TransCanada told regulators last week that it intends to mothball three of its Ravenswood gas peakers in New York City due to the units’ age and condition.
TC-Ravenswood (Source: TransCanada)
In a letter Tuesday to the New York Public Service Commission, the company wrote that gas turbine units 4, 5 and 6, which began operating in 1970 and total 64.2 MW, could be taken out of service on April 30, 2016. “Over the past 24 months, several operational and maintenance issues have occurred, including evaluation and repairs resulting from Hurricane Sandy. These units are reaching end of life unless substantial investment is made to numerous components.”
Unit 7, of similar size and vintage, was taken out of service in March 2014 after “it experienced an over speed condition, high vibrations, a rotor ground and discovery of failed bolts in the turbine rotor first stage section.”
The units are part of a 2,480-MW complex of gas-fired generators, including baseload plants, in Astoria, Queens. At its full capacity, the complex could serve about one-fifth of New York City’s peak demand.
“Over the next six months, they will continue to operate as we have obligations to make the units available to the New York market,” company attorney Jim D’Andrea told RTO Insider.
The company said it has not made a final decision on the plants’ fate. D’Andrea said that the company would make a decision on whether the units should be refurbished “based on the economics.”
According to the latest NYISO Gold Book, the three plants produced a combined 500 MWh of net energy in 2014.
The PSC will request a study by NYISO to determine if the units are needed to maintain reliability.
LITTLE ROCK, Ark. — MISO said last week it is continuing discussions with SPP on one interregional project, despite earlier staff recommendations to not proceed.
In September, MISO staff said it would not recommend for approval any of the three potential joint projects evaluated by it and SPP. SPP staff has recommended one of the projects, the 11-mile South Shreveport-Wallace Lake 138-kV rebuild in northeastern Louisiana.
SPP said the project would have a benefit-cost ratio of 11.86, assuming MISO funded 80% of the cost. MISO said the same assumptions resulted in only a 0.86 B/C ratio, below the minimum threshold.
But Jennifer Curran, MISO’s vice president of system planning and seams coordination, told the System Planning Committee last week that the RTO might yet support the project if SPP picked up a bigger share of the cost. “We’re continuing discussions with SPP to see if there are alternative price allocations,” she said.
MISO’s Board of Directors will take up staff’s interregional recommendations during its December meeting.
Curran also said a second project considered in the interregional analyses, the Alto-Swartz 115-kV series reactor in West Texas, might have a “fair amount of value.” She said it will be taken into MISO’s regional study process.
Meanwhile, MISO Technical Advisor for Economic Studies Arash Ghodsian met with SPP’s Economic Studies Working Group last week to help the group better understand MISO’s interregional review process and this year’s results.
Ghodsian said the initial interregional study ended in June, and that MISO spent the next three months updating its modeling based on SPP and stakeholder feedback. While an interregional review found the three projects had benefit-to-cost (B/C) ratios of 1.22 or more, MISO decided against recommending any of the three when it reviewed its assumptions after a regional review found the B/C ratios for two of the three projects were under 1. (See “No Go for MISO-SPP Interregional Projects,” in MISO Planning Advisory Committee Briefs.)
Ghodsian said MISO and SPP “effectively collaborated” during the study and said the knowledge gained would improve the interregional planning process.
“We look at it as a great working relationship,” he said. “I don’t know the plans for the future, but we look forward to more interregional studies.”
Brett Hooton, SPP’s senior interregional coordinator, said both RTOs will compile stakeholder feedback on the process for discussion during the Dec. 2 Interregional Planning Stakeholder Advisory Committee.
MISO has notified FERC that it intends to terminate its system support resource agreement with Illinois Power Holdings’ Edwards unit 1 generator in Peoria, Ill., effective Jan. 1 (ER16-129).
MISO said an examination of Edwards 1’s retirement found that new transmission infrastructure, including the 345-kV Maple Ridge-Fargo line and Maple Ridge Substation, are on track for completion by mid-2016 and eliminate the need for the generator to continue under SSR status after this year.
