Shirley Bloomfield, Lonni Dieck and Deborah Wheeler will join the board effective Jan. 1, 2021, the same date the new bylaws take effect (RR20-2).
SERC’s newest independent board members | SERC
Of the three new directors, Dieck has the most direct utility experience, having served as senior vice president and treasurer at American Electric Power from 2008 to 2019 — part of what SERC notes as “37 years of financial experience, primarily in the utility industry.” Currently, Dieck serves as treasurer of the board at Ronald McDonald House Charities of Central Ohio and on The Women’s Fund of Central Ohio’s board.
Bloomfield is the CEO of NTCA – The Rural Broadband Association, a trade association representing small telecommunications companies operating in rural and remote communities. She has been with the group and one of its predecessors, the National Telecommunications Cooperative Association, for more than 30 years. Bloomfield also serves on the board of the National Rural Telecommunications Cooperative and GlobalWin, a professional association representing women in the tech industry, and has previously worked as a senior executive at both Verizon Communications and Qwest Communications International.
Wheeler has served as chief information security officer at a number of companies, including Ally Financial, Fifth Third Bank, the Federal Home Loan Mortgage Corp. and, since 2017, Delta Airlines. She also serves as governing board chair for Evanta’s CISO Forum in Atlanta and works as an adviser at software companies Proofpoint and Forcepoint.
“This is really an exciting moment for SERC as we continue a governance transformation that will improve the reliability and security of the electric grid,” board Chairman Greg Ford said in a press release. “The addition of three independent directors is essential to our continued strategic growth and will help to provide a balanced, independent perspective to our stakeholder expertise.”
With the appointments of Wheeler, Dieck and Bloomfield, SERC now meets the minimum required number of independent directors for its board under the new bylaws. The board is required to have 15 sector representatives and may have up to five total independent directors.
Other structural changes in store for SERC next year include:
requiring that a majority of the board, as well as a majority of the independent directors, be present to have a quorum for meetings;
eliminating the use of alternates and proxies for directors;
formalizing SERC’s membership body by transitioning the existing board structure into a members group, which will include a representative from each member company and meet at least annually to advise the board on the business plan and budget, elect independent directors and approve bylaw changes as needed;
changing the Board Compliance Committee into the Board Risk Committee; and
adding a Human Resources and Compensation Committee, Nominating and Governance Committee, and Finance and Audit Committee.
Implementation measures include revising SERC’s Regional Reliability Standards Development Procedure (RSDP) to reflect the new structure by, among other things, removing references to board representatives and alternates and replacing references to the SERC Executive Committee with the board. NERC earlier this month posted the revised RSDP for stakeholder comments, which are due by 8 p.m. Nov. 20. (See NERC Opens Comments on SERC RSDP.)
The California Public Utilities Commission acted to correct a “serious omission” Thursday that it said had resulted in huge sums of money going to owners of rural homes, regardless of income, to provide battery backup for electric well pumps.
The commission voted 4-1 to limit its Self-Generation Incentive Program’s (SGIP) “equity resiliency” grants to those with 80% of an area’s median income. The changes will take effect retroactively to Aug. 17, when Commissioner Clifford Rechtschaffen issued a scoping memorandum indicating the CPUC was considering altering program criteria. (See PSPS Relief Funds Not Spent as Intended, CPUC Says.)
The SGIP funds were meant to help low-income and medically vulnerable residents of areas affected by public safety power shutoffs (PSPS), the intentional blackouts that utilities use to prevent their equipment from starting wildfires.
Other components of the equity resiliency budget had income restrictions but not the well pump grants. The result was that purveyors of battery storage targeted wealthier homeowners, including those with vacation homes.
Rechtschaffen said the CPUC quickly added the equity resiliency component to SGIP last year to help those facing hardships from multiple power shutoffs, including residents who rely on well water. But the program has been overwhelmed, he said.
Nearly $400 million of the $612 million meant to last through 2024 was spent in less than a year, the commission said. PG&E received 10,000 applications for the program’s subsidies this year, more than it received in the first 18 years of the SGIP program, and committed all of its $270 million share of the equity resiliency proceeds, Rechtschaffen said.
Home battery storage systems are at the heart of the controversy over well backups in the CPUC’s Self Generation Incentive Program. | Southern California Edison
The program is funded by $166 million per year in ratepayer charges.
“In hindsight, given this surge of applications by well customers, it would have been better to limit the program to low-income customers from the outset,” Rechtschaffen said. “We are making that adjustment now.”
Half the equity resiliency grant recipients are well customers, he said.
Rechtschaffen laid part of the blame on companies that sell energy storage systems.
“I think it’s somewhat unfortunate that the developers have focused so much of their attention on signing up well customers … as opposed to focusing on medical baseline or low-income residential customers,” Rechtschaffen said. “Those customers face the greatest need. They suffer the most from power shutoffs.”
He noted that developers had opposed changes that would affect already-filed applications.
In a written statement, the California Solar and Storage Association, said, “CALSSA strongly objects to retroactive changes to customer programs, which undermine customers’ faith in California’s distributed energy programs.
