WESTBOROUGH, Mass. — ISO-NE’s latest briefing on its ongoing economic study focused on the shortfall of energy market revenues, prospects for storage and the ability to meet increased renewable portfolio standards.
Planners told the Planning Advisory Committee on Wednesday that uplift and capacity revenues will become increasingly important because energy market revenues will be insufficient to support any form of new generation in 2025 or 2030, the two time horizons in the draft study.
“Additional revenue from other sources will be needed to support new resources, as the energy market contribution isn’t sufficient to cover fixed costs,” said Michael Henderson, director of regional planning and coordination at ISO-NE.
In the simulations, energy market revenues are below annual carrying charges for all new generation resources, including wind, solar photovoltaic, natural gas combined cycle and combustion turbines. Units would recover some costs through energy market revenues plus uplift, the study says. Resources also would need “significant revenues” from the capacity market, Henderson added.
The study says the shortfall results because cheap gas-fired units typically set LMPs and higher-cost resources are rarely on the margin.
Another factor is low- or no-cost resources. The region is experiencing little or no load growth as the states have made significant commitments to behind-the-meter solar resources and energy efficiency. Wind and PV that aren’t behind the meter are price takers.
Uplift would be highest in 2025 under scenario 2 — in which all additional capacity needs, including retirements, are met with new renewable and clean energy resources, including nuclear power — hitting almost $179 million assuming no transmission constraints.
The lowest uplift — $88 million — is under scenario 5, in which RPS requirements are met by resources interconnected to the system, under construction or approved as of April 1, 2016, with alternative compliance payments used to meet any remaining RPS requirements. Retired units would be replaced with combined cycle plants to meet installed capacity requirements.
In 2015, uplift payments to resources operated out of merit — typically to ensure power system reliability — totaled $119 million, 2% of the total energy payments of $5.9 billion, according to Internal Market Monitor’s 2015 Annual Markets Report.
Energy Storage
The study found that net revenues for energy storage increase along with more production by renewable resources.
Net revenues would be highest under the “RPS-plus scenario,” which assumes additional renewable and clean energy resources above existing RPS requirements. Annual net revenues — revenue from generation minus the cost of storing energy — are projected to total more than $12 million in 2025 under the scenario, assuming no transmission constraints.
By contrast, storage would show negative net revenues of $1.5 million under scenario 5.
Increasing RPS
The study finds that scenarios 1, 2 and 3 all can meet the projected growth in the new RPS target for 2025 (8,069 GWh) and 2030 (10,806 GWh), although scenario 1 barely meets the 2030 target under a constrained transmission system.
Meeting the RPS targets under scenarios 4 and 5 would require the addition of more renewable resources, imports, alternative compliance payments or reducing RPS targets by adding energy efficiency and behind-the-meter solar.
Below is a summary of the issues scheduled to be brought to a vote at the Markets and Reliability and Members committees Thursday. Each item is listed by agenda number, description and projected time of discussion, followed by a summary of the issue and links to prior coverage in RTO Insider.
RTO Insider will be in Wilmington, Del., covering the discussions and votes. See next Tuesday’s newsletter for a full report.
Markets and Reliability Committee
2. PJM Manuals (9:10-9:20)
Members will be asked to endorse the following manual changes:
A. Manual 14A: Generation and Transmission Interconnection Process. Revisions, recommended by the Earlier Queue Submittal Task Force, include: changes to the assignment of queue priority; timing, including scheduling of deficiency reviews; criteria for inclusion in feasibility studies; and fee structures.
3. Installed Reserve Margin Study Results (9:20-9:30)
Members will be asked to endorse the 2016 Installed Reserve Margin study results. (See “More Granularity Requested on Winter Reserve Targets,” PJM Planning Committee Briefs.)
4. Credit Subcommittee (9:30-9:40)
Members will be asked to endorse proposed clarifications to the credit policy in Tariff Attachment Q that reorganize provisions and make five minor changes to them, none of which affects credit requirements. (See “Attachment Q Modified; Credit Requirements Unaffected,” PJM Market Implementation Committee Briefs.)
5. PJM Capacity Problem Statement / Issue Charge (9:40-10:25)
6. Market Implementation Committee Charter (10:25-10:30)
Members will be asked to approve the updated Market Implementation Committee charter, which removes references to working groups. (See “‘Working Groups’ Removed from MIC Charter,” PJM Market Implementation Committee Briefs.)
Members Committee
Consent Agenda (1:20-1:25)
Members will be asked to endorse:
B. Tariff revisions regarding the release of capacity in the third incremental auction for the 2017/18 delivery year in response to a FERC reporting directive (ER16-532) related to excess capacity procured in the Capacity Performance transition incremental auction. (See “Proposal Chosen for Capacity Release,” PJM Markets and Reliability and Members Committees Briefs.)
The length of MISO’s lone market efficiency project for 2016 will have to be extended, increasing its cost by as much as one-quarter and reducing its benefit-cost ratio.
MISO said the estimated cost of the Huntley-Wilmarth 345-kV project has jumped by $20 million from the original $81 million as a result of having to reroute the line to bypass the Mankato, Minn., area.
| MISO
MISO staff told the Oct. 19 Planning Advisory Committee meeting that the new benefit-cost ratio on the project may be as low as 1.5-to-1, down from the original 2-to-1.
