MRO 2020 Virtual Reliability Conference MRO Shares the ERO Vision: A highly reliable and secure North American bulk power system. Key Characteristics of HEROs

3 The hallmark of reliability in complex, interdependent systems is not that errors won’t occur...

It’s that errors and operating anomalies won’t create an uncontrolled, cascading event.

What It Means To Be Reliable 4 Our Footprint

195 Registered Entities 3 Reliability Coordinators 4 Planning Coordinators 2 RTOs

5 Outreach and Engagement Provide guidance to individual registered entities regarding specific concerns • [email protected] Host conferences and training events on matters important to reliability and security of the bulk power system Assist industry experts in developing guidance documents • Standard Application Guides • Best practice whitepapers Publish tips, lessons learned and recommendations Bimonthly newsletter: Midwest Reliability Matters

6 WebEx Chat Feature Open the Chat Feature:

The chat feature will appear to the right of the WebEx window.

Attendees should chat their questions to: “Dana Klem”.

Select Dana Klem by using the drop down arrow in the “To” field.

7 MRO Advisory Council Structure

MRO Members

MRO Board of Directors

President and Board CEO Committees

Governance and Personnel Organizational Group Finance and Audit MRO Staff Committee Oversight Committee Committee

CMEP Advisory Security Advisory Reliability Council Council Advisory Council

Security Advisory NERC Standards Council Threat Special Protection System Review Forum Forum Working Group

Subject Matter Expert Protective Relay Subgroup Teams 8 What is the Reliability Advisory Council?

The MRO Reliability Advisory Council was established to provide advice and council to the MRO Board, staff, and members on risks to the regional bulk power system, as well as increase outreach and awareness in key risk areas.

9 Reliability Advisory Council Charter

The Reliability Advisory Council Charter Key objectives and responsibilities • Identify and carry out activities that support MRO Strategic Plan. • Support the preparation of special assessments and seasonal readiness plans by regional Reliability Coordinators. • Review significant BES events in the MRO region and identify lessons learned to share more widely with industry. • Conduct outreach and awareness to increase reliability and decrease risk to the reliable and secure operations of the BES.

10 Reliability Advisory Council

Member Company Allen Klassen Westar Energy, an Evergy Company Antoine Lucas Southwest Power Pool Binod Shrestha Saskatchewan Power Corporation C.J. Brown Southwest Power Pool Dallas Rowley Gas and Electric Dean Schiro Northern States Power, d/b/a XCEL Energy Dick Pursley Great River Energy Dwayne Stradford Gayle Nansel Western Area Power Administration Jason Weiers Otter Tail Power Company John Stephens City Utilities of Springfield, Durgesh Manjure MISO Nandaka Jayasekara Manitoba Hydro Nick Giffin American Transmission Company Ron Gunderson Public Power District

11 MRO RAC Outreach

Webinars • CAPX2050 Transmission Vision Study July 14, 2020 • PRS High Impact Misoperations July 21, 2020

12 Behind the Seams: Thoughts on the Grid From a RYAN SILVEY AUGUST 26, 2020 Regulator PRESENTATION AT MRO VIRTUAL on the Edge RELIABILITY CONFERENCE 2020

Disclaimer: The views expressed are those of Ryan Silvey and not that of the Missouri Public Service Commission. 13 Background on the Show Me Population of Missouri: 6.137 million State (2019 US Census Bureau)

Large sections of Missouri served by unregulated co-ops or municipal utilities; many do not belong to either RTO

IOUs Liberty Utilities, Evergy Metro and Evergy Missouri West in SPP and Ameren Missouri in MISO

Utilities are Vertically Integrated

14 Missouri is a State On and With Many Borders

• Investor Owned Utilities in both SPP and MISO on separate ends of the state • Missouri is in Central Region of MISO and connects MISO North and South Regions • Internally, have seams between SPP, MISO and AECI

15 Can Our ExistingInfrastructure Meet Our FutureNeeds?

Missouri’s Traditional Power System • In 2011, Missouri was 34th lowest in the country for weighted- average price of electricity across economic sectors. • Electricity generation from coal, hydroelectric, natural gas, nuclear. • Significant majority of fuel for base load from coal. • In 2010, coal accounted for over 81% of electricity generation (6th highest in nation). • Vertically integrated utilities rely on transmission and distribution infrastructure to get power from large centralized generation plants

Missouri’s Future Power System • Being shaped by regulatory mandates, investors, customers, and aging generation 16 Section 393.1665 RSMo. Proposition C Yearly Renewable Resource Requirements: 1. No less than 2% in 2011 − 2013; 2. No less than 5% in 2014 − 2017; 3. No less than 10% in 2018 − 2020; and 4. No less than 15% in each calendar year beginning in 2021.

Utility-owned solar facilities Between August 28, 2018, and December 31, 2023

The State of Missouri’s Renewable Energy Mandates Not as High as Other States in the Midwest Renewable Energy • Voter-supported Proposition C passed in 2008 • Utility-Owned Solar Investment Statute enacted in Mandates 2018.

