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Christie sworn in as member of FERC, resulting in full complement of commissioners

January 4, 2021

by Paul Ciampoli
APPA News Director
January 4, 2021

Mark Christie was sworn in as a member of the Federal Energy Regulatory Commission (FERC) on Jan. 4.

Christie, who was previously the Chairman of the Virginia State Corporation Commission, fills the FERC seat vacated by Bernard McNamee in September 2020. Christie is a Republican.

His term runs through June 30, 2025. 

Christie joins Chairman James Danly (R), Commissioner Neil Chatterjee (R), Commissioner Allison Clements (D), and Commissioner Richard Glick (D) to give FERC a full complement of five commissioners for the first time in nearly two years.

FERC approves SPP’s resubmitted proposal for a Western Energy Imbalance Service market

December 24, 2020

by Paul Ciampoli
APPA News Director
December 24, 2020

The Federal Energy Regulatory Commission on Dec. 23 approved the Southwest Power Pool’s resubmitted Western Energy Imbalance Service (WEIS) Market tariff, Western Joint Dispatch Agreements and Western Markets Executive Committee Charter, effective February 1, 2021.

SPP had resubmitted the WEIS proposal after the Commission rejected its initial proposal on July 31. In that order, FERC cited a number of reasons for rejection of the proposal and provided guidance for a new submission if SPP chose to do so.

While APPA has been monitoring developments related to the SPP WEIS, it has not taken a position on SPP’s proposal.

A number of protests of the resubmittal were filed at FERC including Colorado Springs Utilities and Platte River Power Authority. SPP resubmitted the proposal in early October.

The Commission in its Dec. 23 order found that the WEIS Market “will yield diverse benefits to the participating utilities and customers in the Western Interconnection, and that SPP has both addressed the concerns presented by the Commission in the July Order and demonstrated that its proposal presents a just and reasonable regional solution.” 

Expected benefits described in the order include having a broader pool of resources available to serve load, which allows participants to meet their energy imbalance needs at lower cost; improved reliability; and better integration and management of higher levels of variable energy resources.

The protestors were aligned in their concerns on most issues.

In the order, the Commission made findings regarding the issues raised by at least one of the protestors.

Among other things, FERC found that:

The FERC order is available here.

House, Senate reach deal on energy bill that includes provisions that APPA supports

December 15, 2020

by Paul Ciampoli
APPA News Director
December 15, 2020

The House and Senate on Dec. 14 reached a deal on a bipartisan, bicameral energy bill that includes several provisions that the American Public Power Association supports.

Lawmakers hope to include the “Energy Act of 2020” in a must-pass government funding bill.

The draft energy bill, which covers a wide range of energy topics including nuclear power, energy efficiency, energy storage, and carbon capture, is the result of a compromise between the American Energy Innovation Act (AEIA), introduced last March by Senators Lisa Murkowski (R-AK) and Joe Manchin (D-WV), and the Clean Economy Jobs and Innovation Act, which passed the House of Representatives in September by a vote of 220 to 185.

Controversial provisions, and those which APPA did not support, including several Public Utility Regulatory Policies Act section 111(d) “must consider” requirements, a requirement for the Department of Energy (DOE) to report on the interregional transmission planning process, and for the Federal Energy Regulatory Commission (FERC) to issue a rulemaking on the interregional transmission planning process, did not make it into the final energy package.

At the same time, the bill does not include language APPA supported to assist public power and rural electric cooperatives with their cybersecurity efforts.

 Overall, several provisions that APPA supports made it into this compromise deal, while provisions that APPA opposed in the Clean Economy Jobs and Innovation Act (H.R. 4447) have not been included.

 Notable provisions include:

Plan for Southeast energy exchange market previewed for regulators in the Carolinas

December 11, 2020

by Paul Ciampoli
APPA News Director
December 11, 2020

A group of Southeast energy companies on Dec. 11 offered a courtesy preview to state utility regulators in North and South Carolina of a filing the group plans to submit to the Federal Energy Regulatory Commission for the creation of a centralized, automated, intra-hour energy exchange called the Southeast Energy Exchange Market (SEEM).

The companies involved intend to file for approval from FERC by the end of the year and to begin operations as early as fourth quarter 2021.

Founding members of SEEM are expected to include:

Participation in SEEM is open to other entities that meet the appropriate requirements. Some utility commitments will take place following FERC approval.

SEEM is a 15-minute energy market, the first of its kind for the region, that will use technology and advanced market systems to automatically match participants with low-cost energy to serve customers across a wide geographic area, according to a news release related to the market.

The new SEEM platform will facilitate sub-hourly, bilateral trading, allowing participants to buy and sell power close to the time the energy is consumed, utilizing available unreserved transmission.  The exchange is an extension of the existing bilateral market.