MISO Senior Manager of Competitive Transmission Administration Brian Pedersen said the original line length was estimated at 38.5 miles. It’s unclear how many miles the reroute will add to the project, which is slated for completion in 2022.
Putting aside misgivings about the cost increase, a majority of PAC sectors approved a motion recommending that the 2016 Transmission Expansion Plan report proceed to the System Planning Committee of the Board of Directors for consideration. After that, the report will go before the Advisory Committee and Board of Directors for approval in December. (See MTEP 16 Proposes 394 Projects at $2.8 Billion.)
In a first round of feedback on MTEP 16, stakeholders urged MISO to competitively bid the line, despite Minnesota’s right-of-first-refusal statute, which would designate the project to incumbents Xcel and ITC.
“This is an issue we see no matter who does it,” an Xcel representative told stakeholders. “It’s still an urban area; it still needs to be addressed. This is the difference between the planning estimate and what the route actually is.”
Hwikwon Ham of the Minnesota Public Utilities Commission “strongly” urged Xcel to come before the state’s Department of Commerce — which advocates to the PUC on behalf of consumers — to discuss the change.
Steve Leovy of WPPI Energy asked why MISO had not presented a more accurate cost estimate when it initially rolled out MTEP 16.
John Lawhorn, senior director of policy and economic studies at MISO, said the RTO does “the best job it can.”
“Cost estimates and actual costs can vary, as you know, so we have variance analysis built into our Tariff,” Lawhorn said.
“We constantly hear MISO pushing openness in the process, and here it is again that we don’t have all the details. At a minimum, an MTEP report should at least present the best cost estimate possible,” said George Dawe, vice president of Duke-American Transmission Co.
However, Ham said he was pleased that Xcel came forward with the increased price before MTEP 16 is approved. “I’m happy to see this number came in ahead of time,” he said.
| MISO
The MTEP report says the Huntley-Wilmarth project will give load more access to lower-cost generation because it “completely mitigates” congestion on the Huntley-Blue Earth 161-kV line near the Iowa-Minnesota border. The line has been stressed by large amounts of wind capacity and low-cost coal generation in northern Iowa.
“Further worsening congestion is the increase in wind capacity in Iowa that is assumed over the next 15 years,” the report says. “Finally, expected coal retirements near the Minneapolis/Saint Paul area such as Sherco 1, Sherco 2 and Clay Boswell 3 tend to increase the need for power to flow from northern Iowa to the Twin Cities via the Lakefield to Wilmarth 345-kV path. As a result, for the loss of this high-voltage transmission path, the low-voltage parallel path of Huntley to Blue Earth 161-kV becomes congested.”
FERC last week eliminated the must-offer obligation in effect throughout the Western Electricity Coordinating Council region since the tail end of the California energy crisis of 2000-2001.
“In light of the passage of time and significant improvements to California’s wholesale electricity markets over that time, the must-offer requirement established for the WECC in 2001 produces little or no benefits today,” the commission wrote (EL27-16).
FERC implemented the obligation in June 2001 in response to what it called “serious market dysfunction” in California — the effort by some of the region’s generators to withhold power supplies to drive up prices in the now-defunct California Power Exchange. The rule required most generators serving California to offer all capacity not already committed under bilateral agreements into the state’s real-time market.
Last week’s order also ended a requirement that public and nonpublic utilities post a daily log of available capacity on their websites, as well as to a site hosted by the Western Systems Power Pool (WSPP).
The commission also rejected a request by the Edison Electric Institute to retroactively relieve affected industry participants of costs related to the posting requirement, instead affirming Feb. 24, 2016, as the refund effective date — days after FERC initiated a Section 206 proceeding to explore eliminating the must-offer obligation. (See FERC Likely to Eliminate Must-Offer Rule for West.)
While EEI did not specify an alternative date, it contended that the posting requirement became unduly burdensome once California’s market had undergone substantial changes and that FERC should therefore “grant such further and other relief as to the posting requirement that the commission deems necessary or appropriate.”
The must-offer and posting requirements were originally slated to expire in September 2002, but FERC subsequently extended the rules for an unspecified period of time until “long-term market-based solutions” could be fully implemented.
In eliminating the obligation, the commission cited numerous changes to California’s markets over the years, including CAISO’s development of LMP-based day-ahead and real-time energy and ancillary services markets, a day-ahead residual unit commitment process, local market power mitigation measures, reduced reliance on spot markets, and the state’s resource adequacy program.
“These market design improvements have contributed to a well-functioning CAISO market,” the commission wrote, adding that the electricity supply outlook for the West has “significantly improved.”
The commission noted that its ruling only dealt with rules stemming from the energy crisis. This was in response to Pacific Gas and Electric’s argument that termination of the obligation should not be construed as limiting the need for a must-offer requirement for resource adequacy capacity in the CAISO-run Energy Imbalance Market or new ISO transmission owners.
“We are not prejudging any future must-offer proposals related to the Energy Imbalance Market or to new transmission owners joining CAISO,” the commission affirmed.
