Thread by @LizaBevin

First topic on #FERCNARUCTF2:
Discussion of Specific Categories and Types of Transmission Benefits that Transmission Providers Should Consider for the Purposes of Transmission Planning and Cost Allocation

@RichGlickFERC: we need to take a look at how cost allocation is treated in states and regions. Are benefits being fully considered.

@FERC has significant authority but states have enormous role to play, esp as it collides with siting.

Chair Jason Stanek: state membership continues to discuss cost allocation processes.

Pvs mtg consensus was transmission planning reform needed. Early state input and regional flexibility

Today is an uncomfortable question about how to share costs. Pretty good meal sharing metaphor, and postage stamp rate has already come up.

Who pays is hard. Who benefits is actually much more difficult to quantify.

But we're getting into it.

And how to best measure benefits, like economic development, clean air.

Are we seeking lowest cost projects or lowest delivered cost or energy? These are different approaches

There's a moderator today: Dr. Jonathan Rob (sp?)

I have skipped the hellos and welcomes. But everyone said hello and welcome.

.@wlpFERC opening statement was dense and I could capture it. Very good layout of the challenge ahead. Resilience, GETs, costs, incentives, sustainability

Affordability is a critical backbone

Chair Thad LeVar: most important development in the west is more regional coordination. Ongoing efforts must be continued, states showing respect for each other. Need time and space to continue momentum.

Proper govt role reqd. State or fed government dictates can polarize

FERC known for durable policy making. Trusts this will continue. Transmission dev needs to improve safety, reliability and affordability or shouldn't happen.

Interdependence btwn NG and El infrastructure increasing with increased renewables. Must be considered together

Jonathan RAAB is moderating. my newness is showing.

Goal is interactive, bidirectional conversation, not just question and response

Topic 1. Categories of transmission benefits. What should be considered?

Existing:
Reliability
Economic
Public policy

CR from cali: expand 3 categories for more comprehensive approach. FERC should issue guidance on broadening

Reliability: resilience and hardening,

Economic: Connectivity and resource diversity

PP expanded to include transmission development for renewable portfolios.

Also expand time horizon.

West particularly interested in resilience. But hurricanes impact other regions.

FERC should define resilience and give guidance on how regions should approach.

Inclu. Environmental benefits like emissions reductions.

Connectivity could be an economic or reliability. Multiple categories could fit.

Quantifying a broader range and extended time period is more comprehensive and leads to better planning and investment, lower sys cost

RA from VT: agrees with CR.

Theme: cost containment. Same as @wlpFERC affordability. Internalize the ambitions of containment. Lowest LONG TERM cost, not least cost.

Look at decadal transmission expansion.

Robust body of experience with multi value frameworks in NE. Working with ISONE on transmission 2050 and One Transmission.

40-60 yr life of assets. Benefits follow in those timeframes. Consider at least 20 yr eval, using risk frameworks and probabilistic approaches

Use portfolio basis to get synergies instead of silos.

Need integrated look at projects and categories, not dimensioned in 3 silos. Expanding categories is still a siloed approach, just more/bigger siloes.

Portfolio analysis doesn't mean bad benefit projects get a pass. Still need good CB

@RichGlickFERC agrees broadly.

Siloed approach makes less sense now. Benefits may be different at different times and geographic points of a project.

Extreme weather means we need a transmission build out for resilience. Exisiting Cost allocation approach to reliability doesn't fit

Some regions already successful with portfolio approach.

Cost containment, and beneficiary getting the benefit are both key.

@ChristieFERC benefits have to be specific and verifiable for cost allocation. Generalized benefits can't be allocated according to 7th circuit.

Need to protect consumers from benefits that don't pan out.

15-20 yr planning is like IRP (integrated resource planning). But that's not a project plan.

Single state RTOs , eg CA, are different than multi state. Cost shifting is risk.

MC says these are reiterations of @NARUC comments

MN of MA: RTO does IRP in ISONE. Can we discuss this more? Maybe RTOs should do this. MC seemed to indicate they didn't or shouldnt. Let's clarify

MC: states have IRPs but that's a snapshot, not approval of a specific project and cost. Public has access. State regulators engage public and must defend it.

