FERC last week said that SPP’s proposal to add the defined terms “load-serving entity” and “non-load-serving entity” to its membership agreement became automatically effective (ER19-2524).
The commission said that because it lacked a quorum and did not act on SPP’s request within a 60-day period, the revisions are effective by “operation of law,” under Section 205 of the Federal Power Act.
Chairman Neil Chatterjee and Commissioner Bernard McNamee filed a joint statement Friday saying they would have accepted SPP’s proposed revisions, effective Oct. 1, as requested.
FERC is currently down to three commissioners while it waits for two seats to be filled. However, Commissioner Richard Glick is precluded from acting on proceedings involving his former employer, Avangrid, until Nov. 29. (See Glick Recusal May Mean No MOPR Ruling Before December.)
In a statement, Glick said that while Avangrid was not a intervenor in the docket, “The substantive issues presented relate directly to a contested issue in another pending proceeding” (EL19-11).
Invenergy is among the many intervenors in SPP’s membership exit fee docket. | Invenergy
SPP’s revisions are related to a complaint filed last year by the American Wind Energy Association and the Advanced Power Alliance over the RTO’s membership exit fee. FERC in April agreed with AWEA and APA and ordered the grid operator to lower its exit fee to $100,000, a 67% reduction from current levels. Avangrid Renewables is among the many intervenors in that docket. (See FERC Tells SPP to End Exit Fee for Non-TOs.)
Chatterjee and McNamee said they agree with SPP that defining the LSE and non-LSE terms “provides clarity to members as to which level of withdrawal deposit will apply in the event that a member submits a notice of intent to withdraw.” LSEs would also be subject to an additional fee based on their net energy-for-load share of the RTO’s financial obligations and future interest.
SPP has requested a rehearing of FERC’s April decision, although it made a compliance filing reducing the fee as ordered in August. (See “Directors Lower Exit Fee to $100K,” SPP Board of Directors/MC Briefs: July 30, 2019.) The RTO said the commission’s conclusion that SPP’s exit fee was a “barrier to membership” was incorrect. “All that the exit fee does is require that members have ‘skin in the game,’ thereby serving as the quid pro quo for the privilege of obtaining voting rights,” SPP said.
Several LSEs — including American Electric Power, Evergy, Golden Spread Electric Cooperative, the Nebraska Public Power District and Xcel Energy — also requested rehearing. “While the commission is wrong that the existing exit fee formula is unjust and unreasonable, it is arbitrary and capricious to conclude that the complete elimination of any exit fee for non-transmission owners would be just and reasonable,” they said.
The commission issued a tolling order on June 17 giving it more time to consider the rehearing requests.
President Trump last week nominated FERC General Counsel James Danly to fill one of the two vacant seats. There has been no nominee for the other vacancy. (See related story, Dems, Enviros Upset Over Solo FERC Nomination.)
HOUSTON — The Baker Institute Center for Energy Studies last week hosted its third annual energy summit, “The Energy Transition: Legacy, Scale and Technology.” The event provided a forum for market players and decision-makers to share insights into the energy industry’s future.
Speakers and panels addressed energy transitions and how economics, policy and technology are driving change across the industry.
Mark Finley, a fellow with the institute, set the table by saying that carbon dioxide emissions continue to increase globally, despite the growth of renewable energy. “Transitions take time,” he said.
As an example, Finley said it took oil 40 years to gain 10% of the energy market, faster than any other fuel.
“Fossil fuels will contribute the majority of energy [production] in 2040,” he said.
“I think the energy system is always in transition,” said Tristan Abbey, a staffer for the U.S. Senate Energy and Natural Resources Committee. “When oil was discovered 150 years ago in Pennsylvania, coal didn’t suddenly go away. When people starting driving, we were still using coal. When nuclear power was harnessed, we didn’t stop using oil. I think we’ll see that continue. We’re always in a transition.”
Finley noted that the world’s largest economies, which make up the Organisation for Economic Co-operation and Development (OECD), only consume 40% of the world’s energy.
“The expectation is growth will be in the rapidly growing emerging economies,” he said. “The bottom line is what happens here means less and less in the global context.”
Hap Ellis, a general partner with RockPort Capital Partners, said that while there is a need to bring renewable energy to the developing world, OECD countries should be cognizant of developing countries’ need for cheap baseload power. He said Bangladeshi Prime Minister Sheikh Hasina stood before the World Economic Forum earlier this year and defended a “state-of-the-art” coal facility.
“We need this power,” Ellis recounted Hasina saying. “We need this cheap baseload power. We need a lot of it to get our economy going.”
Finley said that while the data are clear on the decreasing cost of renewable energy (“It’s not a game for rich countries anymore.”), the OECD countries should refrain from imposing their environmental priorities on emerging economies.
“Climate considerations are one on a list of priorities in countries around the world. We can’t say, ‘You can’t do that.’ It’s an equally important consideration we have to honor as well.”
Shell, Oxy Committed to Paris Agreement
Representatives from two of the world’s largest petroleum companies, Royal Dutch Shell and Occidental Petroleum, flashed their green bona fides in encouraging other corporations to follow their lead and support the Paris Agreement.
Jason Klein, Shell’s vice president of energy transitions, explained the company’s Sky scenario, which provides a “challenging pathway” to reach the agreement’s goals of limiting global warming to less than 2 degrees Celsius. The Dutch company’s scenario relies on seven key elements, ranging from tripling the rate of electrification and increasing renewables “50 fold” to pricing carbon and capturing it on a “massive scale.”
“It will take massive collaboration between societies, business and governments,” among others, Klein said, “and a rewiring of the global economy in just 15 years.”
