2023 was an active year for TAPS, including the following:

Legislation

2023 brought considerable interest in electric transmission policy.  Key constituencies interested in transforming the electric sector increasingly focused on the availability of transmission as a critical impediment to decarbonizing the grid.  Numerous bills were filed in the House and in the Senate to address perceived problems restricting transmission construction and dealing with policies like cost allocation and federal siting through amendments to the Federal Power Act.

TAPS engaged with the committees with jurisdiction over energy policy and with other key energy policy leaders to reiterate longstanding policy positions.  TAPS engaged with the House and Senate Energy Committees to encourage the Committees to prioritize sound policy initiatives when developing transmission policy.

A major expansion of the nation’s electric transmission system is widely considered necessary to achieve the Biden Administration’s climate goals, which include a GHG-neutral electricity sector by 2035 and net-zero GHG emissions economy-wide by mid-century.  In addition to national interest in reforming how federal permitting decisions are impeded by existing statutes, Congress developed proposals to facilitate, and in some cases mandate, new transmission construction.  TAPS members engaged on these provisions, expressing concerns about the scope and terms of FERC’s proposed new siting authorities while proposing alternatives to policymakers that could improve the transmission development process by lowering costs and improving siting decisions.

TAPS maintained its longstanding advocacy for Congress to ensure that load-serving entities have a seat at the table to ensure their reasonable needs are planned for in the transmission planning process.  The lack of transparency in the transmission planning process is a problem in too many parts of the country where planning processes occur without meaningful stakeholder input.  As transmission planning for our changing resource mix takes center stage, this deficiency must be addressed.

TAPS members continued to advocate for federal support for joint ownership in the electric grid.  Under such arrangements, load-serving entities embedded in the transmission system have the opportunity to invest in their load-ratio share of the transmission grid; they have a seat at the “grown up” table in the planning process, so they can play an integral role in ensuring their load is being properly served with necessary infrastructure.  Non-profit, public power load-serving entities also have no interest in “gold-plating” the transmission system, so including them in the transmission planning process helps to ensure that the grid is robust and reliable, without imposing unnecessary costs.  And ownership participation by public power and non‑profit cooperatives reduces the cost of transmission for all customers that bear the cost of the transmission facilities.  For Congress to provide a constructive and beneficial role for LSEs in new transmission development, it will be important to tie federal incentives for building new transmission to offering LSEs a reasonable stake in new transmission projects.

In addition to TAPS’ consultant’s regular communications with legislators and staff, the TAPS Government Affairs Committee conducted virtual and in-person visits with Hill staff on several occasions in 2023 to advocate in support of these positions.

NERC/NAESB

As the FERC-certified Electric Reliability Organization (“ERO”), NERC is authorized to establish and enforce mandatory reliability standards, subject to FERC review.  FERC also reviews NAESB standards and incorporates them into its regulations by reference.  TAPS works to ensure representation at both NERC and NAESB, with the late Bill Gallagher mobilizing and coordinating TAPS efforts to monitor and participate in activities at both organizations to protect the interests of TDUs.  Since Bill Gallagher’s passing in 2021, Brian Evans-Mongeon has been heading up TAPS NERC/NAESB efforts, taking on Bill’s responsibilities on the NERC Member Representatives Committee (“MRC”), the ERO Business Plan and Budget Group, the NAESB Wholesale Electric Quadrant Executive Committee and the NAESB Board of Directors.  Chris Norton (AMP) also serves on the NAESB Wholesale Electric Quadrant Executive Committee.  Roy Jones (ElectriCities), then-TAPS Executive Director Terry Huval, and John Twitty (MPUA and former TAPS Executive Director) also served on the MRC in 2023.  Scott Tomashefsky (NCPA) serves as chair of the Compliance and Certification Committee.  TAPS members also have a presence on each of the NERC standing committees and on significant drafting teams, and TAPS itself monitors reliability standards projects of particular relevance to TAPS members.

