A coalition of organizations representing low- and moderate-income households in New York has asked for a clarification and rehearing of last month’s Reforming the Energy Vision order to allow greater participation in the program by less affluent residents (14-M-0101).
The New York Public Service Commission set up a framework for the REV process that limits utility ownership of distributed energy resources with a limited number of exceptions, one of the cornerstones of the state’s path-breaking initiatives in the smart grid, distributed energy resources (DER) and energy storage. (See New York PSC Bars Utility Ownership of Distributed Energy Resources).
“While seeking to pay attention to low- and moderate-income residents, the commission continues to view low- and moderate-income households as merely consumers of energy while providing the opportunity for more affluent residents to be more active participants and owners,” according to a Tuesday filing by the Energy Democracy Working Group, a coalition of six organizations from throughout the state.
The REV generally excludes utility ownership of DER assets, but it allows exceptions for the development of DER intended to benefit the less affluent. The REV order noted that consumer advocates expressed concerns during the proceeding that those residents, including renters, would be excluded from REV benefits.
Energy Democracy agreed with the PSC’s assessment that utility investment may be needed but said the order is unclear regarding what types of investments that may mean, and how partnerships with community groups would be organized.
“We seek clarification as to whether ‘investment’ … means ‘ownership’ or whether it means providing access to financing or other support to allow low-income and moderate-income people to own distributed energy resources themselves,” it wrote.
The group also says that the assumption that DER markets will not develop without utility ownership is “premature” and that the “REV proceeding is meant to change the status quo and reduce barriers” for DER.
While the order does not define low or moderate income, Energy Democracy said it assumes standard measures that define “area median income” are used. “We hope the commission does not mean to write off the approximately 50% of New Yorkers who are low- or moderate-income as unreachable by the new REV markets,” the petition states.
“Low- and moderate-income New Yorkers represent a substantial portion of the state’s population and a large portion of the electricity market. This raises the possibility that … the exception … will represent a significant portion of the market,” it adds.
NYISO asked the Federal Energy Regulatory Commission this week if a recent order meant to mitigate market power in the installed capacity market in New York City would apply to its new capacity zone in the Lower Hudson Valley (EL07-39-006). NYISO wants an expedited ruling by Monday because market participants are preparing for the May monthly auction. Enrollment closes on Wednesday.
The order accepted NYISO’s compliance filing with the exception of its proposal to grant a blanket exemption from offer floor calculations for all payments and other benefits to special case resources (SCR) under state programs. An SCR is a demand-side resource that participates as a supplier in NYISO’s capacity market. (See FERC Upholds Most of New York City Market Power Order.)
NYISO said it is clear the order requires revisions to state programs for SCRs in New York City and will be included in determinations under buyer-side capacity market power mitigation rules. “It is not clear whether that revision is also to apply to new SCRs in the Load Zones G, H and I (i.e., those within the G-J Locality) or in any mitigated capacity zones that may be created in the future,” NYISO wrote.
The New York Transmission Owners on Thursday opposed the NYISO petition, saying it was counter to the plain language meaning contained in the FERC order. “The clarification request is, in substance, an untimely motion asking the commission to expand the scope of a March 19, 2015, ruling in this proceeding far beyond that expressly established by the commission and addressed by the parties during the more than seven years that this proceeding has been pending,” it wrote.
A split Federal Energy Regulatory Commission on Tuesday granted ITC Midwest’s request for an incentive adder but cut the bonus in half, prompting a dissent from Commissioners Philip Moeller and Tony Clark.
ITC had requested an adder of 100 basis points, consistent with what the commission has granted “independent, stand-alone” transmission companies (transcos) since such incentives were authorized by Congress in 2005 to increase transmission spending.
In response to that directive, the commission issued Order 679, concluding that the transco business model responds more rapidly and precisely to market signals and was thus deserving of an incentive.
“We continue to find that the transco business model provides the benefits that the commission recognized in Order No. 679. However, we note that the commission did not specify the size of the transco adder in Order No. 679,” the commission wrote (ER15-945).
Under current conditions, the commission said, 100 basis points is excessive. “We conclude that 50 basis points is an appropriate size for the transco adder, taking into account the interests of consumers and applicants, as well as current market conditions. Granting this 50-basis-point adder strikes the right balance by appropriately encouraging independent transmission consistent with Order No. 679, while acknowledging protesters’ concerns regarding the rate impacts of such adders.”
