PJM Files Proposed Winter Storm Elliott Settlement With FERC
September 30, 2023
by Paul Ciampoli
APPA News Director
September 30, 2023
The PJM Interconnection and 80 other settling parties on Sept. 29 filed a settlement package with the Federal Energy Regulatory Commission to comprehensively resolve 15 separate FERC complaints regarding extraordinary non-performance charges resulting from Winter Storm Elliott in December 2022.
The settling parties requested that FERC approve the settlement no later than Dec. 29, 2023.
The proposed settlement is a result of expedited talks requested by PJM and approved by FERC.
“It is a product of collaboration among PJM and a significant number of diverse market participants — including complainants, intervenors who are net non-performance-charge payors, intervenors who have zero assessed non-performance charges, and intervenors who are net-performance payment recipients — that either support the settlement or do not oppose it,” PJM said.
Under the terms of the proposed settlement, swift resolution of the complaints relating to Winter Storm Elliott supports continuing reliable operations, confidence in PJM energy markets and overall generation fleet resilience, the settling parties told FERC.
Proposed settlement terms include:
- Market-wide reduction in non-performance charge assessments, which reduces performance payments;
- Review of PJM credit requirements and return of collateral consistent with the PJM tariff;
- Resolution of all allegations regarding PJM operations lodged before FERC in the Winter Storm Elliott complaints, with the exception of two matters that are not central to PJM operations during the event;
- No admission by PJM to any violation of the PJM tariff or any other wrongdoing
Based upon FERC action on a waiver and the filing of the settlement, PJM will pause billing of the remaining, unbilled non-performance charges and concurrent disbursement of payments to suppliers that over-performed during storm events.
These changes are expected to take effect in the October billing cycle.
The proposed settlement does not resolve capacity market design issues recognized during Winter Storm Elliott.
PJM and its stakeholders have been discussing additional changes to capacity market rules as communicated in a letter from the PJM Board of Managers dated Sept. 27, 2023.
A final report on Winter Storm Elliott was presented to FERC Commissioners on Sept. 21.
The report recommends completion of cold weather reliability standard revisions stemming from 2021’s Winter Storm Uri and improvements to reliability for U.S. natural gas infrastructure.
New Report Says Ann Arbor, Mich., Public Power Utility is Economically Feasible
September 25, 2023
by Paul Ciampoli
APPA News Director
September 25, 2023
The City of Ann Arbor, Mich., on Sept. 22 released a draft report that shows a city-owned municipal electric utility is both economically feasible and preferable to continued DTE Energy ownership of the local grid over the long term.
The report also indicates that municipalization is entirely consistent with the city’s climate action goals, including 100 percent renewable power.
The report, “100 Percent Renewable Energy Options Analysis,” was produced by policy consulting firm 5 Lakes Energy.
“With feasibility now established, we look forward to working with our elected city officials and city staff to advance the process of establishing a public power utility that replaces DTE,” said Ann Arbor for Public Power president Greg Woodring. Ann Arbor for Public Power has been leading the municipalization effort since 2020.
The report took over a year to complete, and included five separate tasks: an energy options analysis, the municipalization feasibility study, a sustainable energy utility rate analysis, and two procedural tasks. Several options for meeting the city’s renewable power goals were considered.
Ann Arbor for Public Power said that the report’s single most important conclusion was that municipalization makes long term financial sense for Ann Arbor.
Subcontractor NewGen Strategies & Solutions modeled operating revenues and costs of a city-owned electric utility versus continued DTE ownership of the grid, and concluded that a public utility can reliably deliver electricity to customers at comparable or lower rates.
“The report confirms what we already knew from the experience of other cities: that a public power utility can deliver superior service more affordably than DTE, because the millions in current annual DTE profits instead will remain in the community to be reinvested in infrastructure or returned to ratepayers,” said Woodring.
The city’s next step is to study municipalization in more detail in order to place an accurate valuation on DTE’s assets and to estimate more closely the likely acquisition cost.
“We suggest that the city authorize a Phase 2 Feasibility Study to characterize more precisely the costs and risks of the MEU approach,” writes 5Lakes in its executive summary. The report also recommends concurrent development of the SEU while laying the groundwork for full municipalization.
