Electric Storage as a Transmission Solution in the MTEP Reliability Planning Process. Planning Advisory Committee September 26, 2018

Transcription

1 Electric Storage as a Transmission Solution in the MTEP Reliability Planning Process Planning Advisory Committee September 26, 2018

2 Discussion Today Discuss Stakeholder response to MISO proposed process questions from August PAC Consider threshold issues and review path forward

3 MISO Strawman - Key Elements 1. SATA may be proposed in MTEP as a BRP or Other-R 2. Tsm-only SATA if selected for MTEP recover costs via T rates no interconnection queue needed as long as no market participation / services 3. In order to provide any market services, needs IA via ATT X (Q) even if previously selected and connected via MTEP 4. Asset registration of SATA is required to enable MISO control for transmission reliability when notified by MISO 5. When SATA is not notified by MISO as needed for transmission services, asset owner participates in markets per Order 841 provisions 6. Notice of need day-ahead and recalled as needed intra-day 7. Price-takers under MISO instructions. Net revenues or charges credit/debit T revenues 8. Market revenue crediting treatment none proposed

4 1. SATA may be proposed in MTEP as a BRP or Other-R What criteria will be used to determine SATA need? How will costs be determined? Are generation or storage generation hybrids eligible for the same? How do MTEP costs anticipate market revenue credits? Preference should be given to solutions that do not require operator action (similar to infrequent use of SPS). Consistent with FERC Orders and policy that allows ESR to provide grid reliability functions and be recovered in T rates. Studies should include fault duties and all necessary reliability tests under TPL Same as for wires solutions. Must solve the issue at lowest cost. Cost specified by owner. No. FERC policy statement recognizes that ESR may be treated as T assets. No other policy exists to treat generation assets same. MISO would not anticipate this. MISO would accept the asset owner cost for TRR and compare to other wires solutions. We agree that all else equal, the simplicity of conventional wires solutions is preferred. We agree We agree 4

5 1. SATA may be proposed in MTEP as a BRP or Other-R MISO should develop SATA in 2 stages: T Only and then Mixed T and market services. Consider both reliability and economic transmission projects. Evaluate more granularity (hours) of possible reliability violations and solutions than just max violation hour. SATA modeling should benefit from better understanding of ESR characteristics. Should be compared to other potential generation solutions peakers/solar. Not clear why specific rules for ESR compared to other NTA (demand, generation). MISO is strongly considering this. Comment also suggested learning from CAISO Nov. Level of complexity as economic T projects argues for deferring until simpler reliability policies established. Agree. MTEP analysis considers more than peak conditions/hours. Agree. Part of the MTEP reliability evaluation process / practices applicable to devices. MISO is interested in stakeholder arguments on this position. In general, as a T asset MISO tariff and agreements provide solution assurances we do not have for non T solutions. 5

6 2. Tsm-only SATA if selected for MTEP recover costs via T rates no interconnection queue needed as long as no market participation / services All SATA should go through Q, even if providing transmission only services. Must be assurances that SATA will not harm queued generators by triggering additional upgrades in Q process. Going through the GI process to study impact of new injections has been necessary to ensure that no harm is done to existing or planned generators. What dispatch assumptions for SATA in the interconnection studies for other assets? Would there be any restriction in reliable operations for MTEP connected SATA? Storage should be potential solutions in GIP studies. 6 A threshold issue. As a T asset, comparable treatment to other T assets argues for no GIP. As an energy injection competing for T capacity, comparable treatment to assets with similar characteristics argues for some level of GIP. MISO proposal is for split policy requiring Q only if asset desires to compete with other energy injection assets for market services. Should be the same as the assumptions in MTEP baseline reliability cases. Development at PSC needed. No MTEP reliability evaluation would evaluate full reliability requirements before including in plan as T asset. SATA can be considered for any T reliability issue in planning once SATA policies established.

7 2. Tsm-only SATA if selected for MTEP recover costs via T rates no interconnection queue needed as long as no market participation / services (Cont d) MISO proposal would distinguish between fuel sources and carve out SATA based upon technology injecting the power. If SATA do not go through Q, at a minimum MTEP studies of these must be more aligned with GIP for equal treatment. A possible solution is to insert MTEP proposed SATA into current DPP model and require payment of shared upgrade costs, and at risk milestones. Currency of DPP model would be a problem and shouldn t permit Q jumping. Proposed process would allow TO ESR to avoid reliability upgrades that would be assigned to them in the DPP. For large ESR it may be useful to examine possible market impacts. 7 Same threshold issue. Is it treated as a T asset or just another injection machine. Agree. Analysis would mimic ERIS but not NRIS deliverability, as SATA is not seeking to be a capacity resource via MTEP. We like the innovative thinking for middle ground methods of satisfying the dual nature of these assets. Please flesh this out further over time. Same issue. We assume this means impact of the reliability solution on market efficiency Agreeas we do with wires solutions.

