Company Briefs

Using internal records, private emails and recorded conversations provided by a whistle-blower, The New York Times published a lengthy investigation July 5 into the delays and costs overruns at Southern Co.’s Kemper coal-gasification plant.

The Times found that the plant’s owners understated its costs and repeatedly tried to conceal its multitude of problems. Southern is under investigation by the Securities and Exchange Commission, and the Occupational Safety and Health Administration told the company in March that it violated federal whistle-blower protections when it fired Brett Wingo, an engineer who was the Times’ primary source for the article.

In response, Southern released a statement the same day as the article’s publication, calling Wingo’s claims “unsubstantiated” and insisting that the newspaper took quotes from recordings out of context. “Rather than educate readers on the worldwide benefits of this cutting-edge, first-of-its-kind facility, today’s New York Times article on the Kemper project provides a negative recap of previously disclosed developments that have already been addressed,” the company said.

More: The New York Times; Southern Co.

Duke Increases its Quarterly Dividend

Duke Energy increased the quarterly dividend payment on its common stock by 3.6%, payable Sept. 16.

The dividend was set at $0.855/share, an increase of $0.03.

“For 90 consecutive years, Duke Energy’s dividend has been as reliable as the energy we provide,” CEO Lynn Good said.

More: Duke Energy

Ameren Asks for Rate Increase, 7th in a Decade

Ameren Ameren filed for a $206 million rate increase with Missouri regulators in early July, the seventh request for a rate review in a decade. A final determination is due at the end of May 2017.

The company says the increase equates to an average 7.8% rate boost for consumers. Missouri’s Office of Public Counsel says the increase is actually closer to 8.3% for residential customers, who will bear more of the cost burden than other customer classifications.

Warren Wood, Ameren Missouri’s vice president of external affairs and communication, said the increase serves to recoup some of the $1.4 billion in investments the company made since its $122 million rate increase two years ago. He also said the company is also coping with the bankruptcy of Noranda Aluminum smelter, its largest consumer.

More: St. Louis Post-Dispatch

Cube Hydro Buys 215 MW of NC Hydro

Cube Hydro Partners said it will buy and upgrade four hydropower units along North Carolina’s Yadkin River from Alcoa Power Generating, a subsidiary of aluminum smelter Alcoa. The transaction, for an undisclosed sum, will add 215 MW to Cube’s current 126-MW portfolio.

Alcoa developed and operated the four hydro units along a 38-mile stretch of the Yadkin for nearly 100 years as part of its aluminum smelting operation at Badin Works. Alcoa closed the plant in 2010.

Cube, based in Bethesda, Md., currently owns and operates 14 hydro plants in New York, Pennsylvania, Virginia and West Virginia.

More: Salisbury Post

Duke Providing $1.5M for EV Charging Ports in NC

Duke Energy announced last week that it is providing North Carolina municipalities subsidies to help construct electric vehicle charging stations. The company said it would provide $1 million for EV charging stations and $500,000 for electric bus stations.

The company said that would increase by 30% the number of charging stations throughout the state, where it said there are currently about 700 stations operating and about 4,700 plug-in EVs registered.

“Over the past decade, Duke Energy has supported the development of several hundred electric vehicle charging stations in North Carolina,” said David Fountain, Duke’s North Carolina president. “Adoption of EVs depends on a robust infrastructure for consumers.”

More: Duke Energy

Duke’s Solar Farm on Ind. Naval Base Gets Nod

The Indiana Utility Regulatory Commission has given final approval to Duke Energy’s proposed 17-MW solar farm on a naval base.

The 76,000-panel project will be situated on 145 acres at the Crane naval station in southwestern Indiana and begin selling power early next year. The project, the second solar installation partnership between Duke and the Navy, would be the second-largest solar plant in the state.

More: Charlotte Business Journal

Duke Consolidates Renewable, Distributed Energy Divisions

Duke Energy consolidated its renewables and distributed energy businesses following the departure of 14-year veteran Greg Wolf, president of its Commercial Portfolio unit.

The Commercial Portfolio, which oversees Duke Energy Renewables, will be combined with its Distributed Energy Resources wing, now headed by Rob Caldwell.

Caldwell, an 18-year Duke veteran, will become president of the new division: Duke Energy Renewables and Distributed Energy Technology. Some functions of the old divisions will be pooled, while others will remain separate, according to the company.

More: Charlotte Business Journal

Westar Shareholders Allege Execs Undervalued Company

A group of Westar Energy stockholders has filed a class action suit in Kansas alleging that executives undervalued the company in its $12.2 billion sale to Great Plains Energy in May.

Under the sale agreement, shareholders will get $60/share: $51 in cash and $9 worth of Great Plains stock. The plaintiffs, however, think that is too cheap. They say that Westar’s stock price rose 55% in the year before the sale, but the $60/share total offered shareholders is only a 13% increase.

“Westar stockholders, who stand to receive a portion of the merger consideration in Great Plains stock, will also be burdened with the onerous debt Great Plains will be taking on,” according to the lawsuit. “The proposed transaction will almost triple Great Plains’ debt.”

More: The Topeka Capital-Journal

NextEra Subsidiary Begins Construction on Wind Farm

Kingman Wind Energy has signed a $26.4 million agreement with Kansas’ Kingman County to begin construction on a 200-MW wind farm later this year.

Kingman is a subsidiary of NextEra Energy Capital Holdings, and it has a 20-year contract to sell the power to Westar Energy. The agreement was signed late last month.

More: The Wichita Eagle

EDF Sells Half its Stake In Kansas Wind Farm

EDF Renewable Energy said last week it has sold half of its Slate Creek Wind Project in Kansas to a consortium led by Axium Infrastructure. EDF will continue to own the other half and provide part of the operations and maintenance.

The 150-MW project began operations in December. Its power is sold to Kansas City Power & Light on a 20-year, fixed-price power purchase agreement.

More: The Wichita Eagle

KCP&L Opens 1st Solar Plant, Producing 4,700 MWh Annually

Kansas City Power & Light last week opened its first commercial-scale solar power facility, capable of generating more than 4,700 MWh of energy annually. The 12-acre plant has 11,500 solar panels at KCP&L’s Greenwood Energy Center, south of Kansas City.

“Solar technology is constantly getting better and more efficient,” said Chuck Caisley, KCP&L’s vice president for marketing and public affairs. “We are investing in solar because of its relatively quick construction and our commitment to a sustainable future.”

More: The Kansas City Star

Dominion Wins Smart Grid Tech Patent Suit

Alstom Grid infringed on a patent for energy efficiency technology used in Dominion Resources’ “Edge” products, a federal jury found, awarding $489,000 to subsidiary Dominion Voltage.

The company uses the app in substations to stabilize and slightly reduce voltage in areas where smart meters are installed, resulting in lower electricity bills. The software is used by 12 U.S. utilities.

The ruling, out of the U.S. District Court for the Eastern District of Pennsylvania, said Alstom had willfully violated the patent and convinced one of its utility customers to use it.

More: Richmond Times-Dispatch

JCP&L Completes $48M Transmission Upgrade

Jersey Central Power & Light has finished the last phase of a $48 million transmission project to bolster reliability for customers in the New Jersey counties of Mercer, Middlesex and Monmouth.

The project involved constructing a new 8-mile, 115-kV transmission line and upgrading an existing 230-kV line along a 3.5-mile right of way.

The utility installed more than 200 new wood utility poles, five new steel monopoles and more than 174,000 feet of new wires. A new transformer and circuit breaker upgrades also were installed at the substation in Highstown.

More: FirstEnergy

KCP&L Files for 7.5% Rate Increase with Missouri PSC

Kansas City Power & Light has filed a 7.5% rate increase request with the Missouri Public Service Commission. If approved, the increase would go into effect in April 2017.

