The Omaha Public Power District has notified the Nuclear Regulatory Commission that it will permanently shut down its Fort Calhoun reactor on Oct. 24. The OPPD board unanimously approved a recommended shutdown in June, but officials had not provided a date for when the plant would stop operating, only saying it would by the end of the year.
With the shutdown date set, the plant’s decommissioning will kick into gear. That includes the removal and transfer of nuclear fuel from the reactor into the spent fuel pool, where fuel rods will be placed for about 18 months while they cool to a level that permits transfer into longer-term storage.
The decommissioning process could take up to 60 years and will cost OPPD as much as $1.5 billion. The 43-year-old, 478-MW Fort Calhoun is the smallest nuclear plant in the country, which made it financially untenable to continue operating.
Firm Lands DOE Grant for Flameless Combustion Plant
Southwest Research Institute has received a $3.28 million grant from the Energy Department to develop a project that could eliminate smokestacks and reduce emissions from coal-fired power plants.
The project is described as a “flameless pressurized oxy-combustion plant” by Rep. Joaquin Castro (D-Texas), who announced the grant. The organization also received nearly $900,000 in private industry support for the research.
SwRI, a research and development nonprofit, said the smoke produced from burning coal will be purified in a process that captures carbon dioxide and results in zero emissions. The captured CO2 will be kept out of the atmosphere by injecting it underground.
Energy Department representatives said that retrofitting the Colstrip coal-fired power plant in Montana to reduce greenhouse gas emissions would cost at least $1.2 billion, but that price tag could be partially offset by selling captured carbon dioxide for use in oil fields. Colstrip emitted about 16.5 million tons of CO2 in 2014, two-thirds of the state’s total, according to EPA.
The department presented its analysis of reducing emissions from the Colstrip plant at the request of Montana Gov. Steve Bullock. A Democrat up for re-election in November, Bullock has faced a barrage of Republican criticism for not doing enough to protect the aging plant.
“We need to be saying, what can we do to find solutions?” Bullock said to utility and mining executives gathered at the governor’s office in Helena to hear the Energy Department’s findings. “Those discussions only become more urgent given recent developments at Colstrip.”
FERC Approves Dominion Pipeline Expansion in Md., Va.
FERC has approved an expansion of one of Dominion Transmission’s natural gas pipelines necessary to serve new generating stations in Maryland and in Virginia. Dominion filed to expand the Leidy South Project in May 2015.
The project involves adding compressor stations and other equipment to the pipeline, which crosses Pennsylvania, Maryland and Virginia. Ultimately, it will allow natural gas to be carried to the Panda Stonewall generating station planned for Loudoun County, Va., and the Mattawoman Energy project in Prince George’s County, Md.
Dominion estimates the expansion will cost $209 million.
The Nuclear Regulatory Commission cited FirstEnergy for failing to provide accurate medical information after a nuclear operator at the company’s Davis-Besse plant lied about taking his prescribed medication.
The commission found that the operator, who resigned before the investigation began, failed to notify the plant when he stopped taking medicine for diabetes and high blood pressure. As a result, the commission said, the company unknowingly provided it with inaccurate information.
A FirstEnergy spokesperson said the operator’s failure to take his medication did not impact the plant’s operations. The company has agreed to modify its fitness-for-duty procedures as a result of the incident.
A main transformer fault at the Tennessee Valley Authority’s new Watts Bar 2 nuclear station caused a transformer oil fire and tripped the reactor last week. The incident occurred during testing of the unit before it goes into commercial operation.
TVA had achieved 99% of maximum output during the test before the fire broke out. It completed construction of the plant this year.
The fire was extinguished and there were no injuries. TVA said it is completing a full examination of the incident and the plant before resuming the testing. It said it didn’t know when it would go back online.
The Clean Power Plan poses no threat to PJM’s reliability, but compliance costs are highly sensitive to gas prices and whether states go it alone or combine efforts with a regional approach, according to a study released by the RTO last week.
If gas prices remain low, states within PJM’s footprint are likely to meet EPA-mandated emissions reductions simply through the replacement of coal plants with new combined cycle generators. However, compliance costs could more than triple if states decide to meet their CPP targets individually while also regulating emissions from new sources, the RTO’s analysis concludes.
Issued by EPA in August 2015, the CPP requires PJM’s states to reduce carbon dioxide emissions by 36% from 2005 levels by the year 2030. The analysis, requested by the Organization of PJM States Inc., compared seven compliance “pathways” employing mass- and rate-based trading at regional or state levels. Rate-based plans would mandate that generators meet a pounds-per-megawatt-hour target, while mass-based plans cap state emissions in tons per year.
PJM also looked at several sensitivities, including the impact of retirements on resource owners’ exit decisions based on five- and 20-year horizons. Also modeled were the impact of lower natural gas prices, a multistate split of rate- and mass-based compliance within the PJM region and state renewable portfolio standards.
Regardless of the pathway used, the CPP would not have a substantial impact on resource adequacy as “the capacity and energy markets [will be] able to attract sufficient new investment to satisfy PJM’s reliability requirements,” the RTO said.
Regional Compliance Reduces Costs
The analysis found that levelized compliance costs would range from $0.61/MWh (1.1% of the average total wholesale cost) for regional plans and $1.93/MWh (3.3%) for individual state plans that include regulation of both new and existing sources.
“The cost of compliance for the entire PJM region differs according to the compliance pathway chosen, but regional compliance leads to lower costs than does individual state compliance under both mass-based and rate-based compliance pathways,” the report said.
Regional compliance would result in fewer coal generator retirements and less new combined cycle gas plants than individual state compliance “due to the greater flexibility and options for emissions reductions offered across the entire PJM region,” the study said.
As a reference case, PJM also ran a simulation in which the CPP, which has been stayed by the U.S. Supreme Court pending legal challenges by numerous states, is not implemented. The simulations begin in 2018, thelatest that compliance plans can be submitted if the rule survives.
Impact of Gas Prices
The study found that continued low natural gas prices — assuming they remain in the $3 to $4/MMBtu range (in 2018 dollars) over the 20-year study period — “has a greater effect on emissions levels, the retirement of fossil steam resources and new entry of natural gas combined cycle resources than even the most stringent of the studied compliance pathways that also regulate the CO2 emissions of new natural gas combined cycle resources.”
“Because of accelerated [coal] retirements, there would be no cost to achieve compliance, and the resulting emissions would be below the final Clean Power Plan targets, even without the Clean Power Plan,” PJM said.