“MISO determined that the last of the transmission reliability projects needed to permit the retirement of Edwards 1 remains on schedule for completion by June 1, 2016, to meet the peak conditions for which Edwards 1 was designated a SSR unit,” the RTO told the commission.
MISO notified Illinois Power in late September that the 90-MW coal-fired unit would be released from SSR status at the beginning of the year and that the agreement would not be renewed. The SSR agreement took effect in January 2013.
The termination of the SSR agreement comes two weeks after FERC affirmed that Edwards should be allowed to recover fixed costs through a full cost-of-service rate when operating is mandatory to maintain reliability. (See MISO SSR Unit’s Recovery of Fixed Costs Upheld.)
The developers of the Northern Pass transmission line have filed for siting approval from New Hampshire with a higher price tag, a slightly altered route and another adjustment in the amount of hydropower the project can carry from Canada.
(Click to zoom.)
Eversource Energy now says the high voltage transmission line from Canada will cost $1.6 billion, up from previous estimates of $1.4 billion. The higher cost reflects changes in the route made in recent weeks after a series of public meetings held in five New Hampshire counties.
The line will carry 1,090 MW, up from an estimated 1,000 MW when project revisions were announced in August. Capacity was revised downward two months ago when an additional 52 miles of the route were proposed to be buried in the White Mountains. (See Northern Pass Opponents Want More of Line Buried.)
The New Hampshire Site Evaluation Committee is expected to take 14 months to review the proposal; Eversource hopes to bring the 192-mile project online in 2019.
The increased costs resulted in part from engineering and design changes to more than 60 structures to reduce view impacts along scenic byways and river and highway crossings. The filing also projects a 9% increase in capacity over earlier estimates.
“At the time we announced the new plan, in August, we were analyzing a number of technical issues surrounding the project and firming up costs,” spokesman Martin Murray said. “Now that we’ve locked in our cable and converter supplier, and completed our technical review, we are comfortable that the project will be capable providing up to 1,090 MW.”
The “filing marks another important milestone in our effort to deliver a clean energy solution that our customers desperately need in order to diversify our power supply and stabilize energy prices,” Bill Quinlan, president of Eversource Operations in New Hampshire, said in a statement.
Project developers noted that Entergy’s Oct. 13 announcement that it will retire the Pilgrim nuclear plant in Massachusetts will reduce New England’s carbon-free generation, “challeng[ing] the region’s clean air goals.” (See Entergy Closing Pilgrim Nuclear Power Station.)
The proposed route would cross over land owned by the Society for the Protection of New Hampshire Forests. That won’t happen without a fight, the group says.
“What Eversource has put forward blatantly and knowingly disregards our property rights and the conservation easements we hold in northern New Hampshire, where they do not have an existing [right of way],” group spokesman Jack Savage said in a statement. “It is unclear to us how they hope to acquire a contiguous route without having access to eminent domain.”
WILMINGTON, Del. — The Members Committee overwhelmingly agreed last week to fund a $450,000 budget for the Consumer Advocates of the PJM States (CAPS), in part through an assessment on electric customers.
According to the proposal, the charge to a residential customer using 12,000 kWh annually will be eight-tenths of a cent. The group also would receive a one-time infusion of $350,000 from Exelon if the D.C. Public Service Commission approves its acquisition of Pepco Holdings Inc., under a settlement brokered with D.C.’s mayor.
“The consumer advocates designated by state statute are in a position of having to be in two places at once — the state where there’s always lots to do, and here at PJM, where most of the charges are coming from,” said CAPS Executive Director Dan Griffiths. That, he said, has stretched the advocates’ resources, making it difficult to monitor the “hundreds” of meetings the RTO holds each year.
“This is something we think is a serious problem because the voice of the retail folks who are ultimately paying the bills is absent.”
