Treating the CPP Like Schrödinger’s Cat
By Michael Brooks, Amanda Durish Cook and Tom Kleckner
While President Trump’s executive order rolling back the Obama administration’s efforts to combat climate change upset environmentalists, RTO officials are largely shrugging their shoulders, vowing to continue on without the federal government as market forces and state policies continue decarbonizing their generation mixes.
Their reaction to Trump’s order last week was largely the same long-term view as they expressed when the CPP was stayed in February 2016. (See RTOs, States Respond to CPP Stay.)
MISO Tx Planning Unchanged
MISO, for example, has spent the past several months treating the CPP like Schrödinger’s cat: alive and dead simultaneously.
“We planned for the absence of any kind of federal carbon policy and the addition of any kind of federal carbon policy. We’re planning for both of these scenarios simultaneously,” Vice President of System Planning Jennifer Curran said in an interview. To MISO, “there is no more uncertainty today about the Clean Power Plan than there was yesterday. We’re having to execute transmission policy as if it would exist and as if it wouldn’t exist.”
MISO will soon reassess its futures weighting — or the likelihood that some futures will occur before others — but it has nothing to do with the CPP’s downfall, Curran said. At March’s board of directors meeting, Curran said MISO is currently testing for “gaps” in MISO’s overall futures development.
“When we think about the futures scenarios, what we do is try to capture the uncertainty that exists in state policy, in federal policy and in energy economics,” she continued. “We don’t know exactly what the future looks like, so we’re identifying … transmission projects that will perform well in a variety of scenarios and provide lower cost energy to consumers.”
All but three states in MISO’s footprint — Illinois, Iowa and Minnesota — joined the lawsuit to block the Clean Power Plan.
But despite state officials’ antipathy to the EPA mandate, MISO’s carbon emissions have dropped from just under 550 million tons/year in 2005 to 450 million tons/year in 2015. RTO officials say they expect coal plant retirements and increases in natural gas and renewable sources to continue reducing emissions regardless of federal regulations.
Other RTO officials agree that trends that are changing the generation mix will continue.
PJM: Regulatory Changes Less Important than Gas Prices
PJM unveiled a comprehensive analysis of the CPP in September and little has changed since then, the grid operator says, despite the recent instability of the federal rule.
“Our analysis indicated that regulatory [changes] didn’t have as much impact as … the price of natural gas,” PJM’s Mike Bryson said last week during a media briefing introducing a whitepaper on system resiliency. “That effect [of natural gas pricing] would have more to do with getting to the targets.” (See related story, PJM: Increased Gas Won’t Hurt Reliability, Too Much Solar Will.)
MISO and PJM recently completed a joint CPP study that built on their previous individual studies. While these analyses may be moot, the RTOs credited them with providing “a good stress test” for the systems’ future. (See MISO, PJM Find Value in CPP Study, Despite Rule’s Likely Demise.)
SPP: Renewables Growth to Continue, Though Pace in Question
SPP’s most recent Integrated Transmission Planning 10-Year Assessment included two scenarios in which the CPP was in place and predicted more output from renewables and natural gas.
“Even after the plan was stayed at the Supreme Court — and most recently, the presidential order was issued — our members and stakeholders were still comfortable with the results of that study,” Lanny Nickell, SPP vice president of engineering, said in an interview. “That was primarily because of the assumption of higher renewables and an energy shift from high carbon-emitting resources to lower carbon-emitting and renewable resources, which is actually what we are already seeing.”
SPP has almost 17 GW of renewable generation and expects 22 GW by 2018, based on the resources in the generator interconnection queue.
“That growth hasn’t been driven by the Clean Power Plan, it’s been driven by market forces,” Nickell said. “The production tax credit has something to do with that too. We will continue to plan based on the expectations renewables will continue to grow. What we don’t know is — after the expiration of the PTC — will the growth rate we’ve seen be sustainable?
“What will happen in 2019, when we start the next 10-year assessment, is yet to be known. Will [renewables] be beyond 22 GW? We have another 30 GW of wind under study.”