Challenges for Nuclear, Boon for Renewables
Compared to the reference and mass-based options, PJM found that rate-based compliance would create lower energy market prices because subsidies for renewable resources would allow them to submit offers below production costs. This would increase capacity prices, however, as resources seek to replace lost energy revenue.
This would drive growth in renewables — which would earn more revenue from emissions rate credits than from the increase in energy market revenues under mass-based compliance — but “results in increased economic challenges for existing nuclear resources,” PJM said.
Mass-based plans, on the other hand, would increase energy market prices by adding costs for allowances. They would allow low-emission resources to depend less on non-market revenue and provide no incentive to price generation below cost. They would also make nuclear facilities more viable by pricing their low-emissions status.
The analysis also evaluated the impact of different time horizons on the nuclear and coal fleets.
If generation owners make retirement decisions based on a five-year horizon from 2018 through 2022 before initial compliance targets take effect, the study predicted up to 6 GW of nuclear retirements (in addition to the already-announced decommissioning of the Oyster Creek nuclear plant) and less than 1 GW of incremental coal-fired retirements. Gas prices would drive the reductions in the short run, but the study found nuclear plants become viable again in 2026 under CPP.
Steam Turbine and Nuclear Units Age 40+, Combined Cycle Units 30+ (As of 2018)
“What the analysis shows is that over a 20-year horizon, the existing nuclear fleet can become economic, but in this near term, they face a lot of stress given the low gas prices and current market prices,” PJM’s Muhsin Abdur-Rahman said during a media briefing on the report Thursday.
The analysis found congestion will decline by 2025 under every compliance pathway compared to the reference scenario. Congestion related to historical west-to-east flows drops because of coal retirements in western PJM, although it is accompanied by more localized congestion.
Energy Efficiency
Rate-based plans would also require precise measurement and verification of energy efficiency to earn emission rate credits. A sensitivity that assumed states can convert only 50% of energy efficiency included in load forecasts into credits resulted in cost increases that were more than double the cost of trade-ready mass-based compliance, although still less than $1.50/MWh.
CAISO’s Board of Governors last week approved proposed Tariff revisions that will require new renewable resources be capable of providing grid-stability services as a condition for interconnecting with the ISO’s system.
CAISO’s Tariff changes will require new and upgraded renewable resources to be capable of providing reactive power and voltage control. Photo of San Gorgonio Pass Wind Farm source: Wikipedia
While stakeholders largely support the amendments, some market participants contend they don’t go far enough in guaranteeing adequate compensation for what has become an increasingly important service as more intermittent resources link up with the grid.
The proposed revisions follow FERC’s June issuance of Order 827, which requires that all newly interconnecting non-synchronous generators have reactive power capability. Resources undergoing upgrades would also be subject to the new rules.
“We are pleased to now take this next step, in which clean power resources can contribute to the reliability of the grid,” CAISO CEO Steve Berberich said in a statement. “By providing reactive power, these resources are better suited to help us integrate increasing numbers of renewable resources.”
“It’s really good utility practice to require all resources in the fleet to have reactive power,” Keith Johnson, CAISO manager of infrastructure policy and contracts, told board members during an Aug. 31 meeting.
The ISO’s Tariff changes go beyond FERC’s mandate for reactive power capability by adding a provision requiring that non-synchronous resources also provide voltage regulation.
“Maintaining voltage is very important for how we operate in the West,” Johnson said, explaining the ISO’s rationale for the additional requirement. “The incremental cost of [automatic voltage regulation] equipment is very, very minimal.”
Thermal Generators Seek Raise
Although the new requirements had broad support among stakeholders, a disagreement arose over CAISO’s decision not to use this FERC filing to alter its compensation for reactive power — a move that would especially benefit thermal generators that are steadily losing market share to renewables.
Under current ISO practice, any generator that is dispatched down to provide reactive power is paid its opportunity cost for lost energy revenues. Generators want the ISO to implement a new market provision that would compensate them for the capital cost of installing reactive power equipment — effectively creating a capacity payment for providing reactive power service.
CAISO contends that generators can recover those costs through their power purchase agreements, given the West’s continued reliance on bilateral contracts for the provision of capacity. Any additional market mechanism would run the risk of creating double payments for the service, Johnson said.
“Providing reactive power is a service essential to the operation of the grid,” said Brian Theaker, director of market affairs at NRG Energy. “Today’s disappointing decision doesn’t advance that.”
Theaker said that the current compensation structure does not provide “reliable signals” for generating units that require longer-term guarantees to remain financially viable.
“We feel like there’s been an opportunity missed here,” said Carrie Bentley, a consultant representing the Western Power Trading Forum. “The ability to provide reactive power is not free,” she continued, adding that five other organized markets offer compensation for the service.
“It’s not a secret that renewable power is disrupting the [capacity] and energy market — a lot of thermal generation will not be able to remain in the market,” Bentley continued. “How do you provide a market signal strong enough to keep the thermal generation we need.”
“The ISO did talk about compensation and looked at some of the other ISOs and RTOs across the country,” Johnson responded. “When PJM or MISO was formed, there were legacy arrangements for capacity payments for reactive power. We have no such system of capacity payments — we have bilateral contracts.”
Keith Casey, CAISO vice president for market and infrastructure development, said Bentley’s concerns about the ISO’s thermal fleet were “spot on.” He pointed out that the ISO’s new flexible ramping product — which compensates generators for the ability to rapidly respond to intermittent output from renewables — is one effort to reward “needed” generators.
“We just view the reactive power capability as a fundamental requirement,” Casey said. “The capital cost for that capability should be addressed through bilateral contracts.”
EPA has finalized a federal implementation plan for compliance with its Regional Haze Rule for the state, but regulators and at least one generator say they may appeal the decision.
The final rule calls for increased emissions control at three coal-fired plants and three natural gas-fired plants, in addition to a paper mill. One of the plant owners, Entergy, said compliance measures could cost it up to $2 billion and that the company is exploring its options. State environmental officials may also appeal the rule.
Imperial Irrigation District Strikes Net Metering Agreement
Imperial Irrigation District, which generated public backlash after it cut off enrollment in its net metering program earlier this year, will allow as many as 1,300 new rooftop solar customers to sign up for the preferential rate.
The district, which provides electrical service to 150,000 customers, reached a deal with the solar industry and state lawmakers to enable any customers who applied for a solar interconnection permit and received a building permit by April 1 to enroll in the program.