The commission said the adder would be applied to a base return on equity within the “zone of reasonableness” determined by an updated discounted cash flow analysis being conducted in docket EL14-12. (See ROE Talks Between MISO Industrials and TOs Collapse.) ITC said it would defer collection of the adder, which became effective April 1, pending the outcome of that proceeding.
Dissent
Moeller and Clark blasted the majority’s ruling, the first time that the commission has reduced a requested transco adder.
“The majority has not provided any guidance as to what showing is necessary to support a 100-basis-point adder moving forward,” they wrote.
“We also find it puzzling that the commission would reduce transmission incentives for a transco business model when it is just beginning to see the effects of competitive solicitation under Order No. 1000,” the commissioners continued. “These mixed messages from the commission on the value of innovative business models and transmission investment decrease regulatory certainty at a time when it is most needed.”
The Federal Energy Regulatory Commission on Tuesday rejected PJM’s contingency plan to include demand response in its capacity auctions in the event an appellate court ruling limiting FERC’s jurisdiction over DR is allowed to stand (ER15-852).
FERC called the filing premature, saying it would disrupt the commission’s options in dealing with the aftermath of the Electric Power Supply Association (EPSA) v. Federal Energy Regulatory Commission case.
FERC has asked the Supreme Court to reconsider the 2-1 ruling, which found that Order 745 violated state ratemaking authority by forcing RTOs to pay market-clearing prices to DR resources. While the ruling only directly addressed FERC’s jurisdiction over DR in energy markets, PJM wanted to be prepared in case it were applied to FERC-regulated capacity markets. (See PJM to File Post-EPSA Demand Response Contingency Plan with FERC.)
PJM’s proposal would have altered its demand curve to reflect actual load by accepting DR bids from any “wholesale entity” in May’s Base Residual Auction, reducing the amount of capacity procured and the price at which it clears.
As a result of FERC’s rejection, PJM said in a statement Wednesday, the BRA for delivery year 2018/19 “will move forward under the existing rules for the participation of demand response.” However, the auction, scheduled for May 11-15, may be delayed as a result of a separate FERC ruling Tuesday that required the RTO to provide additional information on its Capacity Performance proposal. (See related story, FERC: PJM Capacity Performance Filing ‘Deficient’.)
FERC ruled that PJM’s DR idea was good but before its time. “While we recognize that PJM’s goal is to reduce uncertainty surrounding demand response participation in its upcoming BRA, in the present circumstances, it is unavoidable that some uncertainty is inherent in the current stance of the EPSA case,” FERC said.
“Moreover, we are concerned that PJM’s proposal introduces uncertainties that may exceed those it seeks to avoid, particularly with respect to potential unanticipated spillover effects on state programs and private sector arrangements.”
Commissioner Tony Clark dissented, saying that the commission was sidestepping the merits of PJM’s filing.
“Today’s order unnecessarily delays action and perpetuates system inefficiencies created by the overcompensation of demand response products in wholesale electricity markets,” Clark said. FERC should “seize the opportunity to provide guidance on a functional demand-side product to the betterment of the PJM markets.”
Clark, however, said he thought that PJM’s proposal may not have gone far enough and ignored the role its existing Price Responsive Demand product could have played. “Enabling functioning price-responsive demand is the right answer to the conundrum in which we now find ourselves, and it is where the commission should expend the bulk of its efforts,” he said.
PJM had requested the proposal go in effect April 1, in time for the BRA. The RTO argued it was being proactive, and that the changes would only be a temporary measure while FERC developed a more comprehensive solution.
PJM noted that if the Supreme Court granted its writ of certiorari, it would have withdrawn the changes from the Tariff and run the BRA under the previous rules. The court is expected to decide this month whether to take the case.
In its protest to the filing, the Advanced Energy Management Alliance argued that LSEs, curtailment service providers and DR owners would not be able to change their business strategies in time for the BRA. The Illinois Commerce Commission and the Maryland Public Service Commission also argued that in some states, laws and regulations would need to be amended in order to enact the changes.
While not taking a strong position on the merits of PJM’s proposal in its protest, Public Service Enterprise Group argued that if FERC accepted the plan, it should require PJM to keep the changes intact regardless of whether the Supreme Court took the EPSA case, as withdrawing them would create uncertainty in the results of the BRA.
