Page 1590 – RTO Insider

November 7, 2016

Enviros, Green Developers Push NY Tx Expansion

By William Opalka

ALBANY, N.Y. — A coalition of environmental groups and clean energy developers on Thursday called for upgrades in New York’s transmission system at the Alliance for Clean Energy New York’s 10th Annual Conference.

Reynolds | © RTO Insider — Reynolds | © *RTO Insider*

“Today’s unique circumstances dictate that the rapid construction of new high-voltage transmission infrastructure should be an important component of the state’s strategy to meet its clean energy goals,” said ACE NY, the Sierra Club, Pace Energy and Climate Center, Environmental Advocates of New York and the Natural Resources Defense Council in a statement released at the conference.

“When we’re looking at transmission projects for the future, we need to see them through the 50% renewables lens,” ACE NY Executive Director Anne Reynolds said, referring to Gov. Andrew Cuomo’s State Energy Plan, which requires the state to procure 50% of its electricity from renewables by 2030.

The joint statement was also filed with the New York Public Service Commission, which is overseeing two transmission initiatives under the public policy provisions of FERC Order 1000. (See NYISO Identifies 10 Public Policy Tx Projects.)

Jones | © RTO Insider — Jones | © *RTO Insider*

The groups had a willing ally in NYISO CEO Brad Jones, who addressed the attendees at the morning session. He decried the 10- to 12-year process to get transmission built, advocating an expedited process of no more than six years.

“We need to develop our transmission system with an eye toward where renewables will be built,” Jones said. He said transmission developers need to build what he called a collector system, where renewables can be easily connected.

He said the ISO wants to lessen risks for energy developers who currently may seek less-than-optimal sites to access existing transmission; Jones had experience in Texas helping to develop collector systems in which networks of lower-capacity transmission lines would link several wind farms to a central point where they would connect to the main transmission corridors.

“My staff calls this our moon shot,” said Jones, who paraphrased President John F. Kennedy’s 1962 Rice University speech about landing a man on the moon: “We do it not because it is easy, but because it is hard.”

clean energy discussed at ACENY annual conference — | © *RTO Insider*

Reynolds said new lines should be built only if they help deploy wind and solar projects.

“With nearly 4,000 MW of new renewable energy projects proposed, real progress toward New York’s 50-by-30 goal is in sight,” Reynolds said in a statement. “New transmission capability is needed, but with upstate New York turning to a renewable energy future, the state should only be investing in those lines that are needed to deliver wind- and solar-generated power.”

November 7, 2016

Markets vs. Climate Goals the Subject at NECA Conference

By William Opalka

WESTBOROUGH, Mass. — The challenge of preserving competitive markets while decarbonizing the New England economy was much on the minds of attendees at the Northeast Energy and Commerce Association’s 15th Power Markets Conference last week.

Northeast Energy and Commerce Association — Bentz | © *RTO Insider*

Some stakeholders fear New England states’ plans to procure up to 2,000 MW of renewable capacity could suppress prices in ISO-NE’s Forward Capacity Auctions. Those fears have receded somewhat, as the states are currently in negotiations for no more than 460 MW. (See New England States Move Toward Renewables Contracts.)

“The short-term problem isn’t as big as what was expected,” Jeff Bentz, director of analysis at the New England States Committee on Electricity, said during a panel discussion on the New England Power Pool’s Integrating Markets and Public Policy (IMAPP) process. “That level is pretty small and could enter in FCA 12 [2021/22] but probably won’t enter until FCA 13 [2022/23].”

Another panelist, Peter Fuller, vice president of market and regulatory affairs at NRG Energy, described his company’s proposed two-step auction to accommodate state policy resources while maintaining efficient pricing for merchant generators.

The first auction would reflect the market without the effect of subsidized resources. which would be paid to all generating resources clearing in the first step. A second, lower price including the subsidized capacity would be paid to the generating resources that are subsidized by state policy.

All resources cleared in both steps would receive a capacity obligation, but these obligations would be pro-rated to ensure that the total quantity of generation purchased is no greater than the status quo, ‘merchant’ outcome. NRG says this would ensure that the cost impact of the states’ policy actions is shared among all market suppliers equitably.

