SPP’s Western Interconnection stakeholders on Monday voted to move forward with parallel operations, the final test before the Western Energy Imbalance Service (WEIS) market’s planned February launch.
The move will conclude a series of market trials that began in June. WEIS members tested the connectivity between their systems and SPP’s before moving into structured and unstructured testing of dispatch instructions.
The Western Area Power Administration’s Rocky Mountain Region abstained from the vote, saying it had to “work things out contractually.”
“We’ve got to finish strong,” SPP’s David Kelley, director of seams and Tariff services, told the Western Market Executive Committee (WMEC) during its meeting Monday. “We’ve been strong to this point. There’s a lot of work to do. I’m confident we’ll meet that challenge.”
WEIS participants are moving on to the final market trial test. | SPP
On Wednesday, SPP held a meeting for new members on the RTO’s integration process. Staff discussed the confidentiality agreements necessary to participate in some future meetings and fielded comments by some of the Western utilities evaluating WEIS membership.
WMEC Approves 6 WRRs
The WMEC remanded back to the Western Markets Working Group a WEIS revision request (WRR) providing further guidance on service flow constraints (SFCs) following concerns raised by SPP’s Market Monitoring Unit.
WEIS market participants review edits to one of several revision requests. | SPP
The proposed change (WRR16) would add a list of SFCs as an appendix to a business practice (BP). The MMU pointed out that “on-the-fly” SFCs cannot be represented in real time in an appendix.
“We have concerns about duplicative or misleading information,” the MMU’s Ian Wren said. “Why have an appendix at the outset when we know it will never be accurate?”
Kelley said including the list in an appendix was an effort to provide transparency and meet the Tariff’s requirements. “We just committed in the Tariff to make it publicly available,” he said.
The MMU and staff agreed the concerns could be addressed by posting the SFC list online.
The WMEC asked the working group to eliminate WRR16’s reference to the appendix. Staff will research all WEIS governing documents, including outstanding revision requests, to remove any other references to the appendix.
The committee approved six other WRRs. The measures cleared unanimously with the exception of WRR13 and WRR14; the Municipal Energy Agency of Nebraska abstained from both votes.
WRR10: ensures the WEIS market’s dispatch of resources does not violate an operating instruction when resources are deployed for ancillary services (AS) by limiting the instruction’s upper limit, reduced by the resource’s upward AS.
WRR11: cleans up language from previous market designs or carried over from the Integrated Marketplace’s protocols and accidentally left in.
WRR12: adds language describing marginal losses and the loss-adjustment factor to align with WRR8.
WRR13: removes the supply adequacy analysis’s undersupply description and documents the real-time operating constraint to be activated when a participating balancing authority has not resolved an energy obligation deficiency, aligning the WEIS protocols with WRR7.
WRR14: recognizes the market economic dispatch’s physical and non-physical constraints and defines the term “market operator.”
WRR15: adds WEIS BPs to the WRR process, allowing stakeholders to create, modify and delete BPs.
Vistra continues to shed fossil-fueled assets, confirming Wednesday it will shut down a 40-year-old coal plant in South Texas over regulatory compliance and economic concerns.
The Irving, Texas-based company said it would retire the 650-MW Coleto Creek Power Plant no later than 2027 because it would be too expensive to comply with a pair of recently finalized EPA rules.
Separately, Luminant, the company’s Texas generator, notified ERCOT on Monday that it intends to retire an older gas-fired generator with 244 MW of capacity in April 2021. The Trinidad Power Plant dates back to 1965.
Vistra said its analysis of EPA’s Coal Combustion Residuals and Effluent Limitations Guidelines and potential future regulations would require a capital investment of “tens of millions of dollars” in emissions-control equipment to operate Coleto Creek beyond 2027. The first rule regulates the disposal of coal ash, and the second limits the amount of toxic metals in wastewater.
Vistra says it will shut down its Coleto Creek Power Plant by 2027. | Luminant
“This investment cannot be justified based on the underlying economics of the plant and the uncertainty of more stringent regulations to come,” Vistra spokesperson Meranda Cohn said in an email to RTO Insider.
Coleto Creek is the smallest of Luminant’s three coal plants in Texas. It was designed as a baseload plant but has been operating at only 38% capacity through the first nine months of 2020, the company said.
Vistra closed three power stations in 2017, shutting down 3.85 GW of coal fired generation because of the “economically challenged” environment. (See Vistra Declares End of Midwest Coal Fleet.)
Luminant has about 39 GW of generation, primarily coal- and gas-fired, across 12 states. In recent years, it has ventured into solar power and energy storage in its Texas footprint, where it has 180 MW of installed capacity and another 2 GW under development or in the pipeline.
“Vistra does not take lightly any decision about operations,” Cohn said. “The company continually assesses our power plants based on real-time information while also analyzing the cost of environmental compliance for existing and pending regulations.
Luminant filed a notification of suspension of operations (NSO) with ERCOT, telling the Texas grid operator it plans to decommission and permanently retire Trinidad as of April 29, 2021. Market participants have until Dec. 21 to file comments on the plan, after which ERCOT will issue a determination on the plant’s future.
Wharton County Generation also filed an NSO on Monday for a 69-MW gas-fired unit along the Texas Gulf Coast. The company said the plant was decommissioned and retired Monday after a forced outage. ERCOT said it will not evaluate the resource for reliability-must-run status.
WECC on Monday released a heavily revised version of its proposal to extensively reorganize its stakeholder committee structure, as it sought to address a flurry of member comments and concerns about the original plan released in October.
