NY Study Highlights Rising Methane Emissions

New York’s greenhouse gas emissions in 2015 were virtually unchanged from 1990 levels, according to a newly published study that highlights upstream impacts and the role of methane under the state’s revised reporting rules.

The study, published in the Journal of Integrative Environmental Sciences, concludes that methane emissions have grown as carbon dioxide emissions have declined, leaving New York’s total GHG emissions in 2015 virtually unchanged from 1990.

The analysis by Robert Howarth, Cornell University professor of ecology and environmental biology, was based on the new emissions reporting rules enacted in the 2019 Climate Leadership and Community Protection Act (A8429), which calls for reporting to include emissions from outside New York if they are associated with energy use within the state. It also requires that methane emissions be compared with CO2 over a 20-year time frame rather than the 100-year time frame still used by virtually all other governments in the world, according to Howarth. Methane is about 80 times as potent at trapping heat as CO2 in the first 20 years but has a much shorter half-life.

New York Methan Emissions — Greenhouse gas emissions by sector and fuel type for fossil fuel energy use in New York state for 2015. Estimates reported by the state are shown on the left (NYSERDA), and estimates calculated using the CLCPA guidelines are shown on the right. | *Journal of Integrative Environmental Sciences*

Calculating Emissions

Howarth’s paper compares emissions based on the CLCPA approach for GHG reporting with the traditional inventory, driven almost entirely by CO2 emissions. As of 2015, the latest state data available for comparison, carbon emissions had declined by 15% since 1990, thanks to an 88% cut in coal consumption and a 27% decrease in petroleum use, he said, while methane emissions increased by almost 30% over the same period, largely from the increased consumption of natural gas. According to the new GHG reporting rules, methane rose from 28% of all fossil-fuel emissions in 1990 to 37% in 2015. (Other GHGs, including nitrous oxide and fluorocarbons, represent less than 4% of total emissions.)

“A robust conclusion is that total emissions have changed remarkably little over the past 25 years, when viewed through the lens of the CLCPA approach,” Howarth wrote.

It is difficult to establish the 1990 baseline greenhouse gas emissions, which the state needs to finalize by December 2020, Howarth said. Next year, the state agencies will determine how to account for contemporary GHG emissions, he said.

“I would prefer they be done together in a combined way … but I think overall, [the state agencies] have done a pretty good job,” Howarth, one of 22 members on the state’s Climate Action Council, told RTO Insider.

The CLCPA’s mandate means “not simply to rely on EPA-packaged emissions estimates, but rather to fall back and use the best available science, including the peer-reviewed academic science,” Howarth said. “They’re not using EPA estimates at all, which is good, because the EPA has systematically low-balled [emissions], particularly methane emissions from the oil and gas industry, for decades and continues to do so. And the peer-reviewed literature is full of papers where that’s been demonstrated time and time again.”

New York state agencies did not do a thorough review of the peer-reviewed literature and are relying on the Greek model, a method developed in Europe for estimating GHG emissions, which doesn’t reflect all the latest and best science, Howarth said. “I would have preferred the DEC [Department of Environmental Conservation] make sure they have the best science in there, but nevertheless, it’s a step in the right direction.”

Including out-of-state emissions in reporting “is a big step forward,” he said, because most methane emissions occur at the site of gas production, processing and storage. “When we use natural gas here in New York, a lot of those methane emissions are occurring in Pennsylvania, West Virginia [and] Ohio, and we should take responsibility for them. The DEC in their draft has included that, but they’ve come up with an estimate of methane that I think is low. It’s not as low as what the EPA would have you believe, but it’s still somewhat low,” Howarth said.

On the other hand, the DEC also included CO2 emissions from out of state that are associated with the mining, processing and transporting of the fuel, whether coal, oil or gas, he said.

“And they came up with a pretty big number for that. I sidestepped that in my paper and said you might want to do it, but I thought it was a pretty big challenge — beyond what I was going to take on,” Howarth said.

Last month, New York officials on the Climate Action Council discussed the DEC’s newly proposed statewide GHG limits of 60% of 1990 emissions by 2030 and 15% by 2050. Administrative Law Judge Molly McBride will conduct two public comment hearing webinar s for the proposed rule on Oct. 20, and public comments will be accepted by the DEC until Oct. 27. (See NY Seeks Comment on Proposed Emissions Limits.)

Meeting the CLCPA’s 2030 emissions target will require major reductions in natural gas use in the residential and commercial sector and similar cuts in petroleum use in transportation, Horwath said. “To date, the state has focused little attention on GHG emissions from these sectors and has instead prioritized reducing the use of fossil fuels to produce electricity.”

Converting from natural gas heating to modern heat pumps will reduce GHG emissions even if the heat pump is powered by electricity generated from fossil fuels, Howarth said. “Similarly, electric vehicles reduce overall emissions compared to gasoline- and diesel-powered vehicles, even if fossil fuels are used to produce the electricity, because of the greater efficiency of the electric vehicles. Consequently, to reduce overall GHG emissions for New York state, electrification of heating and transportation systems must proceed as quickly as possible, even if this precedes reduction of fossil fuels to produce electricity.”

September 15, 2020

NERC Planning Lessons Learned on COVID-19 Response

NERC is preparing a Lessons Learned report on the electrical industry’s response to the COVID-19 pandemic to help utilities prepare for future emergencies.

Speaking during a meeting of the Event Analysis Subcommittee (EAS) on Monday, Richard Hackman, NERC senior event analysis adviser, said the idea of compiling the industry’s experiences with the pandemic started in March, when utilities began to adjust their business practices to reduce the risk of losing critical personnel while still providing full service to customers.

