VALLEY FORGE, Pa. — The 90-day clock for stakeholders to work out how PJM will unwind $100 million worth of financial transmission rights (FTR) settlements begins June 19, said PJM legal counsel Jen Tribulski.
The update comes after FERC issued an order June 5 that encouraged conflicting parties to hammer out disagreements ahead of a scheduled paper hearing under the guidance of a settlement judge, who will report progress on the discussions to the commission at the 45- and 90-day marks (ER18–2068). A one-time extension may be granted for 30 days, FERC said. (See FERC: PJM Settle Disputes Before GreenHat Hearing.)
“During the settlement proceedings, all issues are on the table,” Tribulski said. “It doesn’t have to be just the six [issues PJM raised in its request for clarification]. If we go to hearing, it’s limited to just the six issues.”
Stakeholders expressed a mix of confusion and frustration over the ruling, with most unsure of what’s left to settle considering many were in agreement with PJM’s initial waiver request.
“The real problem is FERC just making the wrong decision and setting us down a path that PJM said is untenable,” said Carl Johnson, of the PJM Public Power Coalition. “You asked them to clarify their own rules, so I think it’s unrewarding that FERC is going to ask us to fix it among ourselves.”
5-Minute Dispatch Problem Statement Endorsed
Stakeholders gave near-unanimous support for the Independent Market Monitor’s problem statement to review processes for real-time security-constrained economic dispatch (RT SCED) and market pricing that PJM uses to send dispatch signals to generators and calculate LMPs. (See “Monitor Presents Updated 5-Minute Dispatch Problem Statement” in PJM MIC Briefs: May 15, 2019.)
Siva Josyula of Monitoring Analytics said a publishing price delay on April 8 — as well as a July 10, 2018, low area control error (ACE) event and corresponding Manual 11 revisions — call into question the transparency of PJM’s RT SCED processes.
Education about RT SCED will begin in the MIC next month.
Electric Storage Participation Rule Changes
PJM presented more manual revisions for electric storage participation rules in compliance with FERC Order 841.
In Manual 11: Energy & Ancillary Service Operations, section 2.3.4B was added to explain how electric storage resources (ESRs) would participate in the markets, including clarification that the resources can sell in the energy, capacity and ancillary markets if they are technically capable of providing those services. It also provides information on dispatch and pricing, bid parameters and clarifies that stored MWh are billed at LMP as wholesale. Staff also added definitions for defined modes and the opt-in and opt-out processes and updated ESR hourly limits.
In Manual 18: PJM Capacity Market, staff updated the definition of capacity storage resource to include ESRs that participate in the reliability pricing model or are “elsewhere treated as capacity in PJM’s markets such as through a fixed resource requirement capacity plan.” Revisions also clarify that ESRs may not receive peak load contributions for energy they sell back to the grid.
Laura Walter, a senior lead economist for PJM, said the purpose of the revisions — and many more anticipated in other manuals — is to open up markets for ESRs and ensure parameters allow such resources to operate effectively.
PJM’s ESRs include approximately 5,000 MW of pumped hydro and 310 MW of battery storage, she said. The resources will be allowed to offer into both the day-ahead and real-time markets and will be modeled as continuous resources with the ability to self-manage their own state of charge.
PJM will seek MIC endorsement at the July 10 meeting.
CARMEL, Ind. — MISO will one day see a proliferation of electric vehicles, just don’t expect them to begin plugging in en masse before millennials begin hitting midlife crises.
The region served by MISO can expect to see significant EV penetration of anywhere from 1 to 12 million vehicles by 2039, according to a Lawrence Berkeley National Laboratory impact study prepared for the RTO.
MISO policy studies engineer Aditya Jayam Prabhakar opened his June 12 presentation on the study before the Planning Advisory Committee with an anecdote describing how his neighbor on one side had recently purchased a red Tesla model, while his other neighbor is also considering buying a Tesla.
“I’m going to be addressed as the guy between two Teslas,” Prabhakar joked.
But he said the story illustrates that “what was once was out-of-reach is now becoming attainable.”
If EV adoption revs up, MISO could see as many as 36 million EVs in the footprint if “MISO turns into San Jose,” Prabhakar said. But that’s an extremely unlikely case, he pointed out.
“There’s obviously a very high range,” Prabhakar said.
The likeliest range of future EVs, he said, lies somewhere among the study’s “low,” “base” and “high” case scenarios of 1.6 million, 4 million and 12 million vehicles, respectively, by 2039. To come up with its estimates, Berkeley used a combination of MISO and state-level data, 2018 projections from Boston University researcher Peter Fox-Penner and figures from the U.S. Energy Information Administration.
The MISO footprint currently contains only about 70,000-80,000 EVs, Prabhakar said.
“That’s a very small number compared to where we could be in the future,” he said
The study shows that if left uncontrolled, EV charging stands to steadily increase peak loads and the ramps needed to accommodate those peaks. However, if EV charging is controlled, it can deliver “significant load shaping grid services,” MISO said.
Controlled charging can occur in one of two ways, the study explained. Under “unidirectional” control, the flow of power to the vehicle can vary over the course of a charging session based on a timer, price signal or other set of rules based on grid conditions. “Bidirectional” control offers all those same features, while additionally allowing power to flow from the vehicle to the grid, helping to alleviate grid stress during periods of peak consumption.
MISO also noted that managed EV charging can help mitigate the daily load troughs and morning and evening ramps that increased renewable use can exacerbate.
In the extreme, 36-million vehicle case, uncontrolled EV charging “dominates loads throughout the day” and could add about 40 GW to MISO load by mid-2038. MISO’s average summer load last year was 86.6 GW.
“Preparing for EV impacts and their charging is a really great thing to start thinking about,” Prabhakar said. ” … This is uncharted territory in terms of what can happen; there’s so much that can happen.”
