MISO is considering whether the transfer limit of 876 MW between MISO South and MISO North used in this year’s Planning Resource Auction should be adjusted for the 2017/18 capacity auction and if resources supplying the capacity will be delivered on a firm or non-firm basis.
MISO posed several questions to stakeholders at the Aug. 3 Resource Adequacy Subcommittee (RASC) meeting:
Should the starting limit for the sub-regional power balance constraint (SRPBC) prior to accounting for firm transmission service be 2,500 MW or 1,000 MW?
In treating firm transmission service sold across the contract path, should SPP:
Differentiate for firm transmission that is or is not associated with a capacity sale in another market?
Consider the ability of a transmission customer to redirect transmission service (i.e., redirect sink from PJM to MISO North)?
Treat pseudo-tied resources differently?
Under MISO’s settlement with SPP over the use of its transmission system, flows between the North and South regions are considered non-firm. The agreement “explicitly did not provide firm contract path or firm flow entitlements,” according to MISO.
MISO South region represented in orange.
MISO’s 2016/17 PRA enforced a limit of 876 MW for South-to-North transfers. The initial limit of 2,500 MW was downgraded to 876 MW after MISO subtracted firm exporting reservations that had completed a feasibility analysis.
“We’re trying to achieve an efficient but reliable PRA outcome,” explained Kevin Sherd, MISO director of forward operations planning. “If we approve 2,500 MW and can only get 500 MW delivered due to congestion, that’s a problem. The higher the number goes from South to North or Zone 1 to Zone 6,” the higher the risk, he said.
“I’m not arguing one or the other today. I’m teeing this up for a September discussion,” Sherd said.
Currently MISO allows two opportunities for resources to participate in the PRA as firm capacity: as a network resource interconnection service (NRIS) or as an energy resource interconnection service (ERIS) with a firm point-to-point transmission reservation.
MISO Manager of Resource Adequacy Coordination Laura Rauch said the RTO completes an annual deliverability test on NRIS generators to make sure they are able to deliver power to network load. ERIS generators are analyzed via an annual long-term transmission rights feasibility test and through the expansion planning process.
ITC Holdings’ Ray Kershaw suggested that opening up participation for generators without firm rights might allow some non-firm external generators to participate in the PRA. “You’re opening up a whole lot here,” Kershaw said.
Dynegy’s Mark Volpe asked if MISO could use data from this summer to establish anticipated power flow needs to make a more educated decision.
Sherd said multiple days this summer could provide data for an estimated transfer limit and said MISO would bring numbers back to the next RASC meeting.
Other stakeholders asked what the Independent Market Monitor thought of changing the transfer limit.
IMM staffer Michael Chiasson said the Monitor will review MISO’s questions but declined to comment on the transfer limit. The Monitor’s State of the Market report recommended improving the modeling on transfers by introducing a derating factor representing the probability that MISO neighbors will request a reduction from the 2,500-MW transfer limit because of an emergency. (See Monitor’s State of the Market Report Seeks Changes to MISO ELMP.)
Stakeholder input on the matter is requested before the Aug. 31-Sept. 1 RASC meeting. MISO hopes to adopt a solution for the 2017/18 PRA.
MISO Inserting More Deadlines into PRA Timeline
MISO wants more official deadlines for market participants worked into the PRA timeline, Manager of Resource Adequacy John Harmon said.
The RTO is proposing to attach explicit due dates to multiple data submittals made before the auction, including quarterly Generating Availability Data System figures, annual output data for run-of-river and biomass resources, load forecast revisions after Nov. 1 and the unforced capacity value confirmation.
“These [requirements] aren’t new, but we’ve never had definitive dates. No new action is required … but a lot of market participants said, ‘I didn’t know you needed this by this date,’” Harmon said. “We had trouble during the last auction working with folks to make sure deadlines were met.”
The RTO will also attach consequences to missed deadlines, Harmon said, but not before MISO Client Relations reaches out to market participants about delinquent information. After that, MISO will process late submissions in monthly “batches” rather than on an individual basis and could deny requests for late submissions altogether, possibly disqualifying the market participant from offering in the PRA.
SPP and MISO are inching closer to agreement on a second joint transmission study on their seams, though they continue to disagree how “targeted” a targeted study should be.
The two grid operators have agreed to conduct another transmission study this year, using the carbon-constrained scenarios in SPP’s 2017 Integrated Transmission Planning 10-Year Assessment and MISO’s 2016 Transmission Expansion Plan as starting points.
The study, to be completed in the first quarter of 2017, will use the needs identified in the regional studies to develop solutions that benefit both RTOs. It will model the years 2020, 2025 and 2030; SPP will have to create a model for 2030, which is not included in the 2017 ITP10.
MISO prefers limiting the study to the seams between it and the Integrated System, which joined SPP last October, while SPP favors looking at a broader geographic area.
Staff shared the draft scope with the RTOs’ Interregional Planning Stakeholder Advisory Committee on Aug. 2, with SPP’s Seams Steering Committee again taking up the issue Aug. 3.
MISO staff said it preferred to focus on process improvements this year, but it did propose that a set of five needs — three belonging to SPP, two to MISO — be included in the joint study. SPP suggested 10 regional needs, eight in its footprint and two in MISO’s, that it said would “provide the most value to be evaluated” in the Coordinated System Plan study.
Time Best Spent
MISO agreed to a joint study this year only after a May meeting of its Planning Advisory Committee. (See “MISO Rethinks Coordinated Study with SPP,” MISO Planning Advisory Committee Briefs.)
“We have to ask ourselves, where is our collective time best spent?” said MISO’s Eric Thoms, manager of planning coordination and strategy, in arguing against a broader study. “The 2014-15 [study] took three extra months. It took a herculean effort to finish … that’s the most diplomatic way to define it.”
