Page 1579 – RTO Insider

December 6, 2016

Overheard at the ISO-NE Consumer Liaison Group Meeting

BOSTON — New England appears poised to withstand another winter of tight natural gas supplies, an ISO-NE official told the RTO’s Consumer Liaison Group meeting on Thursday. Other speakers debated whether states’ renewable portfolio standards are demanding enough to meet climate goals.

george-rto-insider — George | © *RTO Insider*

Anne George, ISO-NE vice president of external affairs and communications, said the 342,000-dekatherm Algonquin Incremental Market project just went online, and while it’s primarily meant to serve local distribution companies’ natural gas customers, it should ease system constraints for power generators.

“But as we see [the 1,517-MW] Brayton Point station retire [next June], we see the additional gas capacity going away as a large non-gas resource will likely be replaced by more gas generation,” she said.

Bride | © RTO Insider — Bride | © *RTO Insider*

Overall consumer costs for electricity have remained relatively flat for New Englanders over the past six years, even as more charges have been added to the distribution side of the bill. Electric distribution companies and their customers are responsible for funding public policy as renewable standards, including the cost of solar carve-outs, energy efficiency and other programs grow, said Jim Bride, president of Boston-based Energy Tariff Experts.

“Transmission charges have gone up a lot. So, there’s this increasing cost wedge, whether it’s renewables or other mandated charges over transmission that’s taken up a greater portion of the bill. What has allowed that to happen without consumers really noticing is the decrease in natural gas prices. Wholesale market power costs are down significantly,” he said.

Massachusetts lawmakers abandoned an effort to increase the state’s RPS this year to further reduce greenhouse gas emissions.

iso-ne consumer liaison group meeting — Gerwatowski | © *RTO Insider*

Ron Gerwatowski, an advisor on energy policy and utility regulation and former assistant Massachusetts energy secretary, said the renewable energy credit market that has driven clean energy projects needs further study and more recent data, noting that complete regionwide figures are about three years old. Another area worth more study is the impact of high alternative compliance payments in Massachusetts. The $67 cap draws RECs away from neighboring New Hampshire, Connecticut and New York, potentially leaving them short of meeting their own goals.

“Will an increase in annual obligations really achieve emissions reductions? Or, will it just cause a reshuffling of where the RECs are sold over time? I’m not suggesting we eliminate the RPS … but we really do need a comprehensive study before states consider raising them,” he said.

Cunningham | © RTO Insider — Cunningham | © *RTO Insider*

Greg Cunningham, vice president and director of clean energy climate change for the Conservation Law Foundation, said the two largest New England states, Massachusetts and Connecticut, are mandated to reduce greenhouse gas emissions by 80% below 1990 levels by 2050. From that, the Integrating Markets and Public Policy initiative was born to help markets assist all of the states to reach their climate goals.

“We, CLF, have watched as slowly clean energy has been built out, but at a trajectory that doesn’t come close to meeting this essential obligation — that is not only law, but [what] the science dictates we must do — to avoid the worst implications of climate change,” he said.

December 6, 2016

CAISO Monitor Proposes Fixes for EIM Market Power Concerns

By Robert Mullin

CAISO’s internal Market Monitor is proposing new enforcement measures to address market power concerns in the Energy Imbalance Market — an effort that could help participants win market-based rate authority in the West’s only real-time energy market.

The Monitor’s efforts come in response to FERC rulings limiting nearly all of the EIM’s current participants to transacting at cost-based rates — the result of the commission’s ongoing concerns about manipulation in the nascent market.

“We’ve been working with the [EIM] participants and the ISO to address the various concerns that FERC articulated so [participants] could refile and get market-based rates,” Eric Hildebrandt, director of CAISO’s Department of Market Monitoring, told a Nov. 30 meeting of the EIM’s governing body.

Hildebrandt pointed out that FERC now requires all prospective EIM members to file for market-based rate authority before joining the EIM — even if those entities already exercise that authority in the rest of the West.

“At the Market Monitor, we actually think it’s a very good thing — as long as the conditions are competitive — to have the full flexibility of bidding that is afforded entities which have market-based rates,” Hildebrandt said.

That flexibility has so far been elusive for three out of the four current EIM members.