“While NRG supports including state policy-subsidized generating resources in the markets, t wholesale sellers and the private investors in the market should not have to shoulder the entire burden of all of the state policy objectives,” Fuller said. “And effectively that’s the world we’re in right now. The [ISO-NE] renewable technology resource exemption, while limited, does create a price-suppression effect and potentially puts the full cost of adding those resources on the backs of all resources in the markets.”

Bill Berg, vice president of wholesale market development at Exelon, said the IMAPP meetings instead need to determine what subsidized resources are able to bid into the FCA and which aren’t. An estimated 8.7 GW of nameplate clean energy generation capacity will be needed to meet the states’ 2030 goals.

“We’re talking about 8.7 GW of subsidized capacity. Think about the angst that 200 MW has caused. Think about trying to design a market that puts both objectives, allowing the states to do what they want and protect reliability and the market, when you’re dealing with an 8.7-GW spread, which is 25% of the [FCA] market,” he said.

Pallas LeeVanSchaick, vice president of Potomac Economics, the ISO-NE External Market Monitor, said there are inherent risks in the adoption of out-of-market contracts intended to achieve public policy objectives.

“We’re going to get to the point that contracts with individual resources may not pass on costs in the short term, except that they’re able to fund those priorities through lower wholesale prices,” he said. “Maybe in the short term we don’t see higher rates to consumers, but in the long term, I bet we will see legacy costs that go on long after the impacts on the lower wholesale prices end. We’re going to notice over time that these are not in the interests of consumers.”

On a panel on the opportunities presented by energy storage, Ian Springsteel, director of U.S. regulatory strategy for National Grid, likened the industry to how consumers might have reacted to a smart phone a decade ago. It has seemingly unlimited potential, but the industry and public aren’t quite sure what the device can do or how to integrate it into daily practices.

“We’re in the same place with storage. We have an inkling of what it can do as one of many tools in the energy market or the distribution system. But to integrate it into all the rules and operational framework, to fully use this technology, we’re at the beginning of that process,” he said.

Christopher Parent, director of market development at ISO-NE, said the RTO is comfortable with storage, having had decades of experience with pumped hydro in New England. ISO-NE currently has about 90 MW of storage in its interconnection queue. The queue has a total of 10,000 MW of resources, many from flexible fast-start gas generators.

“When we look at our 2025 [projections], we’re looking at 4,400 MW of wind and about 3,300 MW of solar on the system,” Parent said. “That creates a lot of variability on the system that shows annual summer peaks of about 25,000 to 28,000 MW. That’s going to create a need for a lot of flexible resources on the system, be it storage or whatever technologies materialize in the coming years. The key thing in the market is to send the right price signals so we get the response we need.”

— William Opalka

November 4, 2016

MISO Files Forward Capacity Auction Plan with FERC

By Amanda Durish Cook

MISO has filed with FERC its proposal to implement a separate three-year forward capacity market with a downward-sloping demand curve for its retail-choice areas.

The nearly 1,700-page filing, submitted Nov. 1, creates Tariff Module E-3 and makes corresponding changes to modules A, D and E-1 (ER17-284). Jeff Bladen, MISO executive director of market services, said the RTO took pains to incorporate stakeholder advice into the proposal over the 20-month period since the initial issues statement.

“The proposal is a reflection of the breadth of advice we got throughout the process,” Bladen said during a conference call after the filing. “There are no surprises in what we filed this afternoon. … We look forward to the review process FERC will undertake.”

ferc, miso — Jeff Bladen discusses the forward auction construct at the October Informational Forum. MISO Deputy General Counsel Eric Stephens is in the background. | © *RTO Insider*

The filing came despite calls from some stakeholders for more discussion. Bladen said that although all stakeholders didn’t agree on MISO’s forward auction solution, virtually all stakeholders agree that a problem exists that needs to be corrected. Bladen pointed to the OMS-MISO Survey that found a possibility of a generation shortfall below the RTO’s minimum reserve margin requirement in 2018. (See OMS-MISO Survey: Generation Shortfall Possible.)

