FERC on Thursday granted NERC another extension on the deadline for two compliance filings ordered earlier this year so that the organization can focus on its response to the COVID-19 pandemic (RR19-7). The commission ordered the filings Jan. 23 in response to NERC’s five-year performance assessment.
One filing, originally due April 22, required the ERO to detail any audits it has conducted of regional entities during the past five years, or a plan for performing them within the next 18 months. (See NERC Wins Another 5 Years as ERO.) Last month FERC moved the due date of this filing to May 1, acknowledging that responding to “the emergency conditions related to … COVID-19” should be a higher priority for NERC. This week’s order pushes the deadline “to and including June 1.”
The second filing, initially ordered for July 21, demanded a number of revisions to NERC’s Rules of Procedure (ROP), such as updating terminology regarding the Electricity Information Sharing and Analysis Center (E-ISAC); providing greater transparency in its sanction guidelines; and making various improvements to its certification program. FERC last month approved a request by NERC to delay the filing until Aug. 28, which the ERO said would give more time for stakeholder comment and review by the Board of Trustees. (See FERC Approves NERC Rule Change Extension.) The new deadline for the filing is Sept. 28.
Progress Seen in Pandemic Prep
NERC has been working to assist with industry response to the pandemic, including by issuing a Level 2 alert last month and publishing a document titled “Assessing and Mitigating the Novel Coronavirus (COVID-19)” on the Electricity Subsector Coordinating Council’s website. Earlier this week, NERC described the industry as “taking aggressive steps” in response to the pandemic, with most utilities either having a written response plan or currently developing one, and a majority pledging to support mutual aid requests from others involved in a pandemic emergency. (See Industry Pandemic Prep Encouraging, NERC Says.)
The organization’s internal response includes activating its Business Continuity Plan and shifting its upcoming meetings to conference calls or video conferences. This week NERC announced that the E-ISAC’s annual security-focused conference GridSecCon, scheduled for Oct. 20-23, would be canceled. Representatives told ERO Insider that attendees’ commitments to pandemic response made confirming conference details difficult, and it seemed “more prudent” to call the event off completely.
NERC and FERC have also taken steps to relax compliance burdens for utilities through the use of regulatory discretion. Regulatory easing so far is limited to delays in obtaining and maintaining personnel certification, failure to perform required periodic actions and postponing on-site activities such as audits and certifications. (See FERC, NERC Relax Compliance in Light of COVID-19.) NERC has updated the website for its Compliance Monitoring and Enforcement Program (CMEP) with a list of frequently asked questions related to these changes.
Bruce Scherr, a former NERC vice chair and member of SPP’s Board of Directors, died on March 29, according to a NERC press release. He was 72 years old.
Scherr served on NERC’s board from 2002 to 2015. In addition to serving as vice chair, at various times he chaired the Finance and Audit and Compliance committees, and was also a member of the Standards Oversight and Technology Committee and the Nominating Committee. Since he joined SPP’s board in January 2016, Scherr had served on the Finance Committee — becoming its chair in 2018 — and the Oversight Committee, as well as on the Value and Affordability Task Force.
Outside of his roles with NERC and SPP, Scherr served on the boards of E. Ritter & Company, Santa Energy and J.D. Heiskell & Company. He was also an adviser to the Council of Economic Advisers and NASA.
“Bruce was a dedicated and tremendously talented member of our Board and a good friend,” NERC board Chair Roy Thilly said. “The thoughts and prayers of the entire NERC family go out to Bruce’s family during this difficult time.”
In a separate statement, SPP CEO Barbara Sugg said Scherr “gave 100% to SPP and always had our best interests in mind.”
“His financial and executive leadership experience afforded Bruce a unique and valuable perspective regarding our business,” she added.
Scherr’s family conducted a private service on Wednesday in Florida; a larger memorial will be held later this year. NERC did not disclose the cause of death.
The Federal Communications Commission has scheduled a vote for its April 23 open meeting on draft rules that would open the 6-GHz wireless spectrum — currently available only to licensed operators — to unlicensed users. However, utilities remain concerned about the potential for disrupted operations.
The commission began considering opening the 6-GHz spectrum in 2017 and issued a Notice of Proposed Rulemaking in 2018 in response to growing demand for wireless broadband access by consumer devices and a congressional directive to identify additional spectra (18-295, 17-183). By some estimates, North American mobile traffic, including unlicensed Wi-Fi devices, is projected to grow nearly 35% annually through 2021.
