Page 1009 – RTO Insider

December 8, 2020

Consumer Panel Discusses ISO-NE ‘Visions of the Future’

The ISO-NE Consumer Liaison Group last week held its final quarterly meeting of the year where a virtual panel of regional energy experts wrapped up 2020 and attempted to cast a hopeful look to 2021 as New England continues its transition to clean energy.

Robert Rio, senior vice president of government affairs and counsel at Associated Industries of Massachusetts, served as moderator for “Clean Energy & Regional Markets: The New England States’ and Other Visions of the Future.” He said the RTO must provide reliable and cost-effective power to preserve the wholesale markets, “all the while navigating the political minefields that are the New England states.”

In October, ISO-NE confronted a joint statement from five of the region’s six governors (Connecticut, Maine, Massachusetts, Rhode Island and Vermont) calling for market design, transmission planning and governance reforms, saying the RTO is frustrating their efforts to reduce economy-wide greenhouse gas emissions. The New England States Committee on Electricity, which represents the collective perspective of the region’s six states in the NEPOOL stakeholder process, also released a vision statement that detailed specific reform measures. (See States Demand ‘Central Role’ in ISO-NE Market Design.)

NESCOE Executive Director Heather Hunt said the “concepts and concerns” in the vision statement should not come as a surprise; “If there were easy solutions … we would have solved them by now.” Hunt said the governors’ joint statement “underscored their interest in better aligning our regional markets with the achievement of their collective and individual decarbonization goals and mandates.”

David Cavanaugh, vice president of regulatory and market affairs at Energy New England, said NEPOOL has worked with ISO-NE and NESCOE through the stakeholder process on the Future Grid Initiative, which includes a reliability study and potential pathways, the latter of which “looks to identify a framework that may facilitate the entry of state policy resources, such that we can avoid the double-pay issues folks are concerned about.”

‘Figuratively Screaming’

Doug Hurley, principal associate at Synapse Energy Economics, said for the past 16 years he’s spent his “time working with or directly for state agencies in most of the New England states on the cost of the wholesale electric grid and how to integrate clean energy into that system as quickly as possible.” He said states have been “figuratively screaming” at ISO-NE for years about the issues in the NESCOE vision statement and hopes the RTO recognizes its gravity.

RENEW Northeast Executive Director Francis Pullaro echoed Hurley’s comments, saying it is “an impressive accomplishment to get six states that have different constituencies and different interests from time to time, to be able to come together with a detailed vision.” He said the current power system was “designed for a different era” and the capacity market is “very costly to consumers.”

Clockwise from top left: Robert Rio, Associated Industries of Massachusetts; Robert Either, ISO-NE; Francis Pullaro, RENEW Northeast; Doug Hurley, Synapse Energy Economics; Heather Hunt, NESCOE; David Cavanaugh, Energy New England | *ISO-NE*

The capacity market “was put in place for a variety of reasons and some of those reasons have evolved over time, but basically it never contemplated a world of renewable energy at this scale, and you have now a lot of renewables coming in and not being able to participate in the capacity market and states wondering why [they are] paying for duplicative resources,” Pullaro said. “I think the old ways are just not suited for the future.”

Robert Ethier, ISO-NE’s vice president of system planning, said he looks forward to “figuring out with the states” what it will take to interconnect all the renewables they are seeking to contract over the next several decades.

“Clearly, that’s not going to be a one-shot deal,” Ethier said. “It’s going to be an evolving plan as we learn more, as additional contracts are signed, etc.”

According to Ethier, a 2019 NESCOE economic study looked at how much offshore wind could interconnect to the current grid.

“And the short answer is about 8,000 MW before things start to get really expensive,” Ethier said, adding that “2,500 to 3,000 MW” in Cape Cod “could easily cost $300-plus million to interconnect it to the existing system.”

“I think we all have to be cognizant of the fact that it’s going to be expensive to interconnect all these renewable resources,” he said. “The costs are going to go up dramatically once we sort of hit the limits of our current system, and we have to start building large new 345-kV lines or large underground lines or underwater lines. While all of us are going to work together in good faith, and we are going to try to develop things at least-cost, it will cost money to integrate all these renewables in a useful way.”