It also seeks to address the reservations of stakeholders who felt the effort might move too quickly to provide for thoughtful deliberations. (See WECC Members Seek More Time, Input on SETF Plan.)
In a document summarizing the revisions, the SETF acknowledged stakeholder complaints that it was not clear about what problem it is seeking to solve with the proposal. One commenter wrote that “not being direct about the problem to be solved is a fatal flaw. I recommend adding an explicit problem statement that is specific.”
The updated proposal explains that “access to stakeholder subject matter expertise is critical to WECC’s ability to fulfill its reliability and security responsibilities.”
“The existing stakeholder engagement structure and processes are not well suited to enable WECC to marshal that expertise to identify and analyze emerging reliability and security issues in a timely manner,” the proposal says, adding that a streamlining of the existing committee structure and creation of new structures will better support WECC’s mission.
The newer plan largely scraps a previous proposal to consolidate two of WECC’s three major standing committees — the Operations (OC) and Market Interface (MIC) committees — into a single Operations, Security and Market Interface Committee (OSMIC), while leaving the Reliability Assessment Committee (RAC) intact.
WECC’s latest proposal seeks to completely disband the Operating, Market Interface and Reliability Assessment committees and house their functions into a more fluid “working committees” structure overseen by a new Committee Review Body. | WECC
The SETF had found that the OC and MIC mostly functioned as networking and information-sharing venues rather than as groups producing vital work products for WECC. On the other hand, the task force determined the RAC plays a key role in the regional entity’s resource adequacy efforts.
Stakeholders expressed different concerns about WECC’s approach to streamlining the committees. As one commenter said, “The combined OSMIC seems way too broad a scope to allow useful participation.” Others worried that in effectively disbanding the OC and MIC, the task force was too heavily discounting the value to stakeholders of the networking and information-sharing opportunities provided by the committees.
But the latest proposal does not back off from making radical changes to the standing committees. Instead, it identifies two “value streams” flowing from the existing committee structures: work products (value stream 1) and stakeholder interaction (value stream 2).
Retirement, not Consolidation
The SETF proposes to address value stream 1 by retiring all three standing committees — including the RAC — and placing their work product efforts into a more fluid “working committee” structure overseen by a newly created Committee Review Body (CRB), which would replace WECC’s existing Joint Guidance Committee.
The proposal explains that WECC’s standing committee structure “does not readily allow for issues to be addressed across multiple disciplines.” As a result, an issue that crosses disciplines is typically assigned to multiple committees rather than a single multidisciplinary one, with various ad hoc work groups and task forces organized to fill in the gaps.
“Once the various committees complete their work, which is not necessarily coordinated, there is no reconciliation of the work, findings or recommendations. This results in piecemeal work, which may still have value, but lacks cohesiveness and requires stakeholders to reconcile the separate work products on their own,” the proposal notes.
Under the new proposal, the nature of the issue would dictate the composition of the group working on the topic, “rather than the work on the issue being dictated by the composition of the group,” the proposal says. And while the CRB would be responsible for managing and aligning work products, approval of final products would be left to the members of the working committees.
Each working committee would be “co-led” by a stakeholder chair and a subject matter expert drawn from WECC staff.
“This will formalize the role of WECC staff in communicating messaging and directional expectations. It will also provide continuity when the chair changes,” the proposal says.
Working committees will consist of voting members and general members. The latter would be able to “come and go,” offer input or just observe, but they would not be allowed to vote on a work product.
The proposal envisions the CRB as a small committee consisting of members drawn from stakeholders, WECC management and the RE’s Board of Directors, with a board member functioning as chair. The CRB would make decisions related to the creation and retirement of working committees and perform annual reviews to ensure work is proceeding as planned.
And while the CRB will not be responsible for approving work products, it will evaluate whether committees are meeting specific criteria related to WECC’s “strategic direction” and long-term priorities, and whether it is staffed with appropriate subject matter experts.
Nurturing Cohesiveness
The SETF plan seeks to address value stream 2 — stakeholder interaction — through the establishment of a Reliability and Risk Security Committee (RRSC), which would “serve as the permanent home for stakeholder discussion, networking and information sharing activities.”
“This value stream is equally important to stakeholders and WECC as it helps incubate ideas, stimulates thinking and nurtures the cohesiveness of our stakeholder community. The SETF is committed to preserving this value stream and enhancing the benefit it brings to WECC and its stakeholder community,” the proposal states.
Run by a combination of stakeholders and WECC staff, the RRSC would be responsible for conducting forums and recommending other opportunities for stakeholder interaction while also helping to identify new issues “ripe for work” by a working committee. It will also provide a forum for sharing work provided by the working committees.
The RRSC would be open to all interested parties, and its leadership would be drawn from a wide swathe of stakeholder groups, including policymakers and regulators; public interest groups and nongovernmental organizations; consultants and National Laboratory staff; WECC staff; and industry experts in operations, planning, markets and security. Leaders would be nominated and elected through a formal process still to be determined.
More Time, Space for Comments
In addition to the substantive revisions, the SETF also conceded to stakeholder concerns that the project’s timelines were too aggressive by allowing for multiple iterations of the proposal and extending discussions into 2021. It also opened a second six-week comment window until Jan. 15, 2021, and addressed logistical issues related to the commenting process, including one related to word limits.
Renewable energy proponents expressed frustration this week over what they perceived as MISO’s premature declaration that its planning studies are above reproach.
The source of concern came during the Planning Subcommittee meeting Tuesday, where MISO made a pre-emptive determination that its planning study objectives, methodologies and assumptions are “fair” in both its generator interconnection and annual Transmission Expansion Plan (MTEP) studies. The grid operator said the separate processes don’t require significant alteration, despite stakeholder concerns that they should be better aligned.
