Iowa Industrial Energy Group
ELECTRIC SUPPLY AND RELIABILITY ISSUES
October 14, 2014
Don Stursma
Manager, Safety & Engineering
Iowa Utilities Board
Reliability is:
• Physical Infrastructure
- IUB
- NERC/FERC
• Supply
- Generation and Fuel
- Midcontinent Independent System
Operator (MISO)
IUB
• Franchise of Transmission Lines
- Review route and design
• Generating Certificates
- Review new projects for need and benefits
• Electric Safety Inspection Program
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2.5 full time IUB positions
Inspection and Maintenance Plans required
Electrical facilities inspected
Safety Standards
• NESC requirements
Conductor Clearance (Above ground, From
buildings, From other wires)
Grounding
Support Structures
Enclosures
• Additional Board Requirements (Examples)
Support cable (guy) markers – must be highly visible color.
Grain bin clearance (Information campaign, can deny service
clearance inadequate)
Warning signs on above ground equipment
Safety of workers in fenced substations
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North American Electric Reliability
Corporation (NERC)
NERC’s mission is to ensure the reliability of the North
American Bulk Power System (BPS)
Reliability - A reliable bulk power system is able to meet
the electricity needs of end-use customers even when
unexpected equipment failures or other factors reduce the
amount of available electricity
Bulk Power System – NERC defines the bulk power system
as electric power generation facilities combined with the
high-voltage transmission system
NERC Responsibilities
• Develop reliability standards with stakeholder input –
Annual compliance report, regional audit report, vegetation
management report
• Monitor bulk power system status in real time
• Assess bulk power reliability and adequacy – long-term 10
year assessment report, summer and winter assessment reports
• Analyze system events (e.g., multi-state outages) – issue
lessons learned
• Coordinate physical cyber security needs
• Train and certify system operators
• Enforce reliability standard compliance – assessing
penalties
FERC, NERC Initiate Review of Electric
Industry Recovery and Restoration Plans
News Release: September 30, 2014
The Federal Energy Regulatory Commission (FERC), working with the
North American Electric Reliability Corporation (NERC) and the
Regional Entities, has initiated a joint staff review to assess and verify
the electric utility industry’s bulk power system recovery and restoration
planning, and to test the efficacy of the relevant Reliability Standards in
achieving and maintaining reliability. Staff selected a sample of
registered entities with bulk power system significance to participate in
the voluntary review.
Effective system recovery and restoration plans are essential to a quick
and orderly recovery from reliability events caused by weather, bulk
power system disturbances or possible cyber/physical attacks. The
objective of the review is to support registered entities in ensuring
reliable restoration of the bulk power system following a reliability
event. The review is not a compliance and enforcement initiative.
But There is Only So Much You Can
Do to Prevent Outages
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Board Permits (Contd.)
Generating Certificates
Iowa Code Chapter 476A requires that
Certificate of Public Convenience, Use, and
Necessity (CPCN) may be required for
• Any plant (or combination of plants at a
single site) with total generating capacity
of 25 MW or more (GCU Dockets)
• Waivers can be issued for any plant if the
Board finds that the public interest would
not be adversely affected
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Generating Certificate Process (Contd.)
Main decision criteria:
Whether the proposed facility will promote
adequate and reliable electric service
Whether the proposed facility will be consistent
with environmental policies, considering
• The available technologies and
• The economics of any alternatives
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Advance Ratemaking – Decision
Criteria
• Board has to make two findings before utility
can receive advance ratemaking principles:
- Utility has in effect a Board approved
energy efficiency plan.
- Utility must demonstrate that the facility is
“reasonable” as compared to other
resources.
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Creation of Midcontinent Independent
System Operator (MISO) &
Organization of MISO States (OMS)
• FERC approved MISO as an RTO in 2001 (non-profit)
• Had the effect of accelerating regional transmission
planning efforts
• MISO has an elaborate stakeholder process
• Regulatory Sector is one of the nine sectors which
Advise the MISO Board
• Midwest state regulators through OMS participate in
MISO processes -- provide leader ship and guidance
• Regulators are now a part of interconnection-wide
planning process
• OMS also represents states’ interests before FERC
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Iowa Electric Energy Happenings
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Wind
Distributed Generation
EPA 111(d) Rule Development
OMS/MISO Resource Adequacy Survey
Multi-Value Projects
Other proposed transmission and pipeline
projects
Iowa Action on Renewable Energy
IOWA ACTED EARLY AND OFTEN TO ADOPT POLICIES TO
ENCOURAGE RENEWABLE ENERGY
– Alternate Energy Production Law (1983, as amended) (Iowa Code
§ 476.41 et. seq.)