As part of their evaluation, SEEM members performed a detailed study to assess the costs and benefits of forming such a platform.

An independent third-party consultant estimated the platform’s total benefits to members and their retail customers range from $40 million to $50 million annually in the near-term, potentially growing to $100 million to $150 million annually in later years as more solar and other variable energy resources are added.

After validating the concept of forming this market with the study, SEEM members discussed the potential structure and benefits with numerous energy regulators, policy makers, consumer advocates, non-governmental organizations, energy associations, solar developers and business customers. Feedback helped strengthen the platform agreement by adding more transparency measures, according to the news release.

SEEM members will maintain local control of their generation and transmission assets and participation is voluntary.

Many of the member companies operate within state guidelines and directives, so having full control over their respective generation and transmission resources is an important governing requirement.

“TVA continues to actively work with other utilities on the proposed Southeast Energy Exchange Market, which offers the potential of lower costs and optimized renewable energy resources that both support TVA’s mission of serving the Tennessee Valley,” said Jim Hopson, TVA Public Information Officer.

“The courtesy preview of the upcoming FERC filing shared today is another important milestone in SEEM’s formation,” he said.

“Santee Cooper will take up our required SEEM approval process after FERC has reviewed and made its decision on the proposed platform,” said Mollie Gore, Corporate Communications Director at Santee Cooper. “We do believe there is an opportunity for real, meaningful savings for customers here, plus the ability to better integrate renewables – which is helpful given Santee Cooper’s aggressive plans for new solar over the next decade. It is also very low risk, which is important.”

“We are pleased to be part of this effort to bring benefits to the southeast and our customers,” said Drew Elliot, Manager, Government Affairs at ElectriCities. “SEEM will maximize the investment in the transmission system and should allow better integration of renewables in the region. We see this as a no-regrets strategy to lower costs for customers due to the relatively quick set-up and low costs – both start-up and ongoing – compared to other wholesale market concepts.”

In a recent blog, Elise Caplan, Director, Electric Market Analysis, at the American Public Power Association, notes that the Southeast is the largest geographic area without some form of a centrally dispatched energy market.

“It is therefore no surprise that various entities are giving attention to the development of a coordinated energy market in the Southeast,” she wrote, noting the significant benefits that can be achieved.

While APPA does not have a position on whether some form of organized energy market should be adopted in the Southeast, Caplan said that there are some important lessons to be learned from other regions, which she details in her blog.

Allison Clements sworn in as FERC Commissioner

December 9, 2020

by Paul Ciampoli
APPA News Director
December 9, 2020

Allison Clements was sworn in as a member of the Federal Energy Regulatory Commission (FERC) on Dec. 8.

Clements, a Democrat, fills the seat on the Commission vacated by Cheryl LaFleur in August 2019. Clements’ term runs through June 30, 2024. 

Her nomination was confirmed by the Senate on November 30, 2020, along with Republican Mark Christie, who has not yet been sworn in. Christie will serve a term expiring June 30, 2025.

Senate confirms FERC nominees Clements and Christie

December 1, 2020

by Paul Ciampoli
APPA News Director
December 1, 2020

The U.S. Senate on Nov. 30 confirmed by voice vote the nominations of Allison Clements and Mark Christie to be members of the Federal Energy Regulatory Commission.

Clements, a Democrat, will serve a term expiring June 30, 2024, while Christie, a Republican, will serve a term expiring June 30, 2025.

The Senate Energy and Natural Resources Committee on Nov. 18 favorably reported the nomination of Clements and Christie to be members of FERC.

President Donald Trump on Nov. 5 named James Danly as Chairman of FERC. He will replace Neil Chatterjee as head of the agency.

Danly has served as a Commissioner since March 2020. Prior to that he served as general counsel to the Commission since joining FERC in 2017.

Chatterjee, who joined the Commission in 2017 and served as Chairman from August to December 2017 and since October 2018, congratulated Danly on his appointment and said the Commission will be well-served by Danly’s leadership.

Chatterjee will remain a FERC Commissioner, along with Commissioner Richard Glick.

Study finds electrification is key to decarbonization of New England

November 24, 2020

by Peter Maloney
APPA News
November 24, 2020

New England will require economy wide electrification to achieve greenhouse gas reduction targets, according to a new report by Energy + Environmental Economics (E3) and Energy Futures Initiative (EFI).

All six New England states have adopted economy wide greenhouse gas (GHG) reduction targets of at least 80% reductions by mid-century, and Massachusetts recently adopted a net-zero commitment. And every state in the region, except Vermont, has seen its gross emissions decline since 1990 aided by the power sector’s transition from coal to natural gas as a generation fuel.

The region does pose unique challenges in achieving its emission reduction goals, the authors said.