“My impression was [MISO has] already decided what they want to do, and it’s up to us to convince them otherwise. I don’t like that position,” SSC Chair Paul Malone, of the Nebraska Public Power District, said at Wednesday’s meeting.
The IPSAC conference call also left some SPP stakeholders questioning the stakeholder meeting process. The Wind Coalition’s Steve Gaw expressed concern that the decision to use a targeted scope was made prior to the joint stakeholder meeting.
“I thought the [IPSAC] call was about defining the scope,” Gaw said at the SSC meeting. “It confused me that a decision has already been made about [the scope] being targeted.”
David Kelley, SPP’s director of interregional relations, agreed with Gaw. “The way you described it should have been the way to work,” he said. “We bring issues to the table, [and] we decide if they’re enough to warrant a study.”
Staff set an Aug. 24 deadline for stakeholders to submit comments on the draft scope. MISO has another PAC meeting scheduled Aug. 17 that could further clarify the study’s final scope.
The IPSAC has tentatively selected Sept. 7 to finalize the scope with stakeholders.
Task Force to Look at Non-Order 1000 Regional Cost Allocation
In a related matter, the SSC voted 8-5 to create a task force to revise a proposed business practice for regional cost allocation of seams projects outside FERC’s Order 1000 process. The task force will use a white paper that has already been through the stakeholder process to document the policy. The group will be chaired by Oklahoma Gas & Electric’s Jake Langthorn.
MISO will monitor maximum generation procedures as a result of pricing errors during a late July max gen warning, the RTO’s Kevin Larson said at last week’s Market Subcommittee meeting.
Jeff Bladen, executive director of market services, said pricing corrections for the multiple scheduled resources and one emergency resource were “relatively small” and represented less than $1/MWh. (See “June Energy Prices Up Across Footprint; New Emergency Pricing Encounters Snag in July,” MISO Informational Forum Briefs.)
David Sapper of Customized Energy Solutions asked if MISO could have withdrawn the max gen warning.
Rob Benbow, MISO’s senior director of systemwide operations, said the RTO forecast that high loads would persist throughout the day. “It’s one of those things where you’ve got data saying one thing, but … the load did not materialize,” Benbow said.
In the coming months, Bladen said MISO would review the performance of the new emergency offer floors.
Task Team to Take on 5-Minute Settlement Issue
MISO has charted a course for achieving five-minute settlement calculations with the creation of a six-month-long task team.
John Weissenborn, MISO’s director of market services, said the task team will discuss which day-ahead, real-time and financial transmission rights charges might be impacted, and identify changes needed for the Tariff and Business Practices Manuals. It will then shape the subsequent compliance filing due this winter.
Weissenborn said MISO hopes to have five-minute settlement language completed by December. The RTO expects five-minute settlements of energy resources and operating reserves in place by January 2018.
Currently, MISO’s real-time settlement occurs with an hourly average price while real-time operating reserve settlements are already conducted on a five-minute basis.
FERC Order 825, issued in June, directed RTOs to align settlement and dispatch intervals in real-time markets by January 2017.
However, MISO said even after Order 825 is implemented, interchange transactions will continue be settled at the 15-minute intervals that were instituted last June, as the settlement is performed using five-minute prices.
Weissenborn said MISO will have to explain the continued used of the 15-minute interchange transaction settlements in the compliance filing to FERC. “I think we’ll be successful in explaining that,” he said.
Brian Garnett of Duke Energy asked if the RTO expects companies to provide information on a five-minute basis.
Weissenborn said MISO “spent a lot of time talking with SPP on their implementation.” He said SPP experiences roughly 10% of market participants reporting at five-minute intervals and uses a curve fitting to calculate the rest. Weissenborn said most companies within SPP continue to report meter information hourly.
MISO Wants Future Control in Flow-Control Resources
Beibei Li, a senior operations engineer, said MISO is evaluating the need for optimization of flow-control resources to follow a real-time dispatch target.
MISO says its flow-control resources “are not directly represented in the market dispatch process” and that its inability to control them leads to inefficiency in the physical flow. This inefficiency, the RTO said, could impact AC system dispatch and “introduce unnecessary losses and congestion across the surrounding AC system.”
The RTO envisions increased use of several types of flow-control resources in the future, including HVDC lines, phase shifters, variable frequency transformers and series compensation flexible AC transmission system devices, designed to increase control and power transfer capability on the network. (See MISO Grid Meets ‘Big Data’.)
Li said MISO wants to be able to optimize its fleet of flow-control resources by the fourth quarter of 2018.
MISO staff plan to return to the October MSC meeting to deliver an update with project objectives and rough work plan.
Real-Time Offer Enhancements Start Time Delayed, Storage Assignments Divvied Up
Bladen reported that MISO’s real-time offer enhancements project will be delayed more than a month while MISO runs additional software testing.
The project, which will allow market participants to make overrides to real-time offers in MISO’s portal, is now scheduled for an early September go-live date. MISO was expecting to have the project completed by the end of July.
Although real-time offer enhancements are on hold, energy storage work is moving ahead. Bladen said MISO has divvied up tasks related to creating a storage policy.
Clarifying a storage interconnection definition has been referred to the Planning Advisory Committee and Interconnection Process Task Force. The Resource Adequacy Subcommittee will tackle how behind-the-meter generation can participate in the capacity market and decide how a stored energy resource capable of providing four hours of continuous power can participate in the regulation market.
Bladen also said MISO has had a low response rate to its annual customer opinion survey. MISO sent out 1,200 requests for responses to market participants. Bladen said just 9% of companies had responded as of Aug. 2. “That’s quite low, even at this stage in the process. We would very much like to get above the 9% we’ve got so far,” he said.
The survey window was extended by a week and is open until Aug. 12.
FERC last week certified a settlement between Entergy Services and the Louisiana Public Service Commission in the corporation’s ninth annual bandwidth filing under its system agreement, saying it “resolves all issues of dispute” (ER15-1826).
