The CAISO Board of Governors praised the work of retiring colleague David Olsen on Wednesday and adopted the second part of a plan to speed the interconnection of storage resources to avoid future blackouts.
The governors and new CEO Elliot Mainzer recognized former Chair Olsen for his efforts to bring renewable power into the mainstream over the past four decades, including nearly nine years on the CAISO board.
“You are truly a titan in the energy field,” Chair Angelina Galiteva said. “Your wisdom, dedication and commitment to the decarbonization of the grid … especially to elevating the ISO to an international and global leader in the field of integrating renewables … is greatly appreciated and cherished.”
Mainzer read a resolution from the governors honoring Olsen and presented him, in an online meeting, with a commemorative plaque. The resolution recognized Olsen’s many achievements, including ushering in an era of corporate sustainability as president of Patagonia in the late-1990s. He led the outdoor-gear company’s carbon-reduction efforts, making it the first U.S. corporation to get its electricity from wind and solar power. (See Ex-CAISO Board Chair to Retire.)
Olsen, 74, served as CAISO board chair from February 2018 to Oct. 1. Earlier this month, he announced he would retire Nov. 30 with more than a year left in his term.
“I’ll be 75 years old soon and have been on the CAISO board for almost nine years,” Olsen said in an email. “That’s long enough on both fronts.”
David Olsen’s colleagues on the CAISO Board of Governors presented him with this plaque at his last meeting before retirement. | CAISO
Hybrid Resources Initiative
The board unanimously approved the second phase of CAISO’s hybrid resources initiative, letting co-located storage and generation resources operate under a single resource ID.
“The hybrid model allows for the underlying resources to be managed by the resource operator as opposed to the ISO,” CAISO COO Mark Rothleder said in a memo to the board. New provisions would allow hybrid resources to provide energy and ancillary services, he said.
“The proposal also includes a dynamic limit tool that will enable the resource operators to communicate their maximum and minimum operating limits to the ISO in real time,” Rothleder wrote. “This tool will help the ISO ensure it is issuing feasible dispatches to hybrid resources participating in the market.”
The board approved the first phase of the hybrid resources initiative in July. It laid out new rules for co-located resources that operate under separate resource IDs for dispatch purposes. FERC approved those Tariff changes Thursday, allowing them to take effect in December. (See related story, FERC Accepts CAISO Co-Located Resources Plan.) The ISO’s second-phase proposal also requires FERC approval.
Both phases are intended to better integrate storage coupled with solar and wind generation. CAISO needs thousands of megawatts of storage to transition to 100% clean energy by 2045, as state law requires. It has about 200 MW of storage now.
In the near term, the ISO is urgently trying to interconnect more storage before summer 2021. Resource shortfalls next summer are forecasted to exceed those in August and September, when CAISO declared energy emergencies, including rolling blackouts, in mid-August.
FERC on Thursday rejected challenges to its July order revising how it enforces the Public Utility Regulatory Policies Act but granted clarification on several points (RM19-15-001, AD16-16-001).
Order 872 allowed state regulatory commissions more flexibility in how they establish avoided-cost rates for qualifying facilities and said they could require the rates to vary over the span of a QF’s contract. It also modified the “1-mile rule” and reduced the rebuttable presumption for nondiscriminatory access to power markets, from 20 MW to 5 MW, for small power production, but not cogeneration, facilities. (See FERC Issues Final Rule to ‘Modernize’ PURPA.)
Numerous stakeholders requested rehearing on Aug. 17, including California’s three investor-owned utilities, the Electric Power Supply Association, the Northwest and Intermountain Independent Power Producers Association, the Sierra Club, the Sustainable FERC Project and the Solar Energy Industries Association.
The requests were automatically denied when the commission failed to act within 30 days. In Thursday’s order, FERC explained why the challengers were wrong while also offering some clarifications. The order was supported by Chair James Danly and Commissioner Neil Chatterjee, both Republicans, but opposed by Commissioner Richard Glick, a Democrat, who had dissented in July.
‘Tiered’ Pricing, Variable Energy Rates
The commission rejected a request by Pacific Gas and Electric, San Diego Gas & Electric and Southern California Edison to clarify that it is no longer commission policy to permit states to subsidize QFs by the use of “tiered” avoided costs — the costs of a subset of facilities from which a state has mandated purchases or facilities that meet state requirements such as use of renewable fuel.
“PURPA neither requires nor prohibits states from establishing tiered procurement (and thus tiered pricing), such as California does,” the commission said.
