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October 6, 2024

MISO Reliability Subcommittee Briefs: Aug. 3, 2017

Recommendations made by NERC and FERC in a June report on restoring power after the loss of normal communications are guidelines and not likely to become binding, a NERC official said last week.

ReliabilityFirst Corp. Chair John Idzior, one of several experts who prepared the joint FERC-NERC study and report, told the MISO Reliability Subcommittee that utilities are too reliant on supervisory control and data acquisition (SCADA) and energy management systems (EMS) when restoring the bulk power system from a total blackout. (See NERC: Despite Solid 2016, Grid Threats Remain.)

The joint report recommends that entities take five measures to restore power absent SCADA and EMS, which include:

  • Improving backup communication measures;
  • Planning for extra control room personnel on hand during a restoration without SCADA or EMS;
  • Reviewing backup power resource provisions beyond normal battery backups;
  • Using other power system analysis tools; and
  • Training personnel for situations where SCADA and EMS are unavailable.

Idzior said that the recommendations will not be enforced and will likely not become future NERC reliability requirements.

“It’s currently guidance for entities to use as they see fit. There is no follow-up or tracking as a result of these recommendations,” Idzior told MISO stakeholders at an Aug. 3 Reliability Subcommittee meeting. “This is more an above-and-beyond. I don’t see a push for this being included in reliability standards.”

Hwikwon Ham of the Minnesota Public Utilities Commission asked if any entity could enforce the recommendations. RTOs could incorporate the recommendations into their own restoration planning protocols, Idzior responded.

Idzior said the report’s findings will be presented to NERC’s Operating Committee at future meetings, but the entities that participated in the study will remain confidential.

MISO: Not Enough Solar to Add More Reserves

MISO staff expect the RTO will remain largely unaffected by a possible NERC industry recommendation to procure more operating reserves to cover the widespread loss of solar resources during faults on the power system.

The possible NERC recommendation stems from an August 2016 event, when 1,200 MW of Southern California solar generation was lost after the Blue Cut wildfire erroneously tripped inverters. (See CAISO Boosts Reserves After August Event Report.) RTOs have until Aug. 31 to respond to NERC’s request for solar inverter data and reserve information.

MISO reliability subcommittee NERC
Swan | © RTO Insider

Steve Swan, MISO senior real-time operations engineer, said MISO will solicit data from the three solar farms representing about 170 MW capacity in the RTO’s footprint.

“MISO will be answering for the MISO balancing authority. We’re drafting the answer, and it’s basically going to say yes and no,” Swan said, referring to the fact that the RTO does cover the loss of solar through reserves, but only incidentally because of the relatively small amount of solar participating in the market.

“Eventually, we’ll get over 1,700 MW of solar, but that’s a ways down the road,” Swan said.

MISO is more interested in reviewing the responses from markets in the Western U.S., where solar participation is more prevalent, he said. “There will be some good information coming out of this, but right now, it’s not an issue to MISO.”

Dispatch Instruction Pilot Almost Ready

MISO is “very close” to implementing a pilot program that seeks to encourage generating units to more closely follow dispatch instructions, Swan said.

Under the program — which was conceived by MISO’s Independent Market Monitor, the RTO will send real-time alerts to generators that do not follow dispatch, followed by direct contact from MISO operators notifying unit operators of their non-responsiveness. Before rolling out the pilot, MISO staff will work with the Monitor to eliminate the chance for false positives, which could occur when the RTO binds a transmission constraint, Swan said.

Information collected from each notice will be conveyed to the Monitor to either confirm the lagging response or report system conditions that prevented efficient dispatch.

“The idea is we’ll be sending information back to the IMM in every instance,” Swan said.

Reliability Subcommittee Chair Tony Jankowski asked for MISO to provide a presentation on its current dispatch requirements at the next Steering Committee meeting in October. He also asked for an update on the RTO’s effort to tighten its tolerance bands on generators’ uninstructed deviations from dispatch orders. MISO in May said the project was in the software development phase after several months of delay. The Monitor has been recommending the project for more than five years. (See Monitor Again Criticizes MISO’s Uninstructed Deviation Rules.)

Northern Indiana Public Service Co.’s Bill SeDoris said his company is concerned about the move to tighten dispatch tolerance bands. The new standard is set to go live next spring, and generation owners need to know if the move will affect headroom, he added.