Pullaro said while ISO-NE has been successful with competitive markets to bring costs down, “what we’ve seen over the last 10 years or so in New England” is that states putting out their renewable energy goals to a competitive bid has also reduced costs.

Word from an ‘Energy Nerd’

When Rio posed a question about distributed energy resources (DERs), Hurley answered that “the challenges are numerous, and it would be hard to list all of them.”

“I would say first and foremost as part of this overall transition, it wasn’t what we originally envisioned when the markets and all the planning procedures were created,” Hurley said. “We’ve made a number of adjustments to those planning procedures and the markets to try to incorporate [DERs] better.”

He added that DERs provide “a whole bunch of opportunity” for participation by people who have small amounts of resources available to them like solar, wind or storage.

“It allows the opportunity for private businesses who are aggregators of those smaller resources together because even as much of an energy nerd as I am, I’m not going to try and enroll my solar panels directly into the ISO system, and put them in every day,” he said. “That’s just not a good use of my time. Even I would put them into an aggregation from something that some other company runs and put mine together with all my neighbors and then get that into the ISO systems in whatever way is appropriate.”

Finding the Pathway

Looking to 2021, Rio asked panelists what they think would be “really helpful” for the energy grid next year.

Cavanaugh, incoming chair of the NEPOOL Participants Committee, said New England has been struggling “with this tension of integrating state policy resources.”

“If 2021 was to have a success statement, it would be to find the appropriate pathways that balance investment, as well as state policy resources and achieving state goals, because you have to have a balance,” Cavanaugh said. “You still want to have the signals to draw merchant investment in the region because you need it, but you also need the ability to represent and respect state policy, so if ’21 could deliver anything, it’d be identifying a pathway that’s successful in achieving that goal.”

Either added that, “if we can achieve it, that would be fantastic.”

Hunt said that 2021 “is a year for a fresh look at what we’re asking the markets to do and how we’re governing how the markets operate.”

Pullaro said he could not help but look for sources of hope during the pandemic.

“So [my thought] for 2021 is to try and enjoy the fact that we’re at a point where we’re not arguing whether to transition to a clean grid, but how to do it,” he said.

December 8, 2020

NY Seeks ‘Just Transition’ in Decarbonization Plans

The New York State Energy Research and Development Authority (NYSERDA) this month issued a request for proposals seeking contractors to conduct site reuse planning studies for retired power plants.

The $5 million solicitation is just one manifestation of the huge effort the state is mounting to implement the Climate Leadership and Community Protection Act (CLCPA), which requires the state to switch to 100% zero-emission electricity by 2040 and reduce greenhouse gas emissions to 85% below 1990 levels by 2050.

At least 10 state agencies have roles in the transition, led by NYSERDA, the state Department of Environmental Conservation and the Climate Action Council, a 22-member committee that will prepare a scoping plan for achieving the state’s energy and climate goals.

The council’s work will be informed by more than 100 stakeholders — including manufacturers, farmers, generators, labor unions, environmental groups and trade associations — in advisory panels for Agriculture and Forestry; Energy Efficiency and Housing; Energy-Intensive and Trade-Exposed Industries; Land Use and Local Government; Power Generation; Transportation; and Waste. The RFP is related to the work of an eighth group reporting to the council, the Just Transition Working Group, which is considering issues of displaced workers, environmental justice and economic redevelopment.

At a meeting last week, the working group reviewed a straw proposal for the principles the state should follow, which it will present to the council on Dec. 15. In addition to the redevelopment of industrial communities, the 10 principles include topics such as “stakeholder-engaged transition planning”; preservation of culture and tradition; equitable access to “high quality, family-sustaining jobs”; climate adaptation planning; and protection of natural systems and resources.

Support for Power Plant Communities

The RFP is expected to result in $4.75 million in spending on consultants providing affected plant-site municipalities with technical assistance and $250,000 for a site reuse “toolkit” that could be used by other communities.