Advocates of opening up the 6-GHz spectrum include FCC Chairman Ajit Pai, who said in a press release Wednesday that making the spectrum (5,925 to 7,125 MHz) available to consumer devices would “effectively increase the amount of spectrum available for Wi-Fi almost by a factor of five.” Electronic device makers such as Apple, Cisco Systems, Google and Qualcomm — along with wireless companies — have been vocal in their support for allowing unlicensed use of the spectrum in the hopes of easing congestion on existing frequencies, particularly from Internet of things (IoT) devices.
Measures to Prevent Interference
But electric utilities currently use the spectrum for point-to-point microwave links providing communications with substations, fault sensors, two-way meters and service crews. It is also used to provide situational awareness in rural areas where wired networks are not available. Other critical infrastructure such as police and fire dispatch, railroads, and natural gas and oil pipelines also use the spectrum. These users have expressed concern on numerous occasions about the danger of interference with their communications from consumer equipment. (See Utilities Warn of Encroachment on Communications Band.)
Microwave relay dish
The proposed rule change, which Pai called the commission’s “boldest initiative yet” and a “huge benefit to consumers and innovators across the nation,” represents a partial concession to these fears. It would authorize two types of unlicensed operation in the band: a standard-power mode covering 850 MHz of the available range and indoor low-power operations across the full 1,200-MHz spectrum.
The plan would require that standard-power mode use automated frequency coordination (AFC) to avoid interfering with existing services. Utility representatives described the measure as a good start that needs expansion.
“While we appreciate the FCC proposing to require AFC for the standard-power access points, these measures must also be applied to all unlicensed devices in the band to prevent interference to mission-critical utility communications systems,” Sharla Artz, senior vice president of government and external affairs for the Utilities Technology Council (UTC), said in a statement. “We have and will continue to engage with the FCC and interested stakeholders to develop technical requirements that adequately protect critical infrastructure incumbents and allow unlicensed operations to use in the band.”
UTC’s recommendation was echoed in a filing by the National Public Safety Telecommunications Council (NPSTC), citing numerous cases in which unlicensed equipment operating at 5 GHz have interfered with higher-priority authorized services. NPSTC observed that similar situations could easily occur if consumer use of the 6-GHz band becomes more widespread without universal application of AFC, even to low-power devices.
A separate planned NOPR would allow very low-power hardware to operate across the 6-GHz spectrum as well and is intended to facilitate performance by high-bandwidth applications such as wearable technology, virtual reality and augmented reality. The FCC plans to request comment from industry on technical aspects of the proposal, including power levels and operational measures to prevent interference with existing services.
Last year’s GridEx V security exercise provided the electricity industry with a number of lessons about crisis management that are proving timely in the current COVID-19 pandemic, according to NERC officials.
“One of the reasons we do exercises like this is so we are prepared to deal with significant challenges, and we are certainly in one now,” said NERC Senior Vice President and CEO of the E-ISAC Manny Cancel at a media briefing on NERC’s after-action report on the exercise. “And certainly, some of the lessons we learned from GridEx and the procedures that we practiced [have] prepared us for dealing with COVID-19, specifically the business continuity procedures that we and our entities have in place.”
NERC conducted GridEx V, the fifth of its biennial exercises, on Nov. 13-14, 2020, drawing more than 7,000 participants from more than 526 organizations across the industry and government — up from 6,000 participants and 450 organizations for GridEx IV. Organizations were asked to respond to a wide array of threat vectors representing what one PJM official called a “true doomsday scenario.” (See GridEx V Throws New Tech Curveball.)
Distributed Play Borrows from Life
The exercise had two major components. First was a distributed play model involving players from across the electricity industry, as well as government officials and representatives from interdependent industries such as natural gas, water, finance and telecommunications. The two-day exercise presented participants with a range of simulated challenges including social media hacks, vehicle fires at regional facilities, intruders in headquarter buildings and infections by malware.
An unnamed staffer at NERC’s Electricity Information Sharing and Analysis Center (E-ISAC) participates in day one of GridEx V. | NERC
In creating the distributed play scenario, planners drew heavily on lessons learned in previous exercises as well as from real-world crises. For example, the malware that attacked participants was patterned after the 2016 CrashOverride cyber-attack against Ukrainian utilities, a choice inspired by the malware’s targeting of industrial control systems (ICS) intended to cause chaos in the electric grid.
“When the exercise planners … were putting this together, the ICS component of CrashOverride in 2016 provided a lot of great training value to the industry,” said Matthew Duncan, senior manager of resilience and policy coordination for E-ISAC. “We had very good feedback from the utilities, seeing this malware that they could [respond to] in an exercise environment and really test their defense capabilities against it.”