Denials

FERC denied NV Energy and PacifiCorp — both subsidiaries of Warren Buffet’s Berkshire Hathaway Energy — EIM market-based rate authority in a November 2015 ruling that cited the companies’ failure to employ sufficient tests demonstrating their inability to wield economic power in their portions of the imbalance market (ER15-2281). The commission rejected Arizona Public Service in an August 2016 ruling (ER10-2437).

In both instances, the commission said it could not rely on CAISO’s market monitoring and mitigation to sufficiently address market power concerns in the EIM. All three utilities were invited to reapply for market-based rate authority once they could provide an additional 12 months of operational data demonstrating whether or not they possess market power.

FERC is concerned about the potential for EIM participants to engage in physical or economic withholding of generating resources in areas of the EIM subject to transmission constraints — wide areas dominated by generation owned by EIM members themselves.

Physical withholding can involve a supplier not bidding lower-cost resources into the market in order to allow higher-cost units to set clearing prices. This risk arises from the fact that the EIM has no must-offer requirement.

Economic withholding occurs when a unit bids into the market above its marginal costs in order to elevate the market price.

Monitor’s Proposals

CAISO has attempted to address this risk through automated bid mitigation procedures that kick in when transmission congestion limits supply into an EIM area. But FERC expressed concern that the ISO might not enforce the market constraints required to trigger mitigation.

To address the commission’s concerns about physical withholding, the Monitor suggests that the ISO improve the EIM’s outage reporting rules by logging when plant outages are submitted by market members for non-physical reasons. In short, the ISO must have more visibility into EIM outages, Hildebrandt said.

To counter economic withholding concerns, the Monitor recommends that the ISO step up enforcement of local market constraints in specific EIM areas and provide FERC an explanation when it decides not to enforce them.

Hildebrandt said the Monitor will heed a commission request that it comment on market-based rate authority proceedings, something the department hasn’t done in nearly a decade, he noted.

Puget’s Success

Lessons can be learned from Puget Sound Energy’s successful effort to obtain market-based rate authority in the EIM, Hildebrandt said (ER10-2374).

The commission determined that Puget provided sufficient evidence that its limited link to other EIM areas would not become constrained frequently enough to create a submarket requiring specific measures to mitigate market power.

A significant factor in gaining approval: Puget’s commitment to providing 300 MW of firm transmission to the market at all times. Other EIM members committed a “less certain” volume of transmission to the market, Hildebrandt said.

“I think the key there is the amount of potential transmission,” Hildebrandt said. “If they can satisfy to FERC that it’s going to be offered or available all hours, that would seem to play a big role.”

Hildebrandt said Puget’s approach could provide a template for how the ISO can work with other members to help them win FERC approval.

The EIM’s continued expansion should go a long way in assuaging FERC’s concerns about the interplay between transmission constraints and local market power, according to Hildebrandt. The Monitor’s own analysis indicates that the addition of NV Energy a year ago created enough additional transfer capacity to ensure competitiveness in all EIM balancing authority areas during nearly all hours.

That additional capacity is translating into increased flows between EIM areas, making the market more competitive, Hildebrandt said.

market-based rate authority caiso monitor — Map illustrates average transfer capacity throughout the Energy Imbalance Market since Arizona Public Service and Puget Sound Energy joined the effort in October. | *CAISO*

“Now with multiple connections between the ISO and the EIM, you really have to have congestion on multiple constraints at the same time to isolate any one area,” he said. If congestion occurs at one constraint, energy can be scheduled around it to supply the affected area.

“You’re really operating as one single market on a system basis throughout most — if not all — of the EIM,” Hildebrandt said.

December 6, 2016

MISO-PJM TMEP Projects Drop to Five

By Amanda Durish Cook

MISO and PJM’s targeted market efficiency project portfolio has dipped from seven projects to five.

The latest project to drop off is the Marysville-Tangy 345-kV upgrade in central Ohio, which was supposed to deliver $122 million in benefits at a “minimal” cost. PJM and MISO staff have since learned that the line’s emergency rating will be increased by the end of this year, eliminating the need for a congestion-relieving fix.

The Klondike-Purdue 138-kV project in north-central Indiana was also scrapped this fall after RTO staff discovered the congestion the project was aimed at relieving was merely outage-driven. (See MISO, PJM Move Forward on TMEPs; 6 Projects Planned.)