“Storage developers, including many small businesses across the state, invested thousands of dollars and countless staff hours identifying eligible customers, designing projects, and learning SGIP’s complex application process for projects that complied with the program’s rules at the time and that will now be rescinded.”
The CPUC approved $830 million for the SGIP in January, with $612 million dedicated to “equity” and “equity resiliency” subsidies to aid residents who face repeated PSPS. Thousands of the program’s targeted customers rely on electrically powered medical equipment to keep themselves alive. (See California PUC Devoting $1.2B to Self-generation.)
Commissioner Martha Guzman Aceves cast the lone “no” vote in Thursday’s voting meeting, saying the remaining funds in the program should be given first to customers who rely on electrically powered medical devices.
Rechtschaffen said he sympathized but didn’t think he had the votes among the five commissioners to make that change.
Customers who filed grant applications but had not yet received funding will have to meet the new criteria.
Commissioner Liane Randolph repeated her misgivings about applying new rules to pending applications but voted for the changes.
“I was very concerned about … modifying the rules in the middle of the process,” Randolph said. “I still have that concern, but I recognize there are countervailing issues with regard to the large amount of funds that would otherwise not be available for other aspects of the program.”
In a meeting Oct. 12, Commissioner Genevieve Shiroma called the situation a “serious omission” but one she thought shouldn’t be fixed by changing the rules midstream. Shiroma voted for the changes Thursday.
CPUC President Marybel Batjer, who also voted “yes,” thanked Rechtschaffen and staff members for “making this difficult situation as right as can be.”
She said she was frustrated by the lack of data showing “this was an abused situation by people who … are using the program for a second home.” The CPUC asked for the data from utilities but had not received it yet, she said.
Facing growing uncertainty from intermittent resources, MISO and other grid operators must increase use of demand resources and provide market participants with tools to hedge risks, academics, consultants and others told the RTO’s Market Symposium this week.
“The challenge facing ISOs around the world in the next decade or 15 years is quite unprecedented,” said Andy Sun, associate professor at the Georgia Institute of Technology’s H. Milton Stewart School of Industrial and Systems Engineering. “We’re moving into territory I think we haven’t seen before in terms of the uncertainty that will be in the system. Demand and supply are all becoming a lot more stochastic — which means it’s both uncertain and also dynamic.”
Andy Sun, Georgia Tech | MISO
Scott Harvey of FTI Consulting said California’s and Australia’s challenges in managing higher levels of solar output foreshadow MISO’s future and the limits of markets.
“One of the key things we have to look at is: Are the markets consistent with the actions the operators are taking? Are they reinforcing those actions?” he said. “What we’re seeing in California is [that] the failure of some of the tools to deliver — to perform as intended — has led to a continuation of operators taking out-of-market actions.”
Harvey and Sun were among the panelists in a discussion Tuesday on “Addressing Uncertainty, Variability and Risk via Power Markets and Operations.”
Need for DR
Scott Harvey, FTI Consulting | MISO
Harvey and Ross Baldick, professor emeritus in the Department of Electrical & Computer Engineering at the University of Texas, Austin, also called for more emphasis on demand resources.
More than 90% of demand response in MISO is only available in the lead up to an emergency, and there is little DR in much of MISO South, according to testimony by former Ohio regulator Paul Centolella that was filed with a complaint over state DR opt-out policies in MISO on Tuesday. (See DR Firm Challenges FERC, MISO on State Opt-out.)
“I think there is an incredibly invaluable role that needs to be played by the demand side,” Baldick said. “We’re simply, in a high renewable world, moving away from the presumption that we can serve all demand no matter what. And the way I would like to see that worked out is that we have a lot more price-based demand response that gives us gigawatts and gigawatts of flexibility.”
Ross Baldick, University of Texas, Austin | MISO
Harvey said the most important areas for MISO to improve in the operational time frame are DR and ensuring the demand curve and operating reserve demand curve provide resources needed to balance variations in net load and reduce operators’ “ad hoc” actions.
“We need to get demand response into the market — not just have demand response be something you pay for providing phantom response, but actually be there, providing regulation [and] reserves that the operators can see and count on.
“If we’re going to get into energy-limited situations, I think we’re going to need demand-side resources that can provide 30-minute reserves or longer; reserves that can drop off for periods of time to enable us to conserve energy, and not necessarily during emergency conditions,” he continued. “We may need to conserve energy before we get into the emergency so we can get through the emergency. So that’s another [thing] we need to study.”
In a panel discussion Wednesday on “Infrastructure as an Enabler,” Julian Leslie, head of networks for National Grid Electricity System Operator in the U.K, said grid operators will move from dispatching generation to meet demand to dispatching load to meet generation.
“So, on those windy days, the hydrogen electrolyzers are running; people are charging their electric vehicles; they’re charging their batteries in the lofts of their houses. And on those non-windy days, they’ll be using all that stored energy,” he said. “We’ve got one supplier here in Britain that offers you a negative pricing tariff, so when it’s really windy and the demand is low, say on a Sunday afternoon, this supplier will pay its customers to consume electricity.” About 150,000 customers have signed up for the service, he said.
