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December 22, 2020

Western RA Planning Must Change, WECC Says

Western utilities and their state regulators should increase their coordination and adopt dynamic planning reserve margins to help ensure the region’s grid is equipped with adequate resources as it takes on more variable generation, according to a new WECC report.

WECC Resource Adequacy — WECC’s report divided the Western Interconnection into five subregions based on load patterns and topology. | *WECC*

The recommendations come out of WECC’s first Western Assessment of Resource Adequacy Report, released last week. The report, the regional entity’s signature work for 2020, is the product of an internal effort to repurpose its mission by focusing on the growing challenges of resource adequacy in the Western Interconnection. (See WECC Seeks to ‘Invent’ Future with RA Forum.)

“We are really excited about this work,” Branden Sudduth, WECC vice president of reliability planning and performance analysis, said when staff provided a preview of the study at a meeting of the organization’s Board of Directors on Dec. 9.

The report is intended to supplement NERC’s 2020 Long-Term Reliability Assessment, published Dec. 15. (See NERC: Grid Operations ‘Fundamentally’ Changing.) Some Western stakeholders have complained that last year’s assessment failed to capture the risks that emerged this summer when a record-setting heat wave forced CAISO to initiate rolling blackouts for the first time in two decades while other balancing authorities prepared to take similar measures.

Both WECC and a joint root-cause analysis by California agencies have cited supply shortages as a key factor behind the energy emergencies, although WECC’s effort to address regional RA preceded the heat wave event. (See WECC Says Extreme Events Require Forecast, RA Changes.)

To account for the local and topological factors that contribute to interconnection-wide RA issues, the study divides the Western Interconnection into five subregions that align with the region’s three reserve sharing groups: CAISO, Southwest Reserve Sharing Group (SRSG) and Northwest Power Pool (NWPP).

Because of variations in peak seasons, the NWPP subregion is further divided into Northwest, Northeast and Central subsections. The report refers to CAISO as California-Mexico (CAMX) and the SRSG as the Desert Southwest (DSW).

Scenarios and Variations

WECC’s assessment applied two scenarios to each of the five subregions “to highlight a broad range of future resource possibilities, including known and expected resource retirements.” Scenario 1 assumes each subregion is required to meet its own demand, while Scenario 2 allows for imports.

The RE overlaid each scenario with three variations of resource availability. Variation 1 includes all resources currently in service and expected to run in future forecasts. Variation 2 includes existing resources and those under construction and expected to run in the forecast year (Tier 1 resources). Variation 3 includes existing and Tier 1 resources as well as those currently in licensing or siting phases but not yet under construction (Tier 2).

The reports points out that RA planning has typically relied on a “deterministic” — or static — approach that calculates needs by comparing the amount of available generation capacity, plus a planning reserve margin, to the highest demand of the year. If those resources cover the peak day, they are assumed to be sufficient for all other days of the year.

That planning approach is fraying at the edges with the increased adoption of variable renewables, prompting WECC to adopt a “probabilistic” approach that examines resource needs on an hourly basis over the next 10 years using supply and demand projections provided by Western balancing authorities. WECC ran the data through its Multi-Area Variable Resource Integration Convolution modeling tool, which matches generation to load for each hourly interval to determine if there is enough capacity to meet demand and to calculate a planning reserve margin.

“The model determines whether there are enough resources in the interconnection to meet expected demand while maintaining reserves to account for any variations from the expected forecasts or loss of generation. The results from this analysis are used to determine where resource shortfalls may occur in the system over any given study period,” the report said.

WECC’s analysis found that under Scenario 1, all subregions show some risk of loss of load, even with Tier 1 and 2 resources. All variations of that scenario contain hours with insufficient resources to serve load and maintain planning reserve margins.

The RE also found that most hours of unserved load can be solved under Scenario 2.

Still, the report notes that “under the most optimistic assumptions about future loads, resources and imports, there are still hours in which the interconnection does not meet” the one-day-in-10-years (ODITY) threshold for the 10 years studied. The DSW, NWPP Central and Southern California portion of CAMX were particularly vulnerable to loss of load, WECC found.

In what might be the most pressing finding, the analysis showed that even under the most optimistic assumptions under Variation 3 of Scenario 2, 2021 could see one to eight hours in which some subregions fail to meet the required planning reserve margins of the ODITY standard.

“The results worsen as the assumptions about resource construction and reliance on imports span to the more realistic, less optimistic end of the spectrum,” WECC said.

WECC also found that increased volumes of variable resources on the system compound the RA issues, making resource planning more challenging because more resources are not consistently available to meet demand. Additionally, demand is also becoming increasingly variable because of climate change, behind-the-meter generation and transportation electrification.

The report’s final finding: RA will suffer “significant degradation” if historical approaches to resource planning are left unchanged.

Getting There

WECC’s first recommendation is for resource planners and regulators to transition away from fixed planning reserve margins to dynamic margins aligned with hourly needs.

The second recommendation is for planning entities to not only consider how much additional capacity is needed to mitigate variability but also the expected availability of new resources. “Understanding the differences in resource type availability is crucial to performing resource adequacy studies,” WECC said.

The report’s final recommendation encourages balancing authorities to coordinate their planning activities each year to help prevent them from relying on the same resources. “This coordination will help subregions make assumptions about import availability in the context of the entire interconnection,” WECC said.

“I think we got the train on the track now and can understand how to manage this resource adequacy issue,” WECC Director Gary Leidich said during the Dec. 9 board meeting. “This information has to get in the hands of policymakers so they understand what’s going on.”

Director Richard Woodward said he liked the idea of a dynamic reserve margin but asked, “How do we get there?”

Matt Elkins, WECC manager of performance analysis, said he wants the RE to meet with planning entities to explain the range of resources they will need to meet reliability requirements. “We have to do it together.”

WECC’s Sudduth added that he was encouraged to see multiple states already working together to address RA issues.

Director James Avery said it will be necessary for every state in the West to count RA in the same way. “Otherwise, the work we do is going to be meaningless.”

WECC said it will release a more detailed analysis of subregional RA issues in the first quarter of 2021.

