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August 11, 2024

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PJM Markets and Reliability and Members Committees Preview

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 (9:10-9:30)

Members will be asked to endorse the following manual changes:

  1. Manual 1: Control Center and Data Exchange Requirements. Adds new section for planning, coordination and notification of system changes and events, with updated procedures. New Attachment C is the new Inter-control Center Communication Protocol (ICCP) failover test plans diagram. Removes references to the PJM ICCP network interface control document and PJM ICCP communications workbook.
  2. Manual 6: Financial Transmission Rights. Housekeeping changes resulting from annual review. Clarifications better describe existing rules and processes.
  3. Manual 11: Energy and Ancillary Services. Changes implement Capacity Performance rules regarding unit-specific parameters. For base capacity resources, the status quo remains until 2018. For CP resources, beginning in delivery year 2016, unit-specific parameters will apply during hot weather alerts, cold weather alerts, emergency actions and when being offer-capped to maintain system reliability.
  4. Manual 11: Energy and Ancillary Services Market Operations. Revisions reflect day-ahead market timeline changes. Among them: effective Friday, the deadline for submitting day-ahead bids will be 10:30 a.m. The day-ahead clearing window will be reduced to three hours. The deadline for posting day-ahead results will be 1:30 p.m. or as soon as practicable. Results will be posted upon approval but not before noon.

3. Confidential Market Data Postings (9:30-9:45)

Manual 33: Administrative Services for PJM Interconnection Agreement. Changes provide six exceptions for when PJM may release market data. (See “Market Data Confidentiality Rule Change Gets First Reading,” Market Implementation Committee Briefs.)

4. Operating Parameter Definitions (9:45-10:15)

Manual 11: Energy and Ancillary Services Market Operations; Manual 15: Cost Development Guidelines; and Manual 28: Operating Agreement Accounting. Revisions define operating parameters. (See “Operating Parameter Definitions Approved,” PJM Market Implementation Committee Briefs.)

5. Performance Assessment Hour Ramp Rate (10:15-10:45)

Revisions to Tariff and Manual 18: PJM Capacity Market offer an interim solution to the performance assessment hour ramp rate.  (See “Ramp Rate for CP Approved,” PJM Operating Committee Briefs.)

6. Regional Transmission and Energy Scheduling Practices (10:45-10:55)

Proposed revisions to regional transmission and energy scheduling practices reflect PJM’s adjustment to its day-ahead energy market timeline.  (See “Day-ahead Submission Deadline Moved up,” PJM Market Implementation Committee Briefs.)

7. Governing Documents Enhancement & Clarification Subcommittee (GDECS) (10:45-11:05)

  1. Members will be asked to approve updated definitions and clarifications to PJM’s governing documents. They involve the terms PJM board, market participant, credit breach, PJM region, regional entity, affiliate, PJM markets, economic minimum and transmission customer.

Members Committee

CONSENT AGENDA (1:20-1:25)

  1. Members will be asked to approve revisions to governing documents related to updated definitions developed by the GDECS.

ENDORSEMENTS (1:25-1:55)

  1. GOVERNING DOCUMENTS ENHANCEMENT & CLARIFICATION SUBCOMMITTEE (GDECS) (1:25-1:35)

  2. Members will consider proposed changes to governing documents as well as additional clarifications to previously endorsed revisions.
  3. Members will be asked to endorse Tariff and Operating Agreement revisions regarding the definition of the term counterparty. In an Aug. 27 Members Committee vote, the word counterparty was removed from a batch of proposed definitions and returned to the GDECS for further review at members’ request. The definition was aligned to use more precise language in the OA that specifies when PJMSettlement will and will not be a counterparty to a transaction or agreement.

  4. CAPACITY PERFORMANCE IMPLEMENTATION (1:35-1:45)

See MRC item 5 above.

  1. OPERATING PARAMETER DEFINITIONS (1:45-1:55)

See MRC item 4 above.

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MISO Redesign Nears Completion

By Amanda Durish Cook

NEW ORLEANS — MISO’s stakeholder redesign is complete — or nearly so, according to committee members close to the project.

MISO Steering Committee © Copyright <em>RTO Insider</em>
At the meeting © RTO Insider

“We have gotten through what I would consider to be a complete transition,” Steering Committee Chair Tia Elliott, of NRG Energy, said during last week’s board meeting. “Quite a bit of streamlining has taken place.”

Audrey Penner, chair of the Advisory Committee, said the redesign was about 90% complete.

Continuing that work, the Steering Committee unanimously supported a motion to retire the Pseudo-Tie Issue Task Team. MISO Director of Market Engineering Kim Sperry said the team had fulfilled its objective of framing pseudo-tie issues and passing them along to other working groups. Sperry said that those issues will be taken up in the Joint and Common Market meetings between PJM and MISO, while related market topics will be addressed at future Market Subcommittee meetings.

miso retirements - stakeholder redesign entity transitions

Other highlights of the redesign:

  • With the retirement of the Data Transparency Working Group, the Steering Committee will take over responsibility for recommending which MISO group should handle data requests. (MISO will retain final say.) Working group liaison Tom Welch said two of the five data issues that remain open will be concluded in the first week of April, when MISO is expected to begin posting final five-minute real-time market clearing prices and historical five-minute real-time ex ante LMPs and MCPs.
  • Steering Committee members approved the Credit Settlements Working Group charter and management plan. The newly formed group will hold its first quarterly meeting in Carmel, Ind., on May 12.
  • The Resource Adequacy Subcommittee has elected Madison Gas and Electric’s Gary Mathis and Wisconsin Public Service’s Chris Plante to serve as chair and vice chair, respectively. The RASC replaces MISO’s former Electric and Natural Gas Coordination Task Force and the Demand Response and Loss of Load Expectation working groups.
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How a ‘Phantom Mouse’ and Weaponized Excel Files Brought Down Ukraine’s Grid

By Rich Heidorn Jr.