Swan said he would return to the RSC with updates.

MISO and PJM File JOA Pseudo-Tie Rules

Sperry | © RTO Insider

MISO and PJM on Aug. 1 filed changes to their joint operating agreement (JOA) to better manage the RTOs’ pseudo-tied resources, MISO’s Kim Sperry said.

The filing (ER17-2220) aims to improve the “administration and coordination of pseudo-ties between MISO and PJM by incorporating into the JOA standard definitions, rules and responsibilities between the two RTOs,” MISO said. PJM submitted a simultaneous filing to adopt identical changes in its version of the JOA.

The standard rule set makes clear that pseudo-ties must obtain station service according to native balancing authority rules and follow the modeling rules of both the native and attaining balancing authority areas. The rules dictate that only pseudo-tied units — and not the RTOs — are responsible for compensating an attaining balancing authority for failure to deliver energy. Pseudo-tied resources also cannot be directed to serve load in the native balancing authority when the attaining balancing authority requires the unit’s output — unless they are needed to avoid exceeding NERC operating limits in the native balancing authority. (See MISO, PJM Float Pseudo-Tie Coordination Plan.)

Jankowski asked if the filing marked a first in a series of filings to improve MISO and PJM pseudo-tie coordination.

Sperry said that while the RTOs will continue working together into the fall on a separate filing to address the double-counting of pseudo-tie congestion, MISO does not envision another joint filing to amend the RTOs’ administration of pseudo-ties.

— Amanda Durish Cook

PPL: No Load Growth in Sight for US Operations

By Rory D. Sweeney

PPL is maintaining a flat demand outlook for its U.S. service territories through 2020, company executives said during Thursday’s quarterly earnings call.

The utility, which operates in Pennsylvania, Kentucky and the U.K., said it is not forecasting load growth in the U.S. through the end of the decade. Its previous business plan assumed 0.5 to 1% annual load growth.

Chairman and CEO Bill Spence said the company’s Pennsylvania utility may ask regulators for a rate true-up based on volume. He said there was no “near-term concern” for its Kentucky operations.

Spence | PPL

“I think the best tool for us to deal with demand, which is flat, is our forward rate years,” added Victor Staffieri, CEO of PPL’s LG&E and KU. “So, we take that into account every time we file [a rate case]. You all know we’ve been filing every two years and so I would expect that would be the best way for us to capture any changes in the … demand.”

The company posted a profit of $292 million ($0.43/share) in the second quarter, compared with $483 million ($0.71/share) a year ago. The decline was primarily driven by lower foreign currency exchange rates, company executives said.

Earnings from ongoing operations were $356 million ($0.52/share), compared with $380 million ($0.56/share) a year ago.

PPL load growth earnings
PPL Pole Truck | PPL

The company reduced its expected annual earnings from its regulated Kentucky utilities by 2 cents/share, attributing the drop to lower electricity sales because of mild weather. For the year, which included Kentucky’s warmest February on record, the company said weather in the U.S. has negatively impacted its results by about 3 cents/share.

However, the company remains confident in its 2017 earnings forecast of $2.05 to $2.25/share, a 5 to 6% compound annual growth in earnings per share and a 4% growth in dividends through 2020.

The British pound, which fell from about $1.48 to as low as $1.20 following the U.K.’s vote in June 2016 to leave the European Union, has since rebounded to about $1.30. The company said it can reach the low end of its projected EPS even if the pound hits parity with the dollar.

British pound to U.S. dollar exchange rate | XE

“We’re executing very well on our low-risk business plans,” Spence said.

[Editor’s note: Quotes from conference call courtesy of Seeking Alpha.]

OGE, CenterPoint Earnings Calls Focus on Enable Midstream

By Tom Kleckner

CenterPoint Energy and OGE Energy both reported positive earnings Thursday, but company officials spent much of their time during conference calls with analysts discussing their gas-gathering and processing joint venture, Enable Midstream.

CenterPoint executives had promised an update during its call on efforts to sell or spin off its 54.1% share of the partnership. Instead, they could only say that a spinoff is no longer being considered because it would result in undesired credit metrics for the company. (See OGE Anticipates Legislative Review of Oklahoma Regulators.)

