Monday, February 18, 2019

Coal Group Seeks Reliability Bonus from MISO, SPP

By Tom Kleckner and Amanda Durish Cook

The Lignite Energy Council, a North Dakota coal lobbying group, reportedly plans to approach MISO and SPP in an effort to have them pay more for coal-fired generation.

Lignite Energy Council CEO Jason Bohrer | Lignite Energy Council

CEO Jason Bohrer told the group’s Oct. 3 fall meeting he thinks the LEC could show the RTOs that they should pay more for coal-fired power because it provides resilience benefits, The Bismarck Tribune reported.

Bohrer also said the council has applied for membership in MISO, saying its focus on coal energy is “sometimes overlooked in their boardroom and their circles,” according to the report.

The LEC did not respond to a request for comment, and, as of late Tuesday, MISO said it had not heard from the group. If MISO does receive a request, spokesman Mark Brown said it would likely go before the RTO’s stakeholder process for discussion.

“Without having seen a specific request from the council, we can’t speculate on these questions; however, it appears this would be a matter for our stakeholder process,” Brown said.

SPP also hasn’t been contacted. COO Carl Monroe said the RTO is aware “some in the industry” believe “particular resources deserve compensation specifically for their guaranteed availability and role in ensuring reliability.”

“We are currently considering whether and how we might accurately and fairly assess a resource’s ability to meet reliability-related requirements,” Monroe said. “We assume this may lead to modifications to our market rules and capacity requirements and eventually to a market-based solution that values particular resources differently than we do today.”

Bohrer was optimistic when the Department of Energy released its August 2017 study on grid reliability, which recommended supporting out-of-market coal and nuclear plants. (See Perry Grid Study Seeks to Aid Coal, Nuclear Generation.)

The CEO said coal “not only ensures reliability for our nation’s electric grid, it also is far less expensive than heavily subsidized renewable fuels.”

The council was disappointed, however, when FERC in January unanimously rejected DOE’s proposal and opened a docket on grid resilience. (See FERC Rejects DOE Rule, Opens RTO ‘Resilience’ Inquiry.)

“Currently, regional electricity markets do not properly compensate generators who produce ‘always on’ power or whose power is not susceptible to weather disruptions,” Bohrer said in a statement Jan. 9. “It remains our hope that FERC will ultimately level the playing field when it comes to dispatching energy sources with the long-term goal focused on a resilient grid to serve our homes, businesses and the national economy.”

Williston Basin lignite mine | North Dakota Studies

The council aims to maintain the viability of lignite, which is mined at five sites in North Dakota and one in eastern Montana, according to the LEC website. The group’s members include mining companies, generators and service businesses.

By participating in RTOs, Bohrer said at the conference, the LEC would make the case that wholesale markets are skewed by subsidies for renewables. “The market is a competitive market, but it is not a free market,” Bohrer said.