Sometime last spring, employees of three Ukrainian electric distribution companies opened Microsoft Office files infected with BlackEnergy 3 malware. It was the beginning of a six-month campaign of reconnaissance and testing that culminated Dec. 23 with an outage that knocked out power to 225,000 customers for several hours.

Word-File-Infected-with-Malware-(NERC,-SANS-ICS)-webThe story of the cyberattack — the first publicly acknowledged assault to cause power outages — was spelled out in riveting detail in a report released last week by NERC’s Electricity Information Sharing and Analysis Center.

The Security Service of Ukraine blamed the attack on the Russian government. But the report, the product of NERC’s E-ISAC and the SANS Institute, focused on the methods of the attack and not on identifying the attackers.

Based on a summary of publicly available information and analysis performed by the SANS Industrial Control Systems unit, the report contains recommendations for defending grid operations.

The report’s authors express also grudging respect for the expertise of the hackers. “The strongest capability of the attackers was not in their choice of tools or in their expertise, but in their capability to perform long‐term reconnaissance operations required to learn the environment and execute a highly synchronized, multistage, multisite attack,” the report said.

Spear Phishing

The report estimates that the blackouts came more than six months after the initial penetration of the companies, when employees in the administrative or information technology networks of the electric companies opened Microsoft Excel and Word documents from spear phishing emails.

Rogue-Client-Used-'Phantom-Mouse'-(NERC,-SANS-ICS)-webThe employees enabled macros in the files that allowed the installation of BlackEnergy 3 malware on the companies’ systems, providing access to command and control Internet Protocol addresses.

After gaining a foothold in the companies’ IT networks, the hackers were able to obtain credentials that gave them access through virtual private networks (VPNs) to the industrial control systems (ICSs). The report said the hackers demonstrated expertise in network-connected infrastructure and in operating the ICSs.

They used “rogue” client software and a “phantom” mouse to highjack the supervisory control and data acquisition (SCADA) systems remotely, taking control of operator workstations and locking the operators out of their systems.

Kyivoblenergo, a regional electricity distributor in Ukraine, was one of the three “oblenergos” (energy companies) attacked. Beginning about 3:35 p.m. on Dec. 23, the hackers took remote control of the company’s SCADA distribution management system, disconnecting seven of its 110-kV substations and 23 35-kV substations for three hours and cutting off power to about 80,000 customers.

Similar attacks on the other two companies, executed within minutes of each other, blacked out an additional 145,000 customers.

Burning the Bridges

KillDisk software was used to erase the master boot record of the companies’ systems and delete some logs, preventing the companies from using the ICSs to restore the system. The attackers also uploaded malicious firmware to serial‐to‐Ethernet gateway devices, ensuring that even if the operator workstations were recovered, remote commands could not be used to bring the substations back online.

“This means that the attacker ‘burned the bridges’ behind them by destroying equipment and wiping devices to prevent automated recovery of the system,” the report said.

The attackers also generated thousands of automated phone calls to the call center of one of the companies — a version of a denial-of-service attack — to hamper communications with customers.

With their computer systems compromised, field staff went to substations and manually reclosed breakers, restoring all of the customers to service in three to six hours.

NERC, cyberattack

“It is important to note that there are risks operating your system without the benefit of an automated dispatch control center, and utilities that are more reliant on automation may not be able to restore large portions of their system this way,” said Michael Assante, SANS Institute director of ICSs and one of the report’s authors, in a January blog post. “In many ways, the Ukrainian operators should be commended for their diligence and restoration efforts.”

Missed Opportunities

While the report’s authors found the companies’ restoration admirable, they had plenty to criticize, saying the utilities missed opportunities to detect the intrusion during the months of reconnaissance and testing that preceded the attack.

According to the report, the companies’ firewalls allowed the adversaries to exercise remote control, and the VPNs from their business networks into the ICSs appeared to lack basic two‐factor authentication; think cash machines, which require both a bank card and a personal identification number.

The companies also appeared to lack the capability to continually monitor their ICS networks for increased traffic that could indicate rogue firmware updates, the report said. “In a prolonged attack campaign, there are likely numerous opportunities to detect and defend the targeted system.”

Why the three oblenergos were targeted is unclear, but John Hultquist, director of cyberespionage analysis for computer security firm iSight Partners, said he believes the attacks were the work of hackers aligned with the Russian government. He told The Washington Post that there are links between the malware used in the attacks and a cyberespionage campaign against NATO and Western European governments by a group of Russian hackers iSight named “SandWorm.”

iSight said it has documented SandWorm infiltrations of Ukrainian government computer systems and telecommunications and energy companies since 2014, when Russia annexed Crimea in support of separatists in eastern Ukraine.

Recommendations

How-Cyberattack-Shut-Down-Ukrainian-Power-Cos-(NERC,-SANS-ICS)-webThe report concludes with a number of recommendations, including eliminating unnecessary VPN pathways and developing “cyber blackstart” capabilities. But it warns that “it is likely that the adversary will modify attack approaches in follow‐on campaigns and these mitigation strategies may not be sufficient.”

Some analysts were initially skeptical of the Ukrainian government’s claims that the outages were the result of cyberattacks. “ICS organizations frequently have reliability issues and incorrectly blame cyber mechanisms such as malware found on the network that is unrelated to the outage,” the report said.

In this case, however, the report’s authors had no doubt about the credibility of the government’s and utilities’ claims. It also ranked the technical information available a 4 on a scale of 5, citing the availability of malware samples, observable ICS impacts, technical indicators and firsthand interviews.

The attack marks “the first time the world has seen this type of attack against [operational technology] systems in a nation’s critical infrastructure,” the report said. “This is an escalation from past destructive attacks that impacted general‐purpose computers and servers (e.g., Saudi Aramco, RasGas, Sands Casino and Sony Pictures).”