TAPS has also made its voice heard on reliability issues through submissions to FERC in NERC and NAESB-related proceedings, as well as submission of comments to NERC.  TAPS attempts to maximize its impact by filing separate TAPS comments that reflect the distinct viewpoint of TAPS members, both as users highly dependent on the bulk electric system (“BES”) facilities owned by others and as entities subject to NERC’s mandatory reliability standards for our own facilities, or where appropriate, submitting joint comments with all or portions of the rest of the industry to emphasize the widespread support for a position.  Insiders have told us that seeing TAPS and EEI on the same submission to FERC sends a strong message.  While a number of these efforts are still playing out, there is no doubt that in 2023 TAPS played an important role in the ever-evolving relationship among FERC, NERC, and stakeholders.

TAPS 2023 NERC and NAESB-related activities

  • Extreme Cold Weather Grid Operations, Preparedness, and Coordination (NERC Project No. 2021-07, RD23-1)
    • October 28, 2022 NERC submits petition to FERC in Docket No. RD23-1 for approval of EOP-011-3 and EOP-012-1.
    • December 23, 2022 Responding to competitive generators’ requests for FERC to ensure their ability to recover EOP-012-1 compliance costs, TAPS and APPA submit joint comments arguing that cost recovery is beyond the scope of the current proceeding and that guarantying cost recovery on top of market-based rates would be contrary to FERC precedent.
    • February 16, 2023 FERC issues order approving proposed standards and directing various modifications. FERC finds that cost recovery is beyond the scope of the proceeding.
    • March 20, 2023 EPSA and other generator associations request rehearing of FERC’s February 16 order, arguing that FERC should have addressed generator cost recovery.
    • June 29, 2023 FERC’s order addressing arguments raised on rehearing reaches the same result as the February 16, 2023 order, again finding that cost recovery is outside the scope of the proceeding.
  • Registration of Inverter-Based Resources (RD22-4)
    • November 17, 2022 FERC issues order directing NERC to develop a work plan to identify and register owners and operators of unregistered BPS-connected inverter-based resources (IBRs) that have an aggregate, material impact on reliable operation of the BPS.
    • February 15, 2023 NERC submits its IBR Registration Work Plan to FERC for approval. The work plan proposes to revise NERC’s Rules of Procedure to include generator owner-IBR (GO-IBR) as a new registered entity function.
    • March 3, 2023 FERC issues letter requesting additional information from NERC concerning registration of IBR operators.
    • March 13, 2023 In response to March 3 letter, NERC submits amendment to its work plan, stating that it “intends to include operating functions to the extent necessary.”
    • March 17, 2023 TAPS submits a doc-less motion to intervene.
    • March 20, 2023 TAPS, APPA, EEI, and LPPC submit joint comments to FERC supporting the work plan in concept, noting the need to refine the GO-IBR concept through NERC’s stakeholder process, and asking FERC to require NERC to add initiation of the standards development process to its timeline.
    • May 18, 2023 FERC approves NERC’s IBR Registration Work Plan filing. Consistent with TAPS’s comments, FERC does not rule on the preliminary GO-IBR registration thresholds described in NERC’s Work Plan; and FERC states that “the development of new or modified Reliability Standards is outside the scope of this proceeding.”
    • August 16, 2023 NERC submits IBR Work Plan Progress Update to FERC.
    • August 31, 2023 TAPS, APPA, EEI, and LPPC submit joint comments to FERC on the Progress Update, emphasizing that while they were encouraged by the improvements NERC made in the revised draft Registry Criteria language in partial response to stakeholder concerns regarding its original draft, further revisions are necessary.
    • September 12, 2023 NERC posts proposed ROP revisions adding new GO-IBR and GOP-IBR categories to Appendix 5B (Statement of Compliance Registry Criteria), with conforming changes to Appendices 2 (Definitions Used in the Rules of Procedure) and 5A (Organization Registration and Certification Manual).
    • October 30, 2023 TAPS submits comments to NERC urging clarifications to proposed Registry Criteria language.
  • Reliability Standards for Inverter-Based Resources (RM22-12)
    • November 17, 2022 FERC issues NOPR proposing to direct NERC to develop new or modified Reliability Standards addressing data sharing, model validation, planning and operational studies, and performance requirements for inverter-based resources (IBRs).