FERC granted SEIA’s request for clarification that a state may only use variable rates to set avoided energy costs if the utility has fulfilled its obligations to disclose avoided-cost data as required under PURPA regulations.
FERC ruled in 2016 that Entergy did not have to purchase power from Occidental Chemical’s Taft plant in Louisiana because the PURPA generator had unconstrained transmission access and could sell its output in the MISO wholesale market. | Occidental Chemical
“We do not find the disclosure of such information unreasonable as the commission’s PURPA regulations already require its disclosure,” FERC said. “In addition, although electric utilities are required to disclose this data generally, it is especially important when a state has selected the fixed capacity/variable energy rate construct to ensure that QFs have this data from the purchasing electric utility to provide transparency with regard to a utility’s avoided costs.”
Competitive Solicitations
The commission also clarified the rules regarding the use of competitive solicitations to set QF rates.
“If a competitive solicitation is not conducted in accordance with the requirements of the final rule guidelines, then an aggrieved entity may challenge the competitive solicitation before the commission or in the appropriate fora,” FERC said.
Order 872 allows competitive solicitations as long as they are the result of a transparent process open to all sources, conducted at regular intervals and overseen by an independent administrator.
Rebuttable Presumption of Separate Sites
The commission offered clarification on several aspects of its requirement that the capacity of all small power production facilities “located at the same site” not exceed 80 MW.
“If a hydroelectric generating facility is more than a mile apart (but less than 10 miles apart) from an affiliated facility, yet on the same impoundment, the rebuttable presumption would be that they are at separate sites. We further clarify that, although the second sentence of footnote 769 [in Order 872] suggested that a hydroelectric generating facility in this circumstance was free to seek waiver (most likely in order to eliminate any uncertainty as to its status), it would be unlikely that any such a facility would, in practice, need to request such waiver.”
It also clarified that “the factors that may be used by an applicant to pre-emptively defend against rebuttal include the example factors identified in … paragraph 509 of the final rule.”
Paragraph 509 cited “physical characteristics, including such common characteristics as: infrastructure, property ownership, property leases, control facilities” and “whether the facilities in question are: owned or controlled by the same person(s) or affiliated persons(s), operated and maintained by the same or affiliated entity(ies).”
Rebuttable Presumption of Nondiscriminatory Access to Markets
FERC declined to rule on the argument by wind developer One Energy Enterprises that a behind-the-meter distributed energy resource’s primary purpose is to generate electricity for its host and any potential sale is secondary like cogeneration facilities.
But it clarified that behind-the-meter DERs such as municipal solid waste facilities and biogas facilities may argue that having “‘a predominant purpose other than selling electricity which would warrant the small power QF being treated similarly to cogenerators’ … supports their argument that they lack nondiscriminatory access to markets.”
“We will rule on any such arguments on a case-by-case basis taking into account the specific facts of the DER making the argument,” the commission said.
It also granted a request for clarification “that the list of factors in section 18 CFR 292.309(c) that small power production facilities between 5 and 20 MW can point to in seeking to rebut the presumption that they have nondiscriminatory access was not — but should be — added to 18 CFR 292.309(e) that applies to QFs in ISO-NE, MISO, NYISO and PJM, and also to 18 CFR 292.309(f) that applies to QFs in ERCOT. In order to avoid confusion, we hereby incorporate the factors listed in 18 CFR 292.309(c) into both (e) and (f).”
Glick’s Dissent
Commissioner Glick opposed Thursday’s ruling, saying during the monthly open meeting that the commission’s record was “insufficient to support several of the key changes” in Order 872. Glick said he requested a technical conference to create such a record but was denied by former Chair Chatterjee.
Glick said the commission “is administratively gutting PURPA” in response to utilities and others who had been unsuccessful in getting Congress to revise the law, which was last amended in 2005.
“It doesn’t matter whether you believe PURPA offers substantial benefits or whether you think it’s bad public policy,” he said. “The fact is these are matters for our elected representatives in Congress to decide. We should not be using our regulatory authority just because some might be frustrated by Congress’ inaction.”
The rulemaking eliminates QFs’ guarantee of obtaining a fixed-term, fixed-rate contract, undermining their ability to obtain financing, Glick said. “At the same time, utilities in vertically integrated states can depend on the guarantee that their ratepayers will pay for a generating plant over the life of the facility,” he said. “How is that not discrimination?”
