Page 1125 – RTO Insider

July 27, 2020

NE Women Push for Racial, Environmental Justice

A panel of women discussed promoting equitable access to clean energy and a sustainable environment Thursday at the annual summer meeting of New England Women in Energy and the Environment (NEWIEE). More than 200 women gathered in cyberspace for the event.

“Of course, I regret that we can’t meet in person as in prior years, but it’s wonderful to have so many participants at today’s discussion of an important topic,” said NEWIEE President Jacquie Ashmore, director of Boston University’s Institute for Sustainable Energy.

Women Environmental Justice — Jacquie Ashmore, Boston University | *NEWIEE*

“A year ago, the NEWIEE board of directors chose increasing racial diversity in the NEWIEE community, and ultimately in the New England energy and environment industries more broadly, as our top priority,” Ashmore said. “Today, almost two months after the murder of George Floyd, NEWIEE has redoubled its commitment to addressing systemic racism and its impacts in our community.”

Following is some of what we heard at the event.

Turning Point

“I actually think the last several months will prove to be a turning point in our efforts around climate justice and environmental justice, and indeed, in the overall thrust and trajectory of the climate and clean-energy movement,” said FirstLight Power CEO Alicia Barton, who previously served as CEO of the New York State Energy Research and Development Authority and the Massachusetts Clean Energy Center.

The intersection of the COVID-19 pandemic, calls for racial justice and the ongoing climate crisis have laid bare the inequalities that result and continue to result in unfair and unjust outcomes for many people, Barton said.

“Now is the time to say that enough is enough,” she said.

Besides reforming the criminal justice system, Barton recommended that the region reconsider its approach to energy and environmental policy.

“Environmental justice, racial justice and equitable access to clean energy are topics that have been ancillary to the overall conversation rather than a driver of the conversation, but I do think that with recent events and because of conversations like the one we’re having today, that is changing and will change going forward,” Barton said.

What’s at stake in this conversation? she asked.

“First, we have known for a long time that pollution is not equitably distributed in the United States,” Barton said. “African-Americans, although they’re a minority of the U.S. population, are 75% more likely than white Americans to live in a community that’s adjacent to sources of pollution.”

Second, air pollution directly increases a person’s likelihood of getting severely sick or dying from COVID-19, she said.

Alicia Barton, FirstLight Power | *NEWIEE*

“A recent study out of Harvard found that someone who lived in an area of high particulate matter pollution is 15% more likely to die from COVID-19 than an individual who has not been exposed historically to that pollution,” Barton said. “Our energy choices are creating lethally unfair outcomes for many Americans, and we have to do better moving forward.”

Barton noted that New York’s Climate Leadership and Community Protection Act (CLCPA) passed last July “was the first major climate bill in the country to put climate, justice and environmental justice front and center. It requires under the law that at least 35% of the benefits of state investments in climate solutions go directly to disadvantaged communities.”

She said she was pleased to see her former colleagues at NYSERDA issue the biggest clean energy solicitation in U.S. history on July 21.

“If you didn’t notice, [as] part of that effort, the request for proposals specifically requires bidders to prioritize job-creation opportunities for disadvantaged populations. That’s really transformative and something that should be replicated elsewhere,” Barton said. (See related story, NY Announces 4 GW in Clean Energy RFPs.)

She also said that NYSERDA for several years has been including local content and labor provisions in the state’s renewable energy contracts, such as requiring developers to pay workers the prevailing wage. (See New York Plans for Wind Energy, Related Jobs.)

The CLCPA set a target of 6,000 MW of solar by 2025, “and earlier this year, the Public Service Commission approved NYSERDA’s request to increase funding for low-income access to solar and disadvantaged community access to solar 20-fold from what we had done historically,” Barton said.

The NY-Sun initiative was part of the Clean Energy Fund created by the commission in 2016, which established utility collections from ratepayers to support the overall $960 million funding requirement. (See NYPSC Launches Grid Study, Extends Solar Funding.)

Environmental Warriors

Nancy Seidman, senior adviser at the Regulatory Assistance Project, introduced and moderated the panel. Seidman was a co-author of a study released in April, “Energy Infrastructure: Sources of Inequities and Policy Solutions for Improving Community Health and Wellbeing.”

“The report documents current inequities in our energy infrastructure: processes, structures and policies that affect low-income and communities of color, including tribes, with a focus on rural areas,” Seidman said.

For example, the report looks at arrearage-management programs to prevent cutoffs in utility service, which is especially important because of job losses from the coronavirus pandemic, she said.

“The timing for releasing our report was good in some respects,” Seidman said. “With COVID and the social unrest of the past few months, I and likely you have all been confronting how inequitable the U.S. really is.”

Mariella Puerto is co-director for climate at the Barr Foundation in Boston, which grants $95 million per year to programs in the arts, climate and education.

“The choices I’ve made have been grounded in equity and justice from the beginning, which was a combination of my love of nature and the environment while I was growing up in Malaysia,” Puerto said.

Training as a police cadet in the rainforests of Malaysia left her awestruck at the jungle’s intense beauty. And a childhood friend’s death from exposure to pesticides pushed her to protect the environment, she said.

“This really opened my eyes to the dangers of toxic chemicals and environmental injustices,” Puerto said. “I knew early on that I wanted to be an environmental warrior, fighting for people and the planet.”

Shalanda Baker, professor of law, public policy and urban affairs at the Northeastern University School of Law and co-director of the Initiative for Energy Justice, is author of “Revolutionary Power: An Activist’s Guide to the Energy Transition,” to be published in January by Island Press.

Baker works with other people of color to make sure that energy policy honors equity and social justice.

