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 Oklahoma Gas and Electric Dean Schiro Northern States Power, d/b/a XCEL Energy Dick Pursley Great River Energy Dwayne Stradford American Electric Power Gayle Nansel Western Area Power Administration Jason Weiers Otter Tail Power Company John Stephens City Utilities of Springfield, Missouri Durgesh Manjure MISO Nandaka Jayasekara Manitoba Hydro Nick Giffin American Transmission Company Ron Gunderson Nebraska 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-Kansas Consequences border impacted by cold weather in MISO