Entergy filed the settlement in March. In April, FERC staff filed supporting comments and Louisiana PSC staff approved the agreement, which had been set for hearing and settlement procedures in October. (See FERC Sets Hearings for Entergy’s Cost Allocations.)
Entergy’s Nine Mile 6 Plant in Westwego, La. Source: Entergy
At issue was Entergy’s exclusion of its Arkansas subsidiary from the allocation of its operating companies’ 2014 production costs. The corporation’s cost allocation under its system agreement has been regularly challenged by regulators since it took effect in 2007.
Entergy’s six operating companies essentially operate as one system, although each has different costs. Payments are made annually by Entergy’s low-cost operating companies to the highest-cost company in the system, using a “bandwidth” remedy that ensures no company has production costs more than 11% above or below the system average.
Public Policy, Market Efficiency Theme of PJM’s Grid 20/20
Public policy goals and market efficiency are the topics of PJM’s upcoming Grid 20/20 conference, to be held Aug. 18 in Audubon, Pa., the RTO announced.
Panelists will explore how market rules can further public policy goals without distorting market principles. Discussions will include changing the minimum offer price rule, restructuring the process of procurement and other “outside the box” alternatives.
Constellation, Direct Energy Vie for Residential Customers
Exelon subsidiary Constellation has begun offering residential electricity supply plans in Delmarva Power territory. The company is featuring fixed-rate plans of one or two years with gift cards and no enrollment charge.
Also this summer, the state declared Direct Energy the “electric retail supplier exclusively contracted by the state of Delaware.”
In addition to lower fixed prices, Direct Energy gives residents who enroll a free Nest Learning Thermostat and a six-month heating and cooling equipment protection plan.
Louisville Gas & Electric and Kentucky Utilities have filed a request with the Public Service Commission to start a community solar network. The solar facility would be established in Shelby County on a subscription-based system, allowing residential, business and industrial customers to join and receive solar energy credits.
The PPL-owned utilities said the site is big enough for a 4-MW facility, but plans call for it to be built in 500-kW sections, based on customer demand. Construction would begin when the first section is fully subscribed.
Hundreds in Financial Limbo as Solar Credits Fade Away
Hundreds of rooftop solar users have been thrown into financial limbo after the state’s Department of Revenue warned in July that it had run out of money to fund tax credits intended to promote installations.
Lawmakers decided last year to cap the solar tax credit program in the face of worsening budget woes. Legislators also widened the cap to cover everyone who purchased solar in 2015, including those who bought their systems well before any changes were proposed.
The solar tax credit is among the most generous in the country, covering up to 50% of the first $25,000 spent to install a rooftop solar system, or up to $12,500 total. It can be combined with a 30% federal tax credit for extra savings. The program had a 2017 sunset, but lawmakers went a step further last year and capped credits for purchased systems at $25 million.
Kinder Morgan surveyors are mapping the route of its proposed 2-mile natural gas pipeline, part of the three-stage $86 million Connecticut Expansion Project, through a state forest.
The state Department of Conservation and Recreation granted permission for surveying and marking the pipeline’s right of way through Otis State Forest. No permission for land clearing has been granted as the developers await FERC approval, and legal challenges to the project continue.
Opponents argue that the old-growth forest is protected by the state constitution, as the land was acquired by the state for conservation a decade ago at a cost of $5.2 million.
Gov. Charlie Baker on Monday signed a bipartisan bill that requires utilities to obtain 9,450 GWh annually of clean energy from large-scale Canadian hydropower, onshore wind power and solar, and 1,600 MW of offshore wind from developers who currently hold federal leases.
“Massachusetts is always at the forefront of adopting innovative clean energy solutions, and this legislation will allow us to build on that legacy and embrace increased amounts of renewable energy, including hydropower,” Baker said. The bill was passed a week ago in the waning hours of the recently concluded legislative session. (See Massachusetts Bill Boosts Offshore Wind, Canadian Hydro.)
Attorney General Bill Schuette says Enbridge Energy’s application to install more pipeline support anchors is evidence that the company’s Line 5 pipelines under the Mackinac Straits are currently in violation of safety standards, which require pipe-support anchors at least every 75 feet.
Enbridge recently submitted a request for a permit to install up to 19 additional anchors. The company says it informed state officials of the need for more support after a June inspection.
The company has been under heightened scrutiny since a 2010 pipeline break spilled more than 800,000 gallons of oil into the Kalamazoo River. In July, it agreed to pay $177 million to settle claims in connection with that spill.
The state Supreme Court last week unanimously ruled to block a referendum from appearing on the Nov. 8 general election ballot that could have restored favorable net metering rates to customers. The court ruled that the way the question was formed was “not only inaccurate and misleading, but also argumentative.”
The referendum question has been seen as a battle between NV Energy and the solar industry. The state, after heavy lobbying from NV Energy, set lower net metering rates this year. Many solar companies announced they were leaving the state, saying the new rates effectively suffocated the solar industry there.
Solar advocates expressed disappointment in the ruling, but said they would pursue alternative strategies. “We look forward to crafting strong solar policies that give Nevadans the freedom to power their homes and communities with clean solar energy,” said Erin McCann, campaign manager for Bring Back Solar.
PUC Adopts New Energy Efficiency Resource Standard
The Public Utilities Commission approved an Energy Efficiency Resource Standard, creating a framework for achieving cost-effective energy savings.
Programs will be required to demonstrate they are cost-effective and satisfy goals laid out in the standard. According to the PUC, the standard will help the state meet its 10-year State Energy Strategy goals.
During the first three-year period of the EERS, the cumulative goal for electric savings will be 3.1% of delivered 2014 kilowatt-hour sales, with interim annual savings goals, by 2021. Programs under the standard will begin on Jan. 1, 2018.
Public Regulation Commission staff have expressed doubt about the public benefits of Public Service Company of New Mexico’s plans to install advanced metering infrastructure (AMI), while eliminating the jobs of the 125 employees who monitor them.
