FERC has again turned down LS Power’s argument for a lower voltage threshold on economic transmission projects in the MISO footprint.
The commission repeated its refusal to consider a lower voltage threshold in two orders on rehearing Dec. 3 (EL19-79; ER20-1723-001).
LS Power made a late-summer push to persuade FERC that MISO should use a 100-kV threshold for market efficiency projects instead of the 230-kV cutoff the RTO was cleared to use beginning in July. (See LS Power Again Seeks MISO Cost Allocation Change.) The competitive transmission developer claimed that MISO’s 230-kV threshold is “arbitrary” because projects with voltages down to 100 kV can deliver significant regional benefits.
But FERC said small, regionally beneficial projects are the exception, not the rule, and do not justify opening more projects to competitive bidding.
“LS Power’s isolated and hypothetical examples are not generally representative of transmission projects with voltages as low as 100 kV within MISO,” FERC said. “We continue to find that MISO’s market efficiency project category and voltage threshold is not unjust and unreasonable simply because LS Power would prefer a lower voltage threshold that would open up more projects to competition.”
LS Power argued that FERC’s refusal to order a lower threshold ran counter to 2018’s Old Dominion Electric Cooperative v. FERC, in which the D.C. Circuit Court of Appeals ruled the commission erred when it prohibited cost sharing for a class of high-voltage projects that demonstrated significant regional benefits. The company argued the decision should be applied as caselaw, even for MISO lower-voltage facilities.
FERC said LS Power’s examples of low-voltage transmission projects “are not indicative of the benefits that would accrue from such projects on a more general basis.”
The commission also clarified that its decision does not mean that a regional economic project must benefit “all of MISO to be considered regionally significant.” FERC said it never made the determination that LS Power incorrectly interpreted.
In a bid to clamp down on an increase in emergency operating conditions, MISO plans to develop a new direction for its capacity auction and reliability requirements by the end of the year.
The grid operator said it wants to modify its capacity auction design to include a sub-annual component and create a selection method for new resource adequacy hours that define risk throughout the year. MISO hopes to file the two proposals with FERC by mid-2021.
Speaking during a virtual workshop Dec. 2, MISO Director of Research and Development Jessica Harrison said it’s time to “lean in and pick an option” on how the grid operator will divide its annual capacity auction into sub-annual portions and to determine which resource adequacy hours it will use to size up reliability risks instead of relying on analyzing summer peaks.
When pressed by stakeholders, Harrison said MISO prefers a seasonal auction frequency over monthly auctions, which would make forecasting more complicated. She also said it is leaning toward selecting resource adequacy hours using a “hybrid” approach where it would use both past maximum generation events and forward-looking risk predictions to select the year’s most precarious hours.
The RTO said sub-annual requirements will better reflect differing capacity needs during the year when compared to a single annual requirement.
The grid operator recently conducted yet another analysis in an attempt to persuade stakeholders that loss-of-load risk is looming outside the summer season. Staff said the footprint can no longer rely on a hypothetical summer peak day as an adequate risk measure.
MISO performed a loss-of-load risk analysis on its current portfolio mix should the interconnection queue’s projects be realized using two of the grid operator’s three futures. The analysis showed that the current portfolio’s risk was largely confined to the summer, including a slight risk in September. In the other scenarios, it found additional risk in January that increases year over year.
MISO control room and operator | MISO
According to the analysis, the footprint could be exclusively winter peaking by 2035 when using the planning future with the most aggressive electrification and renewables predictions.
Duke Energy’s Bryan Garnett said when he discusses a MISO seasonal construct with colleagues, he’s invariably asked: “Didn’t MISO already do that?” Garnett was referencing the RTO’s monthly voluntary capacity auctions that became annual auctions in 2013.
“Why is MISO doing this when no other RTO is doing this?” Garnett asked during the Resource Adequacy Subcommittee teleconference on Nov. 4.
“While there’s not a long, tenured history on this, I think we are seeing other ISOs and RTOs starting this discussion,” Harrison said. “We need to modify our construct before we run into problems.”
Madison Gas and Electric’s Megan Wisersky cautioned staff that load-serving entities can only build new capacity so fast. She said MISO’s seasonal definition of risks might push LSEs into building more generation on distribution systems.
“Tread carefully here about when you think all of this will happen and how fast we can respond,” Wisersky said.
MISO predicts it needs an 18.3% reserve margin requirement in 2021, compared with the 18% it used for 2020. Staff project a regional surplus for the 2021 summer and possibly 2022’s; however, it said supply could fall near or below its required reserve margin in 2023 or 2024. The RTO said its increasing resource-adequacy risk can be avoided if its LSEs firm up commitments of additional resources.
Some stakeholders aren’t convinced that MISO will effectively manage separate seasonal offers or be able to accommodate coal generation outages under a seasonal capacity design.
WEC Energy Group has suggested MISO can obviate the need for its planning reserve margin and capacity accreditations if it transitions to an annual capacity auction with four independent seasonal auctions, coupled with monthly auctions to take care of expected scarcity conditions.
WEC’s Chad Koch said the monthly auctions can account for supply changes, including planned outages, retirements, new resources, seasonal renewable profiles and retail seasonal non-firm load.
Impending Availability Accreditation?
Independent Market Monitor David Patton recommended MISO transition to an “availability-based accreditation based on resources’ availability during tight margin hours,” as the RTO ponders whether to recalibrate resources’ capacity accreditation.
Patton said he doesn’t believe that adjusting the accreditation will tighten supply and drive prices up as some stakeholders have suggested, but will lead instead to “more available, more accessible” capacity.
