PJM Making Moves to Preserve Market Integrity

By Rory D. Sweeney

For some time, PJM has found itself in a no-win situation, pitting stakeholders valuing market consistency against those seeking flexibility to integrate changing ideas and technologies.

From technological advancements that have reduced demand, to the shale gas boom that has upended the supply stack, to governmental actions that have artificially buoyed preferred technologies, what’s an RTO to do?

“Increasingly, public policies seek to recognize value associated with generation plants beyond their cost effectiveness and reliability attributes,” PJM said in an explanatory document released last week. “The most recent iteration of state policies has involved explicit, legislatively driven subsidies for specific generating units. These types of subsidies can suppress wholesale electricity market prices and threaten these markets’ basic design mission.”

But through that document and three supporting papers, PJM believes it has found a way forward. The RTO published the document along with the last two of three working papers that each focus on addressing different aspects of the issue.

The first, published the same day as a May FERC technical conference analyzing the viability of energy markets, offered guidelines for how states could work with PJM to develop carbon pricing rules that integrate with existing market structures. (See PJM Stakeholders Offer Different Takes on Markets’ Viability.)

The second, published last week as an update of a proposal PJM floated last year, outlines a two-phase capacity auction that would allow subsidized resources to be counted as available reserves without influencing the clearing price. (See PJM’s Grid 20/20 Ponders Mixing Public Policy, Competitive Markets.)

Also published last week was a third paper containing ideas initially advanced in PJM’s response to its Independent Market Monitor’s 2016 State of the Market report. In it, the RTO proposes tweaks to its energy market design to address complaints that market factors — both naturally developing and artificially introduced — have improperly depressed clearing prices so that true real-time costs aren’t being accurately reflected. The grid operator argues that its price-setting logic should be revised to allow inflexible units to set LMPs. (See PJM Differs with Monitor in State of the Market Response.)

“Since the inception of competitive wholesale electricity markets, the industry has evolved significantly and in ways that could not have been fully anticipated,” the document said. “Technological disruptions … have altered the economics of electricity supply, creating new opportunities and challenges. … These shifts in economic trends and market dynamics could lead to an unintended bias in the energy markets favoring lower capital cost resources … [putting] financial stress on all units, but particularly large units with high capital costs.”

The proposals face an uphill battle for acceptance. Stakeholders have criticized PJM for filing some of the ideas with FERC as additional testimony during the technical conference. The Monitor opposes the proposed changes to the LMP-setting logic.

Market participants have also expressed concerns with the RTO’s two-phase capacity-auction proposal. And carbon pricing was a tough sell long before President Trump set out to eliminate his predecessor’s signature Clean Power Plan. (See Trump Order Begins Perilous Attempt to Undo Clean Power Plan.)

PJM acknowledges the work ahead. The capacity proposal, it said, “likely will be evaluated with other potential solutions” by the Capacity Constructs/Public Policy Senior Task Force, which has been meeting regularly since January and remains mired in foundational discussions on the basic goals of a capacity construct. (See PJM Capacity Task Force Debates the Value of Price Transparency.)

The other proposals haven’t found a home for discussion yet, but the RTO is confident something must be done.

“I certainly think a do-nothing approach going forward puts the goals of the markets in general at risk,” Stu Bresler, PJM’s senior vice president of operations and markets, said at PJM’s Grid 20/20 conference on the issue last August. “The risk of a do-nothing approach is a detrimental effect on the long-term price signal.”

June 20, 2017

SOAPBOX – Huntoon Microgrid Critique ‘Seriously Flawed’

By Jeffrey Marqusee

Steve Huntoon’s March 13 column “Microgrid Kool-Aid and National Security” reviews the Noblis report “Power Begins at Home: Assured Energy for U.S. Military Bases” and raised a number of issues that he claims invalidate the study’s conclusions. Huntoon’s claims and conclusions are seriously flawed.

Huntoon cites a recent Government Accountability Office report that found outages can be attributed to on-base problems as opposed to the utility. He states that outages attributed to on-base issues cannot be solved: “if they were easily avoided, they would be.” From this statement he concludes, incorrectly, microgrids cannot be the solution.

Our report specifically acknowledges that problems with on-base distribution systems must be corrected prior to using a microgrid and in most cases this can easily be accomplished. Currently, some outages on military bases are completely due to the utilities that serve the base (Fort Irwin), while others are due to on-base infrastructure issues (Camp Lejeune). Fixing these on-base problems is well understood and routinely done. Simple activities such as tree trimming, routine maintenance and, when needed, undergrounding of distribution systems can and do reduce the issue to near zero. Fort Belvoir has demonstrated this through these actions over the last several years.