The deadline for responding is 3 p.m. Jan. 13; an informational webinar for prospective bidders will be held at 10 a.m. Dec. 15. NYSERDA expects to invite communities to apply for assistance in the first quarter of next year.

At the Just Transition Working Group’s meeting Thursday, Steve Ryan, director of business engagement for the state Department of Labor, briefed the panel on the department’s Rapid Response program, which offers résumé development, interview coaching and training opportunities.

New York Decarbonization — Workforce for New York’s traditional power generation (2016-2019) | *New York Just Transition Working Group*

The department had deployed the program for workers at the Somerset Operating Co., the state’s last coal-fired generating plant, which retired in March, and Indian Point nuclear plant, which shut down Unit 2 in April and will close its remaining unit next spring.

Ryan said the laid off workers appreciate the help. “We provide that hope. Because many of them have no idea where their next employment is going to be,” he said.

James Shillitto, president of the Utility Workers Union of America Local 1-2, which represented 400 workers at Indian Point, said site redevelopment is an easier challenge than retraining laid off workers and finding them new, well paying jobs. “Retraining workers is a little bit more difficult because you have people in various levels of their lives. You have the ones that need to hang on for five or six more years to retire, and the ones that are going to work another 20 to 25 years.”

The state Worker Adjustment and Retraining Notification (WARN) Act requires businesses to give 90 days’ advance notice for large layoffs or plant closures. “Typically, what happens with Rapid Response is it’s triggered by a WARN notice. But in these cases, as with Indian Point, we’re going to know well in advance what’s coming so we should have a framework where we can begin that process without waiting for a WARN notice,” Labor Commissioner Roberta Reardon said. “We need a long runway: as long a runway as we can get with both the employers and the workers to do the kinds of negotiating … or training to really have the best impact.”

Deliverables

Public Service Commission Chairman John B. Rhodes said the working group has two main deliverables, including an inventory of power plants at risk of closing, an effort to identify issues affecting plant site reuse.

The second deliverable is identification of problems and opportunities presented by site reuse. Among the problems: the local economic effects of lost salaries and reduced property tax revenues for local governments and schools. Also to be considered: environmental remediation and restoration.

Plant sites — often on lakes or rivers because of the need for cooling water — can be repurposed as parks or commercial or mixed-use developments. Their access to transmission lines and cooling water has also made them attractive to data centers — a use the owners of the Somerset plant are pursuing. They can also provide interconnection points for new renewable generation.

Jobs Mapping

The state also has begun early work on an assessment of job-loss-threatened power plant workers’ skills to identify retraining paths and match them with job openings in clean energy and elsewhere.

As of 2019, the state had 800 workers in oil-fired generation, almost 5,400 in natural gas and more than 3,800 in nuclear. It also had more than 65,000 workers in transmission and distribution.

As of 2018, 76 of New York’s 106 gas turbines (2,356 MW) were older than 46 years; nationally, 95% of such units have deactivated by this age. Similarly, 95% of steam turbines nationally retire by age 62.5. By that measure, 11 out of 46 units (866 MW) are at retirement age. By 2028, more than 8,300 MW of gas and steam turbine-based capacity in New York will hit retirement age.

About 35% of the state’s generating capacity has been added since 2000. “There’s been in recent years about 2,000 MW of natural gas combined cycle generation [added],” Emilie Nelson, executive vice president for NYISO, told the working group. “The plant staffing required for those types of facilities tends to be lesser than some of the older plants. We have about 2,000 MW of large-scale wind on the system. A lot of the solar that we have thus far is behind the meter, so [it requires] a little different type of support from a job perspective.”

Policy Drivers

In addition to the CLCPA, New York’s transition is being driven by Regional Greenhouse Gas Initiative regulations adopted Dec. 1 to reduce the carbon dioxide emissions cap by 30% from 2020 to 2030. The changes also expand the program to cover peaking units above 15 MW, a reduction from the current 25-MW threshold.

