PJM Offers Perspective on How Federal Policy Can Encourage Innovation

Emerging grid technologies signal need for incentive reform

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PJM will testify this week at a Federal Energy Regulatory Commission (FERC) workshop on the opportunities and challenges that grid-enhancing technology innovations present to transmission developers and regulators.

The two-day technical conference on Nov. 5–6 will explore how federal policy can support the development of grid-enhancing technology when available as a cost-effective solution.

The agenda ranges from an overview of current grid-enhancing technologies and regulation, to their prospects for future grid integration.

In submitted testimony, Craig Glazer, vice president – Federal Government Policy, PJM Interconnection, shares PJM’s perspective on how regional transmission organizations (RTOs) innovate to improve transmission operations and planning.

When planning, operations and cutting-edge technology align harmoniously with federal regulatory policies, the grid functions at its best, Glazer said. Regional transmission operators are at a crossroads, he added, suggesting that the “Commission’s incentive rate policies and its Order 1000 policies need to be examined … to increase the throughput and efficiency of the existing grid.”

Ways to Improve

Some technologies, such as line ratings that adjust a line’s capacity based on ambient temperature, can and should be deployed today, Glazer said. If and when FERC requires the universal use of dynamic line ratings, Glazer said, it must allow RTOs the flexibility to implement it in a way that accounts for regional differences and challenges presented along seams where grids are linked.

Glazer suggested that FERC encourage RTOs like PJM to catalog other “sufficiently proven” technologies, which add value but offer implementation challenges. This list could “help provide additional transparency and notice to all stakeholders as to what technologies the RTO expects, at a minimum, the transmission provider should consider as it addresses end-of-life issues for particular transmission lines.”

For emerging tech, the grid serves as a “test bed,” Glazer added. For example, PJM and American Electric Power partnered to study the application of dynamic line rating technology to reduce congestion. In another instance, PJM field tested phasor measurement units, or PMUs, with the U.S. Department of Energy. This 2010 study informed PJM policy so that, beginning with the 2020 planning cycle, PJM requires PMUs for all new generators larger than 100 MVAs. Deployments like these, Glazer added, need not receive special incentives and should be considered exceptions to the competitive bidding process of FERC Order 1000.

Going forward, Glazer suggested that the RTO formalize a screen which would make transparent the consideration of grid-enhancing technologies, prior to the RTO ordering a greenfield solution. Such a formalized screen would make known to developers the need to consider grid-enhancing technologies, and would also serve as a transparent analysis that would enhance the record in state siting proceedings. However, Glazer underscored the need for the Commission to address certain aspects of its Order 1000 and incentive rate policy which could work against the deployment of grid-enhancing technologies.

The Commission will be seeking post-technical-conference written comments as a follow up to the conference.