CenterPoint Energy lineman | CenterPoint Energy

“I’m hesitant to give another date in the future when hopefully this will be closed out,” CEO Scott Prochazka told analysts. “We hope to move this to conclusion pretty quickly.”

CenterPoint said multiple parties are conducting due diligence to potentially acquire shares of Enable but would not comment on the status. The Houston-based company last month extended another right of first offer to OGE.

“We would like to reduce our exposure to the oil and gas sector,” Prochazka said. “If we’re not able to affect an outright sale, we would like to lighten our ownership through a public sale.”

The process of “diluting” CenterPoint’s ownership share has been ongoing since last year.

“It’s admittedly taken longer than suspected,” CenterPoint CFO Bill Rogers said. “We took some time to get confidence in the forecasts over multiple years that we could then present to multiple buyers. Any potential purchaser wants to get comfortable with their partner.”

“My view is we’re both aligned around wanting Enable to do well,” OGE CEO Sean Trauschke said during the Oklahoma City-based company’s earnings call, which preceded CenterPoint’s. “We continue to be pleased with its performance. Enable is doing everything it was set up to do, and there is significant untapped value in this business, and we are excited for what the future holds.”

OGE holds a 25.7% limited-partnership interest and a 50% management interest in Enable.

Trauschke said OGE has received about $70 million in distributions from Enable this year and noted the company recently announced a second-quarter distribution of $35 million.

Enable Midsteam’s structure | Enable Midstream Partners

Formed in 2013, Enable’s assets include about 12,900 miles of gathering pipelines, 14 major processing plants with 2.5 Bcfd of processing capacity, 7,800 miles of interstate pipelines, 2,200 miles of intrastate pipelines and eight storage facilities with 85 Bcf of storage capacity.

Enable was trading at $15.42/share Friday, up just over 20% in the last year.

Q2 Earnings Beat Investors’ Expectations

Quarterly earnings at both OGE and CenterPoint exceeded investors’ expectations.

OGE said lower operating expenses resulted in net income of $104.8 million ($0.52/share), up from $72 million ($0.35/share) a year ago. Analysts surveyed by Zacks Investment Research had predicted earnings of 47 cents/share.

OGE expects full-year earnings to be between $1.93 and $2.09/share.

Investors reacted to the news Thursday by pushing OGE’s share prices up 66 cents to $36.01 in after-hours trading. The stock is up 15.4% in the last year.

“I’m proud we aren’t talking about surprises: surprises like delays, cost overruns,” Trauschke said. “Quite simply, we’re getting things done in an environment where we don’t necessarily control variables like the weather or actions of others.”

CenterPoint reported net income of $125 million ($0.29/share), up from $73 million ($0.17/share) last year. The company attributed the good news to rate increases and customer growth.

Zacks’ analyst survey had projected earnings of 21 cents/share.

CenterPoint shares gained 83 cents Thursday, finishing at $28.47 after the market closed.

NiSource Blames Debt Refinance Fee for Q2 Loss

NiSource lost $44.3 million ($0.14/share) in the second quarter, with company officials pinning the sagging earnings on an expensive debt-related charge.

The Merrillville, Ind.-based parent of Northern Indiana Public Service Co. and Columbia Gas took a $111.5 million charge on early extinguishment of higher-coupon, long-term debt. However, CEO Joseph Hamrock said the charge, incurred for refinancing $990.7 million in debt, will be offset in the long term. The refinance will “result in significant interest expense savings over the next several years,” Hamrock said during an Aug. 2 earnings call.

NiSource reported $167 million in net income from continuing operations for the first six months of this year, compared with $215.6 million in the first half of 2016.

NiSource earnings
NiSource Headquarters | NiSource

CFO Donald Brown said the company currently carries $7.9 billion in debt, with a 13-year weighted average maturity for long-term debt and a 5.4% average interest rate.

“It’s worth mentioning that our credit ratings at the three major agencies are investment-grade. Standard & Poor’s rates NiSource at BBB+, Moody’s at Baa2 and Fitch at BBB ― all with stable outlook. Going forward, our financial foundation is solid and poised for continued growth,” Brown said.

Hamrock said the company plans to invest $1.6 billion to $1.8 billion annually in utility infrastructure programs from 2018 through 2020, part of more than $30 billion in long-term investment opportunities the company has identified. (See NiSource Pegs Q1 Success on Infrastructure Investments.)