“We’re going to need every single technology at our disposal if we’re going to meet [the Paris Agreement’s] objectives,” Occidental’s William Swetra said, underscoring the sense of urgency exhibited by the world’s youth. “It’s time for large companies to come to the table to see how they can be a part of the solution. It will take time, but there’s urgency in the matter.”
Even so, natural gas will still remain a major part of Shell’s business, albeit in some forms previously unimaginable.
“Clearly, there’s a role for oil and gas in a net-zero-carbon world. You need some negative emissions to get to a net-zero world,” Klein said, pointing to carbon capture and sequestration. He said CCS requires “government support and collaboration to get to scale,” but it also needs high concentrations of CO2 and a friendly regulatory regime that allows pipeline construction.
“If we can’t find that in Houston, Texas, I don’t know where we’ll make that work,” Klein said.
Alluding to natural gas emission rates being half those of coal, Klein said, “We see natural gas as a key transition fuel, both domestically and with LNG. We see the ability to provide natural gas and LNG to offset coal and the intermittency of renewables. We want to ensure the environmental story around natural gas is credible.”
Asked how Shell will track progress against the Sky scenario, Klein said the company has set a net carbon-emission footprint, with the goal of cutting that in half by 2050. Executive compensation will be tied to the reduction targets, which include the customer emissions that account for 80% of Shell’s total. In Europe, he said, customers who buy regular unleaded at the pump are also buying a “nature-based offset” to fund forestation activities.
“The CO2 that comes out of your tailpipe is included in our carbon footprint,” Klein said. “We have a 3% net carbon reduction target by the end of 2019. Every year, we’ll set a new target on a three-year rolling basis to hold ourselves accountable.”
Swetra said Oxy’s Low Carbon Ventures subsidiary, which is developing carbon-capture projects, is helping the company support the Paris Agreement’s objectives and working to “prove carbon capture is ready for primetime.” The company has partnered with Canada-based Carbon Engineering to design what they say is the world’s largest direct-air CCS facility in West Texas’ Permian Basin.
Oxy considers CO2 a commodity, Swetra said, alluding to its “enhanced oil recovery” process. The company uses the process to “flood” oil fields and bring the remaining product to the surface; it injects 2.6 Bcfd of CO2 into the Permian Basin, making it one of the global leaders in the field.
“We’ve been injecting it into the ground for [40] years. Over time, the CO2 becomes stable and permanently stored,” Swetra said. “Our aim is to sequester more CO2 in oil and gas reservoirs than we produce.”
Baker: Partisanship Poisons ‘Almost Every Policy’
The institute’s namesake, James Baker III, a partner at Houston’s Baker Botts law firm, made a late-afternoon appearance at the summit to warn that growing political polarization in the U.S. is making it difficult to address the nation’s issues.
“I know politics is a contact sport and it’s a blood sport. I have the bruises to show for it,” said Baker, a former cabinet secretary and chief of staff under two Republican presidents. “But we’ve moved into a new, rather insidious atmosphere, where partisanship has poisoned almost every policy. This destructive cycle is going to prevent us from addressing the critical issues we face.”
Central among those issues is the outsized influence of the Middle East and other energy-rich regions around the world. As Baker described the U.S.’ own shift from coal-fired to renewable generation and its reduction in the growth of greenhouse gas emissions, he said, “Note I said ‘reduced,’ not ‘ended’ or ‘limited.’ We remain vulnerable to disruptions in the major hydrocarbon regions of the world.
“To walk away from the Middle East is the stuff of fantasy. That should be obvious by now,” he said. “The Middle East is going to challenge our ability to balance ends and means for a quarter of a century. We ought to abandon any illusion of our ability to remake that region of the world.”
‘Balkanized, Regional’ Grids Lead to a ‘Mess’
Sunnova Energy CEO John Berger bemoaned the nation’s regulatory structure, saying “balkanized, regional grids” have meant more power to the states than the federal government. That has helped hinder renewable developers like his company, which in July became the first U.S. residential solar company to go public in four years.
“We are uniquely screwed up,” Berger said. “There are about 5,000 utilities with different regulatory structures … investor-owned utilities, co-ops, municipalities, federally owned entities … we don’t have a consistent policy. There is no [national] grid. We’re basically a bunch of balkanized, regional grids, and those are becoming more balkanized and regional in nature, not less.
“All that leads to … a mess. Everybody agrees the system is broken, and everybody has a different view on how to fix it,” he said.
“It sounds like there’s a cost to [a national grid],” Ellis told Berger. “What’s the prize to be gained from a great, nationwide integration of the grid?”
“The idea that there’s a lot of [transmission] buildout out there is not true,” Berger said, noting that facilities built to accommodate nuclear energy in the 1960s and 1970s were not fully subscribed until the late 1990s.
“That’s been some benefit for wind [energy],” he said. “[Building] a power line crossing someone’s ranch that’s been in the family for 100 years is a problem. It has a true cost to it. It’s not just people not wanting development.”
And while that may offer opportunities to solar power and other distributed energy forms, Berger called for a balance between centralized and decentralized regulation.
“I don’t think it makes sense to build transmission lines for solar,” he said. “What you’ve been doing for the last 100 years doesn’t make sense, because technology is changing, as it is everywhere.”
LOS ANGELES — If millions of electric vehicle owners charge their cars at work in the future, it will absorb the abundant solar power produced during the day in California. But if they charge at home immediately after work, it could strain the ability of the grid to meet peak demand, according to a study commissioned by the U.S. Department of Energy.
“Early-morning charging is beneficial for [California’s] duck curve, [but] coming home and plugging in for California is really detrimental,” Michael Kintner-Meyer, a staff scientist with the Pacific Northwest National Laboratory (PNNL), told this year’s audience at Infocast’s EVs and the Grid forum. Kintner-Meyer reported the preliminary results of the study he led, which will be published in the next three months.
