Page 1014 – RTO Insider

November 20, 2020

NJ Regulators Critical of Storm Response

New Jersey regulators on Wednesday criticized the state’s utilities’ response to Tropical Storm Isaias, saying they have failed to correct longstanding problems with vegetation management. They also singled out Rockland Electric Co. (RECO) for slow restoration of its customers and Jersey Central Power & Light (JCP&L) for poor communication with customers and public officials.

The Aug. 4 storm disrupted service to 1.3 million customers at its peak and affected 1.6 million customers overall, making it “the most destructive weather event” in the state since Superstorm Sandy in 2012, said Jim Giuliano, director of the New Jersey Board of Public Utilities’ Division of Reliability and Security.

Wind gusts exceeding 60 mph and heavy rain caused “thousands of tree impacts” and outages in all 21 counties, Giuliano said in describing BPU staff’s report on the event. RECO, JCP&L, Public Service Electric and Gas, and Atlantic City Electric deployed 130,000 utility workers and support personnel, restoring service to more than 70% of customers within 72 hours, Giuliano said. Full restoration to all customers was “virtually completed on the evening of Aug. 11,” he added.

storm response — New Jersey regulators criticized Rockland Electric Co. for restoring service to only 72% of its customers within 72 hours following Tropical Storm Isaias. | *New Jersey BPU*

“For a damaging weather event which caused well over 1 million customers [to lose power] in a COVID pandemic environment, the overall pace and length of restoration appeared reasonable in staff’s view,” he said. “RECO, however, was an outlier, with only 72% of its 52,000 customers [restored] in 72 hours, a slow pace that continued through the event.” More than 70% of the company’s customers lost service, and it took nine days to restore all of them.

Communication

Giuliano also said, “Certain areas of utility performance during these events clearly warrant improvement,” citing “an emphatic message” from ratepayers and elected officials for more effective communication.

The BPU said the electric distribution companies (EDCs) had difficulties with call center call volumes and multiple inaccurate automated estimated time of restoration (ETR) updates. “Although calls with officials were conducted daily, some elected officials were concerned about not getting updated and timely information concerning repair activities in their communities. Elected officials objected to being put in a position of acting as an intermediary between customers and the utility, especially without having sufficient information and awareness about outages and the restoration process,” BPU said.

“When a lifeline service is disrupted for an extended period, residents must have the best information available as soon as it is available to make the right choices for their families, businesses and communities,” Giuliano said. “This was an area of concern during the storm event, especially with JCP&L.”

Regulators also hit JCP&L for not offering free water and ice to customers during outages, unlike the other three EDCs. JCP&L instead offered vouchers that could be used at local stores. “While this theoretically should have increased availability of outlets, complaints were heard that the stores were out of water and/or ice, ergo the vouchers were of no value,” BPU said.

On the bright side, the utilities’ storm-hardening investments since Sandy appeared to have helped, the BPU said. “It appears the post-Sandy completed projects experienced less damage than the older, more vulnerable overhead infrastructure.”

“We have come a long way as far as the infrastructure is concerned,” BPU President Joseph Fiordaliso said. “I was talking to some people who know a heck of a lot more than I do who said if this storm had occurred 10 years ago … people could have been out for two weeks. So, the infrastructure investments that we’ve been making over the years, particularly since Sandy, I think are paying off.”

Vegetation Management

But Fiordaliso said he was disappointed that trees continue to be the primary cause of outages.

“We’re hearing the same things after each storm, unfortunately. I spoke with the presidents of all of the electric utilities after the storm and told them that vegetation management is a top priority. I’ve been on the board [nearly] 16 years, [and] vegetation management has been a … constant problem.”

BPU staff highlighted the impact of outages caused by trees outside utilities’ rights of way (ROW). “Many of these trees were otherwise healthy trees outside of the ROW but large enough to make contact with utility infrastructure, whether it was the EDC’s, telecommunications or cable infrastructure,” BPU said. “While the EDCs do make some efforts to address ‘hazard trees’ (trees outside the ROW that are dead, dying or in some way compromised and likely to fail that can contact electric utility infrastructure), this is not uniform across all of the EDC’s vegetation management plans. In addition, ‘danger trees’ (otherwise healthy trees outside the ROW that could contact electric utility infrastructure) are not regularly addressed by the EDCs.”

Fiordaliso said he told the utilities: “Bring us suggestions, because it is … the biggest problem that we have.”

He said the BPU hears complaints about utility communications from JCP&L customers more than anyone else and said he hoped an upcoming audit “may discover some things that can help us help them.”

“It’s something that is a constant problem: the outreach to individual customers; the outreach to public officials.”

Fiordaliso also expressed disappointment with Consolidated Edison’s RECO, saying restoration was much quicker in Con Ed’s Orange & Rockland Utilities (ORU) across the border in New York. BPU staff said information provided in the company’s major event report was mostly aggregated for ORU and RECO, making it difficult for staff to evaluate RECO’s response.

“When it takes seven days to restore 50,000 customers, and a neighboring utility is restoring 700,000 in the same period of time, that’s a resource issue to me,” Giuliano said. “Obviously, they need to provide more resources.”

“If anyone from Rockland is listening, we’re going to be looking very closely,” Fiordaliso responded. “That [performance] is unacceptable.”

Commissioner Bob Gordon said he shared Fiordaliso’s anger over “what I would call the lackadaisical response” by the utility, saying the state should consider increasing penalties for poor performance.

“My friends and former colleagues in the legislature have introduced legislation that would impose higher fines on utilities that have extended outages. I believe New York is exploring similar policies,” he said. “I think that’s one of things we should explore.”

Commissioner Mary-Anna Holden suggested, “Perhaps there was political pressure — because there were so many outages in New York — to take resources away [from New Jersey]. I’m just speculating. I don’t know that for sure.”

Fiordaliso said he wanted to end the discussion on a positive note. “I am very pleased that, since those March nor’easters a few years ago [when] I had very frank discussions with some of our utilities, the intrastate cooperation has improved tenfold. I want to thank each and every one of those electric utilities for their cooperation.”

