UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION

Transcription

1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Grid Resilience in Regional Transmission Organizations and Independent System Operators ) ) ) ) Docket No. AD COMMENTS OF SOUTHERN CALIFORNIA EDISON COMPANY ON GRID RESILIENCE IN REGIONAL TRANSMISSION ORGANIZATIONS AND INDEPENDENT SYSTEM OPERATORS Southern California Edison Company ( SCE ) respectfully submits these reply comments in response to the Order Terminating Rulemaking Proceeding, Initiating New Proceeding, and Establishing Additional Procedures ( Resilience Order ) filed by the Federal Energy Regulatory Commission ( Commission or FERC ) on January 8, 2018 and the responsive comments of various Regional Transmission Organizations ( RTOs ) and Independent System Operators ( ISOs ) thereto. SCE commends the Commission for engaging in a more in-depth analysis of the need for resilience, with a focus on engaging ISOs and RTOs for their unique perspectives. SCE is an investor-owned utility ( IOU ) within the California Independent System Operator Corporation ( CAISO ). Accordingly, SCE s comments will focus on resilience as it pertains to the CAISO and SCE s own actions to improve resilience within its service territory. SCE sees a role for the Commission in promoting resilience on the Bulk Electric System ( BES ). However, California has unique issues of resilience that are very different from those experienced in other parts of the country. Likewise, other federal agencies, states and local 1

2 governments, distribution utilities, and many other stakeholders are also critical to that process. SCE recommends resilience standards at the Commission that focus on the BES and are flexible enough to accommodate regional differences, while leavings space for states and other actors to contribute to resilience as well. I. COMMENTS A. Any Commission Action Regarding Resiliency Must Allow for Regional Flexibility and Recognize the Role of States, Other Agencies, and Stakeholders SCE agrees with the CAISO that any rule on resilience needs to allow for regional flexibility and take into account unique conditions of each region. 1 California has unique operational challenges and threats to resilience. In SCE s service territory, primary natural threats come from natural disasters such as earthquakes, windstorms, drought, extreme heat waves, and catastrophic wildfires, rather than the extreme cold and hurricanes experienced in the Midwest and on the East Coast. Likewise, California IOUs have different fuel standards and resources, with a coal-free resource mix, a heavy and increasing reliance on renewable and distributed resources, and a diminishing reliance on natural gas. For these reasons, the Commission s approach to resilience needs to be flexible enough to account for significant differences in regional circumstances. SCE echoes CAISO s statement that improved resilience will require the involvement of many entities other than ISO s and RTOs, including state public service commissions, utilities, transmission and generation owners, other federal agencies as well as consumer and 1 Docket No. AD , Comments of the California Independent System Operator Corporation in Response to the Commission s Request for Comments about System Resiliency and the Threats to Resilience, at pp. 5 and 7-8 (March 9, 2018) ( CAISO Comments ); see also, Response Of ISO New England Inc., at p

3 environmental groups. 2 As explained herein, SCE has been actively engaged in improving resilience on its transmission and distribution system. As further described in Section E below, SCE has been able to address some grid resilience needs through coordination with its state regulator, the California Public Utilities Commission ( CPUC ). Because of these regional differences and diverse stakeholders, SCE has concerns with PJM s broad recommendation that the Commission clarify that resilience resides within the Commission s existing authority with respect to the establishment of just and reasonable rates and that the regional planning responsibilities of RTOs... includes an obligation to assess resilience. 3 Resilience issues extend beyond the Commission s sole jurisdictional authority and, in particular, the resilience needs of the distribution grid will overlap with the needs of the Commission-regulated BES and thus will require careful coordination with state regulators. SCE urges the Commission to allow jurisdictional transmission providers to address identified issues on a regional basis and in coordination with state regulators, rather than prescribing one approach for all. PJM also recommends that the Commission require that all RTOs (and jurisdictional transmission providers in non-rto regions) submit a subsequent filing, including any necessary proposed tariff amendments, to implement resilience planning criteria, and develop processes for the identification of vulnerabilities, threat assessment and mitigation, restoration planning, and related process or procedures needed to advance resilience planning. 4 This recommendation is premature. 5 Before tariff changes can be made, the Commission needs a CAISO Comments, at p. 8. Docket No. AD , Comments and Responses Of PJM Interconnection, L.L.C., at p. 5 (March 9, 2018) ( PJM Comments ). PJM Comments, at p. 33. PJM Comments, at pp