RTO planning process says "this project should be built" and then state approves or not.

So what is the right size role of RTOs? And if IRPs are snapshot does the money get committed to project immediately under cost allocation before states have a shot?

KD of NC: look at jurisdictional perspective. States responsible for resource adequacy. Are RTOs?

Next question:

Are existing 3 categories being adequately considered? Can they be improved upon separately or together?

.@ClementsFERC how we define benefits? We have learned a lot from experience. MV lines in MISO provided critical transfer in Uri. Keep these principles in mind and customers in mind but plenty of room for improvement.

Transmission investment is increasing year over year. So we should look forward, knowing the costs are occurring, at best ways to protect customers over time.

GBD of PA: Reiterate principle: if you're not benefitting you shouldn't pay for it. Expanding the grid planning approach may change that and defining who pays.

Her region is very diverse. Definitions have been expanded and flexibility of Definitions is there bc each RTO and state approach is different

Multi driver approach could be used more. Let's look at why it's not being used enough. Need a deep dive on this

AF from KS: categories are already broad (agrees with GBD). Perhaps FERC can add clarity and direction for modeling and cost benefit test. CBT must be able to be evaluated in the end tho.

Caution against dozens of benefits for planning justification.

We don't build every project we plan.

Some benefits are held in reserve to ensure public is served, maintain public trust.

We don't need to expand list, we need to consider categories together

Benefits list is benefits to load, but there are other groups served that could be considered and added to cost share.

SPP MISO joint targeted interconnection queue study: 7 projects, $1.7B, planned for more capacity and generation.

Also evaluating congestion and cost to load.

Generators also receiving benefit and should chip in.

More sharing needed. Projects meet multiple needs and everyone pays some.

Dont forget to optimize for resilience, import/export capability.

JTIQ is proof of concept. Continue down this path

@wlpFERC less siloed makes sense. Expanded set of benefits makes sense.

NARUC also suggested to explore how benefits flow to underserved communities. Let's not miss that

Raab notes not quite consensus on siloes broadening vs integrating

@ChristieFERC type of project idea from RTO market monitor: RTOs should make plan with neighbors for minimal pwr capacity transfer.

Reliability and resilience project.

What do people think?

TT from AR: JTIQ resulted from FERC Seams process.

Likes MC idea. Measure what we have now and then come up with threshold. These projects could help a lot. We need transactions to get data to future evaluate benefits and cost allocation

RA: maybe?

Is better planning accomplished through coordination, like in O1000, which this resembles?

Concept of minimum makes him nervous

AF: KCC also proposed this approach. KS experienced Uri, could measure the power flows that kept the lights on with brief controlled outages. Support connecting to neighbors.

KS sensitive bc resources flow out to benefit others, but recognize it can benefit them in emergencies

Shifting to drill deeper into benefits.

Are there specific benefits considered that should be more widely adopted? Are there some that are unique to regions?

TT: anopr presentation from @TheBrattleGroup details this.

Need common ground from those with transmission imperative vs fuzzy benefits concern. Bridge that gap by moving away from postage stamp generalization to rigorous review like Brattle did.

GETs can provide data for rigor.

Rigor should be refuted by rigor if postage stamp is to be considered.

ISONE doesnt have economic projects. Not bc they don't care, just they evaluate differently. Impacts cost allocation.

PJM tilts towards local planning. Fewer fights.

MISO SPP do more regional. More fights.

PJM has an economic project with changing formula. Adds flexibility so allocation flows as benefits flow without sacrificing certainty.

MN: commonalities are there but vocab may be different across regions

FERC should create common terminology and categories of consideration for more clear and transparent understanding.

Then look in 2 parts:

Look at benefits first. Then cost. Costs is where the arguments are. Agree on benefits and ensure they exist first and independently. Then determine if everyone is getting bang for buck.

Environmental policies are valued differently in regions, including carbon. W/o carbon price it's policy not economic.

Understand and acknowledge these different priorities and what it might mean for WTP differences.

Public policies and environmental laws are going to impact benefits and costs considerations.

@RichGlickFERC providing commonality makes sense. We want to respect diversity of regions and leave flexibility but find commonality too.

