Grid Geeks Podcast S2E4

RTO Governance - Is It Broken and Can It Be Fixed? 

Listen here . . .

Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) have existed in their current constructs since 1999. That year, FERC finalized a rule called Order 2000 that encouraged RTO and ISO development and provided minimum characteristics and functions for their operation related to transmission service and centralized energy markets. Today, there are six FERC-jurisdictional RTOs and ISOs (and Texas has one too, not regulated by FERC) that manage transmission service, wholesale energy markets and perform reliability functions for about 2/3 of the country’s electricity customers.

But, what are these entities, exactly? They’re not government agencies, and not private companies. They are managed by a staff and independent board and all have varying degrees and types of stakeholder involvement. How do decisions get made? Which stakeholders hold the most influence? Are existing governance structures broken, and what can be done to fix them?

On today’s episode, Mark James, Senior Research Fellow at the University of Vermont Law School, and Christina Simeone, Director of Policy for the University of Pennsylvania’s Kleinman Energy Center, join me to talk about their respective research into RTO governance and potential reform.

From this episode:

Mark’s paper, commissioned by the R Street Institute, a free market think tank.

Christina’s paper

FERC Order 719

U.S. Court of Appeals for the D.C. Circuit decision emphasizing the importance of RTO stakeholder processes.

Grid Geeks Podcast S2Ep3

This Thing About Coal and Nukes

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The U.S. Department of Energy’s proposed rule on grid resilience has existed for two weeks now, and is nothing if not controversial. The rule that DOE would have the Federal Energy Regulatory Commission enact would invent a new “resilience” value based on on-site fuel availability (a 90-day supply, to be specific) that could only (or mostly) be provided by merchant coal and nuclear plants. In the Mid-Atlantic and Northeast, the rule would award these power plants a payment in addition to the clearing price they receive in wholesale energy, capacity and ancillary service markets in order to help them cover their going forward costs and stay in business.

This effective bailout for coal and nuclear plants would provide a life line to power plants that are losing in the market place and therefore uneconomic to keep online. The action would undermine the existence of competitive, technology-neutral wholesale energy markets. In addition, the proposal requires a significant leap in logic from determining that the grid needs something called “resilience,” defining that term as on-site fuel security, and then formulating criteria that ensure only merchant coal and nuclear plants qualify to provide the service.

Sue Tierney, Senior Advisor at the Analysis Group and former DOE Assistant Secretary, and Doug Smith, partner at Van Ness Feldman and former FERC General Counsel, join me to consider the market and legal aspects of DOE’s proposal.

From this episode –

DOE’s Proposed Rule

FERC Staff’s questions in the docket

Another good podcast on the issues – GTM’s the Interchange with Ari Peskoe

Grid Geeks Podcast Season 2 Episode 2

Securitization to Accelerate the Energy Transition

Listen here . . .

 

Now that wind and solar resources are achieving cost parity (assuming potential import tariffs don’t change the equation), why don’t those pesky less economic coal plants go away? On today’s episode, Uday Varadarajan of the Climate Policy Initiative and Harriet Moyer Aptekar of Crest Consulting discus the potential for utilities to use securitization via utility bond financing to address utility accounting and rate base erosion issues that stand in the way of retiring old, uneconomic coal plants.  

We’ve talked about how some coal plants are losing out in wholesale energy markets due to lower-cost natural gas resources, among other reasons. It’s a different story in states that remain vertically integrated with utilities that do not participate in centralized wholesale markets. In these vertically integrated states, costs for power plant investments are recovered through retail customer bills over the “useful life” of the assets, often 30 years. Sometimes, even if plants are operating at inefficient or uncompetitive costs, a utility’s need or desire to maintain the coal plant as rate base are the main reason they stay in operation.

So what if we can change that equation? What if we can use private financing to get utilities on board with coal plant retirement? Today we talk about efforts to do just that.

 

Grid Geeks Podcast Season 2 Episode 1

Markets, Reliability and Resilience

Season 2 of Grid Geeks is here!

Listen here . . .

Season 2 kicks off with a great episode Markets, Reliability and Resilience featuring Rob Gramlich, President of Grid Strategies, LLC, and Alison Silverstein, energy consultant, strategist and writer who DEO hired to write this summer’s Staff Report on Electricity Markets and Reliability. Alison also led DOE’s 2003 Blackout Investigation and Report.

