1 1 UNITED STATES OF AMERICA 2 FEDERAL ENERGY REGULATORY COMMISSION 3 Federal-State Current Issues Collaborative 4 RTO Governance/Resource Adequacy 5 6 Sunday, July 27, 2025 7 9:30 a.m.- 12:00 p.m. 8 Omni Boston Hotel, at Seaport 9 Ensemble AB (Level Two) 10 450 Summer Street 11 Boston, MA 02210 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2 1 APPEARANCES: 2 FERC COMMISSIONERS: 3 CHAIRMAN MARK C. CHRISTIE 4 COMMISSIONER DAVID ROSNER 5 COMMISSIONER LINDSAY S. SEE 6 COMMISSIONER JUDY CHANG 7 8 9 FERC OFFICE OF GENERAL COUNSEL: 10 CECE COFFEY, ATTORNEY/ADVISOR 11 12 NECPUC PRESENTATION: 13 PANELISTS: 14 CHAIRMAN PHILIP L. BARTLETT, Maine Public Service Commission 15 COMMISSIONER PRADIP CHATTOPADHYAY, New Hampshire Public 16 Utilities Commission 17 18 MARC PRESENTATION: 19 PANELISTS: 20 CHAIRMAN JIM HUSTON, Indiana Utility Regulatory Commission 21 COMMISSIONER KATHERINE PERETICK, Michigan Public Service 22 Commission 23 24 25 3 1 MACRUC PRESENTATION: 2 PANELISTS: 3 VICE CHAIR KIMBERLY BARROW, Pennsylvania Public Utility 4 Commission 5 COMMISSIONER DENNIS P. DETERS, Ohio Public Utilities 6 Commission 7 8 WESTERN DISCUSSION: 9 PANELISTS: 10 CHAIR PATRICK O'CONNELL, New Mexico Public Regulation 11 Commission 12 PRESIDENT EDWARD LODGE, Idaho Public Utilities Commission 13 14 15 SEARUC DISCUSSION: 16 PANELISTS: 17 CHAIRMAN CHRIS R. BROWN, Mississippi Public Service 18 Commission 19 COMMISSIONER GABRIELLA PASSIDOMO SMITH, Florida Public 20 Service Commission 21 22 23 24 25 4 1 P R O C E E D I N G S 2 9:32 a.m. 3 4 (*NOTE: Due to technical issues the first 9 minutes of the 5 conference was not recorded.*) 6 7 MS. COFFEY: This is the time and place that has 8 been noticed for the second meeting of the Joint Federal-State 9 Current Issues Collaborative, to consider the matters that have 10 been posted in the agenda issued on July 11, 2025 in Docket 11 AD24-7. This meeting is on the record and a transcript will be 12 placed into the docket. The public can listen and observe in 13 the room and online. Any comments by the public can be submitted 14 into the docket through FERC's e-Filing system -- please visit 15 the FERC website. Collaborative members can address matters 16 raised in pending proceedings generally but should not speak to 17 the specific merits of a pending contested proceeding. Thank 18 you. I'd like to now turn the meeting back over to the 19 Collaborative Co-Chairs, FERC Chairman Mark Christie and Indiana 20 Utility Regulatory Commission Chair Jim Huston. 21 CHAIRMAN HUSTON: Thank you, CeCe. And we're 22 going to start off with the Northeast part of the country 23 and Phil and Pradip, Commissioner Bartlett and 24 Commissioner Chattopadhyay, I don't know which one of you is 25 going first, but feel free to jump in. 5 1 CHAIR BARLETT: Good morning. Thank you, Chair 2 Huston, Chair Christie. It's a pleasure to be with all of 3 you today. As I just want to make a few points, but I do 4 want to just note that Pradip and I put these together sort 5 of in consultation with our colleagues, but they are not 6 intended to reflect the distinctive view of NECPUC or the 7 region per se, but rather sort of our thinking as we are 8 approaching these issues. 9 We're very fortunate in New England that we have 10 -- the states have been very strong and have positive 11 relationships with ISO New England. We regularly meet with 12 management, with staff, with the Board of Directors. We 13 also are engaged with the NEPOOL stakeholder process, so -- 14 CHAIR HUSTON: Phil, could you just move the mic 15 a little bit more toward you? 16 CHAIR BARTLETT: Sorry. 17 CHAIR HUSTON: Thank you. 18 CHAIR BARTLETT: Is that better? 19 CHAIR HUSTON: That's better. 20 CHAIR BARTLETT: All right. It's better, but I 21 feel like I'm echoing, but yeah. I mean, we're very 22 fortunate in the region to have a very positive relationship 23 with ISO New England, with the stakeholders, and with each 24 other, with the other states. And we've made progress in a 25 number of areas, but we do want to highlight a few where we 6 1 think there's been some progress, but we could do more. 2 First and foremost, you know, we get a lot of 3 criticism, or I hear a lot of criticism about the lack of 4 transparency in the stakeholder process in New England. 5 Folks want to learn more about the work we're doing. This 6 is becoming a bigger topic, I think, for policymakers, for 7 advocates out in the community, and we need to make sure 8 that they have confidence in the work that is being done on 9 their behalf at the region. 10 So, the first recommendation from a Governor's 11 perspective I would have, is to open up all of our NEPOOL 12 stakeholder meetings to the public. Not for active 13 participation per se, but to allow folks to see what's going 14 on, whether it's a livestreaming, or people could show up to 15 watch, but it seems like an important way to help build 16 trust and confidence in the work that's happening. 17 Any time we can let people in and sort of peek 18 behind the curtain, I think it takes away some of the 19 mystery, or the concern about decisions being made in a back 20 room. And they can really see the complexity of the issues 21 we're dealing with, and the thoughtfulness that I think all 22 the stakeholders in the region engage in, trying to tap into 23 those problems. 24 Secondly, as I mentioned before on resource 25 adequacy, it's really important that the states work closely 7 1 and build a strong relationship with ISO New England, to 2 make sure that if there are problems that are identified 3 that analysis is shared with the states in a timely way, and 4 a consistent way, so that the states could take the 5 appropriate action. 6 I think we're making some positive moves on this 7 front. ISO New England has really started doing a lot more 8 robust analysis. Every fall they will be releasing, you 9 know, I believe it's a five- and ten-year look ahead, to 10 give us a sense of how well we're doing, whether there are 11 resource adequacy problems that are emerging. 12 And I think having that as a regular process 13 would enable the states to then have the conversation with 14 ISO New England about what steps, if any, that we need to 15 take in order to tackle these issues. 16 Thirdly, when such -- if there are solutions 17 that are identified to potentially address any resource 18 adequacy issues, we need to make sure that there's a 19 streamlined process for the study and review process, so 20 that if we need resources, we can get them interconnected 21 quickly. If we need some transmission planning done very 22 quickly, we've got to figure out how to get the resources on 23 it, so that the problems can be solved when the states are 24 prepared to act. 25 And I think that's just an important part of 8 1 thinking holistically about the system and about resource 2 adequacy, and how we can all play a role in making sure it's 3 fulfilled. And then finally, we wanted to mention, you 4 know, one of the challenges that we've been facing in the 5 region that I think goes to sort of the governance issue, is 6 that the lack of transparency and lack of oversight of 7 certain transmission spending, and in particular in the 8 region asset conditioned projects. 9 We made some very good progress on trying to 10 develop a reviewer, an asset condition reviewer that will 11 help to hopefully provide some insights and some confidence 12 to the states, and we just want to highlight that as a place 13 where I think NESCOE, ISO New England, the stakeholders, 14 have been working constructively, but also where there's room 15 to keep pushing that to make sure that we are, as we're 16 spending more and more money of our ratepayers on 17 transmission build, that there's real accountability, and 18 that people can have confidence in the work that we're 19 doing. 20 COMMISSIONER CHATTOPADHYAY: Can you hear me? 21 So, I'm just going to build on the first point, which is 22 about transparency, and the last point. And my comments are 23 going to be linking those two a little bit. So, if you 24 think about transparency, you know, it's not just that you 25 let folks come in and see what's going on. 9 1 Some of the bodies, certainly states, for 2 example in New England, the smallest states, we don't fully 3 have the ability to process the information, even if we get 4 it, so there is this need when you talk about transparency, 5 it's not merely about providing the information, it's also 6 having or giving the parties or states the ability to 7 understand what's going on. 8 And so, to that extent, I'm going to say that 9 the FERC can probably, along with RTOs, play a role that 10 would help smaller states to participate better. And that 11 might mean that it needs resources, so it's not going to be 12 a cost-free process, but that's very important for smaller 13 states like us in New Hampshire, because again, I'm speaking 14 from my own experience from when I was participating in regional 15 processes, the NEPOOL process and then you have the cost 16 assessment--those two pieces can sometimes be disconnected 17 sufficiently that for a smaller party that's hard to understand 18 what's going on. So, I'm kind of urging FERC, as well as the 19 RTOs, to think outside the box and enable the kind of process 20 that went in for the, you know, asset conditions process, you 21 know, the RTO, ISO New England, has been very helpful in 22 figuring out a space where we can work together. 23 A similar mindset is needed for even projects 24 that are part of traditional transmission planning, and FERC 25 goes through the approval process, looks at the cost later. 10 1 So, I think we may have to create a process that is more 2 friendly for parties, so that they are on the same level 3 playing field, as opposed to, you know, some parties will 4 have deep pockets; they're able to participate better. 5 So, that issue also needs to be addressed as we 6 look into the future. Thank you. 7 CHAIR HUSTON: Okay. I've got to ask a 8 question on transparency. How do you two feel the dynamic 9 is in the Northeast when working towards some of the 10 transparency objectives that you seek with the Northeast 11 ISO? 12 CHAIR BARTLETT: There is -- I mean, there's 13 certainly been some progress. Several years ago the states 14 through NESCOE put out a vision statement seeking a number 15 of governance reforms, and there has been some progress. 16 For example, ISO New England's Board now has one open public 17 Board meeting a year. That could obviously be improved on. 18 We'd like to see more transparency. 19 But I do think there has been some efforts to 20 make positive steps. We also have the Planning Advisory 21 Committee, which is kind of the one committee meeting that 22 is open to the public. And NESCOE has long pushed for as 23 many discussions as possible to happen in that forum, so 24 that there is public insight into the issues that we care 25 about, and that folks can see what's happening. 11 1 The challenge right now I think there's -- 2 because there's so much spending happening, there's so much 3 attention being focused on the electric sector now, I think 4 there's a lot of advocates who just feel like they're 5 worried about the decision-making, they're worried about the 6 influence of various interests. And I think opening up more 7 of the meetings so that they can see what's happening, and 8 see some of the technical discussion that's happening, 9 seeing the thoughtfulness of and the give and take of 10 various stakeholders in the region would be really 11 valuable. 12 And my understanding is that our stakeholder 13 process is the only one in the country that is not open to 14 the public, so it seems like we have plenty of models we can 15 look to of where it's been successful and not interfere 16 unduly with the work that needs to be done. 17 COMMISSIONER CHATTOPADHYAY: I will share 18 similar sentiments. I would also say that one will have to 19 think about the NEPOOL process, and then what the FERC does 20 in terms of, you know, determining what is just and reasonable 21 in terms of cost. Those two processes probably should be 22 looked at even more within the context of letting others 23 also understand what is going on. So it's one piece is 24 certainly allowing more stakeholders who participate in the 25 NEPOOL process perhaps, but not necessarily as members, but 12 1 you know, understanding what's going on. 2 But I'm also going to stress that there may be 3 ways to include the RTO in the process of helping those 4 parties that are not as financially capable to understand 5 what's going on, and they can partner with us and, you know, 6 that's the kind of structure I'm hoping that we can get. 7 CHAIRMAN CHRISTIE: Let me ask a follow-up. One 8 of the themes that came through your statements, which I 9 read, and you just indicated, was you're very concerned 10 about the spend on what you call asset management, I'll just 11 call them local projects, and that you don't have the 12 resources at your Commissions to thoroughly vet or evaluate 13 these local projects, so you want the RTO to do it? 14 Do you want an independent transmission monitor 15 to do it? Who would do it at the RTO? 16 CHAIR BARTLETT: I mean, my biggest concern is 17 really the regional project, projects that are being shared 18 across the region, as opposed to the purely local ones, because 19 I do think, certainly in Maine, we have pretty good 20 oversight of the local projects in Maine. The challenge is, 21 if you're talking about a regional project, Maine pays you 9 22 or 10 percent of that cost, and it's, you know, if we're 23 making a decision we can scrutinize it, but those decisions 24 are being made in five other states as well. 25 CHAIRMAN CHRISTIE: Well, who do you want to do 13 1 it at ISO New England? 