“In many ways, we are beginning to repeat the mistakes of the fossil fuel system in transitioning to clean energy,” Baker said.

In Oaxaca, Mexico, for example, Baker met indigenous peoples fighting against large-scale wind energy. The more she learned about those struggles, the more she realized that people were facing displacement, unfair contracts and unemployment from renewable energy development.

Later, while teaching law at the University of Hawai’i at Mānoa, “I had a front-row seat to that state’s energy transition. The state had just adopted a 100% renewable portfolio standard [and] was experimenting with community solar. We had maxed out rooftop solar in the state with the highest penetration rates in the country at 17%, and whenever I raised the question of equity or including voices of folks in the community in the energy policy conversation, I got looked at like I had two heads,” Baker said.

She brought the conversation back home by referring to New England having a number of leaders on the American Council for an Energy Efficient Economy scorecard for states.

“Massachusetts [is] No. 1 on energy efficiency, but I guess the dirty little secret about the Massachusetts efficiency programs is that there’s a lot of room for improvement on serving low- and moderate-income renters, as well as people who are not English speakers,” Baker said. “There’s a whole swath of the population that we are not serving.”

Shalanda Baker, Northeastern University | <em>NEWIEE</em> — Shubhada Kambli, city of Hartford | *NEWIEE*

Shubhada Kambli, sustainability coordinator at the city of Hartford’s Office of Sustainability, agreed with Baker, saying, “Our community is majority black and brown, with about 30% of residents in poverty. We have energy burdens in some households of about 33%, which means, basically, that some of our residents are paying up to a third of their household income towards energy bills. … For reference, you may know that above 12% is considered high.”

The Hartford city government looks at climate action in terms of social benefits, Kambli said.

She cited the Connecticut Green Bank as a leader in innovation. She also touted PosiGen Solar, which operates in Connecticut, New Jersey and Louisiana. “They are specifically focused on increasing access to solar in low- and moderate-income communities, and they have eliminated the credit score as a gatekeeping tool to determine what types of participants should be partnered with in solar development,” Kambli said.

July 26, 2020March 13, 2024

Hybrid Resource Developers Ask for Uniform Rules

RTOs will need uniform interconnection processes if hybrid and co-located resources are to provide the flexible, cost-effective service its proponents say they will.

That was the consensus among developers during one of four virtual panels FERC staff facilitated last week as part of a technical conference on such resources (AD20-9).

“The types of supply resources that participate in wholesale electricity markets in the U.S., and the technologies they use, are evolving dramatically,” Adam Stern, research and analytics manager for the American Wind Energy Association, said during Thursday’s panels. “As technology evolves, so too must the policies and procedures of wholesale electricity market operators to effectively integrate new resource technologies and fully realize the benefits they provide.”

According to a Lawrence Berkeley National Laboratory study, 125 hybrid or co-located projects of various configurations — wind and storage, solar and storage, fossil and storage, wind and fossil among wind and solar, wind and fossil, solar and fossil — were providing 13.4 GW of generating capacity and almost 1 GW of storage capacity by the end of 2019.

Grid operators’ interconnection queues included another 50 GW of standalone storage and 113 GW of storage paired with wind and solar at the end of last year. Much of that proposed capacity can be found in the West, thanks to state renewable portfolio standards and clean-energy legislation.

CAISO’s Deb LeVine, director of infrastructure contracts and management, said grid operators are facing a “tsunamic wave” of storage.

The ISO has determined storage can use existing processes to interconnect to the grid,” LeVine said. “It can apply through the existing interconnection process, or by pairing the energy storage with an existing resource and using [our] modification process.”

Thanks to that process, existing resources in CAISO can add storage in some circumstances and avoid being sent back to the end of the queue or restudied. LeVine said the ISO’s interconnection study process generally takes two years, but a modification can be done in about three months.

“CAISO been working on this for many years. Some are just catching up,” said Patrick Tan, senior director of transmission and interconnection for 8minute Solar Energy. “Demand [for hybrid resources] has been increasing over the last two years, faster than we can get through the interconnection process. [That’s] the bottleneck. Developers wish we could get our generation agreement in a couple of months and change anything we want to maximize customer demands.”

Stern pointed out that FERC Order 845, designed to increase the interconnection process’s transparency and timeliness, allowed for the addition of “permissible technological advancements” to an interconnection customer’s requested service. (See FERC Order Seeks to Reduce Time, Uncertainty on Interconnections.)

“However, it is not clear whether the addition of energy storage to an existing renewable interconnection request would constitute a ‘permissible technological advancement’ or a ‘material modification,’” he said. “This uncertainty may prevent the potential increase in dispatchability and flexibility in projects [that] are already enqueued.”

The modification process was one of five suggested areas of focus for FERC, Stern said. He urged the commission to explore four other issues regarding interconnecting hybrid and co-located resources, all of which align with Order 845’s reforms:

Interconnection agreements: Direct all RTOs to allow all of the hybrid resources’ components to execute a single interconnection agreement. Not all grid operators allow single agreements even if the resource will be operated, bid and dispatched as a single resource.
Study requirements: Because RTOs have “widely varying methods” for studying hybrid resources, particular interconnection study assumptions “directly affect the need for network upgrades” and can “significantly affect” hybrid projects’ viability.
Injection points: RTOs have not adopted a consistent methodology for considering the capacity of hybrid resource components or how a storage component could serve to limit a particular resource’s maximum injection.
Surplus capacity: Use Order 845’s “surplus interconnection service,” the portion of interconnection capacity not being fully used, to add energy storage resources to existing renewable projects. That would create a pathway for new hybrid and co-located resources without requiring new upgrades, Stern said.

