Monday, June 18, 2018

ISO-NE Visits Vermont to Discuss Tx Planning

WOODSTOCK, Vt. — ISO-NE officials came to Vermont on Thursday to discuss how FERC Order 1000 has affected transmission planning in the region.

ISO-NE ferc order 1000

George | © RTO Insider

ISO-NE Vice President for External Affairs and Corporate Communications Anne George gave a presentation on the grid operator’s role in implementing Order 1000, along with updates on the RTO’s preparations for Forward Capacity Auction 12, the Integrating Markets and Public Policy (IMAPP) initiative and its 2018 budget.

Vermont Gov. Phil Scott also addressed the Sept. 7 meeting of ISO-NE’s Consumer Liaison Group.

Here are the highlights of what we heard.

Order 1000 and Public Policy Tx Projects

In April, the D.C. Circuit Court of Appeals rejected separate challenges by New England Transmission Owners and state officials to Order 1000, including FERC’s elimination of federal rights of first refusal (ROFR) for incumbent transmission owners and one aspect of the public policy transmission planning process. (See Court Rebuffs New England TOs, Upholds FERC ROFR Order.)

ISO-NE FERC PJM Insider TXU Corp.

Marshall | © RTO Insider

Jason Marshall, general counsel for the New England States Committee on Electricity (NESCOE), said during a panel discussion that the ruling on the public policy process, while denying the petition, had “at least provided what we wanted: a ruling that ISO New England does not have to choose a public policy project as part of the Order 1000 process.”

The court also ruled that “ISO-NE has no role in setting public policy for the states.”

Liaison Group Chair Rebecca Tepper, chief of the energy and telecommunications division in the Massachusetts attorney general’s office, brought up the transmission projects proposed in response to the Massachusetts solicitation for 9.45 TWh a year of Class I renewables (wind, solar, hydro or energy storage). (See Hydro-Québec Dominates Mass. Clean Energy Bids.)

“What’s confusing to people is that none of these projects are ‘public policy’ projects that have gone through the Order 1000 process,” she said. “People are trying to understand what kinds of projects these transmission projects are [under the FERC Order 1000 construct] and who’s going to pay for them.”

ISO-NE FERC Order 1000

ISO-NE Consumer Liaison Group meeting underway | © RTO Insider

Marshall responded that if a transmission project arises out of a state-run request for proposals, it would be one of two types. “It could be a public policy upgrade, which has to go through the Order 1000 process. Alternatively, it could be an elective transmission upgrade, and that’s a separate category that’s not regionalized, not socialized across New England to all consumers. That’s the difference.”

ISO-NE FERC Order 1000

Owyang | © RTO Insider

Colin Owyang, general counsel of Vermont Electric Power Co. (VELCO), said he believed that the Massachusetts projects were mostly outside the three categories. “I think of the public policy upgrades as regional public policy decisions, so if there were a New England governing body … and if they were to collectively agree on a mutually acceptable public policy, then it would go through the [Order 1000] process.”

In addition to its own RFP, Massachusetts has teamed with Connecticut and Rhode Island on a separate solicitation. (See Second Circuit Upholds Conn. Renewable Procurement Law.)

Owyang said that states may have believed that if they went through FERC’s process, they would lose control of projects. As a result, he said, that’s why he thinks they run their own RFPs “over on the side.”

Developer Balancing Act

ISO-NE FERC PJM Insider TXU Corp.

New England Clean Energy Power Link | Transmission Developers Inc.

VELCO negotiated the compensation to Vermont — a total of $136 million spread evenly over 40 years — for the New England Clean Power Link, which includes a submarine cable under Lake Champlain and a smaller overland section connecting with a substation in Ludlow. Transmission Developers Inc. has fully permitted the project to bring 1,000 MW of hydropower, solar and wind from Canada with its partner, Hydro-Québec. The Vermont section of the line is 154 miles long.

ISO-NE FERC PJM Insider TXU Corp.

Jessome | © RTO Insider

Another developer, Stephen Conant of Anbaric, asked how developers could justify making Massachusetts residents pay a “tax” to Vermont for letting energy cross the latter state. Owyang said he would not put it so “flippantly,” calling the payments fair compensation and a necessary cost of doing business.

“As a developer, what you have to balance is how do you get your project developed [and] how do you get it built on time,” added TDI CEO Donald Jessome. “There’s going to be costs, whether those are capital costs or operating costs, property taxes — you could go down a whole laundry list of different issues that you have to take into account. Ultimately, if the benefits don’t outweigh the costs of the project, you’re just not going to go forward.

ISO-NE FERC PJM Insider TXU Corp.

Paravalos | © RTO Insider

“There are going to be costs, there are going to be community issues and we have to take all of that into account,” Jessome continued. “If we priced it wrong, we will lose the [Massachusetts] RFP.”

Mary Ellen Paravalos, vice president for ISO, siting and compliance at Eversource Energy, also appeared on the panel moderated by Guy Page, communications director of Vermont Energy Partnership.

Vermont’s Clean Energy Economy

ISO-NE ferc order 1000

Scott | © RTO Insider

Gov. Scott said that one in 16 workers in Vermont are employed in clean energy, the highest ratio of any state in the U.S., he said.

“We’re going to need all those workers and all that knowledge because we have a goal of getting 90% of our energy needs from renewable resources by 2050,” he said. “As daunting as that might sound, I believe it’s achievable.”

Scott highlighted how investments in clean energy are also changing the state’s electric grid, which frequently sees its lowest net load in the middle of the afternoon because of the amount of solar on the system. The peak hour is now after sunset, once the solar resources stop producing.

As the state encourages people to switch to electric vehicles, the resulting increase in electrification calls for smarter load management and rate design, partly “to ensure that we don’t increase peak demand or make the Northeast less competitive than it already is in terms of rates,” Scott said. “Also, when we talk about changes in how people consume power, we need to be certain we aren’t hurting the most vulnerable. We can’t have regressive policies that add costs onto people who can’t afford to pay, or hurt folks who are working third shift, for instance, and can’t change the timing of their electrical usage.”

Scott said that while modernizing the grid and how people use electricity, planners shouldn’t ignore more traditional resources such as baseload hydroelectric. Vermont has a long history of working with Hydro-Québec, he noted.

“We first started importing power from Quebec in the late 1980s through Highgate, Vt.,” Scott said. “A few years later we hosted the first DC line into New England from Quebec through the Northeast Kingdom of Vermont [Essex, Orleans and Caledonia counties], and through to northwestern New Hampshire. We now have a number of companies looking to use Vermont as a conduit to transfer more power from Quebec to help our friends and neighbors in Massachusetts. And as unbelievable as this may sound to anyone who has done work in this state, Vermont has already fully permitted one of those projects, TDI’s Power Link.”

Scott said that TDI worked with host communities and “now enjoys significant support in our state and a clear path to construction. In my view, the Clean Power Link is a smart, common sense and very affordable solution for Massachusetts and New England. It provides economic and environmental benefits for both states, and it shows how a region can work together to accomplish energy goals.”

—  Michael Kuser

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