2 CHAIR BARTLETT: I mean, we're trying -- 3 CHAIRMAN CHRISTIE: Who do you want to do it 4 there? 5 CHAIR BARTLETT: Yeah. We're developing an 6 independent reviewer model, and, you know, ISO New England 7 has agreed to sort of house it, and we're now working on 8 some of the governance issues, who would they report to, and 9 then exactly what the role would look like, but the idea is 10 there being yeah, or an independent entity that we can then 11 take the information to FERC or elsewhere if we're seeing 12 problems arise. 13 CHAIRMAN CHRISTIE: And when do you think we'll 14 see that filing? 15 CHAIR BARTLETT: I believe we're sort of at the 16 beginning of what's likely to be a two-year process, a 17 stakeholder process, but will unfortunately expect it to be 18 a little bit. 19 CHAIRMAN CHRISTIE: Okay. 20 CHAIR HUSTON: I'm going to go ahead and ask a 21 resource adequacy type of question, and the intersection 22 between resource adequacy in the region as well. As a NARUC 23 organization, we're blessed to have presentations directly 24 from ISO New England, and your dynamic is a little bit 25 different than some of the other regions of the country. 14 1 How do you see that coordination on what you are doing in 2 your state jurisdiction and how it intersects with the 3 region as a whole? 4 CHAIR BARTLETT: I mean, I think, you know, the 5 states all have slightly different policies, but most of us 6 have fairly aggressive clean energy policies that are 7 driving a lot of the resource acquisitions by the states. 8 We are in general, I think, very committed to markets, and 9 want to figure out how to maximize the benefit we can get 10 out of the wholesale markets, and make sure that the 11 decisions the states are making are building constructively 12 on that, and not unduly interfering with it. 13 I think right now the resource adequacy outlook 14 is good. We don't see immediate concerns on the horizon, 15 but if they do pop up, what we see in the past is it feels 16 like we're lurching from crisis to crisis, that geez, we 17 have a problem, now we've got to rush to try and solve it. 18 And so, the states are scrambling, you have 19 stakeholders, ISO New England is scrambling, and you don't 20 feel like it's a really well-thought-out approach. And 21 probably, my concern is that we spent a lot more money 22 trying to solve these problems because we're not proactive. 23 And so, what I've been advocating for, and I think there's 24 real interest in the region for, is to have a regularized 25 process, so that once or twice a year there's -- we're using 15 1 analysis by ISO New England, and states can offer some 2 scenarios for further review and really look at, what are the 3 potential challenges that are coming at us? We have plenty of 4 time for the states to, in a coordinated way, make decisions 5 about whether it's acquiring resources, whether it's 6 supporting a transmission build, whatever the need is, to be 7 presented in sort of a thoughtful and cost-effective way, as 8 opposed to this--I feel like we've been doing it for years, 9 which is lurching from one crisis to another because of concerns 10 around particularly winter reliability in the region. And 11 so, it's one fix after another, one expensive fix after 12 another in an emergency situation as opposed to part of a 13 consistent analysis and plan. 14 I want to make sure that every decision, every 15 dollar we're spending is driven by really sound analysis, 16 and is the best option available for the region, as opposed 17 to the only thing we could grab in an emergency situation. 18 COMMISSIONER CHATTOPADHYAY: Sorry, there is a 19 tension between what markets are supposed to do, and what 20 reality, you know, we have faced. So, I mean, it's 21 understandable. This is not like the markets are organic. 22 You have markets that have been created by human beings, and 23 it's well intentioned, all of that. But, you know, once in 24 a while we are dealing with these non-market issues, and we 25 try to figure out how we solve a particular crisis. 16 1 And what that means is that one might conclude 2 that the cost is not being controlled enough. So again, 3 coming from states like New Hampshire where, you know, as a 4 Commissioner I'm very pro markets, for me, having the 5 ability, somebody helping us with the analysis and sort of 6 saying you know what, we can do a better job in terms of 7 keeping a tab on costs and reducing it, even as we approach 8 this field as a combination of market-based approaches, and 9 non-market interventions. 10 So, right now, you know, with the changes 11 happening in the electric arena, obviously it's not an easy 12 problem to solve, but some sort of help coming in from, you 13 know, some independent party will be good going forward. 14 COMMISSIONER ROSNER: Is this on? Oh. Thank 15 you so much. It's a fascinating conversation. I wanted to 16 follow up, Chair Bartlett, you were kind enough to spend 17 some time with us in Washington, D.C. earlier this year, and 18 I just wanted to ask, you know, one observation I have from 19 your comments and from working on some of the things that 20 ISO New England has filed, is I observe incredible success in 21 the region on planning transmission that you all need 22 jointly, and figuring out cost responsibility, and getting 23 good buy-in for the siting. 24 I just wonder, as you are now considering 25 resource adequacy together, I hear, I just wonder if you 17 1 have more thoughts about what that looks like? I hear the 2 need for analysis, and you know, as someone steeped in or a 3 client of those -- that analysis, I agree with that, and 4 support you getting that information from ISO. 5 But what does the next step look like? Let's 6 say there's something that the region thinks they need. Any 7 thoughts there? 8 CHAIR BARTLETT: Yeah, so I mean, a couple of 9 like examples kind of the way I'm thinking about this is, 10 you know, the states are already doing a number of 11 procurements, right? They're looking at different kinds of 12 resources they want to bring on the system. If we were 13 doing analysis that showed, look, we may have a resource 14 adequacy challenge, you know, if we had a significant 15 amount of additional storage on the system, that would 16 really make a difference. 17 In the states, it's in sort of their bucket of 18 things to procure is storage, right? So, they could say 19 okay, how do we now tier sort of our RFPs to get this on? 20 Maybe we move up some of those investments sooner. So, I 21 think it could help inform the states as they are going and 22 seeking to bring on new resources to meet the climate goals. 23 Another way I think this could be helpful, you 24 know, for example, you know, if we were to see, you know, 25 we're trying to build out the resources in northern Maine, the 18 1 onshore resources. We know there's about 3,000 megawatts out 2 there. We have kind of plan to go and get 1,200 megawatts. 3 If we were to know that there was a resource 4 adequacy problem coming at us in 2040, and having another 5 1,500, 2,000 megawatts of onshore wind from northern Maine 6 would help to solve that, then the region could make 7 decisions about okay, how do we want to invest in the 8 transmission to unlock those resources. 9 Or, another example could be geez, we're seeing 10 a resource adequacy challenge. A good way to solve that 11 could be increased interconnection with one of our 12 neighbors. And so, you could prioritize that and move the 13 ball forward. 14 So, I think it really makes sure that when you 15 understand the problem, look at the various tools that ISO 16 New England has, that the states have, and figure out then 17 how to pull the various levers in order to avoid that 18 resource adequacy challenge, as opposed to just waiting and 19 getting ourselves into a sort of RMR situation, which feel 20 like where we'd be headed, if we're not being very 21 thoughtful and doing a five- to ten-year look ahead. 22 CHAIR HUSTON: Commissioner Peretick? 23 COMMISSIONER PERETICK: Thanks. Yeah, I -- just 24 following up on that last piece there. So, I think that 25 that really comes down to the accountability piece too, 19 1 right? Like who was actually accountable for that resource 2 adequacy and making sure that you are accurately planning 3 and getting the right forecasts in place? 4 And I think that that accountability has caused 5 some, I don't know, blame issues I guess maybe occasionally, 6 who to blame when something goes wrong? So you know, RTOs do 7 have much more diffuse accountability structures, but it's 8 oftentimes us, as state regulators, or other state leaders, 9 or sometimes federal regulators who receive that outcry when 10 capacity prices skyrocket, or when there's a resource 11 adequacy issue, or when there's a reliability issue. 12 How are you looking at that in the Northeast, 13 and how are you thinking about how to ease those tensions 14 and move that conversation more towards collaboration 15 between the states and RTO partners, and our federal 16 partners, and how are you trying to solve that, and how are 17 you trying to move that more towards collaboration, rather 18 than blame? 19 CHAIR BARTLETT: You know, when I started in 20 this job, and thinking about resource adequacy, I mean the 21 states clearly decided to rely on the wholesale markets 22 about resource adequacy. So, I think I came into the 23 discussion thinking, you know, ISO New England is ultimately 24 responsible for resource adequacy. 25 I think where I have kind of evolved over the 20 1 last several years is understanding that, or recognizing the 2 fact that if the lights go out it doesn't matter where the 3 formal lines of accountability are, we're all going to be, 4 you know, we're going to have plenty of blame coming our 5 way. 6 So, it's important, I think, for everyone, for 7 all of us, to sort of lean in to these problems, and if 8 there is an issue figure out, okay, I think for the way I 9 look at it is first and foremost, we should be designing the 10 markets to achieve resource adequacy to the maximum extent 11 possible. So the markets should be -- the first responsibility 12 is trying to get that right. 13 And then secondly, I think the states then need 14 to look at were there places where ISO New England cannot 15 act, because of limitations on their authority that the 16 states may need to step in at certain situations. And 17 again, you don't want to be interfering with the markets. I 18 think we would want the markets to be sort of the 19 centerpiece of resource adequacy, but you also don't want 20 the lights to go out because of a market failure that you 21 saw coming at you, or because the resource constraint that 22 was unavoidable. 23 COMMISSIONER CHATTOPADHYAY: What I would add is 24 that even when states somehow determine okay, we have a role 25 now because the markets aren't really doing what it was 21 1 supposed to do, I'm not at a -- you know, I'm still hoping 2 that we can have a conversation on how the states can come 3 in again through market process, that's one aspect. 4 The second piece I'll mention is really based on 5 what you just pointed out. Yes, I mean accountability in 6 everything we do. Ultimately it's like we are the ones who face 7 they brunt, okay? So, the process should be such that we have 8 confidence in working together, and having the ability to 9 understand what's going on, and not the party sort of saying 10 for example, oh, we don't have the ability to do anything. 11 It's really your problem. Our task was this, we did it, sorry 12 if it's turning out to be bad. 13 It's really at the point that we have to 14 figure out how to improve the interactions, and allow 15 parties that are not as -- they don't have deep pockets to be 16 part of the process and help. I mean there's different 17 ways to think about the markets as well. It's not just what 18 the ISO New England is doing. 19 The markets can come in from other ways too, so 20 I'm just keeping it broad enough, that's what I would say. 21 CHAIR HUSTON: Any other final observations? We 22 have about 35 seconds if that clock is right. 23 CHAIRMAN CHRISTIE: All right. Well, let's move 24 on to the -- thank you all very much for that presentation 25 on New England. Our next region we're going to hear from is 22 1 the Midwest, MARC, and it will be Chair Jim Huston of 2 Indiana and Commissioner Katherine Peretick of Michigan. 3 CHAIR HUSTON: I'm going to sound a little bit 4 like a broken record because I had the blessing of appearing 5 before FERC on the 1st of June at a Technical Conference as 6 well. The big point that I wanted to emphasize was on the 7 resource adequacy side. Katherine is going to cover more of 8 the governance type of questions in her opening remarks. 9 We in Indiana believe in cooperative federalism. 10 We put together a general administrative order several years 11 ago to get direct feedback from our RTOs on resource 12 adequacy, every CPCN that's brought before us, to get that 13 kind of color, to get that kind of insight. 14 We applaud the FERC on what you guys have done 15 with seasonal accreditation. We applaud the FERC on what 16 you've done with the queue process as well. There's an 17 order that passed, so I can't say that compliment, correct? 