PJM proposed creating two new capacity products: Whole Load Reductions and Whole Energy Efficiency Load. PJM General Counsel Vince Duane said in December, when the proposal was first presented to stakeholders, that the term “wholesale entity” was left “deliberately vague” to allow load-serving entities and electric distribution companies to submit DR bids.
PJM’s controversial Capacity Performance plan was turned back Tuesday by the Federal Energy Regulatory Commission, which deemed the filing deficient and gave the RTO 30 days to provide additional information (ER15-623).
FERC’s four-page order questioned 10 areas of the proposal, which was conceived to increase reliability expectations of capacity resources with a “no excuses” policy.
PJM said Wednesday it will respond to FERC’s questions “promptly and seek expedited review” to allow the new rules to be in effect for the Base Residual Auction scheduled for May 11-15.
“We recognize that process may require a delay to conduct an orderly auction process,” Dave Anders, director of stakeholder affairs, said in an email to members. “While PJM clearly would have welcomed approval, we appreciate the FERC’s thoughtful consideration of our proposal and the commission’s demonstrated commitment to reliability and enhanced generator performance.”
Anders said PJM has never delayed a BRA before.
The commission compared aspects of the PJM proposal with ISO-NE’s “pay-for-performance” design, which it approved last year and on which PJM’s proposal was in large part modeled.
PJM’s proposal was expected to result in both larger capacity payments for over-performing participants and higher penalties for non-performers.
FERC asked PJM to explain its derivation of an appropriate competitive clearing price when no new capacity is required in a locational deliverability area (LDA), and to provide more detail on a default offer cap and how it would apply in several situations.
It also requested any analyses the RTO had conducted on expected performance charges and bonus payments under the proposal. The commission asked if it made sense to phase in the penalties — as ISO-NE has — and for ideas of how to provide incentives for resource performance. In addition, it asked PJM how it plans to evaluate the performance of external resources not pseudo-tied to the RTO.
Moeller: Delay Creates Uncertainty
The commission’s order drew a rebuke from Commissioner Philip Moeller. The RTO’s filing “already contains sufficient information to permit the commission to issue an order on the merits of PJM’s proposal in advance of the May 2015 Base Residual Auction,” he said in a statement.
“Markets provide the best prices for both buyers and sellers when participants know the market rules. Regardless of whether the commission ultimately decides to accept or reject PJM’s Capacity Performance proposal, by failing to act, the commission is creating market uncertainty on issues that need clarity now,” he added.
Dynegy and NRG Energy shares fell sharply April 1 on the news of the ruling, with Dynegy down 2.1% and NRG falling 5.6%. Dynegy recaptured its losses April 2 while NRG only partially rebounded.
More than 60 entities filed comments and protests in response to the plan.
States and load-serving entities (LSEs) were skeptical about the need for a major overhaul, while generators split over elements they liked and others they said must be changed. (See States, LSEs Skeptical, Utilities Split Over Capacity Performance.) Many generators complained the penalties were too harsh; others, including Exelon, said the penalties were too lax.
LSEs feared the product redesign was overkill and would result in unnecessary price increases.
As proposed, the changes would have begun to take effect for the 2016/17 delivery year and be fully implemented in 2020/21.
The details are outlined in nearly 1,300 pages filed in two dockets:
EL15-29 contains proposed changes to PJM’s Operating Agreement and Tariff “to correct present deficiencies in those agreements on matters of resource performance and excuses for resource performance.”
ER15-623 proposes changes to the Reliability Pricing Model in the Tariff and Reliability Assurance Agreement.
Exelon would retain Pepco Holdings Inc.’s D.C. headquarters, not forcibly reduce the workforce for at least two years and match any commitments it has made to New Jersey, Delaware and Maryland if it is permitted to buy Pepco in a proposed $6.8 billion deal, CEO Christopher Crane testified Monday before the District’s Public Service Commission.
Those promises include customer bill credits, grid reliability improvements, renewable energy projects, energy efficiency programs, help for low-income consumers and the creation of trails.
D.C. and Maryland are the last holdouts to the transaction, which Crane agreed Monday is an acquisition rather than a merger, given the size of the Chicago-based energy giant. The evidentiary hearings, which are being webcast, continue through April 8 in D.C. and are scheduled for April 15-17 in Maryland.
