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November 13, 2024

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SERC Board of Directors Briefs: Sept. 23, 2021

Awareness of Risk from Extreme Weather

Extreme weather poses a significant risk in the SERC Reliability region, according to a presentation from Maria Haney, the regional entity’s manager of situational awareness and events analysis, who provided an update on Hurricane Ida and an overview of the bulk power system.

Ida, which struck Louisiana as a Category 4 hurricane on Aug. 29, caused 210 transmission line outages and left 1.184 million customers without power in Louisiana, Mississippi and Alabama.

“We recognize that these storms have devastating impacts on the power system and the community,” Haney said. “During extreme weather events, we know it is critical for the industry — from government agencies to the ERO Enterprise to registered entities within our [footprint] — to coordinate with the impacted entities throughout the days of restoration.”

Haney said that SERC is working with stakeholders to promote awareness by offering forums on extreme weather events, discussing trends and lessons learned, and offering resources such as checklists that show best practices.

“Although we are at the peak of the hurricane season,” Haney said, SERC is promoting winter weather readiness. It has already held several webinars in August and September, and NERC had an alert to survey agencies to prepare for the upcoming season.

“We’ve seen an increase in cold weather events over the last several years. So we plan to have that be an ongoing activity in our program,” Haney said. “We do plan to modify cold weather standards that will come out, including the release of the February cold weather inquiry report [from FERC and NERC] in November.” (See related story, FERC, NERC Share Findings on February Winter Storm.)

Erixton Nominated to Board

The board approved the nomination of Ricky Erixton, vice president of electric systems for the Jacksonville Electric Authority in Florida, to a two-year term as a municipal sector representative.

Erixton replaces Robert McGarrah, general manager of the city of Tallahassee’s electric and gas utility, who retired in June before the end of his term. Erixton was the only nominee to replace McGarrah, so the sector election was able to be conducted by email ballot. He was approved by a majority of the municipal sector, and there was no opposition.

Upcoming Meeting Schedule

The next board meeting is scheduled for Dec. 15, and it will be a hybrid event, with both WebEx and in-person attendance in Charlotte, N.C.

SERC President and CEO Jason Blake said he wants to be “optimistic” about the in-person component. However, if the mask mandate for indoor spaces in Mecklenburg County, where Charlotte is located, is still in effect come December, Blake added that SERC would “probably revisit” the in-person meeting and go completely virtual.

The meetings for 2022 are scheduled to be in-person gatherings, for now:

  • March 30 in Savannah, Ga.
  • June 23 in Charlotte
  • Sept. 22 in Charlotte
  • Dec. 14 in Charlotte
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Boston City Council Approves Enforceable Building Emissions Standard

The Boston City Council on Wednesday unanimously passed an amendment to its buildings ordinance that establishes an enforceable emissions performance standard.

“We are going to decarbonize our large buildings over the next 25 years, full stop,” acting council President Matt O’Malley said during the council’s meeting. “Beginning in 2025, and following every five years thereafter, through this ordinance we’ll be setting aggressive but achievable metrics … for buildings to reach a substantial cut in their greenhouse gas emissions.”

The Building Energy Reporting and Disclosure amendment (BERDO 2.0) updates the city’s original reporting ordinance from 2013 by expanding the number of covered buildings and setting fines for noncompliance of $150 to $300/day, depending on building size.

“We’re going to work to make sure that all of the work is centered around equity, equality, addressing environmental justice communities and working with the institutions to get it right,” O’Malley said.

BERDO 2.0 establishes an Emissions Review Board, two-thirds of which will comprise members nominated by community groups. It also establishes an Equitable Investment Fund for emission-reduction projects that benefit environmental justice populations in Boston.

The Massachusetts Sierra Club applauded the council’s decision.

“It’s past due time for the biggest buildings in Boston to be held accountable for their pollution and required to take significant action to reduce their impact,” Michele Brooks, Boston community organizer for Sierra Club, said in a statement.