“This is a great resource; it’s cheap,” said James McCalley, a professor of electrical and computer engineering at Iowa State University who appeared on the panel with Leslie. “The only problem there is [is] to identify the right kinds of loads to go after. Not all loads are created equal.”
One desirable type of load, he said, is water treatment plants. “They have an inherent flexibility in when they use their energy as a result of the ability to store water,” he said. “And they’re ubiquitous. … Every region has many, many water treatment plants, so this is a very good target.”
New Products
Harvey said the future will require new products, calling on grid operators to start “radically thinking about regulation in next 10 years.”
“We may need two types of regulating resources — those that can only regulate up five minutes because they’re a battery and they’re going to run out [of energy] … and others that can keep reg up, and as we need more and more and more, they can keep going up and up and up. That’s something the ISOs, as they encounter this, need to talk to each other and do joint research,” Harvey said.
Renuka Chatterjee, MISO’s executive director of systems operations, said she sees change coming also.
Renuka Chatterjee, MISO | MISO
“One of the biggest MISO value propositions is our large footprint. So, we could be having snowstorms up north and hurricanes in the south simultaneously. We operate that market today with 400 MW of regulation, and we don’t use most of it on most days. We operate very, very well within that 400 MW for a 125-GW peak load system.
“I keep wondering when we’ll change the algorithm,” Chatterjee said. “So, the traditional thinking … is about to change.”
Baldick said grid operators might consider a product that addresses the reduced inertia provided by renewables.
“When we’ve defined things like contingency reserves, spinning reserves … we haven’t fully represented all the physics. We’ve captured the essence of the issue, and we find a constraint that is a pretty good surrogate for capturing the issue most of the time,” he said. “Maybe we need to do something like that for inertia or maybe some other products.”
Don’t Act Without Data
Several of the speakers said MISO and other grid operators should put an emphasis on data gathering before thinking about potential solutions.
“Let’s not make choices about how we’re going to build the software or how we’re going to solve the problem too soon. I think [there should be] a lot of looking at this and learning from each other and then deciding which road is the best for everybody,” Harvey said.
He noted that CAISO is trying to calculate the demand for flexibility resulting from intermittent resources, unpredictable load and resources that fail to follow dispatch instructions.
“So, you can try to do that calculation and assign [the costs] to the resources that are creating the uncertainty and perhaps incent them to behave differently,” he said. “But it is complicated, and it’s going to be a burden on your settlement system. … So, you have to make a judgment of: Is this going to make enough difference in behavior and resource choices to improve the outcomes?”
Mark O’Malley, University College, Dublin | MISO
Mark O’Malley, professor of electrical engineering at University College, Dublin, agreed. “Why don’t we experiment? Why don’t we understand it before we do it?” he said. “If you’ve got a product in a market that’s got a zero-price … then you didn’t need it. And I think some of the products thrown out there [are unnecessary]. … I think people go too far with markets sometimes.”
He said grid operators should concentrate on “real measurements after the fact, collecting large amounts of data. … Get enormous amounts of data that’s real and use that. That’s better than any model data.”
Socializing Risk
Baldick said MISO shouldn’t seek to eliminate market volatility resulting from the increased variability of renewables. “We do have to think very carefully about how to navigate who takes on those risks, who hedges them,” he said. “From my own philosophical perspective, the risks that can be borne by market participants are best left with those market participants, and we should only hope to socialize the risks that are truly ones that pose systemic risks to the operation of the system — cascading outages, as a good example. … To the extent possible, [MISO should be] making sure that market participants are seeing those risks and are provided with the right incentives to hedge them whenever its economically efficient to hedge them.”
Even the best data and the most carefully designed market tools will not eliminate the increasing uncertainty, speakers said.
“Ultimately, we need to pay more attention to the underlying statistics of renewables — and particularly wind — to really understand the answers to questions like: If we connect MISO with PJM and average out the wind across that footprint, do we significantly reduce the relative variability or not?” Baldick asked.
“It’s pretty clear to me that there are fundamental stochasticities that aren’t going to be smoothed out by larger and larger footprints until we average coastal [and] far inland wind, for example; until we average storms in the western half of the United States with weather in the eastern half. … So, while I certainly want to improve weather forecasting, it’s not going to take away from the fundamental variability of those renewables.”
Grid emergencies in MISO began increasing in 2016, with 21 of the 28 events occurring in non-summer months that rarely posed reliability problems in the past. | MISO
“What we need to forecast is how big the variability could be,” Harvey said. “Even if we can’t forecast what load can be, can we forecast how high net load could go? That’s complicated enough.”
Forecasts also need to be matched with an understanding of transmission congestion, he added, citing CAISO’s load-shed events in August.
“It’s not just, ‘How much variability is there [and] when?’ It’s when [and] where. Because congestion is critical. A lot of the reasons why the CAISO’s ramp product has completely failed is because of locational constraints. They had enough upward ramp capability, but it was behind transmission constraints. If we’re going to use storage to balance some of this, we not only need to know how much [and] where but for how long and how much energy we’re going to need.”
