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November 14, 2024

Connecticut Advances Small-Scale Renewables Contracts

By William Opalka

Connecticut has selected 25 small clean energy and energy efficiency projects totaling 402 MW to negotiate power purchase agreements with the state’s two electric distribution companies.

The Class I projects, all less than 20 MW each, responded to a request for proposals earlier this year. They will negotiate PPAs with Eversource Energy and United Illuminating as part of Connecticut’s legislative mandate to decarbonize its electric generation resources.

Wind Turbine | CTEWD - Get Into Energy CT
Wind Turbine | CTEWD – Get Into Energy CT

“The response to the RFP for small-scale clean energy projects was robust and competitive — giving us the welcome challenge of carefully considering more than 100 projects and evaluating them against our established criteria,” Department of Energy and Environmental Protection Commissioner Robert Klee said in a statement Nov. 28.

Included among the 25 projects are 11 totaling 170 MW within the state: nine solar, one wind and 34 MW of energy efficiency offered by Eversource, making it both a resource supplier and the EDC negotiating procurement.

“DEEP and the state Attorney General’s office will play a role in development of the efficiency contract,” DEEP spokesman Dennis Schain told RTO Insider. “Also, all contracts have to be reviewed and approved by our utility regulatory body, so there are protections for ratepayers in this project from Eversource having been selected.”

Besides the 11 Connecticut projects, seven have been selected in Vermont, two each in Maine, Massachusetts and New York, and one in New Hampshire. The projects range in size from 3.5 MW of wind in Connecticut to two solar projects of 19.99 MW in New York.

Final contracts will be submitted to the Public Utilities Regulatory Authority for approval, which is expected in early 2017.

Connecticut also is part of a separate procurement with Massachusetts and Rhode Island for large-scale projects of 20 MW or greater. The states selected seven projects totaling 460 MW for contract negotiations. However, those negotiations have been stayed by the Second Circuit Court of Appeals following a challenge by Allco Renewable Finance, a developer of small-scale renewable projects. Oral arguments in that case are scheduled for Dec. 9 (Allco Finance Limited v. Klee, 16-2946). (See Court Halts New England Clean Energy Contracts.)

FERC Declines PURPA Case

In a related matter, FERC ruled Nov. 22 against initiating an enforcement action against Connecticut regulators over Allco Finance’s claims that the state was not abiding by the mandatory purchase requirements of the Public Utility Regulatory Policies Act (EL16-115, QF16-362, et al.).

The commission’s action means Allco and its unit Windham Solar may file their own enforcement action against the PURA “in the appropriate court,” FERC said.

Allco contends the state regulators improperly concluded that Windham is not entitled to a legally enforceable obligation at a forecasted avoided cost rate and that Eversource has no need for capacity.

It is at least the third time this year that declined to act on Allco’s PURPA claims. (See FERC Rejects Enforcement Action in Connecticut PURPA Dispute.)

Clean Energy Innovation Requires Collaboration, Researcher Says

By Rory D. Sweeney

PHILADELPHIA — The next wave of clean-energy innovation will require collaboration as well as competition, says a researcher for the Near Zero energy policy advocacy group.

Speaking at a lecture series sponsored by the University of Pennsylvania’s Kleinman Center for Energy Policy last week, Dan Sanchez, a postdoctoral scholar at the Carnegie Institution for Science, said sharing intellectual property and allowing open access to research data are catalysts necessary for growth in the clean energy industry.

clean energy innovation
Researcher Dan Sanchez discussing his conclusions for developing effective clean-energy policy. | © RTO Insider

“There’s actually some really strong empirical work that shows that connectivity between the private sector and the public sector really does improve innovation outcomes and really does improve the chances that publicly funded research results in commercially successful products,” he said.

Sanchez focused his argument on two initiatives, one an institutional effort and the other creating a roadmap for successful implementation of technology. The technological initiative focused on developments in bio-energy with carbon capture and storage (BECCS).

The institutional effort focused on Mission Innovation, a 23-country commitment established in 2015 to double their annual combined public funding of clean-energy research and development from $15 billion per year to $30 billion per year by 2021.

