Seattle City Light Supports Carbon Reductions as EPA Considers Replacing Clean Power Plan Rules

Seattle City Light is one of eight electric utilities that are urging the Environmental Protection Agency to maintain cost-effective carbon-reduction opportunities as the agency considers a replacement for the Obama Administration’s Clean Power Plan.

City Light and the other utilities support the Clean Power Plan. In formal comments submitted as part of the EPA’s rulemaking process, the utilities urged the agency to:

  • Maintain rules that achieve meaningful emission reductions and are based on measures that reflect the interconnected nature of the electric grid.
  • And provide guidance on state plans to ensure meaningful emission reductions while creating flexible compliance opportunities for utilities.

One key consideration is whether utilities will be allowed to shift generation sources or reduce the use of high-emission plants to achieve carbon emission reduction goals.

City Light and the other utilities believe generation shifting is one of the most cost-effective means to deliver reliable electricity and reduce emissions.

The other utilities supporting this approach are Austin Energy, Exelon, Los Angeles Department of Water and Power, National Grid, New York Power Authority, Pacific Gas and Electric and the Sacramento Municipal Utility District.

Here is the text of the full comments submitted by the utilities:

February 26, 2018

Docket ID No. EPA-HQ-2017-0545 Environmental Protection Agency EPA Docket Center (EPA/DC) EPA WJC West Building, Room 3334 1301 Constitution Ave. NW Washington, DC 20460 (submitted via regulations.gov)

Re: State Guidelines for Greenhouse Gas Emissions from Existing Electric Utility Generating Units Advance Notice of Proposed Rulemaking
To Whom it May Concern:

On December 28, 2017, the U.S. Environmental Protection Agency (EPA) published in the Federal Register an Advance Notice of Proposed Rulemaking (ANPRM) regarding “State Guidelines for Greenhouse Gas Emissions from Existing Electric Utility Generating Units”.1 This action seeks comment on the regulatory structure for a potential replacement rule to the previous administration’s Clean Power Plan, which was finalized on October 23, 2015.2 On behalf of Austin Energy, Exelon, Los Angeles Department of Water and Power (LADWP); National Grid; New York Power Authority (NYPA); Pacific Gas and Electric, Seattle City Light; and Sacramento Municipal Utility District (SMUD), we submit the following comments on the ANPRM.3
1 State Guidelines for Greenhouse Gas Emissions from Existing Electric Utility Generating Units, 82 Fed. Reg. 61,507 (Dec. 28, 2017).
2 Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,661 (Oct. 23, 2015).
3 The signatory companies may offer additional comments on the ANPRM in separate comments.
4 EPA identified four main areas in which it solicited comment (while also noting that it did not intend to limit comment to those identified areas) and requested that commenters include the corresponding numeric identifiers when providing comments (see 82 Fed. Reg. 61,510). Accordingly, we note in each section below to which questions we are responding. As a whole, these comments address areas 1a, 1b, 2, 3a, 3b, 3c, and 3e.

These comments are focused on ensuring that any definition of the best system of emission reduction (BSER) and program to replace the Clean Power Plan achieves meaningful emission reductions and reflects best practices utilized across the industry, consistent with the statutory language of the Clean Air Act (CAA).4 We supported the Clean Power Plan’s approach, which was based upon a determination of BSER that reflects the system of emission reduction opportunities that the electric industry is already implementing to reduce emissions while maintaining a reliable electric grid, including the use of generation shifting. Pursuant to this ANPRM, if EPA elects to repeal the Clean Power Plan, we urge EPA to:
• • replace the rule with one that achieves meaningful emission reductions and that is based on measures that reflect the interconnected nature of the electric grid; and
• • provide guidance on state plans to ensure meaningful emission reductions while creating flexible compliance opportunities for covered entities.