KCP&L said in a news release the request is “needed to recover money spent upgrading the company’s infrastructure, adding regional transmission lines and complying with environmental and cybersecurity mandates.” The average customer’s bill would increase by $9/month.

The increase will affect customers in the KCP&L Missouri service area, which encompasses the Kansas City area. KCP&L asked for an 8.2% rate increase in February for a different territory in Missouri previously served by Aquila before its 2008 acquisition.

More: The Kansas City Star

Hawaii PUC Rejects NextEra-HEI Deal

The Hawaii Public Utilities Commission rejected NextEra Energy’s $4.3 billion takeover of Hawaiian Electric Industries, finding that the deal was not in the public interest.

The companies have elected not to challenge the decision in court, and NextEra will pay HEI $95 million in break-up fees.

The PUC said the companies failed to demonstrate benefits for Hawaii residents and a commitment to the state’s clean energy goals. The commission voted 2-0 to reject the deal. Commissioner Thomas Morak, recently appointed by Gov. David Ige to replace outgoing Commissioner Michael Champley, abstained from voting, but he said he supported the commission’s decision.

More: Honolulu Star-Advertiser

July 18, 2016

SPP MOPC Recommends 5-Year Timetable for Resolving $849M Z2 Bill

By Tom Kleckner

RAPID CITY, S.D. — More than five hours of presentations and stakeholder discussions over two days last week did little to resolve SPP’s albatross of Z2 credits, but they did potentially add more than four years to the crediting project’s timeline and increase the possibility that it will result in litigation.

Faced with an approximate bill of $848.8 million for 158 creditable transmission upgrade projects over the last 10 years (up from last summer’s staff estimate of $750 million), the Markets and Operations Policy Committee voted to give companies five years to pay off their Z2 bills, up from the 10 months approved by the Board of Directors in April. (See “Board Approves Z2 Level Payment Plan,” SPP Board of Directors Briefs.)

The board will take up the recommendation during its quarterly meeting next week. If approved, the change will require a filing at FERC.

The MOPC also rejected all five requests from the so-called Group B members — American Electric Power, the City of Chanute, Kan., Golden Spread Electric Cooperative, Kansas Electric Power Cooperative (KEPCO) and Westar Energy — to have their $42.6 million in charges allocated to the base plan and included in regional and zonal charges under SPP’s Tariff, rather than being directly assigned to the companies.

Still unclear is when the amounts owed and due become final, how to handle sponsoring customers who are no longer customers and what happens when companies go to state regulators to recover their costs.

‘Lawyered Up’

McAuley © RTO Insider — McAuley *© RTO Insider*

Dogwood Energy’s Rob Janssen suggested members were flying blind and said they should take a “rational” look at their options before going to FERC.

“No one knows the real impact of voting to transfer funds when we don’t know what the funds are. We need more facts on the table,” he said. “I don’t know if everyone is lawyered up enough to understand the implications, but I strongly suggest everyone do so before the next board meeting.”

“I feel like now that the numbers are higher than some people expected, they want to change the rules of the game,” said Greg McAuley of Oklahoma Gas & Electric. “I don’t think that’s the right way to do business.”

“We’re likely headed to a complaint at FERC because of the magnitude of the [Z2] numbers,” SPP CEO Nick Brown told the Regional State Committee on Monday. “The last thing I want to do is spend an inordinate amount of time before an administrative law judge in D.C.”

The Group B waiver requests were deferred by the MOPC, the board and the Cost Allocation Working Group in June. At the same time, those groups approved the Group A waiver requests to allocate their $56.4 million in obligations to the base plan. (See SPP Z2 Project Faces Further Hurdles, Possible Delay.)

Group A members — AEP, Arkansas Electric Cooperative Corp., the Northeast Texas Electric Cooperative and the Oklahoma Municipal Power Authority — are point-to-point transmission customers with Z2 obligations whose waiver requests were endorsed by SPP staff. Group B members are transmission customers that SPP said didn’t qualify for waivers, and Group C are those who didn’t request waivers.

McAuley grew visibly irritated as the discussion over Z2 waivers wore on. The OG&E settlement zone’s base-plan funding obligation of $31.7 million dwarfs every other zone, except AEP’s $29.9 million, and the company is waiting to learn its customers’ point-to-point claw-backs and credits for sponsored projects.

Grant © RTO Insider — Grant *© RTO Insider*

“We have retail customers who have waited patiently to be paid. Now, all of a sudden, we’re being told, ‘No, it’s too much,’” McAuley said. “We voted on how we were going to deal with the issue. People had expectations, and now we’re going to change it again. Everyone’s been impacted by this one way or the other, but now it’s time to settle accounts.”

“I raised the issue before that we were putting the payment plan in before we knew the impacts,” said Bill Grant, whose Southwestern Public Service’s zone faces a $10.4 million obligation. “SPP has some ownership in this, because they said this wasn’t going to be a big amount. Now we have some numbers and they’re not small. I think a lot of the people in this room would vote differently now. It is a pretty substantial number to some zones, and to some zones, that’s a pretty substantial number to recover for our customers.”

‘But For’

Ross © RTO Insider — Ross © *RTO Insider*

Attachment Z2 of SPP’s Tariff details how sponsors that fund network upgrades can receive reimbursements through transmission service requests, generator interconnections or upgrades that could not have been honored “but for” the upgrade. SPP has struggled for years to perform a proper accounting of the bills and credits and who owes what to whom.

AEP’s Richard Ross opened the second day of the MOPC discussion Wednesday by proposing the payment plan’s extension to five years.

Ross also proposed waiving all of Group B and Group C’s directly assigned upgrade costs, but that motion was rejected in a separate roll-call vote.

“You’re going to think I’m up to something, but the most important thing is that top line … spreading things out over five years,” Ross said, pointing to the language on the projector screen. “The second thing is, whatever we do, my customers will pay the same. I fear this will end up in FERC or the courts or somewhere. … I’m not interested in that.”

“If we can agree on this, I’d like to encourage we get behind this and have no further delays,” Grant said. “Let’s get this filed [at FERC], so we can have certainty around the issue. This has gone on way too long. It’s a concern for people who owe money, it’s a concern for people owed money. Our major concern is the impact to customers, and this five-year plan helps us address it.”

Staff assured members that interest on the debts would only apply to the initial balance and not accrue during the five-year payment plan. (Members can still choose to pay everything up front.) The revised payment plan cleared the MOPC with four votes in opposition and five abstentions.

The committee then rejected five individual waiver requests by either voice or roll-call votes. KEPCO argued unsuccessfully to have $6.1 million in revenue credits applied to the base plan, saying four service requests ranging between 7 MW and 25 MW should not have been aggregated together. As a result of the aggregation, KEPCO exceeded the Tariff’s resource-load ratio rule — limiting customers’ transmission service requests to 125% of their projected system-peak responsibility.

Evans © RTO Insider — Evans *© RTO Insider*

“If you apply the Tariff the way we interpret it, we don’t believe we exceeded our 125% limit,” KEPCO COO Les Evans said.

Midwest Energy’s Bill Dowling noted FERC distinguishes between discrimination and undue discrimination. “The Tariff discriminates between parties who are not similarly situated,” he said. “I consistently got the message from SPP [that] you can’t change something after the fact because you didn’t like the way it turned out. If we [grant the request], we’re sort of opening the door to other requests.”

KEPCO’s waiver request failed to come close to the 67% threshold, not even clearing 50% in positive votes. The four requests that followed — from AEP, Chanute, Golden Spread and Westar Energy — all met the same fate.

The rejections did not faze Westar’s John Olsen when his company’s time came up. Asked whether he wanted to proceed with a vote after having seen the previous results, Olsen sighed with resignation, “Oh, hell yes. Why not?”

“I continue to reflect on how can we do business this way based on what’s happened here this morning,” said McAuley, who opposed all five requests.