The main reason it has not been done at all bases is well recognized at the Defense Department and is the driver for utility privatization. Maintenance of on-base utility systems has been underfunded for decades. Fort Belvoir is a perfect example. Upon privatizing the on-base utilities, the frequency of outages attributed to on-base issues began to rapidly decline to near zero.

Huntoon argues that microgrids place military installations at risk to cyber threats. He implies that this risk should not be taken.

As the report explicitly states, cyber risks are real and must be addressed, but this was not the focus of our study. If you believe that cyber risks should be always avoided, then you cannot have advanced meters, smart buildings or network anything (including weapon systems). You network things because it buys performance advantages, as in the case of microgrids, and if you own the network you can manage that risk. Huntoon seems unaware that cyber protection for microgrids exists. Cybersecurity solutions for microgrids have been demonstrated on bases by the government’s Environmental Security Technology Certification Program and its Smart Power Infrastructure Demonstration for Energy Reliability and Security (SPIDERS) program.

Huntoon says, “please note one other glaring oversight in the study. This one involves the estimated cost of microgrids.” He claims the study’s estimated costs are grossly wrong by comparing numbers he incorrectly quotes from the report with recent costs for a project at Marine Corps Air Station Miramar.

His comparison of our estimates and a real-world example at Miramar are grossly in error. He quotes our number for the capital costs of an all diesel generator system rather than the costs for one that is half natural gas and half diesel like Miramar. The numbers he should have quoted from the report, which are relevant to Miramar, are twice the numbers he does quote. In addition, he ignored the costs of two microgrid control stations as well as other upgrades. In fact, our cost estimates, constructed prior to the award of the Miramar contract, when compared apples to apples is within 10% of the actual costs.

In the conclusion, Huntoon states, “And speaking of fact, the nation’s ‘flagship’ microgrid at the University of California, San Diego flunked its acid test in the Southwest Blackout of 2011. The campus shut down with the rest of San Diego.” He implies that microgrids don’t work.

microgrids military bases noblis — UC San Diego Microgrid | *UC San Diego*

No one in the microgrid technical community believes that the U.C. San Diego microgrid is the “flagship” example. Using a decade-old, university-based microgrid as an example is strange at best. Dozens of microgrids have been demonstrated in recent years. They all operate as designed during outages and provide assured power. For example, the White Oak microgrid, which is described in the report, has maintained power during dozens of outages, never experienced a failure and is saving money each year.

Jeffrey Marqusee, Ph.D., is chief scientist for Noblis, a nonprofit science, technology and strategy organization whose clients include many federal government agencies.

(See Huntoon: Microgrid Defense Misses the Point.)

June 20, 2017

UPDATE: California Heat Wave Prompts CAISO Flex Alert

CAISO on Monday called on consumers to voluntarily conserve energy this week as scorching heat drove up electricity usage and caused outages in Pacific Gas and Electric’s service territory.

The ISO issued a “flex alert” effective 2 to 9 p.m. on Tuesday and Wednesday, with peak load expected to break 47,000 MW both days in the face of triple-digit temperatures. The alerts are issued when the grid is “under stress” from generation or transmission outages, or persistently high temperatures, the ISO said.

This week’s expected peaks would be more than 90% of CAISO’s all-time peak demand of 50,270 MW, set on July 24, 2006.

By late Monday, the ISO forecast that the day’s peak demand would hit about 44,600 MW, well short of an earlier forecast of 46,500 MW.

Temperatures soared up to 110 degrees in California’s interior, the most intense heat wave to hit the state since the summer of 2013. Multiple days of extreme heat are stressing equipment and causing some outages. PG&E still had 4,200 customers without power as of Monday morning, with about 189,000 customers initially affected.

“This is a heat wave, and we have got all our generation that we can make available made available to us,” CAISO spokesman Steven Greenlee said during a media call held jointly with PG&E.

An extended period of very hot weather is expected across the interior portions of southwest California through the middle of the week, and temperatures could reach 112 degrees in parts of the state, the National Weather Service said as it issued a heat advisory.

– Jason Fordney

June 20, 2017

Offshore Wind Developers Ponder Tx Options

By Michael Kuser

BOSTON — Massachusetts faces a big question in its plan to add 1,600 MW of offshore wind by 2027: What’s the best way to get the power to shore?

