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June 18, 2018March 25, 2025

NYISO Management Committee Briefs: June 12, 2018

COOPERSTOWN, N.Y. — As it wrestles with the increasing penetration of distributed energy resources and growing efforts to decarbonize the grid, FERC is closely watching New York’s efforts to price carbon into its wholesale electricity market.

“New York is working on carbon pricing, which is an attempt to reflect and achieve and reconcile state policy goals in the market, through the market, rather than just accommodate them as in New England and PJM,” Becky Robinson, deputy director of FERC’s Division of Economic and Technical Analysis, told NYISO’s Management Committee on Tuesday. “So the commission is watching very closely.” (See NYISO Favors Cost Levelizing on Carbon Charge.)

Staff from FERC’s Office of Energy Policy and Innovation also attended the meeting June 12 and answered questions from stakeholders.

ISO-NE’s Competitive Auctions with Sponsored Policy Resources construct “is what we term more of an accommodate approach, where the goals are to allow state-supported resources to participate in the capacity market, but put a structure in place that maintains competitive markets,” Robinson said. (See Split FERC Approves ISO-NE CASPR Plan.)

PJM has also filed two competing proposals dealing with state-sponsored resources that the commission must rule on by June 29, she said.

“The first PJM proposal, capacity repricing, is a different type of accommodate solution, and the second is what they call MOPR-Ex, which expands” PJM’s existing minimum offer price rule to bar subsidized resources from receiving a capacity commitment, Robinson explained. (See PJM Urges FERC to Act on ‘Jump Ball’ Despite Criticism.)

DERs Feedback

Speaking about the commission’s April 10-11 technical conference on distributed energy resources, Robinson said “one key takeaway is that states want flexibility. You still need to flesh out what is the role of the distributing utility relative to that of the aggregator.” (See Ready to Act on DERs, FERC Tells Congress.)

Asked about the key areas the commission is examining in market rules for DERs, Robinson said, “Coordination is a big one … and double-counting is an issue. We think there are ways — there are tools you can use — to avoid that. And jurisdiction, that has been contentious in the docket: Who does what and where?”

Couch White attorney Kevin Lang, representing New York City, said opinions differ on how to look at FERC Order 841. (See FERC Rules to Boost Storage Role in Markets.)

“Some people think it means we should be creating rules to recognize the differences in those technologies from more traditional types of generation resources, and other folks have assumed that we should be trying to create the same rules as much as possible between new technologies and traditional resources,” Lang said.

He asked whether an energy storage project should have to meet the same market rules as a 500-MW combined cycle unit.

“I think we tried to indicate some flexibility on that,” Robinson said. “Commission staff look for ways to rationalize the participation model. … On the DER space, I don’t think we proposed a participation model for DER aggregation.”

Adequate Summer Capacity Forecast

NYISO Vice President of Operations Wes Yeomans told the committee the ISO is prepared to meet peak demand this summer, with a total of 42,169 MW of resources available to cover an expected peak of 32,904 MW, which is 2.9% above the long-term average.

Yeomans said his report was identical to that presented to the Operations Committee and the press on May 30, except for a note explaining that that the Market Monitoring Analysis Group (MMA) had visited 22 generator sites to check their reliability readiness. (See NYISO Ready to Meet Summer Demand.)

The MMA reviewed planned maintenance outages and practices in order to reduce forced outages, and also checked that generators had adequate supplies of backup fuel storage.

2018 Master Plan Focuses on Grid Evolution

NYISO is this year preparing a Master Plan with three key themes: resource flexibility, grid resilience and price formation.

Michael DeSocio, the ISO’s senior manager for market design, told the committee that ISO staff are working on a comprehensive five-year plan to prepare for anticipated changes to the bulk power system, with a focus on projects that help prepare for the evolution of the grid.

“The addition of renewable resources expected as a result of the [state’s] Clean Energy Standard will create a more dynamic grid, where supply is heavily influenced by the weather,” the draft plan said. “This necessitates a look at the incentives for flexible resources that will be needed to balance intermittent renewables, as well as alternative market designs that preserve revenue adequacy for generators needed for reliability.”

NYISO is examining how to incentivize development of flexible resources needed to balance the growth of intermittent renewables on its grid. | DOE

“Some grid operators are concerned about fuel security, but we feel pretty comfortable about fuel energy security,” DeSocio said.

Nonetheless, future changes to New York’s fuel supply mix, as well as increased demands for natural gas, may stress the grid, and the ISO recommends that it conduct a 10-year fuel security study in 2019 and, if necessary, implement market design changes in 2021.

“On carbon pricing, we got a lot of feedback,” DeSocio said, noting that stakeholders have commented that the ISO should accelerate the proposed timeline for implementing carbon pricing.

The ISO is also thinking about how to implement the market design, which they expect to have complete by Q2 2019, DeSocio said.

The revised Master Plan timeline accommodates carbon pricing implementation in 2021, which could be advanced to 2020 if stakeholders want to make it their top priority, he said.

Mark Younger of Hudson Energy Economics said he supported pricing carbon as quickly as possible, but shared the Market Monitoring Unit’s concerns about why so many of the other initiatives in the plan are listed as taking four years.

For example, transmission clearance prices: “It’s unclear why that should be hard to implement,” Younger said.