17 Missouri’s FuturePower What Do Investors Want? Resource Mix is Shaped by More Than Our Environmental, Social, and Corporate Governance(ESG) State’s Statutory Investing Influencing Utilities in Two Ways Requirements. - Utility Investors Pushing for Diversification from Coal

We will engage with companies that For financings involving any power derive a significant portion of their sector companies that derive a • Federal Regulatory significant portion of their Uncertainty – Clean Power revenue from coal power generation to understand their strategy to generation from coal, we will engage Plan and Cap and Trade diversify away from coal and reduce with the companies to understand Neighboring States’ their carbon emissions. their strategy to diversify away from • coal, and reduce overall carbon Renewable Energy Standards Morgan Stanley updated its emissions, with the goal of and Capacity Environmental and Social Policy supporting their low carbon Statement in April 2020 • Pressure from Investors transition in line with the Paris Climate Agreement. • Customers’ Wants

Goldman Sachs updated its Environmental Policy Framework in December 2019

18 What do Customers Want?

Large commercial customers want or have committed to carbon neutrality. Walmart - Goal of being supplied by 50% renewable energy by 2025. Ford – Previously announced use of 100% renewable energy to power its plant in Michigan that producesthe F-150. - Ford announced aim to power all its manufacturing plants with local renewable energy by 2035 and be carbon neutral by 2050. Anheuser-Busch InBev - 100% of purchased electricity from renewables by 2025

1919 Utilities are Responding

Capacity and Energy by Resource Type

KCP&L Public 2016 IRP Evergy Metro Public 2020 IRP Formerly KCP&L

*Wind capacity is based upon nameplate

20 Utilities are Responding

Capacity and Energy by Resource Type

KCP&L GMO Public 2016 IRP Evergy Missouri West Public 2020 IRP Formerly KCP&L GMO

*Wind capacity is based upon nameplate

21 What CanMissouri Geographically Deliver?

Ø Compared to nearby states, our solar and wind potential is limited. Ø At end of 2019, 1,000 MW wind generating capacity, with 900 MW under construction. Ø Although coal now accounts for 73% of electricity net generation (down from 81%), Missouri is in top 3 states for coal consumed for generation. Ø As IOUs transition to renewable energy, will likely need to rely on out of state resources to meet needs.

Ø Renewable resources tend to be located where energy can be produced efficiently and require energy be transmitted to load.

22 Missouri Utilities and Customers Can Benefit from Strategically Planned and Placed Transmission Projects Located Both Within and Outside of Missouri

23 As we move away from the current generation model to reliance on other capacity sources, such as purchase power from out- of-state, in- state small scale, and intermittent solar and wind generation, we find the transmission system that was built may no longer be the transmission system we need.

24 Missouri “seams” like a nice place for transmission projects, but it isn’t an easy place for them.

25 Barriers to Building Transmission inMissouri

1 2 3

Competing Interest Competing Interest Competing Interest at Interregional at the Intra- at the Intrastate Level regional Level Level

26 1. Competing Interest at Interregional Level

REGIONAL, INWARD FOCUS OF RTO…THE OBJECTIVES OF RTO… THE GOOD BAD Purpose of RTOs is to Promote RTOs coordinate, ◦ Difficult and Long Process to Approve Regional control and Interregional Economic Transmission Projects Economic monitor the Grid Efficiency and in multiple states ◦ RTOs are necessarily less interested in promoting Reliability benefits in neighboring areas, which can lead to FERC Order No. 2000 inefficiencies and can create an inherent conflict Aim to of interests between members of adjoining RTOs. RTO designed to promote work for voluntary efficiencies members within ◦ RTOs are NOT designed to promote benefits in RTO’s footprint and benefits neighboring areas. for members

27 Lack of Unified Interestat January 17, 2018 Max Gen Event Impact Felt Interregional Seam Can Across Missouri and Midwest Have Unintended SPP’s Neosho - Riverton Flowgate near the MO- Consequences border impacted by cold weather in MISO

28 Hurdles to Approving Interregional Economic Transmission Projects

MISO and SPP’s Original Coordinated System Planning Process Joint Model Cost Benefit Test a. Each region determines their own benefits per the requirements of their respective regional planning process. b. Projects must meet thresholds for both cost and voltage minimums. c. Joint model requirement included cost benefit along with SPP٭ test for interregional project regional and MISO regional cost benefit tests. No Approved Projects

29 Barriers to Transmission Not Solely Because of Competing RTO Interests

Competing interests also exist within each RTO

Diverging interests are apparent at the stakeholder level

Impacts in Missouri compounded by diverging shareholder interests within multiple RTOs

Examples of how Intraregional conflicts can have negative consequences…

30 2. Competing Interest atthe Intraregional Level: SPP

Recognition of Need and RTO Support for Project Not Always Enough

Brookline and Morgan Projects

- SPP Board of Directors Approved as part of 2017 ITP 10 Portfolio - SPP to pay 89.1% of Morgan Transformer Project and AECI to pay 3% of Brookline Reactor Project. - Two members of SPP opposed the filing and challenged at FERC. - FERC approved but projects delayed due to opposition. - Brookline Reactor Project completed. - Morgan Transformer Project currently being completed.