I I. Any Definition of BSER And Program to Replace the Clean Power Plan Must Reflect Industry Practice, Including Generation Shifting5

5 This section of the comments is responsive to EPA area 2.
6 John Larsen et al., Assessing the Final Clean Power Plan Energy Market Impacts (May 2016), http://rhg.com/wp-content/uploads/2016/05/AssessingCleanPowerPlan_EMI.pdf.
7 Comments of Los Angeles Department of Water and Power, Docket ID No. EPA-HQ-OAR-2013-0602 (Dec. 1, 2014).
a. Generation shifting is how the grid and companies operate

The definition of BSER and any program to replace the Clean Power Plan must reflect actual operation of electric grid and the strategies the electric sector has deployed to reduce emissions. These strategies include generation shifting, or operating lower- or non-emitting resources more and operating higher emitting resources less in response to market signals, regulatory constraints, or demand. This should also include operating and maintaining existing zero-carbon resources or building new zero-carbon generation.
The electric grid operates as an interconnected system, shifting generation among affected units and to zero-emitting sources for a variety of reasons, including environmental requirements. In fact, generation shifting is the ordinary means by which supply and demand are instantaneously matched throughout the interconnected electricity grid, and as balancing authorities and utilities make dispatch decisions to deliver power to consumers at least-cost, subject to reliability and other constraints.
Generation shifting is consistent with industry practice and is evident in the transition from a system heavily dependent on coal (55 percent of all generation in 1990) to one that in 2016 was more evenly balanced across natural gas (33 percent), coal (31 percent), nuclear (21 percent), and hydroelectric and other renewable resources (14 percent). Combined with the expanding role of energy efficiency in meeting consumer demand, the shift in generating resources has led to a decrease in emissions of criteria air pollutants and greenhouse gases. Our companies’ successes at reducing emissions while continuing to deliver electricity reliably demonstrates that this approach is consistent with the nature of the electric grid and the emission reduction opportunities generation shifting provides.

Modeling of the emission guidelines established by the Clean Power Plan suggested the most cost-effective compliance would be through generation shifting.6 Our companies construct, generate, sell, and purchase renewable and zero-carbon electricity in response to customer demands, state policies, and market opportunities, and we do so cost-effectively. For example, many of our companies have assets that are covered by or are within the footprint of the Regional Greenhouse Gas Initiative or the California Cap-and-Trade Program. We comply and facilitate cost-effective compliance with those programs through a combination of measures including the use of lower- and zero-emitting resources and deployment of energy efficiency.

There are numerous examples of companies using generation shifting as a cost-effective, efficient, and low-emitting best practice across the country. Many companies also invest in energy efficiency projects to reduce emissions. For example, Los Angeles Department of Water and Power is making investments across its system to lower emissions, including “replacement of coal resources, renewable energy, modernizing power plants…[and] energy efficiency.”7 This approach, focused on shifting generation to cleaner resources, has reduced its total CO2 emissions by 42 percent from 1990 to 2016. Similarly, Austin Energy has pursued a strategy of generation shifting in order to reduce emissions, including “replac[ing] older fossil-fueled generation with efficient natural gas combined cycle and simple cycle turbine units,” adding 1,005 MW of renewable capacity resulting in over 20 percent of generation to come from renewables in 2013 (with additional contracts to reach a 35 percent renewable portfolio in 2017), and setting “future resource priorities to allow for the reduced utilization or retirement of [its] coal and gas steam units within the next decade.” 8 Pacific Gas and Electric delivered nearly 70 percent greenhouse gas-free electricity to its customers in 2016 from a combination of nuclear, large hydro and renewable sources of energy.9 Exelon Corporation also has long provided a zero-carbon nuclear fleet that underpins regional air quality and grid reliability. For example, in 2016, Exelon completed an uprate at Peach Bottom Atomic Power Station in Pennsylvania, which added another 276 MW of zero-carbon generation, displacing over two million short tons of CO2 annually. Additionally, Seattle City Light has been “operating an aggressive conservation program for more than thirty years,” and has reached net CO2 emissions neutrality by serving residents and businesses primarily though “low cost, reliable, non-emitting hydropower.”10 National Grid has been, and continues to be, a national leader in the deployment of energy efficiency programs, and “believes strongly that energy efficiency strategies and technologies are an achievable and cost-effective means to reducing carbon emissions nationwide.”11
8 Comments of Austin Energy, Docket ID No. EPA-HQ-OAR-2013-0602 (Dec.1, 2014).
9 Denny Boyles, Nearly 70 Percent of PG&E’s Electric Power Mix Free of Greenhouse Gases (Mar.16, 2017) http://www.pgecurrents.com/2017/03/16/nearly-70-percent-of-pge%E2%80%99s-electric-power-mix-free-of-greenhouse-gases/.
10 Comments of Seattle City Light, Docket ID No. EPA-HQ-OAR-2013-0602 (Dec. 1, 2014).
11 Comments of National Grid, Docket ID No. EPA-HQ-OAR-2013-0602 (Dec. 1, 2014).
12 Repeal of Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 82 Fed. Reg. 48,039 (Oct. 16, 2017).
b. Generation shifting satisfies the criteria for BSER

In EPA’s Proposed Clean Power Plan Repeal published prior to this ANPRM, EPA proposed to define BSER “as being limited to emission reduction measures that can be applied to or at an individual stationary source,” and are, therefore, “based on a physical or operational change to a building, structure, facility, or installation at that source.”12 While EPA has now proposed that the Clean Power Plan did not fit this statutory interpretation, we disagree.