Recommendations

The BPU’s o rder approved a series of staff recommendations. Some highlights:

The EDCs shall improve ETR messaging automatically generated by their outage management system (OMS) and test the OMS under stressed conditions; provide a plan to improve call center peak volume during a major outage event; and develop a plan that proactively educates customers and elected officials on the restoration process.
The board shall, in its review of the recently filed advanced metering infrastructure (AMI) plans, continue to consider AMI’s potential in reducing the length of prolonged customer outages following a major weather event.
The board shall continue its stakeholder process to update the 2015 vegetation management rules to include reporting of indices specific to tree-related outages and major events, with a focus on circuits heavily damaged by trees. Circuits with disproportionately high indices of tree-related damage and outages should be targeted for enhanced vegetation management to address off-ROW hazard and danger trees.
The board shall evaluate potential legislative solutions to address the EDCs’ rights to perform trimming or removal of off-ROW “hazard trees” where they threaten overhead facilities.
The EDCs shall evaluate their five worst performing circuits or other metric to determine whether portions of the circuits would be candidates for undergrounding and submit a cost/benefit analysis to the BPU within 90 days.
For any “major event” that affects RECO’s and ORU’s service territories, RECO shall have an average daily restoration rate in New Jersey that is approximately equal to the average daily restoration rate for ORU. Additionally, RECO shall report the average daily restoration rate of in both New Jersey and New York in its major event report.

November 20, 2020

PUCO Chair Randazzo Resigns

Public Utilities Commission of Ohio Chair Sam Randazzo resigned Friday, less than a week after the FBI raided his home in Columbus.

Randazzo, who has served as the chair of the PUCO since he was appointed by Gov. Mike DeWine (R) in 2019, made the announcement in a letter sent to the governor.

The move came one day after FirstEnergy told the U.S. Securities and Exchange Commission that it made a $4 million payment to an “entity associated with an individual who subsequently was appointed to a full-time role as an Ohio government official directly involved in regulating” companies regarding “distribution rates.” FirstEnergy said the payment led to the firing of three of its executives, including former CEO Charles Jones. (See Chief Ethics, Legal Officers ‘Separate’ from FirstEnergy.)

“At this time, it has not been determined if the payments were for the purposes represented within the consulting agreement,” FirstEnergy said. The executives who were terminated “did not reasonably ensure that relevant information was communicated within our organization and not withheld from our independent directors, our Audit Committee and our independent auditor.”

Parting Words

In his letter, Randazzo mentioned both the FBI raid and the SEC filing as reasons for his resignation, saying the incidents could “fuel suspicions about and controversy over decisions I may render in my current capacity.”

“The events and news of this week have undoubtedly been disturbing or worse to many stakeholders who rightfully look to the Public Utilities Commission of Ohio, the Ohio Power Siting Board and me as the chair to act in the public interest within the statutory legal framework,” Randazzo told DeWine. “In present times, when you, good sir, are valiantly battling to save Ohioans from the surging attack of COVID-19, there is no room or time for me to be a distraction.”

DeWine, who appointed Randazzo in February 2019, announced the resignation during a Friday morning press conference. The governor confirmed reiterated that Randazzo said he felt he would be a distraction.

“I want to thank him for his work,” DeWine said. “He has done very, very good work as chair.”

Ohio Gov. Mike DeWine | *Ohio Governor’s Office*

At a Tuesday morning press conference about the state’s COVID-19 response, reporters asked DeWine whether Randazzo was the target of a federal investigation into an alleged scheme by FirstEnergy to bribe state officials, including former House Speaker Larry Householder (R).

“I have no reason to think he is a target,” DeWine had said. “We’re waiting for additional information, quite candidly.”

Before joining PUCO, Randazzo was a partner at McNees, Wallace & Nurick and represented Industrial Energy Users-Ohio. According to an ethics statement, Randazzo has an ownership in two consulting businesses, including Sustainability Funding Alliance of Ohio, that did work for FirstEnergy Solutions (FES), FirstEnergy’s former generation subsidiary. FES emerged from bankruptcy this year as an independent company, Energy Harbor.

Earlier this month, PUCO began an audit of FirstEnergy to see whether the company broke any laws or regulations regarding its interactions with FES.

In July, federal prosecutors alleged FirstEnergy spent $61 million in bribes, “dark money” campaign contributions and advertising to elect Householder and his allies in return for their support of House Bill 6, which provided $1.5 billion in subsidies for the utility’s struggling nuclear plants. (See Feds: FE Paid $61 Million in Bribes to Win Nuke Subsidy.)

In his letter, Randazzo defended his tenure on the commission, saying that before he joined, its decisions were “better characterized as being the product of a rubber stamp than reasoned analysis and proper application of the law. Local interests were unnecessarily subordinated to the virtue-signaling demands of wind and solar farm developers, some of which were only interested in flipping their project.”

He also argued that PUCO had “taken on the runaway electric transmission service rate increases by proactive intervention and advocacy at the Federal Energy Regulatory Commission, a federal agency that has exclusive jurisdiction in this area and seems eager to give transmission utilities money for nothing.

“Prior to my arrival, this important work was not getting much if any attention, and the customer impacts of federal decisions on the price and availability of energy in Ohio were not getting their deserved attention,” he said.

Also contained in the letter was parting advice for DeWine and his former colleagues.

“The worst out-of-market compensation abuses of the Strickland administration’s electric security plan (ESP) statute, all of which were imposed on customers well prior to my arrival, have been mitigated or cut short where possible,” he wrote. “The next step is, in my view, elimination of the ESP statute itself and focusing on the use of a proper competitive bidding process to set the generation supply price for retail electric customers not served by a competitive supplier.”

He also called on the state legislature to rescind HB 6.

November 20, 2020

Ex-ComEd CEO, Officials Charged in Ill. Bribery Scheme

Several former Commonwealth Edison executives, including a former CEO, were indicted Wednesday in connection to the ongoing investigation into alleged bribes of Illinois House Speaker Michael Madigan (D) in return for legislation that increased the company’s earnings and bailed out its money-losing nuclear plants.

Four individuals were charged with bribery conspiracy, bribery and willfully falsifying ComEd books and records in a 50-page indictment returned by a grand jury to the U.S. District Court in Chicago. The individuals indicted include:

Anne Pramaggiore, 62, the former CEO of ComEd from 2012 to 2018 and later of parent company Exelon Utilities;
John Hooker, 71, ComEd’s executive vice president of legislative and external affairs from 2009 to 2012 who later worked as an external lobbyist for the utility;
Michael McClain, 73, a lobbyist and consultant for ComEd and a former member of the Illinois House of Representatives from 1972 to 1983; and
Jay Doherty, 67, the owner of Jay D. Doherty & Associates, which performed consulting services for ComEd from 2011 to 2019.

Investigators allege the four conspired with outside consultants to influence and reward a high-level elected official in Illinois to assist with the passage of legislation favorable to ComEd. The legislation included the 2011 Energy Infrastructure Modernization Act, which created a formula ratemaking process for the utility, and the 2016 Future Energy Jobs Act, which authorized subsidies for Exelon’s Clinton and Quad Cities nuclear generators. (See How ComEd Got its Way with Ill. Legislature.)