4 more complete record, defining exactly what resilience is, differentiating it from reliability, and demonstrating specific gaps in resilience on the BES that cannot be addressed through compliance with North American Electric Reliability Corporation ( NERC ) reliability standards. B. The Definition of Resilience Should Be Focused on the Bulk Electric System, Should Be Distinguished from Reliability, and Should Take Costs into Account The Commission puts forth the following definition of resilience for comment: The ability to withstand and reduce the magnitude and/or duration of disruptive events, which includes the capability to anticipate, absorb, adapt to, and/or rapidly recover from such an event. SCE shares the CAISO s view that this definition of resilience is lacking. 6 First, it uses the broad term disruptive events. Without explanation or examples, the phrase disruptive events is indistinguishable from contingencies, 7 which, per NERC reliability standards, refers to unexpected failures or outages of a BES component. Second, resilience, as currently defined, does not include a need to weigh resilience benefits against costs. Third, it is not clear how resilience differs from reliability. Finally, the definition is broad enough to potentially involve disruptive events across the entire grid, including state jurisdictional distribution facilities. Within the context of the Commission s involvement, the term resilience should focus on the aspects of resilience within the Commission s purview. 6 7 CAISO Comments, at pp See CAISO Comments, at p. 9. 4

5 The first step in addressing resilience must be for the Commission to develop a clear definition of resilience. To that end, SCE generally supports PJM s definition of resilience, but proposes the following modifications (modifications shown are to PJM s version): 8 The ability to withstand or reduce the magnitude and/or duration of disruptive events, such as significant and unanticipated loss of generation or fuel not caused by economic factors, unanticipated failure of system elements, natural disasters, or physical and cybersecurity incidents that impact operation on the Bulk Electric System. This which includes the capability to go beyond what is required by NERC Reliability Standards to identify vulnerabilities and threats, and plan for, prepare for, mitigate, absorb, adapt to, and/or timely recover from such an event in a cost-effective manner. SCE modifies PJM s definition of resilience to include some examples of disruptive events. SCE clarifies that Commission resilience should not be used as a means to boost uneconomic generation. Additionally, SCE adds the phrase on the Bulk Electric System to clarify that the Commission s role in resilience is limited to impacts on the BES. The Commission must ultimately share its role in grid resilience with other regulators (e.g., state jurisdiction over distribution and procurement). SCE clarifies that resilience projects are above or beyond the scope of what is being done to achieve reliability under the NERC standards, but limits the scope of resilience improvements to those that are cost-effective. C. Transmission Plays a Crucial Role in Improving Resilience Investment in transmission infrastructure is critical for maintaining system reliability and resilience. For example, in the January bomb cyclone extreme cold weather event on the East Coast, the only resilience issue was related to a downed transmission line that prevented a 8 PJM proposed the following changes to the Commission s definition of resilience: The ability to withstand and or reduce the magnitude and/or duration of disruptive events, which includes the capability to anticipate, identify vulnerabilities and threats, and plan for, prepare for, mitigate, absorb, adapt to, and/or rapidly timely recover from such an event. 5

