Transmission ‘Monitor’ Emerges As Flashpoint In FERC Grid Proposal

Source: By Rick Weber & Lee Logan, InsideEPA • Posted: Sunday, October 17, 2021

Regional electric grid operators are pushing back on the Federal Energy Regulatory Commission’s (FERC) draft rules to ease deployment of transmission lines needed to integrate high levels of renewables, while environmentalists, Biden administration officials and some states are cheering the plan.

A key point of contention is FERC’s proposal for expanded federal oversight of transmission planning, in the form of an “independent transmission monitor” that would oversee planning and costs of transmission projects in a given region.

Regional grid operators, such as the California Independent System Operator (CAISO), argue they are already “independent” of market participants and can adequately perform this task.

“CAISO does not support adopting a uniform requirement to create independent transmission monitors, especially within planning areas administered” by regional grid overseers, according to the group’s Oct. 12 comments to FERC.

However, environmentalists are praising the idea as an important facet of bolstering federal transmission planning.

“Robust grid standards mean little if the . . . grid planning regions fall short in practice. FERC can prevent that from happening by creating independent transmission monitors to assess compliance and interregional planning boards to plan upgrades across broader regions,” writes Natural Resources Defense Council (NRDC) grid expert John Moore in an Oct. 13 blog post summarizing joint comments by a coalition of public interest groups.

Moore argues “most planning regions fail to systematically assess whether fewer large regional projects would better meet system needs than many more local projects.” He added: “Strong oversight would reduce this unacceptable bias in favor of local projects.”

The comments are among hundreds submitted to FERC by an Oct. 12 deadline regarding its July advance notice of proposed rulemaking (ANPR) floating several potential transmission policy changes.

The preliminary rule focused on three areas: longer-term regional planning and cost-allocation processes that account for anticipated future generation, primarily from renewables; rethinking cost responsibility for transmission facilities and interconnection upgrades; and enhanced oversight of how transmission is identified and funded.

Other comments include an Oct. 12 letter from the Energy Department (DOE) calling FERC’s effort crucial as the power system transitions to a lower-carbon resource mix.

“Strengthening and expanding existing transmission infrastructure, particularly the development of regional and inter-regional transmission projects, is key to continued access to reliable, resilient, lower-cost, and clean electricity for all,” DOE writes.

Meanwhile, a coalition of various agencies from 13 mostly Democratic states is also embracing the notion of an independent transmission monitor, while also warning against shifting the cost burden for new projects too heavily to ratepayers.

Further, the federal Fish & Wildlife Service in Oct. 12 comments argues that as FERC and grid operators are identifying “geographic zones” for deploying renewables they should also “consider the ecological value of habitats to species of conservation concern.”

Varied Input

FERC officials must digest the input from various groups as they try to advance the rulemaking to modernize the nation’s power grid — a step experts consider crucial to integrating large amounts of renewables to achieve climate goals.

After the current comment process concludes, the commission might next develop a proposed rule that would be subject to an additional round of public comment before the panel would be able to finalize any new changes.

Another factor could be the possible confirmation of Willie Phillips to FERC, a step that would give Democrats a majority on the panel for the first time since the Biden administration took office. President Joe Biden recently nominated Phillips, the chairman of the District of Columbia Public Service Commission, for the role.

In early August, a council representing all regional grid operators sought additional time to comment on the ANPR, arguing the issues are complex and warrant further review. FERC partially rejected the request, allowing parties more time — until Nov. 30 — to file “reply” comments that respond to claims by other groups.

In its comments, CAISO says it “does not oppose scrutiny of its transmission planning process and welcomes proposals to enhance that process. However, requiring an independent transmission monitor is unnecessary and problematic. It would duplicate work already performed by the CAISO, disrupt and add uncertainty to the transmission planning process, and create potential delays.”

The Golden State grid operator also objects to FERC’s plans for reviewing the cost-allocation system for transmission.

FERC Chairman Richard Glick has argued that system-wide beneficiaries of reduced congestion and outages caused by severe storms and wildfires should be expected to pay for grid upgrades that help mitigate climate change.

But CAISO disagrees, arguing it “allocates the costs of all high voltage transmission facilities, including facilities intended to access and integrate renewable resources, on a system wide basis to all customers.”

The state officials also warn against funding approaches that “could shift the economic risks of transmission projects to ratepayers.” They suggest a 50-50 split between developers and transmission owners for larger transmission projects, while also promoting more efficient use of existing transmission, backing “active competition” among project developers, and deploying “non-wires alternatives” to reduce grid congestion.

Meanwhile, renewable energy advocates and environmentalists are pressing FERC to bolster transmission planning as a key step to reduce power-sector greenhouse gas emissions.

“We applaud the Commission for its leadership in identifying this need and opening this inquiry and we encourage moving towards rules that improve the structures and regulations under the Commission’s jurisdiction that enable large-scale regional and interregional transmission expansion to ensure that we have a resilient, clean, reliable, and affordable power system,” says an Oct. 12 joint statement by NRDC, the Sierra Club, the American Council on Renewable Energy, the Macro Grid Initiative and nearly two dozen other organizations including utilities and labor groups. — Rick Weber (rweber@iwpnews.com) & Lee Logan (llogan@iwpnews.com)