LeVine threw a note of caution into the discussion.

“We need to get some more operations under our belt before we start changing the rules,” she said.

Panelists: Technology’s Changes will Continue

The technical conference began with FERC Chairman Neil Chatterjee encouraging participants to “get down into the weeds” — they did — and Commissioner Richard Glick asking whether grid operators’ market rules are acting as barriers and how they can be eliminated.

“This is the most important step the commission can take to ensure a smooth transition to a clean-energy future,” Chatterjee said. “What can we do to accommodate the next wave of resources?”

Panelists suggested addressing market mitigation and ensuring the correct participation model. There are two primary configurations for hybrids: a 1R configuration, in which storage and generation are co-controlled and share a resource ID, and 2R, in which storage and generation are co-located as two independent resource IDs.

“All RTOs should allow hybrid resources, if they wish to do so, to use an existing market participation model,” Mark Ahlstrom, president of the Energy Systems Integration Group and vice president of renewable energy policy for NextEra Energy Resources, said in his written testimony. “Just as a conventional plant provides its parameters for start-up time and minimum run time, a hybrid could provide its own parameters. This may not be the optimal way to extract the full value from a hybrid resource, but I see no logical reason why we would prevent a hybrid that can emulate a gas plant (but with no start-up cost, no start-up time, no minimum run time and a faster ramp rate) from participating in this way.”

Jason Burwen, vice president of policy for the Energy Storage Association, said one of the keys will be the “extent of response for the efficient use of hybrid resources” as the world continues to change around the grid.

“It’s worth considering [that] we are focusing on today’s technology and today’s offers,” he said. “The future will continue to come at us. We would do well to keep other technologies in mind. Removing barriers is going to be a continuing game of making sure [the grid] is keeping up with the technologies.”

Berkeley Lab researcher Will Gorman said hybrid technology costs’ “dramatic decline” have led to the resources’ popularity. He said costs fell from $40 to $70/MWh in 2017 to $20 to $30/MWh last year.

“Solar is now seen as the cheapest form of generation in many parts of the country. We’re seeing that many utilities are asking for hybrids,” said John Sterling, First Solar’s director of market and policy affairs.

He said two “interesting things” are happening. “We’re hearing a lot of questions about renewables needing to be dispatchable, so how do we encourage that activity? The other thing we’re getting is how storage can be coupled with solar projects … and shift [its energy] to more valuable times of the day.”

Sterling encouraged FERC not to limit itself to think about just hybrid resources.

“All inverter-based resources have the capability to provide [flexibility],” he said. “We should be thinking about in 10 years, when the grid is fully hybridized, about what we want to be asking these resources to do.”

Increasing Complexity

A panel discussion in the afternoon revealed that needed market rule changes will be even more complex than those developed in response to FERC Order 841, the commission’s landmark rulemaking to remove market barriers for energy storage resources.

Ted Ko, vice president of policy and regulatory affairs at storage systems developer Stem, said Order 841’s “problem space” was “relatively small” compared with integrating hybrids because it dealt only with standalone storage resources in the three “domains” of transmission, distribution and behind-the-meter, resulting in just three “major configurations” that RTO market models had to accommodate.

Hybrids add new dimensions to that problem space through a larger number of potential resource configurations within the same three domains, Ko said.

“Now you have one resource versus two resources in the wholesale market — what I’m going to call ‘1R’ versus ‘2R’ — and then you have AC- versus DC-coupled in the solar-storage space.”

That leaves market designers to consider four different options for storage hybrids — “1R AC, 1R DC, 2R AC, 2R DC” — across each of the three domains, he said.

“Of those 12 different configurations, which one of them does the market design need to accommodate to provide a participation path for all of them? And then in each of those configurations, which of the market services … do those configurations need to be able to access?” Ko asked. “In the [Order] 841 case, the answers to those questions were ‘everything.’ … For hybrid, it should be the same ultimate answer, but because of the constraints of the technologies of the different wholesale markets and the software … it may take time to enable all of those.”

Rachel McMahon, senior manager of public policy at Sunrun, said her comments during the panel would focus “entirely” on enabling aggregations of BTM residential solar-plus-storage hybrids to provide local resource adequacy capacity and other services, particularly for the CAISO grid.

“The challenge before us is several-fold,” she said. “First, we need a consistent and equitable capacity valuation methodology … that accounts for the full value of the resources.

“Second, clear and consistent workable rules are necessary to ensure participation … of many, many small systems. So, from the perspective of providing wholesale services, such as energy, capacity and reliability services, it requires a different perspective than ISOs and public utilities typically have,” McMahon said.

She said Sunrun’s resource aggregations do not have a “clear, easy or economically viable path to provide” capacity or energy services in CAISO but do currently participate in the market under demand response rules, which prevent those aggregations from injecting power back into the system.

No Time to Wait

“As an industry, we can’t wait to develop new rules to facilitate hybrid and co-located resources … onto our grid,” said Gabe Murtagh, senior infrastructure and regulatory policy developer at CAISO. “In California, these resources are coming very quickly, and they’ll be on our grid very soon, and we need to have the right tools in place to be able to accommodate them when they get onto our market.”

Some of the urgency stems from the fact that state environmental regulations will force a large number of gas-fired generators to retire over the next three years.

“This means that we need the proper tools and infrastructure in order to manage and operate these [new] resources efficiently and effectively,” Murtagh said.

CAISO’s approach distinguishes between market models for co-located and hybrid resources. Co-located resources will consist of multiple resources modeled behind a single interconnection point, each subject to its own bid curves and market awards. True hybrids would have a single resource ID, bid curve and a single market award.

