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Rajnish Barua, Ph.D. Executive Director Organization of PJM States, Inc. (OPSI)

Michigan State University - Institute of Public Utilities Grid School, Richmond, VA; 10 March 2010 Transmission Planning: Federal, Regional, and State Jurisdiction/Coordination/Siting. Rajnish Barua, Ph.D. Executive Director Organization of PJM States, Inc. (OPSI)

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Rajnish Barua, Ph.D. Executive Director Organization of PJM States, Inc. (OPSI)

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  1. Michigan State University - Institute of Public UtilitiesGrid School, Richmond, VA; 10 March 2010Transmission Planning:Federal, Regional, and StateJurisdiction/Coordination/Siting Rajnish Barua, Ph.D. Executive Director Organization of PJM States, Inc. (OPSI) Email: raj@opsi.us; Tel: 1-302-757-2441 DISCLAIMER: Opinions expressed in this presentation and related discussions belong to the presenter and do not represent any views of his employer or the organizers of this event; employment affiliation is listed for information purpose only. To the extent possible, all public sources of material have been identified.

  2. Epilogue as Prologue • My house is in the line of the proposed power line, so I will lose it, along with many other people, we are upset. • This is an inadequate solution. Is it a good idea to consolidate so much power in lines that run for hundreds of miles through rural areas? • I protest. I am very concerned about the effects that a power line of this nature and all that must be done to maintain it will have on our surroundings. • This power line is proposed to run right through the center of TOTALLY residential neighborhoods! Make a visit here and see for yourself. Source: Excerpts from DOE’s NIETC Comment Sessions IPU's Grid School: Rajnish Barua, Ph.D.

  3. Overview • North American electricity grid • Reliability Councils • RTOs and ISOs • Where are we now and why? • Transmission planning • Jurisdiction, Coordination, Siting • Current issues IPU's Grid School: Rajnish Barua, Ph.D.

  4. One picture/slide = 1,000 words?May need more than a thousand words to explain this one! IPU's Grid School: Rajnish Barua, Ph.D.

  5. North American ElectricReliability Corporation (NERC) • Ensure the reliability of the bulk power system • Develop and enforce reliability standards • Assess reliability annually via 10-year and seasonal forecasts • Monitor the bulk power system • Educate, train, and certify industry personnel • Self-regulatory, subject to oversight by the FERC and Canadian authorities Source: www.nerc.com IPU's Grid School: Rajnish Barua, Ph.D.

  6. Selected NERC Terminology • Bulk power system = generation assets and transmission lines and components • Balancing Area = Multiple assets together • Balancing authority = matches generation with demand • Transmission operator = monitors the flows over the transmission system and voltages at substations • Different balancing areas are connected to each other by “tie lines” • Regional Entity = delegated enforcement authority through an agreement approved by FERC Source: www.nerc.com IPU's Grid School: Rajnish Barua, Ph.D.

  7. NERC’s Regional Entities (RE) • RE members are investor-owned utilities; federal power agencies; rural electric cooperatives; state, municipal and provincial utilities; independent power producers; power marketers; and end-use customers • Eight REs are: • Florida Reliability Coordinating Council (FRCC) • Midwest Reliability Organization (MRO) • Northeast Power Coordinating Council (NPCC) • Reliability First Corporation (RFC) • SERC Reliability Corporation (SERC) • Southwest Power Pool RE (SPP) • Texas Regional Entity (TRE) • Western Electricity Coordinating Council (WECC) Source: www.nerc.com IPU's Grid School: Rajnish Barua, Ph.D.

  8. North American Electric Reliability Corporation (NERC) Western Interconnection Eastern Interconnection Canada USA ERCOT Mexico Source: NERC IPU's Grid School: Rajnish Barua, Ph.D.

  9. RTO/ISO Structure • Regional Transmission Organizations (RTOs) • Independent System Operators (ISOs) • Single state: NY, CA, TX • Multi-jurisdiction: New England, PJM, SPP, MISO • RTOs/ISOs do not own assets • Operate by an approved agreement among transmission owners (TOs) in that area IPU's Grid School: Rajnish Barua, Ph.D.