Consistency is Key

He identified three “waves” of clean-energy investment in the past 70 years that failed to take hold permanently: nuclear energy following World War II; nuclear, renewables and energy efficiency in response to the oil crisis of the 1970s; and renewables, carbon sequestration, efficiency and grid upgrades in the 2000s.

Following each spurt of investment, there was a “dramatic retrenchment” in private funding as projects failed to deliver on their promises, he said.

“I think the lesson of the past two waves of energy innovation is that capricious funding — funding that ramps up and then ramps down very quickly — can really stall the pace of innovation,” he said. “Following World War II, the U.S. and the European Union in particular really focused on research and development of nuclear energy technologies. … We really kind of settled on standardized technology pretty quickly, and then dramatically reduced our R&D funds.”

Sanchez sees Mission Innovation having the potential to spur a fourth investment wave and says a clear, consistent path will be necessary to sustain it. That will include a centralized, independent headquarters, along with public visibility of R&D expenditures and better coordination among countries. For example, the U.S. and China have been collaborating for the past eight years on clean energy research centers, but in the past five years, no joint patents have been filed nor have any projects truly been jointly funded, Sanchez said.

“Essentially, the U.S. funded their technologies; China funded their technologies. They shared a little bit of information, but it really wasn’t joint, collaborative R&D in the way we’d really like to see,” Sanchez said.

BECCS

Sanchez focused on BECCS as a likely candidate for the next investment wave. He pointed out that just one facility in the world — an Archer Daniels Midland corn-to-ethanol plant in Decatur, Ill. — is employing the technology to sequester about 1 million tons of carbon dioxide a year, accounting for about 1/10,000th of the worldwide reductions that are estimated to be necessary.

“It’s fair to say there’s a very large gap between where we want to be and where we are right now,” he said.

Critics have said experimenting with sequestration could delay deployment of emissions technologies and even provide tacit acceptance of additional emissions. But Sanchez said that perspective misses the “market opportunity” that could be created by planning the development and deployment of the technology — essentially creating a roadmap for its successful implementation.

Next Steps

Sanchez said whether researching technologies or getting them deployed deserves more focus is the wrong question. “I think a lot of people frame this as an either/or question, but I think it’s silly … because it’s pretty obvious we really need both,” he said. “There’s not really enough time in the day to really fight those fights.”

He pointed to gasification of coal and biomass as technologies with high commercial potential because of their ability to balance carbon-reduction product costs and scale facilities. However, the necessary research will require collaboration among public and private organizations. He offered as a successful model the National Nanotechnology Initiative, which coordinates the work of 13 federal agencies and industry groups in addition to performing regulatory and public outreach.

Combining lessons learned from the BECCS and Mission Innovation initiatives, Sanchez said, could “fill the gap between our ambitions and where our technologies lie right now.”

Davis Quits Arkansas Commission for MISO South Post

By Amanda Durish Cook

Arkansas Public Service Commissioner Lamar Davis has resigned to take a newly created position as executive director of government and regulatory affairs for MISO’s South Region.

Beginning Dec. 1, Davis will serve as MISO’s main liaison with state regulators, lawmakers and governors within MISO South, the RTO said Nov. 28. Davis resigned from the PSC effective Nov. 25.

Davis is the third former state regulator to join MISO’s staff since last year, following Vice President of Government and Regulatory Affairs David Boyd, who joined the RTO in 2015 after eight years on the Minnesota Public Utilities Commission, and former Public Utilities Commission of Ohio Chairman Andre Porter, who resigned to become vice president and general counsel in May. (See Former PUCO Chairman Andre Porter Joins MISO.)

“MISO is truly honored and excited to have Lamar join our team,” said Todd Hillman, vice president of MISO’s South Region. “We look forward to Lamar representing MISO South and the work we are doing to facilitate collaboration among state regulators, policymakers and stakeholders.”

Prior to his appointment to the PSC in January 2015, Davis served eight years as deputy chief of staff under former Arkansas Gov. Mike Beebe. Davis was also an assistant attorney general in Arkansas’ Consumer Protection Division, taught consumer law at the William H. Bowen School of Law in Little Rock, Ark., and served as a law clerk for the Arkansas Court of Appeals.