Real-world Test for Contingency Planners

“I remembered that back in 2006, there were a whole lot of entities out there creating business continuity plans for all sorts of disasters,” Hackman said. “Pandemics [were] one of the things they tried to cover in that: how would they handle it if they had to operate in a pandemic environment, keep their controllers safe from disease carriers, segregate shifts … provide supplies to them while they are continuously on site and all sorts of issues that might come up.”

The Lessons Learned report, which will be produced by the EAS and the Operating Reliability Subcommittee, will compare these plans with their real-world test during the COVID-19 outbreak. NERC noted earlier this year that the arrival of an actual pandemic had exposed vulnerabilities that many in the industry had not anticipated — for example, in the increased risk from cyberattacks after many employees started working remotely. (See Pandemic Poses Long-term Reliability Challenges.)

The unexpected duration of the pandemic will also be explored by the groups; as Hackman acknowledged, even utilities that had contingency plans specifically for pandemics rarely anticipated the emergency to last longer than a few months. As a result, many companies had to adjust their plans on the fly to ensure they could remain in their emergency stances indefinitely. Utilities could study the effectiveness of these improvisations as they re-evaluate their plans following a return to normal operations.

Team to Probe Regulatory Response

In light of the relaxation of remote work postures by some utilities, the subcommittees hope to evaluate the effectiveness of companies’ plans for ending their emergency policies (though many industry participants, including NERC itself, plan to keep their offices closed for the foreseeable future). (See NERC Offices to Stay Closed Through December.) In addition, the subcommittees plan to examine the actions that regulatory agencies and policymakers took in response to the outbreak and how they helped to keep the grid stable.

“There were some things that are schedule-related that FERC, NERC Relax Compliance in Light of COVID-19.) “Are there other things that they could have used some regulatory relaxation on, and [can we] establish a list of such things, prior to the next time we’re brought into such an event?”

The subcommittees are seeking volunteers to participate in the drafting process. Once the team is formed, it will solicit notes and other information from utilities that could be helpful in creating the report. The subcommittees plan to begin work on the draft report by the end of October.

In response to a question about the protection of sensitive information, Hackman confirmed that the team will be careful to safeguard not only specific entities’ confidential data but also information that could point to more general weaknesses in the wider grid.

“We can communicate lessons learned in a generic fashion. There is some specific information in those notes that we might want to either genericize or leave out. … We don’t want to … provide a [path] to the bad guys on how to screw up a business plan,” he said.

September 14, 2020

WECC Board Approves New Chair, Long-term Strategy

“This year is our special first, and hopefully only, virtual meeting,” Kristine Hafner, (now former) WECC board chair, declared as she opened the regional entity’s annual meeting Thursday.

The meeting, typically part of a larger multiday affair hosted at a hotel in a Western city that also includes individual member class forums and a Board of Directors meeting, was this year transferred entirely to the Web in response to the ongoing COVID-19 pandemic. (See No ‘Hiccups’ for West’s RC Transition.)

ERO Insider tuned in for much of the event. Following is some of what we heard.

‘Gently Powerful’ Hafner Steps Aside as Chair

Friday’s board meeting featured a changing of the guard, as the term-limited Hafner yielded her position as chair to former Vice Chair Ian McKay, while Richard Campbell replaced McKay.

Hafner said it had been a “privilege and pleasure” to serve as chair since 2017 and that she looked forward to continued collaboration with the board.

WECC Board — WECC CEO Melanie Frye and board members Kristine Hafner and Ian McKay at WECC’s last in-person board meeting in March. McKay on Sept. 11 took over as board chair from Hafner, who had served in the role since 2017. | *Chad Coleman/WECC*

McKay said he could describe Hafner’s leadership style by borrowing a term he had heard elsewhere: “gently powerful.”

He noted that Hafner had led the board through a series of challenging issues, including the untimely passing of Director Armando Perez in 2017, a “sweeping” change of WECC’s bylaws, the hiring of a new CEO and — most recently — the pandemic.

“I found your leadership to be extremely effective because of your calming demeanor,” Director Richard Woodward said.

“It’s a big job, but it’s fascinating; it’s challenging; it’s such a learning experience,” Hafner said.

Future Focus

The board on Friday approved WECC’s proposed long-term strategy (LTS), which is built on the foundation of NERC’s ERO L ong-T erm S t rategy while offering a specific Western slant. (See WECC Seeks Western Bent on Strategy Plan.)

“It really acts as our guiding star for what we aspire to be,” Jordan White, WECC vice president of strategic engagement, told members and directors during the meeting Thursday. White joined WECC early this year after serving on the Utah Public Service Commission.

“The challenges on the bulk power system have never been greater,” White said.

During Thursday’s meeting, WECC staff elaborated on each of the five focus areas of the LTS.

Speaking about focus area 1 — “innovate and expand risk-based focus in all standards, compliance monitoring and enforcement actions,” Senior Vice President of Reliability and Security Oversight Steve Goodwill said WECC’s intent is to work with registered entities to move beyond mere compliance to focus on creating “a culture of risk identification and mitigation.” The RE wants to identify and address grid risks in ways that best reflect the “uniqueness” of the Western Interconnection, and it hopes a key outcome of the focus area is that the Western viewpoints are represented and incorporated into NERC reliability standards, he said.

Branden Sudduth, vice president of reliability planning and performance, said focus area 2 zeroes in on WECC’s “core mission” of assessing and mitigating known and emerging risks.

“This focus area is meant to really ensure we’re directing our [attention] in the right area,” Sudduth said. Success in this area, he said, would mean high precision in the models WECC uses to assess risk on the BPS and exploration of different ways to assess reliability.

White said focus area 3 covers WECC’s efforts to maintain and expand relationships with “key partners” and elevate its “relevance” in the region.

“It lets the rest of the West know about the amazing work that goes on at WECC,” White said, adding that the organization should become the “gold standard” for reliability expertise in the region. “I’d really love to see public service commissioners … start asking the question, ‘What does WECC have to say about this?’”