Executive Tabletop Brings Needed Focus
The distributed play model was accompanied by an executive tabletop session with participation by leaders of electric, natural gas and telecommunications industries, along with senior government officials. While this has been a feature of previous exercises, this year the executive tabletop featured, for the first time, a separate scenario from the distributed play. In addition, unlike in previous events, the scenario was focused on a regional rather than a national threat, which organizers hoped would create more useful response data.
“In previous GridExes having the entire nation and continent under attack made it difficult to get down to the technical detail necessary [to model an effective response],” Duncan said. “By picking the Northeast, New York State and Southern Ontario, we were able to get sufficient detail to play this out, and it was very helpful.”
Recommendations from the executive tabletop included the following:
Ensure grid emergency response and restoration plans describe coordination with federal and state or provincial authorities in the event of a national security emergency;
Incorporate natural gas providers and pipeline operators into restoration planning and drills;
Enhance coordination with communications providers to support restoration and recovery and work to ensure the 6-GHz spectrum communications band remains open to utilities in emergencies;
Build consensus with the Department of Energy on procedures and requirements for issuing grid security emergency orders;
Identify key supply chain elements and ensure inventory can be shared in a crisis;
Expand participation in the Electricity Subsector Coordinating Council (ESCC) cyber mutual assistance (CMA) program; and
Strengthen industry and government coordination between the United States and Canada.
Supply Chain Participation Falls Short
NERC set seven objectives for GridEx. The organization reported that six of these were fully achieved: practice incident response plans, expand local and regional response, engage interdependent industries, improve communication, engage senior leadership and gather lessons learned.
The seventh objective, increase supply chain participation, was only partially achieved. NERC had hoped to expand engagement with the vendor supply chain in GridEx V after calling out utility operators in GridEx IV for failing to recognize the importance of maintaining vendor support. (See Ukraine Attacks, ‘Fake News’ Color NERC GridEx IV Drill.) However, only three major electric industry supply chain vendors officially registered for the most recent exercise. While more vendors may have participated unofficially, NERC said that organizations must work harder to include these critical industry players in their response plans.
Organizations are already planning for GridEx VI, scheduled for Nov. 16-17, 2021. MISO has begun selecting internal committees to design scenarios and lead simulations for the next exercise. (See MISO Preps for GridEx VI.) Duncan said future GridEx planning will continue to draw from current events such as the COVID-19 pandemic to ensure that the industry is as ready as possible.
“We say that GridEx is designed to overwhelm even the most prepared utilities, and we use realistic scenarios to keep making the industry better,” Duncan said. “There’s no shortage of threats out there, but the only way we’re going to get better at mitigating and defending against those threats is [by] practicing against those threats, and that’s what GridEx is all about.”
PJM Board of Managers Chair Ake Almgren opened the Markets and Reliability Committee meeting Thursday by introducing a redesigned compliance hotline for RTO personnel and stakeholders to anonymously report violations of laws, regulations or RTO rules.
Almgren said the RTO broadened the existing PJM employee hotline as part of its commitment to a “ethical conduct and the culture of compliance.” Anonymous callers can send tips on violations of the PJM Employee Code of Conduct, RTO governing documents, FERC orders and NERC reliability standards.
The hotline (1-866-776-6942), which will be operated by an independent third-party organization (Navex Global), can also be used to report issues with PJM’s financial reporting.
“In addition, credit risks to the organization that are not being addressed by PJM may also be reported to the hotline,” Almgren said. An independent investigation of the 2018 GreenHat Energy default concluded PJM staff ignored red flags about the company’s assets and exhortations from other members.
| PJM
Posters highlighting the hotline will be hung around the PJM campus beginning next month.
“I believe the compliance line provides another way for PJM to achieve transparency and continue communications with members and stakeholders,” Almgren said.
Paul Sotkiewicz of E-Cubed Policy Associates called the hotline “an absolutely fabulous idea.”
“We should have had it much earlier in the game,” he said.
Sotkiewicz asked how much authority the third party has to serve as a “mediator” to resolve issues brought to its attention.
“I’ll have to come back to answer that more precisely,” Almgren responded. “The idea is to have an escalation.”
The question–and–answer document for the hotline states that the PJM board “has a formal escalation policy — like that of many of our member companies — that requires certain types of concerns to be escalated promptly to the board. Then the board has the ability to direct the next steps including engaging other independent outside expertise to investigate or otherwise assist with the resolution of the concern.”
The Code of Conduct outlines rules for PJM employees on subjects including conflicts of interest, receiving gifts and maintaining confidentiality. Employees are prohibited from accepting gifts worth more than $150 in any 12-month period and must report all gifts exceeding $50 to Ombudsman Jim Burlew.