“We all have FERC attorneys. My suggestion is pay your FERC attorney and go to FERC and solve this,” OG&E’s Jake Langthorn told members. “If we want to come up with a fix to the Tariff, it’s going to take a lot more work than we can do this morning.”

FERC Ruling

The lawyers have already been active.

Ross’ proposal was made possible by FERC’s July 7 approval of an SPP request to waive the one-year limit for adjusting payment obligations and revenue distributions (ER16-1341). SPP’s request drew at least 18 protests or interventions.

FERC’s order also allowed transmission customers to request exemptions on safe-harbor cost limits.

“We note that it has been eight years since the commission accepted SPP’s Tariff provisions to implement revenue crediting. In the intervening years, SPP has experienced multiple delays in implementing the crediting Tariff provisions,” FERC said.

“Upgrade sponsors who have been negatively affected by SPP’s delay will finally, through this order, get the appropriate relief. We remind SPP of the need for transparency and timeliness when implementing commission-accepted Tariff provisions, especially in matters that so directly impact market participants and customers and are completely under the control of SPP.”

Project Progressing

The Z2 crediting project itself is progressing. The software system is partially complete and scheduled to deliver revenue crediting reports in September.

OG&E’s David Kays, chairman of the Regional Tariff Working Group, told the committee that staff has completed the historical calculations for long-term credit obligations for network service. He said base-plan funding adjustments and detailed settlements for historical data are still underway.

The final historical results are scheduled to be available for stakeholder review prior to the quarterly MOPC and board meetings in October, with the Z2 settlement invoices expected in early November.

“Everything seems to be trending along in a manner that is anticipated,” Kays said.

As the two-day conversation devolved into the minutia of the Z2 calculations, transmission-service and point-to-point requests, rate schedules, claw-backs and threshold limits, an exasperated Paul Malone of the Nebraska Public Power District almost threw his hands up in surrender.

“I need a program,” the MOPC vice chairman said. “I feel like I’m in a game of cricket, and I don’t know any of the rules.”

MOPC Chairman Noman Williams, of South Central MCN, was sympathetic.

“I want to thank everyone for wandering through the mud here,” he said as he closed the agenda item. “I guess it could have been done differently, but it had to be done.”

July 18, 2016

Utah Bill Would Require Legislative OK for PacifiCorp RTO Membership

By Robert Mullin

Utah lawmakers plan to draft a bill requiring PacifiCorp to gain legislative approval before joining an RTO based on an expanded CAISO.

Members of the Public Utilities, Energy, and Technology Interim Committee approved a motion to create the proposed law July 13 after listening to more than 90 minutes of testimony from power industry participants — most of whom were wary about the state’s participation in a regional integration effort driven by California.

Specific terms of the legislation were left unclear.

Utah sits squarely inside the PacifiCorp East (PACE) balancing authority area, which also extends into portions of Idaho and Wyoming. It is served by PacifiCorp’s Salt Lake City-based Rocky Mountain Power subsidiary.

Western Interconnection Balancing Authorities (WECC) - pacificorp rto membership utah legislation — The entire state of Utah is contained within the PacifiCorp East (PACE) balancing authority area, which the utility hopes will become part of an expanded CAISO.

“This potential issue is significant from both a policy perspective and a financial perspective,” said Thad LeVar, chair of the Utah Public Service Commission.

LeVar noted that PacifiCorp must go before his agency for a ruling once it makes a determination to join an expanded regional grid. The decision “shouldn’t fall solely to the regulatory arena without some guidance from the legislators in the state,” he said.

Governor Skeptical

Laura Nelson, director of Gov. Gary Herbert’s Office of Energy Development, said the office was skeptical about an RTO but still engaged in the process related to its development.

“Our consistent message has been that any participation in the [CAISO] must protect Utah’s long-term interest and authority over its power system,” Nelson said, citing the state’s role in protecting ratepayers, maintaining system reliability and choosing the generating resource mix.

Nelson told the committee that the state needs to perform an “exhaustive” study to determine if PacifiCorp’s membership is in the best interest of ratepayers. “Any recommendations about joining CAISO are not yet fully informed,” she said.

Ratepayer protections were foremost among the concerns of Michele Beck, director of the state’s Office of Consumer Services. While Beck acknowledged that there are technical benefits to participating in a more centrally operated grid, she questioned who would enjoy them.

“Do the benefits accrue to customers, or will they accrue to just select elements within the industry?” she said. “Are the benefits reasonably distributed across the footprint? Are the modeled benefits durable?”

She said that membership in an expanded CAISO should be conditioned on a demonstration that it has greater benefits than the Western Energy Imbalance Market, in which PacifiCorp currently participates.

“We’re struggling to document that all the benefits of the EIM that have been stated and have been published have been realized,” Nelson said.

Chris Parker, director of Utah’s Division of Public Utilities, said he was concerned about risks as well as benefits — namely the state’s risk in giving up control over its utilities to an RTO, whose backstop authority would be FERC.

Fear of California Dominance

Parker also cited the risk of an RTO being dominated by California interests, saying his agency would seek assurances that policy changes would require the unanimous support of participating states. He said CAISO’s latest RTO governance proposal — which would initially provide California with numerical voting superiority — was unacceptable. (See Governance Plan Fails to Dispel Western RTO Concerns.)

Rocky Mountain Power CEO Cindy Crane called the development of an independent governing structure a “threshold” issue for her company in its decision to participate in an expanded CAISO.

“What we are not doing is joining the California ISO,” Crane said. “We are working to transform an existing operating entity into something that could be a regional operating entity.”

Crane said the requirement that an RTO deliver “risk-balanced” net benefits to PacifiCorp customers in each of its six states was a second condition for the utility.

“If it’s not going to deliver benefits for our customers, there is no reason for us to advance,” she said, adding that regulators in each PacifiCorp state will have the authority to decide whether the utility joins.

Watching California’s Legislature

A few witnesses testifying before the committee said the fate of a Western RTO is now in the hands of California lawmakers, which are slated to begin considering legislation in August that would loosen the state’s authority over CAISO.

“We’re at the point where we’re waiting to see what the California legislature is willing to give up,” said Parker, referring to the concerns about California’s dominance in a governing structure. “If they’re willing to give up enough, then it may be worth it.”

July 18, 2016

Overheard at the NECA Environmental Conference

Mary Beth Gentleman, a former co-chair of the energy practice at law firm Foley Hoag and current Hillary Clinton volunteer, said that the presumptive Democratic nominee for president would likely have coattails if elected, resulting in a switch to a Democratic-controlled U.S. Senate, but a takeover of the U.S. House appears far less likely. While there may be opportunities for bipartisan energy legislation, a continuation of the legislative stalemate may continue.

Gentleman © RTO Insider - NECA Environmental Conference — Gentleman © *RTO Insider*

“I think the Clinton approach will be to avoid legislation, if at all possible, avoid anything that is fully dependent on both houses passing something. Instead, she would use other tools in the toolbox [such as agency actions and executive orders] to advance a clean energy agenda,” she said.

Republicans would likely maintain control of both houses of Congress if Donald Trump, the party’s presumptive nominee, is elected president, said David Tamasi, a senior vice president at Rasky Baerlein Strategic Communications. The Trump campaign eschews traditional staples such as position papers, detailed policy discussions and other documents that signal the legislation he might pursue.

david-tomasi-web NECA Environmental Conference — Tomasi © *RTO Insider*

But based on a speech Trump gave in North Dakota at the end of May that called for promoting domestic fossil fuel production and weakening EPA, “his energy policy is absolutely in lock-step with what the Congressional leadership has been pushing,” Tamasi said. “There’s absolutely no daylight on that between them.”

