2022 was an active year for TAPS, including the following:

Legislation

2022 was another busy year for Congress.  An election year, prognostication that little would happen was proven incorrect with numerous major bills passing before the 117th Congress adjourned.  The Inflation Reduction Act, enacted in 2022, included several provisions that were important to the electric sector.

TAPS engaged with the committees with jurisdiction over energy policy and with other key energy policy leaders to reiterate longstanding policy positions.  TAPS engaged with the House and Senate Energy Committees to encourage the Committees to prioritize sound policy initiatives when developing transmission policy.

A major expansion of the nation’s electric transmission system is widely considered necessary to achieve the Biden Administration’s climate goals, which include a GHG-neutral electricity sector by 2035 and net-zero GHG emissions economy-wide by mid-century.  The debate during and following the passage of the IRA included substantive discussions around permitting reforms, including regarding expansion of FERC’s authority to permit and direct cost allocation for new transmission.  TAPS members engaged on these provisions, expressing concerns about the scope and terms of FERC’s proposed new siting authorities.

TAPS maintained its longstanding advocacy for Congress to assure that load-serving entities have a seat at the table to ensure their reasonable needs are planned for in the transmission planning process.  The lack of transparency in the transmission planning process is a problem in too many parts of the country where planning processes occur without meaningful stakeholder input.  As transmission planning for our changing resource mix takes center stage, this deficiency must be addressed.

TAPS members continued to advocate for federal support for joint ownership in the electric grid.  Under such arrangements, load-serving entities embedded in the transmission system have the opportunity to invest in their load-ratio share of the transmission grid; they have a seat at the “grown up” table in the planning process, so they can play an integral role in ensuring their load is being properly served with necessary infrastructure.  Non-profit, public power load-serving entities also have no interest in “gold-plating” the transmission system, so including them in the transmission planning process helps to ensure that the grid is robust and reliable, without imposing unnecessary costs.

In addition to TAPS’ consultant’s regular communications with legislators and staff, the TAPS Government Affairs Committee conducted virtual and in-person visits with Hill staff on several occasions in 2022 to advocate in support of these positions.

NERC/NAESB

As the FERC-certified Electric Reliability Organization (“ERO”), NERC is authorized to establish and enforce mandatory reliability standards, subject to FERC review.  FERC also reviews NAESB standards and incorporates them into its regulations by reference.  TAPS works to ensure representation at both NERC and NAESB, with the late Bill Gallagher mobilizing and coordinating TAPS efforts to monitor and participate in activities at both organizations to protect the interests of TDUs.  Since Bill Gallagher’s passing in 2021, Brian Evans-Mongeon (Utility Services) has been heading up TAPS NERC/NAESB efforts on an interim basis, taking on Bill’s responsibilities on the NERC Member Representatives Committee (“MRC”), the ERO Business Plan and Budget Group, the NAESB Wholesale Electric Quadrant Executive Committee and the NAESB Board of Directors.  Chris Norton (AMP) also serves on the NAESB Wholesale Electric Quadrant Executive Committee.  Additionally, Roy Jones (ElectriCities) served as Chair of the MRC in 2022; TAPS Executive Director Terry Huval and John Twitty (MPUA and former TAPS Executive Director) also serve on the MRC.  Scott Tomashefsky (NCPA) serves as chair of the Compliance and Certification Committee.  TAPS members also have a presence on each of the NERC standing committees and on significant drafting teams.

TAPS has also made its voice heard on reliability issues through submissions to FERC in NERC and NAESB-related proceedings, as well as submission of comments to NERC.  TAPS attempts to maximize its impact by filing separate TAPS comments that reflect the distinct viewpoint of TAPS members, both as users highly dependent on the bulk electric system (“BES”) facilities owned by others and as entities subject to NERC’s mandatory reliability standards for our own BES facilities, or where appropriate, submitting joint comments with all or portions of the rest of the industry to emphasize the widespread support for a position.  Insiders have told us that seeing TAPS and EEI on the same submission to FERC sends a strong message.  While a number of these efforts are still playing out, there is no doubt that in 2022 TAPS played an important role in the ever-evolving relationship between FERC and NERC.

