Federal and state utility regulators on Wednesday explored options to improve the process for planning interregional transmission lines and allocating their costs, including the possibility of requiring minimum amounts of transfer capacity between regions.
However, utility commissioners in the Southeast and West have balked at the idea of the Federal Energy Regulatory Commission requiring specific transfer levels for non-regional transmission organizations, according to comments from the fourth meeting of FERC and the National Association of Regulatory Utility Commissioners Transmission Task Force. .
Even so, task force members said inter-regional transmission facilities can offer a range of benefits. “There is an overwhelming and growing body of evidence that materially expanding import and export capabilities across regions will yield immense economic, reliability and public policy benefits,” Andre Frenchsaid the commissioner of the Kansas Corporation Commission.
Overview of the dive:
The experience of winter storm Uri loomed large over the working group’s discussions at the San Diego meeting. During this February 2021 storm, freezing weather covered the central United States, destroying power plants from Texas to Minnesota.
The Electric Reliability Council of Texas, which is largely cut off from neighboring grid systems to avoid FERC monitoring, has ordered days of continuous outages in which about 250 people died and over $195 billion in the material damage that has occurred.
Meanwhile, the Midcontinent Independent System Operator and the Southwest Power Pool, which also lost power plants during the cold spell, largely avoided planned outages because they were able to import power from other areas, including the PJM interconnection, according to a report by FERC and the North American Electricity Reliability Corp.
“Inter-regional transmission has many advantages, but reliability and public safety are part of it,” FERC Chairman Richard Glick said at the meeting, adding that the processes established in FERC Order 1000 , a key decision on transportation planning and cost allocation, has failed to stimulate cross-regional projects.
Noting that there is no requirement for regions to be able to transfer electricity between them, FERC Commissioner Willie Phillips warned that extreme weather conditions do not respect grid limits.
“We’re just crossing our fingers, hoping nothing terrible happens again,” Phillips said. “To me, it all comes down to reliability, and reliability is about risk. So we all have to ask ourselves, what is our tolerance for risk?”
According to FERC Commissioner Allison Clements, it may be wise to focus initially on defining minimum cross-regional capacity transfer requirements instead of a broader overhaul of cross-regional planning and cost allocation rules.
Work on this specific issue could provide a platform to develop processes and methodologies that could then be used for other cross-regional projects, Clements said.
Focusing on inter-regional transfer capability simplifies cost-benefit and cost allocation analysis, which could be helpful in getting additional inter-regional transfer capability built, says Arkansas Public Service Commission Chairman relatively quickly. Ted Thomas.
“We’re in a race between implementing this solution and the next time we’re affected,” Thomas said. “If someone gets hit and we haven’t acted, it’s on us… Let’s start.”
If a region doesn’t want to move forward with adding transfer capability, that’s their choice, according to Thomas. “When you do that, you take a pair of dice and hope,” he said.
Regulators in non-RTO states have been cautious about setting specific transfer capability requirements.
FERC should allow flexibility and avoid top-down approach in any minimum transfer capacity requirement to reflect regional differences, says North Carolina Utilities Commission commissioner Kimberly Duffleywhich represents an area without RTO.
Non-RTO states shouldn’t be burdened with a transfer capability requirement that would force them to build unnecessary transmission, Duffley said.
There are already avenues for interested parties to discuss cross-regional projects, Duffley said.
According to Riley Allencommissioner of the Vermont Public Utility Commission.
Some regulators suggest that establishing cross-regional transfer requirements could be done through a possible NERC reliability standard.
Based on feedback from task force members, Glick said there appears to be “significant support” for doing more on cross-regional transmission. He warned that allowing differences in approaches between regions could create obstacles to the development of new transmission projects.
So far this year, FERC has proposed revising its regional transport planning and cost allocation rules as well as the requirements of interconnected generators at the grid.
FERC released these proposals after the FERC-NARUC working group discussed the topics.