31 2. Competing Interests at Intraregional Level: MISO

Differing Stakeholder Priorities Within an RTO Can Pose aChallenge to Transmission

- Varying Renewable Energy Guidance

- Prioritization of Generation or “MISO Classic” Transmission?

- Residual impacts of interregional differences

“New MISO”

32 2. Competing Interests at Intraregional Level: MISO MISO North – MISO South: Differences in Perspectives

When southern utilities joined MISO, the Dell- New Madrid Line was logical way to directly connect southern region to MISO Classic.

• Owned by Ameren-Missouri, AECI, and Entergy .

• Intraregional transmission needs of MISO North-South dependent on interregional access.

• Due to narrow bridge of MISO territory around New Madrid, future transmission options to connect MISO North - South are limited and will likely require coordination with stakeholders in other planning regions.

33 2. Competing Interests at Intraregional Level: MISO MISO North – MISOSouth

The Dell-New Madrid Line has become clear site of bottleneck between MISO North and MISO South.

While weather is unpredictable, capacity constraints are happening throughout the year.

When everything works right, all regions of MISO can help each other, but it doesn’t always work right.

34 3. Intrastate Barriers: Competing Interest Within a State

Transmission Sighting is a Local Issue. Even projects approved by an RTO and unopposed by stakeholders can face roadblocks at the local level.

Mark Twain Transmission Line Project by ATXI approved through MISO’s MVP in 2011 • 345 kV transmission line from Palmyra, Missouri to border.

•Applied and received approval for a Certificate of Convenience and Necessity (CCN) from the Missouri Public Service Commission (MO PSC). • Statutory requirement for electric corp. to obtain authority to construct plant within Missouri. CCN gives utility ability to use Eminent Domain. • 2016 MO PSC Order granting line certificate conditioned CCN on acquiring assent from each county Mark Twain Line would traverse. • Landowners opposed construction and filed suit challenging the validity of the CCN since ATXI didn’t first obtain permission from all counties. • 2017 Missouri Western District Appellate Court sided with landowners. • Facing potential costly and lengthy legal challenges from the counties, ATXI found alternative solution. • Used new route and existing right-of-way of Northeast Missouri Electric Cooperative and Ameren Missouri.

35 3. Intrastate Barriers: When RTO Approval Not Involved The Saga of the Grain Belt Express - Privately Funded HVDC Transmission Line to Bring KS Wind Eastward Timeline

March 2014 – Grain Belt’s 1st CCN application at MO PSC. PSC denied in 2015 in a 3-2 decision for failure to show need in Missouri.

2016- Grain Belt’s 2nd CCN application at MO PSC. Includes plan to deliver 500 MW wind in MO, including 100 MW committed to municipals.

2017 MO PSC thinks revised plan feasible but 5-0 denies application because of ATXI court decision that county assents prerequisite for line certificate. Grain Belt Appeals PSC order to Eastern District Court of Appeals.

2018- Eastern District sides with Grain Belt. Case transferred to MO Supreme Court. • 2018- Mo Supreme Court agrees with Grain Belt, remands case to PSC to determine if project is necessary or convenient for the public interest.

2019 – MO PSC grants line certificate. Landowners appeal. • 2019 Eastern District affirms MO PSC’s order on Grain Belt CCN. • 2019- MO PSC approves Invenergy’s acquisition of Grain Belt. Landowners appeal.

July 7, 2020 – Appellate Court affirms order approving Invenergy acquisition.

36 Drama in the House Grain Belt In 2020 Missouri Legislative session bill submitted to prohibit use of eminent Battle Beyond the Courts domain for HVDC merchant transmission lines by requiring substations at 50-mile intervals. • Measure passed in the House but stalled in the Senate. • Resulted in literal last-minute Some County Commissions maneuvering to sneak restriction in that initially supported Grain bill during final hours of the last day of Belt project began to oppose session. or seek to revoke approval once residents vocally After… opposed. - 16 Local Public Hearings - 4 Hearings at the MO PSC - 4 Appeals - 1 vigorous challenge with hearings before the legislature Takeaway: - 6 years Construction not yet started. Transmission projects are not quick or easy. Multiple barriers exist to approval andbuilding.