— Amanda Durish Cook

Con Ed Earnings Down; PSC Rules on Subway Outage, Solar Pilot

By Michael Kuser

Con Ed NYPSC earningsConsolidated Edison on Thursday reported its second-quarter net income dropped almost one-third from a year ago, mainly reflecting changes in rate plans and regulatory charges and the impact of weather on revenues from the company’s district-energy steam system.

The company posted $175 million in net income for the quarter ($0.57/share) on $2.63 billion in revenue, compared with $232 million ($0.78/share) on $2.79 billion in revenue in 2016.

Adjusted earnings — which exclude the gain on the sale of a solar electric production project, the impairment of a solar electric production investment in 2016 and the mark-to-market impact of the company’s Clean Energy Businesses — were virtually equal to last year at $178 million ($0.58/share) versus $179 million ($0.60/share) in 2016.

The new electric rate plan for Consolidated Edison Company of New York (CECONY) included changes in the timing of recognition of annual revenues between quarters. Operations and maintenance expenses for CECONY for the second quarter and first half reflect lower pension costs and lower regulatory assessments and fees.

CEO John McAvoy said the company has begun installing smart meters and offering customers new products such as smart air conditioners and Wi-Fi-enabled thermostats.

NYPSC Actions

The New York Public Service Commission on Aug. 2 approved a pilot 3-MW solar project by CECONY aimed at saving low-income customers money on their utility bills (16-E-0622). Con Ed will place the solar panels on rooftops and property owned by the utility.

con ed nypsc earnings
Solar panels | ConEd

The commission also directed the utility to change the way it tries to collect money from delinquent customers (16-M-0501). Specifically, Con Ed must propose a process for executing deferred payment agreements and make the company’s meter-seizures “much more straightforward,” the order said.

“To prevent backsliding, Con Edison is required to provide quarterly updates to commission staff to ensure the new procedures are being properly executed,” PSC Chair John B. Rhodes said.

The Public Utility Law Project of New York had requested that the commission examine the utility’s methods of seizing customers’ electric or gas meters for unpaid bills, as well as the way it negotiates deferred payment agreements.

The commission also voted to issue an order on Con Ed’s response to a power outage April 21 that cut electricity to the Seventh Avenue subway station and led to a loss of the subway signals (17-E-0428).

Although the order was not immediately available, it is expected to require the company to create a stockpile of emergency generators that could be deployed anywhere in the system within 30 minutes take actions, as laid out in a July 26 letter from Rhodes.

He also said Con Ed would need to replace its aluminum cables with failure-resistant copper cables and install backup electric lines to eliminate single points of failure. It also must analyze power supply and power quality affecting the subway’s signal system.

Gov. Andrew Cuomo said last week that power-related issues caused more than 32,000 subway delays in the last year.

Berkshire Hathaway Energy Earnings Up on Solar Rebound

By Rich Heidorn Jr.

Berkshire Hathaway Energy reported a $38 million increase in earnings for the second quarter over a year earlier, largely because of improved performance of BHE Renewables.

The renewable unit saw net income increase $39 million due primarily to higher generation at the Solar Star projects, which were hobbled by transformer-related forced outages in 2016. It also benefited from earnings from tax equity investments reaching commercial operation and additional wind and solar capacity placed in service.

Berkshire Hathaway Energy earnings
Buffett

BHE Transmission’s earnings dropped by $15 million from lower earnings at AltaLink and BHE U.S. Transmission, which saw lower income from Electric Transmission Texas because of new rates that took effect in March.

Oncor Hearing Set

BHE is awaiting an Aug. 21 U.S. bankruptcy court hearing on its proposed $9 billion acquisition of Energy Future Holdings’ Texas utility Oncor. BHE’s bid is being opposed by EFH’s largest creditor, Elliott Management, which won an 11-day delay in the hearing after telling the bankruptcy court on July 26 that 10 other investors are interested in joining it in a competing bid. (See PUCT Staff Welcomes Buffett’s Oncor Bid; Debtor Miffed.)

Elliott’s $9.3 billion offer values Oncor at $18.5 billion including debt, exceeding the $18.1 billion valuation in BHE’s all-cash deal.