The five remaining projects are expected to cost $14.45 million and deliver $100 million in benefits, a 6.9:1 benefit-cost ratio. The original seven-project TMEP package was expected to cost $19 million and deliver $117 million in benefits, a 6.2:1 ratio.

miso pjm tmep market congestion planning — Twelve flowgate projects were initially considered in MISO and PJM’s TMEP analysis.

During the Dec. 2 MISO-PJM Interregional Planning Stakeholder Advisory Committee conference call, PJM engineer Alex Worcester said the RTOs will continue to monitor the Marysville-Tangy project site to see if it could use future improvements.

“We’re still looking at a $100 million benefit for [less than] $15 million in this portfolio of projects,” Worcester added.

There are no recommended changes to the other five projects, MISO and PJM staff said.

WPPI Energy’s Steve Leovy said he wanted more information on how the TMEP costs and benefits were calculated. “Based on [the dropped projects], the benefit metric could have changed significantly,” Leovy said.

Leovy also said he would like the TMEP cost-benefit calculation to resemble the benefit analysis used in MISO’s Market Congestion Planning Study. Leovy said when the TMEP project creation is filed with FERC, he will recommend WPPI make a filing asking the commission to consider making MISO use the Market Congestion Planning Study’s benefit analysis for TMEPs.

MISO engineer Adam Solomon disagreed, replying, “We think having separate benefits metrics is OK.”

December 6, 2016

Stakeholder Soapbox: The Ripple Effects of Subsidizing Monopolies

By Dick Munson

environmental defense fund — Munson | *Environmental Defense Fund*

Ohio regulators recently provided $600 million to FirstEnergy, the state’s largest utility. Although the decision was labeled as a “distribution modernization rider,” the money seemingly came with no strings attached, meaning the utility giant need not do anything to update or improve its system of wires and transformers.

Even the chairman of the Public Utilities Commission of Ohio, Asim Haque, described the decision as “undoubtedly unconventional.” His rationale for the subsidy was that FirstEnergy could not modernize its grid until it reduced its debt, which would allow it to obtain a better credit rating, which, in turn, would lead to lower financing costs for future grid investments — if they occur.

That line of thinking led to the $600 million decision, raising six questions.

First, rather than advance grid modernization in the state, has the decision actually set it back? FirstEnergy will not spend any of the money on near-term upgrades. Plus, other electricity companies will avoid investing in Ohio, as regulators are showing a preference for the incumbent utility monopolies. Innovative entrepreneurs will not risk their capital when regulators have stacked the market against them.

Second, should we reward a utility’s poor management? FirstEnergy needed to reduce its debt because its executives made bad business decisions, particularly buying up old coal-fired power plants at the very time the price of natural gas was falling, making those plants uneconomic. Rather than reduce executive bonuses or trim generous dividends to shareholders, regulators sent the tab to customers, every one of whom must pay $36 more per year to cover FirstEnergy’s mistakes. Regulators are signaling more interest in a utility’s pleas than its performance.

Third, how much will Ohioans really have to pay? Since every other utility in the state is now lining up to get the same deal regulators gave to FirstEnergy, the cost will certainly be much more than $600 million.

Fourth, doesn’t the subsidy distort regional power markets? FirstEnergy originally asked for money to cover power purchase agreements that would support the continued operation of its uneconomic (and dirty) power plants. Federal regulators objected, saying such a subsidy would distort competitive markets. To skirt those objections, the utility then asked for the subsidy to go to a different subsidiary instead. The effect, however, is the same — state regulators have provided a competitive advantage to FirstEnergy’s generators. As a result, FERC will need to decide if such a “virtual PPA” also illegally disrupts regional markets.

Fifth, is there true corporate separation between FirstEnergy’s generation and distribution subsidiaries, as required by Ohio’s deregulation law? As mentioned, FirstEnergy diverted the subsidy, directing the money away from its generation units to its distribution companies. Those subsidiaries, ironically, are doing very well financially, largely because they are monopolies that enjoy guaranteed profits. Although state law requires arms-length dealings among the utility’s subsidiaries, the subsidy came in through a different door but ended up in the same house. In effect, it is still propping up FirstEnergy’s economically challenged generation units that are not able to compete in regional power markets.