CFO Jillian Lessner said focus area 4 is “all about effective day-to-day business operations at WECC” and keeping it fiscally sound. Lessner said WECC seeks to be a “nimble” organization, citing its ability to quickly pivot to home-based working as an example.

CEO Melanie Frye called focus area 5 — building a “capability and culture” to deliver on the reliability mission — the “cornerstone” of the LTS.

“If we really sit back and think about what WECC does, we don’t make electricity; we don’t buy or sell. The value that we add to the interconnection is all about what we can create with the resources we have, and that is our people,” Frye said.

She said WECC needs to attract the “right talent” and that she wants the organization to be considered an “employer of choice.”

“The second piece of [the focus] is putting in the energy to build partnerships with experts in the industry,” Frye said, adding that WECC will “measure our success by how we’re respected as a partner.”

COVID-19 Response

WECC will continue its “work-from-home posture” for the foreseeable future and will not provide a target for return “because we’ve had to keep extending it,” Frye told board members Friday.

“Our first priority is the health and safety of our employees,” including mental health, she said, noting that WECC works to keep in contact with staff and hold regular webinars through its employee-assistance program to help them avoid a sense of isolation.

While Frye thinks WECC has been largely successful in completing its work since the onset of the pandemic, she wanted “to emphasize that we don’t think this is a permanent solution.”

“I think we all look forward to the future when we can safely travel and reconnect again,” she said.

Align a ‘Huge Undertaking’ and ‘Opportunity’

WECC faces a “huge undertaking” in having to train 400 registered entities on NERC’s Align software, which is now slated for release in the first quarter of 2021 — a year and a half later than originally expected. (See Align Tool Set for 2021 Rollout.)

Formerly known as the Compliance Monitoring and Enforcement Program Technology Project, Align is intended to improve and standardize compliance monitoring and reporting processes across the ERO Enterprise.

“We really see the adoption of Align as a key corporate activity for 2021,” Goodwill told the board.

WECC wants members to be “very satisfied” with its work on the project, he said. “We see that as an opportunity in building our relationship with the registered entities.”

Blackout Talk

California’s recent rolling blackouts and the ongoing concern about future resource shortages in the West were among the hot topics of discussion at Friday’s board meeting. (See Theories Abound over California Blackouts Cause.)

Frye recounted that the heat wave precipitating the Aug. 14-15 blackouts drove temperatures to 15 to 30 degrees Fahrenheit above normal throughout much of the West, hindering the ability of neighboring states to export energy to California because of the need to meet their own high demand. Additionally, California’s wind generation fell off sharply, and a key gas-fired generator went offline unexpectedly.

“The California ISO was very proactive in dealing with this, making calls to other utilities,” Frye said. “I know the CEO [Steve Berberich] was getting engaged in making those calls at the CEO level to identify as many megawatts as possible [and] issuing public appeals for load reduction.”

Frye said the success of those efforts were evident during another heat wave occurring over the Labor Day weekend, when California was able to avoid load shedding despite getting to a Stage 3 emergency. (See California Avoids Blackouts amid Brutal Heat, Fires.)

“The public appeals for peak shaving were very effective, but at the end of the day, these are not the kinds of situations that we anticipate, and I don’t think any of us see this as an acceptable solution,” she said.

Frye noted that WECC will perform its own analysis of the events, “working very closely with the entities involved, as well as NERC, to identify the specific situation … and identify what can be done to improve this in the future.” (See CalCCA Seeks ‘Objective’ Review of Blackout Report.)

“It does highlight the conversation that we’ve been having in the West for the last year or so around resource adequacy, and that there does need to be a broader view of the issues,” she added.

“I was really struck by the incident itself,” Director Gary Leidich said. “I understand the weather situation and the imports, but the fact that this was during a pandemic over a weekend really causes a bit of an alarm bell to go off in terms of, ‘What’s the outlook?’

“While it’s always very interesting to talk about 2038 and long-term forecasts and such, I would really appreciate a brief summary on the outlook for the next three to five years in California, because I’m not sure it’s going to get a whole lot better,” Leidich said. “People are going to come back to work. We’re going to be in a Monday-through-Friday load picture. We’re going to shut down two units at Diablo Canyon and continue to retire thermal units, so the ramping capability will be challenged even more, I suspect.”

Vice Chair Campbell asked whether there was “any movement at NERC at all” in re-examining the assumptions in its Western long-term reliability assessment (LTRA).

“Wouldn’t NERC be interested to look at their data limitations in light of the West having to do its own thing, because we find their LTRA not sufficient and how it completely missed on this California event?” Campbell asked.

“We’ve had some conversations about the recent summer assessment that we published a few months ago, and how it did or didn’t reflect the conditions in California,” Sudduth responded. “I think the simple answer to your question is that we are definitely having those conversations and identifying ways to improve the process, and I think all of us are starting to understand some of the limitations of the data assumptions and the different types of analysis that go into the LTRA.”

Peak Windfall

The board also voted to authorize WECC to accept a $3.8 million donation from Peak Reliability, representing money left in the former reliability coordinator’s accounts after it settled obligations in the wake of its dissolution last year.

Peak’s bylaws required it to donate any leftover funds to a nonprofit, Goodwill explained to the board. The RC, formerly part of WECC before bifurcation separated the two in 2014, chose to turn over the largesse to its former parent organization.

While FERC must still approve WECC’s acceptance of the money, Goodwill encouraged the board to approve the transfer before filing to obtain permission to accept the funds and determine how they can be spent.

Goodwill said FERC could authorize WECC to treat the donation as statutory funds (with money directed for the RE’s core operations) because it had provided Peak with about $7.8 million in start-up funds to facilitate bifurcation. He said WECC would set aside up to $300,000 of the money to cover any trailing requests for payment from Peak.