    • February 6, 2023 TAPS, APPA, EEI, LPPC, and NRECA submit joint comments generally supporting revisions to standards to address IBR impacts, but drawing FERC’s attention to standards projects already underway at NERC to address some of the concerns cited in the NOPR, and noting limitations on the ability of TOs and DPs to collect and verify data regarding third party unregistered IBRs and IBR-DERs on their systems.
    • March 6, 2023 TAPS APPA, EEI, LPPC, and NRECA submit joint reply comments supporting NERC’s request for flexibility in responding to proposed requirements of DPs and TOs to collect data and verify modeling for third-party unregistered IBRs and IBR-DERs on their systems, and providing further detail regarding the associated challenges.
    • October 19, 2023 FERC issues Order 901, modifying the NOPR’s proposed directives by permitting TOs and DPs that are unable to provide accurate third-party IBR data to system planners and operators to instead provide estimated data with an explanation of the estimation method and of the limitations on the data and on the availability of data.
  • Transmission System Planning Performance Requirements for Extreme Weather (RM22-10)
    • June 16, 2022 FERC issues NOPR proposing to direct NERC to modify TPL-001-5.1 to address planning for extreme heat and cold weather events.
    • August 26, 2022 TAPS joins APPA, EEI, LPPC, and NRECA in comments supporting planning for extreme heat and cold weather but noting the need for standard drafting team flexibility in responding to any Commission directive, as well as for registered entity flexibility in addressing transmission system deficiencies.
    • June 15, 2023 FERC issues Order No. 896, directing NERC to develop a reliability standard requiring transmission system planning for extreme heat and cold weather conditions over wide geographical areas, including studying the impact of concurrent failures of bulk power system generation and transmission equipment and implementing corrective actions as needed. Among other things, NERC must develop “benchmark events” describing the types of heat and cold scenarios that responsible entities must study, and require consideration of “wide-area” impacts of extreme heat and cold events.
  • Proposed Revisions to Section 300 and Appendix 3A of the NERC Rules of Procedure (Reliability Standards Development Process) (RR23-4)
    • January 18, 2023 NERC posts proposed changes to Section 300 (reliability standards development processes) and Appendix 3A (Standard Processes Manual or SPM) of the NERC Rules of Procedure for comment. NERC proposes to curtail or eliminate steps in the standards development process, and proposes a new Rule 322, which would allow the NERC Board to direct the development of a new or revised standard, backed by Rule 321 authority; currently, the Board can only invoke Rule 321 to comply with regulatory  The limited changes in response to Member Representatives Committee policy input submitted in November 2022 included (1) restoration of “errata” language that had been inadvertently dropped from Rule 321, which states that the Board must seek to maximize stakeholder participation, to the extent feasible and consistent with its obligations and deadlines; (2) addition of statements that Rule 322 will only be used in “extraordinary circumstances,” and (3) elimination of a proposal to add ERO staff members to interpretation drafting teams.
    • March 6, 2023 TAPS submits comments on Section 300 changes urging NERC to limit the Rule 321 options that the Board can use to enforce its own directives, and supporting the redline of Rule 322 submitted by LPPC. Changes to the SPM, which must be balloted, receive only 37.7% approval.
    • April 5, 2023 NERC Board issues its quarterly request for policy input from MRC representatives, in which it expresses significant disappointment at the SPM revisions’ failed ballot, and suggests, among other things, that the failed ballot was due to a lack of “alignment” between industry SMEs (i.e., ballot pool members) and CEOs.
    • April 13, 2023 NERC posts modified version of SPM revisions for comment and ballot, which include some improvements in response to comments. NERC does not post a revised version of Section 300, and indicates that it is still considering the comments received on that posting.
    • April 26, 2023 State/Municipal and TDU Sector MRC representatives provide policy input to the NERC Board supporting the Board’s goal of improving the standards development process, but attributing the failed ballot to valid concerns that some of the proposed changes could be counterproductive; expressing continued concern that the proposed SPM and Section 300 changes neglect the root causes of delays; noting the importance of cooperation and collaboration; and emphasizing that it is vital that stakeholder comments on the proposals be addressed.