MISO’s Advisory Committee has voted to allow the RTO’s newly created Affiliate sector voting rights in certain committees.
Sector representatives voted 15-9 during the committee’s teleconference Thursday to recommend that the Board of Directors allow MISO’s 11th sector one vote in the AC and one vote on issues before the Planning Advisory Committee.
The minority of AC members voted in favor of splitting the Environmental Groups sector’s existing two votes with the Affiliate sector. The latter sector was borne from the previous Environmental and Other Stakeholder Groups sector. Currently, it is not allowed a vote in committee matters but had one designated non-voting seat during meetings. (See New MISO Sector Gets FERC OK — with a Catch.)
The decision is considered advisory in nature to the board, where the final determination rests, and came after a failed motion from some members to delay the vote. Some representatives complained that the new sector’s purpose was still too shadowy to yet determine if it is worthy of casting votes like other sectors that have clearer intents.
Representatives have said that the sector should receive one vote when the AC votes on advisory items to the board or RTO leadership. But some members this week seemed split on the issue. Some also said it wasn’t clear how the sector would access or communicate with MISO directors about stakeholder issues.
Environmental Groups representative Beth Soholt called for a “comprehensive” understanding of what exactly is the sector’s purpose before deciding to award it any votes on AC recommendations.
“We’ve heard this is a standalone, catch-all sector, and we’ve also heard this will be an incubator sector. … There is a number of outstanding issues,” Independent Power Producers and Exempt Wholesale Generators representative Travis Stewart said.
During the committee’s Sept. 16 meeting, Public Consumer Advocates representative Christina Baker had also said her understanding of the Affiliate sector was that of an “incubator” for new members until enough like-minded entities joined to branch off into a new sector. She said she was unsure if a collection of miscellaneous entities could get along and agree on a vote.
AC Chair Audrey Penner pushed back on the notion that there was confusion about the Affiliate sector’s purpose.
“I don’t know how else it could be interpreted but that it’s a home for all newcomers that can’t find a place in another sector,” Penner said. She also said she viewed voting rights as a separate issue from how the new sector would interact with the board.
Existing sectors will now draft eligibility criteria and mission statements so it’s clearer where new MISO members should be placed.
Unlike the divergent opinions around Affiliate sector voting rights, nearly all sector representatives have opposed the consolidation of some existing sectors, an idea that was presented earlier as the committee was considering restructuring. (See MISO AC Works on Sector Rules as FERC Timeline Ticks.)
“There’s no desire to consolidate, not even to align,” Penner said.
“We believe that one strength of the MISO stakeholder process is the diversity of opinions,” Soholt said at the committee’s September meeting.
Representatives have also asked that the grid operator allow more informal and less stage-managed access to the board.
“We’re looking for more meaningful interaction with the board,” Stewart said.
Many sector representatives have also expressed the desire to curtail new sector creation in the future.
“We hope that the creation of new sectors will be really limited in the future, and MISO will work hard to find places for new members in the existing sectors,” the State Regulatory Authorities sector’s Julie Fedorchak said.
Unlike spring, when New York City was the epicenter of the COVID-19 pandemic, health indicators are now pointing in the right direction for the city, but its unemployment rate is still about double the national average, according to Moody’s Analytics.
Moody’s expects the recovery of the U.S. economy to extend over one to two years, given the unlikelihood of an effective vaccine becoming available before spring 2021. But after national GDP fell more than 10% last spring, the economy is slightly more than halfway back, Adam Kamins, a director at Moody’s, said Wednesday at the NYISO Fall Economic Conference.
Adam Kamins, Moody’s Analytics | NYISO
The economy was technically in recession for only two or three months before it began to recover, but the hit was “extraordinarily deep,” he said.
“A lot of the lower hanging fruit was plucked, because firms reopened; people started to re-engage with the economy; you started to see a little bit more restaurant reopenings and stores starting to reopen and a return to something resembling normalcy,” Kamins said. “For sports fans like me, it’s almost a microcosm of what you saw over the course of the summer; you saw sports return, but in a weird and different way, with no fans. That’s how you can think of the economy too.”
Moody’s calls the current period “the pre-vaccine recovery” phase, with a “pretty stagnant economy” projected through 2021, Kamins said.
“First, the fiscal stimulus has expired, and our baseline expectation is that there won’t be more stimulus coming from the federal government until probably after the next inauguration in January,” Kamins said. “The other factor is that COVID-19 cases are rising, and they are starting to rise pretty rapidly in a lot of the country,” especially in the Sunbelt states and in the Upper Midwest.
New York’s economic outlook is “still pretty bleak,” he said. The shock from being the national epicenter of the pandemic was so severe that the city’s unemployment rate shot up to 20%, easily an all-time high since statisticians started keeping records 50 years ago.
