rajnish barua, ph.d. executive director organization of pjm states, inc. (opsi)

Michigan State University - Institute of Public Utilities

Grid School, Richmond, VA; 10 March 2010

Transmission Planning:Federal, Regional, and State

Jurisdiction/Coordination/Siting

Rajnish Barua, Ph.D.Executive Director

Organization of PJM States, Inc. (OPSI)Email: [email protected]; Tel: 1-302-757-2441

DISCLAIMER: Opinions expressed in this presentation and related discussions belong to the presenter and do not represent any views of his employer or the organizers of this event; employment affiliation is listed for information purpose only. To the extent possible, all public sources of material have been identified.

Epilogue as Prologue My house is in the line of the proposed power line, so I will lose

it, along with many other people, we are upset.

This is an inadequate solution. Is it a good idea to consolidate so much power in lines that run for hundreds of miles through rural areas?

I protest. I am very concerned about the effects that a power line of this nature and all that must be done to maintain it will have on our surroundings.

This power line is proposed to run right through the center of TOTALLY residential neighborhoods! Make a visit here and see for yourself.

Source: Excerpts from DOE’s NIETC Comment Sessions

10-March-10 2IPU's Grid School: Rajnish Barua, Ph.D.

Overview

• North American electricity grid– Reliability Councils– RTOs and ISOs

• Where are we now and why?

• Transmission planning– Jurisdiction, Coordination, Siting– Current issues


One picture/slide = 1,000 words?

May need more than a thousand words to explain this one!


North American ElectricReliability Corporation (NERC)

• Ensure the reliability of the bulk power system• Develop and enforce reliability standards• Assess reliability annually via 10-year and

seasonal forecasts• Monitor the bulk power system• Educate, train, and certify industry personnel• Self-regulatory, subject to oversight by the

FERC and Canadian authoritiesSource: www.nerc.com


Selected NERC Terminology• Bulk power system = generation assets and

transmission lines and components• Balancing Area = Multiple assets together• Balancing authority = matches generation with demand• Transmission operator = monitors the flows over the

transmission system and voltages at substations• Different balancing areas are connected to each other

by “tie lines” • Regional Entity = delegated enforcement authority

through an agreement approved by FERC

Source: www.nerc.com


NERC’s Regional Entities (RE)• RE members are investor-owned utilities; federal power

agencies; rural electric cooperatives; state, municipal and provincial utilities; independent power producers; power marketers; and end-use customers

• Eight REs are:– Florida Reliability Coordinating Council (FRCC)– Midwest Reliability Organization (MRO)– Northeast Power Coordinating Council (NPCC)– Reliability First Corporation (RFC)– SERC Reliability Corporation (SERC)– Southwest Power Pool RE (SPP)– Texas Regional Entity (TRE)– Western Electricity Coordinating Council (WECC)

Source: www.nerc.com


North American Electric Reliability Corporation (NERC)

Source: NERC

Eastern InterconnectionWestern Interconnection

ERCOT

Canada

USA

Mexico


RTO/ISO Structure• Regional Transmission Organizations (RTOs)

• Independent System Operators (ISOs)

• Single state: NY, CA, TX

• Multi-jurisdiction: New England, PJM, SPP, MISO

• RTOs/ISOs do not own assets

• Operate by an approved agreement among transmission owners (TOs) in that area


RTOs / ISOs

Source: FERC


Restructuring and Retail Choice

Source: EIA


Comparison of Average Electricity Prices


(Somewhat) famous quotes

• Restructuring and competition will lead to less work!

• Restructuring of the electricity industry is not about the flow of power . . .

rather, it is about the flow of money![Refresher - electrons follow the laws of physics and not

of legal contracts!]


What do we have?• Federal – transmission; State – distribution• Generation – depends on state• New challenges for the regulatory community• Involvement in RTO/ISO issues• Regulatory practices gradually include monitoring of

non-jurisdictional entities• How does one ensure safe and reliable electric

service with no jurisdiction over wholesale generation?

• Provider of Last Resort (POLR), Default Service Provider

• Reliability standards; customer service


PJM Service Territory

Illinois

Michigan

Indiana

Ohio

Kentucky

Pennsylvania

New Jersey

Maryland

Delaware

Washington, DC

Virginia

North Carolina

Tennessee West Virginia10-March-10 15IPU's Grid School: Rajnish Barua, Ph.D.

Profile of Jurisdictions in PJM area• 13 states and DC• Several have traditional rate regulation and the

others have retail choice• Several have coal as a major resource (cheaper

power, economic driver)• Several have clean air mandates (also happen to

have the load centers)• Some have RPS (varied targets, dates,

requirements, definitions)• Wind availability on both sides• Some are predominantly in another RTO


Transmission Planning

• Transmission planning is regional• Transmission construction is utility’s

responsibility• Transmission financing is utility’s responsibility• Transmission siting is affected by state and

local jurisdictions


Choice of Resource• Build new generation, or build more lines, or both• Retrofit/upgrade existing generators• Specific requirements of resources

– Wind is usually far from customers– Nuclear needs water (and what about waste?)

• Demand response by customers – does it make a significant difference (how much and

for how long)• Energy efficiency measures

– mandatory, voluntary (how much and for how long)


Availability vs. Needs• Wind resources in the Midwest and Atlantic

(off-shore)• Load centers in the Mid-Atlantic• Electricity based on price primarily• Fuel resources based on other reasons• Renewable standards are state-by-state• If demand is greater than supply, then,

– build generator near customers– build transmission to customers


Issues to Keep in Mind• Coal is economic lifeline in some states• All electricity is clean and compete on price• Wind-generated electricity prices vary• LNG does not do much for energy

independence• Commercial and industrial customers behave

and respond differently to prices• Residential customers do not react to prices

until they receive last month’s bill10-March-10 20IPU's Grid School: Rajnish Barua, Ph.D.