The DOE staff report was the summer’s somewhat controversial highlight of an ongoing energy debate involving words like “baseload,” “reliability,” “fuel assurance,” and “resiliency” and everyone who is anyone chimed in. All that can be said about it has been said.

Or maybe not.

Regardless of what you think about the study, the issues it attempts to address – namely, grid reliability and resilience in the midst of a rapidly transforming energy system – are critical. Hurricanes Harvey and Irma (and maybe its friends Jose and Maria) are demonstrating the supreme importance of figuring out how the system can withstand and respond to serious grid disturbances like hurricanes. On today’s episode, Alison and Rob discuss reliability and resilience-related grid needs and the role of wholesale markets (or not) in addressing these needs.

Oh, and as lead consulting author, Alison may have a bit to say about the evolution of and findings in the DOE report as well.    

From this episode -

DOE Staff Report on Electricity Markets and Reliability

National Academies of Sciences Report, Enhancing the Resilience of the Nation's Electricity System

Mike O'Boyle's Utility Dive Article on resilience and flexibility

And, an oldy-but-goody, my blog with John Moore on what actually happened during the polar vortex in 2014 related to fuel assurance and "baseload" power.

Grid Geeks Podcast Episode 7

Mysterious Frontiers: The New FERC

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The Senate has confirmed the appointment of two new FERC Commissioners, Neil Chatterjee and Robert Powelson. Together with Acting Chair Cheryl LaFleur, that brings the Commission to 3, constituting a quorum for taking action and making decisions. The new FERC will face important issues around wholesale power market design, as well as transmission planning, among others.

With me to discuss the process and issues is Suedeen Kelly, Partner at Jenner & Block and former FERC Commissioner (2003-2009) and New Mexico Public Regulation Commission Chair and Commissioner.

 

 

 

Grid Geeks Podcast Episode 6

A Rooftop Solar Case Study - Net Metering in Utah

 

Listen here . . . 

Solar companies and advocates, utilities, and regulators in states around the country are struggling to determine workable rate design for customers with rooftop solar panels. Net metering - the program that in varying forms credits customers credits on their bills at the full retail rate they otherwise pay for electricity - is viewed by many as unsustainable. Rooftop solar companies and stakeholders supportive of their increased deployment are looking for durable alternatives, and are not so convinced the need to move away from net metering is imminent in many states.

In my home state of Utah, the investor-owned utility, Rocky Mountain Power, has proposed replacing its net metering program with a controversial rate design. My guests Travis Ritchie (Sierra Club), Rick Gilliam (VoteSolar) and Sophie Hayes (Utah Clean Energy) join me to talk about the issues specific to Utah and rooftop solar policies more broadly.

From this episode:

The Utah net metering docket at the Public Service Commission with thousands and thousands of pages of good reading.

Grid Geeks Podcast Episode 5

 A Coal Retirement Case Study: The Navajo Generating Station

Despite the remaining political rhetoric, the energy transition is well underway and our nation is moving away from powering its systems with fossil-fueled power plants.

This transitioning involves retiring gigawatts and gigawatts of coal plants. Each individual 500, 1000 or more MW plant is a massive heavy industrial operation usually with significant number of employees to manage it. Each plant provides a significant number of megawatt hours, which may or may need to be replaced after retirement. In addition to energy, many coal plants have taken their place as the default provider of grid services, or at least insurer of grid stability, where they live. These technical issues need to be managed.

In addition, there is a reality of community and individual impacts that come with the loss of a major industrial coal plant, especially in rural areas in which the plant has served as a key or even sole economic driver for the area.

This week, Amanda Ormond, Managing Director of Western Grid Group, joins me to discuss the technical and some of the people issues related to coal plant retirements. We focus specifically on the Navajo Generating Station near Page, Arizona, which provides a case study with several similarities and unique attributes as compared to retiring coal plants across the West.

Listen here . . .

Grid Geeks Podcast Episode 4

Transmission and Distribution System Coordination to Support DERs

What happens when a rooftop solar aggregator can’t deliver its power as committed to the wholesale market because it’s distribution utility’s line is out? What about when demand response customers participate in both utility demand management programs and wholesale markets and both make calls on their megawatts? As the amount of distributed energy resources or "DERs" on the distribution system grows, so does their impact on and interaction with the transmission system.

With help from the organization More than Smart, the California Independent System Operator, the state’s investor owned utilities, and competitive DER providers are leading the way in addressing operational issues that arise as DERs interconnected to the distribution system are engaging as resources with distribution utilities and wholesale grid operators.