“These roles have afforded me the opportunity to work with countless public servants to serve the people of Arkansas, which has been very rewarding,” Davis said in a PSC statement. “I now have been offered a position in the private sector that will afford me the opportunity to champion policies to help advance the goals of our beloved state and region.”

Davis received his law degree from Bowen and a bachelor’s in political science from Dillard University in New Orleans.

Loss on Water Permit a Setback for Indian Point Extension

By William Opalka

New York’s highest court ruled Monday that the Indian Point nuclear plant is subject to state coastal waters rules — a potential hurdle in Entergy’s bid to extend the plant’s operating licenses.

The unanimous Court of Appeals ruling said that Entergy must obtain a Department of State permit under the state’s Coastal Zone Management program. Indian Point Units 2 and 3 are on the banks of the Hudson River, 30 miles north of New York City.

“In sum, the Department of State’s interpretation of the exemptions in the Coastal Management Program, and its conclusion that Entergy’s application to relicense the nuclear reactors at Indian Point is subject to consistency review, are rational and must be sustained,” the court said.

New York’s CMP, adopted in 1982, includes protections for fish and wildlife while also “meeting public energy needs in an environmentally safe manner,” according to the opinion.

License Extensions

The plants were licensed by the U.S. Nuclear Regulatory Commission in the early 1970s and are operating under extensions while the commission reviews their applications for 20-year license renewals.

Entergy applied for the license renewals in 2007 and initially conceded that its application was subject to the state review under the CMP. In 2012, however, Entergy changed its position, arguing that the plants were grandfathered.

The court disagreed, saying that relicensing applications require new permits. Nuclear power plants’ use of state waterways is listed as a regulated use.

indian point, new york, clean energy standard
Indian Point Nuclear Power Plant

“Entergy is reviewing the court’s decision to determine its next steps, which could include refiling its Coastal Zone Management application that Entergy previously withdrew pending issuance of the NRC’s final supplemental environmental impact statement,” the company said in a statement. “Notwithstanding this court decision, we continue to believe we will ultimately be successful in obtaining a CZM permit and relicensing Indian Point. The facility continues to safely operate in a manner that is fully protective of the Hudson River and in compliance with state and federal law.”

The 16-page decision overturned a previous ruling from an Appellate Division court, which sided with Entergy.

The state’s objections to Indian Point will now be considered as part of the record for federal relicensing. However, if the state eventually denies a coastal certification, the plant owner could appeal to the U.S. Department of Commerce, which could override the state’s action, according to the decision.

Entergy also has a concurrent challenge pending in the U.S. District Court for the Northern District of New York. It sued New York in January, claiming the state’s attempts to require a CMP review intrudes on federal jurisdiction.

According to Entergy’s 2016 Form 10-K, New York is citing “nuclear safety concerns.”

That is a persistent complaint after a series of mishaps occurred in recent years at the plant.

“Indian Point is antiquated and does not belong on the Hudson River in close proximity to New York City, where it poses a threat not only to the coastal resources and uses of the river, but to millions of New Yorkers living and working in the surrounding community,” Gov. Andrew Cuomo said in a statement.

Cuomo, along with several of the state’s environmental organizations, has long advocated the plant’s closure. (See Environmental Groups Press for Indian Point Shutdown.)

Cooling Towers

Entergy also has been challenging New York’s contention that closed-cycle cooling would be the “best technology available” for addressing concerns over the impact of the nuclear plants’ cooling water intakes on aquatic life.

The company has estimated that retrofitting Indian Point with cooling towers would cost more than $1.2 billion. The company proposed as an alternative the use of cylindrical wedgewire screens at an estimated cost of $250 million to $300 million.

Because of the uncertainty over whether it will succeed in relicensing, Entergy said it may enter into fewer unit-contingent forward sales contracts for output from the plants.

No OMS Consensus on MISO Cost Allocation Changes

By Amanda Durish Cook

The Organization of MISO States was unable to achieve consensus on a response to a five-question survey asking how MISO should revise its cost allocation procedures, Wisconsin Public Service Commission staffer Randel Pilo said Tuesday.

organization of miso states miso cost allocation
OMS Executive Director Tanya Paslawski at the 2016 OMS Annual Meeting in October | © RTO Insider

During the Nov. 22 OMS Board of Directors conference call, Pilo said that although state regulators were not able to reach unanimity on possible revisions to MISO’s cost allocation methodology, the discussion was a “helpful exercise.”