Danly and Chatterjee, however, said claims that the rulemaking discriminates against QFs are “based on the incorrect assumption that electric utilities have not been required to lower their energy rates as prices have declined. The commission found, to the contrary, that utilities typically charge their customers cost-based rates, and, as their fuel and purchased power costs have declined, they typically have been required to provide corresponding reductions in the energy portion of their rates to their customers. …
“Requiring QF avoided-cost energy rates to likewise change as purchasing electric utilities’ avoided energy costs change does not create a discriminatory difference, but rather puts QF rates on par with utility rates,” they added.
Glick also criticized the commission for presumptively authorizing states to use LMPs to set avoided costs, “even though LMP may not fully represent the utility’s avoided costs. This leaves utility generation with a distinct advantage — exactly the opposite of the role Congress intended PURPA to play.”
Danly and Chatterjee rejected arguments that precedent prohibits establishing a rebuttable presumption that LMP reflects avoided costs for as-available energy.
“Because LMP is likely to reflect the true marginal cost of energy in the vast majority of cases … it is ‘so probable that it is sensible and timesaving to assume’ that LMP for a particular utility is an appropriate measure of the utility’s avoided costs for as-available energy, unless disproven in a particular case,” they said. “We leave open for specific cases to determine the appropriateness of using a particular LMP such that a QF could rebut the presumption that LMP is appropriate.”
Four-star Gen. Wesley Clark retired from the Army after a 38-year career that saw him wounded as an infantry commander in Vietnam and rise to become commander of the U.S. Southern Command and the U.S. European Command. He helped write the U.S. National Military Strategy and Joint Vision 2010 for maintaining “full-spectrum” dominance.
The National Commission on Grid Resilience recommended establishment of an independent National Resilient Grid Authority to develop an experimentation program that identifies emerging threats and vulnerabilities. | National Commission on Grid Resilience
“The grid is the fundamental infrastructure for the U.S. It’s more important than pipelines, transportation or anything else because everything depends on the grid,” he said Wednesday at the American Council on Renewable Energy’s Grid Forum. “If it ever goes down, we’re in enormous difficulty.”
Although the terrorist attacks of Sept. 11, 2001, and Russia’s attacks on the Ukrainian grid have increased vigilance in the U.S., Clark said, the nation lacks a way to coordinate its response or measure its success.
“Lots of different groups have made recommendations, and many of their recommendations have been adopted. But there’s no clearinghouse; there’s no report card; there’s no way of knowing how well we’re doing” in responding to cyberthreats, he said.
“We need to be more open … about what the threats are,” he said in an interview with ACORE CEO Gregory Wetstone. “It’s really hard to find out whether we’re in danger or not if you’re just a citizen or on a public utilities commission setting a rate. You don’t really understand the threat. We know our enemies understand the threat. The question is: Can we do a better job of conveying this to the American public?”
Centralize Oversight
Clark also called on the U.S. to centralize its oversight responsibility. “Someone on the National Security Council staff should be tasked with looking at grid resilience. They aren’t. There should be a congressional caucus that meets to look at resilience issues. There isn’t.”
Retired Gen. Wesley Clark | ACORE
The U.S. also should develop a “test bed” where contractors, technologists and utilities can “try their hand against the latest threat,” he said. “That’s the way we did it in the Army to develop new technology.”
Clark also called for an expanded transformer reserve and development of microgrids, starting with ones on military bases. “In the event of a major grid crash caused by, let’s say, hostile action or environmental conditions, we have isolated islands that are self-powered and have enough [power] to be able to spread to the local communities.”
Wetstone raised President Trump’s May 1 Executive Order 13920 banning certain grid components from foreign adversaries, complaining that it was too vague.
“We never knew what was banned. It just created a lot of uncertainty,” Wetstone said. “Guidance was promised by mid-September; then it was reframed that we would see a Notice of Proposed Rulemaking by the end of the year. So, obviously, all this is being punted to the Biden administration.”
“This is an example of how difficult it is to move forward in the grid resilience area,” Clark said. “If we were China, we’d have a central data repository, and we would know everything that’s ever been bought from any foreign supplier and it would be controlled. But we don’t have the inventory. We don’t actually know what’s out there. We do know the threat because it’s been detected. But we don’t know where the threat is.
“It’s one of the first issues that I hope the Biden administration will be able to get a grip on. It is an urgent problem,” he continued. “The executive order was a great first step. But it wasn’t executable.”