December 20, 2020

FERC OKs Ownership Change in IIF Subs

FERC last week authorized the installation of a new general partner and transfer of ownership interests in the privately held Infrastructure Investments Fund (IIF) that acquired El Paso Electric (EPE) earlier this year. (See IIF Closes El Paso Electric Purchase.)

The commission on Thursday accepted a request by IIF US Holding and IIF US Holding 2 (master partnerships operating under the IIF umbrella name) to transfer one individual’s 33.3% general partnership interest in the entities to Anne Cleary, another private individual (EC20-94).

In addition to EPE, IIF US Holding owns a string of public utilities authorized to sell wholesale electric energy, capacity and ancillary services at market-based rates.

The commission said it found no evidence that the transaction would have an adverse effect on horizontal competition, rates or federal or state regulation, nor would it produce vertical market power concerns or result in the cross-subsidization of a non-utility associate company by a utility company.

IIF said that save for EPE’s transmission facilities and the “limited and discrete interconnection facilities associated with individual generation facilities,” it doesn’t operate or control any transmission in the U.S. FERC said IIF’s generation will continue to operate under existing market-based rate tariffs or cost-based rate schedules.

Public Citizen protested the transfer, criticizing Cleary’s installation and noting that she was president of a power company (Mirant California) that declared bankruptcy and was charged with market manipulation and other illegal conduct during California’s electricity deregulation crisis in 2000-2001.

The consumer advocacy group argued that IIF failed to represent all of Cleary’s energy-related affiliations as a former advisor of project managing service company Taffrail Group, a former principal with Modern Grid Solutions, and her link to a member of PJM’s Board of Managers through her board position with the Bermuda-based Ascendant utility. The group also argued that Cleary already serves on the board of directors at IIF subsidiary Southwest Generation Operating Co.

Public Citizen said IIF is a “lightly regulated, off-the-books series of private equity shell companies.” It said the three owners don’t function as owners but as a board of directors that simply delegates the day-to-day management of IIF to J.P. Morgan. It also said it’s “unclear what role J.P. Morgan played” in selecting Cleary for the Southwest Generation board seat.

Infrastructure Investments Fund — Anne Cleary | *Modern Grid Solutions*

IIF said it is advised by J.P. Morgan and structured as a “limited partnership investment vehicle, the equity of which is held by passive limited partners.” The company disputed that J.P. Morgan directs IIF. It said its utilities handle their own “day-to-day management and activities.” It also said because Cleary is a private individual, “there are no common officers or directors of parties” to the ownership transfer and that her role at Southwest Generation isn’t relevant.

FERC said Cleary’s connections are not a concern because Public Citizen did not prove that the transaction would harm competition.

“Public Citizen has not argued, let alone demonstrated, that its allegations, if proved true, show that the proposed transaction will have an adverse effect on competition, rates, regulation or result in cross-subsidization,” the commission said.

FERC agreed with IIF that because Cleary and Dennis Clarke, the seller, are private individuals, there are no common officers or directors of parties to the transaction.

December 20, 2020

Business Group Seeks to Triple Clean Energy R&D Funding

R&D — Norm Augustine, retired chairman and CEO of Lockheed Martin | *Bipartisan Policy Center*

A group of utility CEOs and other business leaders last week said the U.S. should triple federal funding for clean energy innovation to $25 billion annually over the next five years, calling it essential for addressing climate change and ensuring a leadership role for the U.S. in new technologies.

The American Energy Innovation Council, an 11-member group whose principals include the chairs of Southern Co., Dominion Energy, Xcel Energy and Royal Dutch Shell, said the increase should include a boost for the Advanced Research Projects Agency – Energy to $1 billion a year from the current $425 million.

Founded in 2010, the council is a project of the Bipartisan Policy Council, which presented a panel discussion Thursday on the group’s recommendations.

“There was a great deal of skepticism when we started as to whether [climate change] was really a problem. Today I think there are very few people who question whether or not we have a serious problem,” said Norm Augustine, retired chairman and CEO of Lockheed Martin. But he added: “We have a long way to go. Even today, about 88% of the world’s energy consumption use still comes from fossil fuels. That’s a number that’s declined by about 1% in the last quarter of a century.”

R&D — The American Energy Innovation Council said additional federal funding is needed to sustain innovations through the second “valley of death” between prototype and demonstration projects. | *American Energy Innovation Council*

A ‘Sputnik Moment’

The group cited research that 50 to 85% of annual GDP growth in the U.S. “can be traced to innovation.” In its first 11 years, ARPA-E provided $2.4 billion in funding for more than 950 projects, 166 of which have attracted more than $3.3 billion in private-sector follow-on funding, the group said. “Technology innovation improves productivity across industries and creates entirely new ones. Economists agree that innovation is the key engine of long-term economic growth and stability,” it said.

The council said the U.S. should expand “centers of excellence,” such as the Department of Energy’s Energy Hubs, Energy Frontier Research Centers and Lab Embedded Entrepreneurship Programs.

“Technology innovation requires expensive equipment, well trained scientists, multiyear time horizons and flexibility in allocating funds. This can be done most efficiently and effectively if the institutions engaged in innovation are located in close proximity to each other, share operational objectives and are accountable to each other for results,” it said. “Resources should not be spread thinly across many institutions working on the same problem.”

The group said it is alarmed that competing nations’ investments in science and technology are outpacing the U.S.

In fiscal year 2020, Congress appropriated about $9 billion for energy research, development and demonstration. But the U.S.’ “research intensity” — the ratio of R&D investments to GDP — has stagnated, while China’s tripled between 1995 and 2019, the group said.

“China’s recent announcement that it intends to completely decarbonize its economy by 2060 should be viewed as a new ‘Sputnik moment,’” they wrote, referring to the Russian satellite that prompted the U.S.-Soviet Union space race.

Valleys of Death

Although federal funding for early-stage R&D has increased in recent years, they said, “the later stages of demonstration and deployment continue to lag in resources and prioritization. Closing this gap is essential to successfully commercialize breakthrough technologies.”