Sixth, should utilities get something for nothing? Ohio regulators did “not place restrictions on the use” of the subsidy and said FirstEnergy could use the funds to cover “outstanding pension obligations, reducing debt or taking other steps to reduce the long-term costs of accessing capital.” Almost as an afterthought, PUCO also said FirstEnergy could use the subsidy “to indirectly support grid modernization investments.” The operative word, of course, is “indirectly,” noting the utility need not show any connection to grid modernization efforts. Put another way, Ohioans are paying millions of dollars for something they have no guarantee of receiving.

Such questions suggest a simple subsidy prompts ripple effects that set back grid upgrades, hurt customers and distort competitive markets. The PUCO chairman has said he wants to move beyond the subsidy debate so regulators can focus on modernizing the grid. Perhaps the question he should be considering is, what are the investments and innovation needed to build a cleaner, more affordable energy system?

Dick Munson is director of Midwest Clean Energy for the Environmental Defense Fund.

December 6, 2016

ISO-NE Study Sees Little Savings from Keene Road Tx Upgrade

By William Opalka

WESTBOROUGH, Mass. — A transmission project intended to release bottled wind resources in Maine may not be cost-effective, according to a draft report issued at the ISO-NE Planning Advisory Committee meeting last week.

The needs assessment for the Keene Road market efficiency transmission upgrades showed relatively small annual savings in energy production costs of $1.35 million to $1.38 million (2015 $) if the export limits were raised from the current 165 MW to 195 MW.

iso-ne market efficiency project keene road — Detail of Keene Road Constrained Area | *ISO-NE*

An additional increase to 225 MW would save another $100,000 to $180,000. No additional savings are realized if the limit is further raised to 255 MW. The assessment measured the four export limits for the years 2020, 2025 and 2030.

A preliminary economic study from last year estimates the project could save ISO-NE ratepayers $1.4 million to $5.7 million by allowing additional wind development in the area and displacing more expensive hydropower.

The PAC set the parameters for determining if Keene Road could qualify as a market efficiency project in September. (See ISO-NE Outlines Keene Road Tx Upgrade Study.)

“This has the look of providing a de minimis benefit, so you have to ask if it’s worth doing,” said Bob Stein of Signal Hill Consulting Group, who represents Hydro-Quebec and other power generators.

Michael Henderson, ISO-NE’s director of regional planning and coordination, said those were “questions more properly dealt with at a later date.”

The RTO has not released any estimates on the cost of the upgrades, which would be eligible for competitive bidding under FERC Order 1000.

Rollins Wind Farm in Maine | Reed & Reed, Inc. — Rollins Wind Farm in Maine | *Reed & Reed, Inc.*

Under the RTO’s Tariff, the cost of a market efficiency project must be less than the resulting production cost savings. “If the ISO does issue a request for proposals and no developer provides a proposal that meets this cost threshold, then no regionally funded transmission project would move forward,” ISO-NE spokeswoman Marcia Blomberg told RTO Insider on Thursday.

A final discussion of the results will be held at the December PAC. In January, the committee will discuss whether to move toward a competitive solicitation for bids from potential developers.

December 6, 2016

NY Regulators Call for Overhaul or End to Mass-Market Retail Choice

By William Opalka

Eighteen years after opening retail electric and gas choice, New York regulators concluded Friday that the initiative has failed, launching a proceeding that could bar energy service companies (ESCOs) from operating in the state.

“After considerable experience with the offering of retail service to mass-market customers by ESCOs, the [New York Public Service Commission] has determined that the retail markets serving mass-market customers are not providing sufficient competition or innovation to properly serve consumers,” the commission wrote in its notice (98-M-1343). “Despite efforts to realign the retail market, customer abuses and overcharging persist, and there has been little innovation, particularly in the provision of energy efficiency and energy management services.”

The commission has attempted to revamp consumer protections in the program, including a guarantee of savings for customers not enrolled with green energy suppliers, but it has been thwarted by the courts. (See Marketers Seek Rehearing on NY Low-Income Moratorium.)

Two-Track Process

The notice sets out a two-track process, one an evidentiary process to determine “whether ESCOs should be completely prohibited from serving their current products to mass-market customers” or whether reforms could save it. Evidentiary hearings will follow written submissions from energy marketers, consumers and PSC staff on a list of 20 questions posed in the notice. Responses are due April 7, 2017.

The commission defines “mass-market” customers as residential and small commercial customers — those whose bills do not include a demand rate element.

