FERC staff provides guidance on CPP compliance, with principles for grid planners

FERC staff issued a Jan. 19 white paper to help transmission planning entities in conducting analyses of the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan (CPP) and associated compliance plans, with suggestions about modeling inputs and simulation tools.

Incorporating four guiding principles listed in the white paper in the modeling of CPP compliance plans “is one way to promote a robust analysis of the reliability impacts of the CPP,” FERC staff said.

The principles address four areas: transparency and stakeholder engagement; study methodology and interactions between studies; study inputs, sensitivities and probabilistic analysis; and tools and techniques.

The principles may form the basis for further action by FERC staff regarding the CPP, such as industry outreach or a technical conference, according to the document, which noted that EPA and FERC agreed to coordinate certain activities about CPP implementation, with the commission possibly being called upon to address concerns about grid reliability as the CPP is implemented.

The final rule of the CPP lists state-specific goals for reduced carbon dioxide emissions from existing fossil fuel-fired power plants, with interim goals from 2022 to 2029 and a final goal starting in 2030, the white paper noted.

NERC, regional reliability organizations, independent system operators (ISOs) and other power industry stakeholders may benefit from following the principles as they analyze the CPP, FERC staff said.

“Effectively evaluating the potential reliability impacts of the CPP associated with the development of compliance plans presents a number of challenges for transmission planning entities,” FERC staff said, adding that while the CPP provides states with significant flexibility in how they meet their emission-reduction goals, that flexibility can introduce uncertainty and complexity into grid planning studies.

The use of inconsistent models or inconsistent modeling inputs, for instance, may suggest reliability problems where none exist or may mask problems that do exist, FERC staff said.

Long-term transmission planning processes already involve a number of discrete studies that use a variety of economic and technical factors, which also could be applied to analysis under the CPP, the white paper pointed out. Such studies can include, but are not limited to: resource adequacy, production cost, integrated gas-electric systems simulations, powerflow and transient stability analysis and frequency response.

Regarding transparency and stakeholder engagement, FERC staff said that there are a number of ways to determine the value of inputs such as fuel costs or capital costs for new resources, and developing a clear process that allows stakeholder input on aspects of the planning process is a practical way to assure that reasonable assumptions and inputs are considered.

Openness and transparency can help states as they formulate compliance plans, along with minimizing potential issues with the interpretation of results, the paper said. “States developing CPP compliance plans may find it useful to incorporate in their models neighboring states or regions inputs and assumptions regarding the utilization of existing generation and new energy resources.  Such transparency will help states and neighboring planning regions assess the impact of another state’s compliance plan on the electric system within their state or region” and help them prepare for changes in power flows and transmission needs when implementing CPP compliance plans, FERC staff said.

Addressing interactions between studies, the paper noted that software applications and modeling tools can be used to assess a range of influences on grid reliability, such as fuel prices and availability, the generation mix and how state plans may affect load growth. Working with multiple software applications and study tools can help grid planners leverage data not previously available in some tools, FERC staff said.

For example, a resource adequacy tool could be used to predict changes to the composition of the generation fleet, while a tool modeling natural gas infrastructure could show whether sufficient pipeline capacity exists to supply the modeled generation mix.

On the third guiding principle – study inputs, sensitivities and probabilistic analysis – the paper said that any studies accounting for uncertainty and testing for sensitivity can effectively assess the impact of the CPP and associated compliance plans. Developing base case scenarios and subsequent policy scenarios can test the uncertainty of variables, with base case scenarios benefitting from use of up-to-date plans for renewable resources, energy efficiency programs, the expansion of power and gas infrastructure and other environmental regulations.

“By accounting for the full range of probable outcomes, rather than just ‘best’ and ‘worst’ cases, studies are more likely to identify effective compliance options or potential reliability concerns,” FERC staff said.

Regarding the tools and techniques principle, FERC staff said transmission planning entities may need to develop new tools or methods to assess the impact of the CPP and associated compliance plans.

Because the power grid has undergone a number of changes in generation mix and environmental rules prompting increased renewable resource penetration, grid planners may need to develop specialized software tools, new data sources other measures to assess such issues as the increased interdependence of the power and gas industries. Transmission planning entities may also need to assess their capabilities to share results between related analyses and consider emerging and ongoing trends in the power industry, FERC staff said.