  10. RTOs / ISOs Source: FERC IPU's Grid School: Rajnish Barua, Ph.D.

  11. Restructuring and Retail Choice Source: EIA IPU's Grid School: Rajnish Barua, Ph.D.

  12. Comparison of Average Electricity Prices IPU's Grid School: Rajnish Barua, Ph.D.

  13. (Somewhat) famous quotes • Restructuring and competition will lead to less work! • Restructuring of the electricity industry is not about the flow of power . . . rather, it is about the flow of money! [Refresher - electrons follow the laws of physics and not of legal contracts!] IPU's Grid School: Rajnish Barua, Ph.D.

  14. What do we have? • Federal – transmission; State – distribution • Generation – depends on state • New challenges for the regulatory community • Involvement in RTO/ISO issues • Regulatory practices gradually include monitoring of non-jurisdictional entities • How does one ensure safe and reliable electric service with no jurisdiction over wholesale generation? • Provider of Last Resort (POLR), Default Service Provider • Reliability standards; customer service IPU's Grid School: Rajnish Barua, Ph.D.

  15. PJM Service Territory Pennsylvania New Jersey Maryland Delaware Washington, DC Virginia North Carolina Illinois Michigan Indiana Ohio Kentucky Tennessee West Virginia IPU's Grid School: Rajnish Barua, Ph.D.

  16. Profile of Jurisdictions in PJM area • 13 states and DC • Several have traditional rate regulation and the others have retail choice • Several have coal as a major resource (cheaper power, economic driver) • Several have clean air mandates (also happen to have the load centers) • Some have RPS (varied targets, dates, requirements, definitions) • Wind availability on both sides • Some are predominantly in another RTO IPU's Grid School: Rajnish Barua, Ph.D.

  17. Transmission Planning • Transmission planning is regional • Transmission construction is utility’s responsibility • Transmission financing is utility’s responsibility • Transmission siting is affected by state and local jurisdictions IPU's Grid School: Rajnish Barua, Ph.D.

  18. Choice of Resource • Build new generation, or build more lines, or both • Retrofit/upgrade existing generators • Specific requirements of resources • Wind is usually far from customers • Nuclear needs water (and what about waste?) • Demand response by customers • does it make a significant difference (how much and for how long) • Energy efficiency measures • mandatory, voluntary (how much and for how long) IPU's Grid School: Rajnish Barua, Ph.D.

  19. Availability vs. Needs • Wind resources in the Midwest and Atlantic (off-shore) • Load centers in the Mid-Atlantic • Electricity based on price primarily • Fuel resources based on other reasons • Renewable standards are state-by-state • If demand is greater than supply, then, • build generator near customers • build transmission to customers IPU's Grid School: Rajnish Barua, Ph.D.

  20. Issues to Keep in Mind • Coal is economic lifeline in some states • All electricity is clean and compete on price • Wind-generated electricity prices vary • LNG does not do much for energy independence • Commercial and industrial customers behave and respond differently to prices • Residential customers do not react to prices until they receive last month’s bill IPU's Grid School: Rajnish Barua, Ph.D.

  21. A Different Jurisdictional Issue • Conflict between a state’s economic regulator and environmental agency • Stringent environmental controls could lead to shutting down generating plants . . . • . . . which could lead to less electricity supply and higher prices . . . • . . . which could lead to lower economic development . . . • . . . but utility commissions do not regulate wholesale generation . . . • . . . so what is important: environment or jobs? IPU's Grid School: Rajnish Barua, Ph.D.

  22. So the dilemma: • Who will pay for transmission lines – • Societal benefit • Cost “causer” • What resources for generation – renewables, fossil, nuclear? • Who decides - federal or state? IPU's Grid School: Rajnish Barua, Ph.D.

  23. Major Challenges to Siting • Lengthy application process • Document intensive process • Approvals required from other agencies-federal, state and local • Additional timing pressures resulting from federal backstop authority • Public notification can be an issue especially where eminent domain authority is sought • Political involvement including county and municipal governments and local legislators • Land availability Source: Jim Melia, Esq., PAPUC IPU's Grid School: Rajnish Barua, Ph.D.

  24. Dominant Themes in Siting • Is need predicated on state-specific or regional concerns? • Route selection: Is the final route the least intrusive? • Land-use concerns: proximity to populated areas • Environmental impacts • Health and safety issues • Aesthetic considerations Source: Jim Melia, Esq., PAPUC IPU's Grid School: Rajnish Barua, Ph.D.