The code says the third party will relay details of calls to the ombudsman with a copy to General Counsel Christopher O’Hara. Depending on the nature of the concern, the ombudsman may relay the information to the director of business operations, the director of internal audit, the director of human resources or the senior director of physical security and facilities, “who will conduct a prompt, impartial and thorough investigation.”
“If the violation involves a subject matter which may impact the ability of individuals who should otherwise receive a report to be impartial, the situation will be investigated accordingly,” it says.
PJM declined to say how many calls the existing hotline has received in the past year.
Shift to IMM Opportunity Cost Calculator
Stakeholders approved a compromise proposal to eliminate use of the RTO’s opportunity cost calculator and make the Independent Market Monitor’s calculator the required tool for market sellers. The action will take effect beginning June 1.
The proposal was approved on an acclamation vote with one abstention.
The new policy required changes to Manual 15: Cost Development Guidelines to document the Monitor’s calculator and provides for an annual review of the calculator to ensure compliance with the manual and Operating Agreement. (See “PJM Seeks to Retire Opportunity Cost Calculator, Use IMM Tool,” PJM MRC/MC Briefs: Feb. 20, 2020.)
The calculator is intended to ensure generators are made whole for being scheduled by PJM outside their most profitable time periods.
An opportunity cost adder can be included in a cost-based offer when a unit faces environmental restrictions on how much they can operate, an equipment manufacturer imposes an operational restriction because of equipment limitations, or the unit faces a fuel limitation resulting from a force majeure event. The value of the adder is based on historical LMPs and forecasted future fuel prices.
Jim Davis of Dominion Energy thanked PJM officials for the change.
“It seems like we’ve been talking about these things for not just months, but years,” Davis said. “We look forward to the continued discussion and documentation as changes are made to the calculator.”
Black Start Resources Initiative on Hold for 4-8 Months
PJM said it could take eight months or longer to complete additional analysis in the contentious initiative that could tighten fuel requirements for black start resources.
The RTO told stakeholders March 2 that the initiative would go on “hiatus” for up to six months to conduct the analyses, as requested by the Organization of PJM States Inc. (OPSI). (See PJM Backs off Black Start Fuel Rule.)
But PJM’s Janell Fabiano told the MRC that the analyses could take four to eight months, and possibly longer, because of the need to reconsider the prioritization of other pressing issues in light of the COVID-19 pandemic.
PJM plans to analyze restoration times, the impact of gas supplies costs and economic impact. It called for the initiative in 2018, noting that the only fuel assurance requirement for black start resources is that they maintain enough for 16 hours of run time.
The RTO has estimated that requiring 100% of black start units to have a secondary fuel source would require $513 million in capital spending, increasing annual revenue requirements by $67.2 million over the current $65 million. A proposal that would limit such fuel assurance requirements to one resource per transmission owner zone is estimated to cost $13 million, or $1.9 million per year.
Manual Changes OK’d
The MRC endorsed six manual changes, including updates from periodic cover-to-cover reviews and updated procedures:
Incorporated changes to Manual 14A: New Services Request Process, Manual 14E: Upgrade and Transmission Interconnection Requests and Manual 14G: Generation Interconnection Requests, related to FERC Order 845 on generator interconnection procedures and agreements.
The Members Committee unanimously approved one-time revisions to Section 11.11 of Manual 34 regarding voting requirements for board elections in response to the cancellation of PJM’s annual meeting originally scheduled for May 4-5 in Chicago.
Section 11.11 calls for votes on board members to be taken by secret paper ballot by those at the meeting and by secret ballot over the phone for members participating by teleconference, PJM’s Dave Anders said.
Anders said that because this year’s meeting will now take place solely by teleconference, the members have been left with an “untenable situation” with collecting votes over the phone. PJM suggested a one-time waiver of the requirement of a secret ballot to allow the use of the RTO’s voting application.
In response to members’ concerns to keep the vote secret, Anders said PJM staff will delete the record of individual votes immediately after tabulating the results.
Some members suggested using an independent third party to tally the votes.
Anders said using a third party was a legitimate suggestion for future votes but would be difficult to implement in time for the May vote.
The revision passed unanimously by acclamation.
January Minutes Still not Approved
The minutes for the Jan. 23 MC meeting were not approved for a second consecutive month. Initially the minutes weren’t approved at the February meeting because they weren’t posted in time.
Sharon Midgley of Exelon requested Thursday that the minutes not be approved because of potential “voting anomalies” at the meeting. Midgley said she relayed questions to PJM after the meeting regarding the vote, but the voting discrepancies have not been resolved and are still being investigated.
Anders confirmed that Midgley had told the RTO that a member who voted at the January meeting may be affiliated with another member. The member organization was not identified.