Natural gas pipelines are primarily under the jurisdiction of FERC, but important reviews of them — and of transmission lines like Northern Pass — occur under EPA’s National Environmental Policy Act, said John Moskal, senior adviser for energy policy and infrastructure in EPA Region 1, which comprises New England.

john-moskal-web - NECA Environmental Conference — Moskal © *RTO Insider*

“We’ve been dealing mostly with gas pipeline projects, whereas 10 years ago it was all LNG import terminals,” he said. “Natural gas has been part of the picture here for a long, long time.”

Marc Nascarella, director of the Massachusetts Department of Public Health’s environmental toxicology program, said the state is unique in that 351 towns have health departments with input into power plant siting issues. And there are three components to every local review, he said.

Marc Nascarella - NECA Environmental Conference — Nascarella © *RTO Insider*

“Environmental problems are extremely emotional. Environmental solutions are highly technical. … Environmental policy or environmental decisions are highly political. If there is a concern that this power plant is going to cause a health impact, and the political force gets the emotive response behind it, the science be damned,” he said.

This adds a layer of complexity to a project that may require modifications by the developer, he added.

July 18, 2016

Federal Briefs

A three-judge panel of the D.C. Circuit Court of Appeals upheld FERC Order 1000 after Oklahoma Gas & Electric and other utilities challenged the landmark rule’s elimination of incumbent transmission owners’ right of first refusal to develop transmission projects.

OG&E sued FERC in December 2014, arguing that when it agreed to join SPP, it gave up some transmission planning rights in return for the right of first refusal. The utility said FERC couldn’t meet a higher legal burden to negate that part of the membership agreement, which predated Order 1000.

The utility has not yet decided whether it will appeal the decision to the full court. SPP supported OG&E’s case, which was also joined by Southwestern Public Service, ITC Great Plains, Xcel Energy Services, Mid-Kansas Electric and Sunflower Electric Power.

More: The Oklahoman

GAO Audit: DOE not Protecting Whistle-blowers

The Department of Energy has failed to protect whistle-blowers at its nuclear plants from retaliation, a Government Accountability Office audit found.

The report said the department has issued only two violation notices in the past 20 years against contractors who created chilled work environments at nuclear sites. Employees who try to use the department’s whistle-blower protection program find it difficult to navigate without legal help, the report says.

The report was requested in 2014 by three Democratic senators in response to reports of retaliation against whistle-blowers at the Hanford nuclear reservation in Washington state. The audit broadened to the handling of 87 contractor employee complaints at 10 of the department’s largest nuclear facilities.

More: McClatchyDC

FERC Allows BG&E to Recover $1.2M from Scrapped MAPP

Baltimore Gas and Electric may recover nearly $1.2 million it spent on the Mid-Atlantic Power Pathway (MAPP) project, which was canceled by the PJM Board of Managers in 2012, under a settlement between the company and the Maryland Public Service commission that FERC approved earlier this month.

The MAPP involved a 230-mile 500-kV transmission line from Virginia to New Jersey intended to “relieve load deliverability criteria violations” expected to occur on the Delmarva Peninsula. In canceling the project, PJM said that its “reliability drivers no longer existed.”

FERC had granted BGE incentives effective May 29, 2009, allowing it to recover costs if the project were abandoned. The commission has previously approved settlements between others state regulators and utilities that had contributed to the project.

More: ER15-2331

Entergy Asks NRC for More Time for Upgrades

Entergy has asked the Nuclear Regulatory Commission for more time to meet post-Fukushima upgrade requirements at its Pilgrim Nuclear Power Station in Massachusetts, which is set to close by June 2019.

The company asked for a deadline of Dec. 31, 2019, in order to avoid making permanent modifications before the closure. Instead, it wants to use a FLEX strategy, so called because it uses portable equipment.

“The plant does have a limited operational timeframe going forward, but our mandate is to make sure that the public is going to be adequately protected,” NRC spokesman Neil Sheehan said.

More: CapeCod.com

FERC Gives Go Ahead for Bosher Dam Study in Va.

FERC has approved an application to conduct a feasibility study for an 8-MW hydro facility outside of Richmond, Va., at the existing Bosher Dam on the James River. The proposed project would use the existing 12-foot-high dam and create a 1,000-acre impoundment area, with new intakes, a new tailrace and four 2-MW turbines, along with a new powerhouse and substation.

The Richmond Department of Public Works, along with the James River Association and others, questioned the need for the facility during the public comment period, but FERC said the feasibility study was necessary to determine the validity of any opposition concerns.

The project is being proposed by Energy Resources USA.

More: GenerationHub.com

Pipeline Projects Get Positive Draft EIS

Two jointly proposed pipeline projects to move Marcellus and Utica shale gas in Ohio to the Midwest and Canada received a favorable draft environmental impact statement from FERC.

DTE Energy and Spectra Energy’s 260-mile Nexus Gas Transmission pipeline would move 1.5 Bcf/d. It is being developed along with the Texas Eastern Appalachian Lease project, which would expand Spectra subsidiary Texas Eastern Transmission’s system by 950,000 dekatherms/day to accommodate the new pipeline.

FERC noted some “adverse environmental impacts, but impacts would be reduced to less-than-significant levels” with mitigation efforts. Public comment is open until Aug. 29. The commission said the final EIS should be ready by Nov. 30.

More: Natural Gas Intelligence

DOE Approves $15M for Algae-Based Fuels Efforts

The Department of Energy is providing $15 million for algae-based biofuel projects in California and Florida. The grants are aimed at furthering the commercialization of biofuels as a renewable, affordable fossil fuel replacement, it said.

Three companies and their research partners will receive the funds. Global Algae Innovations in California is working on cultivation and preprocessing technology to produce algal oil. MicroBio Engineering, also based in California, is researching wastewater treatment and carbon-dioxide mitigation to produce useable oils. Finally, Florida-based Algenol Biotech is working to devise ways to use cyanobacteria to produce algal oil.

More: Biofuels International

House Passes Funding Bill For Interior Department, EPA

The House passed a $32.1 billion funding bill for the Interior Department and EPA, about $1 billion less than what the Obama administration requested, and a $64 million cut over current spending levels. The bill includes a number of riders intended to block EPA water, power plant and coal mining regulations.

“There is a great deal of concern over the number of regulatory actions being pursued by the EPA in the absence of legislation and without clear congressional direction,” Rep. Ken Cavert (R-Calif.) said. “For this reason, the bill includes a number of provisions to stop unnecessary and damaging regulatory overreach by the agency.”

The bill passed 231-196, with most Democrats opposing it. The White House has threatened to veto it.

More: The Hill; House Appropriations Committee

Report: Green Energy Funding Down 23% from Last Year

A report by Bloomberg New Energy Finance shows that renewable energy funding has fallen 23% for the first six months of the year compared to last year. It said investments globally were about $116.4 billion for the first half of the year. Second-quarter investments were $61.5 billion, 12% higher than the first quarter, but still 32% lower than the $90 billion for the same period last year.

“It is now looking almost certain that the global investment total for this year will fail to match 2015’s runaway record,” Michael Liebreich, chairman of the advisory board at BNEF, said in a statement accompanying the report.

More: USA TODAY

Cook Nuclear Plant Back Online After Steam Leak

Unit 2 at the Donald C. Cook nuclear plant in Berrien County, Mich., returned to service last week after being shut down for six days because of a steam leak.

Plant spokesman Bill Schalk attributed the July 6 steam line rupture to “vibration-induced metal fatigue” of an expansion joint. He said the rupture also damaged the wall of the turbine building.

Vendors fabricated new parts for the line and repaired it. The plant came back online July 12. The Nuclear Regulatory Commission says it will analyze the plant crew’s response to the incident.

More: The Herald-Palladium

TVA Closer to Taking Watts Bar Commercial

The first new U.S. nuclear plant to be built in two decades is closer to being deployed after the Tennessee Valley Authority last week completed a key performance test on the reactor.

The unit, which has been operating at 30% of its 1,150-MW capacity, was raised to 50% so operators could perform load rejection tests, in which power is rapidly lowered and raised to simulate a storm-induced loss of load or other accident.