BSER should not be limited only to measures applied to an individual facility nor should it be interpreted to preclude the system that most cost-effectively reduces emissions and that is broadly used by companies and states to reduce emissions. BSER should reflect the best that a facility can do to reduce emissions. This can include the application of a technology or operational change at a facility, such as the reduced utilization of a higher emitting facility due to generation shifting. Each of these actions reduces emissions.

Generation shifting involves a reduction in utilization of higher-emitting methods of generating electricity, which can lead to an increase in utilization of lower-emitting methods of generation. Including generation shifting in BSER and any program to replace the Clean Power Plan is consistent with the Clean Air Act. BSER that reflects generation shifting reduces emissions, is of reasonable cost, encourages technology development, and is adequately demonstrated to reduce emissions from affected sources. Thus, it fulfills the statutory criteria—it achieves meaningful emission reductions considering cost and is adequately demonstrated.13
13 42 U.S.C. §7411 (1)(a).
14 This section of the comments is responsive to EPA area 2.
15 This section of the comments is responsive to EPA area 1a, 1b, 3a, 3b, 3c, and 3e.
I II. Limiting Measures to those EPA Describes as “Inside the Fence-line” Could Increase Costs and Potentially Emissions14

Generation shifting reflects the most cost-effective and flexible strategy for lowering emissions at affected units. This has been demonstrated and implemented by our companies and companies across the sector throughout the U.S. Defining BSER or establishing any program to replace the Clean Power Plan in a way that precludes and does not reflect generation shifting would ignore this long-standing industry best practice and fail to encourage the industry to pursue the lowest cost emission reductions. Such an approach could increase costs of compliance with BSER, as compared to a definition that reflects industry realities and current operating practices.

Furthermore, focusing on heat rate improvements as a system of emission reduction could increase emissions, particularly over the long-term, by potentially creating incentives to invest in and increase the operation of higher emitting resources—the potential “rebound effect”. Because heat rate improvements reduce variable operating costs, their implementation at affected units could increase the cost-competitiveness of those units compared to lower-emitting fossil sources. This effect could lead to greater total CO2 emissions, despite the units’ reduced emission rate. We would oppose any legal interpretation of BSER that does not achieve meaningful emission reductions. Thus, we urge EPA to establish emission standards that achieve meaningful emission reductions and are based on measures the industry is already cost-effectively implementing, including generation shifting.

III. EPA Should Finalize Binding Emission Guidelines to Ensure a Level of Consistency Across States and Provide Guidance on Flexible Trading Programs15 a. EPA should ensure consistent implementation of emission standards under section 111

EPA requests comment in the ANPRM on its role in developing emission guidelines and the role of states. We urge EPA to set binding emission guidelines to ensure states develop plans that are approvable and consistent with statutory requirements. While it is important that states have the flexibility to design plans that reflect their power plants’ and states’ unique characteristics, EPA must establish a clear set of criteria for evaluating state plans and determining whether state standards are sufficient for environmental and public health protection. Thus, the emission guidelines should set forth what all states must at a minimum achieve, recognizing that the Clean Air Act allows states to require additional reductions, if appropriate and desired.

Consistent with past practice and legal obligation, EPA should provide clear guidelines for emissions standards and components of a satisfactory state plan that achieve the emission guidelines established by EPA. This will help avoid states spending time and resources on approaches and plans that may not ultimately be approvable or legally defensible. Section 111 requires EPA to ensure state plans contain “satisfactory” “standards of performance,” which necessarily requires EPA to set criteria for evaluating the standards of performance proposed in state plans for their effectiveness in reducing emissions consistent with the emission guidelines.16
16 42 U.S.C. § 7411(d)(1), (2)(A).
b. EPA’s emission guidelines should be technology forcing consistent with section 111 c. EPA must consider the implications of varied emission reduction opportunities across affected sources