“I think EVs are a question of not if, but when,” Wabash Valley Power Association’s Matt Dorsett said. “What are the next steps for MISO? It’s certainly on our radar, and I think it’s coming quicker than we’d like.”
Prabhakar said MISO can begin adding more sophisticated EV load shapes in planning models. He said previous attempts to model future EV use boiled down to simple energy use increases.
“This is a more engineering-based approach,” he said, referring to the load-shaping approach.
Veriquest’s Dave Harlan asked whether MISO would also consider that, by 2040, several MISO generators could have already installed storage that would already serve to flatten load.
Prabhakar agreed potentially disruptive technologies like storage and EV charging should be considered together.
Multiple stakeholders also asked MISO to keep an eye on burgeoning, ultra-fast technology that can fully charge a vehicle within minutes, placing extra demand on the grid.
PHILADELPHIA — “There’s probably no topic that inspires more emotions” than electromagnetic pulses (EMP), says Electric Power Research Institute CEO Michael Howard.
An Amazon search of the topic shows why, he said at the Edison Electric Institute’s 2019 conference here Tuesday. “I haven’t done this in a little while, but I know three years ago, the first 19 of the top 20 books [on EMPs] were science fiction. And [they talk] about the end of the world,” he said. “It’s not a good day, but it’s not the end of the world when you have an EMP blast. That emotion creates hysteria. It creates unrealistic understanding about what EMP is really about and what we need to do to mitigate the impact.”
In April, EPRI released a study that concluded a high-altitude nuclear explosion could cause a multistate electric outage but not the nationwide, months-long blackout some observers have warned of. (See EPRI Report Downplays Worst-Case EMP Scenario.) On Wednesday, a NERC task force met for the first time publicly to discuss the EPRI research and President Trump’s March 26 executive order directing the federal government to protect the nation’s critical infrastructure from EMPs. (See EMP Task Force Takes ‘First Bite of the Elephant.’)
Mark P. Harvey, the National Security Council’s senior director for resilience policy, told the EEI crowd the executive order was long overdue.
“It’s been a known threat for a long time, and we get a lot of questions that say, ‘Has the threat picture changed? Is somebody now more capable? Why are you doing this now?’” said Harvey. “Frankly, it was time to take action. We’ve known about this for so long, but we haven’t had decisive action.”
Harvey said those who consider the risk of a high-altitude EMP (HEMP) remote shouldn’t dismiss the threat.
“Twenty-five years ago, the Department of Energy proved you could take material that’s already posted online and build an EMP generating device for as little as $50 with a trip to Sally’s Beauty Supply and Home Depot and knock out power to a building about this size,” he said, referring to the Marriott Hotel where EEI met.
“Don’t think just missiles over the poles, high-altitude nuclear detonation when you’re thinking about EMP. … There are ways of doing this on smaller scale with flux compression devices [or] high-powered microwave devices that could be applied against particular critical infrastructure.”
Harvey said the potential impact of such an attack has been magnified because “our critical infrastructure not only is more interconnected than it ever has been, it is now to a point where its operating with as little excess capacity as possible. It is almost maxed out within our electric sector, our communications sector, our transportation networks. So, there is little margin for error and little margin for loss across all of those critical infrastructure sectors, especially when you consider how connected they are and that you can have cascading impacts.”
Moderator Caitlin Durkovich, a director at Toffler Associates and the Department of Homeland Security’s former assistant secretary for infrastructure protection, said she is amazed by the lack of awareness about the threats of EMPs and geomagnetic disturbances. “There are people who very much think this is a thing of science fiction. They would laugh and say, ‘Really? There’s something called space weather?’”
“We are very good at planning for what’s in the rear-view mirror,” she said. “We have to get better at planning for what’s on the horizon, and even the unimaginable.”
Robert Blue, CEO of Dominion Energy’s Power Delivery Group, noted his utility supplies power to the Pentagon and numerous defense contractors and military facilities, including the world’s largest naval base at Norfolk, Va. “And a large portion of the world’s Internet traffic goes through data centers that are ours … in Northern Virginia,” he added. “So, as we think about these issues, we feel like we have a particularly important role to play because of that customer base.”
Blue said Dominion began developing expertise and mitigation measures after a GMD event in March 1989 caused the failure of the Hydro Québec system and trips of capacitor banks that Dominion used to control voltage.
“We started off by changing the specs for substations — capacitors, transformers [to] make sure they have the ability to withstand GMD-type events. [We] improved our situational awareness … equipment changes, process changes,” he said. “That sort of view has transferred to much of what we do on other issues of physical and cybersecurity.”
David W. Roop, Dominion’s director of electric transmission operations and reliability, has become a national authority on GMDs and EMPs, testifying before Congress on the topic in February.
Harvey said utilities and other critical infrastructure providers are now in a role like that of police and firefighters after 9/11.
“We looked to cops and firefighters after 9/11 and said, ‘You’re on the front lines of the global war on terror,’ and they said, ‘Hold on, I’m not ready for that.’ We said, ‘That’s fine. We’re going to give you doctrine, we’re going to give you training, we’re going to give you tools. And they stepped up.
“Now you, your members, your colleagues, are on the front lines of the great power competition of the 21st century,” he told the audience. ” … The defining threat of this era is the asymmetric threat to critical infrastructure.”
PHILADELPHIA — Cybersecurity was the subject of two panels at the Edison Electric Institute’s 2019 conference this week. Here’s some highlights of what we heard.
Hawaiian Electric Industries CEO Connie Lau, who moderated a June 10 panel on grid security, said her utility is a cyber target in part because the Honolulu area is home to the Defense Department’s Indo-Pacific Command (USINDOPACOM).