The deadline for stakeholders to submit replies to a Master Plan project prioritization survey is June 26.

— Michael Kuser

June 18, 2018

American Market Architect Reflects on Mexico’s Reforms

By Tom Kleckner

MEXICO CITY — So what drove a nice kid from Chicago — a “regular American” with a minimal knowledge of the Spanish language — to move to Mexico and not only make his home there, but help design the country’s deregulated electricity markets?

“I really had no link to Mexico,” said Jeff Pavlovic, the nice-kid-turned-40. “After looking at the whole world, I figured electricity is a very important industry, and I could make a very big impact. If you can make electricity cheaper, you can change the economy.

“I saw Mexico as a great opportunity, as a place that hadn’t embraced market principles in the electric industry,” he said in a recent interview. “It was a long shot. You’re making a big bet on major change. If I could help change the electric markets in Mexico, I thought that could have as big an impact on the world as anything. I just thought about it and came to Mexico.”

Simple as that. Pavlovic obviously has an analytical mind. The son of a teacher, he also has the academic pedigree to match his entrepreneurial spirit. He picked up economics and math degrees from Duke, an MBA from Stanford and, after moving to Mexico in 2008, a master’s in economics from the Centro de Investigacion y Docencia Economicas (Center for Economic Research and Teaching).

Pavlovic, who spent a few months studying Spanish before moving to Mexico, is now fully bilingual. “I thought my Spanish was good enough, but it took three or four years before I could really communicate,” he said.

Fortunately, Pavlovic found himself in the right place at the right time. He was in Mexico, where the state-run electric monopoly doesn’t have “51 state governments deciding the rules.”

And though he admits it was a longshot, Pavlovic’s expertise in unbundling electric utilities as a financial consultant and in generation control and dispatch for Xcel Energy landed him several different positions with the Ministry of Energy (SENER) and the Federal Electricity Commission (CFE), Mexico’s national utility. In 2011, he took a position as general director of generation, conduction and energy transformation with SENER, just as the push for electric reform, driven by the need for more efficient generation and lower prices, began in 2012.

“Very good timing. I thought it would happen six years later than it did,” Pavlovic said, referring to Mexico’s single, six-year presidential terms. “When I was dreaming of this, I didn’t think I’d be in government writing the rules. I thought I’d be on the sidelines, maybe in some private company sending suggestions that would mostly be ignored. Being in the middle of the process was better than anything I dreamed of.”

Big Designs, Slow Progress

Anxious to make the sector “more efficient and reduce costs,” Pavlovic said he and the market-design team borrowed textbook principles and elements from RTOs in the U.S. “We wanted a Day 2 settlements market at least. We wanted nodal prices,” he said. “We followed MISO and PJM in letting the system operators make the commitment decisions.”

Mexico began its incremental rollout of market reforms in 2014, but progress has been slow and halting. The financial transmission rights market has been delayed until 2019, frustrating participants who have complained about a lack of liquidity. The first midterm capacity auction in February cleared only one transaction, Enel’s 50-MW purchase from Spain’s Global Power Generation, leading one observer to say, “Whenever a bilateral agreement is signed, [the market] has a party.”

Market participants have complained about the market’s lack of transparency, exemplified by the confusion around transmission retail rates that led to a new, transitory methodology. Rate increases will be phased in through 2018 while a permanent solution is developed.

Some market participants have given themselves six months to see how the market shakes out and “grows legs,” as one player said during the recent Gulf Coast Power Association market conference in Mexico City, before jumping headlong into the market.

Pavlovic left the government last year, forming his own generation asset firm, Bravos Energia, and taking his message on the speaking circuit. (See “Market Architect Calls for Increased Transparency,” Overheard at the GCPA Mexico Electric Power Market Conference.)

Asked about his reaction to how the market has developed, Pavlovic said he believes the market design “was mostly efficient.”

“A perfectionist can always find things that could have been done better, but in the big picture, I was happy,” he said. “The way the powers were separated among the government authorities was right. The implementation has had some very good early successes with the short-term market, the auctions, the capacity market. I was pretty satisfied, but always conscious of things not going as well as I had hoped.”

mexico Bravos Energia Jeff Pavlovic — | *Bravos Energia*

Pavlovic pointed out that several market pieces — FTRs, virtual trading and a fully functional real-time market — still need to be implemented.

“Most of the [market’s] weaknesses are caused by the environment the market operates in,” he said. “How many participants are there? What kind of positions do those participants need to take?”

Pavlovic said many market participants can’t take large positions because of the lack of private generation assets in operation and uncertainty over regulated transmission rates.

“A lot of auction projects are under construction, but the market suffers from the lack of a dynamic retail market,” he said. “It’s a chain of cause and effect. With no retail market, the speed of investments is slowed down.”

A New Wave

When Pavlovic rejoined the private sector, his biggest worry was whether the market reform’s unbundling of CFE’s generation, distribution and retail businesses would hold. It hasn’t. During his GCPA keynote, he said the former monopoly continues to combine the financial accounting for its several subsidiaries.