September 13, 2020

Tiny RI Seeks its Share of Offshore Wind Jobs

Rhode Island boasts the first and only offshore wind farm in the Western Hemisphere, the 5-MW Block Island facility, but the smallest state in the U.S. has seen its modest OSW procurement goals eclipsed by surrounding states like Massachusetts, Connecticut, New York and New Jersey. (See related story, New Jersey BPU OKs 2nd Offshore Wind Solicitation.)

Despite only being committed to buy slightly more than half the output of the 704-MW Revolution Wind, a joint project between Ørsted Wind and Eversource Energy, the Ocean State is pioneering workforce development for the new industry.

The Revolution project will create hundreds of construction jobs and include $100 million in port infrastructure improvements in Rhode Island and Connecticut, which contracted for 300 MW.

Michael Donegan, Orson and Brusini | *EBCNE*

“‘Thirty-five by 35’ is what we like to talk about, as 35 GW by 2035 on the East Coast of the U.S. looks like a realistic aspect,” attorney Michael Donegan, of Orson and Brusini, told a meeting on OSW hosted Thursday by the Environmental Business Council of New England.

Meeting that goal would mean adding 300 to 400 turbines a year, or about one a day, Donegan said.

“So, the demand for land, for port space, for vessels, workers and everything is very high,” Donegan said. “If you look at the addressable market [and] you start to draw circles around different ports … there are 115 ports that could be used for offshore wind marshalling and service up and down the East Coast … and there’s a fairly large number of potential wind farms that can be accessed from Rhode Island.”

The U.S. Bureau of Ocean Energy Management has so far designated 17 lease areas with potential capacity of more than 21 GW along the coast.

Innovation Hub

The state is also moving its rust belt economy, parts of which date to the dawn of the Industrial Revolution, into the new era of renewable energy. (See RI Seeks to Lead with 100% Renewable Goal.)

For example, the Providence and Worcester Railroad, founded in 1844, last year sold its artificial quay in Narragansett Bay to a firm founded in 2018, RI Waterfront Enterprises, which in turn is digging foundations strong enough to support the huge cranes needed to load and offload wind turbines. The company is partnering with Waterson Terminal Services, which operates the Port of Providence (ProvPort), to develop the 36-acre South Quay site across the Providence River.

Rhode Island Offshore Wind — Jay Borkland of Lloyd’s Register disclosed engineering details for an offshore wind staging port at South Quay in East Providence. | *City of East Providence*

“There will be elements to the South Quay project that will allow for transfer back and forth between ProvPort; we’re going to put a [roll-on/roll-off] ramp in to match up with the one that ProvPort has, so cranes and other things can go back and forth, which will be a nice way of sharing equipment and costs,” said Jay Borkland, senior engineering manager and renewables lead for Lloyd’s Register Energy Americas.

Earlier this year, Ørsted announced the opening of an OSW innovation hub in Providence, which already hosts its U.S. headquarters, to help identify and finance related enterprises, especially next generation technology.

“With Ørsted being the global leader in the development of offshore wind, and Eversource being New England’s largest energy company and transmission builder, we’re really well positioned to bring offshore wind to the Northeast,” said Stacy Tingley, senior stakeholder communications manager at Ørsted.

The Revolution Wind project about 15 miles south of Newport will comprise approximately 100 turbines and be operational by the end of 2023, she said.

Regional and Global Market

Laura Hastings, deputy program director for the state Department of Labor and Training’s Real Jobs Rhode Island, said she believes the state has the first OSW certification program in the country for high school students looking to work in the industry, Wind Win RI.

“We have a mantra: ‘You can’t be what you can’t see.’ So we take these kids out from urban high schools, and some of them have never been on a boat, never been to Block Island, or seen a wind farm,” Hastings said. “Because the jobs aren’t here yet … it’s a development process to keep moving forward, to expose the kids to what’s out there and hope that it triggers something in them.”

The state also offers a renewable energy associates program where young people can go to community college for two years without paying tuition, and it partners with the Business Network for Offshore Wind to train companies that want to work in the industry.

Borkland reminded participants that the region is part of a global market, with a project pipeline of approximately 190 GW through 2030. “That’s an incredible amount of offshore wind going on, and if you think about the transition to this clean energy economy, the number of workers that will be needed, the number of components, everything is going to be stretched, which means a tremendous opportunity, also in Rhode Island, for manufacturing hubs to develop and for these innovation centers to grow.”

Regionalization and cooperation with other states makes sense in New England, as no single state can get all the development, Hastings said.

“If Rhode Island’s economy is robust, southeastern Mass[achusetts] is, and Connecticut and vice versa,” Hastings said. “There’s this constant chatter of American individualization, but recognizing that we aren’t going to get it all is important, that working together is going to be more helpful.”

September 13, 2020

CAISO MSC Urges Scarcity Pricing for Emergencies

CAISO’s Market Surveillance Committee last week said the ISO needs to consider implementing scarcity pricing as a way to obtain energy during heat waves and supply shortages such as those California saw in mid-August and over Labor Day weekend.

The MSC met Wednesday to discuss CAISO’s proposal for complying with FERC Order 831. The order requires ISOs and RTOs to raise the hard caps on supply bids from $1,000 to $2,000; offers over $1,000 require suppliers to justify their costs.

FERC issued the order in 2016, two years after the polar vortex of 2014 pushed natural gas prices in the Midwest and Northeast “to levels where marginal generation costs plausibly rose over the $1,000 offer caps then in place,” the MSC wrote in its opinion. “The spirit of the order was to allow supply resources to earn prices at least sufficient to recover their operating costs during periods of high generation costs, thereby helping to ensure reliable electricity supply during these periods.”

CAISO filed Tariff changes with FERC last September to adopt the $2,000 price cap. It is now weighing additional changes in a sta k eholder in itiative, including penalty pricing during times of scarcity.