2537 WHILE THE IDENTIFIED Are We at the Tipping BARRIERS ARE NOT NEW, THE RAPID try harder to TRANSITION TO Point and Ready to RENEWABLE ENERGY CREATES A Fix the Barriers? VALID SENSE OF URGENCY

38 What Steps Are Being Taken?

Interregional Within RTOs

• MISO-SPP Coordinated System Planning • Collaboration between stakeholders on • OMS/SPP-RSC Seams Liaison potential MISO North-South projects Committee • MISO focus on interregional projects to • Goal to study potential resolve intraregional issues improvements along MISO-SPP • Midwestern Governors Association seam • IMM push for Dynamic Line Rating • TOs Push for More Expansive Studies

39 What are RTOs Currently Doing?

MISO-SPP Interregional Efforts

In 2019, MISO-SPP Coordinated System Plan Study to identify mutually beneficial transmission improvements. (Report issued 2.27.2020) • Under the new study process, MISO-SPP staff • First Year of New Study Process focused efforts on an economic analysis of 13 • Positive from this is that the RTOs had discussions and targeted transmission needs along the seam worked with stakeholders to try and improve review identified in the SPP 2019 Integrated Transmission process. Planning (ITP) Assessment and the 2019 MISO • Improved CSP Study Process: 1. Removed Joint Planning Model Requirement Transmission Expansion Plan (MTEP19) regional • Each RTO determines own benefits based on own planning processes. regional planning process • Interregional cost allocation determined by • 7 projects showed potential to be beneficial to proportion of benefits calculated in each RTO planning model both RTOs. 2. Expand Interregional Benefit Metrics • Adjusted Production Cost (APC) and Avoided Reliability Cost benefits can be considered 3. Remove $5 Million Cost Threshold 2020 CSP Study is Ongoing

40 What are RTOs Currently Doing?

2019 CSP Study Report

After analysis completed, no projects ultimately met the MISO-SPP JOA criteria for interregional cost allocation.

5.4.5 Blackberry to Wolf Creek “A new 345 kV line from Blackberry to Wolf Creek was considered to address congestion on the Neosho to Riverton flowgate. The project ranked highly after showing initial benefits to both RTOs, however, final analysis showed that over 97 percent benefits were to SPP, failing the five percent threshold required by the MISO-SPP JOA.”

41 What are States Currently Doing?

Seams Liaison Committee (SLC)

GOALS: Identify potential improvements in the following areas and work with SPP and MISO on implementation: • Increase benefits to ratepayers in both markets by improving market-based transactions and operations across the seam. • Ensure equal consideration of beneficial regional and inter-regional projects in transmission planning, including evaluation of projects identified in the Coordinated System Plans. • Support the timely interconnection of new resources that includes consideration of the dynamics of the interconnection queue in both RTOs. • Improve inter-RTO relations through state-led cooperation.

42 What are Stakeholders Doing? IMM Recommends Use of Dynamic Line Rating

Transmission Owners Pushing MISO • “The Owners strongly believe that MISO should engage in the requested studies with for Further Studies a scope that reflects an ongoing multi-year evaluation of emerging needs and benefits - In letter to MISO, several TOs in MISO noted above as well as others that might be pointed out need to prioritize MISO Classic’s applicable.” impending transmission needs to meet renewables. • In addition to MISO North, Owners requested - Transmission owners pushing MISO for MISO also “initiate a long-term study of action, needs in Iowa, Indiana, Missouri, and Illinois, “it is important for MISO to consider as well as the overall Central region….” more broadly how this resource transition, along with collective outcome of these studies, impacts the entire MISO North area.”

43 Removal of Red Tape? • Establish Preset Cost Allocation Methodologies for all Projects? ◦ Regulatory efficiency ◦ Joint planning and sharing requirements created by Order 1000 ◦ Parity in treatment between interregional and intraregional

Possible Consistency in Relationships?

Solutions? Better Coordination and Collaboration Even if Outside of FERC Order 1000 Process. • More communication – Like a good neighbor

IF ALL ELSE FAILS… • Is something like a national highway plan necessary?

44 Possible Solutions for Interregional Barriers?

Consistency in Relationships? ◦ While FERC approved MISO–PJM Order 1000 interregional coordination and cost allocation on economic projects down to 100kV, FERC approved MISO-SPP coordination only down to 230kV. ◦ MISO-PJM Targeted Market Efficiency Projects (TMEP) like process for SPP seam. ◦ TMEP projects identified and approved.

45 Possible Solutions to Sighting Concerns?

• NIMBY not going away •Recognize landowners' concerns and try to accommodate when possible •Not always a regulatory solution •Think outside the box and approach with carrots and not just sticks • Invenergy offering Broadband •Alternatives to planned transmission (example of Mark Twain Line) •Legislature • Discussions about coming reality of renewable generation penetration

46 The Future is Coming Fast

47 47 Ways the Paradigm Can Still Change

Election Impacts

Technological Advancements 2006 NREL Wind Resource Map • Battery Storage Costs Decreasing • Storage as Transmission • Hybridization of Generation • Improvements in Wind and Solar Efficiencies and Accessibility • Distributed Energy Resources • Electrification and High EV Adoption

2018 Wind Resource Map 3 48 Flowgates Renewable resources tend to be located where energy can be produced efficiently and require energy be The transmitted to load. ◦ Will competing distant and nearby resources cause congestion when they need access to same Canary in transmission elements? ◦ We need better joint planning ◦ Dialogue and collaboration the Coal ◦ Recognition of barriers Mine

These are issues from increased renewable and its only getting worse • Neosho Riverton flowgate in southeastern Kansas impacted by renewable energy flows eastward to Missouri (SPP) and south into Arkansas (SPP and MISO). • Impact on MISO from congestion on Kelly transformer due to western Kansas renewable, Nebraska conventional and Iowa renewable energy needing access to Kelly transformer. 49 Questions?

