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April 26, 2025

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NYISO’s Firm Fuel Proposal Criticized by Market Monitor

NYISO’s market monitor claims the ISO’s firm fuel capacity accreditation proposal would incentivize generators to rely on inferior types of firm fuel service that could undermine the winter reliability benefits of firming up. 

“The current tariff is enforced through documentation, the need to obtain agreements that commit to firm fuel obligations,” said Pallas LeeVanSchaick, vice president of Potomac Economics. “The NYISO proposal fundamentally changes the obligation … by switching to something with a performance-based rule.” 

The NYISO proposal asks that generators elect as firm or non-firm roughly 16 months in advance of the capability period they are electing for. The proposal requires that generators electing firm notify the ISO they have secured firm contracts by Dec. 1 of the capability year.  

Generators that elect firm need to have fuel supply, transportation and replenishment strategies in place by the December deadline to ensure they can operate 56 hours over a consecutive seven-day period during the winter. Failure to perform during the capability period could result in sanctions. 

LeeVanSchaick said in a presentation April 9 to the Installed Capacity Working Group (ICAP WG) that NYISO’s current proposal creates an incentive for generators to rely on “inferior types of firm fuel service” to qualify as firm. That’s because of the way it interacts with the natural gas import infrastructure.  

During most periods, “firm” gas used by generators is made available on the system through capacity release, LeeVanSchaick said. Capacity release is the reselling of firm fuel rights to another entity. These can be pre-arranged for set terms of time.  

“Most of the gas that’s available during winter is mostly a function of capacity release,” LeeVanSchaick said. “It’s not something that’s going to be available under all circumstances.” 

During the worst winter periods, more generators are called on, reducing available fuel. If more generation is called on than there is natural gas available, then they must rely on fuel injections at the LNG ports in New Brunswick and the Boston area. These periods are infrequent. Most generators, LeeVanSchaick said, don’t bother coming up with firm fuel transportation contracts. 

“A performance-based penalty doesn’t provide a very strong incentive to do this,” LeeVanSchaick said. “You’re sort of relying on generators to ignore their incentives.” 

LeeVanSchaick said the purpose of firm fuel capacity accreditation is to try to incentivize generators to have capacity for infrequent conditions. He said it requires either verification of firm fuel and transport contracts on the front end, which the NYISO proposal does not do, or extreme penalties to make a violation too risky.   

He proposed levying an additional firm fuel penalty on any generator that notifies the ISO of failure to contract by Dec. 1. For generators that are discovered to have not informed the ISO of a failure to get firm fuel contacts in place, he recommends a financial sanction and FERC referral. He also recommended moving the deadline up to March before the capability period.  

Representatives of the generator sector took issue with this analysis, saying there were penalties beyond the firm fuel sanction that they would be exposed to if they misrepresented how firm their fuel was. Specifically, misrepresenting how firm a contract was already could get a generator in trouble with FERC for a tariff violation.  

“I think the concern you raised is that this (getting firm fuel) is not a black-and-white behavior and therefore the ISO should allocate penalties,” said Mark Younger of Hudson Energy Economics. “I think if we’ve got issues that need to be evaluated where it’s not black and white, that FERC is the appropriate place to do that.” 

Younger said he was more comfortable with the clarity of the ISO proposal and there was nothing in it to prohibit the ISO from asking generators what they did to secure a firm resource.  

Doreen Saia, chair of the energy law practice at Greenberg Traurig LLP, said she wasn’t comfortable with a system that forced generators to declare they could lock down fuel supplies 15 months in advance, combined with a penalty if they couldn’t secure a contract because of market reasons.  

“It’s like having a cop on a road seeing a car go really fast and not know if it went 70 or 90 and therefore not know what kind of ticket it should get,” Saia said. “I think that’s a FERC question and FERC should decide whether any additional penalty should be required or not.” 

NYISO staff attending the working group disappeared during the lunch break to confer in private on the MMU proposal and the discussion it generated. They came back with an ellipsis.  

“We’d like to get any additional feedback or thoughts on the proposal that was put forward today,” said Shaun Johnson, vice president of market structures for NYISO. “We’ll take that feedback, process it and consider our next steps going forward.”  

Zack Smith, senior manager capacity and new resource integration market solutions for NYISO, said they would move “rapidly” with their considerations.  

Julia Popova, chair of the ICAP WG, asked about the timing of NYISO returning with an answer. The ISO is running out of time to file with FERC and avoid jostling the current Aug. 1 deadline.  

Smith said the ISO would return “soon” but didn’t provide a clearer timeline.  

“The message is clear. Stay tuned,” Popova said.  

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NY Energy Summit: Making the RAPID Act Live up to its Name

ALBANY, N.Y. — Speeding up the construction of new transmission and other energy infrastructure is a recurring topic of conversation each year at the New York Energy Summit.

The 2025 edition of the Infocast event included standard complaints and constructive criticism, but there also seemed to be more progress to report than in some years.

The April 7-9 Energy Summit fell shortly before the one-year anniversary of the Renewable Action Through Project Interconnection and Deployment Act.

The RAPID Act expanded the powers and responsibility of the Office of Renewable Energy Siting, in hopes ORES could create for major transmission proposals some of the same streamlining it has done for proposed large-scale renewables: a standardized and expedited permitting process that can override local authority if needed.

