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NewsData's "People in Power" is an exciting new biweekly podcast that explores issues in the energy industry, featuring expert guests from a wide range of backgrounds. Hosted by veteran energy journalists Jason Fordney and Abigail Sawyer of California Energy Markets and including appearances by writers from sister publication Clearing Up, People in Power will explore trends such as development of a Western wholesale electricity trading market, the transition to a more electrified world of new infrastructure and transportation, renewables integration and reliability, wildfire response and mitigation, and many other topics. "People in Power" draws from an unprecedented pool of expertise and insight in a way never seen before! It's available on all major podcast platforms as well as at www.newsdata.com.
Intro:
Welcome to NewsData's Energy West, a podcast about the energy
industry today and where it's going tomorrow.
Dan Catchpole:
Hello, I'm Dan Catchpole, reporter with NewsData's Clearing Up,
joined by my co-host and editor of NewsData's California Energy
Markets, Jason Fordney.
NewsData covers the energy sector in California, the Northwest
and beyond like no one else.
And here are some of our top stories right now.
First, Jason, how are you doing?
Jason Fordney:
Great, Dan. How are you doing?
Dan Catchpole:
I'm doing really well. We had my daughter's my oldest daughter's
11th birthday party this weekend, took her rock climbing with her
friends. It was a lot of fun.
Jason Fordney:
Nice. Were you using like ropes and equipment?
Dan Catchpole:
Well, just to a gym.
Jason Fordney:
Well, yeah.
Dan Catchpole:
That's a lot easier. Yeah.
Jason Fordney:
I guess you wouldn't want to oversee safety for a bunch of your
friend's kids.
I can see that.
Dan Catchpole:
I know my limitations, you know?
So, yeah, everybody survived.
Everybody had a lot of fun, so yeah.
It was a good time.
Jason Fordney:
Awesome. Glad to hear that.
Dan Catchpole:
Yeah. Well, I'm going to go ahead and get us started for our
stories this week.
SPP, The Southwest Power Pool, its markets plus governance team
rolled out a straw proposal which
they divvied up authorities very clearly.
At the top of the org chart is SPP's own board of directors
but, they drove home in the straw
proposal during a webinar late last month that the power and
responsibilities
of the board of directors is very limited to a very finite
number of things.
And really the real decision making power rests with an
independent panel that
would be elected from the markets plus participants and voting
stakeholders.
And that was really the main, I guess, the meat of the proposal
that they had and really what got discussed at
length in the webinar.
Beyond the markets plus independent panel, the MIP, is of course
with a new
market entity comes new acronyms that we all have to learn.
Jason Fordney:
We need more acronyms in this industry.
Dan Catchpole:
Exactly. So then there's other committees that would round this
out to propose policies, proposed changes, and
including one of representing state regulators.
So the responsibilities of the board of directors, SPP's board
of directors really would be confined to
things like that, like contracts that entities sign, like, say a
utility signs, a contract to participate in the markets
plus, they're signing it and the SPP is the other signatory on
that contract.
So contract language things would be under the purview of the
board of directors, whereas markets
plus market mechanisms would be under the purview of the markets
plus independent panel.
So you can read more about all that at NewsData's Clearing Up.
And Jason, what do you have?
Jason Fordney:
Well, Friday, I took a look at refund orders from the Federal
Energy Regulatory Commission.
Kind of a big deal.
What FERC did is they've been issuing orders for refunds for
power sales that were made in August
2020 during tight supply conditions.
This is when we had the rolling outages in California.
So very interesting where you have federal regulators coming in
and basically resetting prices, transactions.
The people that we talk to from the Western Power Trading Forum
say that this will create uncertainty around power grid trading
and maybe even operations this summer.
It could create reluctance to sell power during times this
summer when tight supply conditions are
in place. FERC on May 20th issued the latest round of refund
orders instructing sellers to pay back revenue from sales in the
Western Electricity Coordinating Council, which covers much of
the West, including California.
These were transactions outside CAISO, but within WEC, where
there's a $1,000 per megawatt hour
soft price cap.
So a very detailed filings from some of the sellers, for
instance,
Tri-State, the prices were based on Palo Verde hub,
but lots of things in play here like the Mobile Sierra Public
Interest Standard.
And what FERC did was they made the the sales
be retroactively set at an index price which drew some
heartburn.
FERC member James Danly dissented in all these orders.
He said the legal question in this case is whether the
commission can abrogate a contract to sell electricity pursuant
to market based rate authority when the contract price is above
a commission imposed soft price cap.