MISO’s plan is designed to “ensure conditions don’t deteriorate further,” Bladen said.

Bladen also noted that MISO’s Independent Market Monitor was heavily involved throughout the process, although the RTO and Monitor continue to have “philosophical differences.” (See MISO Delays Forward Auction Filing; Issues Draft Tariff and Business Rules.)

“It’s no secret that there has been difference in opinion about the preferred approach,” he said.

Bladen said the proposal is designed to provide equally valued capacity from both merchant generators and regulated utilities. An analysis from The Brattle Group has demonstrated that the proposal would ensure enough capacity to meet reserve margins.

MISO is requesting an effective date of March 1, 2017, the beginning of its implementation timeline for the 2018/19 planning year capacity auction. He would not speculate as to what the RTO might do if FERC doesn’t approve the changes by then. “There are many plausible ways FERC might act, so there are too many hypotheticals,” he said.

To respect state jurisdiction, the filing includes a prevailing state compensation mechanism modeled after one in PJM that will provide an alternative method for demonstrating long-term resource adequacy outside of the forward auction.

Under the mechanism, state regulators can facilitate settlements of compensation rates between their load-serving entities and suppliers outside of MISO’s processes. Authorities must notify MISO of the amount of demand under such agreements two months prior to the auction.

The filing also includes the late addition of a pivotal supplier test that Monitor David Patton said is based on language used by NYISO. (See Late Changes to MISO Auction Plan Renew Calls for Filing Delay.)

November 4, 2016February 5, 2025

CPUC Contests ISO Incentive for PGE

By Robert Mullin

The California Public Utilities Commission is protesting FERC’s decision to allow Pacific Gas and Electric to include a 50-basis-point ISO participation adder in its 2017 transmission rates proposal.

The CPUC said that the commission’s ruling “ignores the need to demonstrate that an incentive must be ‘justified’ pursuant to [FERC] Order 679,” which allows transmission owners to collect the adder as motivation to join an RTO.

The Sacramento Municipal Utility District (SMUD) joined the CPUC’s request that the commission reconsider its Sept. 30 order granting the adder, which the CPUC contends will provide PG&E an annual $30 million “unjustified windfall” at the expense of its ratepayers (ER16-2320). As a transmission customer of CAISO, SMUD uses part of the PG&E system to serve its own load and is subject to any rate changes.

Pacific Gas & Electric Transmission Lines | PG&E

While the commission’s Sept. 30 order accepted and then suspended PG&E’s request for a 10.9% return on equity based on concerns that the proposed rate adjustment could produce “substantially excessive revenues,” it denied a CPUC request to disallow the incentive adder. (See FERC Sets PG&E Rate Increase Proposal for Talks.)

The CPUC argued that California law requires PG&E — as well as the state’s other investor-owned utilities — to maintain membership in CAISO, invalidating the need for a financial incentive. Furthermore, justification for the adder is the subject of an ongoing proceeding before the 9th U.S. Circuit Court of Appeals, the CPUC noted.

FERC countered in its September order that the court challenge “does not operate as a stay of the commission’s consideration” of the issues.

In its Oct. 31 rehearing request, the CPUC pointed out that the commission has granted the adder to nearly every utility that has asked for it since it was implemented almost 10 years ago — including PG&E. The PUC has four times sought rehearing on the issue, but in each instance it withdrew the requests as a condition of a settlement.

“Faced with rapidly escalating transmission access charges, with no end in sight, the CPUC, and the California ratepayers who the CPUC represents, can no longer afford to let the FERC orders, which grant unjustified ROE incentives to California utilities for doing something they are already required to do, go unchallenged,” the CPUC wrote.

The CPUC estimates that the adder has so far cost PG&E ratepayers $125 million.

SMUD previously disputed the appropriateness of the adder and questioned whether it furthers California or FERC objectives with respect to the cost-benefits of ISO membership for PG&E customers. Like the CPUC, SMUD asked the commission to defer action on the incentive until the 9th Circuit’s decision.

FERC has scheduled a Feb. 7-8, 2017, settlement conference to address PG&E’s 2017 rate proposal.