18 Okay. That's all I'm supposed to say, but thank you. 19 CHAIRMAN CHRISTIE: If you're thanking us, you 20 can talk about whatever you want. 21 CHAIR HUSTON: That is a big thank you. But I 22 also want to say that on the seasonal accreditation side, we 23 modified our general administrative order to make sure that 24 now that we have seasonal accreditation in the MISO 25 footprint, that we get that additional color from the CPCNs 23 1 that are brought before us as well. 2 And to me that's a good example of the way it's 3 supposed to work. Our hope is that from a resource adequacy 4 perspective, we get every bit of information from the RTO, 5 whether they feel confident about the way the statutes are 6 written or not. They need to be able to tell us what they 7 need to get their job done in moving electrons throughout 8 the footprint, and then to be able to share electrons 9 effectively throughout the country when it's needed 10 economically, or when it's needed for service delivery. 11 So, with that, I will turn it over to Katherine. 12 Katherine is going to talk about governance. 13 COMMISSIONER PERETICK: Thank you, Chairman 14 Huston. And thank you Chairman Christie as well for the 15 invitation and all of the FERC and NARUC members for the 16 opportunity to be here. I do have a prepared statement, given 17 that I only have two and a half minutes to get through this, I 18 have a lot to say, and if I don't have a script in front of 19 me I will wander. 20 So, in your opening comments, Chairman Huston, 21 you rightly emphasized the issue of resource adequacy. And 22 in my brief time today I'm planning on focusing on the other 23 half, on RTO governance, though I look forward to 24 engaging closely on both of these very closely connected 25 issues during our discussion. 24 1 So, I'm a Michigan Commissioner. Michigan is in 2 both MISO and PJM, and the MARC region as a whole contains 3 parts of MISO, PJM and SPP. I happen to be an OPSI Board 4 member, but in preparation for this meeting today I reached 5 out to all Commissioners in the MARC region for their input 6 to ensure that I'm representing our region, the MARC region, 7 accurately, and I got a lot of responses. 8 There was a lot of input and a lot of 9 recommendations for what to talk about, or what not to ask 10 for today. I spoke also with Commissioners who are very 11 deeply involved in both the MISO and SPP RTOs, and have 12 incorporated their thoughts here as well. So, I'll start by 13 saying that RTOs have served us very well for decades. You 14 know, their structure, while not perfect, has supported 15 reliability, it's supported market development and 16 coordination across large regions, but the energy landscape 17 has changed dramatically since these governance structures 18 were first established. We're now seeing significant load 19 growth, changing energy mix, with new generation attributes, 20 and expansion of state and federal public policies, and 21 interconnection queues that are increasingly clogged. 22 These shifts raise serious questions about 23 whether the existing RTO governance structures remain well 24 suited to today's challenges. The other MARC Commissioners 25 that I spoke to in advance of this meeting expressed general 25 1 satisfaction with the state input process in both MISO and 2 SPP, but that was not the case in the very diverse 3 member-driven PJM. 4 In PJM, the state's perspectives, and by 5 extension, the customer's needs, are not adequately 6 represented. States don't have Section 205 filing rights, 7 as Chairman Christie mentioned. We do not have a meaningful 8 vote on major decisions. During their formation, utilities 9 were the architects of RTOs, so it's no surprise the 10 governance models tilt in their favor. 11 At least in PJM, state and ratepayer interests 12 are not prioritized, or even fully considered, which is a 13 foundational governance issue. It's important that the RTOs 14 are not captured by one particular member interest. A 15 strong back stop, whether it's FERC, and an empowered, 16 educated Board, or a management team with more authority is 17 necessary to ensure an independent RTO can remain an 18 independent RTO. 19 Board autonomy is another concern. While most 20 of the Board members are highly qualified, these Board 21 members receive 100 percent of their training from the RTOs 22 that they oversee, which might be a conflict that limits 23 fresh perspectives. We need more diverse training for Board 24 members, greater representation of ratepayer interests, and 25 a rebalancing of influence. 26 1 Voluntary membership allows transmission owners 2 to leverage threats to exit if outcomes don't go their way. 3 Decisions should be more transparent, votes should be fully 4 public, meeting minutes should be accessible, and there must 5 be a clearer representation of all stakeholder needs, 6 especially the customer, and states should have a say in 7 setting the level of resource adequacy that we're planning 8 for. 9 Major proceedings need to have a formal notice 10 and opportunity for comment, and the product that each state 11 expects from the market should be defined and respected. So 12 that's a lot to tackle, and I think we have the right people 13 here to start the conversation, so thank you. 14 CHAIRMAN CHRISTIE: All right. Great openings. 15 Anybody have questions? I think no one had coffee today, 16 but I did. I always do. I'm going to start with a 17 question. I'm going to go to Katherine, but I want to ask 18 you about MISO, which I thought your PJM comments were spot 19 on, but we'll go to MISO. 20 Would you describe how does the -- I've always 21 been sort of envious of you and SPP of your filing rights, 22 the 205 rights in MISO. It's not total, but could you 23 sort of explain how that -- what filing rights you do have, 24 the states have in MISO? 25 COMMISSIONER PERETICK: Sure. It's not direct 27 1 filing rights. In SPP they do have direct filing rights. 2 In MISO it's not direct, but they have a much bigger input 3 through multiple different venues into what is actually 4 filed before FERC. I'm not the OMS representative, so I 5 don't have that. 6 CHAIRMAN CHRISTIE: Right. 7 COMMISSIONER PERETICK: Maybe Chairman Huston, 8 you probably have a better answer for exactly how it happens 9 in MISO. 10 CHAIR HUSTON: Well, what I would say is that I 11 don't sit on either one of them because, and this is 12 probably a comment that somebody else is going to make 13 because I saw it in the bullet points, but we have two 14 Commissioners, one on PJM, and one on OMS as well. And the 15 stakeholder process is so involved on the OMS side. I think 16 that they feel like that they can get comments through. 17 Now, the flip side, on the governance side is 18 the Board orientation. I think that there is some concern 19 about the independence and training. So I agree with what 20 Katherine is talking about on that side. 21 CHAIRMAN CHRISTIE: Yeah, Commissioner Bartlett, 22 Chairman Bartlett? 23 CHAIR BARTLETT: Yeah, since your comments about 24 the states having a greater role in determining the level of 25 resource adequacy that should be planned for, how do you 28 1 envision it? Would it be sort of the states feeding in 2 certain information, like expected demand growth, or would 3 it be states sort of collaborating on whatever that target 4 number is to be of in the future? 5 COMMISSIONER PERETICK: Yeah. So, maybe I'll 6 describe how it works in Michigan right now, and this is 7 both on our MISO and PJM side. The way that -- so, we're 8 vertically integrated. Well, we're 90 percent vertically 9 integrated. We have a 10 percent retail choice in Michigan. 10 So, for the 90 percent, we require a capacity demonstration 11 that is four years out, and that -- at the state level. 12 So, at the state level we require all of our 13 load serving entities to demonstrate their sufficient 14 capacity four years into the future. And that capacity is 15 set, like that number is set in collaboration with the RTO, 16 so the RTO actually provides input to us at the Commission 17 to then determine what that capacity number should be that 18 those load serving entities then need to demonstrate their 19 capacity for. 20 So, maybe that's one model. I think another 21 model would just be, you know, directly with the RTOs 22 themselves, having -- just having a stronger seat at the 23 table, whether that is to 205 filing rates, or whether 24 that is the ability to sit on committees, like at the RTOs, 25 or chair committees--they have that opportunity in MISO, 29 1 and, you know, they don't in PJM. And, I think having that 2 just additional seat at the table and input, I think, would 3 create better outcomes where both the states and the RTOs 4 would be able to have more of that information about what's 5 happening more at the local level, and what's happening at 6 the broader regional level. 7 Because the point of an RTO is, so you don't 8 have to do everything yourself, right? Like it's so you 9 have that regional coordination, and you're able to draw on 10 the resources that exist in other states. 11 CHAIR HUSTON: I'm going to answer it a little 12 bit differently from a resource adequacy standpoint because 13 I think this is one of the big challenges moving forward on 14 load forecasting at the regional level, at the national 15 level, and it's one of the things that I brought up at the 16 technical conference in June as well. 17 It's great to see all of that engagement at the 18 national level about what stakeholders expect to see in the 19 country as a whole. It's great to see it forecasted out at 20 a regional level, but where the rubber hits the road is at 21 the state level for actually meeting that resource adequacy 22 need with the power and the responsibility that the 23 individual states have at meeting their obligation to serve 24 customers. 25 And we're blessed and cursed at the same time to 30 1 be living in the most dynamic period of time in history. It 2 may not be hitting New England the same way with 3 hyperscalers, but it's hitting us in Indiana in a big, big, 4 way, and I know it is hitting elsewhere in the country at 5 the same time. And how does one project or forecast load 6 moving into the future, I think, is a serious issue that 7 national and regional and state people need to take a look 8 at because of the intersecting roles that we all have in 9 meeting that obligation to serve. 10 It's incredibly important, and just as Chair 11 Christie talked about here, usually you get one hyperscaler 12 comes in a with a gigawatt load, and you're a 4 gigawatt 13 system, that's an incredible amount of load being put onto 14 one particular system at a time, let alone if you have three 15 of them hitting your state at the same time. 16 How do you wind up injecting that kind of 17 economic development in a futures model that never based it 18 on any kind of a history before? I think that is an 19 enormous challenge for both the RTOs, the states, and the 20 country as a whole. So, Phil, I don't know if that's what 21 you were asking about or not, but I couldn't help myself but 22 go sideways a little bit. 23 CHAIRMAN CHRISTIE: Anybody else? Oh, yeah, 24 Commissioner Barrow, Pennsylvania, Vice Chair. 25 VICE CHAIR BARROW: Thank you, thank you. I 31 1 just want to tag on to something that Commissioner Peretick 2 just said. The point of an RTO is so that states don't have 3 to go it alone, don't have to do -- make a lot of these very 4 thorny decisions on their own. The point of the RTO is 5 efficiency. It's power pooling, it's expertise when it 6 comes to the engineering and the buildout and all of that. 7 And one thing I have noticed, especially for 8 states like Pennsylvania that is restructured, and we 9 restructured, and we said here, PJM, you handle resource 10 adequacy. And we stepped back because we have all the 11 confidence in the world that things would be managed as they 12 should. 13 But now, and we were able to do that because at 14 the time the RTO was formed, we were long on supply. We had 15 very large fossil units, we had large nuclear units, and 16 there was an expectation that those -- that amount of supply 17 would continue going forward. Obviously, things have 18 changed. The resource mix has changed. 19 And as we delve back, as we, the State of 20 Pennsylvania, delve back into the details of the RTO, one of 21 the things that we're realizing is that when it comes to our 22 state's expertise in this, we've got a long way to go. And 23 the reason we've got a long way to go is that in the years 24 that we stepped away, the RTO became a behemoth. 25 We went from the original P the J the M, 32 1 Pennsylvania, Jersey, Maryland, and now we've got almost 2 five times as many states and state policies trying to work 3 together on the state staffing side, and I think this is a 4 good time to emphasize this. We've got a lot of room to 5 catch up. We're doing it. We're making a valiant effort, 6 but I'm thinking about last week. Just last week we had the 7 BRA results. We had a big ELCC meeting. We had quad 8 review. 9 We also had a jam-packed markets and reliability 10 meeting. And the amount of staff time that it takes to get 11 into the weeds of all of those things happening in one 12 single week, week after week, month after month, cannot be 13 overstated. So, we need -- we asked for as much 14 collaboration with the RTO. And when we raise issues they 15 are responsive, but it's going to take time for the states 16 to get up to that level of expertise because at the same 17 time we do have other jobs, setting rates, et cetera, so I 18 just want it said, mention that. 19 CHAIRMAN CHRISTIE: Any follow-up to that? 20 Yeah, Commissioner? 