“The CAISO market uses these penalty prices … to relax constraints in the market and set prices if needed to reach a solution,” the ISO said in its final revised proposal. “This includes the power balance constraint that requires supply to equal demand, which sets the system marginal energy cost under such conditions.”

Order 831 did not specify how an ISO or RTO should set its penalty prices but suggested it could file proposed modifications to shortage pricing.

CAISO proposed that “the market would set energy prices based on the amount of shortfall in supply to meet demand when the market must relax the power balance constraint and there are energy costs greater than $1,000/MWh. In this event, the market uses constraint penalty prices scaled to a $2,000/MWh power balance penalty price and would otherwise set prices based on the $2,000/MWh power balance penalty price.”

Storms of Cold and Heat

The heat wave that strained the Western Interconnection in mid-August and forced CAISO to order rolling blackouts was similar to the “cold storm” — or polar vortex — of 2014 that spread from the Rocky Mountains to New England and south to Florida and Texas, the MSC noted.

CAISO emergency pricing — Record temperatures on Sept. 6 drove CAISO to the brink of rolling blackouts. | *NASA*

Prices during what some called the Western “heat storm” in August rose to $1,000/MWh or more and showed the need for higher-priced import offers during times of regional scarcity, the committee said in its opinion, which its three members unanimously approved.

“The experiences of mid-August again signal the urgency of such an initiative,” the committee said. “These conditions will likely grow more frequent, and the region is in need of a more coordinated approach to managing scarcity conditions.”

It urged CAISO to begin a scarcity pricing stakeholder initiative.

“We support the scarcity pricing or penalty value element of this proposal, but we support them as an interim measure that’s an improvement over current practice,” committee member James Bushnell, a professor in the Department of Economics at the University of California Davis, said Wednesday. “At the same time, we urge the CAISO to begin a more formal stakeholder process focused specifically on scarcity pricing so that a lot of the issues that were raised in this initiative could be dealt with in a more holistic way.”

Scarcity pricing is triggered in markets when systems become so strained that reserve margins meant to protect the grid from collapse are threatened.

Proponents say it is a way to procure resources during extreme shortages or even an incentive to build resources to help prevent future emergencies, but critics say it holds the potential for market manipulation and excessive prices. Other organized markets have struggled with whether to adopt scarcity pricing or how best to implement it.

Advocates have contended that SPP should adopt scarcity pricing, and FERC has pointed out the RTO uses out-of-market mechanisms to ensure generators come online as a way to avoid it. (See FERC OKs SPP Scarcity Pricing Change.)

MISO Revisits Scarcity Pricing Rethink.)

CAISO’s Order 831 proposal goes next to the Western Energy Imbalance Market for an advisory vote on Wednesday and to the ISO’s Board of Governors for final approval on Sept. 30.

September 13, 2020

No Turning Back on Decarbonization, CEOs Say

California will need more storage and higher reserve margins to prevent a recurrence of the rolling blackouts that hit the state in August, Edison International CEO Pedro Pizarro said last week, but he insisted there is no turning back on the increasing use of renewables.

It was climate change, he said, that caused the oppressive heat that stressed the grid to its breaking point. “We saw not only heat, but a heat dome over the entire Western United States that was really unprecedented,” Pizarro said during a panel discussion with other utility CEOs that closed the Edison Electric Institute’s Virtual Leadership Summit on Thursday. He said heat domes normally last four or five days, but this one lasted two weeks.

utility decarbonization — Edison International CEO Pedro Pizarro | *Edison Electric Institute*

“It’s not the renewables that did this,” he said. “It’s been unfortunate to see some of the press saying … California’s push for addressing climate change and using renewables was the culprit here.

“We saw more coincident peaks across California, and we saw more of the other Western states needing their own resources that decreased imports into [California],” Pizarro said. “We saw gas and renewables operate as you would expect. There’s variability with wind … but within the natural volatility of that. It’s the same with solar. It’s not the renewables that did this.”

Pizarro acknowledged that renewable-dependent systems will require different parameters and “much more storage.” He also called for revisions to planning reserve margins. “With a more volatile system — a system that has more intermittent resources — we need a little more safety margin,” he said.

Recalling a study he commissioned when he became Edison’s CEO in 2016, Pizarro said he wanted to determine how the state could meet its climate-change objectives in a way that made sense for the economy.

“That led to the conclusion that it’s a clean-energy-led pathway that has clean energy, has renewables, but it importantly needs to have a lot more storage built into the system to provide that shock absorber so that we can use that clean energy to electrify a lot of society,” he said. “This should not be viewed as a step away from the clean-energy transition so many of us are committed to.”

DTE Energy Executive Chairman Gerry Anderson, Exelon CEO Christopher Crane, Ameren CEO Warner Baxter and Xcel Energy CEO Ben Fowke, EEI’s incoming chairman, also reiterated their support for decarbonization during the panel discussion.

Fowke said renewables can’t solve climate change alone.

“Our industry and my company, we’ve done a lot to reduce carbon, and renewable energy played a big role in that,” Fowke said. “But at some point … the big grid becomes saturated. You can only have so much renewables.”

Xcel has set carbon-reduction goals of 80% by 2030 and 100% by 2050. Other companies represented on the panel have set similar goals.

“That last 20% of carbon [removal] is going to require technologies to be commercially and economically viable that aren’t today,” Fowke said. “We need to start investing today and nurturing those technologies so they can be ready for tomorrow. It’s really important that we are out there continuing to lead and reduce carbon, while at the same time thinking about those long-term goals that will require different technologies.”

“So much of our strategy is now defined by that clean-energy transition,” Anderson said. “As an industry, we’ve learned that what looked so challenging a decade ago now looks like an opportunity to transition much of the economy to electricity, to grow fundamentally in the process and do something that we’ll all really be proud of.”