• Requires IOUs to interconnect with and purchase from AEPs at avoided cost
• Includes net metering option (500 kW individual capacity limit)
• Includes an RPS of sorts (105 MW combined obligation)
– Advanced Ratemaking Principles (2001, as amended) (Iowa Code
§ 476.53)
• Applies to new/significantly altered 200+ MW baseload generating facilities
and utility-owned or purchased renewable energy generation
• Approval in advance of the ratemaking principles that will apply when
generation goes into base rates
• E.g., jurisdictional allocation, accounting for environmental credits/wholesale
revenues, depreciation, ROE, cancellation cost recovery
Iowa Action on Renewable Energy
– Renewable Electric Generation Law (2011) (Iowa Code
§ 476.53A)
• Specifically states that the State’s intent is to encourage
development of renewable electric power generation, to
encourage the use of renewable power to meet local electric
needs and to develop transmission capacity to export Iowagenerated wind power
– IUB Rules for Interconnection of Distributed Generation
(2010) (199 Iowa Admin. Code Ch. 45, as amended)
• Some expedited review possible
• Differing levels of review, depending upon size of the facility
Iowa Action on Renewable Energy
Other Laws Designed to Encourage Development of Alternate/Renewable Energy
Iowa Code § 476.47
Customer Contributions to AEP Development
Iowa Code § 476A
Generation Siting Exemption for Small (< 25MW) Facilities
Iowa Code § 476.48
Small Wind Innovation Zones
Iowa Code § 476.46
Alternate Energy Revolving Loan Program
Iowa Code Ch. 564A
Solar Access Easements
Iowa Code § 427.1(29)
Property Tax Exemption - Methane Gas Conversion Property
Iowa Code § 427B.26
Special Property Tax Valuation and Assessment - Wind Energy Conversion Property
Iowa Code § 441.21(8)
Property Tax Exemption - Renewable Energy Systems
Iowa Code §§ 437A.6 ,
437A.3(27)
Replacement Tax Exemptions - Methane Gas Conversion Property, Large Hydro
Facilities, Self-Generators and Wind Energy Conversion Property
Iowa Code §§ 423.3(54), (90)
Sales Tax Exemptions - Wind Energy Conversion Property & Solar Energy Equipment
Iowa Code §§ 476B, 476C
Wind Energy Tax Credit; Renewable Energy Tax Credit
The Results Iowa’s Energy Resource Mix
Source: 2012 EIA Data
The Results – Wind Energy
• Iowa is #1 in the nation for the percentage of electricity generated by
wind energy at 27.4%
• Iowa ranks 2nd in total wind generation
• Installed wind capacity: 5,177 megawatts (MW). Iowa ranks 3rd for
total MW installed
• Number of wind turbines: 3,216 turbines. Iowa ranks 3rd for
number of utility-scale wind turbines
• Wind projects online: 101 wind projects
• Wind capacity under construction: over 1,055 MW
Source: AWEA State Energy Statistics – Iowa , http://www.awea.org/Resources/state.aspx?ItemNumber=5224
Top 10 Wind Power States
State
Megawatts/Hour Percent of total output
Texas 35,937 ------------ 8.3 percent
Iowa 15,571 ------------27.4 percent
California - 13,230 -------------6.6 percent
Oklahoma - 10,881 -----------14.8 percent
Illinois 9,607 -------------4.7 percent
Kansas 9,430 ------------19.4 percent
Minnesota - 8,065 -----------15.7 percent
Oregon 7,452 ------------12.4 percent
Colorado - 7,382 -----------13.8 percent
Washington - 7,008 -------------6.2 percent
Currently the U.S. overall gets three percent of its energy from wind power. .
Courtesy of the American Wind Energy Association, All statistics are for 2013
Iowa has 3,216 wind turbines in service
The Results – Other Renewables
Installed Renewable Energy
Capacity (2012)
Solar PV
1.2 MW
Hydro
131.3 MW
Biomass/Waste
14.6 MW
Ethanol
3,848 mGy
Biodiesel
305 mGy
Source: American Council On Renewable Energy (ACORE), Renewable Energy in the 50 States: Midwestern Region (Updated October 2013)
Renewable Fuels Mandates
Iowa is 105 MW mandatory 1983, Governor 1000 MW voluntary 2001 (the 3000
shown below is an error), 5177 MW installed 2013
DG Issues
• Many small providers wanting to sell to the
system– solar/wind/biomass
• Is on way to being significant contributor
• Interconnection issues – safety and
synchronization
• Variable load/delivery
• Is net metering causing improper crosssubsidization (Are utilities able to recover
cost of facilities involved)?
NOI on Distributed Generation
Docket No. NOI-2014-0001
– Grew out of EEP proceedings – debate whether utilities should have
incentive-based renewable energy programs.
