Complying with ‘public policy’ among challenges in organized markets

Representatives from the Midwest Independent Transmission System Operator (MISO), PJM Interconnection (PJM) and Southwest Power Pool (SPP) discussed regional planning’s implications for transmission siting and investment at Infocast’s Transmission Summit 2012 on Feb. 29 in Washington, D.C.

Jennifer Curran, executive director, transmission infrastructure strategies at MISO, said the thing that people seem to find most challenging in the FERC Order 1000 regional planning requirements tends to involve public policy.

“The way we’ve approached it is by starting with a partnership with our states to understand what the requirements are so when we’re planning for public policy at MISO, what we’re trying to understand is, ‘What requirements do our load serving entities have today?’”, she said. “In our case, of course, it’s mostly renewable generation, which is mostly wind.” Given the generation being supported by the states’ individual renewable portfolio standards and the load serving entities that have those obligations, she said, “how can transmission make that more economic and…the best example I have is how that plays out in MISO, and it does relate to multi-value projects.”

MISO has wind distributed across the footprint, she said, adding that the west to east congestion does not allow low-cost resources to displace other higher cost resources, which results in a higher price. “[W]hat transmission enables you to do is relieve that congestion, so at the end of the day, planning for public policy in our mind is really about planning for reliability and economics, given a public policy which is going to change the resources that are on the system,” Curran added. “I think that partnership with the states really helped us achieve that.”

Paul McGlynn, general manager, system planning with PJM said most of PJM’s efforts related to Order 1000 have involved what it means to plan for public policy.

PJM has also discussed right of first refusal, including the procedures PJM needs to put in place to accommodate the non-incumbent transmission owners developing transmission facilities within PJM. From an interregional planning perspective, he said: “We do have interregional planning protocols with many of our neighbors. Certainly, they’ll need to be enhanced to show and demonstrate full compliance with Order 1000, but it’s all work that is currently [taking place].” With regard to planning for public policy beyond reliability and market efficiency, the challenge within PJM is going to be getting all of the states across PJM and the MISO footprint aligned to agree on the policies that should be implemented, he said.

“The interest of the eastern states may be very different than the Midwestern states,” McGlynn said, adding, “[W]e do need some direction on the policy that the policymakers want the transmission system to be able to accommodate.”

Katherine Prewitt, director, planning with SPP said the interregional issue is important to SPP because it has a lot of neighbors.

“We’re working right now with MISO to do a joint study in our longer term view and it’s good,” she said, adding that logistically, however, it is difficult. “It’s very hard to pull all the MISO stakeholders together, all the SPP stakeholders together, build that consensus, figure out how we’re going to do that study and get it done, but it’s good, it’s promising.”

Another issue discussed was planning for the future.

McGlynn said PJM is trying to do more scenario analyses and looking at more potential system conditions in the future based on different scenarios and the transmission solutions that PJM wants to put in place. “As planners, we all make assumptions about the future state of the system,” he said, adding, “It would be nice if they were etched in granite, but the reality is that things do change and projects are delayed.”

Prewitt noted that while the engineering part is easy in planning, “picking the futures is the hard part.”

She said SPP’s processes are a little different than MISO’s in that SPP does not separate projects that could be identified as reliability, economic and/or policy as they are all interconnected. “SPP’s philosophy is that economics and reliability are inseparable, especially when you start looking at the engineering of it,” she said. “You start to trying to break down those pieces, it’s really hard to compartmentalize just those three components. As some of those components change, we have to make sure we’re continuing to provide the most cost-effective solution and we believe that the only you can do that is to look at all of it collectively and reevaluate projects as they come.”

The panelists also commented on the role of advanced technologies.

McGlynn noted that challenges involving integrating wind resources, for instance, can be addressed by using new tools, such as price responsive demand. “As our studies are looking out further and further, if it takes sometimes 15, 20 years to develop some projects, I think it is important for you, in your assumptions that you make about what you’re future state is going to be, to make assumptions about how the world is going to be different 20 years from now,” he said. “Price responsive demand is one thing that will certainly change how you need to plan the system.”

About Corina Rivera-Linares 3203 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.