Presentation on theme: "Iowa Industrial Energy Group ELECTRIC SUPPLY AND RELIABILITY ISSUES October 14, 2014 Don Stursma Manager, Safety & Engineering Iowa Utilities Board."— Presentation transcript:
Iowa Industrial Energy Group ELECTRIC SUPPLY AND RELIABILITY ISSUES October 14, 2014 Don Stursma Manager, Safety & Engineering Iowa Utilities Board
Reliability is: Physical Infrastructure - IUB - NERC/FERC Supply - Generation and Fuel - Midcontinent Independent System Operator (MISO)
IUB Franchise of Transmission Lines - Review route and design Generating Certificates - Review new projects for need and benefits Electric Safety Inspection Program -2.5 full time IUB positions -Inspection and Maintenance Plans required -Electrical facilities inspected
Safety Standards NESC requirements Conductor Clearance (Above ground, From buildings, From other wires) Grounding Support Structures Enclosures Additional Board Requirements (Examples) Support cable (guy) markers – must be highly visible color. Grain bin clearance ( Information campaign, can deny service clearance inadequate) Warning signs on above ground equipment Safety of workers in fenced substations 4
North American Electric Reliability Corporation (NERC) NERC’s mission is to ensure the reliability of the North American Bulk Power System (BPS) Reliability - A reliable bulk power system is able to meet the electricity needs of end-use customers even when unexpected equipment failures or other factors reduce the amount of available electricity Bulk Power System – NERC defines the bulk power system as electric power generation facilities combined with the high-voltage transmission system
NERC Responsibilities Develop reliability standards with stakeholder input – Annual compliance report, regional audit report, vegetation management report Monitor bulk power system status in real time Assess bulk power reliability and adequacy – long-term 10 year assessment report, summer and winter assessment reports Analyze system events (e.g., multi-state outages) – issue lessons learned Coordinate physical cyber security needs Train and certify system operators Enforce reliability standard compliance – assessing penalties
FERC, NERC Initiate Review of Electric Industry Recovery and Restoration Plans News Release: September 30, 2014 The Federal Energy Regulatory Commission (FERC), working with the North American Electric Reliability Corporation (NERC) and the Regional Entities, has initiated a joint staff review to assess and verify the electric utility industry’s bulk power system recovery and restoration planning, and to test the efficacy of the relevant Reliability Standards in achieving and maintaining reliability. Staff selected a sample of registered entities with bulk power system significance to participate in the voluntary review. Effective system recovery and restoration plans are essential to a quick and orderly recovery from reliability events caused by weather, bulk power system disturbances or possible cyber/physical attacks. The objective of the review is to support registered entities in ensuring reliable restoration of the bulk power system following a reliability event. The review is not a compliance and enforcement initiative.
But There is Only So Much You Can Do to Prevent Outages
Board Permits (Contd.) Generating Certificates Iowa Code Chapter 476A requires that Certificate of Public Convenience, Use, and Necessity (CPCN) may be required for Any plant (or combination of plants at a single site) with total generating capacity of 25 MW or more (GCU Dockets) Waivers can be issued for any plant if the Board finds that the public interest would not be adversely affected 12
Generating Certificate Process (Contd.) Main decision criteria: Whether the proposed facility will promote adequate and reliable electric service Whether the proposed facility will be consistent with environmental policies, considering The available technologies and The economics of any alternatives 13
Advance Ratemaking – Decision Criteria Board has to make two findings before utility can receive advance ratemaking principles: - Utility has in effect a Board approved energy efficiency plan. - Utility must demonstrate that the facility is “reasonable” as compared to other resources. 14
Creation of Midcontinent Independent System Operator (MISO) & Organization of MISO States (OMS) FERC approved MISO as an RTO in 2001 (non-profit) Had the effect of accelerating regional transmission planning efforts MISO has an elaborate stakeholder process Regulatory Sector is one of the nine sectors which Advise the MISO Board Midwest state regulators through OMS participate in MISO processes -- provide leader ship and guidance Regulators are now a part of interconnection-wide planning process OMS also represents states’ interests before FERC 15
