Page 1010 – RTO Insider

December 4, 2020

FERC Orders End to ISO-NE Capacity Price Locks

FERC on Thursday ordered ISO-NE to remove its new-entrant rules for its Forward Capacity Market from its Tariff, preventing resources from being allowed to lock in their prices for seven years (EL20-54).

The commission said the rules resulted in “unreasonable price distortion” and that locked-in prices are “no longer required to attract new entry, with the benefits provided by price certainty no longer outweighing their price-suppressive effects.” FERC said that price-lock agreements in effect before the order will not be impacted, with the new rules starting with FCA 16, scheduled for February 2022.

The rules had been in effect since ISO-NE began its capacity market in 2006. They allowed capacity resources to sell at the same price for five years — extended to seven years in 2014 — with resources offering in Forward Capacity Auctions at $0 after the first year to ensure that they cleared. Although this prevented them from taking advantage of higher prices, it was seen as a shield against lower prices.

ISO-NE Capacity Price Locks — Before accepting a new generating resource for its FCM, ISO-NE tests to ensure they do not cause overloads that cannot be fixed in time for the capacity commitment period. | *ISO-NE*

ISO-NE implemented several other changes to the FCM when the price-lock period was extended, including a systemwide downward sloping demand curve to address capacity price volatility. It also implemented market scarcity pricing enhancements that increased reserve constraint penalty factors for 10- and 30-minute reserves, and bumped up the price that resources are paid for energy and reserves in real-time during scarcity conditions.

“Together, these changes to the capacity, energy and ancillary services markets have significantly altered the landscape for new entrants in ISO-NE,” the commission wrote. “The energy and ancillary services market improvements provide resources to receive a more significant proportion of revenues in these markets, which reduces the revenue that resources need to earn from the FCM to recover their costs.”

The order ends a six-year-long proceeding. When FERC approved the price-lock extension, it allowed ISO-NE to forego an offer floor for resources, despite previously rejecting a request by PJM to remove the offer floor for its own price-lock period. This prompted a challenge by Exelon and the New England Power Generators Association (NEPGA) and the D.C. Circuit Court of Appeals remanding FERC’s approval, though the court did not vacate the rules.

FERC subsequently instituted a paper hearing in July to re-examine the rules. (See FERC Opens Proceeding on ISO-NE New-entrant Rules.)

The commission said that new resources’ entry should be driven “at least in part” by future price expectations, and that the price lock interferes with that dynamic. With the elimination of price risk, a new resource may lower its offer price to increase the likelihood of being selected in the auction. FERC said that if this resource is the marginal resource, the lower clearing price “distorts the price signal sent by the FCM and reduces the price paid to all capacity suppliers in that auction.” The commission added that it previously recognized that new-entrant rules could result in price suppression, but ultimately found that it was “an acceptable byproduct of market rules that would attract new entry through greater investor assurance and protect consumers from very high year-one prices.”

ISO-NE spokesperson Matt Kakley said the RTO appreciated “the clarity” of FERC’s decision and is “prepared to eliminate the price lock for new resources.”

“We are gratified that the commission recognized the many improvements we have implemented in the New England wholesale markets,” Kakley said.

NEPGA President Dan Dolan said the organization is “very happy to see that FERC agreed that the seven-year capacity price lock is no longer necessary to bring in new investment and resources into New England. … This order is a strong statement that New England’s Forward Capacity Market has matured to be an investible market that, when properly structured, can support reliability and new investment.”

But FERC disagreed with NEPGA’s argument that unreasonable price suppression would continue even after the price lock is removed unless ISO-NE implements a soft offer floor. The commission said that though NEPGA demonstrated “that FCA pricing outcomes can theoretically differ depending on whether a soft offer floor or a zero-price offer requirement is in place, recently cleared resources are unlikely to have high going-forward costs.”

The commission agreed with ISO-NE and Potomac Economics, the RTO’s External Market Monitor, that the adoption of an offer floor “would unnecessarily complicate the FCM and have detrimental consequences.”

Dolan said NEPGA stands by its concerns about “the ongoing price suppression effect that price-taking units have on the auction results” but added that “fortunately, the end is now in sight.”

December 4, 2020April 14, 2025

Experts: New Ontario Capacity Market Can Learn from US

Ontario’s nascent capacity market could take advantage of lessons from the U.S., experts said Wednesday.

The panel during the Association of Power Producers of Ontario’s (APPrO) annual energy and networking conference was coincidentally the same day as the Ontario Independent Electricity System Operator’s (IESO) first ever capacity auction for summer 2021. The auction marks the first time the province will allow non-demand response resources the opportunity to supply capacity.