21 COMMISSIONER CHATTOPADHYAY: I'm just going to 22 make a very general comment. When we think about this 23 process, and trying to improve the governance, we should 24 also be mindful of, you know, given what's going on 25 nationally, that there may be a need for FERC and the other 33 1 RTOs, all of the RTOs to work together, and think about, you 2 know, the resource adequacy more globally, so that you have 3 a better outcome in terms of cost. 4 I mean, if we start thinking just individually 5 about RTOs and regions, given what's going on the 6 national scale, it may be ultimately in the future we might 7 say we actually took the wrong path, so I just wanted to 8 make that comment as well. 9 COMMISSIONER PERETICK: Yeah, just to follow-up 10 on one thing that Vice Chair Barrow said. The staff time 11 that it takes to participate in these RTOs is astronomical. 12 Like it was shocking when I joined the Commission four and a 13 half years ago. I was really surprised that we had -- and I 14 have some of my staff here with me today who do this on a 15 daily basis. 16 And thank you, Eric, for everything that you do 17 because I don't know how they keep up with it all. Like, 18 it's really time-consuming, and it's really complicated, and 19 it's changing. The rules change. The format of everything 20 changes, more things get added. Nothing ever gets taken 21 away. And it's really difficult to keep up with this from 22 the state level, right? 23 The well-funded organizations that are members 24 of these RTOs have lots of money to spend on participating 25 in these. They can hire additional people, right? Like 34 1 it's -- we have a limited staff, and we have a limited 2 budget to be able to participate, and that causes a real 3 challenge for us too, even though we have, you know, some 4 pathways for input, and even more now, especially, you 5 know, thanks to the 1920 Order. It's really...the resource 6 limitations are real. 7 CHAIRMAN CHRISTIE: Yeah, let me endorse those 8 comments just from experience. When Virginia went into PJM, 9 when other utilities go in as 2004, and we had no idea 10 because no one really knew what these creatures were at that 11 stage, totally. And no idea that the staff time it would 12 take our staff, Virginia staff, to just try to figure out 13 and follow what PJM was doing. 14 I mean, you don't have time. Your staff are, 15 you know, basically swamped from Monday to the next Monday, 16 and the weekend, trying to do your own work. And so, when 17 you're trying to keep up with I think you referred to PJM as 18 a behemoth. You know, trying to keep up with just what's 19 going on with your own staff it's almost impossible. 20 I would say the single probably most important 21 thing that we did in PJM was we set up OPSI, the Organization 22 in the PJM States, early on and most importantly, we were 23 able to get a tariff change to fund dedicated staff for 24 OPSI. You know, I don't think you can possibly, at any of 25 the big RTOs, from a state's standpoint, you can possibly 35 1 protect your interests, and your consumer's interest, and 2 your state's interest without having dedicated staff. 3 And if hadn't gotten the great staff that OPSI 4 set up and funded separately, you know, and I know there's 5 RTO, multi-site RTOs that don't have dedicated staff, and I 6 mean I don't know how it works. I don't know how you could 7 possibly do it. I think your points are absolutely -- if 8 you look at governance, and one of the big things on 9 governance, I think that's got to be one of the big things 10 is having dedicated staff for each RTO whose job is to work 11 for the states. 12 You can't dedicate full-time staff members to go 13 do this, yeah. Let me ask you a question, and Kim, I'm 14 going to have a question for you when we get to MACRUC, 15 because you dove in big time on PJM, so we'll save it for 16 the MACRUC. But let me ask you, Katherine, because I was 17 shocked when you said Michigan. I knew you were in PJM and 18 MISO; I didn't know you were in SPP. We're talking about 19 three. 20 COMMISSIONER PERETICK: MARC. 21 CHAIRMAN CHRISTIE: Oh, okay. 22 COMMISSIONER PERETICK: MARC is in SPP. 23 CHAIRMAN CHRISTIE: Okay. 24 COMMISSIONER PERETICK: I'm thinking it's not. 25 CHAIRMAN CHRISTIE: Okay. I think you get the 36 1 prize for three RTOs. I thought maybe the UP, a little 2 corner was in that because -- but anyway. So, here's my 3 question. You know, on governance, and you guys are in 4 MISO, so I'm going to ask you about MISO, and it goes to you 5 too, both of you in MISO. Indiana is another split 6 personality. 7 So, what would you do if you had one thing that 8 you could change in MISO governance for the states? What 9 would it be that you think would improve the ability of the 10 states in MISO, and we'll get to PJM, to more effectively 11 represent states and your consumers, which is who you're 12 representing and your interests, what would you do? What's 13 the one thing? 14 COMMISSIONER PERETICK: You know, so I'm 15 actually -- it's not directly for the states, but I think 16 it's one of the things that you could do the most to help 17 the states, and that's the Board education. Something I 18 mentioned in my opening comments is that all of the Board 19 members of all of these RTOs pretty much get 100 percent of 20 their training from the RTOs that they govern. 21 And those -- it needs to make sense, right? 22 Like who else knows all of the ins and outs? Like these are 23 extremely complicated structures, and extremely complicated 24 and high stakes, things that they are then responsible for 25 governing. So, they need that -- that should absolutely be 37 1 part of it, but they should also be getting their education 2 from other places as well. 3 And so they can then better represent the 4 state's interest, and not just the voices that have the 5 biggest influence over the RTO. 6 CHAIRMAN CHRISTIE: Okay. 7 CHAIR HUSTON: And I'm going to answer it a 8 little bit differently, but based on something that I 9 mentioned in the opening as well. In our attempt to involve 10 cooperative federalism, it is to get pure, unadulterated 11 feedback directly from the RTO. And that includes 12 MISO and PJM about that intersection role. We're in charge 13 of resource adequacy at the state level, but as it is 14 emerging, that is a big deal at that regional and national 15 level as well, and we need that kind of feedback. 16 And frankly, the policeman for the RTOs is right 17 here in the room, FERC. So, if you were asking me, I agree 18 with what Katherine said about the training on the Board 19 side of the equation. 20 CHAIRMAN CHRISTIE: Or you mean the MISO Board? 21 CHAIR HUSTON: Yeah. But I agree with that, but 22 I would emphasize that complete feedback on the CPCN 23 processes, the states are involved in, that we understand 24 fully the implications. And you've already done things, 25 I've complimented the seasonal accreditation, complimented 38 1 the queue process. That's as far as I'll go, CeCe. 2 I complimented FERC on that, but I would say 3 getting that unadulterated feedback, and what I mean by that 4 I think the system itself is going to need more dispatchable 5 and controllable characteristics and attributes going 6 forward to make sure that that number one responsibility for 7 reliability is maintained. 8 I think accreditation will go a long way, but I 9 think there's probably going to need more in the future, and 10 that would be my invocation. 11 CHAIRMAN CHRISTIE: Yeah. A little bit more, 12 I'm trying to process this. So, more specifically what role 13 did you want the RTO to do? I'm trying to figure out what 14 exactly. You mentioned CPCN, you do the CPCN? 15 CHAIR HUSTON: We do the CPCNs, but 16 understanding how that CPCN affects the region and the 17 country -- 18 CHAIRMAN CHRISTIE: Oh. 19 CHAIR HUSTON: -- I think is an important 20 characteristic for state policymakers and state regulators 21 to understand, as they are making decisions about the CPCN 22 process. 23 CHAIRMAN CHRISTIE: Can MISO come and testify in 24 your CPCN proceedings and tell you that? 25 CHAIR HUSTON: They can, but, as you talked 39 1 about earlier, it's that odd bake: there's no region in the 2 Constitution of the United States. It's that odd 3 characteristic that does not compel anybody. We can't 4 compel, as a state, MISO testimony or PJM testimony. They 5 can offer it, and so the plea would be for you to intone to 6 those to participate in that process with testimony if 7 possible. 8 CHAIRMAN CHRISTIE: Well, I will tell you from 9 experience, we had PJM come and testify in CPCN proceedings 10 for regional transmission projects. Very, very valuable 11 testimony. PJM never bucked at that, I mean, and so I think 12 the new thing you might be introducing is whether the RTO 13 would testify in a CPCN for a generating project, and for a 14 generating unit, and how that would affect. 15 CHAIR HUSTON: I think that's a good idea. 16 CHAIRMAN CHRISTIE: Well, why don't you ask them 17 to come testify? You could send them a -- 18 CHAIR HUSTON: The only way that we can do it, 19 structurally, is to ask those who applied before us to ask 20 them. 21 CHAIRMAN CHRISTIE: Interesting. Okay. That's 22 an interesting idea. I would think they'd want to come 23 testify, but anyway, that's not -- I've seen them testify in 24 transmission cases, but that's a new one on generation, but it 25 would be helpful, that information, wouldn't it? Okay. Any 40 1 other questions on MARC? If not, I think it's time for us 2 to move on. 3 CHAIR HUSTON: One more before the break, and 4 I'm going to turn it over to Pennsylvania and Ohio from 5 MACRUC. Kim, I didn't check with you or Dennis on who was 6 going first. Both of you had some observations in there, 7 and we already started touching on some of them, so 8 Commissioner Barrow or Commissioner Deters, you're on. 9 VICE CHAIR BARROW: Thank you. Thank you. So, 10 Commissioner Deters is from Ohio, and me, Kim Barrow from 11 Pennsylvania; we are representing MACRUC and our individual 12 states of course. So, I think some people might still be 13 asking why are we tackling governance when resource adequacy 14 is the biggest topic that any of us is facing right now. 15 And it's not that it might seem 16 counterintuitive, but it's not, and the reason why it's not 17 is because this resource adequacy issue that we are facing, 18 we cannot come up with a durable, and I do emphasize 19 durable, solution for it unless we change, fix, adapt the 20 governance structures in the RTOs. 21 And speaking just for, you know, of course I'm 22 just familiar with PJM mostly, so that's what I'm going to 23 focus on. So, the governance structures in PJM came about 24 at a time when we were long on generation supply. We 25 obviously are not at -- we're not there anymore, not for the 41 1 mid-term or the long-term; we're looking at shortages. 2 So, rules are created based on the reality at 3 the time that they are created. The reality right now is a 4 lot different than when PJM was formed, so the rules, the 5 governance rules need to change. They can't be intractable, 6 or we're not going to dig ourselves out of this quicksand 7 that we find ourselves in. That's the first thing, is that 8 governance rules cannot be orthodoxy, they have to adapt to 9 reality. 10 They have to adapt to -- and the RTO, frankly, 11 has to adapt to the changes in the states that form the RTO 12 in the first place. So, that's the basis. And I mean, and 13 the second thing I want to say is RTOs are good. Never let 14 it be said that I am not a fan of them. They bring 15 efficiency, competitive markets, bring down costs for all of 16 my ratepayers, and ratepayers in the region, and I think it 17 would not be a good thing to get rid of this market 18 construct that we have created. 19 Can we simplify some of the rules? Absolutely. 20 Can we make the market construct more responsive to the 21 states which formed it in the first place? Absolutely. 22 When it comes to governance, governance choices can impede, 23 or they can facilitate how we get out of the resource 24 adequacy problem. And now when we have a variety of states 25 with different and very fragmented state policies, 42 1 governance becomes more important than ever. 2 When it comes to those fragmented state 3 positions in PJM, we've got vertically integrated states, 4 we've got restructured states, we have exporters, we have 5 importers, we have states that are actually, you know, 6 pretty close to being balanced when it comes to resource 7 adequacy. And so, there's a tension in decisions around 8 resource adequacy because of that fragmentation, but it 9 actually doesn't fall as much along vertically integrated 10 versus restructured lines as you might expect. 11 Pennsylvania by far, we're the largest exporter. 12 We're exporting 20 to 50 percent of peak load at any given 13 time. Virginia, which is vertically integrated, imports 7 14 to 30 percent of peak load at any given time. And Maryland, 15 which is restructured, imports anywhere from 0 to 40 percent 16 of peak load at any given time. 17 I have no criticism for any state about their 18 policies, those are their sovereign choices when it comes to 19 state policy, and I'm not one that will speak on that. The 20 good thing about an RTO construct and a market construct, 21 and we see it where we are today, is that the markets can 22 locate generation in the least cost manner where needed, and 23 that is inevitably going to result in some states exporting, 24 some states importing. 25 But that is not a bad thing. I have some ideas 43 1 about where my RTO needs to go in order to meet the needs of 2 its states that I'm quite happy to share with you, but first 3 I'm going to touch on the question about what governance 4 change needs to -- I would like to see made in PJM. 5 So, and it has to do with voting, and voting 6 rights. So, New England, I believe, has the jump ball 7 voting rights, right? And I think that is responsive to its 8 states. There's that. And then across the country we've 9 got CAISO, where the stakeholders aren't voting, but they 10 have a process where the stakeholders have ample opportunity 11 to inform the vote, but at the end of the day they're not 12 voting. 