Recently appointed ORES Executive Director Zeryai Hagos brought the audience up to speed on the work of what officially now is the Office of Renewable Energy Siting and Electric Transmission but still is known as ORES.

“We’ve got a much larger volume of transmission projects that we already know exist and are coming, and we have many, many more that are going to get approved by the [Public Service] Commission, I think, in the coming years, as the [Coordinated Grid Planning Process] begins to develop its first real big slate of projects at the end of next year,” he said.

“And so primarily the purpose of the RAPID Act was to ensure that we could keep moving at the pace necessary to achieve the climate goals and not let transmission be a barrier.”

Hagos recalled coming to New York in 2019 and discovering what everyone else discovers: It was a slow and expensive place to build generation and transmission.

U.S. Rep. Daniel Goldman | © RTO Insider

Long-running efforts to address this have been complicated by events at the local and global level. Hagos recalled several such events during his tenure in New York:

Later in 2019, the state passed its landmark climate law, with statutory requirements that will radically increase the amount of electricity used in New York and radically decrease the amount of greenhouse gases emitted. (And radically increase the amount of generation and transmission capacity needed.)

In 2020, the COVID pandemic altered energy use patterns as people began to stay at home.

In 2022 and 2023, global supply chain and cost factors eviscerated New York’s portfolio of contracted clean-energy projects, likely making the first target of the climate law — 70% renewables by 2030 — unreachable.

Marguerite Wells, Alliance for Clean Energy New York | © RTO Insider 

Now in 2025, Hagos said, federal policy changes could actively thwart New York’s energy agenda, or make it more expensive to achieve, or both.

Interconnection queues are crowded and permitting reviews can be slow anywhere in the nation, not just in New York.

U.S. Rep. Daniel Goldman (D) focused on federal sluggishness in his remarks. “We really need to continue to streamline the process of getting clean energy up and running and on the grid. We need permitting reform,” he said, calling out specifically the irony of environmentally beneficial renewables being subject to the lengthy and rigorous reviews originally designed for environmentally unfriendly fossil fuel projects.

Max Luke, National Grid’s director of transmission and wholesale market policy, said the utility is optimistic about changes wrought by the RAPID Act as well as by FERC orders 1920 and 2023, and will work with NYISO and other stakeholders to continue refining the process.

The draft regulations promulgated through the RAPID Act are not complete — public comments are being accepted through April 18 — so their exact impact remains to be seen, Luke added.

Joel Thomas, AES Corporation | © RTO Insider 

“But National Grid is hopeful that that they will expedite transmission development considerably,” he said. “We’re faced with needing to build a lot more transmission in the state for a whole bunch of reasons, but a lot of that is driven by the state’s public policy objectives.”

ORES is not a magic bullet. It was intended to streamline the permitting process and limit the ability of local governments to stand in the way of policy goals, but it is not “drill, baby, drill,” a rubber stamp or a carte blanche. The application process is rigorous and complex, the pre-application process can take longer than the application process, and local opinion still matters.

One after another, developers, advocates and officials speaking at the summit warned against scrimping on community outreach or ignoring public opinion when pursuing energy projects.

Boralex public affairs manager Zack Hutchins said public outreach is even more important in the ORES era.

“The ORES structure has been extremely helpful as far as providing certainty and helping with timelines and all of that,” he said. “One of the unfortunate side effects of it has been that it’s created this tension between developers and local officials who feel that they don’t have a say.”

Max Luke, National Grid | © RTO Insider 

Boralex gets feet on the ground early and often when it is advancing a project, Hutchins said.

“And if we can prove that we provide value and that we can answer questions that [local officials] receive from angry citizens, then that gives us a leg up when it comes time to actually move into the development phase, the construction phase and then the operation phase of these various projects.”

Joel Thomas, who leads East Coast development for the AES Corporation, said a developer that waits until the permitting process to start pitching the project to the community has waited too long and can find themselves being reactive to people who already have made up their minds.

Alliance for Clean Energy New York Executive Director Marguerite Wells also emphasized proactive outreach. “You should be having dozens and dozens of community meetings before any public decisions get made,” she said.

Wells warned that the various streamlining efforts that ORES, NYISO and other New York entities are making are not simple changes:

Zack Hutchins, Boralex | © RTO Insider

“The promise and the challenge of the revised approach to managing the queue is that it’s going to deliver us projects out the other side that have been fully vetted in a much shorter period of time, but it is more expensive, and it requires a higher level of rigor going in and a higher level of financial commitment on the part of the developers throughout the process.”

As the one-year anniversary of the RAPID Act nears and the comment period on its draft regulations ends, ORES is trying to balance the many demands and expectations placed on it.

New York does not speak with one voice: It is a deep blue state by population but a heavily red state by geography. The red areas often are prime targets for energy development; some of them resent that fact and resent that ORES can override their objections.

More than 200 comments have been submitted about the RAPID Act draft regulations (24-M-0433), ranging from it being another dictatorial power grab to ORES not going far enough to shorten the permitting and pre-permitting processes.

“We recently extended the comment period because many stakeholders just thought that this was such a substantial change, and there was so much happening in the regulations,” Hagos said.

“We understand that there is a tradeoff between having really, really strong environmental protections and making sure we do it right, and also time — time and feasibility.”

And that provides a hint about a likely theme of conversation at the 2026 New York Energy Summit: How can we tweak New York’s permitting just a little further, and how can we assuage local discontent just a little more effectively?