Griffiths said the group modeled its budget and funding request on that of the Organization of PJM States Inc. (OPSI), which is funded through a charge in Schedule 9 of the RTO’s Tariff.
The proposal passed with slightly more than 81% of a sector-weighted vote, receiving unanimous support from End Use Customers and 89% from Other Suppliers. About 79% of Electric Distributors supported the funding, along with 71% of Generation Owners and two-thirds of Transmission Owners.
At the Members Committee meeting earlier this month where the plan was introduced, it met resistance from some suppliers, most notably Direct Energy, Talen Energy and Dynegy. Last week, Direct Energy abstained from the vote, while Talen and Dynegy opposed it. (See Consumer Advocates’ Funding Request Sparks Sharp Words.)
Jesse Dillon, assistant general counsel for Talen, repeated his argument that the proposal runs afoul of the First Amendment prohibition against “compelled speech.”
“I’ve already made the policy point that no member should have to fund the advocacy voting of another member, period,” he said. “This one group is receiving treatment that others aren’t. Their voices are no more relevant in the marketplace of ideas than other entities.”
In response to the free speech argument, the consumer advocates penned an Oct. 13 memo to the heads of the Members Committee defending the proposal, saying in part that the doctrine doesn’t apply to government entities, “which the members of CAPS clearly are.”
The memo cites FERC’s approval of OPSI funding in 2006 over a similar objection by Public Service Enterprise Group (ER06-78).
In that case, FERC ruled, “PJM is providing funding to make its job of working with the states easier and more efficient. The ability of any participant to express its views will not be constrained by this proposal.”
Dillon disputed the classification of CAPS as a government entity, noting that the group is a 501c tax-exempt nonprofit organization.
CAPS, made up of consumer advocates from PJM states and D.C., was formed in 2012 with start-up funding from a FERC enforcement settlement with Constellation Energy (IN12-7-00).
West Virginia Consumer Advocate Jackie Roberts pointed out that a portion of electric customers’ bills already go toward having the companies — Appalachian Power, in her case — represented at PJM.
“All we’re asking is that the customers we represent have an opportunity to pay less than a cent a year to have us have a seat at the stakeholder table,” she said.
States trying to meet their goals for the federal Clean Power Plan should be able to get two-year extensions without much trouble, according to the Environmental Protection Agency.
EPA Acting Assistant Administrator for Air and Radiation Janet McCabe told the Environmental Council of States that meeting the requirements for the two-year extension was “not intended to be a heavy lift.”
“We understand that it may be every single state that needs to seek an extension,” McCabe said. “There’s a lot of work for states to do and a lot of different processes.”
Trudeau’s Election in Canada May Be Good News for Keystone
Trudeau
Canada’s new prime minister, Justin Trudeau, has said he supports the construction of the embattled Keystone XL pipeline, which would carry oil from Canada to the U.S. Gulf Coast. The proposed pipeline does not have the support of the Obama administration, so environmentalists in both countries are waiting to see how hard Trudeau’s Liberal Party will push for the project.
Trudeau declined to say if he and President Obama discussed the Keystone XL project during their call after the election. “I think one of the things that has been a challenge in the relationship between Canada and the United States is it has in many cases been focused on a single point of disagreement, a single potential point of disagreement, a single pipeline,” he told reporters.
Although he is publicly in favor of pipelines as part of a national infrastructure program, Trudeau has also been an outspoken advocate for adoption of a national plan for reducing greenhouse gas emissions.
DOE Approves Emera CNG Exports from Florida Facility
The Department of Energy on Thursday gave its approval for Emera CNG to export a relatively small amount of U.S.-produced compressed natural gas out of a proposed terminal at the Port of Palm Beach, Fla.
Emera needed federal authorization to export to countries that do not have free trade agreements with the U.S. Emera will be allowed to export 8 million cubic feet of gas a day in trailers, tank containers and ocean-going carriers for 20 years.
Massachusetts Attorney General Maura Healey has asked FERC to closely examine Tennessee Gas Pipeline’s proposed Northeast Energy Direct pipeline, questioning whether there is a need for the new pipeline in view of the number of other projects either planned or in progress.