Iowa Electric Energy Happenings Wind Distributed Generation EPA 111(d) Rule Development OMS/MISO Resource Adequacy Survey Multi-Value Projects Other proposed transmission and pipeline projects
Iowa Action on Renewable Energy IOWA ACTED EARLY AND OFTEN TO ADOPT POLICIES TO ENCOURAGE RENEWABLE ENERGY –Alternate Energy Production Law (1983, as amended) (Iowa Code § 476.41 et. seq.) Requires IOUs to interconnect with and purchase from AEPs at avoided cost Includes net metering option (500 kW individual capacity limit) Includes an RPS of sorts (105 MW combined obligation) –Advanced Ratemaking Principles (2001, as amended) (Iowa Code § 476.53) Applies to new/significantly altered 200+ MW baseload generating facilities and utility-owned or purchased renewable energy generation Approval in advance of the ratemaking principles that will apply when generation goes into base rates E.g., jurisdictional allocation, accounting for environmental credits/wholesale revenues, depreciation, ROE, cancellation cost recovery
Iowa Action on Renewable Energy –Renewable Electric Generation Law (2011) (Iowa Code § 476.53A) Specifically states that the State’s intent is to encourage development of renewable electric power generation, to encourage the use of renewable power to meet local electric needs and to develop transmission capacity to export Iowa- generated wind power –IUB Rules for Interconnection of Distributed Generation (2010) (199 Iowa Admin. Code Ch. 45, as amended) Some expedited review possible Differing levels of review, depending upon size of the facility
Iowa Action on Renewable Energy Other Laws Designed to Encourage Development of Alternate/Renewable Energy Iowa Code § 476.47Customer Contributions to AEP Development Iowa Code § 476AGeneration Siting Exemption for Small (< 25MW) Facilities Iowa Code § 476.48Small Wind Innovation Zones Iowa Code § 476.46Alternate Energy Revolving Loan Program Iowa Code Ch. 564ASolar Access Easements Iowa Code § 427.1(29)Property Tax Exemption - Methane Gas Conversion Property Iowa Code § 427B.26Special Property Tax Valuation and Assessment - Wind Energy Conversion Property Iowa Code § 441.21(8)Property Tax Exemption - Renewable Energy Systems Iowa Code §§ 437A.6, 437A.3(27) Replacement Tax Exemptions - Methane Gas Conversion Property, Large Hydro Facilities, Self-Generators and Wind Energy Conversion Property Iowa Code §§ 423.3(54), (90)Sales Tax Exemptions - Wind Energy Conversion Property & Solar Energy Equipment Iowa Code §§ 476B, 476CWind Energy Tax Credit; Renewable Energy Tax Credit
The Results - Iowa’s Energy Resource Mix Source: 2012 EIA Data
The Results – Wind Energy Iowa is #1 in the nation for the percentage of electricity generated by wind energy at 27.4% Iowa ranks 2 nd in total wind generation Installed wind capacity: 5,177 megawatts (MW). Iowa ranks 3rd for total MW installed Number of wind turbines: 3,216 turbines. Iowa ranks 3rd for number of utility-scale wind turbines Wind projects online: 101 wind projects Wind capacity under construction: over 1,055 MW Source: AWEA State Energy Statistics – Iowa, http://www.awea.org/Resources/state.aspx?ItemNumber=5224http://www.awea.org/Resources/state.aspx?ItemNumber=5224
Top 10 Wind Power States State Megawatts/Hour Percent of total output Texas - 35,937 ------------ 8.3 percent Iowa - 15,571 ------------27.4 percent California - 13,230 -------------6.6 percent Oklahoma - 10,881 -----------14.8 percent Illinois - 9,607 -------------4.7 percent Kansas - 9,430 ------------19.4 percent Minnesota - 8,065 -----------15.7 percent Oregon - 7,452 ------------12.4 percent Colorado - 7,382 -----------13.8 percent Washington - 7,008 -------------6.2 percent Currently the U.S. overall gets three percent of its energy from wind power.. Courtesy of the American Wind Energy Association, All statistics are for 2013 Iowa has 3,216 wind turbines in service
The Results – Other Renewables Installed Renewable Energy Capacity (2012) Solar PV1.2 MW Hydro131.3 MW Biomass/Waste14.6 MW Ethanol3,848 mGy Biodiesel305 mGy Source: American Council On Renewable Energy (ACORE), Renewable Energy in the 50 States: Midwestern Region (Updated October 2013)
Renewable Fuels Mandates Iowa is 105 MW mandatory 1983, Governor 1000 MW voluntary 2001 (the 3000 shown below is an error), 5177 MW installed 2013
DG Issues Many small providers wanting to sell to the system– solar/wind/biomass Is on way to being significant contributor Interconnection issues – safety and synchronization Variable load/delivery Is net metering causing improper cross- subsidization (Are utilities able to recover cost of facilities involved)?