– Initiated January 7, 2014, in recognition of the response to increasing
interest in Solar PV, CHP, biomass, and other forms of distributed
generation.
– Purpose to consider the technical and policy issues associated with
potential widespread use of DG. Goal to determine extent of interest,
existence of opportunities and barriers, existence and extent of consumer
protection, safety and/or interconnection issues, and IUB’s role in dealing
with any such issues.
– Working definition: Generation fueled by renewable or fossil-fuel
sources built in order to serve load located at or near the generator
and capable of delivering power to a utility’s distribution system.
– So far, two rounds of comments on questions presented by the IUB.
Eagle Point Solar Decision
• Eagle Point Solar installed PV solar panels on a Dubuque
city-owned building.
• Eagle Point Solar would finance, install, own, operate, and
maintain the solar system.
• PV generated energy will be sold to Dubuque, on a cents-perkWh basis through a third party agreement.
• The solar energy remained “behind” Interstate Power and
Light’s (IPL) meters. The building would continue to remain
connected to the electric grid and purchase some energy from
IPL to satisfy some of the electric energy needs of the
building.
• Alliant claimed the agreement violated Alliant’s exclusive
service territory rights.
• The Board agreed with Alliant and issued an order in 2012.
Eagle Point Solar Decision (Contd.)
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A Polk County District Court Judge reversed the
ruling a year later.
On July 11, 2014 the Iowa Supreme Court held
that the “behind the meter” direct sale of
electricity generated from solar arrays and using
a power purchase agreement that sold the
electricity on a cents-per-kWh basis did not
automatically render the seller a “public utility.”
SZ Enterprises, LLC, d/b/a Eagle Point Solar v.
Iowa Utilities Board, ___ N.W.2d. ____ (July 11,
2014)
EPA’s Proposed 111(d) Regulations
For Existing Power Plants
• Iowa Department of Natural Resources is responsible
for Iowa’s environmental regulation.
• Board has authority over some environmental
activities by utilities. For example, Utilities’ Emission
Plan and Budget (Iowa Code Section 476.6(21)).
• Proposed 111(d) regulations affecting existing power
plants are different - These rules could have significant
adverse effects on the reliability and cost of providing
electric service.
• Also, the EPA specifically invited public utility
commissions to engage with the EPA in the
development of the proposed rules.
EPA’s Proposed 111(d) Regulations
Board Actions to Date
• Iowa Utilities Board sent comments to EPA in December 2013 on
how the regulations should be drafted.
• IUB is interested in that the final 111(d) rules are written and
implemented such that they do not:
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create disruptions in the provision of electric service and;
create significant, unnecessary increases in the cost of electric service
• IUB is working jointly on comments with IDNR and Iowa Economic
Development Authority (IEDA).
• IUB is an active participant in IDNR’s 111(d) collaborative process,
and will be actively involved in the development of Iowa’s
compliance plan after the rules are final.
MISO/OMS Resource Adequacy
Survey
• MISO and OMS initiated a resource adequacy survey in
summer of 2013.
• Surveyed Load Serving Entities (LSEs) to gain better
understanding of Long-Term Resource Plans.
• Survey:
• Was a first-of-its-kind collaborative effort for MISO, LSEs and
OMS
• Sought information about all existing and future resources
• Updated demand forecasts including projected Demand Side
Management Programs
• Asked respondents to identify confidence factors for a better
understanding of certainty on LSE side
• Sought longer-term information (10 years out)
Survey Results
June 4, 2014 survey update shows:
• For MISO Resource Zone 3 (Iowa and parts of IL and MN)
• 2016 resources equal 10.1 GW
• 2016 resource requirements equal 10.6 GW
• Projected shortfall equals 0.5 GW
• For MISO North and Central Region
• 2016 resources equal 110.1 GW
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2016 resource requirements equal 112.4 GW
Projected shortfall equals 2.3 GW
A shortfall figure means increased probability of a loss of load event
A 2.3 GW shortfall means approximately a .2 day/year probability of
a loss of load event, which is higher than .1 day/year industry
standard
(A projected shortfall means MISO would have to import power – not loss
of service)
Survey Future - MISO Proposal
• MISO proposes:
• continuing the survey in 2014-15 (and
potentially beyond).
• matching the survey process with the work
MISO performs as part of the Long Term
Reliability Assessment (LTRA).