“This proposed pipeline would have a significant impact on local residents and the energy future of Massachusetts,” Healey wrote to the commission. “FERC should fully evaluate the need for this project in conjunction with other pipeline proposals for the region.”
She urged the commission to study the results of a regional electric reliability study on the Northeast region, which is due Oct. 31. The Northeast suffered from fuel constraints during the past two cold winters, with gas supply at a premium.
FERC OKs Environmental Study for Dominion Pipeline in NY
FERC issued a positive environmental assessment for a natural gas pipeline in New York, spurring complaints from opponents of the project. Dominion Transmission, a subsidiary of Dominion Resources, wants to expand its 200-mile pipeline to deliver natural gas produced in the Marcellus Shale fields in Pennsylvania.
FERC ruled that there were no adverse environmental impacts, but opponents in central New York have said the assessment was rudimentary. They called for a more detailed review, as well as an analysis of the project’s possible impact on existing and future infrastructure.
National Renewable Energy Laboratory Names Keller as New Director
Martin Keller, a Department of Energy veteran who headed up the Energy and Environmental Sciences Lab at the Oak Ridge National Laboratory, has been named director of the National Renewable Energy Laboratory.
Energy Secretary Ernest Moniz said Keller’s “track record in building links between the basic sciences and our nation’s energy challenges will help NREL reinforce its place as the world’s leading laboratory for renewable energy and energy efficiency research and development.”
Along with the promotion, Martin Keller will also become president of the Alliance for Sustainable Energy.
Three quarters of Americans now share the scientific community’s acceptance of climate change, the highest number in four years of polling by the University of Texas at Austin.
Perhaps the largest surprise in the findings is that 59% of Republicans now believe climate change is happening, up from 47% only six months ago. The Democratic acceptance level is hovering at about 90%, the university reported.
$13.5 Trillion Investment Needed to Fund Climate Change Pledges
The International Energy Agency has calculated a number needed to meet the climate change action pledges submitted for the upcoming Climate Summit in Paris: $13.5 trillion.
The IEA’s World Energy Outlook estimated the energy industry will need to make a substantial investment in wind, solar, nuclear carbon capture and storage to meet the energy efficiency and low-carbon technology goals that will be introduced at the summit.
“The energy industry needs a strong and clear signal,” said IEA Executive Director Fatih Birol. “Failing to send this signal will push energy investments in the wrong direction, locking in unsustainable energy infrastructure for decades.”
TVA’s Watts Bar 2 Granted Operating License by NRC
The Nuclear Regulatory Commission last week granted the Tennessee Valley Authority an operating license for its Watts Bar Unit 2 reactor, the first new U.S. nuclear station in nearly 20 years. The license paves the way for fueling the reactor and to start testing. TVA says the plant, near Spring City, Tenn., will go online by December.
Construction began on Watts Bar 2 in 1973 but stopped in 1988 when TVA suspended its nuclear operations due to safety concerns. Watts Bar 1 was finished and went online in 1996. Work on Watts Bar 2 restarted in 2007.
NRC’s action “demonstrates to the people of the valley that we have taken every step possible to deliver low-cost, carbon-free electricity safely and with the highest quality,” said TVA President and CEO Bill Johnson.
Environmental Groups File to Intervene in ACP Project
Sixteen environmental groups on Friday filed to intervene in the permit process of the proposed 564-mile Atlantic Coast Pipeline, which would deliver shale gas from West Virginia through Virginia into North Carolina. Dominion Resources and Duke Energy are among the investors in the $5 billion project.
The groups, including Chesapeake Climate Action Network, the Sierra Club and Appalachian Mountain Advocates, say the pipeline would cause irreparable harm to the environment, it would “fragment the heart” of the largest tract of land in the eastern U.S. and the developers have not proven that it is needed.