BHE said July 26 that it supports Oncor’s rate settlement with Texas regulators and its agreement to swap $400 million of assets with Sharyland Utilities. “The rate settlement contemplates a stronger financial structure for Oncor, with more owner-funded equity to fund proposed projects and investments in the grid,” BHE said.

| Sharyland Utilitities

Pending approval by Texas regulators, Sharyland would take over 258 miles of 345-kV transmission from Oncor in exchange for Sharyland’s distribution network and retail delivery customers. “Oncor will be welcoming thousands of new customers, many of which are located in areas that have seen significant load growth, like the Permian Basin,” said Oncor CEO Bob Shapard.

The proposed swap was submitted to the Public Utility Commission of Texas on Friday (Docket No. 47469).

CAISO Flex Capacity Effort Targets Increased Variability

By Jason Fordney

CAISO is developing new tools to deal with the variable output from the increasing amount of renewable and non-dispatchable generation on its grid, an effort that could bring fundamental changes to California’s resource adequacy rules.

The tools are meant to deal with the highly variable output of new wind and solar generation and changes in net load on the CAISO grid. The grid operator must not only properly balance generation and demand, but also avoid reliability violations and accommodate policy objectives such as renewable integration.

CAISO flexible capacity renewables
| CAISO

“The system is evolving and the challenges are evolving,” CAISO Principal of Renewable Generation Clyde Loutan said in an stakeholder call Wednesday. He added that “we are encountering operational challenges on the system that we need to understand.”

Through its Flexible Resource Adequacy Criteria and Must Offer Obligations 2 (FRACMOO2) proceeding, the ISO is proposing to introduce new variations of its flexible resource adequacy capacity product, which is intended to increase the ramp rate of the flexible capacity fleet that is becoming more critical to integrating new renewables.

The bulk of the current proposal is designed as short-term modifications to the flexible capacity criteria to emphasize start-up and minimum run times. CAISO is exploring the use of intertie resources but does not yet have a specific proposal. It hopes to have a program in place in time for the 2020 resource adequacy year. A separate initiative will develop a long-term flexible capacity solution and a resource adequacy roadmap in conjunction with the California Public Utilities Commission.

“The proposed short-term solution is unlikely to be sustainable long-term because the forecasted three-hour net load ramps could exceed the available flexible capacity in several years under this proposal without additional enhancements,” CAISO said in its revised straw proposal.

The package is designed to address the changing characteristics of the grid as CAISO requires quicker ramping speeds within shorter time cycles. While the steepest three-hour net load ramp in 2015 was about 10,600 MW, those ramps are projected to reach about 16,800 MW by 2020, with one ISO estimate putting hourly ramps as high as 7,000 MW by that time. New flexible capacity products would be designed to address variability and uncertainty down to five-minute increments.

CAISO flexible capacity renewables
CAISO is Developing New Tools to Deal With the Variable Output of Renewables | © RTO Insider

The proposal is divided into an operational aspect and a capacity procurement workstream, Johannes Pfeifenberger of the Brattle Group said in a presentation during the call. Brattle has been developing a proposal for CAISO’s flexible capacity procurement framework. Addressing the issue requires a better understanding of the physical capability of the system and flexible and non-flexible resources, he said.

There was broad opposition to a previous ISO flexible capacity proposal, according to a CAISO presentation. Critics contended that the plan conflated three separate drivers that should be dealt with more independently: curtailment of renewables, risk of generation retirements and maintaining a reliable grid.

During the Aug. 2 call, CAISO officials were asked if they have considered putting more limits on how quickly variable resources are allowed to ramp up or down, as is done in ERCOT.

“We are trying to look at all solutions right now,” Loutan said. But ERCOT has different operating characteristics, less non-dispatchable generation and different frequency requirements, he said, noting also that Texas is not interconnected with other regions, unlike California.

CAISO said it has been considering limiting the ramp rate of renewables to manage swings in generation output, but oversupply and minimum load requirements put more focus on flexible resources and start times of flexible capacity resources. The ISO proposed to require a flexible capacity resource have a start-up time of less than 4.5 hours and minimum run time of less than 4.5 hours.

CAISO is accepting comments on FRACMOO2 until Aug. 16, with a draft final proposal planned for December. The initiative also requires coordination with the PUC and other agencies with generation resource adequacy jurisdiction.

The ISO hopes to submit a final product to the Board of Governors next summer, followed by implementation in 2020.