EPA and courts have historically interpreted and implemented Section 111 as technology-forcing. Thus, EPA has the authority and obligation to establish a regulation that is based on the use of a technology even if that technology has not been routinely deployed by all existing units. EPA has successfully promulgated several technology-forcing standards. For example, under the 1971 new source performance standard under section 111(b) for certain new, modified, and/or reconstructed coal-fired electric generating units, EPA established a SO2 emissions standard informed by emission reductions that could be achieved with the application of a flue gas desulfurization device (or scrubber). When EPA established this standard, only three scrubbers in the U.S. were in operation. By 1984, EPA reported that there were 114 scrubbers in operation, with more than 100 more systems planned or under construction, and today these units are widespread. While clearly not all units had implemented the technology at the time EPA applied its regulatory standard, such a standard was still considered achievable. The D.C. Circuit has also recognized EPA’s authority to set such a standard.

To facilitate the design of approvable state plans, EPA should also finalize presumptive standards and provide sample state plan text. However, both must ensure the achievement of meaningful emission reductions.

Emission reduction opportunities will vary due to multiple factors, including geographic location, access to fuel and technology types, operational and ownership characteristics, already-undertaken efficiency and emission reduction improvements at specific sources, and market dynamics. Thus, facilities will have differing levels of reduction opportunities at differing costs. For example, a generator that has not undergone any significant facility upgrades in the past decade may be able to implement more cost-effective incremental emission reductions than a generator that implemented efficiency improvements in the previous year. Other facilities, such as the W. A. Parish Plant in Texas, may find it cost-effective and competitive to install carbon capture and sequestration or co-firing technologies. And, other facilities may elect to reduce their utilization as a means to reduce emissions. Thus, emission guidelines should reflect such opportunities across the electric sector and allow for trading across facilities that can help capture these cost-effective emission reductions.
Additionally, while subcategories can be a means to recognize these varying reduction opportunities, we urge EPA not to divide affected sources in a way that effectively allows for the establishment of standards that do not achieve meaningful emission reductions. The result of subcategories should not be to create exceptions for certain facilities that would otherwise be held to an achievable and cost-effective standard.

d. EPA should provide guidance on the use of trading systems and ensure that guidelines for state standards are conducive for trading programs with environmental integrity

Because the most cost-effective means to achieve reductions will vary, the final rule should ensure that states have the authority to allow facilities to trade in order to capture lower cost opportunities while still achieving meaningful reductions.

Additionally, EPA’s emission guidelines should ensure that states and companies can build upon the successful use of flexible compliance measures, including trading programs. These measures can be critical for achieving efficient, cost-effective emission reductions. They are also important opportunities for power producers and utilities that own and operate facilities across multiple states to reduce emissions most efficiently across their fleets and the electric grid, which rarely follow state boundaries. EPA can help facilitate cost-effective compliance with regulatory obligations for these multi-state companies by finalizing binding emission guidelines that provide a level of consistent stringency among states.
We look forward to continuing to constructively engage with EPA on this rulemaking and urge EPA to implement a regulation under section 111 that achieves meaningful reductions, considers the electric system as a whole, and allows cost-effective approaches, including generation shifting. If you have any questions, please do not hesitate to contact me at mbradley@mjbradley.com.

Sincerely,

Michael Bradley
President
M.J. Bradley & Associates

Seattle City Light Supports Renegotiation of Columbia River Treaty

Grand Coulee Dam on the Columbia River — Photo by US Bureau of Reclamation

Seattle City Light is pleased by an announcement that the United States and Canada will begin negotiations in 2018 to modernize the landmark Columbia River Treaty, which has supported hydropower operations, flood control, irrigation, municipal water use, navigation and recreation on the international river since 1964.

“We’re thankful to the Pacific Northwest congressional delegation for their support in getting Columbia River Treaty negotiations started with Canada, American Indian tribes and Canadian First Nations,” City Light’s Interim Power Supply Officer Robert Cromwell said. “It’s time to modernize the operations of the Columbia River for power, flood control and address important ecosystem functions.”

Under the existing treaty, river users in the United States, including hydroelectric dam operators such as the Bonneville Power Administration, pay Canada for power production and flood control support provided by their reservoirs. The U.S. electric utilities and agencies covered by the treaty believe they are paying too much for that power production and flood control support.

