an outage, a derate or a failure to start from Feb. 8 to 20.

The team laid much of the outages’ blame on freezing generator components and fuel-supply issues. The report said all fuel types were affected but that 57% of the 1,045 impacted generators were natural gas-fired units that primarily faced fuel-supply challenges.

Cold weather conditions on Feb. 15, 2021 | NOAA

Referring to comments from Texas politicians and others who pointed fingers at renewable resources, Glick said, “Today’s report makes it clear that the facts don’t support this rhetoric. This should make us rethink the current approach to assess when dispatchable generation should be available.”

The preliminary report makes nine key recommendations, including changes to mandatory reliability standards that build upon those developed in the wake of a 2019 joint inquiry into a prior cold weather event and recently approved by FERC. (See FERC Approves Cold Weather Standards.)

The recommendations include:

  • require generator owners to identify and protect cold weather-critical components;
  • build new or retrofit existing units to operate to specific ambient temperatures and weather based on extreme temperature and weather data;
  • take into account the effects of wind and precipitation in winterization plans;
  • create corrective action plans for generator owners that experience freeze-related outages; and
  • ensure the system operator is aware of the generating fleet’s operating limitations so that they can plan mitigation actions.

The preliminary report also recommends that generator owners be provided the opportunity for compensation and recovery of the costs of building or retrofitting to operate to a specific temperature, and that Congress, state legislatures and jurisdictional regulators require gas facilities to prepare and follow cold weather preparedness plans.

“We can’t allow this to happen again,” Glick said. “This time, we must take these recommendations seriously, and act decisively, to ensure the bulk power system doesn’t fail the next time extreme weather hits.”

Glick said the storm’s effects would have been much worse in SPP and MISO had they not been able to import power from PJM. He said ERCOT’s lack of interconnections with the other U.S. grids and its limited ability to import power was “unfortunate.”

“ERCOT is essentially an island unto itself,” Glick said, repeating a familiar expression among Texans who relish their freedom from FERC jurisdiction. “That is very short-sighted. That is nothing more than cutting off your nose to spite your face.”

The Texas Public Utility Commission is looking into strengthening its connections with the Eastern and Western Interconnections. ERCOT has also included an item to “assess the potential costs and benefits of increased transmission both internal and external to ERCOT and increase coordination with other power regions” in its 60-point roadmap to grid reliability.

“Changes are obviously needed to protect Texans from future winter weather events … and ERCOT is working closely with the PUC to aggressively implement [new state legislation],” ERCOT spokesperson Leslie Sopko said in an email. “We fully expect the report’s findings to complement the positive impact of the PUC’s market-redesign work sessions and our 60-point Roadmap to Improving Grid Reliability.”

Asked about ERCOT’s isolation and the PUC’s discussion of interconnections without involving FERC, Glick said he “couldn’t care less” about jurisdiction.

“All I care about is making sure that we don’t have a repeat of what happened last winter, which was tragic,” he responded, saying jurisdictional issues are for Congress to decide. “We just need to work with our friends at the PUC and other policymakers in Texas to encourage a greater level of interconnection. We can work out the concerns that they have about FERC jurisdiction; we can work that out down the road.”

The Texas Reliability Entity has scheduled a winter weatherization workshop Sept. 30 to review the cold weather standards and share best practices in preparing generators for severe winter weather.

“I appreciate the recommendations outlined within the report to improve grid reliability,” Texas RE CEO Jim Albright said in a statement. “We’ll continue to work with our stakeholders within the Texas Interconnection via outreach and training such as [the workshop].”

In an emailed statement, SPP spokesperson Meghan Sever said the RTO’s initial assessment of the preliminary findings and recommendations is in “strong alignment” with FERC’s.

“We’ve both determined that fuel-supply issues were at the heart of the reliability issues we experienced, that strong interconnections and effective communication helped to minimize the impacts of the storm, and that better coordination between the gas and electric industries is needed to mitigate the threats of similar events in the future,” she wrote. “We’re working hard to implement the recommendations that came from our own analysis and expect much of what we are working on to satisfy FERC and NERC’s recommendations.”

American Electric Power, a major player in the MISO and SPP markets, said it relies on the “collective reliability” of the combined fleet.