The CEOs raised the issue of investing in smarter energy infrastructure. EEI says its member companies sink an average of more than $110 billion each year into the grid.

Baxter stressed the importance of regulatory frameworks that support those investments.

“Customers have been loud and clear that they want cleaner, more reliable, more resilient [energy],” he said. “I think we’ve made good progress. Some of the frameworks are better than others. This is where we as an industry. These are the types of things that we know can really make some step changes. We can’t let up.”

Crane said the stakes will increase with vehicle electrification.

“The old CAIDI [Customer Average Interruption Duration Index] and SAIFI [System Average Interruption Frequency Index] top-quartile numbers are not going to cut it when you electrify a whole bus system and the power goes down for eight hours and the buses can’t charge before they’re supposed to roll in the morning,” he said. “We’ve got new standards coming our way, and we have to be ready to invest in it and be able to get some recovery.”

When Crane closed the session with the standard “what-keeps-you-up-at-night” question, Fowke had a ready answer: public policy.

“I like to say that with a stroke of the pen, our fortunes can be changed for the better or the worst,” Fowke said. “Natural gas and nuclear may not be popular technologies with all of the environmental communities, but I worry perfection may get in the way of the greater good. Our industry is making a lot of progress, but if we make our product unaffordable, or worse, unreliable, I think the clean-energy transition is going to come to a slowdown or a halt.”

Fowke also lamented the nation’s increasing polarization.

“We don’t listen to each other very well anymore,” he said. “That’s the challenge. The opportunity is we are in the communities. I think through this COVID-19 crisis, we’ve seen our customer satisfaction scores improve. People like … what we’re doing in their backyards. So, I think as an industry, we can really rally and maybe bridge some of this polarization and really show that big business can also come up with big solutions.”

Anderson said his company is watching the upcoming elections closely for their potential impact on the clean-energy transition. “If we get a flip of the presidency and a flip of the Senate, this will be a key near-term priority for both Congress and the president I think.”

September 13, 2020

Xcel’s Fowke Faces Weighty Issues as EEI Chair

Xcel Energy CEO Ben Fowke, the Edison Electric Institute’s incoming chairman, outlined his goals for the group during last week’s CEO roundtable discussion that typically concludes EEI’s annual Leadership Summit.

“COVID recovery is probably one you didn’t pick at first,” Exelon CEO Chris Crane, Fowke’s predecessor, said as he moderated the virtual conversation Thursday.

Xcel Fowke EEI — Ben Fowke, Xcel Energy | *Edison Electric Institute*

“It’s a major issue,” Fowke replied. “I didn’t come in with that goal, but I didn’t come in with the goal of dealing with racial injustice, either. What I was really thinking about was the clean-energy transition and the innovation I feel needs to take place.”

Fowke’s goals changed on May 25 when George Floyd was killed in police custody and in full public view, igniting a summer of nationwide protests about racial equality. Floyd died in Minneapolis, where Xcel is headquartered.

“The killing of George Floyd happened right in our backyard. It impacted me very personally, as I’m sure it did many of our members,” he said. “It was pretty hard not to be impacted by it. It gave me an opportunity to reflect and realize there’s more I can do as a CEO, and there’s more the industry can do.

“That’s not to say that we haven’t done some good work, but let’s do more in our community. Let’s do a better job of hiring and retaining and promoting people of color,” Fowke continued. “I’ve said it many times: My company is only as healthy as our community, and we need to be there for our communities. There are things we can double down on. It’s been a long-term problem and there are no quick fixes for this. But as with anything we’ve tackled as an industry, we can make a big difference.”

EEI’s annual Leadership Summit was a virtual affair this year. | *Edison Electric Institute*

DTE Energy Executive Chairman Gerry Anderson agreed with Fowke, saying “his emphasis on this at this time is exactly right.”

“Because of the impact of COVID and the attention brought to racial injustice, it’s an opportunity for all of us to share what we’re learning and to dig deeper and do more,” Anderson said, contrasting the coronavirus’s disparate effect on low-wage earners with the 2008 Great Recession’s impact on white-collar workers and industries.

“This is playing out much more heavily with small business and low-wage earners,” he said. “We are all going to have a challenge in front of us to reach into those low-wage and underserved communities, because this crisis has really hit those [sectors] hard.”

Anderson described DTE’s “re-entry” program, in which the company goes into Parnall Correctional Facility in Jackson, Mich., to train inmates as tree-trimmers. DTE has also developed education programs in inner cities to help develop a viable workforce.

“Some of the most moving moments I’ve experienced as a leader at DTE is going inside those prisons and hearing directly from people thanking you for giving them a second chance. It took just one day of that to lock me in,” Anderson said.

“What DTE is doing is really about giving people a second chance,” Fowke said. “I think there are a lot of things we do that unintentionally create barriers. That’s the hard look our entire industry and industries in general need to do.”

Anderson, who co-chairs EEI’s environmental committee, was joined on the panel by Ameren CEO Warner Baxter and Edison International CEO Pedro Pizarro. All three will serve as vice chairs to Fowke.

September 13, 2020

Rehearing Sought on PJM End-of-life Order

More than a dozen load-side stakeholders on Thursday asked FERC Accepts PJM TOs’ End-of-life Revisions.)

The order represents a “fundamental and unlawful shift in transmission planning responsibility from the regional transmission organization, PJM, to the PJM Transmission Owners,” said consumer advocates for Delaware, D.C., Indiana, New Jersey, Ohio and West Virginia, who joined American Municipal Power, AMP Transmission, Blue Ridge Power Agency, LS Power, Old Dominion Electric Cooperative, the PJM Industrial Customer Coalition and the Public Power Association of New Jersey in filing one challenge.