City Light supports the regional recommendation that was submitted to the U.S. State Department in 2013. It calls for:

  • Better address the region’s interest in a reliable and economically sustainable hydropower system and reflect a more reasonable assessment of the value of coordinated power operations with Canada;
  • Continue to provide a similar level of flood risk management to protect public safety and the region’s economy;
  • Include ecosystem-based function as one of the primary purposes of the treaty; and
  • Create flexibility within the Treaty to respond to climate change, changing water supply needs and other potential future changes in system operations while continuing to meet authorized purposes such as navigation and irrigation.

Such changes could reduce Seattle City Light’s costs for the electricity it buys from BPA by $9 million to $11 million per year.

More details about the regional recommendation are available here.

Customers Asked to Help with Final Restoration Efforts by Re-reporting Remaining Outages

Seattle City Light is asking all customers who are still experiencing power outages to re-report those outages to ensure crews have an accurate picture of the work that remains.

In many instances, crews have made repairs only to have circuits fail a short time later. Among the circumstances in which this can happen, is when equipment was weakened by the initial outage and failed after the line was re-energized. It can also happen when continuing winds cause new damage.

If you are currently without power, please call City Light at (206) 684-3000 to report it, even if you have reported that outage earlier.

The phone system will ask you to press t 1 to report an outage, which will require the phone number associated with your account or the account number. You will then receive an automated status update. Press 1 again to talk to a live person and wait while the system transfers you to a representative.

Thank you for your help. An accurate picture of current outages will help crews get everyone back into service as quickly as they can.

Historic Georgetown Steam Plant Powers Graphic Novel

An atist works outside the Georgetown Steam Plant.

The Seattle Office of Arts & Culture (ARTS), in partnership with Seattle City Light has selected David Lasky and Mairead Case to create a fictionalized graphic novel about the historic Georgetown Steam Plant.

Built in 1906, the Georgetown Steam Plant advanced industrial architecture in its time through the early use of reinforced concrete employed on a massive scale. It was also forward thinking in its turbine generator design that greatly increased power generation capability across the nation, and in turn influenced modern power generators.  This project offers the opportunity to bring Seattle history to life, as demonstrated through the development and use of this building.

“We are thrilled to have David Lasky and Mairead Case create a story grounded in the experiences of the people and significance of the steam plant’s history,” says Lynn Best, Chief Environmental Officer Seattle City Light. “Their narrative will reach beyond Seattle and will tell the story of the historic plant as it transitions from retirement into a fully realized cultural space.”

David Lasky

Mairead Case

Lasky and Case will write and illustrate a compelling fictionalized graphic novel that incorporates aspects of the Georgetown Steam Plant’s history. Lasky will serve as the illustrator and bring his skill as a comic book artist with fine art sensibilities’.. Case, serving as the writer, will develop storylines that bring in historical information with a fictionalized narrative to ignite wonder and joy about this special building. Both have works previously published including Carter Family: Don’t Forget This Song, by Frank Young and David Lasky and See you in the Morning by Mairead Case.

Lasky and Case were selected from an open call inviting comic writers, artists, and illustrator teams from Washington, Oregon, Idaho and British Columbia to apply. Seventy-one applications were reviewed by a selection panel that included Taneka Stotts, editor, comics artist, and creator of award winning anthologies; Kelly Froh, comics artist and co-founder of Short Run Comics and Arts Festival; and Larry Reid, Fantagraphics Bookstore Manager and President of the Georgetown Merchants Association.

The team will begin work immediately with in-depth research.  As part of the project, they will be sharing progress throughout the next year in a combination of online updates and in-person events.

The finished book will be printed and made available free of charge through regional libraries, museums, and schools in 2019.  The Georgetown Steam Plant graphic novel is commissioned by the Office of Arts & Culture and is funded by Seattle City Light 1% for Art funds.

One of the generators inside the Georgetown Steam Plant.

City Light Opposes Federal Rule Favoring Coal, Nuclear Power

Seattle City Light is opposing a proposed federal rule change that would provide higher prices for baseload electricity generated by coal and nuclear power plants for reliability and resiliency attributes the U.S. Department of Energy claims they provide.

While the proposed rule does not apply to City Light at this time, the utility filed comments to preserve our interest in regulatory proceedings that might affect how we do business.

City Light believes the process to develop this rule so far has been insufficient for thoughtful engagement by stakeholders. The utility also believes the rule sets narrow solutions that do not adequately address the country’s needs.