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MISO: DR to Face More Stringent Testing by 2026 Capacity Auction

CARMEL, Ind. — MISO said its next capacity auction in spring 2026 will feature more rigorous testing for its demand response that registers to provide capacity. 

The grid operator said it will discontinue its practice of allowing its demand resources to provide hypothetical, mock tests as a performance indicator, except where state regulations might allow, for the 2026/27 Planning Resource Auction. 

The end of mock testing follows MISO enforcing stricter registration requirements ahead of the 2025/26 capacity auction offer window, which ran March 26-31. (See Following DR Exploitation, MISO Announces Stiffer Requirements Before Capacity Auction.) Taken together, the more unyielding rules are a response to five recent instances of disciplinary action from FERC regarding companies allegedly misrepresenting their demand response in MISO’s capacity auctions. (See Voltus Agrees to $18M Fine to Settle DR Tariff Violations in MISO.)  

“There are concerns about the mock test, how it’s being used and the information around it,” MISO Market Design Economist Joshua Schabla said during a Resource Adequacy Subcommittee meeting April 9. “Frankly, it’s something we’re uncomfortable with.”  

Schabla said at times, mock tests are “little more than a function in an Excel file.”  

MISO said all demand resources that plan to provide capacity beginning in June 2026 should be prepared to prove their capabilities via actual demand reductions to at least 50% of their stated seasonal values or down to a firm service level, if they specified one. Tests that show less than a 100% result need to be backed up with documentation explaining why a full reduction wasn’t possible.  

MISO said it wasn’t foreclosing the possibility that mock tests won’t ever be allowed among its demand response fleet in the future. So far, the testing requirement would apply only to the 2026/27 capacity auction.   

Schabla said MISO plans to require a real test of its load-modifying resources (LMRs) once per year. The tests can be completed on the resource owner’s time and would count as one deployment. MISO’s LMRs currently are bound to deploy if necessary five times apiece in the summer and winter and three times apiece in spring and fall. 

Erik Hanser, of the Michigan Public Service Commission, said the new testing requirements won’t give resource owners much time because real power tests for the 2026/27 planning year begin in summertime up until LMR registration for the 2026/27 Planning Resource Auction begins Dec. 15.  

Schabla said MISO has not called LMRs since December 2022. The three-year downtime provides further justification that it’s time for LMRs to make a demonstration of their abilities, he said.  

“We need to see something positive, that this demand resource is real and can perform to requirements. … We need to see that it can do what we’re paying it to do,” Schabla said.  

MISO Independent Market Monitor David Patton said terminating the mock test practice is critical because the IMM has noticed mock test results submitted from LMRs with reduction levels that are “difficult to believe.” He said in some cases, LMRs appeared to fail a real power test and then decided to conduct a mock test instead. Patton said at this point, MISO likely is hosting and paying several megawatts of LMRs that either aren’t real or can’t achieve what they say they can.  

Patton said it’s “entirely fair” for MISO to provide notice now that it will enact stricter testing requirements, even if it doesn’t yet have FERC approval to end mock testing. He said LMRs should use the time to prepare for actual testing.  

Patton said MISO’s proposed 50% benchmark testing is “far too lax.” MISO pays LMRs too much to accept a 50% performance, Patton argued.  

“We’re going to continue to talk to MISO and stakeholders about that dimension of this proposal,” he said. 

MISO to Allow LMR Capacity Substitutions

MISO also said it will permit load modifying and demand response resources to replace their auction-cleared capacity with other, uncleared capacity in the event they’re unable to deliver promised load reductions. The change would also take effect in the 2026/27 planning year auction.  

MISO allows its more traditional resource types to replace zonal resource credits, but that allowance doesn’t extend to demand response resources and LMRs. In MISO, resources’ accredited capacity values are converted to zonal resource credits that are used in auction trading.  

MISO said it will allow LMRs to make similar, limited replacements if: the end-use customers it contracted for reductions must terminate contracts; regulations prevent the LMR from performing; or a change in ownership occurs in an end-use facility that the resource was banking on to shrink load. For behind-the-meter generation registered as LMRs, MISO said a planned outage longer than 31 days or a catastrophic outage would present the opportunity for replacements. 

MISO said in all cases, it may require documentation or evidence.  

Schabla said resources “must have a good reason to replace” and must be prepared to explain their situations to MISO and the IMM.  

MISO staff said they intentionally drafted narrow criteria for replacement conditions so auction commitments remain binding, and market participants don’t have a route to avoid obligations.  

Some stakeholders have said MISO’s replacement proposal is encouraging and will be helpful if facilities close and zonal resource credits need to be replaced. 

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IMM Praises MISO for Fewer Out-of-market Actions

CARMEL, Ind. — After years of its Independent Market Monitor critiquing MISO for making too many out-of-market actions to tame congestion, the IMM congratulated the RTO for dramatically reducing such actions over this winter’s sustained cold.

Speaking at the Market Subcommittee’s meeting April 10, IMM Carrie Milton said MISO operators’ manual actions for congestion management fell dramatically over the winter. She said despite record peak loads over the winter, MISO trusted its markets more and paid minimal uplift payments. (See MISO: Better Preparations Clinched Winter Storm Operations.)

The IMM has long advocated for the MISO control room to allow market-based interventions rather than operators making what it calls inefficient, out-of-market actions to manually redispatch or cap generation output.