NOI on Distributed Generation Docket No. NOI-2014-0001 –Grew out of EEP proceedings – debate whether utilities should have incentive-based renewable energy programs. –Initiated January 7, 2014, in recognition of the response to increasing interest in Solar PV, CHP, biomass, and other forms of distributed generation. –Purpose to consider the technical and policy issues associated with potential widespread use of DG. Goal to determine extent of interest, existence of opportunities and barriers, existence and extent of consumer protection, safety and/or interconnection issues, and IUB’s role in dealing with any such issues. –Working definition: Generation fueled by renewable or fossil-fuel sources built in order to serve load located at or near the generator and capable of delivering power to a utility’s distribution system. –So far, two rounds of comments on questions presented by the IUB.
Eagle Point Solar Decision Eagle Point Solar installed PV solar panels on a Dubuque city-owned building. Eagle Point Solar would finance, install, own, operate, and maintain the solar system. PV generated energy will be sold to Dubuque, on a cents-per- kWh basis through a third party agreement. The solar energy remained “behind” Interstate Power and Light’s (IPL) meters. The building would continue to remain connected to the electric grid and purchase some energy from IPL to satisfy some of the electric energy needs of the building. Alliant claimed the agreement violated Alliant’s exclusive service territory rights. The Board agreed with Alliant and issued an order in 2012.
Eagle Point Solar Decision (Contd.) A Polk County District Court Judge reversed the ruling a year later. On July 11, 2014 the Iowa Supreme Court held that the “behind the meter” direct sale of electricity generated from solar arrays and using a power purchase agreement that sold the electricity on a cents-per-kWh basis did not automatically render the seller a “public utility.” SZ Enterprises, LLC, d/b/a Eagle Point Solar v. Iowa Utilities Board, ___ N.W.2d. ____ (July 11, 2014)
EPA’s Proposed 111(d) Regulations For Existing Power Plants Iowa Department of Natural Resources is responsible for Iowa’s environmental regulation. Board has authority over some environmental activities by utilities. For example, Utilities’ Emission Plan and Budget (Iowa Code Section 476.6(21)). Proposed 111(d) regulations affecting existing power plants are different - These rules could have significant adverse effects on the reliability and cost of providing electric service. Also, the EPA specifically invited public utility commissions to engage with the EPA in the development of the proposed rules.
EPA’s Proposed 111(d) Regulations Board Actions to Date Iowa Utilities Board sent comments to EPA in December 2013 on how the regulations should be drafted. IUB is interested in that the final 111(d) rules are written and implemented such that they do not: create disruptions in the provision of electric service and; create significant, unnecessary increases in the cost of electric service IUB is working jointly on comments with IDNR and Iowa Economic Development Authority (IEDA). IUB is an active participant in IDNR’s 111(d) collaborative process, and will be actively involved in the development of Iowa’s compliance plan after the rules are final.
MISO/OMS Resource Adequacy Survey MISO and OMS initiated a resource adequacy survey in summer of 2013. Surveyed Load Serving Entities (LSEs) to gain better understanding of Long-Term Resource Plans. Survey: Was a first-of-its-kind collaborative effort for MISO, LSEs and OMS Sought information about all existing and future resources Updated demand forecasts including projected Demand Side Management Programs Asked respondents to identify confidence factors for a better understanding of certainty on LSE side Sought longer-term information (10 years out)
Survey Results June 4, 2014 survey update shows: For MISO Resource Zone 3 (Iowa and parts of IL and MN) 2016 resources equal 10.1 GW 2016 resource requirements equal 10.6 GW Projected shortfall equals 0.5 GW For MISO North and Central Region 2016 resources equal 110.1 GW 2016 resource requirements equal 112.4 GW Projected shortfall equals 2.3 GW A shortfall figure means increased probability of a loss of load event A 2.3 GW shortfall means approximately a.2 day/year probability of a loss of load event, which is higher than.1 day/year industry standard (A projected shortfall means MISO would have to import power – not loss of service)
Survey Future - MISO Proposal MISO proposes: continuing the survey in 2014-15 (and potentially beyond). matching the survey process with the work MISO performs as part of the Long Term Reliability Assessment (LTRA). OMS will vote in October whether it continues to serve as a survey partner