Anders said PJM is working with legal staff to resolve the inquiry by Midgley. He said he had no issues with deferring the approval of the January minutes until the next meeting scheduled for May 4.
“Our concern is around two companies who appear to potentially be affiliates that both participated in the voting at the MC that day,” Midgley explained after the meeting.
Liaison Committee Meeting Rescheduled
Katie Guerry, vice chair of the MC, said the Liaison Committee meeting with the board scheduled for April 21 has been rescheduled until July. Guerry said members decided it was “not a responsible decision” to move forward with an in-person meeting for April because of the COVID-19 pandemic and have instead looked to have it in the summer. An additional Liaison Committee meeting will also be added on the calendar for December, Guerry said, so that four meetings can still be held within the calendar year.
Guerry also said PJM officials are considering whether to re-evaluate priorities in the MC Annual Plan because of the pandemic.
“There’s a mindfulness of the reality of the situation that we are all in and the limited resources that we all have,” Guerry said. “We want to minimize the burden on folks in this extreme time.”
New Finance Committee Member Elected
Mike Peters of industrial and medical gas producer Messer LLC was selected to fill an open position on the PJM Finance Committee within the End Use Customer sector.
Peters will fill the seat vacated by George Waidelich of Safeway, which recently left PJM membership. Peters’ term expires at the end of 2020.
The PJM Members Committee approved changes Thursday to the RTO’s fuel-cost policy (FCP) rules, but not before another round of animated debate over force majeure events.
The new rules, which are spelled out in revisions to Schedule 2 of the Operating Agreement and Manual 15: Cost Development Guidelines, were approved by a sector-weighted vote of 3.9 (78%).
The package, proposed by the PJM Industrial Customer Coalition, was approved by the Markets and Reliability Committee last month on a sector-weighted vote of 3.57 (71%) despite concerns that new safe harbor provisions would create loopholes permitting the exercise of market power. (See PJM MRC OKs Revised Fuel-cost Policy.)
Heat rate and cost curves for 550-MW natural gas-fired team unit | PJM
It eliminates the FCP annual review, the FCP requirement for zero-marginal-cost offer units, and market seller submission deadlines. The deadlines for reviewing FCPs was changed: The Independent Market Monitor will have an initial 10 business days to review a policy and an additional five business days when a market seller revises the policy. PJM will have 20 business days to review a policy and an additional five business days for reviewing revisions, although that time frame can be changed if agreed to by PJM and the market seller.
The ICC included a safe harbor provision proposed by generators but modified the terms for imposing penalties for noncompliance. It would impose the full penalty if the unit clears in the day-ahead market or runs in real time on a cost-based offer and is paid day-ahead/balancing operating reserves. The full penalty also would apply if the unit fails the three-pivotal-supplier (TPS) test for constraints or the cost offer is above $1,000/MWh.
Susan Bruce, representing the ICC, said the concerns raised in February about the proposal “resonate with industrial customers,” but she said she will continue to support the measures.
“We offered [changes] in the spirit of compromise, and we believe that compromise is an essential element of the stakeholder process,” Bruce said.
The safe harbor section of the proposal allows a generator to avoid penalties if it deviates from its FCP because of a force majeure event.
PJM will determine whether the evidence proves the force majeure event “directly impacted the market seller’s ability to conform to the methodology” in its FCP. “The applicability of this provision shall not apply for economic hardship nor obviate the requirement for a market seller to submit cost-based offers that are just and reasonable, and utilize best available information to develop fuel costs during a force majeure event,” the revised OA says.
Greg Poulos, executive director of the Consumer Advocates of the PJM States, cited concerns over the safe harbor provision in requesting a sector-weighted vote on the proposal, saying he was surprised to see the revisions listed in the consent agenda because it had been the subject of a contentious vote at the MRC. “Many of us will be voting ‘no,’” he said of his group’s members. He said he would like to see PJM create a policy on what items can be included in the consent agenda.
Monitor Joe Bowring said he continued to oppose the revised force majeure language because no one has identified an event that would prevent market sellers from following their fuel-cost policies. With the emergence of the COVID-19 pandemic since February’s meeting, he said, sellers could argue “that every single fuel-cost policy would now be moot.”
“There’s actually no reason to have a force majeure exception, and the current state of the world indicates that even more clearly,” Bowring said. “The proposal is equivalent to not having any fuel-cost policies now and having every single unit be subject to unit-specific review based on the actual facts. That is not workable. The purpose of fuel-cost policies is to address unusual and unexpected conditions, and current fuel-cost policies do that.”