Moody’s Analytics said that unlike in spring when NYC was the epicenter of the pandemic, indicators are pointing in the right direction but the city’s unemployment rate is still about double the national average. | Moody’s Analytics
The gaps are starting to narrow between the city, the rest of the state and the rest of the country. But the state was the second-worst performing in terms of three-month annualized growth through August, after Hawaii, he said.
State Handling COVID
In terms of its handling of the pandemic, while infection and death rates are rising everywhere in the U.S., New York is actually better off than most of the country, he said.
“We have an alarming trend here where cases are starting to spread out from the middle of the country,” Kamins said. All but two states are experiencing an increase in daily per capita cases, so the country is in “a pretty tough spot” while it waits for a dependable, widely available vaccine, he said.
Moody’s Analytics expects the economic recovery nationally may extend over one to two years, given the unlikelihood of an effective vaccine becoming available before spring 2021. | Moody’s Analytics
Western New York and the capital region have fared particularly well in terms of infection rates, and “two relatively large metro areas are at the top of the list in terms of best performance with respect to COVID-19. … We have fewer than one out of 1,000 residents in both Rochester and Albany that have tested positive, and those are the lowest numbers in the U.S.,” Kamins said.
This fact is all the more impressive considering that New York’s testing capacity is as high if not higher than that of any other state, so it is well positioned to ride out a second wave of COVID infections, he said.
Election Outcomes
Kamins closed out his national presentation with a one-page summary of the policy differences between former Vice President Joe Biden and President Trump.
“Generally, in terms of governing and COVID-19 response, a Biden administration would be looking at a federally led approach, would be looking to strengthen institutions and the federal government,” he said. “The Trump administration’s approach has been more state-led; they’ve taken more proactive steps to weaken government oversight in some ways, weaken some institutions.”
A Democratic-controlled Senate with Biden in the White House would likely pass a hefty fiscal stimulus package, which would create more jobs, he said, noting that the Biden campaign had cited Moody’s numbers. (See ‘Massive’ Clean Energy Stimulus Under Biden Likely)
“Take that for what it’s worth, but our point of view is pretty clear: that that would be the most beneficial outcome for the economy,” Kamins said.
Moody’s model indicates a narrow win for Biden, but “I still remember vividly telling you four years ago that our model predicted a pretty decisive win for [Hillary] Clinton, and then I was sitting in the airport that night flying home, and that’s when,” on Oct. 28, 2016, FBI Director James Comey told Congress the bureau had discovered more of the former secretary of state’s emails sent from a private server. Comey’s letter was “possibly one of the most consequential turning points in the election,” Kamins said.
No one can really diagnose why some of the predictions in 2016 were as off as they were, he said.
“We changed our model a bit to control more for turnout, because that’s what we found was missing. Ultimately, Trump was much more successful in turning out his base than Hillary Clinton was,” Kamins said.
Missouri regulators have opened a working case to determine whether the state’s investor-owned utilities’ continued RTO membership “is in the ratepayers’ best interest.”
The state’s Public Service Commission issued an order on Oct. 14 that directs each IOU to participate in a workshop that has yet to be scheduled and to cooperate with the “investigation.” PSC staff will file a report with their findings by June 30, 2021 (EW-2021-0104).
The order applies to Evergy Missouri Metro, Evergy Missouri West, Empire District Electric and Ameren Missouri. Evergy Metro and Empire are SPP members; Ameren is a MISO member; and Evergy West is a member of both.
The PSC said it “believes there are benefits” to the IOUs’ RTO memberships but that they “exceed the long-term costs and commitments of RTO membership, especially given that the structure, services and membership of both Southwest Power Pool and the Midcontinent Independent System Operator continue to change significantly with the passage of time.
“The commission must inquire into the nature of the benefits of RTO membership, the monetized value of those benefits and what time horizons should be employed to compare asset lives (costs) to the values of benefits streams,” the PSC said.
According to the order, the workshop will determine:
the information needed to respond to the commission’s current and previous orders on RTO membership;
whether such information is reasonably and economically available, and if not, what kind of information could be used as a proxy to control costs and expeditiously respond to the commission;
the cost of gathering, analyzing and interpreting such information; and
whether there are any identifiable “deal breaker” events or event categories that would make it unreasonable for an IOU to remain in an RTO.
SPP said it welcomes the study and stands ready to support its members’ efforts to “evaluate the cost and benefits of their membership.”
“We fully respect that the states and utilities we serve need to ensure they’re receiving adequate value from their membership in SPP,” spokesman Derek Wingfield said. “We remain committed to continually finding new ways of adding value in collaboration with our stakeholders.”
MISO said it is aware of the investigation and is waiting for further guidance on how to assist.
The issue stems back to the early aughts, when the PSC initially placed contingencies on IOUs wishing to transfer functional control of their transmission systems to the RTOs. That allowed the commission to maintain jurisdiction and better understand whether RTO membership would provide the IOUs’ expected benefits, former Commissioner Steve Gaw said.
“At that time, there was no track history to go by in the Midwest, and the net-benefit calculations were estimated,” said Gaw, now with Advanced Power Alliance after six years on the PSC.
