[USA] FERC approves $500K fine for ISO-NE over allegations it paid $100 million to nonoperating gas plant

According to an agreement approved on September 30, 2022, by the Federal Energy Regulatory Commission (FERC), ISO New England (ISO-NE) will pay a $500,000 fine to settle allegations that it violated market rules by allowing a 674 MW natural gas-fired power plant to collect money from consumers before the facility had produced any power.[1] The settlement between ISO-NE and FERC’s Office of Enforcement was approved by FERC commissioners in a 4-0 decision. The investigation, which took place over the last five years, found that ISO-NE issued over $104 million in payments to Salem Harbor Power Development LP, a subsidiary of Footprint, in 2017 and 2018 despite knowing that the company’s gas facility was not going to meet its expected commercial operating date. The Salem Harbor Generating Station was initially expected to enter commercial operation on May 31, 2017. However, it did not reach commercial operations until June 2018. The grid operator also withheld information about the facility from its independent market monitor.

In the agreement, ISO-NE agreed to the facts presented by FERC staff but “neither admits nor denies” that any violations occurred. The fine will be paid through a reduction in compensation for ISO-NE’s 10-person senior leadership team. The grid operator also agreed to invest up to $350,000 to bolster its compliance program to prevent future incidents.

[1] https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20220930-3077&optimized=false

[USA] New York ISO reports ability to meet winter demand

On November 9, 2021, the New York Independent System Operator (NYISO) reported that electricity supplies in New York will likely be sufficient to meet peak demand this winter, with a total of 42,415 MW of power resources available.[1] NYISO forecasts that peak demand for winter 2021-2022 will reach 24,025 MW, about 6.6% higher than last winter. According to the grid operator’s extreme winter weather scenario, peak demand could increase to as much as 26,230 MW. The state’s all-time winter peak was set in January 2014 when a multi-day polar vortex pushed demand to 25,738 MW.

Although the 2014 polar vortex did not cause any reliability issues, NYISO has since made changes to its market designs to provide stronger incentives for generators to secure fuel and increase winter preparedness. The grid operator also took steps to improve situational awareness of natural gas conditions and enhance procedures for monitoring generator fuel inventories. NYISO says these actions have allowed it to meet demand during more recent severe cold weather. For winter 2021-2022, NYISO said that it is monitoring regional fuel supplies as there could be a limited supply. The grid operator also noted that seasonal and weekly fuel surveys indicate oil and dual-fuel generators have sufficient inventories to start the winter but are still lower than in past years.

[1] https://www.nyiso.com/-/press-release-%7C-new-york-s-electric-grid-prepared-to-meet-winter-demand

[USA] ERCOT report finds weather-related issues were the primary cause of February outages

On April 6, 2021, the Electric Reliability Council of Texas (ERCOT) sent its preliminary report to the Texas Public Utility Commission (PUC) on the causes of generator outages and derates during the February 14-19, 2021 extreme cold weather event.[1] ERCOT’s report follows initial requests for information from generators about why so much generation went offline during the cold weather event. The report found that most of the outages during the event were weather-related outages, which ERCOT defined as outages “explicitly attributed to cold weather,” such as frozen or flooded equipment. During the February 14-19 time period, weather-related issues caused 54% of generator outages, equipment failures caused 14% of outages, and fuel limitations caused 12% of outages. ERCOT estimates that approximately 51,173 MW were forced offline during that period, which is slightly lower than the original estimate of 52,277 MW. ERCOT is still waiting on data for February 10-13, 2021. The grid operator anticipates completing a full report on the event by the end of August 2021.

[1]http://www.ercot.com/content/wcm/lists/226521/51878_ERCOT_Letter_re_Preliminary_Report_on_Outage_Causes.pdf

[USA] Texas governor declares billing errors an emergency matter

On March 9, 2021, Governor of Texas, Greg Abbott (R), announced that the correction of billing errors is an emergency matter to be considered immediately by the Texas legislature.[1] The announcement comes after regulators at the Texas Public Utility Commission (PUC) declined on March 8, 2021 to direct the Electricity Reliability Council of Texas (ERCOT) to retroactively reprice its artificially inflated prices during the February 2021 cold weather event.[2] The commissioners expressed concern that there was too much uncertainty in how customers might be impacted by directing ERCOT to reverse its pricing. The decision goes against the recommendation of Potomac Economics, the region’s independent market monitor (IMM). According to the IMM, ERCOT should have immediately lowered prices after load shed instructions ended on February 17, 2021, but prices remained high through February 19, 2021 which cost the market $16 billion over the course of 32 hours. On March 8, 2021, Texas Lt. Gov. Dan Patrick called on the PUC to retroactively change the prices from that time period. On the same day, Texas PUC Commissioner Shelly Botkin resigned effective immediately. Her departure comes just a week after the resignation of Chair DeAnn Walker and leaves the commission with just one member left, Chair Arthur D’Andrea.