The proportion of emissions in New England attributable to the transportation sector is higher than the national average while emissions from industrial sources are lower.

Transportation accounts for 42% of carbon dioxide emissions in New England while electricity accounts for about 20%, the report, Net-Zero New England: Ensuring Electric Reliability in a Low-Carbon Future, noted.

The report was sponsored by Calpine, an independent generation company that is heavily invested in gas-fired power plants. Calpine provided “input and perspectives” regarding the scope and analysis of the study but “all decisions regarding the analysis were made by E3 and EFI.” The authors also noted that the report “solely reflects the research, analysis, and conclusions” of E3 and EFI.

The report found that New England’s unique energy profile means that the region will not “be able to attain its GHG reduction goals with an exclusive focus on electricity production; it will be necessary to implement aggressive decarbonization on an economy-wide basis.”

Another unique factor in New England’s energy profile also creates a challenge. Fossil fuels used for residential and commercial heating contribute about 25% the region’s emissions, and New England is the only region in the country where oil is the most common heating fuel, the report said.

Direct energy use for transportation and buildings makes up two-thirds of New England’s emissions, therefore, mitigating GHG emissions will require strategies that emphasize the aggressive deployment of energy efficiency; widespread electrification of buildings, transportation and the industrial sector; development of low-carbon fuels, and deep decarbonization of electricity supplies, the report found.

The study modeled two scenarios: one focused on electrification (High Electrification) and the other on low-carbon fuels (High Fuels) to achieve 95% carbon emissions reductions in the region, although the scenarios use both strategies to some degree. As New England states draw closer to their GHG reduction goals, electricity demand in the region will increase significantly over the next three decades, the report said. In the two primary scenarios studied, annual electricity demand grows by 70 terawatt-hours (TWh) to 110 (TWh) by 2050, roughly a 60% or 90% increase from current levels. And electric peak demand would rise to between 42 gigawatts (GW) and 51 (GW).

Meeting GHG reduction goals while increasing electrification will also require a greater reliance on renewable energy, the authors said. Under the two scenarios, a mix of 47 GW to 64 GW of new renewable generation capacity would be needed by 2050, including land-based solar and wind, offshore wind, and distributed solar, along with 3.5 GW of incremental Canadian hydro. The authors also noted, however, that New England’s constrained geography, “slow pace of electric transmission planning, and historical difficulty siting new infrastructure are significant challenges that the region must overcome.”

Higher levels of renewable energy would also require firm capacity to ensure cost-effective and reliable energy supplies, the report said. As much as 46 GW of firm capacity could be needed in 2050 to ensure resource adequacy. Relying on renewable energy resources backed by battery storage, would be “extremely costly,” the authors added. Firm capacity would include about 34 GW of gas-fired generation, 3.5 GW of nuclear power, 8 GW of energy imports, and 1 GW of biomass and waste energy, the report found.

New resources, such as advanced nuclear, natural gas plants with carbon capture and sequestration, long duration energy storage, or generation from carbon-neutral fuels such as hydrogen, could be used to provide firm capacity, but until any of those technologies are commercially viable, natural gas generation is the most cost-effective source of firm capacity, the report said, adding that “some reliance” on gas generation is consistent with achieving a 95% carbon-free electricity grid in 2050 as long as the gas plants operate at a “suitably low capacity factor.”

Senate Energy and Natural Resources Committee advances FERC nominees

November 18, 2020

by Paul Ciampoli
APPA News Director
November 18, 2020

The Senate Energy and Natural Resources Committee on Nov. 18 favorably reported the nomination of Allison Clements and Mark Christie to be members of the Federal Energy Regulatory Commission.

The committee held a hearing to consider the nominees on Sept. 16. The committee approved both nominees by a voice vote.

The nominees now await further consideration by the full Senate. Should they be approved by the Senate before the end of the year, Clements would serve a FERC term expiring June 30, 2024, and Christie a term expiring June 30, 2025.

In other recent FERC-related news, President Donald Trump on Nov. 5 named James Danly as Chairman of FERC. He will replace Neil Chatterjee as head of the agency.

Danly has served as a Commissioner since March 2020. Prior to that he served as general counsel to the Commission since joining FERC in 2017.

Chatterjee, who joined the Commission in 2017 and served as Chairman from August to December 2017 and since October 2018, congratulated Danly on his appointment and said the Commission will be well-served by Danly’s leadership.

Chatterjee will remain a FERC Commissioner, along with Commissioner Richard Glick.

WAPA, Municipal Energy Agency of Nebraska and others to evaluate SPP membership

November 13, 2020

by Paul Ciampoli
APPA News Director
November 13, 2020

Southwest Power Pool (SPP) on Nov. 12 reported that it has received letters from several western power entities committing to evaluate membership in the organization.

