Montana PSC: Clean Power Plan based on ‘old world definition’ of power grid

The Montana Public Service Commission has told the Environmental Protection Agency (EPA) that assumptions in the proposed Clean Power Plan are based on an ‘old-world definition’ of the transmission grid that does not accurately represent the realities of RTO divisions, according to TransmissionHub.

In Nov. 21 comments submitted to the EPA, the PSC suggested that the final rule include a ‘safety valve’ feature that would permit a state to submit its compliance plan to the regional transmission planning body for reliability review.

The PSC outlined its concerns about the draft plan in a 14-page letter that expressed the PSC’s opposition to the plan “in its entirety.”

“The EPA applies a strained interpretation to an already tenuous regulatory model,” the PSC said in its letter. “The proposed regulation leaves the [PSC] with less discretion to regulate electric utilities, even though public utility commissions are best situated to make several of the decisions contemplated by the proposed rule. This raises basic concerns of federalism.”

As part of its review, the PSC questioned whether emissions reductions in the draft plan have been adequately demonstrated through transmission reliability modeling, noting that reliability analyses of proposed reductions for the Western Interconnection do not exist at this time.

The PSC cited EPA’s presumption that the generation from the Big Stone coal facility in Big Stone, S.D., would be displaced by production from the Deer Creek natural gas facility near Elkton, S.D. That presumption, the PSC said, is flawed because the dispatch for those facilities is performed by different grid operators.

While interrelation between those operators does exist, the PSC noted that coordinated dispatch of Big Stone and Deer Creek would require a reorganization of how the two operators’ markets interact.

In comments that align with the observations of other industry representatives, the PSC said proposed changes in the draft plan pose a significant threat to grid reliability and the EPA should subject the draft plan to modeling that meaningfully studies its impact on system reliability.

Since September, the Southwest Power Pool, ERCOT, NERC, the Midcontinent ISO, and the Western Electricity Coordinating Council (WECC) have expressed concern about the affects the draft plan will have on reliability without time for further analyses and significant financial investments in system upgrades. The comment period for the draft plan closes on Dec. 1.

Addressing renewable energy goals in the draft plan, the PSC suggested that the EPA acknowledge that increases in renewable energy will not occur on a linear path in states with existing renewable energy plans, given operational, dispatch, and transmission challenges. The PSC explained that renewable energy growth in Montana and neighboring states is limited by transmission system constraints and reliability.

“WECC has modeled scenarios in which large amounts of remote renewables are located in Montana and Wyoming but serve out-of-state customers,” the PSC said. “In those studies, the path constraints of the transmission lines from Montana to the Northwest were pushed to the limit, resulting in energy generated but not transmitted nearly half of the time.”

Ultimately, the PSC noted, the draft plan fails to identify the monetary costs and timeline delays that are associated with constructing or upgrading transmission lines and building sufficient generators to ensure the provision of ancillary services to renewable generators. These costs, it added, have slowed renewable energy development in Montana.

For example, a proposed upgrade to the 500-kV Colstrip transmission line to accommodate 550 MW to 900 MW of transmission capacity for potential new wind projects in the state would cost $240 million. The Colstrip line connects the Colstrip coal-fired generation units in eastern Montana to the Pacific Northwest grid.

The PSC said the cost for this upgrade is a “formidable hurdle” for wind energy developers. The Bonneville Power Administration is leading development of the line upgrade. A draft environmental impact statement (EIS) is due this year, with the final EIS and record of decision due in late 2015.

In addition to concerns about the draft plan’s framework, the PSC asked the EPA for clarification of state authority to execute and enforce the final rule. Specific to transmission, the PSC asked what authority states will have to compel multi-state transmission organizations to alter their dispatch or operating procedures and compel compliance by generation or transmission facilities that are financed or administered by the federal government.

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