Elaborating on benefits is a good idea too.

Public Policy issue is difficult. States' PP goals are not consistent w/in a region.

States that benefit from achieving a PP goal should pay some, but others still benefit from resilience and other aspect. Don't leave benefits on the table. That's not "roughly commensurate"

Should look into quantifying benefits to having access to diversity of generation resources in your own region and other regions.

.@wlpFERC some ISOs considered avoided issues in replacement projects (? I missed this statement fully!)

.@ClementsFERC public policy is just one driver. There are many drivers to projects. Lowest cost delivery to customers is often a key, transmission is necessary. Transmission addresses multiple drivers/needs more cheaply.

Build out system in cost effective way

JS of MD: siting is a one at a time approach. Portfolio approach as O1000 recommended is better. Projects that could help don't get over benefit ratio but could yield more in a portfolio. Get more projects rolling

DS of MI: MISO futures development illustrates difficulty of Public Policy drivers. RPS is straightforward, but non-legislative state goals are uncertain, outcomes of state IRPs with no commission approval. Utility or corporate goals. Which of these are valid policy drivers

Lots of drivers here. It's not just state policy, it's coal retirements and how to replace. It's as much economics as public policy. Even defining the driver is tough.

Transition is happening. Many drivers. Important to work through this uncertainty and focus on reliability

RA: RG diversity benefit is a good point. Real value in building greater connections to regions and resources

MC: PJM projects are reliability driven, regionally cost allocated. Most local per GBD. Everyone accepts that.

If VA RPS reqs $1B line, who should pay? Is that the optimal solution?

PJM uses state agreement approach. PP driven projects paid by state driving it. Incremental benefits to others not included

Before state siting happens, FERCs policies award $ to developer. Should we decouple this flow from the regional planning? Then you can look at different projects in plan because the money doesn't flow immediately so cost allocation isn't triggered immediately.

MN: agree with AC. Transmission projects built have suite of benefits. It's not clear cut, it's blurred. They has cascading effects on others' choices in generation and Transmission.

Last question: how should certainty of benefits be addressed? What tools should be developed? Which benefits are easy to consider, and which are complex?

.@wlpFERC as a general matter quantified benefits is balancing act
Hard to quantify is still real, like weather preparedness. What ways can we quantify, and is it even possible? Do we need to put a number on reliability?

.@RichGlickFERC need to quantify for allocation and cost benefit ratio, but don't need to be exact. There are statistical and economic methods for estimation.

JS: quantification is crucial. As much as possible. RTOs say what they quantify, and they differ. Spp doesn't do Reserve margin.

IIJA has funds for studies. Hope national labs can help provide tools to measure these benefits.

MVP projects in MISO passed test, but PJM postage stamp failed. Sweet spot to show customers they see benefits to their costs.

FERC resilience docket found it mattered but regionally different. Can NERC look region by region for quantifiable markers and benefits?

CR: benefits should be quantifiable. Good track record and proven processes exist.

Reliability has NERC criteria. Environmental benefits are more challenging and FERC should give stronger recognition to them.

Support probabilistic approaches where feasible. Able to co sides multiple planning objectives and longer horizons and uncertainty. RTOs can use these tools effectively.

In absence of data FERC could require phase in of probabilistic approach as data is increased.

CAISO looks at siloes iterative to address multi value.

RA: emphasize quantify WHERE POSSIBLE in NARUC comments.

Environment, diversity, health and safety hard to quantify. But there are sensible approaches as noted by Brattle report.

Need to get better over time and not ignore benefits just bc they haven't been quantified

DS: reliability projects treated differently in cost ratio considerations. So quantifying is especially important when expanding definitions.

Not sure we have tools yet for long term analysis

Interregional solutions can only be driven by FERC and they should do something

If we design for worst days every 10 years then the system works differently most of the time, in a quantifiable way, but aren't necessarily the driver.

FERC should lead on how to balance this tension

KD: reliability is main driver, then iterate through the other drivers of economic then public policy.

Planners says PP projects look different from reliability projects.

Portfolios approach may not work for all regions.

Lunch break.

Will start a new thread for afternoon bc this one is too long for my phone.