IID struck the compromise in the face of possible passage of legislation that would have expanded the eligibility period to July 19.
Appeals Court Denies Release Of PUC-San Onofre Emails
A state appeals court last week reversed a lower court decision that would have forced the Public Utilities Commission to disclose its communications related to the agency’s settlement with Southern California Edison over the closure of the San Onofre nuclear generating station.
The appellate court sided with the PUC, which argued that the communications involved privileged information regarding a rate case. San Diego attorney Michael Aguirre had sought to release the emails to determine whether Gov. Jerry Brown was party to ex parte, private negotiations between former PUC President Michael Peevey and the utility ahead of the settlement. Peevey, a former SoCalEd executive, stepped down from the commission after the negotiations were revealed.
Though the court denied disclosure, it recommended Aguirre submit his request to the PUC under the state’s Public Records Act and, if denied, take his case directly to the appeals court. Aguirre said he will appeal to the state Supreme Court.
Co-op to Shutter 2 Plants Under Regional Haze Plan
The Tri-State Generation and Transmission Association said it will retire more than 500 MW of coal-fired generation in the next decade in order to comply with the state’s implementation plan for EPA’s Regional Haze Rule.
The electric cooperative said it plans to shutter the 100-MW Nucla Station in Montrose County by 2022, along with the nearby mine that feeds the plant. It also plans to close the 427-MW Unit 1 at the Yampa Project by 2025, although two other units at the site will continue to operate. It said it is more economical to close the units rather than retrofit them to comply with the regulations.
“Tri-State has worked tirelessly to preserve our ability to responsibly use coal to produce reliable and affordable power, which makes the decision to retire a coal-fired generating unit all the more difficult,” the company said. “We are not immune to the challenges that face coal-based electricity across the country.”
The Agency for Energy and the Department of Health and Human Services approved $89.5 million in Energy Assistance Program grants last week for 14 nonprofits and utilities.
The grants are meant to help low-income residents pay electric bills. Among the organizations and municipalities that received multi-million dollar grants, DTE Energy received $17 million and Consumers Energy received $13.2 million. The Salvation Army also received $13.7 million, while TrueNorth Community Services received $15 million.
Regulators Promise Decision On PNM Rate Case by Sept. 28
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The Public Regulation Commission said it will issue a decision within a month on Public Service Company of New Mexico’s rate-increase request. The PRC’s announcement came after most parties in the case objected to reopening hearings.
PNM proposed a 15.8% rate hike earlier this year to cover its investments in power and energy-efficiency measures. In early August, a PRC hearing examiner recommended a 6% increase, saying PNM hadn’t justified the higher rate.
PRC acting general counsel Michael Smith said that as a result of the nearly “uniform” opposition to holding more hearings, “We are going to make a decision based on the recommended decision that was issued by Carolyn Glick,” the hearing examiner.
Regulator Approves ROW for Southline Transmission Project
Land Commissioner Aubrey Dunn last week gave right-of-way approval to the Southline Transmission Project, a proposed 345-kV double-circuit line that would cross into Arizona. Developers must still submit detailed plans about the exact location of structures and roads associated with the line, along with cultural and biological surveys.
Sponsored by Hunt Power subsidiary Southline Transmission, the line will provide up to 1,000 MW of transmission capacity in both directions and connect with as many as 14 existing substation locations.
OCC Orders Fracking Wells Shut down After Earthquake
A magnitude-5.6 earthquake last week spurred state regulators to order 37 fracking waste disposal wells to shut down over a 725-square-mile area.
The order came from the Corporation Commission’s Oil and Gas Division. Gov. Mary Fallin said the commission is coordinating with well operators around the town of Pawnee and that several buildings in the Pawnee Nation had been rendered uninhabitable by the quake. She also said EPA is assessing the region.
The wells will close within 10 days of the order, according to a schedule the commission says is necessary because scientists have warned that a sudden shutdown could provoke another earthquake. A commission spokesperson said the wells were ordered closed because of the link found by the U.S. Geological Survey between wastewater disposal and the increased number of earthquakes in the region, particularly in the state.
WindWaste, an organization opposed to wind power incentives, estimates that future wind developments could force the state to shell out more than $500 million annually in zero-emissions tax credits by 2019.
The subsidy is set to sunset on Jan. 1, 2021, but WindWaste wants lawmakers to end the credit by July 1, 2017. The next legislative session begins in February.
Representatives of the wind industry say WindWaste’s estimates of $5.2 billion in payouts by 2030 is wildly inflated. It argued that the group based its predictions on the amount of generation in SPP’s interconnection queue, which only has a buildout rate of about 15%, it says.
Developers of Wind Project Withdraw Request for Permit
Developers of the Prevailing Winds project asked state regulators last week to withdraw their application for a permit. The retreat came one week after a raucous, four-hour community meeting near Pierre.
Public Utilities Commission Chair Chris Nelson said the request was “unexpected.” The request came shortly before the commission’s Aug. 30 meeting and could be considered at its Sept. 13 meeting.
Prevailing Winds would produce about 200 MW of electricity. By asking to have its application dismissed without prejudice, developers could again apply for a permit at a later date.
The Austin City Council last week unanimously approved Austin Energy’s request to redo its residential electric rates, but not before the city-owned utility first dropped a controversial proposal for an increase. Under the revised rate structure, the municipal utility’s 400,000 residential customers would see bills cut by about $62/year.
The council also signed off on $42.5 million in annual cuts that Austin Energy and its major customers agreed to earlier this month. Most of those cuts will go toward reducing electric bills for industrial and commercial customers. Major customers, such as data centers and large hospitals, will see their electric rates cut 24%.
The utility’s original proposal came under attack because of Austin Energy’s tiered residential price structure: Customers pay the base rate for their first 500 kWh of electricity and higher rates for subsequent blocks of 500 kWh.
SCC Examiner Affirms Right To Third-Party Solar Financing
A State Corporation Commission hearing examiner rejected an argument by Appalachian Power that third-party solar financing was illegal, paving the way for homeowners to sign up for the popular method of paying for residential solar-system installations.
“Today’s decision is an important win for solar rights in Virginia, which has continued to lag behind neighboring states on solar because of outdated policies and utility opposition like we saw from Appalachian Power in this case,” said Will Cleveland, staff attorney at the Southern Environmental Law Center. “The ruling confirms that Virginians have the right to use common sense financial tools to choose solar power without utilities acting as the middle men.”
The utility argued that third-party financing, in which homeowners paid for solar systems through monthly contracts, was legal only under a Dominion Power pilot project. The ruling now goes before the full commission for public comments and final briefs.
