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CEO Forum: Facing the Future

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Fortnightly - June 2012

of the pipelines in our region were built to deliver gas for heating load, and not power generation.

Finally we need to get some things ironed out between NERC and FERC. A lot of compliance requirements are coming out of NERC, and everyone is focused on that. We’d like to see more lessons coming out of the reliability and compliance initiatives, rather than just penalties. We need more transparency and sharing of best practices on how to operate more reliably.

We could learn a lot about information sharing from the Nuclear Regulatory Commission.

Fortnightly: What about FERC’s order on demand response compensation? What do you see as the potential for DR in the MISO market?

Bear: We’ve put into place all of the things we need to implement what FERC wants to do with DR, from the standpoint of technology and tariffs. Everything is there. The decision of how to implement it rests with the utilities in our marketplace.

We have a lot of DR now, but it’s mostly from older demand-side management (DSM) contracts. After EPA implementation, when we have lower capacity margins, the pressure will be on. Prices will come up a bit, and DR will be important for filling the resource gap.

We’re now evaluating the DR resource in our footprint. We believe we have a significant opportunity. Most of our current DR is on industrial loads, and the working hypothesis is there’s a big opportunity for aggregation of commercial customers and some residential customers at certain times of the day. Many of our members who are vertically integrated utilities are working to understand their opportunities and how to tap into them.

Fortnightly: What advanced technology initiatives are you working on, and where are they heading?

Bear: We’re pleased with what we’ve been able to accomplish with our synchrophasor project. It takes the wholesale model to a new level. Phase-angle indicators have real benefits for us, especially for regional coordination with Canada, PJM, and New York. We can dramatically impact loop flows, which will be helpful. Previously we were able get data on the system in three to four seconds, and now synchrophasors give us readings 30 times a second. They’re more accurate, they allow us to see what’s happening on the system, look backwards, and plan forward to make sure we’re as reliable as possible.

Also we’re working with our members on the smart grid technologies they choose. We’re involved in the Energy Systems Network in Indiana, including Project Plug-In with Duke and Indianapolis Power & Light as they integrate electric vehicles (EV). We have charging stations outside the building here, and we have quite a few employees participating in the program. We’re evaluating data to understand implications for the system.

Fortnightly: Are you considering vehicle-to-grid (V2G) technology, where EV batteries would provide distributed storage for the grid?

Bear: We’ve had a couple of instances where people brought in 1-MW batteries to provide ancillary services and balancing. It’s worked well, but our ancillary service prices are low relative to the rest of the nation. Those batteries moved east