The request came about a week after it was determined that the proposed route takes it through a portion of the George Washington National Forest in Virginia, which is home of the protected Cow Knob salamander.
Minnesota, North Dakota Continue Clash over Coal-fired Energy
The 8th U.S. Circuit Court of Appeals heard arguments in a case pitting Minnesota regulators against North Dakota and its utility and coal interests over a 2007 Minnesota law restricting new power generation from coal.
North Dakota successfully argued in federal district court that the law illegally regulates out-of-state utilities in violation of the U.S. Constitution’s Commerce Clause. A three-judge panel of the appeals court is reviewing the decision, which enjoined Minnesota from enforcing key sections of the law.
North Dakota interests say it hampers their ability to find buyers for power from existing coal-fired generating plants or to plan for new ones. Coal-generated electricity comprises 78% of North Dakota’s electricity.
WASHINGTON — For months, supporters and detractors of the Environmental Protection Agency’s Clean Power Plan have been debating whether the carbon reductions are too stringent or not tough enough; whether it will compromise reliability; whether it will save struggling nuclear power plants.
With Thursday’s publication of the rule in the Federal Register, another question took center stage, one whose answer could make the others academic: Does EPA have the legal authority to do what it did?
Twenty-six states gave their answer Friday, filing suit in the D.C. Circuit Court of Appeals to void the rule, which seeks to cut the power sector’s carbon emissions by 32% by 2030, compared with 2005 levels.
West Virginia and 23 other states — Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Michigan, Missouri, Montana, Nebraska, New Jersey, North Carolina, Ohio, South Carolina, South Dakota, Texas, Utah, Wisconsin and Wyoming — joined in one challenge while Oklahoma and North Dakota filed separate suits. Congressional Republicans have also vowed to push legislation preventing the plan from taking effect.
Fifteen other states, along with D.C. and New York City, are planning to intervene in support of EPA.
A senior EPA official and a panel of legal experts gave their own opinions at Infocast’s second Clean Power Plan Summit in Washington last week.
Best System of Emission Reduction
The Supreme Court ruled in 2007 that EPA had authority to regulate carbon dioxide. At issue is how EPA is attempting to do it, specifically how the agency defined the “best system of emission reduction (BSER),” the standard set in Section 111(d) of the Clean Air Act.
“The best system of emission reduction is a term of art in Section 111 [that] has been applied more than 60 times. And at bottom we did not undertake the process of answering that question any differently than we have in the past,” said Joseph Goffman, EPA associate assistant administrator and senior counsel.
The answer that EPA came up with — largely substituting coal-fired generation with natural gas and renewables — “amounted to assembling the information that we were getting back from states and utilities and stakeholders based on what they were already doing,” said Goffman, noting that nearly all states have energy efficiency programs and more than half have policies encouraging or requiring renewables.
“So we answered the question ‘What is BSER?’ in some ways by saying, ‘Keep doing what you’re already doing.’ Level the playing field so that everyone is doing some ensemble of those things.”
Impossible Standards for Coal Plants
Critics contend that the Clean Power Plan is based on a novel — and improper — interpretation of 111(d).
“While EPA has issued numerous rules under Section 111, it has never interpreted this section in this manner or this broadly,” said Allison Wood, an environmental and administrative law attorney with Hunton & Williams. “Are you allowed under the Clean Air Act to look beyond [the fence line] and think about the electric system as a whole? … The answer to that I would say is ‘no.’”
Peter Glaser, an energy and environmental lawyer with Troutman Sanders, noted that EPA added in the final rule something that was missing from the draft — national emission standards: 1,305 lbs/MWh for coal and oil plants and 771 lbs/MWh for natural gas plants.
“It’s something that [has been] in every single new source performance standard that EPA has ever done. The fact that they determined that they really want to have something like that in the final [rule] tells you that they were very nervous about the legal justification,” Glaser said. “The problem is that the rates they came up with are rates that obviously the sources in the category can’t meet. And that’s the whole point, actually. Coal plants are not supposed to be 1,305. It’s supposed to reduce generation or close.