The Department of Natural Resources has granted a waterway and wetlands permit for Enbridge Energy to replace a section of old oil pipeline.
Ben Callan, a DNR water management specialist, said the permit is for replacing a 14-mile stretch of Line 3, a 1960s-era pipeline. The pipeline had been operating at a diminished capacity after Enbridge recently found issues during integrity tests. The new section will have a 36-inch diameter and be able to carry up to 760,000 barrels per day.
Callan said that the permit requires the hiring of an independent consultant to oversee compliance. Enbridge spokeswoman Shannon Gustafson said the company has not set a timeline for construction.
ERCOT’s latest resource adequacy assessments indicate it has 25,000 to 30,000 MW of spare generating capacity for the fall and winter.
ERCOT’s control rom Source: ERCOT
The Texas grid operator’s final Seasonal Assessment of Resource Adequacy (SARA) for October and November includes more than 82,000 MW of capacity, more than enough to meet a projected peak demand of about 54,400 MW.
The preliminary winter SARA report is similarly rosy, with more than 81,000 MW of capacity available to meet a forecasted record peak demand just under 59,000 MW. The winter demand record of 57,265 MW was set during February 2011’s record cold.
ERCOT, which operates 90% of the Texas grid, said four gas-fired combustion turbine units and three wind projects have begun operating since its preliminary fall SARA, adding nearly 900 MW of capacity. Three of the gas units are switchable resources and can connect to either ERCOT’s or SPP’s grids. The fall forecast assumes 13,700 to 19,000 MW of planned and unplanned outages.
Another 1,200 MW of new winter-rated capacity is expected to be in service for the winter season (December-February). The final winter SARA report will be released in November.
PJM’s Independent Market Monitor last week gave his blessing to the RTO’s Base Residual Auction for delivery year 2019/20 but called for additional rule changes to build on the tougher standards of Capacity Performance.
The Monitor’s report on the May auction concluded that the results “were competitive, with the caveat that although the Capacity Performance design addressed the most significant issues with the capacity market design, the Capacity Performance design was not fully implemented in the 2019/2020 BRA and there continue to be issues with the capacity market design which have significant consequences for market outcomes.”
PJM will require all capacity to meet CP standards starting with the 2020/21 delivery year.
The Monitor called for additional changes concerning the treatment of pseudo-tied generation, demand response and energy efficiency; the calculation of net revenues; and the application of the minimum offer price rule (MOPR).
The Monitor also acknowledged that its call for using the lower of the cost- or price‐based offer in the calculation of net revenues was rejected by FERC in June (EL14-94-001, ER16-1291). (See “FERC Won’t Revisit Cost-Based Energy Offer Cap Ruling,” PJM News Briefs from FERC Open Meeting.)
But he said the FERC-approved approach used in the May auction, which always uses the cost‐based offer, “resulted in an increase of [$43.4 million], or 0.6%, in the cost of capacity in the 2019/20 BRA.”
In addition, the Monitor recommended:
All costs incurred as a result of a pseudo-tied generator be borne by the unit and included in its capacity market offers.
The “electrical proximity” of pseudo-tied resources be “explicitly accounted for” when defining how external resources should be treated during performance assessment hours.
Enforcing “a consistent definition” of capacity resource as a physical resource at the time of the auctions — with a commitment to be physical in the delivery year and moving all DR to the demand side of the market. The Monitor referenced its 2013 report on replacement capacity, in which it warned that “speculative” DR can suppress prices in the BRA and displace physical generation: “Under the current application of the rules, DR providers may not have identified customers, may not have clear plans for implementing DR measures and may not receive commitments from new customers until relatively close to the delivery year and well after the RPM BRA is run for that delivery year. This is not consistent with the rules.”
Ensuring the net revenue calculation used to establish the net cost of new entry “reflect the actual flexibility of units in responding to price signals rather than using assumed fixed operating blocks that are not a result of actual unit limitations.” Reflecting actual flexibility will result in higher net revenues, which affect the demand curve and market outcomes, the Monitor said.
Eliminating the rule requiring that small proposed increases in the capability of a generator be treated as planned for purposes of mitigation and exempted from offer capping.
Changing the MOPR review to require all projects use the same modeling assumptions. “That is the only way to ensure that projects compete on the basis of actual costs rather than on the basis of modeling assumptions,” the Monitor said.
Extending the MOPR to existing units in addition to new units.
Re-evaluating the market mitigation exemption granted DR and energy efficiency resources in 2009. “In 2009, there was one product defined for capacity, and there were no resource constraints defined,” the Monitor said. “Particularly in [locational deliverability areas] with few suppliers, there is now the potential for DR and EE providers to exercise market power and affect the clearing price.”
Changing the RPM solution methodology to explicitly incorporate the cost of make-whole payments in the objective function.
Removing energy efficiency resources from the supply side of the capacity market to reflect the change in PJM’s load forecasts. (See Changes to PJM Load Forecast Cuts Benchmark Peaks.) “If EE is not included on the supply side, there is no reason to have an add-back mechanism,” the Monitor said. “If EE remains on the supply side, the implementation of the EE add-back mechanism should be modified to ensure that market clearing prices are not affected.”
FERC on Wednesday rejected Algonquin Gas Transmission’s request to exempt gas-fired generators from competitive bidding under capacity release rules, another blow to those seeking to increase New England’s gas infrastructure (RP16-618).
Photo credit: Steve Oehlenschlager
The proposal to amend Algonquin’s tariff was an offshoot of the company’s proposed Access Northeast pipeline. Electric distribution companies Eversource Energy and National Grid — which are partnering with Algonquin on the pipeline — sought the exemption to ensure the capacity they purchased would be used to fuel gas-fired generators.
The EDCs hoped to release capacity to gas generators as prearranged “replacement” shippers. FERC rules allow such preferences as long as the replacement shipper matches the highest bid submitted by any other bidder. The proposal would have limited that bidding to gas-fired generators, excluding those who might value the fuel more for winter heating.
The proposal was opposed by numerous merchant generators, including NextEra Energy, Exelon and Calpine, which said they had found cheaper alternatives to ensure fuel supplies under ISO-NE’s Pay-for-Performance capacity incentives, including installation of dual-fuel capacity and contracts with natural gas marketers and LNG suppliers.
