On Nov. 5-6, 2019, FERC held a technical workshop regarding grid-enhancing technologies (Docket No. AD19-19-000). FERC articulated that the purpose of this two-day workshop was to discuss grid-enhancing technologies that increase the capacity, efficiency, or reliability of transmission facilities.
No expected goal or outcome for the technical workshop exists in the official record. However, it has been reported that FERC Commissioner Richard Glick provided opening remarks that discussed the need to build additional transmission capacity FERC's statutory obligation under the Energy Policy Act of 2005 to incentivize utilities to improve the efficiency of the grid, as well as FERC Order 1000, where FERC essentially laid the groundwork for consideration of non-transmission alternatives, including grid-enhancing technologies. FERC Staff described the workshop as complementary to Docket Nos. PL19-3 Inquiry on Improvements to Electric Transmission Incentives Policy, and AD19-158 Managing Transmission Line Readings.
Stakeholders
Participants at the workshop included representatives from utilities, RTOs/ISOs, technology vendors, researchers, and other interested parties. Specifically, the participants were Pacific Northwest National Laboratory, New Grid, Lindsay Manufacturing Co., Apex Clean Energy, Midwest Independent System Operator (MISO), Duke Energy, Exelon, National Grid, Western Interstate Energy Board (WIRAB), California Public Utility Commission (CPUC) Public Advocates Office, National Rural Electric Cooperative Association (NRECA), American Electric Power (AEP), Ameren, Washington State University, Southern Company, Smart Wires, Grid Strategies LLC, Hiorns Smart Energy Networks, Transmission Assess Policy Study Group (TAPS), Grid Policy, Monitoring Analytics, Potomac Economics, Pennsylvania New Jersey Maryland Interconnection LLC (PJM), and the California Independent System Operator (CAISO).
Stakeholders discussed how grid-enhancing technologies are currently used in transmission planning and operations, the challenges to their deployment and implementation, and what FERC can do regarding those challenges, including incentivizing or requiring the adoption of grid-enhancing technologies by utilities and RTOs/ISOs. These technologies include but are not limited to: (1) power flow control and transmission switching equipment, (2) storage technologies, and (3) advanced line rating management technologies.
Stakeholder Recommendations
There were several recommendations specific to how FERC may incentivize grid-enhancing technologies. These recommendations included FERC policy statements, NERC standards, pilot programs, and financial incentives. The topic of financial incentives appears to have been the most controversial recommendation. Within the theme of financial incentives, a proposal known as the "WATT Proposal" seems to have emerged as the predominant proposal.
The WATT Proposal
The acronym WATT stands for Working for Advanced Transmission Technologies. The goal of the WATT Coalition is to reduce the US$6 billion a year that customers are paying for transmission congestion by bringing new technologies to market. WATT was established by companies who have developed those technologies to (1) help others understand the potential of advanced power technologies, (2) spur policymakers to put incentives in place that promote deployment, and (3) allow transmission owners and others who pay for those investments to share in the savings. The WATT Coalition is made up of several technology companies, including: Ampacimon, LineVision, Inc., Lindsey Manufacturing, NewGrid, SmartWires, and WindSim Americas Inc.
The WATT proposal is a shared-savings approach where transmission owners can keep a portion of the congestion reduction savings from grid-enhancing technology deployment. Supporters of the WATT proposal pointed to operational incentives that have occurred in England, Wales and Australia under similar proposals. Even some non-technology vendor supporters, such as the utility company, American Electric Power, pointed out the “benefits-driven” evaluation for this approach, rather than the risk-based evaluation used for ROE incentives. However, it appears that not all utilities were on the same page. Exelon indicated that regulatory support for deploying non-conventional transmission technologies through pilot programs would do more than monetary incentives. Interestingly, there seems to have been very little stakeholder advocacy for the traditionally popular incentive of FERC ROE adders, giving credence to the notion that stakeholders are in fact looking for novel solutions to this critical question.
Next Steps
Following the technical conference in November 2019, the FERC opened this docket for written public comment and reply comments.
This will be an interesting docket to watch to see what, if anything, FERC may do to incentivize grid-enhancing technologies with the potential to help reduce congestion, integrate renewables and create a more resilient transmission grid.