Augustine said ARPA-E “does a fabulous job in dealing with that first ‘valley of death’” — the feasibility challenge between research and prototypes. But he said neither government nor industry has addressed the second gap between prototype and demonstration projects.

R&D — Former PG&E Corp. CEO Geisha Williams | *Bipartisan Policy Center*

The council recommended creation of a national, politically neutral “Energy Strategy Board” that would include experts in energy technology and markets, develop a long-term national energy plan and oversee a “New Energy Challenge Program” to build large-scale pilot projects.

“If you go from … research to prototype to demonstration it takes tremendous resolve, tremendous leadership and tremendous resources,” former PG&E Corp. CEO Geisha Williams said. “And I will tell you that no one company has the wherewithal to make it happen. It requires a very strong private and public partnership. And frankly, it’s going to require the type of funding that only the federal government can provide.”

“The U.S. government hasn’t had an energy plan for a long time,” Augustine added. “We don’t even have a capital budget for anything. … I know of no successful company that doesn’t have a capital budget.”

R&D — The American Energy Innovation Council said the U.S. should triple federal funding for clean energy innovation to $25 billion over the next five years. | *American Energy Innovation Council*

Augustine said such long-term planning is essential for a successful R&D program. “There will be failures; we’re talking about research and development,” he said. “My background is principally aerospace, and not every rocket works, I’ll guarantee you that. I’m afraid that’s true in the energy arena as well.”

Most Promising Technologies

R&D — Chad Holliday, chairman of Royal Dutch Shell | *Bipartisan Policy Center*

The group identified as the most promising technologies large-scale energy storage, advanced nuclear reactors, renewable and low-carbon hydrogen, and carbon capture and removal.

“If we try to focus on everything, it will be too much,” said Chad Holliday, chairman of Royal Dutch Shell. “But I think hydrogen is certainly one of the candidates for [research spending], and I believe carbon capture and storage is a second candidate for that.”

“There’s a lot of projections that suggest within 30 years, hydrogen in itself could be about 20% of the entire energy supply requirements [of] the entire world,” said Michael J. Graff, CEO of industrial gas manufacturer American Air Liquide Holdings.

Legislation

Speakers on Thursday expressed optimism that some of the priorities identified by the council will receive attention in an energy package as part of the year-end budget omnibus bill.

A discussion draft of the energy package includes a 75% increase in ARPA-E’s budget and funding for large-scale demonstrations of carbon capture utilization and storage technology, said Rep. Lizzie Fletcher (D-Texas), who also participated in the BPC forum.

ARPA-E’s budget would increase gradually, from $435 million for fiscal year 2021 to $761 million for fiscal 2025.

U.S. Rep. Lizzie Fletcher (D-Texas) | *Bipartisan Policy Center*

The Better Energy Storage Technology Act, which would reauthorize DOE’s grid-scale storage research, also is part of the package, said Fletcher, chair of the House Science, Space and Technology Subcommittee on Energy and a member of the House Transportation and Infrastructure Committee. At least one demonstration project would be due by September 2023.

Fletcher said House Democrats’ $1.5 trillion Moving Forward Act, which passed 233-188 in July, is not expected to clear this session, but it could be a “framework” for an infrastructure package in the next Congress. The bill, which received only three Republican votes, would allocate more than $70 billion to upgrade the electric grid to accommodate more renewables and electric vehicle charging and provide tax credits for EVs.

“A lot of people are talking about the challenges. We need a lot of people talking about the answers,” Fletcher said. “I think that it’s essential that this work centers on crafting ambitious but workable plans and depoliticizing this conversation. … That’s why … AEIC’s leadership and vision at this moment is so important.”

December 20, 2020

SPP FERC Order Briefs

FERC last week approved Basin Electric Power Cooperative’s revised market-based rate tariff, allowing it to make wholesale sales of energy, capacity and ancillary services at market rates in its Southwest, Southeast, Northeast and Northwest regions, effective Sept. 30, 2020 (ER20-2590).

SPP — The Basin Electric service territory | *Basin Electric Power*

The order expands Basin Electric’s authority to make sales at market-based rates beyond the SPP and Central regions. The commission found the cooperative’s lack of horizontal or vertical market power in the requested regions satisfied its requirements for market-based rate authority.

FERC designated Basin Electric, which became commission jurisdictional in November 2019, as a category 1 seller in the Southwest, Southeast and Northeast regions and as a category 2 seller in the Northwest.

Under FERC Order 697, category 1 status applies to wholesale marketers and producers that own or control 500 MW or less of generation per region; do not own, operate or control transmission facilities other than that necessary to connect individual resources to the grid; are not affiliated with anyone that owns, operates or controls transmission facilities in the same region as the seller’s generation assets; are not affiliated with a franchised public utility in the same region as the seller’s generation assets; and do not raise other vertical market power issues. Category 2 sellers are those that do not fall into category 1 and are required to file updated market power analyses.

SPP TCR Collateral Requirements Upped

The commission on Wednesday accepted SPP’s proposed Tariff revisions to establish minimum collateral requirements for transmission congestion rights (TCRs) (ER21-79.)

The RTO’s stakeholders and staff strengthened the use of credit in SPP’s TCR market following the 2018 GreenHat Energy default in SPP Board/Members Committee Briefs: April 28, 2020.)

Tri-State Order 845 Compliance Lacking

FERC ruled last week that Tri-State Generation and Transmission Association has partially complied with Orders 845 and 845-A, directing a further compliance filing within 60 days (ER20-687).

SPP — The Tri-State G&T footprint | *Tri-State G&T*

The commission in May said Tri-State had partially complied with the orders, directing the cooperative to describe the specific technical screens or analyses and the triggering thresholds or criteria it will use to determine which facilities are contingent facilities — unbuilt interconnection facilities and network upgrades upon which an interconnection request’s costs and timing are dependent.

In its order on Thursday, FERC found Tri-State’s proposed changes to its pro forma large generator interconnection procedures described the specific technical screens and analyses and provided requisite transparency. However, it said Tri-State’s proposal to evaluate system performance “against the technical screens” was not clear as to where the cooperative would post the information and what is included in its “posted engineering standards.”

