HomeMy WebLinkAbout10012018 City Council Laydown - SOA Order inviting Final Round of Presentations Before Second Response to Legislature1
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STATE OF ALASKA
THE REGULATORY COMMISSION OF ALASKA
I Before Commissioners. -
In the Matter of the Evaluation of the Operation
and Regulation of the Alaska Railbelt Electric
Transmission System
In the Matter of the Evaluation of the Reliability
and Security Standards and Practices of Alaska
Electric Utilities
Stephen McAlpine, Chairman
Paul F. Lisankie
Robert M. Pickett
Antony Scott
Janis W. Wilson
1-15-001
AMa];1:4ON
1-16-002
ORDER NO. 8
ORDER INVITING FINAL ROUND OF PRESENTATIONS BEFORE
SECOND RESPONSE TO LEGISLATURE
I BY THE COMMISSION:
Background
In 2014, the legislature appropriated funds for us to determine "whether
creating an independent system operator or similar structure for electric utilities in the
Railbelt area is the best option for effective and efficient electrical transmission ...."' We
opened Docket 1-15-001 to investigate this question, and requested information from
interested persons.2
'Ch. 18, Sec. 31(b) SLA 2014.
2Order 1-15-001(1), Order Opening Docket and Requesting Responses, dated
February 27, 2015.
1-15-001(8)/1-16-002(8) - (09/12/2018)
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Based upon the information we received in Docket 1-15-001, we responded
to the Legislature on June 30, 2015, with the following findings:
Finding No. 1: The present Railbelt electrical transmission system requires
institutional reform.
Finding No. 2: Although short-term bilateral economy energy transactions
occur in the Railbelt electric market, true economic dispatch of generation
units on a system -wide basis does not occur.
Finding No. 3: Many past efforts to reform and rationalize the Railbelt
electrical system have failed.
Finding No. 4: Reliability standards for the Railbelt electrical grid are
voluntary and not all electric utilities have adopted the same standards.
Finding No. 5: Full implementation of the proposed Railbelt electrical
system structural changes will likely take five to ten years. Many obstacles
remain to be overcome.
Based on these findings, we made five recommendations, summarized as:
Recommendation No. 1: An independent transmission company should
be created to operate the transmission system reliably and transparently
and to plan and execute major maintenance, transmission system
upgrades, and new transmission projects necessary for the reliable delivery
of electric power to Railbelt customers.
Recommendation No. 2: System -wide merit order economic dispatch of
the Railbelt's electrical generation units will bring the maximum benefit to
ratepayers and the Commission should promote this goal.
Recommendation No. 3: Though history strongly indicates that the current
voluntary transmission restructuring and economic dispatch efforts by the
utilities may fail, the Commission believes the utilities must be given the
opportunity to succeed.
Recommendation No. 4: Enforceable and consistent Railbelt operating
and reliability standards are necessary for consistent, safe, reliable, and
efficient operation of the Railbelt electric system.
Recommendation No. 5: The Commission will require additional
resources to fully implement these recommendations .3
3Correspondence from R. Pickett, dated June 30, 2015, at 3-5, in Docket 1-15-001.
1-15-001(8)/1-16-002(8) - (09/12/2018)
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We opened Docket 1-16-002 to gather information about the reliability and
security standards and practices of Alaska electric utilities.' In 2016, 2017, and early
2018, we received the presentations and information identified in Order 1-15-001(7)/ -
1-16-002(5).5 On April 17, 2018, the six interconnected Railbelt electric utilities and the
Alaska Energy Authority (AEA) submitted revised draft reliability standards for adoption
and enforcement by a Railbelt reliability organization.6 On May 15, 2018, we requested
status reports from affected or potentially affected electric utilities and other interested
persons on the issues raised in these dockets.'
At our public meeting on May 23, 2018, we received a joint presentation
from the Municipality of Anchorage d/b/a Municipal Light & Power Department (ML&P);
Chugach Electric Association, Inc. (Chugach); Golden Valley Electric Association, Inc.
(GVEA); Homer Electric Association, Inc. (HEA); Matanuska Electric Association, Inc.
(MEA); the City of Seward (Seward); and American Transmission Company (ATC) on the
current status of efforts to create an independent Railbelt transmission operator.' We
also received comments from Renewable Energy Alaska Project (REAP)9 and separate
'Order 1-16-002(1), Order Opening Docket and Requesting Responses, dated
June 8, 2016.
50rder 1-15-001(7)/1-16-002(5), Order Inviting Presentations, dated May 15, 2018
(Order 1-15-001(7)/1-16-002(5)), at 2-3.
6Correspondence from L. Thibert, filed April 17, 2018, in Docket 1-16-002.
'Order 1-15-001(7)/1-16-002(5) at 3-4.
8May 23, 2018, Public Meeting Tr. 7-43.
9May 23, 2018, Public Meeting Tr. 3-5.
1-15-001(8)/1-16-002(8) - (09/12/2018)
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1 comments by MEA, 10 ML&P,11 Chugach,12 and HEA.13 ML&P, Chugach, GVEA, HEA,
2 MEA, Seward, and ATC filed an update to their presentation on July 25, 2018.14
3 At our public meeting on June 13, 2018, we received a joint presentation by
4 Chugach, ML&P, and MEA on progress made in developing a power pooling and joint
5 dispatch agreement between those utilities.15 We also received comments from REAP16
6 and a presentation by HEA on power pooling." We received comments from the Alaska
7 Public Interest Research Group addressing power pooling at our public meeting on
8 June 27, 2018.18 We received an updated power pooling report from HEA on July 30,
9 2018.19
10 On May 16, 2018, we received a report prepared for Alaska Railbelt
11 Cooperative Transmission and Electric Company (ARCTEC) by GDS Associates, Inc.
12 (GDS) on the development of a Railbelt Reliability Council to adopt and enforce electric
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1OMay 23, 2018, Public Meeting Tr. 43-52.