13 And in a different way, that is also very 14 irresponsive to the state. So, that's my answer to you on 15 that. 16 COMMISSIONER DETERS: First of all, thank you, 17 Chair Christie and Chair Huston, for convening this. This 18 has been a tremendous opportunity for states like Ohio, who 19 fully rely on the RTO to have their voice heard when I think 20 we're in a position where we don't have jurisdiction on most 21 issues. Resource adequacy being the main issue. 22 Vice Chair Barrow's comments on the rules of the 23 road when our RTO was formed, changing, and layer on the 24 challenges with load growth, the resource adequacy crisis 25 that we're hearing from NERC--we need to take a hard look 44 1 at governance. The PJM structure, with a large membership 2 where you've got super majority rules that drive a lot of 3 the major decision-making, should be of great concern to all 4 states, but specifically states like Pennsylvania and Ohio 5 who have given the resource adequacy keys to their RTO. 6 I think there's a lot of discussion that needs 7 to be had on long-term solutions. PJM has been transparent, 8 and I think that FERC should -- the FERC commissioners 9 should take credit for the engagement that we see from PJM 10 because FERC is listening to states, and PJM knows that they 11 need to listen to us as well. 12 But to Chair Bartlett's point, I think that a 13 lot of the decisions that have been made are made without 14 transparency, and they're reactive. It seems like we've 15 gotten into a position where we've got major issues in the 16 RTO that are -- with quick responses, that may not be 17 long-term and sustainable. The two that come to mind are 18 the RRI, which was, you know, a stakeholder process, you 19 know, I guess a pilot to get some generation online 20 quickly, in a quicker fashion. 21 But then we had a reactionary response to a 206 22 from one of our states that put a collar on our capacity 23 market. Those are not long-term sustainable solutions. 24 CECE COFFEY: I'm sorry, can we move 25 on? Thank you. 45 1 COMMISSIONER DETERS: I'm sorry. 2 CECE COFFEY: From those two. 3 COMMISSIONER DETERS: Oh yeah, I'll stop talking. 4 So, we end up having -- we end up getting in a position 5 where we're responding instead of the long-term planning, 6 and I think that's the challenge in governance when we have 7 states who are relying on PJM, RTOs in that sense. 8 So, there are some quick solutions we can make. 9 You know, obviously there's been a push to have some state 10 representation on the Board. We've been given certain 11 controls in transmission planning, the states have. I 12 think that's a great step forward, as it relates to both 13 planning and cost allocation. 14 But the long-term solutions need to come with a 15 recognition that we're planning for sustainable grid. And 16 from a resource standpoint when we're talking about constant 17 changes to our market, which we've relied upon, to 18 incentivize new generation, I think we need to rethink how 19 we, you know, come together with states, along with PJM to 20 have a conversation about what governance will look like in 21 the future. 22 CHAIRMAN CHRISTIE: Well, let me follow up if no 23 one else is. I want to drill back down on what both of you 24 said about changes to PJM's governance. And Kim, you talk 25 about voting, and you referenced New England. I'd like to 46 1 hear from Chair Bartlett, both our New England reps. I've 2 always sort of been not totally up on top of how you -- the 3 jump ball process. Is that what you're referring to, Kim? 4 Could you all just walk us through. I know it's 5 got, what was it NECPUC, NEPOOL, and you've got like three 6 acronyms up there, and -- 7 CHAIR BARTLETT: It's through NEPOOL, so it's 8 not the states. It's through NEPOOL, so if a -- 9 CHAIRMAN CHRISTIE: Can you bring the mic closer 10 to you? 11 CHAIR BARTLETT: There's a proposal that's 12 coming from ISO New England, and the stakeholders were to 13 vote for an alternative, then that could be put before FERC 14 on equal footing, so that there would be -- that's where the 15 jump ball comes from, but it's through the stakeholder 16 process. 17 CHAIRMAN CHRISTIE: You've got NESCOE, and 18 NESCOE is the states, but it's not necessarily state 19 regulators, right? It's the governor appoints NESCOE, 20 right? 21 CHAIR BARTLETT: That's right, and 22 the states don't have a vote at NEPOOL. We might attend, we 23 engage, we advise, we cajole, but ultimately it is the 24 stakeholders. 25 CHAIRMAN CHRISTIE: But you obviously have votes 47 1 through NESCOE because that is state-appointed, right? 2 CHAIR BARTLETT: We take positions, but during 3 the formal stakeholder process at NEPOOL, the states don't 4 vote. So, we weigh in. We ask questions, we offer our 5 views, but ultimately it is the stakeholders that vote. 6 CHAIRMAN CHRISTIE: So, Kim in PJM, we have 7 OPSI, obviously, and OPSI is the state regulators. We don't 8 have a NESCOE equivalent, that would be a governor-appointed 9 entity. Is that the kind of thing you'd like to see when 10 you say a jump ball type of arrangement like New England, or 11 something unique to PJM? 12 VICE CHAIR BARROW: Yes. But that is -- I think 13 it would be a lot more. It would give the states a larger 14 voice. So, OPSI does a great job on staying on top of the 15 issues. 16 CHAIRMAN CHRISTIE: Right. 17 VICE CHAIR BARROW: And making filings and such, 18 but when going through the stakeholder process at PJM, there 19 needs to be a way that we can be a lot more real time 20 interactive, and have the states heard. 21 CHAIRMAN CHRISTIE: We the states? 22 VICE CHAIR BARROW: We the states. 23 CHAIRMAN CHRISTIE: Got you. Okay. 24 Commissioner Chang? 25 COMMISSIONER CHANG: Thank you very much for 48 1 your presentations and to all the other panelists. I have a 2 follow-up question very closely to what Chair Christie 3 asked. And I've always been curious about the New England 4 context as well, so it's interesting to hear your comments 5 about PJM, which is it sounds to me that the states would 6 actually want to have a voice, and not just in engagement, 7 which is of course, you know, of course the states want to 8 be engaged in particular resource adequacy, but also on 9 transmission planning and cost allocation. 10 But focusing on resource adequacy, which is one 11 of the main topics today, how -- aside from engagement, are 12 you -- what are you thinking today? Are you discussing with 13 PJM for example about potentially allowing states to have 14 some kind of a vote in one of the processes, or are you 15 thinking that jump ball process, which is sort of a NEPOOL, 16 not a state option? 17 Would that be -- but it doesn't mean it has to 18 be a NEPOOL type of structure, right, so you could have some 19 kind of a state voice in a jump ball I suppose. But what 20 are being considered now, and what do you think the steps 21 are in sort of working with PJM and getting what the states 22 feel like they can come up with? 23 And I also want to say that in recognizing that 24 there's so many different states with different policies, 25 and my experience in New England is even in I'll say, 49 1 like-minded states, it's actually pretty challenging to have 2 the states have say one vote, or one jump ball position, but 3 how are you thinking about all of these things? 4 VICE CHAIR BARROW: Thank you for that question. 5 So, at this point, this is just me thinking, as far as the 6 states in a cohesive manner, presenting options to the RTO, 7 as far as I know, that's not really happening. And it is my 8 hope that this meeting today will kind of jumpstart and get 9 some guidance about possibilities, about where this 10 discussion can go. 11 And the reason I jumped on -- why I mention New 12 England, is it seems like a pretty elegant solution, without 13 having 14 different states have to reach agreement on every 14 single little thing in order to get things moved through the 15 RTO stakeholder process. 16 And the reason I also mention the CAISO process 17 where the stakeholders don't have voting rights, is because 18 currently today the states are outgunned. We are outspent. 19 We're outmatched when it comes to being heard at the RTO. 20 So, the solution is give us a greater voice, or level the 21 playing field where none of us have voting rights. 22 I don't know if that's like taking your marbles 23 and going home, but I think it would afford a greater level 24 of independence to RTO -- to the Board if they were not so 25 beholden to the stakeholder process, and the membership. 50 1 So, it's just two completely diametrically opposed ways of 2 solving the problem, but I think that either one could work, 3 but we haven't delved into it as a membership as yet. 4 COMMISSIONER DETERS: Yes. And Vice Chair 5 Barrow's comments on the diversity of states at PJM, you 6 know, presents a challenges. We do have vertically 7 integrated states, and states like Ohio and Pennsylvania. 8 They're states that have very ambitious carbon targets, and 9 you know, finding the right mix there, you know, from a 10 state's standpoint is -- will be a challenge. 11 I do think that there are solutions where we can 12 put some controls back to the PJM Board, where they will 13 have some 205 filing rights that will relieve some of the 14 pressure on the states that are sweating the resource 15 adequacy side and the increasing costs of transmission in 16 the PJM footprint. But a solution that, you know, gives a 17 jump ball scenario with whatever organization would come out 18 is welcomed. 19 And this conversation needs to be had. Credit 20 to Vice Chair Barrow and Commissioner Peretick, who are 21 working governance issues in PJM aggressively. I think 22 we'll, you know, continue to have the conversation. 23 CHAIR HUSTON: Commissioner Peretick? 24 COMMISSIONER PERETICK: Oh, thank you. Yeah. I 25 just wanted to follow up on that a little bit too. Vice 51 1 Chair Barrow, I thought you -- I think it's a really good 2 point, and exactly what we should be talking about. And 3 building on the way that the Northeast does it. So SPP has 4 direct 205 rights, right. They can -- the RSC can file 5 directly their own proposal. 6 OMS and MISO, it's a little bit different, and I 7 think this kind of gets to your question earlier too, 8 Chairman Christie, is that OMS can propose a different 9 methodology or changes to whatever MISO proposes, and then 10 MISO can then decide whether or not to file that OMS 11 proposal on their behalf, or they can choose not to. 12 But either way they need to respond to OMS in 13 writing, so it's not so much a direct jump ball provision 14 where they can propose something that is directly in 15 contrast, and file it directly, but they can ask MISO to 16 file on their behalf, and then MISO can decide whether or 17 not to do that. All of the MARC Commissioners who I talk to 18 who are part of OMS seemed to be fairly comfortable with 19 that, and the way that that process works, and felt like 20 they were accurately represented by MISO, even though MISO 21 does ultimately have that choice, whether or not to file on 22 their behalf. 23 Have you considered that model at all, or any 24 ideas or thoughts around whether that would be sufficient in 25 PJM? 52 1 VICE CHAIR BARROW: I actually think that could 2 work for PJM as well, the SPP model. 3 COMMISSIONER PERETICK: Sorry, I meant the MISO 4 model, but yeah, but the SPP model is great, yeah. 5 VICE CHAIR BARROW: Any of them could work. I 6 think any of them would be an improvement, yeah. 7 CHAIR HUSTON: I'm going to ask the resource 8 adequacy question. Not to put you guys on the spot, but 9 Commissioner Barrow, you particularly pointed out some very 10 wide import/export discrepancies within the PJM footprint. 11 Are you picking up on policy changes at a state level that 12 will deal with that export/import challenge? 13 VICE CHAIR BARROW: I'm hearing rumors. So, the 14 good thing about -- and I've said this before, the good 15 thing about the RTO construct for market construct is that 16 it is flexible enough to have certain member states that 17 export a lot, and certain member states that import a lot. 18 Now, getting cost allocation right is critical, and that's 19 where there will be a lot of friction, and if we don't have 20 the right governance structure in place, that friction will 21 eventually break apart the whole thing, the whole 22 construct. 23 And I would very much like for us not to go 24 there. Governance is key, but I think it would be naive of 25 me not to say that in addition to governance, probably we 53 1 might need to take a deeper dive, a deeper look into some 2 structural change within the RTO as well. And by structural 3 I mean -- you heard me say I'm a fan of the RTO. 4 I am absolutely a fan, but no one ever said that 5 we couldn't change things when it comes to keeping a single 6 market clearing price, of course, for reliability, but then 7 also making changes where we look at certain other issues 8 subregionally because our RTO is so very large, and so very 9 diverse. Maybe subregionally we look at things like 10 transmission planning. 11 We look at things like environment, energy 12 efficiency. The things that we maybe would keep central, are 13 FTRs, day ahead and real time markets, and back to central 14 dispatch for reliability. That is what the RTO at its 15 foundation was about. 16 CHAIR HUSTON: Commissioner Deters, you have 17 about 30 seconds. Is that correct, Rob, one minute? 