“It’s not turning out to be as strong a separation as we had hoped for,” Pavlovic said. “They are the big player in the market, but I don’t think they have built the systems or generated the knowledge to be able to use the market as a tool to hedge their risks. If they were using those markets, then there would be a lot more liquidity, a lot more price discovery, and that would bring in a lot more participation from private companies.”

Complicating matters is the country’s July 1 presidential election. With presidents and their administrations limited to a single-six year term, governmental work naturally slows to a crawl in the months before the election. This year, populist Andres Manuel Lopez Obrador holds a 26-point lead over his two opponents from the traditional ruling parties.

Obrador’s energy platform includes increasing hydroelectric generation and preventing the retirement of 16 GW of thermal generation, without allowing their modernization, repowering or conversion to cheaper fuels. He is also calling for a million small renewable plants for residential users and the services sector.

“It’s dangerous, because those [hydro and thermal] investments could crowd out more productive and efficient investment from the private sector,” Pavlovic said. “The rest of his proposals are not going to have a big impact on the market. He’s not talking about undoing the power market, he’s not talking about the states taking over private assets. It doesn’t look like there’s a very big downside to be worried about.”

Pavlovic’s greater worry is about the industry’s regulation. The Energy Regulatory Commission (CRE) consists of seven commissioners serving staggered seven-year terms. Every New Year’s Day, a new commissioner joins.

“The big risk is whether they will nominate competent technical leaders to regulate the electrical sector,” Pavlovic said. “There’s still a lot of work to be done, in the regulation and implementation of the market. You need competent technocrats and technical leaders in the power sector.”

Still, Pavlovic draws hope from the growing number of participants in the market’s capacity auction.

“There is a new wave that will come in,” he said during the GCPA conference. “I think the market will continue to get deeper and help us exercise influence over the policy.”

June 18, 2018

New York Public Service Commission Briefs: June 14, 2018

Electric reliability in New York state declined last year compared to 2016 because of a severe wind storm in March, Department of Public Service staff told the Public Service Commission on Thursday.

Excluding weather-related outages, overall interruption frequency — the main metric DPS staff use — improved slightly, according to their annual report on reliability. However, some service areas saw longer interruptions, and others saw an uptick in tree-related outages compared to other causes (18-E-0153).

A severe wind storm in early March 2017 downed distribution lines in Rochester, N.Y. | *NY PSC*

But while it led to record wind generation in NYISO, the March storm, with gusts up to 70 mph, easily downed distribution lines in upstate New York. (See “NYISO Sets Wind Energy Record in March,” NYISO Management Committee Briefs.)

The three upstate utilities — National Grid, Rochester Gas & Electric and New York State Electric and Gas — collectively reported about 284,000 outages in their service territories as a result of the storm. A DPS investigation found that RG&E and NYSEG did not follow their emergency response plans, leading to longer outage times, and the utilities have filed a joint proposal with the PSC to settle staff’s alleged violations for $3.9 million.

Staff expect reliability to only worsen because of severe weather. “The weather events dominating the headlines recently indicate weather patterns are producing more frequent and powerful events,” they said. “As a result, this reliability category is expected to decline given the number of significant weather events that have occurred in 2018.”

New York has already experienced several unusually powerful storms this year, including January’s bomb cyclone, a series of March nor’easters, a spate of severe thunderstorms on May 15 and a tornado on May 3.

Pipeline Safety Efforts Improve

Meanwhile, pipeline safety improved overall last year, as local distribution companies improved their damage prevention, emergency response and leak management efforts (18-G-0260). The number of reported damages to natural gas pipelines in the state decreased slightly, from 1,565 to 1,562.

The DPS measures LDCs’ damage prevention by tallying up damages resulting from certain actions, such as mismarking areas or contractors failing to notify LDCs of excavation activities. By this standard, damage prevention improved by 22.5%.

The LDCs’ ability to respond to emergencies within 30, 60 and 90 minutes all improved, staff said. Additionally, the utilities reduced their backlog of leaks by 2,354, or 13.4%.

Staff also presented reports on electricity safety (18-E-0279) and customer service (18-M-0267).

Separately, as part of its consent agenda, the PSC approved a $1.98 million settlement by National Grid for a 2015 pipeline explosion on Long Island that destroyed a house and severely injured two people inside (15-G-0298). A staff investigation found the company failed to disconnect gas service to the house after a resident request.

Central Hudson Rate Increase Lowered; Burman Dissents

The PSC voted 3-1 to approve a $36.4 million electric and gas rate increase for Central Hudson Gas & Electric, 57% below what the utility initially requested (17-E-0459, 17-G-0460).

Empire State Plaza, where the New York PSC meets

Under a joint proposal with DPS staff, Central Hudson agreed to increase its rates over three years, instead of all at once. Eligible low-income customers will also see a 65% rate decrease under the plan.

“The progressive plan that was adopted — endorsed with complete stakeholder support by environmental groups, large business customers and the largest municipality in the region — includes a nation-leading affordability policy that substantially lowers bills for most low-income customers,” Chair John B. Rhodes said in a statement.

Commissioner Diane Burman spoke for more than half an hour explaining the many reasons for her “clear ‘no’ vote.” But she said the single issue that tipped the scales for her was a $264 credit to customers who install geothermal HVAC systems, which the commission says are more energy efficient and emit less carbon.