In addition to the effect of EVs on the grid, the conference delved into the prospect of self-driving cars eventually becoming the norm.
As General Motors CEO Mary Barra likes to say, “‘The industry will see more change in the next five years than in the previous 50,’” Jamie Hall, GM’s director of advanced vehicle and infrastructure policy, said in his keynote address. “Our vision of the future is zero crashes, zero emissions and zero congestion.”
Self-driving Cars Face Hurdles
In a panel on autonomous vehicles, panelists said technological and regulatory hurdles mean the vehicles won’t be sold to consumers for at least 20 years.
A big challenge is teaching the computerized cars to drive more like humans.
Jonathan Riehl, a transportation engineer at the University of Wisconsin-Madison, said problems occur when self-driving cars enter the mix with human drivers. An autonomous vehicle programmed to follow traffic laws will slow at a yellow light, while a human will typically speed up, leading to rear-end crashes, he said.
The solution, he said, is trying to get autonomous vehicles “to drive a little more aggressively.”
Panelists also said it will be important for self-driving vehicles to be able to communicate with each other about road conditions and to be connected through communications infrastructure so that they’re able to anticipate hazards.
Gregory Winfree, director of the Texas A&M Transportation Institute and former assistant secretary of the U.S. Department of Transportation, said autonomous vehicles can only see so far ahead, just like human drivers. Self-driving cars wouldn’t know if a boulder fell in the roadway on the other side of a blind curve, or if black ice suddenly formed, unless they were connected through infrastructure to other vehicles and information sources, he said.
Creating that infrastructure will be needed before self-driving cars can become an accepted part of the transportation mix, panelists said.
Lincoln Bleveans, assistant general manager at Burbank Water and Power, said he was driving to the conference hotel on the notoriously congested Interstate 405 and wondering what the carbon footprint of the thousands of slow-moving vehicles must be. EVs could help lessen pollution, but only if there are adequate charging stations for drivers at their workplaces, he said.
The city of Burbank sees about 100,000 commuters leave for jobs elsewhere each morning, while 200,000 workers pour in, mainly by car, he said. They park all day at the movie and animation studios of the Walt Disney Co., NBCUniversal and Nickelodeon, among others.
The city is working with those employers to install hundreds of chargers so that workers can fuel up their vehicles while electricity is cheap, because of low demand and ample solar power, from dawn to dusk. The middle of the day is the “belly of the duck” in California’s so-called “duck curve,” when demand is low but the supply of solar power soars. The economics of the situation should help speed the transition from fossil fuels to renewable energy, but only if employees can plug in at work, he said.
Impact on the Grid
In his presentation, Kintner-Meyer said getting workplaces to install chargers, and encouraging workers to charge their EVs during the day, is key to ensuring resource reliability in the future.
DOE asked his team to examine if the grid was ready for a rapid expansion of EVs, especially in the West, where they already have a strong foothold. NERC reliability assessments extend 10 years in advance, so the study could only project data that far into the future, he said.
The PNNL team examined the balancing authority areas in the Western Interconnection, with the assumption that light-duty EVs would increase nationally from roughly 1.3 million today to an “optimistic” forecast of nearly 24 million a decade from now. They superimposed the forecasted load from EV growth onto the native load anticipated by the Western Electricity Coordinating Council for 2028.
Researchers ran different scenarios of charging patterns, including one in which drivers charged primarily at work during daylight hours and another in which drivers charged their cars during peak demand hours after work. Another scenario anticipated that drivers would charge at home late at night and in the early morning hours to take advantage of lower electricity costs during off-peak times.
They also considered the expected growth in solar generation, with California reaching a projected 40 GW in the next 10 years. Natural gas generation will also play a large part in charging EVs, the study suggested.
Under all the scenarios, Kintner-Meyer said, there were no expected electricity shortages, assuming normal conditions with all transmission lines in service.
“We don’t anticipate major resource adequacy issues,” he said.
Charging at home immediately after work (HHND) could worsen California’s “duck curve” and put further strain on the grid during peak demand by 2028, a study showed. | PNNL
However, if conditions change — with wildfires burning under power lines or widespread heat waves, for instance — problems could arise, he said. Congestion at transmission bottlenecks, such as the California-Oregon Intertie or the Path 15 transmission line linking Northern and Southern California, could also upset the balance, he said.
There would be insufficient resources if the number of EVs rose to between 30 million and 37 million, the study found.
The problem isn’t a lack of generation, but the ability to move electricity where it’s needed.
“It’s the transmission system,” Kitner-Meyer said. To head off shortfalls, “either you open that up [the congestion points], or you put more generation into the respective balancing areas,” he said.
California Gov. Gavin Newsom last week signed two dozen bills dealing with wildfire prevention and affecting the state’s electricity providers. Many of the bills codify recommendations from the governor’s wildfire “strike force” report released this spring.
“The report provided guidance on how the state can build a safe, reliable and affordable energy future,” Newsom’s office said in a news release after the signings Wednesday. (See Calif. Must Limit Wildfire Liability, Governor Says.)
The governor’s report recommended easing the strict liability that utilities face when their equipment sparks wildfires, but none of the bills signed by Newsom dealt with that politically unpopular idea. Instead, they addressed topics such as public safety power shutoffs during hot, windy days and the safety implications of the sale of investor-owned utility assets.
“Given the realities of climate change and extreme weather events, the work is not done, but these bills represent important steps forward on prevention, community resilience and utility oversight,” the governor said in his signing statement.
Among the bills that became law was SB 676, which seeks to ensure that adding millions of electric vehicles in coming years won’t overtax the grid and lead to greater need for fossil-fuel generation. It instructs the Public Utilities Commission to establish strategies to integrate EVs, including time-of-use rates that encourage charging during the “belly” of the state’s so-called duck curve, when there’s a glut of cheap solar power in the middle of the day. (See related story, EVs Could Soak Up Solar or Exacerbate ‘Duck Curve’.)