MISO said any differences in the study approaches are appropriate.
The Planning Subcommittee had reviewed MISO’s generator interconnection queue and MTEP planning study processes as part of a larger endeavor to better align its annual transmission planning with necessary network upgrades identified in interconnection studies.
The effort, which could have included study process alterations, is meant to produce more multifunctional transmission projects and combat steeply rising interconnection costs that result in high dropout rates of proposed generation projects.
Multiple stakeholders questioned MISO’s stance on the issue.
“It doesn’t seem fair that MISO has made this determination that its process is fair without stakeholder discussion,” Clean Grid Alliance’s Natalie McIntire said.
“I don’t agree that the status quo is fair,” the Union of Concerned Scientists’ Sam Gomberg said. “We aren’t diving deep enough to figure out how reasonable these studies are. … I don’t feel that I’ve been convinced.”
“I think of the planning as ‘The Price is Right’s’ Plinko game,” Gomberg continued, likening proposed generation projects to the discs and the various assumptions in interconnection studies to the pegs — where any peg hit can derail a project. He said interconnection projects are subject to factors not assumed in MTEP studies, culminating in costs being shifted away from annual transmission investments and onto generation projects’ network upgrades.
Sustainable FERC Project’s Lauren Azar asked for the opportunity to submit written comments to rebut MISO’s conclusion.
McIntire said MISO’s assessment of its separate study processes does not address transmission owners’ unique local planning criteria, which are varied and possibly discriminatory, as they are applied to interconnection studies but not MTEP studies.
“At some point, we need to address that in the stakeholder forum,” McIntire said.
MISO plans to hold a discussion on TOs’ local planning criteria in spring.
But Xcel Energy’s Drew Siebnaler said that no stakeholder has demonstrated that interconnecting generators are bearing cost shifts because of inadequate transmission planning.
“I have yet to see that there is any harm caused to generators because of modeling assumptions,” he said.
MISO Senior Manager of Expansion Planning Edin Habibovic said the RTO has found that costs are being assigned appropriately between the queue and MTEP.
CGA’s Rhonda Peters said the fact that nearly all generation projects in MISO West’s 2017 cycle dropped out of the queue points to the “process being broken and something being wrong.” The West region has been routinely flagged by stakeholders as troublesome for interconnecting generation. (See MISO West Risks Becoming ‘Dead Zone,’ Stakeholders Warn.)
WEC Energy Group’s Chris Plante pointed out that MISO is also mounting a long-range transmission plan, which will most likely be a “substantial transmission overlay” to address some of the footprint’s generation interconnection constraints.
But McIntire said that the addition of a long-range planning effort still does not explain why the transmission issues found in generation interconnection queue studies do not show up in the annual MTEP economic studies.
Brattle Urges Look Beyond Reliability
Meanwhile, one consulting group has encouraged MISO to think outside of reliability and local needs for upcoming long-term transmission planning. (See MISO Outlines Early Long-term Tx Plan Details.)
Brattle Group Senior Fellow Johannes Pfeifenberger said that in general, current planning processes do not produce the most valuable transmission infrastructure because most projects only address reliability and local needs and exclude public policy or economic needs.
“A continued reliance on traditional transmission planning that is primarily focused on reliability and local needs leads to piecemeal solutions instead of developing integrated and flexible transmission solutions that enable the system to meet public policy goals will be more costly in the long run,” Pfeifenberger told MISO state regulators in November. “Substantial recent transmission investments focused too narrowly on reliability and local needs have resulted in missed opportunities.”
The Organization of MISO States has convened a special cost allocation committee to draw up principles on how the RTO should approach the cost sharing of its recently announced long-term transmission planning effort.
Pfeifenberger said most grid planners tend to default to the easiest method: developing necessary local and regional projects that do not have to be allocated.
He said that bickering over project cost allocation has “derailed many planning efforts and created barriers to the development of valuable transmission projects.” He asked MISO to consider the “full range of benefits” of new transmission projects and urged staff to do the difficult work of allocating the costs of beneficial economic and public policy projects.
Brattle notes that the U.S. is experiencing an investment cycle in transmission to replace the last large system buildout in the 1960s and 1970s. The firm said the rebuild coming due offers an opportunity for a modern rework that has lower incremental costs and makes use of existing rights of way for transmission.
As Joseph T. Kelliher started the third and final panel of the virtual New England Energy Summit on Monday, the former FERC chairman said there has “always been some level of tension” between federal and state governments and grid operators.
“It existed before me. It’ll frankly probably always exist,” said Kelliher, a Republican who led FERC from 2005 to 2009. “So, it really is a question [of] how do you try to minimize the extent of that tension as much as possible.”
Kelliher served as moderator of a panel that featured FERC Commissioner Neil Chatterjee, Massachusetts Secretary of Energy and Environmental Affairs Kathleen Theoharides and ISO-NE CEO Gordon van Welie. Kelliher ultimately did not have to referee a tense exchange of ideas. Instead, an “interesting and substantive” discussion unfolded from a “polite group,” according to Kelliher.
“I thought maybe you’d mix it up a little bit just for the entertainment value of the audience,” Kelliher said.
Clockwise from top left: former FERC Chair Joseph T. Kelliher; Kathleen Theoharides, Massachusetts EEA; ISO-NE CEO Gordon van Welie; FERC Commissioner Neil Chatterjee; Dan Dolan, NEPGA; and Jim Monahan, The Dupont Group. | NEPGA
Vision of the Future
Van Welie said that as ISO-NE did its strategic planning over the past 15 months, it was “very clear to us that there was significant change coming, and we wanted to make sure that we had appropriately positioned ourselves for those changes.”