“We always say that we’re fuel-neutral [and] technology-neutral … here, we would not be,” Burman said. “And there’s no explanation to me why except that it was agreed to in the joint proposal.”

— Michael Brooks

June 18, 2018

MISO Nixes LSE Load Forecast Plan

By Amanda Durish Cook

CARMEL, Ind. — MISO has called off a proposal to rely on data from its load-serving entities to compile its own long-term load forecast, stakeholders learned last week.

The RTO will instead continue to use independent load forecasts (ILFs) prepared by Purdue University’s State Utility Forecasting Group but with a twist: It will now order four versions of the forecast, each tailored to one of the futures used to inform MISO’s annual Transmission Expansion Plan.

MISO LSE load-serving entities load forecasts — Lawhorn | © *RTO Insider*

“After careful consideration of the comments and proposals by stakeholders, MISO will begin to use the independent load forecasts to develop futures-specific load and energy forecasts for MTEP 20 and beyond,” John Lawhorn, MISO senior director of policy and economic studies, told stakeholders at a June 13 Planning Advisory Committee meeting.

Lawhorn said “consistency and clarity, not necessarily increased precision,” prompted the decision, and he stressed that MISO will continue to use LSE forecasts to plan for resource adequacy.

The expanded independent forecast is “for transmission planning purposes only,” Lawhorn said.

“I know we’ve been talking about the ILF for the past five years, with more discussion in the past eight months,” he said.

The change to an LSE-based forecast would have required MISO’s 140-plus LSEs to annually assemble four different 20-year load forecasts to fit with each of the MTEP futures, an unpopular proposition with many stakeholders. (See Advisory Committee Steps up Criticism of MISO Forecast Plan.)

The LSEs themselves were mixed over whether they would be able produce their own 20-year forecasts. An April survey generating responses from one-third of LSEs representing about two-thirds of load showed that LSEs estimated the costs of putting together forecasts would be anywhere from “minimal” to a few hundred thousand dollars, Lawhorn said.

“Costs were all over the map from that perspective, whether they already had a load forecasting group or not,” Lawhorn said in April.

Stakeholders at last week’s meeting asked whether MISO has a plan to monitor its ILFs and compare them with actual loads after the fact.

Lawhorn said although it’s difficult for MISO to line up all variables to compare forecasted load to actual load, Purdue’s own analysis has shown its forecasts “trend well” with actual load in the long term.

Other stakeholders expressed concerns that MISO had no specific plan to hold the ILF to a standard of accuracy.

WPPI Energy’s Steve Leovy said he would have liked MISO to hold more discussion with stakeholders before deciding on the ILF, adding that a single survey of LSEs was inadequate to collect opinions. Organization of MISO States Executive Director Tanya Paslawski said she was likewise concerned about MISO’s short comment period and scant communication about its decision. She noted she would take her concerns to her Board of Directors.

‘Post-capacity’ Planning

MISO said it makes sense for the ILF to be tailored to MTEP futures because energy usage is increasingly driving transmission planning, shifting away from capacity-based planning that relies on an annual system peak. The RTO says it will increasingly experience peaks that can occur during any hour of the year.

“It’s a shift that we’re seeing from a capacity-planning paradigm to an energy-planning paradigm … as we move to more facilities that are small and local. Energy delivery is becoming the driver of a robust transmission system. Moving energy around the system becomes more important as the resource mix changes,” Lawhorn said, pointing to MISO’s 93-GW interconnection queue, which includes 80 GW of potential renewable sources. “This is portending to be a major shift in our system.”

June 18, 2018

ISO-NE Planning Advisory Committee Briefs: June 13, 2018

MILFORD, Mass. — ISO-NE forecasts a net installed capacity requirement (ICR) value of 34,000 MW for capacity commitment period 2023/24, a 275-MW increase from the 33,725 used in February’s Forward Capacity Auction 12 for 2021/22, officials told the Planning Advisory Committee on Wednesday.

The net ICR is forecast to rise by 200-MW increments each period to 34,800 MW for 2027/28 with capacity margins dropping to 15% from 16.7% for 2021/22.

The forecast uses the same capacity and transmission transfer capability assumptions used to develop ICR values for FCA 12 but with the 2018–2027 Forecast Report of Capacity, Energy, Loads and Transmission (2018 CELT) load forecast. The FCA 12 values were based on the 2017 CELT, system planning engineer Manasa Kotha told the PAC. (See ISO-NE Capacity Prices Hit 5-Year Low.)

The RTO modeled three capacity zones for FCA 12: the Southeast New England (SENE) import-constrained capacity zone comprising Northeast Massachusetts (NEMA)/Boston, Southeast Massachusetts (SEMA) and Rhode Island; the Northern New England (NNE) export-constrained capacity zone comprising Maine, New Hampshire and Vermont; and the Rest-of-Pool capacity zone comprising Connecticut and Western/Central Massachusetts.

Comparisons of the 2018 and 2017 CELT load forecasts show that while overall New England load decreased, load in the SENE sub-areas has increased, as it did last year, Kotha said.

Comparison of 2017 and 2018 Net ICR Forecasts (MW) | *ISO-NE*

The increase is attributable to the Massachusetts economy continuing to grow faster relative to the other New England states, she said.