    • May 30, 2023 Standard Processes Manual revisions receive 97% approval, confirmed by final ballot June 15, 2023.
    • July 14, 2023 NERC makes available the “final” proposed Section 300 revisions that the Board intends to act on at its August meeting. NERC has adopted many of the changes LPPC (with TAPS’s support) had proposed to Rule 322, but does not limit the Rule 321 options the Board can use to enforce its own directives.
    • August 17, 2023 NERC Board approves Section 300 and SPM changes for filing at FERC.
    • September 15, 2023 NERC submits proposed changes to Section 300 and Standard Processes Manual to FERC for approval in Docket No. RR23-4.
    • October 6, 2023 TAPS, APPA, and LPPC submit joint comments to FERC indicating that they do not oppose the new Board 321/322 authority because of that authority’s limitation to carefully circumscribed “extraordinary circumstances,” and that they similarly do not oppose elimination of the requirement that NERC maintain ANSI accreditation because NERC will retain a framework based on the ANSI core principles.
    • November 28, 2023 FERC issues order approving changes to Section 300 and the SPM.
  • NERC Report on the Evaluation of the Physical Security Reliability Standard (RD23-2)
    • April 14, 2023 In response to a December 15, 2022 FERC directive, NERC submits a report on its study of the efficacy of CIP-014-03. NERC does not recommend expansion of CIP-014 applicability criteria, though it states that CIP-014’s risk assessment requirement should be refined to help ensure it is performed consistently and with appropriate technical rigor. NERC also recommends future technical conferences.
    • May 15, 2023 TAPS, APPA, NRECA, EEI, and LPPC file joint comments taking the position that the recommendations in the NERC Report appropriately reflect a risk-based approach to physical security of the Bulk Power System, while offering reasonable suggestions for further action or analysis on certain specific issues, including a Commission technical conference, and clarification of the risk assessment requirement in Reliability Standard CIP-014.
  • Secure-the-Grid Coalition CIP-014 Petition (EL23-69)
    • May 15, 2023, Secure-the-Grid Coalition files a request asking FERC to direct NERC to develop an enhanced reliability standard for physical security of the grid.
    • June 13, 2023, TAPS, APPA, LPPC, EEI, and NRECA submit a joint protest noting that Secure-the-Grid’s petition was procedurally deficient and that granting its request could interfere with FERC and NERC’s ongoing efforts in connection with physical security.
    • July 27, 2023, FERC issues an order denying Secure-the-Grid Coalition’s request that FERC direct NERC to develop an enhanced reliability standard for physical security of the grid. FERC agrees that physical security is of paramount importance, but finds that FERC and NERC are already taking adequate steps to assess the need for further requirements.
  • State/Municipal and TDU Sector Policy Input to NERC Board of Trustees
    • The NERC MRC members from the State/Municipal and TDU Sectors (“SM-TDUs”) submit joint policy input to the Board of Trustees in response to the Board’s quarterly request for input. The responses are generally coordinated by TAPS, APPA, and LPPC.
      • February 1, 2023 SM-TDUs provide input on steps NERC and industry can take to achieve a better balance of resources relative to risks being mitigated.
      • April 26, 2023 SM-TDUs provide input regarding NERC’s proposed changes to the standards development process, the source of stakeholder opposition to the changes, and the importance of collaboration and cooperation between NERC and stakeholders.
      • August 2, 2023 SM-TDUs provide input encouraging NERC to solicit stakeholder comment regarding revisions to the SAR form; expressing support for NERC’s proposed development of tools to identify and map terms and issues related to current and upcoming projects; noting, with respect to the proposed standards development process changes, that the ROP’s omission of a statement regarding appeals does not limit FERC’s ability to hear challenges to Board actions and stating the expectation that Rule 322 will be triggered only in the rarest of circumstances; encouraging NERC to reconsider its opposition to seeking federal funding when directed by Congress to carry out studies; and encouraging NERC to assess the reliability impacts of EPA’s proposed “Clean Power Plan 2.0” rules.
      • December 12, 2023 The NERC Board holds a virtual Q4 meeting separate from the MRC meeting (which occurred in October), and does not solicit policy input from the MRC.