Charles Gunter, accounting bureau chief for the PRC’s utility division, said the commission staff support the concept of advanced metering, but PNM’s projected costs to replace about 531,000 electricity meters “are uncertain and indicate that the AMI project would not produce sustained savings, compared to the existing metering system, until 2024.”
The attorney general’s office also submitted testimony from an expert witness, Columbia Group President Andrea Crane, who said the project would result in a net cost of $12 million instead of the net savings of nearly $21 million that PNM claims.
The state toxicologist said he discussed with Gov. Pat McCrory the “scientifically untrue” health advisories the state released that downplayed the risk of well water contamination near Duke Energy plants, but the governor’s office strongly denied ever having that conversation.
State Toxicologist Kenneth Rudo testified in a deposition that state-issued health advisories saying the water was safe to drink were wrong and that he told McCrory and other state officials. Rudo, in a later interview with The Charlotte Observer, said he spoke with the governor by phone for about four minutes and said he advised that well owners should be warned of the risk, as an earlier state-issued comment had done. Instead, the state issued a statement saying tests showed well water met federal clean water standards.
“We don’t know why Ken Rudo lied under oath, but the governor absolutely did not take part in or request this call or meeting as he suggests,” Chief of Staff Thomas Stith said in a statement. Lawmakers passed legislation calling for Duke to provide clean drinking water to affected residents.
Opponents of a new $1 billion natural gas power plant lost their appeal to the Utilities Commission because they failed to post a nearly $100 million guarantee to cover potential construction delays.
The commission had approved the Ashville plant to take the place of a coal-fired facility run by Duke Energy.
The appeal was filed by NC WARN and the Climate Times.
Contractors are pumping about 7,500 cubic yards of grout into an abandoned underground lignite mine, part of a project conducted by the Abandoned Mine Lands Division of the Public Service Commission. The drilling and grouting project will prevent dangerous sinkholes from forming as a result of mine subsidence.
The cost of the work is covered by federal reclamation fees on active coal mines. The division has conducted two major and one minor project this year; since its start in the 1980s, it has conducted more than 100 reclamation projects, usually finishing four to 10 annually.
Wilton was the focal point for state lignite mining in the early 20th century.
Offshore Turbine Installation Starts at Block Island Project
Deepwater Wind has begun installation of the first offshore wind turbines in the U.S. at its project 3 miles off Block Island. The turbines will each rise 589 feet above the ocean’s surface.
The work kicked off a month-long push to complete construction of the 30-MW wind farm. Two months of testing will follow before full operation starts in the fall.
Deepwater has budgeted three days to put up each turbine, the company says. In Europe, where thousands of offshore wind turbines are in operation, the standard is a day and a half.
Natural Resources Board Buys Riverfront Land from Xcel
The Natural Resources Board last week approved the purchase of nearly 1,000 acres of riverfront property from Xcel Energy, which had planned to build a power plant on the site.
With the board’s approval, the state’s Department of Natural Resources will pay almost $2.1 million for 990 acres along the Lower Chippewa River southwest of Eau Claire. The property includes 18,000 feet of shoreline and a section of the Chippewa River Trail.
Xcel was planning to use the site for a nuclear power plant that it never built. The utility still owns just more than 3,400 acres of nearby riverfront land.
University Receives Xcel Grant for Microgrid Research
The University of St. Thomas has received a $2.1 million grant from Xcel Energy for microgrid research.
Engineering professor Greg Mowry said about $1.5 million of the grant will be used to construct a research facility and a 30- to 60-kW microgrid, with an accompanying solar array.
The initial goal is not to supply power to the university, though that may come later. The first phases of the project involve managing “dummy loads” and simulating different energy sources, such as a wind turbine “emulator” controlled by researchers and students.
Gov. Matt Mead appealed to the U.S. Interior Department to end its moratorium on new coal leases in a 76-page letter with 4,179 pages of attachments sent to Secretary Sally Jewell and Bureau of Land Management Director Neil Kornze.
“States like Wyoming, where coal is produced and environmental stewardship is a model for the nation, were not consulted and were caught by surprise,” Mead wrote. “Now, national revenues, energy users across the nation, coal miners and their families are at risk. The justification for this moratorium and the manner it was unveiled are unjustifiable.”
Mead said the moratorium, announced Jan. 15, is dramatically impacting jobs, energy security and energy independence, and that it specifically targets the state, the nation’s leader in coal production. The state produces roughly 40% of the nation’s coal, most of which is mined from federal land.
A segment of the long-awaited Tres Amigas transmission project in New Mexico is expected to begin transmitting power to CAISO in early 2017. A company executive confirmed that construction of a 35-mile portion of the line called the Western Interconnect began after FERC approved the project last December and is expected to be completed at the end of the year.
“It’s a huge win for New Mexico: that much wind developed here and going all the way to California [is] a great business development piece, and a great asset for the state,” Tres Amigas CFO Russell Stidolph said.
The Broadview and Grady wind farms will be allocated 497 MW of the line’s 1,100 MW of capacity.
NextEra to Sell $1.5B in Equity to Help Finance Oncor Purchase
NextEra Energy said it will sell $1.5 billion of equity units to Goldman Sachs, Credit Suisse and Mizuho Securities.
Each equity unit will be issued for $50 and will consist of a contract to purchase NextEra common stock in the future and 5% interest in a $1,000 NextEra Energy Capital Holdings debenture, a bond without collateral, due Sept. 1, 2021. The proceeds of the sale will go toward financing the company’s acquisition of Oncor, it said.
After announcing it would spend $1 billion on wind projects in Iowa, Alliant Energy’s CEO said the company will also consider investing in wind buildout in neighboring Wisconsin.
“We are also evaluating additional wind energy purchases and future investments for Wisconsin customers,” Alliant CEO Pat Kampling said during an earnings call. “This will add economic and stable energy to our fuel cost and allow us to offset market purchases of energy.”