The report said there was nothing about Ukraine’s infrastructure that made it uniquely vulnerable.

“The impact of a similar attack may be different in other nations, but the attack methodology, tactics, techniques and procedures observed are employable in infrastructures around the world.”

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ISO-NE Leaves Boundaries Unchanged for FCA 11

By William Opalka

WESTBOROUGH, Mass. — ISO-NE will propose that the zonal boundaries for its 11th Forward Capacity Auction remain unchanged from those set for this year’s auction.

Zones for FCA 11 (ISO-NE)Transmission projects expected to be in service by 2020 are adequate to leave the boundaries of the four zones intact for the capacity commitment period of 2020/21, ISO-NE Director of Transmission Services and Strategies Al McBride told the Planning Advisory Committee last Tuesday. The zones are also unaffected by resource retirements and additions already accounted for.

The four zones are: Southeast Massachusetts/Rhode Island, which includes Greater Boston; Northern New England, which includes Maine, New Hampshire and Vermont; Connecticut; and Rest of Pool, generally central and western Massachusetts.

The zones were reconfigured last year due to transmission constraints in SEMA/RI caused by generation retirements. However, ongoing transmission projects are expected to mitigate the effects of those retirements: The Greater Boston upgrades north of the city have been accepted by ISO-NE, and several projects in Rhode Island have been either completed or will be in response to the Brayton Point retirement in southern Massachusetts. (See ISO-NE Chooses $740M Land-Based Tx Project for Boston Area.)

In addition, a “significant part” of the Greater Hartford/Central Connecticut upgrades have been certified by ISO-NE and are expected to be in service by June 2019, McBride said.

External transfer limits will not be changed. However, McBride said the Cross Sound Cable that connects ISO-NE with NYISO under Long Island Sound will be re-evaluated with results due by May.

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MISO Board of Directors Meeting Briefs

NEW ORLEANS — MISO will commence its long-term Clean Power Plan analysis in July regardless of the existing Supreme Court stay, Clair Moeller, executive vice president of transmission and technology, told the Board of Directors last week. Moeller said the RTO would provide individual state data to officials in all states, including those having placed a “hard stop” on CPP preparations.

FERC Chairman Norman Bay at MISO Board of Directors (copyright RTO Insider)
Bay © RTO Insider

FERC Chairman Norman Bay, who attended the board meeting, said he hoped MISO states challenging the CPP and halting compliance work had a “Plan B.” He also thanked the RTO for its “uniquely constructive and pragmatic voice” in supporting the measure.

“We know we’re on a glide path already with low-cost wind turbines, lower-cost solar panels and greater efficiency,” board member Tom Rainwater said. He asked how the economics of renewable penetration would play out even if the CPP is struck down.

Moeller called that one of the more complicated questions MISO would seek to answer through remaining modeling, saying the RTO’s “job is to plan into an uncertain future.”

MISO-Board-of-Directors-Meeting-(copyright-RTO-Insider) with Norman Bay
MISO Board of Directors Meeting © RTO Insider

Bay said that if analysts are correct in predicting a 50% decline in the cost of storage by 2020, storage technology could be a “game changer” for renewable penetration.

“Everyone knows the cost of energy storage will decline,” Bay said. “It’s a question of how much and when. … This is an area where I expect FERC to do more work and work to remove barriers to entry.”

MISO YTD Financials 1% Over Budget

MISO’s year-to-date February financials came in $400,000 — or 1.1% — over the RTO’s $36 million budget for the period.

Most of the overage — $300,000 in additional costs for “compliance and process-improvement activities” is a permanent variance, said Vice President of Finance Jo Biggers, who said MISO was seeking to trim other spending to make up for the shortfall.

“We’re still forecasting to be on budget by the end of the year,” Biggers said.

MISO-YTD-Budget-(MISO)-(discussed at MISO Board of Directors featuring Norman Bay)

Board member Paul Bonavia noted that the board had “only just finalized the budget, and we already have a permanent variance.”

“We’re going to figure out a way to cover it by reducing costs somewhere else,” MISO CEO John Bear told the board.

The overrun occurred despite MISO spending only $6 million of its forecasted $7.1 million capital budget, mostly because of project delays. Biggers said capital spending is expected to fall in line by the end of March when projects catch up to their timelines.

MISO Adds Transmission Developers, Industrial Customer Group to Membership

MISO’s board unanimously approved membership applications for three non-transmission owning entities, including:

  • Cobra Industrial Services, a Houston-based transmission developer;
  • Transmission developer PPL TransLink, a unit of Pennsylvania-based PPL; and
  • Louisiana Energy Users Group, an association of 23 industrial customers.

— Amanda Durish Cook

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MISO Proposes Adding Forward Auction for Retail Choice Zones

By Amanda Durish Cook

NEW ORLEANS — Deregulated markets in MISO would get a three-year forward capacity auction beginning in 2018, under a proposal unveiled by the RTO last week.

Forward Capacity Auction - Retail Choice Zones - Dynegy's Baldwin Energy Complex in IL
Dynegy’s Baldwin Energy Complex in MISO

The RTO announced the proposal after reviewing stakeholder recommendations for addressing the capacity needs of retail choice regions such as southern Illinois’ Zone 4. (See PJM-Type Capacity Auction for MISO Zone 4 Proposed.)

“It is now evident MISO’s markets … need to effectively and efficiently signal the need to maintain existing and/or invest in new resources necessary to assure resource adequacy in competitive retail areas that rely exclusively on markets,” MISO said. “Given the existing [Planning Resource Auction] was not designed to meet this need, narrowly focused reforms are required to complement the existing market construct while also preserving the benefits currently derived by most of MISO’s region from simple capacity balancing.”

The proposed Forward Local Requirements (FLR) auction would be held three years in advance of the planning year and employ a downward sloping demand curve. Procured local capacity would be self-scheduled into the existing PRA with costs allocated pro rata to participating load-serving entities.