CAISO Board, WEIM Governing Body Adopt Market Rules Affecting California and the West
September 24, 2023
by Paul Ciampoli
APPA News Director
September 24, 2023
Several proposals related to rates and energy market rules that affect utilities in California and the West have been adopted by the California Independent System Operator Board of Governors and the Western Energy Imbalance Market Governing Body.
During a joint meeting, the two governing bodies that have shared governance authority over market rules that apply to WEIM participants approved:
- An amendment to the Rules of Conduct governing ISO market participants that stipulates sanctions for violations. The ISO’s Track 1 Rules of Conduct review resulted in limited change to eliminate disproportionate meter data penalties for small, long-term inaccuracies;
- The 2023 Cost of Service Study which set rates and fees for current ISO Balancing Area Authority participants while also establishing new rates for entities in the Extended Day-Ahead Market. The rates are based on the time and resources required to provide services offered by the ISO;
- An 18.73% inflation adjustment to the 2023 variable operations and maintenance default adder value to better reflect resources’ operational capabilities and maintenance costs in the day-ahead and real-time markets.
Following the joint meeting of the Board and WEIM Governing Body on Wednesday, the Board convened Sept. 21 where it approved initial EDAM Participation Rules, which will regulate how the ISO’s own balancing area would participate in the EDAM.
The Board also conditionally approved the extension of existing reliability must-run contracts for two energy resources in Oakland to help maintain local reliability conditions through 2024.
An RMR designation requires resources to be available during critical times for grid operations.
Owensboro Municipal Utilities Seeks Power Supply Proposals
September 18, 2023
by Paul Ciampoli
APPA News Director
September 18, 2023
Kentucky public power utility Owensboro Municipal Utilities has issued a request for proposals for various power supply alternatives to serve its future retail load.
OMU is seeking proposals for the following types of products: Unit-contingent gas fired capacity and associated energy, requirements capacity and associated energy and Midcontinent ISO Zonal Resource Credits.
OMU may accept a combination of alternatives from one or more suppliers.
The RFP term sheet and attachments will be posted at https://soar.gdsassociates.com/RFPs.
All questions or other communication regarding this RFP should be submitted in writing to OMU’s engineering consultants at GDS Associates, Inc. (OMU_RFP2023@GDSAssociates.com) on or before October 20, 2023.
Proposal submissions are due no later than November 8, 2023.
Eugene Water and Electric Board’s Call to Conserve Energy Yields Significant Savings
September 5, 2023
by Paul Ciampoli
APPA News Director
September 5, 2023
Customers of Oregon public power utility Eugene Water and Electric Board played a key role in maintaining grid stability during a recent extreme heat wave by acting collectively and making small adjustments to temporarily reduce energy consumption, EWEB said on Aug. 24.
Electricity was in short supply for several days during the week of Aug. 14 as temperatures crested 100 degrees for four days in a row and several regional electricity generators were shut down due wildfire conditions, including EWEB’s Carmen-Smith hydroelectric project.
In response, EWEB issued its first-ever voluntary call for customers to safely conserve energy on Aug. 15. The utility sent an email to 66,000 residential, commercial and industrial customers, and issuing an alert on social media.
“Customers responded in force by raising the temperature settings on their air conditioners, charging electric vehicle overnight rather than in the evening, delaying running large appliances such as dryers or dishwashers until after 9 p.m. and turning off unnecessary lights and electronics,” EWEB noted.
By comparing customers’ hourly electricity demand on Monday, Tuesday and Wednesday, EWEB estimated that customers’ actions caused demand to be 10 to 15 megawatts lower than expected, given the temperatures and compounding heat effects. That’s roughly the equivalent of 10,000 to 15,000 window air conditioners getting shut off.
By cutting back on consumption, customers both reduced strain on the grid and contributed to keeping EWEB’s electric rates low by helping EWEB avoid paying exorbitant prices for electricity on the wholesale market, the utility noted.
“Power prices fluctuate by the hour, and customers’ actions allowed EWEB to skip purchasing some energy when prices were at their highest – ultimately saving EWEB customers money on rates in the long run,” it said.