November 3, 2016

FERC Rejects Complaint on Montana Solar; 2nd Case Pending

By Ted Caddell and Rich Heidorn Jr.

FERC on Tuesday cast shade on an attempt by environmentalists and solar proponents to block NorthWestern Energy from cutting the prices for solar qualifying facilities in Montana.

But the commission’s procedural ruling didn’t address the merits of complaints that Montana regulators are attempting to discourage solar developers — a claim it will address in a separate docket.

The complaints were filed in response to the Montana Public Service Commission’s 3-2 ruling in June to suspend NorthWestern’s tariff for solar QFs larger than 100 kW under the Public Utility Regulatory Policies Act pending an updated rate review.

The commission acted after the utility sought emergency action, saying it feared a “flood” of QF filings because the rate — set in 2013 at $53.14/MWh (off-peak) and $92.37/MWh (on-peak) — was now 35% above its avoided costs (Docket No. D2016.5.39).

The change put about 130 MW of planned solar facilities in Montana in limbo. While the commission said solar projects could negotiate rates with NorthWestern while the review is pending, developers say they have no leverage and would be forced to accept the utility’s avoided cost figure.

FERC dismissed a complaint by the Vote Solar Initiative and the Montana Environmental Information Center, saying the PSC is not subject to the general complaint jurisdiction under Section 306 of the Federal Power Act and that the plaintiffs had no standing to file a complaint seeking PURPA enforcement (EL16-117).

“The Montana commission is not an entity that, for purposes of enforcement, [FERC] may, by order, require to take or not take particular actions,” FERC said. “Additionally, Vote Solar is neither a QF nor an electric utility, and as such is not authorized to file a petition for enforcement pursuant to Section 210(h) of PURPA.”

Jenny Harbine, an attorney with Earthjustice, which represented the complainants, called the decision disappointing. “It limits the ability for advocacy groups — including consumer advocates as well as clean energy advocates — to raise issues before FERC that are critical to the future of clean energy development and consumer choice,” she said.

Second Case Pending

But Harbine said the groups would participate as intervenors in a PURPA enforcement petition filed last month by FLS Energy, a North Carolina-based solar developer.

FLS said the Montana PSC’s actions “precluded [it] from continuing with the development of 14 advanced-stage solar QFs” and faces the loss of more than $750,000 that it has invested (EL17-5). The company said the order eliminated NorthWestern’s only PURPA tariff allowing for fixed, long-term payments for solar, which it called an “essential element of a financeable” power purchase agreement.

FERC Solar Power Rates in Montana - impact FLS Solar, a small utility scale solar developer who has developed solar farms like these. — FLS Solar’s Fairmont Solar Farm in Fairmont, NC | *FLS Solar*

The developer said the commission’s order — which followed a hearing in which only the utility gave testimony and was not subjected to cross examination — is intended to discourage the development of small solar QFs.

“The Montana PSC performed a back-of-the-envelope calculation and suspended the rates based on an initial conclusion (untested by discovery or opposing testimony),” FLS said.

It said the commissioners’ “hostility towards the goals of PURPA is evident from statements made by a majority of the commissioners” at hearings in the NorthWestern case and in an editorial by Commissioner Brad Johnson, who accused solar developers of using PURPA to finance projects, “cherry picking the states with the highest government-assured rate to do business in.”

“Simply put, it was well past time to put the rate on pause and update it again,” Johnson said, noting that the Montana Consumer Counsel supported NorthWestern’s request for the suspension.

Dissent

In his dissent, Commissioner Travis Kavulla accused his colleagues of flouting the commission’s procedures and precedents.

“The intervention deadline to the proceeding occurred only after a hearing on NorthWestern’s motion was held. Certain parties — or rather, quasi-parties, since the intervention deadline had not arrived — participated in that hearing, but the developers of the projects that would be compensated under the rate schedule did not,” wrote Kavulla, the current president of the National Association of Regulatory Utility Commissioners. “The hearing commenced with the purpose of taking ‘argument’ on NorthWestern’s motion. Then, as a surprise to those in attendance, counsel for NorthWestern alerted the commission that it also wished to offer evidence. No other quasi-party presented evidence at this hearing.”