He said MISO’s current capacity accreditation is lacking because it doesn’t account for any outages or derates beyond forced outages or the operating inflexibility of certain resources. He said those factors raise the accreditation for all units.
“If I’m an old steam unit with a 20-hour startup time, I may offer into the day-ahead, but I’m rarely going to be used,” Patton explained during a Resource Adequacy Subcommittee teleconference on Dec. 3.
However, MISO should rely on history, not forecasts, to define the tight margin hours that accreditation would be based on, he said.
“I can’t conceive of any other way to define tight margin hours other than using actual tight margin hours, not a forecast,” Patton said. “If at the end of the day we’re managing a system with uncertainty … we have to use real-world hours.”
He added that using real-world hours in accreditation shouldn’t deter MISO from forecasting tight conditions and using them as a basis to rearrange planned outages.
Some stakeholders used nuclear maintenance as an example, where outages are scheduled three years ahead of time. They asked what happens if the outage lands on one of the predefined tight margin hours.
“That goes back to our principle: If you’re not there when you’re needed, then your accreditation should reflect that,” Patton said.
As U.N. Secretary-General Antonio Guterres warned of the fatal consequences of humanity’s “suicidal” war on nature on Wednesday, college teachers and students in New York started a three-day conference on how to save the planet through social equity, science and education.
Bill Nye “the Science Guy” said he likes to think of three big ideas to help sustain civilization, “and the first big idea is to raise the standard of living of women and girls, for when you raise the standard of living for women and girls, everybody’s life is better.”
Nye made his remarks Thursday at the 10th annual State of New York Sustainability Conference hosted by Cornell University, Ithaca College and the New York Coalition for Sustainability in Higher Education.
Bill Nye shared a session with keynote speaker Ayana Elizabeth Johnson at the 10th annual State of New York Sustainability Conference on Dec. 3. | NYCSHE
A 1977 Cornell graduate in mechanical engineering, Nye said his second big idea is science, in this case “electricity, which is magical. Electricity enables this electronic conference that we’re having today, and electricity can make toast. It’s this amazing source of energy. And when you think about the way we use energy right now, at least a third of it goes to the transportation sector. By some estimates half of it goes to the transportation sector.”
Electrifying all ground transportation and coming up with a better fuel for airplanes can eliminate an enormous amount of fossil fuel consumption, which will lead to cleaner air for everybody, Nye said.
“And the third thing is access to the internet, for when everybody has access to the internet you can have education for everybody in the world,” Nye said. “And when we have that you will not have this extraordinary anti-science movement, this anti-vaxxer movement, this weird denial of climate change point of view.”
When everybody shares this common vision of the future, “of science and our place in the cosmos, we’ll move forward very, very quickly. That’s my claim, based on history. Once things get going, things move really fast,” Nye said. “And so I am very excited about the future. If there are engineers out there listening, I want you to come up with better transmission lines for electricity, better ways to store electricity, along with electric vehicles, electric trucks and some new kind of airplane propulsion. It’s going to be fabulous.”
Policy Work
New York Sen. Rachel May | NYCSHE
State Sen. Rachel May (D), representing Central New York’s 53rd District, said that almost everything she’s worked on in the senate has to do with quality of life.
“I want to focus on three areas where there isn’t enough research and teaching being done at the higher ed level, and not enough policy being done at the legislative level, where I hope to see more collaboration and more interdisciplinary collaboration so that we’re bringing all the minds together, and the areas are reducing and eliminating waste, respecting our relationship to other species and the world around us, and questioning commodification.”
Anne Reynolds, executive director of the Alliance for Clean Energy New York, said the Climate and Community Investment Act (S 3616) now in committee is probably the most aggressive in the country and is economy-wide, requiring 85% reduction in greenhouse gas emissions from 1990 levels by 2050.
The state’s Climate Leadership and Community Protection Act passed last year has very specific provisions for electricity — 70% from renewable sources by 2030. In contrast, its transportation provisions are very general, Reynolds said.
Anne Reynolds, ACE NY | NYCSHE
“The electricity portions are more specific and more detailed because New York state has so much experience there,” she said. “For the last 20 years you all, if you live in New York, have had a charge on your electric bill that’s been a dedicated source of revenue paying for a whole suite of programs related to energy efficiency … and the state has had renewable energy goals since 2003 … and increased to 30% by 2015, a goal we did not meet. That’s important to know. We’re aiming for 70% renewable energy, but we’ve never met the goals we set before, so we have a lot of work to do.”
The clean transportation provisions are relatively weak because New York state has less experience in that area, Reynolds said. “There is not a dedicated source of revenue for transportation electrification, transportation alternatives, things that would reduce emissions.”
“The Department of Transportation always is going to have the priority of keeping the roads and bridges safe, as they should, whereas the [Metropolitan Transit Authority] is always going to have the priority of keeping the trains running on time in New York City,” she continued, arguing for the state to change the way it approaches the issue.
Map Your Magic
Shorna Allred, Cornell | NYCSHE
Shorna Allred, associate professor of natural resources and the environment at Cornell, introduced marine biologist Ayana Elizabeth Johnson and quoted from the anthology “All We Can Save,” which Johnson co-edited with Katharine Wilkinson.
“There’s a quote in your book that the climate crisis is not gender neutral, and that we have to really pay close attention to not just the science, but also to policy and justice,” Allred said.
“I think a lot more about the flip side of that, about what are we missing as far as opportunities for solutions,” Johnson said. “It is no surprise that the people who are already marginalized in society bear the brunt of the impacts of climate change. That is intuitive and there are lots of numbers to back that up, whether it’s people who are exposed to pollution from coal-fired power plants or people who are dealing with the impacts of hurricanes, and often the burden is on women and communities to help their families.”