“The ISO would be seeing one resource behind one constraint, and we would be giving it one set of dispatch instructions,” Murtagh said.

RTOs and ISOs should implement both models and adapt rules as needed as technologies evolve, he said. CAISO’s Board of Governors last week approved Tariff revisions that would accommodate market participation of co-located resources. A similar proposal for hybrid resources is pending next year. (See related story, CAISO Adopts Co-located Resources Plan.)

NYISO Director of Market Design Mike DeSocio said about 700 MW of solar, wind and storage resources in the ISO’s queue could qualify as co-located resources and that his team is currently developing a proposal to accommodate such resources, with plans to develop an aggregated resources option next year.

But DeSocio cautioned that reliability must be a key factor in model design.

“We see ranges of storage-generation ratios ranging from 5 to 50%, and this difference in storage capability among co-located projects creates different operational scenarios where reliability implications of those scenarios must be considered,” DeSocio said.

“NYISO believes that it is important that the participation models account for the operational capabilities of the resource and enforce the reliability rules,” he said. “The NYISO, for example, must comply with reliability rules from three reliability organizations: NERC, Northeast Power Coordinating Council and New York State Reliability Council. This means that rules that may work in other regions may not adequately address rules that the NYISO is responsible to enforce.”

‘Wide Open’

From PJM’s perspective, the markets are already “wide open” to hybrid participation, said Andrew Levitt, the RTO’s senior business solution architect.

“Hybrids we see in the queue are different from the types of hybrids we’ve seen in the past,” which were located at the same point but typically configured to work independently from each other, he said.

New hybrids use storage to firm up the output of wind or solar during down times and charge during periods of surplus generation. That creates a “significant interaction” between the resources that is best managed by the plant operator — including managing state-of-charge, Levitt said.

“And it’s clear to us that the most straightforward way to do that is to model all those units as a single entity in the market so that it’s totally opaque to the grid operator,” he said.

PJM sees “a lot of potential benefits” from hybrid configurations because the storage component “can increase the resource adequacy of the variable energy component and it can actually support that resource adequacy value, which might decline in time as you see greater deployment of renewables in PJM.”

From a market perspective, “it really facilitates the flexibility that [a] resource needs [in order] to offer significant amounts of reserves to the system and also offers value in giving that resource the ability to produce more output at times of higher value when prices are higher,” Levitt said. Hybrid configurations also enable variable resources to relieve local reliability issues in ways they cannot without the addition of storage, he noted.

Levitt acknowledged McMahon’s concerns regarding market access for BTM aggregations, saying the treatment of wholesale distributed energy resources is still “a tough nut to crack.” But he expressed confidence that the sector is doing a “great job” addressing the problem, including ongoing DER efforts in CAISO and NYISO along with FERC’s outstanding Notice of Proposed Rulemaking on the issue.

FERC’s Matt McWhorter asked whether hybrid resources should be able to participate in markets as each of their technology types or just as a single resource.

“I think we need robust hybrid participation models [that] can simultaneously allow these resources to either be participating in the market as a separate resource or as a single resource, and I do believe that right now we don’t have such robust hybrid participation models throughout the nation,” said Mike Tabrizi, vice president and principal engineer at DNV GL.

Tabrizi advocated for a market framework that “relies on the pricing node to be able to direct asset owners and asset operators to make the decisions” about how to offer into the market.

“At the end of the day, asset owners and operators have better visibility on their assets, and so I think they’re in the best position to make financial decisions on how they want to operate their assets; but at the same time, we need to have some sort of improved centralized strategies to be able to kind of intervene when needed to [ensure] grid reliability,” Tabrizi said.

“We tend to agree there needs to be some option in models and having that capability,” DeSocio said, cautioning that markets must avoid providing too much flexibility for hybrids.

“When you think about capacity, capacity’s a future call on energy, so you need to be able to provide energy in order to provide capacity; the same is true for reserves. So, there are some linkages that we need to be careful and acknowledge before we just allow the a la carte [idea of] picking what service I want to provide at which time,” DeSocio said.

‘All Theoretical’

In a final panel on calculating the capacity value of hybrid resources in organized markets, Rob Gramlich, president of Grid Strategies, called for RTOs to decrease their reliance on capacity markets.

“The whole way of thinking about capacity markets may have to change, especially for these incredibly and highly controllable resources,” Gramlich said. “What really matters is not the crude estimate one makes in a capacity valuation three years ahead of time, but the accuracy of the real-time price signals by time, location and reliability service that are strictly necessary to achieve efficient and reliable operation when you get to real time. There’s no replacement for those efficient price signals.

“If you’re going to have a capacity market,” Gramlich said, the “most appropriate” methodology for estimating capacity valuations for hybrids is the effective load-carrying capability (ELCC) methodology, where capacity credits are awarded based on the ability of a resource to consistently deliver energy during periods of high demand.

Kelli Joseph, director of markets and regulatory policy for Clearway Energy Group, pointed to the challenge of pondering capacity valuations for hybrid resources when “we don’t even know yet what the full participation models are.”

Joseph questioned whether existing reliability metrics for measuring capacity — such as ELCC and loss-of-load expectation (LOLE) — will remain relevant in a system with increasing renewables. Peak periods are becoming much narrower, reliability events are shorter but coming more often, and peak periods — as measured by net load — are shifting from the daytime to morning and evening, she said.

NERC “has started to say that we really ought to be considering flexibility metrics in our planning models, but they did point out that if you actually try to incorporate these flexibility metrics, it’s going to be a really significant challenge,” Joseph said.

Erik Ela, senior technical leader with the Electric Power Research Institute, said the peak load period is no longer necessarily the most critical period for assessing capacity value.