O’Malley said during the meeting that he expects acting Mayor Kim Janey to sign the ordinance.

“We are going to begin cutting 37 million metric tons of GHG emissions over the next 30 years,” he said. “This ordinance affects 4% of our total building stock; that’s 3,500 buildings, yet those 4% of buildings account for nearly 60% of all building emissions.”

Emissions

Under the new standard, buildings will have to comply with emissions standards on an annual basis according to their classification and measured in metric tons of carbon dioxide equivalent (CO2e) emissions per square foot.

Manufacturing and industrial buildings, for example, must not exceed 23.9 kg of CO2e/square foot/year through 2029, and the allowance reduces gradually to 3.2 kg for 2045-2049. All covered buildings must reach zero emissions by 2050.

Buildings equal to or greater than 20,000 square feet, 15 units but less than 35,000 square feet or 35 units do not have to comply with the standards until 2031. Buildings under 20,000 square feet are not covered by the ordinance.

Owners can mitigate emissions by purchasing renewable energy certificates and securing renewable energy power purchase agreements. They also will have the option of making a compliance payment that the ordinance initially sets at $234/kg CO2e. The compliance payment amount will be reviewed every five years.

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Southwest Gas Facing Regulatory Hurdles in Securing RNG

Southwest Gas is facing regulatory barriers to increasing its renewable natural gas purchasing despite a goal set by the Nevada legislature to raise the amount of RNG in public utility portfolios.

Southwest Gas, which is a major gas provider in the state, is asking the Public Utilities Commission of Nevada (PUCN) for authority to buy renewable natural gas without going to the commission for approval of each individual RNG purchase.

But PUCN staff have recommended that the commission deny the application. The RNG market is still in its early stages, and Southwest Gas could become locked into a long-term contract with fixed or escalating prices, PUCN staff said.

“The proposed purchase authority could not only negatively impact the company’s financials, but also harm its ratepayers,” Yasuji Otsuka, manager of the Resource and Market Analysis Division for the PUCN, said in written testimony.

PUCN staff have recommended that the commission require Southwest Gas to seek approval for any RNG contract of three years or longer.

In addition, staff recommended that Southwest Gas be required to file a report by the end of 2023 regarding the company’s RNG activity as well as the status of the RNG market in Nevada and elsewhere.

PUCN held a hearing on the Southwest Gas proposal on Sept. 13. The next step is for PUCN staff to write a proposed order regarding the application, which the full commission could vote on. A date for full commission review has not been set.

Flexibility Sought

Southwest Gas said the purchasing authority is needed to give the company flexibility as it tries to meet a goal of 3% RNG in its portfolio by January 2035.

Nevada’s 2019 Senate Bill 154 set the 3% RNG target for natural gas utilities, with interim targets of at least 1% by January 2025 and 2% by January 2030.

Southwest Gas is seeking purchasing authority for up to 3% of its projected 2035 sales; under the company’s proposal, it would need to return to the commission for approval of any RNG purchases above that amount.

Southwest Gas said some RNG facilities produce relatively small amounts of renewable gas each day. Therefore, the company may need to make many small purchases of RNG to meet the targets.

“Obtaining the commission’s approval for short-term agreements, which can take up to 180 days after filing of the company’s application, is inefficient and will likely lead to RNG suppliers being unwilling to sell RNG to Southwest Gas because of the lengthy approval process,” John Olenick, director of gas supply at Southwest Gas, said in written testimony.

In other cases, Southwest Gas might be working on an agreement with an RNG provider that hasn’t yet built production facilities. Those suppliers would also be looking for a speedy purchase commitment so they could move forward with financing and construction.

If Southwest Gas is granted RNG purchasing authority without the need for PUCN review of individual purchases, costs and prudency of the purchases would instead be reviewed during annual rate proceedings.

This could result in rate proceedings that are “unnecessarily complicated and contentious,” Otsuka said.