As part of its review of ICR assumptions for Operating Procedure No. 4 conditions (action during a capacity deficiency), the RTO has proposed using 700 MW of minimum operating reserves in the ICR model, an increase of 500 MW over the long-term assumption of 200 MW previously used. The new 700-MW assumption will be used in FCA 13 ICR calculations, Kotha said.

Future Locational Reserve Needs

ISO-NE foresees reserve needs in NEMA/Boston to be in the range of 250 to 700 MW for summer 2019 and 250 to 400 MW for winter 2019, Fei Zeng, technical manager for resource adequacy, told the PAC.

The RTO developed future representative operating reserve needs for the current reserve zones in NEMA/Boston, Southwest Connecticut (SWCT) and Greater Connecticut for summer and winter for study period 2018-2022. The actual requirements reported for 2018 are based on historical data of the last two years.

Investment of New England transmission reliability projects by status through 2022 (numbers represent project quantities) | *ISO-NE*

The forecasts did not consider the impacts of Footprint Power’s new 674-MW combined cycle power plant in Salem, Mass., “which when it goes into service by the end of the year is expected to have an impact on the following year’s calculations,” Zeng said.

Together with upgrades in the greater Boston area, the new Salem Harbor Station will help eliminate the local reserve needs for the study period, Zeng said.

In SWCT, the grid operator expects Competitive Power Ventures’ Towantic Energy Center, which began generating last month, to help reduce local reserve needs to a minimum level for summer 2019. With the assumed addition of Bridgeport Harbor 5, and the SWCT transmission upgrades, forward reserve requirements are expected to be zero for the remainder of the study period. (See related story, CPV: Subsidies — not Gas Shortages — Challenge for New Plants.)

CEII Presentations Describe Aging Infrastructure

The PAC heard five presentations on regional transmission infrastructure, which collectively described the rust in New England’s rustbelt. All five presentations were classified as containing critical energy/electric infrastructure information (CEII).

However, one stakeholder pointed out that much of what the classified material detailed would be visible to any interested commuter in the region. The needed replacements range from vintage control room equipment to brown glass insulators to replacing rusting towers.

Pradip Vijayan, ISO-NE senior engineer for transmission planning, updated the PAC on results from the SWCT 2027 needs assessment, as well as one project related to an older needs assessment for Greater Hartford/Central Connecticut.

Christopher Malone, Avangrid manager for Connecticut transmission planning, presented railroad corridor transmission line asset conditions. Maintenance of century-old catenary structures over the railroad is complicated by railroad control of 22-kV feeder/signal conductors.

Eversource Energy system planning manager Shaun Moran presented on challenges with the infrastructure in Eastern Massachusetts that carries much of the load for Cape Cod.

Kelly Csizmesia presented on behalf of National Grid’s New England Power unit, which operates transmission facilities in every regional state except Connecticut.

Transmission Projects and Asset Condition Update

Jon Breard, ISO-NE associate engineer for transmission planning, presented an update on the Regional System Plan regarding transmission projects and asset conditions, noting that seven new transmission projects totaling $146.8 million have been placed in service since the last update in March.

The RTO estimates about $1.74 billion in active reliability projects are underway now, compared to $1.9 billion in March.

Regarding asset conditions, the RTO reported one new project (the $6.3 million replacement of the Montville 16X transformer in Connecticut), and three projects placed in service since the last update in March, including: the installation of two 40-MVAR reactors on the Scobie 115-kV bus in New Hampshire ($4.7 million); replacement of the Salem Harbor Substation 115-kV oil circuit breaker ($4.6 million); and the 1231/1242 structure replacement project in Massachusetts ($8 million).

— Michael Kuser

June 18, 2018

6 Projects for ISO-NE’s 1st Clustered System Impact Study

By Michael Kuser and Rich Heidorn Jr.

MILFORD, Mass. — Only six of 32 interconnection requests studied by ISO-NE in its initial test of its new queue clustering methodology have moved on to the next stage of the process, all of them in western Maine.

The six interconnection requests, totaling 691 MW, will be included in the RTO’s first cluster system impact study (SIS), Al McBride, director of transmission strategy and services, told the Planning Advisory Committee last week.

ISO-NE implemented the clustering methodology to address the queue backlog in Maine, where more than 5,800 MW of proposed resources, mostly wind, want to connect to the grid.

iso ne maine system impact study sis — Bingham Wind Project | *NovatusEnergy*

The process allows for two or more interconnection requests in the same area to be analyzed together and to share costs for required transmission upgrades when none of the requests can interconnect without the use of common new infrastructure rated at 115 kV AC or HVDC.

The first Maine Resource Integration Study (MRIS) concluded that the RTO could connect nine Northern Maine requests totaling 1,118 MW and 23 western Maine requests totaling 777 MW with about $1.83 billion in transmission upgrades. The upgrades included a second 345-kV Coopers Mill-Maine Yankee 392 line — which both clusters required — at a cost of $108 million.

With constraints on the system, “we found ourselves hitting a ceiling of around 1,800 MW” in interconnection requests able to be accommodated, “which is a significant addition to the Maine transmission system,” McBride said.

Projects had 30 days after posting of the MRIS on March 12 to inform ISO-NE of their intention to move on to the clustered SIS process.