“We have a mission statement, which is a fairly detailed statement, hardcoded in our Tariff documents … [and] essentially says that we have responsibility for designing and operating the wholesale markets, for upgrading the power system and doing transmission planning for the New England region, but it doesn’t really say anything about future intent,” van Welie said.
ISO-NE presented a vision statement at the NEPOOL Participants Committee meeting last month: “to harness the power of competition and advanced technologies to reliably plan and operate the grid as the region transitions to clean energy.” (See “ISO-NE Shares’ Vision for the Future,’” NEPOOL Participants Committee Briefs: Nov. 5, 2020.)
According to van Welie, the vision statement “is a clear leaning in by the ISO into the broad policy objectives in the region to drive towards decarbonization of the grid and the economy as a whole.”
Theoharides said one approach to meeting the decarbonization goal is the Transportation and Climate Initiative (TCI), a collaboration of 12 Northeast and Mid-Atlantic states and D.C. TCI would set a limit on carbon dioxide emissions from diesel and gasoline vehicles and allow states to invest proceeds from the sale of carbon allowances to support the goals of the program, such as electric vehicle chargers and electric buses.
The initiative estimates a cap that cuts emissions 25% from 2022 levels by 2032 while covering almost three times the Regional Greenhouse Gas Initiative (RGGI) cap, which includes the New England states, New York and more recently New Jersey and Virginia. Transportation represents 43% of emissions in the TCI region, which includes 72 million people, 52 million registered vehicles and $5.3 trillion in GDP.
“Through this initiative, we can ensure a sustained investment in transportation to give people better, more affordable transportation options, while cutting the pollution that contributes to global warming and makes people more vulnerable to disease,” Theoharides said.
Whether through TCI or RGGI, Theoharides said, it is important that states are “able to work regionally to ensure residents have cost-effective and reliable energy.” She added that a decarbonized future cannot happen without a strong partnership between federal and state governments.
“We need a federal government that will be a committed partner, investing in climate solutions [and] setting minimum standards for climate action,” Theoharides said. She said that vehicle fuel efficiency standards are “a great example of this type of minimum federal standard that has been so important.”
“Federal climate policy should inherently include policy flexibility for states to design solutions that work for their unique circumstances,” Theoharides said. “But at the same time, our ability to take meaningful action on climate change depends on that federal baseline of standards.”
Chatterjee Touts Carbon Pricing
Chatterjee, who chaired FERC until President Trump demoted him shortly after the election in November, said FERC will be pivotal in the Biden administration’s efforts to “shape energy and climate policy” with an important caveat.
“The fundamental fact is that FERC is not an environmental regulator,” Chatterjee said. “We have neither the expertise nor the statutory authority to be in the driver’s seat. When it comes to emissions policies, we are a market regulator. Our statutory mandate is to ensure the wholesale rates we oversee are just and reasonable, and that means that we have the responsibility to ensure that the markets we regulate remain competitive.”
Chatterjee said he has seen state policies negatively affect the competitiveness and functioning of wholesale markets, which required “tough, but in my view, necessary decisions” at FERC. He added that he was “truly excited” about the intersection of state carbon pricing policies and organized wholesale markets, which culminated with a technical conference on carbon pricing in September. (See FERC Urged to Embrace Carbon Pricing.)
“We learned at the technical conference that there was broad agreement that wholesale market rules, incorporating a state-determined carbon price could offer a number of benefits like increased efficiency improvements on price formation and better support for the types of long-term price signals that our energy future requires,” Chatterjee said. “It all boils down to this: Carbon pricing is a fuel-neutral, transparent and market-based approach that can be harmonized with the markets we oversee. This stands in stark contrast to policy tools like subsidies, which can amount to hidden costs that can degrade market efficiency and skew price signals, ultimately hurting the consumer.”
Chatterjee said that as a conservative Republican, he believes “fundamentally” in states’ rights and the “ability to make decisions about their local energy futures.” He also admitted that it was a “mistake … an oversight” to not have state policymakers at the technical conference.
“I thought state interests were well represented in that conversation, but we should have had more direct state participation,” Chatterjee said.
He also wanted to make clear that the proposed policy statement inviting states to introduce carbon pricing in wholesale electricity markets was not “in any way shape or form an effort by FERC to set a carbon price or require any action” under the Federal Power Act. “It was a way for us to carry this important conversation forward and provide the industry with our current thinking.” (See FERC: Send Us Your Carbon Pricing Plans.)
Transmission, Governance and Transparency
Van Welie said that without “a substantive price on carbon, there’s no choice but to engage in transmission planning out of market, per se.” He mentioned Texas’ Competitive Renewable Energy Zones as an example for developing the infrastructure needed to deliver remote wind to load centers.
“If you come from a policy point of view, you can’t get there,” van Welie said. “Then the only pathway from a transmission point of view is to do it along the lines of what the states have suggested, which is sort of like the Texas model in some ways that is going to end up deciding where we want to build the transmission in order to enable renewables. I don’t think there’s a market, per se, that will drive that outcome.”
When it comes to the governance and transparency at ISO-NE, van Welie said that he and the Board of Directors will listen to the states to “understand what’s driving the concerns” with the RTO. States have called for governance reforms at ISO-NE, including issuing a vision statement of their own. (See New England Governors Call for RTO Reform and States Demand’ Central Role’ in ISO-NE Market Design.)