The proposed RNG purchase authority “provides only alleged but not proven benefits and may result in more RNG purchases than necessary while involving speculative activities,” Otsuka said.

In addition, Otsuka said, Southwest Gas is proposing to skip the 1% and 2% milestones set by the legislature for RNG procurement and “leap” to the 3% target set for 2035.

That’s in contrast to the legislature’s “gradual and stepwise approach,” which was possibly a recognition of “the nascent stage of the RNG industry and market,” he said.

Second Attempt

Southwest Gas first filed its request for RNG purchasing authority in January. The commission rejected the proposal, saying the company hadn’t shown that the RNG purchases would have environmental benefits as required by SB154.

The company filed a revised application in May, proposing to buy only RNG that is eligible for D3 or D5 credits under the federal renewable fuels standard program.

The program classifies fuels based on their feedstock. D3 fuels are considered “cellulosic,” and feedstocks include corn stover, wood chips and biogas, according to the Environmental Protection Agency. D5 is the “advanced biofuel” category, with feedstocks including sugarcane, biobutanol and bionaptha.

The categories also include a minimum reduction in greenhouse gas emissions over the lifecycle of the fuel. The reductions for D3 and D5 fuels are at least 60% and 50%, respectively.

With its commitment to buy only D3- or D5-eligible RNG, “the company’s proposed RNG activity could provide environmental benefits relative to fossil fuel alternatives to the state,” Otsuka said.

Environmental groups remain unconvinced that RNG purchased by Southwest Gas would have environmental benefits.

Dylan Sullivan, a senior scientist with the Natural Resources Defense Council, said that the EPA classification system for biofuels does not require that RNG produced at specific facilities be analyzed on an ongoing basis for amounts of GHG reduction.

And the federal program assesses greenhouse gas emissions of biofuels relative to gasoline, Sullivan said in written testimony on behalf of NRDC, the Sierra Club and Western Resource Advocates.

“‘Sixty percent better than gasoline’ is insufficient given Nevada’s policy of reducing methane emissions and reaching zero or near-zero GHG emissions by 2050,” he said.

Arizona Attempt

Southwest Gas applied to the Arizona Corporation Commission for approval of a similar RNG program, with a 1% RNG target in 2025, 2% in 2030, and 3% in 2035. In a December order, the ACC denied the request.

“We find that there are too many unknown variables associated with RNG to support the adoption of the proposed RNG program at this time,” the commission said in its decision. “We note that the proposed RNG program involves a high-risk, speculative activity, and we do not believe it would be appropriate to pass the associated risks and costs on to ratepayers.”

The commission also ordered staff to open a generic docket on the role of RNG in Arizona and schedule at least one workshop on the topic. ACC held an RNG workshop in May.

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Overheard at the NECA Fuels Conference

Oil and gas companies are turning to renewable gas, green hydrogen and biofuel as a pathway to cutting emissions in the transportation and building sectors while retaining existing infrastructure.

But deep energy efficiency retrofits coupled with building electrification via heat pump and induction cooktops is the central solution to decarbonizing buildings, said Ben Butterworth, senior manager of climate and energy analysis at the Acadia Center. He spoke at the Northeast Energy and Commerce Association’s (NECA) Fuels Conference on Sept. 22.

The conference brought together policy experts from stakeholder organizations, such as Acadia, oil and gas companies Enbridge and Shell Oil, and utilities Eversource and National Grid, to discuss the benefits and challenges of green hydrogen.

Zeyneb Magavi, co-executive director of the Home Energy Efficiency Team (HEET), presented the alternative of using geothermal heat pump networks for clean home heating and cooling.

Following is some of what we overheard at the event.

New England utilities, such as Eversource and National Grid, are in the process of approving and siting locations to test HEET’s geothermal energy technology. Companies such as Enbridge and Shell Oil are investing in renewable natural gas or green hydrogen to reduce emissions while using existing natural gas infrastructure.