On Tuesday and Wednesday of the week in August, power prices ranged from $70 per megawatt-hour overnight, when demand was lowest, to as high as $1,800 per megawatt-hour from 5 to 8 p.m. when demand was highest. At the peak of the day, when prices were highest, reduced energy usage saved EWEB and customers approximately $10,000 per hour.
EWEB said that future customer programs that EWEB will soon start assessing could look like last month’s call to conserve.
Electric utilities across the Northwest and the entire nation have instituted various demand response programs that incentivize customers to use less electricity when overall demand is at its highest, it noted.
The programs largely depend on advanced metering infrastructure, or smart meters, EWEB noted.
EWEB has been rolling out smart meters to customers free of charge over the last several years, though supply chain disruptions in the last two years have slowed down deployment. So far, EWEB has deployed more than 68,000 electric smart meters, covering about 69% of customers.
Demand response programs also rely on modern back-end computer systems that better integrate information related to metering, energy supply, customer demand and billing. EWEB is currently undergoing a major technology upgrade to do just that.
Integrated Resource Planning
EWEB’s 2023 Integrated Resource Planning process identified demand response programs as a key element of the utility’s future resource mix.
The IRP forecasted electricity demand 20 years into the future and used modeling software to analyze dozens of resource options — such as wind, solar and hydropower — to create potential mixes of electricity sources that will reliably meet customers’ needs at the lowest price while being 95% carbon-free.
The analysis yielded valuable insights about the challenges EWEB faces in the future, it noted.
EWEB said it doesn’t need to procure any resources in the next few years and will instead spend that time conducting additional analysis and preparing for the 2025 IRP.
One of those studies will look specifically at demand response. The study will seek to determine how much potential exists among EWEB customers for demand response programs, which ones are the best fit, how much they would cost to administer and what benefits would result.
EWEB will also conduct a study on the potential to incentivize customers to conserve and consume less energy overall.
BANC, SMUD Move Forward with Consideration of CAISO Extended Day Ahead Market
September 4, 2023
by Paul Ciampoli
APPA News Director
September 4, 2023
The Balancing Authority of Northern California announced that its Commission has concurred with a staff recommendation to pursue the California Independent System Operator Extended Day Ahead Market as its preferred option for day ahead market participation.
The move will be subject to the final and individual decision-making of each of the BANC Western Energy Imbalance Market participants (Modesto Irrigation District, City of Redding, City of Roseville, Sacramento Municipal Utility District, and the Western Area Power Administration – Sierra Nevada Region).
The recommendation was based upon analysis done by BANC, which included a detailed cost evaluation conducted by Utilicast to move from WEIM to EDAM and a benefit analysis on participation in EDAM conducted by The Brattle Group.
“We have concluded that participation in EDAM provides the best benefit for BANC and its WEIM participants while leveraging the investment we have made, and preserving the benefits we see, in WEIM,” said BANC General Manager Jim Shetler. “BANC looks forward to joining PacifiCorp and others to drive further economic, environmental, and operational benefits for the EIM footprint through the EDAM. This decision is also consistent with BANC’s position that evolutionary development of markets in the West provides the most long-term durability.”
Based upon final participant approvals, BANC is looking to join EDAM by the Spring of 2026.
In a parallel action, the Sacramento Municipal Utility District has obtained approval from its Board of Directors to proceed with engaging with BANC to participate in the EDAM. This action was based upon SMUD’s separate evaluation of market options.
“Engaging with BANC to participate in the EDAM is a natural progression from SMUD’s participation in the WEIM,” said Paul Lau, CEO and General Manager of SMUD. “Not only is the EDAM an important tool to support reliability and resiliency and low rates while helping SMUD deliver on our industry-leading decarbonization goals, it will also provide broader price, reliability and decarbonization benefits in support of regional goals.”
BANC is the third largest balancing authority in California and the 16th largest in the Western Electricity Coordinating Council.
BANC is a joint powers agency whose members include the Modesto Irrigation District, the City of Redding, the City of Roseville, the Sacramento Municipal Utility District, the City of Shasta Lake, and the Trinity Public Utilities District. BANC began operations in May 2011.