8 3. To provide any market services, SATA must have IA via ATT X (Q) even if prior selected / connected via MTEP Is this the same or some abbreviated process? Agree and GIP studies should acknowledge use as T asset eg. If SATA for peak usage, do not study in GIP for peak conditions. Timing differences in MTEP and GIP study processes could delay ability of ESR to provide market services so alternatives to this proposal may be appropriate. Only require Qfor Capacity Resource services not for energy or ancillary services. No IA needed for regulation and frequency response. Comparable treatment for non SATA resources that only provide regulation and frequency response, should permit abbreviated GIP (no DPP). 8 We anticipate that some abbreviated process would make sense. SATA would be treated as a BRP in the scenarios it was planned for. There may be other GIP cases it would need to be studied for. A likely outcome could be that significant other upgrades could be required for this dual service capability. An Alternative is go through the queue for MTEP eligibility. True. But no longer than any generator is delayed in providing market services. Further discussion needed as to why competing on these market services would not require comparable interconnection procedures.

9 4. Asset registration of SATA is required to enable MISO control for transmission reliability when notified by MISO Is this necessary since providers of transmission services are not registered as MP today Is market registration and participation required given that MISO RC has authority to call on generators that are not participating in MISO markets to maintain reliability? Are there alternative arrangements where any financial consequences of energy exchange is applied to TRR rather than via market settlements? Transmission Only utilities are restricted from registering as a MP would this preclude these entities from using SATA? Registration of the assets in the Network and Commercial models for these purposes is appropriate. Registration should be distinguished from other resource types. 9 MISO is concerned that ESR injections and withdrawals could be significant and this energy must be accounted for in markets. What is the alternative? Calling on non participating generators is an emergency protocol. SATA are designed for normal planned conditions. Please explain further. We anticipate arrangements where a TO may own and recover the TRR, but a MP entity would register for market instructions. Agree.

10 4. Asset registration of SATA is required to enable MISO control for transmission reliability when notified by MISO How would instructions for withdrawal differ from those for injection, reduction of generation, or curtailment of load? Will this registration for SATA modify its participation model under 841? Clarify on communication of reliability need vs. availability for market operations, given that Market instructions are provided to MP while T operating instruction to TOPs MISO should respect asset s SOC parameters per 841 both as SATA and in providing market services. The SATA would be prioritized for operation in either C/DC mode as needed to address T reliability issues. ESR would operate in a bifurcated mode. Full 841 model when not notified by MISO for SATA. We envision that instruction to SATA whether for reliability or market operations would be via a registered MP. For VITOs this would be via the generation/mp side. To ensure operation of the SATA in the manner for which it is being paid cost based rates, MISO would need to control its SOC. When released for market operations MP would control per

11 5. When SATA is not notified by MISO as needed for transmission services, asset owner participates in markets per Order 841 provisions Are SATA able to transition from SATA to a market resource without foregoing TRR? How will suppression of market prices via TRR subsidies be avoided? Policy Statement noted this concern (See LeFleur). Will need to discuss energy withholding with IMM if required to hold offline to comply with SATA requirements. We do not envision a SATA withdrawing from its SATA obligations and transitioning to market services. We do see a SATA being able to access market revenues. If a SATA wanted to withdraw from its transmission responsibility together with foregoing TRR, there would need to be a retirement protocol similar to ATT. Y to fill the T reliability gap. One consideration is the extent to which this would be different than certain generation resources that receive some fixed costs via regulated rates. Market revenue crediting could reduce this issue. Needs more discussion Agree 11

12 5. When SATA is not notified by MISO as needed for transmission services, asset owner participates in markets per Order 841 provisions Can the ESR be bifurcated into a portion reserved for SATA and an incremental capacity available for market services? Market rules must be implemented to optimize ESR physical characteristics without decreasing life of asset. Some crediting mechanism to reflect life degradation from market services should be considered. This was also suggested as a GI Q approach. More technical information is needed as to how this would work. More technical information is needed as to what level of market operations will reduce asset life. If this is not predictable and controllable it could preclude the asset from participating in markets, or being selected as a SATA. CAISO proposed a mechanism where crediting was linked to level of market activities. 12

13 6. Notice of need day-ahead and recalled as needed intra-day How will cycling limitations for the SATA be considered in DA scheduling, and in MTEP T alternatives analysis? How do we assure that reliability and market use of the ESR does not impact life cycle so that it cannot perform the reliability functions as planned for including life cycle assumptions? We need to know more about these impacts. An ESR selected as SATA cannot be limited in performing the necessary reliability function and expect to receive TRR. How are market opportunity costs addressed if recalled for reliability? Who is responsible for market deviation penalties if recalled by MISO? If SATA clears DA market but then recalled for reliability, no profit/loss to SATA through DA RT settlement. Requirements for transmission service need to be addressed. 13 The SATA should be held harmless from costs incurred in following MISO instructions to perform the transmission reliability function. Agree. Anticipate that no charges would apply for any usage as SATA, and 841 rules otherwise.