LSEs not subject to retail choice will continue to procure capacity through state integrated resource plans and the PRA using the current vertical demand curve.

“These enhancements are designed to have no impact on the existing state or local jurisdictional long-term planning processes for those that do not participate,” MISO said. “The effect will be that nonparticipating LSEs and participating LSEs will have different price sensitivities to purchasing … capacity in the auction.”

Design Elements

The RTO proposed to hold the first FLRAs in spring 2018 for planning years 2019/20 through 2021/22. The amount of capacity retail choice LSEs obtain under the sloped demand curve would be variable, within a newly defined “target reliability range.” Any capacity needs not met through the forward auctions will be filled through the existing prompt-year capacity auction.

While LSEs in deregulated areas would be automatically entered into the FLRA, they could opt out by developing a fixed resource adequacy plan in advance of the auction. LSEs outside of deregulated areas could opt-in to the forward auction but would be required to remain for at least five years.

Participation will be voluntary for supply resources except for those in a local resource zone with participating demand. Such resources will be subject to existing market power rules.

Supply resources owned or controlled by LSEs will be exempt from the must-offer requirements if the LSEs have forecasted demand equal to or more than their supply portfolios.

Seasonal Construct

The forward capacity product would match the two-season construct MISO proposed in December for the PRA, with a four-month summer season (June-September) and eight-month winter (October-May). The RTO hopes to implement the seasonal structure for the 2018/19 planning year. (See MISO Delays Seasonal, Locational Capacity Constructs.)

MISO officials said the RTO is committed to working with stakeholders to refine the new auction proposal. “I think the key is keeping that stakeholder dialogue going, and we’ll continue that in the April Resource Adequacy Subcommittee,” MISO CEO John Bear said.

In a recent letter to stakeholders, MISO Executive Director of Market Design Jeff Bladen wrote, “The goal is to ensure MISO’s capacity market design is up to the task of serving as the primary market mechanism for assuring resource adequacy in all time horizons in competitive retail areas of the MISO region while also serving a complementary role in the rest of MISO.”

MISO plans to file a final proposal with FERC in July, according to Bear.

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State Briefs

ISO-NE Launches 2016 Regional Electricity Outlook

New England’s power grid is on course to becoming a hybrid system in the next decade, where up to 20% of its resources are provided by retail customers or by local distribution utilities, according to ISO-NE’s 2016 Regional Electricity Outlook.

ISO-NE LogoAmong the report’s highlights: More than 4,200 MW of the region’s conventional nuclear, coal- and oil-fired generating capacity has retired recently or is scheduled to retire soon; about a third of the 13,000 MW of proposed generation projects are wind resources; and pipeline constraints and few delivery points for LNG will continue to pose challenges for fuel supply.

More: ISO-NE

Study: 569,000 Clean Energy Jobs in Midwest

The 12 Midwestern states are home to nearly 569,000 clean energy jobs, with projected employment growth of 4.4%, according to a study by Chicago nonprofit Clean Energy Trust. Kansas and Indiana both had below-average predicted growth in the sector, while Missouri leads with a projected growth of 8.3%.

The analysis is based on U.S. Bureau of Labor Statistics data and a survey of thousands of businesses in the region. The comprehensive report not only breaks down job numbers by state, but by Congressional and state legislative districts as well.

The study also found that energy efficiency is by far the leading clean energy sector, employing more than 423,000. The runner-up, renewable energy, boasts about 70,000 jobs.

More: Solar Industry Magazine

CONNECTICUT

Emissions Would Spike Without Millstone Plant

MillstoneNuclearSourceDominionIf Dominion Energy’s three-reactor Millstone Power Station were to close, more than 1,000 jobs would be lost and carbon emissions in New England would increase by 27%, officials told a legislative panel.

The nuclear plant is not endangered, but the General Assembly’s Energy and Technology Committee discussed the announced closure of Pilgrim nuclear station in Massachusetts as the industry struggles to remain financially viable in a market flooded with cheap natural gas.

“I do not anticipate in the short term the need to shut down Millstone,” said Daniel G. Stoddard, senior vice president of nuclear operations for Dominion. “However, the challenges exist, the challenges are significant and the trends continue to make those challenges more difficult.” The Waterford facility is the largest nuclear power station in New England; it provides about 2,100 MW, or roughly half of Connecticut’s electrical consumption.

More: Hartford Courant

ILLINOIS

ComEd Using Smart Meters To Gauge GHG Effects

smartmeterSourceCUBCommonwealth Edison will begin using data collected by smart meters to calculate greenhouse-gas reductions that can be linked to initiatives to reduce peak demand.

The Chicago utility is using a metric proposed by the Citizens Utility Board and the Environmental Defense Fund to calculate emission reductions at specific hours. A kilowatt-hour saved during times of high carbon intensity, when more power is generated by less efficient means, is more valuable than one saved during periods when more renewable energy is being pumped onto the grid.

“As the first utility in the country to adopt this greenhouse gas measurement tool, ComEd is leading the way to a cleaner energy future,” said Dick Munson, EDF’s Midwest director of clean energy.

More: SmartGrid News

LOUISIANA

PSC Postpones Action On $4.9B Cleco Acquisition

ClecoSourceWikiState regulators on March 21 agreed to postpone until this week whether to reconsider their rejection of international investors’ $4.9 billion bid for Cleco. The Public Service Commission is considering whether to change last month’s order that nixed the acquisition of the utility.

More: The Advocate

MASSACHUSETTS

Former Secretaries Support Baker Bill

MassGovBakerSourceGov
Baker

Three former state energy secretaries are supporting Republican Gov. Charlie Baker’s proposal to solicit long-term contracts for hydropower.