Transmission - Multi-Value Projects (MVP Projects) Main purpose is to integrate growing wind power into the upper Midwest transmission system Roughly 500 miles of new 345,000 volt electric transmission circuit in Iowa alone 17 projects in all, four in Iowa requiring IUB approval in Iowa In Iowa as much as possible will be built on existing transmission rights-of-way – often double-circuited with existing 161 kV Will reinforce electric transmission capacity and reliability overall by looping the system as well as integrating wind power
Transmission - Multi-Value Projects MVP 3 - MEC/ITC joint ownership MEC will construct approx. 120 miles of 345 kV line, rebuild existing 161 kV, build two new substation modify one substation – in service date is end 2016. ITC will construct 145 miles in Iowa and 75 miles in MN. Board issued franchise for MEC’s portion of MVP 3 on August 19 for O’Brien, Clay, Palo Alto, Kossuth, Humboldt and Webster counties (Docket Nos. E-22106, E-22103, E-22107, E-22105, E-22104 E-22108) ITC has filed franchise petitions for projects in Kossuth, Winnebago, ands Worth counties (E-22116, E-22140, E-22142, and E-22141). Board issued franchise for a section of ITC’s share (11.43 miles) on May 1 in Cerro Gordo County (Docket No. E-21894.2))
Transmission - Multi-Value Projects (Cont.) MVP 4 -- MEC/ITC joint ownership Consists of several sections (new additions, upgrades, rebuilds) For each section, an electric franchise petition or an amendment of a franchise petition has been filed with the Board. Board issued franchise for MEC’s section on June 22 approx. 22 miles in Black Hawk County (Docket No. E-22099) Board issued franchise for ITC’s section on June 17 9.5 miles addition in Buchanan County (Docket No. E-22011.1) 2.5 miles addition in Black Hawk County (Docket No. E-22034.1) Board issued franchise for ITC’s section on May 1 11.5 miles addition and rebuild in Cerro Gordo County (Docket No. E-22034.1) Three MEC petitions and two related petitions by ITC for sections of MVP 4 are under review by the Board. Hearing is scheduled for December 9 in Franklin county. (Docket Nos. E-22097, E-22098, E-22099.1, E-22153, and E-22152)
Transmission - Multi-Value Projects (Cont.) MVP 7 – Ottumwa, IA to Adair, MO MEC has not filed with the Board MVP 5 – Dubuque County into Wisconsin ITCM and ATC – no Iowa filings yet
Other Projects Rock Island Clean Line 500 mile, ±600kV HVDC line A Direct Current line to minimize line loss Designed to transport wind power from NW Iowa and adjoining states. 375 miles in Iowa, 125 miles in Illinois Proposed to deliver 3500 MW from O’Brien County, Iowa, to Grundy County, Illinois. Estimated cost: $2B $7B in new wind development possible Facing heavy opposition in Iowa and Illinois IUB has received 1,148 objections at last count
Rock Island Clean Line Route in Iowa Rock Island Clean Line 500 mile, ±600kV HVDC line Proposed to deliver 3500 MW from O’Brien County, Iowa, to Grundy County, Illinois. Estimated cost: $2B 500 mile, ±600kV HVDC line Proposed to deliver 3500 MW from O’Brien County, Iowa, to Grundy County, Illinois. Estimated cost: $2B – plus $7B in new wind development
Other Projects Energy Transfer Partners Pipeline Project (Bakken Pipeline a.k.a Dakota Access Pipeline) Energy Transfer is name of sponsor company 1,100 mile crude oil pipeline (343 mi. in Iowa) Estimated cost $3.7 billion Bakken ND area to Patoka, IL through ND, SD, IA, IL 30 inch pipe, 320,000 barrels/day initially In service in 2016 (?) IUB has routing/siting and eminent domain authority IUB does not have safety authority Expected to be controversial An alleged project benefit is reducing railroad oil shipments - making more rail capacity available for coal and grain.
Where will your electricity come from? WIND POWER Available, supply growing, cost competitive, green, intermittent/variable, what happens if subsidies end DISTRIBUTED GENERATION Growing more common, many players, variable, subsidization/safety issues NATURAL GAS Affordable to build and fuel, flexible output, greener than coal, peak gas supply issues COAL Economical base load, not green/unpopular, being regulated into minority status, coal transportation issues NUCLEAR Economical base load, green but unpopular/not trusted, costly to operate and build, having trouble in competitive markets, heavy regulation HYDROPOWER Economical, green, reliable, flexible, limited supply, limited growth opportunity SOLAR/BIOMASS/ETC Small but growing, green, popular, DG
The Results - Iowa’s Energy Resource Mix Source: 2012 EIA Data