AD15-12-000 S lide 1 Transmission Metrics: Initial Results I tem No. A-4 March 1 7 , 2 0 1 6 Good morning Mr. Chairman and Commissioners. Office of Energy Policy and Innovation st aff has att empted to develop obj ect ive and st andardized measures of various charact erist ics of t he electric syst em and it s performance to help assess t he effect iveness of t he Commission’ s policies regarding t ransmission invest ment and t o inform potential policy revisions going forward. As t he team described in it s present ation at the April 2015 open meet ing, st aff considered a range of potentially relevant metrics in t hree broad categories: (1) met rics designed t o evaluate key goals of Order No. 1000; (2) met rics designed t o indicate whet her appropriat e levels of t ransmission infrast ruct ure exist in a part icular region; and (3) metrics designed to permit analysis of t he impact of Commission policy changes by comparing key values before and after changes t ake place. In t he st aff report being released t oday, st aff describes our met hodology for calculat ing each of the t hree categories of met rics and t he results of t hat analysis. We will now provide a brief overview of t he report , which will be available t hrough t he www.ferc.gov websit e. To begin, my colleague Ben Fost er will discuss t he first met ric, whose development he led, which is int ended t o help assess a key goal of Order No. 1000 – nonincumbent participat ion in regional t ransmission planning processes. Page 1 of 22
S lide 2 Key Goal Order No. 1000 – Nonincumbent Developer Reform Purpose: measure nonincumbent participation at the bid/proposal stage of the Order No. 1000 regional transmission planning process Analysis focused on PJM and CAISO because bid/proposal data from these two regions was available at the time of analysis This met ric measures t he percent age of bids or proposals for new t ransmission proj ect s in t he Order No. 1000 regional t ransmission planning processes t hat nonincumbent transmission developers submit ted. At t he t ime t hat st aff was preparing t he report , relevant dat a was only available for CAIS O and PJM. As explained in more detail in t he report, st aff gat hered dat a from public document s posted on CAIS O’ s and PJM’ s websit es and elsewhere. S t aff applied Order No. 1000’ s definition of nonincumbent transmission developer, which turns on whet her a t ransmission developer has a ret ail dist ribut ion service t errit ory or footprint and, if so, whet her t he proj ect is located there. To det ermine t he incumbency st atus of developers submitting proposals, which was generally not available on the regions’ websit es, st aff compared t he zone in which each proposed proj ect would be built wit h t he developer’ s ret ail dist ribution service t erritory or foot print , where applicable. Page 2 of 22
S lide 3 Competitive Proposals by I ncumbents vs. Nonincumbents 80% Percent of annual proposals in CAI SO and PJM ( 2 0 1 3 -2 0 1 5 ) 78% 70% 75% 67% 60% 65% 63% 62% 50% 40% 37% 38% 30% 35% 33% 20% 25% 22% 10% n=9 n=43 n=20 n=4 n=304 n=105 0% 2013 2014 2015 2013 2014 2015 CAISO PJa Incumbent bonincumbent Incumbent bonincumbent Sources: CAISO 2012-13 and 2013-14 transmission plans; PJa Transmission Expansion Advisory Committee and RTEP Proposal websites S lide 3 summarizes t he result s of st aff’ s analysis of t he bids and proposals t hat developers submitt ed from 2013 t o t he period in 2015 when t his report was being prepared. The figure shows t he percent age of proposals in each RTO t hat came from incumbent and nonincumbent t ransmission developers during t he st udied period, wit h t he associat ed number of proposals received in each region and year. Overall, of t he 485 proposals submit ted in t he CAIS O and PJM regions, 53 percent were from incumbent s and 47 percent from nonincumbent s. On a regional basis, the percent age of proposals from nonincumbent s account ed for t wo-t hirds t o three-quart ers of proposals in each of the three years in CAIS O. In PJM, t he percent age of proposals from nonincumbent s account ed for more t han 60 percent of all proposals in 2013 and t he st udied portion of 2015, but less t han 40 percent of proposals in 2014, t he year in which PJM received t he maj orit y of it s proposals. Page 3 of 22