Ayana Elizabeth Johnson | NYCSHE
Johnson said she much prefers to focus on solutions than detailing the problem, which is overwhelming.
The Brooklyn native co-founded The All We Can Save Project and recently co-created a roadmap for including the ocean in climate policy, the Blue New Deal, working with U.S. Sen. Elizabeth Warren’s (D-Mass.) staff.
A contrarian, Johnson has a way of looking at things from a fresh perspective, saying, for example, that “even people who deny climate change are on board with most of the solutions,” so why waste time arguing with them?
She is working on a book called “What If We Get It Right?” that says it’s important to know what you’re aiming for and touts diversity of opinion as important too, because “people [who] go to Bill Nye for [information are different] from people who want to hear me.”
“I think the first thing to always remember is that we each have a different role to play, and I encourage people to actually sit down and map what are you, what is your magic, what are the special skills that you can bring to the table when it comes to accelerating the implementation of climate solutions,” Johnson said.
The 20-year, $21.3 billion plan would reduce Tri-State’s CO2 emissions by 80% from 2005 levels by 2030 (20A-0528E). The plan’s preferred scenario would add more than 1.8 GW of renewable capacity by 2030 — more than doubling Tri-State’s currently contracted solar and wind resources — and 225 MW of standalone battery storage.
“We do not have to commit to a path at this time,” CEO Duane Highley said in a statement. “There will be time for emerging technologies to become competitive before we have to make acquisition decisions.”
At the same time, Tri-State pushed back against a recent preliminary order by the Colorado’s Air Quality Control Commission (AQCC) directing three coal-fired power plants, including Tri-State’s Craig Station, to close by the end of 2028, two years earlier than the cooperative planned.
Highley said Tri-State had “responsibly” set a voluntarily retirement date for Craig Station by the end of 2029, when it intends to have added 2 GW of renewable resources.
The Kit Carson Windpower facility | Tri-State G&T
“It must be noted that Tri-State, the other utilities and the state’s professional staff all testified that accelerated plant closures were unnecessary to achieve visibility goals and exceed requirements to achieve reasonable progress toward achieving visibility improvements under the regulations,” he said. “The [AQCC’s] unprecedented preliminary final action to require the early closure of Craig Station rejected the recommendation of the state’s professional staff.”
The agency issued the order under the Clean Air Act’s Regional Haze Rule and to meet the state’s greenhouse-reduction targets (26% reduction over a 2005 baseline by 2025, 50% by 2030 and 90% by 2050). The AQCC will make a final decision during its Dec. 16-18 meetings.
Closing Craig and a second coal plant by 2030, as Tri-State announced in January, would cut more than 1.1 GW of coal-fired generation out of its fuel mix. Some Colorado environmental groups have pointed out the cooperative will still draw 23% of its energy in the next decade from coal-fired resources elsewhere in its four-state footprint.
Under Tri-State’s preferred ERP scenario, renewables will account for 59% of its generation mix by 2030. That amount of renewables will require the company participate in a Western RTO, Highley said. The company is among several Western entities evaluating membership in Western Utilities Eye RTO Membership in SPP.)
“One of the great attributes of SPP is its reach across 14, 15 states. [It’s] been able to integrate more renewables in a bigger way than thought possible,” Highley said during a virtual press conference last month alongside Colorado Gov. Jared Polis. It was the second time this year he has joined forces with the Democratic governor to highlight Tri-State’s effort in meeting the state’s greenhouse gas emission-reduction targets.
“There are hours of getting 80% renewable service [in SPP]. We’re going to need that same coordination as we build out our renewables,” Highley said, pointing to SPP’s presence in both the West and East. “There’s a better market in the West if we can get [renewable energy] across that border between the Eastern and Western grids. SPP is in a better situation to manage that.”
U.S. energy leaders crossed the virtual border to Canada last week to share regional and federal updates with the Association of Power Producers of Ontario (APPrO) at its annual energy and networking conference.
“Every jurisdiction has its own peculiarities and specific assets … so everybody’s going to have a slightly different view, but I suspect the issues probably are very similar,” APPrO CEO David Butters said.
Nancy Bagot, senior vice president of the D.C.-based Electric Power Supply Association, said decarbonization goals create “a lot of tension in the energy space” because they were not considered in the current energy market construct.
“I think the path forward is a national economy-wide carbon price,” Bagot said. “That’s the most effective tool to get us to our target as a nation that may be more likely under a Biden administration.”
Bagot said there are “disparate interests and perspectives” on exactly how to achieve decarbonization targets without a clear federal policy.
Clockwise from top left: David Butters, APPrO; Nancy Bagot, EPSA; Dan Dolan, NEPGA; Gavin Donohue, IPPNY; Evan Bahry, IPPSA | APPrO
FERC took “an important first step” with its technical conference on carbon pricing in September, Bagot said. She added that NYISO has worked on developing a carbon price approach with stakeholders, and she hopes it can eventually file a proposal with FERC.
Gavin Donohue, CEO of the Independent Power Producers of New York (IPPNY), said that carbon pricing “has been our number one issue” since before the COVID-19 pandemic.
“We want to see carbon pricing. Obviously, we’d like to see an economy-wide approach, [and] the NYISO has developed a carbon pricing proposal that is ready to go; Tariff language is drafted,” Donohue said. “We need the state of New York to step up to indicate that they’re willing to use this market fix as a way to get to the next generation of resources to comply with the” New York Climate Leadership and Community Protection Act.
Dan Dolan, president of the New England Power Generators Association (NEPGA), said the ISO-NE region is comparable to “most other jurisdictions on the U.S. or the Canadian side.”
