2011 was an active year for TAPS, including the following significant activities:
As in 2010, TAPS federal legislative priorities for 2011 included cyber security, federal transmission planning, siting and cost allocation, and incentive rates of return.
The Department of Energy (DOE) created a stir when it announced its intention to delegate the transmission congestion study and National Interest Electric Transmission Corridor designation authority, granted in the 2005 Energy Policy Act, to the FERC. The study and corridor designation are conditions precedent to FERC’s exercise of federal “backstop” siting authority, authority also granted in EPAct 2005. The Congressional response was swift and negative. House and Senate energy leaders, and others involved in negotiating the balance of authority between DOE and FERC in the 2005 law, strongly objected to DOE’s decision to consolidate the authorities at FERC.
The DOE/FERC initiative coincided with new Congressional interest in Order 1000, FERC’s regional transmission planning and cost allocation rule. The House Energy and Commerce Committee held the first in what is anticipated to be a series of oversight and background hearings on FERC activities on Order 1000. The Committee is expected to hold more hearing on FERC activities and programs this spring
Senators Ron Wyden (D-OR) and Bob Corker (R-TN) introduced legislation, S. 400, which would significantly impact cost allocation policies established under current law as well as setting prospective policy thresholds for new cost allocation policies. TAPS’ analysis of the legislative proposal concluded S. 400 was significantly broader in scope than the original proposal, authored by Sen. Corker, which had been adopted in the 2010 Senate Energy and Natural Resources Committee energy bill, and would significantly complicate cost allocation decisions and impair the construction of new transmission lines.
TAPS continued to meet with members of the Senate Energy and Natural Resources Committee to express concerns regarding the language and to advocate a middle ground on cost allocation issues. In anticipation of possible action on this issue in the Senate, TAPS sent a letter to the Senate Republican and Democratic Leadership expressing reservations about S. 400.
In response to a FERC Notice of Inquiry (NOI) on incentive pricing for transmission, TAPS, in addition to filing comments with FERC, worked to inform and educate Members of Congress about the history behind the policy and concerns regarding implementation. TAPS and others worked with Sen. Jeanne Shaheen (D-NH), who spearheaded a letter from ten Senators to FERC, commending the Commission for undertaking the NOI and urging FERC to “consider using a set of objective, performance-based criteria to determine whether or not a particular transmission project deserves an additional rate-enhancing incentive.” FERC has not yet acted on comments it received on the NOI.
Federal cyber security continued to be a legislation priority for TAPS in 2011. As part of a broad coalition of electric sector organizations, TAPS continued to advocate legislation that would give FERC narrow authority to address “imminent threats” to the cyber security of the bulk electric system, while preserving the standards development process established under Section 215 of the Federal Power Act. TAPS and the coalition have significant policy concerns about the GRID Act (H.R. 5026) passed by the House in 2010, and the version of the GRID Act approved by the Senate Energy and Natural Resources Committee, both of which would give FERC broader authority over cyber security vulnerabilities and distribution facilities.
In mid-2011, the Senate Commerce and Homeland Security Committees began to explore a comprehensive approach to cyber security that would address all critical sectors, not just the electric sector. While TAPS and the electric sector coalition are generally receptive to a more comprehensive approach, we do not support legislation that would create a duplicative, possibly inconsistent, federal cyber security regime administered by the Department of Homeland Security. We believe that such a design would be confusing and costly to ratepayers and not improve cyber security.
TAPS expects cyber security legislation to be a priority for the second session of the 112th Congress.
NERC’s transformation into the Electric Reliability Organization authorized by the Energy Policy Act of 2005 to establish and enforce mandatory reliability standards, subject to FERC review, has enhanced the importance of the NERC standards development process and related NAESB business practices. Since his “retirement” from Vermont Public Power Supply Authority in 2006, Bill Gallagher has mobilized and coordinated TAPS efforts to monitor and participate in NERC and NAESB activities to protect the interests of TDUs. For 2011, Bill served as chair of the NERC Member Representatives Committee. Bill also serves on the NAESB Wholesale Electric Quadrant Executive Committee, and for 2012 has been elected to the NAESB Board of Directors.
TAPS has worked to ensure TDU representation at both NERC and NAESB. TAPS has significant representation on the NERC Member Representatives Committee (including TAPS Executive Director John Twitty), the NAESB Board, and the NAESB Wholesale Electric Quadrant Executive Committee, and is represented on most NERC standing committees. TAPS members also participate in significant drafting teams at NERC and/or NAESB.
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 and NAESB. 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 BES 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. While the results of these efforts are still playing out, there is no doubt that in 2011 TAPS played an important role in the ever-evolving relationship between FERC and NERC.
TAPS 2011 NERC and NAESB-related activities include:
Reliability Technical Conference (AD12-1)
- Bill Gallagher appears at November 29-30 FERC Technical Conference on progress made on priorities and other emerging issues, after submitting written comments on November 25, 2011.
- TAPS submits follow-up comments on December 9, 2011.