If they pursue membership, Basin Electric Power Cooperative, Deseret Power Electric Cooperative, the Municipal Energy Agency of Nebraska (MEAN), Tri-State Generation and Transmission Association, and Western Area Power Administration (WAPA) would become the first members of SPP’s regional transmission organization to place facilities in the Western Interconnection under the terms and conditions of SPP’s open access transmission tariff.

SPP said that WAPA’s evaluation of RTO membership will consider the participation of its Upper Great Plains-West region and Loveland Area Projects. “This would extend the reach and value of SPP’s services — including day-ahead wholesale electricity market administration, transmission planning, reliability coordination, resource adequacy and more — and the synergies they provide when bundled under the RTO structure,” SPP said in a news release.

Basin Electric, MEAN, Tri-State and WAPA’s Upper Great Plains-East Region are already members of SPP, having joined the RTO in 2015 when they placed their respective facilities in the Eastern Interconnection under SPP’s tariff.

Along with Deseret, each is also a customer of at least one of SPP’s contract-based Western Energy Services, which includes reliability coordination and a real-time market scheduled to launch in February 2021.

The companies’ letters indicate they will now work with SPP to evaluate the terms, costs and benefits of putting western facilities under the RTO’s tariff.

A recent SPP Brattle study found that WEIS participants’ membership in the SPP RTO would produce approximately $49 million in savings annually for SPP’s current and new members.

The RTO said that the western utilities joining SPP would receive $25 million a year in adjusted production cost savings and revenue from off-system sales, and SPP’s members in the east would benefit from $24 million in savings resulting from the expansion of SPP’s market, transmission network and generation fleet.

SPP said its prior calculations of the value of RTO membership suggest that these benefits are only a portion of those current and new members will derive. There is additional value not considered by the Brattle study in five-minute real-time economic dispatch, achievement of public policy goals, lowered reserve-margin requirements, consolidation and regionalization of planning and other processes and more, the grid operator said.

SPP launched its first real-time balancing market in 2007 then transitioned to a day-ahead market and became a single, consolidated balancing authority in 2014.

It first began serving customers in the west in December 2019 when it launched its Western Reliability Coordination service on a contract basis.

SPP is awaiting FERC approval to implement a western energy imbalance service market that it plans to launch in February 2021.

FERC in July rejected the SPP proposal for a western energy imbalance service market. At the same time, FERC offered guidance for a modified proposal should SPP choose to submit one. SPP then submitted a modified western energy imbalance service market proposal in October.

CAISO Western EIM

Earlier this year, the California Independent System Operator signed an implementation agreement with Xcel Energy-Colorado, which paves the way for its participation in the CAISO Western EIM in 2022.

The agreement also provides for participation of three other utilities: Black Hills Energy Colorado Electric Colorado Springs Utilities, and Platte River Power Authority.

The four utilities currently share resources and balance demand for electricity during peak periods through a Joint Dispatch Agreement.

These utilities launched a study in 2019 to determine which market, the WEIS proposed by SPP or CAISO’s Western EIM, would provide greater benefits to customers.

The Colorado utilities also report that the Western EIM has lower administrative costs and is exploring adding day-ahead market services, which could help participants to make wider use of renewable energy resources.

Calif. CCA Valley Clean Energy completes repayment to SMUD

November 10, 2020

by Paul Ciampoli
APPA News Director
November 10, 2020

California community choice aggregator Valley Clean Energy (VCE) recently made its final installment payment to the Sacramento Municipal Utility District (SMUD), reimbursing SMUD for its assistance with operating services during VCE’s launch in 2018.

The $1.5 million in deferred charges and interest were paid off on schedule, “which demonstrates VCE’s financial discipline while continuing to offer clean electricity at competitive rates,” VCE said in a Nov. 9 news release.

The SMUD payback is the second major financial commitment met by VCE during its start-up. VCE began its operations in 2018 with a $1.5 million seed loan from its three founding jurisdictions: Woodland, Davis and Yolo County.

Don Saylor, chair of VCE’s board of directors, noted that these funds, with interest, were paid back in October 2019, years ahead of schedule.

“SMUD continues to assist us in our business operations and we are grateful for their partnership,” he said.

Tracy Carlson, director of customer services and operations for SMUD, said that the public power utility is proud of its partnership with VCE and believes “that partnership can continue to bring benefits to VCE’s and SMUD’s customers for many years to come.”

SMUD in September 2017 said that it had been selected to negotiate a services agreement to provide VCE with technical and energy services, data management/call center services, wholesale energy services, credit support services and up to five years of business operations support.

SMUD noted that this was its first services agreement in the fast-growing CCA market.

The American Public Power Association has initiated a new category of membership for community choice aggregation programs.