By Robert Mullin
CAISO last week provided stakeholders an update on its efforts to address concerns that the Energy Imbalance Market is not properly accounting for the impact of emissions from dispatching out-of-state resources into California — what the state’s Air Resources Board calls “carbon leakage.”
“We are working collaboratively with the ARB to address their identified issues with greenhouse gas accounting in the EIM,” Mark Rothleder, CAISO vice president for market quality and renewable integration, said during an Aug. 4 Regional Issues Forum held at Idaho Power headquarters in Boise.
Leakage occurs when California’s emissions program logs a reduction, despite the fact that no actual decrease in atmospheric GHGs has occurred based on the effects of the secondary dispatch.
The board’s concerns focus on how the EIM’s least-cost dispatch model attributes balancing energy from a low-emitting out-of-state resource to CAISO, while not accounting for the secondary dispatch of another higher-emitting resource that serves external demand that could have been covered by the first resource absent the market.
The cleaner resource is “deemed delivered” to California, and the cap-and-trade system issues an emissions-compliance obligation to the scheduling coordinator for the resource, the ARB has noted.
“However, in certain instances, the full transfers that support balancing load to California are not identified and accounted for in the cap-and-trade program, resulting in emissions leakage,” the board wrote in a recent staff report proposing changes to the state’s cap-and-trade system.
CAISO is considering a range of options to help the ARB account for the emissions stemming from secondary dispatch.
The favored option: calculating the emissions from the secondary dispatch and assigning the GHG obligation to ISO load responsible for imbalances. However, this option could call the ISO’s dispatch decisions into question, Rothleder said.
Other options include requiring a minimum GHG bid for low-emission resources based on a system-emission rate or creating a hurdle rate for EIM transfers into the ISO. Both would put clean out-of-state resources at a disadvantage to equivalent resources inside the ISO.
The ISO also floated the idea of ARB lowering the electricity sector’s emissions caps or retiring GHG allowances by the estimated amount of secondary dispatch effects. Under California’s cap-and trade system, load-serving entities are issued a set amount of allowances each year subject to a declining annual cap.
One unlikely proposal is to have CAISO become a regulated party under cap-and-trade and produce all the emissions-compliance instruments associated with EIM dispatch.
“This is not high on our list as the way to go,” Rothleder said.
He pointed out that any solution would apply only to the EIM, and not to an expanded ISO. Still, the outcome could inform GHG accounting under regionalization.
CAISO seeks to issue a paper on the subject within a month and is targeting a fall meeting for further discussion. Any changes to GHG accounting in the EIM are slated to go into effect in January 2018.
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.
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.
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.
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.
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 Public Utilities Commission approved an Energy Efficiency Resource Standard, creating a framework for achieving cost-effective energy savings.
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.
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.
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 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.
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.
NextEra Energy said it will sell $1.5 billion of equity units to Goldman Sachs, Credit Suisse and Mizuho Securities.
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.
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.
PECO Energy has embarked on a behavioral experiment to reduce power consumption by sharing customers’ usage with their neighbors.
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.
Austin-based Revolve Solar, formerly one of Texas Hill Country’s largest clean-tech companies, has filed for Chapter 11 bankruptcy protection.
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.
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.
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.
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.
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.
The Nuclear Regulatory Commission is reviewing NextEra Energy’s plan to address concrete degradation issues at its Seabrook nuclear generating station.