The direction of questioning followed opening statements delivered by the D.C. Office of People’s Counsel and the D.C. government, who strongly oppose the deal. Crane was grilled on Exelon’s commitment to renewable and distributed energy, protecting ratepayers’ interests over the profitability of its nuclear generators, retaining a true local presence and how Exelon would be held accountable to its promises.
“We hope to, within the District and other districts, to enter settlement negotiations to satisfy stakeholders in the process if we could,” Crane said.
Regarding jobs, Crane said, “There will be no reductions of the utility staff for two years — there’s actually a commitment to hire.”
In part, that’s because about 400 employees are eligible for retirement, he said, and Exelon wants to bring some of the work currently being contracted in-house. While Exelon can’t promise to preserve staff “in perpetuity,” Crane said there was nothing viewable in today’s landscape that would indicate the need for future layoffs.
Crane said Exelon cannot alter its proposal to D.C. without resetting the clock for the decision timeline, but he welcomed additional concessions either through a negotiated settlement or a unilateral decision by the commission.
When asked by People’s Counsel attorney Jason Gray what would be the “tipping point” that would make the acquisition unprofitable, Crane said that to his knowledge, Exelon had not conducted such an analysis.
“You don’t have any concern that applying any of these provisions would put you over the tipping point?” Gray asked.
“I don’t believe any of these do,” Crane responded.
In his opening statement, John Coyle, an attorney representing the D.C. government, noted that the transaction involved a premium of more than 24% over the current market value of Pepco stock, when in essence, he said, “Exelon is proposing $6.8 million for a $4.3 million balance sheet.”
“The mere size of the premium begs the question of why it is being offered,” Coyle said, suggesting that commissioners engage in what he called an old D.C. tradition and “follow the money.” (See Consumer Advocate Seeks Delay in Exelon-Pepco Proceedings.)
Md. County Reps Want More from Deal
Leggett
Meanwhile, Exelon continues to encounter opposition in Maryland, where the Montgomery County Council has split from County Executive Ike Leggett, arguing that the settlement he reached with Exelon doesn’t go far enough to protect ratepayers and encourage renewable energy.
The nine-member Council on Tuesday unanimously passed a resolution asserting that Leggett’s settlement “does not adequately address the overarching issues that have led the state, the Office of People’s Counsel, the environmental community and other public interest organizations to maintain that the merger is contrary to the public interest.”
The resolution, spearheaded by energy attorney Roger Berliner, cites fears that Exelon will seek to raise rates to offset losses at its nuclear plants and will favor that generation at the expense of renewable and distributed energy resources.
“If the serious risks the proposed merger poses to the public interest can be mitigated, it can only be mitigated by very strong, verifiable and financially accountable commitments by Exelon to holding down costs and to clean, renewable, distributed energy, including energy efficiency, values at the heart of Maryland’s energy policy,” the resolution states.
Patrick Lacefield, a spokesman for Leggett, toldBethesda Now that the executive took the council’s position into account before signing the settlement with Exelon.
“The alternative to this settlement is not necessarily something better. The alternative could well be no deal at all. … We made this decision in the public interest to change the status quo. It is an executive decision.”
The Maryland Public Service Commission is set to finish reviewing the takeover on May 8.
The acquisition has been approved by the New Jersey Board of Public Utilities, the Federal Energy Regulatory Commission, the Virginia State Corporation Commission and the staff of the Delaware Public Service Commission.
Exelon hopes to close the deal in the second or third quarter of this year.
The Mercury and Air Toxics Standards (MATS) at issue before the U.S. Supreme Court last week are the result of a quarter century of legislation, regulation and litigation that began with the 1990 amendments to the Clean Air Act.
Congress amended the act to give the Environmental Protection Agency the authority to regulate 189 hazardous air pollutants (HAPS), including mercury, arsenic and cadmium that had not been previously controlled.
The law, signed by President George H.W. Bush, required EPA to develop emission standards for the pollutants, and then identify, categorize and regulate the sources that emitted them in large amounts.
The act expressly forbade EPA from considering cost when deciding whether to regulate sources other than electric generating plants; cost would only come into play in setting the level of regulation.
Other provisions of the 1990 amendments specifically targeted power plants, including the acid rain program, which required regulations on sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions from the largest coal-fired generators.
Appropriate and Necessary
Congress ordered EPA to perform a study evaluating whether the acid rain and other programs had addressed all public health concerns from generators. It ordered EPA to develop additional regulations if the agency determined it was “appropriate and necessary.”