A Different Jurisdictional Issue

Conflict between a state’s economic regulator and environmental agency

Stringent environmental controls could lead to shutting down generating plants . . .. . . which could lead to less electricity supply

and higher prices . . .. . . which could lead to lower economic

development . . .. . . but utility commissions do not regulate

wholesale generation . . .. . . so what is important: environment or jobs?


So the dilemma:

• Who will pay for transmission lines –– Societal benefit– Cost “causer”

• What resources for generation – renewables, fossil, nuclear?

• Who decides - federal or state?


• Lengthy application process• Document intensive process• Approvals required from other agencies-federal, state and

local• Additional timing pressures resulting from federal backstop

authority• Public notification can be an issue especially where eminent

domain authority is sought• Political involvement including county and municipal

governments and local legislators• Land availability

Source: Jim Melia, Esq., PAPUC

Major Challenges to Siting


• Is need predicated on state-specific or regional concerns?

• Route selection: Is the final route the least intrusive?

• Land-use concerns: proximity to populated areas• Environmental impacts• Health and safety issues • Aesthetic considerations

Source: Jim Melia, Esq., PAPUC

Dominant Themes in Siting


ARRA of 2009$4.5 billion for DOE’s Office of Electricity Delivery and Energy

Reliability $100 million is for worker training $10 million is for smart grid $80 million is for facilitating the development of regional

transmission plans Remaining funds -

for electricity delivery and energy reliability activities to modernize the electric grid

to include demand responsive equipment, enhance security and reliability of the energy infrastructure, energy storage research, development, demonstration and deployment

facilitate recovery from disruptions to the energy supply


ARRA of 2009

• $80 million is for facilitating the development of regional transmission plans

• Conduct a resource assessment and analysis of future demand and transmission requirements

• Formation of interconnection-based transmission plan for the Eastern and Western Interconnections and ERCOT

• May include modeling, support to regions and States for development of coordinated State electricity policies, programs, laws, and regulations


EIPC and EISPC• Part A: Eastern Interconnection Planning

Collaborative – over 40 planning authorities (RTOs/ISOs, TOs in non-RTO areas)

• Part B: Eastern Interconnection States’ Planning Council – 41 states and jurisdictions in the Eastern interconnection; a self-governing entity with its own staff

• At least 1/3 members on EIPC’s Steering Committee will be from EISPC


EIPC’s Objectives• Establish processes for aggregating the modeling and

regional transmission expansion• plans of the entire Eastern Interconnection• Perform interregional analyses to identify potential

conflicts and opportunities between regions.• Serve as a reference case for modeling various

alternative grid expansions based on the scenarios developed by stakeholders

• Perform scenario analysis as guided by broad stakeholder input and the consensus recommendations of the Steering Committee to aid policy makers and other stakeholders in assessing interregional options and policy decisions


MOU among Federal Agencies• Signed October 23, 2009 by:

U.S. Departments of Agriculture, Commerce, Defense, Energy; EPA, CEQ, ACHP, USDOI, and FERC

• To expedite the siting and construction of qualified electric transmission infrastructure

• Improves coordination among project applicants, federal agencies, and states and tribes involved in the siting and permitting process.

• Improve uniformity, consistency, and transparency by setting forth the roles and responsibilities of these entities when project applicants wish to construct electric transmission infrastructure


U.S. COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 07-1651

Argued September 24, 2008; decided February 18, 2009

PIEDMONT ENVIRONMENTAL COUNCIL, Petitioner,NYPSC and MNPUC, Intervenors,

v.FERC, Respondent,

SOUTHERN CALIFORNIA EDISON COMPANY; ALLEGHENY POWER; TRANS-ALLEGHENY INTERSTATE LINE COMPANY; EDISON ELECTRIC INSTITUTE; AMERICAN PUBLIC POWER ASSOCIATION; NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION; AMERICAN WIND ENERGY ASSOCIATION; SAN DIEGO GAS & ELECTRIC COMPANY; PPL ELECTRIC UTILITIES CORPORATION, Intervenors.



• On Petition for Review of an Order of the Federal Energy Regulatory Commission (RM06-12-001)

• Argued: September 24, 2008• Decided: February 18, 2009• Before MICHAEL and TRAXLER, Circuit Judges, and Richard

L. VOORHEES, United States District Judge for the Western District of North Carolina, sitting by designation.

• Reversed in part, affirmed in part, vacated in part, dismissed in part without prejudice, and remanded by published opinion.

• Judge Michael wrote the opinion, in which Judge Voorhees joined. Judge Traxler wrote a separate opinion concurring in part and dissenting in part.



• Decision reverses “FERC’s expansive interpretation of the language in FPA § 216(b)(1)(C)(i) that grants FERC permitting jurisdiction when a state commission has "withheld approval [of a permit application] for more than 1 year." The phrase does not include, as FERC held, the denial of an application.“

• U.S. Supreme Court -Sep. 17, 2009: Petition for a writ of certiorari filed;Jan. 19, 2010: Petition denied.


rajnish barua, ph.d. executive director organization of pjm states, inc. (opsi)

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