Maeve Vallely-Bartlett, Rick Sullivan and Ian Bowles, who served under former Democratic Gov. Deval Patrick, offered bipartisan support for legislation requiring utilities to solicit long-term contracts for hydroelectric power. Administration officials have said this would increase the use of hydroelectric power in the state, which is necessary for it to meet its goals for reducing carbon emissions.

The legislation remains bottled up in a legislative committee, although House Speaker Robert DeLeo (D-Winthrop) has said it could be reported out soon. Conventional power generators and environmentalists who support solar and wind energy have criticized the bill.

More: MassLive.com

MICHIGAN

State Wants Pipeline Condition Information from Enbridge

EnbridgeMackinacSourceNatWildlifeFederationState officials, concerned about the possibility of leaks from pipelines that run under Lake Michigan, have asked Enbridge to provide specific condition information on Line 5, a pair of pipelines that cross the Straits of Mackinac.

The 63-year-old pipelines were recently declared safe by the company, but Enbridge released little detail on its inspections. The state has requested reports from the inline inspection robots used to check on the pipelines’ condition. The state is hiring an outside analyst to review the data.

“The attorney general has said, time and time again, that the days of this pipeline are limited,” said spokeswoman Andrea Bitely. “And doing these independent analyses — this independent risk analysis and the alternative analysis — will tell us what’s next.”

More: Michigan Radio

MISSISSIPPI

Commissioner Says Kemper Will Be Watched Closely

MissPSCCecilBrownSourceGov
Brown

Public Service Commissioner Cecil Brown said Southern Co.’s costly Kemper Project will be closely watched when it goes into operation this year. Brown said monitoring the coal-gasification power plant  will be the commission’s biggest challenge in the coming months.

“There are people out there who say Kemper is dangerous,” Brown said at the Stennis Institute’s monthly luncheon. “I don’t know about that, because I’m not an expert. I’ve talked extensively with Mississippi Power and I’ve raised that question and I’ve been assured that it is safe.”

The plant’s gas synthesizer is supposed to go online later this year.

More: Watchdog.org

MONTANA

Judge Nixes Water Permit For Rosebud Coal Mine

MontanaDEQSourceGovA state district judge has struck down a water-discharge permit for a southeastern coal mine, saying officials failed to fully consider the effects of pollutants on several nearby creeks.

In a March 14 decision, Judge Kathy Seeley ordered the Department of Environmental Quality to reconsider the mine’s water discharge permit. She said the agency had shown “clear errors of judgment” in allowing reduced monitoring of pollution from the mine and reclassifying surrounding waterways so they were subject to less stringent pollution standards.

A separate challenge of the state’s approval of a 12-million-ton expansion of the Rosebud mine is pending before the Board of Environmental Review. The Rosebud strip mine produces about 9 million tons of coal a year, primarily for the Colstrip power plant.

More: Billings Gazette

NEW JERSEY

BPU Imposes Cybersecurity Policies on Utilities

NJBPUMrozSourceGov
Mroz

Regulated utilities will be required to follow a new set of cybersecurity protocols under policies adopted by the Board of Public Utilities.

The requirements are designed to protect customer information and grid reliability, according to the board. The new standards are based upon recommendations from the state Cybersecurity and Communications Integration Cell, with input from the FBI.

“To ensure that we continually meet the challenges of this ever-changing threat, we have made certain that these policies are uniform yet flexible, promote information-sharing and are capable of evolving as the threat landscape emerges,” BPU President Richard Mroz said.

More: Homeland Preparedness News

NEW MEXICO

Environmental Group Calls for Investigation of Commissioner

Karen Montoya, Democratic candidate for PRC District 1, 2012. mhartranft@abqjournal.com Wed May 02 11:44:17 -0600 2012 1335980652 FILENAME: 130212.jpg
Montoya

An environmental advocacy group has asked the state Secretary of State to investigate Public Regulation Commission Vice Chairwoman Karen Montoya, alleging she has violated the Government Conduct Act through her communications with executives of an electric utility that she regulates.

New Energy Economy, a group that has been engaged in several legal battles with the PRC in the past year, filed the complaint March 17. It said in September several commissioners, including Montoya, were overly friendly with representatives of Public Service Company of New Mexico.

The state Supreme Court considered the complaint in late 2015 before dismissing it.

More: The Santa Fe New Mexican

PENNSYLVANIA

Quaker Group Urges PECO to Embrace Philly Solar Project

The advocacy group Earth Quaker Action Team is demanding that PECO Energy purchase power from potential solar installations in North Philadelphia, one of the city’s poorest areas.

The group predicts that investors will come forward for solar projects if PECO demonstrates there is demand for the output.

A PECO spokesman said that while the utility is open to considering such a program, it is legally required to buy competitively priced electricity.

More: StateImpact; The Philadelphia Inquirer

TENNESSEE

Colbert Fossil Plant Closes after 61 Years

ColbertFossilPlantSourceTVAAfter 61 years of providing electricity to the Tennessee Valley, the Colbert Fossil Plant has been disconnected from the grid.

The Tennessee Valley Authority said more than a year ago that the plant would close by April 15, when new regulations for mercury and air toxins go into effect.

Employees were offered transfers to similar jobs at other TVA fossil fuel plants.

More: The Chattanoogan.com

TEXAS

Environmental Groups Try to Block Nuclear Expansion

NuclearInnovationNASourceNINAEnvironmental groups want the Nuclear Regulatory Commission to revoke licenses for two new reactors at the South Texas Project, claiming the project is controlled by a foreign owner in violation of the Atomic Energy Act.

Public Citizen, the Sustainable Energy and Economic Development Coalition and the South Texas Association for Responsible Energy say Japanese company Toshiba, which owns 10% of Nuclear Innovation North America, has been fully funding the pre-licensing proceedings for two new reactors. “In our view, the entity who funds it then has the ability to control it,” said Robert Eye, an attorney representing the groups. NRG Energy owns 90% of the project.