The commission directed Tri-State to submit a description of the transmission provider’s posted engineering standards and the posted information’s location. FERC also ordered Tri-State to identify whether the interconnection customer’s costs, timing and study findings are dependent on the unbuilt facility, consistent with the definition of contingent facilities.

FERC disagreed with renewable energy developer Gladstone New Energy’s protest that Tri-State’s proposed changes were beyond the scope of the proceeding. The commission said the cooperative did not add to its existing procedure for determining contingent facilities, but instead revised it.

FERC issued Orders 845 and 845-A in 2018 and 2019 to increase the generator interconnection process’ transparency and speed. The changes are grouped into three categories: improved certainty for interconnection customers; promoting more informed interconnection decisions; and process improvements. (See FERC Order Seeks to Reduce Time, Uncertainty on Interconnections.)

December 20, 2020

LIPA Allowed to Compete for NY EV Prize Funds

The New York Public Service Commission on Thursday ruled that projects located anywhere in New York may be eligible for state-sponsored electric vehicle prize competitions, granting a request from the Long Island Power Authority (LIPA), which is normally not subject to PSC jurisdiction.

The commission in July approved just over $700 million in spending over the next five years to install more than 50,000 light-duty EV charging stations throughout the state, including $80 million for three prize competitions to be administered by the New York State Energy Research and Development Authority (NYSERDA) (18-E-0138). (See NYPSC Approves $700 Million for EV Chargers.)

The EV Make-Ready Program is funded by investor-owned utilities through a cost-sharing program meant to incentivize utilities and charging station developers to site EV charging infrastructure in places that will provide maximum benefits to consumers.

The commission’s declaratory ruling Thursday “remains consistent with the July order by continuing the policy that benefits will accrue to the ratepayers funding a chosen prize,” said Bridget Woebbe, assistant counsel in the Department of Public Service. “However, other communities throughout the state would also be allowed to participate in the prize competitions so long as a separate funding source is secured for any project selected outside of an investor-owned utility service territory.”

NY EV Prize Funds — Southampton, Long Island offers plug-in EV charging at the Ponquogue Beach parking lot. | *Southampton Town*

LIPA and its service provider, PSEG Long Island, have pledged to add 4,650 new charging ports by 2025 — enough to support 188,00 EVs — beginning with a proposed investment next year of $4.4 million.

Gov. Andrew Cuomo’s office said the three prizes are intended to support clean transportation options benefiting “lower socio-economic and environmental justice communities.”

They include a $40 million environmental justice program to reduce air pollution in “frontline communities” and create transportation “green zones” across the state and a $25 million program aimed at individual buyers that will seek “innovative and high impact approaches that enable access to clean transportation services for disadvantaged and underserved communities.”

In addition, a $20 million program will seek “innovative and high-impact approaches to medium- and heavy-duty electrification that can be replicated at scale, including for `last-mile’ solutions, one of the fastest growing emissions sources in this class of vehicles.”

The state’s EV program allocated $206 million toward equitable access and benefits for poor and disadvantaged communities, which also will be eligible for a higher incentive supporting up to 100% of the costs to make a site ready for EV charging. The Climate Leadership and Community Protection Act (CLCPA) requires all state agencies to prioritize greenhouse gas emissions reductions in disadvantaged communities and stipulates that at least 35% of the overall benefits of spending on clean energy programs benefit disadvantaged communities.

The commission has yet to rule on New York’s six local distribution companies’ recent proposals for managed charging programs, which were split between “passive” and “active” approaches. (See NY Utilities Diverge on Managed EV Charging.)

Long-term Concerns

While the initial focus was on funding projects located in communities served by investor-owned utilities, the commission said that the objectives to advance transportation electrification, expand access to clean transportation and reduce emissions in disadvantaged communities are relevant throughout the state. (See NY Panel Examines Vehicle Electrification, Cleaner Fuels.)

The prize competition is important “in that it expands the realm of the possible,” PSC Chair John Rhodes said. “We need functional, cost-effective electric transportation solutions across the board, and we need more innovation on a couple of areas: in finding good solutions for disadvantaged communities and neighborhoods and in terms of expanding beyond passenger and light-duty vehicles, which are relatively well established now as electric vehicle use cases, to other more heavy- and medium-duty vehicles.”

Commissioner Diane Burman supported the ruling but expressed concern for the future.

“I do think that at some point we’re going to have to consider a broader statewide policy for the medium- and heavy-duty sectors, and so [that] prize itself really is looking at how this investment and lessons learned from that may be,” Burman said.

Commissioner Tracey Edwards said the PSC should ensure that disadvantaged communities are not left behind.

“I would have liked to see for the future some status reports with NYSERDA that have a direct line back to our policies within the PSC, just some timelines and checkpoints to make sure that whatever we have outlined is actually working so that if we have to change course or amend any of the things in place, we have time to do that,” Edwards said.

Commissioner John Howard said he was concerned about financing the work required by the CLCPA and other initiatives to change the grid and electrify transportation and buildings.

“We cannot finance it exclusively through ratepayer dollars,” Howard said. “It is my sincere hope with a new administration in Washington that these initiatives will be funded at least in part if not in total through the federal [government]. The benefits will be both statewide and worldwide … and I agree with Commissioner Edwards that we need to be able to provide flexibility so that we can know quickly when things aren’t going as intended.”

December 20, 2020

NYISO Management Committee Briefs: Dec. 16, 2020

NYISO CEO Rich Dewey told the Management Committee Wednesday that the ISO succeeded in completing many stakeholder processes despite the coronavirus pandemic. “This has been probably one of the most challenging years of any of our professional experience,” he said, referring to the challenges of working remotely.

He thanked stakeholders and staff for helping the ISO replace its energy management system and business management system, complete a demand curve reset and roll out market rules for energy storage.

“I hope 2021 is a little easier, but there’s still a significant chance that it will get a whole lot worse before it starts getting better,” Dewey said. “So I want to encourage everybody to stay safe as we head into the holiday season.”