Among the questions is whether the commission currently has authority to penalize ESCOs for abuses and whether it should revisit its decision to exempt them from Article 4 of the Public Service Law. Another asks whether ESCOs should be required to offer value-added energy efficiency and energy management services as a condition of selling gas and electricity.

The second track would include “collaborative” meetings of interested parties to develop proposals on what new practices or products “would provide sufficient real value to mass-market customers … [and] ensure just and reasonable rates.”

“For too long, [the PSC] has seen substantial overcharges and deceptive practices by the ESCO industry harming New York consumers,” the commission said in a press release. “As part of these hearings and by obtaining testimony under oath, we will give ESCOs the opportunity to explain their pricing practices and to hear from consumers who have been harmed by these practices. We will then push ahead with reforms to ensure that ESCOs provide useful, value-added, economical services to New York consumers, particularly as part of our efforts under Reforming the Energy Vision.”

ESCOs Cry Foul

ESCOs have said the state’s approach to reform has been heavy-handed and has not given them a proper chance to respond to the allegations. They have also challenged the state’s data.

“The Retail Energy Supply Association believes that a fair and impartial review of New York’s competitive energy markets will show clear and unambiguous benefits for consumers and the state’s economy,” spokesman Bryan Lee said Monday. “RESA seeks to keep the competitive markets for electricity and natural gas open to all consumers. RESA intends to actively participate in this Public Service Commission proceeding to achieve that goal. Consumers enjoy and demand choices in every aspect of their daily purchasing decisions, from car insurance and cell phone providers to doctors and vacation destinations. Any policy changes ultimately identified by the commission must preserve opportunities for choice by consumers in their energy supply decisions.”

Retail choice was phased in by utilities on different schedules, beginning with Consolidated Edison in 1998.

More than 20% of New York’s residential and small commercial customers currently receive energy from one of the approximately 200 ESCOs operating in the state. Regulators have previously cited several examples of unacceptable conduct, including companies that charged more than double or triple the rates of incumbent utilities. The commission has also cited examples of companies falsely representing themselves as local utilities.

December 6, 2016April 1, 2025

LaFleur Backs NEPOOL Market-Climate Collaborative

By William Opalka

BOSTON — The New England Power Pool’s collaborative process to address climate change while preserving wholesale electricity markets won an endorsement from FERC Commissioner Cheryl LaFleur at the ISO-NE Consumer Liaison Group meeting Thursday.

LaFleur | © RTO Insider

LaFleur, a New England native, was referring to the Integrating Markets and Public Policy collaborative, which seeks to reconcile markets with state mandates to decarbonize the grid. (See Markets vs. Climate Goals the Subject at NECA Conference.)

Stakeholders are meeting into next year with the goal of having ISO-NE present Tariff revisions to FERC.

“I think there’s a lot in it for customers because we will still harness the power of the competitive market while also having the states address climate change [to see if] those are two things that can be reconciled,” she said.

One contentious point is that states have mandated clean energy procurements leading to subsidized out-of-market contracts that skew prices.

“What I’m worried about as we go forward is if we go without a plan and try to have it both ways: try to have a market that’s working … but then we get to a place where it’s not working and it begins to be cannibalized by the subsidized resources,” LaFleur said.

Noting the unlikelihood that the Trump administration would endorse a federal carbon tax, LaFleur said that the commission would probably look favorably on a state-based consensus that meets the regional goals along with market-based solutions.

“In my mind, Plan A is the region creates some kind of comprehensive plan that recognizes the state environmental goals and the [role of] pricing in the wholesale market and files it at FERC,” she said.

She said the two alternatives would have unappealing outcomes: The current state of affairs, with FERC acting as arbiter in the disputes between state governments, RTOs and market participants; or a de facto reregulation, as states more actively promote resource adequacy with preferences for cleaner energy sources, with out-of-favor generators then looking for their own state support.

“Pretty soon you realize the market’s pretty small and you’ve reregulated in a messy, expensive way. I don’t think that’s a good idea, particularly for a region that invented competitive markets, ISO-NE,” she added.

Adjustments Ahead

Besides an expected lessening of government activism in climate policy, LaFleur will have to adjust to being a minority member of FERC when three Republicans are expected to be nominated to FERC next year.