Here is the full text of the comments City Light submitted:

UNITED STATES OF AMERICA

BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION

Grid Reliability and  

Resilience Pricing

Docket No. RM18-1-000

 

COMMENTS OF THE CITY OF SEATTLE OPPOSING THE GRID RELIABILITY AND RESILIENCE PRICING RULE

Pursuant to the Notice Inviting Comments on Grid Reliability and Resilience Pricing in Docket No. RM18-1-000 of the Federal Energy Regulatory Commission (Commission) filed on October 2, 2017, The City of Seattle, by and through its City Light Department (Seattle), hereby respectfully submits these Comments of The City of Seattle Opposing the Grid Reliability and Resilience Pricing Rule in the above docket. Seattle appreciates the opportunity to offer comments on the proposed rule.

  1. BACKGROUND

The City of Seattle is a Washington municipal corporation that operates a municipal electric utility, through its City Light Department, which is governed by the Seattle City Council. Seattle’s principal place of business is located at the Seattle Municipal Tower, 700 Fifth Avenue, Seattle, WA 98124-4023. Seattle is not a public utility as defined by the Federal Power Act Section 201(f) (16 U.S.C. § 824(e)).

Seattle is dedicated to delivering its customers affordable, reliable and environmentally responsible electricity service. Seattle operates one of the largest publicly-owned utilities in the United States in terms of customers served, providing retail electric service to nearly 450,000 residential, commercial, and industrial customers in the Puget Sound area and thus serving nearly 1 million Seattle-area residents. Seattle’s customer rates are among the lowest of any urban electric utility.

Seattle owns and operates a transmission system consisting of more than 650 miles of transmission lines and towers connected to the utility’s five hydroelectric generation facilities. Reliable load service is at the core of Seattle’s mission, and a reliable transmission grid is essential to our ability to meet load service. Seattle’s power resources are 90 percent hydropower, much of which is owned and operated by Seattle. Additionally, Seattle operates its hydroelectric projects to support flood control, instream flows for fish, and reservoir recreation. Seattle’s total system generation capability was 2,014.1 MW in 2016. Notably, in 2005, Seattle became the first utility in the nation to achieve net-zero carbon dioxide emissions by fully offsetting emissions created by day-to-day operations and market power purchases to supplement its hydroelectric generation.

  1. COMMENTS

On September 28, 2017, the Secretary of the Department of Energy (DOE) submitted a proposed rule to the Commission addressing Grid Reliability and Resilience Pricing, and the formal proposal was published in the Federal Register on October 10, 2017 (proposed rule). The proposed rule published in the Federal Register limited the scope to independent system operators and regional transmission organizations (ISOs/RTOs) with energy and capacity markets, and Seattle has determined it is not subject to this narrowed rulemaking. However, Seattle has an interest in regulatory proceedings that may affect how it does its business, its wholesale electricity market transactions, and which might subsequently be imposed upon Seattle’s interests, as well as a greater interest in market, resource, reliability and resiliency issues throughout the nation. Additionally, decisions that apply to organized capacity markets may influence Commission approval of bilateral contracts that Seattle may seek in the future. Seattle is providing comments because it believes the proposed rule is problematic due to: (1) the inadequate process and insufficient time allowed for the development of a robust record with thoughtful engagement by stakeholders, and (2) the narrow solution this rulemaking sets forth that inadequately addresses regional and state market differences and needs.

Seattle supports the comments filed contemporaneously by the Large Public Power Council (LPPC), the American Public Power Association (APPA), the Clean Energy Group (CEG), and the National Hydropower Association (NHA) organizations to which Seattle belongs.

  1. The process to examine resiliency attributes of energy resources and infrastructure must be a deliberative one to develop a robust record with meaningful stakeholder participation.

DOE directed the Commission to act within 60 days of publication of the proposed rule in the Federal Register, or to issue an interim final rule immediately with modifications to the rule after receiving public and stakeholder comment. This short and aggressive period is insufficient to provide a reasonable opportunity for meaningful input from stakeholders and to examine the complex and important issues the proposed rule seeks to address, including pricing of generation and supporting grid reliability and resilience. Although Seattle agrees with the importance of addressing regulatory matters on a timely basis, the timeframe is unnecessarily hurried and the urgency with which DOE sets out to examine the proposed rule is not apparent and needs further scrutiny.

In August 2017, DOE released a Staff Report to the Secretary on Electricity Markets and Reliability (DOE Staff Report). The DOE Staff Report pointed out that there is a limited understanding of the best way to define and value grid resilience, noting that “[m]arkets recognize and compensate reliability, and must evolve to continue to compensate reliability, but more work is needed to understand what can be done to maintain resilience.”