The state, which is expected to issue a request for proposals by the end of the month for at least 400 MW, will ask the three winners of offshore wind leases to propose both underwater transmission cables for each of their projects and a single trunk line that would serve all three. Developers also will have to choose between high-voltage AC or DC lines.

Panel left to right: Stephens, Conant, Calviou and Hindbo | © *RTO Insider*

The stakes, as a panel told Raab Associates’ 154th New England Electricity Restructuring Roundtable on Friday, are high.

A multibillion-dollar offshore wind farm can be stranded for six months because of a single cable fault. However, developers can reduce their risk through contracts that provide compensation for transmission failures, said Søren Hindbo, senior director of electrical systems for DONG Energy. In addition, interlink cables among substations can allow electricity to be sent ashore even when an export cable fails, he said.

Denmark-based DONG — which has 26 years of offshore wind experience, with 21 European wind farms in operation and seven under construction — was one of three companies to win leases off of Massachusetts from the U.S. Bureau of Ocean Energy Management. Deepwater Wind and Vineyard Wind (formerly OffshoreMW) also won.

iso-ne transmission offshore wind — | *National Grid*

Hindbo described the contracts used in Germany, France, the Netherlands and Denmark, which provide wind developers compensation if there is a transmission problem. “You measure the wind speed on the wind farm and get compensated according to that, if for instance the connection is delayed or faulty. And that’s very important, because who wants to invest in something and have your billions put up there and no chance of getting anything back because you haven’t got an export connection?”

DONG expects two to three export cable faults per 100 km per 20 years, so having interlinks to provide alternative routes for delivering power is important, he said. “One benefit is you don’t need diesels [for] a black start; also if you are delayed, which often happens … you are still in the game,” Hindbo said.

In Europe, developers have found HVDC lines more cost effective for the most distant wind farms and AC better for those closer to shore, with a break-even point between 100 and 200 km (about 62 to 124 miles).

The export cable represents up to 60% of the total cost in an HVAC system. The total percentage is somewhat lower with a HVDC system, Hindbo said, though the total capital expenditure is higher. “The export cable,” he said. “It’s the weakest and the most expensive part.”

Backbone or Alternatives?

Mike Calviou, senior vice president at National Grid USA, said the most cost-effective approach is a “coordinated and expandable” plan that accommodates future offshore resources, citing research showing it can reduce costs by 8 to 16%. National Grid connected the first offshore wind farm in the U.S. to the grid, the 30-MW Block Island project off Rhode Island.

“We believe coordination does provide a range of benefits: fewer cables; you get the economies of scale; the permitting complexity can actually be significant. There are certainly, we believe, some environmental and safety benefits,” he said. “And particularly the expandability: When you know you are going to be doing more offshore wind … you can actually design for future expansion.”

Anbaric’s Stephen Conant said the RFP unwisely excludes transmission developers such as his company from participating in the design of a solution: They aren’t permitted to respond to the RFP except in partnership with one of the three wind developers/lease holders.

“We think competition is good for the industry,” Conant said. “Putting generators in the transmission business seemed a little odd in the RFP. We have a system here that we separate transmission and generation by having a common transmission system [onshore]. That then allows … those generators to bid competitively into the market.”

The RFP could give market power to the three leaseholders, he said.

“The way the construct is now, essentially if they pick one [bidder], then the first one in … their tendency is going to be to sort of lean towards the expansion of their [initial] 400 or 800 [MW]. So you’ve essentially gotten a little market power that exists as a result of not letting others into the field.”

Anbaric, which was among a group of entities that built the 660-MW Neptune HVDC cable linking PJM to Long Island Power Authority and the 660-MW Hudson project connecting PJM to New York City, is also developing the Vermont Green Line, a 400-MW project to deliver power from upstate New York into the New England grid.

Equal Treatment

Erich Stephens, CEO of Vineyard Wind, highlighted the risk of separating the transmission and generation projects. “If you separate as a matter of policy who builds the generation from who builds the cable, you basically have two projects going forward at the same time,” he said. “Inevitably those projects are not going to be finished at the same time … and that means you’re going to have a very expensive asset sitting offshore that’s not earning the revenue that it should.”

Vineyard Wind was already working with Copenhagen Infrastructure Partners on its offshore wind projects before earlier this year selling a 50% stake to Avangrid Renewables to bid in the Massachusetts RFP.