“What EPA did is to say, ‘We’re not really regulating the sources in the categories; we’re regulating the owners of the sources.’ So owners can meet the standards by reducing the generation of their coal units and increasing the generation — or paying someone else — to increase generation of renewable resources. … Despite Congress having consistently resisted giving EPA authority to do cap-and-trade, that’s exactly what EPA has finalized here.”
Wood agreed. “Never before in the history of the Clean Air Act has a standard of performance … been based on ‘don’t run,’” she said. “There is not any coal plant in the world that can meet [the emissions standard]. The only way it can meet it is by not running.”
Shutting Plants Down
Panel moderator Kate Konschnik, director of the Harvard Environmental Policy Initiative, disagreed, saying that EPA has previously issued rules that “caused certain units to shut down.”
“In particular, that was squarely at issue in a D.C. Circuit case about the cement kiln industry in the 1970s — that one type of cement plant would cease to exist because of the standards,” she said.
Bob Sussman, an environmental and energy policy consultant and former EPA senior policy counsel, also saw the rule differently than the critics.
“I don’t think that 111(d) of the Clean Air Act is guaranteeing that every existing plant subject to a standard is going to be able to meet that standard and continue to operate. Indeed, the whole idea of 111(d) is to push the envelope on technology and emission reduction,” Sussman said.
“I think the important point here is that the term in the statute is ‘best system of emission reduction.’ It’s not ‘best emission-reduction technology achievable.’
‘System’ is a pretty big and [expansive] term. It doesn’t necessarily mean only hardware that can be installed at a plant site that would reduce emissions. Here EPA is defining ‘system’ in a way that reflects the interconnected nature of the electricity grid and I think that’s a very reasonable thing to do.”
Ann Weeks, senior counsel and legal director for the Clean Air Task Force, said the rule was “locking in” the industry’s displacement of coal-fired generation by cheaper natural gas.
“Could EPA have done more in this rule? Absolutely,” she said. “The rule is not really technology-forcing.”
Redundant Regulation?
Wood said the interpretation of BSER is not the only obstacle EPA will have to face in defending the rule.
“The other hurdle that EPA is going to have to get over is whether this source category can even be regulated under 111(d) of the Clean Air Act because of the fact that it is also regulated under Section 112 through the Mercury and Air Toxics Standards,” she said.
The rule’s fortunes in the D.C. Circuit may depend on which three judges are picked to hear the case. But observers on all sides of the issue expect the Supreme Court to have the last word. (See Former EPA Official: Clean Power Plan won’t Survive.)
Sussman predicted that conservative Justices Antonin Scalia, Clarence Thomas and Samuel Alito will find EPA’s interpretation of the rule unreasonable and liberals Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan to rule in the agency’s favor.
“I think in the end it will come down to what Chief Justice [John] Roberts thinks and what Justice [Anthony] Kennedy thinks,” he said.
In the court’s 5-4 ruling in Massachusetts v. Environmental Protection Agency, which established EPA’s authority to regulate CO2, Kennedy sided with the majority, while Roberts joined the minority.
The chief justice wrote a dissent that focused not on the merits of the case but on rejecting the legal standing of the coalition of government officials and environmental groups that sought to force the Bush administration to act.
EPA’s Goffman said the agency didn’t concern itself with handicapping the justices’ leanings when it was writing the rule. “I only think about it in terms of whether we have a solid legal case to make and we think we do,” he told RTO Insider after his remarks. “We think we’re on solid ground. We trust that ultimately the merits will speak for themselves.”
LITTLE ROCK, Ark. — Industry representatives and those that regulate or work with them gathered here last week to discuss the Clean Power Plan and its implications — primarily near-term uncertainty — for the industry.
Regional compliance or state-by-state? Mass based or rate based? Comply or resist?
One certainty, as FERC Commissioner Colette Honorable joked, is that the Clean Power Plan is “a job-security act for lawyers.”