SB 676 was authored by State Sen. Steven Bradford (D), a former public affairs manager for Southern California Edison and member of the Energy, Utilities and Communication Committee. Bradford also authored SB 155, which will require the PUC to monitor the renewable portfolio standards of load-serving entities to make sure they’re meeting their goals under the state’s ambitious greenhouse gas reduction scheme. Last year’s SB 100 requires the state to rely on zero-carbon energy sources by 2045.
One of the bills signed by Gov. Gavin Newsom tries to ensure that millions of electric vehicles won’t overtax California’s energy grid. | U.S. Marine Corps
Another measure, SB 520, reworks the notion of the provider of last resort (POLR) in the face of the state’s fast-changing electricity landscape. Traditionally, California’s three big IOUs have filled that role. But with the rapid increase of community choice aggregators (CCAs), lawmakers decided the old rules needed updating. (See Calif. Lawmakers Reveal Growing Divisions over CCAs.) Authored by Sen. Bob Hertzberg (D), the law allows CCAs to be the POLRs in their service territory, contingent on approval by the PUC.
Under SB 550, by Sen. Jerry Hill, a San Francisco-area Democrat, the PUC must review the acquisition of an IOU’s assets based on safety criteria. It specifies the commission’s review would apply even if the sale is to a public entity, such as a city. (San Francisco has offered $2.5 billion for PG&E’s assets there.) Under current law, the PUC must evaluate the sale or merger of utility assets based primarily on the net benefit to ratepayers.
Addressing power shutoffs, SB 167, by Sen. Bill Dodd, a Democrat from the Napa Valley, requires IOUs to improve their legally mandated wildfire mitigation plans by lessening the impact of public safety power shutoffs on residents. PG&E has turned off power to tens of thousands of customers across Northern California in recent months to prevent wildfires, including in Dodd’s district.
Consumers in MISO and PJM could save about $7 billion a year if they adopt several market changes that the Wind Solar Alliance recommended last year, the group said last week.
According to a new report prepared for WSA by Grid Strategies and Milligan Grid Solutions, with more wind, solar and storage on their grids, average residential customers in the PJM and MISO region could save up to $48 each year.
The findings are a follow-up on last year’s WSA report that concluded MISO and PJM could keep electricity reliable and affordable through more than 30 market changes aimed at incorporating renewable generation. (See Report: MISO, PJM Must Change Markets for Renewables.) WSA advised MISO and PJM to create multiday forecasts, compensate reactive power, create primary frequency response markets, price the “inflexibility” of conventional generation, incentivize more accurate renewable forecasting and stock contingency reserves to offset drops in renewable output, among other suggestions.
The new report quantifies only some of those market changes, including limiting the self-scheduling of conventional generation, removing PJM’s minimum offer price rule, incentivizing consumers to adjust their demand based on real-time market prices and allowing renewables and storage to provide reliability services.
Harding Street Energy Storage in MISO | AES
WSA’s interim director, Kevin O’Rouke, said the findings should be particularly interesting for consumer advocates and that he hoped regulators and market participants would use the new report to “advocate for more consumer-focused market structures going forward.”
“Here we’re focused on what this means for your pocketbook. … We’re talking about large amounts of money here, billions of dollars for MISO and PJM,” Grid Strategies Vice President Michael Goggin said during a webinar Wednesday to discuss the findings.
Goggin said the savings are dependent on renewable penetration increasing in both RTOs.
“The unfortunate reality is that across the country in RTOs, wind and solar are kept from being able to offer reliability services. … I think it’s because these rules were written a decade ago. I think technology is moving so quickly that the rules haven’t kept up,” Goggin said, adding that wind and solar generation and battery storage can provide ancillary services “as well or better” than traditional generators.
Greg Poulos, executive director of the Consumer Advocates of the PJM States, said more wind and solar integration could be beneficial to the RTOs.
“When we’re looking at hot weather alerts … it’s an extremely small sliver of solar that’s being used,” Poulos said.
“From where I stand, capacity markets, energy markets [and] ancillary services should be moving in the same direction, supporting innovation and capturing new technology to effectively meet customer demand,” Illinois Citizens Utility Board Deputy Director Kristin Munsch said.
Clean energy advocates are asking MISO to make comprehensive changes to its transmission planning to help ensure the region can continue an uninterrupted shift toward renewable resources.
Among the requests from the Environmental and Other Stakeholder Groups sector: that the RTO revise its future scenarios, synchronize interconnection and planning studies, and re-evaluate interconnection upgrade cost allocation.
Renewable projections under current futures used in MISO’s Transmission Expansion Plan (MTEP) are “far too conservative,” Clean Grid Alliance (CGA) consultant Natalie McIntire said in an interview with RTO Insider.
“If you look at the four futures, only the most aggressive future is an accurate depiction of what’s happening today,” CGA Executive Director Beth Soholt said. “In other words, we’ve blown past those futures. So, MISO isn’t planning for the future, much less planning for today.”
The four futures estimate that MISO’s resource mix will consist of a 15 to 35% share of renewables by 2033. But stakeholders for months have been criticizing those estimates as seriously underestimating the widespread adoption of renewables. Several have said the RTO’s predictions are resulting in inadequate new transmission projects and leaving renewable developers with prohibitively expensive interconnection upgrades as system patches. (See More MISO Members Join Call for Tx Planning Change.) MISO has said its large interconnection queue means that the “scope and costs of network upgrades are expanding.”
