The Texas Public Utility Commission last week dismissed a complaint asking that ERCOT be required to reprice a 2019 dispatch interval after a pricing error sent wholesale prices to their $9,000/MWh cap (49673).
Houston-based energy trader Aspire Commodities last year asked the commission to make generators repay the ERCOT market an estimated $18 million for what it called a “fictitious spike price” in May 2019. Calpine later admitted it had mistakenly notified ERCOT that it had taken about 4 GW of generation capacity offline when, in actuality, it was still operating. (See ERCOT Asks PUC to Dismiss Trader’s Complaint.)
In agreeing with an administrative law judge’s proposal for decision, the commission said ERCOT’s protocols don’t mandate a price correction when an interval’s pricing is affected by a market participant’s “erroneous telemetry.” At the same time, they suggested the grid operator work on a change request to make sure it better defines the process in the future.
Commissioner Arthur D’Andrea listens to the discussion. | PUCT
“We shouldn’t wait for there to be a really huge event to be having this discussion and this fight,” PUC Chair DeAnn Walker said during the commission’s open meeting Thursday. “ERCOT does have to rely on the input given by the market participants. There’s no way to do it other than that, so when the market participant provides something that is wrong, ERCOT’s left in a position not knowing what to input to get whatever is right.”
“In this case, ERCOT applied the protocols correctly,” said Commissioner Shelly Botkin, who joined the commission after serving as the grid operator’s director of corporate communications and government relations. “I would like a conversation with ERCOT to see if there’s a different way to do these things.”
ERCOT staff last year said they would seek to strengthen telemetry data and work with stakeholders to evaluate alternatives.
In other action, the PUC approved adjusted energy efficiency cost recovery factors (EECRF) for Oncor (50886) and Texas-New Mexico Power (50894). The commission set Oncor’s 2021 EECRF at $64.8 million and TNMP’s at $5.9 million. Both companies reached unanimous settlements with all parties involved.
NYISO analysis of reserve pickup (RPU) performance for winter 2019/20 shows that 76% of the time, resources provided more than 90% of total energy expected.
Control Room Operations Manager Jon Sawyer told the Installed Capacity/Market Issues Working Group on Monday that from November 2019 to April 2020, 16 RPUs occurred, and there were 93 unique instances in which a resource was asked to convert reserves to energy.
For gas turbines, total energy provided was measured at the 11th minute after the start of the RPU. For all other resources, total energy provided was measured one minute after the end time of the RPU.
This graph shows that 76% of the time, resources provided more than 90% of total energy expected. | NYISO
One stakeholder asked how aggregated data used in the analysis can account for single generating units that fail to perform adequately, and whether the ISO can provide such breakout data for the upcoming RPU report for summer 2020.
Sawyer said the ISO cannot divulge unit-specific data, but that it has a process for generators that do not pass a performance audit and is working through the same process for RPU performance.
The process involves the same tight tolerances used in an audit. As soon as a unit fails, there is immediate communication through the transmission owner to the generator that it did not pass, and the Market Mitigation and Analysis Department starts follow-up immediately, Sawyer said.
If a resource does not perform, or performs poorly, it will fail the audit, upon which NYISO may derate the resource’s response rates and possibly the resource’s upper operating limit. For a gas turbine that fails to start during the audit, there would be a derate down to 0 MW.
It’s expected that the generator would respond with the cause of the failure and what has been done to mitigate it, Sawyer said. The ISO would perform another audit of the same generator within 48 hours.
The tables summarize the results of NYISO’s reserve pickup analysis for November 2019 though April 2020, during which period 16 RPUs occurred. | NYISO
New Business
NYISO acknowledged that, as part of the ongoing demand curve reset, it has proposed a revision to the logic of the model used to estimate net energy and ancillary services revenue earnings for the hypothetical peaking plant. The revision addresses a misalignment of natural gas prices with actual delivery date associated with such prices.
One stakeholder asked if the ISO has looked back to see whether the same thing happened in the model in use for the past three and a half years.
Michael DeSocio, the ISO’s director for market design, said they are still investigating that issue and will have results in a week, or earlier if possible.
Another stakeholder asked about fast-start pricing revisions, which the ISO is supposed to be implementing by the end of this year.
DeSocio said that the software is in development and that the ISO expects to wrap it up in a couple weeks and move to testing, still on time for implementation by year-end.
American Electric Power on Tuesday announced it will become at least the fourth major U.S. utility to switch its stock listing from the New York Stock Exchange to the Nasdaq Stock Market, joining Exelon, Xcel Energy and Alliant Energy.
The move to Nasdaq’s Global Select Market will be effective with the market’s opening bell on Oct. 1. The company’s stock will continue to trade under the “AEP” ticker symbol.
In explaining the move, AEP CEO Nick Akins said, “Nasdaq’s tradition of innovation aligns well with our company’s strategic goals.”
“As AEP transitions to a cleaner energy future, we’re harnessing the power of technology to create new solutions for our customers while bringing value to our shareholders,” he said.
Nasdaq claims it has won 76% of all switches among U.S. equity exchanges since 2005, saying “stocks listed on Nasdaq experience less volatility, tighter spreads and more depth.” It also says it is the only exchange in the Dow Jones North America Sustainability Index. Among the companies that have switched to Nasdaq are PepsiCo, T-Mobile, Kraft Foods and AstraZeneca.
Xcel, which switched from the NYSE effective Jan. 2, 2018, said it was the first Fortune 500 utility listed on Nasdaq. Alliant moved in late December 2018, noting its “shares will be listed on the same exchange as some of the world’s largest technology companies.”
Exelon, which made its move on Sept. 25, 2019, issued a press release saying it made the move to join “leading climate-focused innovators.”
“Nasdaq is the platform that many of the world’s leading innovators call home and — importantly — shares our commitment to a low-carbon economy and reducing greenhouse gas emissions,” Exelon CFO Joseph Nigro said in announcing its move. “We believe that moving to Nasdaq provides us the most cost-effective channel to connect with investors efficiently through technology.”
In recent years, Columbus, Ohio-based AEP has taken several actions to back up its mission of “redefining the future of energy and developing innovative solutions.” The company has an aspirational goal of zero emissions by 2050 and has said it believes it can cut CO2 emissions by more than 80% by 2050 from its 2000 levels. (See AEP Ups its Emission-reduction Targets for 2030.)
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.
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.
Stylized comparison of the global temperature response over time from methane (solid) and carbon dioxide (striped). Methane is about 80 times as potent at trapping heat as CO2 in the first 20 years but has a much shorter half-life. Other GHGs, including nitrous oxide and fluorocarbons, represent less than 4% of total emissions. | Journal of Integrative Environmental Sciences
“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 webinars 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.”
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.)
| Columbia River PUD
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.
“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 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.
“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?’”
Jillian Lessner, WECC | WECC
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?’
Branden Sudduth, WECC | WECC
“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
Steve Goodwill, WECC | WECC
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.
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.
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.
Ameren CEO Warner Baxter | Edison Electric Institute
“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.”
Exelon CEO Chris Crane | Edison Electric Institute
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.”
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.
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.”
Gerry Anderson, DTE Energy | Edison Electric Institute
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.
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.”
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.)
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.
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 rules 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. Package 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)