“Clearly, the most straightforward and economically efficient solution is a carbon price,” Dolan said. “Our view is that should happen, and it needs to be a carbon price that is sufficient to both support investment of the new clean energy that’s necessary as well as to support the retention and the re-integration of those resources on the systems that are providing those services as well.”
Evan Bahry, executive director of the Independent Power Producers Society of Alberta, said his province is the “most attractive jurisdiction” in Canada to add renewables as solar and wind prices have fallen. There are provincial and national carbon taxes in Canada, and in Alberta, next year half of the cost of electricity will be a carbon tax, Bahry said. Alberta is also the heart of the Canadian oil and gas industry, but the province does not have nuclear or hydropower.
Bahry said the challenge of meeting net-zero emissions by 2050 as laid out by the Paris Agreement is “a very large promise for our government to make on our behalf.”
“But like anyone else in our business, we like our challenges; we like our puzzles,” Bahry said. “We’re going to see how we can maintain reliability and open markets and achieve progressively more ambitious climate challenges.”
Butters said, “If it is all going to be electricity — and of course there are other technologies out there that people are looking at like hydrogen — I just find it frustrating that so much weight seems to be put on electricity carrying water for decarbonization.”
Navigating the Minefield
Dolan agreed with Butters and said there have been similar analyses in New England but added that the challenge also represents an opportunity.
“If we can get these two prongs right about getting the right services and monetized options for the services that are going to be necessary, and the financial structure within a market context to drive these new investments, it’s a tremendous opportunity for the companies that we all collectively represent, and for the next wave of companies that come in,” Dolan said. “It’s about trying to create that more sustainable market structure that has durability to it, to be able to both integrate and withstand the policy pressures that are right now the existential crisis we’re all wrestling.”
Donohue said that to have an honest discussion, “you can’t sit here and just say, ‘Hey, we’re going to do all this stuff,’ and not talk about carbon capture sequestration, not talk about offsets, not talk about the need for natural gas to back up the system in New York City.”
“What I’m trying to do is make sure that New York doesn’t sleepwalk itself into a California situation, because you can talk about all this wonderful stuff you’re going to do. … 9,000 MW of offshore wind and 6,000 MW of solar sounds great, but New York is a unique place,” he said. “We need to be honest with the public on what we need to do to keep the lights on and affordable. We fail to do that in New York. We just say we’re going to do things, and then when it comes to how you deal with building emissions, transportation systems and manufacturing from a carbon perspective, there are no details. There’s no discussion. It’s ‘Let’s go back to no more natural gas,’ so we’ve got to start having honest discussions with the people in our jurisdictions.”
Bahry surmised that the panelists have “spent much of our careers trying to explain to politicians unintended consequences.”
“We’re concerned about wealth transfer as a carbon tax rises in our jurisdiction and inflates the market price. How much wealth transfer are we contributing to jurisdictions around us? There’s a lot of unintended consequences that can occur in the electricity system if you’re not open to the landscape and know where the mines are on the minefield.”
The Western Interconnection Regional Advisory Board (WIRAB) on Thursday recounted its accomplishments in 2020 and laid out what it hopes to achieve in the coming year.
“It was an interesting year, but I think it was a successful year for the organization,” Eric Baran, program manager for electric system reliability at the Western Interstate Energy Board (WIEB), said during WIRAB’s monthly meeting.
WIRAB was established by Western governors under Section 215 of the Federal Power Act to advise NERC, WECC and FERC on proposed reliability standards for the Western Interconnection. The body, one of a handful that falls under the umbrella of WIEB, comprises members from all U.S. states and Canadian provinces that have load within the interconnection, as well as from northern Baja California, Mexico.
Among the group’s 2020 achievements, Baran said, were its contributions to a WECC Market Interface Committee (MIC) study to assess the reliability benefits and risks associated with the inclusion of day-ahead trading in CAISO’s Western Energy Imbalance Market (EIM). (See Study Measures Reliability Benefits of EIM Day-ahead.)
That study enumerated key benefits for the West from an EIM day-ahead market, including increased coordination across a broader geographic area; uniform application of advanced scheduling processes over multiple balancing authority areas; and improved positioning of resources for real-time operations. Risks included increased operational complexity, lower liquidity in the region’s existing bilateral markets and a potential disconnect between optimization of the electricity grid operations and natural gas pipeline system scheduling.
WIEB Executive Director Maury Galbraith highlighted the efforts of Alaine Ginocchio, a policy analyst for the board, in shepherding the market study through the MIC. “She worked long and hard in editing that paper with the folks at WECC, so that was instrumental,” he said.
WIRAB this year also “effectively encouraged” WECC to improve its assessment of long-term resource adequacy (RA) in the West, Baran said. As evidence of WIRAB’s success in this area, Baran noted that WECC will this month release an in-depth Western assessment of RA to complement an expand on NERC’s annual long-term resource adequacy assessment of the bulk electric system. (See WECC Board Adopts Reliability Risk List.)
Based on stakeholder input, WECC this year decided to make the West’s looming RA shortages a central focus of the organization. (See WECC Seeks to ‘Invent’ Future with RA Forum.)
“I think just based on the fact that WECC is going to be putting out this Western assessment … that was an effective initiative of WIRAB for this year,” Baran said.
Galbraith also lauded the work of California Energy Commission Vice Chair Janea Scott and Wyoming Public Commission Chair Kara Fornstrom, both WIRAB members, for increasing the group’s profile at WECC.
“I think they were instrumental in helping to raise awareness of the resource adequacy issue in the West, and without their leadership, I don’t think we would’ve made as much progress on that issue as we have,” Galbraith said.