“All of the tests went like clockwork,” a TVA spokesman said. The corporation expects to bring the Watts Bar Unit 2 to full power later this summer.

More: Times Free Press

July 18, 2016

PJM Plans for Changes in Tx Flows Without Con Ed-PSEG ‘Wheel’

By Rory D. Sweeney

Preparing for next year’s termination of the Con Ed-PSEG “wheel,” PJM is using a three-pronged approach to coordinate stakeholder efforts through its Operating, Markets Implementation and Planning committees.

Each committee received updates last week on Consolidated Edison’s decision not to renew the agreement, under which NYISO moves 1,000 MW from upstate generators through Public Service Electric and Gas facilities in northern New Jersey to serve Con Ed load in New York City.

Con Ed said it would not renew the agreement, which began in the 1970s, after receiving a $680 million bill for two transmission upgrades in PSE&G territory — cost allocations that Con Ed complained were unreasonable. (See Con Ed-PSEG ‘Wheel’ Ending Next Spring.)

Overview of PSE&G – ConEd 600 400 Contract (PJM) — PJM and NYISO are determining new protocols for three interconnection facilities (Waldwick, Goethals and Farragut) that, as of next year, will no longer carry 1,000 MW from upstate New York, through PJM and back into NYISO.

PJM assigned Con Ed $629 million of the costs of PSE&G’s $1.2 billion Bergen-Linden Corridor upgrade to address a short-circuit problem; PSE&G was allocated $52 million. Con Ed was also assigned $51 million of PSE&G’s $100 million Sewaren storm-hardening project.

The transmission contract for the wheel expires May 1. Con Ed informed the grid operators that it found cheaper alternatives.

PJM and NYISO are collaborating on a replacement protocol that maintains reliability and is mutually beneficial to both grid operators. The protocol will adhere to FERC’s open access rules and support any existing market-to-market exchanges, PJM said. It will utilize existing infrastructure and won’t address merchant facilities, they said.

The Impact of PARs

Several stakeholders expressed concern that PJM’s goal of “free-flowing ties” would be hampered by the eight phase angle regulators (PARs) that currently govern the direction of flows on lines connecting the RTO with NYISO. There are one each on the A, B and C lines that flow 1,000 MW from PSE&G into New York, three just south of Waldwick on the J and K lines that flow the 1,000 MW into PSEG from upstate and two on the Branchburg-Ramapo 5018 line.

One of PARs on the 5018 line owned by Con Ed failed in June, and it was unclear whether NYISO and Con Ed plan to replace it. Participants asked if the PARs could be removed. “I worry about PJM calling balls and strikes on market optimization,” said Ed Tatum, vice president of transmission for American Municipal Power.

Several participants questioned why the PARs must be kept at all. Speaking after the meeting, Mike Bryson, PJM’s vice president of operations, explained that NYISO has always had a philosophy of using control devices to manage congestion and loop flow.

‘Insider Information’

Other participants expressed concern that the discussions between PJM, NYISO, PSEG and Con Ed haven’t been transparent. Dave Pratzon of GT Power Group, which represents some generators, asked for confirmation that the discussions haven’t included any “insider information.”

Bryson said PJM has ensured that conversations never overstepped the rules. “When we approach that line, we back the parties away,” he said.

Wheel’s New Look

PJM officials said further detail wouldn’t be available until August’s MIC meeting because of the timeline required to approve changes to the PJM-NYISO joint operating agreement. A broader picture wouldn’t be available until September.

Tim Horger, manager of market simulation at PJM, said the New York interface will likely be changed to model what’s “actually going to happen in real time.”

Both NYISO and PJM ran independent studies to determine interchange flows unconstrained by PARs — what they called “natural flow.” The studies were based on a summer peak case and found that 32% would flow over the western ties that connect between the “Twin Tiers” of Pennsylvania and New York, while 68% would interchange between the eastern ties involved with the wheel.

PJM engineer Asanga Perera said that part of the wheel’s benefit today is that the 1,000 MW coming into New York City from New Jersey pushes back on bottlenecks north of the city so it doesn’t see additional congestion.

Cost Allocation

With Con Ed out of the picture, the $680 million in upgrade costs will be reallocated to the existing stakeholders based on guidance in PJM’s manuals, officials said.

In response to a request from Tatum, PJM Vice President of Planning Steve Herling said he would look into providing a document answering frequently asked questions about the change and any public documents that governed the decision-making process.

July 18, 2016January 18, 2024

Mountain West RTO Could Pose Competition for CAISO

By Robert Mullin

An effort to create an organized electricity market is taking shape in the inland West even as CAISO continues to build the case for expanding its operations into the wider region.

The Mountain West Transmission Group — a partnership consisting of seven different transmission owning entities within the Western Interconnection, including the Western Area Power Administration’s Loveland Area Projects and Colorado River Storage Project — is exploring the benefits of implementing a common transmission tariff across multiple states and developing an organized market.

Mountain West issued a request for information in May to CAISO, MISO, PJM and SPP regarding tariff administration and market operator services — “one of multiple sources of information to assist the group in consideration of [a] path forward,” the group said. Proposals were due back to the group July 15.

The group’s footprint covers most of Colorado and Wyoming, along with smaller areas of Arizona, Montana, New Mexico and Utah.

WAPA operates 17,000 miles of transmission spanning 15 states, nearly 5,000 miles of which is located inside Mountain West.

Other members of the group include Basin Electric Power Cooperative, Black Hills, Colorado Springs Utilities, Platte River Power Authority, Xcel Energy’s Public Service Company of Colorado, and Tri-State Generation and Transmission, which together control about 11,000 miles of transmission.

WAPA’s expansive network — as well as its status as a federal power marketing agency (PMA) — makes Mountain West an appealing alternative for some industry participants wary of joining a market operated by CAISO and potentially dominated by California interests. (See related story, Study Touts Benefits of CAISO Expansion.)

Among the skeptics is Utah Associated Municipal Power Systems (UAMPS), which provides energy on a nonprofit basis to community-owned utilities in eight Western states.

CAISO “is not the only game in town,” UAMPS CEO Doug Hunter told Utah lawmakers during a July 13 hearing to discuss the legislature’s role in PacifiCorp’s proposed ISO membership.

Hunter encouraged legislators to look at WAPA’s footprint.

“It runs right through us,” he said. “It would be much better if the entire West had access to it.”

WAPA has said that joint tariffs and energy imbalance markets are among the topics “driving the energy future.”

The agency “recognizes the impact this has on our business and as an organization continues to pursue and develop collaborative paths forward to best benefit our customers,” it said. The agency provides power at relatively low cost to publicly owned utilities referred to as “preference” customers.

WAPA has said that it “is uniquely positioned to facilitate collaborative discussions with industry experts and customers about engagement and involvement in industry activities, such as regional transmission organizations and other market initiatives.” The agency has said its interest stems from its “significant transmission system,” the “expanding geographic scope of markets” and “increasingly limited trading partners.”

A centrally operated Mountain West market could boost trading activity in the region by eliminating the “pancaking” of transmission charges and facilitating a transition from contract path to flow-based transmission rights, which more closely matches scheduled transactions with actual power flows.

Mountain West says its members have achieved “significant success” with rate design and cost-shift mitigation, issues that have stymied previous efforts at developing a common tariff. The group has engaged The Brattle Group to perform a scoping study examining the potential benefits of a day-ahead electricity market.

Although the outcome of the effort is still unclear, the Mountain West entities plan to make a decision on a direction forward in the third quarter of 2017, after a stakeholder process. A common tariff — or broader organized market — could be implemented as early as 2018.

July 18, 2016

NYPSC Extends Comment Period on Nuclear Subsidy

By William Opalka

The New York Public Service Commission last week extended the comment period on a proposed multibillion-dollar nuclear power subsidy by four days, until Friday (15-E-0302).