• OMS will vote in October whether it continues
to serve as a survey partner
Transmission - Multi-Value Projects
(MVP Projects)
• Main purpose is to integrate growing wind power into the upper
Midwest transmission system
• Roughly 500 miles of new 345,000 volt electric transmission
circuit in Iowa alone
• 17 projects in all, four in Iowa requiring IUB approval in Iowa
• In Iowa as much as possible will be built on existing transmission
rights-of-way – often double-circuited with existing 161 kV
• Will reinforce electric transmission capacity and reliability overall
by looping the system as well as integrating wind power
Transmission - Multi-Value Projects
MVP 3 - MEC/ITC joint ownership
• MEC will construct approx. 120 miles of 345 kV line, rebuild existing 161
kV, build two new substation modify one substation – in service date is
end 2016.
• ITC will construct 145 miles in Iowa and 75 miles in MN.
• Board issued franchise for MEC’s portion of MVP 3 on August 19 for
O’Brien, Clay, Palo Alto, Kossuth, Humboldt and Webster counties
(Docket Nos. E-22106, E-22103, E-22107, E-22105, E-22104 E-22108)
• ITC has filed franchise petitions for projects in Kossuth, Winnebago,
ands Worth counties (E-22116, E-22140, E-22142, and E-22141).
• Board issued franchise for a section of ITC’s share (11.43 miles) on
May 1 in Cerro Gordo County (Docket No. E-21894.2))
Transmission - Multi-Value Projects
(Cont.)
MVP 4 -- MEC/ITC joint ownership
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Consists of several sections (new additions, upgrades, rebuilds)
For each section, an electric franchise petition or an amendment of a franchise petition
has been filed with the Board.
Board issued franchise for MEC’s section on June 22
• approx. 22 miles in Black Hawk County (Docket No. E-22099)
Board issued franchise for ITC’s section on June 17
• 9.5 miles addition in Buchanan County (Docket No. E-22011.1)
• 2.5 miles addition in Black Hawk County (Docket No. E-22034.1)
Board issued franchise for ITC’s section on May 1
• 11.5 miles addition and rebuild in Cerro Gordo County (Docket No. E-22034.1)
Three MEC petitions and two related petitions by ITC for sections of MVP 4 are under
review by the Board. Hearing is scheduled for December 9 in Franklin county. (Docket
Nos. E-22097, E-22098, E-22099.1, E-22153, and E-22152)
Transmission - Multi-Value Projects
(Cont.)
• MVP 7 – Ottumwa, IA to Adair, MO
• MEC has not filed with the Board
• MVP 5 – Dubuque County into Wisconsin
• ITCM and ATC – no Iowa filings yet
Other Projects
Rock Island Clean Line
• 500 mile, ±600kV HVDC line
• A Direct Current line to minimize line loss
• Designed to transport wind power from NW Iowa and adjoining
states.
• 375 miles in Iowa, 125 miles in Illinois
• Proposed to deliver 3500 MW from O’Brien County, Iowa, to
Grundy County, Illinois.
• Estimated cost: $2B
• $7B in new wind development possible
• Facing heavy opposition in Iowa and Illinois
• IUB has received 1,148 objections at last count
Rock Island Clean Line Route in Iowa
• Rock Island Clean Line
•500 mile, ±600kV HVDC line
•Proposed to deliver 3500 MW from O’Brien
County, Iowa, to Grundy County, Illinois.
•Estimated cost: $2B
• 500 mile, ±600kV HVDC line
• Proposed to deliver 3500 MW from O’Brien County, Iowa, to Grundy County, Illinois.
• Estimated cost: $2B – plus $7B in new wind development
Other Projects
Energy Transfer Partners Pipeline Project
(Bakken Pipeline a.k.a Dakota Access Pipeline)
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Energy Transfer is name of sponsor company
1,100 mile crude oil pipeline (343 mi. in Iowa)
Estimated cost $3.7 billion
Bakken ND area to Patoka, IL through ND, SD, IA, IL
30 inch pipe, 320,000 barrels/day initially
In service in 2016 (?)
IUB has routing/siting and eminent domain authority
IUB does not have safety authority
Expected to be controversial
An alleged project benefit is reducing railroad oil shipments making more rail capacity available for coal and grain.
Bakken (aka Dakota Access) Pipeline
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Where will your electricity come from?
• WIND POWER Available, supply growing, cost competitive, green,
intermittent/variable, what happens if subsidies end
• DISTRIBUTED GENERATION Growing more common, many players,
variable, subsidization/safety issues
• NATURAL GAS Affordable to build and fuel, flexible output, greener
than coal, peak gas supply issues
• COAL Economical base load, not green/unpopular, being regulated into
minority status, coal transportation issues
• NUCLEAR Economical base load, green but unpopular/not trusted,
costly to operate and build, having trouble in competitive markets, heavy
regulation
• HYDROPOWER Economical, green, reliable, flexible, limited supply,
limited growth opportunity
• SOLAR/BIOMASS/ETC Small but growing, green, popular, DG
The Results Iowa’s Energy Resource Mix
Source: 2012 EIA Data
Questions?