“Therefore, AEP supports the development of NERC standards that will assure that all generators in the regions are preparing for these conditions in a comparable fashion,” spokesman Scott Blake said in an email. “Similarly, we support efforts to improve the weatherization protection for the natural gas infrastructure, including having pipelines share the state of weatherization of their equipment with generators that may be adversely impacted.”

The inquiry team comprised nearly 50 staff members from FERC, NERC and its regional entities: Midwest Reliability Organization, Northeast Power Coordinating Council, ReliabilityFirst, SERC Reliability, Texas RE and WECC. The Department of Energy and the National Oceanic and Atmospheric Administration also contributed.

The final report is scheduled to be released before winter.

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Climate Alliance Governors Embrace ‘Friendly Competition’

States are “moving the needle” on climate change but must continue to challenge the federal government and each other, members of the U.S. Climate Alliance said Thursday.

“Local communities — states, provinces, cities, counties — we have the ability to be more ambitious than our federal … partners. Across the globe, we have the ability to act more quickly. We have the ability to be more innovative,” said Washington Gov. Jay Inslee during a discussion with New Mexico Gov. Michelle Lujan Grisham and Hawaii Gov. David Ige.

The governors lead three of the 25 states in the alliance, which was created in response to former President Donald Trump’s announcement that the U.S. would withdraw from the Paris Agreement. Alliance members commit to taking actions to meet the Paris Agreement’s goal of limiting global temperature increases below 1.5 degrees Celsius.

“We are moving the needle big time,” Inslee said during the session, part of the Climate Week NYC events. “We just need … to develop these relationships to encourage other governors, mayors and the like to join us … with specific commitments and actual things that can be implemented rather than vague, amorphous long-range kind of statements of intent.”

Inslee said the states in the alliance are engaged in “friendly competition.”

Clockwise from top left: Taryn Finnessey, U.S. Climate Alliance; New Mexico Gov. Michelle Lujan Grisham; Washington Gov. Jay Inslee and Hawaii Gov. David Ige. | U.S. Climate Alliance

“We want people to be inspired by us. When Michelle does something great in New Mexico that inspires me to up our game in Washington. When I do something here, it might inspire Gov. Ige.”

“We think this is going to bode well in Glasgow [the site of the COP 26 United Nations climate meeting]. We’re looking forward to it. This is the moment we don’t intend to waste.”

“We want to demonstrate what’s working in our states,” Lujan Grisham said. “We’re decarbonizing the utility sector. We’re working with the federal government and other states to decarbonize the transportation sector. We’ve got measures in place to decarbonize the agricultural sector. … Without the work by the other governors … I don’t have a platform to take to my legislature to implement. I can show that it works because it’s working in other states.”

Ige said his state’s ambition is beyond net-zero emissions, with a goal of being carbon negative by 2045. “We know that we need to sequester more than we put into the air if we’re going to ensure to keep the world from heating up beyond 1.5 degrees.”

Lujan Grisham predicted New Mexico’s geology and access to oil and natural gas will make it a “hydrogen hub,” using the fuel to decarbonize transportation.

“It’s quite likely that New Mexico is the first place in the country that converts a [fossil fuel] power plant to a hydrogen plant,” she said. “And as we do that, we will be doing carbon sequestration.

“I think those innovations will lend themselves to replication worldwide,” she added. “And I think we’re actually, potentially competing on that front with the [United Kingdom]. And that’s exactly how that should look. Those best practices will replicate themselves. And every time they do, they’ll be a little bit better, state to state, country to country, region to region.”

For his part, Inslee cited a Washington company that invented a silicon anode that it says could extend electric vehicle batteries’ capacity by 50% and another that has nearly completed the world’s first all-electric commuter airplane. “There are … hundreds of jobs in my state because of this,” he said.

“I know we’re concerned about how fast climate change is going, but we ought to be thrilled at the pace of job creation going on,” he added. “Look, the states in this Climate Alliance are the states with the fastest economic growth. And that’s not a coincidence; it is a cause of our economic growth.”

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Oil Majors Prepare to Produce Hydrogen

Policies calling for drastic reductions in CO2 emissions in the coming decades have transformed hydrogen from an oil refinery chemical to a top production priority for oil and gas companies.