“In reality, the real time where we have situations where there might be load shedding or large frequency deviations or other emergency criteria are happening because of other conditions, whether that’s outages or massive forecast errors,” Ela said.

Some resources may be better equipped to respond to those events than others, but that’s not currently captured in capacity valuation, he said.

“That’s very hard to quantify because it’s different from where we typically do our calculations for capacity and resource adequacy. … Extending that to standalone storage and hybrids just emphasizes that because the flexibility could be something that could avoid the potential situations that you might be planning for,” Ela said.

He offered another key point specific to estimating valuations for hybrid resources: “There’s not really any data. We don’t know how hybrid resources contribute, so it’s all theoretical.”

July 26, 2020

FERC Gets More Time on Tolling Orders

The D.C. Circuit Court of Appeals on Thursday granted FERC’s request for a delay in responding to the court’s June 30 order barring the commission’s use of tolling orders to delay judicial review of its rulings under the Natural Gas Act.

The court ordered its clerk to withhold issuance of the mandate through Oct. 5 to give the commission time to decide whether to seek a Supreme Court review. If the commission does seek a writ of certiorari from the high court, the mandate will not be issued until the court rules on the request.

FERC tolling orders — E. Barrett Prettyman Federal Courthouse, home of the D.C. Circuit Court of Appeals | *HSU Builders*

FERC’s motion said it needed time to consider its response to the order overturning “the commission’s decades-old, judicially sanctioned rehearing process.” The commission routinely issues tolling orders to buy itself more time to consider rehearing requests because both the NGA and the Federal Power Act deem such requests denied if it does not act on them within 30 days.

The D.C. Circuit’s 10-1 ruling concluded that FERC’s use of tolling orders to stop the 30-day clock for acting on rehearing requests improperly prevents litigants from appealing commission rulings even as it allows gas pipeline companies to seize property under eminent domain and begin construction (Allegheny Defense Project, et al. v. FERC, 17-1098).

The D.C. Circuit said it had erred since 1969 when it first ruled that issuing a tolling order meant that FERC had “acted upon” the request under the language of the NGA and that parties must wait until the commission’s review of the request is complete before seeking judicial relief. (See D.C. Circuit Rejects FERC on Tolling Orders.)

July 26, 2020

MISO Anticipates High Energy Prices at 50% Renewables

MISO staff last week reiterated that they can likely reliably operate the grid with a 50% renewable energy mix but warned that variables like generation retirements, fuel prices and solar siting could send energy prices soaring at certain times.

The findings were the latest in the grid operator’s ongoing, multiphase Renewable Integration Impact Assessment (RIIA). Staff’s findings focused on MISO’s ability to provide energy during all operating hours throughout the year as renewable penetration increases.

During a virtual workshop Friday, MISO Senior Policy Studies Planner Chen-Hao Tsai said that for the most part, the RTO can operate the system reliably with 50% renewable penetration, but only if it has the dramatic transmission expansion it identified earlier in the study. (See MISO Renewable Study Shows More Tx, Tech Needed.)

MISO energy prices renewables — Chen-Hao Tsai, MISO | *University of Texas at Austin*

Tsai said escalating fuel prices, increases in solar generation and the pace of generation retirements play pivotal roles and could stand in the way of a 50% systemwide renewable portfolio. Any of those variables alone could set off a rise in LMPs, MISO said.

At a 50% penetration, MISO said prices predictably spike in the evening, when peaking units — mostly combined cycle gas units — step in to fill ramping needs. However, Tsai said that if natural gas prices more than double from about $2.50/MMBtu to about $5.60/MMBtu, more coal units will be used for ramping needs, driving up LMPs.

Multiple stakeholders observed that steady, lumbering coal units aren’t designed to provide quick on-and-off daily ramping. Some said the cycling MISO contemplated in the study would cause wear and tear on coal plants and possibly lead to more forced outages.

Other stakeholders pointed out that MISO is still leaving storage out of the study equation, ignoring the technology’s capability to dull ramping needs. Tsai said the RTO plans to reveal new study results with storage considerations in late August or early September.

A spate of thermal unit retirements might also threaten the reliability of a 50% renewable fleet, Tsai said. High retirements paired with a 50% renewable fleet also produce high prices in the evening, he said, with July evening hours yielding systemwide prices as high as $300/MWh.

“In many cases, many peaker units received over $1,000/MWh,” Tsai said. “We still make the penetration target, but we pay high system prices.”

On the other hand, the study indicates that increased solar capacity expected in MISO South would drop LMPs by midday and make the region an exporter to the rest of the RTO’s footprint during those hours. The trend also leads to significant middle-of-the-day solar curtailment during spring and fall months.

Tsai said the solar buildout “creates a new stressed operating point during the shoulder load periods, which may need further review.”

MISO’s earlier RIIA results, released in June, predicted dramatic solar generation expansion. (See Study Foresees MISO Solar Eclipsing Wind.)

The RTO is also accounting for hundreds of gigawatts of renewable energy in its 20-year transmission planning. It foresees as much as 137 GW of renewables added and up to 114.5 GW in generation retirements by 2040. (See MISO Foresees Massive Shift to Renewables by 2040.)

Again, stakeholders said MISO should investigate how storage devices could soak up excess solar capacity. Some also asked the RTO to revisit the transmission needs it identified late last year to accommodate a 50% renewable mix. Tsai said the study’s transmission expansion portion is too involved and time-consuming to redo.

MISO plans to wrap up the RIIA study by the end of the year.