On Wednesday, FERC granted Montana regulators’ request for more time to respond to the petition, extending the deadline until Nov. 17.

Other States

Utilities in other states also are trying to limit PURPA payouts. Idaho, for instance, has limited such solar QF contracts to two years only in a 2015 ruling. Duke Energy is contemplating a similar move against solar QF rates in North Carolina, according to Vote Solar.

November 3, 2016

AEP Turns Away from Generation to Transmission, PPAs

By Tom Kleckner

American Electric Power CEO Nick Akins hardly sounded like someone whose company had just taken a $2.3 billion impairment Tuesday, telling investors and analysts he is “very happy with the strategic process” and that “conditions are in place that are conducive to us achieving our objectives.”

Akins’ comments came as he led a panel of AEP executives briefing investors and analysts in New York following the company’s third-quarter earnings release. With the one-time charge, AEP posted a loss of $765.8 million (-$1.56/share) for the quarter, compared with a profit of $518.3 million ($1.06/share) for 2015’s third quarter. Sales were up from $4.4 billion to $4.7 billion, partly because of a warm summer.

“The new story of AEP is one of higher growth, higher dividends, more regulation and more certainty,” Akins said. “When you stop chasing the wrong things, you give the right things the chance to catch you.”

aep — Lower Rio Grande Valley Transmission Project | *AEP*

The impairment reflects AEP’s ownership share of 2,684 MW of competitive generation in Ohio, including its Cardinal, Conesville, Stuart and Zimmer plants. It also includes the competitive portion of the coal-fired Oklaunion Plant in West Texas, the Desert Sky and Trent Mesa wind farms, also in West Texas, and some coal-related properties.

Akins said the company will spend $17.3 billion in capital investments through 2019 — $9 billion on transmission — an increase of $4.3 billion from plans laid out last year through 2018. The company owns the largest transmission system in the U.S., with 40,000 miles of lines and more 765-kV extra-high voltage than all other transmission systems combined.

“We’re focusing the proceeds on the [transmission business] we find attractive,” said Akins, who noted AEP already accounts for 14% of the country’s transmission investment. “We’re able to invest in transmission in an order of magnitude not many others have. If you’re looking for a transmission company, AEP is certainly that. We’re well-positioned as a regulatory business.”

The company also plans to increase its renewables through long-term power purchase agreements. AEP expects to add 5,400 MW of wind energy and 3,400 MW of solar power through 2033.

Investors didn’t respond positively to the news. AEP shares closed Wednesday at $62.61/share, down 77 cents (-1.21%) on the day.

AEP’s embrace of regulation also allows it to escape the problems it faces in Ohio’s competitive-generation market. Many of the company’s coal plants date back to the 1970s and earlier, making them underperformers against other power units. Coal resources accounted for 71% of AEP’s generation in 2005, but that figure is projected to drop to 47% next year.

“Fortunately, AEP’s balance sheet can withstand this impairment,” CFO Brian Tierney said. “Combined with other sales of generating assets, it puts the Ohio generation debacle behind us. We also have wires companies in the states with very attractive returns.”

Akins said AEP would continue working with legislators to restructure the Ohio market.

Both AEP and FirstEnergy attempted to get relief from the Public Utilities Commission of Ohio with what amounted to a subsidy request for their competitive generation. While what opponents called a “bailout” was approved by PUCO, FERC effectively scotched the deals, saying they needed to undergo a more stringent review.

AEP decided to work to get favorable reregulation legislation approved.

But FirstEnergy — which reported a $1.1 billion loss in the second quarter, much of it related to the closure of five coal-fired units — filed a modified request with PUCO seeking a $558 million-a-year rate stability rider for eight years.

In October, PUCO voted instead to give the company $204 million a year for only three years. FirstEnergy has until Nov. 11 to file for a rehearing on the order, which it called “disappointing.” (See PUCO Rejects FirstEnergy’s $558M Rider, OKs $132.5M.)