In a push to stay relevant in a decarbonized future, major oil and petrochemical companies are scrambling to offer hydrogen as a fuel source to replace fossil fuels. Meanwhile, think tanks and universities are focusing on how to clean up hydrogen made from natural gas and bring down the price of “green” hydrogen made by using renewable energy to electrolyze water.

During a Reuters webinar Wednesday, hydrogen experts from London-based BP, Norway’s Equinor and Spain’s Repsol made clear that their companies are not about to be left behind if hydrogen becomes the fuel of the future envisioned by governments.

Shirley Oliveira, vice president of hydrogen services at BP, said her company wants to take a 10% share of clean hydrogen sales in core European markets by 2030.

“We think that hydrogen has a particular role to play in certain industrial sectors … that are hard to abate [for carbon] where they need concentrated high heat energy,” Oliveira said.  Hydrogen will also have applications in “heavy duty transportation” through the electrification of trucking and buses using on-board fuel cells, she added.

“We already produce a fair amount of gray hydrogen and have a lot of experience handling gray hydrogen,” Oliveira said, referring to the type of hydrogen produced with steam reforming of methane, which leaves behind CO2.

BP is looking at replacing gray hydrogen with “lower-carbon” — or blue — hydrogen, which would rely on technologies that capture and sequester CO2 in the production process.

“It’s also really important to help shape this market. We see it as a very dynamic. Helping to build demand is absolutely critical,” she said.

Henrik Andersen, vice president of low-carbon technology at Equinor, which supplies 25% of natural gas used in Europe, said the company has ramped up its carbon capture and sequestration (CCS) activities in the last three or four years.

“We want to supply our gas customers with a solution that enables them to meet a net-zero target — and that means CCS and hydrogen. In CCS, the ambition is to capture and store 15 to 30 million tons of carbon dioxide per year,” Anderson said.

Anderson said CCS is embedded in Equinor’s strategy as “one of our key strategic pillars.”

“We really see this as something where we can contribute because of competence and skills. … We are out in the market today with our natural gas products, and the future is really hydrogen,” he said.

Tomas Malango, hydrogen director at Repsol, said hydrogen is also one of his company’s key pillars for decarbonizing, and that Repsol hopes to contribute more to the development of green hydrogen than blue.

“We need to … [use] all the technologies available, look at which one is going to make the transition with the lowest cost for our society, and push technology development, which I think is something that can help us to move faster.

“When we’re talking about green hydrogen, essentially it’s a matter of the cost of energy [to electrolyze], which is 70- something percent of the total cost of the green hydrogen. I think the deployment of the renewable system to support green hydrogen is one of the challenges of green hydrogen deployment itself,” Malango said.

‘Lead Horse’

Also on Wednesday, the Energy Futures Initiative (EFI), a think tank established in 2018 by former U.S. Energy Secretary Ernest J. Moniz, released an 81-page study, “The Future of Clean Hydrogen in the United States.”

Based in part on private interviews with 72 U.S. companies, including investors, the energy industry and manufacturers, the report found broad interest in hydrogen both as a fuel for heavy trucks and as a substitute fuel for gas turbine-powered generation.

The report also reviewed the cost of hydrogen produced from natural gas as compared to hydrogen produced through electrolysis of water, using electricity generated either by wind and solar or nuclear power plants. About three-quarters of hydrogen produced today is from natural gas.

An earlier EFI report, released in conjunction with the AFL-CIO, noted that gray hydrogen, produced from natural gas, could become cleaner blue hydrogen if the carbon dioxide produced by the process were used in other industries or sequestered deep underground. The theme of a webinar that accompanied that report was blue hydrogen as a job creator (See Shale Gas Could Decarbonize Ohio River Industrial Valley Industry).

In introductory remarks at Wednesday’s EFI webinar, held as part of New York City’s Climate Week, Moniz noted that while hydrogen is now a “specialty chemical,” it will be “the lead horse in deep decarbonization” of the economy. It will also be studied as a fuel and as a method of long-term energy storage, he said.

“The reality is, today, we have many, many companies. Some publicly and some below the radar, engaging in hydrogen activities. We thought that a foundation for our future studies would be, in fact, to find out what these companies are thinking, where are they putting their money down, how are they seeing this value chain evolve,” he said, explaining the point of the study and Wednesday’s published report.