1 By filing the proposed rule with the Commission, DOE ignores the recommendation of its own Staff to further research and review this subject.

The DOE Staff Report also finds that “[p]resently, BPS reliability is adequate despite the retirement of a portion of baseload capacity and unique regional hurdles posed by the changing resource mix.”2 Notably, the North American Electric Reliability Corporation (NERC) issued its 2017 State of Reliability Report in June 2017, which also found “the BPS provided an adequate level of reliability.”3 NERC President and Chief Executive Officer Gerry Cauley also testified at a FERC Reliability Technical Conference on June 22, 2017 that “the state of reliability in North America remains strong, and the trend line shows continuing improvement year over year.”4 The DOE proposed rule runs counter to the DOE Staff Report and NERC findings issued within the past few months.

Seattle urges the Commission to decline to adopt DOE’s proposed rule and close this docket, and initiate a new proceeding with a technical conference to allow stakeholders an opportunity to discuss a framework for ISO/RTO resiliency assessments to examine regional needs and basis for regional solutions. This will allow the Commission sufficient time to build a robust record for thoughtful and meaningful participation by interested parties.

 

1 Staff Report to the Secretary on Electricity Markets and Reliability, Department of Energy, August 2017, page 12 (DOE Staff Report, p. 12).

2 Id. at p. 11.

3 State of Reliability 2017 Report, North American Electric Reliability Corporation, June 2017, page vi (Executive Summary).

4 FERC Reliability Technical Conference/Panel I: Overview on the State of Reliability, Remarks of Gerry Cauley, President and CEO of the North American Electric Reliability Corporation, North American Electric Reliability Corporation, June 22, 2017, page 1.

  1. The subject of resiliency is better suited for regional consideration, with deference to State and local authorities to establish resource preferences and Integrated Resource Planning framework.

Resilience can be supported by a wide range of existing and emerging technologies; resilience services and products should be developed in a way that encourages participation by a broad range of resources, including generation, as well as other grid assets.

  1. Resources utilized for their resiliency attributes must be examined from a goals-desired basis and should not be resource-specific focused.

DOE clearly sets out to compensate what it pre-determines to be baseload resources, generally coal and nuclear generation, to support its position that reliability and resiliency of the grid is threatened due to lack of appropriate compensation for these resources. By narrowly defining which resources DOE believes impact the grid’s reliability and resilience, DOE fails to properly begin its analysis in examining generating resource attributes that actually support grid reliability and resilience. Seattle urges the Commission to focus on the attributes of resources and the goal of strengthening the grid’s reliability and resiliency, and to remain technology neutral rather than working to compensate specific resources. The proposed rule is incompatible with the foundational principle of organized electric market pricing whereby buyers and sellers bid at marginal cost and the market operator selects the least-cost stack of resources required to meet loads at the lowest-priced service. If the Commission approved the rule as proposed, it would be acting in an unduly preferential manner to the benefit of a very limited number of suppliers, and their fuel suppliers, when the industry has shown it is able to operate reliably with many and diverse fuel sources.

  1. State resource preferences and Integrated Resource Planning processes effectively establish and guide generating solutions for utilities.

Seattle uses its Integrated Resource Plan (IRP) process to ensure an adequate supply of resources to reliably meet the needs of our customers. The IRP looks out over a 20-year period, and evaluates risks associated with supply resources. Any single resource does not necessarily provide reliable service as that resource is subject to single point(s) of failure. A diversity of supply resources, including fuel type and location, increases the reliability of load service. The proposed rule would add costs for customers without any identified benefits to utilities’ resource mixes, and interferes with the right to identify and pursue a resource portfolio that meets customers’ needs at the lowest reasonable cost.

  1. Seattle is committed to meeting its customers and City Council expectations for carbon neutrality, while maintaining an affordable and reliable power system.

In April 2000, the City Council set a long-term goal for Seattle to achieve greenhouse gas neutrality while meeting all electricity needs of Seattle’s customers. In 2005, Seattle became the first utility in the nation to achieve net-zero carbon dioxide emissions by fully offsetting emissions created by day-to-day operations and market power purchases to supplement its hydroelectric generation. Seattle has maintained this carbon neutral status every year since, and intends to continue to pursue clean energy with renewable resources, energy efficiency and offsets.