Paul Sotkiewicz of E-Cubed Policy Associates disagreed with the classification of the current pandemic, saying he believed it was “alarmist and also wrong” to use the coronavirus as a force majeure event because there have been no issues in getting pricing for fuels.
“I think the fuel-cost policies are still in effect here, even with the coronavirus,” Sotkiewicz said. “It’s a scare tactic.”
Two market efficiency transmission projects already approved by MISO face continued obstacles, while two others slated for belated inclusion in the 2019 Transmission Expansion Plan must wait longer for approval, stakeholders heard last week.
Speaking during a conference call of the Board of Directors’ System Planning Committee on March 24, MISO Executive Director of System Planning Aubrey Johnson said uncertainty lingers for the nearly $129 million Hartburg–Sabine Junction project because of the passage of a Texas law granting incumbent utilities the right of first refusal for any transmission projects built in the state. The law may mean incumbent Entergy ultimately takes up the project. (See Appeals Court Sets Dates in Texas ROFR Challenge.)
The RTO is currently using its established variance analysis process to study the project and developments around it. The analysis is used to study projects already approved under the MISO Transmission Expansion Plan that are later disrupted by circumstances that affect the project’s cost, schedule or “the ability of selected developers and transmission owners to complete.”
“We are now continuing to gather information as part of the variance analysis and continuing to work with legal teams,” Johnson said.
The proposed 23-mile 500-kV transmission line, four short 230-kV lines and new substation would connect three county networks in East Texas and alleviate longstanding congestion and import limitations in the area.
MISO has acknowledged the recent court action, but confidentiality restrictions limit its ability to talk publicly about the project. Spokesperson Allison Bermudez said the RTO will make a further statement once it completes the variance analysis, which is expected soon.
“MISO is committed to delivering the benefits of the Hartburg-Sabine Junction transmission project in East Texas. Under our Tariff, MISO is currently executing a process to assess the Texas state law developments and their impact on the project,” Bermudez told RTO Insider earlier this month.
Huntley-Wilmarth Costs Up
MISO is similarly conducting a variance analysis on the nearly $156 million Huntley-Wilmarth line, which now faces cost overruns after a route change.
Huntley-Wilmarth met the criteria to qualify as a market efficiency project in MISO’s 2016 Transmission Expansion Plan. It would have been open to competitive bidding if not for Minnesota’s right-of-first-refusal law. Original estimated costs on the project ranged from $88 million to $108 million.
MISO said costs increased 30% because of state-ordered changes to the routing plans. The new permitted route will cross the Watonwan River in Minnesota.
Johnson said a variance analysis is automatically triggered when a project experiences cost overruns of more than 25% of original baseline costs.
MISO President Clair Moeller said the analysis is performed to provide a clear public record of the project, not to re-evaluate its merits or halt work.
“Once we approve a project, we don’t really have the ability to stop it,” Moeller said.
MISO executives said they believe Huntley-Wilmarth will still be able to deliver benefits in excess of its cost.
Meanwhile, MISO’s first competitively bid project from 2016 — the $67 million Duff-Coleman 345-kV transmission project in Southern Indiana — is making progress and could be completed as early as June 2020.
MISO-PJM Interregional, 1st SATA Projects not yet Approved
Two holdover projects from MTEP 19 have yet to receive the board approval MISO hoped for by March.
“We will not seek approval until Tariff revisions are approved,” Johnson said, noting that MISO staff must first attend a technical conference that will probably be set for late spring.
American Transmission Co.’s Waupaca area energy storage project was meant to ease transmission reliability issues in central Wisconsin.
“What happens — is this project just in limbo? So how do we deal with the congestion that this project was supposed to alleviate?” Director Nancy Lange asked.
Vice President of System Planning Jennifer Curran said MISO wants to “let the process play out a little more” before it decides on a direction or project alternative. She said it is in communication with the developer in the meantime.
MISO also faces more work before the board can approve its first major interregional market efficiency project with PJM.
The $22 million reconstruction of the 138-kV Michigan City-Trail Creek-Bosserman line in the northwestern corner of Indiana can save about $5 million in congestion costs per year, MISO said. (See MISO, PJM Poised for 1st Major Interregional Project.) PJM’s Board of Managers has already approved the project.
But MISO doesn’t yet have an approved regional cost allocation for interregional projects with PJM. FERC rejected its newest interregional cost allocation filing in late March, finding the proposal to reserve regional allocation for market efficiency projects 230 kV and above ignored the potential regional benefits of lower-voltage projects. MISO proposed that its share of interregional economic projects with voltages below 230 kV — but at or above 100 kV — be allocated 100% to the transmission pricing zones where the project is located, barring lower-voltage projects from cost-sharing.