EPA submitted the required utility study in 1998, concluding that the acid rain program would not significantly reduce HAPS emissions. In 2000, EPA announced it would regulate mercury, other metals and acid gases, noting that power plants were the biggest source of mercury emissions in the U.S.
EPA said mercury is a health hazard because it enters the food stream through fish and shellfish. Mercury can impair neurological development for fetuses, infants and children.
Reversal by Bush Administration
In 2005, however, the George W. Bush administration attempted to withdraw the listing, a decision that was voided by the D.C. Circuit Court of Appeals. The court said the government hadn’t met the criteria for delisting.
The Obama administration reaffirmed the decision to regulate mercury in 2012, saying it was necessary because other Clean Air Act regulations would not eliminate the health hazards posed. EPA said it interpreted Congress’ instructions in section 112 of the act as prohibiting the consideration of cost when it made the “necessary and appropriate” determination.
The MATS rulemaking sparked numerous challenges. While all parties agreed that section 112 was silent on the issue of costs, they disagreed on how that silence should be interpreted.
Last April, the D.C. Circuit upheld the MATS rulemaking in a 2-1 decision, with Judge Judith Rogers writing that section 112 “neither requires EPA to consider costs nor prohibits EPA from doing so.”
Judge Brett Kavanagh provided the ammunition for challengers to appeal to the Supreme Court, writing that the term “appropriate” required a cost-benefit consideration.
Dayton Power & Light is protesting a $106 million transmission project by Dominion Resources under PJM’s 2015 Regional Transmission Expansion Plan because of a change in how the project’s costs will be allocated (ER15-1344).
The 500-kV Cunningham-Elmont end-of-life project (Project b2582) initially was designated a supplemental proposal, for which Dominion, as the incumbent utility, would bear the full cost.
“That was the correct designation for this project because it is simply a replacement for an existing transmission line for which Dominion has always had 100% cost responsibility,” DP&L said in a March 24 filing with the Federal Energy Regulatory Commission.
But after changing its local planning criteria last year, Dominion asked PJM to study the need for the project and received permission to change its designation to baseline, categorizing it as a new line and allowing Dominion to export more than half of its expense.
The new allocation scheme will charge DP&L about $1 million, the Ohio utility said, noting that larger PJM stakeholders such as Commonwealth Edison and American Electric Power will be expected to pay six to seven times that much. While AEP has filed a motion to intervene in the case, DP&L is the only entity to have submitted a protest.
The Dominion project was described as a supplemental project in a reliability analysis update at PJM’s July 10, 2013, Transmission Expansion Advisory Committee.
The criteria PJM used to redefine the transmission project, DP&L said, “was not developed by PJM for consistent application across PJM, but was instead based solely on ‘Dominion Planning Criteria.’ In other words, Dominion’s unilateral change of its own criteria for construction within its own zone has resulted in a recharacterization of this project from a supplemental project for which it would bear 100% of the costs to a baseline project for which about 52% of costs are exported to other zones.”
DP&L is asking FERC to reject the project or defer consideration to allow PJM transmission owners time to revise the Tariff to prevent them from unilaterally revising local planning criteria to secure baseline status for their projects.
DP&L said Dominion is exploiting what it called a loophole resulting from an Order 1000-related filing by PJM TOs that permits a portion of the costs of new 500-kV baseline projects to be shared by load-serving entities throughout the RTO.
WILMINGTON, Del. — The MRC endorsed the following Thursday:
Manual 11: Energy & Ancillary Services Market Operations — Updates manual to include a method for screening of demand bids by load-serving entities, as approved by the Federal Energy Regulatory Commission in November (ER14-2976). Bids are limited to the LSE’s calculated zonal peak demand reference point for the day plus whichever value is more, 30% of the reference point or 10 MW. PJM said the need for such limits was illustrated by the default of a retail provider in January 2014 after it mistakenly entered a demand bid about 100 times its actual load. (See MIC Briefs.)
Marji Phillips of Direct Energy said the change is requiring her company to confirm its loads daily by phone with Pepco Holdings Inc. because of problems with Pepco’s electronic system. “Every day, we have no idea whether we will be able to meet the obligations we have to meet,” she said. “It is killing all the LSEs in the Pepco area — Delaware, New Jersey, D.C. It’s a tremendous problem.”