14 7. Price-takers under MISO instructions. Net revenues or charges credit/debit T revenues What provisions are needed to address MP charging costs in preparation for market offers to discharge, when MISO recalls the device for reliability discharge at prevailing LMP? Are any charges or revenues allocated to SATA? Another option is unaccounted for energy (losses). Though this may not work well with large aggregate volumes of ESR over time. More settlement details needed Agree this needs to be addressed see prior response re hold harmless. No. Any net charges or revenues would be debited or credited to TC via TRR. We share these concerns which is the reason for market control of these assets to balance energy. Agree 14

15 8. Market revenue crediting treatment none proposed Consider partial crediting options. Incenting dual use SATA performance can reduce overall TRR. Also some limits to SATA market operation may be required to support proper price formation. Regardless of whether SATA is receiving full cost recovery or partial cost recovery through transmission rates, market revenues for participation in the DA/RT markets should not change/offset the transmission rates earned by SATA. TOs should not be able to keep market revenues if they own the SATA. But joint ventures where separate entity (LSE) is the MP should be encouraged. 15 MISO straw man proposal is that market services should be encouraged. Market services are different than transmission reliability services. Therefore MP should be able to retain market revenues unless precluded from doing so by regulatory authorities. Seems this agrees with the straw man proposal Please explain further. Would such a MP be able to keep the market revenues? Could this be the market side of a utility? Should MISO or state regulators make this decision?

16 8. Market revenue crediting treatment none proposed To what extent are potential market revenues considered in determining MTEP T costs? Who bears risk? All market revenues should be credited. Market value could be achieved via must offer requirements at IMM monitored marginal costs (incl. loss of life costs). Joint ventures without need for SATA Owner (TO) to be MP, should be considered. Market services should not be allowed with full cost based recovery. Partial CB recovery with no crediting is preferred SATA owner bears risks. The accounting for market revenues relative to TRR, should be left to the TO submitting the SATA (and state regulator). 16 MISO would not make a determination of market revenues but would evaluate the SATA based upon declared cost for TRR consideration. SATA owner would bear risk for any necessary additional revenues. Please expand. Agree Not consistent with FERC policy? Incorporated in the MISO straw man.

17 Other Issues Issues related to markets, settlement, and reliable operations may be better suited to groups other than PAC to address Who is eligible to propose, build and own SATA? Would competitive solicitation apply? SATA should be competitively bid. Non TO should be able to propose as well. How would MISO SATA treatment interact with state permitting processes? Treatment of facilities connected to lower voltage than MISO Transmission System. How will MISO decide to deploy SATA vs. committing generation to address transmission issues? Frequency expected? We concur and have engaged these folks for future discussions. Modifying eligibility for reliability projects would be a much larger undertaking than current scope. Non TO may propose a SATA as a preferred solution and if selected by MISO non TO could arrange with TO to provide the solution. In same manner as other transmission assets. Eligibility for transmission status in MISO requires connection to transmission voltage levels. Connections to distribution systems would be handled by others as distribution facilities or behind the meter assets. On a priority basis because the SATA is replacing an otherwise always available wire solution. 17

18 Threshold Issues Is queue based interconnection required even for transmission only SATA if so how to align process timelines? Does queue make sense for previously MTEP connected SATA? Modified queue processes? Is crediting of market revenues (all or some) required for SATA, or are these not the same services? Does MISO control for transmission services require market processes (with asset registration) or can this be done via transmission operations protocols? Others?

19 Critical Path Items Comprehensive solution for both transmission and market services may not be possible by MTEP 19 project inclusion May need expertise beyond PAC for markets and operations specific provisions How to control for transmission reliability Treatment of market revenues Impacts on market prices marginal offers Should MISO address SATA as transmission only as a first phase Provides more time for market eligibility and market revenue determinations Still need to resolve mechanisms for control and queue question for T-only projects.

20 Stakeholder Process Schedule Date Milestone Apr 18 PAC Mtg: initial discussion of issues and process Jun 13 PAC Mtg: review and discussion of Issue Paper Jul 15 Stakeholder comments on Issue Paper Due Aug 17 PAC conf. call discussion of comments / revisions Sep 26 PAC meeting discussion of comments and any revisions Oct 17 PAC meeting Continue Issue discussion at PAC Engage / schedule MSC and RSC discussions of relevant issues Nov 14 PAC meeting revised proposal Dec 11 Stakeholder comments on draft BPM / tariff language Jan 2019 PAC Mtg: target BPM / tariff language Jun 2019 PAC Mtg: Final BPM for SATA eligibility