HOUSE ALTERNATIVE ENERGY PRESENTATIONS by PJM Interconnection and The Ohio State University (as referred to in previous report by Gary Smith)

Presentations were heard from Kerry Stroup, manager for state relations for PJM Interconnection; and from Drs. Gregory Washington, Jeff Daniels, and Steve Slack of Ohio State University (OSU). Washington is a professor and the dean of research for the College of Engineering; Daniels is a professor and associate dean of research for the College of
Mathematics and Physical Sciences; and Slack is the director of the Ohio Agricultural Research and Development Center and associate dean of research at the College of Food, Agricultural and Environmental Sciences.

During the first presentation, Mr. Stroup gave an overview of PJM’s role in managing a portion of Ohio’s electricity transmission network, and providing access for distributed generation from alternative electrical energy generators. Stroup described PJM as one of two regional transmission organizations (RTO’s) serving Ohio. Stroup emphasized that PJM independently operates, but does not own, transmission facilities owned by AEP and Dayton Power and Light as part of a regional network that extends from New Jersey and North Carolina through Chicago.

Stroup made it clear that PJM is a non-profit entity regulated by the Federal Energy Regulatory Commission (FERC).

PJM ensures short-term reliability by:

1. Receiving, confirming and implementing all interchange schedules;
2. Ordering the re-dispatch of generators connected to PJM-controlled transmission facilities;
3. Approving all scheduled outages of transmission facilities;
4. Scheduling generator maintenance outages;
5. Monitoring the electrical system on a real-time basis; and
6. Implementing emergency procedures required to maintain system reliability.

He said long-term reliability is assured through its long-term Regional Transmission Expansion Plan (RTEP) planning process that examines load, generation and transmission over a 15-year planning horizon. He noted that FERC has recently modified its RTEP process to address persistent and costly transmission system congestion.

Stroup said that requests for new connections are assessed through a three-step feasibility process. He noted that while current generation connections are dominated by nuclear, coal and natural gas; the mix of current applications includes wind at nearly 25 percent; natural gas at nearly 30 percent; coal at 25 percent and nuclear at nearly 15 percent.

Stroup said requests to connect new sources of less than 20 megawatts are expedited, including expediting new sources of 2 megawatts or less using pre-certified generation equipment and systems that meet IEEE standards. Stroup noted that the majority of interconnection requests from distributed generation developers are for distribution level system interconnection (under state jurisdiction) rather than to the bulk power generation system (under FERC
jurisdiction). He said these entities can still apply to take part in PJM’s wholesale markets and their impact on wholesale power transactions assessed.

Stroup also discussed PJM’s management of voluntary wholesale spot markets, local marginal price (LMP) signals, curtailments, the use of transmission congestion charges, capacity and ancillary service markets. He said these markets encourage the development of demand-side resources, buttress bulk power reliability, and can provide revenue streams to support investments in Ohio’s abundant electric energy resources.

PJM also runs a Generation Attributes Tracking System (GATS) through a for-profit subsidiary. He said the GATS allows owners of renewable generators to obtain the full value of their resource by letting them use the energy produced, and then separately selling the renewable energy certificate associated with it to suppliers who need clean energy, or certificates, to comply with state renewable portfolio standards (and fuel emission disclosure requirements).

In response to Rep. Latta, Stroup said wholesale electric power averages $40 per MWH, and can increase up to a ceiling of $1000 per MWH under special conditions.

During the second presentation, Dr. Washington gave a slide presentation of Energy: A National and Ohio Overview. He said, the most important challenge of our age is to find a clean and renewable replacement for inexpensive fossil fuels.

Washington noted that 67 percent of oil production is used in transportation worldwide. He said conservative estimates suggest that peak oil production will occur in this century, with some pointing to this decade. He also cited the rise in population and energy consumption in developing countries. He said that while the population of developed countries is expected to remain flat or decline during the 21st century, that of developing countries is projected to rise to 10 billion.

Washington said total world energy consumption has increased from 12.8 TW (Terawatts, 1 TW = 1012 watts) in 1998 to 14.8 TW in 2004 (about 88 percent from fossil fuels). He evaluated the potential for renewable energy to replace fossil fuels:

Hydroelectric 0.9 TW economically feasible
Geothermal 11.6 TW continental total potential
Wind 2-3 TW
Biomass/Biofuels 7-10 TW gross, using 50 percent of all cultivatable land and current
technology; ignores the energy needed to produce biofuels (that may
or may not exceed the energy obtained).
Solar 20 TW using an area the size of Oklahoma; high capital cost

Washington concluded that we will need a mix of all the energy sources we can get, and described the energy research and education efforts at OSU and 14 other Ohio universities in the University Clean Energy Alliance of Ohio (UCEAO).

Rep. Koziura asked about the roll of mass transit and changing people’s energy habits. Rep. Goodwin asked about the use of hydrogen fuel.

Source: Hannah Report, March 7, 2007