“The U.S. watches 52% of the world’s surface from our little island,” she said. ” … If our adversaries wish to compromise INDOPACOM’s mission readiness, it’s unlikely they’re going to go directly after the DoD but more likely they might target the critical infrastructures that service those bases.”
“The good news is that our industry’s partnership with the government has never been stronger, led by ESCC [the Electricity Subsector Coordinating Council],” added Lau, who is chair of the president’s National Infrastructure Advisory Council. “Our sector’s coordinating council is considered the best around and a model for other sectors.”
Brian Harrell, the Department of Homeland Security’s assistant director for infrastructure security in the Cybersecurity and Infrastructure Security Agency (CISA), agreed.
“When you have CEOs in a room and we’re having conversations about storm restoration … whatever the issue is, we know that when we can engage the senior leaders, things all of a sudden happen. And we don’t necessarily see that in other critical infrastructure sectors.”
Harrell joined DHS after stints as NERC’s director of critical infrastructure protection programs, where he headed the Electricity Information Sharing and Analysis Center (E-ISAC), and as managing director of enterprise security for Duke Energy.
Harrell recalled when NERC began planning for its first GridEx in 2011, “not a whole lot of folks wanted to play in a cybersecurity exercise with their regulator. And now I think we’ve been able to get over that hill. … The reason we do this is for us to collectively — from a government and industry response — get better. To ask ourselves the hard questions under blue sky conditions and not necessarily when things go wrong. We do not want to be passing around business cards in the midst of [a] crisis.”
Harrell warned against the risk of “security fatigue.”
“We’re bored of talking about information sharing at this point. But in reality, it’s one of the most critical things we do,” he said.
He also called on the industry to become more proactive in anticipating threats. “We cannot [be] constantly bolting security on to some of our systems and plans that we have. We need to get ahead of the adversary.”
Adrienne Lotto, deputy assistant secretary in the Department of Energy’s Office of Cybersecurity, Energy Security, and Emergency Response (CESER), discussed DOE’s Cyber Analytics Tools and Techniques (CATT) and Cybersecurity for the OT Environment (CYOTE) projects, which hope to improve situational awareness.
“Threats for the sector today are forcing us to think differently and act differently to ensure what we are telling our systems to do is actually what’s happening out on those systems,” she said. “Right now, there’s no way to know with any degree of confidence that an app, a switch or a router or anything is doing precisely and only what you purchased it to do.”
A Pawn
Duke Energy Chief Information Security Officer Dennis Gilbert, who moderated a June 11 panel on the challenges of the interconnected grid, said his company, like other utilities, has become “a pawn in the geopolitical struggle.” He lamented hackers have turned the dark web into a marketplace for “cybercrime as a service.”
Robert M. Lee, CEO of cybersecurity company Dragos, said while experts have learned much about threats to industrial environments in the last five years, “a lot of our frameworks, regulation, best practices … [haven’t] adapted.”
“We’re actually using a lot of enterprise security strategies and then forcing them on the industrial side of the house. To actually take lessons learned, we’re going to have to do that as a community. We can’t just wait for [National Institute of Standards and Technology] to put out the latest thing or for [the] NERC CIP [standard] to be adapted. It’s going to be the electric sector leadership that steps up and takes their role and says here’s what we’re learning out in the field. And here is what we think the government can do on top of that.”
“What keeps me up at night is not Duke or Southern Co. going down; I think they have generally good security,” he continued. “What concerns me is distribution. [If hackers cause] a 30-minute power outage …. Congress is going to freak out because the public is going to freak out. They’ve heard everything from Ted Koppel’s book [Lights Out] to [predictions] about we’re all going to die. … If we don’t get a control on that narrative, the fear alone could outpace what we’re trying to accomplish.”
Frank J. Cilluffo, director of Auburn University’s McCrary Institute for Cyber and Critical Infrastructure Security, said industry and government have “spent five years sniffing each other. I think the trust is there now,” he said.
In addition to those from China and Russia, Cilluffo warned of risks from North Korea and Iran. “What they lack in ability, they make up in intent,” he said.
Steven Dougherty, global leader of IBM Security’s Energy, Environment and Utilities group, warned social engineering tactics are becoming more automated. “Look at the work that was done on BlackEnergy. That was a team of [about] 35 different coders who worked on that malware. The sophistication that we’re seeing in this space is significantly greater than in the past.”
President Trump’s March 26 executive order calling for actions to protect the grid from electromagnetic pulses (EMPs) has “troublesome” timing requirements, a Department of Homeland Security official told a NERC task force at its first public meeting Wednesday.
The task force was formed in response to the Electric Power Research Institute’s April report on EMPs, which concluded a high-altitude nuclear explosion could cause a multistate electric outage but not the nationwide, months-long blackout some observers have warned of. (See EPRI Report Downplays Worst-Case EMP Scenario.)
The task force, which met at NERC headquarters in D.C., was charged by the board of trustees to determine if any immediate mitigation should be taken and to identify additional research needs, said Vice President of Standards Howard Gugel. It is expected to make any recommendations for guidelines or other actions by the third quarter.
A Department of Homeland Security official said President Trump’s March 26 executive order on EMPs has “troublesome” timing requirements. | Department of Homeland Security
Using Physics to Bound Risk
Scott Backhaus, the Department of Homeland Security’s coordinator for electromagnetic pulse impacts on critical infrastructure, gave a briefing in which he described the “huge timing challenge” posed by the president’s executive order and talked about the need to revise the definition of critical infrastructure.
Backhaus urged the task force to “use physics and engineering to constrain our analysis” and avoid overestimating the risk.
“Let’s incorporate the engineered nature of the infrastructure systems. … Impacts may already be mitigated by existing control systems, redundancy backups, hardening that’s already in place … and existing restoration plans.”