None of the Northern cluster projects — whose upgrades would have totaled $1.36 billion, including the second 392 line — agreed to proceed.

Seven of the 23 western Maine requesters sought to be included in the cluster SIS, but one, for 1,200 MW, was not permitted because it exceeded the capacity of the “cluster-enabling transmission upgrades.” It will be studied separately.

Costs of the upgrades for the western projects, including the second 392 line, were estimated at $575.5 million. The other upgrades include a new 345-kV line from a new substation near Johnson Mountain to the existing 345-kV substation at Larrabee Road.

Second Study Planned

The RTO is planning a second MRIS to evaluate upgrades needed to accommodate an additional 22 interconnection requests, including about 1,350 MW in Somerset and Franklin counties and about 2,300 MW in Aroostook and Penobscot counties.

McBride said the study will consider new HVDC transmission connecting to the southern part of the RTO’s system, connecting either radially to proposed generation or to the existing network.

The RTO asked stakeholders to email feedback on the proposed study scope to PACmatters@iso-ne.com by July 13.

It hopes to complete the study within 12 months.

“We would be very reluctant to study major transmission proposals, from $500 million to $1 billion, that provide only minimal interconnection capability,” McBride said.

June 17, 2018

CEC Approves $10 Million for Microgrids

By Jason Fordney

Sacramento, Calif. — The California Energy Commission on Wednesday approved $10 million in grants for two microgrid projects, including one that represents a new form of partnership between investor-owned utilities and a community choice aggregator.

The commission in a 4-0 vote approved $5 million apiece in grants for microgrids at California Redwood Coast-Humboldt County Airport and at Santa Rosa Junior College in Sonoma County. The CEC said the airport project enables further research into microgrids and many value streams, including demonstrating the ability for CCAs to work with utilities to maintain reliability, offsetting electricity costs, integrating microgrids into CAISO operations, generating data and producing ancillary benefits at the remote location.

California Energy Commission left to right: Karen Douglas, Chairman Robert Weisenmiller, Andrew McAllister, and Janea Scott (David Hochschild absent) | © *RTO Insider*

The solar/storage project at the coastal airport will “represent the first multi-customer, front-of-the-meter microgrid with renewable energy generation owned by a CCA and the microgrid circuit owned by an IOU.” Redwood Coast Energy will own the generation while Pacific Gas and Electric will own the distribution circuit, with Schatz Energy Research Center leading the project.

The airport facility consists of two ground-mounted solar PV arrays, one a 250-kW array configured for net energy metering service, and the other a 2-MW, 6-acre array for wholesale power sale. It also features a 2-MW/8-MWh lithium ion battery storage system and will additionally power a U.S. Coast Guard station. It will add resilience to 18 accounts on PG&E’s Janes Creek 1103 distribution circuit and is seen as providing a roadmap for microgrid development, the CEC said.

The Santa Rosa project will be 136,000 square feet of rooftop solar on two existing parking structures and two 1-MW lithium-ion battery systems. Other subcontractors and vendors include the California Center for Sustainable Energy, PXiSE Energy Solutions, WorleyParsons, SunPower, STEM and nine other subcontractors to be announced.

Chairman Robert Weisenmiller on Wednesday said the CEC has been communicating with utilities and the Public Utilities Commission about making microgrids a priority in high fire-risk areas to help maintain resilience and reliability.

“It is time to move more toward the future in this area,” Weisenmiller said.

Commissioner Andrew McAllister said: “I think this is absolutely a valid thing to be doing,” but he called for “realism” as microgrids are developed. “Part of the challenge is to figure out and learn where they are really needed. … The goal isn’t necessarily for the whole distribution grid to be a complete assembly of microgrids.”

The projects were funded through the latest round of solicitations of the Electric Program Investment Charge (EPIC), a retail ratepayer surcharge. (See California Awarding $45 Million for Microgrids.) The program has funded hundreds of projects, approaching $500 million in awards.

The CEC also approved:

Building energy efficiency standards for Marin County that will require all new single-family residences less than 4,000 square feet to be all electric or, if mixed fuel, to reduce energy consumption by 15%, or 20% below the 2016 standards if a PV is included. New low-rise multifamily residential will be required to be all electric or reduce energy consumption by 10%, or 15% if a PV system is included. New high-rise multifamily residential and new nonresidential construction will be required to be all electric or reduce energy consumption by 10%.
A $1.5 million, 1% interest rate loan for energy conservation measures for the city of Weed for city-owned sites.
A $260,000, 1% interest rate loan to San Diego County to install demand-controlled ventilation and more efficient interior and exterior lights at a nursing facility.

June 17, 2018

Plan Would Reduce PJM Capacity Curve Through Peak Shaving

By Rory D. Sweeney

PJM hopes to reduce its capacity market demand curve by including peak shaving among the variables used to develop its load forecast.

Andrew Gledhill, senior analyst of resource adequacy planning, explained the proposal at a meeting last week of the Summer Only Demand Response Senior Task Force (SODRSTF). It has the potential to reduce reliability requirements — and subsequently the variable resource requirement demand curve — by hundreds of megawatts.