By the IMM’s count, MISO operators ordered just 42 manual redispatches and generation caps over winter 2025, compared to 769 in winter 2024 and 1,236 in winter 2023 that the IMM previously cataloged.

“It almost looks like we’re missing data,” Milton said of the IMM’s striking graph comparing the instances of actions in winter 2023, 2024 and 2025. Milton called it a “very impressive result.”

Milton said MISO has worked to make better data available and has congestion management guidelines among control room operators.

Stakeholders asked if the IMM believed that the minimal out-of-market actions could be an enduring trend.

An illustration of the contingency reserve shortage on Feb. 19 | Potomac Economics

Milton said she thought MISO can reduce its extraneous actions in the long run, even if actions outside of the market tick up during spring. She said maintenance outage season combined with volatile spring weather and high wind likely will lend itself to more out-of-market interventions March through May.

“We understand if we don’t see the same result in the spring quarter,” Milton said.

Finally, Milton advised the MISO operations team to put more trust into its look-ahead commitment tool to call up units. If control room operators had followed the tool’s recommendation to procure and committed an additional 905 MW around 7 p.m. ET on Feb. 19, they could have avoided a contingency reserve shortage that day, Milton said. MISO committed only 450 MW, she said.

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FERC Issues Order 1920-B Upholding States’ Role in Cost Allocation

FERC issued Order 1920-B on April 11, denying rehearing requests on its previous iteration that mostly sought to overturn requirements that transmission planners file cost allocation methods agreed on by state regulators and that they are consulted on future reforms. 

Order 1920 gave states in a planning region six months to work on a cost allocation methodology, but it declined to require that they be filed by the ISO/RTO or other planning entity. That changed with Order 1920-A, which did require any agreed-upon cost allocation methods to be filed. 

Edison Electric Institute, WIRES, and some regional transmission owner groups argued in separate rehearing requests that forcing transmission owners to file state cost allocation methods, even if they disagree with them, intrudes on their filing rights under the Federal Power Act’s Section 205. That part of the law gives public utilities unilateral and exclusive filing rights to propose rates, terms and conditions of service that essentially places FERC in a reactive role. 

But FPA Section 205 is complemented by Section 206, which provides FERC with the authority to modify any existing rates after a finding that they are unjust, unreasonable or unduly discriminatory. 

A group of MISO transmission owners argued that the requirement to file state agreements disrupts the balance set by those two sections of the law — “allowing FPA Section 206 to usurp FPA Section 205,” the order said. 

“The compliance filings required by Order Nos. 1920 and 1920-A are a tool to implement the commission’s authority under FPA Section 206 and do not implicate public utilities’ rights and obligations under FPA Section 205,” FERC said. 

FERC issued Order 1920 and 1920-A under a Section 206 process that it initiated, which included a finding that its existing regional planning and cost allocation rules were unjust and unreasonable. The submission of compliance filings assists in implementing FERC’s authority under Section 206. 

“The express text of FPA Section 206 does not provide public utilities with statutory filing rights with respect to the just and reasonable replacement rate following a finding that existing rates are unjust, unreasonable, or unduly discriminatory or preferential,” the order said. “Rather, the authority to ‘determine the just and reasonable rate, charge, classification, rule, regulation, practice or contract to be thereafter observed and in force’ is vested in the commission, and — in commission-initiated proceedings under FPA Section 206 — the commission must find that the replacement rate it determines and fixes meets the statutory criteria.” 

The law does not preclude FERC from requiring transmission providers to file state cost allocation methods. And just because a public utility has to file a compliance filing does not transform that into a Section 205 filing. 

“A contrary conclusion would fail to recognize and give effect to the distinct and express statutory authority afforded to the commission in FPA Section 206, which arises pursuant to specific statutory findings and which, once triggered, is subject to different requirements than FPA Section 205 filings,” the order said. 

While Section 205 does give public utilities exclusive filing rights, when considered in the correct statutory context the arguments that require them to file state cost allocation agreements are not persuasive. 

“FPA Section 205 is not implicated by these aspects of Order No. 1920-A, and arguments to the contrary conflate compliance filings to assist the commission in implementing its authority under FPA Section 206 with public utilities’ rate filings under FPA Section 205,” the order said. 

Part of the debate goes to a court case from Atlantic City where FERC tried to require public utilities to cede their Section 205 filing rights to an RTO (PJM in the court case). The court found that FERC could not deny utilities statutory rights given to them by Congress. 

Order 1920 does not remove those filing rights, because the requirement to file state cost allocation agreements falls under FERC’s authority to set a replacement rate under Section 206. 

Transmission owners also made arguments that imposing the state filing requirements goes against the Administrative Procedures Act. FERC responded that given how important state engagement is to getting large, regional transmission lines built, it makes sense to ensure they have meaningful participation in the process. 

“The commission found that the additional requirement would allow it to better evaluate whether transmission providers have complied with Order No. 1920’s requirement to provide a forum for negotiations that enables meaningful participation by relevant state entities during the engagement period,” the order said. 

A group of PJM transmission owners argued the requirement goes against the First Amendment to the Constitution by compelling speech. 

“Order No. 1920-A imposes no actual burden or limitation on transmission providers’ speech but instead requires nothing more than the attachment of one or more files, containing the information provided by relevant state entities, to transmission providers’ compliance proposals under FPA Section 206,” the order said. 