WIRAB’s other 2020 accomplishments included:
Submission of detailed proposals for WECC’s 2020 study program, including studies on weather-induced loss-of-load risk; essential reliability services from distributed energy resources; weak grid, system stability and path limits; transmission expansion reliability; and resilience.
Encouraging Western reliability coordinators to adopt consistent metrics to measure performance and identify best practices.
Advising WECC’s Board of Directors on the organization’s near-term priorities and the reliability challenges stemming from the region’s changing resource mix.
‘Deeper Dive’
Baran described four initiatives WIRAB will pursue in 2021, including an effort to advise WECC to continue improving its RA assessment to ensure that FERC, NERC, and state and provincial regulators “have access to accurate, consistent and timely information to inform capacity expansion decisions in the West.”
A second initiative will advise WECC to assess the reliability benefits and risks of implementing dynamic line ratings throughout the Western Interconnection, Baran said, noting that FERC last month issued a Notice of Proposed Rulemaking to require all transmission providers to implement seasonal and ambient-adjusted ratings on their lines. (See FERC Proposes Requiring Variable Tx Line Ratings.)
“But there’s still more work to be done on … managing transmission line ratings” in the West, Baran said.
WIRAB’s third initiative focuses on advising Western RCs to improve their operational performance metrics and “strive for exceptional reliability in the Western Interconnection.”
The fourth initiative will see WIRAB advising WECC to undertake “comprehensive and forward-looking assessments” of essential reliability services as Western states and provinces pursue “100% clean” or zero-carbon policies.
“I think we have a lot of work to do in 2021,” Galbraith said. “I think we’re going to continue to work with WECC to revise their Western assessment of resource adequacy.”
“The issue of dynamic line ratings is becoming increasingly important. … I expect [to be] doing a deeper dive into what are the barriers that exist to having more dynamic line ratings and better performance on the transmission systems,” he said.
Although the pandemic turned this year into one of the most challenging in living memory, the U.S. offshore wind industry put “steel in the water”; the federal government made progress on environmental reviews; and many states ramped up their clean energy and procurement targets.
But growth challenges are starting to appear as several large projects move toward completion in the mid-2020s, putting pressure on transmission capability and supply chain infrastructure, according to federal and state officials.
So heard 150 participants on Wednesday at the eighth Annual New England Offshore Wind Conference hosted by the Environmental Business Council of New England (EBCNE). Following is some of what we heard.
Federal Perspective
James Bennett, BOEM | EBCNE
“The big item for 2020 is that we have steel in the water in the federal [Outer Continental Shelf],” said James Bennett, manager of the Renewable Energy Program at the Bureau of Ocean Energy Management (BOEM), referring to two 6-MW turbines in a pilot project on a site leased by the Virginia Department of Mines, Minerals and Energy.
BOEM currently has 16 leases and is looking at other areas as well, while states have gone beyond goals and have identified about 12 GW of offtake, he said.
“It’s not just the leasing and offtake, it takes a substantial development of the industry, including port facilities, testing facilities, academic programs have sprung up, particularly up and down the East Coast, and we have industrial facilities and industrial synergies available through the offshore industry in the Gulf of Mexico,” Bennett said.
BOEM has 10 construction and operation plans (COPs) under review now and anticipates another five or so in the near future, he said.
“We have issues that are starting to develop with regard to transmission and whether or not the system we have in place is as effective as it could be,” Bennett said.
“Navigation, of course, is probably the single biggest definer of what areas are even available for offshore development, and commercial and recreational fishing has been a key issue that we’re in the process of working through,” he said. “We’re anticipating a very active decade ahead.”
BOEM’s assessment of offshore wind development on the East Coast as of Dec. 2 | BOEM
BOEM in November announced a one-month delay in Vineyard Wind’s final permitting, now scheduled for mid-January, with another delay announced this week by the developer due to a change in turbine design.
“Our programs have been very aggressive in anticipating movement on these projects, and we run into some delays, but we continue to move along. South Fork is the next project we’re working on for the environmental impact statement to move towards a record of decision. We’re also looking at the New York Bight, in addition to the lease we issued, the Empire Wind project, and we anticipate moving on additional areas and now have established the Gulf of Maine Task Force … and are also looking at the Carolinas and out on the West Coast and Hawaii as well.”
Asked whether BOEM plans to open an office in the Northeast, Bennett said, “We believe that having our offices where the developers are would be a very good thing, but there are no concrete plans at the moment. It’s one of the things we’ll be looking at with the change in administrations. … We’ve been surprised during COVID at how much can be done remotely.”
States Ponder Shared Tx
Connecticut DEEP Commissioner Katie Dykes | EBCNE
“We are very close to issuing the draft of our integrated resources plan for our state … which enables us to track our progress in meeting our state public policy goals,” said Commissioner Katie Dykes of the Connecticut Department of Energy and Environmental Protection. “As a preview, we’ll be announcing in that plan that we are well on our way to meeting that 100% zero-carbon electric grid target by 2040, based on a whole portfolio of different resources, but recent commitments to offshore wind make up a really critical part of our state’s progress.”
Last year’s 800-MW Park City Wind project selection was the largest ever renewable procurement in Connecticut history, and the state has plenty of precision manufacturing to help develop a domestic supply chain for OSW and hopefully counteract the economic downturn inflicted by the pandemic, she said. For example, Park City will help build up the Port of Bridgeport, and the contract for 304 MW from Revolution Wind will help develop the state pier in New London.
“We were really pleased when Gov. [Ned] Lamont joined with four other New England governors to announce a vision statement that our states are working to implement that calls for a new, regionally based market framework,” Dykes said. (See States Demand ‘Central Role’ in ISO-NE Market Design.)