NYPSC Pushes Ahead with ESCO Investigation

By Michael Kuser

The New York Public Service Commission on Wednesday rebuffed an appeal by a trade group seeking to prevent evidentiary hearings in the commission’s investigation into overcharging by energy service companies (ESCOs).

The commission rejected separate requests by the Retail Energy Supply Association and Direct Energy Services to halt the evidentiary phase of the proceedings, currently slated to begin in October, although it did grant one appeal.

nypsc energy service companies esco
ALJ Julia Bielawski

“For the commission to entertain an interlocutory appeal — an appeal from a judge’s ruling — at this early stage in the evidentiary process of a proceeding is extraordinary, and it’s up to appellants to show extraordinary circumstances to warrant the commission’s intervention at this point,” Administrative Law Judge Julia Bielawski told the PSC. “Here, typically a discovery dispute would not rise to that level. Here, however, one of the arguments presented by the appellants meets that criteria, so the recommendation is for the commission to entertain this appeal.”

Bielawski was citing the appellants’ assertion that a commission requirement to release certain customer data violates uniform business practices, commission policy and existing contracts.

nypsc energy service companies esco
PSC Chair John B. Rhodes

Commission Chair John B. Rhodes agreed to reverse that one part of the PSC’s May 2017 order while dismissing the other appeals. The commission voted with him.

“The record is clear that certain ESCO customers have paid much more for their energy than necessary,” Rhodes said. “We have cracked down on bad-acting ESCOs, and we have banned ESCOs from serving low-income consumers.

nypsc energy service companies esco
PSC Commissioner Gregg C. Sayre

“I’ve been observing the ESCOs using every legal, procedural move that I can imagine — and I’m a regulatory attorney of some years standing — to slow down and limit this proceeding,” Commissioner Gregg C. Sayre said. “I look forward with very great interest to the record now — and may I say, finally — being developed in this case. Even more, I look forward to having an opportunity to make some decisions regarding what appears to be a troubled market.”

A state Supreme Court judge in June ruled that the commission has “the very broadest of powers” to regulate ESCOs and utility rates, especially when seeking to prevent the overcharging of low-income customers. (See Court Backs NYPSC on Regulating Retail Sales.) The court’s Appellate Division last month upheld its conclusion that the commission has authority to cap prices of ESCOs at utility rates.

PSC Affirms REV Order

nypsc energy service companies esco
DPS Assistant Counsel Ted Kelly

The PSC also ruled against a petition to rehear or reconsider the order adopting a regulatory and policy framework and implementation plan in the Reforming the Energy Vision case, also commonly known as the Track 1 — or REV framework — order.

Assistant Counsel Ted Kelly said, “The Track 1 order applied the general presumption against utility ownership of generation to these distributed energy resources. I identified several limited exceptions to that rule; in particular, one exception provides for utility ownership of [DER] to enable lower- and moderate-income customers to benefit from those resources.”

Several nonprofit organizations had asked the commission to eliminate that exception.

“Utility ownership of DER was one of the most controversial issues in our Track 1 order,” Sayre said. “We made a compromise between always allowing utilities to own DERs and put them in the rate base, or never. I think we made a good compromise.”

ConEd plant on the East River at 15th Street in Manhattan, New York City

The commission also approved a 3-MW solar project by Consolidated Edison in New York City aimed at saving low-income customers money on their utility bills. Con Edison will place the solar panels on rooftops and property owned by the utility.

NRG CEO Hopeful About ZEC Suits, Company Future

By Peter Key

NRG Energy CEO Mauricio Gutierrez said Thursday that his company is optimistic that FERC and U.S. courts will find that the zero-emission credits (ZECs) being issued to nuclear generators by two states are harmful to the market and consumers.

Mauricio Gutierrez NRG zero-emission credits ZECs
NRG Energy CEO Mauricio Gutierrez | NRG

Speaking during NRG’s second-quarter earnings conference call, Gutierrez was also bullish on the company’s future as a power generator and retailer, in part because of the location of its generation assets.

Additionally, he said that although the asset sales included in a transformation plan launched last month may not be completed by the end of the year, he expects the company will be able to announce them all by then.

NRG earned $99 million ($0.36/share) from continuing operations during the quarter, after losing $163 million ($0.25/share) a year earlier. That beat the Zacks consensus analysts’ estimate of a 5-cent/share loss. Both sets of figures excluded the results of GenOn Energy, which filed for bankruptcy in June and will become the property of its senior noteholders.