The comment period on a July 8 staff proposal, providing subsidies for the upstate nuclear fleet for up to 12 years, was to have ended on Monday. Environmental groups, industrial customers and anti-nuclear activists had sought a 45-day comment period.

“These extensions are granted for the fair, orderly and efficient conduct of these proceedings,” the PSC said Friday.

Political and labor leaders and economic development proponents in the Finger Lakes region have embraced the proposed zero-emission credit for financially stressed nuclear power plants. It is part of the proposed Clean Energy Standard, which seeks to transition the state to 50% renewable energy by 2030.

But the ZEC proposal has been opposed by some environmental organizations.

“Staff’s earlier cost estimates for the nuclear tier ranged from $59 million to $658 million over the first seven years. Now, under the new proposal, staff estimates the first two years will cost nearly $1 billion. Over the life of the program, it could amount to over $7 billion,” the Alliance for a Green Economy wrote in its petition seeking an extension last week.

Nine Mile Point - NYPSC nuclear subsidy — Nine Mile Point Nuclear Plant

Exelon, which owns three nuclear plants on Lake Ontario, opposed any extension that would prevent the commission from voting on the proposal at its next scheduled meeting Aug. 1. It repeated its position last week that any delay jeopardized its attempt to schedule a $55 million refueling of its Nine Mile Point 1 reactor next spring. (See Exelon Threatens to Close Nine Mile Point 1.)

The company said it needs a signed contract guaranteeing the continued operation of Nine Mile Point by Sept. 30 to prevent the plant’s retirement.

The company also started a separate proceeding to obtain subsidies through a cost-based regulatory order in the event the CES did not get approved in time. That proceeding is pending.

Exelon also owns the R.E. Ginna plant, which also could close at the end of March when its reliability support services agreement with Rochester Gas & Electric expires, and is in negotiations to acquire Entergy’s James A. FitzPatrick plant. (See Entergy in Talks to Sell FitzPatrick to Exelon.)

July 18, 2016

State Briefs

Regulators OK APS Battery Storage Program

The Corporation Commission approved Arizona Public Service’s demand-side management plan, which includes $4 million to incentivize the use of battery storage systems for residential customers.

The plan’s aim is to reduce peak load on the utility’s distribution system and includes programs to encourage the use of smart thermostats, demand response, LED lighting and technologies that improve the efficiency of air conditioners.

“Pairing advanced technology with customer education empowers our customers to have more control over their own energy use,” said Jim Wontor, the utility’s manager of demand-side management.

More: KJZZ; Arizona Public Service

CALIFORNIA

Brown Moves to Extend Cap-and-Trade

Gov. Jerry Brown’s administration last week moved to keep the state’s cap-and-trade program alive beyond its scheduled expiration in 2020. The Air Resources Board proposed a plan that would progressively decrease emissions caps until 2031 — to 40% below 1990 levels — and extend the carbon market to 2050.

Legislation to limit 2050 emissions to 80% below 1990 levels — and extend the market — stalled in the state’s lower house last year. While lawmakers have taken up a scaled-down version of the bill this year, passage is not ensured because of strong opposition. Brown is negotiating with oil companies who have criticized the cap-and-trade program.

More: Los Angeles Times

CAISO Solar Record Slips Past 8,000 MW

CAISO solar output hit a new record of 8,030 MW at 1:06 p.m. on July 12, exceeding year-ago levels by 2,000 MW and nearly doubling the peak in May 2014. Renewable portfolio standard resources together covered 29% of load during the ISO’s system peak later that day.

The state currently has about 8,600 MW of solar resources connected to the grid.

More: CAISO

CONNECTICUT

Report: State Energy Costs Highest in US

The state has the highest average energy costs in the nation, according to financial website WalletHub. The report says the average household in the state spends $400/month on energy.

The state ranked No. 3 for electricity costs, No. 3 for home heating oil costs, No. 11 for natural gas costs and No. 14 for gasoline costs, equating to average monthly costs of $155, $104, $44 and $100, respectively.

The state’s New England neighbors also ranked in the top five.

More: Hartford Courant

Green Bank’s Program Aids Energy Efficiency

The state’s Green Bank unveiled a new $800,000 grant program called Energy on the Line to assist manufacturers in using renewable energy and efficiency measures.

The program provides up to $50,000 in supplemental funding for projects. An $800,000 funding pool from the state Department of Economic and Community Development will be matched by more than $8 million in private-sector loan funds procured by the Green Bank.

Manufacturers interested in participating in the new grant program must apply by Sept. 16.

More: New Haven Register

MAINE

Governor Opposes Wind, Solar Projects

Gov. Paul LePage, speaking at a town hall in the Moosehead Lake region, said that area is not right for renewable energy development.

“Is there room for wind and solar?” the governor said. “Yes, in certain spots of the state. But I want to tell you Moosehead is not one of them.”

SunEdison is seeing opposition in the Greenville area to its proposed 26-turbine wind farm on Misery Ridge, near Moosehead Lake, but the project’s fate is uncertain since the company’s bankruptcy. Though the governor mentioned solar power, there are no such projects being proposed for the area.

More: Portland Press Herald

Largest Solar Farm in State Under Development

Ranger Solar is conducting an environmental assessment for a solar farm of up to 80 MW that could break ground in 2018.

The project would be the largest utility-scale solar farm in the state. A solar farm requires about 5 acres/MW, according to the developer. An exact number of panels that would be needed for the project is not yet known, but upward of 90,000 to 100,000 panels are likely.

Once a project plan is completed, Ranger Solar will bring it formally before the Farmington Board of Selectmen and the state Department of Environmental Protection.

More: Portland Press Herald

MICHIGAN

State Hires Two Firms For Pipeline Analysis

The state has hired two companies to analyze the financial impact of a hypothetical rupture of Enbridge’s underwater pipelines, collectively called Line 5, in the Straits of Mackinac and to explore potential alternatives to their route. Enbridge will pay $3.5 million for the studies but declined to oversee the work.

Det Norske Veritas will work on an analysis of the cleanup costs in the event of a rupture. Dynamic Risk Assessment Systems will look into alternatives for Line 5, which carries 23 million gallons of oil and LNG per day.

More: The Associated Press

Snyder Appoints Former BP Lobbyist to Head MDEQ

Gov. Rick Snyder has appointed a former BP lobbyist to head the state’s Department of Environmental Quality, sparking criticism from residents and environmentalists already galvanized over the Flint water crisis.

Heidi Grether, currently a deputy at the Agency for Energy, previously spent 21 years with BP in external communications, including managing the public response to the Deepwater Horizon oil spill. Former MDEQ chief Dan Wyant resigned in late December amid the Flint controversy.

“After the Flint water crisis clearly demonstrated there were cultural problems within the DEQ, this appointment is a concerning development,” said Lisa Wozniak, executive director of the Michigan League of Conservation Voters.

More: Detroit Free Press

MISSOURI

PSC: Grain Belt Express Must Wait 60 More Days

The Public Service Commission ruled that Clean Line Energy must wait another 60 days for its Grain Belt Express transmission line application to be considered for approval because the company did not provide adequate public notice when it made its filing.

The commission rejected the project a year ago in a 3-2 vote, but it said this latest delay was strictly procedural.

More: St. Louis Post-Dispatch

NEW HAMPSHIRE

Merrimack Valley Power Line Approved by State

The state Site Evaluation Committee approved an application from Eversource Energy and National Grid for construction of the Merrimack Valley Reliability Project, the first major upgrade to the electrical transmission system in 20 years.

The new 18-mile overhead transmission line will be built on an existing interstate right of way.

The application for the project was submitted in July 2015. Its cost is estimated at $125 million, and the utilities are evaluating construction bids.