In multiple recent stakeholder meetings, MISO expressed a desire to work on cost allocation revisions through 2017 and implement the change by 2018, when Entergy’s integration transition period — which limits cost sharing in MISO South — expires. (See MISO Stakeholders Propose Changes to Market Efficiency Cost Allocation Process.)

The RTO circulated a five-question survey on market efficiency project cost allocation in October, which asks:

  • Should MISO allocate all costs to benefiting local resource zones for economically beneficial projects lower than 345 kV?
  • Should MISO investigate additional quantifiable benefit metrics in addition to adjusted production costs for market efficiency projects?
  • Should MISO allocate all costs to benefiting local resource zones for economically beneficial projects lower than 345 kV?
  • Should MISO allocate all costs to benefiting transmission pricing zones for economically beneficial projects lower than 345 kV?
  • Should MISO allocate all costs to a blend of benefiting local resource zones and transmission pricing zones for economically beneficial projects lower than 345 kV?

Pilo said states are “nervous” about a blend of allocation to local resource zones and transmission pricing zones.

MISO will share and go over individual state responses at the Dec. 13 Regional Expansion Criteria and Benefits Working Group meeting and use input to make a conceptual proposal.

Pilo also noted that the questions were close-ended, and some states used an all-no answer strategy in the hopes of getting MISO to pay attention to their written responses.

“Moving forward, MISO has built in a year’s worth of time … and is planning on filing a process with FERC in December 2017,” said David Carr of the Mississippi Public Service Commission.

OMS Executive Director Tanya Paslawski also said work continues on the organization’s 2017 strategic initiative document, which identifies long-term goals similar to the 2016 document. Paslawski said the new document is set to be approved before the new year.

Paslawski also said OMS will adopt a banking resolution Dec. 1 to allow incoming OMS president and Indiana Utility Regulatory Commissioner Angela Weber to sign off on banking transactions. OMS voted to approve Weber as president at its annual meeting in October. She will replace current president and Michigan Public Service Commission Chair Sally Talberg in January.

Trump: ‘Open Mind’ on Climate Change

By Rich Heidorn Jr.

President-elect Donald Trump said Tuesday he has an “open mind” on humans’ role in global warming, appearing to soften his campaign pledge to withdraw the U.S. from the Paris Agreement.

Trump made his comments in an interview with editors and reporters of The New York Times.

Asked by columnist Thomas Friedman if he would “take America out of the world’s lead of confronting climate change,” Trump responded that he is “looking at it very closely,” adding “I have an open mind to it.”

“I absolutely have an open mind. I will tell you this: Clean air is vitally important. Clean water, crystal clean water is vitally important. Safety is vitally important,” Trump said.

Editorial page editor James Bennet asked, “When you say an open mind, you mean you’re just not sure whether human activity causes climate change? Do you think human activity is or isn’t connected?”

Trump responded: “I think right now … well, I think there is some connectivity. There is some, something. It depends on how much. It also depends on how much it’s going to cost our companies. You have to understand, our companies are noncompetitive right now.”

donald trump climate change
Methane flaring | Bureau of Land Management

White House correspondent Michael Shear followed up with a question about the potential of foreign leaders to impose tariffs on American goods to offset the carbon that the U.S. had pledged to reduce.

“I think that countries will not do that to us,” Trump responded. “I don’t think if they’re run by a person that understands leadership and negotiation, they’re in no position to do that to us, no matter what I do. They’re in no position to do that to us, and that won’t happen, but I’m going to take a look at it. A very serious look. I want to also see how much this is costing, you know, what’s the cost to it, and I’ll be talking to you folks in the not too distant future about it, having to do with what just took place.”

Trump did not specifically mention EPA’s Clean Power Plan, which he has vowed to block. Still, his moderate tone was a marked contrast to his previous bombast on global warming.