“I’m excited to share the work that we’re doing at this foundational stage of thinking about market designs that can work into the future to better catalyze the efficient deployment of renewables like offshore wind, and do so in a way that is harmonized with our regional wholesale energy markets,” Dykes said.
States will organize technical meetings in the new year and “we will be emphasizing the need for transmission, that our planning for a transmission backbone is critical to ensure that we have onshore and offshore system upgrades that will provide for efficient utilization of the offshore resources being built,” Dykes said.
Massachusetts DOER Commissioner Patrick Woodcock | EBCNE
Massachusetts Department of Energy Resources Commissioner Patrick Woodcock said it is important to maintain short-term progress but address long-term barriers to OSW development.
“We really are seeing that the transmission network will be limited when you see the states’ ambition, and we conducted a technical conference in 2020 that assessed whether there would be advantages to competitively soliciting transmission independently from generation, and we ultimately determined that it is a regional challenge,” Woodcock said. “The challenge is real, but trying to do competitive transmission and address the long-term challenges of stable growth for the industry really does need to be a regional effort done in coordination with Mass. Nixes Separate Offshore Tx RFP.)
The states need to start long-term planning for the OSW industry, Woodcock said, including transmission planning, development of ports to support the supply chain. They also need to answer the question whether “our market structure is positioned to deliver this scale of resources, and I think the answer to that is no,” he said.
The density of lease areas for uptake in New York, Connecticut and southern New England will create limitations that will require upgrades onshore, and questions linger about whether that will be cost-prohibitive and how to allocate those costs, he said.
Dan Burgess, Maine | EBCNE
“Delays in projects have put pressure on our port infrastructure across the East Coast. When you look at the condensing of schedules, it is the mid-2020s where a lot of projects are now planning to be installed, so there’s a scarcity of acreage for portside infrastructure,” Woodcock said. “Lastly, I would never have guessed in 2017 that there is some scarcity for leasing areas, but the interest of New York, Connecticut and New Jersey has really put pressure on our leasing area, which reinforces why we need to start planning for commercial leases in the Gulf of Maine.”
Dan Burgess, director of the Maine Governor’s Energy Office, said the state wants “to work closely with BOEM and make sure that whatever happens in the Gulf of Maine takes into consideration how important the fisheries are to our state. The lobster industry in particular is a big part of our heritage, but also a big part of our economic picture for the coastal communities.”
Developer Updates
Nathaniel Mayo, Vineyard Wind | EBCNE
Nathaniel Mayo, director of public affairs for Vineyard Wind, said the project the previous day had announced a supplier agreement with General Electric for 13-MW Haliade X turbines, supplanting a previous deal with MHI Vestas.
“There’s a lot of moving parts to that, the most notable of which from the development side being that we are now anticipating 62 turbine locations (down from 84), further shrinking that footprint and really capitalizing on a product from General Electric,” Mayo said.
The change in equipment necessitates a temporary withdrawal of the COP for some internal due diligence, which “will add a few weeks of additional delay to our work, but it’s been a long road and we look forward to completing that and resuming those operations as soon as possible,” Mayo said.
The company still plans to begin construction in the second half of next year and for the project to go online by the end of 2023.
Ruth Perry, Shell | EBCNE
The Massachusetts DPU last month approved contracts for the 804-MW Mayflower Wind project, said Ruth Perry, marine science and regulatory policy specialist for Shell, a co-sponsor of Mayflower Wind Energy with Ocean Winds, a joint venture between ENGIE and EDP Renewables.
The project is slated to go operational in 2025 and to date has completed benthic habitat surveys and export cable routing, and will continue surveys in 2021, Perry said.
Sophie Hartfield Lewis is head of permitting and marine affairs for the 704-MW Revolution Wind project, a joint venture between Ørsted and Eversource that also is scheduled to go online at the end of 2023.
Lewis touted the partnership having chartered the industry’s first Jones Act-compliant, U.S. flagged service operation vessel, a ship more than 260 feet long that Edison Chouest Offshore will build at its three shipyards in Florida, Louisiana and Mississippi.
Sophie Lewis, Ørsted | EBCNE
The focus was transmission for Scott Lundin, head of permitting in New England for Equinor Wind US, which partnered with BP on the Empire Wind lease off New York and the Beacon Wind lease off Massachusetts.
New England differs from New York in being a region with six states interconnected electrically. For the Beacon project, Equinor has looked for points of interconnection capable of delivering to New England, New York and New Jersey, he said.
“There’s no perfect solution, so we need to find a concept that will both be technically feasible, commercially viable and also permittable. … So we’re looking for the nexus of where those things come together,” Lundin said. “Within 60 miles we can maintain standard high voltage AC, but beyond that and definitively after 100 miles we have to start thinking about reactive compensation and consider DC.”
Scott Lundin, Equinor Wind | EBCNE
For the Beacon project, 60 miles reaches Cape Cod, but all the main load centers are outside the 100-mile radius, so “DC technology satisfies some of these regional transmission concerns and challenges,” and also requires less cabling, Lundin said.
The Southeastern Massachusetts region of ISO-NE is challenged to take much more power, so “where we can interconnect in one state but deliver power to another presents some opportunities here,” Lundin said.
FERC on Thursday ordered ISO-NE to remove its new-entrant rules for its Forward Capacity Market from its Tariff, preventing resources from being allowed to lock in their prices for seven years (EL20-54).