Another item that transmission owners filed for rehearing was the requirement that regional planners consult state regulators before amending long-term cost allocation arrangements, making similar arguments about the FPA. 

FERC disagreed again, saying the consultation requirement does not regulate Section 205 filing rights but rather addresses the practices through which cost allocation methods are developed, which is tied to the likelihood such lines actually get built. 

“In Order No. 1920-A, the commission determined — and we here sustain — that requiring transmission providers to consult with relevant state entities will provide an opportunity for state input, which ‘has the potential to minimize additional costs and delays in the siting process and to facilitate the development of long-term regional transmission facilities,’” the order said. 

One area where FERC did tweak Order 1920 was to clarify that regional transmission plans can consider the needs of non-jurisdictional utilities if they voluntarily agree to pay their fair share under regional cost allocation.  

The National Rural Electric Cooperative Association and transmission owners in the WestConnect regional planning area argue the previous language could be interpreted to ban any planning around non-jurisdictional utility needs. 

If a non-jurisdictional utility has not voluntarily enrolled in a transmission planning region, its needs cannot be addressed. But if they have signed up for a region, then they can as long as the compliance filing can show FERC there is no free ridership issue.

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FERC Sustains Order Rejecting Expanded Susquehanna Co-located Load Arrangement

FERC sustained its rejection of amendments to the Susquehanna nuclear plant interconnection service agreement (ISA) to increase the amount of power serving a co-located data center (ER24-2172).

The changes sought by Talen Energy would have increased the scale of the Amazon Web Services data center operating behind the fence of Susquehanna from 300 MW to 480 MW. That was rejected by the commission on Nov. 1 on the grounds PJM had not demonstrated the proposal was “necessary for any interest unique to the interconnection of the Susquehanna customer facility.” (See FERC Rejects Expansion of Co-located Data Center at Susquehanna Nuclear Plant.)

The April 10 rehearing order defended the commission’s earlier finding that the proposed ISA amendments were not based on “specific reliability concerns, novel legal issues and unique factors” as demonstrated by it being based on PJM’s generally applicable guidance document for co-located configurations. While the RTO since has rescinded that document, the commission noted that portions of the proposed amendments to Susquehanna’s ISA mirrored the guidance and comments debating the proposal referred to it repeatedly. The rehearing order argued that allowing a standardized practice to be the basis of ISA language that does not conform to the pro forma interconnection service agreement (ISA) would weaken the commission’s necessary standard.

In its request for rehearing, Susquehanna said the commission’s rejection was not based on the unique configuration Talen sought, but rather that it could create a precedent for other resources that would not be reflected in the pro forma ISA. The company argued that being the first of its kind is not a valid reason for denying the application.

The commission wrote that reliance on the guidance document “raised the question of whether PJM intended to offer certain terms to all similarly situated interconnection customers.”

“Creating a requirement that the commission wait for a pattern to emerge before rejecting a non-conforming provision, as Susquehanna requests, would meaningfully weaken the necessary standard and meaningfully increase the possibility for disparate treatment that the necessary standard is designed to diminish,” the commission wrote.

Susquehanna also argued that reliability concerns “haunt” the rejection order despite PJM stating that necessary studies had not identified any issues with the configuration.

In the rehearing order, the commission wrote the study findings are not relevant to the rejection order, which hinged on a determination that PJM had not shown that the non-conforming language was necessary.

Vistra requested the commission clarify whether its rejection establishes a blanket limit on amending ISAs to co-locate data centers. If the intention was to hold that such amendments are not appropriate, Vistra said the underlying issues should be outlined so Susquehanna could refile without those provisions and others could do so as well. The commission responded that the rejection order does not prejudice any future co-located load configurations.

Phillips Dissents

The rehearing order was approved on the same lines as the original rejection, with Commissioners Mark Christie and Lindsay See in support and Willie Phillips dissenting. Commissioners David Rosner and Judy Chang did not participate.

Phillips wrote that he’s hopeful the commission’s order that PJM show cause investigating whether PJM’s tariff is just and reasonable without language addressing co-located load will allow such configurations to proceed. He repeated arguments he made opposing the original rejection that data centers represent an “era defining technology” that requires regulatory leadership. (See FERC Launches Rulemaking on Thorny Issues Involving Data Center Co-location.)

“Notwithstanding my disagreement with these orders’ rationale and determination, I remain hopeful that the Commission’s recently issued order … will soon result in solutions to address what I regard as unnecessary roadblocks to the continued maturing of an industry that is vital to our economic prosperity and national security,” Phillips’ dissent on the rehearing order said.

PJM’s response to the show cause order said more FERC guidance is needed on how the RTO should allow co-located configurations to proceed and laid out several possible pathways. It also noted challenges that remain unsolved, such as how to account for ancillary services the RTO maintains are consumed by co-located loads and whether protective schemes can be adequate for preventing the load from inappropriately taking energy from the grid. (See PJM Responds to FERC Co-located Load Investigation.)

Proponents of co-location have argued that in some instances the load should be considered separate from the wholesale grid and should not be charged for services such as regulation and black start.

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Urgent EDAM Congestion Revenue Issue ‘Will Take Time’ to Address

The complex issue regarding congestion revenue allocation in CAISO’s Extended Day-Ahead Market (EDAM) continues to raise questions and cause some confusion for market participants, with a market expert reviewing possible solutions at an April 8 Western Energy Markets Governing Body meeting.