This week, More than Smart’s Matthew Tisdale joins me to consider recommendations in the organization’s new report on operational issues that need to be addressed between the transmission and distribution systems to reliably facilitate a high DER future, and a framework for addressing those issues. The report’s working group (including CAISO, as well as PG&E, SCE and SDG&E) focus on communication and coordination as near-term steps to support a reliable and highly distributed electricity grid.

From this Episode:

Coordination of Transmission and Distribution Operations in a High Distributed Energy Resource Electric Grid, More than Smart.

My 2016 Small Power, Big Grid blog series from my NRDC days…

Grid Geeks Podcast Episode 3

Western Markets and Regionalization: Why Should We Care?

LISTEN HERE

The transmission system for the Western 1/3 of the United States is divided up into over thirty different electrical fiefdoms known as balancing areas. Each one controls planning, ensures reliability and coordinates operations for their own small area. California is the exception to this rule, as it has developed a state-wide "regional grid." In addition to cost inefficiencies related to the lack of coordination across the smaller regions, a new problem has emerged. California's abundance of carbon-free and zero fuel-cost solar, along with wind in Wyoming and other states, is getting curtailed or "dumped" because there is over supply within their regions or balancing area. At the same time, customers in surrounding states are losing out on the bill savings that could come with access to these cheap resources. What's a state to do?

On what will be the first of several conversations on the issue of western market development, renewables integration, and coal power plant retirement, Jennifer Gardner from Western Resource Advocates joins to discuss the potential for utilities in the West to join regional grid operators. Specifically, she considers the California Independent System Operator and the Southwest Power Pool. 

(And once again, next week will start a new era in audio sound production, so stay tuned!)

From this episode:

CAISO Regionalization Information

Mountain West Transmission Group and SPP Information

More on the duck curve:

CAISO Duck Curve FAQs

Regulatory Assistance Project, Teaching the Duck to Fly

 

Grid Geeks Podcast Episode 2

Wholesale Markets and State Policies: What’s all the Fuss?

Listen on soundcloud or itunes.

Today’s episode features Ari Peskoe, Senior Fellow in Electricity at Harvard Law School’s Environmental Policy Initiative and Miles Farmer, Clean Energy Attorney at Natural Resources Defense Council. They explain the intricate details of the interactions between wholesale energy markets and state energy policies like renewable portfolio standards and zero carbon credits for nuclear power plants. The audio production is still a bit scrappy, but if you make it through this one you can wear your energy nerd badge proudly!

From this episode:

Ari’s new paper, Easing Jurisdictional Tensions by Integrating Public Policy in Wholesale Electric Markets

Miles’ blog on wholesale market issues, State Policies and Electricity Markets: Harmony or Conflict?  

Grid Geeks Podcast Episode 1: Renewables and Reliability

I’m happy to introduce my new podcast Grid Geeks (itunes or soundcloud), where I’ll be talking to energy policy thinkers about those esoteric electricity rules that will shape our energy future. My first guest is none other than John Moore (@cleanferc), director of the Sustainable FERC Project at Natural Resources Defense Council. He joins me to talk about renewables and reliability. And Rick Perry’s report. Because if you’re not talking about Rick Perry’s report, then what are you talking about, exactly!?

PS - Thanks to Adam Rubenstein (@adamrubenstein) for the great music (podcasts jingles aren’t exactly his sweet spot so I extra appreciate it). And, bear with me on the audio production. Learning as I go!

As mentioned on this episode:

-PJM Renewable Integration Study

-NERC Study on Distributed Energy Resources

-John Moore’s relevant blogs:

Energy Dept. Grid “Study”: Politics Trump Facts

Powering into the Future with Renewable, Reliable Power

Good beginnings...

Good beginnings...

I'm excited to introduce goodgrid, my new consulting firm and the culmination of two decades' experience in the clean energy sector. 

The changes taking place across this sector in recent years are monumental. Wind and solar power are cost-competitive, dispatchable and reliable. Customers are empowered, and, increasingly, interested in energy management. Communities and companies not only want to buy their own clean energy but also sell it. Even the outdated laws and regulations that have held back progress are joining the party. The financial and environmental opportunity is massive and there's no better time to hang my shingle in pursuit of changing the trajectory of our energy systems. I look forward to working with you!

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