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"May 23, 2018, Public Meeting Tr. 52-58,
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12May 23, 2018, Public Meeting Tr. 59.
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13May 23, 2018, Public Meeting Tr. 59-60.
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1 Informational Docket 1-15-001 - In the Matter of the Evaluation of the Operation
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Regulation of the Alaska Railbelt Electric Transmission System, filed July 25, 2018.
June 13, 2018, Public Meeting Tr. 10-47.
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16June 13, 2018, Public Meeting Tr. 4-9.
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"June 13, 2018, Public Meeting Tr. 47-53. Presentation to Regulatory
Commission of Alaska, filed June 12, 2018, by Homer Electric Association, Inc.
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18June 27, 2018, Public Meeting Tr. 3-6.
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19Correspondence from J. Draves, filed July 30, 2018, in Docket 1-15-001.
1-15-001(8)/1-16-002(8) - (09/12/2018)
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1 utility reliability standards.20 At our public meeting on June 27, 2018, we received a joint
2 presentation by MEA, HEA, Chugach, ML&P, and GVEA21 on the development of electric
3 utility reliability standards.22 We also received a presentation by ARCTEC and GDS on
4 the formation of a Railbelt Reliability Council.23
5 At our public meeting on July 11, 2018, Commission Staff (Staff) gave a
6 presentation on the draft reliability standards filed in Docket 1-16-002 on April 17, 2018.24
7 We scheduled technical conferences to allow responses to questions raised by Staff
8 about the draft reliability standards.25 GVEA, ML&P, the Attorney General (Regulatory
9 Affairs and Public Advocacy Section), AEA, Chugach, MEA, and HEA participated in our
10 technical conference on July 27, 2018.26 Chugach, GVEA, ML&P, MEA, HEA, and AEA
11 participated in our technical conference on August 8, 2018.27
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20Correspondence from D. Glines, filed May 16, 2018, in Docket 1-16-002.
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z'These utilities indicated that most of this effort was being carried out by the
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Alaska Intertie Management Committee through the Alaska Intertie Operating Committee,
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of which Chugach, GVEA, MEA, ML&P, and the AEA are members, with HEA the City of
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Seward actively participating. Tr. 8-9.
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22June 27, 2018, Public Meeting Tr. 7-43.
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June 27, 2018, Public Meeting Tr. 43-66.
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24July 11, 2018, Public Meeting Tr. 4-21.
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25Order 1-16-002(6), Order Scheduling Technical Conference, dated July 17, 2018;
Order 1-16-002(7), Order Scheduling Technical Conference, dated August 2, 2018.
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26July 27, 2018, Technical Conference Tr. 3-5.
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27August 8, 2018, Technical Conference Tr. 68.
1-15-001(8)/1-16-002(8) - (09/12/2018)
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Discussion
As discussed at our public meeting on May 9, 2018, there is concern on our
part, by legislators, and by other interested persons whether adequate progress is being
made on the timely development of an independent Railbelt transmission operator,
mandatory merit based economic dispatch of Railbelt generation resources, and
enforceable electric utility reliability standards.28 It is our intention to issue a report on
these issues prior to the start of the 31 st Legislature Session. To ensure that this report
is current, we include the following topics on the agenda for our next three scheduled
public meetings as follows:
• September 26, 2018 — (Docket 1-15-001) A status report on the
creation of an independent Railbelt transmission operator, including specific
dates and benchmarks on which we can base a determination of adequate
and timely progress.
• October 10, 2018 — (Docket 1-15-001) A status report on
development of a commercial agreement implementing a Railbelt system-
wide mandatory merit based economic dispatch model, including specific
dates and benchmarks on which we can base a determination of adequate
and timely progress.
• October 24, 2018 — (Docket 1-16-002) A status report on voluntary
adoption of mandatory electric utility reliability standards, including
standards addressing financial obligations, cyber security, and enforcement
mechanisms, and the need for adoption of electric utility reliability standards
as regulations.
We invite affected, or potentially affected, electric public utilities and other
interested persons to present reports or comments at these public meetings. This will be
the final opportunity for presentations or comments before we submit our second report
to the legislature.
28May 9, 2018, Public Meeting Tr. 3-14.
1-15-001(8)/1-16-002(8) - (09/12/2018)
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I
ORDER
2 1 THE COMMISSION FURTHER ORDERS that any public utility or other interested person
3 may individually or jointly with others make a public presentation on the issues identified
4 in the body of this order at the public meetings scheduled at 9.00 a.m. on September 26,
5 2018, October 10, 2018, and October 24, 2018, in the East Hearing Room of the
6 Regulatory Commission of Alaska, 701 West Eighth Avenue, Suite 300, Anchorage,
7 Alaska.29
8 DATED AND EFFECTIVE at Anchorage, Alaska, this 12th day of September, 2018.
9 BY DIRECTION OF THE COMMISSION
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291f you are a person with a disability who may need a special accommodation,
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auxiliary aid or service, or alternative communication format to participate in the
scheduled event, please contact Valerie Fletcher -Mitchell at 1-907-276-6222,
or
TTY/Alaska Relay at 7-1-1 or 1-800-770-8973, or send your request by electronic mail to
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rca.mail(cDalaska.gov at least three business days before the scheduled event to make
the necessary arrangements.
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Any person wishing to appear telephonically at the public meeting must advise us
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in writing and provide a telephone number where it may be reached for that appearance.
1-15-001(8)/1-16-002(8) - (09/12/2018)
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