50 Reliability Guideline Fuel Assurance and Fuel-Related Reliability Risk Analysis for the Bulk Power System

Thomas Coleman MRO August 26, 2020 RELIABILITY | RESILIENCE | SECURITY NERC Reliability Leadership Summit

lity Leadership Summit

52 RELIABILITY | RESILIENCE | SECURITY NERC Reliability Leadership Summit

53 RELIABILITY | RESILIENCE | SECURITY Identified Risks

Bulk Power System Planning Resource Adequacy and Performance Loss of Situational Awareness Protection System Complexity Human Performance and Skilled Workforce Extreme Natural Events Physical Security Vulnerabilities Cyber Security Vulnerabilities Changing Resource Mix Critical Infrastructure Interdependencies * * Newly Identified Risk

54 RELIABILITY | RESILIENCE | SECURITY Guideline Overview

• Equip resource owners and planners with guidance . How to evaluate fuel related risk factors in assessing potential impacts on the Bulk Power System . Avoid prescribing solutions (not one size fits all) . Expand on existing studies and works o Give a starting point for assessing o Prompt thought on items easily overlooked • Organization . Chapter 1: Fuel Assurance . Chapter 2: Electric Generation Fuel Supply Primer . Chapter 3: Fuel Risk Analysis Consideration . Chapter 4: Fuel-Related Reliability Risk Analysis Framework . Appendices: Checklist/Summary and Survey

55 RELIABILITY | RESILIENCE | SECURITY Key Takeaways

• “Fuel Assurance” . Principles: Markets, fuel procurement options, and contingency considerations • Major fuel supply chains . Natural Gas, Oil, Coal, Nuclear, Hydro, Solar, Wind, and Other . Natural Gas • Fuel Risk Analysis Considerations . Supply chains (multiple fuels) – natural gas focus • Fuel-Related Reliability Risk Analysis Framework . Multi-step approach • Appendices . Checklists & Surveys

56 RELIABILITY | RESILIENCE | SECURITY Fuel Assurance

Fuel Assurance: Proactively taking steps to identify fuel arrangements or other alternatives that would provide confidence such that fuel interruptions are minimized to ensure reliable BPS performance during both normal operations and credible disruptive events

57 RELIABILITY | RESILIENCE | SECURITY Response to Comments

• 21 entities submitted comments . State gov’t, trade groups, consultants, NERC, and NERC registered entities (e.g., generator owner/operators, ISO/RTO, and planners) . Approximately 400 comments and suggestions • Non-substantive . Proposals improved clarity . Editorial suggestions • Proposed revisions incorporated . Where proposed language was given, or . Deferred for future incorporation if no proposal given

58 RELIABILITY | RESILIENCE | SECURITY Next Steps

• Measurement and Efficacy • Continue to analyze case studies and gather industry experts to develop appropriate mitigating strategies for gas/electric interdependence • Standards evaluation TPL 001-4

59 RELIABILITY | RESILIENCE | SECURITY 60 RELIABILITY | RESILIENCE | SECURITY Inverter-Based Resources Update

Rich Bauer NERC Event Analysis MRO Reliability Conference August 26, 2020

82 NERC Disturbance Reports and Alerts

83 RELIABILITY | ACCOUNTABILITY IRPTF works

84 RELIABILITY | RESILIENCE | SECURITY IEEE PES Technical Report #68

• BPS challenges with increasing penetration of inverter-based resources • Transmission protection impacts • Large system stability issues • Design and control philosophy changes

85 RELIABILITY | RESILIENCE | SECURITY Current Injection to Support BPS during Fault Events

https://www.nerc.com/comm/PC/IRPTF%20Workshops/Key_Takeaways_April_2019_Inverter_Relay_Manufacturer_Meeting.pdf

86 RELIABILITY | RESILIENCE | SECURITY Models

87 RELIABILITY | RESILIENCE | SECURITY Level 2 NERC Alert II: Industry Recommendation • Issued May 1 • Level 2 Alert – Industry Recommendation • Topics covered: – Modeling improvements for existing equipment/controls NEEDED – Momentary cessation mitigation – performance improvements – Ramp rate interactions – DC reverse current – Transient overvoltage data collection

88 Level 2 NERC Alert II: Industry Recommendation

Generator Owners Recommendation 1a: Ensure that the dynamic model(s) being used accurately represent the dynamic performance of the solar facilities. If the inverters at the solar facility use momentary cessation, update the dynamic model(s) to accurately represent momentary cessation and provide the updated model(s) or written notification of no change to the Transmission Planner, Planning Coordinator, Reliability Coordinator, Transmission Operator, and Balancing Authority as soon as possible but no later than July 31, 2018.