While Madigan is not named directly in the documents released Wednesday, the scheme allegedly revolved around what the deferred prosecution agreement released in July called “Public Official A,” identified as the “speaker of the Illinois House of Representatives and the longest serving member of the House of Representatives.” Madigan is the longest-serving leader of any state or federal legislature in U.S. history, having held the speaker title for all but two years since 1983.

ComEd agreed in July to pay a $200 million fine to settle the bribery allegations. Other lawsuits and indictments have resulted from the initial settlement, including a $450 million racketeering suit filed in August. (See ComEd, Madigan Sued for $450M in Racketeering Suit.)

The grand jury probe leading to the bribery charges brought about the retirement of Pramaggiore in October 2019, less than a week after the company disclosed it had received a subpoena seeking communications between Exelon and state Sen. Martin Sandoval, a Chicago Democrat whose home and offices were raided by FBI agents in September 2019. Sandoval’s daughter was hired by ComEd during Pramaggiore’s tenure.

Indictment

According to the newest charges, efforts to influence and reward Madigan began around 2011 and continued through 2019. During that time, Madigan controlled what legislation was called for a vote in the Illinois House and “exerted substantial influence” over other lawmakers concerning legislation affecting ComEd.

The charges allege that the defendants conspired with Fidel Marquez, ComEd’s former senior vice president for legislative and external affairs, along with other unnamed conspirators to influence and reward Madigan through the arranging of jobs and contracts for his political allies and workers, some of whom “performed little or no work” for ComEd.

Marquez pled guilty in September to a bribery conspiracy charge.

The defendants allegedly created false contracts, invoices and records within Exelon, ComEd and Exelon Business Services to disguise the true nature of some of the payments to circumvent ComEd’s internal controls. The indictment also alleges that the defendants helped ComEd retain an unnamed outside law firm favored by Madigan as a political favor and to accept students into ComEd’s internship program from Chicago’s Ward 13, Madigan’s political district.

Pramaggiore, Hooker, McClain and Doherty have yet to be arraigned. No charges have been filed against Madigan.

Wednesday’s indictment was announced by John R. Lausch Jr., U.S. Attorney for the Northern District of Illinois; Emmerson Buie Jr., special agent-in-charge of the Chicago Field Office of the FBI; and Tamera Cantu, acting special agent-in-charge of the IRS Criminal Investigation Division in Chicago.

November 19, 2020

NJ Scrutinizing JCP&L over FirstEnergy Bribe Probe

The New Jersey Board of Public Utilities voted Wednesday to hold a public hearing on Jersey Central Power & Light in response to the ongoing bribery scandal involving its parent, FirstEnergy.

The BPU acted two days after FBI agents raided the home of Public Utilities Commission of Ohio Chair Sam Randazzo and several weeks after S&P Global and Fitch Ratings downgraded the credit rating of FirstEnergy and its subsidiaries, including JCP&L.

JCP&L — PUCO Chair Sam Randazzo | *PUCO*

In July, federal prosecutors alleged FirstEnergy spent $61 million in bribes, “dark money” campaign contributions and advertising to elect the speaker of the Ohio House of Representatives and allies in return for their support of House Bill 6, which provided $1.5 billion in subsidies for the utility’s struggling nuclear plants.

On Oct. 29, FirstEnergy announced it had fired CEO Charles Jones and two others following an internal review related to “government investigations.” On Nov. 8, the company released its top lawyer and chief ethics officer. (See Chief Ethics, Legal Officers ‘Separate’ from FirstEnergy.)

S&P said it dropped FirstEnergy and JCP&L to BB+ from BBB as a result of the alleged scheme.

“The two-notch downgrade reflects the termination of the company’s CEO, Chuck Jones, and two other executives for violating company policies and its code of conduct. We view the severity of these violations at the highest level within the company as demonstrative of insufficient internal controls and a cultural weakness,” S&P wrote in announcing its Oct. 30 downgrade. “We view these violations as significantly outside of industry norms and, in our view, represent a material deficiency in the company’s governance.”

On the same day, Fitch downgraded FirstEnergy and FirstEnergy Transmission’s long-term issuer default ratings (IDR) to BBB- from BBB and JCP&L’s long- and short-term IDRs.

Moody’s Investors Service has not changed its ratings but put FirstEnergy and JCP&L on a negative credit watch.

Mitigation Plan

The downgrades required JCP&L to provide the BPU with a mitigation plan for shoring up its rating.

The board said it will receive written comments until Dec. 4 on the mitigation plan. It set a public hearing for Dec. 11, when it will hear from JCP&L and “determine the appropriateness of any additional board action to protect” ratepayers.

BPU Chief Economist Ben Witherell recommended the hearing “to be comprehensive and transparent in its review of the company’s mitigation plan and to assess the company’s ability to successfully implement an appropriate mitigation plan.”

“I don’t think we have all the information we want yet,” he said. “The New Jersey subsidiary is financially solid. However, the parent company’s risks do weigh on that. … Issues at the parent company are very significant.”

BPU President Joseph Fiordaliso said, “The situation is very serious.

“I was in communication with the acting CEO of FirstEnergy, [Steven Strah] … and he assured me that the internal investigation is just as aggressive as the investigation from external sources.”

Commissioner Bob Gordon noted that the BPU had recently ordered an audit of JCP&L. “It’s really important that it go beyond the numbers, beyond the financial audit. It needs to be an audit of operational effectiveness and organizational design; incentive systems; reporting relationships. It really needs to be a management audit, not simply to assure us that it’s a creditworthy organization.”

Randazzo Raided

On Monday, FBI agents raided the Columbus home of PUCO Chair Randazzo, who was appointed to the commission in February 2019 by Gov. Mike DeWine.

“FBI agents are conducting court-authorized law enforcement activity in that area in relation to a sealed federal search warrant,” FBI spokesman Todd Lindgren told local media. “Due to this matter being sealed, no further details can be released at this time.”

Randazzo and PUCO officials have declined to comment on the raid.

Randazzo’s ethics statement shows an ownership in two consulting businesses, including one Sustainability Funding Alliance of Ohio, that did work for FirstEnergy Solutions (FES), FirstEnergy’s former generation subsidiary. It emerged from bankruptcy this year as an independent company, Energy Harbor.

Before joining PUCO, Randazzo was a partner at McNees, Wallace & Nurick and represented Industrial Energy Users-Ohio.

Earlier this month, PUCO began an audit of FirstEnergy to see whether the company broke any laws or regulations regarding its interactions with FES.