Nickell said the pace of coal plant retirements may slow as a result of Trump’s action. “While we’ve seen a lot and we expect a few more retirements, I do expect that will stabilize somewhat,” he said.
California, New York Going it Alone
The RTOs’ planning has been based not only on the CPP but also on state and municipal carbon-reduction measures. Minnesota, for example, is on track to reduce emissions 40% by 2030 with or without the CPP. Late last year, Michigan passed a new energy policy that contains a nonbinding goal of meeting 35% of the state’s energy needs through renewables and energy efficiency by 2025.
Even Republican stronghold Carmel, Ind. — home of MISO’s headquarters — has pledged to continue energy efficiency and carbon-limiting measures. As The Washington Post reported, the city has shifted its vehicle fleet to hybrids and biofuel, installed low-energy LED streetlights, planted trees to absorb carbon dioxide and provide shade, and converted dozens of intersections into roundabouts — which help to conserve gasoline, reduce air pollution and eliminate the electricity demand of traffic lights.
New York and California, which account for about 10% of U.S. greenhouse gas emissions, vowed last week to continue working toward their aggressive climate goals, whose targets far exceed what would have been required under the CPP: 40% below 1990 levels by 2030 and 80% below 1990 levels by 2050. The states policies have largely driven planning by CAISO and NYISO.
In a joint statement, California Gov. Jerry Brown and New York Gov. Andrew Cuomo vowed to “help fill the void left by the federal government.”
The states are also part of the Under2 Coalition, a pact of 167 jurisdictions around the world that have committed to limiting the increase in the global temperature to 2 degrees Celsius.
And both states’ attorneys general are among a coalition that said it is considering legal action to uphold the CPP.
“Addressing our country’s largest source of carbon pollution — existing fossil fuel-burning power plants — is both required under the Clean Air Act and essential to mitigating climate change’s growing harm to our public health, environments and economies,” said the attorneys general. “We won’t hesitate to protect those we serve — including by aggressively opposing in court President Trump’s actions that ignore both the law and the critical importance of confronting the very real threat of climate change.”
Among the attorneys general in the coalition are Connecticut, Maine, Massachusetts, Rhode Island and Vermont, four of the five states within ISO-NE. Far from considering a rollback in carbon-cutting efforts, New England stakeholders are deliberating over ways to incorporate state GHG policies into the wholesale markets. (See IMAPP Pondering 4 Options for Incorporating Clean Energy in NE.)
David T. Doot, counsel and secretary to the New England Power Pool, said that under Obama, FERC was “begging” New England to propose market rules that incorporate carbon policy. The commission has scheduled a technical conference for May 1-2 on the energy and capacity markets in PJM, NYISO and ISO-NE.
“Now, that was FERC before President Trump,” Doot told the Northeast Energy and Commerce Association’s 2017 Renewable Energy Conference on March 6. After Trump? “There’s just no way of predicting,” Doot said.
Similarly, ERCOT’s planning cannot ignore Texas’ anti-CPP stance.
“We’re heartened by the president’s latest action, which shows he’s serious about returning common sense and the rule of law to the EPA,” Texas Attorney General Ken Paxton said in a statement.
But the economics of renewables may be a bigger factor than state policy in Texas, which boasts the largest wind generation fleet of any state and is also increasing its solar capacity.
ERCOT’s Long-Term System Assessment, which is updated every other year, includes a range of regulatory scenarios that could occur. “As the assessment is developed for the next update in 2018, ERCOT staff and stakeholders will evaluate what likely scenarios would affect transmission planning within the next planning horizon,” spokeswoman Robbie Searcy said.
Searcy said it was unclear whether the Trump order will affect the pace of new renewable generation.
About 29 GW of new wind and utility-scale solar generation resources are under study in ERCOT, and more than 12 GW have interconnection agreements. “Our last Long-Term System Assessment indicated these resources likely would continue to grow under all scenarios studied,” Searcy said.
Michael Kuser and Rory D. Sweeney contributed to this report.