18 COMMISSIONER DETERS: Well, I think the question 19 was about state policies relieving the imbalances. Ohio 20 just passed some aggressive incentives for natural gas 21 generation and pipeline siting streamlining. So I think 22 you'll see that coming from Ohio, to be determined, but it's 23 there, and the State Legislature has recognized the concerns 24 about resource adequacy in our state. And that's about all 25 we can do, obviously as a state, because we're connected to 54 1 the market. 2 But you know, at this point in time Ohio is 3 importing, and a lot of the pressures on some of our older 4 fossil generation from federal regulations have forced that. 5 And I think that, you know, there's a consciousness now in 6 the conversation that we need to maintain that dispatchable 7 energy in Ohio. And other states, you know, are in the same 8 boat and doing the same things, specifically Pennsylvania. 9 CHAIR HUSTON: Thank you very much. 10 Commissioners, that brings an end to this part. 11 CHAIRMAN CHRISTIE: Can I ask a real quick 12 follow-up? 13 CHAIR HUSTON: Yep, yeah. 14 CHAIRMAN CHRISTIE: I want to ask Commissioner 15 Deters and Commissioner Barrow real quick, would you like to 16 see states in PJM have the same 205 rights that the states 17 in SPP have? 18 VICE CHAIR BARROW: I would. 19 COMMISSIONER DETERS: Yes. 20 CHAIR HUSTON: And that brings an end to this 21 session. We'll be back in 10 minutes with the Western 22 Conference. 23 (Break 10:56 a.m. 11:07 a.m.) 24 CHAIRMAN CHRISTIE: Okay. If everybody can 25 resume. Go back to your seats. I don't think my mic has 55 1 been on the whole time. All right. Our next region that 2 we're going to move on to is the Western, which covers a 3 broad range, obviously. It does say everything west of the 4 Mississippi, which is going to include SPP, and a non-RTO 5 region of the Rocky Mountain West, and California, so with 6 that, we're going to invite Chairman Patrick O'Connell of 7 New Mexico, and President Edward Lodge of Idaho to present 8 for the West, so welcome, thank you. 9 PRESIDENT LODGE: Thanks very much. I really 10 appreciate this opportunity. Am I still on? You cut me off 11 already. 12 COMMISSIONER O'CONNELL: It wasn't me. 13 CHAIRMAN CHRISTIE: I think you blew it out. 14 Blew a transformer. 15 PRESIDENT LODGE: There you go. We know 16 somebody here. Well, I just really appreciate this 17 opportunity, and have learned a lot this morning from 18 everyone in all the regions. And we don't have an RTO in 19 the West, but we're learning more and more about it, and 20 through this opportunity we have. 21 And just to kind of give you a little bit of 22 quick background on the West. According to the Western 23 Electricity Coordinating Council, we are resource adequate 24 for a few more years. We, that's only because of delayed 25 retirements in our base load. Wildfire and unpredictable 56 1 weather, have really changed the way we have historically 2 shared resources in the West. 3 And of course, growth, inflation, artificial 4 intelligence, data centers have really put an interesting 5 and unique strain on our grid, and in a time when the West 6 is transitioning from traditional base load resources to 7 more intermittent resources. And Mr. Chairman, if I could, 8 I'd like to share a prop map here. I don't know if it comes 9 across too well on cameras, but what that is is the United 10 States, and that red region is the West. 11 And that red is everything that is owned by the 12 federal government. And to say that the federal government 13 is just another land owner in the West is like saying King 14 Kong is just another monkey. And when we are having our 15 issues, it's maybe appropriate that that red region is red 16 because of red tape. And to give you a couple examples of 17 the governance challenges we are facing in the West is due 18 to our enormous federal government land. 19 When we think about some of the issues we've 20 been experiencing, the one that comes to mind for me is the 21 Boardman to Hemingway transmission line that stretches from 22 Oregon into Idaho. It has been starting the permitting 23 process under the George W. Bush administration, back in 24 2007, and is still in the permitting process. 25 That is a 300-mile line just between Oregon and 57 1 Idaho, and the thing about we had several different changes 2 in administration--and an absolute yes when it comes to 3 federal permitting and an absolute no can change every four 4 years. An example of that is the Lava Ridge Project, which 5 was in the State of Idaho on BLM land, and it was yes one 6 day, and absolutely no the next, with the changing 7 administration. 8 And in the Western states in the meantime, we're 9 the we be's: We be here when the administration begins, 10 and we be here when the administration changes. But, 11 despite all that, there's a lot of good things happening in 12 the West. We have imbalance markets that are coming on, and 13 they have had a lot of success. 14 And we are very excited about the promise of the 15 day ahead markets. We also have organizations like West 16 Tech and the Western Transmission Consortium, that are 17 helping us with transmission planning, and making a lot of 18 progress on that as well. And helping us answer those 19 questions as how we can get transmission built, and who 20 pays. 21 And of course we're very grateful to FERC and 22 how good you've been to the West in allowing the West to be 23 the West, and we have appreciated the respect you have for 24 our structures. Keeping the lines of communication open and 25 recognizing the flexible pathways that we are having, and 58 1 experiencing some success and in the West. 2 One of the greatest assets I think we have 3 amongst the West is even though the Western states tend to 4 align around political and policy structures, we know, as 5 Commissioners, when we sometimes let politics and policies 6 between states get in the way, ultimately it's our customers 7 that suffer and pay the price. 8 So, when I look about the opportunities in the 9 West, I kind of am reminded of that famous poem by Robert 10 Frost, the Mending Wall. And that's where we get that 11 famous line, "Good fences mean good neighbors." And it's 12 not about isolation. It's about harmony and respect. 13 And I know that I'm a better Commissioner in 14 Idaho because I can pick up the phone and call Commissioner 15 Rendahl in Washington, and even though our states are 16 politically different, we know that energy and resource 17 adequacy is not a Republican problem or a Democrat problem, 18 it's a common problem. And by working together and 19 collaborating, communicating and coordinating, we know that 20 in the West that's our greatest asset. 21 And I liken it to the collaboration of a Western 22 icon in the West, which is the American Grey Wolf. Wolves 23 can be fine on their own, but they are more successful when 24 they collaborate as a group, as a pack. And when it comes 25 to our success and our future success in the West, it's 59 1 going to be us working as a pack, communicating and 2 collaborating and coordinating. 3 Because Mr. Chairman, when you run with the 4 wolves, you will learn how to howl. So, I just appreciate 5 this opportunity. Again, we're learning a lot. We look at 6 this structure, when we see what challenges we have with a 7 federal governance structure, I think the question in the 8 West is, is adding regional transmission organization structure 9 on top of this, will that help or hurt us when we are trying 10 to solve the great challenges we have in the West with 11 resource adequacy and governance? 12 So, with that, I would like to hand it over to 13 my Co-Commissioner here, Mr. O'Connell. 14 CHAIR O'CONNELL: Well, great, thank you. And, 15 you know, I put myself in the unenviable position of 16 following the most interesting Commissioner in the United 17 States. Also, thank you for convening the group, as 18 Commissioner Lodge said, is a very active topic in the West 19 in our regional organizations to benefit us all. We're 20 deeply engaged in that. 21 It's growing from kind of the ground up, you 22 know, RTOs are ultimately service providers, and so services 23 are getting added one by one. Right now, I'd say there's an 24 active competition between service providers. As a 25 Commissioner, I'm trying to make sure that competition 60 1 improves whatever happens, and when we get there, and just 2 on score sheet what is that resulting in; you had to get 3 some states talking about how many organizations they're 4 involved in governance on. 5 For New Mexico we have the OG SPP, we have SPP's 6 Western RTO, we have SPP's Markets Plus. We have EDAM, that 7 is a service being provided out of California. The resource 8 adequacy construct, which is again being built from the 9 ground up by the vertically integrated utilities. So the 10 thing I'm most interested with that is the old expression, 11 the only cheese that's for free is in the mousetrap. 12 And then we're also working on regional 13 transmission planning through 1920, and then as Commissioner 14 Lodge said, the good news is that despite the very stark 15 political differences across our states, as a group, we're 16 working together. We also have a very able convener in the 17 Western Interstate Energy Board. So, delighted to be here 18 today. 19 We landed here in this conversation in a very 20 interesting moment for the West, so, looking forward to the 21 conversation. 22 CHAIRMAN CHRISTIE: Let me ask you all to start 23 off, I've been out West a lot. One of my themes always, 24 you decide is you all, make the decision what you want, 25 what works for you. FERC shouldn't impose on what works for 61 1 you. And I've always had a hard time. I almost need a 2 scorecard because you have so many acronym groups. 3 In SPP, and Patrick, are you still the Chair of 4 the Regional State Committee? 5 CHAIR O'CONNELL: Yeah. I'm the President of 6 the RSC at the SPP. 7 CHAIRMAN CHRISTIE: And so, I understand that 8 part, but in the non-RTO West, what are the -- I always 9 wondered where is the one place, or is there one place where 10 the states in the non-RTO -- SPP is easier, and 11 you've got the RSC. In the non-RTO West, where do you all 12 get together as states to actually promote your state 13 interests? 14 And I mean because you've got WIEB, you've got 15 CREPC, you've got WIRAB, you've got WRAP for resource 16 adequacy, I mean you've got probably more acronyms per 17 square mile than any region I'm aware of. And after many 18 years I still can't figure out the one place where the 19 states actually, you know, get together across states to 20 talk about what is important. Is there one, or is it just 21 sort of spread over these different acronyms? 22 CHAIR O'CONNELL: Well, there is one that is 23 three acronyms, Western Interstate Energy Board, is WIEB, 24 and they convene twice a year a conference called CREPC 25 WIRAB. 62 1 CHAIRMAN CHRISTIE: I've been to that several 2 times. 3 CHAIR O'CONNELL: Yeah. So, CREPC is the 4 organization of state regulators and WIRAB is the 5 organization of State Energy Offices. So, twice a year 6 those different groups come together to talk about important 7 topics, and then yeah, other one-off things like, you know, 8 Markets Plus--there's been a group that is working on that. 9 State regulators, BOSR exists, that's a body of 10 state regulators out of the California ISO, for example, and 11 then, you know, just the point I was making is as small a 12 state as New Mexico is, we are trying to make sure that we 13 weigh in on all of those things. So, to the point of 14 regional organization, an argument for it is efficiency it's 15 not just economic efficiency, it's also just efficiency of 16 regulators trying to do their work is a part of the 17 attraction. 18 PRESIDENT LODGE: Thank you, Mr. Chairman. I 19 think also, we have the opportunity, I think it's the first 20 time, at least in a while, we're just going to be meeting as 21 a group of State Commissioners by ourselves this fall. And 22 we're really looking -- no one else in the room, just 23 Commissioners, so we can look across the room at each other, 24 and really have those -- the conversations we really need to 25 be having when it comes to addressing the challenges we 63 1 have. 2 CHAIRMAN CHRISTIE: Is that going to be a new 3 acronym? 4 PRESIDENT LODGE: We're shopping for acronyms 5 right now, Mr. Chairman, so if you have any suggestions, 6 we'll take it. 7 CHAIR HUSTON: Grey Wolf. 8 CHAIR O'CONNELL: Everyone is a lobo. 9 CHAIRMAN CHRISTIE: Nice. Well, one thing I 10 have to say with the RSC, one of the things I was surprised 11 to learn when I visited the RSC is you apparently, Patrick, 12 don't meet alone as state regulators. You meet only in the 13 context of an SPP meeting with all the room filled with all 14 the different interest groups. 15 And I would say as an OPSI veteran, those 16 meetings where OPSI members go off and just talk among 17 themselves are invaluable, are invaluable, and I didn't see 18 that in SPP. 19 CHAIR O'CONNELL: Yeah, that's right. We have 20 started in that direction starting with the last regional 21 meeting. In Omaha, we had an Executive Lunch Session for 22 just state regulators. That was very productive. We'll do 23 that again in Kansas City. We're planning for Little Rock 24 to also have a retreat just for the state regulators on the 25 RSC. 64 1 And I agree with you, Chair Christie, that 2 that's important, and it's something that we're working to 3 improve at SPP. Commissioner Lodge talking about the 4 convening in Scottsdale. I'm sure that won't be the last 5 time, and I would bet just because it's the first one we're 6 going to find a list of topics where we need to have 7 intentional meetings of regulators. 