BANC’s footprint currently extends from the Oregon border to Modesto and from Sacramento to the Sierra and includes the Western Area Power Administration’s transmission grid and the U.S. Bureau of Reclamations’ generation resources in California. BANC includes the California-Oregon Transmission Project, as well as the systems of its members.
California Governor, Lawmakers Reach Agreement on Set of Energy Proposals
September 2, 2023
by Paul Ciampoli
APPA News Director
September 2, 2023
California Gov. Gavin Newsom and the California Legislature reached an agreement on a set of proposals from Newsom that, among other things, will allow for the state to create a central buyer to procure clean electricity for the grid.
Under the agreement, announced on Aug. 31, the central buyer would focus on sources like offshore wind and long-duration storage to diversify the state’s energy portfolio.
The package comes in the form of an amendment to AB-1373, which was amended in the California Senate on Aug. 31.
The agreement also aligns the state’s primary clean energy planning and procurement programs – its renewable portfolio standard, resource adequacy and integrated resource planning – with California’s 100% clean electricity by 2045 goal.
The agreement also includes new measures to help prevent the misuse of the state’s new Strategic Reliability Reserve which is designed to maintain grid reliability during extreme weather events, like heatwaves.
The Strategic Reliability Reserve was developed in 2022 to expand the resources capable of managing or reducing net-peak demand during extreme events.
The Strategic Reliability Reserve provides funding to secure conventional generation, efficiency upgrades at existing natural gas plants, demand response, distributed generation, and long-duration storage.
In addition, the agreement calls for accelerating permitting for electric transmission projects.
Publicly Owned Utilities
The as amended AB-1373 includes sections related to publicly owned utilities in the state.
Existing law requires each local publicly owned electric utility serving end-use customers to prudently plan for and procure resources that are adequate to meet its planning reserve margin and peak demand and operating reserves, sufficient to provide reliable electric service to its customers.
The measure authorizes a local publicly owned electric utility to meet its minimum planning reserve margin through individual contractual procurement or through an aggregated or pooled portfolio of resources, as specified.
Kentucky Municipal Energy Agency Seeks Electric Intermediate Capacity, Energy Resources
August 27, 2023
by Paul Ciampoli
APPA News Director
August 27, 2023
The Kentucky Municipal Energy Agency has issued a request for proposals for electric intermediate capacity and energy resources.
KYMEA intends to purchase power from one or more suppliers starting on June 1, 2024, for a term of three to five years.
Resources should: (i) be deliverable on a firm, non-interruptible basis to the LGE/KU transmission system, (ii) be delivered to KYMEA on a first call basis and not be committed for sale to third parties, and (iii) qualify for designation as network resources under the LGE/KU Open Access Transmission Tariff to serve the loads of KYMEA’s member municipal electric systems.
Potential proposers may request a copy of the RFP by emailing KYMEA at: rleesman@kymea.org. Those requesting the RFP are asked to provide the organization’s legal name and address and a primary contact name, email address, and phone number.
The RFP specifically provides that prospective proposers must contact only Rob Leesman at KYMEA to obtain information about this solicitation. Contacts by prospective proposers with KYMEA Board members and other representatives of KYMEA or its Members will be a cause for disqualification of proposals, as further explained in the RFP.
The RFP requires the submittal of a proposal responsive to the RFP and containing data at a level sufficient for KYMEA to screen alternatives to determine if the proposal is reasonably susceptible of being accepted for an award based upon the evaluation factors set out in the RFP.
Questions regarding the RFP must be submitted by email no later than 2 pm EDT on September 8, 2023, to assure an answer.
KYMEA must receive proposals by email from interested proposers no later than 2 pm EDT on October 9, 2023.
Created in September 2015, 11 municipal electric utilities entered into an Interlocal Cooperation Agreement creating KYMEA, a joint public agency.
California Grid Operator Submits Filing to FERC Related to Extended Day-Ahead Market
August 23, 2023
by Paul Ciampoli
APPA News Director
August 23, 2023
The California Independent System Operator recently filed the necessary proposed tariff changes with the Federal Energy Regulatory Commission related to the development of an extended day-ahead market for California and the West.
The FERC filing addresses two separate but closely related initiatives — rules for a day-ahead market platform that could extend across the West, and proposed rule changes to the ISO’s current day-ahead market that serves approximately 80 percent of California and a small portion of Nevada.