NERC responded to the executive order in July with a Level 2 alert seeking data on the presence of foreign-provided equipment in the bulk electric system, and the Department of Energy issued a request for information on utilities’ practices for identifying and mitigating supply chain vulnerabilities. In September, FERC Opens Supply Chain Cyber Risk Inquiry.)
Clark said the commission will “continue to push this and keep this issue alive because otherwise, everybody sort of nods sagely when you say these things: Yes, it’s complicated; yes, it’s a risk. And then it’s business as usual until there’s a catastrophe. If you think COVID and the lockdowns are difficult … it really doesn’t compare to what could happen with a significant grid problem.”
Commission Recommendations
Members of the National Commission on Grid Resilience, which made nine recommendations in a report in August. | National Commission on Grid Resilience
The National Commission on Grid Resilience issued a report in August that made nine recommendations:
Congress should direct DOE, the Department of Homeland Security and the Director of National Intelligence to establish a central clearinghouse and decisional node for communicating full and accurate threat information to BES operators and electric utilities.
Congress should establish a National Resilient Grid Authority, an independent agency staffed by rotating appointments of the country’s most highly qualified energy, cybersecurity and national defense experts from both the government and private sectors.
Congress should direct the Department of Defense and DOE to establish a nationwide advanced resilience technology (ART) test bed network of long-duration, blackout-survivable microgrids on military bases and other critical federally owned facilities that are predetermined to be safely sited on stable lands free from flooding, wildfires and other high-impact disasters for the foreseeable future. These should be devoted to both immediate defensive capabilities and rapid development of advanced grid resilience technologies.
FERC — in consultation with appropriate expertise at DOE and the Department of Interior, states actively procuring offshore wind energy resources and the relevant ISOs/RTOs responsible for the management of the onshore grid in their jurisdictions — should reform and strengthen interregional transmission planning, cost allocation and competitive bidding processes to better address the characteristics of widely dispersed renewable energy generation.
Congress should direct DOE and DHS to create a voluntary central repository of information regarding security and resilience investments in the electric power system.
Congress should pass a Resilience Investment Tax Credit that incentivizes investments in cyber and physical security transmission components and equipment that are American-manufactured, as well as electromagnetic pulse security measures at both the distribution utility and BES levels. It should also direct federal spending toward resilience and security investments in federally owned electric utilities and end-use federal facility energy applications such as grid-connected devices, electric vehicle fleets and charging infrastructure, and distributed energy resources.
Congress should establish a bipartisan caucus on grid security that meets regularly to consider issues impacting the security and resilience of the U.S. electric grid. The National Security Council should lead a complementary interagency committee on grid security that acts as a liaison with the caucus.
The White House and Congress should establish a secure ongoing domestic supply chain, manufacturing capability and labor skills sets for all critical components and whole equipment essential to the operational security of the bulk electric grid, particularly prioritizing the largest and longest lead time transformers. Further, Congress should make annual updates to the DOE’s “Large Power Transformers and the U.S. Electric Grid (2012)” and “Strategic Transformer Reserve Report (2017)” reports and deliver briefings on them to the NSC and Congress.
The president should order climate impact modeling of a range of future scenarios to identify where it will be safe to site new and upgraded bulk electric transmission. These planning scenarios should take into account sites critical to national infrastructure, areas threatened by environmental impacts (including sea-level rise, extreme heat and climate-driven population migration), impacts to the national economy and enhancements that could be made by public-private partnerships.
In an effort to improve the accuracy of U.S. transmission transfer capability, FERC on Thursday issued a proposal to require all transmission providers to implement seasonal and ambient-adjusted ratings (AAR) on their lines (RM20-16).
Such ratings are based on the predicted seasonal or forecasted air temperatures, allowing for more electricity to flow when the temperature is lower and, thus, reducing congestion and its costs.
Most transmission providers use static ratings that are only updated after equipment is upgraded. Static ratings tend to be very conservative and based on worst-case-scenario temperatures, often restricting power flow unnecessarily. Using ratings that vary by season is more accurate, but they still do not account for unexpected temperature fluctuations.
“Because ambient air temperatures are typically less extreme than worst-case assumptions, seasonal and static transmission line ratings typically indicate that there is less transmission system transfer capability available than the transmission system can actually provide,” FERC staff told commissioners in a presentation during their monthly open meeting. “This increases congestion costs.”