Nancy Lange (Minn PUC), Andy Kellen (WPPI), Scott Weaver (AEP), Sandy Byrd (AECC) and Pam Kiely (EDF) at the Great Plains CPP Seminar.
More seriously, Honorable said, “I do believe it’s important to hear from all the parties.”
Three panels of industry insiders did just that during a seminar organized by the Great Plains Institute and the Bipartisan Policy Center, focused on the Clean Power Plan’s impact on the midcontinent states.
“It was a very useful day. We spent time on the same issues we’re thinking about right now in Iowa,” said Amy Christensen, an administrative law judge with the Iowa Utilities Board. “We’re living and breathing this right now. It’s helpful to hear other speakers talk about the same issues.”
‘Common Currency’
Ted Thomas, chairman of the Arkansas Public Service Commission, told RTO Insider he was particularly struck by comments from PJM Senior Economic Policy Advisor Paul Sotkiewicz on the rate- vs. mass-based issue and use of gas plants.
A rate-based plan caps the emissions of a state’s power fleet based on an average (CO2 tons/MWh). A mass-based plan caps the total tons of carbon the power sector can emit each year.
“With a mass-based program … you can bring in new gas units and set aside the allowances,” Sotkiewicz explained.
“The thing to me that needs more study is [Sotkiewicz’] thought that mass-based is more accommodating than rate-based, because you can’t use new gas units to manage down your rates,” Thomas said. “The rate[-based] stuff is so complicated. With mass, it’s just tons of emissions. You already have a common currency.”
“Under an emissions-rate regime, new gas [units] can’t be brought in. So why go with an emissions rate if you’re a coal-heavy state?” asked MISO’s Kari Bennett. “With mass-based, you can retire older units and bring in newer ones. It’s easier to facilitate load growth with mass-based approaches.”
Nancy Lange of the Minnesota Public Utilities Commission took a different viewpoint. “I don’t know of any states that have done enough analysis to show one [mass- or rate-based] is more preferable than the other,” she said.
Both MISO and SPP say the mass-based approach would make regional compliance, with trading of emission credits, easier to administer, helping coal-reliant states. SPP released a study in July that indicated a state-by-state compliance approach could result in nearly 40% higher costs than a regional approach.
“The prudent thing is to look at regional compliance,” Honorable said, citing the SPP study.
Costs
“If we’re going to be retiring a significant portion of the nation’s coal fleet, the only substantial winner will be natural gas,” said the Arkansas Electric Cooperative Corp.’s Sandy Byrd, vice president of public affairs and member services. “If there’s going to be a dash for gas, we’ll be building more combined cycles, transmission infrastructure … there will be a huge cost coming that wouldn’t be without the CPP. We need to ensure the consumers know it’s going to happen.”
Jim Hunter, representing the International Brotherhood of Electrical Workers, agreed with Byrd. “We’re betting on gas,” he said, “but when the price goes up — and it will — the price of electricity is going up, too.”
Leakage
The panels also discussed “leakage” and its implications on adding new generation.
The Clean Power Plan covers generators that began construction on or before Jan. 8, 2014. Plants built after then are subject to EPA’s new source performance standard, which limits carbon emissions to 1,000 lbs/MWh for new baseload gas-fired units, versus the 771-pound limit for existing gas plants.
For a state that adopted rate-based compliance but shifts added new plants, the mass-based limit would no longer be equal to the original emission-rate limit.
“It’s a fuzzy concept, as described by the EPA,” said Scott Weaver, manager of strategic analysis for American Electric Power. “I think it’s flawed. The [emission] rates for [new] gas units are less stringent, so you’re shifting emissions from existing units to new units.”
States must decide whether to pursue rate-based or mass-based plans by September 2016. (States can also ask for a two-year extension at that time.)
States that decide not to comply with the Clean Power Plan or submit inadequate plans will be subject to a federal plan.