NRC recently approved two new reactors at the site southwest of Houston, where two reactors currently produce about 2,700 MW. NRG is holding off on building the reactors because of low natural gas prices and a lack of demand for new energy in the state.

More: Victoria Advocate

VERMONT

Renewable Energy Siting Legislation Opposed

EnergizeVermontSourceEnergizeVermontCritics of the state’s process for selecting sites for renewable energy projects are opposing proposed legislation designed to give regional planning commissions greater say in where solar and wind power projects are located.

Leaders of the Energy Transformation Coalition and Energize Vermont said Senate Bill 230 still gives the Public Service Board too much ability to override the wishes of residents when approving renewable energy projects.

“Energy developers are running roughshod over our communities,” said Mark Whitworth, president of the board of Energize Vermont. “The result is an energy rebellion that has now spread to 128 towns.”

More: The Associated Press

WISCONSIN

PSC: State’s Electricity Rates Among Highest in Midwest

WisconsinPSCSourceGovElectricity rates in the state are among the highest in the Midwest, but residents pay less than customers in surrounding states because they use less power on than average, according to a recent study by the Public Service Commission.

The study found that 2015 rates in the state were higher for residential, commercial and industrial users than in Michigan and six other Midwestern states. But the same study showed that the typical monthly residential bill was $8 less than those in other states, due to lower consumption.

More: The Associated Press

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Company Briefs

Duke Energy has announced plans to buy power produced from methane collected from livestock waste.

HogsdukeSourceWikiDuke has contracted with Carbon Cycle Energy, which will build and own a plant that will generate enough electricity from chicken and swine waste to power about 10,000 homes a year.

The plant will likely be located in eastern North Carolina. The state, which falls just behind Iowa as the country’s largest pork-producing state, requires utilities to produce power from swine and poultry waste. The state’s renewable energy law also requires utilities to procure 12.5% of its power from renewable sources by 2021.

More: Insurance Journal

Black Hills Energy Starts Construction on Tx Line

BlackHillsEnergySourceBlackHillsBlack Hills Energy has started construction on a 144-mile, $54 million transmission line that will run from northeast Wyoming to Rapid City, S.D.

The 230-kV Teckla-to-Rapid City project is about a year behind schedule because of delays to get permission from property owners, who held out for higher easement payments. The company also needed permission from the federal government to run the line through the Black Hills National Forest.

More: Rapid City Journal; Black Hills Energy

Atlantic Coast Pipeline Sells 96% Of Capacity, Surveys 90% of Route

AtlanticCoastPipelineSourceDominionThe operator of the Atlantic Coast Pipeline, a $5 billion pipeline that will deliver natural gas from Appalachian shale fields to Virginia and North Carolina, has sold 96% of the future pipeline’s capacity and surveyed 90% of the 550-mile route, according to an update from the company.

Dominion Energy President Diane Leopold said 90% of the 2,800 landowners along the route have allowed survey teams on their land and 500 have signed easements. She also said that a Pennsylvania steel mill is set to start manufacturing the pipe in a $400 million contract.

More: The Associated Press

Ex-Austin Energy Chief Confirmed As Seattle City Light’s GM, CEO

LarryWeisSourceAustinGov
Weiss

The former head of Austin Energy was approved as Seattle City Light’s general manager and CEO, despite criticism over his January remarks that Austin’s utility should be run by an independent board and not the City Council.

The Seattle City Council voted 7-2 to confirm a four-year appointment of Larry Weis to run the city’s electric utility. He will earn $340,000 a year.

Council members made few explicit references to Weis’ time at Austin Energy, but his record was central in the public testimony at his confirmation hearings. His supporters praised him for winning over the union that represents Seattle City Light workers and for his decision to hire a director of environment and sustainability issues.

More: Austin American-Statesman

Lincoln Electric Plan Calls for $453M in Upgrades, Expansions

LincolnElectricSourceLincolnLincoln Electric System, the Nebraska public utility serving the state capital region, approved a six-year $453 million capital budget to replace and upgrade infrastructure.

Lincoln Electric, an SPP member that has about 120,000 customers, says it expects to add 9,400 customers, move the overhead service lines for 1,800 customers underground and add 44 MW of new load to its system. Its two most costly projects call for $204 million to update overhead and underground distribution and transmission lines and $152 million for power generation facilities.

Almost $100 million is slated to update power plants to comply with EPA’s Clean Power Plan.

More: Lincoln Journal Star

Two Westar Employees Threatened By Residents When Changing Meters

westarenergysourcewestarTwo Hutchinson, Kan., residents were arrested in separate incidents for threatening Westar Energy employees who swapped out their old electric meters.

County officials charged a resident who held a Wester employee at gunpoint with aggravated assault and kidnapping. Four days earlier, deputies arrested another Hutchinson resident who threatened bodily harm to a Westar employee who had changed his meter.

More: The Hutchinson News

Duke Energy’s California Deal Expands its Solar Stable

dukeenergysourcedukeDuke Energy Renewables has purchased a proposed 20-MW solar project in California from EDF Renewable Energy. The project, to be built in San Bernardino County near Barstow, will be called the Longboat Solar Power Project.

The output and the renewable energy credits are being sold to Southern California Edison in a 20-year power purchase agreement.

The project, which is expected to come online by the middle of this year, will bring Duke’s solar stable in California to 130 MW. Duke’s regulated and commercial businesses have invested more than $4 billion in solar and wind generation over the past eight years.

More: Duke Energy

Dynegy Announces Closure Of Wood River Plant in June

WoodRiverSourceDynegyDynegy’s coal-fired Wood River plant in Illinois will be shuttered in June after a MISO study concluded it was no longer needed to ensure reliability in the region.

The company said the plant was unprofitable under MISO’s “poorly designed” capacity market. About 90 jobs will be lost when the plant closes. The plant also pays about $1.6 million in community property taxes.