June 19, 2017

MISO Rethinks Weighting of MTEP 18 Futures

By Amanda Durish Cook

CARMEL, Ind. — Recent market developments are compelling MISO to reconsider how it weighs the relative importance of its 15-year future scenarios designed to inform its 2018 Transmission Expansion Plan, staff said last week.

miso mtep 18 futures — Ellis | © *RTO Insider*

“The final MTEP futures reflect the various opinions of this group,” Matt Ellis, a MISO policy studies engineer, told the Planning Advisory Committee at its June 14 meeting. He noted that the RTO sifted through 128 pages of stakeholder input to create the four recently completed futures.

MISO is proposing to eliminate futures weighting — which assigns a probability-based likelihood to each MTEP planning scenario — in favor of placing equal importance on each of the four futures. The proposal comes after stakeholders criticized the RTO’s weighting process for not being transparent enough. Some MISO South members called for less stringent carbon-reduction estimates. (See MISO Changes MTEP Futures Weighting for South.)

“It comes down to no one knows what the future will bring,” Ellis said. “The whole point with this that we’re truly trying to acknowledge is no one knows what is going to happen 15 years out, so let’s give them equal consideration.”

Uncertain Outlook for Carbon, Nukes

President Trump’s decision to withdraw the U.S. from the Paris Agreement on climate change prompted some stakeholders to ask if MISO should further reduce the 20% target carbon reduction in the accelerated alternative technologies future. (See Trump Pulling US Out of Paris Climate Accord.) Other stakeholders contend that some states’ renewed commitment to the agreement in the wake of Trump’s move indicated a possible need to increase the carbon-reduction constraint.

Ellis said MISO plans to keep the 20% carbon reduction measure. “It’s something we’ll keep an eye on,” he added.

Nuclear retirements easily earned the most stakeholder comment, according to Ellis. They were included last month as part of MISO’s fourth and newest future — a distributed and emerging technologies scenario. (See “MISO Tweaks 4th and Newest MTEP Future,” MISO Planning Advisory Committee Briefs.)

MISO will assume that 5 GW of nuclear will retire by 2032 based on the license expiration dates of five units in the RTO’s footprint, which include Callaway Unit 1 in Missouri, Clinton Unit 1 in Illinois, Palisades in Michigan, Point Beach Unit 1 in Wisconsin and River Bend Unit 1 in Louisiana.

Some stakeholders asked MISO to consider nuclear economic data in forecasting retirements, but Ellis reminded them that the RTO uses only public information to inform MTEP futures, precluding the inclusion of forecasted retirements based on the future financial viability of nuclear units, which is considered confidential.

Richard Seide of Apex Clean Energy said he was troubled that MISO would only use license expiration dates to forecast nuclear retirements. Ellis asked for stakeholders to submit their reasoning for including or removing other nuclear retirements from a future scenario.

Equal Weighting Spurs Doubts

Some stakeholders expressed surprise at MISO’s proposal to weigh all scenarios equally, saying they agreed on the futures under the assumption they would have input on weighting them.

“My concern boils down to: We’re pretty comfortable with the futures process now because we know we can weight them later. I think there will be a lot more focus on the development of futures,” WPPI Energy’s Steve Leovy said. He asked for MISO to delay finalizing the futures to ensure that stakeholders agree to those that could be applied equally across MTEP projects.

Stakeholders have until July 14 to comment on MISO’s proposal.

Ellis also said the RTO will attempt a series of workshops to improve project siting for the MTEP 19 cycle, especially for renewables. He said he would bring a proposal for workshops to the July Planning Advisory Committee meeting.

June 19, 2017

ETT Updates ERCOT on Extended Outages

By Tom Kleckner

Electric Transmission Texas told ERCOT market participants last week that it is working closely with the ISO to minimize the economic effects of an 18-month project to repair cracks on metal transmission structures that will result in extended transmission outages through November 2018.

ETT, a joint venture between subsidiaries of American Electric Power and Berkshire Hathaway Energy, is currently inspecting transmission facilities on seven different 345-kV lines in Northwest Texas. The lines were all built as part of the Competitive Renewable Energy Zones (CREZ) project, which resulted in 3,600 miles of transmission to carry West Texas and Panhandle wind energy east to urban load centers. The project was completed in 2013 at a cost of $6.9 billion.

The transmission company notified market participants in May that it would be taking the CREZ lines out of service to inspect and, if necessary, replace structural components as part of a warranty claim. ETT said the work would involve visual and ultrasonic inspection of 2,743 structures, 21,944 arms, and 2,192 flanges and baseplates.

“Our contractors and suppliers are committed to completing things and not just doing the work to go home,” ETT President Kip Fox told market participants during a June 15 web conference. “We’re very confident we’re pursuing a solution that limits our costs to ratepayers, supports long-term reliability, improves safety and reduces the risk of unplanned outages.”