November 2, 2016

UPDATE: Council OKs Seattle City Light Bid to Explore Joining EIM

By Robert Mullin

The Seattle City Council authorized Seattle City Light to perform “a detailed analysis of costs, benefits and potential risks” of joining the Western Energy Imbalance Market (EIM) to inform the council’s decision on whether to approve the move.

The unanimous Oct. 31 vote came three weeks after council members Lorena González and Mike O’Brien voiced concern about the upfront costs of exploring membership, leading the council to defer a vote on entering an “exploratory phase” with the CAISO-run EIM. González had expressed concern that authorizing a study created an expectation that “we will invest and carry forward” with the market. (See EBA Speakers Ponder a Western RTO.) With its vote, the council is asking City Light to flesh out the findings of an EIM benefits study performed by consulting firm E3 that showed the utility could earn an additional $4 million to $23 million in yearly revenues from the market.

“City Light’s own evaluation of the E3 study identified a number of deficiencies that call the study’s revenue estimates into question,” González told RTO Insider after the meeting. “Furthermore, the cost estimates were based on those experienced by other utilities entering the market. I think it prudent for City Light to do its own assessment of the costs it is likely to incur.”

González said the council’s ordinance provides the utility with “the time and spending authority necessary to conduct a thorough gap analysis.”

“The council’s vote gives us the opportunity to further investigate participation in the EIM,” said Scott Thomsen, City Light’s senior strategic advisor in communications and public affairs. “This will involve more due diligence to get more details on the areas outlined in the [E3] report.”

Introduced in September, the original ordinance would have greenlit City Light’s membership in the EIM, but it was scaled back ahead of the council’s Oct. 10 meeting to require more analysis before a final decision.

As approved by the council, the ordinance includes a González-sponsored amendment requiring the city-owned utility to report its findings to the council’s Energy & Environment Committee by April 10, 2017.

“This amendment will allow the council to receive and review the results of this analysis within a reasonable timeframe and grant City Light sufficient time to conduct the analysis that is required,” González said.

She said that there are “significant risks that accompany [City Light’s] varying revenue projections,” which needed adequate time for the council to evaluate before the utility could enter “what would be a new line of business.”

With a generating portfolio heavy in hydroelectric resources, City Light stands to benefit from the EIM as an exporter of the flexible ramping capability needed to smooth out intermittent renewables.

The utility’s revenue estimates from the market are dependent in part on water supply conditions. Implementation is projected to ring in at about $8.8 million, while operations costs could run at around $2.8 million annually.

The Pacific Northwest’s ability to export power from surplus hydro can vary significantly based on precipitation.

“While there is a range in the estimated benefits, it is commensurate with the uncertainty in our current hydroelectric generation portfolio because of variable weather and water conditions,” City Light said in a summary and fiscal note to the council.

Seattle’s neighboring utility Puget Sound Energy began participating in the EIM last month, along with Arizona Public Service. (See Sacramento Utility to Join EIM; Other BANC Members May Follow.)

October 31, 2016

Federal Briefs

The Obama administration provided a $28 million infusion of federal grants last week to 13 coal-producing states to assist workers affected by job losses in the declining coal industry.

The money is part of the POWER Initiative, which provides federal funding for locally created programs that support new economic activities in coal regions as the nation moves toward cleaner energy. More than $66 million has been awarded to 71 projects this year.

More: Reuters

$3.6B Loan Program Will Fund Rural Electrification Projects

The Agriculture Department has announced a $3.6 billion loan program to fund rural electrification projects nationwide.

The program will benefit 82 projects in 31 states, Agriculture Secretary Tom Vilsack said, and it will add or upgrade 12,500 miles of rural electric transmission and distribution lines.

More: The Kansas City Star

OSHA Investigates Hydrogen Sulfide Exposure at Big Ox Plant

The Occupational Safety and Health Administration began an inspection Oct. 19 of Big Ox Energy’s biomass plant in South Sioux City, Neb., after an employee of a contractor was hospitalized for hydrogen sulfide exposure.

The investigation is expected to take 60 to 100 days, said Darwin Craig, assistant area director at OSHA’s Omaha office.