S lide 4 Metrics to Help Assess Need for Transmission I nvestment Assumption: Persistent and costly congestion may indicate need for additional transmission capacity Different approaches for bilateral markets and RTO/ISO markets • Bilateral Markets – based on number of interchange-curtailing Transmission Loading Relief (TLR) events • RTO/ISO markets – based on Locational Marginal Price data Thank you, Ben. Next we will t urn t o met rics designed to help indicate whether appropriate levels of t ransmission infrast ructure exist in a region. Here, st aff relied on the assumption t hat persist ent cost ly congestion in an area may indicat e insufficient t ransmission invest ment because it may suggest t hat there is not enough available transfer capabilit y on t he transmission syst em t o support the delivery of less cost ly energy. Ideally, persist ent cost ly congest ion would be ident ified direct ly from hist orical energy price informat ion by looking for significant ly large price different ials t hat persist for ext ended periods of time. RTO/ ISO market s generat e pricing data direct ly applicable t o t his purpose, and as such, staff used this data t o calculat e the met ric for RTO/ IS O market regions. For non-RTO/ IS O market regions, st aff used a more indirect metric based on hist orical NERC Transmission Loading Relief (TLR) dat a. Page 4 of 22
S lide 5 Load-Weighted Curtailment Frequency Metric For non-RTO/ IS O market regions, my colleague Abdur Masood led st aff’ s invest igat ion of whet her NERC TLR procedures used t o manage congestion can serve as an indirect measure of t he level of t ransmission infrast ructure in t he region. S pecifically, all ot her t hings being equal, more TLR event s might indicat e a need for more t ransmission infrast ruct ure and fewer event s might indicat e less need for addit ional t ransmission infrast ruct ure. In practice, st aff assumed t hat such a TLR-based met ric would need t o be used in conj unct ion wit h publicly available sources of pricing data, such as price indices or ret ail rate informat ion, in order t o incorporat e t he concept of cost ly congestion. In ot her words, even if a region experiences large numbers of TLR event s, in the absence of any significant and persist ent price differentials in t hat region, t he TLR event s might not indicat e a need for addit ional t ransmission infrast ruct ure. At t his point , I need t o not e t hat instead of TLRs, t he West ern Int erconnect ion manages unscheduled flows using a coordinat ed combinat ion of cont rollable devices, such as phase shifting t ransformers, and schedule curtailment s t hat st aff believes are similar t o TLRs but are not recorded in the NERC TLR logs. Thus, st aff did not calculat e this met ric for t he West ern Interconnect ion. Page 5 of 22
For t he East ern Interconnection, TLR dat a is publicly available from NERC, but reliable price information for non-RTO/ IS O market areas is less readily available for t he t ypes of price indices or ret ail rat e data t hat st aff initially hoped t o use. However, in t he future st aff int ends t o explore whet her it could use FERC Elect ric Quart erly Report (EQR) wholesale pricing dat a t o calculat e t his met ric for non- RTO/ IS O market s. All j urisdictional and some non-j urisdictional wholesale sellers of elect ricit y submit EQR pricing dat a t o FERC, and st aff believes t hat t he approximat e location of associat ed t ransactions can be gleaned from t he data. Accordingly, EQR data may provide a comprehensive view of pricing t rends in bilateral market regions comparable t o what RTO/ IS O pricing dat a provides for organized market s. For t his report , t he basis of t his met ric is the number of interchange-curt ailing TLRs t hat t he t ransmission operat ors of the region report ed t o NERC. In order t o provide a basis for comparing bet ween regions of different sizes, st aff normalized t his metric based on t he retail load associat ed wit h the region in question. Page 6 of 22
Recommend
More recommend
