POWER June 2017 - 53

ELECTRIC POWER
2. Optimism on the nuclear front. Bryan Hanson, senior vice president for Exelon
Generation and president and chief nuclear officer for Exelon Nuclear, gave the keynote speech at
the ELECTRIC POWER Conference and Exhibition on April 11. Source: POWER/ Mark Campbell
in critical infrastructure exposure. More serious
than the organization's past concerns,
which were centered on weather-related outages
or equipment failure, are cyberthreats
and terrorists, he said. Ott later revealed
that the organization is so concerned about
system corruption that it created a secondary,
constantly updated energy management
system that it calls its " Golden Image, " and
which it keeps in a " dark room. "
" If we find our control systems are unmanageable
because they're corrupted and
we just can't use them anymore, we have
the ability to jettison that whole system and
bring on the [Golden Image] system within
an hour within the current online structure, "
he said.
But Ott also suggested there was palpable
anxiety about how exposed fuel delivery and
power systems are, and, inevitably, about
how sturdy efforts to restore systems can be.
" There's a lot more risks that we're facing as
thousands of our talented, hard-working employees
out of work-broke my heart. Policy
reforms were the only thing that could save
them, " he said.
That's why Exelon embarked on a hardfought
campaign to underscore nuclear power's
value to local stakeholders, state policy
makers, elected officials, and state legislators,
and with the crucial backing of a broad
coalition of more than 200 business, labor,
environmental, and even religious groups,
the company managed to help enact the Future
Energy Jobs Act in Illinois in December
2016. A similar measure had previously been
adopted in New York to preserve the at-risk
Nine Mile Point and Ginna reactors upstate.
For Hanson, the measures were pivotal for
Exelon and the larger nuclear industry. " We
had to take action, " he said.
But the fight isn't over. The states' measures
are being challenged in court by a consortium
of non-nuclear merchant generators,
including Dynegy, Eastern Generation, NRG
Energy, and Calpine Corp., which argue that
they interfered with FERC's jurisdiction over
wholesale electric rates and unlawfully interfered
with interstate commerce. Even so,
Exelon " is confident about the future, " Hanson
said. One driving factor certain to underscore
nuclear's value is that " The transition
to a lower-carbon economy is irreversible, "
he said. Market forces, technology advancements,
and consumer preference show an
overarching shift towards " energy that is
clean and affordable, " Hanson added.
June 2017 | POWER
An Era of New Threats
Yet, according to Andrew Ott, who is president
and CEO of PJM Interconnection, a regional
transmission organization (RTO) that
operates a competitive wholesale electricity
market within 13 states and the District of Columbia,
" competitive markets are working. "
PJM has seen 30 GW of new gas-fired capacity
come online over the past six years,
85% of which was on competitive investment-and
most are without long-term
power purchase agreements, said Ott, who
was one of three panelists at the ELECTRIC
POWER executive roundtable (Figure 3) on
April 11. " What we're seeing ... is a fairly
significant fuel swap, where we have in that
same period about 24,000 MW of coal plants
retiring, " he said. " It's more than just a fuel
swap. It's actually a technology swap. "
Today, PJM has about 300 MW of gridscale
storage, and an assortment of resources
and provided services, like frequency regulation,
that is requiring it to interact and coordinate
with the distribution system or
distribution companies, he noted. The rapid
ramp up of gas capacity in PJM's system-
from 4% in 2008 to 30% today-has actually
served to boost fuel diversity in the PJM
space rather than being a liability. Ott added:
" I think the legitimate question is if this is a
sustainable approach. Will we build ourselves
into a problem? " A report PJM compiled to
answer that, he said, basically says, " We think
we are fine from a reliability perspective. "
For now, PJM's biggest worries are rooted
www.powermag.com
a power industry, " he said. " The question is
'Are we really accounting for all those risks
in our operations?' "
One way to do it is to factor in resiliency,
which in the context of the power system includes
the ability to harden the system against
and rapidly recover from high-impact, lowfrequency
events. " We need to look at resilience, "
Ott said. " We need to start pricing
resilience and flexibility into our markets. "
Resiliency should also be a factor driving
transmission planning, he said. But rather
than rely on state action, such as Illinois'
measures to prop up its nuclear plants as
an environmental and economic measure,
that action should occur on a regional level.
" It's certainly more logical that if we're seeing
regional benefits to these types of assets
we should price it in. Of course, the most efficient
way to do that is through a regional
carbon price, " he said. " That may not be
politically attainable but we think there are
ways to look at the way energy prices are
formed, look at the way certain aspects of
resources are valued. "
One example would be to think about
pricing commodities. " Maybe we should
price flexibility separately and maybe we
should price energy dispatch and balancing
of supply and demand a little bit differently, "
he said. " The commodity itself then
would price out based on just the supply and
demand balance. "
The Complexity of Regional
Operations
For John Bear, president and CEO of the
Midcontinent Independent System Operator
(MISO), another panelist on the roundtable,
the recent state nuclear incentives posed a
conundrum: " We've got kind of this crazy
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POWER June 2017

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