  25. ARRA of 2009 $4.5 billion for DOE’s Office of Electricity Delivery and Energy Reliability • $100 million is for worker training • $10 million is for smart grid • $80 million is for facilitating the development of regional transmission plans • Remaining funds - • for electricity delivery and energy reliability activities to modernize the electric grid • to include demand responsive equipment, enhance security and reliability of the energy infrastructure, energy storage research, development, demonstration and deployment • facilitate recovery from disruptions to the energy supply IPU's Grid School: Rajnish Barua, Ph.D.

  26. ARRA of 2009 • $80 million is for facilitating the development of regional transmission plans • Conduct a resource assessment and analysis of future demand and transmission requirements • Formation of interconnection-based transmission plan for the Eastern and Western Interconnections and ERCOT • May include modeling, support to regions and States for development of coordinated State electricity policies, programs, laws, and regulations IPU's Grid School: Rajnish Barua, Ph.D.

  27. EIPC and EISPC • Part A: Eastern Interconnection Planning Collaborative – over 40 planning authorities (RTOs/ISOs, TOs in non-RTO areas) • Part B: Eastern Interconnection States’ Planning Council – 41 states and jurisdictions in the Eastern interconnection; a self-governing entity with its own staff • At least 1/3 members on EIPC’s Steering Committee will be from EISPC IPU's Grid School: Rajnish Barua, Ph.D.

  28. EIPC’s Objectives • Establish processes for aggregating the modeling and regional transmission expansion • plans of the entire Eastern Interconnection • Perform interregional analyses to identify potential conflicts and opportunities between regions. • Serve as a reference case for modeling various alternative grid expansions based on the scenarios developed by stakeholders • Perform scenario analysis as guided by broad stakeholder input and the consensus recommendations of the Steering Committee to aid policy makers and other stakeholders in assessing interregional options and policy decisions IPU's Grid School: Rajnish Barua, Ph.D.

  29. MOU among Federal Agencies • Signed October 23, 2009 by:U.S. Departments of Agriculture, Commerce, Defense, Energy; EPA, CEQ, ACHP, USDOI, and FERC • To expedite the siting and construction of qualified electric transmission infrastructure • Improves coordination among project applicants, federal agencies, and states and tribes involved in the siting and permitting process. • Improve uniformity, consistency, and transparency by setting forth the roles and responsibilities of these entities when project applicants wish to construct electric transmission infrastructure IPU's Grid School: Rajnish Barua, Ph.D.

  30. U.S. COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 07-1651 Argued September 24, 2008; decided February 18, 2009 PIEDMONT ENVIRONMENTAL COUNCIL, Petitioner,NYPSC and MNPUC, Intervenors, v. FERC, Respondent,SOUTHERN CALIFORNIA EDISON COMPANY; ALLEGHENY POWER; TRANS-ALLEGHENY INTERSTATE LINE COMPANY; EDISON ELECTRIC INSTITUTE; AMERICAN PUBLIC POWER ASSOCIATION; NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION; AMERICAN WIND ENERGY ASSOCIATION; SAN DIEGO GAS & ELECTRIC COMPANY; PPL ELECTRIC UTILITIES CORPORATION, Intervenors. IPU's Grid School: Rajnish Barua, Ph.D.

  31. U.S. COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 07-1651 • On Petition for Review of an Order of the Federal Energy Regulatory Commission (RM06-12-001) • Argued: September 24, 2008 • Decided: February 18, 2009 • Before MICHAEL and TRAXLER, Circuit Judges, and Richard L. VOORHEES, United States District Judge for the Western District of North Carolina, sitting by designation. • Reversed in part, affirmed in part, vacated in part, dismissed in part without prejudice, and remanded by published opinion. • Judge Michael wrote the opinion, in which Judge Voorhees joined. Judge Traxler wrote a separate opinion concurring in part and dissenting in part. IPU's Grid School: Rajnish Barua, Ph.D.

  32. U.S. COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 07-1651 • Decision reverses “FERC’s expansive interpretation of the language in FPA § 216(b)(1)(C)(i) that grants FERC permitting jurisdiction when a state commission has "withheld approval [of a permit application] for more than 1 year." The phrase does not include, as FERC held, the denial of an application.“ • U.S. Supreme Court -Sep. 17, 2009: Petition for a writ of certiorari filed;Jan. 19, 2010: Petition denied. IPU's Grid School: Rajnish Barua, Ph.D.

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