They said the order is improper because it gives the TOs unilateral authority to propose revisions related to transmission planning, gives them veto authority over future planning methodologies, restricts PJM’s role as the regional planner and reduces transparency and the rights of other stakeholders.

“Not only is the order’s decision to accept the TO proposal not supported by substantial evidence, the TO proposal is contrary to the plain language of the governing documents upon which it is based,” they said. “The Aug. 11 order fails to reconcile the TO proposal’s conflicts with regional transmission planning protocols and procedures established in the PJM Operating Agreement.”

PJM end-of-life — Crane lifts workers to top of transmission tower in Potomac, Md. | © *RTO Insider*

The New Jersey Board of Public Utilities also filed a challenge saying the order violates the transparency principles of Order 890 and ignores cost concerns over “unchecked transmission owner investment.”

“After transmission spending remained between approximately $1.7 billion and $3.7 billion from 2005 to 2009, it rose to approximately $8 billion in 2018. Transmission owners invested approximately $69.6 billion in baseline and supplemental projects from 2005 through 2019,” the BPU said. “New Jersey has been particularly hard hit. For example, over a third of PJM’s total $55.6 billion in transmission between 2015 and 2019 occurred in New Jersey.”

The TOs had proposed to identify and include asset-management projects within the existing planning procedures of Tariff Attachment M-3 and to include procedures for the identification and planning for EOL needs of transmission lines 100 kV and above. They voted in June to approve a Federal Power Act Section 205 filing of the proposed amendments.

Stakeholders challenging the filing asserted that the TOs do not have “exclusive filing rights” in regard to EOL projects and that PJM members maintain rights under the OA to also make filings related to EOL projects. A competing, joint stakeholder proposal is still pending before FERC (ER20-2308). (See PJM Files EOL Proposal over TO Protest.)

September 13, 2020

PJM MRC/MC Preview Sept. 17, 2020

Below is a summary of the issues scheduled to be brought to a vote at the PJM Markets and Reliability and Members committees on Thursday. Each item is listed by agenda number, description and projected time of discussion, followed by a summary of the issue and links to prior coverage in RTO Insider.

RTO Insider will be covering the discussions and votes. See next Tuesday’s newsletter for a full report.

Markets and Reliability Committee

Endorsements/Approvals (9:10-11:00)

1. Cost Development Subcommittee (9:10-9:20)

Members will be asked to endorse a revised charter for the Cost Development Subcommittee, which has been dormant since 2013 but is being revived to address issues including the biennial review of Manual 15 and clarifications to variable operations and maintenance rules and the fuel-cost policy. The revised charter would have the subcommittee report to the Market Implementation Committee instead of the MRC.

2. Critical Infrastructure Stakeholder Oversight Senior Task Force (9:20-9:40)

Greg Poulos, executive director of the Consumer Advocates of the PJM States, and Erik Heinle of the D.C. Office of the People’s Counsel will ask members to revoke an existing issue charge for Planning Committee special sessions on critical infrastructure stakeholder oversight and approve a new issue charge creating the Critical Infrastructure Stakeholder Oversight Senior Task Force, which would report to the MRC.

They say the change is needed because of PJM MRC Briefs: Aug. 20, 2020.)

3. PMU Placement in RTEP Planning Process (9:40-10:10)

Members will be asked to endorse changes to Manual 01: Control Center and Data Exchange Requirements and Manual 14B: PJM Region Transmission Planning Process to expand the use of synchrophasors and make them a requirement for certain projects under the Regional Transmission Expansion Plan. (See “Manual 1 Changes for PMUs,” PJM Operating Committee Briefs: Aug. 6, 2020

4. Capacity Capability Senior Task Force Proposed Solutions (10:10-11:00)

The MRC will be asked to endorse rule s for using the effective load-carrying capability (ELCC) method to calculate the capability of limited-duration, intermittent and combination (limited-duration plus intermittent) resources, the results of which would be revised with changes to the resource mix or load shape.

The rules will govern the timing of annual ELCC analyses; the allocation of ELCC capability of a resource class to specific units; the simulated dispatch of energy storage and hybrid resources; and the determination of resource classes. The main motion, Package A, which does not include a transition plan, received 64% support of the task force. P ackage D, which includes a transition, won 57% support and may be considered if the main motion fails.

MC endorsement will be sought on the same day.

Members Committee

Consent Agenda (12:35-12:40)

B. The committee will be asked to approve Tariff clean-up provisions related to its credit and risk management revisions to the Tariff and Operating Agreement, which FERC accepted on May 30 (ER20-1451). The changes are needed to ensure consistency with other recent rule changes and to avoid confusion.

C. Members will vote on proposed OA revisions to grant transmission owners access to the Dispatch Interactive Map Application. (See “DIMA Quick Fix Endorsed,” PJM OC Briefs: July 9, 2020.)

D. The committee will vote on OA revisions to clarify when capacity benefits of market efficiency projects are calculated, removing obsolete language from the Tariff that conflicted with the OA. (See “Market Efficiency Proposals,” PJM MRC Briefs: Aug. 20, 2020.)

Endorsements/Approvals (12:40-1:10)

1. Capacity Capability Senior Task Force Proposed Solutions (12:40-1:10)

See MRC item 4 above.

September 13, 2020

‘Future is Now’ for Electric Truck Fleets, EEI Told

Executives from Volvo and FedEx told the Edison Electric Institute last week they are fully committed to transitioning to electric trucks but need utilities’ help on rate structures and charging infrastructure.

For “what we do, which is last-mile delivery … electricity is the most efficient energy source for a vehicle fuel,” said Russell Musgrove, managing director of global vehicles for FedEx Express, which is adding 1,000 electric trucks in California.