“[FERC commissioner] is my first government job and it’s only been for President Obama, so I’ll see what it’s like,” she said. LaFleur said the Democrats on the commission had a good working relationship with the former Republican members. “The only thing we’ve had that had a partisan feel was anything that relates to environmental rules.”

That could continue.

“One of the things everyone will be watching is where the new administration takes us in the intersection of energy and the environment,” she said.

Regardless of what the Trump administration does, LaFleur said, she’s on FERC for the duration.

“I plan to serve out my term until 2019. I don’t know what anybody else is going to do, but I know what I’m going to do,” she said.

December 6, 2016

ERCOT Technical Advisory Committee Briefs

AUSTIN, Texas — ERCOT’s Technical Advisory Committee assigned two subcommittees to consider responses to discrepancies in day-ahead market make-whole payments.

ERCOT staff said it noticed a material increase in make-whole payments in November, which it said resulted from the implementation in June of NPRR617, which eliminated the caps on the first two parts of three-part day-ahead offers. It said a review determined the increase resulted from a mismatch between start-up and minimum energy costs used by the day-ahead market’s clearing engine and those used for payments.

ERCOT TAC Meeting Underway | © RTO Insider — ERCOT TAC Meeting Underway | © *RTO Insider*

None of the operating days met the 2% threshold to prompt resettlements. A software code fix corrected the problem effective Nov. 16.

The ISO is evaluating additional means of monitoring settlement outcomes “to more rapidly identify implementation issues or other anomalies in the future.”

TAC Chair Adrianne Brandt assigned the issue to the Commercial Operations and Wholesale Market subcommittees for further discussion and potential policy recommendations.

Committee Vice Chairs Approved

The TAC unanimously confirmed Oncor’s Martha Henson as vice chair of the Protocol Revision Subcommittee. The committee also unanimously confirmed the re-election of TXU Energy’s John Schatz as vice chair of the Commercial Operations Subcommittee.

Revision Requests Approved, Tabled

Underway | © RTO Insider — Bill Barnes, NRG at the ERCOT TAC Meeting | © *RTO Insider*

The TAC approved three nodal protocol revision requests (NPRRs), one nodal operating guide revision (NOGRRs) and two revisions to the Settlement Metering Operating Guide (SMOGRRs).

The committee tabled a Commercial Operations Market Guide revision request (COPMGRR044), pending the COPS’ resolution of the related NPRR794. The changes relocate reporting requirements for unregistered distributed generation from the Commercial Operations Market Guide to the protocols.

NPRR773: Broadens the scope of acceptable letter of credit issuers, allowing electric cooperatives to post letters from the National Rural Utilities Cooperative Finance Corp. with ERCOT.
NPRR792: Aligns the nodal protocols with NERC’s definition for special protection system (SPS) and uses “remedial action scheme” and “automatic mitigation plan” in place of SPS for consistency purposes, when applicable. Also approved was the related PGRR051.
NPRR803: Removes un-codified language from NPRR439, which was approved four years ago and updated a counter-party’s available credit limit for the day-ahead market’s current day.
NOGRR162: Establishes a process for resolving real-time data discrepancies that affect ERCOT’s network security analysis. NERC Standard IRO-010-2 (Reliability Coordinator Data Specification and Collection) requires ERCOT and applicable entities to have a mutually agreeable process for resolving real-time data conflicts.
SMOGRR018: A change sponsored by the Texas Industrial Energy Consumers will allow efficient private use network configurations without jeopardizing ERCOT-polled settlement metering requirements.
SMOGRR019: Makes several changes to the Settlement Metering Operating Guide, including a requirement that nameplate photos be submitted as part of site certification package for new or replacement instrument transformers.

Stakeholders also left NOGRR164 on the table until its accompanying protocol change (NPRR792) can be taken up by the board next week. The TAC will then conduct an email vote on the NOGRR.

– Tom Kleckner

December 6, 2016

MISO Resource Adequacy Subcommittee Meeting Briefs

CARMEL, Ind. — MISO has come up with two possible responses to its Independent Market Monitor’s suggestion to apply its 50-MW physical withholding threshold to affiliated market participants collectively, rather than individually.

MISO told the Resource Adequacy Subcommittee on Nov. 30 that the withholding threshold should either use allocations based on load ratio share, or the fixed 50-MW limit should be scrapped in favor of a new threshold based on percentage of generation assets.

