With the 2015 TransForum East just around the corner, TransmissionHubpresents a roundup of coverage from last year’s event held in Washington, D.C.
During the “Executives Perspectives” panel, for instance, Mary Ellen Paravalos, director, performance and strategy with National Grid, saidthat it is going to take a breadth of skills and competencies to develop, operate and maintain the transmission infrastructure moving forward.
“[I]t will continue to be very important, moving forward, to have these skills and capabilities – everything from engineers to operators to accountants and economists, attorneys, even – to help us maintain and develop the backbone of” the nation’s transmission system, she said. “It’s going to be really important to be able to have the system do what it needs to do before it’s called upon to do it.”
She also noted that the drivers toward cleaner generation are going to continue, and that energy prices are going to remain under pressure.
Another speaker, David Batz, director of cyber and infrastructure security with the Edison Electric Institute (EEI), discussed physical and cyber security during a presentation, noting that regulation is only part of the answer.
“In today’s world, I would suggest that regulation is necessary but not sufficient,” he said. “We need more than simply, or only, or merely regulatory answers to these challenges.”
Regarding the current FERC/NERC regulatory model, Batz noted that it was “actually the industry who asked for regulatory oversight for the bulk electric system and the industry worked with Congress for a number of years … [to amend] the Federal Power Act to bring about this regulatory regiment.”
The industry has taken, and should take, a leadership position on physical and cyber security matters, he said.
Discussing the 2013 incident at Pacific Gas and Electric’s (PG&E) Metcalf transmission substation near San Jose, Calif., Batz noted that in the early morning hours of April 16, 2013, a person or persons, who have not been apprehended, “took a rather disciplined and I would say military type approach to an assault rifle attack on” the substation.
The attack “has the appearance of significant planning and coordination,” he said, adding, “[W]e don’t know precisely what the adversaries intended to do, but we can talk about what happened afterwards.”
Funding matters were also discussed during last year’s TransForum East.
Electric transmission projects are still viewed by potential lenders as relatively safe and attractive investment projects, an official with Scotiabank said at the event.
U.S. Power & Utilities Investment Banking Co-Head Boyd Nelson made the comments as part of a panel discussion on investing in transmission.
Scotiabank has global banking and markets operations and has financed numerous North American energy projects, including power generation and transmission, Nelson noted. Transmission is still considered a good investment in part because the technology is well-established and the regulatory risk is modest compared to other energy ventures, he said.
A number of power companies have formed so-called “yieldcos” in recent times in order to take advantage of potential growth opportunities, Nelson said.
Companies such as NextEra Energy (NYSE:NEE) and NRG Energy (NYSE:NRG) are among power companies that have spun off yieldco affiliates in the past couple of years.
Another topic that was highlighted during last year’s event was FERC Order 1000.
While strides have been made regarding the planning and cost allocation aspects of FERC Order 1000, there is an “incomplete out” on the matter involving nonincumbent developer reforms, FERC Commissioner Tony Clark said during the event.
“I think in terms of planning, we’ve come a long way,” Clark said during his keynote address at TransForum East, adding that the order is “encouraging a lot of needed planning to happen.”
He continued: “I think the commission was right on this aspect of Order 1000 to encourage more planning so that utilities aren’t just planning for their own needs, but talking with their regional peers. … I think the planning efforts have begun bearing some fruit.”
Clark said some strides have also been made in a number of regions regarding cost allocation.
Also participating in the event were Transmission Developers Inc. CEO Don Jessome and Anbaric Transmission Senior Vice President Clarke Bruno, who said that cooperating with everyone from landowners to public interest groups is critical for a non-utility transmission developer.
Money, politics and friends are all crucial, Bruno said during the conference.
Given that independent transmission companies lack the power to use eminent domain, it is especially important for them to develop cooperative relationships, Jessome said.
“We have to make friends,” Bruno said. “We have to make friends at every step of the way.”
Anbaric developed the Neptune Project, an HVDC undersea and underground power cable that links the PJM Interconnection grid to New York and serves the Long Island Power Authority (LIPA) with 660 MW of power – enough for 600,000 homes. The cable runs approximately 65 miles between Sayreville, N.J., and New Cassel (North Hempstead) on Long Island, N.Y.
Anbaric is also involved with the Hudson Transmission Project, a 660 MW electric transmission link between New York City and PJM. Furthermore, Anbaric is involved in microgrids, Bruno said.
Transmission Developers put together the Champlain Hudson Power Express, a 1,000 MW project to bring renewable hydro power from Canada to the New York metro area. The HVDC cable will be placed in waterways or buried along railway routes.
The project successfully secured a presidential permit to cross the U.S.-Canada border, Jessome said.
The event also highlighted gas-electric coordination matters. While New England gets roughly half of its electric generation from natural gas, gas-electric coordination is not just a New England issue, panelists said.
“This past winter has shown that it is not just a New England problem,” said ISO New England Senior Regulatory Counsel Kevin Flynn.
PJM saw a 22% forced outage rate on Jan. 7, 2014, at the height of the polar vortex, compared to the 7% average forced outage rate for the winter, PJM’s Lead Market Strategist Gary Helm said.
It was a time when generators were needed “and they were not there,” Helm said.
Part of the issue is that the natural gas business day and electric business day are different, Helm said. Much of the work being coordinated by FERC since then has been devoted to helping the gas and electric power industries to understand each other, Helm said.
All the regional transmission organizations in the Northeast have been working on gas-electric issues, said David DesLauriers of Black & Veatch.
The next TransForum East will be held on Dec. 1-2 in Washington, D.C. A copy of the agenda can be found here.