MISO is now developing a straw proposal on new futures development for stakeholder review at an Oct. 17 workshop. The new futures will be in place for MTEP 2021, and the RTO will use a slightly updated version of its MTEP 19 futures for its 2020 cycle of transmission planning.
The Union of Concerned Scientists’ Sam Gomberg said he generally thinks the four scenarios have been thoughtfully constructed.
“In terms of structure, I think the futures don’t need to look radically different. The structure is sound,” he said.
It’s the content that concerns him.
“The futures are not living up to this ‘bookend’ framing,” Gomberg said, using an oft repeated word among MISO planners. “They’re not planning in the futures for what is coming.” He said the RTO needs to consider both widespread renewable participation and a “carbon constraint umbrella.”
Members of the Environmental sector have also called for one or more futures to model carbon regulations.
“Maybe I’m living in my own environmental echo chamber, but if the political winds shift, what we’re talking about is getting to 0% carbon emissions by 2050. Decarbonizing the electricity sector by 2050 is a real possibility,” Gomberg said.
The growing grassroots momentum to address climate change also can’t be ignored, Gomberg said, with or without a federal government willing to draft a carbon cap policy.
“These [policy] conversations slowed down, and MISO staff for a couple of years maybe felt like they had a justification to slow down and wait for some kind of carbon cap,” Gomberg said. “We can’t be sure what shape it’s going to take … but we can be very sure that’s there going to be some type of limit. I don’t want MISO to be caught off-guard on the pivot.”
Increasing Complexity
“MISO likes to plan around certainty,” Soholt noted, adding that the RTO accounts for state statutes and orders from state commissions but could be overlooking municipal and corporate renewable commitments and carbon targets, as well as utilities’ request for proposals.
“There’s all this mismatch of things that MISO isn’t taking into account. We’re always going to be in a chicken-and-egg situation if MISO doesn’t expand their bookends and reflect reality,” she said.
It’s not simply a matter of waiting for the expiration of the investment and production tax credits to expire so transmission planners can get back to business as usual, Gomberg said.
“The numbers that I’m seeing say wind and solar are still going to be the cheapest resources out there. There’s going to be other developers ready to fill that void,” he said.
MISO might be underestimating in its future how electrification might stimulate the currently flat demand for energy, McIntire added. “If not right now, we see that demand might grow in the next five to 10 years.”
Gomberg also said MISO should more closely evaluate the effects of nuclear plant retirements in the 2030-2035 time frame as plant owners are faced with choosing between a license extension or retirement.
Soholt expressed concern that MISO’s renewable estimates could lead to a system “funded on the backs of interconnection customers, which naturally raises questions of who can reap the benefits of such projects.”
McIntire said interconnection customers don’t receive financial benefits from transmission investments comparable to the rate of return that the RTO’s transmission owners receive.
“They’re not getting benefits commensurate with the costly transmission upgrades interconnection customers are having to construct,” she said. “And if load ultimately pays, we want the transmission planning and interconnection process to consider what’s most cost efficient for ratepayers. We would suggest that constructing a transmission grid with a whole lot of lines paid for by interconnection customers is not fair or efficient. Comprehensive transmission planning with much more realistic future scenarios is a more cost-effective way to build out the MISO grid.”
“It’s not just a little tie-line; it’s not just a substation upgrade,” Gomberg said, stressing that interconnections have now become regionally beneficial to the system.
McIntire pointed out that MISO also separates interconnection upgrades from other transmission project types in such a way that cost allocation is the burden of interconnection customers only.
That existing process is blind to the fact that many others in MISO benefit from interconnection upgrades, she said.
“We all know transmission will bring a variety of benefits to a variety of beneficiaries,” McIntire said, calling for a “more holistic” cost-benefit analysis on interconnection upgrades.
Synched
McIntire also said MISO’s interconnection upgrade studies and transmission planning studies should move on the same schedule and draw on the same study assumptions.
“There’s a bit of a timing disconnect in that we have generator interconnection studies on one track and MTEP planning studies on a different track,” she said.
McIntire said MISO is in a position where it could reject a congestion-relieving transmission project, believing the congestion will be taken care of through an interconnection upgrade attached to a proposed generation project. However, interconnection upgrades can disappear as developers withdraw project proposals from the queue. McIntire said it’s not fair to assign the costs for an interconnection upgrade simply based on which of these study processes finishes first.
“Because those processes are done in silos, they’re cutting some projects off at the knees,” Gomberg said. “The left hand isn’t talking to the right hand to some degree.”
McIntire also said transmission planners should be looking to the queue as an indicator of where developers will site new resources.
“The queue is a good indicator of what will occur,” CGA Regional Policy Manager Sean Brady agreed.
“It’s always been that not all the projects in the queue get built. That’s a fair thing to say,” Gomberg said.
Though not perfect, the queue is a “strong indicator” of where resources will get built because often another developer comes in with plans in the same area, Gomberg said. The fact that all of the projects in the queue don’t get built shouldn’t be used as an excuse to say there’s too much uncertainty to move forward in the planning process, he added.
RENSSELAER, N.Y. — A NYISO study released last week finds that pricing carbon into the ISO’s wholesale markets will help New York achieve its clean energy goals — the most ambitious in the country.
“Carbon pricing advances the value of New York’s leadership role,” said Sue Tierney of Analysis Group, co-author of the final carbon pricing report. “Assuming New York endorses this idea, NYISO will adopt it and make a filing with FERC.”
Tierney summarized the carbon pricing report to the Installed Capacity and Market Issues Working Group (ICAP/MIWG) after its release was delayed a couple months to perform additional analysis on the impacts of the Climate Leadership and Community Protection Act (CLCPA), as requested by the NYISO Board of Directors. (See NYISO Management Committee Briefs: July 31, 2019.)
