Dive Brief:
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Citing a procedural flaw, the Federal Energy Regulatory Commission last week reversed an earlier decision approving the Southwest Power Pool’s capacity accreditation plan for wind and solar resources.
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FERC didn’t consider arguments by a coalition of clean energy advocates that SPP’s plan discriminated against wind and solar resources compared to thermal power plants that don’t face the same accreditation process, according to the 3-1 decision issued March 2. Because of the procedural flaw, those arguments were moot, FERC said.
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The Sierra Club, part of the coalition, hopes SPP will refile a “comprehensive” accreditation proposal at FERC that doesn’t discriminate between types of power supplies, Casey Roberts, a senior attorney with the environmental group, said Monday.
Dive Insight:
The dispute centers on the SPP’s November 2021 proposal to measure the effective load carrying capacity, or ELCC, of wind and solar resources in its footprint, which runs from eastern New Mexico to Montana. Grid operators use ELCCs to estimate how much capacity a resource type can deliver when energy is most needed on a system to help make sure they have enough power supplies to maintain reliability.
FERC approved the plan in August over objections from the American Clean Power Association, or ACP, the Advanced Power Alliance, Advanced Energy United, the Sustainable FERC Project, Sierra Club, Natural Resources Defense Council and Solar Energy Industries Association. They said the proposal left key details outside of SPP’s tariff and was discriminatory.
After FERC failed to rule on their rehearing request by a 30-day deadline, the groups asked the U.S. Court of Appeals for the District of Columbia Circuit to review FERC’s decision to approve the plan.
In a ruling that may make the appeals case moot, FERC decided its initial decision was wrong. The commission said it should have required SPP to define “seasonal net peak load” in its tariff.
“We find that this resulted in a lack of adequate notice to interested parties,” FERC said without addressing the discrimination arguments. “In light of the relationship between ELCC and reliability, we encourage SPP to expeditiously submit any future filing it may choose to make.”
FERC Commissioner Allison Clements, who voted against the initial decision, said SPP’s proposed capacity accreditation structure was discriminatory because it would cut the capacity accreditation of wind and solar resources based on historic performance, but failed to account for non-performance of other resource types.
In December’s Winter Storm Elliott, for example, about 45,950 MW, or 23% of the PJM Interconnection’s generating fleet, was unexpectedly offline. Gas-fired capacity accounted for about 70% of the unplanned outages.
In another flaw, SPP’s proposal applied different credits to the wind and solar resources of different “load responsible entities” in a way that would distort market signals to inefficiently spread those resources across the SPP region, according to Clements.
In a dissent, FERC Commissioner James Danly noted the majority declined to address the arguments raised by the clean energy advocates.
Danly “strongly” encouraged SPP to address all of them when it submits a new proposal to avoid more litigation.
“The most straightforward approach to meeting the requirements of the Federal Power Act, and the best one in the long run, would be for grid operators like SPP to develop capacity accreditation methodologies that are consistent across all resource types,” Clements said.
SPP is reviewing FERC’s order and will work with its stakeholders to respond to it, Derek Wingfield, a spokesman for the grid operator, said. “The order has an impact on reliability, so we will proceed with reliability as the top consideration,” he said in an email.
FERC appears reluctant to tackle the issue of equitable ELCCs or other measures for assessing the reliability value of a resource, Roberts said, pointing the the agency’s decision last month to dismiss a complaint by ACP and RENEW Northeast alleging that ISO New England discriminated in favor of thermal power plants.
“So we're going to keep pushing on it at the RTO level and in the courts when we get the opportunity because we think it's really important to building a reliable and cost-effective grid,” Roberts said.
According to Rob Gramlich, Grid Strategies president, FERC should hold a technical conference on capacity accreditation because divergent methods across regional transmission organizations “can’t all be just and reasonable.” Also, conversations with FERC staff on the issue are not allowed due to contested proceedings, he said Friday on Twitter.
Further, a just and reasonable approach to capacity accreditation needs to account for common outage issues affecting multiple generation types, Gabe Tabak, ACP senior counsel, said on Twitter. Drought, for example, can simultaneously reduce cooling water availability for gas, coal and nuclear plants while lowering hydroelectric output, he said.