Alliant reported net income of $86.4 million ($0.37/share) for the second quarter this year, compared to $67.6 million ($0.31/share) for the same period last year.
Dynegy reported a net loss of $800 million for the second quarter this year, compared to net income of $388 million for the same period last year.
The announcement comes as Dynegy completed a “rebranding,” with a new logo and redesigned website, in recognition of becoming one of the country’s largest independent power producers after purchasing 17 power plants from Paris-based ENGIE.
Solar Mosaic Raises $220M for Solar Installation Loans
Solar Mosaic, a six-year-old California company that acts as a middleman between residential customers and solar installation companies, raised $220 million to finance installations around the U.S. The company provides loans with fixed interest rates to residential customers, with an average loan of about $30,000.
The company has previously secured about $200 million in debt in April and said that it would support loans for about 5,000 customers. More than 250 solar companies use Solar Mosaic to arrange funding for their customers.
Exelon has named Maggie FitzPatrick, formerly of Johnson & Johnson, as its senior vice president of corporate affairs, philanthropy and customer engagement, effective Aug. 29. She takes the place of Jamie Firth, who is retiring at the end of this year.
FitzPatrick will oversee communications, brand strategy and the disbursement of charitable giving out of D.C., where Exelon’s headquarters moved following its acquisition of Pepco Holdings Inc. She also takes a seat on Exelon’s executive committee.
Exelon’s Pepco subsidiary hired Clarissa Beyah-Taylor as its vice president of communications to oversee public outreach for the three PHI utilities: Atlantic City Electric, Delmarva Power and PEPCO.
El Paso Electric officials said the company has become coal-free and no longer is using the fossil fuel, making it the only electric utility in Texas and New Mexico without any coal-fired generation.
EPE recently completed the sale of its part ownership in the Four Corners coal-fired power plant on the Navajo Indian Reservation near Farmington, N.M., the company’s sole source of coal power. The company received 5% of its power this year from the plant, which has been replaced with natural gas-fueled generators and solar power.
ExxonMobil to Invest $15M in Renewable Energy Research
ExxonMobil announced it invested $15 million in the University of Texas at Austin Energy Institute to research integrating renewable energy sources into the nation’s current portfolio to reduce the impact on water, air and climate. The research will take advantage of the school’s renewable energy, battery technologies and power grid modeling.
PECO Gives Customers a Glimpse into Neighbors’ Homes
PECO Energy has embarked on a behavioral experiment to reduce power consumption by sharing customers’ usage with their neighbors.
The utility plans to provide the reports every other month for two years. All customers, regardless of whether they were chosen to receive the mailed reports, can view the data online.
The plan is part of PECO’s effort to cut 2 million MWh and lower peak demand by 161 MW by 2021.
Black Hills Energy in Midst of $20M Tree-Trimming Effort
South Dakota’s Black Hills Energy has invested more than $10 million during the past three years trimming trees and other vegetation along its electricity lines and intends to spend $10 million more in 2016-17, according to a report approved Aug. 2 by the state’s Public Utilities Commission.
The five-year project to trim vegetation along 69-kV rights of way stems from a 2012 agreement between the company and the commission to protect the utility’s distribution system. Outages caused by trees numbered 116 in 2011 but fell to 38 in 2014.
PUC Chairman Chris Nelson said the results looked good but expenses have been “surprisingly” more than expected. “The numbers are higher than we had been anticipating, and we have been given an explanation why that is.”
Once Fastest-Growing Austin Firm, Solar Company Faces Bankruptcy
Austin-based Revolve Solar, formerly one of Texas Hill Country’s largest clean-tech companies, has filed for Chapter 11 bankruptcy protection.
The company’s CEO, Tim Padden, said the bankruptcy filing was the result of a billing dispute with a vendor and that he was optimistic the matter could be resolved. Revolve filed a voluntary petition for bankruptcy on July 31 in U.S. Bankruptcy Court for the Western District of Texas.
The bankruptcy comes less than a year after Revolve was honored as the second-fastest-growing Austin company, with revenue of more than $10 million from 2012 to 2014. During that time, the company said its revenue grew from $1.76 million in 2012, the year it was founded, to $15.9 million in 2014.
American Electric Power purchased a series of solar and energy storage projects in Hawaii from EnSync Energy Systems. Neither AEP nor the Wisconsin-based company put a price tag on the acquisition, but EnSync said the projects were the “major portion” of its investment of $13 million.
EnSync is switching to a business model according to which it will be more reliant on projects using power purchase agreements, rather than selling its energy storage equipment.
AEP’s subsidiary, AEP OnSite Partners, sees more opportunity in Hawaii. “Hawaii provides ideal conditions to create customer value with solar resources combined with energy storage,” said Joel Jansen, COO of AEP OnSite Partners. “These projects are the first integrated solar and storage projects in Hawaii.”
EFH Creditors See Industry Vet as Luminant, TXU Energy CEO
Energy Future Holdings creditors filed court papers last week that said energy veteran Curtis Morgan would become CEO of power generator Luminant and retailer TXU Energy once their parent company emerges from bankruptcy.
Morgan has 35 years of experience with Reliant Energy, NRG Energy and EquiPower Resources, and he was an operating partner at Energy Capital Partners. He has served on a committee of private equity consultants advising Dallas-based EFH as it winds its way through one of the largest bankruptcies in U.S. history.
If the company’s bankrupty reorganization is approved later this year, Luminant and TXU Energy will break away from EFH as a tax-free spinoff. EFH’s other main business, distributor Oncor, is expected to be sold to NextEra Energy for $18.4 billion.
FERC Commissioner Tony Clark announced through Twitter that he would leave the commission after its next open meeting in September.
Clark
“After 4+ years on FERC, I’m announcing today that the September Commission meeting will be my last,” Clark posted. “Public service has been an honor, but these aren’t meant to be forever jobs. Looking forward to next chapter, whatever that may be.”