“We’ve always felt that we are very transparent, and we feel like we’re goldfish swimming around in the bowl, and everybody can see exactly what we are doing all the time,” van Welie said. “Ultimately, we can’t make decisions without making a finding down at the FERC, so I think we need to understand what’s really driving this concern” about governance and transparency.
Whether it is market designs, progress and innovation or transmission planning, van Welie said he “can guarantee you it’s going to be done in a very transparent way because we’re going to be doing it through the stakeholder process.”
“There’s no way the ISO has the wherewithal to sit there in its ivory tower and come up with the solution,” van Welie said.
He added that the Tariff also “requires us to be transparent,” but if it is a question of whether the RTO is too independent, then he said that is part of a different conversation. He said CAISO’s Board of Governors is appointed by the state, and there are no “preconceived notions at this point.”
“We are listening. We want to understand,” van Welie said. “What we don’t want to do is have a conversation about governance impede our ability to make progress on the market design [and] in the transmission side of things. I think that needs to be full speed ahead, irrespective of what is happening on governance.”
MISO urged members to prepare for its redesigned, one-shop modeling system for transmission planning.
The new Model Manager — part of MISO’s ongoing effort to replace its outdated market platform — will start running in the third quarter of 2021. It’s designed to be a singular repository for its many planning models and will include a customized grid-engineering software application. The RTO currently relies on several different methods to collect and validate grid information for modeling.
Planning Modeling Manager Amanda Schiro said now is the time for members to get acquainted with the Model Manager and prepare their systems for the interface changes.
“Processes are going to change. Members’ data submission processes will need to adapt to the new modeling system,” she told stakeholders during a Planning Subcommittee meeting Tuesday. “Actions taken now to ensure readiness will allow for a smooth transition to the new system.”
MISO Reports Nearly 900 Active Tx Projects
MISO is managing almost $11 billion in active transmission projects, according to the latest quarterly statistics gathered for its annual Transmission Expansion Plans (MTEPs).
The grid operator is tracking 890 active projects at $10.7 billion, with 147 projects, worth around $3 billion, currently under construction. The list doesn’t include the 514 projects in MTEP 20, estimated to cost $4 billion, that MISO plans to advance for approval during the Board of Directors meeting Dec. 10. (See MISO in Final Stretch of $4B MTEP 20.)
Expansion Planning Engineer Gregory Plauck said most of the projects are expected to be in service within the next few years.
Over the third quarter, staff said developers withdrew 25 transmission projects worth $237.6 million.
Plauck said about $25 billion worth of projects have gone into service since MISO began its MTEP planning cycles in 2003.
New York officials on Monday concluded two weeks of public hearings on draft regulations for the siting of renewable energy resources, with comments ranging from impassioned pleas to save the planet to skepticism that the state even cares what people think about its plans to speed up development of wind and solar.
The budget bill in April created the Office of Renewable Energy Siting (ORES) to help the state meet the ambitious clean energy goals outlined in the Climate Leadership and Community Protection Act (CLCPA), especially the mandate for it to get 70% of its electricity from renewable sources by 2030. (See Cuomo Proposes Streamlining NY’s Renewable Siting.)
“The reforms that Gov. [Andrew] Cuomo and the legislature agreed to last April in the Accelerated Renewable Energy Growth and Community Benefit Act couldn’t have been more timely or more necessary,” said Joe Martens, director of the New York Offshore Wind Alliance, testifying on behalf of the Alliance for Clean Energy New York. The state’s leaders “recognized immediately that the climate and renewable energy targets in the CLCPA simply could not be met if the permitting process for siting large-scale renewable energy projects took five to 10 years, and that’s how long it was taking under the former Article X process.”
The new siting law (in section 94-C) makes the expectations and conditions for permit approval clear and well known early in the process, Martens argued, and provides for local input to ensure that local requirements and conditions are factored in. It only allows local requirements to be overridden if they are “unreasonably burdensome.”
“Despite claims to the contrary, eminent domain cannot be used to site a renewable energy facility.”
Rooftop solar panels in Brooklyn | NYSERDA
Blake Radtke, operations manager of EDP Renewables’ 78-MW Arkwright Summit Wind Farm in Fredonia, said that since coming online in 2018, the project has already paid $1 million to local landowners and more than $780,000 to local governments.
“With that in mind, I would like to highlight a common theme I have been hearing from my site’s landowners over the last several months,” Radtke said. “With so much uncertainty surrounding COVID and the resulting economic impacts many of them faced, the benefits and financial certainty provided by the wind farm for them has been a much needed counterbalance. … Renewable energy creates good-paying jobs for New Yorkers.”
Opposing Voices
State Sen. George Borrello (R) opposes the regulations because “New York state is trampling on our state constitution’s home-rule provisions and right of local self-governance.” In casting aside these principles to remove obstacles to renewable energy projects, he said, the state is ignoring the wishes of residents to preserve the natural beauty of their region, ignoring studies, public hearings and zoning laws passed locally to limit the spread of such projects.
“We’ve performed our due diligence; we’ve exercised our rights as outlined in Article X; … [and] the new regulations will strip us of those rights,” Borrello said. “These rules are designed to fast-track renewable energy projects by removing localities and their vetting processes from decision-making.”
As an example of what can go wrong with fast-tracking such projects, Borrello mentioned the state having had four wind turbines installed along the State Thruway in Chautauqua and Erie counties in 2014.