6 nuclear generator in New England from providing electricity. 9 Accordingly, the Commission is correct to shift its resilience focus (from an initial focus on 90-day fuel storage and plant retirements) to the transmission system. 10 In light of the importance of transmission to resilience, the Commission s Order 679 (incentives) and Order 1000 (regional planning and competitive transmission processes) should be revised to incorporate resilience benefits. D. SCE Is Working in Coordination with the CAISO to Support BES Resilience RTOs and ISOs are not the only entities supporting resilience. SCE has been a partner in supporting many of the BES resilience efforts referenced in the CAISO s comments. Below are a few examples of SCE s efforts, in conjunction with the CAISO, to promote reliability and resilience on its system. San Onofre Nuclear Generation Station ( SONGS ) Early Retirement. In the immediate aftermath of SONGS early retirement, SCE s efforts focused on maintaining service to emergency loads, especially the spent fuel storage and cooling systems. SCE also upgraded transmission facilities, converted certain retired generators into synchronous condenser operation, and installed special protection devices to shed load in the event of contingencies on the transmission system. SCE held special solicitations for supplies of conventional generation, renewable power, energy efficiency, demand response, and other resources in the Western Los Angeles Basin to help meet local capacity reliability needs. Aliso Canyon Gas Storage Outage. In response to restricted gas supply related to the Aliso Canyon gas leak, SCE installed a large utility-owned energy storage project at Mira Loma substation that was able to charge from the grid during off-peak hours and then inject that power back into the grid during peak demand. Drought. SCE worked with the CAISO to address severe drought conditions that impacted areas of the grid in the San Joaquin Valley by limiting water for SCE s Big Creek Hydroelectric Project and causing corresponding load increases for agricultural pumping. SCE installed special protection devices to shed load in the event of contingencies during the low-hydro drought conditions and is working on a rating 9 10 See Welton, Robert, Pilgrim Nuke Goes Offline as Northeast Buffeted by Winter Storm, Utility Dive, January 5, 2018, available at: AD , 162 FERC 61,012, Order Terminating Rulemaking Proceeding, Initiating New Proceeding, And Establishing Additional Procedures, at p. 15 (P. 25, Question 25 (n)). 6

7 increase project that will enable higher flow of power to serve our load in the absence of generation from Big Creek. Solar Inverter Dropout. On several occasions large amounts of solar photovoltaic ( PV ) generation ceased producing electricity as a response to a phase-to-phase fault during a fire. SCE and the CAISO have been working with relevant industry stakeholders such as inverter manufacturers and PV plant developers to identify the causes and assist in making recommended improvements to inverter behavior during and after a fault. Solar Eclipse. To compensate for the loss of solar PV during the eclipse, SCE operators complemented CAISO efforts to balance the state s energy needs by adding power generated by hydroelectric and natural gas plants so that the eclipse did not electrically impact customers. These represent just a few examples of how SCE has and will continue to make reliability and resilience a priority. In some cases, mitigation falls clearly under existing NERC reliability standards, in other circumstances a collaborative effort among the utility, the CPUC, the CAISO, interested stakeholders including environmental interests, potentially other agencies such as the BLM, and the Commission is the appropriate path forward. Accordingly, the Commission should avoid creating rules that hinder the cooperation among agencies and stakeholders who are in alignment on resilience concerns and solutions. E. SCE Has Addressed Resilience Issues in Its Service Territory in Collaboration with State Regulators SCE has also been able to address some grid resilience needs through coordination with the CPUC. One example is SCE s work in the Santa Barbara/Goleta area, which is exposed to a prolonged 230 kv N-2 (loss of two transmission lines) contingency that could result in extended outages, impacting up to 85,000 local customers. In the CAISO's Transmission Plan, 11 the CAISO acknowledged that the CAISO-approved Moorpark-Pardee project, while addressing Moorpark local capacity needs, did not address the 86 MW Santa Clara local capacity need or 11 CAISO Transmission Plan, at p