July 26, 2020January 18, 2024

SPP Briefs: Week of July 20, 2020

SPP said Wednesday that its Western Energy Imbalance Service (WEIS) market is at risk of falling behind schedule because it is still waiting on FERC approval of the market’s standalone Tariff.

The RTO had asked for a July 21 effective date, but that deadline passed the day before the Western Markets Executive Committee met virtually. FERC in April issued a deficiency letter, asking for more information on 14 issues. SPP filed a response in May.

“Without having any sort of regulatory certainty, we have to recognize that that is a risk to the program,” David Kelley, SPP’s director of seams and market design, told the committee. “There are a number of things waiting to move forward, pending receipt of the FERC order. There’s still a lot hinging on us getting that order.”

Kelley said the rest of SPP’s work to stand up its WEIS market by February 2021 is on schedule and “going according to plan.” Market trials are scheduled to start in August.

The WEIS market is modeled on the Energy Imbalance Market that it operated from 2007 to 2014. It has attracted eight participants. (See SPP Board OKs $9.5M to Build Western EIS Market.)

SPP has proposed a 22-cent/MWh net energy-for-load rate for the first year of market operations, based on annual $5 million operating costs, and said initial implementation costs will total $9.5 million. The commission asked the RTO to describe what costs are included in the implementation costs and to explain the ongoing administrative costs that it intends to recover through the WEIS rate (ER20-1059, ER20-1060).

Colorado utilities Xcel Energy-Colorado, Colorado Springs Utilities, Platte River Power Authority and Black Hills Energy have protested the WEIS filings. They contend an existing and neighboring joint dispatch agreement could be impaired by the WEIS market dispatch and that its market flows may harm the Western Interconnection Unscheduled Flow Mitigation Plan. They also contend SPP’s proposal disregards the Northwest Power Pool’s activities and could island Xcel’s balancing authority area from the NWPP reserve sharing group.

The Colorado utilities have all signed up for CAISO’s Western Energy Imbalance Market.

Advance Power Alliance Now an SPP Member

SPP said last week that the Advanced Power Alliance has become its first alternative power/public interest member, raising its membership count to 102. The group is an industry trade association supporting renewable generation and energy storage in SPP and ERCOT.

APA joined SPP following FERC-directed changes to the RTO’s exit fee after a Federal Power Act Section 206 filing by the group and the American Wind Energy Association in 2018. The commission ordered the RTO to eliminate its exit fee for its non-transmission-owning and non-load-serving members. SPP members pay an annual $6,000 membership fee, but exit fees for non-load-serving entities could cost $600,000 under the old format. (See FERC Tells SPP to End Exit Fee for Non-TOs.)

APA CEO Jeff Clark said the organization is “excited” about the opportunity to have “a more significant impact on the policies discussed and adopted in the RTO.” As a member, APA can now vote and join stakeholder groups.

“The SPP is home to some of the best renewable resources in the world. … The growth of clean, renewable generation in the region has been rapid,” Clark said in a statement.

MMU Releases Spring Quarterly Report

SPP’s average hourly load this spring was down 6% from last year, according to the Market Monitoring Unit’s spring S tate of the M arket report.

The report, which covers March through May, attributed the decrease to a drop in demand because of the COVID-19 pandemic and to fewer heating and cooling days.

The average day-ahead price was $14.03/MWh, and the average real-time price was $12.58/MWh, down 41% and 44%, respectively, from last spring. The April day-ahead price of $14.03/MWh and real-time price of $10.43/MWh were the lowest monthly average prices since the Integrated Marketplace went online in 2014.

Coal-fired generation’s share of the fuel mix again fell, down from 32% last spring to 24% this year. Gas-fired generation and wind energy picked up the slack.

The report’s special issues section discusses the impact of a 2018 FERC order that resulted in a major-maintenance cost component for mitigated offers, addressing market participants’ concerns about recovering costs associated with mitigated resources (ER18-1632). (See FERC Accepts SPP Proposal on Maintenance Costs in Offers.)

Of the 491 thermal units eligible for major-maintenance adders, 113 have been approved, the report says.

The MMU will host a webinar Friday to discuss the report and answer questions.

New Wind Mark of 18,343 MW

SPP said it upped its wind-peak record to 18,343 MW on July 17, breaking the previous mark of 18,259 MW established Jan. 8. The record came at 11:13 p.m.

October Board, MOPC Meetings Now Virtual

SPP’s October quarterly governance meetings will be virtual only. The meetings were originally scheduled to be held at its corporate headquarters in Little Rock, Ark., during the weeks of Oct. 12 and Oct. 26.

The Board of Directors, Members Committee, Markets and Operations Policy Committee, Regional State Committee, Strategic Planning Committee and most other governance groups have not met in person since January.

SPP has discussed a mix of in-person and virtual meetings in 2021. Under that format, the MOPC would meet in person and the board virtually during one quarter, and then switch for the following quarter.

July 26, 2020

NextEra Dips its Toe in Hydrogen Energy

NextEra Energy continues to stake out a position as a clean-energy leader. Already the self-proclaimed “world’s largest generator of renewable energy” with more than 17 GW of wind and solar generation in North America, the company is now dabbling in hydrogen energy.

During the company’s second-quarter earnings call with financial analysts Friday, senior executives said that they are taking a “toe-in-the-water” approach, as they did with solar and battery storage, to green hydrogen. NextEra’s Florida Power & Light plans to propose a $65 million pilot project that will use “clipped,” or unneeded, solar energy to produce 100% green hydrogen through a 20-MW electrolysis system.

The hydrogen can be used to replace some natural gas consumed at one of the three turbines at the Okeechobee Clean Energy Center. The project is expected to be online in 2023.