The problem has been that the IOUs have continually kicked the proverbial can down the road.
In 2011, the Evergy companies — then operating as Kansas City Power & Light — filed an interim report requesting the commission approve their continued participation in SPP beyond October 2013. In May 2013, the commission approved an interim agreement between KCP&L, PSC staff, the Office of the Public Counsel (OPC), SPP and Dogwood Energy that extended its approval through September 2018 (EO-2012-0136).
Four years later, the commission accepted the companies’ motion to extend the interim period to 2021 and to absolve them of the requirement to file the 2017 interim report.
Ameren Missouri, which does business as Union Electric, received PSC approval in 2012 to transfer functional control of its transmission system to MISO, subject to certain conditions. Those conditions required the utility to file a new case addressing its continued participation in the RTO in 2015. At Ameren’s request, the commission extended the date to November 2017 and then March 2020 (EO-2011-0128).
In March 2019, the commission granted a motion by Ameren, commission staff, the OPC and the Missouri Industrial Energy Consumers to delay the rate-case filing until March 2023.
Acknowledging Ameren’s contention that “it would be unduly expensive to perform the comprehensive cost-benefit study” necessary to assess the value of its MISO membership, the PSC agreed that the study’s cost “outweighs the importance of the study.”
The growth of renewable energy resources stemming from technological developments and the resulting cost reductions has caused more than a few skirmishes, FERC Commissioner Richard Glick said on Wednesday.
“We’re seeing growth on renewable energy, and we’re seeing conflict as well: friction between the states’ efforts to promote renewable energy … and FERC’s regulation of wholesale electric markets,” Glick said in opening the first day of Renewable Energy Vermont’s annual conference. This year, the group is holding the conference online and over the course of three months.
FERC Commissioner Richard Glick | Renewable Energy Vermont
“I don’t think there’s necessarily a natural competition or divergence there, but we’ve seen for a variety of reasons traditional electric generators, primarily natural gas and coal, fighting it out in regional electricity markets,” particularly in the Eastern RTOs, Glick said.
“States want their decisions to be heard in these regional markets,” Glick said. “From my perspective, FERC’s responsibility is to figure out a way to help these RTOs design their markets and oversee [these] design changes to ensure that state policies are accommodated, not blocked. If we don’t do that, I think we’re headed towards a bad situation in which some states are going to drop out of RTOs, and certainly states aren’t going to do anything further that would give FERC additional authority over resource decision-making.”
REV Chair Josh Bagnato asked what FERC is doing that impacts Vermonters who are pushing for the clean energy transition.
REV Chair Josh Bagnato | Renewable Energy Vermont
“The commission has quite a bit of jurisdiction over the New England electricity market through our oversight of ISO-NE, so almost all wholesale transactions throughout the region are subject to FERC regulation and oversight. So, the decisions we make have a great deal of impact on the resource mix, prices and on reliability,” Glick said.
“I don’t think the people at ISO New England … get up in the morning and say, ‘How can we frustrate or block state programs?’ I don’t think they do that at all, but they are looking at the markets from a different perspective. They want to make sure that the lights stay on and that they provide power at a relatively reasonable price.”
The federal government right now “is relatively AWOL on greenhouse gas emissions, [so] it’s really up to the states at this point to address those issues, and I don’t think the commission blocking state policies, whether it be intentional or inadvertent, is the way to go at this point,” Glick said.
He cited a recent Lazard analysis that said wind and solar are now the most cost-competitive energy technologies, not only in the U.S., but around the world.
“That’s certainly been a pretty dramatic change,” Glick said. Though federal and state policies have helped somewhat, he said, far and away the biggest driver has been consumer demand, and that will certainly continue in the future.
Individual consumers as well as corporate America have concerns about climate change and would like to see a much greener mix in their utilities’ resource portfolio.
FERC Commissioner Richard Glick cited a recent Lazard study that shows that when U.S. government subsidies are included, the cost of onshore wind and utility-scale solar is competitive with the marginal cost of coal, nuclear and combined cycle gas generation. | Lazard
At first it was just Big Tech companies, “but now we’re seeing it all over the place, with Proctor and Gamble, Anheuser-Busch, Walmart — companies that you wouldn’t normally think of in terms of the energy space,” Glick said. “They’re saying, ‘We want to be 100% green and have a 100% net-zero emissions portfolio as quickly as possible.’ And they’re demanding that of utilities, which are going out and substantially changing the resource mix.”
Bagnato asked what three magic buttons Glick would push to help the transition to renewable energy.
“The first is more of an esoteric one, which is follow the science,” Glick said. “The U.S. is the only country in the world having this debate. … Two, massively build out the transmission grid to be able to accommodate offshore wind and … onshore wind and solar. Third, we have to have a federal policy. States have been doing a great job, but whether on carbon pricing or whatever, cooperation on a regional basis doesn’t work without a federal overlay.”
NERC is set to begin training registered entities on its new Align software project and Secure Evidence Locker (SEL) by the end of the year. Training will follow a staggered schedule, with the Midwest Reliability Organization and Texas Reliability Entity going first.