“EMP is one of many threats, so we need to develop our best estimate of risk from EMPs and [geomagnetic disturbances] to place them in context of the other risks that the bulk system faces,” he continued. “In a world of constrained resources, if we overestimate one risk, that will suck all the air and all the money out of the room, and it could potentially degrade our ability to harden and respond to other risks.”
Seeking a Government Consensus
The Department of Energy (DOE), the Defense Threat Reduction Agency (DTRA), DOE’s nuclear weapons labs and DHS are working to develop a U.S. government consensus on intelligence- and science-based EMP threats that it can declassify and share with the industry, Backhaus said. “What’s the explosive package? How is it going to be delivered? How high can it be delivered? What’s the worst-case delivery?”
The analysis will be based on several EMP “waveforms,” to account for threats from multiple actors with a range of nuclear weapons technologies. “We need to address a sufficient number of different technologies [so] that we cover the span of our adversaries,” Backhaus explained. “We can estimate the impacts across the entire threat spectrum. We’re putting the decisions about how much risk you’re willing to take … to the people who spend money — the utilities.”
One task force member asked how different the current waveforms are from those developed in the 1950s based on the Soviet Union’s capability. “No comment,” Backhaus responded. “No comment,” he repeated as the questioner attempted a follow-up query.
Gugel asked Backhaus if NERC members will be able to obtain unclassified information on peak magnitudes or the duration of EMP events. “We’ve got to make sure we’re in the right ballfield,” Gugel said.
“How we remove the classified information is still a topic of discussion,” Backhaus said.
Example of the area affected by E1 EMP resulting from a high-altitude nuclear explosion | Electric Power Research Institute
‘Huge Timing Challenge’
Backhaus noted the executiveorder calls for development of vulnerability impacts at the 15-month mark from March 26. “But for some reason, technology mitigation options and regulatory incentives come in month 12. So, we will not have finished any vulnerability or impacts by the time we have to suggest mitigation and regulatory incentives and non-regulatory incentives. There’s a huge timing challenge here.
“I need to give FEMA some guidance on the size of power outages that would be expected from an … EMP effect. Do they need to update their plans or are their plans sufficient to handle an outage of that size?” he continued. ” … FEMA needs to go and update its response recovery plans in month six. We still don’t even know what the impact is.”
“The timing wasn’t determined by DHS. It wasn’t determined by DOE,” Backhaus said.
Backhaus said DHS’s only option is to use existing impact studies that are sound and consistent with each sector’s best practices. DHS and DOE are currently peer-reviewing recent EMP impact studies from different entities, an effort to quell the “controversy” over the proper model to use.
Identifying Critical Infrastructure
Backhaus said DHS’s traditional criticality approach focuses on singular assets or tight clusters of assets, such as certain chemical plants and some banking and finance. “The threshold for calling them critical is when there’s a significant national or regional impact if one asset — or one cluster of assets — goes away.”
That, he said, is not appropriate for electric assets. Bulk power systems are highly redundant and “don’t really have singular assets. You can lose a large multi-gigawatt generator and … it impacts your operations, but you can operate through because you have redundancy both in the generation fleet and in the [transmission] network.”
The DHS approach also fails to recognize common-mode disruptions of components that are replicated throughout the networks.
“A lot of the work that [EPRI’s] done is on protective relays. Those would never be identified in this approach as a critical assets because the failure or any one of them is not that significant on the national or regional scale.”
He proposed adding to DHS’s criteria the identification of regional scale infrastructure networks whose disruption would create significant impacts. “So, things like ERCOT, … WECC, or [CAISO], however it makes sense to break those down,” he said.
He would also identify local distribution companies with common architecture that are replicated nationwide.
EPRI Study
EPRI’s Randy Horton briefed the task force on its April study, which recommended mitigation measures including shielding cables, enhanced grounding and modifications to substation control houses.
Horton acknowledged the study was limited to the grid and transformers and did not examine potential impacts on generation. “Trying to solve the EMP problem on the bulk power system is very much like trying to eat an elephant,” he said, noting the study’s call for additional research. “You’ve got to start somewhere, and the transmission system is a very important aspect of resiliency.”
Illustration of an substation control house hardened against an E1 EMP | Electric Power Research Institute
Horton said the study found the impact of an E-3 pulse — a very low frequency pulse similar to severe geomagnetic disturbances (GMDs) although much shorter in duration — would be a voltage collapse in “a large region … on the order of the 2003 blackout, maybe a little bigger than that.”
EPRI is now conducting 18- to 24-month field trials of hardening measures at 17 U.S. utilities. Horton said the trials hope to prevent unintended consequences from the measures, such as protective system misoperations.
“There’s lots more work to be done,” he said. “We’re not finished by a long shot.”
Task Force Membership
The task force members, selected from names submitted by trade groups, include representatives from utilities Southern Co., American Electric Power, Dominion, Exelon, TVA and Xcel, along with the New York Power Authority, the NASA Goddard Space Center, FERC’s Office of Electric Reliability and the National Rural Electric Cooperative Association. The task force is not accepting additional members, said NERC’s Soo Jin Kim, to keep its numbers manageable.
It will hold a technical workshop on July 25 at NERC headquarters in Atlanta, she said.
Gugel said although the task force hasn’t been formalized with a reporting relationship to a standing committee, it will probably report to the Operating Committee, the Planning Committee or both. (See Standing-room Only for NERC EMP Meeting.)
PHILADELPHIA — Energy Secretary Rick Perry hasn’t given up on his campaign for coal and nuclear generation, but he conceded Tuesday he hasn’t made much progress either.