The Department of Environmental Conservation’s “peaker rule” will be phased in between 2023 and 2025, affecting 3,300 MW of capacity. The rule has two compliance options for plants that cannot meet emission limits on pounds of NOx per megawatt-hour: stopping operation during summer ozone season, or replacing their output with energy storage or renewable generation at the same interconnection.

The 2020 NYISO Reliability Needs Assessment identified transmission security needs beginning in 2024 and resource adequacy needs by 2027. The ISO’s first quarterly short-term assessment of reliability (STAR) report found an additional transmission security need in New York City for 2023. In addition, city regulations will bar combustion of Nos. 6 and 4 fuel oil by 2020 and 2025, respectively, affecting 2,946 MW.

“This is manageable if we’re thoughtful and look ahead,” Rhodes said.

Putting it All Together

Lara Skinner, executive director of The Worker Institute at Cornell University, which performs research and education on current labor issues, noted that the Labor Department’s Rapid Response program was created to respond to individual business closures. “When we think about this transition to a zero-carbon economy, we’re taking about a massive transition. A major economic transition with significant labor, social, community impacts — economic impacts,” she said.

Skinner suggested panel members review U.S. Sen. Tammy Duckworth’s (D-Ill.) proposed “Marshall Plan for Coal Country Act,” which would modify bankruptcy rules to require companies that shut down to provide health care and pension benefits to former workers and give free tuition at public colleges for their children.

“Today’s meeting demonstrates to me that there’s some really great thinking happening around the broader impact of the transition in New York state,” Skinner said. “For me, it raises the question of how do we link all of this up? And how do we think bigger and broader about this transition and make sure that our approach to the transition is going to be comprehensive and cohesive?”

December 8, 2020

FBI Sees No Rest from Cyber Battles in 2021

FBI Cybersecurity — Manny Cancel, NERC | *NERC*

Foreign adversaries continue to hone their cyber threat strategies against the North American bulk power system, cybersecurity experts told the Midwest Reliability Organization’s (MRO) Annual Member and Board of Directors Meeting on Thursday.

“The bad guys have not taken the pandemic off; they’ve seen it as an additional opportunity to exploit or do more harm to the sector,” said NERC Senior Vice President Manny Cancel, the CEO of the Electricity Information Sharing and Analysis Center (E-ISAC).

Cancel joined Joel Max, energy sector and control systems lead at the FBI’s Cyber Division, to brief MRO’s members and directors on the current threat landscape and the government’s efforts to help utilities fight back.

Iran Tensions Lead Immediate Concerns

According to Max, the most prominent state-backed cyber threats against the BPS continue to originate from Iran, Russia and China.

Iran seemed to loom large in the minds of several attendees at the meeting, who asked about the likelihood of threats originating from recent tensions between it and Israel, which is believed to have been behind the assassination of Iran’s top nuclear scientist Mohsen Fakhrizadeh on Nov. 27. Similar fears arose after the U.S. drone attack that killed Iran’s Maj. Gen. Qassem Soleimani on Jan. 2. (See Iran Cyber Threat Increasing, Experts Say.)

Max acknowledged that Iran is known to have the capability for “localized, temporary disruptive effects against corporate networks;” the 2012 attack on Saudi Arabia’s national oil company Saudi Aramco is believed to have been carried out by hackers backed by Iran. Iran is also believed to have carried out damaging cyber operations within the U.S., targeting the tourism and financial services sectors, along with gaining access to the supervisory control and data acquisition system for the Bowman Avenue Dam in Rye, N.Y.

While Max assured attendees that “we don’t have any indication of [an] imminent [threat],” he reminded them that this is a “time of turbulence,” with both the ongoing COVID-19 pandemic and the transition to a new U.S. presidential administration creating distractions that adversaries may want to take advantage of. Entities must remain vigilant for any opportunistic actions, he said.

Spies and Saboteurs Probing Weaknesses

Like Iran, Russia’s cyber activities targeting the U.S. energy sector include both “reconnaissance [and] future attacks,” Max said. He reminded participants that Russian hackers have gained access to networks used by both large and small players in the energy sector, gaining success in recent years by finding weak links among vendors or service providers that have not put in the same level of effort as utilities themselves.