Align — formerly known as the CMEP (Compliance Monitoring and Enforcement Program) Technology Project — is intended to improve and standardize compliance monitoring and reporting processes across the ERO Enterprise. The SEL was conceived as a way to provide secure storage where potentially sensitive information collected as evidence can be kept separate from work papers managed through the Align tool itself.
NERC Planning 3-phase Rollout
In a joint webinar Tuesday, representatives from MRO and ReliabilityFirst provided more details about the timeline for Align’s rollout, currently scheduled to begin in the first quarter of 2021. The tool is to be released in three stages covering escalating levels of functionality:
Release 1 — Q1 2021. To be introduced as a pilot in MRO and Texas RE before expanding to other regions. Functionality includes allowing registered entities to create and submit self-reports and self-logs, create and manage mitigating activities and mitigation plans, and respond to requests for information.
Release 2 — Q2 2021. Includes technical feasibility exceptions, periodic data submittals, self-certifications and additional needed enhancements identified in Release 1.
Release 3 — Q4 2021. Includes compliance planning and audits, spot checks and compliance investigations.
NERC is finalizing training materials for RE representatives, who will train registered entity staff from their regions in turn. Training for Release 1 will cover functionality for the initial release and features of the SEL supporting that functionality, along with regional changes in business procedures and transition plans for legacy systems. All training sessions will be conducted remotely.
The current schedule for the release of the Align tool. The ERO Secure Evidence Locker is still under construction but planned to be introduced alongside Release 1. | NERC
“During the short time frame between Release 1 and Release 2, the information listed under Release 2 will be maintained in the current platforms, such as WebCDMS or any other platforms that [your regional entities] are having you work in now,” said Ray Sefchik, director of reliability assurance and monitoring at RF. “So there’ll be a couple of months’ gap where you may have to maintain [these platforms] for TFEs, periodic data submittals [and self-certifications] until rollout for Release 2 happens in Q2.”
Entities Free to Develop Private Lockers
The SEL is still under development, with plans to introduce it alongside Release 1 and expand it to store data for the functionalities covered under each subsequent release. NERC had initially planned to include this feature — which for security reasons is not part of the main Align tool — in an update, but the organization added it to the initial release because of concerns from registered entities over the software provider’s ties to a Hong Kong-based private equity firm. (See NERC Investigating Chinese Tie to Software Vendor.)
While all entities will be required to use a secure evidence locker to store relevant data, participants in the webinar stressed that they are free to deploy their own lockers if they prefer to keep potentially sensitive information in their own systems. This is already done by many entities for evidence associated with NERC’s Critical Infrastructure Protection rstandards, though Sefchik and MRO’s Desiree Sawyer said no entities have indicated definite plans to do so for CMEP information. (See FERC Approves NERC’s Align Spending Request.)
However, Matthew Thomas, RF’s director of compliance monitoring, emphasized that entity-developed lockers must be “authorized for use by CMEP activities” by NERC and the REs to ensure their reliability and security according to the specifications provided by NERC in April. A webinar is scheduled for Oct. 29 to answer entities’ questions about developing their own tools.
Avangrid is poised to expand into the Southwest after announcing Wednesday that it will spend $4.3 billion in cash to acquire PNM Resources, which operates regulated utilities in New Mexico and Texas.
Connecticut-based Avangrid has agreed to pay $50.30/share for PNM, a 19.3% premium over its average closing price over the last 30 days, and will assume $4 billion in debt.
Avangrid’s parent company, Spanish energy giant Iberdrola, said the merged company would have assets worth $40 billion and generate around $2.5 billion in earnings and a net profit of $850 million.
PNM shareholders unanimously approved the transaction. Additional approval from state and federal regulators is needed, including FERC, the New Mexico Public Regulation Commission, the Public Utility Commission of Texas, the Federal Communications Commission and the Nuclear Regulatory Commission. The deal must also be cleared under the antitrust provisions of the Hart Scott Rodino Act and receive approval from the Committee on Foreign Investment in the United States. Regulatory approvals should take approximately 12 months.
Avangrid CEO Dennis Arriola will continue in that role for the combined company. In a statement, Arriola said the merger is “a strategic fit and helps us further our growth in both clean energy distribution and transmission, as well as helping to expand our growing leadership position in renewables.”
PNM’s utilities provide electricity to nearly 800,000 homes and businesses in New Mexico and Texas; Avangrid has 3.3 million customers in Connecticut, Maine, Massachusetts and New York. PNM also owns power plants and wind farms in New Mexico. Avangrid currently owns 1,900 MW of renewable energy in 22 states and has a pipeline of 1,400 MW of renewables assets in New Mexico and Texas.
Iberdrola CEO Ignacio Galán said during an earnings call Wednesday that the merger “fits our strategy and improves our position and growth potential significantly in the United States … one of our key geographies.”