FERC on Thursday denied Dominion Resources’ request for rehearing of an order rejecting its challenge to ISO-NE’s 2016 Forward Capacity Auction over a paperwork error that excluded capacity from its generating plant in Providence, R.I. (EL16-38-001).
Manchester Street Station | Dominion
The commission on May 2 denied most of Dominion’s February complaint about ISO-NE’s decision to block new incremental capacity from an upgrade to the company’s Manchester Street Station from participating in FCA 10 in February. The three-unit generator boosted its summer capacity by 21 MW to 477 MW.
In September 2015, ISO-NE approved the additional 21 MW for the auction. But the RTO later disqualified the additional capacity because Dominion failed to submit a “composite offer” linking the new capacity and the existing capacity at the plant.
The deadline for composite offers was Oct. 9, 2015. Dominion filed its complaint with FERC just days before the FCA in February.
The commission rejected the complaint in May, finding that the company had received adequate notice of the RTO’s filing requirements in October and November. The commission directed ISO-NE to revise its Tariff to provide greater clarity but denied Dominion’s request to resettle the auction as if the company’s additional capacity had participated.
“We are not persuaded by Dominion’s assertion that the commission erred in determining that ISO-NE did not violate its Tariff and was therefore mistaken in finding that resettlement was not required,” FERC wrote last week. “It would be contradictory to find that ISO-NE’s Tariff was unjust and unreasonable because it failed to provide notice of the filed rate, while also finding that ISO-NE violated the filed rate.”
FERC’s May order did find that ISO-NE’s tariff was “unclear regarding the process for new incremental generating capacity and existing generating capacity at the same resource to participate in the FCA.”
ISO-NE responded with proposed Tariff changes under which it would automatically match new summer incremental generating capacity with excess existing winter qualified capacity at the same resource.
But the commission ordered the RTO on Aug. 30 to further amend its Tariff to automatically match new winter incremental capacity with excess existing summer qualified capacity at the same resource. “We find that there is no reason to limit, based on season, the automatic matching of new capacity with excess existing capacity,” the commission said (ER16-2126).
ISO-NE’s second compliance filing is due by the end of October.
FERC Chairman Norman Bay announced the departure of his chief of staff, Larry Gasteiger, last week at the commission’s open meeting.
Gasteiger, whose last day was Friday, will take the role of Public Service Enterprise Group’s chief of federal regulatory policy. He worked at FERC for 19 years, including as Bay’s deputy director at the Office of Enforcement.
“I am personally grateful to Larry for the help he has given me over the years,” Bay said. He called Gasteiger “clearly one of the most important picks I had to make when I came in as the director of [Enforcement], when I was new to FERC and I was in great need of having a Sherpa.” Bay named Jamie Simler, current director of the Office of Energy Market Regulation, as Gasteiger’s replacement.
Energy Department Plans to Build Experimental Carbon Dioxide Plant
| Energy.gov
The Department of Energy is providing $80 million to build an experimental 10-MW power plant in San Antonio that will use carbon dioxide instead of steam to generate power.
Gas Technology Institute will lead the pilot project with Southwest Research Institute serving as an equal partner. General Electric’s Global Research team will also be involved.
EPA has not properly estimated job losses in the coal industry resulting from the Clean Air Act, a federal judge ruled last week.
The District Court for the Northern District of West Virginia ruled in favor of coal mining company Murray Energy, finding EPA has a “nondiscretionary duty” to track potential job losses and employment shifts from regulations written under the act.
“With specific statutory provisions like Section 321(a), Congress unmistakably intended to track and monitor the effects of the Clean Air Act and its implementing regulations on employment in order to improve the legislative and regulatory processes,” the opinion said.
Plaintiffs to Refile Lawsuit Blaming Fracking Industry for Earthquakes
Lawyers for two Oklahoma women will refile in state court a class action lawsuit that blames the fracking industry for the state’s recent spate of earthquakes.
The plaintiffs previously filed the suit in state court, but Devon Energy removed it to federal court under the Class Action Fairness Act of 2005, prompting them to agree to a voluntary dismissal.
The plaintiffs are required by law to wait one year to refile.
House Committee Investigating WAPA Security Breaches
A House of Representatives committee has asked the Western Area Power Administration to turn over documents by Nov. 1 relating to security breaches at the Liberty substation in Arizona.
The document request is part of the House Committee on Oversight and Government Reform’s investigation spurred by a July 14 Wall Street Journal article describing physical intrusions at the substation, including one in which its control room was ransacked.
There have been no arrests, and security cameras mostly weren’t working.
Interior Secretary Supports Klamath River Dam Removal
Secretary of Interior Sally Jewell sent a letter last week to FERC urging it to approve applications by PacifiCorp and Klamath River Renewal Corp. to remove four hydroelectric dams on the Klamath River.
PacifiCorp owns the dams, and Klamath River Renewal — a consortium of federal, state, tribal and local officials — wants to take ownership for the purpose of demolition.
In a measure that’s considered mostly symbolic, county voters will have the opportunity to vote on Nov. 8 as to whether the dams should be removed.
FERC last week approved a $154.8 million 2017 budget for NERC, its eight Regional Entities and the Western Interconnection Regional Advisory Body (WIRAB) (RR16-6).