AARs’ updates can vary in frequency from daily to every 15 minutes. According to FERC, AARs are already widely used in PJM and ERCOT; elsewhere in the U.S., static and seasonal ratings are the norm.
The commission’s Notice of Proposed Rulemaking would require transmission owners to implement both seasonal ratings and AARs, with the former being used to evaluate long-term transmission service requests and the latter for near-term.
It would also require RTOs and ISOs to allow TOs to update their line ratings at least hourly to allow them to use a method more accurate than AARs: dynamic line ratings (DLRs). These take into account many other factors in addition to temperature, such as wind speed, precipitation, humidity, cloud cover and solar intensity, allowing for a much more accurate rating.
FERC staff said that it did not seek to require the use of DLR devices because of the challenges and costs of installing them. But they also said the provision in the NOPR may encourage TOs to begin testing their use. “This proposed requirement seeks to remove this barrier to adoption of these more accurate line ratings.”
The proposal comes nearly a year after a staff-led technical conference on the use of AARs and DLRs. Many transmission company representatives who spoke there recommended against such a proposal, saying that a one-size-fits-all approach was inappropriate. (See FERC Considering Tx Line Rating Rules.)
But it seems FERC was convinced by the testimony of, among others, PJM Independent Market Monitor Joe Bowring and Michael Chiasson of Potomac Economics, the Monitor for ERCOT, ISO-NE, MISO and NYISO. They lambasted TOs for having such inaccurate ratings and their lack of transparency around how they determine them.
To address their latter criticism, FERC proposed requiring TOs to share their ratings and methodologies with RTO/ISO market monitors. “Such information sharing would increase situational awareness and improve the ability to verify the accuracy of transmission line ratings,” staff said.
Comments on the NOPR are due 60 days after its publication in the Federal Register. If approved, TOs would be required to prioritize implementing AARs on historically congested lines, defined as lines that have been congested in the last five years. Those lines would need to have their AARs in place within a year; all other lines would be given two years.
Commissioners Neil Chatterjee and Richard Glick were enthusiastic about the proposal.
“If finalized today’s proposed rulemaking will produce substantial benefits to consumers by simply ensuring line ratings are more accurate,” said Chatterjee, who as chair had initiated the proceeding that led to the NOPR.
“Most people will tell you we need a substantial amount of new transmission capacity, and I definitely agree,” Glick said. “But we should also strive to operate the current grid more efficiently to ensure that we squeeze more out of current assets while, of course, not impairing grid reliability. The NOPR would take us a substantial step in the right direction.”
Even Chairman James Danly — who rarely makes any comments at all and did not make an opening statement during his first open meeting as chair — chimed in, though he did not indicate how he felt about the proposal itself. “I have no questions [for staff]. I’ll just say that I think this is a very important issue, and I encourage everybody to comment and file so that we get the most robust record we can.”
As part of the NOPR, the commission is also seeking comment on whether it should require transmission providers to use unique emergency ratings.
A San Francisco-based renewable developer will get more time to prove it has secured enough land for its proposed wind farm in MISO East because of emergency conditions created by the COVID-19 pandemic, FERC ruled Thursday.
The commission granted Pattern Energy Wind Development’s waiver request of MISO generation interconnection procedures on the grounds that the ongoing pandemic hampered property plans for the Uplands Wind Project, a 600-MW wind farm in southern Wisconsin. The waiver will buy Pattern an extension on MISO’s current Nov. 27 deadline to prove site control and the Jan. 25 deadline for the grid operator to review site control submissions (ER21-30).
The Uplands project is part of the 2020 MISO East cycle of project hopefuls working their way through the RTO’s interconnection queue set to begin study on Feb. 24. Pattern submitted the project under two separate interconnection requests in June in order to connect it to both American Transmission Co.’s 345-kV Hill Valley-to-Cardinal line and the 345-kV Hill Valley substation.
Pattern said it experienced “business interruptions and delays in the land acquisition process caused by governmental orders, health and safety concerns and illness of key personnel resulting from COVID-19.”
| Pattern Energy
The company said that even with business restrictions enacted in Wisconsin from March through May, its agents were able to “sign several thousand acres of land, despite not being able to take any in-person meetings.” However, Pattern said its title specialist became “severely ill in late July/early August 2020, and a land agent was hospitalized for an extended period in late August 2020.” The illnesses “made it difficult to maintain the consistent dialogue necessary to negotiate a land easement and then register the easement with the local authority,” Pattern said. The company said despite conducting outdoor meetings with township boards, landowners and nonprofits, it simply lost too much time to “establish site control for 30,000 acres of land by Nov. 27, 2020.”