Speaking at the Edison Electric Institute’s 2019 annual conference, Perry said he continues to support an “all of the above” generation mix, praising coal and nuclear as the “most reliable” generation resources and criticizing the “blatantly discriminatory rules and regulations” he said are hampering them.
Perry called out the Obama administration and Green New Deal Democrats who he said want to ban anything but wind and solar power. “They will ruin our ability to run our economy when the sun doesn’t shine and the wind doesn’t blow,” he said.
He also criticized New York officials for blocking new natural gas pipelines, saying they were to blame for the “bizarre spectacle” of New England having to import Russian LNG last winter.
In a press conference later, Perry conceded “we’re pretty much at the same point where we were” after the White House failed to act on the Department of Energy’s proposal for price supports for “fuel secure” generation last fall. (See FERC Rejects DOE Rule, Opens RTO ‘Resilience’ Inquiry.)
Perry said he has seen “no movement from FERC or the White House.”
But it’s not all bad, he said, citing “progress” on research into carbon capture and expanded coal exports.
After his speech, Perry sat for a brief interview with incoming EEI Chair and Exelon CEO Chris Crane.
Crane thanked Perry for the electric load provided by the Department of Energy’s Argonne National Laboratory in Commonwealth Edison territory in Lemont, Ill.
“Keep the prices down,” Perry responded.
“Keep the nuclear plants running,” Crane shot back, before fist pumping with the secretary.
PJM and its Independent Market Monitor must turn over a trove of documents stemming from allegations of market manipulation against now-defunct Coaltrain Energy over its profits on up-to-congestion (UTC) trades collected in 2010.
The U.S. District Court for Southern Ohio subpoenaed both agencies on June 4 for records supporting complaints to FERC that the trading group profited by $4.2 million using an “over-collected loss strategy” that diverted more than $8 million in marginal loss surplus allocation (MSLA) payments between June and September 2010.
FERC and Coaltrain’s former staff — including leaders Shawn Sheehan and Peter Jones and traders Jeff Miller, Jack Wells, and Robert Jones — have been locked in a lengthy and expensive court battle over the commission’s demand for $42 million in fines and disgorged profits as penalty for the bad behavior.
Coaltrain is one of at least three firms accused by FERC of market manipulation for profiting on line-loss rebates from what the commission called risk-free UTC trades in PJM. (See Traders Deny FERC Charges; Seek Independent Review.) The company maintains it didn’t manipulate the market, its trading strategy wasn’t deceptive and it didn’t engage in wash trades or try to affect market prices.
Chart illustrates the time period over which Coaltrain Energy engaged in its over-collected losses (OCL) strategy, illegally earning it payments from PJM’s marginal loss surplus allocation program. | FERC
FERC also alleged Coaltrain’s use of employee-monitoring software gave investigators evidence of the company’s trading strategy. FERC said Coaltrain employees at first claimed they had forgotten about the software — Spector 360 — when the Office of Enforcement initially asked and then repeatedly delayed giving up the data. Sheehan and Jones allegedly didn’t have the program installed on their computers, effectively concealing their actions. (See FERC: Spy Software Provide Evidence of UTC Scam.)
Now, the court wants the Monitor and PJM to hand over all communications regarding Coaltrain from Jan. 1, 2010, through Sept. 30, 2010 — including phone calls, emails, studies, simulations, calculations and even the 2009 State of the Market Report.
The Monitor said in a June 4 email to PJM stakeholders the court order forces it to reveal confidential member information. Those opposed to the release must alert the IMM no later than June 28, the Monitor said.
The Pennsylvania State Senate’s top Democrat wants other lawmakers to sign onto his plan to cap energy sector emissions in a state known for its abundance of fossil fuels — an uphill battle he says matches the ambitions of Gov. Tom Wolf and other zero-carbon crusaders in the Mid-Atlantic.
Senate Minority Leader Jay Costa | Jay Costa
Senate Minority Leader Jay Costa said Friday his “cap and invest” program instructs the Environmental Quality Board (EQB) to adopt a mechanism that will prioritize the deployment of zero-emission technologies in an effort to reduce carbon pollution from the state’s electric power sector by at least 90% over the next 20 years.
“The federal government has abdicated responsibility on climate change — states, local governments, private companies and citizens must take the lead in enacting equitable policies to mitigate the growing impacts of climate change,” he said in a press release Friday.
The board would also have the authority to develop a market-based carbon pollution limit that generates revenue for investments in renewable resources that promote energy efficiency and affordability. Rather than imposing a strict charge like a carbon tax, the plan uses an auction system, although both strategies “create a cost for carbon,” said Costa spokesperson Brittany Crampsie.
“Pennsylvania has already made important strides towards reducing greenhouse gases, and mayors from Pennsylvania’s two largest cities have already committed to reducing carbon emissions,” Costa said. “But more work is needed to achieve the emission reductions and to make sure Pennsylvania isn’t left behind in the burgeoning growth of clean energy technologies and jobs.”
The legislation comes just two months after the EQB sent a controversial petition from the Clean Air Council to the Department of Environmental Protection for review and possible rulemaking. The petition calls for a cap-and-trade program that requires power producers to cut emissions to below an established “cap” that will be reduced by 3% each year until reaching zero. Those unable to stay below the limit must buy credits from producers with room to spare.
The Pennsylvania Manufacturers’ Association called the proposal a “regulatory scheme” that unfairly side-steps the legislative process, where such a debate belongs. It’s unclear how similar Costa’s bill is to the petition, if at all, though PMA President David Taylor said Monday it’s likely “more of the same.”
Mark Szybist, a senior attorney with the Natural Resources Defense Council, pointed out that while the bill’s language has not been released, its co-sponsor memo indicates it will not levy a carbon tax, instead directing the EQB to adopt “cost-effective regulatory mechanisms.”
