September 1, 2018
By Steve Mitnick
PUF's Steve Mitnick: Why is this FERC proceeding on reliability and renewable integration considered important to the Large Public Power Council?
Roy Jones, CEO, ElectriCities: We looked at the creation of the technical conference panels and the very topics that FERC was proposing. We felt like it was important to get the Large Public Power Council message out and get that in front of FERC.
I would characterize our message as one where we recognize that our generation mix is changing. It's changing significantly in the United States.
We're moving away from large centralized generation. And while essential reliability attributes were inherent with the traditional generation mix, we're starting to see a lot more renewables coming onto the grid.
We felt like it was important to be able to have a conversation in front of FERC and talk about those essential reliability services. And make sure that as we keep our eye on low-cost reliable power for our community, that we recognize how critical those essential reliability services are.
From the Large Public Power Council perspective, in public power we've got lots of small members. There's over twenty-two hundred public-power communities across the United States that are locally-owned and locally-controlled.
Our largest member is Los Angeles, the Los Angeles Department of Water and Power, or LADWP. At ElectriCities, I may have one of the smallest members. It's Bostic, North Carolina. They've got two hundred citizens.
As you can see, we've got a wide range of expertise about what's important to public power. As we talk about distributive-energy resources and how those resources are now more and more connecting to the local-electric distribution system, it's creating bi-directional power flow challenges.
Many of these small utilities don't have the expertise to be able to manage distributed-energy resources connecting to their electric distribution system. We want to make sure that we talk to FERC about that. And make them aware of the fact that we need to make sure that, while there might be the opportunity to aggregate distributive-energy resources, and to offer them into a market, we still feel like it's important to keep that choice, control, and decision-making at the local level.
We also want to make sure that FERC understands, as we are starting to see more and more of this open system, that everyone remain diligent as to cybersecurity. We want to make sure that, as we are connecting devices to the grid, whether it's at the transmission level or the distribution level, that we keep our eye on cybersecurity.
I say that cybersecurity is a journey without a destination. We've got to constantly be sharing information, best practices, and lessons learned.
PUF: How do these issues hit home at your company?
Roy Jones: At ElectriCities, we've got over seventy members in Virginia, North Carolina, and South Carolina.
It goes back to our guiding principles. First and foremost is, we're not-for-profit. All our public-power communities are locally-owned. Making sure that we keep our eye on low-cost reliable power is paramount to everything we do.
Fuel diversity plays a significant role in ensuring that we do have reliable power.
The geographic diversity of the Large Public Power Council, with twenty-five members, is noteworthy. You've got in the Northeast and Northwest, a lot of hydro-generation. You've got in California and Arizona, a lot of renewables. In the Southeast, where I'm from and the Midwest, coal and nuclear play a big role in our portfolio mix.
As we look at that geographic diversity and look at the resource mix that's located within those geographic areas, we recognize that we don't want to be in the business of picking winners and losers when it comes to a fuel source. Nor do we think FERC or NERC should be picking winners or losers when it comes to fuel sources.
We think that they need to identify and define the reliability attributes that are needed. And allow those generators, whatever fuel source they are, that can meet those attributes, to be able to offer those.
I think that California's amount of installed renewables is going to be about nineteen gigawatts in 2020. We hear a lot of issues about the duck curve in California.
Well, North Carolina's had a lot of success in solar being installed. It's predominantly in the east part of North Carolina. We've had about seven-hundred megawatts, out of twenty-seven hundred megawatts in eastern North Carolina connected to the distribution system. I like to tell folks that the duck that was in California has now flown to North Carolina.
Duke Energy Progress is about a fifteen thousand megawatt peak Balancing Area. This past winter, over two hours in the evening, we had a twelve hundred megawatt ramp. About six hundred megawatts on average for two hours.
If you look at the curve, you can see the solar production was coming off. That was putting a significant burden on the generation system to provide much needed ramping capabilities.
PUF: Do you find, as you're participating in the debate, that your company shares a lot of points in common with the other kinds of utilities?
Roy Jones: The common thread is making sure that you have a reliable power supply. No one wants to sit in front of a regulator and explain why they had operational issues and then had to curtail customers. That's just not a conversation that you want to have.
With the amount of distributed-energy resources that are now connecting to the grid, a lot of the balancing authorities don't have visibility into those distributive-energy resources. Are they online, are they offline? We saw with the Blue Cut fire issue in California, there were some transit stability issues, and some cessation issues.
The industry learned from that, as did NERC, and the solution was to go back and work with the vendors, to make sure that the appropriate inverter settings are set, so that they can provide some of those, once again, essential reliability services.
A lot of times there's not a single answer. Often, it's a multiple approach to solving problems. It takes both federal and state regulators, us as utilities, NERC, market solutions, and as we saw with the Blue Cut fire, it takes the manufacturer.
Collectively, we all must work together to make sure that as more and more distributive energy resources are connected to our grid, that we have the appropriate tools to be able to manage those resources and know in real time what they're doing. Because it does have an impact on the transmission system.
PUF: Put yourself in the shoes of a FERC Commissioner. What should a Commissioner be thinking about here?
Roy Jones: Of course, FERC plays a pivotal role here at the federal level. But we've got to make sure that we're cognitive of federal versus states' rights. And we want to make sure that what I think of as local distribution remains within local control.
It's critical that FERC recognizes and gives some deference to states and state policies with respect to renewables, portfolio standards, and even some of the interconnection standards of distributive-energy resources. That's first and foremost. Make sure we recognize there is a line, and at the federal level, we stay on the appropriate side of the line.
FERC's role in this, from my perspective, is to allow the market participants, whether you're the utility, the generator, the transmission owner, or load-serving entity, to determine together what's in their best interest in their region, especially as it relates to organized markets. Let the folks that are closest to the region come up with the appropriate market solutions, and then present that at FERC. And then FERC can look at it from a just-and-reasonable perspective.
NERC plays a role in this as well. On the issue of changing resource mix, NERC has done a fantastic job in analyzing operational reliability issues, like frequency response, as an example. NERC recognized that a lot of the larger generators were coming off line and that we needed to make sure that we're on top of frequency and maintaining sixty-hertz cycle frequency.
In response to NERC's collecting data, looking at metrics, NERC was able to inform FERC of that issue. And then FERC, in turn, issued an order requiring all new generators, both large and small to be constructed and built with frequency-response equipment on them. That process worked well.
I also want to say that vendors play a role in this as well in securing essential reliability services. A lot of the generation coming online now, whether it's battery or solar is inverter-based, so making sure the inverter set points are set so that they can contribute to maintaining a reliable grid.
PUF: Are you optimistic or maybe pessimistic about where this debate is going?
Roy Jones: I'm optimistic. I've been in the industry since 1981. I came in the industry in a time when we were just coming off of the oil embargo.
We were seeing a tremendous amount of nuclear and coal-fired generation being built in the country. Our industry has always been forward thinking and adaptive to change, and I think we will adapt again.
As we look at the renewable development, and we replace at a lot of our traditional generation, I am optimistic that we're going to find that right balance and continue to be a leader in the world in providing low-cost, reliable power.