TAPS 2023 FERC (Non-Reliability) Efforts

  • Transmission Planning and Cost Management (AD22-8); Joint Federal-State Task Force on Electric Transmission (AD21-15)
    • October 6, 2022 FERC holds Commissioner-led technical conference regarding transmission planning and cost management for transmission facilities developed through local or regional transmission planning processes. Dan O’Hagan (FMPA) submits a written statement and participates as a panelist on behalf of FMPA and TAPS; Randy Howard (NCPA) and Lisa McAlister (AMP) also participate as panelists.
    • December 23, 2022 FERC issues notice inviting post-technical conference comments.
    • March 23, 2023 TAPS submits post-technical conference comments identifying specific measures FERC can use to build cost containment into the transmission planning process, including meaningful promotion of inclusive joint ownership arrangements and adoption of proposals included in TAPS’s comments in the Building for the Future
  • Improvements to Generator Interconnection Procedures and Agreements (RM22-14)
    • June 16, 2022 FERC issues NOPR proposing to implement a first-ready, first-served cluster study process, increase interconnection queue processing speed, and incorporate technological advancements into the interconnection process, with associated changes to the pro forma LGIA and LGIP.
    • October 13, 2022 TAPS submits generally supportive comments focused on preventing pass-through of RTO penalties to customers.
    • July 28, 2023, FERC issues Order 2023, which requires all public utility transmission providers to adopt revised pro forma generator interconnection procedures and agreements that: (1) implement a first-ready, first-served cluster study process; (2) speed up interconnection queue processing by, among other things, imposing firm deadlines and study delay penalties; and (3) incorporate technological advancements.
  • Cybersecurity Incentives (RM22-19)
    • November 15, 2021 Infrastructure Investment and Jobs Act signed into law. The Act directs FERC to first study, then establish, incentive-based rate treatments to encourage investment in advanced cybersecurity technologies and participation in cybersecurity threat information sharing programs.
    • September 22, 2022 In response to the Infrastructure Investment and Jobs Act, FERC issues NOPR proposing incentives for cybersecurity expenditures. Eligible cybersecurity expenditures would have to: (1) materially improve cybersecurity through either an investment in advanced cybersecurity technology or participation in cybersecurity threat information sharing programs, and (2) not already be mandated by CIP Reliability Standards, or local, state, or federal law.
    • November 7, 2022 TAPS files comments proposing modifications to the NOPR’s proposed incentives to better align with the Act’s purpose of benefiting consumers.
    • April 21, 2023 FERC issues Order No. 893, a final rule on cybersecurity incentives, which, consistent with TAPS’s comments, did not adopt ROE incentives, nor did it permit any incentives for sellers with market-based rates.
    • July 27, 2023 FERC issues Order No. 893-A clarifying that a public utility can seek an early-compliance incentive for investments made “after the effective date of the Commission approval but before the effective date of the Reliability Standard (i.e., the date on which the Reliability Standard becomes mandatory and enforceable).” It also clarifies that “Order No. 893 does not preclude utilities that make sales of energy, capacity, ancillary services, or any other jurisdictional product at market-based rates from also making separate sales at cost-based rates that include incentive-based rate treatment for eligible cybersecurity investments.”
  • Establishing Minimum Requirements for Interregional Transfer Capability (AD23-3)
    • December 5-6, 2022 FERC holds Staff-led workshop on Establishing Interregional Transfer Capability Transmission Planning and Cost Allocation Requirements.
    • February 28, 2023 FERC issues notice inviting post-workshop comments.
    • May 15, 2023 TAPS submits post-workshop comments recognizing the need to assess and address the sufficiency of transfer capability between regions, opposing an arbitrary minimum transfer capability requirement, and recommending regional planning process enhancements building on existing successful interregional processes. TAPS urged against use of Federal Power Act Section 215 to address this issue.
  • Designation of National Interest Electric Transmission Corridors (DOE-HQ-2023-0039)
    • May 9, 2023 DOE issues a Notice of Intent and Request for Information on National Interest Electric Transmission Corridors (“NIETCs”), setting forth key elements of an applicant-driven process for DOE designation of route-specific NIETCs.
    • July 27, 2023 TAPS comments on the DOE NOI, urging DOE, if it proceeds with its proposed NIETC designation process, to do so in a manner that achieves efficient and cost-effective transmission development and minimizes consumer costs by, among other things, factoring in joint ownership and not undermining FERC-required transmission planning and coordination processes.
    • Oct 30, 2023 DOE releases its National Transmission Needs Study, which finds a pressing need for new transmission infrastructure, with interregional transmission providing the largest benefits.
    • December 19, 2023 DOE releases final guidance for the NIETC designation process, identifying joint ownership as among the factors DOE will assess in designation and clarifying DOE’s intent to work with—and not hinder—existing FERC-required transmission planning and coordination processes.