“The board could do that by creating a market-based cap-and-invest program that puts a price on carbon dioxide and could also develop other approaches as a complement or alternative to a cap-and-invest program,” Szybist said.
Uphill Battle
Since 2007, the natural gas industry has spent nearly $70 million on state lobbying efforts, including $11.2 million in campaign donations, according to data compiled in the Marcellus Money report. Likewise, natural gas drilling in the commonwealth exploded over the last decade, pushing its output second only to Texas and providing for 20% of the national demand — a figure expected to double by 2040.
The boom has lowered residential electricity bills by an average of $102/month, the Pennsylvania Independent Oil and Gas Association said. Federal data also show a 14% decline in carbon emissions from the proliferation of gas across the country and 30% in Pennsylvania alone.
Still, Costa’s plan would further entrench Pennsylvania in the growing pool of Mid-Atlantic states pursuing ambitious clean energy goals in response to the nation’s withdrawal from the Paris Agreement, a worldwide initiative to limit the increase in global temperature to below 2 degrees Celsius above pre-industrial levels.
In April, Pennsylvania joined the U.S. Climate Alliance, and Wolf released an update to the state’s own action plan to achieve a 26% reduction in statewide greenhouse gas emissions by 2025. (See Pennsylvania Joins the US Climate Alliance.) He’s also called for a severance tax on the natural gas industry to fund infrastructure improvements and joined with the governors of New Jersey, New York and Delaware in supporting a moratorium on natural gas drilling in the Delaware River Basin — making him a controversial figure within the sector and among the state Republicans the industry supports.
“Pennsylvania has already benefited immensely from the boom in natural gas extraction, and House Republicans are dedicated to building on those gains rather than endangering them,” House Speaker Mike Turzai (R) said in a press release Friday that criticized the governor’s severance tax proposal and other economic policies. Turzai received $128,000 from natural gas industry donors in the last campaign cycle — 40% more than Wolf and the most of any state candidate running for office.
“It is an age old and long-established maxim that, if you tax something, you will get less of it,” Turzai said. “And yet, perhaps that is precisely what our Democratic governor and his allies in the House Democratic Caucus intend with his proposed severance tax: to make natural gas more expensive to produce, to deter fracking and to chase it out of Pennsylvania, as New York has done.”
It’s the fifth time Wolf has proposed replacing the state’s impact fee — which gas companies pay for each well they drill — with a severance tax that would be based on the amount of gas each well produces. Democrats argue the impact fee leaves money on the table, while Republicans insist it returns investment right back to the communities where the drilling has the most impact, allowing for localized infrastructure and environmental improvements.
Although Costa’s plan doesn’t overtly tax natural gas generators, the intention is obvious, critics said.
Taylor, who had not yet seen the co-sponsorship memoranda, argued that further regulating industry in the U.S. does nothing to reduce worldwide pollution levels. He said countries like China, India and Brazil produce far more emissions than U.S.-based companies, where regulations make air quality in cities across the country cleaner than in Paris.
“This is profoundly wrongheaded that we are going to further turn the screws in the place where this is done the cleanest with the least impact on the environment,” he said. “This is a global issue, and so you have to take a global perspective.”
So far, five Democratic senators have co-signed Costa’s bill, and Crampsie said the feedback has been largely positive.
“Capping carbon emissions from Pennsylvania’s power sector is absolutely critical in order to reduce a major source of pollution driving climate change,” said Tom Schuster, senior campaign representative for the Pennsylvania Sierra Club. “This legislation is a concrete step toward achieving the goals Gov. Wolf has set forth in committing Pennsylvania to the U.S. Climate Alliance and to building a clean and healthy commonwealth now and for future generations.”
Jacquelyn Bonomo, CEO of environmental group PennFuture, encouraged support of the “comprehensive” climate change plan, calling it a “tremendous opportunity … to improve the health of our families and drive forward a clean and resilient energy economy that benefits all residents no matter where they may live.”
HANNA, Wyo. — PacifiCorp subsidiary Rocky Mountain Power broke ground Wednesday on 1,150 MW of new wind power on the high plains of southeastern Wyoming near its existing Seven Mile Hill wind farm.
The company’s Energy Vision 2020 project is the latest in a series of mega-sized wind farms slated for the gustiest parts of the nation in Wyoming and New Mexico. The 99-MW Seven Mile Hill and other wind farms occupy a part of Wyoming where mountain chains end, allowing 70-mph winds to rush through regularly.
“These are gargantuan projects,” RMP CEO Gary Hoogeveen said of his company’s latest endeavors.
Some of the projects in Wyoming and New Mexico are intended to provide as much wind power as nuclear plants. Questions remain, however, about whether the electricity is needed and how it will get to densely populated areas of the West, particularly California.
In its Energy Vision effort, PacifiCorp/RMP plans to build three new wind farms capable of producing 350 to 450 MW each, along with a 140-mile high-voltage line to link the new turbines to its transmission system. It’s also “repowering” existing turbines at Seven Mile Hill and nearby projects with longer blades and new generating units atop the nearly 300-foot towers.
At the Western Conference of Public Service Commissioners annual meeting in Cheyenne last week, Idaho Public Utilities Commission President Paul Kjellander asked why the Energy Vision 2020 project was moving forward when his state has enough electricity for years to come. Idaho is one of the project’s intended recipients.
California Public Utilities Commission President Michael Picker questioned the construction of so much wind power in Wyoming — including a planned 3,000-MW project — and said there isn’t a clear transmission path to California.
“I can see maybe 1,000 MW, but not 3,000,” Picker said in an interview at the conference.
Many see California, with its 40 million residents, as a prime market for wind power from less populated Western states after it passed a 100% clean-energy mandate last year in Senate Bill 100. (See Calif. Gov. Signs Clean Energy Act Before Climate Summit.) Wyoming has about 578,000 residents with wide-open ranges and powerful winds.