Green hydrogen is created by splitting water into hydrogen and oxygen in an electrolyser using electricity powered by renewable energy.

“It’s going to take multiple pathways to achieve decarbonization,” said Steve Elliott, director of business development for Enbridge. “I think we really need to consider leveraging the best attributes of molecule-based energy like gas.”

However, green hydrogen faces steep challenges, which inhibits a widescale rollout. There is a 20% to 40% energy loss in the electrolysis process and green hydrogen-based, low-temperature heating systems consume 500% to 600% more electricity than heat pumps, making it much less cost-effective, Butterworth said.

Pure hydrogen is a five times more potent greenhouse gas than carbon dioxide when it is released directly into the atmosphere via leaks, and it leaks out of pipes more easily than natural gas because the molecules are smaller, Butterworth said.

“We don’t have time for the green hydrogen economy to develop,” he said. “We need action now.”

As an alternative to hydrogen, Magavi’s GeoBlock concept, also known as a geothermal district, could use existing natural gas rights-of-way to heat and cool buildings. The GeoBlock is a system of networked ground-source heat pumps with a shared ambient temperature loop that delivers cooled or heated water to customer buildings. A heat pump in the building pulls heating or cooling off the supply loop, and geothermal boreholes in the right-of-way maintain the temperature of the system.

“If we are going to meet our emissions mandates, and do it without raising customer bills,” the GeoBlock is a solution that is “ready to do that now,” she said.

Thermal energy can be deposited in bedrock for storage and removed, in part, a year later, helping to make geothermal energy distribution systems highly cost-effective, Magavi said. European installations of similar shared loop systems without boreholes report 30% to 40% energy savings because they allow the utility to move excess or waste thermal energy across space and reuse it, according to HEET.

Adding boreholes to the shared loop allows the utility to store excess or waste thermal energy for reuse, whether it’s wind energy at night that is used the next day or heat in the summer used the next winter.

“If installed by a utility and amortized over time as gas pipes are, the GeoBlock is projected to deliver heating at a lower cost than gas,” Magavi said.

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Concerned Massachusetts Farmers Speak Out Against Dual-use Solar

The agricultural commission in Northampton, Mass., a town with prime farmland in the Connecticut River Valley, opposes a new bill that would open up agricultural lands for solar incentives.

Solar development would be allowed on those lands under the bill (S590), as long the area continues to be used for agricultural purposes.

Fred Beddall, a full-time commercial farmer for 24 years in Northampton, said during a Sept. 22 hearing on the bill that a nearby town’s dual-use solar experiment didn’t work, and he doesn’t want to see the approach continue across the state through the bill.

The town of Northfield approved a 3-acre dual-use sheep farm on prime farmland, “and this is what we don’t want to see happen in Northampton because sheep pasture in general is a very low-value use of farmland,” Beddall said. But the farms were forced to convert to sheep pastureland because the plants did not grow productively under solar panels that were mounted 8 feet off the ground.

The amount of money farmers would make is about $15,000 in sales per year, Beddall testified. The rich soil is more profitable for farmers to grow crops, with a half-million dollars coming from about 80 acres of land, he said.

Already, thousands of acres of Massachusetts forests and farmlands have been developed for ground-mounted solar arrays. A Mass Audubon study found that almost a quarter of the land developed in the state over the past few years has been turned into solar farms, and meeting the state’s renewable energy targets could require clearing up to an additional 150,000 acres.

Climate scientists have recently pointed to the fact that undeveloped land and farmland have helped reduce global warming as carbon sinks, but if they continue to be developed, the atmosphere will warm faster than current climate modeling accounts for.

Turning farmland into sheep pasture also destroys local food systems and the jobs that go with it, Beddall said. People who benefit the Supplemental Nutrition Assistance Program in Massachusetts also rely on locally grown food in the state as part of their assistance.