The issue is whether certain congestion revenues should be allocated to the balancing area in which the congestion costs accrued, or to the neighboring EDAM balancing authority area where the transmission constraint is located, specifically in cases in which parallel — or loop — flows occur.

In March, CAISO launched an “expedited” initiative to address stakeholder concerns. The ISO plans to release a full proposal on the issue in the coming week. (See Fast-paced Effort will Address EDAM Congestion Revenue Issue.)

Under current EDAM market rules, Open Access Transmission Tariff (OATT) customers in one BAA will end up paying costs for congestion for parallel flows caused by binding transmission constraints in neighboring BAAs, CAISO market expert Susan Pope noted during the meeting. This requirement could make a system and its transmission users carry the costs of unexpected congestion.

OATT point-to-point (PTP) service is awarded without fully accounting for parallel flows, while management of infeasible OATT schedules today requires approaches such as curtailment of non-firm service and out-of-merit redispatch by the impacted BAA to manage congestion, Pope said.

“These congestion charges only occur when there are flows over binding constraints and the amount of the charges reflect the cost of managing the congestion on those constraints,” Pope said. “So, if the cost of managing the congestion isn’t that big, the charges aren’t going to be that big.”

There is strong justification for charging OATT customers for EDAM congestion costs, because the charges are tied to the marginal cost of redispatch to manage congestion on the binding constraints impacted by the OATT schedule, Pope added.

At an April 2 meeting on the subject, Anna McKenna, CAISO vice president of market design and analysis, also disputed the contention that EDAM’s existing congestion revenue framework is inherently flawed. (See EDAM Congestion Debate Builds Even as CAISO Moves to Address Issue.)

However, Pope said the ISO could address stakeholder concerns by redesigning EDAM to include an avenue for OATT customers to more fully hedge or otherwise manage EDAM congestion cost charges.

More specifically, EDAM could adopt use of congestion revenue rights (CRRs), which would provide OATT customers with a hedge against EDAM congestion charges. But the market design does not include CRRs, and CAISO would need to address core issues prior to including them, Pope said. Introducing CRRs would require new rules to establish transmission capability for CRRs while also enabling cost recovery for transmission service providers, she said.

In many RTOs and ISOs, such as NYISO, PJM, MISO and CAISO, OATT transmission reservations were infeasible when modeled, according to Pope’s presentation. Furthermore, RTOs with CRRs have required lengthy stakeholder processes to design the market rules for converting existing OATT service arrangements into CRR allocations, Pope said.

Despite these challenges, introducing CRRs for hedging EDAM congestion costs would “likely enable more efficient scheduling and decrease the cost of serving EDAM load,” Pope said. “But it will take time to design and implement CRRs when agreed upon by EDAM participants.”

In the meantime, a transitional approach is needed to address concerns about OATT transmission customers’ potential undue exposure to charges for parallel flow on binding constraints in other BAAs, Pope said.

One transitional solution is to enable PTP customers to “opt out” of EDAM settlements, which could allow them to avoid congestion charges under all grid conditions, such as by self-scheduling rights before or after EDAM without paying congestion charges, Pope said. But this approach could reduce efficiency and customer cost savings from EDAM and make it more difficult to maintain system reliability during stressed system conditions.

More Work Ahead

WEM Governing Body member John Prescott said the parallel flow congestion issue is “a very thorny problem.”

“But I appreciate the fact that everybody is rolling up their sleeves and, I hope, working in earnest to solve this problem,” Prescott said.

At the meeting, Alan Meck, principal market design analyst at Pacific Gas and Electric, asked if CAISO could break down the pros and cons of each possible solution to the matter.

“I think that I’m following this presentation, but it’s been kind of difficult,” Meck said. “It would be really helpful, I think, if you could add one additional slide synthesizing EDAM design pros and cons and where all of these different issues shake out.”

Pope reminded attendees that a good solution to the issue “is probably one that doesn’t make anybody happy.”

“If everybody’s complaining about something, that might be a good solution,” Pope said. “There’s a lot to gain by solving this problem. I just wanted to encourage everybody to sort of work together, be realistic and try to craft solutions.”

CAISO is on track to publish a full proposal on the topic on April 14, spokesperson Jayme Ackemann said. Whether the CAISO Board of Governors will vote on the proposal at its May meeting is still under consideration, she said.

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Robb: NERC Working with DOE on Energy Orders

NERC is examining a series of energy-focused executive orders issued by the White House in a “whirlwind week” for their impact on grid reliability, CEO Jim Robb told the ERO’s Member Representatives Committee in a conference call April 10. 

President Donald Trump signed the orders April 8, seeking to keep existing coal-fired plants open and strengthen grid reliability and security by requiring the Department of Energy to conduct an assessment identify regions with reserve margins “below acceptable thresholds,” and weaken state and local governments’ ability to regulate energy utilities. (See Trump Seeks to Keep Coal Plants Open, Attacks State Climate Policies.)  

The president also released a proclamation that coal plants be exempt from the latest iteration of EPA’s Mercury and Air Toxics Standards to ensure they are not prematurely closed. 

Speaking at the MRC’s April Informational Session, held in advance of the MRC and Board of Trustees’ May open meetings, Robb said NERC and DOE are “still digesting” the executive actions. He added that NERC staff were meeting with DOE “as we speak” to see how the ERO can assist with the reliability assessment. 