PacifiCorp, based in Portland, Ore., is part of CAISO’s Western Energy Imbalance Market, which allows real-time trading across state lines.
RMP Vice President Todd Jensen, who oversees transmission planning, said the electricity from the Energy Vision project is intended only for the company’s service territory, which contains about 1.1 million customers in Idaho, Utah and Wyoming.
The utility has determined that getting its wind power to California would require tying into substations in Utah and Nevada and building hundreds of miles of new transmission lines, Jensen said. “There’s not really the bandwidth or capacity to get it to California.”
Western Wind Rush
Some are aiming to change that.
The TransWest Express Transmission Project is intended to provide 20,000 GWh/year of clean energy generated in Wyoming to the Desert Southwest, including Southern California, according to the Western Area Power Administration. The federal power marketing administration is supporting the project through its Transmission Infrastructure Program.
The TransWest line would “run about 728 miles from south-central Wyoming, crossing Colorado and Utah, to the Marketplace Hub about 25 miles south of Las Vegas, Nev.,” WAPA said. “When completed, this project would have the capacity to transmit about 3,000 MW of electricity generated primarily from renewable resources at planned facilities in Wyoming.”
The project is still in the permitting phase.
TransWest Express is a subsidiary of The Anschutz Corp., whose owner, conservative billionaire Philip Anschutz, built his $11 billion (2019 net worth) fortune in oil, railroads, telecommunications, real estate and entertainment, Forbes says. Anschutz is planning to build the world’s biggest wind farm on 300,000 acres he owns in Wyoming, the business publication says.
Anschutz’s Chokecherry and Sierra Madre Wind Energy Project near Rawlins in south-central Wyoming would consist of 1,000 turbines generating up to 3,000 MW — with much of the energy intended to be sent to California over the TransWest Express.
The massive wind projects have been undergoing environmental review, permitting and right-of-way acquisition since 2006. Completion is slated for 2026, according to Power Company of Wyoming, another wholly owned Anschutz subsidiary.
In New Mexico, Pattern Development’s Corona Wind Project is moving forward. Pattern’s plans call for construction of up to 950 wind turbines with the potential to produce 2,200 MW of electricity. That’s about the same capacity as Pacific Gas and Electric’s Diablo Canyon nuclear power plant, the last in California, which is scheduled to retire by 2025.
In September 2018, the New Mexico Public Regulation Commission declined to let the SunZia Southwest Transmission Project go ahead, citing unresolved concerns, especially that the developers had “failed to sufficiently define the location of the transmission line route for which it seeks approval.”
The commission denied the project without prejudice so that SunZia’s developer, SouthWestern Power Group, could firm up its plan and resubmit it.
SunZia’s $2 billion transmission project would consist of two bidirectional 500-kV lines with a total rating of 3,000 MW. Its proposed 520-mile path from central New Mexico south across the Rio Grande and the Sonoran Desert in Arizona has met with resistance from federal agencies, the military, environmentalists, community groups and ranchers since it was first proposed in 2008.
Some of those concerns have been resolved, particularly with the U.S. Bureau of Land Management and Defense Department, whose land the lines would cross or abut, but problems with some private landowners persist.
SunZia’s fate is linked with the Corona project, which would be the line’s anchor tenant. The transmission line’s developer says it will try again.
“SouthWestern Power Group is planning to reapply for location approval with the PRC during 2019, providing the additional information cited in the PRC decision,” the company said in its most recent update.
CHEYENNE, Wyo. — Former Gov. Jerry Brown sent his energy aide Michael Picker from Sacramento to San Francisco five years ago, telling Picker he wanted him to serve on the California Public Utilities Commission to try to set things right at the beleaguered agency.
“‘I need you to go down there,’” Picker recalled Brown saying. “He voluntold me.”
In 2014, the commission was in disarray. Its then-president, Michael Peevey, was under fire for his allegedly cozy relationships with the investor-owned utilities it regulated. Accounting irregularities were being investigated. And the San Bruno gas pipeline explosion of 2010 had raised concerns about its ability to ensure public safety.
CPUC President Michael Picker and FERC Commissioner Cheryl LaFleur attended the annual meeting of the Western Conference of Public Service Commissioners in Wyoming last week. | Michael Picker
Picker, 67, became president in early 2015 after Peevey’s departure and led the commission through utility-sparked catastrophic wildfires, the huge gas leak at Aliso Canyon and other crises. He recently announced he would retire once Gov. Gavin Newsom appoints his successor, which he has yet to do.
Outspoken as usual, Picker talked about his accomplishments and the commission’s challenges during an interview Wednesday at the Little America Hotel and Resort, where he attended the annual meeting of the Western Conference of Public Service Commissioners.
“It’s a process of rebuilding an organization that’s stumbling over its own history,” Picker said of the commission while sitting outside on a sunny spring morning on the high plains.
The commission was established more than 100 years ago to make unhurried and often unpopular decisions, Picker said. It began in 1911 as the California Railroad Commission and was meant to stem the abuses of powerful railroads, especially the Southern Pacific Railroad, whose reach extended into the State Legislature, the governor’s mansion and even the state Supreme Court.
“Prior to the founding of the CPUC, the Southern Pacific Railroad dominated California politics,” according to a history of the CPUC posted on the commission’s website. The railroad “provided free train passes to politicians and their family members, donated generously to political campaigns and dominated state party conventions to ensure delegates were friendly to the company’s interests.”
“Gov. Leland Stanford, a Southern Pacific co-founder, went so far as to appoint Edwin Crocker to the California Supreme Court, where Crocker served while retaining his position as general counsel for Southern Pacific,” it says. “Public backlash to Southern Pacific gave rise to the Progressive movement, which succeeded in electing Gov. Hiram Johnson and eventually establishing the CPUC to rein in railroad power and influence.”