“We think the whole dual-use policy needs to be seriously re-examined,” Beddall said. “It’s making a big mistake to take prime farmland and turn it into low-value sheep pasture.”

Pine Gate Renewables is also testing the use of solar panels on cranberry bogs as well as irrigation ponds in Carver, Mass.

Another bill (S571) under consideration in the Massachusetts legislature would create a commission to determine how farms can be best used to combat climate change, such as through composting.

“Composting benefits the climate in a few different ways, including by reducing GHGs at landfills by promoting the uptake of carbon dioxide in the leafy vegetation,” said the bill’s sponsor, Sen. Ed Kennedy (D), at the legislative hearing.

Composting diverts organic materials from landfills, where they could break down and be admitted into the atmosphere as methane, and puts it to use as fertilizer to promote healthier soil and growth of plants on the farms.

“This legislation would examine the roles our farms, and farmers can play in helping to keep carbon levels low and slow the impact of climate change in the state,” Kennedy said.

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New York City Unveils 15-year, $191M OSW Plan

New York City Mayor Bill de Blasio on Thursday announced a 15-year, $191 million plan to make the city a manufacturing and staging center for the offshore wind industry.

The city’s Economic Development Corporation (EDC) developed the Offshore Wind Vision plan to help meet the state’s goals of 100% clean electricity by 2040 and carbon neutrality by 2050, hoping to create more than 13,000 jobs and generate $1.3 billion in average annual investment.

“New York City is stepping up to confront the climate crisis with bold action,” de Blasio said in a statement. “Investing in our offshore wind industry isn’t only a win for our planet, it also means thousands of new jobs and affordable, clean power for New Yorkers. This plan will have a dramatic impact on our fight against climate change and will help set us on the path towards a clean energy future.”

The plan focuses on sites and infrastructure, business and workforce, and research and innovation. The city committed to developing infrastructure to support construction and operation of offshore wind farms, and promoting efforts to build, stage, install and maintain wind turbines.

In addition, the EDC will make offshore wind a priority public-private investment area through its Public-Private Impact Initiative Request for Expressions of Interest (RFEI), and it will launch an offshore wind–focused accelerator, according to the plan.

The plan will “reduce emissions while creating good green jobs,” said U.S. Senate Majority Leader Charles Schumer (D-NY). “The mayor has long understood the way transforming our energy system will drive our economy to new heights.”

The South Brooklyn Marine Terminal (SBMT) is being transformed into a world-class OSW port to be operated by Equinor, developer of the 1,260-MW Empire Wind project. Equinor will establish a $5 million fund to ensure that low-income communities, people of color, and New Yorkers from environmental justice communities reap benefits from the new investment. (See NY Builds OSW Ports in Brooklyn, Albany, Long Island.)

Activities at SBMT will include a 30% participation goal for minority- and women-owned business enterprises (M/WBE), and any future site development will also contain a goal of at least 30%, according to the plan. To further support M/WBEs, the city will invest in a program that provides education, networking and resource support to businesses with an interest in offshore wind.

“We have the infrastructure in place to create wind manufacturing hubs right here in Brooklyn, such as South Brooklyn Marine Terminal, the Brooklyn Navy Yard, and the Red Hook Container Terminal,” Brooklyn Borough President Eric Adams said in a statement.

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PJM MRC/MC Preview: Sept. 29, 2021

Below is a summary of the issues scheduled to be brought to a vote at the PJM Markets and Reliability Committee and Members Committee meetings on Wednesday. Each item is listed by agenda number, description and projected time of discussion, followed by a summary of the issue and links to prior coverage in RTO Insider.

Markets and Reliability Committee

Consent Agenda (9:05-9:10)

B. Stakeholders will be asked to endorse revisions to the Regional Transmission and Energy Scheduling Practices document. The document was endorsed at the Market Implementation Committee meeting Sept. 9. (See “Energy Scheduling Practices Revisions Endorsed,” PJM MIC Briefs: Sept. 9, 2021.)