MISO’s Cliff Risley said the downside to the load ratio share option is that market-sensitive information could be released inadvertently through how many megawatts each affiliate is awarded. Risley also said the percentage option could result in more allowed withholding overall and weaken capacity market efficiency.

MISO and the Monitor are proposing to set withholding limits on a company basis rather than the current market participant basis, which allows affiliates to hold back 50 MW apiece without overstepping the Planning Resource Auction withholding threshold. (See “MISO Takes 1st Steps in Monitor Recommendations,” MISO Resource Adequacy Subcommittee Briefs.)

Monitor David Patton said the two alternatives remove the “common incentive” for affiliates to withhold to boost prices for a sister company, but putting the 50 MW on a pro rata basis is “more draconian” than the current market rules.

“There are cases where withholding less than 50 MW is mitigated. You’ve now made the affiliation more stringent,” Patton said. He also said he didn’t know how the percentage method could be distributed fairly.

Some stakeholders argued that FERC Order 697 already prohibits coordination among affiliates that are franchised public utilities and the withholding proposal should only apply to affiliates not covered by the rule.

Risley asked for more stakeholder feedback before Dec. 14.

Projects Without GIA Counted in OMS-MISO Survey?

MISO’s Darrin Landstrom asked stakeholders if the RTO should include resources that have yet to secure a generator interconnection agreement in the annual OMS-MISO Survey.

2017-miso-oms-survey-considerations-for-new-resources-content — | *MISO*

Currently, MISO only includes Tier 1 resources — those that have a signed generator interconnection agreement — into the survey’s regional and zonal weighted averages. The RTO is asking if it should include Tier 2 resources — projects still in the interconnection queue — into the survey totals, or create a separate survey category for them. RASC Chair Gary Mathis asked if MISO could use historical data to calculate the likelihood of projects being completed after they enter the final stage of the queue. Landstrom said the option could be explored.

Laura Rauch, MISO’s manager of resource adequacy coordination, reminded stakeholders that MISO’s ongoing effort to revise its queue rules could complicate the suggestions, as the queue’s stages and restudy periods could be changed.

Landstrom asked for input on the issue by Dec. 15.

IMM Clears Up Market Mitigation Application

The Monitor is proposing a Tariff change to make clear which resources are subject to PRA market mitigation measures.

IMM staffer Michael Chiasson said market mitigation will apply to “generation resources, including behind-the-meter generation, that are internal to or are pseudo-tied into MISO.”

Chiasson said MISO’s Tariff is currently unclear as to what resources are answerable to the Monitor; the edits would be made to Module D.

Demand resources, energy efficiency resources and external resources will be exempted from market mitigation measures, Chiasson said. He asked for stakeholder feedback by Dec. 14.

— Amanda Durish Cook

December 6, 2016

UPDATED: Trump Sends Conflicting Signals on Climate Change

UPDATE: Quoting unnamed transition team officials, The New York Times, The Washington Post and others reported Dec. 7 that President-elect Trump plans to nominate Oklahoma Attorney General Scott Pruitt as EPA Administrator. Trump confirmed the reports Dec. 8.

By Rich Heidorn Jr.

President-elect Donald Trump is sending EPA watchers conflicting signals, interviewing potential agency heads who are vocal critics of climate science while also claiming an “open mind” on the issue.

In an interview with editors and reporters of The New York Times on Nov. 22, Trump said he has an “open mind” on humans’ role in global warming, appearing to soften his campaign pledge to withdraw the U.S. from the Paris Agreement.

gore-at-trump-tower — Former vice president and climate activist Al Gore speaks with reporters after meeting with President-elect Donald Trump at Trump Tower in New York on Nov. 5.

On Monday, Trump met with former vice president and climate activist Al Gore at the invitation of Trump’s daughter Ivanka. Gore told reporters afterward the “lengthy and very productive session” was a “sincere search for areas of common ground.”

Politico reported Dec. 1 that Ivanka intends to make climate change “one of her signature issues.” Quoting a source close to her, Politico said Ivanka, who has endorsed liberal positions on pay equity and parental leave, “is in the early stages of exploring how to use her spotlight to speak out on the issue,” seeing herself as a “bridge” to moderate and liberal women.