“These turbines went up relatively quickly, and after a few years, all four failed,” Borrello said. “The French company that manufactured the turbines has since gone out of business. The installer and others involved claim no responsibility for the failure. The turbines still sit there, towering over the Thruway and useless, except as a reminder of the millions in wasted taxpayer dollars.”
“There’s an inadequate review of the environmental impacts,” said Ginger Schroder, a Cattaraugus County legislator and an attorney serving as counsel to three towns in the Alle-Catt Wind Farm case before the state Siting Board. (See NY Regulators Approve 340-MW Alle-Catt Wind Farm.)
“The draft regulations don’t allow for meaningful identification, assessment or mitigation,” Schroder said. “There’s improper reliance on secrecy to avoid public scrutiny, which has been the calling card of New York state to all renewable projects.” She said the regulations fail to provide access to project details, applications, case documents or even docket lists.
“While I applaud that you’re hosting all these public comments and sessions, I really do not believe, having had my experiences in the Article X process, that New York state really cares what anyone has to say about this, especially anyone who’s critical of the regulations or anyone who will stand in the way of the state’s very aggressive and unrealistic goals for large-scale renewable development.”
Supportive, but…
Audrey Friedrichsen, an environmental attorney speaking on behalf of Scenic Hudson, said her organization supports the goals of the CLCPA and the siting law, but the draft regulations could compromise watersheds and other vital habitats.
Friedrichsen encouraged ORES to develop a stringent standard for when developers will be allowed to get a waiver from the uniform requirements and instead have a site specific condition.
“The purpose of the uniform conditions is to drive projects to be better sited and designed from inception, so the use of too many site specific conditions should be avoided,” Friedrichsen told RTO Insider.
June Summers, president of Genesee Valley Audubon Society, said her organization supports the development of responsibly sited renewable energy facilities and other infrastructure, but “we do not want to see expedited renewable energy projects at the expense of our environment and birds.” The society suggests using the Department of Environmental Conservation’s mitigation ratio of 3 acres of replacement habitat for birds and bats for every 1 taken, she said.
The Marble River Wind Farm along the Canadian border in Clinton County, N.Y. | NYSERDA
Kate Kremer, vice president of environmental advocacy group Save Ontario Shores (SOS), criticized the constant noise produced by wind turbines in quiet rural areas and quoted a study her organization commissioned by Rand Acoustics that found the proposed numerical standard would not protect people from the adverse health effects of the sound.
“A 45-dBA [decibels] limit is more appropriate for louder residential urban areas; however, it is unreasonably high for quiet rural areas,” Kremer said. “Germany now produces over 100,000 GWh every year with wind turbines that have a nighttime noise limit of 35 dBA. If Germany can be successful using this criterion, then so can New York.”
Kremer said that her organization also has been disappointed by the response from ORES, such as receiving formatted responses to email queries that do not address the issues raised.
“And we have been told that, unlike the document website at the Department of Public Service, people who want information on these projects are going to need to use the extremely slow Freedom of Information Act process,” Kremer said. “Given the rapid pace of the ORES siting process that is anticipated, and the advances of website information generally, the failure to have a single, publicly accessible location for all project documents is surprising and shows that faster siting, according to ORES, is also including less access and very little transparency.”
Industry commenters last week accused the Department of Energy of overlooking crucial recent energy trends in its latest study of transmission congestion, in addition to relying on unexamined assumptions.
DOE released its report in September in accordance with the Energy Policy Act of 2005 (EPAct), which directs the department to conduct regular assessments of national transmission constraints and congestion. This year’s study cited a “dramatic increase” in transmission investment since 2005 to conclude that there are no pressing congestion conditions that would require the designation of national interest electric transmission corridors. (See DOE Study Finds No Need for Tx Corridors.)
Comments Allege Sloppy Methodology
Percent of time major transmission paths in WECC operate at 75% or more of their rated capacity (2018). Commenters called the diagram misleading because it relies on a metric not intended for this purpose. | Department of Energy
The department accepted public comments on the study through Nov. 23, with most of the responses largely rejecting its arguments and methodology. The harshest criticism of the report came from an unsigned comment that accused its authors of sidestepping EPAct requirements by “[failing] to present any comprehensive data [or] consult with affected states” and of misinterpreting the data it does contain.
For example, one metric cited in the study is the U75 designation, a measure used by WECC to record the percentage of time that electricity flows in a path, “are greater than 75 percent of the levels permitted by the rules.” The unsigned comment said that presenting this figure as a measure of congestion is misleading because WECC’s website makes clear that “[a] low U75 … does not necessarily indicate a path is underused, nor do high values necessarily indicate congestion.” Many of the lines depicted in the report were “built to carry electricity from large plants” and therefore a high U75 rate is to be expected.
The comment further notes that DOE did not even attempt a similar assessment of transmission capacity in the Eastern Interconnection because of a lack of publicly available data; as a result, “the level of specificity required … has fallen short from the enabling legislation.”
Corridors Suggested as Transmission Incentives
Other commenters raised similar doubts about the report’s underlying assumptions. Berkshire Hathaway Energy (BHE), for instance, questioned whether transmission investment can be correlated to decreases in congestion as the study implies — in particular, the study’s comment that “annual transmission investment [in the Western Interconnection] is more than three times what it was in 2005.”
“That may be true, but any investment looks positive in comparison to the mid-2000’s when transmission investment was so scarce that Congress felt compelled to make transmission investment a centerpiece of the [EPAct],” BHE said.