The spending plan includes $54.3 million for NERC, $99.7 million for the Regional Entities and almost $760,000 for WIRAB, which was created by Western governors to advise FERC, NERC and the West’s RE, the Western Electricity Coordinating Council.
NERC’s budget will increase 3.6% over 2016, while its workforce drops to about 190 full-time equivalents.
Democrats, Republican Call for Full Disclosure of APS Election Spending
Two Democrats on November’s ballot for seats on the state’s Corporation Commission have aligned themselves with a Republican incumbent in calling for full disclosure by Arizona Public Service as to whether it spent money on the 2014 elections.
Democrats Bill Mundell and Tom Chabin called for an end to “a culture of corruption” and cited alleged personal meetings between Gary Pierce, a former commissioner, and Don Brandt, president and CEO of APS and its parent company.
APS is suing Republican incumbent Robert Burns over his position to force it to make full disclosure. Notwithstanding, Brandt’s company is supporting Burns’ bid for re-election, according to an email Brandt sent to company employees last week.
SoCalEd Proposal Addresses Corona’s Dwindling Electric Supply
Southern California Edison engineers and city officials met with Corona residents last week regarding a proposal to build 5 miles of medium-voltage power lines to address the region’s dwindling electric supply — with one area using 92% of its energy production potential last year.
The proposal calls for primarily above-ground lines, including a 66-kV transmission line carrying power to a new substation. It also includes above-ground transmission lines that would bisect the city’s center.
Construction could begin by 2019, with the lines becoming operational by 2012, according to SoCalEd’s website.
Jacumba Solar Approved to Build Solar Plant in San Diego County
Jacumba Solar last week received approval for a permit to build a 108-acre solar plant in Jacumba, near San Diego Gas & Electric’s East County Substation.
The plant will use a little more than 81,000 photovoltaic panels on roughly 2,200 fixed, tilted racks to generate 22 MW, which it will deliver to SDG&E’s substation through a 1,500-foot-long overhead transmission line, a press release from the San Diego County Board of Supervisors said.
County staff and proponents of the project said it would help the region meet state goals of producing one-half of all electricity from renewable sources by 2030 and cut greenhouse gas emissions.
San Diego, SunEdison Tentatively Extend Solar Panel Agreement
An October 2015 agreement between San Diego and SunEdison for installation of banks of solar panels at 25 sites across the city has been tentatively extended to at least April 2017, and possibly to June 2017, after the company failed to install a single panel. The original agreement called for installation of the first solar panels by last month.
SunEdison declared bankruptcy two months before it was supposed to begin construction and sought an extension for the first batch of projects. In July, city officials formally terminated the agreement’s initial five projects.
The city declined to release the new agreement, stating that it has not yet been formally approved, but it said SunEdison agreed to compensate it for opportunity costs related to the delay.
CAISO Flexible Ramping Product Delayed Until Nov. 1
FERC last week granted CAISO’s request to postpone the start date for implementing the ISO’s flexible ramping product until Nov. 1 — one month later than the original start date (ER16-2023).
CAISO last month petitioned to delay the effective date because it did not learn of the commission’s approval of the product until hours after a conference call scheduled to confirm the roll-out to market participants.
The new market mechanism is designed to improve real-time integration of the increasing amount of variable renewable energy resources coming on to the ISO’s system. The product will also be incorporated into the ISO-run Energy Imbalance Market.
UI Customers, Environmentalists Urge Distribution Rate Reduction
While The United Illuminating Co. seeks a distribution rate increase, 16 environmental and consumer groups are urging state regulators to reduce the current fixed-rate charge of $17.25/month its customers currently pay.
In a letter to the Public Utilities Regulatory Authority, the groups noted that the monthly charge is the highest of any investor-owned electric utility in New England and urged PURA to cut it by $6 to $8/month.
Distribution charges account for 27 cents of every dollar that UI customers pay for their electricity, UI spokesman Michael West said. He said the charge allows UI to provide the level of reliability its customers have come to expect.
State Senators Continue to Push For Legislation to Save Exelon Plants
State senators are continuing to look for ways to prevent Exelon from shuttering it Clinton Power Station and Quad Cities Generating Station nuclear power plants during the next two years.
Exelon lost $800 million on the two plants over the past seven years and announced it would close the plants after state lawmakers ended their spring legislative session without approving its proposed “Next Generation Energy Plan.”
Sponsors of the legislation have been negotiating with Exelon and other interested groups, and Sen. Donne Trotter, a Democrat, said he plans to use the General Assembly’s fall veto session to continue pushing legislation when lawmakers return on Nov. 15.
State regulators last week warned that the proposed $12.2 billion sale of Westar Energy to Great Plains Energy is in jeopardy if the companies don’t supply additional information regarding operational savings, and what departments or functions would remain in Topeka and for how long.
The Corporation Commission said in an order that its staff or the Citizens’ Utility Ratepayer Board could file for relief — which could include asking for dismissal of the merger application — if they maintain that the joint application does not adequately address the agency’s merger standards.
Chuck Caisley, a spokesman for GPE and Westar, said the companies were evaluating the order and are committed to closing the transaction in the spring of 2017 as planned.