Absent a finding that the public interest so demands, the answer
is no, according to Danly.
What he said is power sellers really have no choice but to sell
at these times or face investigation for economic or physical
withholding. The end result is that FERC is forcing entities to
sell power at a price set by regulators.
And this will I'd be shocked if it doesn't go to court, which
will drag it out.
We won't have any resolution by this summer, which will create
some uncertainty when people are selling power, not knowing
with the prices going to hold.
So, yep, you'll see more of these orders from FERC and you can
read more of our coverage at NewsData.com.
Dan Catchpole:
Yeah. A lot of interesting information there in your story, Jason
.
Jason Fordney:
Thanks.
Dan Catchpole:
People should definitely go check it out, and it'll be
interesting to see more of that, I'm sure, coming in the years
ahead. Just given the dynamics.
I should add, by the way, I didn't clarify in my story about the
market's plus proposal.
This is just a straw proposal.
Nobody has actually signed on to or signed up to be in the
markets plus
program. So.
Well, I got a story here from my colleague KC Mahaffey.
A relatively cool April, was followed by a relatively chilly wet
May, which has improved the water supply outlook in many Columbia
Basin watersheds.
Some good news ahead of the summer.
But some areas, especially those that were already dry, didn't
get as much precipitation as one would have hoped.
And their water supply will continue to fall short this summer,
according to the Northwest River Forecast Center's latest water
supply briefing on June 2nd.
So the forecast for the summer, it's not expected to be as hot
as it was last year,
but I can attest to it has been a cold and wet May.
I keep waiting for summer to show up.
Right now it feels more like April.
But yeah, this was some good news going into the summer.
Jason Fordney:
Great. Glad to hear that.
We had a bunch of rain here this weekend, which was welcome.
So it won't make a huge difference, but every little drop helps
I guess.
But yeah, glad to hear that.
Back in our territory, we have coverage from Abigail Sawyer.
Transmission Projects Advanced Mission of bringing Wyoming wind
westward.
Construction began this week on, or that would be last week, on
one of two major transmission projects expected to deliver
Wyoming wind power to load centers further west by the middle of
the decade.
The first project is Pacific Corp's Gateway South, a 416 mile
segment of the 2000 mile 500 KV
Energy Gateway Transmission Project received on May 26, a notice
to proceed with construction from the Wyoming State
Office of BLM.
So BLM said this is a significant milestone in the Biden-Harris
administration effort to modernize American power infrastructure
in the West and permanent.
At least 25 gigawatts of wind and solar construction on that
project began on
June 1st.
Also, FERC in February accepted the capacity allocation process
of Trans West Express, a wholly-owned affiliate
of the privately held Anschutz Corporation based in Denver that
is developing the Trans West Express Transmission Project.
That reminds me of that old Kraftwerk song was that Trans Europe
Express Trans Express Transmission Project, which is 500 KV,
732 mile line running from Wyoming to Boulder City, Nevada.
TWE's Wyoming to Utah segment will be a 500 KV TC line.
The Utah to Nevada segment will be 500 KV AC.
So yes, some good news there for people wanting new
transmission.
These are not small projects, one 2000 miles and the other would
say 732 miles.
So let's move that wind west.
Let's see how it goes.
Dan Catchpole:
And we need as much of it as we can get.
Jason Fordney:
Yes.
Dan Catchpole:
Well, there are still spots open for NewsData's, June 23rd, 24th
Virtual Conference covering the regional wholesale
power market in the Northwest.
We've got a great lineup of speakers who will be appearing.
So urge everybody to check it out.
Go to NewsData.com for more information.
And aside from that, that's all from me.
I'm Dan Catchpole.
Thank you for joining us.
As always, please rate and review this podcast in Apple
Podcasts, Spotify or wherever you listen and let other people
know about it. You can find me on Twitter.
I'm at @DCatchpole and my co host Jason Fordney is on Twitter.
He's @FordneyEnergy.
Jason Fordney:
Yep. I'd also say thanks for listening to Energy West.
You can read more of our coverage at NewsData.com.
Nobody covers energy in the West like we do.
Follow us on Twitter. CEM is @CEMNewsDAta That's the letters C
E M NewsData.
Clearing Up our sister publication is @CUNewsdata.
Again, that's the letters CU NewsData.
Thanks for listening. We'll see you back here next week.
Outro:
You've been listening to NewsData's Energy West, a podcast about
the energy industry today and where it's going
tomorrow.