8 SCE s resilience objective for the Santa Barbara/Goleta area. SCE s resilience objectives for the Santa Barbara/Goleta area are driven by a concern for this unlikely but potentially catastrophic N-2 event, rather than by a specific NERC or state regulatory requirement. SCE is also continuing efforts to harden its system in high wildfire-risk areas and we and others will be partnering with state agencies on improved standards for climate resilient infrastructure. Likewise, as discussed above, in 2017 SCE s service territory experienced the worst wildfire season on record. SCE is currently working with a broad coalition of stakeholders to prevent and reduce the destruction caused by catastrophic wildfires. This includes revisiting fire prevention and suppression policies and land use management policies. SCE s infrastructure must be further hardened with stronger building codes in high wildfire-risk areas. Utilities and other operators of critical infrastructure must also partner with state agencies on improved standards for climate resilient infrastructure. F. The Commission Should Be Receptive to Efforts to Improve Resilience Proposed and Supported by Regional Entities While SCE does not support the Commission implementing a one-size-fits-all national criteria for resilience, it would be beneficial for the Commission to continue to be open to transmission providers addressing unique resilience needs for their respective areas. As an example, the CAISO addressed unique reliability risks in the San Francisco Peninsula that required the CAISO to go beyond what the NERC Standards require 12 in order to mitigate risks of extreme events. The Commission should be receptive to authorizing rate recovery for resilience projects that are anchored in, but go beyond what is strictly required for compliance 12 CAISO Comments, at p. 24, n

9 with, the existing reliability standards. 13 These requests could continue to be evaluated by RTOs and ISOs on a case-by-case basis. The following types of projects could be warranted to meet resilience needs, to the extent they are not already justified under current state and NERC reliability standards: Hardening the grid to prevent or reduce the impact of catastrophic wildfires and shorten the duration of associated power outages; Expanding transmission line transfer capability or emergency ratings; Installing utility-owned batteries to provide transmission or generation services; Developing communications and upgrades necessary for improved visibility and communication between distribution grid operator and the ISO/RTO; and Building substations, which, in addition to providing transmission benefits, may provide secondary/additional distribution reliability/resilience benefits to end-use customers. At the same time, cost considerations must be an integral part of any resilience discussions. While certain expenditures may be prudent and reasonable for the resilience benefits they provide, resilience at any cost should never be the objective. G. SCE Is Pursuing Greater Visibility and Control Over DERs in Its Role As Distribution System Operator The CAISO also raises the potential resilience caused by distributed energy resources ( DERs ) that function primarily as load modifiers and alter the overall load shape. As the CAISO explains: [T]he CAISO has no visibility into, cannot track, and does not know exact rooftop solar numbers. This can make load forecasting difficult. Without accurate load forecasts, the CAISO and distribution operators have less certainty whether sufficient resources are available and committed to serve load and maintain system stability. This uncertainty can lead to inefficient dispatch and potential reliability concerns PJM Comments, at p. 4. CAISO Comments, at p

10 In fact, Commission staff s recent report entitled Distributed Energy Resources: Technical Considerations for the Bulk Power System articulates reliability benefits from DERs, but also potential risks, such as load masking. Commission staff articulated the need to develop planning processes that capture more detailed models of DERs and allow for modeling of the interface between the transmission and distribution systems to enable information exchange and more accurate calculations of the DER impact on the bulk power system. 15 SCE agrees; this resilience issue is particularly concerning in states like California where DER penetration is relatively high and growing rapidly. SCE intends to work with the CAISO on coordination of the distribution and transmission system operation with respect to DERs as well as the integration of these resources, individually and in aggregate, to promote reliability and resilience across its system. Respectfully submitted, CLAIRE TORCHIA /s/ Claire Torchia By: Claire Torchia Attorney for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: (626) Claire.Torchia@sce.com Dated: May 9, Docket No. AD , Staff Report, Distributed Energy Resources Technical Considerations for the Bulk Power System, at p. 46 (February, 2018). 10

11 CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing COMMENTS OF SOUTHERN CALIFORNIA EDISON COMPANY ON GRID RESILIENCE IN REGIONAL TRANSMISSION ORGANIZATIONS AND INDEPENDENT SYSTEM OPERATORS upon each person designated on the official service list compiled by the Secretary in this proceeding. Dated at Rosemead, California, this 9 th day of May, /s/ Norman Goss Norman Goss, Legal Administrative Assistant SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770