8 CHAIRMAN CHRISTIE: Yeah. If was going to give two 9 pieces of advice for any state organization, it would be 10 number one, you have to have an organization where the state 11 regulators can go off on their own and talk among themselves 12 without the roomful of audience and everybody else, and RTO 13 reps have to have the ability to talk among yourselves. 14 The second thing I want to add is you have to 15 have your own staff. If you don't have staff at your 16 agencies that can do all this, as Katherine mentioned the 17 demands are incredible. And so, to have an effective state 18 organization at an RTO level, or a non-RTO West even, I 19 think those two criteria are absolutely essential, and 20 that's governance. 21 I mean, that's absolutely governance. It's the 22 processes by which state regulators talk to themselves and 23 are supported and have staff support, absolutely. I don't 24 see any other tent cards up, anybody? Oh, yeah, 25 Commissioner Peretick? 65 1 COMMISSIONER PERETICK: I always have a 2 question, thank you. So, I think really fundamentally what 3 it comes down to is how -- I'm curious about how -- what 4 you're trying to figure out in the West is really how to get 5 the benefits of the regional coordination and planning that 6 we see in RTOs, without those inefficiencies that are caused 7 by the governance structures in some of the RTOs that exist 8 now. 9 I guess, how are you thinking about that? Like, 10 what is the -- what are you trying to protect against? How 11 are you thinking about that from the West perspective? 12 CHAIR O'CONNELL: I'll go ahead and take a shot 13 at that, and then I think that I'd love to hear Commissioner 14 Lodge's point of view. Again, in the West, these services 15 have grown up on more or less an ad hoc basis, you know, 16 from where I'm at, Desert Southwest region, there's a thing 17 called Southwest Reserves Sharing Group, and so that was 18 akin to a power pool. 19 The states of, you know, New Mexico, Arizona, 20 Southern Nevada, kind of share electrically a region, so 21 those are the kinds of things that have always existed out 22 West. Looking across, you know, we do have a significant 23 ISO, Cal ISO, and looking, you know, the experience of SPP 24 if we could get to a more efficient market, costs will come 25 down for our customers. 66 1 I mean, to Commissioner Barrow's point we have 2 exporters and importers. My state is an exporter of the 3 lowest cost resource, the wind and the solar, but you can't 4 have wind and solar all the time, so you want to have that 5 interaction with the region for cost and reliability 6 reasons. 7 So, again in Western tradition is let's build up 8 from the bottom, and so we've been taking incremental steps. 9 The first step was an energy imbalance market. We're on the 10 precipice of the next big step on an economic benefit of the 11 day ahead market. Will we get to RTO for regional 12 transmission planning, or probably even more problematic is 13 operation of the transmission system? We'll see. 14 This is just my personal take on how we're at, 15 where we're at is, when you're obtaining services, who do 16 you trust? So, we've got an ISO that's offering services, 17 and then the ISO is designed to serve the state that it 18 exists in, and we have an RTO coming to offer services. And 19 so, I think different groups are choosing based on that. 20 Personally, I'm a signatory on the Pathways 21 letter, and so I want to get to where we have the most 22 efficient solution, so that would be the market that has the 23 most diversity, the deepest pool of resources, but then 24 you're running into that fault line of who do you trust to 25 manage that market. 67 1 So, anyway, good news as a regulator that's 2 creating competition. I think you will see Markets Plus is 3 different than SPP. You'll see the EDAM is already improved 4 because of the Pathways initiative, and there's hopefully 5 more improvement on offer there, so open question, where are 6 we going to get to? 7 But what's propelling the action is let's take 8 the next step for efficiency, and why for all the reasons 9 Commissioner Lodge said, we've got a wildfire risk. You 10 know, if power lines get wiped out in the West, it affects 11 all of us, not just the state where the line got wiped out. 12 Resource adequacy. New Mexico, number five 13 state in area, but something like number 38 in population, 14 so we're going to supply way more energy than we're ever 15 going to use, but that's wind and solar, so to help back 16 that up it would be nice to have a market where we can 17 import. 18 So, those are the things that are propelling the 19 need for improvement. Western tradition, we're going to 20 measure five times and cut once. 21 CHAIR HUSTON: Okay. So, one of the comments 22 that you made, Commissioner Lodge, about essentially we take 23 care of ourselves, but we work as a group as well. 24 Individually, how would you characterize the reserve margins 25 in the states? You're taking care of yourself. One of the 68 1 advantages that you get from an RTO, or one hopes to get 2 from an RTO, is sharing is better and those reserve margins are 3 set in a way that minimizes overbuild, but at the same time 4 provides resource adequacy when needed. How would you 5 characterize it in the West? 6 PRESIDENT LODGE: I can -- let me start by 7 maybe, if it's okay, Mr. Chairman, to kind of take it from 8 an Idaho perspective. There was a time in Idaho we had 9 enough power to go around. We have 60 percent of our energy 10 comes from hydro, from the Hells Canyon Dam complex, and the 11 rest of it will come from natural gas, from outside the 12 state. 13 And there was a time when we were sufficient, 14 but Idaho is the fastest growing state, and because of that 15 our utilities are some of the fastest growing utilities in 16 the nation. So we are very dependent on the good -- our 17 good neighbors in Wyoming and Utah and others that help us 18 out to make sure we have enough resources for our customers 19 or for their ratepayers and for our growing economies. 20 But I can tell you there have been some close 21 calls. In January of 2024, we had a weather event in the 22 Pacific Northwest that really strained the grid, and our 23 system. We had some pre-planned maintenance on some base 24 load facilities, and we were coming up short. And if it 25 hadn't -- the truth of the matter is if it hadn't been for 69 1 solar resources out of California, we would have had 2 brownouts in the State of Idaho. 3 So, when push comes to shove at this point in 4 time, we are able to rely on resources from other parts of 5 the region. However, the challenge as we grow, and the more 6 we're going to be needing regionally because the whole West 7 is growing and facing similar challenges, coordinating and 8 working together, and building those important transmission 9 lines, which are like the highways and byways of selling 10 goods to each other, need to be improved. 11 And we're working with a lot of entities as I 12 said, not just states, but the federal government as well. 13 Thank you. 14 CHAIR HUSTON: Okay. I think we may have 30 15 seconds, Pat. Commissioner O'Connell, anything you would 16 want to add in conclusion? 17 COMMISSIONER O'CONNELL: Well, I'll just follow 18 up on that resource adequacy question because, you know, 19 Commissioner, you and I were at the resource adequacy 20 technical conference in D.C., and one of the fascinating 21 takeaways for that on me is really the question is, will 22 supply meet demand, and then at what cost? 23 And then resource adequacy is just this 24 construct as regulators we build, so there's a factor of 25 safety on the answer to that question, right. So, who's 70 1 building the construct can have huge impacts on what is it 2 going to cost. So, that's kind of for me the big regional 3 governance question. 4 CHAIR HUSTON: Thank you very much for the West. 5 And we're going to move to SEARUC, okay, and we have two 6 brand new participants, and so we've allotted additional 7 time for introductions. Commissioner Passidomo Smith is 8 taking over for Commissioner Art Graham, who has been 9 nominated by the President to be on the TVA Board. I'll 10 turn it over to you, Gabriella, and then Chris, if you 11 wouldn't mind introducing yourselves and making comments 12 simultaneously, thank you. 13 COMMISSIONER PASSIDOMO SMITH: Thank you, Chair 14 Huston. Yeah, so my name is Gabriella. I have been on the 15 PSC since 2021. I filled -- I originally filled former 16 Commissioner Julie Brown's seat, and then went up for 17 reappointment in my own term the following year, so that was 18 a busy year. I had a year to prove myself. 19 So, thankfully I did to the extent that Governor 20 DeSantis appointed me again. I was at the Commission prior 21 to my appointment, I was an attorney there for a couple 22 years, so I just moved down the hall, so that was easy, and 23 had. It was a good experience, especially in understanding how 24 the agency worked, and being able to -- just the nuances, and 25 knowing the staff, and who to rely on. 71 1 I think it's already been mentioned about how 2 important it is to have a very robust staff, both on the 3 technical and the legal side, and I'm very proud of our 4 staff in Florida. I think they do an amazing job, and are a 5 great resource for me as I'm learning things. 6 I won't go too much. Yeah, that's basically my 7 background. I'll turn to Chair Brown to give his 8 introduction. 9 CHAIR BROWN: Thank you very much. Yes, we're 10 the newbies, so number one, thank you all for having this. 11 We're learning a lot, so from everybody here we always see 12 these conferences as a way to learn. And so a little bit 13 about me. I'm Chairman of the Mississippi Public Service 14 Commission. 15 I was in the Legislature for 12 years, so I'm a 16 recovering legislator. And I've been in this position for 17 about a year and a half, so I'm a reluctant regulator now, 18 but learning a lot. In my House experience I was a Medicaid 19 Chair, so I thought nobody could have any more acronyms than 20 the medical industry until this. 21 So, Commissioner Lodge, the longer the acronyms 22 the better, so just make it like if you can get to 12 or 15 23 that would be amazing. So, it is a very, very important 24 task, and so I know our Commission is very concerned, just 25 like everybody here, about base load and how we're going to 72 1 supply the energy for the future. And so, we have more 2 questions than we have answers, but we're glad to be part of 3 the process, and to learn from everybody here. 4 COMMISSIONER PASSIDOMO SMITH: Can I go into? 5 CHAIR BROWN: Yes. 6 COMMISSIONER PASSIDOMO SMITH: Okay. All right. 7 Thank you. So, I guess, I'm going to kind of -- this is 8 going to be a very different perspective than what I've 9 heard around the table, as far as Florida. We are not part 10 of an RTO, and we have no interest in joining one. I've 11 heard a lot of really great things about them. It sounds 12 like there's a lot of collaboration that happens, and it 13 really -- it's mostly I think predominantly due to our 14 geographic situation in Florida. 15 We are a peninsular state, and with that means 16 that we have physical constraints about our import capacity. 17 So, when what we need -- what we, because of that, our 18 utilities are very forward thinking as far as the IRP 19 process, and making sure that we have adequate resources 20 during all types of events. 21 Obviously, probably the biggest characteristic 22 of our state is hurricanes, and hurricane preparedness, and 23 storm resiliency. I think that our state does a pretty 24 phenomenal job in that regard. We've been usually quite a 25 leader as far as storm resiliency is concerned, and we've 73 1 had a long time to learn a lot, and a lot of practice. 2 So, we -- the way that our IRP process works, we 3 call it a ten-year site plan. Each year the utilities bring 4 to us their ten-year planning horizon, and we approve it or 5 disapprove, approve with modification. But within that, it's 6 very detailed. It's long-term, and ensures sufficient 7 generation capacity and reliability. 8 Embedded in that is that we, talking about 9 reserve margins, we have a pretty high bar. All of our 10 utilities are -- typically maintain above a 20 percent 11 reserve margin, with -- so, it ensures adequate supply 12 without that external dependence, so another reason why we 13 can kind of keep that reliability within our own state 14 control. 15 A high degree of vertical integration. Our 16 utilities are highly regulated by us, the PSC, so they are 17 not as -- don't need to be as reliant on regional markets, 18 they can kind of control and know their generation assets, 19 and when and where to deploy them and work within the state. 20 I included in this a clear line of 21 accountability everything that our investor utilities do for 22 the most part. We give -- they lead, but we -- everything 23 is checked by us. Our staff, and the Commissioners, we have 24 a good working relationship with the utilities. I think 25 it's worked really well, and as a demonstration of that, we 74 1 have a very strong reliability track record today. 2 We really have not experienced major 3 systematic reliability failures that would ever, you know, 4 necessitate a regional backup. The 2024 NERC summer 5 reliability assessment concluded that Florida, the Florida 6 region, expected to have sufficient resources to meet peak 7 demand at normal and extreme conditions. 