House Natural Resources Committee Chairman Doc Hastings, R-Wash., on Nov. 20 slammed a U.S. Department of Energy notice in the Federal Register of its draft recommendations resulting from DOE Secretary Steven Chu’s March 16 memorandum to expand the mission of federal power marketing administrations (PMAs).
“The Energy Department’s Draft Recommendations stemming from Secretary Chu’s March 16 Memorandum once again fail to answer key questions repeatedly asked on a bipartisan basis,” Hastings, a frequent critic of the Chu memo, said. “Basic issues such as the cost, who pays for such costs, who benefits, and uncertain legal authorities very much remain unanswered. At a time when 40 million families and small businesses could experience higher electricity rates as a result of Secretary Chu’s Memorandum, the American people deserve these answers and more transparency.”
Hastings add: “Although today’s recommendations will impact the Western Area Power Administration and its customers, the fact remains that electricity ratepayers of all four of the Power Marketing Administrations – including the Bonneville Power Administration – are subject to the Secretary’s Washington, DC-based Memorandum dictates. This is very troubling if this is template for such mandated changes on the PMAs. As Chairman of the House Natural Resources Committee, I have held two full committee oversight hearings, formally asked for more information in which there has been no response, and I will continue to examine these proposals closely and deliberately through the lens of ratepayer protection.”
A Nov. 20 DOE Federal Register notice established a 60-day comment period on draft recommendations for the Western Area Power Administration (Western). The draft recommendations were produced by the Western/DOE Joint Outreach Team (JOT).
Western’s mission is to market and deliver reliable, cost-based federal hydropower and related services to its customers. The federal government, through four PMAs, owns and operates about 33,730 miles of transmission lines, overlaying approximately 42% of the continental United States. Of that total, Western owns approximately 17,000 miles of high-voltage transmission lines with a footprint covering 15 states in the central and western U.S.
“To facilitate the transition of America’s transmission system to a more resilient and flexible grid while reducing costs to consumers, Western and DOE formed the JOT,” the notice said. “The team conducted a series of informational webinars, as well as stakeholder outreach workshops in five locations and listening sessions in six locations in Western’s service territory with over 500 participants registering to provide input on the process and recommendations. The information gathered, combined with written stakeholder comments and the expertise of Western and DOE subject matter experts, informed the development of the draft recommendations that are now being published for public comment. Development of the final recommendations will be informed by comments received in response to this Notice.”
On March 16, Secretary Chu sent a memorandum to the administrators of the four PMAs, requesting their assistance in facilitating the transition to a more resilient and flexible grid while ensuring customers continue to receive value-added products and services at the lowest possible costs consistent with sound business principles.
“To continue meeting its statutorily defined mission, Western must also adapt and respond to additional obligations imposed by Congress, the Federal Energy Regulatory Commission (FERC), and the North American Electric Reliability Corporation (NERC) as a result of changing technologies and societal needs,” said the draft recommendations. “For instance, Western is responsible for meeting new obligations and requirements for open access transmission service, reliable operations, and transmission development when its facilities are used to deliver the full spectrum of energy and energy-related products, including renewables, as well as transmission-related products and services to meet its customer’s needs. Indeed, as our Nation’s electricity system evolves, new opportunities arise for Western to continue to meet its core mission. Opportunities include a constructive role in addressing issues around cyber security, integrating and/or interconnecting new generating technologies into the Federal transmission system, and remaining fully compliant with the applicable mandatory reliability standards, among others.”
Western and DOE both recognize that resource adequacy and certainty for both funding and supporting personnel are fundamental to ensuring the successful implementation of the JOT’s recommendations, the draft said.
JOT decided to opt out of any energy efficiency issues
“While the JOT recognizes that DOE is looking at energy solutions across multiple market sectors, e.g., wholesale and retail, based on customer, tribal, and stakeholder feedback and team expertise, as well as economies of scale, the JOT decided not to pursue any recommendations specifically targeted at energy efficiency, demand response, or electric vehicles,” the draft said. “Further, a number of the areas addressed through the recommendations are considered on a regional basis, however, the recommendations presented below apply to all regions within Western. Some recommendations presented were developed to engage further collaboration among Western, its customers, tribes, and stakeholders along with other utilities in Western’s 15-state footprint, while others focus more on harmonization internally among Western’s regions and/or standardizing business practices across the organization.”
To support the long-term vision outlined in Western’s Strategic Plan and contemplated in the following recommendations, the draft noted that it is important that an enterprise planning process is in place to identify necessary future resources and prioritize long-term strategic planning activities, including:
- identifying, studying and implementing Western mission-related grid coordination, optimization, and consolidation of applications and best business practices;
- supporting ongoing studies and recommendations that Western standardize its automation tools and other initiatives that incrementally and collectively contribute to grid reliability, resource optimization, cost management, potential revenue enhancement, and ways to incorporate new aspects of doing business; and
- incorporating policies and industry trends in long-term strategic planning contexts that ensure long-term viability and relevance and contribute to strengthening America’s energy security, environmental quality and economic vitality.
Among the draft recommendations are:
- Undertake an analysis to determine the regulation reserve capability that is required for each of Western’s BAs or sub-BAs using a consistent methodology and criteria. Additional analysis should be conducted to determine the regulation reserve capability that is available from all dispatchable generation sources within each of Western’s BAs or sub-BAs.
- Consolidate Western’s four OASIS sites within the Western Interconnection into a single OASIS site. To ensure a uniform and integrated approach to posting Western’s transmission information, products, and services, as well as to ensure one common interpretation and implementation of Western’s Open Access Transmission Tariff, consolidate the posting and administration of Western’s four separate existing OASIS sites within the Western Interconnection into one single OASIS site. Under Western’s current multiple OASIS operating model, the potential for inconsistent interpretation and implementation of Western’s OATT exists.
- Revise Western’s Large Generator Interconnection Procedures (LGIP) to conform to changes recommended by WestConnect’s LGIP Work Group and successfully implemented by several WestConnect participants.
- Conduct a study of the transmission and ancillary services rates charged by each Western-owned transmission project. Determine the feasibility and the appropriate level of potential consolidation of transmission rates from the bottom up, i.e., intra-regionally, inter-regionally, or Western-wide.
- Initiate a collaborative process with Western regional offices, customers, tribes, and stakeholders to identify the best rate-setting methodologies currently in use by one or more of Western’s regions. To the extent possible, explore the potential to harmonize transmission and ancillary service rate setting methodologies across Western.
- Western should evaluate its customer Energy Planning and Management Program (EPAMP) IRP guidelines and processes to ensure Western-wide uniformity of administration and to conduct customer outreach to identify opportunities for training on the planning process. Western should immediately implement a quality control program to ensure that customer plans are complete, conform to existing guidelines and procedures, and accurately reflect the activities accomplished using the planning process.