More: New Hampshire Union Leader

NEW MEXICO

PRC Schedules Hearing on Facebook’s Planned Facility

The Public Regulation Commission unanimously agreed to hold an Aug. 9 hearing on Public Service Company of New Mexico’s request to provide renewable energy to a proposed data center for social media giant Facebook. If no comments are received by July 27, however, the commission may waive the hearing.

PNM submitted an application seeking expedited approval, without public comment or hearing, of a plan to provide 60 MW of solar or wind power. Facebook, which also is considering locating the site in Utah, wants the facility online by mid-2017 and has agreed to cover most of the costs of the power facility.

Facebook wants the center to run on 100% renewable energy, but it would still use traditional power plants as backup energy sources. As part of the deal, Facebook would require PNM to guarantee a fixed price on backup power for the first 10 years.

More: The Santa Fe New Mexican

NORTH CAROLINA

Regulators Set $98M Bond For Duke Plant Appeal

The Utilities Commission says two nonprofits must put up a $98 million bond to go forward with an appeal of a permit given for a new Duke Energy gas-fired power plant. The commission originally set the bond at $10 million, but an appellate court told it to recalculate the bond based on “competent evidence.”

The commission set the new amount based upon a 1965 state law and said it is designed to protect developers from costs associated with construction delays in the event they win a legal challenge. “The statute plainly places on the appealing party the financial risk of what potentially could be extensive additional costs,” the NCUC said in its order.

NC WARN and the Climate Times objected to the Buncombe County plant because it would use gas extracted using fracking. Duke had requested a $240 million bond, while the nonprofits said they were willing to put up $250. NC WARN’s director, Jim Warren, said it is not going to put up the bond. “We don’t have the money.”

More: News & Observer

NORTH DAKOTA

PSC Unanimously Approves Second Brady Wind Farm

The Public Service Commission unanimously approved the $250 million Brady Wind Energy Center II project, which will have 72 turbines and a capacity of 150 MW.

The project would double the potential capacity of Brady Wind, an indirect subsidiary of NextEra Energy Resources. The new facility will be located in Hettinger County, south of its sister project, approved last month, in Stark County.

Commissioner Brian Kalk said the approved siting permit includes strict turbine setbacks of 2,000 feet from homes in the project area and 2,640 feet from homes owned by those not participating in the project. He said the setbacks were negotiated based on county and PSC standards.

More: The Bismarck Tribune

PENNSYLVANIA

Company Could Pay $5M For Deceptive Pricing

Two administrative law judges are recommending that the Public Utility Commission fine Blue Pilot Energy $5 million for charging its variable-rate customers high prices during the polar vortex of 2014.

The judges found that the Las Vegas-based company did not provide accurate pricing information, charged prices that did not match its disclosure statement and falsely promised savings.

They also said that Blue Pilot did not comply with the state’s Telemarketer Registration Act. The company countered that the PUC is authorized only to enforce its own regulations, not the telemarketer law.

More: The Philadelphia Inquirer

TEXAS

Environmental Regulators Approve Controversial Mine Expansion

The Commission on Environmental Quality renewed and expanded a wastewater permit for Dos Republicas Coal Partnership, allowing the company to expand its current operations near the Mexican border and mine up to 6,300 acres for low-quality coal.

The mine’s opponents say the project will pollute the air and the Rio Grande, which is the area’s only source of water. Several Native American tribes have also argued that the mine threatens sacred ancestral ground and that they were never given proper notification about the company’s plans.

Dos Republicas is owned by Mexican companies and by the Plano-based North American Coal Corp. and its subsidiary Camino Real Fuels. Because the coal is categorized as too low-grade for use in the U.S., it’s shipped to Coahuila for use in Mexican plants.

More: The Texas Tribune

NRG, Denton Reach $3.7M Settlement over Rate Credits

The Denton City Council has approved a $3.7 million settlement reached between NRG Power Marketing and the city over money owed to ratepayers.

After the Texas Interconnection became deregulated in 2002, Denton Municipal Electric contracted with NRG to represent Denton at ERCOT until the city could begin buying and selling electricity directly in October 2014. Denton sued the company last year, alleging that NRG withheld credits from ratepayers.

The two parties were ordered into mediation, with Mayor Chris Watts personally assisting in the talks.

More: Denton Record-Chronicle

WISCONSIN

PSC Orders $16.5M Refund to WE Ratepayers

The Public Service Commission approved a $16.5 million refund to We Energies customers after the utility underestimated how falling fossil fuel prices would affect the cost of power. The refund will amount to about $5 for the average residential customer.

Four other state utilities — Wisconsin Power and Light, Madison Gas and Electric, Wisconsin Public Service and Northern States Power — will also issue refunds that range from $9.5 million to $16.5 million.

We Energies had asked the commission for a pass on issuing refunds, arguing that the money should be used to counteract future rate hikes, but consumer advocacy groups lobbied the PSC for immediate refunds.

More: Milwaukee Journal Sentinel; Wisconsin Public Radio

July 18, 2016

SPP Markets and Operations Policy Committee Briefs

RAPID CITY, S.D. — The SPP Markets and Operations Policy Committee last week refused to take action on American Electric Power and Oklahoma Gas & Electric’s revision request to remove the day-ahead limited must-offer.

Left to right: Monroe, Williams © RTO Insider — Left to right: Monroe, Williams © *RTO Insider*

The Market Working Group approved RR 125 last November but postponed moving it forward in December to allow further discussion on RR 135, which would revise physical withholding rules. It again failed to move the request forward in May on a tie vote (8-8, with one abstention).

“This is about the fourth or fifth bite at the apple others have tried with this issue,” Golden Spread Electric Cooperative’s Mike Wise said. “When we were designing the market, we debated this issue ad nauseam. I suggest we not change something that works right now.”

Wise said he agreed with the Market Monitoring Unit’s position of waiting to move forward with RR 125 until RR 135’s rules for physical holding have been completed. He suggested waiting for the enhanced combined cycle (ECC) project to go into effect next spring. The project — an effort to provide more sophisticated modeling that captures such plants’ flexibility — is being done in conjunction with changes to align the Integrated Marketplace’s day-ahead market with gas nominations.

“We should wait until the enhanced combined cycle [project’s completion] next spring, and then move forward,” he said. “It will remove the difficult decision and guessing about which mode of combined cycle operation the market needs, and remove some of those concerns dealing with the physical withholding in the market.”

“I haven’t heard enough about why it’s so important to remove the limited must-offer provision,” Midwest Energy’s Bill Dowling said. “I haven’t heard enough about the benefits [of] moving forward without knowing what the next steps are.”

RR 125 was a result of the Market Monitoring Unit’s recommendations to improve the Integrated Marketplace. It was designed to run in parallel with another revision request that would revise physical-withholding rules.

“We focus on the market power of units and the specific impact of units on the market,” MMU Director Alan McQueen said. “From a market monitoring perspective, physical withholding is the issue that’s a concern to us. I believe there’s value in coupling these things together and think about it in the way FERC’s going to look at it.”

The MOPC passed three revision request brought up individually, though each received a handful of opposing votes and abstentions.

RR 2, which predates SPP’s new revision request process, gives market participants the option of submitting interchange data in five-minute or hourly intervals. Participants were previously prohibited from submitting the data in five-minute intervals.

“As I understand it, the functionality won’t be used by the entire footprint for a long time,” said OG&E’s Greg McAuley, who cast one of four opposing votes against the measure. “Our MWG rep told me no single market participant intends to use this functionality. If we’re not going to consistently use it, why are we even talking about it?”

McAuley also questioned the estimated $50,000 cost of implementing RR 153, which would eliminate market participants’ need to make two separate submissions for a single intraday change.

Under current protocols, resource offers roll forward hour-to-hour, which can cause problems when intraday changes only meant to apply to the current day carry forward to subsequent days.