Downtown Baton Rouge now has 10 electric car charging stations, and city-parish leaders hope to have 50 stations soon as part of their effort to lure green business.
Previously, the only electric car charging stations were near Louisiana State University and in south Baton Rouge.
Entergy gave a $75,000 grant for purchase and installation of the stations.
Stakeholders Clash over Proposal to Phase out Financial Incentives for Solar
LePage
A proposal to phase out financial incentives for homeowners using solar panels caused a clash of viewpoints last week at a hearing before the state’s Public Utilities Commission.
Residents and small-business owners said the proposal — which seeks to grandfather net-metering credits for current solar homeowners for 15 years and gradually reduce benefits for new solar owners over 10 years — would stifle solar energy’s growth and already is reducing the number of installations. Representatives from utilities, government and consumer affairs testified that the current financial incentives for rooftop solar hurt other ratepayers.
Last spring, the Legislature passed a compromise solar bill following a yearlong study and negotiations among stakeholders, but it was two votes shy of overriding a veto by Gov. Paul LePage.
Lincoln is purchasing its first electric car for about $22,000, along with dual plug-in electric charging stations for privately owned electric vehicles for nine downtown garages. Some of the funds will come from a state grant.
There are currently 67 electric vehicles registered in Lancaster County, but the group that spearheaded the grant hopes the new charging stations will encourage more electric car purchases.
300 Electric Vehicle Charging Stations Coming to Public Locations
Cuomo
Gov. Andrew Cuomo announced last week a five-year New York Power Authority contract for the installation of 300 electric vehicle charging stations at public locations across the state.
The agreement supports the governor’s ChargeNY Program, which aims for 3,000 charging stations online in the state by 2018.
It also is an important step in accomplishing the state’s goal to reduce greenhouse gas emissions 40% by 2030 from 1990 levels and ensure 50% of electricity consumed comes from renewable energy sources by 2030.
NYISO Report Finds Two Localized Transmission Security Reliability Needs
A new NYISO report found two localized transmission security reliability needs that will begin in 2017 — involving New York State Electric and Gas’ Oakdale 345/115-kV transformer and Long Island Power Authority’s East Garden City-Valley Stream 138-kV line — that require remedial action soon.
The ISO said in a press release that it will consider transmission plan updates from the transmission owners and then, if necessary, issue a solicitation for market-based and regulated solutions.
NYISO’s 2016 Reliability Needs Assessment report also found that the state’s bulk power system has adequate power generation resources to meet reliability needs for the next decade.
Feds Plans to Auction Gas Lease Rights for Wayne National Forest
The federal government gave notice last week that it is planning an online auction for Dec. 13 for oil and gas lease rights for Wayne National Forest, which could lead to fracking on public land.
Opponents have 30 days to file a formal protest.
The land is located in the far eastern part of the forest, where there are substantial oil and gas reserves and less opposition to energy drilling.
Commission Recommends Taxpayer-Funded Solar Incentives
The Public Utility Commission voted last week to pass a recommendation to the Legislature that it consider adopting taxpayer-funded incentives for solar energy programs that all residents can benefit from, regardless of their utility provider.
The state already has several taxpayer-funded programs intended to encourage solar energy development, but some of the incentives are scheduled to end soon. There also are a small number of ratepayer-funded programs, for which customers of specific utilities pay.
The commission noted that calculating the benefits and costs of each program is difficult because projects and customers are often eligible for more than one incentive program.
FirstEnergy Rate Case Settlements to Increase Residential Rates
FirstEnergy’s utilities filed distribution rate case settlement agreements with state regulators last week that, if approved, would result in rate increases for residential customers.
Met-Ed customers would see an average increase of 10.7%; Penelec customers 12.8%. Penn Power 10.4%; and West Penn Power 7.2%.
The state Public Utilities Commission is expected to issue final orders on the agreements and new rates on or before Jan. 26, 2017. Pursuant to the agreement, the utilities would not file for additional distribution base rate increases in the state until January 2019 at the earliest.
Dominion Required to Increase Water Monitoring at Possum Point
As Dominion Resources works to drain and consolidate five coal ash ponds at its Possum Point Power Station in Dumfries, state regulators are demanding that it install nine additional wells on the property and test water samples from monitoring wells on a biweekly basis.
Two of the nine additional wells will be monitoring wells installed near the property’s perimeter and may help detect whether groundwater from Dominion’s coal ash ponds is flowing toward nearby residential wells and contaminating drinking water.
Dominion is hoping to receive a solid waste permit so that it can move all its coal ash into one pond and bury it beneath two feet of soil.
Grassroots Effort Opposes Pipeline Extension in Eastern Panhandle
A grassroots effort is growing against a proposal by Mountaineer Gas Company of West Virginia to extend its natural gas distribution line by 56 miles in the Eastern Panhandle.
If approved by regulators, the pipeline project, slated to begin in 2018, would pass through Berkeley, Jefferson and Morgan counties, using buried lines 6 to 12 inches in diameter.
The state’s Public Service Commission has received 70 letters in opposition, said Russell J. Mokhiber, of Morgan County USA blog, who conducted an opposition meeting last week and distributed fliers saying “just say no to the gas pipeline.”