“Merchant generators are not asking you for this capacity, and you need to ask yourself why,” Calpine told FERC. The company estimated firm capacity would cost it $25 million annually, or half a billion dollars over a 20-year commitment. It said it could guarantee the same level of service by investing $50 million in a fuel oil tank.
Other opponents argued that the proposal was premature because no state had approved a state-regulated electric reliability program.
“Neither Eversource nor National Grid provided a persuasive explanation for why the ability to release capacity to a prearranged replacement shipper under our existing regulations is not sufficient to meet their needs,” FERC ruled. “Moreover, neither party sufficiently explained why a generator that needed the capacity to obtain the natural gas supplies necessary to generate electricity during a period when Algonquin’s capacity is constrained would not match a higher bid.”
However, the commission said its ruling was “without prejudice to Algonquin developing other more targeted, justified proposals for consideration.”
The commission also granted Algonquin’s request to exempt from bidding an EDC’s capacity release to third parties managing capacity on an EDC’s behalf.
“By permitting capacity holders to use third-party experts to manage their natural gas supply arrangements and their pipeline capacity, [asset management arrangements] provide for lower gas supply costs and more efficient use of the pipeline grid,” the commission said. A compliance filing on this proposal is due in 30 days.
Access Northeast suffered a setback in August when the Massachusetts Supreme Judicial Court overruled state regulators’ order to allow construction costs be assessed to electricity ratepayers. Soon after the ruling, the EDCs withdrew their proposed contracts that were pending before the Massachusetts Department of Public Utilities. (See Eversource, National Grid Withdraw Requests to Bill for Pipeline.)
Access Northeast Complaint Dismissed
In a related case, FERC dismissed a complaint filed by electric generators seeking to block EDC contracts with pipeline owners as premature (EL16-93).
“The circumstances giving rise to the complaint are in a state of flux and the commission does not have before it the concrete facts necessary to determine whether the tariff will be unjust and unreasonable. Several critical project elements of the individual states’ electric reliability programs are undetermined at this time,” FERC wrote.
The commission cited the Massachusetts court ruling, its concurrent order on capacity releases and its pending ruling on Access Northeast, which is expected in the fourth quarter.
The newly established Western Energy Imbalance Market (EIM) governing body kicked off its first meeting last week by electing its leadership.
CAISO’s Board of Governors appointed the five-member body in June, selecting one each from five industry sectors: EIM entities, ISO-participating transmission owners, power suppliers and marketers, publicly owned utilities and state regulators. (See CAISO Board Appoints Western Energy Imbalance Market Governing Body.)
Kristine Schmidt, president of Dallas-based Swan Consulting, was selected to serve as the body’s chair. A former vice president at ITC Holdings and director at Xcel Energy, Schmidt has more than 30 years’ experience in the energy sector. She also worked as an adviser to former FERC Commissioner Nora Brownell.
The EIM Governing Body selected Kristine Schmidt and Doug Howe as its chair and vice-chair, respectively.
Doug Howe, an independent consultant and Ph.D. in mathematics, was chosen as vice chair. Howe has authored or co-authored more than 30 papers and presentations covering industry topics such as energy efficiency in the European Union and utility regulation in the U.K. He previously held an executive position with GPU Inc., which was acquired by FirstEnergy in 2001.
Carl Linvill, a member of the governing body, praised Schmidt for her “equanimity” and also expressed support for the wider Western regional representation that Howe — a New Mexico resident and former state regulator — will provide.
“We still have a lot to figure out and learn,” Linvill said. “Figuring out how to establish a regional presence really is emboldened and enabled by these two positions.”
“On behalf of the ISO, we want to give you our immense thanks for being willing to serve on this body,” CAISO CEO Steve Berberich said. “We consider the EIM as a critical attribute and will continue to support it for as long as necessary.”
A decade ago, Schmidt noted, nobody in the industry would’ve believed the region would have an EIM.
“We’re now seeing a regional market take shape in the West,” Schmidt said. “We’re hitting the ground running.”
Stakeholder Coordination
The governing body’s inaugural meeting included a set of briefings by EIM stakeholders and ISO staff to acquaint members with key structures affecting the market.
“There’s a lot of interest in what you’ll be doing,” said Tony Braun, an industry consultant who chairs the Regional Issues Forum, a loosely structured stakeholder group created by CAISO to foster broad regional discussion about EIM-related issues.
While the forum’s role “has not been concretely laid out,” the group’s first two meetings have been well attended, indicating a high level of interest in the EIM’s activities, Braun said.
The two most significant issues for forum participants: the bidding of external resources at the EIM’s interties and the impact of California’s greenhouse gas regulations on the market. (See related story, CAISO Kicks off Effort to Track GHGs Under Regionalization.)
Braun proposed that future meetings of the forum be coordinated with those of the EIM’s governing body and its state regulators’ group to improve collaboration and reduce participants’ travel for meetings.
“We’d love to hear how we can shape our processes to help you do your jobs,” Braun said.
Governing body members expressed appreciation for the work of the forum.
“The stakeholder-driven nature of the [forum] is probably something that is both difficult and necessary,” said governing body member Valerie Fong. “I found that the way [the meetings are] being run is very open.”
Schmidt called the meetings “extremely helpful.”
“We’re trying to do everything we can do to mitigate some of the travel issues,” she added.
Regulatory Collaboration
Ann Rendahl, chair of the EIM’s body of state regulators, sketched out the role of her group for the new governing body.
“Our purpose is to ensure that state regulators that aren’t involved in this market understand what is going on in EIM,” said Rendahl, a member of the Washington Utilities and Transportation Commission.
The group provides a forum for regulators to learn about EIM and CAISO developments that might be relevant to their jurisdictional responsibilities. While it can take a common position in CAISO and EIM stakeholder processes, individual regulatory commissions are not restricted from taking any position before FERC or the ISO board on EIM-related matters.
The regulators’ group is also charged with monitoring EIM governing body action items and selecting a voting member for the body’s nominating committee.
Rendahl emphasized the need for her group to closely coordinate its activities with that of the governing body. “We want to not just monitor, but work with the governing body,” she said.
ISO Process Basics
Governing body members received a briefing about CAISO’s stakeholder process from Brad Cooper, ISO manager of market design and regulatory policy.
Cooper explained the stakeholder process the ISO uses each fall to develop a “roadmap” of planned policy developments, including EIM initiatives. The ISO last year drew from a catalog of 49 potential initiatives, selecting only 10 because of staff constraints.
“We can’t develop everything in the catalog,” Cooper said.