Borden Ladner Gervais partner and panel host John Vellone said it was only fitting that APPrO host the discussion as offers from Ontario suppliers rolled in.

“Where we’ve been in the U.S. is we’ve had a surplus for quite some time,” said Potomac Economics President David Patton, who was on hand to offer the American perspective on capacity market formation.

Patton said U.S. markets typically maintain 15 to 17% in additional reserves beyond a peak-day forecast to achieve the U.S.’ one-day-in-10-year loss-of-load risk standard. American capacity markets are covering for existing generation’s going-forward costs but not generating signals for new investment, Patton said.

Complicating matters, Patton said policy-driven investments in renewable generation are growing existing surpluses.

“So there’s a bit of a challenge, because the markets don’t look in the near term like they’re going to be moving towards a long-run equilibrium,” he said.

Patton said market design must balance out-of-market investments in renewable generation to meet public policy goals with the need for the market to facilitate good decisions by market participants. He also said most renewables do not contribute meaningfully to capacity reserves and said capacity credits should reflect that.

Incorporating carbon pricing into markets would be beneficial because it would reduce out-of-market distortions, he said. “If you have out-of-market actions, it’s always detrimental to the market.”

“Out-of-market interventions aren’t going to stop; they’re just going to grow,” said Jason Chee-Aloy, managing director at Ontario-based energy consulting firm Power Advisory. “I think we have to admit that’s going to happen.”

Patton said forgoing a capacity market is an option, provided that a market’s shortage pricing is strong enough.

“Pricing is king in any market, and I would argue that’s something that we got wrong in Ontario from the get-go with uniform pricing,” Chee-Aloy said.

Ontario has a chance to recast its pricing, he said, suggesting the province use offer guarantee payments and make-whole payments. He said the re-evaluation would come at an opportune time, as Ontario is predicted to need capacity by the late 2020s.

Chee-Aloy pointed out that local distribution companies in Ontario do not have obligations to serve load, leading to a lack of a “robust buy-side” in the market. He said generators and resource adequacy providers have to finance projects and could bolster investments with market hedges.

“We’re still double-downing on out-of-market payments,” he said. “We’re going to need a multipronged approach to resource adequacy. And sometimes I think Ontario looks to the Northeast when I think we should look to the Midwest. When you look at the characteristics of Ontario, we’re much more like [MISO]. We’ve got a mixture of different types of players; we’ve got rate-regulated generation, and pretty much all of the independent power producers are under contract with the IESO.”

He also pointed out that the government-owned Ontario Power Generation owns about 50% of the capacity in the province, much of it rate-regulated, reminiscent of MISO’s vertically integrated utilities.

“But we could rely less on resource adequacy mechanisms … if we get the shortage pricing right for energy and operating reserves,” Chee-Aloy said.

Risk is currently high in Ontario, he said, evidenced by the 759 renewable energy contracts terminated within the past year-and-a-half by the Progressive Conservative provincial government as a cost-cutting measure. He said he did not know of any other market except Spain that has reversed so many already-executed contracts.

DeMarco Allan senior partner Elisabeth DeMarco said it is no longer simply a matter of working out energy market pricing, but electricity and emissions market pricing.

“We are very much behind the ball of emissions market and electricity market integration,” she said of Ontario. “It’s not some distant, foreign aspect of markets, but now an integral portion of it.”

December 4, 2020April 11, 2024

ReliabilityFirst Annual Meeting Briefs: Dec. 3, 2020

ReliabilityFirst’s annual meeting, held via conference call on Thursday, saw presentations to the regional entity’s membership and Board of Directors on topics ranging from diversity in hiring to next year’s financial metrics.

Board Confirms RF Leadership

The board unanimously reconfirmed RF’s leadership for another year, including President and CEO Tim Gallagher; Vice President of Reliability and Risk Jeff Craigo; Vice President of Entity Engagement and Corporate Services Robert Eckenrod; General Counsel and Corporate Secretary Niki Schaefer; and Treasurer Carol Baskey.

Directors also approved the board meeting schedule for next year, with meetings to be held March 18, June 16-17, Aug. 18-19 and Dec. 1-2. All meetings are currently planned to be held in person, though the board reserved the option to convert to conference calls as needed.

More Diversity Investments Needed

Wendy Weaver, manager of human resources, told the board that the organization’s efforts to create a more diverse workforce are showing signs of success, though much work is still needed.