“We remain confident as ever that wind, solar and battery storage will be hugely disruptive to the country’s existing generation fleet,” NextEra CFO Rebecca Kujawa said. “However, to achieve an emissions-free future, we believe that other technologies will be necessary, and we are particularly excited about the long-term potential of hydrogen.”

NextEra hydrogen — Florida Power & Light’s Okeechobee Clean Energy Center is expected to host NextEra’s green hydrogen pilot project. | *FPL*

Kujawa said the Juno Beach, Fla.-based company will continue to evaluate other potential hydrogen opportunities across its businesses, though she said the near-term investments will be small when compared with NextEra’s overall capital program.

The company says it has already invested more than $20 billion in renewable technologies. Its NextEra Energy Resources subsidiary has a backlog of 14.4 GW of renewables projects — more, it said, than the operating wind and solar portfolios of all but two other companies in the world.

“There’s clearly an opportunity … to displace the last 10% of the carbon emissions out of the electric sector by manufacturing hydrogen with renewables [in five to 10 years],” CEO Jim Robo said. “This is going to drive gigawatts and gigawatts and gigawatts and gigawatts of renewable demand in this country. There is no one better positioned than us to take advantage of that. This is a big strategic initiative for us, and we’re going to drive it, and it’s going to be very important for this company.”

Robo also told analysts NextEra remains very interested in Santee Cooper, South Carolina’s troubled utility. (See NextEra Plans to Combine FPL, Gulf Power Utilities.)

“We continue to be focused on trying to make that happen,” he said. “I continue to believe that there’s not a utility in the country that we couldn’t run more efficiently and better for customers.”

NextEra reported second-quarter net income of $1.275 billion ($2.59/share), up from $1.234 billion ($2.56/share) a year ago. The company’s adjusted earnings came in $2.61/share, exceeding the Zacks Investment Research consensus estimate of $2.50/share.

The company’s share price gained $2.32 after opening at $282.88 on Friday, but it slid along with the rest of the market during the day. It closed at $280.25, a 79-cent drop from the previous close.

July 24, 2020

Consultant Tells MISO Microcities are Wave of the Future

If one business consultant’s vision proves correct, MISO stakeholders learned Tuesday, future neighborhoods will be self-contained developments with their own power sources.

Speaking at MISO’s July Informational Forum, Josh Hodge, CFO of Peoria, Ill.-based Dukes Business Consulting, said zero-carbon-footprint microcities independent of the grid are a possibility. He said the future could lead to vertical gardens on city blocks and parking garages with solar canopies and car-charging stations.

Hodge said microcities offer a sustainable model that can tackle the affordable housing crisis and cities’ “food deserts”: urban areas that lack easy access to fresh and nutritious food.

He said the developments would include hybrid, solar-and-storage resources. The net-zero electricity use could mean residents won’t have electricity bills.

“Massachusetts and California already require solar installations to be coupled with storage, and we expect to see this trend to spread,” Hodge said.

MISO microcities — EverForce Energy’s Magnetic Transducer Generator | *EverForce Energy*

EverForce Energy’s new Magnetic Transducer Generator stands to be a gamechanger for microcities, he said. Hodge said the technology can produce continuous energy without a fuel source, with one 5-MW generator providing uninterrupted, clean energy for roughly 1,000 homes for more than 20 years.

“And this is all with minimal maintenance and minimal impact on the environment,” he said.

Hodge said microcities can “supply and manage their own energy needs, and only connect to the grid to sell excess energy.”

“During emergencies, they could disconnect from the grid to protect themselves or the larger grid,” he said.

Hodge acknowledged microgrids will also cut the need for new generation and transmission and could draw customers away from utilities. While that may be bad news for utilities, he said some could make lemonade from lemons and embrace the increased reactive power and frequency and voltage regulation.

He also said new monitoring technologies on distribution systems could allow utilities to use microgrids’ stored supply when necessary.

July 24, 2020

MISO Members Make 1st Rules on Sectors

MISO’s Advisory Committee members this week adopted the first set of standards for creating and joining stakeholder sectors.

During a virtual meeting Wednesday, committee members adopted new rules that make MISO or its Board of Directors the mediator and final arbiter when a new entity is refused entry to a sector.

“This will effectively eliminate a sector’s ability to ‘veto’ an organization’s request to join that sector,” the AC said.

The rules also mean that sectors must establish their criteria for joining and post them on the public MISO website.

“Sectors are encouraged to be as inclusive as possible, which ideally ensures a new entity can find a fit within the existing set of sectors except in the rarest of circumstances,” the AC wrote.

The committee this spring created a miscellaneous Affiliate sector to serve as a catch-all for new, hard-to-pin-down members. The move prompted the board to charge the committee with making rules on how new members join sectors and how new sectors are created. (See Board OKs 11th MISO Sector, Orders Redesign.)

In its new rules, the AC called new sector creation a “last resort” and said that a group of organizations wishing to form a new sector must make their case in writing and boast documented participation in MISO’s stakeholder committees. While the committee can recommend a new sector’s creation, the board will have the final say.

MISO sector rules — North Dakota PSC Commissioner Julie Fedorchak | © *RTO Insider*

The AC also said that if a band of stakeholders wants to create a new sector, it should be at least 10 organizations strong. If not, the organizations may have to join the Affiliate sector.

North Dakota Public Service Commissioner Julie Fedorchak said the 10-organization threshold seems a little high, considering that most stakeholders would probably find a home in MISO’s existing 11 sectors.

“It seems that having that minimum threshold there is a little restricting,” Fedorchak said. In response, the committee added language giving the board the ability to override the 10-organization requirement.