[1] https://www.utilitydive.com/news/texas-puc-loses-2nd-commissioner-as-lt-gov-presses-ercot-to-correct-16b/596378/

[2] https://www.utilitydive.com/news/texas-regulators-decline-to-act-after-market-monitor-reports-16b-of-inapp/596252/

[USA] ERCOT Board of Directors fires CEO after Texas power outages

The Electric Reliability Council of Texas' (ERCOT) Board of Directors voted on March 4, 2021 to issue a 60-day termination notice for CEO Bill Magness.[1] In a statement, the Board of Directors state that they will "begin an immediate search for a new President and CEO.” The vote comes just weeks after the state experienced widespread power outages during an extreme cold weather event in February 2021. In addition to this news, the Chair of the Public Utility Commission of Texas (PUCT), DeAnn Walker, resigned on March 1, 2021. In her resignation letter, Walker stated that she "accepted [her] role in the situation," but that others, including the Texas Railroad Commission, ERCOT, and the legislature, should accept blame as well.

On March 4, 2021, the chairman of the House Oversight and Reform Subcommittee on the Environment, Representative Ro Khanna (D-California), sent a letter to CEO Bill Magness that requested documents regarding ERCOT's lack of winter storm preparation.[2] In his letter he stated, "The Subcommittee is concerned that the loss of electric reliability, and the resulting human suffering, deaths, and economic costs, will happen again unless ERCOT and the State of Texas confront the predicted increase in extreme weather events with adequate preparation and appropriate infrastructure."

[1] https://www.utilitydive.com/news/texas-head-utility-regulator-deann-walker-resigns-authority-ercot-blackouts/595932/

[2] https://oversight.house.gov/sites/democrats.oversight.house.gov/files/2021-03-03.Khanna%20to%20ERCOT%20re%20Winter%20Storms%20in%20Texas.pdf

[USA] MISO and SPP launch joint study to address interconnection challenges

On September 14, 2020, two regional transmission organizations (RTOs), the Midcontinent Independent System Operator (MISO) and Southwest Power Pool (SPP), announced a year-long transmission study to address historical challenges facing customers in areas where the RTO boundaries connect, known as seams, by identifying comprehensive, cost effective, and efficient upgrades.[1] Seams are the invisible boundaries between two RTO control areas, systems, and markets. The primary issue with seams is that there are inherent differences in how the RTOs create market rules or designs which leads to inefficiencies at the seams that prevent the economic transfer of capacity and energy between neighboring RTOs. One of the biggest issues this study seeks to address is the large amount of renewable energy that cannot be developed due to the issues inherent at seams.

The study will focus on solutions that MISO and SPP believe will offer benefits to both their transmission customers and end use consumers of RTO member companies. While the RTOs’ have a Joint Operating Agreement, which allows them to work through reliability issues, current processes do not include coordinated evaluation of benefits, or allocation of cost, to both load and interconnection customers. The study is expected to formally begin in December 2020 and will include several joint stakeholder meetings to provide updates on the findings. Any projects identified by the joint study will need to be approved by each RTOs’ respective Board of Directors before moving ahead.

[1] https://www.misoenergy.org/about/media-center/miso-and-spp-to-conduct-joint-study-targeting-interconnection-challenges/

[USA] DOE issues order to ramp up generation from gas plants in light of increased demand in California

In light of increased demand due to a massive heatwave, the Department of Energy (DOE) issued an order on September 6, 2020 allowing the California Independent System Operator (CAISO) to dispatch up to 100 MW of additional generation from three plants in the Los Angeles region, if needed, to meet demand through September 13, 2020 between 2 p.m. and 10 p.m. each day.[1] On September 5, 2020, the CAISO issued a Stage 2 emergency[2] after fires took out around 1,600 MW of resources. Another emergency was declared on September 6, 2020 after 260 MW of generation tripped offline and an additional 900 MW of capacity was lost.

The rising demand prompted CAISO to instruct all the generators in its footprint to ramp up to maximum production capacity during specific times of the day. However, the operator of the three natural gas facilities — the El Segundo Energy Center, Walnut Creek Energy Park and Long Beach Generating Station — informed CAISO that it could not hit maximum capability without going above federal air quality. In light of this, CAISO requested that the DOE allow for leeway on environmental and air quality permit limitations for the plants. While the DOE granted this in its order on September 6, 2020, CAISO will have to submit a report to the DOE detailing when the facilities were operated and the estimated emissions that resulted.

[1] https://www.energy.gov/sites/prod/files/2020/09/f78/CAISO%20202c%20Order_1.pdf

[2] Requires ISO intervention in the market, such as ordering power plants online