Dynegy anticipates that cleaning up the West Alton plant’s coal ash ponds will cost $18 million. The plant produced 465 MW from its two units, which went into service in 1954 and 1964.

More: The Telegraph

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UPDATE: Exelon Closes Pepco Merger Following OK from DC PSC

By Suzanne Herel

Exelon closed its $6.8 billion acquisition of Pepco Holdings Inc. on Wednesday, after the D.C. Public Service Commission approved the merger 2-1 on terms it crafted itself.

Two years in the making, the deal will rank Exelon as the largest utility in the country by number of gas and electricity customers.

Pepco shares gained $5.71 (27%) to $26.95 on the news, while Exelon shares lost 28 cents (-0.8%). Pepco stockholders will receive $27.25/share in the deal. PHI’s common stock was removed from the New York Stock Exchange on Thursday.

Pepco’s three operating companies will retain their local headquarters: Atlantic City Electric in Mays Landing, N.J.; Delmarva Power in Newark, Del.; and Potomac Electric Power Co. in D.C.

D.C. also won additional concessions: Exelon will move the offices of the CFO and the chief strategy officer to the district along with that of Pepco Energy Services, which is now in Arlington, Va. David Velazquez will assume the role of president and CEO of PHI, a post previously held by Joseph Rigby, who is retiring.

“Today, we join together as one company to play a vital role as a leader in our industry and the mid-Atlantic region,” Exelon CEO Chris Crane said in a statement. “We’ve made a number of commitments to customers in all of the Pepco Holdings utilities’ jurisdictions — the district, Maryland, Delaware and New Jersey — and we look forward to getting to work to deliver those benefits to our customers and communities.”

An Exelon spokesman said the D.C. agreement triggers the “most favored nation” clauses in the other states’ contracts, and it will be returning to those state regulators to “true up” benefits.

So far, Exelon has committed $430 million for ratepayer credits, reliability improvements and other investments for customers in Pepco’s service territories.

DC PSC Lifeline

dc psc, exelon, pepco, exelon-pepco merger

Many had expected the deal to fail, after the most recent proposal by Exelon and Pepco was rejected by all but three of the other settling parties.

The companies on March 7 asked the commission to consider three options: Revisit its rejection of the settlement agreement brokered by the administration of Mayor Muriel Bowser; adopt the revised proposal by Commissioner Joanne Doddy Fort; or accept a third alternative that would give the PSC more latitude in how to spend money from the $72.8 million customer investment fund on rate relief. (See Exelon-Pepco Deal Doubtful as DC Officials Reject Alternatives.)

Fort and Commissioner Willie Phillips voted to approve the second option; Chairwoman Betty Ann Kane dissented.

Fort’s proposal took Bowser’s deal and added changes regarding the use of the CIF, the development of a 5-MW solar generation facility at the Blue Plains Advanced Wastewater Treatment Plant and the role of Pepco in establishing public-purpose microgrids.

The Bowser-brokered deal had earmarked money from the CIF for a handful of D.C. groups, including the Sustainable Energy Trust Fund, the District of Columbia Consumer and Regulatory Affairs Green Building Fund and the Low Income Home Energy Assistance Program.

The PSC’s counteroffer takes those funds, totaling $32.8 million, and places them in an escrow account to pay for projects to modernize the district’s energy system and for energy efficiency and energy conservation initiatives focused on housing for low- and limited-income residents. The PSC would have authority over the funds’ disbursement.

In her dissenting opinion, Kane said that developments in the record since she voted to oppose the Bowser settlement in February “give me even stronger reasons to find that the takeover of the district’s electric distribution company by a multi-faceted, vertically integrated, generation-focused holding company … benefits Pepco and Exelon shareholders but does not provide sustainable benefits to district ratepayers, places Pepco within a structure that is contrary to district law and policy and should be rejected.”

Unlike a rate case, she said, the sale of Pepco can’t be reviewed again. “It is gone forever,” she said. “The stated motive of the sellers is to increase PHI shareholder value. The motive of the buyer is to add regulated revenue to prop up Exelon’s failure to pay dividends to its shareholders. However, the needs of Pepco’s customers and the district are for a safe, reliable, modern electricity delivery distribution system at a just and reasonable cost.”

In their order, Fort and Phillips said Exelon’s first option identified no error of law or fact that would warrant a reconsideration of its rejection of the settlement negotiated by Bowser’s office.

It found the third alternative unacceptable for three reasons: It would allocate a $25.6 million base rate credit solely to residential and apartment customers; there was not enough information to determine the implications of the proposed base rate credits; and the shift of funding to rate credits would come at the expense of projects that would make the grid better able to accommodate distributed energy resources.

In offering the settling parties the retooled agreement, the commission already had judged it to be in the public interest.

Fort and Phillips said their revised settlement ensures that the district receives the $72.8 million CIF, which will be used for rate relief, energy conservation programs and projects to modernize the distribution grid and enable it to accept more distributed resources, “thereby further promoting the district’s sustainability agenda.”

“These are all funds that will not be available to district ratepayers or the district if the merger is not approved,” they said, adding that the changes made to the Bowser settlement “ensure that the district’s market remains a competitive one for suppliers who want to bring more renewable energy resources to our city while still requiring Exelon to invest in 7 MW of new solar in the district and 100 MW of new wind” in PJM.

Disappointment and Surprise

DC PSC, Exelon, Pepco, Exelon-Pepco mergerPower DC, a coalition formed against the deal, said, “We are profoundly disappointed and saddened that the D.C. Public Service Commission has ignored the clear opposition to the proposed Exelon-Pepco merger voiced by the district’s elected officials, community and business leaders, and residents.

“By approving the merger, the PSC has exposed our city to decades of higher rates, weakened its own ability to guide our city’s energy future and helped ensure that D.C. will fall behind the rest of the U.S. on clean, efficient energy.”