Rules of Procedure Directive (RR09-6)
- Effort stems from March 18, 2010 FERC directive that NERC modify its Rules of Procedure (“ROP”) to prevent stakeholders from preventing NERC from complying with FERC directives.
- While most of the activities occurred in 2010, on March 17, 2011, FERC accepts NERC compliance filing, but includes language asserting its authority to approve, as mandatory, a draft standard that NERC submits as compliance filing with recommendation that it not be adopted.
- May 12, 2011 NERC and the industry (including TAPS) asked the DC Circuit to dismiss their previously filed appeals as not ripe, with FERC’s consent. The motion was granted on May 24, 2011.
Compliance Enforcement Initiative (RC11-6)
- “Find and Fix” concept suggested at May 19, 2011 Legal Advisory Committee Meeting, and Cindy participates in the LAC task force.
- July 14, 2011 Frank Gaffney (FMPA) participates in NERC focus group on enforcement.
- August 26, 2011, TAPS/APPA/LPPC jointly comment to NERC on concept paper.
- Responding to NERC’s September 30, 2011 filing Compliance Enforcement Initiative, TAPS joins with industry in supportive comments filed October 21, 2011.
Bulk Electric System (RM09-18)
- Efforts grow out of FERC’s March 18, 2010 NOPR proposing a 100 kV bright-line threshold from which only FERC can grant exemptions, and FERC’s November 18, 2010 final rule, Order 743, granting NERC additional flexibility to define BES and leaving it to NERC to develop an exemptions process.
- On March 17, 2011 Order 743-A grants TAPS December 20 request for clarification that FERC did not require NERC to change the BES definition’s exclusion of radials to load, as well as additional requests that emphasize NERC flexibility to develop the BES definition and exemption process.
- The NERC BOT makes a special request for the MRC to advise them on policy implications of the BES definition effort. As MRC chair, Bill Gallagher sets up a series of MRC committees to explore any possible NERC policy problems and holds numerous meetings with the Chairs of the two drafting teams. His effort proved important to the ultimate approval of the revised BES definition and setting up a Phase 2 of the definition process.
- TAPS submits comments to NERC on the BES definition, technical criteria for exceptions, and exception procedure on January 21, May 27, June 10, October 10, 2011, and October 27, 2011.
TPL-002 Interpretation (RM10-6)
- This effort grows out of FERC’s March 18, 2010 NOPR, proposing its own interpretation contrary to that adopted by NERC with overwhelming stakeholder support, which TAPS joined industry in opposing in comments filed May 10, 2010.
- June 7, 2011 Cindy attends FERC staff meeting with industry regarding TPL-002.
- July 13, 2011 industry files supplemental comments reflecting alternative approach.
- September 15, 2011 FERC issues Order 754, adopting the alternative approach: accepting NERC interpretation without change, but setting up process for FERC staff to confer with NERC, and NERC to report in six months on if there’s more to be done and priority.
- October 7, 2011 FERC notices October 24 staff meeting to discuss reliability implications of single point of failure on protection systems, as directed by the order.
Transmission Relay Loadability (RM08-13)
- Effort grows out of FERC’s March 18, 2010 Order 733 and February 17, 2011 Order 733-A in which FERC largely denies the April 19, 2010 rehearing application filed jointly by APPA, NRECA and TAPS, and the rehearing application filed by EEI, although improving tone and allowing NERC additional flexibility.
- March 21, 2011 TAPS (with APPA) files a “me to” to EEI’s reconsideration request.
- April 18, 2011 EEI files petition for review (EEI v. FERC, No. 11-1111 (D.C. Cir. 2011)), in which TAPS (with APPA and NRECA) intervened on May 18, 2011.
- After FERC on September 15, 2011 issued Order 733-B granting limited clarification but otherwise denying relief, EEI voluntarily dismissed its appeal by motion granted October 20, 2011.
Interpretation of Protection System Reliability Standard (RM10-5)
- In response to FERC’s December 16, 2010 NOPR proposing to accept NERC’s interpretation but direct development of modified standard, TAPS files comments on March 2, 2011 opposing new FERC directives in context of considering an interpretation.
Under-Frequency Load Shedding (RM11-20)
- Before 2011, TAPS had filed comments on the initially proposed nationwide UFLS standard, which at the time would have applied to generators connected at 69 kV and possibly to all distribution providers regardless of size, and would therefore likely have had a severe anticompetitive impact on small entities. The revised standard that was approved by the Board of Trustees at its November 4, 2010 meeting is narrower. It will apply to Planning Coordinators (who would coordinate the UFLS program for their area), and to TOs and DPs that “are responsible for the ownership, operation, or control of UFLS equipment as required by the UFLS program established by the Planning Coordinators.” It will not apply to generators. The standard was filed at FERC on March 31, 2011.
- In response to FERC’s October 20, 2011 NOPR proposing to accept the standard but raising a number of concerns, TAPS files comments on December 27, 2011 supporting FERC acceptance of the standard as submitted, and opposing requiring he modeling of resources not directly connected to the BES.