“The way you get to the bigger fish is by going through the smaller ones, who may not have the same resources or cybersecurity posture as your company,” he said, noting that even “a vendor that only supplies one piece of software [or] does some sort of maintenance on your system” could provide an entry for a determined and patient intruder.

China, too, appears to have built a highly successful clandestine operation for finding and exploiting weak points in supply chain networks. Unlike Iran and Russia, the nation’s intentions toward the U.S. grid seem primarily focused on industrial espionage rather than sabotage. Max listed renewable energy technology as a key focus for Chinese hackers, reflecting the renewable energy priorities laid out in the Chinese government’s 13th Five-Year Plan.

Feds Seek to Make Hackers Hurt

Max said the U.S. government is taking an active role in combating cyberattacks through a program of “imposing risk and consequence on the adversaries.” This approach includes actions against individuals, such as the indictment earlier this year of six Russian military intelligence officers for attacks against the Ukrainian power grid in 2015 and 2017. (See Six Russians Charged for Ukraine Cyberattacks.)

Max said sanctions against organizations can also be effective tools. In October, the Treasury Department announced economic sanctions against Russia’s “State Research Center of the Russian Federation FGUP Central Scientific Research Institute of Chemistry and Mechanics (TsNIIKhM).” The government-backed institution is believed to be behind the Triton malware that corrupted industrial control systems at a petrochemical facility in the Middle East in 2017 and was accused of targeting at least 20 electric utilities in the U.S. last year.

Chinese organizations believed to support the government’s cyberespionage campaigns have also been targeted. Most prominent among these is Huawei Technologies, indicted in New York in February for conspiring to steal trade secrets from U.S. companies. Huawei makes a wide range of technology products for both consumers and businesses and has been the target of several warnings and inquiries this year, including a Notice of Inquiry from FERC Opens Supply Chain Cyber Risk Inquiry.)

“If we as the FBI can impose consequences on the adversaries, we’re hoping that that deters activity against you as U.S. companies, but also makes it more difficult [and costly] for an adversary … to undertake any sort of attack against your systems or your assets,” Max said.

December 7, 2020

UPDATED: PG&E Gets $1.3B Rate Hike, Cancels Mass Blackouts

Pacific Gas and Electric canceled forecasted blackouts Monday after saying it might shut off power to nearly 400,000 residents to prevent wildfires. The move would have been an extraordinary step in December, when fire season is normally over in the utility’s Northern California service territory.

Over the weekend, Southern California Edison and San Diego Gas & Electric instituted public safety power shutoffs (PSPS) in their service territories that affected roughly 85,000 customers, or nearly 250,000 residents, as hot dry Santa Ana winds created dangerous fire conditions.

PG&E predicted mass blackouts Friday, a day after the California Public Utilities Commission unanimously approved the utility’s 2020-2022 general rate case. The decision included a nearly $1.3 billion, three-year rate increase, much of it meant to help the utility prevent wildfires and limit the extent of PSPS events.

“This decision provides significant funding for PG&E’s Community Wildfire Safety Program,” Commissioner Liane Randolph said. “The CWSP incorporates a risk-based approach to identify and address PG&E assets that are most at risk from the threat of wildfires and associated events.”

PG&E Safety Blackouts — PG&E on Dec. 5 said it could shut off power to 92,000 customers in 16 counties on Dec. 7. | *PG&E*

The CPUC approved $603 million in 2020, $930 million in 2021 and $1.5 billion in 2022 in total funding for the wildfire program. PG&E said it will use the funds for enhanced vegetation management and system hardening, including installing stronger poles and trimming branches from an estimated 120 million trees.

The commission authorized a $9.1 billion revenue requirement for PG&E in 2020, a $584 million increase over 2019 but $474 million less than the utility’s initial request. Increases of $316 million and $364 million for 2021 and 2022, respectively, will follow. PG&E and consumer groups reached the final amounts in a settlement approved by the CPUC.