Manual 12: Balancing Operations — Revisions describe the required regulation range, specifying that resources are required to symmetrically provide the total amount of regulation assigned. The changes also detail how performance evaluations are conducted and further define the basepoint around which the resource will be regulating.
Non-substantive revisions regarding financial transmission rights. The changes concern clearing deadlines, bilateral trades and Tariff references.
A change to demand response modeling assumptions used in load deliverability analyses for the Regional Transmission Expansion Plan. The new method would use the average of the last three years of committed DR for each zone. (See Change Proposed in PJM Demand Response Modeling.)
Revisions to Manual 18 Address Capacity Performance
The MRC discussed manual changes needed to implement PJM’s Capacity Performance proposal, which is pending before FERC (EL15-29). The proposal would penalize underperforming units and reward those that over-perform. (See PJM Defends Capacity Performance Proposal; Drops Change for LSEs.)
The revisions, which affect Manual 18: PJM Capacity Market, would allow capacity resources to avoid performance penalties by requesting approval of retroactive replacement transactions within three business days after a delivery day that includes a performance assessment hour.
That would allow a participant with over-performing uncommitted capacity to replace underperforming committed capacity in the same account, Vice President of Market Operations Stu Bresler said.
Market Monitor Joe Bowring said the changes present an opportunity for economic withholding. “It is an incentive to withhold, and that is one of our concerns,” he said.
Members will be asked to endorse the revisions at the next MRC meeting if FERC has approved the proposal by then.
Members Committee
CTS Product, Fee for $20M-plus Projects Approved
The Members and Markets and Reliability committees endorsed a $30,000 non-refundable fee for studying proposed transmission improvements with estimated costs of $20 million or more. The fee, which PJM would evaluate for two years, would apply to both greenfield projects and upgrades by incumbent transmission operators. FERC last month rejected an earlier proposal to exempt transmission upgrades from the study fee. (See FERC Rejects Fee on Greenfield Transmission Projects.)
The MC also endorsed Tariff and Operating Agreement revisions to implement Coordinated Transaction Scheduling (CTS) with MISO. The objective is to improve interchange scheduling efficiency by aligning energy scheduling with interface prices and adding the option for market participants to schedule energy transactions using an interface bid. (See PJM, MISO Reach Agreement on New Interchange Product.)
Little Rock Operations Center Opened to Serve MISO’s Southern Expansion
MISO has opened a $22 million regional operations center in Little Rock.
The 50,000-square-foot facility works in concert with MISO’s control facilities in Carmel, Ind., and Eagan, Minn.
The facility was needed after MISO expanded its territory into the Gulf Coast states following Entergy’s decision to join the RTO.
The facility initially will employ 42 people. “We hope to use our presence here not only as a resource to the greater Little Rock community but as a magnet for other energy-sector firms,” MISO President and CEO John Bear said.
Crowd Attends Hearing on Refinery’s Bid for Permit on Cooling Water
More than 500 people showed up for a hearing on Delaware City Refinery’s bid to renew permits governing its cooling water intake and discharge. The majority of the crowd was made up of refinery workers and supporters, although a vocal group of environmentalists — some in fish costumes — gathered outside the hearing room at Gunning Bedford Elementary School. They objected to the state Department of Natural Resources and Environmental Control’s issuance of the permit, which granted refinery owner PBF an extension to assess options.
“DNREC has clearly compromised its ability to be an independent arbiter over this matter,” Delaware Riverkeeper Network Director Maya van Rossum said. “They need to step back and request that the Environmental Protection Agency take the lead in order to remove both the actual and appearance of bias. This sweetheart deal needs independent agency review.”
Exelon-Backed Bill to Save Nukes, Impose Surcharge Advances in Senate
A state Senate committee has passed an Exelon-backed proposal designed to ensure continued operation of three nuclear generators the company says are unprofitable, in part by imposing a surcharge on Illinois electricity users. (See Exelon-Backed Bill Proposes Surcharge to Fund Illinois Nukes.)
The Energy and Public Utilities Committee on March 26 endorsed Senate Bill 1585, which would establish a “Low Carbon Portfolio Standard.”
Under the proposed legislation, beginning next year, 70% of the electricity delivered by Commonwealth Edison, which is owned by Exelon, and Ameren would have to be generated by “clean energy” sources: solar, wind, hydro, nuclear, tidal, wave and clean coal.
The fee to customers, which would average $2/month, would fund low-carbon energy credits to be auctioned by the Illinois Power Agency.