COO Rick Gonzales noted the “remarkable decrease in the fuel prices year-over-year” with natural gas in November averaging $1.47/MMBtu, down 44.5% from the previous year. Distillate prices dropped 36.9% year-over-year.

The ISO did an “ad hoc update to its generator survey to include pandemic impacts … but none of the generation sector participants are reporting outages or derates as a result of the pandemic,” Gonzales said. “As a result, we’re not projecting any reliability issues, certainly at this point in time, as a result of the pandemic.”

NYISO Strategic Plan 2021-2025

Executive Vice President Emilie Nelson presented the NYISO Strategic Plan for 2021-2025, reiterating the accomplishments of the year and looking ahead to how the ISO will incorporate the clean energy mandates in the state’s Climate Leadership and Community Protection Act.

NYISO Management Committee — NYISO’s five-year Strategic Plan takes the big-picture view of stakeholder processes to meet the CLCPA statutory requirements in the electricity sector. | *NYISO*

“The board [of directors] thought it was more important than ever in these times of uncertainty to provide some clarity on what the objectives of the organization are for the future,” Nelson said. “If you consider the multitude of planning studies looking out 10 to 20 years in order to inform how the grid is going to transition, there’s a lot of quality work there.”

In addition to deploying the energy storage participation rules in August, Nelson said the ISO continued its exploration of carbon pricing and won FERC approval for its distributed energy resources participation model. She also cited as accomplishments improvements to its market rules for ancillary services and a proposed design for the hybrid co-located model.

Stakeholders and NYISO staff worked hard through the demand curve reset process, “which is always very involved, and … we progressed through the largest class year in a record time, all representing improvements that stakeholders have worked with the ISO on through the years,” Nelson said of the transmission queue that began in August 2019 and concluded this fall.

Tx Planning Changes and TAM Clarification

The committee approved revisions to streamline the ISO’s economic and transmission planning and expand its scope to capture the grid’s ability to deliver energy from the future generation resource mix to the forecasted load. The changes rename the Congestion Analysis and Resource Integration Study as the System & Resource Outlook and double the assessment periods to 20 years, consistent with the study period for proposed economic or public policy transmission projects. (See NYISO Business Issues Committee Briefs: Dec. 9, 2020.)

NYISO will continue to make additional economic planning studies available to interested parties, including one on the new energy deliverability metric. The Board must approve the Attachment Y Tariff revisions before the ISO can make a Section 205 filing with FERC in January.

The MC also approved a clarification on how the ISO’s new Tailored Availability Metric rules apply to landfill gas resources as well as to wind and solar. The clarification will replace the terms “wind and solar resources” with “intermittent power resources,” which includes landfill gas, in section 5.12.14.3 of the Market Administration and Control Area Services Tariff.

December 20, 2020October 30, 2023

NE Energy Leaders Discuss Paths to Decarbonization

State energy and environmental policy leaders from Connecticut, Massachusetts, Rhode Island and Maine outlined their long-term strategies to achieve decarbonization goals Dec. 15 during a webinar co-hosted by the Connecticut Power and Energy Society and New England Women in Energy and the Environment.

Heather Hunt, executive director of the New England States Committee on Electricity (NESCOE), served as moderator of a panel that examined decarbonization “Plans, Roadmaps and Pathways to 2030 and Beyond.”

Hannah Pingree, director of policy innovation and future for Maine Gov. Janet Mills and co-chair of the Maine Climate Council, said Mills was elected in 2018 with climate and energy policy issues leading the way. The governor signed legislation in 2019 to reduce carbon emissions by 45% by 2030 and 80% by 2050, and create the Climate Council, which recently released its first report. Pingree said decarbonizing transportation “is certainly our biggest nut to crack,” as 54% of the state’s emissions come from that sector. Another major hurdle for Maine is the heating sector, she said, where Mills set a goal of installing 100,000 new heat pumps by 2025.

“For a state with about 500,000 homes, these are fairly aggressive goals, and they get a lot more aggressive as we get out to 2030,” Pingree said.

From top left: Judy Chang, Massachusetts Executive Office of Energy and Environmental Affairs; Katie Dykes, Connecticut DEEP; Hannah Pingree, Maine Governor’s Office of Policy Innovation and the Future; Heather Hunt, NESCOE; and Carrie Gill, Rhode Island OER | CPES/NEWIEE

Carrie Gill, an administrator in the Rhode Island Office of Energy Resources, said the electric and thermal sectors are responsible for “about two-thirds of our greenhouse gas emissions.” She noted that Gov. Gina Raimondo issued an executive order tasking her with developing pathways and action steps to meet 100% of the state’s electricity demand with renewable energy resources by 2030, “the fastest pace in the nation.”

Rhode Island consulted with The Brattle Group to conduct an in-depth analysis, which led to a “suite of recommendations that we will act on beginning in 2021.” Gill said some of those recommendations include pursuing a change in the state’s renewable portfolio standard “to ensure that we’re reaching 100% renewables by 2030, and importantly that we maintain 100% renewables past 2030.” The state wants to continue progress on strategically modernizing the electric grid and will start to develop a role for energy storage, which Gill said is “a critical technology to balance renewable energy generation and electricity demand, especially as we green the regional grid.”

Katie Dykes, Connecticut’s Department of Energy and Environmental Protection commissioner, said state statutes require reduced carbon emissions economywide 45% from 2001 levels by 2030 and 80% by 2050. Additionally, last year Gov. Ned Lamont issued an executive order directing Dykes’ agency to evaluate pathways to achieve a 100% carbon-free electric supply for Connecticut by 2040.

“We all have very ambitious goals; some of them are framed slightly differently, but we know that to make progress effectively and get the best value out of the various strategies that we’re all implementing to meet these goals, our participation together in a shared regional grid ties together our fates in meeting these individual state goals,” Dykes said. “Strong regional collaboration is really essential to this effort for our integrated resources plan.”

Dykes said the electrification of the thermal and transportation sectors provides “the clearest pathways, both through procurement mechanisms and technologies that are continuing to come down in cost for reducing carbon emissions affordably.” She said the continued progress in decarbonizing the electric supply pays dividends and ensures that “those measures that we implement to clean up our transportation and thermal sectors will be even more effective in reducing emissions when we plug them in.”