At a press conference this week, DeWine said of Randazzo: “We have no indication he’s under investigation or the target of an investigation.”

November 19, 2020February 13, 2025

Committee Advances FERC Nominees to Full Senate

The Senate Energy and Natural Resources Committee on Wednesday voted to advance President Trump’s nominees for FERC, Allison Clements and Mark Christie, for consideration by the full upper house.

The committee met briefly and approved the nominees by a swift voice vote. Republican Sens. John Barrasso (Wyo.), Steve Daines (Mont.), John Hoeven (N.D.), Mike Lee (Utah) and Cindy Hyde-Smith (Miss.) voted against Clements, a Democrat and energy policy adviser for the Energy Foundation. Sen. Mazie Hirono (D-Hawaii) voted against Christie, a Republican and chair of the Virginia State Corporation Commission.

President Trump’s nominees to FERC, Virginia SCC Chair Mark Christie and Energy Foundation consultant Allison Clements, are sworn in before their confirmation hearing Sept. 16. | Senate ENR Committee

Trump nominated them in late July, and they appeared before the committee to answer questions Sept. 16. (See FERC Nominees Bob and Weave Through Senate Hearing.) Clements would fill the seat left open by the departure of Cheryl LaFleur in August 2019, while Christie would take the place of Bernard McNamee, who departed Sept. 4. If confirmed, Clements’ term would end in June 2024 and Christie’s in June 2025, and Republicans would hold a 3-2 majority on the commission up to the departure of Commissioner Neil Chatterjee, whose term ends June 30.

But whether the Senate will even vote on the nominations before the end of the year is unknown. If not, Trump would need to resubmit them before his term ends Jan. 20. This would add even more uncertainty for FERC, as party control of the Senate next year depends on two runoff elections in Georgia on Jan. 5. If they win, Democrats may want to wait until President-elect Joe Biden takes office and install another Democrat instead of Christie.

The runoff elections will also decide who chairs the ENR Committee, but regardless of which party wins, it will not be current Chair Lisa Murkowski (R-Alaska); Senate rules prohibit any senator from chairing or being the ranking member of any one committee for more than six years.

Barrasso, currently chair of the Environment and Public Works Committee, announced Wednesday that he would take over as the top Republican of the ENR Committee. If Democrats win in January, current ranking member Joe Manchin (D-W.Va.) is in line to be the next chair. Manchin’s colleague from West Virginia, Sen. Shelley Moore Capito, is next in line as the top Republican on the EPW Committee.

November 19, 2020

NJ Asks PJM to Seek Bids for OSW Tx

Signaling a move to the “transmission first” strategy, New Jersey regulators voted Wednesday to ask PJM to conduct a competitive solicitation for upgrades to connect 6,400 MW of offshore wind to the regional grid.

The New Jersey Board of Public Utilities unanimously requested that PJM integrate the state’s OSW goals into the RTO’s Regional Transmission Expansion Plan (RTEP) process under the “state agreement approach” — making it the first state do so since the approach was approved by the FERC under Order 1000. PJM expects to open a competitive solicitation window in the first quarter of 2021.

The approach allows states to seek transmission solutions to meet public policy needs, with costs of the upgrades allocated to state ratepayers. (See PJM Dusts off ‘State Agreement’ Tx Approach.) However, state officials emphasized that the BPU’s agreement to execute a study agreement with PJM does not commit the state to paying anything.

PJM Offshore Wind — New Jersey is considering three options for transmission to accommodate its offshore wind goals. | *New Jersey Board of Public Utilities*

“At the conclusion of the competitive solicitation window, expected in mid-2021, PJM will work with [BPU] staff to evaluate the submitted proposals. At that time, the board will be asked to determine whether any proposed transmission solutions will be selected through the state agreement approach,” explained Joseph DeLosa, BPU’s manager of regulatory affairs. “If the board decides no projects should be selected, the process will terminate without costs to ratepayers. Additionally, the board can terminate the ongoing study process or competitive solicitation at any time.”

Gov. Phil Murphy has set a goal of 7,500 MW of OSW by 2035, but the BPU’s request will not impact the state’s first project, awarded to Ørsted’s 1,100-MW Ocean Wind project, or its second solicitation, which is seeking 1,200 to 2,400 MW. Responses to the second solicitation will be accepted until Dec. 10, with an award expected in June 2021. (See New Jersey BPU OKs 2nd Offshore Wind Solicitation.)

For the first two projects, the BPU required generation developers to include transmission and connection to PJM in their proposals and to include the cost in the state’s Offshore Wind Renewable Energy Certificate funding mechanism.

Although the second solicitation requires developers to address how their interconnection design could support the state’s goals and how a proposed project would work with any future offshore transmission grid, developers were not required to coordinate in a shared approach.

The BPU acted based on information gathered at a technical conference in 2019 and the state’s Energy Master Plan, which concluded that “coordinating transmission from multiple projects may lead to considerable ratepayer savings, better environmental outcomes, better grid stability and may significantly reduce permitting risk.” (See NJ Unveils Plan for 100% Clean Energy by 2050.)

Officials have identified three “inter-related components” of an open-access offshore transmission facility:

PJM Grid to Onshore Substations: This option would upgrade PJM’s onshore regional transmission system to accommodate the increased power flows from OSW facilities. OSW developers would continue to be responsible for getting the power from the lease areas to the newly constructed or existing onshore substations. Solutions could include coordinated onshore “power corridors” that would deliver electricity to existing high-voltage transmission.
Onshore Substations to Offshore Collector Platforms: This option would solicit bids from transmission developers to permit and construct the beach crossings and connect the new or existing onshore substations to new offshore collector stations. This option could be selected in addition to the first option, with OSW developers responsible for interconnection to the offshore collector platforms.
Offshore Transmission “Backbone”: This option would connect offshore collector stations to “network” multiple lease areas.

Based on a screening analysis to determine which substations were most suitable for a large injection of OSW, the BPU is asking PJM to develop needs for injecting 6,400 MW at four locations between 2028 and 2035:

900 MW at the 230-kV Cardiff substation in Southern New Jersey;
1,200 MW at the 230-kV Larrabee substation in Central New Jersey;
1,200 MW at the 500-kV Smithburg substation in Central New Jersey; and
3,100 MW at the 500-kV Deans substation in Northern New Jersey.

“While staff recommends that the board identify these as the most likely locations on the PJM system that will need reinforcement to accommodate 7,500 MW of offshore wind, staff also recommends that the board invite developers to propose particularly cost-effective alternatives that may still meet the state’s immediate policy goals, while deferring less cost-effective elements of the transmission expansion until a future transmission solicitation,” the order says.