Seattle uses hydroelectric resources for the majority of the power it provides, which is one reason its greenhouse gas emissions are so low. Seattle’s carbon emissions are further reduced by its aggressive energy efficiency and conservation programs, which help customers save energy and money. Renewable energy projects have been added to Seattle’s resource mix, including wind, landfill methane, and wood biomass energy. As discussed above, Seattle has adopted an IRP that relies on only new renewables and energy efficiency to meet future load growth. Our City Council approves of Seattle’s resource mix to assure reliable load service. The Commission should respect local and state resource planning requirements in its consideration of this issue, and reject the proposed rule as an undue restriction on utilities’ ability to pursue the resource path that best meets the needs of their customers.

  1. Proceedings that provide a direct incentive to coal resources without consideration of the detrimental impact on long-term grid resilience are ill-advised.

Seattle believes it is important to consider the reliability impacts of not taking significant steps to address climate change. Climate change poses risks to grid resiliency, with impacts that include greater severity of storms, sea level rise, extreme drought in some areas as well as increased heavy precipitation in other areas, and risks to infrastructure from wildfires due to hotter and more extreme temperatures. These impacts of climate change increase the stress on grid operations and infrastructure and require system adaptation to maintain reliability, resiliency and safety.

Specific impacts of climate change on mountain snowpack and glaciers that supply much of the water for Seattle’s hydroelectric projects pose a threat to Seattle and the region’s ability to continue to prosper in coming years. Since the middle of the 20th century, snowpack in the mountains of Washington alone has declined by approximately 25 percent. Further, snowmelt in our region is now occurring earlier than in past years, resulting in changes in the timing of hydropower generation throughout the year.

In response, Seattle created a Strategic Plan that established a Climate Initiative with two primary objectives: (1) research the impacts of climate change on the utility, and (2) develop an adaptation plan with strategic actions to mitigate such impacts. A changing climate is one major consideration in designing the utility of the future, and climate change adaptation is critical to electric utility preparedness, readiness and resilience. Seattle’s Climate Change Adaptation Plan

5 describes changes in the climate that could affect five aspects of its operations and infrastructure: shoreline properties, hydroelectric project operations, electricity demand, transmission and distribution, and fish habitat protection and restoration.

Seattle is one of 18 electric utilities in the nation that participated in DOE’s Partnership for Energy Sector Climate Resilience, where utilities expressed a commitment to increasing resilience to climate change. These utilities represented approximately 20 percent of the nation’s generating capacity and 25 percent of all customers within the United States. In its consideration of grid resiliency, the Commission should address threats to infrastructure that are associated with climate change, and Seattle urges the Commission to consider the reliability impacts of not taking significant steps to address climate change.

In sum, Seattle believes resilience planning, including modifications to markets that may be required to appropriately price resilience services, must occur through a more meaningful and thoughtful process that allows for full consideration of the relative issues and solutions.

5 Seattle City Light Climate Adaptation Plan Executive Summary is available at: http://www.seattle.gov/light/enviro/docs/Executive_Summary_Climate_Adaptation.pdf. Seattle City Light Climate Change Vulnerability Assessment and Adaptation Plan is available at: http://www.seattle.gov/light/enviro/docs/Seattle_City_Light_Climate_Change_Vulnerability_Assessment_and_Adaptation_Plan.pdf.

III. CORRESPONDENCE AND COMMUNICATIONS

All comments, materials, and other communications regarding the above-captioned proceedings in general should be served on the following individuals:

Catherine Leone-Woods

Director of Regulatory Compliance

Seattle City Light

700 Fifth Avenue

P.O. Box 34023

Seattle, Washington 98124-4023

 

Melissa Skelton

Regulatory Affairs Advisor

Seattle City Light

700 Fifth Avenue

P.O. Box 34023

Seattle, Washington 98124-4023

  1. CONCLUSION

For the reasons set forth above, Seattle respectfully requests the Commission decline to adopt the Grid Reliability and Resilience Pricing Rule, close this docket, and initiate a new proceeding with a technical conference to allow stakeholders an opportunity to discuss a framework for ISO/RTO resiliency assessments to examine regional needs and a basis for regional solutions. Seattle appreciates the opportunity to comment and respectfully requests that the Commission consider these comments.

Respectfully submitted this 23rd day of October, 2017.

/s/ Catherine Leone-Woods

Catherine Leone-Woods

Director of Regulatory Compliance

Seattle City Light

700 Fifth Avenue

P.O. Box 34023

Seattle, Washington 98124-4023