Clark announced in January that he would not seek reappointment after his term expired June 30. He had said that he may serve beyond his term until a replacement is found. President Obama, however, has yet to nominate anyone to fill the seat vacated by Philip Moeller, let alone Clark’s. His departure means that FERC will be left without a Republican commissioner.
Report: More EE Standards Under Obama than Any Other President
Under the Obama administration, the Energy Department has finalized more energy efficiency standards than under any other administration, a recent report said.
Regularly updating and creating energy efficiency standards has been part of the department’s duties since President Ronald Reagan signed the National Appliance Energy Conservation Act in 1987. While the department has been publicly touting its progress, the report by two independent groups, the Appliance Standards Awareness Project and the American Council for an Energy-Efficient Economy, validates its claims. The department has adopted 45 standards under President Obama and will potentially adopt 10 more before his term ends next year.
The runner-up to Obama is President George W. Bush; under his presidency, 27 standards were adopted. Bill Clinton’s administration adopted the fewest with only six, the report said. Obama made energy efficiency a top priority for the department after it fell behind in its mandated update quota under Bush, according to the report.
American Petroleum Institute Challenging EPA Gas Rule
The American Petroleum Institute has filed a lawsuit against EPA with the D.C. Circuit Court of Appeals, challenging the agency’s final rule on emissions for new and modified natural gas facilities. The suit says the agency didn’t follow Clean Air Act limitations when developing the regulations.
API joins a coalition of 14 states and a number of trade groups in challenging the rules.
A federal judge last week sharply reduced the potential fine against Pacific Gas and Electric in its criminal trial over gas pipeline violations related to the San Bruno explosion in 2010, which killed eight people and destroyed 38 homes.
U.S. District Court Judge Thelton Henderson slashed the penalty from $562 million to $6 million at the request of prosecutors in the case. Neither Henderson nor the prosecutors provided a reason for the move.
The original penalty would have represented one of the largest corporate criminal fines in history. San Bruno Mayor Jim Ruane said the fine was less important to him than seeing the utility punished.
FERC issued a notice last week alleging that National Energy & Trade and one of its traders, David Silva, engaged in fraudulent trading in the natural gas market in January 2012 by selling a large position in the Texas Eastern M3 market at low prices and then benefiting from the resulting market uptick.
The Nuclear Regulatory Commission issued the final safety evaluation for Duke Energy’s proposed Williams States Lee nuclear plant to be built in Cherokee, S.C., bringing the company one step closer to beginning construction. The commission found no safety issues to prevent the plant from being built.
Duke applied for the licenses in 2007 and received the commission’s final environmental impact statement in 2013, but it still hasn’t made a final decision on whether to go ahead with construction. That decision would come after the commission has issued the two necessary operating licenses, according to the company.
DOJ Opens Investigation into Westar-Great Plains Deal
Coming on the heels of a Missouri Public Utilities Commission staff recommendation that the commission should have jurisdiction over the pending $12.2 billion Westar Energy-Great Plains Energy merger, the federal Department of Justice is also looking into the deal.
Word of the Justice Department investigation came in a report Westar filed with the Securities and Exchange Commission. “We and Great Plains Energy intend to fully cooperate with the DOJ in its investigation,” Westar said in its filing, which did not give details about the reason for the inquiry.
The PUC staff filing said it is looking to see if it can claim jurisdiction, even though Westar operates only in Kansas. Great Plains operates in Missouri. “Staff maintains that all of the known evidence supports a determination that the proposed transaction is detrimental to the public interest and ought not be permitted to go forward,” the staff said.
EIA Predicts NA Carbon-Free Power to Grow to 45% by 2025
The Energy Information Administration projects that by 2025, energy generation from renewable and nuclear resources will grow from 38% to 45%. Part of the outlook is predicated on the recent agreement between the U.S., Canada and Mexico to attain a goal of 50% by then.
EIA also included energy efficiency in the figures, but it didn’t break out the three resources. It predicted a decline in coal-fired generation of about 13% by 2025 and an increase in natural gas generation by 4%. It noted that Canada has already attained a level of 80% clean energy generation, primarily because of its large hydroelectric capacity.
Mexico’s combined nuclear and renewables should grow to 29% by 2025, EIA said. The outlook assumes EPA’s Clean Power Plan is upheld.
White House Requiring All Agencies to Consider Climate
The White House Council on Environmental Quality last week issued guidance under the National Environmental Policy Act that requires all federal agencies to consider the environmental and climate implications of projects.
The directive requires agencies to quantify greenhouse gas emissions and note the potential climate change impacts of each project during the review process. “This increased predictability and certainty will allow decision-makers and the public to more fully understand the potential climate impacts of all proposed federal actions,” the council said in a statement.
The policy change was first proposed in 2010. Republicans complained that it would allow the Obama administration to institute regulations without congressional approval.
NRC Upholds Entergy’s ‘No Booze’ Policy at Vermont Yankee Plant
The Nuclear Regulatory Commission upheld Entergy’s zero-tolerance rule for alcohol at its Vermont Yankee nuclear plant. The commission’s decision was prompted by Entergy’s 2014 suspension and firing of an employee after unopened bottles of alcohol were found in a private vehicle.
A company panel of managers later overturned the suspension, but a further company review reinstated it. A company spokesman said the zero-tolerance policy extended even to empty alcohol bottles that were headed for recycling. “You can’t even have the perception” of alcohol on site, the spokesman said.
At the time of the violation, the plant, which has since been retired, was in full operation with 636 employees.
NRC Reviewing NextEra’s Plan to Correct Seabrook Concrete Issue
The Nuclear Regulatory Commission is reviewing NextEra Energy’s plan to address concrete degradation issues at its Seabrook nuclear generating station.