Transmission infrastructure investment by NERC assessment area, 1996-2018 ($ billion, nominal) | Department of Energy
While BHE agreed that “energy markets and new transmission facilities have addressed congestion to date,” the company noted a number of trends that could lead to overburdening existing transmission lines, including an increasingly diverse resource mix and changing patterns of loads. If current levels of transmission investment prove to be inadequate, BHE suggested that corridors could be helpful to remove barriers to transmission development.
The American Wind Energy Association (AWEA) also suggested that DOE give the idea of national interest corridors more consideration in hopes of encouraging transmission expansion. In this case, AWEA noted that the growing use of renewable energy resources will require longer transmission lines because “[many] desirable locations for citing wind energy … are located further away from the load” than existing generation facilities. The group encouraged DOE to “consider applications for [corridors] that will enable generation buildout without increasing congestion costs.”
DOE Accused of Overlooking Key Customers
A comment by the Industrial Energy Consumers of America (IECA) objected to what it characterized as the report’s disregard for consumer energy costs. The group, which represents “leading manufacturing companies” across a range of industries, observed that “consumer electricity costs … have substantially increased due to transmission spending increases … during an era when electricity demand has not increased.”
IECA also asserted that “low demand and a substantial decrease in fossil fuel costs are the primary drivers of mitigating congestion,” and that in some cases transmission projects have actually increased congestion, though it did not cite a source for either claim.
Finally, the non-profit group Americans for a Clean Energy Grid (ACEG) agreed with DOE that “no [corridor] designations are needed at this time,” but disputed the report’s conclusions that “transmission is adequate,” citing reports by FERC, the Massachusetts Institute of Technology and others that suggest significant investment in transmission may be necessary over the next 10 years. ACEG urged the department to reserve the option to designate corridors, particularly when they might help in development projects with specific needs.
The Illinois Public Interest Research Group is calling on Exelon to divest itself from Commonwealth Edison in the wake of the bribery scandal that has ensnared the company and the powerful House Speaker Michael Madigan (D) over the passage of the 2011 Energy Infrastructure Modernization Act (EIMA).
In a report issued Tuesday, “Guaranteed Profits, Broken Promises: How ComEd and Exelon turned utility regulation on its head,” the nonprofit organization examined the impact of EIMA on Illinois ratepayers. The report also delves into claims ComEd initially made to pass the legislation and continues to make defending its effects on the company and its regulator, the Illinois Commerce Commission.
Federal officials in July said bribes by ComEd aided in the passage of EIMA, which approved a formula rate mechanism, and the 2016 Future Energy Jobs Act (FEJA), which authorized subsidies for Exelon’s Clinton and Quad Cities nuclear generators. (See ComEd to Pay $200 Million in Bribery Scheme.)
Abe Scarr, director of Illinois PIRG and co-author of the report, said ComEd has continued to push the narrative that EIMA has been beneficial to consumers, while the evidence has shown that the law has provided “financial windfalls” for ComEd and Exelon without delivering the promised benefits.
“Customers and the public were harmed by the formula rate law — both in terms of higher delivery rates and in terms of a failure to realize or maximize the potential benefits of the smart grid and other investments ComEd made since the law was passed,” Scarr said. “Illinois policymakers need to take action to right these wrongs and to ensure utilities like ComEd cannot amass so much political influence in the future.”
Background
In 2011, ComEd angled to convince Illinois lawmakers to allow it to make billions in smart grid investments, switching to a formula ratemaking process allowing the company to recover its costs more quickly.
According to the U.S. Justice Department, some of ComEd’s persuasion came in the form of bribes to Madigan, the chair of the state Democratic Party and the most powerful official in the state. Federal officials said the scheme involved ComEd paying Madigan’s associates through jobs and internships and the appointment of a Madigan ally to the company’s board of directors.
In return for the alleged bribes, federal investigators said ComEd gained support for EIMA and later for FEJA, which provided Exelon’s nuclear plants a 10-year, $2.35 billion ratepayer subsidy. (See How ComEd Got its Way with Ill. Legislature.)
Exelon’s Byron Generating Station’s two nuclear reactors in Illinois produce more than 2,300 MW.
When the Justice Department announced ComEd’s deferred prosecution agreement in July, Scarr was one of the most vocal opponents, saying the scheme confirmed long-held fears that EIMA and FEJA were put forward through corruption at the expense of ratepayers in Illinois. Scarr said ComEd “was in crisis” in the decade before the passage of EIMA as the company suffered through reliability problems stemming from mismanagement.
In a statement, ComEd noted that “the deferred prosecution agreement does not contain any allegations that consumers were harmed by legislation passed in Illinois. In fact, the bipartisan legislation that was passed — EIMA and FEJA — resulted in substantial benefits for ComEd’s customers, including reliability that has improved more than 70% since 2012 to record levels.”
Scarr later challenged ComEd officials at a contentious hearing of the ICC in late July, saying the corruption surrounding the company required a “comprehensive audit” to determine if alternative investments to EIMA would have yielded better results. (See ComEd on Hot Seat at ICC Hearing.)
The 111-page report said EIMA has proven to be an “unquestionable success” for the companies, creating a “profit machine” that went above what was originally proposed.
Between 2013 and 2019, the report said, ComEd earned $4.7 billion more than what it would have made if the revenue requirement from its 2011 formula rate case been in place over the same period.
Over an eight-year period, the report said, ComEd’s authorized profits grew by 47%, and its rate base, the value of its assets the company earns a profit off of, increased by 84%.
The report found that if EIMA’s regulatory framework continues without any changes and announced spending by ComEd remains in place, the utility’s authorized profits will reach almost $1 billion per year by 2023.