When the incident was reported, several homeowners who share a sewer system with the plant were reacting to foul odors that have since been traced to sulfides originating from the facility.

More: Sioux City Journal

Appellate Judges Grill Blankenship Defense

220px-don_blankenship_image — Blankenship

Two judges on the 4th U.S. Circuit Court of Appeals last week grilled the attorney for the former Massey Energy CEO Don Blankenship, who is seeking to have his criminal conviction overturned in connection with the deaths of 29 workers.

Blankenship was convicted of conspiring to violate mine safety and health standards after an April 2010 explosion at Massey’s Upper Big Branch Mine, in Raleigh County, W.Va.

Judge James Wynn Jr. and Senior Judge Andre Davis raised issues about Blankenship’s central arguments on appeal. Wynn repeatedly stated that he didn’t think he agreed that the trial court wrongly instructed jurors on what constitutes a “willful” violation of federal mine safety and health laws.

More: Charleston Gazette-Mail

IEA Raises Forecast for 2021 Renewable Energy Production

In 2021, renewable energy sources will provide 28% of the world’s electricity production, compared with 23% in 2015, the International Energy Agency forecasted last week.

The estimate is 13% higher than what the IEA forecasted last year.

The IEA attributed the change to increased government support in the U.S., China, India and Mexico and expected cost reductions of about 25% for solar panels and 15% for onshore wind.

More: Agence France-Presse; The San Diego Union-Tribune

Senators Push for Wave Test Center in Oregon

Six U.S. senators from the Pacific Northwest asked the Energy Department last week to choose the Oregon coast as the site for the nation’s first grid-connected wave energy device test center.

Northwest National Marine Renewable Energy Center proposed the facility, which would consist of four berths for testing wave energy converters in big-wave conditions. It would include a subsea cable to carry up to 20 MW of power ashore.

Other than a potential project proposed for California, it is unknown whether other sites are vying for federal funding, which could cover up to 80% of the facility’s cost.

More: Portland Business Journal

October 31, 2016

NYPSC Vision for DER: From Net Metering to ‘Value Stack’

By William Opalka

Staff of the New York Public Service Commission released a report on Thursday recommending a transition from net energy metering (NEM) to a compensation scheme that provides more accurate, granular values for distributed energy resources (15-E-0751).

“With a more accurate, market-based approach to compensate consumers for the value of their distributed clean energy investments, we will continue to take positive steps towards making these clean resources a core part of our energy system,” PSC Chair Audrey Zibelman said in a statement. “Under this cutting-edge framework, consumers, utilities and energy developers will be rewarded for investment decisions based on the full value that clean energy and other distributed energy resources provide to our electric system.”

Phase One of the transition will seek to apply values “that were able to be considered and discerned with currently available data,” the report says.

The mechanism will compensate customers using a tariff based on calculations of specific value sources. These value sources — including energy, capacity, reduced environmental impacts, demand reduction, locational system relief and distribution voltage support — would comprise a “value stack.”

Phase One will apply to all projects and technologies eligible for NEM under current rules, including solar photovoltaic generation, wind and micro hydroelectric generation, where the operator has no ability to control the facility’s output.

Also included would be dispatchable technologies such as fuel cells, farm waste generators and micro combined heat and power and energy storage paired with eligible generation facilities.

The report acknowledges that establishing these values will evolve and that utilities will need time to develop tools to calculate the impact of a resource’s location, the services it provides and its time of use to fully compensate homeowners.

Staff is proposing interim measures for community distributed generation (CDG) projects — sometimes called shared renewables — that are in the advanced stage of development. The interim rules would allow a specific number of projects to be compensated under current net metering rules for 90 business days. After that period, future CDG projects would be valued under the new methodology.

How the NY PSC wants to value the benefits of distributed energy resources (DER) — | *The New York Public Service Commission*

The report also envisions “virtual generation portfolios” codeveloped by utilities and DER providers.

Existing rooftop solar facilities would be paid at net metering rates for 20 years from the date of their installation. Since 2012, solar facilities in the state have grown from a little more than 78 MW to the current 669 MW, the PSC says. Owners of the systems would have the option to drop net metering and sign up for updated compensation plans.