8 So, we -- we're adequately prepared without the 9 need to join -- without the need to join the RTOs. I 10 definitely learned a lot from this group, and about the 11 process, and Chair Brown and I were just talking about some 12 of the certification, the 205 requirement. I didn't even 13 know what those were. We don't really handle that, but I 14 think it's important for us, just because we don't want to 15 be necessarily joining, I think we are adequately supplied, 16 but we need to one, have a voice at this table, so thank 17 you very much for inviting me to take Art's place and to, you 18 know, express our 19 position, but also to understand how the rest of the country is 20 operating because you know things can change. We are, like 21 anybody else, seeing such a dramatic transition of resources, 22 and the renewables that we're bringing on, and we need -- so, 23 it's important that we are able to adapt if need be, and 24 understand what the rest of the country is doing if at some 25 point more import is needed. 75 1 But as of now we are staying the course. I'll 2 turn it over to Chair Brown now. 3 CHAIRMAN CHRISTIE: Could I ask you a real quick 4 follow-up? 5 COMMISSIONER PASSIDOMO SMITH: Yes, sir? 6 CHAIRMAN CHRISTIE: You're not in -- I don't 7 believe you're in SERTP either, right? 8 COMMISSIONER PASSIDOMO SMITH: No, sir. 9 CHAIRMAN CHRISTIE: Your transmission planning 10 is totally within Florida? 11 COMMISSIONER PASSIDOMO SMITH: Within Florida, 12 yeah, Electric Reliability Coordinating Council. 13 CHAIRMAN CHRISTIE: Okay. 14 CHAIR BROWN: Thank you, Commissioner. Like we 15 stated earlier, a lot of us are concerned about the -- and 16 again, in reference to the governance, you know, and it's 17 been stated here before, the loss of state authority and 18 local control, especially in generation in our own state, 19 and then possibly load sharing orders, and things like that 20 are very concerning. 21 Federal decision-making, RTO undermines state 22 sovereignty, that's part of the governance part that a lot 23 of our states are very concerned about. Simple questions 24 like when our RTO issues a project, and that project is 25 being built, and it overruns, who is overseeing those 76 1 projects that are issued by the RTOs? Does FERC oversee 2 them, or does somebody oversee those projects? We don't -- 3 of course we cannot have any impact, or any say over those 4 projects once they're issued or given out by the RTO. 5 So, how does all that work going forward in the 6 governance? Also, as we're connected in the RTO, there's 7 some of the states will have policies that can be disruptive 8 to the market, so we're starting to see some divergence in 9 policy between some of the states that are involved in the 10 RTO, which causes some stress that it's going to add to the 11 cost, and hurt the resilience of the whole. 12 Again, it goes back to governance at that point. 13 That also goes to the grid reliability, whether it's 14 renewables, and/or whether it's base load dispatchable 15 generation. How much is there? How much is too much, and 16 how do we distribute it? If one RTO -- some states, a 17 region in the RTO make -- goes down one path, and there's a 18 lack of generation, then we're all responsible, or can be 19 issued load shedding, where we can have rolling brownouts 20 based on those things. 21 Also, some of the unaccountable bureaucracy. 22 RTOs are not directly accountable to the voters, ratepayers 23 or state governments, so that creates kind of a little bit 24 of anxiety for some of us going forward, and how do we -- 25 how much input and voice do we have in the direction of the 77 1 RTOs? 2 And again, our task was to again ask the 3 questions to try to find the answers, and what is the future 4 of RTOs for the member states, especially in ours. We are a 5 member of MISO. So, just trying to understand how we go 6 forward together with some of the challenges that we have as 7 states that are members that may be going in divergent paths 8 on generation. 9 CHAIR HUSTON: You've got to hear a lot of 10 problems articulated today. How does that leave you feeling 11 with your states? 12 CHAIR BROWN: It makes me want to throw some 13 acronyms. You know, so you know, and again, that question, 14 do we know who does regulate those RTO projects? Does FERC 15 oversee those projects to make sure there's no overruns, or, 16 and when the overruns are there, of course it just goes into 17 it's just distributed amongst the members of the RTO. 18 CHAIRMAN CHRISTIE: We probably ought to 19 clarify, you're in MISO South? 20 CHAIR BROWN: Yes, sir. 21 CHAIRMAN CHRISTIE: People don't follow the 22 geography. MISO is really big. 23 CHAIR BROWN: Yes, sir, sorry. Yeah, MISO 24 South. 25 CHAIRMAN CHRISTIE: Are there governance changes 78 1 you would like to see? 2 CHAIR BROWN: I beg your pardon? 3 CHAIRMAN CHRISTIE: Are there governance changes 4 you would like to see, the topic of today? 5 CHAIR BROWN: So, I'm sorry. 6 CHAIRMAN CHRISTIE: Are there governance changes 7 you would like to see? That's the topic of today, the 8 governance. 9 CHAIR BROWN: Yes. But that -- more input than 10 that. You know, how do we have input in those decisions? 11 How do we oversee to make sure those costs, or those 12 overruns don't penalize our ratepayers, and as a member of 13 the RTO? And so, I can speak from my state particularly, 14 it's not a very wealthy state, so we do look at the rate, 15 the cost to those ratepayers as -- we take that very 16 seriously, and the fact that the costs go up, it impacts our 17 people a lot in the MISO South, a little heavier than it 18 does in other members' states. 19 COMMISSIONER PASSIDOMO SMITH: And I would -- 20 I'd also say, I mean you're right Chair Huston -- you know, 21 there was issues that were brought up, but I did hear a lot of 22 solutions that are already being implemented, as well as good 23 suggestions. I think Chair Bartlett was the one who said about 24 adding a lot more transparency as far as potential planning 25 advisory committee, or something like that. 79 1 Agree with Chair Brown, we are always so 2 cognizant of the end, you know, cost for consumers at the 3 end of the day, like that is safe, reliable and affordable 4 power is really what we are always, you know, is always our 5 objective. So, when you don't have -- and we, you know, 6 even in a state like ours, that's highly, highly regulated, 7 vertically integrated, there's, you know, there's as much 8 transparency. I want to think there's always more to be 9 had, but we still, there's still complaints about that, so 10 if you have a, you know, an unelected Board that has such a 11 thumb on price control, how does that impact consumers at 12 the end of the day? 13 Do they have a voice? And that's something that 14 we're super cognizant of, so I think everyone here is really 15 making, you know, great strides in addressing that issue 16 because obviously cost is something that we're all grappling 17 with, and we all are accountable to. 18 So, it's not all doom and gloom. I think that 19 there's a lot of progress that is made already, and good 20 suggestions I've already heard today. 21 CHAIR BROWN: And as far as governance changes, 22 you know to answer that more directly, you know, more state 23 involvement, not just advisory, but decisional, so that we 24 have some input on the decisions, not just in advisory. 25 CHAIR HUSTON: And I'll just state the obvious 80 1 for those involved in vertically integrated states, I mean 2 Indiana is very similar to other states around the country. 3 Statutorily we have a consumer counselor's office that 4 is by law there to represent ratepayers at all proceedings. 5 And so, for a state like Florida, who's taking 6 care of everything, that kind of input and what Chair Brown 7 is talking about in terms of overseeing the actual outcome 8 of overruns, or you've got somebody in the room who is 9 participating before you as Commissioners, whose job it is 10 to look out for that consumer interest. 11 That's kind of a dual role, as I understand it 12 from FERC. You don't typically have a consumer counselor, 13 but you have that responsibility for balancing what's just 14 and reasonable at the same time. And so, that goes to 15 governance. It goes to accountability, and ultimate 16 decision-making. 17 CHAIRMAN CHRISTIE: You're right, and there's no 18 consumer advocate at FERC. Never has been. 19 CHAIR HUSTON: Questions from the panel? 20 COMMISSIONER PASSIDOMO SMITH: I know we're kind 21 of in a unique situation. 22 CHAIR HUSTON: I will say this, and even though 23 Florida is the Sunshine State, this past February I believe 24 I got pictures from my in-laws in Destin, Florida, with six 25 inches of snow in their backyard and on their roofs. 81 1 COMMISSIONER PASSIDOMO SMITH: Yeah. 2 CHAIR HUSTON: Not completely undone. 3 COMMISSIONER PASSIDOMO SMITH: No. I mean we 4 definitely, we have, there is a winter peak. It hits. I 5 mean I'm from South Florida, so I'm never affected, but now 6 that I live in Tallahassee I woke up to my whole yard 7 covered in snow, and it was definitely something I was not 8 prepared for. But thankfully, our utilities actually 9 worked, so yeah. 10 We were able to stabilize pretty quickly after 11 that. 12 CHAIR HUSTON: Questions from the panel? Thank 13 you very much. I think we can go to closing remarks. 14 CHAIRMAN CHRISTIE: We can. 15 CHAIR HUSTON: Do you want to go ahead and 16 start? 17 CHAIRMAN CHRISTIE: I think it's a great 18 discussion, fascinating. I enjoyed hearing from all the 19 different regions, and each, you know, mostly RTO regions, 20 but we also have non-RTO regions with a perspective, like 21 Gabriella and Idaho, absolutely. It's ultimately a state 22 decision whether you choose to RTO or not, and that's a 23 decision to be made by the state. 24 But what's interesting to see here from the 25 different RTOs, and there's sort of a common theme of states 82 1 need more role. I think that's pretty common across all the 2 RTOs. But the details matter, and the details are really 3 different. I mean, I look at New England and I have always 4 been fascinated by that jump ball process, and NESCOE's 5 role and your all's role, which is unique. 6 SPP's, you know, the RSC that Patrick chairs is 7 unique. You got that from the beginning of SPP. Kim and 8 Dennis know that in PJM probably the states have the least 9 role of all in terms of authority in the biggest RTO. But 10 it all goes back to history. SPP, the states demand in that 11 role before SPP was certified under Order 2000. 12 And in PJM it just sort of happened 13 incrementally. We started with the big three, the P and the 14 J and the M, and then kept adding on, and there wasn't any 15 moment of creation really, it was just sort of there was a 16 long history. And no one I guess -- I know in Virginia when 17 we were looking at going into PJM, we really weren't even 18 thinking in terms -- well, first of all, we didn't really 19 know, you know, you didn't know the implications of the 20 governance, and how that was going to affect our consumers 21 over time, and our state over time. 22 So, it's been a long process of education, but 23 interesting discussion, absolutely. 24 CHAIR HUSTON: Well, I just want to say thank you 25 to all the members of FERC for participating in this, and 83 1 coming in from your homes in the D.C. area, to both out to 2 Anaheim, California, last fall, to inviting us to your 3 offices for the April meeting, and to conclude this 4 particular iteration of the Collaborative here in Boston. 5 Thank you very much, and your teams have done a wonderful 6 job. Where's Kal? Is he out there? No. I'm going to do a 7 commercial for Kal. He does a good job too. 8 CHAIRMAN CHRISTIE: He does. 9 CHAIR HUSTON: But thank you very much, 10 Commissioners, for all your support of this because as I've 11 mentioned many, many times before, we are living through 12 this dynamic period of change. The amount of our economy 13 that's going to depend on electric generation is the basic 14 fundamental of civilization, and for us to succeed as a 15 nation we've got to get it right. 16 We have to do it right from a cost allocation 17 perspective. We have to do it right based on what's right 18 for the customer and cost causers as well. And so, I can't 19 think of a better way to bring these issues together than in 20 this NARUC FERC Collaborative situation. The issues started 21 as gas/electric coordination last fall. 22 It didn't conclude at that point in time, but 23 just took a little bit of a turn. I don't know what 24 succeeding iterations there may be for this, but obviously I 25 wish the best for everybody in continuing this Collaborative 84 1 into the future. And once again, if you would join me in 2 showing our appreciation to Mark Christie for his service. 3 CHAIRMAN CHRISTIE: And I want to thank Chairman 4 Huston, he is actually finishing up his term on the Indiana 5 Commission, I think, in January, so let's thank him for all 6 his great service to Indiana. 7 CHAIR HUSTON: CeCe, is there anything legal 8 that we've got to do to conclude? 9 CHAIRMAN CHRISTIE: We're adjourned. 10 (Whereupon the Federal Energy Regulatory 11 Commission Federal State Current Issues Collaboration 12 adjourned at 11:52 a.m.) 13 14 15 16 17 18 19 20 21 22 23 24 85 1 CERTIFICATE OF OFFICIAL REPORTER 2 3 This is to certify that the attached proceeding 4 before the FEDERAL ENERGY REGULATORY COMMISSION in the 5 Matter of: 6 Name of Proceeding: 7 Federal-State Current Issues Collaborative 8 RTO Governance/Resource Adequacy 9 10 11 12 13 14 15 Docket No.: 16 Place: Boston, MA 17 Date: Sunday, July 27, 2025 18 was held as herein appears, and that this is the original 19 transcript thereof for the file of the Federal Energy 20 Regulatory Commission, and is a full correct transcription 21 of the proceedings. 22 23 24 Larry Flowers 25 Official Reporter