Footnote B to TPL Standards Table (RM11-18)
- In response to FERC’s October 20, 2011 NOPR proposing to remand Table 1, footnote b to four planning standards (TPL-001-1, TPL-002-1b, TPL-003-1a, and TPL-004-1), TAPS on December 27, 2011 filed comments supporting acceptance of footnote b as submitted by NERC, with suggestions as to how, through the Order 1000 proceeding or otherwise, FERC can improve the stakeholder process relied up in the NERC proposal.
- February 24, 2011 TAPS comments at NERC opposing a draft NPCC UFLS standard that would have applied to very small, otherwise unregisterable generators, and pointing out the waste of resources involved in developing a regional UFLS standard when a continent-wide UFLS standard has just been completed.
- November 2, 2011 TAPS comments at NERC opposing a draft RFC UFLS standard that would have required compensatory load shedding by non-conforming generators, and pointing out the waste of resources involved in developing a regional UFLS standard when a continent-wide UFLS standard has just been completed.
Other Comments to NERC and NAESB
- December 22, 2011 TAPS files comments at NERC on one of several postings of proposed changes to NERC’s Rules of Procedure.
- November 18, 2011 TAPS files comments at NERC, and joins other trade associations’ comments, on NERC’s “draft directive” on registration of GO/GOPs as TO/TOPs.
- October 17, 2011 TAPS files comments at NERC on one of several postings of proposed changes to NERC’s Rules of Procedure.
- September 6, 2011 TAPS files comments at NERC on proposed changes to the Compliance Application Notice (CAN) process.
- September, 2011 TAPS compiles comments for use by TAPS members in commenting on CAN-0016.
- August 15, 2011 TAPS files comments at NERC on one of several postings of proposed changes to NERC’s Rules of Procedure.
- July 11, 2011 TAPS files comments at NERC on the use of a “Rapid Development Team” to develop PRC-004-3, Protection System Misoperation Identification and Correction.
- May 12, 2011 TAPS files comments at NERC on PRC-005-2, Protection System Maintenance and Testing.
- April 14, 2011 TAPS files comments at NERC opposing making the chair and vice chair of the Standards Committee non-voting members.
- April 4, 2011 TAPS files comments at NERC on the “GO/TO” (Generator Requirements at the Transmission Interface) white paper.
- March, 2011 TAPS comments to NERC (orally and in writing) on a proposed procedure for dealing with PRC-023 “critical facilities” determinations.
- February 9, 2011 Terry Huval and John Twitty, TDU members of the Member Representatives Committee, submit policy input to the NERC Board of Trustees recapping TAPS comments on the BES definition and BES exemption process.
FERC (Non-Reliability Initiatives)
Transmission Planning Processes Under Order 890 (AD09-8)/Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities (RM10-23)
- On July 26, 2011, TAPS members participate in a FERC staff outreach conference call regarding Order 1000, issued July 21, 2011.
- TAPS seeks rehearing on August 22, 2011.
Promoting Transmission Investment Through Pricing Reform (RM11-26)
- TAPS files comments on September 12, 2011 in response to FERC’s May 19, 2011 NOI.
Priority Rights to New Participant Funded Transmission (AD11-11)
- Terry Wolf (MRES) appears at the March 15, 2011 Technical Conference.
- TAPS files follow-up comments on May 5, 2011.
Horizontal Market Power NOI (RM11-14)
- March 17, 2011 FERC issues NOI on whether to modify merger and market-based rate analyses to reflect revised DOJ/FTC Horizontal Merger Guidelines.
- TAPS files comments (with TDU Systems) on May 23, 2011.
Transparency/EQR NOI (RM10-12)
- On June 28, 2011, TAPS files comments on FERC’s April 21, 2011 NOPR, proposing to make EQRs applicable to non-public utilities with annual wholesale sales of more than 4 million MWh and non-public utility balancing authorities with 1 million MWh or more in annual wholesale sales.
Frequency Regulation Compensation in the Organized Wholesale Power Markets (RM11-7/AD10-11)
- On May 2, 2011, TAPS files comments on FERC’s February 17, 2011 NOPR proposes increased compensation for faster ramping resources.
Third-Party Provision of Ancillary Services; Accounting and Financial Reporting for New Electric Storage Technologies (RM11-24/AD10-13)
- On August 22, 2011, TAPS files comments on FERC’s June 16, 2011 NOI regarding facilitating development of robust competitive markets for ancillary services in non-RTO areas and storage device issues.
Locational Exchanges of Wholesale Electric Power (RM11-9)
- April 25, 2011 TAPS files comments supporting preservation of locational exchanges in response to FERC’s February 17, 2011 NOI on whether/how to restrict locational exchanges.
Commodity Futures Trading Commission
In rulemaking proceedings and other advocacy activities at the Commodities Futures Trading Commission associated with implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act with respect to the regulation of energy “swaps,” TAPS supports APPA’s participation in the “Not-For-Profit Electric End User Coalition” and the positions taken by that coalition.