NRG’s revenue was $2.7 billion in the most recent quarter, up from $2.25 billion a year ago, but short of the consensus estimate of $3.03 billion.

The company is a plaintiff in lawsuits against ZEC programs in Illinois and New York, both of which were dismissed last month. (See Illinois Zero-Emission Credit Suit Dismissed and New York ZEC Suit Dismissed.) The subsidies also prompted requests for FERC to extend the minimum offer price rule (MOPR) to existing units.

Initial briefs are due Aug. 28 in the plaintiffs’ appeal of the ruling on the Illinois ZECs case, which is pending before the 7th U.S. Circuit Court of Appeals. The plaintiffs plan to ask the 2nd Circuit to review the New York ruling.

Mauricio Gutierrez NRG zero-emission credits ZECs
NRG Energy’s Princeton, N.J. headquarters | NRG

When asked why he was so confident that the cases will be ultimately decided in NRG’s favor, Gutierrez said, “We think that we have a strong case, and with new FERC commissioners coming in, I think there will be a fresh look, a fresh perspective on the validity of our case and the potential impact that these out-of-market subsidies can have in the competitive markets.”

Another analyst on the call pointed to continued renewable subsidies while, outside Texas, load growth in NRG’s markets is flat. He asked if those developments concerned Gutierrez, as NRG will be left with a generation portfolio without renewables once the company finishes its planned asset sales.

Gutierrez said NRG would have a chance to rebalance its portfolio once its transformation process is completed and that its “generation is within the load pocket of the Chicago area, New York City or southwest Connecticut, and that these assets benefit significantly from capacity prices that have been very robust and continue to be robust as far as 2020 [or] 2021.”

As for NRG’s retail business, Guiterrez said the company has looked at best practices in other retail industries for ideas and concluded that it should build up its information technology infrastructure and analytics.

“So the way I characterize this effort is, in the last three years, we grew our business roughly by $200 million,” he said. “What we’re saying is that in the next three years, we are going to grow it by $200 million.”

[Editor’s note: Quotes from conference call courtesy of Seeking Alpha.]

FERC Quorum Restored as Powelson, Chatterjee Confirmed

By Rich Heidorn Jr.

The Senate on Thursday night confirmed Pennsylvania regulator Robert Powelson and GOP aide Neil Chatterjee to FERC, effectively restoring the quorum the commission lost six months ago.

Swearing in at their Senate confirmation hearing left to right: Brouillette, Chatterjee and Powelson | © RTO Insider

Confirmation of the two Republican nominees was never in doubt in the GOP-controlled Senate, but their nominations languished for almost two months after the Senate Energy and Natural Resources Committee approved them on a 20-3 vote June 6, as Democrats reportedly held out for an assurance that the Senate would also move on Democratic nominee Richard Glick.

That hurdle was cleared when the committee announced it had scheduled a Sept. 7 confirmation hearing for Glick, general counsel for the Democrats on the panel, and Republican attorney Kevin McIntyre, whom President Trump nominated as chairman. That action came after the White House, which had announced Trump’s intent to nominate Glick in late June and McIntyre almost a month ago, formally submitted their nominations to the Senate on Wednesday.

Excitement, then a Nervous Wait

Powelson | © RTO Insider

Powelson, a member of the Pennsylvania Public Utility Commission, and Chatterjee, senior energy policy adviser to Senate Majority Leader Mitch McConnell (R-Ky.), were included on the 1 p.m. Senate Executive Calendar Thursday. That set off a flurry of excitement in the offices of energy lawyers and interest groups with issues before the commission.

Chatterjee | © RTO Insider

Dan Brouillette, who had his confirmation hearing alongside the FERC nominees in May, was confirmed by the Senate as deputy secretary of energy shortly after noon. But doubts that Powelson and Chatterjee would win a vote before the Senate began its August recess grew later in the day. The upper house will not return until Sept. 5.

Sen. Lisa Murkowski (R-Alaska), chairwoman of the Senate energy panel, took the Senate podium at about 6:30 p.m. to request a vote after a lengthy quorum call — when the Senate remained in session but no action was taking place on the floor. The nominees were confirmed by a unanimous voice vote.