A final roadmap is presented to the CAISO board — and, in the future, the EIM governing body — at the beginning of each year. The ISO informs stakeholders of any changes to the roadmap through its Market Performance and Planning Forum.
“The roadmap isn’t set in stone,” Cooper said. “For instance, we had the Aliso Canyon issue come up” earlier this year, forcing a modification of the roadmap. (See CAISO Seeks Rapid Response to SoCal Gas Restrictions.)
When developing the roadmap, ISO staff divide initiatives into four categories, including initiatives already in progress, policy changes mandated by FERC, non-discretionary efforts related to reliability or market efficiency, and discretionary initiatives.
For the last category, ISO staff and stakeholders together prioritize potential initiatives according to benefits and feasibility.
“If something could provide great benefits and is relatively trivial to do, that would get priority,” Cooper said.
Cooper acknowledged that CAISO’s policy process is driven more by staff than by stakeholders — and said the ISO prefers it that way.
“We realize that we made a commitment to look at other [stakeholder] processes [to implement under] regionalization, but we think our stakeholder process really allows us to quickly evolve policies,” Cooper said, adding that he didn’t think a project such as the EIM could’ve been developed under a stakeholder-led model.
“The ISO really tries to take a balanced view of our proposed policy,” Cooper said, contending that the ISO’s process does not factor in specific stakeholder interests, avoids “contentious voting structures,” and prevents bias or brokered policy decisions — allowing the ISO to focus on grid reliability.
Still, Cooper emphasized that “stakeholders are involved every step of the way,” including through “working group” meetings that focus on specific initiatives.
“We have a lot of open interaction that may not be possible with more formal stakeholder processes,” Cooper said. “This allows us to really interact with our stakeholders and get their input.”
The owner of the 40-MW White Pine coal-fired power plant in Michigan’s Upper Peninsula blasted MISO after receiving a 90-day notice that the grid operator will terminate its $7.3 million annual system support resource agreement with the 60-year-old plant on Nov. 26.
White Pine Electric Power, a subsidiary of Traxys North America, said the decision jeopardizes reliability until 2020, when 170 MW of new natural gas-fired plants will come online. “This is a short-sighted decision by MISO that they claim is about utility rates,” said White Pine board Chairman Brent Zettl.
The utility claims that the study MISO used to make its decision did not properly evaluate emergency scenarios, arguing that the plant provides a failsafe against unplanned outages.
William E. Webster Jr., former executive vice president for industry strategy at the Institute of Nuclear Power Operations, joined Duke Energy’s board of directors effective Sept. 1.
Webster retired from INPO on June 30, ending a career there that began in 1982. While at INPO, he also served in “on‑loan” leadership positions with FPL Group and Arizona Public Service’s Palo Verde Nuclear Generating Station.
He received his senior reactor operator certification at Duke’s Brunswick nuclear plant and has a bachelor’s degree in civil engineering from Villanova University.
The 200-MW Odell Wind Farm began generating power in southwestern Minnesota last week under a 20-year power purchase agreement with Xcel Energy, its fourth wind facility in the Upper Midwest.
Owned and operated by Canadian company Algonquin Power & Utilities, Odell consists of more than 100 turbines erected in four counties.
Xcel gets 14% of its power from wind sources in the Upper Midwest and predicts the share will rise to 22% in 2020. Xcel’s ultimate goal is 42% from wind.
NYISO has named former energy executive Roger B. Kelley to its Board of Directors, effective this month. He replaces Vikki L. Pryor, whose term expired in April.
Kelley has more than 40 years of experience in the electric generation and transmission business. He previously served as CEO of Peregrine Midstream Partners in Houston. He was also CEO of Midland Cogeneration Venture in Midland, Mich.; CEO of Fortistar Renewables, based in White Plains, N.Y.; and CEO of the New York Power Authority.
“Roger has extensive experience in the energy industry, including as president and CEO of the New York Power Authority,” said Michael Bemis, NYISO’s board chair. “We appreciate his willingness to serve as a director. I’m confident we will benefit from his judgment and counsel.”
Prior to agreeing to a merger with Tesla, SolarCity considered selling its Buffalo solar panel manufacturing plant, which is scheduled for completion next June with $750 million in state assistance, according to a filing with the U.S. Securities and Exchange Commission.
SolarCity eventually decided a sale of the plant, a centerpiece of Gov. Andrew Cuomo’s Buffalo Billion economic development program, would not provide an adequate return for company shareholders. But the filing reveals how strapped for cash SolarCity is, even as it considered being acquired for $2.4 billion. The company’s operations rely heavily on a business model that allows customers to install rooftop solar with no upfront costs, forcing it to constantly raise money from investors.
The filing also reveals at least three other firms declined to acquire SolarCity before it accepted the offer from Tesla, which is facing a cash crunch itself. The company will have to pay $422 million to bond holders in the third quarter. Tesla’s debt-to-equity ratio was 145.5% as of June 30; SolarCity’s was 375.6%.
Development Partners, which is building a $500 million, 700-MW natural gas plant in northern Indiana, has asked MISO to allow it to double the size and the cost of the plant.
The White Plains, N.Y., company wants permission to add two more turbines to the St. Joseph Energy Center near the Michigan border. The first phase of the project is scheduled to be completed in 2018.
After Development Partners gets interconnection approval from MISO, which it hopes to earn by the end of the year, the developer would work with local officials to approve a site plan.
Enbridge Energy Partners, which recently invested $1.5 billion into a rival oil-pipeline project, has put its proposed Sandpiper Pipeline in Minnesota on hold, saying current demand for crude oil no longer supports the need for the project.
Sandpiper, which was initiated three years ago, aimed to carry up to 225,000 barrels of oil from North Dakota through Minnesota and then on to Superior, Wis. The proposal faced heated opposition from Native American tribes and environmental groups who objected to the proposed path, which would have crossed numerous lakes and rivers.
Enbridge stopped short of saying the project was dead, but it did say the five-year projection of production in North Dakota’s Bakken region doesn’t forecast the need for more pipeline capacity. The decision comes just after its recent $1.5 billion investment in the Bakken pipeline system, which includes the Dakota Access project.
Portland General Electric is exploring the possibility of converting its coal-fired Boardman power plant in eastern Oregon to biomass.
The utility plans to run the 550-MW facility on woody biomass for one full day this year as an experiment, following a successful test last year using a 10-to-1 mixture of coal and biomass. The process will entail pulverizing wood debris into the substance before feeding it into the plant’s boiler.