PJM would start by adjusting historical loads back to 1998 through a formula that assumes perfect previous curtailment compliance. The program would be assumed to have been enacted every time a predetermined temperature-humidity index (THI) threshold was reached. THI has a strong correlation with loss-of-load expectation, the RTO said.

Each event would have been six hours from 1 to 7 p.m. on a non-holiday weekday. The events would have occurred any time between May and October, but “we don’t have a lot of high-THI events that occur in May, September and October, so … these are most likely to occur in June, July and August,” which account for the six highest load hours in the RTO, Gledhill said.

Adjusting the Model

The current method identifies the gross load for a delivery year and regresses for the forecast based on variables, including economic, weather and end-use changes.

“But there’s no variable in there for peak shaving,” Gledhill explained, so it would have been included only by reducing the gross load.

pjm load forecast peak shaving — | *An example from PJM of the potential impact to the VRR curve in ATSI’s transmission zone.*

Some stakeholders voiced concerns that requiring commitments to last six hours was a high bar that would reduce offerings into capacity auctions, but others urged them to take a holistic view.

“We have to look at what PJM’s need is, not simply what the easiest program or the most customer-friendly program would be,” GT Power Group’s Dave Pratzon said.

Staff said the six-hour time frame is intentional because it mitigates peak shifting. They noted that the curtailments have already been factored into forecasts. PJM would only be looking for compliance, but these would not be RTO programs.

“The load forecast has already reflected the benefit of reduction of load when THI trigger is hit,” PJM’s Tom Falin said. “The intent of this is to improve the load forecast. … We’ve already assumed a certain amount of behavior, so it has to continue in the future, so the forecast can remain consistent.”

Impact

PJM’s analysis showed that only a percentage of the cumulative peak shaving would impact the load forecast because of the peak simply shifting to another hour. For most transmission zones, the impact shrinks as the amount of shaving increases, staff found. For example, 100% of the megawatts in a 2% shave would impact the forecast in the Penelec zone, but less than 40% of the megawatts in a 10% shave would impact the forecast in East Kentucky Power Cooperative’s zone.

It would have even less of an impact on the reliability requirement, though it would still be significant. PJM found that, given a 6% peak shave, the reliability requirement would be reduced by anywhere from 30 to 85% of the shaved megawatts.

June 17, 2018

MISO to Lower SPP Interregional Project Thresholds

By Amanda Durish Cook

MISO last week said it will revise its regional cost-sharing practices for interregional projects with SPP to match its process for PJM seams projects, lowering the voltage threshold to 100 kV and eliminating a minimum cost requirement.

The move is part of MISO’s broader plan to revise cost allocation for market efficiency projects (MEPs) as Entergy’s five-year transition period — which limits cost sharing in MISO South — expires at the end of the year. The plan still includes Tariff changes to eliminate a footprint-wide postage stamp rate for MEPs in favor of more detailed benefit metrics, and to lower the voltage threshold for cost allocation eligibility of internal MEPs from 345 kV to 230 kV.

Unlike interregional MEPs, internal MEPs will still have to meet a $5 million minimum cost threshold, although both project types will still be subject to a 1.25:1 benefit-to-cost requirement. None of the changes extends to MISO’s multi-value project category. (See MISO Recommends Cost-Sharing for Sub-345 kV Tx.)

MISO’s current regional cost-sharing rules for SPP interregional projects require at least a 345-kV voltage rating and a $5 million price tag. The new rules will mirror regional rules that FERC ordered for MISO-PJM interregional projects in 2016.

Narrowing the Cost Allocation Gap

MISO Director of Strategy Jesse Moser said that ensuring consistency along the RTO seams was the deciding factor in standardizing the treatment of SPP and PJM projects.

miso spp seams cost allocation — Moser | © *RTO Insider*

The current proposal will “best align who pays with who benefits,” Moser told RTO Insider.

“Our goal is to get as close to that as we can,” he said. “We’ve long had a concern about what we call the cost allocation gap on our seams.”

Having differing rules for separate RTO neighbors “leaves the door open for uncertainty,” Moser said. “We prefer a clear rule set for any beneficial project that comes out of the” interregional process.

MISO will spend the next two months preparing its overall cost allocation proposal for a FERC filing by the end of September. The RTO is open to holding a summer conference call that would invite stakeholders to offer minor suggestions for clarity, but it does not intend to open the proposal to any substantive change, Moser said.

MISO staff have spoken to SPP officials about the changes, which will not require a revision to the RTOs’ joint operating agreement because they only involve MISO’s regional cost sharing, Moser said. Meanwhile, the RTOs will work this summer on a proposal to similarly relax interregional project criteria in the JOA, which still mandates 345-kV and $5 million minimums. (See MISO, SPP Look to Ease Interregional Project Criteria.)

Moser said there was a “possibility” that FERC could have ordered MISO to lower the SPP thresholds as it did with PJM projects, if the commission had received a complaint.

“Looking at the direction we’ve seen so far, on the PJM seam, that seems like something FERC would support,” Moser said. “We have a pretty firm belief that if this issue was not addressed, it would get put in front of FERC.”

But Moser reiterated that consistency, not the threat of a FERC complaint, drove MISO’s decision.

Transmission Owners: Equal Treatment Unnecessary

But some stakeholders continue to question what would be a discrepancy between the voltage thresholds for MISO MEP projects and interregional projects with SPP. (See MISO Cost Allocation Plan Hits Interregional Differences.)