Fox and ERCOT staff both answered questions from market participants, many of them wind farm owners and developers.

In response to a written question about whether wind farms would be taken offline by the maintenance work, staff said its “current understanding” of the outage does not indicate that any generation resources will be “islanded” from ERCOT’s grid. The ISO expects some market participants will encounter congestion caused by the work, but it has not performed any specific resource analysis.

The Texas grid operator said it will schedule a second web conference to discuss an alternative ordering of the outages and address concerns about their effects on production costs.

Fox said ETT decided to address the structural issues now, “rather than the next 70-some-odd years.”

The company said it first discovered cracking on a structure arm in late 2012 and began a full inspection and arm replacement of more than 2,000 tangent poles in July 2016. The transmission structures are all steel, single-pole, 345-kV, double-circuit towers. Cracked arms and arm brackets will be replaced, and cracked baseplates and flanges will be repaired.

ERCOT ETT Outages — | *Electric Transmission Texas*

Inspection, repair and replacement crews are working in tandem, and line clearances will be taken continuously to help speed the work along. Outages will be scheduled one at a time and coordinated with ERCOT to minimize effects on the system.

A detailed work schedule and specifics on the outages’ timing and duration can be found in ERCOT’s outage scheduler.

June 19, 2017

MISO Seeking to Hire More Women, Youth

By Amanda Durish Cook

CARMEL, Ind. — MISO’s human resources staff is looking for more ways to hire women and young people to diversify a workforce dominated by Generation X men.

The RTO’s annual workforce diversity results were presented during a June 15 conference call of the Human Resources Committee of the Board of Directors.

miso hire more women — MISO’s Carmel Headquarters | © *RTO Insider*

MISO is faring a bit better at overcoming its gender gap than the electric industry average: The RTO currently employs a 31% female workforce, while the average electric industry workforce average is 21% female. MISO said 36% of 2016 hires were female. The total U.S. workforce is about 47% female.

CEO John Bear said the RTO will continue to seek female representation in its workforce.

“The number of women receiving STEM [science, technology, engineering and mathematics] degrees is incredibly low. … It just means we have to fish from a smaller pond,” Bear said.

“We’re going to have to be super-focused on this to climb the dial forward,” Director Baljit Dail agreed.

MISO staff are also focusing on attracting millennials to close the generational gap across its employees. Generation Xers (ages 35 to 55) account for 62% of MISO’s employees. Baby boomers (55+) make up 13% of the MISO workforce and millennials (18-35) represent 25%. Electric industry employees in the U.S. are 50% Generation X, 26% baby boomers and 24% millennials.

Vice President of Human Resources Greg Powell said the age of MISO’s employees corresponds with its hiring boom after its was formed in 2001. He added that the “electric power generation, transmission and distribution workforce is aging much faster than the overall U.S. workforce and having great difficulty attracting millennials.”

Some directors expressed surprise that MISO’s workforce consisted of so few baby boomers.

Dail asked if there are any “hot spots” of baby boomers in any division that could be vulnerable to losing institutional knowledge through retirement.

“We don’t have critical positions that have an influx of people getting ready to retire,” Powell replied.

MISO is turning to its summer intern program to attract more millennials, Powell said. The RTO has hired 41 summer interns across its four locations this summer, up from 32 last summer. Powell said about 20% are women and 10 to 12% are minorities.

Bear said MISO is looking to increase the number of interns to about 50 in the next year.

“The interns are one of the best advertisements we have. We’re not a retail business, so as they go back into their academic communities … they’ll spread the word,” Bear said.

Powell said it’s MISO’s goal to hire about 50% of its interns on a permanent basis; it currently hires about 30%. “The challenge is these folks are pretty sought after,” Bear said.

June 19, 2017

PJM MRC/MC Preview: June 22, 2017

Below is a summary of the issues scheduled to be brought to a vote at the Markets and Reliability and Members committees Thursday. Each item is listed by agenda number, description and projected time of discussion, followed by a summary of the issue and links to prior coverage in RTO Insider.

RTO Insider will be in Wilmington, Del., covering the discussions and votes. See next Tuesday’s newsletter for a full report.

Markets and Reliability Committee

2. PJM Manuals (9:10-9:40)

Members will be asked to endorse the following proposed manual changes:

A. Manual 14A: Generation and Transmission Interconnection Process and the Tariff. Revisions developed to the manual and the Tariff to allocate reinforcement costs of less than $5 million to all projects in a queue that add load to the violation causing the need for the reinforcement. Also removes alternate queue screening, allowing projects to be evaluated for impacts once the point of interconnection has been established. (See “Should I Stay or Should I Go? PJM Still Searching for Resolution to Interconnection Queue Issues,” PJM Planning and Tx Expansion Advisory Committees Briefs.)