The commission said the rules resulted in “unreasonable price distortion” and that locked-in prices are “no longer required to attract new entry, with the benefits provided by price certainty no longer outweighing their price-suppressive effects.” FERC said that price-lock agreements in effect before the order will not be impacted, with the new rules starting with FCA 16, scheduled for February 2022.
The rules had been in effect since ISO-NE began its capacity market in 2006. They allowed capacity resources to sell at the same price for five years — extended to seven years in 2014 — with resources offering in Forward Capacity Auctions at $0 after the first year to ensure that they cleared. Although this prevented them from taking advantage of higher prices, it was seen as a shield against lower prices.
Before accepting a new generating resource for its FCM, ISO-NE tests to ensure they do not cause overloads that cannot be fixed in time for the capacity commitment period. | ISO-NE
ISO-NE implemented several other changes to the FCM when the price-lock period was extended, including a systemwide downward sloping demand curve to address capacity price volatility. It also implemented market scarcity pricing enhancements that increased reserve constraint penalty factors for 10- and 30-minute reserves, and bumped up the price that resources are paid for energy and reserves in real-time during scarcity conditions.
“Together, these changes to the capacity, energy and ancillary services markets have significantly altered the landscape for new entrants in ISO-NE,” the commission wrote. “The energy and ancillary services market improvements provide resources to receive a more significant proportion of revenues in these markets, which reduces the revenue that resources need to earn from the FCM to recover their costs.”
The order ends a six-year-long proceeding. When FERC approved the price-lock extension, it allowed ISO-NE to forego an offer floor for resources, despite previously rejecting a request by PJM to remove the offer floor for its own price-lock period. This prompted a challenge by Exelon and the New England Power Generators Association (NEPGA) and the D.C. Circuit Court of Appeals remanding FERC’s approval, though the court did not vacate the rules.
The commission said that new resources’ entry should be driven “at least in part” by future price expectations, and that the price lock interferes with that dynamic. With the elimination of price risk, a new resource may lower its offer price to increase the likelihood of being selected in the auction. FERC said that if this resource is the marginal resource, the lower clearing price “distorts the price signal sent by the FCM and reduces the price paid to all capacity suppliers in that auction.” The commission added that it previously recognized that new-entrant rules could result in price suppression, but ultimately found that it was “an acceptable byproduct of market rules that would attract new entry through greater investor assurance and protect consumers from very high year-one prices.”
ISO-NE spokesperson Matt Kakley said the RTO appreciated “the clarity” of FERC’s decision and is “prepared to eliminate the price lock for new resources.”
“We are gratified that the commission recognized the many improvements we have implemented in the New England wholesale markets,” Kakley said.
NEPGA President Dan Dolan said the organization is “very happy to see that FERC agreed that the seven-year capacity price lock is no longer necessary to bring in new investment and resources into New England. … This order is a strong statement that New England’s Forward Capacity Market has matured to be an investible market that, when properly structured, can support reliability and new investment.”
But FERC disagreed with NEPGA’s argument that unreasonable price suppression would continue even after the price lock is removed unless ISO-NE implements a soft offer floor. The commission said that though NEPGA demonstrated “that FCA pricing outcomes can theoretically differ depending on whether a soft offer floor or a zero-price offer requirement is in place, recently cleared resources are unlikely to have high going-forward costs.”
The commission agreed with ISO-NE and Potomac Economics, the RTO’s External Market Monitor, that the adoption of an offer floor “would unnecessarily complicate the FCM and have detrimental consequences.”
Dolan said NEPGA stands by its concerns about “the ongoing price suppression effect that price-taking units have on the auction results” but added that “fortunately, the end is now in sight.”
Ontario’s nascent capacity market could take advantage of lessons from the U.S., experts said Wednesday.
The panel during the Association of Power Producers of Ontario’s (APPrO) annual energy and networking conference was coincidentally the same day as the Ontario Independent Electricity System Operator’s (IESO) first ever capacity auction for summer 2021. The auction marks the first time the province will allow non-demand response resources the opportunity to supply capacity.
Borden Ladner Gervais partner and panel host John Vellone said it was only fitting that APPrO host the discussion as offers from Ontario suppliers rolled in.
“Where we’ve been in the U.S. is we’ve had a surplus for quite some time,” said Potomac Economics President David Patton, who was on hand to offer the American perspective on capacity market formation.
Patton said U.S. markets typically maintain 15 to 17% in additional reserves beyond a peak-day forecast to achieve the U.S.’ one-day-in-10-year loss-of-load risk standard. American capacity markets are covering for existing generation’s going-forward costs but not generating signals for new investment, Patton said.
Complicating matters, Patton said policy-driven investments in renewable generation are growing existing surpluses.
“So there’s a bit of a challenge, because the markets don’t look in the near term like they’re going to be moving towards a long-run equilibrium,” he said.
Patton said market design must balance out-of-market investments in renewable generation to meet public policy goals with the need for the market to facilitate good decisions by market participants. He also said most renewables do not contribute meaningfully to capacity reserves and said capacity credits should reflect that.
Incorporating carbon pricing into markets would be beneficial because it would reduce out-of-market distortions, he said. “If you have out-of-market actions, it’s always detrimental to the market.”
“Out-of-market interventions aren’t going to stop; they’re just going to grow,” said Jason Chee-Aloy, managing director at Ontario-based energy consulting firm Power Advisory. “I think we have to admit that’s going to happen.”
Patton said forgoing a capacity market is an option, provided that a market’s shortage pricing is strong enough.
“Pricing is king in any market, and I would argue that’s something that we got wrong in Ontario from the get-go with uniform pricing,” Chee-Aloy said.
Ontario has a chance to recast its pricing, he said, suggesting the province use offer guarantee payments and make-whole payments. He said the re-evaluation would come at an opportune time, as Ontario is predicted to need capacity by the late 2020s.