In a 2012 tweet, he called climate change a hoax created “by the Chinese in order to make U.S. manufacturing noncompetitive.” During the campaign, he said he would “cancel” the U.S.’s involvement in the Paris Agreement, which aims to limit global warming to 1.5 degrees Celsius above preindustrial levels. (See CPP, FERC’s Bay, Honorable Among Losers in Trump Win.)

But in a video released Monday, Trump also made clear that he will steer a different course than President Obama on energy policy, renewing his promise to “cancel job-killing restrictions on the production of American energy, including shale energy and clean coal.”

Trump and the Republican Congress could use the Congressional Review Act to cancel some of the Obama administration’s most recent regulations, including a Nov. 15 Interior Department rule requiring oil and gas producers to use “currently available technologies and processes” to cut methane flaring in half at oil and gas wells on federal and Native American lands.

The act allows an incoming Congress to reject regulations finalized within 60 days of the end of either the House’s or Senate’s sessions.

The Congressional Research Service has concluded the act would apply to regulations finalized after May 30, if Congress holds no more sessions this year, The Washington Post reported Wednesday.

In contrast, an EPA regulation intended to reduce methane gas leaks was finalized on May 12, making it likely exempt from being reversed under the act, the Post reported. EPA said the rule, designed to reduce methane emissions from new or modified oil and gas wells, will prevent 11 million metric tons of carbon dioxide equivalent emissions by 2025.

Public Advocacy Group Files FERC Complaint over PJM Rate Increase

By Rory D. Sweeney

A consumer advocacy group filed a complaint with FERC on Monday saying PJM’s recent rate-increase request is “unprecedented” and failed to consider mitigating costs by limiting employees’ pay increases (ER17-249).

Public Citizen’s Energy Program, based in D.C., filed the complaint in response to a member fee increase that PJM stakeholders approved in October. (See “Members Committee Endorses Revised Fee Hike,” PJM Markets and Reliability and Members Committees Briefs.)

It asks FERC to deny the rate filing “until PJM offers options on controlling certain expenses.”

The complaint argues that the largest factor necessitating the increase is accommodating PJM’s projected 4.8% average annual growth rate in the financial compensation paid to PJM employees over the next eight years.

“PJM already commands premium salaries paid to its employees, particularly to its top executives,” the complaint contends. “For many of Public Citizen’s members, it remains a tough economy. There aren’t many industries or companies within PJM’s service territory that are projecting a 4.8% annual growth rate for employee financial compensation over the next eight years.”

public citizen ferc complaint pjm rate increase
| PJM

“The impact on consumers of PJM’s proposed administrative rate revisions is 7 cents a month, phased in over eight years,” PJM spokesperson Paula DuPont said in an emailed statement. “Consumer advocates representing the PJM region support our proposal and were involved throughout its development. The proposal was unanimously approved by members.”

Public Citizen argues that neither PJM nor its stakeholders — which include state consumer advocates — “ever formally considered dampening growth in employee compensation as a measure to mitigate the rate hike.”

West Virginia Consumer Advocate Jacqueline Lake Roberts defended PJM’s request in a response to the complaint, also filed Monday. Consumer advocates are “active participants” in PJM’s stakeholder process and aren’t treated differently than other members, Roberts wrote in the response.

“As the steward of consumer interests, [Roberts ] takes rates and proposed increases very seriously,” the response reads. “[Roberts] believes that the stated rate as filed will ensure that consumers continue to benefit from these services. For these reasons, [Roberts] submits that the allegations of Public Citizen are erroneous.”

A representative of the Pennsylvania Office of Consumer Advocate was on PJM’s Finance Committee, Roberts noted, and the committee considered several proposals before unanimously endorsing the one filed with FERC — however, all of them assumed cost increases that necessitated rate increases.

While Public Citizen’s complaint said PJM employees “deserve praise and respect for administrating duties on behalf of FERC under the Federal Power Act,” it also noted that PJM’s audited financial reports indicate employee financial compensation grew from more than $98 million in 2011 to more than $124 million in 2015, for an average annual growth rate of 6.1%. Over this five-year period, employee compensation grew from 35.6% of total PJM expenses in 2011 to 37.4% in 2015.