DOE must complete the assessment within 30 days of the order’s issuance and release it on the department’s website within 90 days. In addition, Energy Secretary Chris Wright must establish a process to regularly assess the assessment’s methodology, along with any analysis and results produced, and “a protocol to identify which generation resources within a region are critical to system reliability.” 

Robb noted that work is underway in Congress on “a fairly similar” bill that would require FERC to use material from NERC’s Long-term Reliability Assessment to “look at how to address the resource adequacy challenges that [NERC has] been flagging for a number of years.”  

While Robb acknowledged “there’s more uncertainty than certainty around these” recent events, he told members they indicate “profound changes in direction for energy policy” in the U.S. He emphasized that NERC is “in the mix” with FERC and DOE to determine the best way to meet Trump’s directives. 

Robb also told members that NERC has been conducting conversations with the regional entities on enhancing the ERO’s reliability assessments by incorporating additional metrics and other means. He suggested the administration’s moves “may put a little bit more urgency in us moving down the path of renovating those assessments.” 

Trustee Ken DeFontes observed that Trump’s executive orders have revealed a public awareness of energy reliability issues that surprised him. He told members about a recent community meeting he attended in Maryland about a proposed transmission line project for the generation planned to replace the Brandon Shores and Wagner plants. The stations, which are fired by coal and oil respectively, were slated for closure until their operator Talen Energy reached an agreement with PJM earlier in 2025 to keep them operating while the transmission was built.  

“You can imagine the community was not very happy about [the new transmission]. What’s interesting is, one of the ladies got up and said, ‘Well, I understand President Trump just issued an executive order mandating that coal plants not be shut down. So if we can get that through, then the plants will stay in business, and we don’t need the transmission line,’” DeFontes said. “She was just somebody from the community. I was surprised; the word’s getting out.” 

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PJM, Alphabet Partnering on AI Tools to Speed Interconnection

PJM and Alphabet on April 10 announced a partnership to develop a suite of new tools using artificial intelligence to speed the RTO’s generation interconnection process. 

Amanda Peterson Corio, head of data center energy at Google, said grid planners face an explosion in the number of new service requests they have received, straining their ability to process applications. Google sister company X Development is leading the initiative to build on its Grid Planning Tool and Grid Aware software to create a streamlined work environment PJM can use to more quickly bring new generation onto the grid at a time when the RTO is sounding alarm bells about future resource adequacy.  

The planning tool has been deployed in Chile to simulate the grid 20 years into the future with hourly granularity, while Grid Aware uses visual information from sources like Google Maps to facilitate inspections and identify where repairs may be needed. 

“This initiative brings together our most advanced technologies to help solve one of the greatest challenges of the AI era: evolving our electricity systems to meet this moment,” Corio said. “We see the opportunity to help secure America’s electricity needs with the many resources seeking to provide energy to the grid and believe this work with PJM is a great catalyst for innovation across the United States.” 

The sluggish pace of new entry is one of three contributors to a potential capacity deficiency that PJM has identified in the 2029/30 delivery year, alongside generation deactivations and ballooning load largely fueled by data centers. Executive Vice President of Operations, Planning & Security Aftab Khan said the RTO’s shift to a cluster-based approach to studying interconnection requests is allowing it to more expeditiously work through its backlogged queue, but it still will take about two years for projects to go through the process. Integrating more artificial intelligence into those studies can add more efficiency and quality to studies, he said. (See PJM Reaches Milestone on Clearing Interconnection Queue Backlog.) 

“Innovation will be critical to meeting the demands on the future grid, and we’re leveraging some of the world’s best capabilities with these cutting-edge tools to further reduce completion times for new service requests,” Khan said. “PJM is committed to bringing new generation onto the system as quickly and reliably as possible.” 

Renewable developers and consumer advocates have pointed to PJM’s interconnection queue as a central obstacle to getting clean energy onto the grid and allowing generation owners to respond to high capacity prices. In a complaint filed at FERC, Pennsylvania Gov. Josh Shapiro (D) argued for a lower maximum capacity price on the grounds the new generation cannot respond to price signals sent by upcoming Base Residual Auctions. PJM has defended the process, saying more projects are clearing the queue but are becoming mired in other issues challenging development, such as supply chain constraints and permitting requirements. (See PJM Presents Capacity Price Cap and Floor to Members Committee.) 

Page Crahan, general manager of X’s electric-oriented Tapestry, said a core challenge grid operators face is information being siloed across disparate information streams and tools, an environment she said could be streamlined through using Google’s expertise in data management to create a unified model of the grid, pulling together the output of existing tools to create a “knowledge graph.” She said the name Tapestry was chosen to represent the goal of creating a platform that can stitch together the fragmented elements of the grid. 

Speaking during a press conference ahead of the announcement of the partnership, Crahan said one area that could be improved by adding AI is processing PDF applications submitted by generation owners with new projects. Assessing the information in those files creates a bottleneck in the study process, where planners have to consult multiple tools, models and datasets when modeling how a new generator may impact existing equipment. She also gave the example of using AI to aid in validating information provided in interconnection applications; rather than planners having to refer to multiple documents to determine whether the land rights are associated with the correct builder, she said Tapestry software could sift through those files. 