Endorsements/Approvals (9:10-10:40)

1. Energy Price Formation Charter (9:10-9:25)

Members will be asked to approve revisions to the Energy Price Formation Senior Task Force (EPFSTF) charter. Votes will be taken on the original proposal and a second with proposed amendments from Exelon.

2. Natural Gas and Electric Markets Issue Charge (9:25-9:40)

The committee will be asked to approve the proposed issue charge and review the problem statement related to natural gas and electric market coordination. Dominion Energy said the problem statement and issue charge were the result of continued concerns over the misalignment between the natural gas and electric markets. (See “Natural Gas and Electric Markets Issue Charge,” PJM MRC Briefs: Aug. 25, 2021.)

3. Market Suspension (9:40-10)

Stakeholders will be asked to endorse the proposed solution and Operating Agreement revisions to address rules related to market suspension. PJM said the revisions are designed to provide clear business rules in the RTO’s markets to account for a market suspension where it cannot clear or produce market results. (See “Market Suspension,” PJM MRC Briefs: Aug. 25, 2021.)

4. Initial Margining Solution (10-10:40)

Members will be asked to endorse a proposed solution and tariff revisions from work done in the Financial Risk Mitigation Senior Task Force (FRMSTF) to address rules related to initial margining. The work is one of the last significant changes resulting from the GreenHat Energy default. Upon endorsement of a proposed solution, the committee will also be asked to approve the sunset of the FRMSTF in an additional vote. (See “Initial Margining Solution,” PJM MRC Briefs: Aug. 25, 2021.)

Members Committee

Consent Agenda (1:40-1:45)

B. The committee will be asked to approve proposed revisions to Manual 34: PJM Stakeholder Process addressing photography in meetings and media guidelines. The changes resulted from feedback by members and discussions at the Stakeholder Process Forum. (See “Manual 34 Revisions,” PJM MRC/MC Briefs: July 28, 2021.)

C. Stakeholders will be asked to endorse proposed revisions from the Governing Document Enhancement and Clarification Subcommittee (GDECS) addressing administrative changes and clarifications in the tariff and OA. PJM said the revisions were found to be “simple and noncontroversial enough” that they were reviewed one time at the GDECS, receiving unanimous stakeholder support. (See “Consent Agenda Manual Endorsements,” PJM MRC/MC Briefs: July 28, 2021.)

D. Members will be asked to endorse proposed revisions to address making cure periods uniform across the tariff and OA. PJM said appropriate cure periods defined in section 15.1.5 of the OA were originally updated in that document, but not in section 7.3 of the tariff, which involves provisions limited to transmission service customers. (See “‘Know Your Customer’ Tariff Changes,” PJM MRC Briefs: Aug. 25, 2021.)

E. The committee will be asked to endorse proposed revisions to address making the definitions of working credit limits uniform across the tariff. The revisions eliminate duplicative definitions of “working capital limit” and leave it only in the definitions section of the tariff.

Endorsements (1:45-2:15)

1. PJM Administrative Rates (1:45-2)

Stakeholders will be asked to endorse the proposed solution and tariff revisions related to PJM administrative rates. The RTO is asking for endorsement after a first read to conduct a rate filing to FERC by Thursday and have a target effective date of Jan. 1, 2022.

2. Nominating Committee Elections (2-2:15)

Members will be asked to elect the sector representative nominees for the 2021-2022 Nominating Committee. The nominees include: Brian Vayda, executive director of the New Jersey Public Power Authority (Electric Distributors); Mike Gahimer of the Indiana Office of Utility Consumer Counselor (End-Use Customers); John Brodbeck, senior manager of transmission at EDP Renewables North America (Generation Owners); Bruce Bleiweis of DC Energy (Other Suppliers); and Jim Davis, regulatory and market policy strategic adviser for Dominion Energy (Transmission Owners).

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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.)