DeLosa said the 6,400 MW cited in Wednesday’s order is “reflective of some uncertainty with the outstanding second solicitation. We’re not sure where it’s coming ashore yet because that window is currently open. So, we need to plan for the full 7,500 MW, inclusive of both the first and second solicitations.”

Cost Allocation

The BPU’s move to the “transmission first” model — in which large-scale transmission facilities are built for anticipated generation — is intended to achieve economies of scale.

But staff acknowledged concerns that a coordinated transmission solution could increase commercial risk on generation developers by making their projects dependent on transmission constructed by third parties. The board “will have to address concerns regarding transfer of commercial risk between transmission and generation developers prior to approving a final coordinated transmission solution,” it said.

“Staff encourages entities bidding into the RTEP process to consider how their submitted cost caps and other binding obligations may relate to interconnection of qualified offshore wind generation developers. … Innovative proposals to address the commercial risks associated with delays in the construction of transmission facilities, on the one hand, or delays associated with construction of the offshore wind generators, on the other, should also be pursued.”

Use of the state agreement approach also raises thorny cost allocation issues, as speakers told FERC during a technical conference last month. They said cost allocation rules don’t properly assign costs to parties that will benefit from the additional offshore and onshore transmission that will be required for states to meet their clean energy goals and OSW targets. (See FERC Pushed to Change Tx Rules for OSW.)

BPU General Counsel Abe Silverman said the board’s action “is going to start a process where we go in and make a series of FERC filings with PJM” laying out cost allocation responsibilities.

“If … other states join and we end up with a regional grid, I think everybody is better off because that makes for more clean energy coming onto the grid and helps share the costs,” he said at a press conference alongside PJM officials after the board meeting. “But that is a much longer-term process.”

Ken Seiler, PJM’s vice president of planning, called integrating New Jersey’s public policy needs a “significant milestone” for the RTO’s transmission planning process, which has traditionally focused on reliability. “It’s very exciting to have generation to the east. We’re traditionally a west-to-east flow type of system. … This is going to increase the reliability as well as the resilience for the PJM grid.”

Asim Haque, PJM’s vice president of state and member services, said the RTO is also working with its other coastal states on their OSW plans.

“PJM is not only working with individual states, but it’s also working collectively with the coastal states as well to try and determine, similarly, what the best possible options are for the advancement of offshore wind individually and collectively. … That work will continue. We are going to continue to have those discussions with our coastal states.”

‘Exciting Stuff’

“This is exciting stuff. It’s not sexy like seeing a turbine out there [in the ocean], but it’s getting us positioned well,” BPU President Joseph Fiordaliso said at the board meeting, adding that “PJM has been tremendously helpful throughout this process.

“In the past, I have been critical of PJM. But PJM has done a wonderful job and, under new leadership, has really stepped up to the plate to be more than helpful to the states,” he said, referring to CEO Manu Asthana, who joined the RTO in January.

Commissioner Dianne Solomon sounded a caution, noting that the state has not quantified the cost of the transmission.

“I would be remiss if I didn’t point out that in the past, [PJM has] had a spotty record in evaluating transmission solutions that were least-cost for the state of New Jersey,” she said.

Solomon also expressed concern about the costs of other programs the BPU has initiated to meet its goal of 100% clean energy by 2050. “It’s not only wind, but we have a new energy-efficiency program; [electric vehicle] deployment; solar, wind and nuclear subsidies; [and] building electrification, not to mention … the cost to maintain and upgrade our existing infrastructure. So, at a time when our state faces an unprecedented financial crisis, and many residents are struggling to pay utility bills, it’s imperative that we as economic regulators do a comprehensive analysis of all these components.”

“Let’s be happy today and optimistic that we’re all moving in the right direction,” Fiordaliso responded. “If the 98% of those scientists are just a little bit right, we have very few alternatives here in trying to mitigate the effects of climate change. … I’m not going to be around to see the dastardly effect of climate change. But my grandchildren are going to be.”

Fiordaliso demurred when asked whether the BPU’s recent collaboration with PJM on transmission had any impact on its deliberations over whether to leave the RTO’s capacity market over the expanded minimum offer price rule.

“We haven’t fully completed that investigation yet,” he said. “It’s big step and one we want to get right.”

November 19, 2020

Struggling PG&E Nabs CMS Energy’s CEO

CMS Energy CEO Patti Poppe will depart the Michigan-based electric and natural gas utility to become CEO of California’s besieged PG&E Corp., the companies announced Wednesday morning.

PG&E — CMS Energy CEO Patti Poppe | *Whirlpool*

Poppe will step down Dec. 1 after four years as CMS’ president and CEO and six more years in various other leadership positions at the company. She will replace PG&E’s interim CEO, William Smith, on Jan. 4. Poppe will join the boards of directors at PG&E and Pacific Gas and Electric; Smith will remain on both boards following her arrival.

CMS’ executive vice president of operations, Garrick Rochow, will succeed Poppe.

“Since 2011, I have considered CMS Energy as my home and my co-workers as my family, and I will miss everyone immensely,” Poppe said in a press r elease. “Garrick is a world-class leader and will continue to deliver on the triple bottom line of people, planet and prosperity, as we have for many years now.”

PG&E — Garrick Rochow, CMS | *CMS Energy*

“I am honored to have the opportunity to lead a company with amazing co-workers who make a difference every day for our customers, investors and the communities we serve,” Rochow said in the release. “I look forward to continuing our strong operational and financial performance while creating an environment that keeps our customers and co-workers safe, reflects our culture and is inclusive and respectful of everyone.”

“You can count on CMS Energy to have consistent and predictable performance because of our strong succession planning and the quality of our executive team. I wish Patti the best of luck,” said John Russell, chairman of CMS’ board.

Challenges Ahead in California

Poppe recognized that she faces a daunting task in becoming the fourth CEO in three years to take the helm of California’s largest utility. PG&E has been dogged in recent years by bankruptcy, devastating wildfires and mishandled power shutoffs that left 2 million residents in the dark in 2019. It surfaced from bankruptcy in June, but not before giving wildfire victims a 22% equity stake in the company under a settlement. (See PG&E Trying to Move Forward from Bankruptcy.)

“PG&E has the privilege of powering one of the world’s largest economies and the opportunity to help lead the state’s clean energy future. It also faces significant challenges. I am eager to get to know the PG&E team and to join in the critical work of strengthening PG&E for California’s next generation and earning back the community’s trust,” she said.

PG&E said its board appointed Poppe “following a broad national search that looked at candidates both inside and outside of the utility and energy industries.”