PJM’s request doesn’t detail other “concerning” expenses, the complaint says, such as payments to outside political lobbying organizations and “expensive social events available to select PJM members.”

Public Citizen says it has tried to become a voting PJM stakeholder, but it can’t afford the RTO’s $2,500 annual membership fee.

“It’s certainly easier to balance budgets if you can tap into a pile of someone else’s money to close the gap,” Tyson Slocum, Public Citizen’s Energy Program director, said in an emailed statement.

“The right thing to do would be for PJM to shrink its out-of-control growth in executive pay,” he said. “FERC should not allow PJM to pay for excessive executive compensation through an unprecedented hike in electric rates paid by household consumers. PJM must learn fiscal discipline and recognize that its salary structure is bloated.”

New FERC Rule Will Double RTO Offer Caps

By Robert Mullin

With winter looming, FERC last week adopted a rule that would double the “hard” offer cap for day-ahead and real-time markets to $2,000/MWh in every RTO and ISO.

Order 831 was a response to the 2013-2014 polar vortex, which caused natural gas price spikes that left some generators in the Northeast complaining they were unable to recover their costs (RM16-5).

The commission also noted that the $1,000/MWh offer caps effective in most RTOs could suppress LMPs below the marginal cost of production “given that recent history demonstrates that resource short-run marginal costs can exceed” that cap.

“We find that the currently effective offer caps may prevent a resource from recovering its short-run marginal costs, which could result in that resource operating at a loss,” the commission said in its decision to adopt the rule.

ferc rto offer caps
| © mg154 / 123RF Stock Photo

FERC last year approved a PJM measure to increase its offer cap to $2,000/MWh after RTO stakeholders voted overwhelmingly to approve the move. (See PJM Members OK 2,000/MWh Energy Market Offer Cap.)

The commission’s revised offer cap rule sets out three requirements:

  • Incremental energy offers must be capped at the higher of $1,000/MWh or a resource’s cost-based energy offer, with $2,000/MWh being the maximum bid.
  • An RTO must verify the costs underlying a resource’s bid above $1,000/MWh before that offer can be used to calculate the market-clearing LMP.
  • All resources — regardless of type — will be eligible to submit cost-based incremental energy offers in excess of $1,000/MWh.

The final rule modifies FERC staff’s original proposal, which would have converted the current $1,000/MWh cap into a “soft” cap — without implementing a new hard cap. (See FERC Proposes Uniform Offer Caps Across RTOs.)

The commission said the absence of a hard cap could be problematic for RTOs and their market monitors, who might have only “imperfect information” ahead of the market clearing process to verify the short-run marginal costs for resources bidding above $1,000/MWh.

“While a hard cap may diminish the ability to fully address the shortcomings of current offer caps identified above in all circumstances, we find that, on balance, a hard cap is necessary to reasonably limit the adverse impact that any imperfect information during the verification process could have on LMPs,” the commission said.

Opposing the rule was CAISO, which said that the current $1,000/MWh ceiling far exceeds the highest cost-justified offer from any ISO resource. CAISO further contended that any natural gas-driven price spikes would be too infrequent and short-lived to warrant a change. ISO-NE said it saw no need to increase the cap, but it didn’t contest the rule change.

Market monitors for ISO-NE and SPP also protested, arguing that new sources of gas supply have provided sufficient stability in fuel prices in recent years.

The commission dismissed those contentions, pointing out that three RTOs — PJM, MISO and NYISO — had made previous filings to temporarily waive or change the level of their offer caps.

“The waiver requests and high natural gas costs experienced during the polar vortex, which could have caused some resources to experience costs above $1,000/MWh, demonstrate that the deficiencies of current offer caps, in particular the $1,000/MWh offer cap, are concrete rather than hypothetical.”

In its Nov. 17 presentation to the commission explaining the rule, FERC staff made the case for applying the change to all organized markets.

“Adopting the same offer cap structure in each RTO and ISO would avoid seams issues that could arise if offer caps differ materially across markets,” staff said.

The new rule will be effective 75 days after publication in the Federal Register.