Judge to Decide Fate of Badger-Coulee Power Line Project
A La Crosse County judge will decide the fate of a 180-mile 345-kV transmission line from the La Crosse to Madison areas.
American Transmission Co. and Xcel Energy developed the Badger-Coulee Transmission Line project in 2010, and the Public Service Commission approved it in 2015.
The Town of Holland maintains that the commission did not legally approve the project — estimated to cost about $580 million — because it did not establish a need for it.
MISO announced on Friday it had changed four elements of its proposed forward capacity auction, prompting renewed calls from some stakeholders to delay a FERC filing planned for Nov. 1.
RTO officials — who described the changes as a “refinement” to a “limited set of design elements” — insisted the filing will be made as scheduled.
On an Oct. 21 Resource Adequacy Subcommittee conference call, MISO revealed it had adopted the Independent Market Monitor’s suggestion to incorporate a pivotal supplier test in the forward auction for the RTO’s retail-choice regions.
Officials also said they will include a three-year forward peak load contribution calculation and modify the design’s materiality test, congestion calculation and cost allocation.
Pivotal Supplier Test
The pivotal supplier test would allow the Monitor to identify resources inside or outside MISO’s footprint that are large enough to affect market outcomes. Suppliers identified as pivotal would be subject to the RTO’s existing physical and economic withholding provisions.
Dynegy’s Mark Volpe said that while the Monitor “should certainly suggest marketing monitoring measures,” the pivotal supplier test had not been explored in the stakeholder process and was not simply a “tweak.” He asked for a conference call with the Monitor prior to Nov. 1 to discuss the test. MISO staff said that was unlikely to happen.
Congestion Charges
Under other changes, MISO would allocate congestion charges resulting from the clearing of infeasible resources to buyers rather than sellers as originally proposed. Officials said the change was made to avoid discouraging sellers’ participation in the auction and to align the cost allocation with other FERC-approved capacity markets.
The RTO also said it will limit congestion charges in the forward auction to situations in which constraint changes lead to a less than one-day-in-five-years loss-of-load expectation. MISO’s prior draft allowed congestion charges to occur anytime a locational constraint binds and proved more restrictive under the forward auction than the prompt Planning Resource Auction. The change will maintain the relationship between the variable reliability target and the quantity of capacity procured for competitive retail demand, MISO said.
Consumers Energy’s Jeff Beattie noted that MISO’s retail-choice areas are “heavily interconnected” and said he doubted the new cost allocation would ever occur.
Jeff Bladen, executive director of MISO market services, agreed that new congestion costs would only occur under “extreme circumstances” when incremental resources are need to step in for megawatts that cannot be delivered.
“In a sense, it’s a replacement charge because the constraints modeled need to be changed,” Bladen said. He said the charge is needed because MISO “can’t guarantee feasibility three years into the future.” He noted that ISO-NE, NYISO and PJM use a similar method.
Peak Load Contribution
The addition of a peak load contribution calculation was intended to “alleviate retail customer risk from their purchase/offer obligations” in the forward auction against any PLC changes that take place in the PRA, MISO said.
Bladen said the PLC provides “equal footing between demand and supply resources that enter into the forward auction.”
Materiality Test
The materiality threshold determines whether local resource zones will be included in the forward auction. It will be used in Michigan and Wisconsin, where the zonal boundaries traverse state lines.
The original proposal would have determined materiality based on the potential impact of competitive retail demand on the systemwide LOLE and could change from year to year.
Under the revision, MISO would determine materiality based on the greater of the LOLE impact and a fixed percentage (0.5%) of the systemwide planning reserve margin requirement.
MISO said the change provides a “reasonable balance” between reliability and certainty.
Filing Delay Sought
Several stakeholders asked for a delay in the filing to better understand the latest changes.
“This congestion charge is just not clear yet,” Indianapolis Power and Light’s Ted Leffler said.
Minnesota Public Utilities Commission staffer Hwikwon Ham said he wasn’t yet comfortable with wording on the Tariff changes.
RASC Chair Gary Mathis said if the subcommittee demanded a filing delay, it would only be taken under advisement by MISO. The next scheduled meeting of the RASC will be held on Nov. 2, a day after MISO’s projected filing date.
Bladen said MISO is “very proud of how the proposal has evolved and the balance it strikes.”
“Thanks for your comments and contributions,” he said.
Tesla Motors and Panasonic have announced they plan to produce solar modules together if Tesla’s shareholders vote on Nov. 17 to approve a $2.2 billion acquisition of SolarCity.
The companies have signed a nonbinding letter of intent under which Panasonic would make solar cells and modules at the SolarCity factory in Buffalo, N.Y. Tesla would work out a long-term deal to buy and use those solar panels in a system combining them with its Powerwall and Powerpack battery storage products. That is all contingent, however, on Tesla’s acquisition of SolarCity.
Panasonic is presently spending $1.6 billion so it can produce battery cells that will be used for Tesla’s Model 3 electric car and energy storage products for home and utilities.
Luminant plans to shutter its Oak Hill, Texas, mine, which is one of the four lignite coal mines that feeds its Martin Lake power plant.
The company, which is Texas’ largest power generator, closed three small North Texas mines earlier this year to switch from lignite to Wyoming’s Powder River Basin coal.