State-by-state carbon dioxide emission-reduction targets for New England | CPES/NEWIEE

Judy Chang, undersecretary of energy for the Massachusetts Executive Office of Energy and Environmental Affairs, said her state has committed to net-zero greenhouse gas emissions by 2050. Energy efficiency is the No. 1 “pillar” of its strategy, she said.

“We have to limit the way we leak,” Chang said. “We leak our energy out of our windows and walls.”

Massachusetts will also need about 15 GW of offshore wind and 25 GW of solar “to power our economy,” and those numbers need to roughly double for the rest of New England “for the next 30 years.”

“We can’t do this by piecemeal planning, and we can’t afford to go into this without a long-term view,” Chang said. “We also cannot afford on the wholesale market side to keep going with our current market design and the current way of planning for transmission.”

That requires collaboration, she said, and “not only do we need to collaborate from a regional perspective … but also at the federal level.”

“We cannot actually achieve all the things that we want to achieve in the next 10 years as we set targets for 2030 without a federal government that can also support that,” Chang said.

Collaboration between the states, such as the Regional Greenhouse Gas Initiative or, potentially, the Transportation Climate Initiative, is not going anywhere. Earlier this fall, five of the six New England governors, excluding New Hampshire, signed a joint statement that was later followed by a vision statement from all six states through NESCOE calling on ISO-NE to make changes and reforms to wholesale market design, transmission planning and RTO governance to enable states to better meet their decarbonization goals. (See New England Governors Call for RTO Reform and States Demand’ Central Role’ in ISO-NE Market Design.)

“I think this is acutely needed, not only to ensure that our voices are heard and that there’s responsiveness within the [ISO-NE] board to state public policies, but also transparency and accountability to consumers,” Dykes said.

She added that from her time as chair of Connecticut’s Public Utilities Regulatory Authority, she recognizes the importance of “transparency and accessibility of the deliberative process that is incredibly important from a governance standpoint.”

“I’m optimistic about where it will take us and the possibilities for real collaboration amongst states, and with the ISO, that I think will be in our future,” Dykes said.

Chang announced an upcoming series of technical conferences in January and February on wholesale market design, transmission planning and governance reform.

“Understanding there are resource constraints on people and organizations, we really cannot afford to just go along and hope that we will land with the right market design and the right transmission pieces that need to be built,” Chang said. “I think that’s the ultimate vision … to really work collaboratively so that we can achieve this future in the least amount of disruption and at the lowest cost.”

December 20, 2020January 15, 2025

NY Climate Action Council Focuses Scoping Efforts

The New York State Climate Action Council (CAC) met Tuesday to discuss bioenergy, methane emissions and the formation of a utility consultation group while also receiving updates from its seven advisory groups.

The 22-member CAC is working toward a fall 2021 target for completing a scoping plan for achieving the state’s goals under the Climate Leadership and Community Protection Act (CLCPA).

The NY State Climate Action Council met via webinar Dec. 15, 2020. | NYDPS

Bioenergy

New York State Energy Research and Development Authority (NYSERDA) Interim CEO Doreen Harris, serving as CAC co-chair, said the council recommended the advisory panels conduct a study on the role bioenergy can play in meeting the state’s goals — switching to 100% zero-emission electricity by 2040 and reducing greenhouse gas emissions to 85% below 1990 levels by 2050.

The initial intent was to see where the CLCPA explicitly addresses bioenergy. Now it is up to the advisory panels to identify opportunities in the various bioenergy sectors, Harris said.

Harris highlighted that NYSERDA earlier this month issued a request for proposals seeking contractors to conduct site reuse planning studies for retired power plants, and that the state’s $226 billion pension plan announced it will divest from fossil fuels. (See NY Seeks ‘Just Transition’ in Decarbonization Plans.)

Utility Consultation Group

Harris invited the CEOs of the New York Power Authority (NYPA) and the Long Island Power Authority (LIPA) to participate in the utility consultation group along with representatives from each of the investor-owned utilities — National Grid, the Avangrid utilities, Central Hudson and Consolidated Edison.

“We see this group serving as a resource to the panels at large to help inform them of system considerations to account for in their strategy and recommendation development,” Harris said. “So, we see this group also becoming very helpful with cross-panel issues such as buildings and transportation electrification strategies … and through the scoping panel process, I welcome thoughts on where this utility information would help to promote our state investments and objectives.”

NYPA CEO Gil Quiniones | NYDPS

Gavin Donohue, CEO of the Independent Power Producers of New York (IPPNY), thanked the co-chairs for recognizing his efforts to get more utility involvement in the council’s proceedings at the working group level.

NYPA CEO Gil Quiniones said the authority’s strategic plan first focuses on “preserving and enhancing the value of our hydropower assets to serve as the base of our state’s renewable energy” as the country’s largest state-owned utility.

LIPA CEO Thomas Falcone | NYDPS

“We will also look to build priority transmission projects to integrate land-based and offshore wind renewables into our system,” Quiniones said.

LIPA CEO Thomas Falcone said the transmission cable permitting process for New York’s first OSW project, South Fork, is moving forward with the Public Service Commission and the federal Bureau of Ocean Energy Management. LIPA and Con Edison recently submitted to the PSC and NYSERDA a study of the transmission reinforcements necessary to deliver 9,000 MW of OSW.

Waste Not, Want Not

CAC Co-Chair and Department of Environmental Conservation (DEC) Commissioner Basil Seggos said that the DEC that day had finalized the regulations to reduce GHG emissions, the first regulatory requirement of the CLCPA.

The state in October completed its public hearing process on the proposed (Part 496) emissions limits. (See New York Holds Final CLCPA Emissions Hearings.)

The CLCPA directs the DEC to measure GHG emissions on a common scale using the carbon dioxide equivalence metric (CO₂e) and the 20-year global warming potential of each gas, as derived from the U.N.’s Intergovernmental Panel on Climate Change.