Appeals Court Ruling for Bondholders Clouds EFH Reorganization

By Tom Kleckner

A U.S. appeals court last week ruled Energy Future Holdings must pay hundreds of millions of dollars to certain bondholders, adding a cloud of uncertainty to the bankrupt company’s attempts to emerge from Chapter 11 protection.

Lamar Plant | Luminant - energy future holdings bankruptcy
Lamar Plant | Luminant

On Thursday, the 3rd Circuit Court of Appeals in Philadelphia reversed lower court decisions and directed EFH to pay holders of the company’s first-lien and second-lien notes. The bondholders had argued that by repaying its debt early in the bankruptcy proceeding, EFH owed them prepayment premiums — or make-whole payments — of $431 million and $351 million, respectively. The payments don’t include several years of interest.

The decision affects $6.2 billion in debts that were refinanced after EFH declared bankruptcy in 2014. The company has said that disallowing the make-whole claims is a condition of its reorganization and that the added litigation would reduce the funds available to other creditors.

The U.S. Bankruptcy Court in Delaware, which has jurisdiction over the case, is to begin hearings to consider confirming the Texas company’s reorganization Dec. 1.

EFH’s reorganization plan hinges partly on the sale of its Oncor wires business to Florida-based NextEra Energy for $18.4 billion. NextEra and Oncor filed for approval of the sale with the Public Utility Commission of Texas on Oct. 31. (See NextEra Energy Talks Up its Oncor Acquisition.)

It’s unclear whether the additional debt would affect NextEra’s acquisition of Oncor, which relies on eliminating debt and replacing it with equity.

EFH has already spun off its Luminant and TXU Energy businesses into a standalone company, since rebranded as Vistra Energy. (See Luminant, TXU Energy Emerge from Bankruptcy.)

Vistra Energy and NextEra both declined requests for comment by RTO Insider on the court’s ruling and its potential effect on the Oncor acquisition.

Meanwhile, NextEra and Oncor are plunging ahead with their merger application in Texas.

Friday, the state’s Public Utility Commission filed an order finding their application to be sufficient (Docket 46238) and an administrative law judge affirmed hearings before the PUC will begin Feb. 21.

The ALJ also granted all motions to intervene in the case. Those intervening include the Texas Office of Public Utility Counsel, NRG Texas, TXU Energy, Local 69 of the International Brotherhood of Electrical Workers, Texas Industrial Energy Consumers and a group of cities currently served by Oncor.

PUC staff has requested Oncor address a set of questions focused on the utility’s rating agency reports, its five-year capital plan and the tax status of the EFH spin-off.

FERC Rejects Entergy Attempt to End PPA with Goodyear Plant

By Tom Kleckner

FERC last week rejected Entergy Texas’ attempt to terminate a power purchase agreement with qualifying facilities at Goodyear Tire & Rubber’s Beaumont chemical plant (EL16-105).

Goodyear filed a complaint with the commission in August, alleging that Entergy Texas’ plan to terminate its PPA with the tire company’s QFs in Southeast Texas violated the utility’s obligation to purchase energy and capacity in accordance with the Public Utility Regulatory Policies Act of 1978.

Goodyear's Beaumont Chemical Plant | Goodyear - Entergy power purchase agreement
Goodyear’s Beaumont Chemical Plant | Goodyear

Entergy contended it had the right to cancel the PPA based on FERC’s January order that terminated the utility’s obligation to purchase from QFs larger than 20 MW in MISO. (See FERC: Entergy not Required to Buy from Large QFs.)

Goodyear’s Beaumont/West QF was self-certified in 1987 with a net capacity of 13 MW. Its Beaumont/East QF was self-certified in 1999 with a net capacity of 18.8 MW.

Entergy argued that the two QFs should be considered as one. It noted that the QFs are located less than a half-mile apart on the same site and that their energy “is commingled behind the meter.”

Goodyear contended that because it had self-certified two cogeneration plants each smaller than 20 MW, the January order did not affect Entergy’s obligation.

The commission agreed. It said its January order concluded that “a QF’s size for purposes of being relieved of the mandatory purchase obligation is determined by its certified size.”

The commission’s January order was based on a 2006 ruling, which said that QFs with net capacity above 20 MW were presumed to have “nondiscriminatory access” to wholesale markets in RTOs such as MISO.