EEI electric trucks — Keith Brandis, Volvo | *Edison Electric Institute*

“I know a couple years ago there were startups and other companies that predicted that electric trucks were going to be right around the corner, and then they … didn’t come through,” said Keith Brandis, vice president of partnerships and strategic solutions for Volvo Group, which will begin production of electric heavy-duty trucks in North America later this year. “If I could speak to your audience of CEOs, I’d like for them to know that the future is happening now.”

Patti Poppe, CEO of CMS Energy and Consumers Energy, moderated the discussion with Musgrove and Brandis during EEI’s Virtual Leadership Summit on Wednesday.

Based on current battery range and charging infrastructure, Volvo’s trucks will initially be used for local and regional deliveries. “We’re not talking a nationwide corridor yet. But it’s happening. And we’re saying: Now is the time for having these real plans for grid upgrades, for charging infrastructure.”

Production of Volvo’s VNR Electric trucks follows the company’s earlier forays into hybrid transit buses and medium-duty trucks. The company also is participating in the Low Impact Green Heavy Transport Solutions project, a collaboration among 15 public and private partners, including the ports of Long Beach and Los Angeles, to demonstrate the viability of all-electric freight hauling.

Brandis said the project is starting with 23 pilot trucks at four sites. “It includes everything in a complete ecosystem. So, we are able to go in and replace all of the propane forklifts with electric forklifts. We’re adding electric yard tractors as well as the Volvo heavy-duty battery electric trucks and tractors. We’re adding solar [generation] on some of the customer sites as well as all the charging infrastructure for these to run in daily operations. … We have two community colleges putting together technician training, because this is not the same as working on a diesel unit.”

Volvo will begin producing its VNR Electric heavy-duty truck in North America this year. | *Volvo*

FedEx Seeking ‘Scale’

Musgrove said FedEx, which has been investigating electricity as a vehicle fuel since 2010, now intends to electrify its fleet — more than 180,000 motorized vehicles — globally where it can.

In what Musgrove called its first “scaled project,” FedEx is purchasing 100 electric delivery vehicles from Chanje Energy and leasing 900 more through Ryder System for deployment in California. Chanje says its V8100 panel van, being produced in Hangzhou, China, can carry 2,000 pounds of payload for a range of 150 miles on a single charge.

FedEx must accelerate its transition, Musgrove said. “I don’t want to do 1,000 trucks a year. I can’t make real inroads into potential savings from a business perspective — and the environmental, carbon-neutrality goals we have as a company — unless we can truly get to scale. And to get to scale, we’re going to need everyone to build these ecosystems, aligning on what we can align on and finding workarounds on those things we can’t.”

After initially focusing on finding the right vehicle, Musgrove said he has shifted his attention to the charging infrastructure inside FedEx’s facilities. “The majority of our facilities are built in warehousing areas. … A lot of time, there’s just not enough energy [available for] putting 150 electric vehicles inside a building. So right now, we’re actually scaling down the number of electric vehicles in the facility until we can get the appropriate utility upgrades, or microgrids, to allow us to have an entire facility using electricity as a vehicle fuel.”

EV ‘Ecosystem’

Brandis said Volvo is listening to its customers to determine what they need from electric trucks and charging infrastructure.

“What we’re finding is that it’s not [enough] to put a bigger transformer on the site because you’re drawing more power. It’s how can you look at that entire site and optimize it based on the daily routines as trucks are ready to leave in the morning and come back in the evening; [it’s] the overall energy usage, and maybe energy offsets with solar or wind in order to look at the entire eco-cycle.”

Musgrove said truck manufacturers, fleet operators and utilities need to have a “true ecosystem discussion, where the stakeholders get in the room and people truly understand the customers’ need. Understand … that there are going to be some locations where we’re going to put in some microgrid technology, where we’re using solar. We’re going to have to use battery storage to … ensure we have the necessary energy to launch those vehicles every day.”

Utilities’ Role

Another challenge, Musgrove said, is dealing with the “very complicated” utility industry, with its variety of regulatory schemes and rate structures.

“Working with energy management companies and utilities is going to be the key globally for us to be able to make a meaningful transition between now and 2030 — 2025 even.”

While some utilities have been good partners, he said, others have a “take it or leave it” attitude that suggests they’re not interested in responding to the increased power demands that vehicle electrification will produce.

FedEx is adding 1,000 Chanje electric-powered panel vans in California in its first “scaled” EV project. | *Chanje Energy*

Brandis said fleet operators need utilities to designate a single account manager to help them navigate the transition and upgrade the infrastructure in their properties.

“We can’t have the typical, ‘Well you’re not talking to the right department. You’ve got to talk to another department.’”

Musgrove agreed, saying utilities should create dedicated fleet EV programs: “A group of people that understand our business, understand us as a customer … [and] help us get the information and do the things that you need us to do.”

FedEx also wants help from utilities in developing rate structures that “stabilize” its costs.

“Maybe some out-of-the-box thinking, where we talk about a fixed, contracted kilowatt rate including some of the infrastructure we need to put in there,” he said.

“I do think our willingness to work with others is essential to getting this ecosystem up and running,” agreed Poppe. “And there’s a huge … potential for our industry to have growth that we haven’t experienced in decades. It is an exciting time if we can all figure out how to swim together.”

Regulators’ Role

CMS Energy CEO Patti Poppe | *Edison Electric Institute*

Musgrove said Volvo is lobbying California officials to revise a rule that prohibits public charging stations for heavy-duty trucks. “So, we’re going the California Public Utilities Commission to say, ‘Look this is not going to take off; this is not going to go anywhere, unless we [have private and] public charging stations.’”

Poppe said utilities will need their customers’ help also.

“There will be times when your voice in a regulatory proceeding … is very influential. Our regulators have to be objective, and they may not always do everything we say needs to be done. But when they hear a FedEx say, ‘This is what we need to be done,’ that can be very helpful in us advocating for the right policies.”