Governors' Wind Energy Coalition

The Federal Energy Regulatory Commission declined last week  to launch an investigation of the California grid operator following rolling blackouts in last summer’s heat wave.

Chairman James Danly, a Republican, brought forward a vote on a draft order to start a show-cause investigation into the California Independent System Operator (CAISO), but Republican Commissioner Neil Chatterjee and Democratic Commissioner Richard Glick voted against the measure, saying they prefer a more collaborative approach. The panel currently has just three voting members.

“I’m concerned about CAISO reliability after last summer’s heat event, but a 206 proceeding is not the solution at this time — collaborative engagement with all stakeholders is a faster and more effective way to address these challenges,” Chatterjee wrote on Twitter at FERC’s monthly meeting.

A show-cause order isn’t a finding of liability, but it would have put the burden of proof on CAISO, potentially leading to civil penalties or sanctions.

Chatterjee’s break with his Republican colleague and alignment with Democrat Glick sparked surprise on Twitter. The commissioner himself noted how unusual his move was.

“I don’t know if I’ve never done this before,” Chatterjee said before his vote.

Glick said, “You get used to it the more you do it.”

The Democrat suggested that the commission host a technical conference to investigate California’s rolling blackouts, and Danly expressed support for that.

Jeff Dennis, general counsel and managing director at Advanced Energy Economy, a trade group, said it’s “definitely unusual” for the commission to reject a draft order during a public meeting.

“It’s not something that’s happened in the last two decades that I’ve been around,” he said. “These kinds of issues and positions are usually worked out behind the scenes.”

He added, “Having said that, it provided some interesting transparency into what the three commissioners were thinking.”

For example, Dennis said, when Danly spoke about CAISO’s reliability crisis, he emphasized the failure of demand response and renewable resources instead of the unexpectedly poor performance of natural gas-fired generation. Meanwhile, Glick emphasized the importance of not punishing California for taking climate change seriously.

The commission also voted to approve plans for the contested Mountain Valley pipeline to cross a national forest in Virginia, a boost for a $6 billion project that has faced multiple legal challenges and construction delays. The approval enraged environmentalists who argue that the commission shouldn’t approve further construction until the pipeline has all its permits. A number are outstanding.

“Through [yesterday’s] order allowing MVP to resume destruction on more areas near our National Forest, the Federal Energy Regulatory Commission has again thumbed its nose at the law and shown utter disregard for common sense and the public good,” Wild Virginia conservation director David Sligh wrote in a statement.

The commission’s meeting also marked the first for newly instated Democratic Commissioner Allison Clements, who was confirmed by the Senate this month along with Republican Mark Christie. Christie’s swearing-in ceremony is slated for early January.

While Clements didn’t vote in this month’s meeting, as is customary for new commissioners who are working to get up to speed, she did offer opening comments, lending insight into her regulatory approach.

“FERC’s obligation to ensure just and reasonable rates and avoid unfair discrimination has not changed,” she said.

But Clements also said the threat of climate change is something the commission needs to account for in its decisionmaking, “as well as the reality that people, communities and habitat are impacted by commission decisions. And those impacts are not borne equally.”

Cybersecurity

FERC also issued a notice of proposed rulemaking for creating incentives for grid cybersecurity investments.

The aim is to beef up the grid’s cyberdefenses and go beyond standards from FERC and the North American Electricity Reliability Corp. (NERC) that can take years to develop and often fall behind new threats by developing technologies.

The proposal “recognizes that the energy sector faces numerous and complex cybersecurity challenges at a time of both great change in the operation of the transmission system and an increase in the number and nature of attack methods,” FERC said in a press release.

FERC’s proposal comes a few months after publishing a white paper advocating for cybersecurity incentives that drew mixed comments from industry.

The Transmission Access Policy Study Group and the American Public Power Association said the incentives would increase consumer costs while not increasing security. Others, like the Edison Electric Institute, lauded the proposal, and in a rare move, the Department of Energy also supported FERC’s position (Greenwire, Aug. 31).

In a statement, NERC said it “appreciates [yesterday]’s action and will continue its efforts to support a strong cyber security posture among stakeholders, including evaluating methods to facilitate the voluntary use of cloud computing where feasible.”

FERC’s proposal offers two approaches that allow investor-owned utilities to request incentive rate treatment. Utilities can apply cybersecurity standards that normally apply to higher-impact systems to low-impact systems or connect a low-impact system to a high-impact control center.

The other approach is to apply automated and continuous monitoring from the National Institute of Standards and Technology framework.

Tom Alrich, a grid security consultant, said that he expects investor-owned utilities to take up the offer if the proposal is passed, but he also said the rulemaking would be a good start but is not a final solution.

“The ultimate solution is to have some public funding for utility cyber improvements come from Congress. Funding needs to be allocated to all utilities (IOUs, municipals and cooperatives) on some sort of equitable formula. Otherwise, areas served by IOUs will be better secured than those served by municipals and cooperatives,” Alrich said in an email.