Signed into law in July by Gov. Andrew Cuomo, the CLCPA requires 70% of the state’s electricity to be generated by renewable resources by 2030, raises its offshore wind energy goal to 9 GW by 2035 and requires the whole economy to be carbon-neutral by 2040. The law also doubles the distributed solar generation goal to 6 GW by 2025 and targets deploying 3 GW of energy storage by 2030.
A newly created Climate Action Council will implement the measures needed to meet the environmental targets.
Emission rates for electricity generation in New York (2000–2018) | NYISO
The report’s authors contend that in order for the electric sector to help decarbonize New York’s other economic sectors, which are responsible for 83% of carbon emissions, on the “aggressive” time frames set out in the CLCPA, the “power system will need to adjust to vastly different levels and shapes of electricity demand while simultaneously adding clean energy resources on a scale and pace unseen in recent years in the state (and perhaps not since the mid-20th century).”
The effort will require “every effective means possible” to achieve reductions at the lowest possible cost, the report says.
The report notes that renewable resources covered about 20% of load-serving entities’ demand for electricity in 2018, with 80% coming from hydroelectric plants. The CLCPA will require renewables to cover 70% of LSE demand by 2030.
“A price on carbon in wholesale markets can provide a signpost to low-cost compliance pathways and preserve the fundamental wholesale electricity market structure that encourages operational efficiency and minimizes consumers’ investment risks,” according to the report.
No Heresy
Tierney also discussed the report with NYISO CEO Rich Dewey during a Thursday teleconference with reporters.
“Competitive electric markets are a strong and proven platform from which to leverage innovation, and we look forward to collaborating with the state on the exciting and important work ahead,” Dewey said in a press release ahead of the event.
“You can’t really leave any tools in the toolbox if we are going to achieve these goals,” he said during the conference, the Times Union reported.
But hours before that feel-good event, Tierney faced NYISO stakeholders in what seemed at first to be a session of the Spanish Inquisition, formed to sniff out any sign of unorthodox methodology or belief.
Twenty minutes into her presentation, she was still practically on the first page of a 35-page summary.
“You guys are ridiculous,” Tierney said in jest, to which one of the stakeholders replied that, on the contrary, they were behaving moderately compared to their usual ways.
Couch White attorney Michael Mager, who represents Multiple Intervenors, a coalition of large industrial, commercial and institutional energy customers, objected to the process of skipping the stakeholder feedback sessions promised by NYISO and jumping straight to a final report.
Mager also raised concerns about the scope of the study being changed without notice to stakeholders or an opportunity for them to provide feedback on the revised study scope.
Tierney deferred to Rana Mukerji, NYISO’s senior vice president for market structures, who assured Mager and other stakeholders that the ISO still welcomed their feedback and would consider if additional work on the study was necessary. And because the stakeholders did not have time to read the report — as it was issued only that morning — Tierney would be back to answer more questions during the week of Oct. 21, he said.
Assuming enormous public health and ratepayer benefits, there will be out-of-pocket costs that can be attributed to the cost of complying with CLCPA, Tierney said. “The study looks at net benefits of carbon pricing. The implication is that there would be near-term costs for long-term savings and benefits.”
Representing New York City, Couch White attorney Kevin Lang expressed concern about the effect of those near-term cost increases in the city, where the closest renewable energy option is offshore wind, which requires state subsidies, at least for now.
“Initial wholesale costs are going to be higher in New York City, so the state may have to enact other policies to mitigate those effects,” Tierney said.
Mark Younger of Hudson Energy Economics said, “If you don’t act [to implement carbon pricing], there will be other costs associated with that inaction,” referring to various harmful effects of climate change.
Asked how much a carbon charge would help incent new renewable energy projects, Tierney said that financing projects based on renewable energy credits (RECs) and zero-emission credits (ZECs) “is hard to come by, as banks prefer to look at market energy prices,” and that when the market price reflects the social cost of carbon, the market will be more efficient.
Guessing Game
“We don’t know what the Climate Council will do, what the Public Service Commission will do [and/or] what the Department of Environmental Conservation will do in terms of adopting a social cost of carbon,” Tierney said. “We imagined a robust policy toolkit, assuming the kinds of things that already exist, such as long-term REC contracts, performance standards and the like.”
Tierney said it might help for policymakers and stakeholders to look at the study as a cost-effectiveness analysis rather than a benefit/cost analysis, and that pricing carbon is a cost-effective way for the state to meet its environmental goals.
“If the New York wholesale market does not align its price signals with the new law, it will not be efficient,” she said. “This is not a modeling report. We describe the modeling results of others, and we calculate a present market value of some of those results.”
Outlook for zero-carbon electric resources | Analysis Group
The study stuck to the electricity sector, but there’s “going to be a lot of work” for New York to get to 70% renewable energy by 2030, she said.
“One of the features of the current construct is that RECs and ZECs are paid on a load-ratio share,” said David Clarke, director of wholesale market policy for Power Supply Long Island. “So rather than those zones whose carbon emissions would be increased most by nuclear closures paying for the ZECs, there is an implied acknowledgement that keeping nuclear plants open to reduce carbon is a statewide goal with statewide sharing of costs. We are paying a load-ratio share downstate.”
He asked whether the study considered how carbon pricing will change the zonal allocation of ZEC and REC costs.
“Qualitatively but not quantitatively,” Tierney said. “We looked at it in terms of increased risk to consumers and felt that rather than relying on long-term contracts for RECs and ZECs, carbon pricing would reduce risk by shifting it away from consumers. … And carbon pricing also would help consumers avoid the costs of buyer-side mitigation.”
MISO officials on Tuesday signaled their willingness to entertain a request by state regulators to develop a long-term transmission package to accommodate growth of policy-driven generation resources.