B. Manual 14C: Generation and Transmission Interconnection Facility Construction. Revisions developed to incorporate the minimum engineering design standards developed by the Designated Entity Design Standards Taskforce for competitively solicited projects for transmission lines, substations and “system protection and control design and coordination.” (See “Competitive Planning Components Endorsed; Pieces Remain,” PJM Planning & Tx Expansion Advisory Committees Briefs.)

C. Manual 14F: Competitive Planning Process. A new manual that consolidates PJM policies implementing FERC Order 1000. (See “Competitive Planning Components Endorsed; Pieces Remain,” PJM Planning & Tx Expansion Advisory Committees Briefs.)

D. Manual 20: PJM Resource Adequacy Analysis. Revisions developed to address changes to modeling of zonal and global locational deliverability areas for capacity emergency transfer objective calculations. (See “ISO-NE out of this ‘World,’ According to PJM Reserve Requirement Study,” PJM Planning Committee/TEAC Briefs.)

E. Manual 28: Operating Agreement Accounting. Revisions conform with FERC order in docket ER16-121-001 requiring allocation of balancing congestion and real-time market-to-market payments to real-time load plus exports on a pro rata basis RTO-wide. (See FERC Finds PJM ARR/FTR Market Design Flawed; Rejects Proposed Fix and “FTR Revisions Continue Forward,” PJM Market Implementation Committee Briefs.)

F. Manual 39: Nuclear Plant Interface Coordination. Revisions clarify that nuclear operators must communicate any limiting conditions affecting interface requirements following notification of a grid-side event. The revisions, which include limits on the operability of offsite power sources, are intended to ensure that PJM and the transmission owner local control center have situational awareness of nuclear plant conditions.

3. Pseudo-Tie Pro Forma (9:40-10:15)

Members will be asked to endorse proposed pro forma agreements, along with corresponding Tariff and Operating Agreement revisions. A draft dynamic schedule agreement will also be presented, but it will be voted on at a future meeting. (See “Pseudo-Tie Discussion Postponed to Continue Negotiations with MISO,” PJM Markets and Reliability Committee Briefs.)

4. Regulation Market Issues Senior Task Force (RMISTF) (10:15-10:45)

Members will be asked to endorse the regulation market changes proposed by PJM and the Independent Market Monitor and endorsed by the Regulation Market Issues Senior Task Force. The changes affect benefit factors, performance scoring and settlements, and implements a 24-month transition plan. (See “Stakeholders Defer Vote on Regulation Revisions,” PJM Markets and Reliability Committee Briefs.)

Members Committee

Consent Agenda (1:20-1:25)

Members will be asked to endorse:

B. Operating Agreement and Tariff revisions requiring solar generators to provide meteorological and forced outage data — previously only required from wind generators — in compliance with FERC Order 764. (See “Solar Forecast Is Coming,” PJM Planning and Tx Expansion Advisory Committees Briefs.)

C. Operating Agreement and Tariff revisions create a method for compensating pseudo-tied generators and dynamic schedules, which are not eligible to submit meter correction data, as permitted for internal generators and tie lines. (See “Meter Correction Initiative OK’d,” PJM Market Implementation Committee Briefs.)

D. Operating Agreement and Tariff revisions related to annual revenue requirements for new black start units. Sets deadlines for the submittal and review of new black start units’ capital, variable and fuel storage costs; policies for allocating costs to network service customers and point-to-point reservations. (See “New Black Start Units Will Have New Annual Revenue Requirements,” PJM Markets and Reliability Committee Briefs.)

1. Energy Market Uplift Senior Task Force (1:25-1:45)

Members will be asked to endorse proposed Tariff and Operating Agreement revisions intended to preserve the benefits of virtual trading while eliminating opportunities for such transactions to profit from the market without providing benefits. Increment offers (INCs) and decrement bids (DECs) are permitted at locations where the settlement of physical energy occurs plus trading hubs; up-to-congestion transactions are permitted at hubs, zones and interfaces. (See PJM MRC OKs Uplift Solution over Financial Marketers’ Opposition.)

– Rory D. Sweeney

June 19, 2017

Scorecard Uncovers Three MISO IT Issues

By Amanda Durish Cook

CARMEL, Ind. — A quarterly IT scorecard audit has uncovered three technology-related issues for MISO staff to address.