Tapestry already has partnered with system operators across the globe, including developing “near real-time grid virtualization” software to simulate AES’ distribution grids in Ohio and Indiana, as well as advanced inverter technology working with Australia’s Commonwealth Scientific and Industrial Research Organization. 

Crahan said Chile’s National Electric Coordinator (CEN) has deployed the Grid Planning Tool to allow planners to simulate its grid 86% faster, allowing 30 times the number of scenarios to be run. Google’s DeepMind software also has improved CEN’s weather forecasting for wind. 

Unlike those other projects, Crahan said the work with PJM will be the “first of its kind” to integrate AI into the modeling interconnection study process of a large grid coordinator. X is aiming to deliver the first tools to PJM in 2025, she said. 

In response to questions on how the effort to speed interconnections may interact with President Donald Trump’s executive order April 8 seeking to ease regulations on coal generation, Khan said PJM is fuel agnostic and will welcome any resource that can improve reliability. He added there are many factors that can impact the viability of coal, including the growth of gas generation. (See related story, Trump Seeks to Keep Coal Plants Open, Attacks State Climate Policies.) 

Corio said Google remains dedicated to its climate goals and will continue to seek clean energy sources that can provide firm capacity. She specified that coal is not a clean technology under that framework. 

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ACP Road Map Suggests Market Changes to Increase Storage Participation

The American Clean Power Association on April 8 released a report produced by The Brattle Group laying out how organized markets can replicate the success CAISO and ERCOT have had in deploying energy storage resources. 

The “Energy Storage Market Reform Roadmap” includes detailed changes for the energy, capacity and ancillary services markets, with individual “road maps” for MISO, NYISO and PJM guiding how to grow storage in their territories. 

The report and road maps focus on those grid operators because they have “opportunities for market reform,” their states are pursuing decarbonization, and they have a mix of central planning and market-based investment. 

CAISO and ERCOT have shown that with updated market rules, energy storage delivers substantial value and complements both thermal and renewable generation to help meet reliability needs. 

“Energy storage technologies add a new dimension of flexibility and efficiency to our electric grid,” ACP Vice President of Energy Storage Noah Roberts said in a statement. “Energy storage has proven to boost reliability and lower energy costs. In Texas, the state added 5 GW of energy storage in one year, eliminating calls for customers to reduce electricity use during historic summer heat, stabilizing the grid through volatile winter storms, all the while delivering more than a billion dollars in energy cost savings. This road map outlines actionable steps to better utilize energy storage to deliver reliable and affordable power across the United States.”  

Before FERC issued Order 841 in December 2020 to open up the RTOs to energy storage, the resource faced barriers to participation in the markets, which were designed around the attributes of other generators. Where the organized markets have encouraged deployment and removed barriers, storage has helped prevent blackouts and reduced pressure on customers during tight operating conditions on the grid, while delivering cost savings, ACP said. 

One of the areas the report and road maps focus on is the need to replace retiring generation while maintaining reliability and meeting growing demand in many parts of the country. Storage can help replace the reliability services retiring generation provided while keeping a lid on high capacity prices, ACP said. 

Many generators were planned to support local transmission needs, especially when they were built in load pockets. Retirements will continue to trigger transmission violations, and some of those are too localized for capacity markets to solve. 

The industry’s historic answer for those situations is to build transmission, and sometimes to keep power plants running with out-of-market, reliability-must-run contracts while that is built. But storage, or non-wires alternatives, can contribute to solving those issues at lower costs to consumers, the paper says. “RTOs should identify solution(s) that lead to the lowest costs for ratepayers when procuring reliability solutions out of market.” 

Some RTOs, including PJM, do not consider non-wires alternatives for retiring generators. Others do, but they are rarely picked because of a lack of comprehensive benefit-cost analysis, which is exacerbated by the short notice period between the solicitation date and required online date, the report says. 

On average in PJM, RMRs have cost $300/MW-day, which is well above the market clearing prices in the long term of $100/MW-day, according to the paper. Studies have shown the benefits of competitive solicitations both in transmission infrastructure procurement and generator procurement, it says. 

Energy storage — especially long-duration and multiday — may be able to resolve both transmission security constraints and provide flexibility value to the grid, the report argues. 

The report highlights how CAISO oversaw a process to replace the 165-MW Oakland gas plant that announced its retirement in 2016. The ISO picked Pacific Gas and Electric’s Oakland Clean Energy Initiative, which included some transmission upgrades, storage and demand response that met the need at a lower cost than transmission or generation solutions alone. 

It also pointed to NYISO’s efforts to replace the dual-fuel Narrows and Gowanus plants that were slated for retirement this year. The plants are to be replaced by the Champlain Hudson Express Line to bring hydropower down from Quebec. That line is on track for an operation date of May 2026 but potentially could be delayed until 2027. 

NYISO identified a short-term reliability need and issued a competitive solicitation for a solution, but none of the responses could solve it in time. Recently, NYISO said the peaker plants will still be needed for the next couple of years. (See related story, NYISO Reaffirms Need for NYC Peakers in Summer.) 

“As electricity grids struggle to keep pace with the feverish growth in energy demand across the country, every electron of power counts,” Eolian COO Stephanie Smith said in a statement. “Battery energy storage helps both thermal and renewable energy technologies optimize their participation and increase reliability and resilience by providing power when and where it is needed quickly. By updating existing rules to account for new technologies, regional electricity markets can enhance grid performance and lower costs for consumers.”