But they also made clear they’re not ready commit to the idea.
MISO and its stakeholders late last year opened a debate on whether the RTO should launch a second regional transmission package similar to 2011’s multi-value project portfolio. Clean energy supporters argued a coordinated approach to transmission development would ensure that proposed renewable projects could be built in a cost-effective manner. (See MISO Stakeholders: New Blueprint Needed for Tx Planning.)
The Organization of MISO States has been clear for months that it wants the RTO to begin analyzing another long-term transmission package. In June, it released a set of principles intended to advise MISO on its long-term planning. In a letter accompanying the principles, OMS President Daniel Hall said several drivers, including “many ongoing state-level activities related to investments in future generation, energy efficiency and distribution systems” precipitate the need for MISO to examine its long-term transmission needs.
“Given the timeline associated with infrastructure planning and development, and the need to cost-effectively maintain reliability in light of the rapidly evolving fuel mix, the OMS finds value in moving forward in a timely manner to assess system needs and identify potential solutions,” Hall wrote to MISO CEO John Bear.
| MISO
OMS’ principles include fostering a transparent stakeholder process to identify cost-effective projects and heeding the changing resource mix, reliability requirements and viable non-transmission alternatives. (See OMS Outlines Long-term Tx Planning Principles.) However, some MISO South members said the principles were too obvious to be helpful.
MISO took a first step to address the issue when it convened a workshop Wednesday to discuss its current long-term planning processes. While RTO officials gave little indication whether they are considering mounting a second regional package, staff did touch on what has changed after eight years.
MISO Executive Director of System Planning Aubrey Johnson clarified that the workshop was not meant to discuss specific long-term project proposals.
“We don’t have any lines on any maps. We don’t have any projects in mind today,” he said.
Currently, MISO’s long-term transmission planning is not developed on a routine cycle but performed on an as-needed basis “in response to major changes in public policy or the industry,” RTO adviser Joe Reddoch said.
MISO principal adviser Matt Tackett said electricity flow patterns are getting more difficult to predict year to year as central baseload generators retire and distributed resources pick up slack.
“I think we might be entering an era where dispatch and availability are more volatile,” he said, noting that distributed resources and electric vehicles can become mobile supply and loads, making them challenging to pin down
He said it’s no longer necessarily the case that MISO will know “where generation is and where the energy is coming from.”
Tackett also said the shifting resource mix also means that MISO shouldn’t simply assume that aging transmission lines need to be rebuilt in their original locations.
Minnesota Public Utilities Commission staff member Hwikwom Ham asked MISO to begin quantifying the costs of not pursuing transmission projects that exhibit long-term benefits.
“I think not doing something is not an answer because that has clear economic effects,” he said.
In response to stakeholders’ questions on whether MISO’s ongoing renewable impact study might spur long-term transmission investments, Johnson said the study shouldn’t be considered a “lead-in” to a long-term transmission package. Instead, he said the study might be used to inform inputs should MISO independently decide it needs a long-term planning cycle.
Pennsylvania Gov. Tom Wolf (D) signed an executive order Thursday directing the state’s Department of Environmental Protection to join the Regional Greenhouse Gas Initiative (RGGI) — a move that left the legislature’s Republican majority bewildered and outraged.
Wolf instructed the department to craft rules that “abate, control or limit carbon dioxide emissions from fossil-fuel-fired electric power generators” and establish “a carbon dioxide budget” on par with the other nine RGGI states no later than July 31, 2020. If approved by the commonwealth’s Environmental Quality Board, Pennsylvania would join fellow PJM states Delaware and Maryland.
Pennsylvania Gov. Tom Wolf | PA.gov
“Climate change is the most critical environmental threat confronting the world, and power generation is one of the biggest contributors to greenhouse gas emissions,” Wolf said Thursday. “Given the urgency of the climate crisis facing Pennsylvania and the entire planet, the commonwealth must continue to take concrete, economically sound and immediate steps to reduce emissions. Joining RGGI will give us that opportunity to better protect the health and safety of our citizens.”
According to RGGI, it has reduced its members’ power sector CO2 pollution by 45% over the last 14 years and provided $2.31 billion in lifetime energy bill savings. Participating states — either through regulation or legislation — cap power plant emissions and auction off credits to generators on a quarterly basis, who purchase these allowances as proof of compliance. The proceeds return to participating states for reinvestment.
“We know that we can’t complete this process in a vacuum,” Wolf said. “The conversation we’ve begun over the past year needs to continue if we are going to craft regulations that fit Pennsylvania’s unique energy mix, while making sure that the transition to a cleaner energy mix doesn’t leave behind workers and communities our state has relied on for decades to produce its power. And it will take buy-in from the legislature to ensure we’re protecting Pennsylvanians from the increasing effects of the climate crisis.”
Firm Opposition
But many of the state’s lawmakers want nothing to do with RGGI.
Republicans in both the House of Representatives and Senate challenged Wolf’s unilateral move as an overreach and argued that the program is nothing more than a tax increase that harms the state’s thriving fossil fuel industry and — ultimately — ratepayers. Pennsylvania is second only to Texas in natural gas production and provides nearly 20% of national demand — a figure expected to double by 2040.
“We strongly disagree with Gov. Wolf’s continued practice of go-it-alone approaches that are unhelpful in working cooperatively to move our commonwealth forward in a way that best represents the interests of all Pennsylvanians,” House Republican leadership said in a joint statement published Thursday. “Our state is not an autocracy, and one-sided decisions as significant as this leave out the important voices of Pennsylvania workers, communities and families whose livelihood is built upon important sectors of our energy economy.”
The Republican leaders went on to tout the natural gas industry’s impact on electricity bills and greenhouse gases “without burdensome regulations” and cited federal data that show a 14% decline in carbon emissions from the proliferation of gas across the country and 30% in Pennsylvania alone.