Public comment will be accepted on the report, part of the state’s Reforming the Energy Vision initiative, until Dec. 5. Initial PSC action is expected in January.

Phase Two of the process, which would further refine the development of DER metrics, is slated to begin with a collaborative later this month. A final order is anticipated by the end of 2018.

Net Metering’s Shortfalls

The report said that while it “has been an important and effective tool in fostering the growth of” DER, “when combined with traditional volumetric rate structures, NEM provides an imprecise and incomplete signal of the full value and costs of DERs.”

“NEM therefore provides insufficient information on which to base informed investment and usage decisions that could benefit both the system and customers under REV,” the report continues. “As a result, investment in new DER capacity is often made without regard to how the design, siting and operation of those resources can maximize benefits to the electricity system overall.”

Failing to properly identify and compensate DERs for their value limits incentives for adding technologies such as smart inverters.

“At low levels of DER penetration, the economic inefficiencies resulting from the incomplete price signals embedded in NEM are less consequential, but as adoption increases, these potential misalignments — and the uneconomic effects associated with them — will increase,” the report said.

The LMP applied in the wholesale markets does not separate ancillary services, load shifting and environmental and performance benefits “that are essential design features of a fully optimized bidirectional power system and decarbonized network,” it said.

Collaborative

A collaborative effort involving utilities, consumer advocates, environmentalists, solar and DER providers that started last December was the first step in providing input for the new market framework. The report also builds on several REV-related efforts including the development of a benefit-cost analysis framework and utility distributed system implementation plans.

“Today, the customer side of the grid represents an enormous and largely untapped resource to optimize value throughout the electricity system. REV will establish markets so that customers and third parties can be active participants, to achieve dynamic energy management on a systemwide scale, resulting in a more efficient and secure electric system, including better utilization of bulk generation and transmission resources,” the report says.

October 31, 2016

Anthropologist Discusses Cultural Attitudes Toward Grid with MISO

By Amanda Durish Cook

CARMEL, Ind. — MISO presented a different perspective at its Oct. 25 Informational Forum, inviting cultural anthropologist Gretchen Bakke to talk about shifting attitudes toward electrical infrastructure.

anthropologist cultural attitudes toward grid miso mcgill university — Bakke | *McGill University*

Bakke, assistant professor of anthropology at McGill University in Montreal and author of “The Grid: The Fraying Wires Between Americans and Our Energy Future,” has studied failing systems in Cuba, the Soviet Union and Yugoslavia. She said the grid is as much of a cultural creation as a technical one. “As such, it moves with us. We think of it as solid and rebar, [towers] and copper, but the truth is it grows with us.”

The current grid is a poor fit for a new generation of customers who want carbon-free electricity, Bakke said. The grid’s reliability becomes more “fragile” with increasing investment in intermittent renewables, and Bakke calls for “a serious reimagination of the grid” beyond simply repairing aging infrastructure.

“People right now are moving against the grid,” Bakke said. She pointed to the development of phones with ultra-low power transistors that can function for years without a battery, Elon Musk’s self-driving cars, Iceland digging a 3-mile hole into magma to tap geothermal power and Democratic presidential candidate Hillary Clinton’s push for 500 million solar panels in the U.S.

Bakke said regulators have made electricity so reliable and so cheap that consumers can “unwittingly” ignore it. Consumers tend to think that energy storage is a panacea, forgetting that producing batteries causes pollution and batteries cannot be charged by renewable power alone, she said.

“The way that solar PV has been presented is as this free power source that you can get money back on. And that contributes to this 21st century [attitude],” Bakke said.

Customers’ desire for more local distributed energy resources are at odds with their preference for renewable generation, which often requires tapping remote sources via transmission.

“All of these dreams rely on a deep ignorance of infrastructure,” Bakke said. “It’s this upswing in wanting to eat food grown from a local farmer,” Bakke explained. “Iowa wind is fine to power the Twin Cities.”

Bakke said MISO stakeholders are the edge of the consumer “push and pull,” but she said resource owners should nevertheless pay attention to what consumers are demanding.