Martin Brand, DEC | NYDPS

DEC Deputy Commissioner Martin Brand said the waste emissions advisory panel has met twice since its founding in November and is focusing on methane emissions as well as collaborating with other panels on “a number of cross-cutting issues that we have to discuss.”

“All the goals are based on the goal of reducing methane emissions, primarily, and certainly there are a number of ancillary benefits for some of these programs,” Brand said. “A general theme is waste avoidance: Don’t create the waste in the first place. … Certainly, we’re going to focus on disposal avoidance, landfill avoidance, capture of resources and emissions from facilities for other use, and to reduce the impact of waste activities on host communities around the state.”

A recent study by Cornell University Professor Robert Howarth found that methane emissions have grown as CO₂ emissions have declined, leaving New York’s total emissions virtually unchanged from 1990. (See NY Study Highlights Rising Methane Emissions.)

Panel Updates

N.Y. DOT Commissioner Marie Therese Dominguez | *NYDPS*

Transportation Commissioner Marie Therese Dominguez said the Transmission Advisory Panel held public meetings this fall, including two roundtables in December that discussed electrification and green hydrogen, among other topics. (See NY Panel Examines Vehicle Electrification, Cleaner Fuels.)

Robert Howarth, Cornell University | NYDPS

Howarth, a professor of ecology and environmental biology, said he lived in a rural area and would like to see more electric buses in upstate New York, but was skeptical that significant amounts of green hydrogen could be generated through clean energy, and was concerned about generating hydrogen from natural gas.

“To the extent that we have surplus renewable electricity, there are far more efficient ways to store and use it than to generate hydrogen,” Howarth said.

Raya Salter, NY Renews | NYDPS

Raya Salter, lead policy organizer for environmental advocacy group NY Renews, said that she would like to see the state “get it right” in analyzing the lifecycle of co-pollutants so that there is strong guidance on these issues.

PSC Chair John Rhodes said that the Power Generation Advisory Panel he leads had organized itself into sub-groups:

The Equity Subgroup is developing recommendations to address community impacts relating to siting, health concerns and access to renewables and energy efficiency.
The Barriers Subgroup is focused on clean energy siting and energy delivery and hosting capacity.
The Solutions for the Future Subgroup is addressing technology and research needs and identifying market solutions to ensure system efficiency and send correct price signals to resources.
The Resource Mix Subgroup is focused on the growth of renewables and EE, transitioning away from fossil fuel generation and the deployment of energy storage and distributed energy resources.

The resource mix is “where a lot of the technical complexity really shows up,” Rhodes said.

Paul Shepson, dean of the College of Marine and Atmospheric Sciences at Stony Brook University, said he is “really fascinated by the distributed energy opportunity” and wanted to hear a comment on the analysis the power generation panel had done on small-scale, community-based power generation.

Paul Shepson, Stony Brook University | NYDPS

Rhodes said that while a 5-MW solar plant may be less efficient than a 100-MW solar plant, the former can still be valuable if it is close to load.

IPPNY’s Donohue said that while the generation working group is prioritizing a market solution, he didn’t hear any mention of carbon pricing, which his organization believes “could be the next iteration of a market outcome.”

Rhodes said the panel discussed it, and that it’s also a CAC agenda topic. “It’s hard to imagine us getting through this process without figuring out a position to recommend on carbon pricing,” he agreed.

Anne Reynolds, ACE NY | NYDPS

Anne Reynolds, executive director of the Alliance for Clean Energy (ACE NY), said that the barriers to getting renewable energy built include establishing uniform property tax rates statewide instead of developers negotiating agreements with every local government. While some people “believe that the main problems are behind us, from developers’ view that is not necessarily true,” Reynolds said. “We’re not all the way through fixing permitting.”

Labor Commissioner Roberta Reardon, co-chair of the Just Transition Working Group, which addresses environmental justice and social equity issues, said that the jobs being created in the clean energy transition “are not simply in the construction trades and in the flow of energy, but in all the support industries that go into it. There’s really a much larger area for workforce development than people tend to think.”

N.Y. Labor Commissioner Roberta Reardon | NYDPS

DEC Deputy Commissioner Jared Snyder said the next step in the scoping process would be for consultants Energy and Environmental Economics (E3) to complete technical analyses of the new state targets and standards and for the council to deliberate over recommendations from the advisory panels.

Peter Iwanowicz, executive director of Environmental Advocates NY asked if NYSERDA and DEC were still looking for someone to help run the CAC. Harris replied yes, saying the agencies “hope to have an announcement sooner than later.”

December 20, 2020

FERC Orders Follow-up NERC Cloud Filing

Citing “general agreement” within the electric industry about the potential benefits of virtualization and cloud computing services, FERC on Thursday ordered NERC to make an informational filing on possible modifications to the critical infrastructure protection (CIP) reliability standards to allow their use (RM20-8).

Thursday’s order follows a Notice of Inquiry issued by FERC in February and a separate order requiring NERC to provide regular updates on two existing standard development projects — 2016-02 (Modifications to CIP standards) and 2019-02 (BES cyber system information access management) — relating to the same issues (RD20-2). (See FERC Sets Inquiry on Virtualization, Cloud Services.)

The commission requested comment from industry players on four topics:

The scope of potential use of virtualization and cloud computing services;
Potential benefits and risks associated with these services;
Potential obstacles to adopting virtualization and cloud computing, including barriers posed by existing CIP standards; and
Potential use of new and emerging technologies in the current CIP standard framework.

FERC said the 26 comments and three reply comments “generally [supported] the voluntary use of virtualization and cloud computing services provided the risks associated with these technologies are mitigated.” It also said it was satisfied that projects 2016-02 and 2019-02 will “facilitate [their use] by clarifying their compliance treatment” in the CIP standards.

However, the commission questioned whether applications that the standard drafting teams (SDTs) for the projects are considering permitting would meet the needs that respondents envisioned.

Industry Wants Freer Hand in Cloud

In particular, industry participants indicated they would like to use third-party cloud services “for purposes beyond data storage (i.e., to perform [bulk electric system] reliability operating services).” But many complained that their ability to utilize such services is hampered by the current CIP standards, and is likely to remain so even after the SDTs complete their work.