“We believe the executive branch cannot bind the state into multistate agreements without the approval of the General Assembly, and we plan to execute the fullest extent of our legislative power on behalf of the people of Pennsylvania,” the letter concludes.
Republican leaders in the Senate said they would only consider policies that further reduce greenhouse gases in a manner consistent with their caucus’s own energy principles — including preserving the state’s energy portfolio, protecting the existing workforce, keeping electricity rates low and implementing any carbon-reduction plan through “an appropriate legal manner.”
“Throughout the last 10 years, we have supported many initiatives that have resulted in Pennsylvania’s greenhouse gas reductions that eclipse the CO2 reductions in RGGI states,” Senate President Pro Tempore Joe Scarnati and Majority Leader Jake Corman said in a joint statement. “As a net-exporter of electricity, we know that energy production is a vital part of our state’s economy.
“We expect that the legislature will have the opportunity to engage in this process, to make sure that any change in energy policy ensures a balance between safeguarding the environment, preserving energy jobs and protecting ratepayers.”
Republican Sen. Gene Yaw, chairman of the Environmental Resources and Energy Committee, chimed in on Twitter, where he expanded upon another one of his caucus’s energy tenets: requiring current RGGI members to “utilize all aspects of the state’s robust energy portfolio.”
“It’s clear to me we have very little in common with [New York], [New Jersey] and the New England states,” he said. “How can we have a common interest with them when they prohibit the importation of our gas? They thumb their nose at Pennsylvania gas and embrace and purchase gas from Russia!”
‘Display of Leadership’
Democrats, however, celebrated the governor’s decision, including Senate Minority Leader Jay Costa, who proposed his own cap-and-invest program over the summer to address carbon emissions. (See Pa. Dem Leader Pushes Cap-and-Invest Energy Plan.)
“Today’s executive order is a strong display of leadership from the governor on one of the most serious issues facing Pennsylvania, this nation and the world,” he said. “Leadership from the federal government is not coming on climate change, and we can’t afford to wait.”
DEP Secretary Patrick McDonnell said RGGI “represents a unique opportunity for Pennsylvania to become a leader in combating climate change and grow our economy by partnering with neighboring states.”
“As a major electricity producer, Pennsylvania has a significant opportunity to reduce emissions and demonstrate its commitment to addressing climate change through a program with a proven track record,” he said.
Coastal regions are picking up steam in implementing energy efficiency, while areas in Middle America are either stalled or backsliding, according to the latest annual ranking of states’ individual measures.
Massachusetts led the American Council for an Energy-Efficient Economy’s 13th annual State Energy Efficiency Scorecard for the ninth consecutive year. California came in a close second, while Rhode Island and Vermont followed in a tie for third place.
During a webinar Tuesday, ahead of the report’s release, ACEEE researcher and report author Weston Berg said Massachusetts’ lead is the result of “groundbreaking” building codes, emissions standards and appliance programs.
2019 state energy efficiency scorecard rankings | ACEEE
To rank the states, Berg said he and other researchers examined states’ utility regulations, building codes and transportation policy in 2018.
“Energy efficiency is sometimes overlooked as an invisible resource,” said Berg, adding that a strong energy efficiency strategy can help states meet emissions targets, reduce air pollutants, create jobs and reduce energy burdens in areas with tight supplies.
All told, states spent $8 billion on energy efficiency in 2018 and saved 27.1 million MWh — 0.73% of total retail electricity sales in the country, enough energy to power 2.6 million homes for a year, ACEEE said. However, that figure is 0.5% less than the 27.27 million MWh saved in 2017.
ACEEE Senior Director of Policy Maggie Molina said the scorecard allows state leaders to compare against each another and “spur some friendly competition.”
Molina said Maryland improved more than any other state in a year-over-year comparison, gaining ground — and three slots to a No. 7 ranking — through utility efficiency programs, stronger building energy codes, public transit funding and electric vehicle adoption.
Massachusetts Department of Energy Resources Commissioner Judith Judson said energy efficiency efforts are the single greatest factor in meeting the state’s 25% reduction goal in greenhouse gas emissions from 1990 levels.
“It’s not just about ranking us against each other … but to learn from each other on programs that really work,” Judson said.
Chris Rice, acting chief of staff of the Maryland Energy Administration, said his state rose in the rankings because of regularly updated building codes and the EmPOWER Maryland initiative, which established energy savings goals on a per capita basis. Rice said the program is effective because it extends to low-income households.
“This is a very important aspect of our program: that everyone is served and able to participate in our program,” Rice said.
New York also maneuvered back into the top five this year thanks to adopting targets to shrink energy consumption by 185 trillion Btu by 2025 and procuring its electricity from 100% carbon-free sources by 2040.
“If states embrace robust energy-saving measures nationwide, Americans can slash greenhouse gas emissions by 50% and deliver more than $700 billion in energy savings by 2050,” ACEEE Executive Director Steve Nadel said in a release.
Kentucky and Ohio lost significant ground this year, according to the report. The report also put North Dakota and Wyoming behind all other states.
Kentucky’s downgrade is the result of regulators in 2018 “drastically cutting” most consumer-facing energy management programs by Kentucky Power and other utilities, Berg said.
Berg said Ohio is set to backslide on efficiency with the passage of its nuclear bailout bill, which also lowers the state’s existing energy efficiency savings standard for utilities from 22% to 17.5% by 2020. Berg said the bill will cause lower investment in renewables and energy efficiency, and it’s “very unlikely” efficiency programs will continue in the future because utilities are already on the verge of meeting the goal. While Ohio is still achieving energy savings, the state’s rank will likely fall in the coming years because of the legislation, he said.