Boardman is slated for closure in 2020, but the use of biomass could extend the life of the plant. Success of the project will hinge on plant conversion costs and securing a steady supply of fuel.
Southern Co., Kinder Morgan Close Deal on Pipeline System
Southern Co. has acquired 50% of Kinder Morgan’s Southern Natural Gas pipeline system, the companies announced. The 7,000-mile system runs from wells in Texas, Louisiana, Mississippi and Alabama to markets in the southeast. Terms of the acquisition were not announced. Kinder Morgan will continue to operate the pipeline system.
Southern CEO Thomas A. Fanning hinted at other deals possibly in the works. “With our new ownership stake in Southern Natural Gas, we look forward to working with Kinder Morgan to explore future opportunities to deliver natural gas to customers,” he said.
Talen Energy withdrew its request for an operating license from the Nuclear Regulatory Commission for the proposed Bell Bend nuclear station in Berwick, Pa., saying that the reactor design company’s decision to suspend its certification process left it no choice.
The Allentown, Pa., company said that it had posted a $122 million loss associated with the project when it released its second-quarter results and that it would stop attempts to get a license for the plant. The reactor design company, Areva, asked NRC in 2015 to stop its design certification process. A Talen spokesman said seeking another design company wasn’t feasible.
Talen said the decision was not related to is pending merger with Riverstone Holdings.
General Electric is joining an energy research program at the Massachusetts Institute of Technology that aims to cut carbon emissions.
GE is contributing $7.5 million to the MIT Energy Initiative for research, particularly in solar power, energy storage, advanced power grids and carbon sequestration, company officials said.
“This partnership really is about advancing the state of the art in low-carbon technologies,” said Steve Bolze, chief executive of the $29 billion GE Power division.
EnerNOC has been awarded a multi-million-dollar contract by Consolidated Edison for the Brooklyn-Queens Demand Management program, part of New York’s Reforming the Energy Vision initiative. The program’s aim is to reduce demand in certain areas of New York City, delaying or eliminating the need for a $1.2 billion substation.
The BQDM project has been described as the largest modern “non-wires” alternative program in the U.S. relying on the use of energy efficiency and demand-side management in lieu of traditional generation and distribution infrastructure.
Duke Energy and 33 solar developers reached an agreement that will allow many solar generation projects to go forward and interconnect with the utility’s grid.
Earlier this summer, Duke announced that so many solar projects are seeking interconnection with their grid that it might cause problems and was going to require each new project to undergo a technical review. The new agreement allows the projects to connect while preserving Duke’s right to disconnect if problems arise. There are 3,300 MW of solar projects in various stages of planning and construction in North Carolina.
“In some areas of our system, we’re reaching a saturation point with solar, and in some places it is ill-placed,” a Duke spokesman said. The intermittent nature of the generation could cause problems with some of the lower-voltage circuits, the company says.
Riverside County officials are advancing a plan to create an alternative retail electricity supplier that would supplant Southern California Edison in unincorporated areas of the county. The officials say that the community choice aggregator, which would purchase power directly from producers, would allow county residents to lower their costs and increase reliance on renewables.
The county plans to engage a third-party consultant to develop and run the program, which would require approval from the state’s Public Utilities Commission. Residents and businesses will be automatically enrolled in the program but could opt out and continue using SCE if they choose. Incorporated communities would have the option to join up after the program is implemented.
Community choice aggregators are authorized under a 2002 state law. Though only four have been formed, renewable advocates are promoting them as a mechanism to allow communities to have more control over the source of their electrical power.
Regulators have approved a 2% rate hike for Duke Energy customers to help the company pay for its beleaguered Edwardsport coal-gasification plant.
Under a settlement, Duke will pay $87.5 million of deferred operating costs dating from when the plant went into service in 2013. The plant’s price tag has climbed to $3.5 billion from its original estimate of $1.9 billion.
The settlement was supported by the state Office of Utility Consumer Counselor, along with industrial customers, environmentalists and consumer advocates. It would result in an additional $1.83/month for the typical residential customer. The company has absorbed about $900 million in construction overruns on the plant.
IUB Denies Permanent Stay to Dakota Access Construction
The Utilities Board unanimously denied landowners’ request for a permanent stay of construction of the Dakota Access pipeline pending a court ruling on whether eminent domain can be used to access their properties.
The board heard about 45 minutes of testimony before deliberating in closed session. When it returned to open session, Chair Geri Huser said the board found that the potential harm of a permanent stay outweighed the potential benefits, as it found little chance of success in the petitioners’ complaint before the Polk County District Court.
The landowners had requested an emergency session of the board to hear their request. But Huser said “any apparent emergency that may exist was created by the petitioners’ own actions and their own decisions.” The board did extend a temporary stay currently in place until 9 a.m. Monday to give the landowners time to file an appeal in court. Commissioner Nick Wagner voted against the extension.
The Public Service Commission has scheduled two public hearings to discuss PEPCO’s request to increase its electric distribution rate by $104 million for 560,000 customers in Prince George’s and Montgomery counties. A typical residential customer would pay $13 more a month under the proposed rate. (Case No. 9418)
Hearings will be Sept. 6 at the Montgomery County Executive Building in Rockville, Md., and Sept. 8 at Prince George’s Community College in Largo, Md.
NRG Energy will pay $1 million to settle a lawsuit alleging two coal-fired plants illegally released high levels of nitrogen in wastewater.
The state filed suit in 2013 alleging NRG’s Chalk Point and Dickerson stations discharged illegal amounts of nitrogen and phosphorus into the Potomac and Patuxent rivers. The chemicals have been blamed for feeding algae that suck oxygen out of the Chesapeake Bay, creating dead zones for fish, crabs and vegetation.
In some years, the state said, the Chalk Point plant released 20 times as much nitrogen as its permit allowed. NRG will also pay $1 million to fund environmental restoration projects and invest $10 million to upgrade the wastewater systems at the two plants.
Public Service Commission Chair Sally Talberg told the Senate Energy Committee last week that the state would go “dark” in 10 years if policymakers did not address an impending electricity shortage.
The committee discussed the PSC’s recent five-year outlook, which predicts reliability challenges during peak demand in the Lower Peninsula, although it forecasts the state will meet minimum reliability standards through imports for the foreseeable future.
State Sen. Mike Shirkey (R) downplayed the report, telling reporters it could be “ripe with people cherry picking pieces of information and then reframing them to advance their narrative.”