Earlier this year, Luminant bought two major gas-fired power plants in northeastern Texas.
Jeffrey Keebler will be taking over as CEO and president of Madison Gas & Electric on March 1, 2017. He will succeed Gary Wolter, who is retiring.
Keebler, who has been with MGE since 1995, presently serves as senior vice president of energy supply and planning.
He holds a bachelor’s degree in finance and economics from the University of Wisconsin-La Crosse and a master’s degree in business administration from the University of Wisconsin-Whitewater.
Regulators: Empire Can’t Raise Oklahoma Rates without Hearing
State regulators last week rejected a request by Empire District Electric to raise Oklahoma customers’ rates to match those of Empire’s Missouri customers.
The state’s Corporation Commission did not rule out a rate hike, but it said Empire would have to go through a rate change hearing to establish justification.
Empire had asked for a rate increase of up to 45.37% per month per 1,000 kWh.
Layoff Plan Set for Fort Calhoun Ahead of Shutdown
The Omaha Public Power District released a plan last week to begin reducing the number of workers at its Fort Calhoun nuclear plant in Blair, Neb., which permanently ceased operations Monday.
As part of the decommissioning, the plant will lay off about 270 workers over the next 20 months in six batches. The first round of cuts — 60 people — is scheduled for Nov. 1, while the second round is set for the first quarter of 2017. Laid off employees will be placed in career transition workshops, OPPD said.
Enbridge announced last week a 5% workforce reduction across the company, amounting to the elimination of 530 jobs in the U.S. and Canada.
The company shed 370 positions in Canada and 160 in the U.S., 45 of which are in Houston.
Enbridge spokesman Michael Barnes said the cutbacks are not related to the company’s plans to purchase Houston-based Spectra Energy in a $28 billion deal expected to close early next year.
Minnesota Power Plans Shutdown Of Two Coal-Fired Generators
Minnesota Power announced last week that it will shut down two of its coal-fired generators in Cohasset by the end of 2018 as it transitions to natural gas and renewable resources.
In June, the Minnesota Public Utilities Commission ordered the utility to shut down Boswell Units 1 and 2 by 2022.
The utility has achieved a 25% renewable energy mix, beating the state’s goal of 25% by 2025. It expects to reduce carbon emissions on its system by about 20% by 2020 and 30% by 2025 compared with 2005 levels.
FERC last week approved an offer of settlement by MidAmerican Energy in which it agreed to reduce its reactive service rate from $0.18/MWh to $0.14/MWh, effective May 1, 2016. The settlement was uncontested.
WASHINGTON — Grid operators assured FERC last week they are confident in their ability to maintain reliability this winter, reporting improvements in gas-electric coordination and monitoring technology.
ISO-NE is making no promises beyond this winter, however, citing concerns over generation retirements and setbacks to efforts to improve New England’s stressed natural gas infrastructure.
It was the second panel on winter preparedness that the commission has convened since the polar vortex of 2014, when frozen coal piles, poorly winterized natural gas plants and other problems idled scores of generators in PJM and the Northeast.
The panel featured the same lineup as last year, except for PJM Vice President of Operations Mike Bryson, who took the place of former COO Mike Kormos, now with Exelon.
After the RTOs’ presentations, FERC staffers also professed confidence in a presentation of their Winter 2016-17 Energy Market Assessment.
The National Oceanic and Atmospheric Administration predicts normal winter temperatures for most of the U.S., with above-average temperatures in Alaska and the South, especially the Southwest, and below-average temperatures in North Dakota, Minnesota and northern Wisconsin. Gas storage is well above annual averages and the mild temperatures should mitigate gas constraints, staff said.
| NOAA
Despite the mild forecast and the unusually warm winter of 2015-16, the RTOs assured the commission that they were being proactive.
“We’re giving winter preparedness the same level of enthusiasm and hyper-awareness as we have the last year … so we’re certainly not sound asleep at the wheels at the heel of a mild winter,” said Wes Yeomans, NYISO vice president of operations. “We have a very good memory of very cold and tight conditions.”
Todd Ramey, vice president of system operations and market services for MISO, agreed. The RTO is “not taking our eye off the ball,” he said.
Unique Market Enhancements
Much of the speakers’ presentations covered ground familiar from last year, they admitted, but there have been a few new developments since then.
Both Yeomans and Bryson said their organizations had hired staff from the natural gas industry to support their control rooms in winter gas-electric coordination. Yeomans said the new hires “help us understand the gas commercial dynamics.”
Bryson said the person PJM hired “is very helpful to us, because he speaks gas, and we don’t.”
“It’s amazing because while we knew he was going to be a good hire, he has provided a lot of insight into the way the gas pipelines [and local distribution companies] think and it forces us to rethink our approach in some ways,” Bryson said.
Yeomans also said the Northeast gas pipeline system is displayed on a large video board in the NYISO control room, with pipelines under operational flow orders brightly lit, which he said enhances operators’ awareness. SPP’s Bruce Rew, vice president of operations, also highlighted his control room’s visualization technology, the Macomber Map, which depicts the transmission system geographically with power flows and constraints. (See ERCOT, SPP Collaborate to Improve Visualization Tool.) The map can also overlay weather systems with the grid, keeping operators aware of potentially hazardous conditions.