In light of the audit, MISO will review a nine-hour website outage, continue to ensure that ex-employees don’t have system access 24 hours beyond their departure and commit more time to building its own settlement software system, the Technology Committee of the Board of Directors learned during a June 15 conference call.

MISO information technology IT scorecard — MISO’s Carmel. Indiana Control Room in 2013 | *MISO*

MISO Technology Executive Kevin Caringer said the RTO will need an additional $390,000 to build its own settlement system software because staff were in some cases required to reverse-engineer the existing system to find original settlement software code.

Director Baljit Dail said the RTO should have all software code already documented as standard practice. “It gets into a very scary place where we want to change the code but we don’t know what the original code is or what it does,” he said.

Caringer said MISO had a majority of the original code and will run the old and new code in parallel for a few days until determining the success of the RTO-built system. If the new code fails, MISO will revert to the old code.

“We have done this in the past in the RTO as well for other major changes. It’s something we’re familiar with,” Caringer said.

He also noted that MISO will use the software to implement five-minute real-time settlements, which are expected in January.

The RTO meanwhile continues to strive to terminate the system access of former employees within 24 hours, Chief Information Officer Keri Glitch said.

“We are moving on a positive trajectory, and I have confidence we’ll continue moving forward,” Glitch said.

MISO has consistently scored near 100% in timely access terminations since February, up from a low of 42% in November. The RTO said access termination issues can arise when a third-party vendor fails to notify it when a contractor leaves.

Dail asked if MISO has any recourse if a vendor fails to alert it of exiting contractors.

Glitch said the RTO is developing new contract language setting out a procedure for vendors to notify it and terminate access.

The RTO is also reviewing a nine-hour public website outage that occurred from 4 p.m. to 1 a.m. on a Friday evening in March, after a physical network device failed and an employee exacerbated the situation by improperly configuring a switch-over to a backup device — leading to the outage.

“It appeared to be a human error,” Glitch said, adding that hardware components on critical network switches rarely fail.

Glitch said MISO is conducting a review of overall network design and failover capabilities when third-party vendors are involved.

June 19, 2017

Questions to FERC Nominees Reflect Democrats’ Wish List

By Michael Brooks

President Trump’s nominees to FERC gave nearly identical, boilerplate answers to senators’ written questions on issues ranging from hydroelectric project licensing to natural gas infrastructure following their confirmation hearing last month.

The questions, mostly from Democratic and left-leaning independent senators, provide more insight into a party grappling with being in the minority under a presidential administration hostile to environmental issues rather than the nominees themselves.

ferc trump chatterjee powelson — Powelson | © *RTO Insider*

Robert Powelson, a Pennsylvania Public Utility Commissioner, and Neil Chatterjee, senior energy adviser to Senate Majority Leader Mitch McConnell (R-Ky.), toed the FERC line, declining to answer questions about specific cases pending before the commission. The two, who were each approved 20-3 by the Energy and Natural Resources (ENR) Committee on June 6, are awaiting a confirmation vote by the full Senate. (See FERC Nominees Easily Advance to Full Senate.) No vote has been scheduled as of last week.

They pointed to recent technical conferences when asked about state energy policies and barriers to participation in the wholesale markets to energy storage, saying they were “eager” or “looking forward” to reviewing comments the commission has received.

They also provided similar answers to questions about Order 1000, about which nearly every senator who submitted written questions asked.

Senators expressed concern that there were still problems with the interregional transmission process. Sen. Joe Manchin (D-W.Va.) in particular quoted PJM CEO Andy Ott and SPP CEO Nick Brown’s criticisms of Order 1000 at the RTO Insider/SAS ISO Summit in March. (See PJM, SPP Chiefs Share Frustration with Order 1000.)

Both nominees said they were supportive of the order and pledged to carefully consider stakeholder feedback on last year’s technical conference. “I am a strong advocate for interregional transmission planning and, in my view, the commission’s implementation Order No. 1000 is a work in progress,” Powelson said.

The nominees also asserted that changes to how the commission administers the Federal Power Act, the Natural Gas Act and the Public Utility Regulatory Policies Act should come from Congress, not FERC.

Sen. Maria Cantwell (D-Wash.), for example, noted that while the electric industry is subject to mandatory cybersecurity standards, gas pipelines are only subject to voluntary guidelines issued by the Transportation Security Administration. She asked the nominees whether they agreed that there should be mandatory standards for pipelines.