That would put her in conflict both with her father’s prior statements on the issue and those of EPA transition leader Myron Ebell and the candidates rumored to be in the running to head the agency.

The Associated Press reported Nov. 29 that it had seen internal documents from the president-elect’s transition team that indicate the new administration plans to stop defending the Clean Power Plan in court. (See CPP, FERC’s Bay, Honorable Among Losers in Trump Win.)

‘Bunch of Bunk’

Trump’s Chief of Staff Reince Priebus told Fox News on Nov. 27 that the president-elect’s “default position” on climate change is that “most of it is a bunch of bunk.”

“The only thing he was saying after being asked a few questions about it [by the Times] is, look, he’ll have an open mind about it, but he has his default position, which most of it is a bunch of bunk, but he’ll have an open mind and listen to people,” Priebus said.

trump climate change — Pruitt | *ScottPruitt.com*

On Nov. 28, Trump met in New York with two rumored EPA candidates, Oklahoma Attorney General Scott Pruitt, one of the state officials leading the legal challenge to the CPP, and Kathleen Hartnett White, former head of the Texas Commission on Environmental Quality, who has criticized “the imperial EPA.”

Other EPA candidates, according to Reuters, include two former EPA executives during the George W. Bush administration, energy attorney Jeff Holmstead and Mike Catanzaro, a lobbyist for CGCN Group. Venture capitalist Robert Grady of Gryphon Investors, who served in President George H.W. Bush’s administration, also is in the running, Reuters reported.

‘Looking Very Closely’

White Texas Public Policy Foundation — White | *Texas Public Policy Foundation*

Although Trump did not specifically mention the CPP during the Times interview, his moderate tone was a marked contrast to his previous bombast on global warming.

Trump was asked by Times columnist Thomas Friedman if he would “take America out of the world’s lead of confronting climate change.” Trump responded that he is “looking at it very closely.”

“I absolutely have an open mind. I will tell you this: Clean air is vitally important. Clean water, crystal clean water is vitally important. Safety is vitally important,” Trump said.

Editorial page editor James Bennet asked, “When you say an open mind, you mean you’re just not sure whether human activity causes climate change? Do you think human activity is or isn’t connected?”

Trump responded: “I think right now … well, I think there is some connectivity. There is some, something. It depends on how much. It also depends on how much it’s going to cost our companies. You have to understand, our companies are noncompetitive right now.”

White House correspondent Michael Shear followed up with a question about the potential of foreign leaders to impose tariffs on American goods to offset the carbon that the U.S. had pledged to reduce.

“I think that countries will not do that to us,” Trump responded. “I don’t think if they’re run by a person that understands leadership and negotiation, they’re in no position to do that to us, no matter what I do. They’re in no position to do that to us, and that won’t happen, but I’m going to take a look at it. A very serious look. I want to also see how much this is costing, you know, what’s the cost to it, and I’ll be talking to you folks in the not too distant future about it, having to do with what just took place.”

‘Hoax’

In a 2012 tweet, he called climate change a hoax created “by the Chinese in order to make U.S. manufacturing noncompetitive.” During the campaign, he said he would “cancel” the U.S.’s involvement in the Paris Agreement, which aims to limit global warming to 1.5 degrees Celsius above preindustrial levels. (See CPP, FERC’s Bay, Honorable Among Losers in Trump Win.)

But in a video released Nov. 21, Trump also made clear that he will steer a different course than President Obama on energy policy, renewing his promise to “cancel job-killing restrictions on the production of American energy, including shale energy and clean coal.”

Trump and the Republican Congress could use the Congressional Review Act to cancel some of the Obama administration’s most recent regulations, including a Nov. 15 Interior Department rule requiring oil and gas producers to use “currently available technologies and processes” to cut methane flaring in half at oil and gas wells on federal and Native American lands.

The act allows an incoming Congress to reject regulations finalized within 60 days of the end of either the House’s or Senate’s sessions.

The Congressional Research Service has concluded the act would apply to regulations finalized after May 30, if Congress holds no more sessions this year, The Washington Post reported Nov. 22.

In contrast, an EPA regulation intended to reduce methane gas leaks was finalized on May 12, making it likely exempt from being reversed under the act, the Post reported. EPA said the rule, designed to reduce methane emissions from new or modified oil and gas wells, will prevent 11 million metric tons of carbon dioxide equivalent emissions by 2025.