Residents Asked to Conserve Water to Help Colstrip Plant
Williams
Colstrip residents were asked to limit their water use so the nearby power plant can continue to safely operate. The notice came at the request of Talen Energy, which operates the 2,100-MW plant.
Colstrip Mayor John Williams asked the city’s 2,300 residents to minimize their use of water for sprinkling and irrigation through the end of August. Williams said low water levels and high temperatures have caused problems with Talen’s water intake system on the Yellowstone River.
Lincoln Electric Plans to Show Off New Solar Farm in September
Lincoln Electric System will dedicate the state’s first commercial solar energy park next month and commemorate the event with tours for customers who helped finance the project.
The utility’s SunShares program allows about 1,200 enrolled customers to pay extra on their monthly bills to support solar energy.
The 5-MW, $8.9 million community solar project is owned by developer Enerparc. LES has a 20-year contract to buy power from the company. Construction began in March, and it went online in late June, producing enough electricity to power about 900 homes.
The Division of Rate Counsel said it will argue against FirstEnergy’s plan to spin off Jersey Central Power & Light’s transmission facilities into a new company to be called Mid-Atlantic Interstate Transmission. The assets include about 2,500 miles of transmission lines and towers.
“We believe that ratepayers are getting the short end of the stick because MAIT is getting these at a very, very favorable price,” said Stefanie Brand, the division’s director.
The Public Regulation Commission is being criticized for its decision last week to reopen hearings for Public Service Company of New Mexico (PNM)’s proposed rate increase. Commissioners said that the case could be extended through December if the utility decides to submit more evidence showing that its energy investments are prudent.
Reopening the proceedings, which began in April, would undermine a determination earlier this month by hearing officer Carolyn Glick, who recommended a 6% increase rather than the 15.8% increase PNM is seeking to cover some $123.5 million in costs. The company has threatened to go to court if the lower increase is approved.
Intervenors said Aug. 25 that the PRC’s decision gives the company too much leeway. If the case is reopened, it would be PNM’s third opportunity this year to provide proof that its investments are fair for ratepayers.
Entergy Would Get Termination Fee if FitzPatrick Sale Fizzles
The New York Power Authority will pay Entergy a $35 million termination fee if the sale of the FitzPatrick nuclear plant to Exelon falls through.
According to spokesman Steven Gosset, NYPA established a $35 million letter of credit that will pay Entergy if the PSC does not approve the sale to Exelon by Nov. 18. Entergy also would get the money if the New York State Energy Research and Development Authority fails to sign a contract by Nov. 18 that guarantees nuclear subsidies for FitzPatrick.
Both of those scenarios, and others that would trigger the fee, are unlikely, said Gosset, who declined to provide a copy of the letter. Entergy also declined to comment on the agreement.
University, Energy Companies Partner in Carbon-Capture Efforts
A diverse group of energy businesses are partnering with the University of North Dakota to develop carbon capture and sequestration technology.
ALLETE Clean Energy, Minnkota Power Cooperative and BNI Energy signed a memorandum of understanding with the university’s Energy and Environmental Research Center to submit a bid to the U.S. Department of Energy for a proposal they call Project Tundra, which aims to devise a way to reduce carbon dioxide emissions from existing coal-fired plants.
U.S. Sen. John Hoeven (R) said he had worked to secure $30 million to assist in the development of commercially viable and retrofittable CCS technology. The bill has passed in the Senate and now awaits House approval, Hoeven said.
AEP Asks PUCO for Distribution Hike to Counter Residential Solar
American Electric Power has asked the Public Utilities Commission for permission to increase the fixed monthly distribution charges for all of its customers to make up for the number of residential customers who are installing rooftop solar and energy efficient technology.
AEP Ohio says it has seen the number of solar net metering customers rise from 286 in 2011 to 983. AEP is asking to increase the average customer charge from $8.40 to $18.40.
“This increase in net metering customers is currently resulting in a shift of the recovery of fixed costs from net metering customers to non-net metering customers,” company spokeswoman Terri Flora said. The hike wouldn’t result in any more revenue for the company, Flora said, but opponents say the increase would discourage installing solar distributed resources.
Regulators Hear Arguments On PSO’s $130M Rate Case
The Corporation Commission last week heard arguments in the long delayed matter over Public Service Company of Oklahoma (PSO)’s requested $130 million electric rate increase. Consumer advocates argue that existing rates should be cut by up to $7 million, and an administrative law judge recommended a nominal rate increase of $676,000.
PSO filed the rate case in July 2015, and the company implemented an interim $75 million rate increase in January after it did not receive a final decision within the required six-month time period. The interim rate increase is subject to refund if the commission finds the utility wasn’t entitled to the extra revenue.
The company said the rate increase was needed to recover $453 million in system investments from February 2014 to July 2015. The utility also spent another $215 million this year on plant upgrades to meet federal environmental regulations.
About 300 people attended a public meeting held by the Public Utilities Commission to gather comments on a proposed wind farm north of Avon.
The 201-MW wind farm, proposed by developer Prevailing Winds, would have 100 turbines generating up to 860 GWh annually. Company representatives gave a presentation about the project and argued for the need for more wind power.
The project has generated opposition from some neighboring landowners. Some see the turbines as “eyesores,” while the others said they were concerned about potential health effects.
Environmental advocates at a Sunset Advisory Commission hearing on the Railroad Commission urged state lawmakers to require coal companies to set aside resources to cover the cost of cleaning up mines. Coal companies are currently allowed to self-bond, a process that could leave residents on the hook for more than $250 million in environmental cleanup costs if the companies renege on their obligations.
The state currently allows four coal mining companies to self-insure the cost of cleaning up seven strip mine operations. With the coal industry’s financial challenges, experts say taxpayers are at risk.
The Sunset Commission, which assesses the continued need for state agencies, held the hearing to get feedback on a scathing report published in April by its staff advisory committee on the inefficiencies and inadequacies of the Railroad Commission, which, despite its name, regulates energy extraction industries in the state.
FirstEnergy asked state regulators to approve a $6.9 million rate surcharge for MonPower and Potomac Edison customers to pay for upgrades at two coal-fired plants.
The requests were made possible by a coal-industry supported bill approved five months ago, which allowed utilities to pass through costs for upgrading their coal-fired plants without having to go through a formal rate proceeding. At the time the bill was introduced, FirstEnergy said it didn’t have any plans to use the provision.
The total cost of the upgrades at the Harrison and Fort Martin plants will be more than $76 million, according to company filings. The surcharges, if approved, will increase a typical residential customer’s rates about $6.60 per year.