The degradation is being caused by an alkali-silica reaction (ASR) in the concrete throughout the plant. It was first discovered in 2009 when Seabrook employees found portions of an underground electrical conduit tunnel degrading. It has since been found in numerous walls throughout the plant.
ASR is a chemical reaction that forms a gel in some concrete mixtures. The moisture-caused reaction forms the gel, which then expands and forms cracks. Approval of NextEra’s plan is critical to NRC issuing a license extension.
FERC last week approved Apple’s application to sell solar capacity at facilities it owns in Nevada, Arizona and California on the wholesale market. The ruling allows it to enter the wholesale market with 20 MW of generation capacity in Nevada, 50 MW in Arizona and 130 MW in California.
“Based on your representations, Apple Energy meets the criteria for a Category 1 seller in all regions and is so designated,” FERC wrote in a letter to Apple attorneys.
Google also has received FERC approval to sell solar capacity into wholesale markets.
Years in the making, a settlement between PJM and transmission owners over the RTO’s procedure for allocating the costs of major transmission projects is receiving criticism from stakeholders that say they weren’t invited to the table.
The case has dragged on for nearly a decade, with FERC’s orders on how to allocate costs for transmission projects at or above 500 kV twice being remanded by the 7th U.S. Circuit Court of Appeals back to the commission.
PJM’s “postage-stamp” cost allocation for the projects was challenged by the RTO’s Midwestern utilities. The method billed all PJM utilities in proportion to their load, regardless of where the projects were located.
The commission had originally approved the postage-stamp method in 2007 and attempted to justify it in its order on remand. The court, however, ruled that FERC had again failed to show how a western utility would benefit as much as an eastern utility from new transmission facilities in the east. (See FERC Orders Proceedings to Decide PJM’s Postage-Stamp Cost Allocation.)
In June, after more than a year of negotiations, a large majority of stakeholders submitted to FERC a settlement that created a cost allocation formula for projects approved prior to Feb. 1, 2013, when PJM abandoned the postage-stamp method (EL05-121).
“The overwhelming majority of the PJM transmission owners and all of the state regulatory authorities that have actively participated in this proceeding are either settling parties or have agreed not to oppose the settlement,” the filing reads.
The agreement would require collecting fees from customers on the eastern side of PJM’s territory and distributing them to customers on the western side. For projects that have been or will be completed, the settlement assigns 50% of costs on a load-ratio-share basis and the remaining 50% under the solution-based distribution factor (DFAX) methodology — the same method used for regional 500-kV projects approved since 2013.
Abandoned or canceled projects would be assigned using the violation-based DFAX method. The charges would be retroactive to Jan. 1, 2016.
Retroactive Issues
The settlement didn’t sit well with Direct Energy and the Retail Energy Supply Association, which argued they were neither invited to participate in the settlement talks through the PJM stakeholder process nor informed that they’d be expected to pay for the result.
On Monday, RESA appealed the denial of a previous motion to intervene in the case. In the appeal, the group stated that the settlement would require its members to pay their allocated share retroactively, “even if the customers who should be billed for the amounts have migrated to another supplier.”
Under deregulation, customers of the load-serving entities that make up RESA’s membership can switch companies quickly, so LSEs aren’t able to pass along retroactive charges to those who’ve left in the interim, the group said.
The denial, written by Acting Chief Administrative Law Judge Carmen A. Cintron, called RESA “a party that is uninformed of the delicate and complex negotiations that transpired in its absence.”
“When entities wait unreasonably long to seek intervention, [FERC] has stated that they ‘assumed the risk that the parties would settle the case in a manner not to their liking.’ Such is the situation that RESA’s delayed request has created for itself,” Cintron wrote.
RESA said it only became aware of the proceedings by reading the published settlement and that its suggested changes would “create minimal, if any, disruptions.”
“This is not a situation where an intervenor seeks to scuttle a settlement,” RESA said.
The group suggested two options to solve the issue: change the date for when charges should go into effect to sometime in the future, or put the burden of recovering the costs on electric distribution companies.
RESA is “hopeful” its new arguments will allow it to intervene, spokesman Bryan Lee said.
Marji Philips of Direct Energy said her company estimates the settlement will cost eastern ratepayers about $287 million.
“The LSEs are going to wind up having to pay for these costs that everybody agreed should be rate-based, and the calculation when it was originally done was done incorrectly,” she said.
Comments Pro and Con
Direct Energy and RESA are not alone in their opposition to the settlement. Linden VFT, which owns merchant transmission facilities, said it would not receive benefits in the settlement commensurate with the costs it would incur. In filed comments, Linden said the solutions-based DFAX method is “unduly prejudicial” to companies like itself.
But many stakeholders filed comments in support of the settlement.
“Pennsylvania’s ratepayers have been unfairly burdened, since 2007, with an excessive portion of those costs associated with the transmission projects encompassed by the settlement,” the state’s Public Utility Commission said. “The settlement agreement resolves those inequities and establishes a more reasonable and equitable cost allocation for both previously incurred costs as well as costs yet to be recovered.”
The PJM Board of Managers has suspended the controversial Artificial Island transmission project pending a “comprehensive” staff analysis to be completed by February, at which time it will decide a course of action, CEO Andy Ott said in a letter to stakeholders Friday.
“It has become evident to all involved that the projected costs to resolve the problems at Artificial Island have increased significantly. PJM has been examining alternatives in an attempt to offset some of the increases,” Ott wrote. “In addition, questions have arisen about whether the currently proposed solution would perform as intended without further expense. Because of these concerns, PJM has come to the conclusion that a pause in the project is necessary before any new financial obligations are incurred by the project developers.
“In light of the current uncertainties around the changing scope and configuration of the project, it is imperative that we understand the basis for any alternatives that may exist to manage the operational issues at Artificial Island.”
Salem and Hope Creek Nuclear Reactors on Artificial Island Source: Wikipedia
This is the second time the board has overturned the stability project — PJM’s first competitive solicitation under Order 1000.