“It sounds like a software problem,” Kansas Power Pool’s Larry Holloway said. “If the software isn’t doing what it’s supposed to, isn’t there some sort of maintenance that occurs before [a revision request] comes to MOPC?”

“It’s a very fine nuance in the protocols,” said American Electric Power’s Richard Ross, who chairs the MWG. “I thought it was the software at first, too, but as we dug into it, there’s a very fine, quirky, strange reading of the protocols. We’re changing the protocols and the Tariff to make sure we get exactly what we want.”

SPP MOPC Meeting © RTO Insider — SPP MOPC meeting © *RTO Insider*

Another request approved by the MOPC, RR 167, would avoid Tariff violations resulting from the incorrect submission of annual revenue rights or transmission congestion rights. It is expected to cost $134,000.

“What’s the saying? ‘Sooner or later, it becomes real money,’” McAuley said. “We’re nickel and diming ourselves to death.”

Ross said the MWG has passed or is working on nine improvements to the Integrated Marketplace at a combined cost of about $11.4 million. The bulk of that total — $9.2 million — is linked to the ECC project.

Revision Requests Approved

The MOPC approved nine revision requests on its consent agenda:

BPWG-RR 88, modifying the time of day when unscheduled firm transmission is released for sale as hourly, non-firm transmission service for the next day from noon (CT) to 10 a.m. The change will allow coordination of next-day scheduling with the Western Electricity Coordinating Council.
MWG-RR 7 MPRR155, revising instructions for dispatching generators out of merit order into two categories: reliability issues and emergency conditions.
MWG-RR 161, changing the method for calculating make-whole payments for multi-configuration combined cycle resources; the new rules allow use of a netting approach in calculating the commitment-level costs eligible for recovery.
MWG-RR 165, removing references to the retired Mitigated Offer Task Force from the Tariff’s Appendix G.
MWG-RR 166, removing references from the protocols and Tariff to the interim transmission congestion rights process developed for the transition into the Integrated Marketplace.
MWG-RR 169, changes reliability unit commitment calculations from evaluating megawatts needed hourly to those needed for each dispatch interval.
ORWG-RR 159, moves requirements regarding the outage-coordination function into SPP Operating Criteria Appendix OP-2 “Outage Coordination Methodology,” eliminating redundant language elsewhere.
RTWG-RR 160, clarifying the Integrated Transmission Planning manual to note which generation interconnections and associated upgrades are required to be modeled in ITP assessments.
RTWG 163, correcting Tariff language to specify the ITP manual includes references to requirements.

Working Group Closes 5 of 9 MMU Market Recommendations

AEP’s Ross briefed the committee on the MWG’s progress in implementing the market monitor’s recommended improvements to the Integrated Marketplace. The recommendations were a result of the July 2015 State of the Market report, which covered the markets’ first year of operation.

Four of the MMU’s nine recommendations are considered closed, having been addressed by revision requests:

Not subjecting quick-start resources to reliability unit commitment and not providing make-whole payments for resources dispatched in the real-time balancing market;
Reducing available financial transmission rights to minimize over-allocations when not supported by day-ahead congestion revenues;
Improving transmission-outage reporting in the FTR process; and
Automating the bidding process for transmission congestion rights to prevent ongoing Tariff violations.

The MMU withdrew a fifth recommendation, related to market power mitigation conduct thresholds. The monitor said it had observed lower-than-expected mitigation levels during the Integrated Marketplace’s second year of operation.

Ross said a task force has been formed to address ramp-constrained shortage pricing, which the MMU suggested should be priced the same as operating-reserve capacity shortages.

SPP RE Selects New Trustee Candidates

The Regional Entity’s trustees have worked with a search firm to select two candidates as new trustees: Mark Maher, who retired as the WECC’s CEO, and retired NYISO CEO Steve Whitley. SPP’s Members Committee will vote on their nominations during the July board meeting.

Maher and Whitley would join incumbents Dave Christiano and Gerry Burrows. Christiano replaced John Meyer as the trustees’ chairman earlier this year, when Meyer resigned to join Western Interconnection reliability coordinator Peak Reliability.

RE General Manager Ron Ciesiel told the MOPC the trustees approved the entity’s $10.9 million budget for 2017 and its business plan during their June meeting.

Ciesiel said the RE continues to see a downward trend in standards violations and vegetation contacts. He reported just two regional events during the second quarter, an outage and a 30-minute partial loss of monitoring at a control center.

The RE is conducting its first Critical Infrastructure Protection v.6 audit this month. Ciesiel said a FERC-led CIP compliance audit is expected next year, as the SPP footprint was not selected for an audit this year.

Recommendation: Retire Task Force, Create New Working Group

The MOPC unanimously approved the Capacity Margin Task Force’s recommendation that it and the Generation Working Group retire and be replaced by a Supply Adequacy Working Group. The new working group would also assume fuel supply work now performed by the Gas Electric Coordination Task Force.

The CMTF held its last meeting June 30, when it finalized a charter for the new working group. It also reviewed its final deliverable, a resource adequacy workbook that combines the data needed for complying with NERC standards with those needed to validate SPP’s planning reserve margin. Chairman Tom Hestermann, of Sunflower Electric Power, said many of the task force’s members will transition to the new group.

The task force was created in 2014 to update SPP’s capacity margin requirements and methodology. Its work resulted in the RTO’s first reduction in its planning reserve margin since 1998 and a package of policies defining a load-responsible entity and its obligations. The task force also drafted a planning-reserve assurance policy and conducted a deliverability study. (See “Lowered Reserve Margin Promises $86M in Annual Savings,” SPP Board of Directors Briefs.)

Study Scopes Approved

The MOPC unanimously approved study scopes and revisions for a pair of studies, the Variable-Generation Integration study and the 2017 Integrated Transmission Plan’s 2017 Near-Term assessment.

The variable-generation study will include stability and frequency-response analyses with wind resources representing 30%, 45% and 60% of total SPP generation. SPP’s peak wind penetration record is 49.17%, and staff has said it expects to see levels approaching 60%.

Asked whether the task force is trying to determine when the 60% figure will be reached, SPP’s Casey Cathey, manager of operations analysis and support, said, “Sixty percent is a good level [to measure], because we have to add wind [generation] to get to that level. …The real issue, based on our footprint and our models, is will we see such penetration?”

Cathey said he is interested in determining whether there will be any voltage issues, saying, “We have to make sure that, given how we work the market, including dispatchable wind, whether we can maintain nominal voltage levels.”

The study will also analyze a potential five-minute ramping product.

The 2017 ITPNT’s scope was revised to include additional NERC transmission system planning performance (TPL-001-4) contingencies. Members also approved a modification to the 2017 ITPNT’s scenario 5, which sets all wind generation and reservations between companies to maximum firm service, as allowed on a pro rata basis. The modification aligns with the TPITF’s white paper, which assumed long-term firm transmission-service usage levels and conventional renewable resource output levels.

Regional Cost Allocation Review Approved

Members approved the Regional Allocation Review Task Force’s second regional cost allocation review of SPP’s regional- and zonal-allocation methodologies (RCAR II). There was one dissent.

The report’s 10 recommendations included proposed Tariff revisions and a proposal to incorporate its lessons learned in future assessments of the SPP highway/ byway methodology.

RCAR II identified the City Utilities of Springfield zone as SPP’s only deficient zone, with a benefit-cost ratio of 0.59, below the 0.8 threshold. Future transmission and seams studies with MISO and Associated Electric Cooperative Inc. are expected to help address the deficiencies. If not, a high-priority study for the area remains an option.

Two other zones (the Omaha Public Power District and Empire District Electric) are above the 0.8 cost-benefit threshold but below 1.0, requiring the RCAR II’s analysis be considered in future transmission plans.

The task force shared its report Monday with the Regional State Committee. Stakeholders will be able to provide their input through Aug. 5 for a lessons-learned report.

– Tom Kleckner