WASHINGTON — FERC officials told the American Council on Renewable Energy’s Policy Forum on Thursday that RTO transmission planning rules must be revised to support reliability and accommodate the flood of renewable generation.
FERC Commissioner Willie Phillips, in what he said was his first speaking engagement since joining the commission in December, cited estimates that weather-related power outages cost Americans $70 billion annually. He also noted the November FERC-NERC staff report that concluded interregional transfers from PJM to MISO, and MISO to SPP, were essential to recovery from the February 2021 winter storm. (See FERC, NERC Release Final Texas Storm Report.)
“I’ve taken a lot of meetings since becoming a commissioner. And one of the things I hear all the time is that we have generators [and] transmission developers out there that want to build reliability projects; they want to build these interregional projects. But one of the one of the complaints I’ve heard is that RTOs sometimes don’t really take into consideration the reliability value of interregional lines. The thing I keep asking myself is that, in the wake of Winter Storm Uri, how in the world would you assess the … reliability benefit as zero?
“We have a wakeup call right now,” he added. “The transmission development and transmission buildout can be a huge part in addressing reliability and resilience.”
“Amen,” responded ACORE CEO Greg Wetstone, prompting applause from the nearly 200 in attendance at the Convene conference center.
Phillips said additional transfer capability along the MISO-SPP seam “could have made a huge difference and saved lives” during the storm. MISO and SPP recently estimated that transmission projects among their seam could free up to 53 GW of new low-cost renewables and more than $900 million in adjusted production costs benefits. (See MISO, SPP Finalize JTIQ Results with MISO Tx Duplicates.)
Also speaking at the conference was Eric Vandenberg, deputy director of FERC’s Office of Energy Policy and Innovation, who said there was a clear “theme” in the tens of thousands of pages of comments filed in response to FERC’s July Advanced Notice of Proposed Rulemaking (ANOPR) on transmission planning (RM21-17). The consensus: Transmission planners’ “reactive” strategy cannot absorb the influx of renewable generation.
“That process … worked really well for these discrete central station generator interconnections. But now that we’re having so many interconnections, and they’re all of a much smaller size, that process is starting to break down,” Vandenberg said, citing offshore wind projects being built along the East Coast. “That kind of reactive process isn’t necessarily the best way to accommodate that multibillion-dollar investment that you’re looking to make in offshore wind.”
Most commenters on the ANOPR agreed with the commission on the need for changes, but there was no consensus over whether the commission should eliminate participant funding or create independent transmission monitors. (See FERC Tx Inquiry: Consensus on Need for Change, Discord over Solutions.)
Vandenberg made his remarks during a panel discussion with speakers from renewable developer RWE Renewables Americas, think tank RMI and Amazon Web Services (AWS), which has about 274 utility-scale generation projects totaling 12 GW in its global portfolio, most in the U.S.
Although the panel was titled “Advancing Competitive Wholesale Electricity Markets,” the speakers spent much of their time also discussing the need for changes to transmission rules.
Kevin Gresham, senior vice president of government relations and external affairs for RWE, agreed that current transmission planning is too slow for the pace of generation development and that OSW projects need regional plans rather than requiring individual states to cover the costs — as under PJM’s “state agreement approach.” (See Fierce Competition in Plans to Upgrade NJ Grid.)
Craig Sundstrom, AWS’ senior manager of energy and environment public policy, also called for broader geographical areas in planning and said RTOs should include corporate power purchase agreements in their forecasts. “That kind of load coming on the system is very real; those commitments are real,” he said, citing the more than 300 companies that have signed on to The Climate Pledge. “Transmission [planning] should account for that.”
Sundstrom said AWS is “super excited” by the provisions of the Build Back Better bill, particularly the investment tax credit for high-voltage transmission, calling it “a critical policy to unlock private investment in transmission.”
Because of its growing power demands, Sundstrom said AWS has started to get involved in stakeholder processes in PJM and CAISO.
AWS began analyzing the PJM queue in early 2021 and determined “a high likelihood of four to five years of project delays,” Sundstrom said. “For companies like ours, that want to decarbonize as fast as possible, that’s simply not keeping up with the pace of innovation and renewable deployment.”
In CAISO, AWS is challenging the ISO’s proposal “to essentially disallow corporate projects with corporate PPAs from availing themselves of resource adequacy in the market, basically limiting those to load-serving entities or utilities,” Sundstrom said.
He said the capacity AWS is deploying “provide some level of resource adequacy, which … load-serving entities and utilities [can buy] to meet their own obligations. We think that there should be some parity in that process to ensure that all the investments that we’re making in Amazon are also helping them meet the reliability needs in the market.”
Katie Siegner — senior associate for carbon-free electricity at RMI, who urged the use of grid-enhancing technologies to relieve some of the pressure on PJM’s transmission queue — also said transmission developers need a public relations makeover to respond to local opposition that can prevent RTO-approved projects from being built.
“I feel like there’s a lot more public support for renewables than there is for transmission today,” she said. “So there’s a need that I see to make transmission sexy.”
She cited an RMI report documenting the economic development opportunities associated with wind and solar projects.
“There’s a need to really highlight [the benefits of] transmission [to respond to complaints that] the lines that go over my state are not benefiting me at all. If we can more clearly communicate how they are — even at a macro scale benefiting us all — that, I think, can help.”
Although there was relatively little change in the electric industry for most of its 140-year history, RWE’s Gresham said the current transition means more communication is needed between generators and RTOs.
He said RTOs have not always recognized the technological advances of wind turbines. “If there was one thing that I would say [is] still to be worked on, [it] is to have more industry-RTO/ISO discussion and engagement to really figure out, what can these machines do? Because I think part of the hesitation on ancillary services and inverter technology is [a lack of] understanding of how these machines function.”
FERC’s Vandenberg said he told his staff that they should consider what the electric system will look like in 15 years in evaluating comments from the commission’s two technical conferences last fall on the energy and ancillary services markets (AD21-10). (See Stakeholders Ask FERC to Support E&AS Market Changes.)
The consensus of the technical conferences, he said, was that no single product will solve all of the issues of the generation transition. “There’s a toolkit that you can use, and that toolkit includes things like changes to your operating demand curves for reserves; things like changes to your software; looking at, you know, more efficient ways to commit your resources.
“The other thing that was also very clear is that different regions have different levels of variability and uncertainty and other operational issues that they’re all trying to accommodate.”