For example, the American Public Power Association and the Large Public Power Council said in a joint filing that their members have “experienced objections by certain regional entities at the compliance level to evidence of security practices undertaken by CSPs [cloud service providers],” on the grounds that the CSPs are outside the members’ control. The organizations urged NERC to consider expanding the scope of the CIP standards to provide entities more flexibility in the tools they can use.

The National Rural Electric Cooperative Association (NRECA) agreed that “many … support services could be implemented in a cloud computing environment” beyond data storage. Examples include electronic access control or monitoring systems and physical access control and monitoring systems, endpoint detection and response tools, and security information and event management tools.

NRECA acknowledged risks associated with the use of cloud computing for these purposes — most notably the potential to expose an entity’s network assets to outside risks. It also acknowledged the potential loss of control over the CSP’s services, reliance on internet connectivity and the possibility of increased outage time when a cloud-based system goes down. However, the organization said many of its members believed that with appropriate infrastructure and security measures they “could utilize the cloud at least as effectively as private infrastructure, if not more so.”

NERC and the regional entities filed a joint comment recognizing that there “may be benefits to using these technologies,” though they also reminded the commission that many risks would need to be mitigated before they are implemented, “particularly with respect to BES reliability operating services.” The ERO emphasized its willingness to work with industry groups to improve reliability standards and said the NOI comments should help with these efforts.

Commission Seeks More Information

In its order, FERC agreed that expanding cloud computing services to include BES reliability operating services and other uses could bring benefits including “cost savings and enhanced security and resilience features” that registered entities may not be able to achieve otherwise. But it also agreed with NERC that the risks and benefits of permitting such use should be fully evaluated before any serious attempts to facilitate them are made.

As a result, the commission ordered NERC to “assess the feasibility of voluntarily conducting BES operations in the cloud in a secure manner” and how the CIP standards could be modified to allow this. Commissioners urged NERC to take the NOI comments into consideration — including potential security benefits of off-site virtualization and cloud computing, risks of storage of bulk electric system cyber system information outside a registered entity’s country, and allowing entities to conduct their own reliability risk assessments related to cloud computing. FERC also told NERC to consider whether a new audit process may be necessary to ensure that entities using CSPs are still in compliance with CIP standards.

The informational filing is due to the commission by Jan. 1, 2022.

December 20, 2020

DOE Issues China BPS Equipment Ban

The Department of Energy on Thursday issued a prohibition order barring some U.S. utilities from acquiring equipment from China, citing concerns that the Chinese government “is equipped and actively planning to undermine the [bulk power system].”

Affected by the order are utilities that supply critical defense facilities (CDFs), defined by Congress as facilities that are “critical to the defense of the United States” and “vulnerable to a disruption of the supply of electric energy” from external providers. Entities that meet this definition will be forbidden from “acquiring, importing, transferring or installing” the following equipment manufactured or supplied by entities “owned by, controlled by, or subject to the jurisdiction or direction of … China”:

power transformers with low-side voltage of 69 kV or higher, along with associated control and protection systems;
generator step-up transformers with high-side voltage rating of 69 kV or higher and associated control and protection systems;
circuit breakers operating at 69 kV or higher;
reactive power equipment, including reactors and capacitors, of 69 kV or higher; and
associated software and firmware installed in any equipment or used in the operation of the previous items.

The order will take effect Jan. 16. Entities affected will be notified no later than five business days after its issuance and will be required to certify with DOE by March 17 that they have not entered into a prohibited transaction and have internal monitoring processes to ensure future compliance. Certification must be performed every three years as long as the prohibition order is in effect.

In addition, the order requires affected entities to certify by Feb. 15 that they have “designated (or taken all action reasonably available … to cause the relevant regional entity to designate)” relevant CDFs as priority loads in system load shedding and restoration plans.

“This order is one of several steps this administration is taking to greatly diminish the ability of our foreign adversaries to target our critical electric infrastructure,” Energy Secretary Dan Brouillette said in a statement.

A media release from NERC called the order “an important next step to further protect defense critical electric infrastructure” and pledged to “continue to work with industry, DOE and other government partners … to protect grid security.”

DOE BPS Equipment Ban — Energy Secretary Dan Brouillette (center) | *International Atomic Energy Agency*

Order Builds on Foreign Cyber Fears

The order is the latest in a series of actions by the government this year aimed at blocking foreign interference in the North American electric grid.

President Trump set the tone in May with executive order 13920, which declared a national emergency regarding foreign threats to the BPS and gave Brouillette authority to ban purchases of equipment that posed a risk to the grid from entities connected to “foreign adversaries.” (See Trump Declares BPS Supply Chain Emergency.) DOE invoked this authority in Thursday’s order.

Trump’s declaration did not specify which countries were in mind. In a subsequent request for information, DOE identified China, Russia, Iran, Cuba, North Korea and Venezuela as foreign adversaries subject to the order. (See NERC Issues Level 2 Supply Chain Alert.)

Cybersecurity experts have expressed concern that China’s national security laws allow the government to compel individuals and companies to assist the country’s intelligence services. In June, the Federal Communications Commission designated Chinese hardware manufacturers Huawei Technologies and ZTE as national security threats. Communication equipment made by the two companies is widespread not only in the North American BPS, but also those in countries around the world.

The focus on Chinese equipment has sparked concern among industry representatives about the difficulty of tracking down manufacturers of specific equipment in the event of wider prohibitions on systems or even subcomponents from blacklisted countries or manufacturers.

“It’s one thing for us to recognize and figure out who we bought from. … We probably have those records going back 10 years,” Mike Kormos, senior vice president of transmission and compliance at Exelon, said at the National Association of Regulatory Utility Commissioners’ Summer Policy Summit in July. (See Industry Seeks Clarity on Supply Chain Orders.) “But when you start talking about potential subcomponents of these systems … [we] might have bought a transformer from one vendor, [and] who that vendor was using for subcomponents in that is something we don’t have, quite frankly.”