“I don’t think we’re surprised” at the ruling, said Williams Fields, senior assistant in the Maryland Office of People’s Counsel, which has appealed the Maryland Public Service Commission’s earlier approval of the deal. “It’s been down a long path. We haven’t read the ruling yet. We will have to evaluate on how it impacts Maryland in regards to additional funding from our most-favored-nation status. And, of course, we will have to see how it affects our appeal.”

Montgomery County, Md., Councilman Roger Berliner, who had campaigned against the merger, said in a statement that the merger approval was “deeply disappointing.”

“Its approval now means that Exelon will totally dominate the Maryland market,” he said. “Environmental and consumer interests were needlessly sacrificed. The only winners are Pepco shareholders and Exelon’s bottom line, a bottom line that has been hammered by its huge investment in nuclear power.”

David Bonar, Delaware’s Public Advocate, said he was “pleasantly surprised.”

“I’m glad to see that it is finally resolved. Each jurisdiction has its own idiosyncrasies and partners who have a right to input, and I’m glad they all had an opportunity to add their input,” he said.

“I think the [D.C.] PSC made the right decision. Now, we have to figure out exactly what it means to us in regards to additional funding. It will come out to several millions of dollars. I certainly hope we can give energy users some long-term benefits, like meaningful energy efficiency programs.”

The Apartment and Office Building Association of Metropolitan Washington was the only settling party to file its support of the commission’s revised proposal.

Those opposing it were the National Consumer Law Center, National Housing Trust and National Housing Trust-Enterprise Preservation Corp., the D.C. Office of the People’s Counsel, the Bowser administration and the D.C. Water and Sewer Authority.

They took issue with the PSC’s requirement that $25.6 million of the CIF earmarked for residential rate relief be held in escrow until the next Pepco rate case and then be considered for disbursement, including to nonresidential customers.

“Despite the commission’s perplexing approval of a proposal that OPC and most of the other settling parties rejected, the Office of the People’s Counsel is fully prepared to continue to aggressively advocate for ratepayers and fight to ensure that rates remain affordable for consumers, particularly for our most economically vulnerable residents,” People’s Counsel Sandra Mattavous-Frye said.

The NCLC and the NHT were the only settling parties to voice support for the companies’ third alternative.

“Should option three be rejected, the merger is likely to collapse,” they said. “From the perspective of NCL/NHT, this is contrary to the public interest and particularly contrary to the interests of low-income households in the district.”

The General Services Administration, the largest consumer of electricity in the district, had not signed on to the settlement negotiated by Bowser but had voiced concern that the included rate relief would not be disbursed to non-residential customers. It initially supported the commission’s revised proposal, which addressed that issue, but on March 17 filed comments urging the PSC to reject Exelon’s filing.

Exelon has spent an estimated $259 million over the past two years trying to capture Pepco’s $7 billion rate base.

Ted Caddell contributed to this article.

Posted on

DC PSC Set to Decide Exelon-PHI Merger Fate Wednesday

[SEE UPDATE: DC PSC OKs Exelon-Pepco Deal.)

By Suzanne Herel

The D.C. Public Service Commission is poised to decide Wednesday the fate of the controversial proposed merger of Exelon and Pepco Holdings Inc.

dc psc, exelon, pepco, exelon-pepco merger
DC PSC Commissioners at the bench © RTO Insider

The $6.8 billion deal looks in doubt, as the most recent proposal by Exelon and PHI was rejected by all but three of the other settling parties.

The companies on March 7 asked the commission to consider three options: Revisit its rejection of the settlement agreement brokered by the administration of Mayor Muriel Bowser; adopt the revised proposal offered by the commission; or accept a third alternative that would include no additional money for a customer investment fund, but would give the PSC more latitude in how to spend it regarding customer rate relief. (See Exelon-Pepco Deal Doubtful as DC Officials Reject Alternatives.)

It asked the commission to rule by April 7.

The Apartment and Office Building Association of Metropolitan Washington was the only settling party to file its support of the commission’s revised proposal.

Those opposing it were the National Consumer Law Center, National Housing Trust and National Housing Trust-Enterprise Preservation Corp., the Office of People’s Counsel, D.C. government and the D.C. Water and Sewer Authority.

They took issue with the PSC’s requirement that $25.6 million of the roughly $78 million customer investment fund earmarked for residential rate relief be held in escrow until the next Pepco rate case and then be considered for disbursement, including to nonresidential customers.

The NCLC/NHT were the only settling parties to voice support for the companies’ third alternative.

“Should option three be rejected, the merger is likely to collapse,” they said. “From the perspective of NCL/NHT, this is contrary to the public interest, and particularly contrary to the interests of low-income households in the district.”

The General Services Administration, the largest consumer of electricity in the district, had not signed on to the settlement negotiated by D.C. government, but had voiced concern that the included rate relief would not be disbursed to non-residential customers. It initially supported the commission’s revised proposal, which addressed that issue, but on March 17 filed comments urging the PSC to reject Exelon’s filing.

The first option proposed by the companies should be rejected because it did not include grounds that the commission’s rejection was “unlawful or erroneous.” The second should be dismissed because it was not approved by all of the settling parties, as the PSC required. The third should be refused as either a petition for reconsideration or a new settlement agreement that would be subject to normal commission proceedings, it said.

Chris Crane testifying on the exelon-pepco merger at the DC PSC
CEO Chris Crane Source: DC PSC

Exelon has spent an estimated $259 million over the past two years trying to capture Pepco’s $7 billion rate base.

CEO Chris Crane said in a Feb. 3 earnings call that the company was prepared to immediately begin buying back the 57.5 million shares it issued for the $6.8 billion deal if the merger fell through.

The uncertainty of the merger has taken a toll on Pepco’s stock. In late afternoon trading, it was down 52 cents (2.37%) at $21.45. Exelon shares have remained largely unaffected. In late afternoon trading they stood up 30 cents (0.85%) at $35.18.