“Patti is an exceptional leader with the experience, drive and character to lead PG&E through its next chapter. She knows the utility industry top to bottom and has a deep understanding of what it takes to provide safe, reliable, affordable and clean energy to millions of customers,” PG&E Chairman Robert Flexon said in a statement. “We all recognize that PG&E must continue to improve, adapt and become more resilient to the changing climate. As the leader of Michigan’s largest utility, Patti has embraced technology and put the company on a course to achieving its ambitious clean energy goals while maintaining steady and safe performance, prioritizing customer service and advancing workplace equity.”

The news had a contrasting effect on the companies’ respective stocks Wednesday morning. PG&E shares perked up, but CMS shares drooped.

Smith said he had “every confidence Patti will hit the ground running and lead PG&E forward.”

“She is incredibly smart, knows the operations side of this business, and brings to her work curiosity, dedication and warmth. These qualities will serve her well as she brings PG&E into the future. I look forward to introducing Patti to our talented workforce, welcoming her to California and working closely with her in the years ahead,” he said.

Poppe has been uncharacteristically candid about her pivot from supporting coal to embracing environmentally friendly energy. (See Consumers Energy Accelerates Zero-carbon Target.) Under her watch, CMS subsidiary Consumers Energy accelerated its target to achieve net-zero carbon emissions from 2050 to 2040, putting the utility on track to achieve that goal a decade earlier than most of its peers in the industry.

She often invokes her grandchildren in comments about the importance of combating climate change, expressing hope that she will be able to tell them that climate change is something people used to worry over.

November 19, 2020

MISO Says Communication Key to DER Order

Seeking to open communication channels with their distribution utilities, MISO staff held a special workshop Tuesday to prepare for FERC Order 2222.

Kristin Swenson, MISO’s distributed energy resource program director, said the grid operator needs better collaboration with distribution system operators to comply with the order, which allows DER aggregators to compete in organized wholesale electric markets. To do that MISO will need access information typically reserved for distribution utilities.

Swenson said during workshop that MISO’s new DER task force, created to navigate Order 2222 compliance, will begin meeting in January. (See MISO Embarks on Order 2222 Work.)

“The hope is we begin to have an idea in March, a conceptual design, so we can come to stakeholders with, ‘Here’s what we think we should do. What do you think?’” Swenson said. She said MISO would like to have a proposal by June that the legal team can prepare for a July filing.

“Any time we alter our Tariff, we have to cross-check the whole Tariff to make sure we inadvertently didn’t change any meanings,” Swenson said.

Per Order 2222, MISO will create a “coordination framework” to guide interaction with relevant electric retail regulatory authorities, distribution utilities and DER aggregators — including both documented procedures and operating agreements.

“It’s OK that we don’t know what the plan will be right now,” Swenson said. “The control systems, while there are a lot of cool ones out there, haven’t been widely adopted yet.”

MISO has compiled a draft list of the information it might need to collect before opening its markets to DER aggregators. While the grid operator envisions amassing data on obvious items like inverter type and settings, maximum capacity, weather, possible operating modes and historical production data, it may also collect more obscure data such as remote-control capabilities and tree cover or building shadows that could obstruct solar panels. MISO said it is interested in refining the list with distribution utilities.

Staff said they need more information from distribution utilities before they can form a conceptual design for DER market participation.

“We’re very interested in distribution operations expertise,” Swenson said.

The RTO would like to know utilities’ established standards of data collection from their DERs, the demand for interconnection to distribution systems, whether companies are selling DER services and whether they’ve experienced a “significant” number of non-solar DER requests such as batteries, electric vehicles or standby diesel generator sets.

Swenson said staff are also looking for information on how distribution utilities forecast DER growth. MISO doesn’t currently include DERs in its planning models.

Swenson said as MISO’s DER program manager, she’s often asked how many such resources the footprint will add. She said her answer is usually “not satisfactory” to members: The RTO doesn’t know.

“Because DER additions are not driven like traditional generation, it’s hard to forecast,” Swenson said. She said MISO is experiencing a steady increase in distributed generation assets in its footprint and expects the trend to accelerate with Order 2222.

Distribution representatives said gathering that information would be no easy feat, requiring conversations with multiple employees and executives.

“Other ISOs have said you have to start with operational coordination. We can create the best market design in the world, but without operational coordination none of this will work,” Swenson said. “Obviously, Order 2222 envisions a world with more DERs, but without coordination we will have something that no one wants to participate in.”

Stakeholders asked whether MISO would grandfather existing DERs already connected to distribution systems in its footprint.

Managing Assistant General Counsel Michael Kessler said state jurisdictions retain authority under Order 2222, so grandfathering will most likely be left to states and applicable distribution companies.

Swenson said the DER participation models put forth by California and New York are helpful only to a point, reminding stakeholders that those ISOs answer to just one set of state regulators.

“MISO is obviously a multistate RTO. There are many parties involved,” she said. “We’d like some standardization; at least from MISO’s perspective, it’s far easier.”

November 19, 2020

After Contradicting Trump, Krebs Out at CISA

Chris Krebs, founding director of the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA), was fired Tuesday night by President Trump, leaving a leadership void at an agency that has provided significant cybersecurity assistance to the utility sector since 2018.

Trump announced Krebs’ departure on Twitter, saying a “recent statement by [Krebs] on the security of the 2020 election was highly inaccurate” and citing a number of conspiracy theories the president has pushed to discredit President-elect Joe Biden’s victory, with almost no success in court.

The president’s tweet did not refer to a specific statement by Krebs. In recent weeks the director and his agency have repeatedly pushed back against claims of electoral fraud by Trump and his allies in media and government with resources such as the Rumor Vs. Reality page, which aims to correct misinformation circulating online. A joint statement issued last week by CISA and other organizations that participated in the Nov. 3 election called it “the most secure in American history” and said that there “is no evidence that any voting system deleted or lost votes, changed votes, or was in any way compromised.”

Tuesday night tweets from President Trump (left) and former CISA Director Chris Krebs | *Twitter*

State of CISA Leadership Unclear

Krebs did not respond directly to Trump’s statement, but shortly after the president’s announcement, he tweeted, “Honored to serve. We did it right. Defend today, secure tomorrow.” He had reportedly expected to be fired since it became clear that Biden won the presidential election. Neither CISA nor DHS have released a statement on Krebs’ departure, and CISA has not updated its website to remove Krebs from its leadership page.