89 Level 2 NERC Alert II: Industry Recommendation

Recommendation 1b: Work with their inverter manufacturer(s) to identify the changes that can be made to eliminate momentary cessation of current injection to the greatest extent possible. For inverters where momentary cessation cannot be eliminated entirely (i.e., by using another form of ride-through mode), identify the changes that can be made to momentary cessation settings that result in: a.Reducing the momentary cessation low voltage threshold to the lowest value possible. b.Increasing the momentary cessation high voltage threshold to the highest value possible, at least higher than the NERC Reliability Standard PRC-024-2 voltage ride-through curve levels. …cont.

90 Level 2 NERC Alert II: Industry Recommendation

c. Reducing the recovery delay (time between voltage recovery and start of current injection) to the smallest value possible (i.e., on the order of 1-3 electrical cycles). d. Increasing the active power ramp rate upon return from momentary cessation to at least 100% per second, unless specific reliability studies have demonstrated otherwise.

Provide these proposed changes as soon as possible but no later than July 31, 2018

91 Level 2 NERC Alert II: Industry Recommendation

Transmission Planners, Planning Coordinators, Transmission Operators, and Reliability Coordinators • Recommendation 6a: Track, retain, and use the updated dynamic model(s) (and any other pertinent information gathered from this NERC Alert) of existing resource performance that are supplied by the Generator Owners to perform assessments and system analyses to identify any potential reliability risks related to instability, cascading, or uncontrolled separation as soon as possible but no later than December 7, 2018, with notification to their Regional Entity that these studies are complete. For updated models received after July 31, 2018, assessments and system analyses should be performed within 120 calendar days.

92 Level 2 NERC Alert II: Industry Recommendation

Recommendation 6b: Track, retain, and analyze the proposed dynamic model(s) supplied by the Generator Owners that indicate their proposed changes (based on Recommendation 1b) to eliminate momentary cessation to the extent possible. Based on the analysis, approve or disapprove the potential changes based on reliability risks related to instability, cascading, or uncontrolled separation as soon as possible but no later than December 7, 2018, with notification to their Regional Entity that these studies are complete. For updated models received after July 31, 2018, assessments and system analyses should be performed within 120 calendar days.

93 Level 2 NERC Alert II: Industry Recommendation

Follow up questionnaire to transmission planners in January 2019 WECC 32/148 GOs submitted an updated model 0 models were useable in their submitted form 7/148 GOs submitted a proposed change model

94 Level 2 NERC Alert II: Industry Recommendation

Follow up meeting with WECC entity transmission planners Tempe, Az April 30, 2019 Created WECC Solar Modeling Advisory Group (SMAG) Spreadsheet for follow up Populate WECC Master Dynamics file

95 Level 2 NERC Alert II: Industry Recommendation

96 Reliability Guideline: Interconnection Requirements Improvements

• Clear and consistent performance requirements needed for inverter-based resources • Building from previous IRPTF guideline on performance recommendations • Alignment with NERC Reliability Standards FAC-001-3 and FAC- 002-2 • Applicability to non-BES resources

97 • Coordination with IEEE P2800 FERC LGIP

98 FERC LGIP

99 FERC LGIP

100 FERC LGIP

101 FERC LGIP

102 FERC LGIP

103 FERC LGIP

104 FERC LGIA

105 FERC LGIA

106 WECC REMTF

107 WECC REMTF

108 WECC REMTF

109 Rich Bauer Associate Director Reliability Risk Management-Event Analysis Office (404) 446-9738 Cell (404) 357-9843 [email protected]

110 Solar Integration in Duke Energy

Adam Guinn, PE, REES Lead Engineer

111 The Landscape

. DER penetration is primarily solar . Transmission-Connected: Sites ranging in size from 25 to 88 MW . Distribution-Connected: Sites range in size as follows:

112 Geographical Overview of Sites in Duke Energy Progress

113 Duke Energy Solar Interconnection Queue

114 Duke Energy Solar Projections for the Carolinas

115 Why so much Solar in NC?

. Not Irradiance Capital of US…

Average Irradiance (kWh/m2/day)

Source: NREL

116 Why So Much Solar In North Carolina?

. NC is leader in PURPA-supported utility scale solar installed capacity . NC is second, only to California, in total installed solar capacity . Reasons • NC REPS – 12.5% of retail electricity sales from renewable energy resources by 2021 • DEP long-term PPAs with avoided cost rates from $55 to $85 per MWh for Qualifying Facilities • 35% NC Renewable Energy Tax Credit (“RETC”) – ended 2015 • 30% Federal solar investment tax credit incentive (“ITC”) – thru 2019 (extension??)

117 Why so much Solar in NC?

. NC is leader in PURPA-supported utility scale solar installed capacity . NC is second, only to California, in total installed solar capacity . Reasons • NC REPS – 12.5% of retail electricity sales from renewable energy resources by 2021 • DEP long-term PPAs with avoided cost rates from $55 to $85 per MWh for Qualifying Facilities • 35% NC Renewable Energy Tax Credit (“RETC”) – ended 2015 • 30% Federal solar investment tax credit incentive (“ITC”) – thru 2019 (extension??)