ReliabilityFirst’s staff in 2020 broken down by age group (top) and gender (bottom) | ReliabilityFirst

Consistent gaps are still present in terms of both ethnicity and gender, with RF’s staff 93% white and 69% male. Weaver reminded the board that the gender division has improved slightly from this time last year — when the split was 29% female to 71% male — and that an equal number of men and women were hired this year. But she said it can do more to ensure that talented women apply to the organization.

Similarly, ethnic diversity remains a “major gap” that the HR department is working hard to overcome. Initiatives to address the shortfall include partnerships with advocacy groups such as the National Society of Black Engineers and the Society of Women Engineers, and outreach to historically black colleges and universities.

The coronavirus pandemic has also provided an unexpected opportunity to expand the RE’s outreach, thanks to the expansion of remote work opportunities and the revelation that many jobs do not actually require an employee’s full-time physical presence. Candidates that may not have seen RF as an attractive proposition may now be tempted to give the organization a second look, while the organization’s recruiters similarly have a new motivation to cast a wider net.

The pandemic “has changed the landscape of recruiting this year and into the future — everything from virtual recruiting, virtual onboarding, virtual job fairs,” Weaver said. “But it’s also created a really great opportunity for us to look at different offerings and try on different vendors.”

COVID Frees Funds for Assessment Relief

RF is on course to end the year $1.1 million, or 4.54%, underbudget, members heard in a presentation from Baskey.

RF staff in 2020 by ethnicity | ReliabilityFirst

Savings mainly came in the areas of employee benefits, contracts and consultants, and meeting and travel expenses, the last of which came as an unexpected result of the COVID-19 pandemic. It also enabled savings in the other two categories, Baskey reported, thanks to the deferral of training programs that the RE counts as employee benefits and the postponement of some contracts and consulting agreements until next year.

Similar trends were seen across the ERO Enterprise this year, with NERC in August projecting it would end the year $2.4 million underbudget for meetings and travel. (See Pandemic Provides Travel Savings for NERC, REs.)

RF’s budget for next year, approved by FERC Approves Standard Revisions, ERO Budgets.) Baskey explained that the lower assessment reflects that the RE plans on “really giving back our savings from COVID” next year.

Elections and Departures

Members elected Rachel Snead, director of NERC reliability compliance and policy for Dominion Energy Virginia, to the board as the new representative from the supplier sector. Re-elected were Scott Etnoyer, senior director of Talen Energy’s NERC and cyber protection program, representing the at-large sector, and independent member Patrick Cass, former executive in residence at the University of Louisville College of Business.

Snead will take the place of Lou Oberski, formerly of Dominion Resources Services, who served on RF’s board since 2011 including stints as chair and vice chair. The board passed a resolution thanking Oberski for his service, as well as fellow retiring Directors Lisa Barton, of American Electric Power, and Susan Sosbe, of Wabash Valley Power Association. Barton has served on the board since 2014 and Sosbe since 2017.

“You guys are great leaders across the industry, and RF is really an example of incredible leadership,” Barton said at the close of the board meeting. “My parting words are … keep it up; keep RF in the lead. It really has been at the cutting edge of governance for all of the regional entities.”

December 3, 2020

SPP WEIS Stakeholders OK Final Test

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.”

SPP WEIS — WEIS participants are moving on to the final market trial test. | *SPP*

SPP has yet to receive SPP Responding to WEIS Tariff Protests.)

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.

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.

December 3, 2020

Vistra to Shut down Another Texas Coal Plant

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 Coal Plant — 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.

The company acquired Coleto Creek in 2018 as part of its merger with Dynegy. (See Vistra-Dynegy Merger Closes After FERC Nod.)

Luminant, 1 Other File NSOs with ERCOT

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.

December 3, 2020

WECC Overhauls, Expands Stakeholder Committee Plan

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.

The latest straw proposal from WECC’s Stakeholder Engagement Task Force (SETF) fills out a number of details that stakeholders said were left out of the original plan while offering a new vision for how committees would be configured after the shake-up. (See Plan Would Consolidate, Cull Stakeholder Groups.)

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 stakeholder committee — 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.

December 3, 2020

Renewable Groups Frustrated with MISO Study Edict

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.

December 2, 2020

Officials Discuss Future of ISO-NE During Summit

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.

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.”

December 2, 2020

MISO Planning Subcommittee Briefs: Dec. 1, 2020

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.

December 2, 2020

NY Renewable Siting Hearings End on Mixed Note

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.

New York Renewable Siting — 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.”

The deadline for comments is Dec. 7.