Initially, PJM planners recommended awarding the work to Public Service Electric and Gas, but the board reopened bidding to finalists following protests from spurned bidders, state officials and others. (See PJM Board Puts the Brakes on Artificial Island Selection.)
PSE&G, one of three entities eventually designated to build a 230-kV transmission line from the New Jersey nuclear complex under the Delaware River to Delaware, said Friday it was “committed to working with PJM and will provide PJM with any information and support they request.”
LS Power’s Northeast Transmission Development, picked to construct the transmission line, said Friday it was “disappointed” by the board’s action.
“The modeling errors in question do not relate to Northeast Transmission’s designated portion of the Artificial Island project and Northeast Transmission was not involved [in] the associated modeling activities,” it said. “Northeast Transmission was surprised by the PJM board’s decision, as Northeast Transmission had received no indication prior to the announcement from PJM on Aug. 5 that PJM had any concerns with PJM’s or PSE&G’s modeling of the system protection and control upgrades.”
Pepco Holdings Inc., chosen to work with PSE&G on the project, did not immediately respond to requests for comment.
The board approved the stability fix for the complex that houses the Salem and Hope Creek nuclear generators last summer. But in April, PJM revealed that PSE&G’s portion of the project — which the RTO initially pegged at $137 million — had nearly doubled to $272 million once the transmission owner completed a detailed analysis. (See Artificial Island Cost Increase Could Lead to Rebid.)
“PJM conducted a preliminary estimate regarding the interconnection to Salem,” a PSE&G spokeswoman said Friday. “We then conducted a detailed, design-level analysis of the interconnection to Salem. We had not previously prepared a detailed estimate for Salem because our proposal would have terminated in Hope Creek.” (See PSE&G Defends Artificial Island Cost Increase.)
The sticker shock prompted PJM planners to consider other alternatives, including terminating the line at Hope Creek.
“However, in reviewing this alternative, an issue arose related to one of the other components of the project: that is, whether proposed system protection and control upgrades would perform as intended,” Steve Herling, PJM’s vice president for planning, said in a letter to stakeholders Friday. “Specifically, PSE&G identified an error related to the modeling of circuit breaker clearing times associated with those upgrades. The effect would be a reduction in the margin of stability provided by those upgrades, regardless of any alternatives to the transmission solution under review, requiring further steps and expense to correct.”
In an informational filing with FERC submitted Friday, PJM said, “By virtue of this suspension, all designated entities are placed on notice to cease incurring any new financial obligations on the Artificial Island project until PJM completes its analysis and the PJM board has made a subsequent determination based on that analysis.”
Neither of the letters PJM sent out Friday mentioned the cost allocation controversy.
Delaware Gov. Jack Markell released a statement commending the PJM board for its action.
“This decision is one that the state of Delaware welcomes,” he said. “The project as it was proposed would have placed an unjust burden on the state, resulting in higher electric rates for our consumers and businesses. I hope that upon further review, a more equitable solution can be identified.”
Bob Howatt, executive director of the Delaware Public Service Commission, said the agency was still analyzing the board’s decision.
“It seems like the political and economic concerns may have succeeded in stopping what has been called the most efficient and cost-effective solution because PJM and FERC have failed to address the cost allocation issue,” he said, adding that the decision seemed “totally unfair” to LS Power.
Howatt said he worried what effect the suspension would have on the desire of independent transmission companies to participate in the Order 1000 process.
“If I were an independent transmission company, why would I waste a lot of time on a project that could get overturned?” he said. “I just see it chilling the competitive transmission market that FERC has been attempting to create.”
Exelon announced Tuesday it has purchased the James A. FitzPatrick nuclear plant for $110 million from Entergy.
Officials from both companies were joined by Gov. Andrew Cuomo at the plant’s gates to announce the deal, which is subject to regulatory approval.
“We are pleased to have reached an agreement for the continued operation of FitzPatrick,” Exelon CEO Chris Crane said in a statement. “We look forward to bringing FitzPatrick’s highly skilled team of professionals into the Exelon Generation nuclear program, and to continue delivering to New York the environmental, economic and grid reliability benefits of this important energy asset.”
Entergy executives had reiterated last week that the company did not intend to continue operating the troubled plant in upstate New York beyond January 2017.
“There are no plans to continue to run the plant under Entergy ownership,” Bill Mohl, president of Entergy Wholesale Commodities, told analysts during the corporation’s second-quarter earnings call Aug. 2.
Fitzpatrick Nuclear Plant Source: Entergy
The company had announced plans to shut down both FitzPatrick and the Pilgrim nuclear plant in Massachusetts, but it recently said it had opened negotiations with Exelon over FitzPatrick. (See Entergy in Talks to Sell FitzPatrick to Exelon.)
Mohl told analysts if Entergy and Exelon are able to gain regulatory approvals for the transaction, refueling activities would begin in January. Otherwise, the decommissioning process would begin instead.
“We’ve made a commitment to reduce the size of the EWC footprint,” Mohl said. “If we’re unable to reach commercial agreements with Exelon or we’re not able to achieve those regulatory approvals, we’ll begin the regular decommissioning process and stay on the same path that we have previously been on.”
New York’s Public Service Commission on Aug. 1 unanimously approved 12-year subsidies for the state’s nuclear power plants on Lake Ontario, which have been buffeted by market forces. (See New York Adopts Clean Energy Standard, Nuclear Subsidy.)
Entergy reported second-quarter net income of $572.6 million ($3.11/share). That beat analyst expectations of $1.05/share, as polled by Thomson Reuters.
Revenue dropped to $2.46 billion, from $2.71 billion in the second quarter of 2015. The company said its March purchase of a 1,980-MW natural gas plant in southern Arkansas helped support revenue during the quarter.
Company shares, up 18.9% this year before the earnings announcement, have dropped 94 cents since, closing at $80.33 on Aug. 3.