According to CISA’s leadership structure, the first person in line to succeed Krebs is Deputy Director Matthew Travis. However, according to an email to agency employees sent by Chief of Staff Emily Early and obtained by POLITICO, Travis was passed over by Trump in favor of Executive Director Brandon Wales.

Multiple media outlets, citing unnamed sources, have reported that Travis was pressured to resign by the White House; Wales is a career civil service employee and therefore cannot be removed by Trump without cause. Bryan Ware, the leader of CISA’s cybersecurity division, told POLITICO on Nov. 12 that he had resigned from the organization as well. His acting replacement, Matt Hartman, is also a career civil servant.

Democrats were quick to condemn the firing. Biden spokesperson Michael Gwin said in a statement that “Chris Krebs should be commended for his service in protecting our elections, not fired for telling the truth,” while Rep. Adam Schiff (Calif.) said on Twitter that Trump “can’t understand Chris Krebs or others … who put duty and service to the country above all else.” House Speaker Nancy Pelosi (Calif.) issued a statement criticizing Trump for “distracting and dividing the country by denying his defeat in the election.”

Republicans also praised Krebs, with Sen. Richard Burr (N.C.) calling him a “dedicated public servant who has done a remarkable job during a challenging time.” Sen. Rob Portman (Ohio) also said Krebs was “a real professional” who “was always responsible and helpful.” However, few Republicans were willing to criticize Trump directly: Sen. Ben Sasse (Neb.) was a rare exception, saying that “Chris Krebs did a really good job … and he obviously should not be fired.”

The 1st Director

Krebs joined CISA at the agency’s inception in November 2018, having served since June 2018 as under secretary for the national protection and programs directorate, CISA’s predecessor in DHS that was founded in 2007. Trump appointed Krebs to both positions. Before joining DHS, Krebs had worked for Microsoft’s U.S. Government Affairs team as the director for cybersecurity policy.

His leadership at CISA was marked by energetic outreach to bring together critical infrastructure sectors, including the oil and gas industries, with government entities, including regulators and intelligence agencies. Krebs saw the agency as a friendly middle ground where both communities could find a common purpose and work together to counter emerging threats from malicious cyber actors.

“What we’ve been doing for the last couple of years [is] getting away from this almost monolithic approach to critical infrastructure, where you have a sector that’s defined by the companies,” Krebs said at the Edison Electric Institute’s Virtual Leadership Summit in September. (See EEI Panel: Public-private Trust Key to Cyber Survival.) “Instead, we’re taking an approach where the critical infrastructure community is defined by the services and functions it provides.”

The convergence of the COVID-19 pandemic and the presidential election made 2020 a busy year for CISA, which in April published a list of guidelines for critical infrastructure sectors to reduce the risk of infections while operating control centers. (See Government Urges Action on Cyber Threats.)

Krebs joins a growing list of officials removed or demoted by Trump since his election loss. On Nov. 5, the president replaced Neil Chatterjee with James Danly as chair of FERC in a move seen by many — including Chatterjee — as retaliation for his support of a proposed policy statement endorsing the introduction of carbon pricing in wholesale electricity markets to address climate change. (See Trump Names Danly FERC Chair.) Chatterjee remains a commissioner and plans to finish out his term, which ends June 30.

The highest-level departure from the Trump administration post-election is Defense Secretary Mark Esper, dismissed Nov. 9 amid reported tensions with his boss over a range of issues. Several lower-rung officials have also left the government, including Valerie Smith Boyd, the assistant secretary for international affairs at DHS, and Lisa Gordon-Hagerty, under secretary of energy for nuclear security and administrator of the National Nuclear Security Administration.

November 19, 2020March 9, 2025

DOE Study Finds No Need for Tx Corridors

The Department of Energy’s latest a ssessment of transmission congestion has concluded there is no need to designate national-interest electric transmission corridors, citing the “dramatic increase” in transmission investment since 2005. But it said future assessments should address the grid’s resilience and the threats posed by cyberattacks and natural disasters.

The Energy Policy Act of 2005 (EPAct) amended the Federal Power Act to direct DOE to conduct regular assessments of national transmission constraints and congestion. It also sought to give the department and FERC “backstop” siting authority if states failed to act. But DOE has not attempted to designate any corridors since court rulings rejected a bid to designate two.

Congress ordered the assessments after DOE’s 2002 National Transmission Grid Study reported that limited transmission construction since the 1990s had resulted in major transmission bottlenecks. The legislation was also spurred by the 2003 U.S.-Canada blackout — the largest blackout in U.S. history — which affected more than 50 million customers and caused an estimated $5 billion to $10 billion in economic damages.

DOE said its latest National Electric Transmission Congestion Study “has not identified transmission congestion conditions that would merit proposing the designation of national corridors.” Stakeholders’ comments on the study are due Nov. 23 and should be sent to 2020congestionstudy@hq.doe.gov.

The department noted that since EPAct, FERC issued Order 679, which created financial incentives for transmission investment, and Orders 890 and 1000, which set requirements for regional and interregional transmission planning and principles for regional cost allocation.

“Annual investment in transmission today is more than five times greater than it was during the years prior to 2005,” DOE said. “The department’s review of available information confirms that transmission constraints and congestion have abated, in large measure because of these investments. The department also confirms that related factors, including lower rates of growth in electricity demand and lower prices for natural gas, have contributed to reducing transmission congestion.”

The number of Level 3, 4 and 5 transmission loading relief (TLR) actions in 2018 was less than 1/10 of that in 2009, the report said. “Market reforms have contributed to some of these reductions, but transmission investment has also had a role in reducing the need for TLRs.”

Level 3, 4 and 5 transmission loading relief actions by reliability coordinator (2005-2018) | Department of Energy

New Approach: Resilience

While DOE said it saw no significant problems with congestion, the new report asks Congress to approve a broader scope for future studies, saying “critical issues facing the electricity system today go beyond understanding transmission constraints and congestion as these terms are defined and used routinely by industry.”

The new assessments should also evaluate the resilience of the existing grid to “emerging threats posed by cyber and physical attacks, severe weather, natural disasters and geomagnetic disturbances,” the department said. “For example, recent hurricanes affecting Texas and Louisiana and the combination of extreme heat and wildfires in California have underscored that a robust transmission network is critical for coping with such challenges.

“The potential for deliberate attacks and our increased vulnerability to severe weather pose new and growing threats to reliability,” it continued. “Our current ability to analyze the value of investments in the resilience of transmission infrastructure is limited due to the lack of details regarding potential threats; data and predictions on resulting impacts; tools required to model multiple infrastructures; and details concerning the coordination of numerous utilities and stakeholders involved in regional and national-scale energy system operations.”