The commission was renamed and given oversight of electric and gas utilities, telecommunications and water companies. It’s had the somewhat thankless job of approving new utility infrastructure and getting ratepayers to cover costs.
Picker said the commission is still a product of its era and not set up to respond to fast-changing technologies and public-safety crises such as wildfires. But he said he’s done his best to change that within the limits prescribed by statute and the state constitution.
In particular, he said he’s instituted organizational and cultural changes among PUC staff and its five commissioners — and he’s put far more emphasis on public safety.
“When I got there, no one was talking about safety, even though San Bruno was just a few years before,” Picker said.
Shortly after taking office, Picker — whose expertise was in environmental issues and organizational reform, not utilities — decided to stand outside the PUC headquarters on Van Ness Avenue and hand out fliers to the commission’s hundreds of employees. The fliers invited workers to contact him on his cell phone with safety concerns they felt had been ignored.
“It was a way for me to have conversations with staff,” Picker said.
Some who read the message contacted Picker, saying it was the first time they’d spoken with a commissioner, he said. They said their safety concerns would travel up the staff chain of command but never be dealt with by commissioners, who were aloof and unresponsive.
“That taught me a lot about what needed be to be done at the PUC,” he said.
Creating Consensus
The situation was right up Picker’s alley. He’d spent years addressing vexing problems in unorthodox ways and bringing together people from different arenas. His work had included serving in Brown’s first administration in the early 1980s setting up toxic waste programs and as a state deputy treasurer in the late 1990s.
“I try to focus on developing solutions that don’t lead to the next round of failures,” Picker said.
As chief of staff to Sacramento Mayor Joe Serna Jr. in the 1990s, he set up neighborhood divisions within city government to give residents more say and to encourage officials to tackle local issues.
Gov. Arnold Schwarzenegger tapped him to help get renewable energy projects approved by FERC and other federal authorities. He set up a multiagency team consisting of representatives from the federal Bureau of Land Management, the U.S. Department of Agriculture and different state agencies to map out the process for 150 projects, each generating more than 100 MW. It was his first real work in the energy sector, he said.
Schwarzenegger, and later Brown, asked him to deal with the CPUC, which as a rate-setter is the “second largest taxing agency in the state,” he said. Some lawmakers distrusted the commission and, over time, created a system of checks and balances to slow down its decision-making and force it to operate transparently. For instance, it is only allowed to decide cases on the written record before it.
A slow, lengthy process is good if there’s a danger that utilities are trying to game the market, he said. But it’s not so good at responding to fast-moving changes that people care about, such as wildfires and cell phone service.
“The way we make decisions is very hard for people to understand and participate in,” Picker said.
Picker has defended the CPUC’s practices before the State Legislature as utility-sparked wildfires ravaged the state.
When he became CPUC president, Picker said he decided not to act like his predecessors. Instead of using his prerogative to name an executive director, he made it a group project “designed to create consensus … [so] commissioners felt like they were part of the organization,” he said.
In August 2015, the commission began an investigation into Pacific Gas and Electric’s safety culture in response to the San Bruno gas explosion, which killed eight residents of a suburban San Francisco neighborhood. That was before the massive Butte Fire of 2015, the disastrous wine country fires of 2017 and last year’s Camp Fire, which leveled the town of Paradise and killed 85 people. PG&E equipment started nearly all the fires, state investigators concluded.
Picker said he and his fellow commissioners reinvigorated the CPUC’s Safety and Enforcement Division, which had languished under prior presidents. Deputy Executive Director Elizaveta Malashenko was selected to head the division.
“I’m proudest we brought back the safety division,” Picker said of his achievements.
A bill signed by Brown in 2018, SB 901, gave the CPUC oversight of IOUs’ wildfire mitigation plans. The commission recently approved the first plans under the bill, along with provisions governing power shutdowns for fire prevention. (PG&E took advantage of those provisions on Saturday and Sunday, when windy conditions caused fires near Sacramento and threatened foothill areas. PG&E told nearly 30,000 customers they could lose power.)
‘A Matter of Time’
Picker said it will be up to future commissions to continue improving wildfire safety.
Utilities need to use drones and other technology to increase line inspections, he said. The CPUC cannot inspect all the state’s power lines, as some have suggested, he said. It would take at least 1,300 new employees and $125 million a year to make that happen, Malashenko recently told a legislative committee. (See California Utilities Prepare as Fire Season Looms.)
“It flies in the face of what we were designed to do,” Picker said. The CPUC performs limited inspections of railroad lines, mainly at-grade crossings, while the railroads use specially equipped engines to inspect their tracks, he said.
The legislature could make changes to how the commission operates, or the state constitution could be amended, he said, “but it’s clearly not the right time to do all of that,” with wildfires and other issues taking precedence.
Picker said one notable change during his tenure has been the perception of California by other Western states. CAISO’s efforts to start a Western RTO have been largely rebuffed both inside and outside the state, he said. But the Western Energy Imbalance Market has been embraced as a no-strings-attached way to trade energy across state lines. Animosity toward California has decreased, he said, and one day the West may be organized into a formal wholesale market.
“Everyone knows where this is going,” he said. “It’s just a matter of time.”
As for retirement, Picker said he felt that after 10 years dealing with energy, and a new governor wanting to name a new president, it was time. “It seemed like a natural break,” he said. Newsom did not ask him to leave, he said.
Picker said he’ll keep pursuing new challenges and may return to his roots as a river guide. He’s been invited on a monthlong trip down the Blue Nile in Ethiopia and Sudan, but he hasn’t made up his mind to go.