“Nine years after EIMA’s passage, the record is clear: EIMA delivered guaranteed, record profits and other benefits to ComEd and its parent company, Exelon Corp., while leaving ComEd customers and the public with broken promises,” the report said.
EIMA delivered revenue and profits to ComEd that are far beyond what was “necessary” to fund infrastructure upgrades, the report said. Instead of a 10-year smart meter deployment that peaked at 500,000 meters per year, according to the legislation, ComEd completed the smart meter deployment in six years with a peak of more than 1 million meters per year.
“ComEd’s energy efficiency programs, which grew significantly under the legislation, have enabled customers to save more than $5 billion on their bills since 2008,” the utility said in its statement. “In 2019, ComEd completed — ahead of schedule — the installation of 4.2 million smart meters that give customers more control over their energy use, enable quicker response times during outages, contributing millions of dollars in storm cost savings, and provide access to money-saving programs.”
But the report said the accelerated deployment of smart meters, which required more financial resources than originally planned, demonstrated that EIMA gave ComEd more resources than necessary to complete the upgrades.
In 2019 ComEd customers paid 37% more for delivery service than they did in 2011, the report said, with EIMA’s “customer protection policy” not protecting customers by design. It said a mandated report on rate impacts was deliberately timed to obscure EIMA rate increases.
Illinois PIRG Director Abe Scarr | Illinois Commerce Commission
Scarr said he was most surprised to find out how the financial benefits to ComEd and Exelon will continue even after the EIMA investments are almost over, leading to almost $1 billion in annual profits by 2023.
“EIMA was a radical and unwelcome inversion of traditional utility regulation, which aims to ensure and maximize the public good through the creation of the opportunity for private profit,” the report said. “EIMA, on the other hand, guaranteed ComEd and Exelon’s private profit while failing to adequately ensure the public good.”
ComEd countered that “the average residential bill is lower than it was nearly a decade ago, and ComEd has requested delivery rate decreases in five of the last 10 years; regulators must review and must approve every dollar of investment that ComEd seeks to recover.”
Recommendations
The report makes several recommendations for Illinois legislators who have raised questions regarding the passage of EIMA and FEJA and their links to the alleged corruption.
Exelon should be forced to divest from ComEd or from Exelon Generation to address conflicts of interest in its ownership of both the nuclear power plants and ComEd, the report said.
It also suggests bans on political contributions by investor-owned utilities and using ratepayer, rather than shareholder, money to make charitable contributions.
The report also calls for the restoration of “effective regulation” of ComEd’s assets through an audit of the company’s grid to determine its actual value and to prevent overpayment by ratepayers.
“The most immediate action the legislature can take is to end formula ratemaking, as the governor has outlined in his energy principles,” Scarr said. “There is a general expectation that a broader energy/utility bill will come together in the 2021 legislative session, so I think they have the opportunity to address all of the recommendations we make, and we will be calling on them to do so.”
The U.S. Senate on Monday quickly and quietly confirmed Mark Christie and Allison Clements to FERC, restoring the commission, at least temporarily, to full strength for the first time since August 2018.
It took less than a minute Monday evening for Senate Majority Leader Mitch McConnell (R-Ky.) to bring the nominations up for a voice vote and say “aye,” with acting President pro tempore Dan Sullivan (R-Alaska) affirming their confirmation before an empty Senate chamber. The scene was a far cry from the confirmations of President Trump’s previous two nominees to the commission, with partisan bickering over Bernard McNamee (confirmed 50-49) and James Danly (52-40).
The Senate confirmed Mark Christie and Allison Clements, with Sen. Dan Sullivan (pictured) presiding over an empty chamber, save Majority Leader Mitch McConnell, who cast the lone “aye” vote. | C-SPAN
The Senate Energy and Natural Resources Committee advanced the nominees to the floor on Nov. 19. Clements, a Democrat and energy policy adviser for the Energy Foundation, fills the seat left open by the departure of Cheryl LaFleur in August 2019. Christie, a Republican and chair of the Virginia State Corporation Commission, takes the place of McNamee, who departed Sept. 4. Clements’ term ends in June 2024 and Christie’s in June 2025. (See Committee Advances FERC Nominees to Full Senate.)
Republicans could hold a 3-2 majority on the commission up to the departure of Commissioner Neil Chatterjee, whose term ends June 30. However, it is customary for the chair appointed by an outgoing administration to tender their resignation upon the inauguration of a new president. By law, FERC is limited to no more than three commissioners of the same party.
Chatterjee has previously pledged to complete his term. That means all eyes are now on Chair James Danly, whose term ends in 2023. Regardless, he will preside over at least two more open meetings: FERC has rescheduled its Jan. 21 meeting for Jan. 19, the day before Inauguration Day, after which either Clements or fellow Democrat Richard Glick will become chair. Jan. 19 is a Tuesday. FERC’s open meetings are normally held on Thursdays.
FERC has not had a full complement of commissioners since the departure of Robert Powelson in August 2018. That period, along with Powelson’s tenure, lasted only a year.
“For the first time in years, FERC will have a full, bipartisan complement of five commissioners,” American Council on Renewable Energy CEO Gregory Wetstone said in a statement. “With fresh voices from clean energy and state regulatory backgrounds, we hope this reinvigorated, independent FERC will look anew at how to achieve the long overdue regulatory reforms needed to accelerate our energy transition.”
“Congratulations to Allison Clements and Mark Christie on their confirmation votes tonight!” Glick tweeted. “I look forward to working with them and am excited we are finally back to a full five-member FERC!”
“I am delighted that our two new colleagues have been confirmed, and I look forward to working with them,” Danly said in a statement.