“I defer to Congress and the Transportation Security Administration (TSA) as to the adequacy of TSA’s natural gas pipeline cybersecurity program,” Chatterjee answered. “Congress has granted TSA authority to establish mandatory cybersecurity regulations for natural gas pipelines.”

“Congress and the TSA are in the best position to evaluate TSA’s current natural gas pipeline security authority to determine if natural gas pipelines should be subject to additional or mandatory cybersecurity standards,” was Powelson’s answer.

Senators also asked questions particular to their individual states. Sen. Al Franken (D-Minn.) asked about problems with coal transportation by railway in Minnesota — another TSA issue, the nominees said.

But Sen. Tammy Duckworth (D-Ill.) asked about states served by multiple RTOs — which include Illinois. “States that are split into two RTOs are encountering issues where generating resources have been separated from the loads that they were built or contracted to serve,” she said. “How should proximity to resources, actual power flows and pre-existing transmission rights be considered in RTO modeling?”

Both nominees said they could not answer, as it was a question pending before the commission.

Environment and Climate Change

Powelson and Chatterjee’s deferral to Congress extended to questions about environmental impacts, climate change and increasing the use of clean energy resources, subjects about which every Democratic and liberal senator asked.

Sen. Bernie Sanders (I-Vt.), one of the three ENR members to vote against the nominees earlier this month, asked the nominees 52 questions — far more than any other senator — many of them related to the environment. Four questions asked in different ways whether the nominees accepted prevailing climate science.

Powelson and Chatterjee repeated their answers from their confirmation hearing that they understood climate change was real — and not a “hoax,” as Trump has claimed. (See No Fireworks for FERC Nominees at Senate Hearing.)

But they said it was not FERC’s place to regulate it or attempt to decarbonize the nation’s energy mix.

“Any policy to mitigate carbon emissions should originate in Congress; it should not be designed at FERC,” Chatterjee said. “Addressing climate change will require policy changes that the public accepts, and maintaining and enhancing affordability and reliability is vital to gaining that public acceptance. Should I be fortunate enough to be confirmed, my role as a FERC commissioner would be to ensure that any such policy not have a deleterious impact on reliability and affordability of our energy supply.”

“My understanding is that FERC’s policies are resource- and fuel-neutral,” Powelson said. “The commission relies on competitive markets to provide just and reasonable rates and reliable service for consumers, and to send appropriate investment signals for developers. … If confirmed, I will refrain from picking ‘winners and losers’ in the energy marketplace, as that is not FERC’s role.”

Questions by Sanders and others indicated their desire for FERC to slow down its approvals of gas pipelines. They asked the nominees if they agreed with former Chairman Norman Bay’s call for a review of the cumulative environmental impacts from Marcellus and Utica shale drilling. (See Bay Calls for Review of Marcellus, Utica Shale Development.)

While Chatterjee’s answer was anodyne — committing to working with his colleagues in reviewing commission policies — Powelson was more forceful in his answer.

“I respectfully disagree with that recommendation,” he said. “As a Pennsylvania state regulator … I believe that this issue would be better addressed at the state level. State environmental regulators and state public utility commissions are closer to the issues of shale gas development and are better equipped than the federal government to undertake such an assessment.”

Public Participation

Senators also expressed concerns about potential barriers to public participation in FERC’s processes.

“FERC is incredibly complicated, and the barrier to entry for someone to simply understand FERC proceedings, much less to participate, is extremely high,” Sanders said. “Stakeholders with considerable financial resources can participate, but everyone else is effectively excluded.”

Both Sanders and Franken asked about legislation that would create an Office of Public Participation and Consumer Advocacy at the commission, an issue earlier raised by public interest group Public Citizen. (See Public Interest Groups Cry Foul over Technical Conference, RTO Transparency.)

Both nominees wrote that they would “work with my colleagues to identify further steps that FERC could take to make its proceedings and processes more accessible to the public.”

But Powelson also said, “I do not believe that the creation of such an office at FERC is necessary. In my view, the public comment process at FERC provides all interested parties with the ability to participate in the process and express their positions on issues.”

Duckworth also spoke up for public interest groups, saying they believe they have “an extremely limited voice in RTO stakeholder discussions, and RTO actions taken behind closed doors seem to be condoned by FERC.”

Last week, Virginia Democratic Sens. Tim Kaine and Mark Warner introduced legislation that among other provisions would mandate public comment meetings in every locality in the path of a proposed interstate gas pipeline. The bill is in response to complaints in the state about the limited opportunity for the public to provide feedback.

Republican Rep. Morgan Griffith, also from Virginia and a member of the House Energy and Commerce Committee, introduced a similar bill in the House.