Jennifer DiStefano, a project manager and senior analyst for the study, said the interviews led to some new insights into emerging clean hydrogen markets.

“We found that there’s broad-based interest in developing hydrogen technologies across nearly every sector of the economy. Companies ranging from data centers, to cement makers, to transit agencies and traditional oil and gas companies are all exploring hydrogen applications, internally, while also sometimes seeking more ambitious projects through partnerships.

“Second, we found that many firms are developing strategies to repurpose existing assets to use hydrogen to help them move more quickly up the learning curve and also lower their costs,” she said.

DiStefano also noted that the Biden administration’s proposed $3.5 trillion infrastructure bill includes $8 billion over five years to help the industry develop four “hydrogen hubs,” including “a range of hydrogen production pathways.”

In other words, the Department of Energy would be funding projects producing hydrogen from water using renewable electricity, as well as other projects pulling hydrogen from methane and either sequestering the left-over carbon dioxide or finding new industrial applications to consume it.

As for replacing natural gas in pipelines as multiple companies were found to be investigating, DiStefano said the top limit of such blends is thought to be 20% hydrogen without damage to the pipelines.

She said several companies interviewed were developing “heavy-duty hydrogen vehicles” that could be commercialized soon. Those vehicles would include 18-wheeler long distance electric trucks as well as metropolitan electric buses powered with electricity generated by on-board fuel cells.

“Hydrogen offers a particularly compelling decarbonization option, according to our interviews, for fleets of medium- and heavy-duty vehicles, such as buses and long-haul trucks, due to its fast-refueling time and improved range over battery electric vehicles. And during the interviews, some companies were optimistic that buses could serve as a good foundation to strengthen the hydrogen market for heavy-duty vehicles since buses have the combination of high duty cycles and also the availability of public funding,” she said.

This rush to hydrogen — now energized by the upcoming COP 26 UN conference in Glasgow beginning Nov. 1 — accelerated in the U.S. early in the year with the Biden administration’s announced goals of reducing carbon emissions 50% by 2030 and reaching net-zero emissions by 2050. The DOE announced a hydrogen shot challenge in June. (See Granholm Announces R&D into Green Hydrogen as 1st ‘Energy Earthshot’.)

And the UN’s Climate Change 2021 Assessment issued in August made it clear that reductions in carbon emissions will be crucial to a livable planet. (See Too Late to Stop Climate Change, UN Report Says).

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FERC Approves PPL Acquisition of Narragansett

FERC on Thursday approved PPL’s purchase of Narragansett Electric in Rhode Island from National Grid for $3.8 billion, giving the Pennsylvania-based company a foothold in ISO-NE (EC21-87).

The commission found that the transaction would not have any effect on horizontal or vertical market power, nor would it have an adverse effect on rates. It made the latter determination over the protest of Rhode Island Attorney General Peter Neronha, who argued that PPL and Narragansett did not include enough information in their application. FERC did not directly address this argument, but it pointed to the companies’ five-year hold-harmless commitment as enough to satisfy its analysis of the deal’s impact on rates.

Neronha also protested the fact that the application did not contain information as to how PPL would continue to support Rhode Island’s climate goals, such as home energy-efficiency programs. FERC agreed with PPL that this was not relevant to the transaction. For its part, PPL said that Narragansett would continue to comply with state climate policies.

No other parties challenged any other aspects of the application.

PPL announced the deal in March, along with a separate, $11 billion agreement to sell its U.K. utility business, Western Power Distribution, to the London-based National Grid. (See PPL to Sell UK Business, Acquire Narragansett Electric.) Narragansett is the largest electricity transmission and distribution service provider in Rhode Island, as well as a natural gas distributor, serving about 780,000 customers.

PPL said it expects to complete the transaction by March 2022. It still needs approval from the Rhode Island Division of Public Utilities and Carriers. In its application with the agency, it had asked that a final order be issued by Nov. 1, in time for when heating demand ramps up in the state.

“We’re pleased with FERC’s decision, which puts us one step closer to concluding an acquisition we believe will drive significant value for Rhode Island families and businesses and strengthen PPL,” CEO Vincent Sorgi said in a statement. “As we await final approval, we look forward to partnering with Narragansett Electric’s talented team to deliver energy safely, reliably and affordably to Rhode Island customers.”