It also creates one of the biggest clean energy companies in the U.S., with 10 regulated utilities in six states and renewable energy operations in 24 states. The enlarged company will be the third-biggest U.S. renewables operator, with about 7.4 GW of capacity, nearly all of which is onshore wind, and a growing pipeline of offshore projects including Vineyard Wind and Park City Wind in New England.
Vineyard is an 800-MW joint venture between Avangrid and Copenhagen Infrastructure Partners (CIP). The project’s expected in-service date has been pushed back to no earlier than 2023 because of delays from the U.S. Bureau of Ocean Energy Management in issuing its final environmental impact study and record of decision. (See BOEM Issues Revised EIS for Vineyard Wind.) Avangrid also partnered with CIP to develop the 804-MW Park City project, which has an expected in-service date of 2025.
“When nobody believes [that] the electricity can be produced with clean sources and everybody thought coal would remain for centuries, and the oil and gas are absolutely needed, we were already the only one saying that we can already generate and produce electricity with clean sources,” Galán said.
PNM has received regulatory approval to more than triple its renewable power capacity to 2 GW by the end of 2022, with a goal to be 100% emissions-free by 2040. There is also an approved exit plan for the 2022 retirement of the coal-fired San Juan Generating Station, of which PNM owns 66.3%, with securitization bonds used to recover the investment, a portion of decommissioning and other costs.
Pedro Azagra Blázquez, corporate development director for Iberdrola, said the company and its subsidiaries “will have no control of any coal asset” by 2022.
Combined heat and power (CHP) systems harbor great potential for small applications, but adopters face the current reality that system costs do not fall in proportion to size, according to proponents.
CHP systems, or cogeneration, are an efficient way to generate electricity and heat from a single fuel source, such as biomass or natural gas. CHP is fuel-efficient, as it uses otherwise wasted heat productively for heating or cooling. It also reduces the need to purchase distributed electricity from the grid, which increases energy security.
The Environmental and Energy Technology Council of Maine on Tuesday hosted a webinar to discuss emerging markets for the technology.
David Dvorak, director of New England Combined Heat and Power Technical Assistance Partnership and professor of mechanical engineering technology at the University of Maine, said more than half the 80.7 GW of CHP installed capacity in the U.S. are “typically very large-scale systems.” Dvorak said these types of CHP systems “work very well,” but they also need to be installed by on-site engineers.
In smaller applications, Dvorak sees changes. “Out of 4,000 sites that we currently have in our installation database, what we’re seeing is that in the past four years, there have been quite a few smaller-scale systems, for instance in multifamily [homes] and schools, that are put into place,” he said. “These tend to be smaller systems where there may or may not be in-house expertise to do a full engineering analysis.”
Combined heat and power installations through Dec. 31, 2019 | New England Combined Heat and Power Technical Assistance Partnership
Dvorak said this represents “technical potential” in New England.
Ian Burnes, strategic initiatives program manager for Efficiency Maine, said that CHP is “a great technology, but the upfront installation cost “is really challenging.” Large-scale CHP installed at an assisted-living facility can cost $300,000 for the total system cost and $80,000 for electrical engineering.
Dvorak added that even with small-scale or micro-CHP systems, the interconnection costs and associated expenses do not scale down with them.
“There’s a certain aspect of [cost] that’s fixed, and it becomes a larger fraction of the total cost, and this is a real challenge, but we see more and more opportunities in these smaller systems,” Dvorak said. “We’re hoping to find ways actually to see more of these small-scale systems installed.”
Burnes said Efficiency Maine offers capped financial incentives on total project costs and 50% coverage up to $20,000 for a technical assistance study and free scoping audit of utility data that includes a final report.
From top left: Adelaide Taylor, E2Tech; Martin Grohman, E2Tech; Eric Burgis, Energy Solutions Center; Ian Burnes, Efficiency Maine; David Dvorak, New England Combined Heat and Power Technical Assistance Partnership; Suzanne Watson, Watson Strategy Group; Lizzy Reinholt, Summit Utilities | E2Tech
Lizzy Reinholt, senior director of sustainability and corporate affairs for Summit Utilities, added that getting people to realize the benefits of CHP is “really important.”
Reinholt said local distribution companies have leadership roles in building a sustainable energy future. Summit — which operates in five states, including Maine — is focused on renewable natural gas and its role in reducing emissions and helping states meet their climate goals. She said Maine Gov. Janet Mills has been pushing an aggressive agenda around emissions reductions and creating the Maine Climate Council, which recently released a draft of its four-year Climate Action Plan that included recommendations for CHP.
It is an “exciting time to work in the energy field,” she said, adding that it is also a critical and transitional time, as regulatory and legislative frameworks need adaptation to better link to goals for reducing emissions and mitigating climate change impacts. Building strong partnerships with lawmakers and regulators is essential, she said.
“Right now, there is a strong push to find a silver bullet to solving all the problems we face, both reducing emissions and reducing costs, and there are no easy answers,” Reinholt said. “I feel grateful for the work that’s already been done that has stayed technology agnostic and instead focused on outcomes. How do we keep that moving forward so that we can be ready to seize on those innovations and emerging technologies in the marketplace?”