Randolph noted that nearly $3 billion of PG&E’s wildfire mitigation work is excluded from its rate case by Assembly Bill 1054, passed last year. The bill prohibits the state’s three large investor-owned utilities from earning a return on equity for their combined share of the first $5 billion spent on wildfire-prevention measures.

The CPUC also approved a settlement provision that allows PG&E to recover up to $1.4 billion in annual insurance costs.

The settlement and commission’s decision followed 17 community meetings held throughout PG&E’s service territory and four weeks of evidentiary hearings.

The utility’s equipment started devastating fires in 2017, 2018 and 2019 that killed more than 100 residents and destroyed tens of thousands of structures, the California Department of Forestry and Fire Protection found. The department is investigating PG&E for starting another wildfire in September that killed four people and burned more than 200 structures in rural Northern California. (See PG&E Under Scrutiny in Deadly Zogg Fire.)

In a recent letter, CPUC President Marybel Batjer threatened to institute a new process of increased oversight of PG&E for what she said were serious lapses in the utility’s vegetation management. (See related story, PG&E Faces ‘Enhanced Oversight’ by CPUC.)

Critics have said the company put shareholder profits over grid maintenance for decades.

“Unfortunately, this summer has showed us again that PG&E is still behind in the investments needed to … make [its] system and vegetation management safe,” Commissioner Martha Guzman Aceves said. She said she would support PG&E’s rate increase for safety reasons despite it coming during a pandemic and economic downturn, when many residents will feel the increase more.

December Fire Conditions

In its initial PSPS statement last week, PG&E said it might shut off power to 130,000 customers — or about 377,000 residents, based on average household size — in parts of 15 counties.

“Dry conditions combined with expected high wind gusts pose an increased risk for damage to the electric system that has the potential to ignite fires in areas with dry vegetation,” the utility said in a news release.

It reduced the number Saturday to 92,000 customers, or about 267,000 residents, after receiving updated weather forecasts. It then cut the number of customers potentially affected by 90% Sunday and canceled the blackouts altogether Monday, citing improved weather.

In a separate statement on its rate case, PG&E said the CPUC’s decision will allow it to keep future PSPS events smaller and shorter.

The late fall fire conditions also impacted dryer Southern California, which has had catastrophic fires in December in recent years. The blazes included the 2017 Thomas Fire, blamed partly on Southern California Edison equipment. (See Edison Takes Partial Blame for Wildfire in Earnings Call.)

SCE said Monday it had shut off power to about 12,000 customers for safety reasons and was considering shutting off power to more than 193,000 others, as the Santa Ana winds whipped wildfires in its service territory.

San Diego Gas & Electric blacked out 73,000 customers on Friday during dry, windy conditions. It had restored power to most by Monday but said more than 50,000 customers remained at risk for PSPS.

During the CPUC’s discussion of PG&E’s rate case, commissioners said climate change was pushing fire season later in the year and affecting greater numbers of residents.

“We are in the midst of customers facing shutoffs now because these … dry winds are continuing into December, beyond what has been our usual fire season,” Commissioner Genevieve Shiroma said.

December 6, 2020

FERC Spurns LS Power’s Voltage Threshold Argument

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.

December 6, 2020

MISO Nearing Decision on Seasonal Capacity Auction

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 Capacity Auction — 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.

December 6, 2020

Bill Nye the Science Guy: Electrification is a Big Idea

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 Electrification — 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

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.

“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, 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.”

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.

December 6, 2020

Tri-State Continues Focus on Renewable Energy

Tri-State Generation and Transmission Association continues to emphasize its environmental bona fides, but on its own terms.

The Colorado-based cooperative filed its first electric resource plan (ERP) with the Colorado Public Utilities Commission on Nov. 30, building on the Responsible Energy Plan it unveiled last year. (See Tri-State to Retire 2 Coal Plants, Mine.)

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.

“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.”

December 6, 2020March 9, 2025

US, Canada Experts Talk ‘Net Zero’ at Ontario Conference

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.”

December 6, 2020

WIRAB Reviews Past Year, Looks Ahead to Next

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.