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- Christie: FERC Transmission Framework “Out of Whack” // ERCOT Eyes More Demand Response
Christie: FERC Transmission Framework “Out of Whack” // ERCOT Eyes More Demand Response
Welcome to Grid Brief! Here’s what we’re looking at today: FERC Commissioner Mark Christie called the commission’s transmission incentives “way out of whack,” Texas looks to add more demand response in 2024, and more.
Christie: FERC Transmission Framework “Out of Whack”
Commissioner Mark Christie
During the Federal Energy Regulatory Commission’s final monthly meeting of the year, Commissioner Mark Christie had choice words for the agency’s incentives regarding transmission lines.
“Christie highlighted his concerns in two orders issued Tuesday: one approving a settlement agreement related to the never-built Potomac-Appalachian Transmission Highline, or PATH, project for which consumers paid about $250 million and the other allowing Exelon utilities to recover prudent costs related to $785 million in transmission projects if they are canceled before they are fully built,” reports Utility Dive.
Christie described the incentives propagated by FERC as “way out of whack” and harmful to consumers because the incentives are too generous to developers and because they presume prudence when developers file for cost recovery.
Separately, Christie expressed his frustration that FERC granted Exelon a $785 million abatement incentive for transmission upgrades that PJM believes are necessary to maintain reliability after Talen Energy’s Brandon Shores coal plant shuts off in Maryland in 2025. For more about the Brandon Shores plant and the panic its retirement has caused in PJM, upgrade to Grid Brief Premium to read our Deep Dive on it.
Utility Dive reports that Christie believes FERC needs to revise its rule making around transmission incentives.
ERCOT Eyes More Demand Response
Photo by Pete Alexopoulos on Unsplash
Officials from the Electric Reliability Council of Texas assured the public that it is ready to handle whatever winter throws its way this year.
“We are in as good a position as we have ever been to deal with the challenges that a winter season can bring,” ERCOT’s CEO Pablo Vegas said on Tuesday.
“ERCOT’s winter preparedness efforts include inspection of generation and transmission facilities for compliance with new weatherization standards,” reports Utility Dive. “The grid operator has completed over 1,500 inspections in the last two years and has 500 more planned for this winter, Vegas said.”
Vegas also indicated that demand response will likely become a larger part of ERCOT’s toolkit.
“I think that there’s an opportunity for us to work with the market and with the Public Utility Commission to work on defining those kinds of products that could be utilized throughout the year, not just during an extreme winter season,” Vegas said. “And so that’s something that we’re going to commit to do in 2024, to work with the Public Utility Commission and with the market to see what the potential is for demand response products.”
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Conversation Starters
FERC OKs PJM Winter Storm Elliott settlement. “The Federal Energy Regulatory Commission (FERC) on Tuesday approved a $1.2 billion settlement between PJM Interconnection and more than 80 parties that resolved complaints stemming from a massive outage during a 2022 winter storm. More than 15 complaints were brought against PJM for non-performance charges following Winter Storm Elliott, which brought sub-freezing temperatures to two-thirds of the U.S.,” reports Reuters. “Power plant owners that failed to deliver electricity during the storm were slapped with penalties under PJM's capacity performance framework. The original settlement proposed $1.8 billion in non-performance charges against power suppliers including Energy Harbor and Calpine.”
Coal is not dead yet. “The amount of bank financing going to mining coal, the dirtiest fossil fuel of them all, remains at surprisingly high levels. Most of it is coming from China,” reports Bloomberg. “Banks arranged about $120 billion of financing for coal projects last year, equal to about 13% of all the financing arranged for fossil-fuel projects, according to BNEF. That ratio needs to fall to just 1% at most by the 2040s to limit the impact of climate change, BNEF’s research shows.”
Houthi attacks in the Red Sea spike Brent. “Brent crude oil broke past the $80 resistance level on Wednesday, as tensions in the Middle East continued to rise and as Houthi attacks on Red Sea shipping showed no signs of easing, prompting concerns of price-impacting disruptions to the energy trade,” reports Oilprice.com. “At 10:38 a.m. ET on Wednesday, Brent was trading at $80.20, up 1.22% on the day, while West Texas Intermediate (WTI) was trading at $74.96, up 1.38% on the day. On Tuesday, Brent grabbed another 1% price hike when companies began to divert vessels away from the Red Sea, while the U.S. announced the deployment of a task force to guard Red Sea shipping lanes.”
Crom’s Blessing
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