Chatterjee, of Kentucky, will replace Tony Clark, whose term expired last Sept. 30. Powelson is replacing Philip Moeller, whose term expired in October 2015.

Murkowski

Murkowski called Chatterjee “an invaluable asset” to her and her committee staff. “Extremely committed and dedicated. And it’s just been a real pleasure to work with him,” Murkowski said on the floor after the vote. “I don’t know Mr. Powelson as well, but having had an opportunity to advance his name before the Energy committee for confirmation too, I know that the … credentials that he will bring to the commission are greatly appreciated.”

Murkowski said restoring FERC’s quorum was essential to building new energy infrastructure. “In order to proceed with much of this you have to have the FERC actually operating: Working to review the permits; working through the ratemaking cases. It is substantive work. It is challenging work. It is work that has now been stopped up for months and months. So, knowing that FERC will be able to commence its operations again with a quorum is really good news today.”

Backlog to Clear

Once the two are sworn in, the commission will be able to resume work on the hundreds of contested dockets that have languished since February, when Chairman Norman Bay resigned after Trump named Cheryl LaFleur acting chair. The commission typically does not meet in public in August. Its next open meeting is scheduled for Sept. 20.

With only LaFleur and Commissioner Colette Honorable, the commission lacked the three-member quorum required to issue most significant orders. LaFleur was left alone on the commission when Honorable left once her term expired June 30.

FERC staffers have been able to issue only delegated orders; contested dockets and rulemakings have been at a standstill. As a result, LaFleur said, the commission has issued only a fraction of the 100 commission-authorized orders it averages a month.

Glick would replace Honorable for a term expiring in June 2022. McIntyre would finish Bay’s term and be reappointed for a term expiring June 2023. (See Trump Names Energy Lawyer McIntyre as FERC Chair.)

Turnover

In an interview in May, LaFleur noted that the four new commissioners will represent the biggest turnover at the commission since at least 1993. LaFleur joined the panel in July 2010. (See LaFleur Braces for ‘FERC 2.0’ Under Trump.)

In addition to the backlog of routine but contested orders they must clear, the new commissioners also will have to deal with another series of federal-state jurisdictional issues — moves by policymakers in RTO states to subsidize in-state generation. (See RTO Markets at Crossroads, Hobbled FERC Ponders Options.)

The confirmations were greeted with relief by many — but not all — stakeholders.

“Happy day!” tweeted LaFleur. “Very excited to work with new Commissioners Chatterjee and Powelson!”

Edison Electric Institute President Tom Kuhn said Chatterjee and Powelson “bring a wealth of experience, and a strong commitment to public service.” Kuhn said EEI’s priorities for FERC are “improving the functioning and price formation in wholesale markets, updating the transmission planning process, streamlining the siting and permitting process, developing predictability for the return on equity (ROE) in order to attract investment, and ensuring reliability and energy grid security.”

“We appreciate the Senate’s action to confirm both Robert Powelson and Neil Chatterjee,” said Jim Matheson, CEO of the National Rural Electric Cooperative Association. “Restoring FERC’s quorum will allow the commission to move forward on critical co-op issues such as access to a diverse power supply and the certification of natural gas pipelines.”

Advanced Energy Economy said it hoped the new commissioners will be receptive to “an energy system that encourages innovation and allows all technologies to compete fairly in wholesale markets while also respecting the right of states to set policy goals of their own.”

“We believe that market rules should not lock in old technologies at the expense of newer ones that can do more for less,” the group continued in a statement. “With a quorum restored at FERC and two more nominations pending, we look forward to working with the commissioners to remove all barriers to advanced energy technologies competing in wholesale electricity markets.”

Pipeline protestors outside Senate Minority Leader Chuck Schumer’s (D-N.Y.) office in Washington. | Beyond Extreme Energy

Some environmental activists, however, would rather the commission remain unable to approve new interstate gas pipelines. (See Pipeline Foes Like Hobbled FERC Just the Way it is.) The activist coalition Beyond Extreme Energy said that two dozen protesters blockaded the front door at the D.C. office of Senate Minority Leader Chuck Schumer (D-N.Y.) Thursday, resulting in arrests. The protesters carried a banner asking Schumer to oppose the FERC nominees and the Energy and Natural Resources Act of 2017 (S 1460), which environmentalists have labeled the “Dirty Energy Bill.”