More than 20 MISO transmission owners joined in written opposition to the 100-kV threshold on interregional projects with SPP. They contend that there are differences between the PJM and SPP seams and that the two “should not receive equal treatment.”

MISO’s seam with SPP is longer and has lower load density than that with PJM, meaning generation can be situated far from load, the TOs have pointed out. Higher-voltage interregional projects are a better fit for those conditions, unlike the MISO-PJM seam where population density makes smaller transmission projects more worthwhile, they argue.

The TOs also note that MISO and PJM have been coordinating along their seam for about 18 years while the relationship with SPP is “less mature,” evolving as SPP integrated the Western Area Power Administration and Basin Electric Power Cooperative transmission systems in late 2015 and MISO integrated its MISO South region in 2013. “Congestion patterns along that seam are not well understood and are subject to change,” the TOs said.

But while acknowledging that the proposal wasn’t “universally liked,” Moser contends that MISO collected sufficient stakeholder feedback on regional cost allocation to move ahead with the plan.

“This has been a fairly long process. We’ve been working on this since 2015. We’re looking at what the new needs might be given our new footprint. … We think we’re putting together a package of reforms that best meets the needs of our footprint,” Moser said.

MISO also plans to conduct a general review of its overall cost allocation design three years after implementation, Moser said. The RTO will examine whether projects built under the new rules have benefits commensurate with cost allocation and examine any past proposed projects that appeared highly beneficial but still couldn’t qualify for cost allocation.

“There’s an understanding that needs will continue to change,” Moser said.

New Local Economic Project Type

MISO last week announced another new wrinkle for its cost allocation plan: a new project type that will be ineligible for regional cost sharing for the sake of clarity.

Moser said the new category, “Local Economic Projects,” is meant for projects that demonstrate at least a 1.25:1 economic benefit but are below 230 kV. Such projects would have their costs allocated 100% to their local transmission pricing zone. Currently, these projects fall under an “other” category.

Moser said the category is needed to distinguish small economic transmission projects from small reliability-driven transmission projects. Today, most of MISO’s “other” category of projects are reliability-driven, with few small projects being built for economic reasons, he said.

June 17, 2018

CPV: Subsidies, not Gas Fears, Challenge for New Plants

By Michael Brooks

Competitive Power Ventures, which last week celebrated the opening of its new 805-MW combined cycle gas-fired power plant in Oxford, Conn., would like to build more gas plants. But it said it is wary of subsidized competitors.

The company announced Thursday that is has begun selling power in ISO-NE from its Towantic Energy Center, which uses two GE Power 7HA.01 combined cycle, dual-fuel turbines, one of the most efficient designs in the world, with up to 64% efficiency.

ferc competitive power ventures cpv towantic energy center — CPV Towantic Energy Center in early May, with construction nearly complete. | *CPV*

The plant represents the 26th HA unit to go online, GE said. The HA series is air-cooled, which CPV says “saves as much as 90% of the water used by similar” steam-cooled designs. Poor sales of its previous steam-cooled H-class turbines prompted GE to switch to condensed air, which allows for a simpler configuration that is not only more efficient but more economic to construct as well, the company says.

The turbines’ efficiency will give Towantic an advantage in ISO-NE’s energy market, said Tom Rumsey, CPV senior vice president of external and regulatory affairs. With no load growth in New England, new plants must be more efficient to be profitable, he said.

The plant officially began generating power May 21, just in time for the June 1 start of the 2018/19 capacity commitment period. CPV sold 750 MW of capacity into ISO-NE’s ninth Forward Capacity Auction in 2015.

It gets its fuel primarily from the Algonquin Gas Transmission pipeline and interconnects to the grid through Eversource Energy’s 115-kV Baldwin Junction-Beacon Falls circuit.

Rumsey said the company expects the plant to be a baseload resource, and it isn’t worried about there being gas shortages for the plant because it can also burn ultra-low-sulfur diesel fuel. In the 2014 polar vortex and this year’s bomb cyclone events, “it wasn’t that you couldn’t get gas. It was that gas was so expensive,” he said.

CPV is concerned, however, about state-subsidized resources disrupting the markets, Rumsey said. The company is looking to build more gas plants in New York, Illinois and New Jersey, all of which have enacted zero-emission credit programs for at-risk nuclear plants. They “represent the biggest challenge to the competitive markets since they began,” Rumsey said.

He cited the brief FERC and the Justice Department filed with the 7th U.S. Circuit Court of Appeals in the challenge over Illinois’ program, which argued that it was not pre-empted by the Federal Power Act under the Constitution’s Supremacy Clause. (See Analyst: FERC Asserts Role in Handling Nuke Subsidies.)

CPV also opposed PJM’s capacity market repricing proposals to address subsidies, instead joining Calpine and Eastern Generation to propose a “clean” minimum offer price rule applicable to all subsidized resources. (See Gas Gens Ask FERC for ‘Clean MOPR’ in PJM.)

“Accommodating these resources is the wrong way to go,” Rumsey said.

Combined with the Department of Energy’s latest plan to bail out uneconomic coal and nuclear plants, “it’s all coming to a head at FERC this year.”