Ramey devoted much of his presentation to MISO’s new ramping product. The service holds back a portion of rampable capacity from five-minute dispatch to respond to short-term variations in load. (See MISO Seeks to Launch Ramp Product April 1.) “We found that to be a significant enhancement within our market design” and ensures “there is enough ramp on the system to meet future dispatch needs both known and unknown five to 10 minutes in the future,” he said.
| FERC
California
The closure of the Aliso Canyon storage facility following a massive gas leak continues to be a concern for California, but both CAISO Executive Director of System Operations Nancy Traweek and FERC staff told commissioners that the reduced gas capacity should not threaten electric reliability in the state.
Traweek said CAISO’s increased coordination with pipeline companies and advanced planning during the summer, when the state’s demand peaks, will mitigate any risks associated with Aliso Canyon.
CAISO has asked the commission to extend for an additional year temporary Tariff changes made in response to the loss of the storage facility. (See related story, FERC OKs Natural Gas Index for CAISO.)
“It’s exciting to see that now others in the West are benefiting from energy markets in real time and consolidated dispatch,” Traweek said.
ISO-NE
Peter Brandien, ISO-NE vice president of system operations, said New England would be fine this winter but he was not so sure about future winters.
“We have some units that have indicated they’re going to retire — we have those units this year,” Brandien said. “So this is probably going to be my last best winter.”
When the representatives were asked by Chairman Norman Bay about their overall comfort level going into the winter, all expressed optimism except Brandien, who did not directly answer the question. Instead he talked about the importance of Spectra Energy’s Algonquin Incremental Market pipeline and the region’s dependence on LNG imports.
Commissioner Cheryl LaFleur noticed this, asking how quickly the RTO can get an LNG delivery in the event of an emergency, such as the loss of a pipeline or nuclear plant.
Brandien said that although New England has had sufficient LNG supplies in prior winters, there is no guarantee that it will receive the same amount this year. The region is supplied by three primary facilities: the Everett Marine Terminal in Everett, Mass., Canaport in New Brunswick and the Northeast Gateway off the coast of Boston. LNG ships may dock at the facilities for days without offloading their cargo if they find a better price elsewhere, Brandien said.
LaFleur also asked whether the RTO was preparing for the coming generator retirements.
“I wish I had a good answer that gave me comfort, that as the non-gas resources retire that I had some sort of magic bullet,” Brandien replied. “The region doesn’t seem to be motivated to go down the path to expand the gas infrastructure. They want to invest in different things, [such as] solar, offshore wind, onshore wind [and] energy efficiency.”
‘Cautiously Optimistic’
“The outlook for winter is cautiously optimistic, with markets well supplied for the coming season,” FERC staff told the commission. “Staff will continue to monitor developments within the electric and natural gas markets, with particular attention paid to the issues at Aliso Canyon and in the Northeast.”
Bay praised the efforts of the RTOs. “I think this is another example of the benefits to consumers living in a region served by an RTO/ISO,” he said.
When asked whether presentations by the RTOs on winter preparations would continue every year, Bay said he found them “very informative and very helpful, and it’s so helpful to hear about the different things the RTOs/ISOs are doing to help prepare for winter …”
“Significant progress has been made [since the polar vortex], but there’s always more work to be done,” he said.
EPA has not properly estimated job losses in the coal industry resulting from the Clean Air Act, a federal judge ruled last week.
Secretary of Interior Sally Jewell sent a letter last week to FERC urging it to approve applications by PacifiCorp and Klamath River Renewal Corp. to remove four hydroelectric dams on the Klamath River.
A new NYISO report found two localized transmission security reliability needs that will begin in 2017 — involving New York State Electric and Gas’ Oakdale 345/115-kV transformer and Long Island Power Authority’s East Garden City-Valley Stream 138-kV line — that require remedial action soon.
The federal government gave notice last week that it is planning an online auction for Dec. 13 for oil and gas lease rights for Wayne National Forest, which could lead to fracking on public land.
The Public Utility Commission voted last week to pass a recommendation to the Legislature that it consider adopting taxpayer-funded incentives for solar energy programs that all residents can benefit from, regardless of their utility provider.
FirstEnergy’s utilities filed distribution rate case settlement agreements with state regulators last week that, if approved, would result in rate increases for residential customers.
As Dominion Resources works to drain and consolidate five coal ash ponds at its Possum Point Power Station in Dumfries, state regulators are demanding that it install nine additional wells on the property and test water samples from monitoring wells on a biweekly basis.
A grassroots effort is growing against a proposal by Mountaineer Gas Company of West Virginia to extend its natural gas distribution line by 56 miles in the Eastern Panhandle.
A La Crosse County judge will decide the fate of a 180-mile 345-kV transmission line from the La Crosse to Madison areas.
The companies have signed a nonbinding letter of intent under which Panasonic would make solar cells and modules at the SolarCity factory in Buffalo, N.Y. Tesla would work out a long-term deal to buy and use those solar panels in a system combining them with its Powerwall and Powerpack battery storage products. That is all contingent, however, on Tesla’s acquisition of SolarCity.