“State plans make a lot of sense,” Lange said. “It’s important to have the flexibility of a state plan, given states want the control and to maintain flexibility on how a state should comply with the rule.”
LITTLE ROCK, Ark. — MISO’s Board of Directors voted last week to switch to a quarterly meeting schedule from its current every-other-month calendar, a change likely to also be adopted by the Advisory Committee.
The changes are the first to result from the RTO’s stakeholder process redesign, which is also expected to result in a reduction in the number of committees.
The board voted unanimously Thursday to switch to four open board meetings, with two strategic planning meetings scheduled in the summer and fall.
“The idea of going to four meetings is to get all of our obligations met. I think it’ll be a really productive way to move forward,” MISO CEO John Bear said.
Too Few?
However, board member Michael Evans said that the quarterly meeting schedule could be too little given the multitude of issues facing MISO.
“We’ve got a lot of balls in the air, a lot of moving parts,” Evans said. “If you miss one [meeting] it means you’re six months in between meetings. I’m concerned about losing the relationships between board meetings and losing continuity on the issues. I think we ought to let that percolate a little bit.”
Board member Thomas Rainwater said less frequent meetings would challenge the board to do more work between meetings and put the onus on the board members to work harder individually. He added that he couldn’t urge the Advisory Committee to meet less if he wasn’t willing to apply that to the board.
“I’m pleased to see the diversity of opinion on the board. I can be persuaded either way. I look at this as four governance meetings … and two really deep dive strategic meetings,” Rainwater said.
Despite Evans’ concerns, the new schedule passed without objection.
The board’s vote came a day after the Advisory Committee discussed — but took no action on — making a similar change.
Advisory Committee Chairman Gary Mathis said the committee should follow the board’s meeting schedule.
“We should continue meeting this way, face-to-face whenever the board meets,” he said. “If the board is considering changing their schedule, then we should follow suit. I think it’s important to match those up. As they go, we should go too.”
Streamlining the Organizational Chart
The Advisory Committee also discussed the stakeholder redesign. At the third redesign workshop in September, stakeholders tentatively identified eight committees that would be eliminated, with their duties assigned to other panels (see organizational chart). MISO’s straw proposal called for eliminating 10 committees.
Board members suggested that stakeholders’ simplified redesign might be in need of further simplification.
Board Chairman Judy Walsh urged the stakeholder process redesign team to combine some of their six desired outcomes. “If you have more than three priorities, you have none at all,” Walsh said.
Rainwater echoed Walsh’s advice to focus on three top priorities. “Let’s start with some small victories,” he said.
Board member Baljit “Bal” Dail asked that the stakeholder planning team respect the role of the board versus the role of management in creating the organizational model. He said sometimes stakeholders bring “hot topic” issues before the board that are better handled by MISO management.
“The board takes a ‘noses in, fingers out’ approach,” Dail told them.
Michigan Public Service Commissioner Sally Talberg said more discussion was needed on whether stakeholders should focus on high-level issues versus specifics that can quickly become complex and warrant multiple meetings. She added that MISO’s 2,000-page Tariff can lead to “endless tinkering.”
MISO stakeholders will develop final recommendations at a fourth workshop Nov. 3. The final proposal for redesign will go before the Advisory Committee on Dec. 9.
LITTLE ROCK, Ark. — MISO is cool and collected heading into the winter, staff told the Markets Committee of the Board of Directors on Wednesday.
Todd Ramey, vice president for system operations and market services, said the RTO has 146 GW of capacity available to serve the estimated winter peak of 104 GW.
The RTO was able to meet its all-time winter peak of 109.3 GW during the polar vortex on Jan 6, 2014, without directing any demand reductions.
Since then, MISO has taken steps to improve gas-electric coordination and provide more transparency on fuel supplies.
Ramey said MISO is looking into putting other winter readiness measures into place, including emergency pricing and seasonal assessments of resource adequacy. Last year, MISO won FERC approval to create two capability products to manage short-term variations in load. MISO hopes to implement the products in 2016.
