Regulators, System Operators, and Utilities Consider Reliability, Renewables, and EPA Regulations

In a Monday morning session at the annual meeting in Austin of the National Association of Regulatory Utility Commissioners (NARUC), panelists and commissioners traded comments on challenges and successes related to integrating increasing levels of renewables while ensuring reliable grid operation.

David Boyd, VP of government and regulatory affairs for the Midcontinent Independent System Operator (MISO), described the situation with multiple new federal regulations-from mercury and ash rules to the Clean Power Plan-as "a puzzle of sorts." There are 14 GW of wind in MISO right now, he said, and that poses difficulties for integration processes and rates, though the possibility of a "dispatchable intermittent wind tariff" is promising, he said.

Xcel Energy's VP of rates and regulatory affairs, Aakash Chandarana, said that his company, which serves eight states, is the nation's largest wind provider and was initially concerned about operational issues of integrating large amounts of wind. However, after working with multiple stakeholders, building new transmission, and working with the National Renewable Energy Laboratory to build a wind forecasting model that the utility has found extremely beneficial, it has found managing wind more predictable than initially expected.

Todd Lucas, general manager, bulk power operations at Southern Company and representing the North American Electric Reliability Corp. (NERC) Essential Reliability Services Task Force, mentioned that the task force will be coming out with a mid-December report that addresses this issue. He also explained how the regulatory role interacts with reliability in a way that one of the moderators later echoed: Policy decisions drive the resource mix, and the resource mix drives reliability issues.

Warran Lasher, director of system planning for the Electric Reliability Council of Texas (ERCOT), also offered a memorable observation about integrating renewables. That process, like preparing Texas brisket, he said, requires time to get it right.

Lasher also noted that just in response to the (Texas-specific) Regional Haze Federal Plan and the Clean Power Plan, ERCOT stands to lose "at least 4,700 MW of coal" in three to five years. That represents, he said, a 6% hit on ERCOT's reserve margin calculation. What's more, the retirements are locationally specific-mostly near Dallas, where the grid isn't very flexible, which provides additional challenges for replacing that capacity.

Michael Nasi, an air quality lawyer in Texas with Jackson Walker, focused on ongoing legal challenges to Environmental Protection Agency (EPA) regulations and the uncertainty around how carbon dioxide emissions levels under the Clean Power Plan might, he suggested, be arbitrarily changed in the future.

When asked by Hon. Nancy Lange, a Minnesota commissioner, what the key grid reliability challenges are from the changing resource mix, Boyd responded that "it remains to be seen" and depends on the region. If variable renewable penetration continues to increase, "Is there still baseload?" he asked rhetorically.

Lucas added that the "biggest risk is uncertainty" because investments won't happen without knowing the answer to, "Where are we headed?"

In terms of the operational impacts of renewables, Lucas noted that Southern is looking at what it can do to lower minimum loads and enhance ramping ability at its thermal units.

Xcel has seen operation and maintenance costs rise as a consequence of cycling thermal plants. Some coal facilities can do some cycling, Chandarana said; some can't. Increased renewables, he noted, also introduce "downward price pressure."

Boyd commented that MISO has a potential hydro resource north of the border, in Manitoba, to balance wind "as a virtual battery."

Boyd later commented that in response to the uncertainty issue (a perennial refrain from utilities), Xcel took a proactive approach rather than a reactive one. Focusing on the upper Midwest territory in particular, he said, "We charted our own certainty" by developing a 15-year generation transition mix, "so we knew what we were heading for." Xcel has an aging fleet in that part of its service territory, so it looked at what would happen when those units reached retirement.

-Gail Reitenbach, PhD, editor (@GailReit, @POWERmagazine)

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