118 Balancing Impacts

119 Hourly Ramps

. In the winter, solar generation is negatively correlated to load • Increases while load is decreasing • Decreases while load is increasing . Results in an additive hourly ramping effect for native resources increasing ramp requirements between 2X and 4X.

120 Ramp Rate Impacts

. Solar generation is incredibly intermittent . Has doubled the regulation requirement from regulating resources . Becomes more problematic during • Lighter loads • Higher solar penetrations

121 Unit Commitment Requirements

. Resource commitment has to manage new needs • Additional regulation response • Tighter startup windows for longer startup time resources. . These new commitment profiles come with new concerns • Higher minimum generation thresholds • Different generation mix needed • More commits and de-commits from native resources • Excess Energy periods . We established the Lowest Reliability Operating Limit (LROL)

122 Actual load vs Forecast

123 Net Demand and Forecast

124 124 10-Minute Average Sustained Ramps

125 Additional Operational Considerations

. Load forecast . Energy Accounting and Reporting . AGC Tuning . Frequency Response . Load Response Characteristics

126 Managing Excess Energy

. Tier-1 • Routine actions with DEP/DEC assets . Tier-2 • Atypical Unit Operation • CPRE/LCP Full Dispatch Control (10% DEP, 5% DEC) . Tier-3 • Legacy Bilateral PURPA PPA/RPPA Operational Dispatch Control (5% or Total Hour Limit) Excess Energy Emergency Action/Curtailment . Tier-4 • System Emergency – Cogeneration/PURPA(PPA and Standard Offer)/RPPA/CPRE Agreements Last Resort Action . Tier-5 • Emergency – Nuclear Reduction

127 Utility Solar/3rd Party Dispatch Control & Curtailment

. Duke-owned solar(full generation control by Duke operations) • Existing Utility Solar . New CPRE/LCP Agreements • 10%/5% Full Discretionary Dispatch Down . 3rd Party Bilateral Agreements (>5MW facilities/ Legacy PURPA/RPPA) • 5% MWH/yr System Operator Operational Dispatch Down . System Emergency Curtailments: Cogeneration/PURPA(PPA and Standard Offer)/ RPPA/CPRE Agreements (system emergency language)

128 Future Needs

. More Flexible Resources . More Storage . Energy Imbalance Market?

129 Transmission Impacts

130 Primary Considerations

. State Estimation . Power Flow Analysis . Contingency Analysis . Operational Planning Models . Transmission Planning Models

131 State Estimation Challenges

. Just because a substation is not feeding power into the transmission network, does not mean it is not impactful . If the load and DER are not separated • State Estimation will limit the amount they can change based on statistics • Scaling an injection as gross load will result in an incorrect P/Q result

12 14 17 1 20 3 2 Sum of behind-the- 0 Telemetered meter non- substation load is net telemetered DERs Actual load is of DER Generation 20 + 14 = 34 MW

132 State Estimation Challenges

. Solar injection profiles are not coincident with load profiles • Affects the statistical results in state estimation • Requires segregation of generation from load . Separation of generation from load improves • State estimation statistics, and thus power flow and contingency analysis accuracy • Control and granularity of power flow studies as load and generation can be altered independently

133 Transmission Power Flow Studies

. The resources are distributed in the model as they are in reality . Injections from these resources drive local area power flows . Failure to study them this way will result in unexpected loading conditions

134 Our Design

135 Questions…

136 Waupaca Area Storage Project and Energy Storage as Transmission MRO 2020 Virtual Reliability Conference

P R E S E NT E D BY

Randy Johanning, Senior Transmission Planning Engineer System Planning, [email protected]

August 26, 2020

137 Agenda

• ATC Background • Storage as Transmission Benefits • Project Need • FERC Policy on Storage as Transmission • MISO SATOA TariffFiling • Project Design Considerations • Waupaca Area Project Description • MISO Evaluation

• Battery Operations Source: https://www.dreamstime.com • Storage as Transmission Asset Used inMarket • Next Steps

138 ATC Background

• Began operations in 2001 as the nation’s first multi-state, transmission only utility • Headquartered in Pewaukee, Wis. • Grew from $550 million in assets in 2001 to more than $5 billion today • Operate 9,890 miles of lines and 568 substations in Wisconsin, Michigan, and Illinois • Projecting $2.9 to $3.6 billion in investment over the next 10 years

139 Interest in Storage as Transmission • Promising tool for addressing transmission issues . Capital costs are declining . Battery technology is maturing . Flexibility of applications . Evolution of utility needs Source: Desert Sun

Source: T&D World Source: T&D World

140 Waupaca Area Project Need • The battery helps address multiple outage issues during certain system load conditions • Existing system requires reconfiguration or radialization during some scenarios . Risk of consequential load loss • Provides voltage support and operational flexibility in responding to multiple contingencies and maintenance • As SATOA, will only be used in specific multiple contingency conditions, automatic action • Operated per operating guide (under development)

141 Benefits of Storage vs. Traditional Wires • Transmission deferral • Voltage support • Faster deployment • Little to no permitting and easement issues • Smaller footprint