The legislation is one of three clean energy measures before the General Assembly. Environmental and consumer advocates are backing the Clean Energy Jobs Bill (SB1485, HB2607).
Meanwhile, ComEd has proposed legislation to foster growth in clean energy for households and microgrids (HB3328, SB1879).
Regulators Again Probing IPL After Two More Downtown Blasts
The Utility Regulatory Commission has opened an investigation into Indianapolis Power and Light’s downtown underground network after blasts sent manhole covers flying downtown.
Two incidents that occurred in March were the latest in several well-publicized explosions dating back four years.
In 2011, the IURC commissioned a study by Atlanta-based O’Neill Management Consulting that found IPL can expect three to five such incidents per year if it didn’t improve maintenance procedures for its downtown electrical network.
Under the nervous gaze of civic leaders, IPL recently installed manhole cover restraining devices in high-traffic areas downtown in anticipation of the NCAA Men’s Basketball Championship in April.
The underground blasts come at a time when IPL is seeking a rate hike that would generate $68 million more in annual revenues. It’s IPL’s first base rate case since 1995.
In light of the recent incidents raising safety and reliability concerns, Citizens Action Coalition, a group representing IPL ratepayers, said it is “unconscionable” that regulators allowed IPL to operate for nearly 20 years without a base rate case.
A former IPL executive, Dwane Ingalls, has alleged that IPL skimped on network maintenance to maximize the dividend the utility sent to parent AES.
House Bill Would Protect Property Owners from ‘Merchant’ Tx Lines
A House committee passed a bill that would protect property owners from losing their land to transmission line developers. The main targets of the bill, offered by House Government Oversight Committee Chairman Bobby Kaufmann, are transmission lines linking out-of-state utilities or companies. Clearly targeted is the Rock Island Clean Line, a proposed $2 billion line that would run from northwest Iowa to Illinois.
House Democrats opposed House Study Bill 222, saying it takes away power from the Utilities Board. “We have a process in place,” Rep. Phyllis Thede said. “We want to make sure people are safe with their land but we also want to make sure the process works.”
Westar Wants Small Generators to Pay Higher Fixed Rates
A case before the state Corporation Commission could mean higher fixed rates for those who produce their own power through solar or wind generation at their homes or businesses. Topeka-based Westar Energy is targeting those smaller generators for higher fixed rates, rather than raising such rates for all customers.
“We just want to make sure it’s fair to any customers, whether they decide to generate some of their own power or not,” said Jeff Martin, the company’s vice president for regulatory affairs.
But solar advocates see it as aimed at small-scale renewable energy. “This is another attempt by the utility to kill solar in Kansas,” said Aron Cromwell, who co-owns a solar installation company.
The Public Service Commission has ordered refunds to some former customers of People’s Power and Gas, a competitive supplier that operated in Emera Maine’s territory in 2013 and 2014. The commission found that People’s charged a $25 monthly “service fee” without notifying customers that it would do so. An investigation revealed that the company collected about $128,070 from about 2,800 customers.
The company filed for bankruptcy shortly after collecting the fees, so the PUC is using People’s security deposit to refund the money.
Another Chicken Poop-to-Power Plan for Maryland’s Eastern Shore
Poultry giant Perdue wants to team with a New Hampshire firm to build a $200 million plant that will be fueled by chicken manure, something that is abundant on the Eastern Shore, a major poultry producing region in the country.
AgEnergyUSA, a firm that is already building a similar plant in Colorado, said its plant would put the manure to good use and keep it out of the waste stream, where it has been identified as a polluter of the Chesapeake Bay. AgEnergyUSA is teaming up with Perdue and French power company EDF Renewable Energy. The plant would use “anaerobic digestion” to break down 200,000 tons of poultry “litter,” a combination of chicken manure and organic bedding, a year. Methane would be extracted, which could then be used for power generation and other industrial uses. The remaining waste would be mined for its nitrogen and then sold back to farmers as fertilizer.
Wind Energy Translates into 30 Billion Gallons of Water Saved Since 2004
Wind energy continues to grow not only as an important source of emission-free electricity, but as a means of saving water as well.
According to the state Department of Revenue and Department of Natural Resources, wind energy production in the state has saved 30 billion gallons of water since 2003. Studies from the departments say that energy production from fossil fuels needs 541 gallons of water for each megawatt of energy produced. Since 2004, wind facilities in the state have produced more than 56 million MW.