Chee-Aloy pointed out that local distribution companies in Ontario do not have obligations to serve load, leading to a lack of a “robust buy-side” in the market. He said generators and resource adequacy providers have to finance projects and could bolster investments with market hedges.
“We’re still double-downing on out-of-market payments,” he said. “We’re going to need a multipronged approach to resource adequacy. And sometimes I think Ontario looks to the Northeast when I think we should look to the Midwest. When you look at the characteristics of Ontario, we’re much more like [MISO]. We’ve got a mixture of different types of players; we’ve got rate-regulated generation, and pretty much all of the independent power producers are under contract with the IESO.”
He also pointed out that the government-owned Ontario Power Generation owns about 50% of the capacity in the province, much of it rate-regulated, reminiscent of MISO’s vertically integrated utilities.
“But we could rely less on resource adequacy mechanisms … if we get the shortage pricing right for energy and operating reserves,” Chee-Aloy said.
Risk is currently high in Ontario, he said, evidenced by the 759 renewable energy contracts terminated within the past year-and-a-half by the Progressive Conservative provincial government as a cost-cutting measure. He said he did not know of any other market except Spain that has reversed so many already-executed contracts.
DeMarco Allan senior partner Elisabeth DeMarco said it is no longer simply a matter of working out energy market pricing, but electricity and emissions market pricing.
“We are very much behind the ball of emissions market and electricity market integration,” she said of Ontario. “It’s not some distant, foreign aspect of markets, but now an integral portion of it.”
ReliabilityFirst’s annual meeting, held via conference call on Thursday, saw presentations to the regional entity’s membership and Board of Directors on topics ranging from diversity in hiring to next year’s financial metrics.
Board Confirms RF Leadership
The board unanimously reconfirmed RF’s leadership for another year, including President and CEO Tim Gallagher; Vice President of Reliability and Risk Jeff Craigo; Vice President of Entity Engagement and Corporate Services Robert Eckenrod; General Counsel and Corporate Secretary Niki Schaefer; and Treasurer Carol Baskey.
Directors also approved the board meeting schedule for next year, with meetings to be held March 18, June 16-17, Aug. 18-19 and Dec. 1-2. All meetings are currently planned to be held in person, though the board reserved the option to convert to conference calls as needed.
More Diversity Investments Needed
Wendy Weaver, manager of human resources, told the board that the organization’s efforts to create a more diverse workforce are showing signs of success, though much work is still needed.
ReliabilityFirst’s staff in 2020 broken down by age group (top) and gender (bottom) | ReliabilityFirst
Consistent gaps are still present in terms of both ethnicity and gender, with RF’s staff 93% white and 69% male. Weaver reminded the board that the gender division has improved slightly from this time last year — when the split was 29% female to 71% male — and that an equal number of men and women were hired this year. But she said it can do more to ensure that talented women apply to the organization.
Similarly, ethnic diversity remains a “major gap” that the HR department is working hard to overcome. Initiatives to address the shortfall include partnerships with advocacy groups such as the National Society of Black Engineers and the Society of Women Engineers, and outreach to historically black colleges and universities.
The coronavirus pandemic has also provided an unexpected opportunity to expand the RE’s outreach, thanks to the expansion of remote work opportunities and the revelation that many jobs do not actually require an employee’s full-time physical presence. Candidates that may not have seen RF as an attractive proposition may now be tempted to give the organization a second look, while the organization’s recruiters similarly have a new motivation to cast a wider net.
The pandemic “has changed the landscape of recruiting this year and into the future — everything from virtual recruiting, virtual onboarding, virtual job fairs,” Weaver said. “But it’s also created a really great opportunity for us to look at different offerings and try on different vendors.”
COVID Frees Funds for Assessment Relief
RF is on course to end the year $1.1 million, or 4.54%, underbudget, members heard in a presentation from Baskey.
RF staff in 2020 by ethnicity | ReliabilityFirst
Savings mainly came in the areas of employee benefits, contracts and consultants, and meeting and travel expenses, the last of which came as an unexpected result of the COVID-19 pandemic. It also enabled savings in the other two categories, Baskey reported, thanks to the deferral of training programs that the RE counts as employee benefits and the postponement of some contracts and consulting agreements until next year.
Similar trends were seen across the ERO Enterprise this year, with NERC in August projecting it would end the year $2.4 million underbudget for meetings and travel. (See Pandemic Provides Travel Savings for NERC, REs.)
RF’s budget for next year, approved by FERC Approves Standard Revisions, ERO Budgets.) Baskey explained that the lower assessment reflects that the RE plans on “really giving back our savings from COVID” next year.
Members elected Rachel Snead, director of NERC reliability compliance and policy for Dominion Energy Virginia, to the board as the new representative from the supplier sector. Re-elected were Scott Etnoyer, senior director of Talen Energy’s NERC and cyber protection program, representing the at-large sector, and independent member Patrick Cass, former executive in residence at the University of Louisville College of Business.
Snead will take the place of Lou Oberski, formerly of Dominion Resources Services, who served on RF’s board since 2011 including stints as chair and vice chair. The board passed a resolution thanking Oberski for his service, as well as fellow retiring Directors Lisa Barton, of American Electric Power, and Susan Sosbe, of Wabash Valley Power Association. Barton has served on the board since 2014 and Sosbe since 2017.
“You guys are great leaders across the industry, and RF is really an example of incredible leadership,” Barton said at the close of the board meeting. “My parting words are … keep it up; keep RF in the lead. It really has been at the cutting edge of governance for all of the regional entities.”