FERC said Pattern’s existing 15,000 acres of site control showed that the developer has made “reasonable efforts to satisfy MISO’s site control requirements in a timely manner.”
MISO said it also supported Pattern’s request for extension.
NERC’s Standards Committee moved ahead on a number of standards development projects and organizational matters in a brief conference call on Thursday.
SAR Team Members Sail Through
The committee approved adding two members to the standard authorization request (SAR) drafting team for Project 2020-03 (Supply chain low impact revisions), following up on its appointment of the chair, vice chair and team members in July. (See “SDT Candidate Restored After Application Oversight,” NERC Standards Committee Briefs: July 22, 2020.)
Soo Jin Kim, NERC’s manager of standards development, told the committee that the project team had decided to solicit additional participants because none of the initial 10 members represented entities with only low-impact cyber assets with the potential to be affected by the project. Four people were nominated, of whom NERC recommended two based on the fact that their entities owned such assets. According to standard practice, none of the nominees was identified by name or organization in the meeting. The committee approved the two NERC-endorsed candidates unanimously.
Members also agreed to move forward with a proposal under NERC’s ongoing Standards Efficiency Review process (Project 2018-03) to retire Requirement R7 from reliability standard FAC-008-3 (Facility ratings). The team had originally intended to retire R8 as well, but this decision was revisited after FERC Accepts Removal of 18 NERC Requirements.)
The meeting agenda had included a proposal to accept the SAR for Project 2020-01 (Modifications to MOD-032-1) and appoint members of the standard drafting team, but this item was struck after several members said they had not had a chance to read the final version of the SAR or review industry comments.
Organizational Updates Move Forward
Participants also approved several internal updates intended to help the committee manage its business more smoothly and simplify the transition process for new members. The first of these was a set of revisions to the Process Subcommittee’s (SCPS) scope document, along with its Technical Rationale for Reliability Standards, intended to clarify language and provide “better alignment with the … [Standards Committee] Charter.”
In addition, Chair Amy Casuscelli updated members on the drafting of a training packet for incoming members, an initiative passed at the committee’s meeting in June. (See “SOL, Training Proposals Accepted,” NERC Standards Committee Briefs: June 17, 2020.) The draft document, developed by the SCPS, is being circulated to committee members for feedback and will be implemented in January.
Some members asked if the orientation would be limited to new committee members only or if others would be allowed to participate; for instance, registered entity employees who wished to learn about the committee and its operations, or proxies for members. Casuscelli said the material was “meant for members as a whole,” but that others interested in joining the committee might be allowed to participate. In regard to proxies, she said the issue was not specifically addressed in the orientation materials but promised to have it added before they take effect.
Yeung, Brytowski to Continue Leading PMOS
Finally, Casuscelli named SPP’s Charles Yeung and Great River Energy’s Michael Brytowski for another two-year term as chair and vice chair, respectively, of the Project Management and Oversight Subcommittee (PMOS) on the unanimous recommendation of subcommittee members.
“We couldn’t do the work that we do without the PMOS; you guys are the eyes and ears on the standards projects, and … the team’s been doing great under your leadership, so thank you for that,” Casuscelli said.
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.
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.”
Jim Giuliano, New Jersey BPU | New Jersey BPU
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.”
Lineman works to restore power in PSE&G territory following Tropical Storm Isaias. | PSE&G
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.”
Workers remove downed tree in PSE&G service territory following Tropical Storm Isaias. | PSEG
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 order 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.
Public Utilities Commission of Ohio Chair Sam Randazzo resigned Friday, less than a week after the FBI raided his home in Columbus.
Former PUCO Chair Sam Randazzo | PUCO
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.
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.
ComEd’s payments to Speaker Madigan’s associates were allegedly funneled through third parties, including the firm of ComEd lobbyist Jay Doherty, pictured with Pramaggiore at the City Club of Chicago. | WBEZ
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
John T. Hooker, ComEd’s former executive vice president of legislative and external affairs, allegedly helped provide two associates of Speaker Madigan with no-work jobs. | Chicago Housing Authority
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.
Retired lobbyist and former legislator Michael McClain delivered Speaker Michael Madigan’s request for favors to former ComEd CEO Anne Pramaggiore, according to federal investigators. | WBEZ
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.
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.
Chris Krebs, former director of CISA | CISA
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.