“Minnesota wind development is in many ways attractive, because it’s a form of industrial development where the primary alternatives are typically focused on agricultural processing, which is generally water intensive,” said Mark Lindquist, program manager for Energy and Biofuels with the state Department of Natural Resources. “So here’s a new industry that puts zero pressure.”
Senate Approves Duke’s Purchase of NCEMPA Generating Assets
The state Senate last week approved Duke Energy’s bid to buy the generating assets of the North Carolina Eastern Municipal Power Agency in a deal valued at more than $1 billion. NCEMPA holds partial ownership in a number of Duke power plants in the state. The $1.2 billion deal includes plant shares, fuel and parts inventories at Brunswick Units 1 and 2, Mayo Plant, Roxboro Plant Unit 4 and the Harris Nuclear Plant. Combined, the ownership interests amount to about 700 MW. The deal received approval from the Federal Energy Regulatory Commission in December. NCEMPA said the deal will mean lower electricity prices for its customers in 32 cities and towns in eastern North Carolina. The House is expected to vote on the measure soon.
State’s Rig Count Falls Below 100 for First Time in 5 Years
The slump in oil and gas prices is spurring exploration companies to shut down operating rigs, leading to a drop in the number of rigs operating in the state to fewer than 100 for the first time in five years. A recent count showed 98 rigs drilling in the state, 100 fewer than there were at the same point a year ago. The state is the No. 2 oil producer in the U.S., behind Texas.
Wind Farm Developers Have to Start Over After Applying for Wrong Permits
The developers of a wind farm in Lincoln County will have to start the permitting process over after the county commission ruled that they applied for the wrong permits for five test towers. Dakota Power Community Wind should have applied for a temporary-use permit for its five test towers, not conditional-use permits. The ruling gives opponents of the planned 500-MW wind farm another chance to convince the county commission to rule against the project.
County Fights Plan to Switch Pipelines from Gas to ‘Gas Liquids’
The Greater Dickson County Gas Authority is teaming with other utility districts in the state and in Alabama to fight a plan by a pipeline company to switch its operations from carrying natural gas to “natural gas liquids.”
Tennessee Gas Pipeline Co., a subsidiary of Kinder Morgan, wants to abandon nearly 1,000 miles of natural gas pipeline and then sell them to Utica Marcellus Texas Pipeline, another Kinder Morgan affiliate. The new owners would use the pipelines to transport natural gas liquids, a different product. The switch to natural gas liquids will mean a need to upgrade compressors and other parts of the pipelines, and that would translate into higher costs for customers all along the route, according to the Greater Dickson filing.
The city of Georgetown’s municipal utility announced plans to cut the cord to all fossil-generated electricity and use wind and solar only to meet its energy needs. It will be the state’s first city-owned utility to do so.
The city announced a deal with SunEdison to provide 150 MW of solar starting next year. Last year, it signed a contract that runs through 2039 for 144 MW of wind energy. The city said it recognizes that the two agreements will mean fewer emissions for the region but that it was the numbers that made them appealing. “It was really primarily a price decision,” city spokesman Keith Hutchinson said.
Both the wind and solar agreements locked in cheaper prices than what it was paying to the Lower Colorado River Authority, Hutchinson said. He also said it provides a hedge against increases from fossil generation going forward. “We don’t know what’s going to happen in the future for regulations for fossil-based fuels,” Hutchinson said. “This really removes that element from our price costs going forward.”
PSC Approves Controversial 180-mile Tx Line After Xcel Joins
The Public Service Commission approved a 180-mile, $580 million transmission line that it previously blocked when it was proposed by non-utility company American Transmission Co. Xcel Energy’s Northern States Power Co. joined the 345-kV line project as partner after it was initially rejected, and MISO endorsed it and designated it a critical path for providing power and reliability to the state. Because of that designation, state residents will pay about 15% of the line’s cost. It is to run from Madison to LaCrosse and is crucial for moving wind power generated from Iowa and Minnesota.
“Construction of the line is critical for the development and delivery of several thousand megawatts of clean, low-cost wind power,” said Beth Soholt, who runs Wind on the Wires, a renewable energy advocacy organization representing clean energy groups and wind energy companies. “The new line will also reduce congestion in the MISO energy market and add to the reliability of the overall MISO grid.”