Before the order, MISO staff said the Michigan City-Trail Creek-Bosserman project would not be regionally allocated in, reasoning that the project’s 138-kV rating disqualified it from a regional allocation.
The commission ordered MISO to instead use a design based on adjusted production costs for economic interregional projects 100 kV and above with PJM. MISO has a month to make the filing. (See “Interregional Filing Also Rejected,” Another Rejection for MISO Cost Allocation Plan.)
MISO will submit the filing within FERC’s 30-day deadline, Johnson confirmed. He said the wait for FERC’s response would probably push approval of Michigan City-Trail Creek-Bosserman to MISO’s June Board Week.
FERC on Thursday approved MISO’s proposal to bar participants from its market when it identifies evidence of default, manipulation or unreasonable risk. The new procedures took effect Saturday (ER20-877).
The Tariff changes allow MISO to request additional collateral when it perceives an unreasonable credit risk from a market participant. The new rules will also allow the RTO to reject applications from new market participants and from former market participants that have an uncured financial default in its markets and attempt to rejoin under a different name.
Finally, the RTO will ask prospective and current market participants for more specifics on their annual certifications. It will inquire about past defaults, bankruptcies, dissolutions, mergers or acquisitions and any investigations. (See MISO Looks Beyond FTRs for Market Protections.)
MISO control room | MISO
“The proposed revisions will allow MISO to improve the protection of its market participants from financial losses that result from unreasonable credit risks and defaults while also providing additional clarity and transparency to market participants,” FERC said.
The commission also pointed out that MISO has pledged to “preserve in writing” any decision it makes to reject or suspend a market participant from participation. FERC said the RTO’s written reasoning could “form a record before a commission proceeding if necessary.”
FERC said MISO made the filing “in light of significant credit events in other” RTOs/ISOs, referencing GreenHat Energy’s record default in PJM’s financial transmission rights market in June 2018. PJM last week approved tightened credit requirements to prevent future defaults. (See related story, PJM Members OK Tighter Credit Rules.)
The revisions are an extension of stepped-up requirements in MISO’s FTR market. The RTO received FERC permission in November to apply higher collateral requirements to the market (ER20-73).
MISO’s Board of Directors last week cleared the Advisory Committee to create an 11th stakeholder sector while also instructing the committee to overhaul its sector design to produce a fuller participatory model.
The board said the committee’s recent recommendation to create a new “Affiliate” sector for hard-to-define members works only in the short term. It directed it to develop a long-term solution that guarantees all members full participation in the stakeholder process. (See MISO Advisory Committee OKs 11th Sector.)
In the meantime, MISO should file with FERC revisions to its Transmission Owners’ Agreement (TOA) to include the new sector, the board said.
Board Chair Phyllis Currie said the board met to discuss the proposal and agreed that it should be in place only until the AC creates a new proposal focused on fair participation for sectors and mindful of voting power. She also said the AC should ensure that sectors are divided into groupings of likeminded members.
“I say ‘short term’ because I think in the longer term, there still needs to be more discussion on how various sectors participate,” Currie said during a committee conference call Wednesday. The meeting took place via conference call instead of in New Orleans as originally planned because of the spread of the COVID-19 coronavirus. (See Virus Fear Sends MISO Board Week to the Web.)
Currie urged the AC to examine its current voting structure and think about affording members an equal voice. She said the board would give the committee a year to draft a fuller solution for incoming — and increasingly diverse — members.
The new sector would not be allowed a vote in either AC or Planning Advisory Committee matters, but it would have one designated seat for AC meetings and be allowed to offer opinions during the committee’s quarterly hot topic discussions.
The sector would serve as a home for any MISO member that isn’t participating in another sector. Prospective MISO members must declare a sector affiliation before they can join the RTO.
“I think other interest groups, other businesses, other NGOs will come to the table,” Director Nancy Lange told the AC.
The AC began debating the merits of an 11th sector last year when Lignite Energy Council, a North Dakota coal lobbying group, approached MISO about membership. The organization did not fit neatly into any of the existing 10 sectors and was almost relegated to the Environmental and Other Stakeholder Groups sector. But some AC members said it wasn’t appropriate for a sector to contain entities with diametrically opposed views and said the new sector was necessary to allow the Environmental/Other sector to have a singular voice. The Environmental/Other sector would be able to drop its “other” designation if FERC accepts the changes to the TOA.
Environmental/Other sector representative Beth Soholt said that, save for the Energy Storage Association, all other entities in the sector have an environmental focus.
So far, the proposed Affiliate sector seems destined for a fossil-fuel focus — at least at the onset. LEC indicated that it has drummed up interest among other entities interested in joining the new sector, including coal and iron mining organizations, coal trade organization America’s Power and various chambers of commerce.