Among other things, these rules propose a day-ahead market feature “that further commits much needed flexible energy supply to efficiently and reliably address changes that occur between day-ahead and real-time market conditions,” CAISO said.
“The proposed tariff changes will expand access to wholesale energy markets in the West, with participants being able to realize lower costs to ratepayers from balancing the most efficient supply across a broader geographic footprint,” it said.
The tariff changes would also increase reliability benefits from greater situational awareness and advance the integration of clean energy resources by allowing participants to share surplus carbon-free power across a diverse Western footprint, according to CAISO.
The ISO has requested a FERC order on the proposals by December 21, 2023.
Virtual Power Plants to Provide Power to Texas Grid for the First Time
August 23, 2023
by Paul Ciampoli
APPA News Director
August 23, 2023
Two virtual power plants are now qualified and able to provide dispatchable power to the Texas electric grid, which is operated by the Electric Reliability Council of Texas, the Texas Public Utility Commission said on Aug. 23.
This marks a first for the state’s electricity market and is part of the Aggregate Distributed Energy Resource (ADER) pilot project the Public Utility Commission of Texas directed ERCOT to begin developing in June 2022.
The pilot project tests how consumer-owned, small energy devices, such as battery energy storage systems, backup generators, and controllable electric vehicle chargers, can be virtually aggregated and participate as a resource in the wholesale electricity market, strengthening grid reliability.
There are currently eight ADERs totaling 7.2 MW in the pilot project. Six have completed the initial registration steps and are in the commissioning process.
Two of the eight (both represented by Tesla Electric) have completed required testing and are qualified to participate.
Texans are increasingly investing in small energy resources, such as backup generators or solar panels connected to battery energy storage systems, for their homes and businesses, the PUCT said.
There are currently 2.3 GW of these small (less than 1 MW each) resources across the state, with 300 MW added so far in 2023 alone.
An ADER represents the aggregation of devices that are located at multiple sites as a single resource.
The ADER coordinates the operation of individual devices to collectively reduce demand or feed power to the grid. Through an automated process, the ADER responds to specific ERCOT instructions, allowing participating customers to sell their surplus power to the grid when called upon or reduce use. This is an additional source of dispatchable power for the ERCOT grid.
ADERs are formed and operated by retail electric providers or utilities that sell electricity to homes and businesses.
In the pilot project, compensation terms and participation requirements will vary depending on the provider operating the ADER. To qualify for the pilot project, an ADER must be able to produce at least 100 kW, and each individual device in the ADER must be less than 1 MW. The average residential battery is about 5 kW.
The pilot project is currently capped at 80 MW of total participation to ensure a safe and controlled rollout.
“As generation and distribution technology continues to improve, we expect to see more Texans taking advantage of these small energy resources in the future,” said ERCOT President and CEO Pablo Vegas. “This pilot project is an opportunity for us, the electric industry, and participants to learn how to harness these resources to support reliability in the ERCOT market.”
The two ADERs announced on Aug. 23 involve Tesla Electric customers who have Powerwall storage systems in their homes and have agreed to sell their surplus power in the ERCOT market.
One ADER aggregates Houston-area CenterPoint Energy customers and the other ADER aggregates Dallas-area customers served by Oncor Electric Delivery Company.
These two VPPs are the first to participate in the ERCOT wholesale market as ADERs.
Participating in the PUCT’s pilot project is voluntary, and any entity that serves electric customers in ERCOT is encouraged to learn about the project and plan for future participation.
ADERs participating in the pilot project must include power generation devices, such as battery energy storage systems or generators, and may also include demand response devices like smart thermostats, controllable EV chargers and smart water heaters that can be controlled to reduce electricity use.
The ADER Pilot Project and a 20-member task force were established by two PUCT Commissioners.
The task force assists the PUCT and ERCOT by ensuring public transparency, providing subject matter expertise and facilitating stakeholder collaboration with ERCOT.
The pilot project “will continue to collaboratively develop solutions until permanent rules are developed for ADER participation in the market or until the PUCT and ERCOT deem the lessons-learned from the pilot project are complete,” the PUCT said.