 

TAPS 2022 NERC and NAESB-related activities

  • Reliability Technical Conference (AD21-11)
    • September 30, 2021 FERC holds a Commissioner-led technical conference to discuss policy issues related to the reliability of the Bulk-Power System; Roy Jones, CEO of ElectriCities of North Carolina, speaks on behalf of APPA, LPPC, and TAPS on Panel 1: Bulk-Power System Reliability and Security, addressing supply chain cybersecurity, challenges posed by a rapidly evolving resource mix, and NERC’s Electricity Information Sharing and Analysis Center (E-ISAC).
    • January 7, 2022 FERC notices opportunity for follow-up comments.
    • February 22, 2022 APPA, LPPC, and TAPS submit joint comments supplementing Roy Jones’ testimony, emphasizing that (1) the Commission can meaningfully advance supply chain security by supporting the development of third-party accreditation or certification for significant electric industry suppliers and vendors and (2) NERC has an important role to play in facilitating transition to a reduced carbon future by addressing the reliability challenges posed by increasing use of intermittent resources.
  • Extreme Cold Weather Grid Operations, Preparedness, and Coordination (NERC Project No. 2021-07, RD23-1)
    • May 19, 2022 SDT posts drafts of EOP-011-3, EOP-012-1, and proposed Implementation Plan.
    • June 17, 2022 TAPS submits comments to NERC on initial posting of draft standards, supporting SDT’s general approach but noting significant concerns with vague and ambiguous language in EOP-012-1.
    • June 23, 2022 EOP-011-3 reaches required two-thirds majority approval, but EOP-012-1 and Implementation Plan do not.
    • August 3, 2022 SDT posts revised versions of EOP-012-1 and Implementation Plan, with comment period concluding September 1. TAPS does not submit comments.  EOP-012-1 and Implementation Plan both approved by ballot pool.
    • September 23, 2022 SDT posts EOP-011-3, EOP-012-1, and Implementation Plan for final ballot concluding September 30. All are approved by ballot pool.
    • October 28, 2022 NERC submits petition to FERC in Docket No. RD23-1 for approval of EOP-011-3 and EOP-012-1.
    • December 1, 2022 TAPS files comments supporting FERC approval of the proposed standards and urging FERC to clearly state its understanding of EOP-012-1 Requirements R1 and R2 in light of those requirements’ potentially confusing wording.
    • December 23, 2022 TAPS and APPA submit joint reply comments, in response to competitive generators’ requests for FERC to ensure their ability to recover EOP-012-1 compliance costs, arguing that cost recovery is beyond the scope of the current proceeding and that granting competitive generators guaranteed cost recovery on top of market-based rates would be contrary to FERC precedent.
    • February 16, 2023 FERC issues order approving proposed standards and directing various modifications. FERC finds that cost recovery is beyond the scope of the proceeding, and largely states its understanding of EOP-012-1 Requirements R1 and R2 consistent with TAPS’ request.
  • Internal Network Security Monitoring (RM22-3)
    • January 20, 2022 FERC issues a NOPR proposing to direct NERC to develop a standard that requires internal network security monitoring (“INSM”) with trusted CIP environments for high and medium impact BES Cyber Systems, and seeking information on the benefits of requiring INSM for low impact BES Cyber Systems.
    • March 28, 2022 TAPS submits comments opposing expanding the NOPR to low impact BES Cyber Systems.
    • January 19, 2023 FERC issues a final rule directing NERC to develop a standard requiring INSM on high-impact systems and medium-impact systems with external routable connectivity. The final rule does not direct NERC to include low-impact systems in the standard, but does direct NERC to study the feasibility of implementing INSM at all medium-impact systems and at least a subset of low-impact systems.
  • Transmission System Planning Performance Requirements for Extreme Weather (RM22-10)
    • June 16, 2022 FERC issues NOPR proposing to direct NERC to modify TPL-001-5.1 to address planning for extreme heat and cold weather events.
    • August 26, 2022 TAPS joins APPA, EEI, LPPC, and NRECA in comments supporting planning for extreme heat and cold weather but noting the need for SDT flexibility in responding to any Commission directive, as well as for registered entity flexibility in addressing transmission system deficiencies.
  • State/Municipal and TDU Sector Policy Input to NERC Board of Trustees
    • The NERC MRC members from the State/Municipal and TDU Sectors (“SM-TDUs”) submit joint policy input to the Board of Trustees in response to the Board’s quarterly request for input. The responses are generally coordinated by TAPS, APPA, and LPPC.
      • January 26, 2022 SM-TDUs provide input regarding the ERATF’s work on energy adequacy risk and its development of the SAR on fuel assurance assessment.
      • April 27, 2022 SM-TDUs provide input regarding how industry and the ERO Enterprise can work together to address emerging reliability risks.
      • August 3, 2022 SM-TDUs provide input regarding actions NERC and the ERO Enterprise should take to assure reliability for the 2022/2023 winter season, the 2023 summer season, and long-term.
      • November 3, 2022 SM-TDUs provide input regarding the NERC Reliability Standards development process.