LEC CEO Jason Bohrer said his organization had been “working on earning a seat at the table for the past 18 months.” He said the board’s decision was “a significant step in this long process.”
“We applaud the work of the MISO Advisory Council, the Board of Directors and MISO staff, as well as our partners like America’s Power, for their support of opening up the regional market planning stakeholder process to more voices and perspectives, which now will include coal producers along with chambers of commerce and other organizations that have strong electricity market interests,” Bohrer said in an email to RTO Insider. “We look forward to providing a strong voice for the coal miners and utilities who provide the electricity that is the ‘always-on’ backbone for the electric grid and the economy in our region.”
Hot Topic Panel Delayed
On the same conference call, the AC postponed the policy discussion portion of its meeting until June.
The committee was supposed to hold a panel-style discussion featuring industry experts as its quarterly hot topic discussion during the March Board Week. The panel was meant to focus on how RTOs deal with resource transition and would have featured one executive apiece from NYISO, CAISO and ERCOT. However, AC leadership said a panel discussion was too difficult to navigate in a teleconference-only format.
The wind and solar industries were disappointed last week that Congress’ massive $2 trillion stimulus bill did not include extensions of the production and investment tax credits.
In a joint letter to Congress, the American Wind Energy Association (AWEA) and the Solar Energy Industries Association (SEIA) said the COVID-19 coronavirus pandemic was causing “delivery delays, necessary employee absences, serious financing concerns, and project cancellations or postponements. This is jeopardizing the jobs of our combined 364,000 workers, threatening to sidetrack tens of billions of dollars in investment.”
President Trump on Friday signed the bill, the largest stimulus legislation in U.S. history, as shelter-in-place rules grind the U.S. economy to a near halt.
The major provisions of the Coronavirus Aid, Relief and Economic Security (CARES) Act (S. 3548) include $1,200 checks for millions of taxpayers “as rapidly as possible”; programs to disburse nearly $900 billion in loans to business impacted by the pandemic; and an expansion unemployment benefits.
AWEA CEO Tom Kiernan said “relief provisions ensuring renewable projects can secure financing and meet safe harbor continuity schedules are critical to preserving a strong domestic clean energy sector. Making these adjustments to existing tax credits would provide the industry the flexibility needed to accommodate COVID-19 delays, without costing the federal government any additional money. … Without assistance, 35,000 American jobs, $43 billion of investment and $8 billion in payments to local communities are at risk.”
President Trump signed the CARES Act on March 27. | The White House
SEIA CEO Abigail Ross Hopper acknowledged that some of the bill’s provisions for individuals and displaced workers would benefit solar industry workers. But she warned that “as a result of this pandemic, the solar industry stands to lose half of our jobs.”
The tax credit extensions were also not part of a separate bill introduced by House Democrats while Senate leaders and Treasury Secretary Steve Mnuchin negotiated over the Republican-crafted CARES Act, though the House bill did include emission limitations for airlines. When Democrats blocked passage of the Senate bill March 22, Majority Leader Mitch McConnell (R-Ky.) the next day falsely accused them of holding up the bill over the extensions and emission limits.
“Democrats won’t let us fund hospitals or save small businesses unless they get to dust off the Green New Deal,” McConnell said. “They’re continuing to hold up emergency measures over tax cuts for solar panels.”
In truth, McConnell was outraged by Democrats blocking a procedural motion on the bill after he had rallied his caucus members to bite their tongues and pass a House Democrat-crafted bill the week before as an initial response to the crisis. Minority Leader Chuck Schumer (D-N.Y.) and his caucus were likewise peeved that Republicans had included a $500 billion fund in the CARES Act to bail out corporations harmed by the crisis without any oversight provisions. The partisan rancor led to a rare, actual debate on the Senate floor, between McConnell and Sen. Joe Manchin (D-W.Va.).
After two days of negotiations, however, the Senate ended up passing the bill early Wednesday morning, 96-0. The House of Representatives followed on Friday, passing the bill by voice vote, rather than unanimous consent off the floor as Speaker Nancy Pelosi (D-Calif.) and Minority Leader Kevin McCarthy (R-Calif.) had wanted, after Rep. Thomas Massie (R-Ky.) indicated he would object and attempt to force members to record their votes.
This forced 218 members of the House to travel back to D.C., some of whom drove to avoid flying, to assemble a quorum to block Massie’s motion — this despite the Centers for Disease Control and Prevention’s advisory not to have 10 or more people gathered in one place.
Trump signed the bill into law hours after the House passed it.