DOE proposed using its North American Energy Resilience Model (NAERM) to evaluate such threats, describing it as “an integrated modeling approach to study the impact of critical energy and other infrastructures, including all forms of generation, on the electric power system.”

“Application of the NAERM will provide real-time situational awareness and analysis capabilities for emergency events so the federal government can respond quickly to potential threats to critical electric infrastructure and the North American energy system as a whole,” DOE continued. “The effort will advance the state of science in planning and operations of electric supply and delivery in extreme events and provide more rigorous resilience and associated economic metrics for the energy and other sectors.”

Former Assistant Energy Secretary Bruce Walker has touted NAERM repeatedly in public appearances. (See “Grid Resilience Model as a ‘Platform,’” DOE’s Walker Sees Big Cuts in Storage Costs.) Walker announced the model after FERC rejected then-Energy Secretary Rick Perry’s proposed rulemaking to benefit coal and nuclear generators in January 2018.

In June 2018, President Trump directed Perry to force grid operators to provide a lifeline to struggling coal and nuclear plants, saying their retirements threaten national security. Trump’s directive came after the leak of a 40-page draft DOE memorandum that cited the Defense Production Act of 1950 and FPA Section 202c, which allows the energy secretary to issue emergency orders during energy shortages. The department never released the memorandum, and the issue seemed to have died.

DOE said NAERM requires “a wider range of information and data — much of which is not now coordinated systematically or collected comprehensively … to assess comprehensively how the critical national interests identified in EPAct are being affected by the ongoing evolutionary changes in the relationship between transmission networks and the broader electricity system.”

“Current planning standards, which lead to identification of transmission constraints, have been designed to address the variety of unexpected circumstances that might compromise day-to-day reliability. These standards were not designed to ensure the transmission system can withstand extremely severe or long-lasting circumstances that threaten reliability.”

National Corridors

EPAct gave the energy secretary power to designate any area experiencing electricity transmission capacity constraints or congestion that adversely affects consumers as a national-interest corridor.

The secretary was directed to act upon a finding that “the economic vitality and development of the corridor, or the end markets served by the corridor, may be constrained by lack of adequate or reasonably priced electricity” or that “the energy independence of the United States would be served by the designation.” FERC was authorized to site transmission within such corridors if state officials or others with authority to approve the siting had “withheld approval for more than one year.”

In October 2007, DOE designated a Mid-Atlantic Corridor from metropolitan New York to Northern Virginia and a Southwest Corridor in Southern California based on its 2006 Congestion Study. But the 9th U.S. Circuit Court of Appeals vacated the designations in 2011, saying the department had failed to adequately consult with the affected states in the preparation of the congestion study. It also ruled that the National Environmental Protection Act required DOE to prepare an environmental impact statement on the corridors.

Percent of time major transmission paths in WECC are operated at 75% or more of their rated capacity (2018) | Department of Energy

The order followed a 2009 ruling by the 4th Circuit that FERC only had authority to order construction if the affected states failed to act for more than one year on a request for construction approval. The court said Congress had not given FERC authority to reverse a state decision explicitly rejecting a project.

The two rulings “mostly eviscerates federal siting of electric transmission lines,” attorneys for Bracewell & Giuliani wrote after the 2011 ruling.

“Due to the subsequent ambiguity about what constitutes appropriate consultation with states, DOE has not designated additional transmission corridors,” Democrats on the House Select Committee on the Climate Crisis wrote in a report in June. (See House Dems Offer Climate Package.)

The Democratic report called on Congress to correct what it saw as flaws in EPAct, including its splitting of backstop siting authority between FERC and DOE. It said the authority should be assigned solely to FERC, triggered if one or more states have approved the project, but one or more states have denied it or withheld approval for more than two years.

It also recommended Congress align the transmission corridors program with national climate goals such as the development of renewables. It also said FERC, working with DOE and the National Labs, should develop a comprehensive, long-range electric infrastructure strategy to achieve 100% clean electricity generation by 2040.

The committee also had a strategic recommendation. “Requiring DOE to designate broad areas as corridors before project proponents have developed specific, narrow proposals can strain relationships with landowners and communities,” it said. “Allowing project proponents to apply for corridor designation after having laid the groundwork with landowners and communities may be better.”

Larry Gasteiger, executive director of transmission trade association WIRES, said, “It’s clear that exponential growth in transmission will be needed to deliver to load the enormous amount of renewable resources coming online to meet clean energy mandates and goals, to meet the needs of an electrified economy and to address resilience needs driven by increasing extreme weather events, aging infrastructure, and growing cyber and physical threats to the grid.

“The need for substantially increased investment in transmission has been supported by a growing mountain of evidence and was most recently demonstrated by the recent study done by ScottMadden [and] sponsored by WIRES. The good news is that regulators and policymakers seem to agree that the nation needs a lot more transmission.”

“Corridor designation should be based on not just current congestion but prospective congestion because one can assess the interconnection queue logjams and other sources of information about future needs,” Rob Gramlich, executive director of Americans for a Clean Energy Grid, said in an email. “I also think it is a better approach to focus on specific projects that a developer might require assistance with, so there should be a process for them to apply and present congestion studies to the agency.”

Spending, Congestion by Region

The DOE report highlights the progress grid operators have made in the past 15 years, noting that congestion costs in ISO-NE, MISO, NYISO and PJM have all dropped.

Congestion costs in ISO-NE “have been virtually nonexistent” for the past decade, it said. “Prior to significant transmission construction activities completed in 2006, congestion costs in ISO-NE were routinely in the hundreds of millions annually.”

Congestion costs in MISO, which hit almost $1.5 billion when it integrated the Entergy system in 2014, are now “far less than $1 billion annually.”

Transmission infrastructure investment, 1996-2018 ($ billions, nominal) | Department of Energy

CAISO congestion costs, which exceeded $500 million between 2012 and 2014, dropped below that level during 2015-2017 before returning above it in 2018.

The report did not include congestion costs for ERCOT, which is not subject to the FPA, or SPP, which did not begin operating its wholesale market until 2014. DOE said SPP’s “historical record … is too brief to provide insight.”

DOE concluded that demand growth — 1.2% annually in the Eastern Interconnection and 0.7% in the Western Interconnection from 2006 to 2016 — “has not been a major factor influencing either transmission congestion or the need for additional transmission investment in recent years.”

The report said the highest annual investments in transmission are currently in the ReliabilityFirst, SERC Reliability and WECC footprints. “The highest levels of total transmission investment since 1996 have been in the RF footprint, followed by the WECC footprint … and then the SERC footprint and the” Northeast Power Coordinating Council.