WORLD-GENERATION NOVEMBER/DECEMBER 2016
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or impair state authority.
Comments from stakeholders are
extensive and are collected in the CEC’s
website,
http://www.energy.ca.gov/sb350/regional_grid/documents/index.html. In
general, commenters support preserving
state authority through its governance
structure. Mandatory forward capacity
markets were not supported but
stakeholders supported a voluntary capacity
market. Transmission owners would be
allowed to withdraw from the regional grid
operator if they were dissatisfied with it.
The governance plan will become effective
only after it is approved by the governor of
California.
EXPERTS COMMENT ON A
REGIONAL MARKET
At the 8th Annual Climate & Energy
Law Symposium on November 4 in San
Diego, the potential impact of a regional
ISO on the future landscape of California’s
and the west’s electricity production and
movement sparked the following comments
from speakers.
Travis Kavulla, a commissioner of
Montana’s Public Service Commission and
president and chairman of the National
Association of Regulatory Utility
Commissioners, commented on the risks of
curtailing renewables or paying them to not
dispatch when the power is not needed.
Expanding to a regional market avoids this
issue. “It’s a software solution to optimize
billions and billions of dollars invested and
paid for by customers in infrastructure.”
Travis also said that a regional ISO
should bypass supporting public policy and
stick to operating the electricity markets.
States should have protections to decide on
infrastructure capital resource planning, he
argued.
DeAnn Hapner, vice president for FERC
and ISO Relations at Pacific Gas and
Electric, commented that with a regional
grid, “There are costs that will likely impact
customers.” She agreed that integrating
municipal utilities, which have separate
local governances from investor-owned
utilities, into a regional ISO must come into
play.
Kavulla added that the corporate
leadership of publicly owned utilities is
more sensitive to and report to local
markets, whereas investor-owned utilities
build in costs that support state policies
such as subsidizing low-income ratepayers,
energy efficiency programs and energy
research.
Tim Duane, a visiting professor in
Environmental Law at the University of San
Diego School of Law which sponsored the
symposium, made the point that if you have
a more diverse spread of renewables in a
few transmission operators, the need for
resource adequacy will be diminished to
zero and there will be less need for new
resources.
John Anders, lead counsel at the
CAISO, discussed the implications of
moving to a western regional market. He
said the risks of not establishing such a
market mean the costs of operating the
current market may become unreasonable.
He predicted a regional ISO would create
$1 billion to $1.5 billion in economic
benefits and an 8% to 10% reduction of
greenhouse gases in California.
SCE REDEFINES ITS POWER GRID
In September, SCE released a short
report, “The Emerging Clean Energy
Economy” in which it describes how it
plans to modernize and reinforce its
distribution grid. It reports that in 2015,
utility operators performed over 22,000
switching procedures to reconfigure or
isolate portions of distribution circuits. As
more and more customers install
distributed energy resources (DERs) these
operations will become more challenging.
As we have become aware, one-way
power flows from a few large generators
connected at transmission voltage is giving
way to two-way variable flows created by
many small DERs connected to the
distribution system or behind customer
meters. Clusters or concentrations of
distributed resources could quickly
complicate grid operations. Safety and
reliability issues will increase in both
frequency and magnitude unless a modern
grid is created with enhanced capabilities.
SCE sees Distribution System
Operators planning and managing the
modernized plug-and-play grid with
advanced sensors, communications and
automation embedded in the distribution
grid.
DERs will be able to connect to
wholesale markets to sell services under
this new grid and receive compensation for
providing location-specific services. It
could also open up third party markets
where the distribution platform could
enable markets for energy transactions
between customers or marketplaces for new
products and services.
Of course, this comes with a price.
SCE writes that “rate designs and programs
must transition to share the benefits and
costs among customers who deploy DERs
to meet a portion of their energy needs and
those who do not. Rates should account for
the fixed costs of the grid so all customers,
including DER owners, pay for access to the
modernized and reliable grid.”
The new proposed rates, which were
not discussed in this report, will likely lead
to lengthy hearings and debates.
The report is available at www.edison.
com/TransformingtheGrid.
SCE CREATES PILOT
To prepare for this transition, SCE has
been planning a preferred resources pilot
for several years in Orange County which if
successful will be a model for the clean
energy grid of the future throughout its
service territory. The Orange County
multi-year pilot will measure the impact on
the grid of clean energy options – energy
conservation, solar and wind generation
and energy storage. The goal of the pilot is
to determine the correct mix and proper
timing for adding these resources to meet
local customer demand. The area was
chosen for the pilot because of its proximity
to the shuttered San Onofre Nuclear
Generating Station and the presumed needs
of the communities impacted by the
closure.
REDEFINING CALIFORNIA’S
POWER GRID
CONTINUED FROM PAGE 15
CALIFORNIA NEWS