TAPS 2022 FERC (Non-Reliability) Efforts

  • Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator Interconnection (RM21-17, AD22-8)
    • April 21, 2022 FERC issues NOPR proposing changes to regional transmission planning and cost allocation and expanded federal rights of first refusal (“ROFR”) conditioned on joint ownership.
    • August 17, 2022 TAPS submits comments offering constructive modifications generally in support of the NOPR, and focused on narrowing FERC’s proposed conditional ROFR reforms to foster joint ownership arrangements with TDUs.
    • September 19, 2022 TAPS submits reply comments addressing initial comments pertinent to TAPS’s approach to the conditional ROFR.
    • October 6, 2022 FERC holds Commissioner-led technical conference regarding transmission planning and cost management for transmission facilities developed through local or regional transmission planning processes. Dan O’Hagan (FMPA) submits a written statement and participates as a panelist on behalf of FMPA and TAPS; Randy Howard (NCPA) and Lisa McAlister (AMP) also participate as panelists.
    • December 23, 2022 FERC issues notice inviting post-technical conference comments.
  • Improvements to Generator Interconnection Procedures and Agreements (RM22-14)
    • June 16, 2022 FERC issues NOPR proposing to implement a first-ready, first-served cluster study process, increase interconnection queue processing speed, and incorporate technological advancements into the interconnection process, with associated changes to the pro forma LGIA and LGIP.
    • October 13, 2022 TAPS submits generally supportive comments focused on preventing pass-through of RTO penalties to customers.
  • Cybersecurity Incentives (RM21-3, RM22-19)
    • December 17, 2020 FERC issues NOPR proposing to grant incentives for cybersecurity investments that go beyond those required by NERC standards.
    • April 6, 2021 TAPS files comments opposing the proposed incentives, and urging against FERC directing development of mandatory standards to require such investments.
    • May 6, 2021 TAPS and APPA file joint reply comments arguing the Commission should not adopt the suggestions of some commenters to expand the cybersecurity incentives proposed in the NOPR or to weaken the proposed application and verification procedures.
    • November 15, 2021 Infrastructure Investment and Jobs Act signed into law. The Act directs FERC to first study, then establish, incentive-based rate treatments to encourage investment in advanced cybersecurity technologies and participation in cybersecurity threat information sharing programs.
    • September 22, 2022 In response to the Infrastructure Investment and Jobs Act, FERC terminates RM21-3 NOPR and issues new NOPR in RM22-19 proposing incentives for cybersecurity expenditures. Eligible cybersecurity expenditures would have to: (1) materially improve cybersecurity through either an investment in advanced cybersecurity technology or participation in cybersecurity threat information sharing programs, and (2) not already be mandated by CIP Reliability Standards, or local, state, or federal law.
    • November 7, 2022 TAPS files comments proposing modifications to the NOPR’s proposed incentives to better align with the Act’s purpose of benefiting consumers.
  • Electric Transmission Incentives Policy Under Section 219 of the Federal Power Act (RM20-10)
    • March 20, 2020 FERC issues NOPR (RM20-10) proposing to move to a new regimen of plentiful benefits-based ROE incentives.
    • July 1, 2020 TAPS files comments opposing most aspects of the NOPR, and urging modifications.
    • April 15, 2021 FERC issues Supplemental NOPR (RM20-10) proposing to decrease the RTO Incentive Adder rather than increase it. Supplemental NOPR’s proposal to limit the current 50-basis point adder to three years after a transmission owner joins an RTO is consistent with the position TAPS has taken in the Transmission Incentives NOI/NOPR.
    • April 15, 2021 FERC notices workshop (RM20-10 and AD19-19) to “discuss certain performance-based ratemaking approaches, particularly shared savings, that may foster deployment of transmission technologies.”
    • June 25, 2021 TAPS comments in support of the April 15, 2021 Supplemental NOPR.
    • July 26, 2021 TAPS and APPA submit joint reply comments on Supplemental NOPR.
    • September 10, 2021 FERC holds workshop on shared savings incentive approaches to fostering deployment of transmission technologies; Steve Leovy (WPPI) participates on behalf of TAPS.
    • January 14, 2022 TAPS files follow-up comments opposing shared-savings GETs incentives.
  • Implementation of Dynamic Line Ratings NOI (AD22-5)
    • February 17, 2022 FERC initiates notice of inquiry to examine whether the required use of DLRs is needed to ensure just and reasonable wholesale rates by improving the accuracy and transparency of line ratings.

April 25, 2022 TAPS files initial comments urging further evaluation of whether and where the incremental benefits of DLRs, above and beyond those achievable by implementing the AARs mandated by Order 881, justify the additional costs and risks.