The AC isn’t finished on sector restructuring. The committee will next discuss divvying up voting rights and how to consolidate like-minded sectors.

Advisory Tx Planning Principles?

Meanwhile, some AC members want to have a say in MISO’s effort to better coordinate its transmission planning processes.

The RTO currently uses separate planning processes to study transmission buildout for its generator interconnection queue and the reliability and economic projects under its annual Transmission Expansion Plan. Several committees are coming up with ideas to better link the planning studies and identify more cost-effective network upgrades that can meet multiple transmission needs. (See MISO Unveils 1st Proposal to Consolidate Tx Planning.)

The AC is debating whether it should draft principles to guide the committees’ discussions. Members of the Municipals Cooperatives and Transmission-Dependent Utilities sector asked the committee to draft coordinated transmission planning principles.

“We’re looking for something more than meeting notes,” DTE Energy’s Nick Griffin said.

Several committee members, however, are opposed to the idea, saying transmission planning isn’t in the committee’s bailiwick.

Environmental and Other Stakeholder Groups sector representative Natalie McIntire, of Clean Grid Alliance, said a set of transmission planning principles would constrain the committees’ work and “confuse the stakeholder process.” She also said it isn’t the AC’s place to shape MISO planning policy.

ITC Holdings’ Cynthia Crane, chair of the Planning Advisory Committee, also said a set of AC principles might muzzle some committee discussions.

Fedorchak said it would be a “pretty heavy lift” for sectors to reach consensus on consolidated planning.

Xcel Energy’s Carolyn Wetterlin, who also chairs MISO’s cost allocation stakeholder group, questioned what purpose the principles would serve and agreed that consensus would be hard to come by.

The AC will again discuss the principles during its August teleconference.

July 24, 2020

FERC OKs Negotiated Rates for Merchant Tx Line

FERC on Thursday approved SOO Green HVDC Link’s request to charge negotiated rates on its proposed 350-mile, 2,100-MW transmission line, which the developers hope to use to deliver renewable energy from upper MISO to Illinois and the PJM grid (ER20-1665).

In June, PJM stakeholders agreed to consider integrating HVDC converters as a new type of capacity resource in the RTO at SOO Green’s request. (See HVDC Initiative Endorsed by PJM Stakeholders.)

The SOO Green line is planned to run underground, primarily along existing rail rights of way from Mason City, Iowa, to Plano, Ill. Construction is expected to begin in early 2022 and be completed by 2024.

SOO Green is owned 80% by Copenhagen Infrastructure III, 10% by Jingoli Power Transmission and 10% by Siemens Energy. None of the owners or their affiliates owns any other transmission facilities, except for generation interconnection facilities, the developers said. (A Jingoli affiliate owns less than 10% of a small cogeneration facility in Michigan, and Siemens holds a minority interest in a combined cycle generation facility near Cleveland.)

The developer has hired London Economics International to design an open solicitation process and serve as its independent evaluator.

SOO Green transmission rates — | *SOO Green*

SOO Green hopes to attract generators, marketers, load-serving entities and end-users to obtaining transmission capacity rights, either as “anchor shippers” or later through an auction. The “registered participants” can seek commercial arrangements on their own or ask to be matched with others by the independent evaluator.

FERC evaluates negotiated rate applications based on four factors: the justness and reasonableness of the rates; the potential for undue discrimination; the potential for undue preference, including affiliate preference; and regional reliability and operational efficiency requirements. The commission said its review takes into account its open-access requirements, the Federal Power Act and the “financing realities faced by merchant transmission developers.”

No one filed interventions or protests in response to SOO Green’s application.

The commission concluded that the developers will bear the full market risk of the project and have no ability to erect barriers to entry or incentive to withhold capacity because they will turn over operational control of the line to either MISO or PJM, which will operate it under its Tariff.

“SOO Green states that while it is currently in discussions with both MISO and PJM about the many operational issues involving the project, it is unclear at this juncture which RTO will ultimately have operational control of the project,” FERC said.

The commission conditioned its approval on SOO Green’s submission of a compliance filing after the open solicitation demonstrating that the allocation process was fair and transparent and consistent with the commission’s 2013 policy statement on allocation of capacity on new merchant transmission projects (AD12-9, AD11-11).

July 24, 2020

FERC Accepts SPP, NIPCO Settlement

FERC on Wednesday accepted an uncontested settlement agreement between SPP and Northwest Iowa Power Cooperative (NIPCO) over the latter’s annual transmission revenue requirement, formula rate template and formula rate implementation protocols as a transmission-owning member of the RTO (ER15-2115).

The commission last year rejected a settlement filed by SPP, saying that, because it was contested, it couldn’t be approved under its guidelines and precedent set by a 1999 case. FERC in February then denied NIPCO’s rehearing request. (See “Co-ops Rebuffed in Settlement Rehearing Requests,” FERC Denies Rehearing in Z2 Remand Order.)

SPP NIPCO Settlement — Northwest Iowa Power Cooperative has agreed to an annual transmission revenue requirement with SPP. | *NIPCO*

NIPCO had argued that when TOs join regional grids, even indirect modifications to grandfathered agreements can trigger a threshold analysis under the Mobile-Sierra doctrine, which holds that negotiated, fixed-rate contracts are to be presumed just and reasonable under the Federal Power Act and cannot be revised by FERC without a finding that the public interest requires modification.

The commission said the Mobile-Sierra “public interest” presumption applies to an agreement only if the agreement has certain characteristics that justify the presumption.

In its latest order, FERC clarified the framework that would apply if it was required to determine the standard of review in a later challenge to the settlement by a third party or by the commission acting on its own authority.

SPP was given 30 days to file a compliance filing.