• Smaller economic impact Source: https://www.123rf.com • Better aesthetic • Easily scaled to adapt to different time horizons • Configured to sizing constraints • Less financial risk than traditional transmission asset (40 years)

142 FERC Policy About Storage as Transmission • Western Grid Development order (EL10-19) . Classified a group of batteries as transmission facilities based on how they were to be operated • Cost Recovery Policy Statement (PL-17-2) . Determined that energy storage devices could provide both transmission and market services and raised issues to consider related to cost recovery Source: https://www.ferc.gov • Generator interconnection reform (Order No. 845) . Affirmed storage could serve as a transmission asset

143 Treatment of Storage as Transmission in MISO • Since April of 2018, MISO has conducted a stakeholder process to develop rules to treat storage as transmission • MISO filed “Storage as Transmission Only Asset (SATOA)” tariff revisions with FERC on 12/12/19

. Projects evaluated for ability to address transmission issues . Operated under MISO’s functional control . Not required to be evaluated in interconnection queue • FERC issued order for a technical conference 3/11, held the Source: clipartkey.com conference 5/4, order expected by 8/11 • In 2020 or 2021, MISO expected to transition to developing rules for using storage as transmission assets to provide market services

144 MISO SATOA Tariff Filing • SATOA are wholesale transmission facilities used to solve transmission performance issues identified in the MISO transmission planning process • If selected and included in MTEP as the preferred transmission solution, the SATOA would be subject to cost-based transmission rate recovery

• SATOA only would operate under MISO functional control to address transmission issues, same as for any transmission asset • SATOA owner would not participate in the MISO market, and would be responsible for maintaining the state of charge necessary to address the transmission issue under MISO direction

• Net revenues will be used to offset the transmission charges to customers

145 Project Design Considerations • Define the Problem / Usage of battery . Cycles/day . SOC/Availability . Duration/C-Rate . Degradation . Applications . Operating Range (4 Quadrant) • Siting and sizing analysis . MW and MWh sizing (PF) tosolve . Siting indices Source: blog.adafruit.com . Thermal and voltage needs • Hourly load profile analysis . 8760 hour look . Size to solve majority of hours andcondition

146 Project Design Considerations Cont.

• Site visits • Vendor discussions • Facility layout and topology design . Building or containers (20’, 40’, or 53’) • Interconnection requirements . Interconnecting at transmission . Communication and control needs . Network Upgrades? • Consider inverter needs

• Initially considered multiple sites Source: Quanta-technology.com . Hybrid • In-house analysis and work with consultant . Verify performance and location . Dynamic performance • Comparable traditional/conventional project solution • Techno-economic evaluation . Lifetime economics comparison . Revenue stacking opportunities considered

Source: okorder.com

147 Waupaca Area Storage

• Includes 2.5 MW/5 MWh lithium ion battery, designed for lowPF • Combined 14 MVAr of shunt capacitance at Arnott and Harrison North • Estimated capital cost $8.1 million • Estimated ISD 12/31/21

148 MISO Evaluation - Project Assumptions

149 MISO Evaluation - Project Alternative & Comparison

150 MISO Evaluation - Result • MISO identified project in MTEP19 report as preferred solution . No further analysis anticipated . Project would be the first storage as transmission asset in MISO • Transmission asset and revenue requirement Source: https://www.misoenergy.org recovered under cost-based rate • The MISO Board will consider including project in Appendix A subject to FERC acceptance of the proposed SATOA tariff revisions

151 Battery Operations • Battery under functional control of MISO • ATC is working with MISO to establish operating guide for the device providing transmission service . Required in proposed tariffrevisions . ATC to control battery for transmissionservice • ATC and WEC are in process of framing

Market ParticipantAgent Agreement to be Source: http://www.globalenergyworld.com filed at FERC . As SATOA, mostly consist of registering device and energy settlements

152 Storage as Transmission Asset Used in Market • MISO stakeholder process for developing rules expected after FERC order . The Market Subcommittee will take lead and Reliability Steering Committeeand Planning Advisory Committee will be involved in the process

• When MISO rules allow, battery would be used to provide market services when available

• Market Participant Agent will operate battery per agreement filed at FERC • ATC’s intention is that all market service revenues – net agents’ fee for operating battery – will be used to offset charges to transmission customers

• Interconnection agreements are expected to be required in order for all storage as transmission assets to be used in market (next Phase)

153 Takeaways and Next Steps

General • Energy storage costs are declining • Storage as transmission is a tool to address issues seen on the transmission system • SATOAs/SATAs considered transmission assets, will be their priority use • Talk to vendors/consultants early • Many design considerations, include on front-end • Multiple applications and revenue stacking are good, but keep expectations realistic Source: https://www.123rf.com

ATC • MISO identified project inMTEP19 report as preferred solution • Continue efforts on WaupacaArea Storage Project . Partner with Owner’s Engineer . Coordinate on MISO Op Guide . Work on market participant agentagreement • Additional Discussion at MISO (include in markets)

Source: https://www.123rf.com

154 Appendix - Wire Alternative

155 atcllc.com 156 157