New York regulators on Wednesday declined for the third time to renegotiate a contract with a financially troubled biomass generation plant, saying that doing so would threaten the integrity of the state’s renewable energy procurement program.
In 2007, the 51-MW co-firing Niagara Generating Facility (NiGen) in Niagara Falls won a $21.6 million contract to provide up to 180,500 MWh of energy per year from renewable-eligible biomass for 10 years. The contract was awarded under the main tier of New York’s renewable portfolio standard following a competitive bidding process.
Sterling Energy Group, which purchased the NiGen plant in 2013, mothballed it in August 2014, saying the fall in wholesale energy prices had left it unprofitable despite its $11.99/MWh in RPS incentives.
Sterling told the New York Public Service Commission it should be given extra credit for increased clean energy generation because it is now able to generate 80% of its power from wood products, without burning tires, which had previously represented 40% of its fuel. The company said the change increased its RPS-eligible generation and reduced harmful emissions.
The petition had won backing from local elected officials who said the plant’s closing would result in the loss of 100 direct and indirect jobs and more than $10 million in local spending. In its mothballed status, the plant has 26 part-time employees.
But the commission was unmoved, saying that Sterling knew of the plant’s shaky finances when it acquired it (03-E-0188).
“The petitioners have requested that the commission provide additional financial incentives that it has twice denied in the past and the commission does not see any significant material differences in this request that compels the reversal of earlier decisions,” the PSC wrote.
“The contract was awarded under a competitive solicitation at a price chosen by NiGen and for the term of years chosen by NiGen. Adjusting NiGen’s RPS benefits would undermine the competitive nature of the solicitation process established by the commission for the main tier.”
Instead, the commission said Sterling should bid its additional renewable capacity into future main tier solicitations.
The plant is permitted to burn coal, tires and various wood-based fuels, but it only receives RPS incentive payments for the amount of generation produced by agricultural residue, wood and other eligible biomass.
Below is a summary of the issues scheduled to be brought to a vote at the Markets and Reliability Committee on Thursday. Each item is listed by agenda number, description and projected time of discussion, followed by a summary of the issue and links to prior coverage in RTO Insider.
RTO Insider will be in Wilmington covering the discussions and votes. See next Tuesday’s newsletter for a full report.
Markets and Reliability Committee
2. PJM Manuals (9:10-9:30)
Members will be asked to endorse the following manual changes:
A. Manual 36: System Restoration — Annual review. Adds detail about when PJM assumes control and when it returns to normal operation. Also adds guidance on completion of interconnection checklist. Effective: June 15.
B. Manual 03: Transmission Operations — Updates index and operating procedures for PJM RTO operation (nuclear station voltage limits, operation procedures with neighboring systems and operation procedures for AEP, ComEd, Dominion, PPL, UGI, PSEG and PECO.) Effective: June 1.
C. Manual 38: Operations Planning — Makes minor changes due to system upgrades and specifies periodic review of IROL facilities. Updates the study process for transmission reliability analysis procedure. Effective: June 1.
4. INTERIM FEE FOR VIRTUAL TRANSACTIONS (INCs/DECs and UTCs) (9:45-10:30)
Members will be asked to approve a proposal by Inertia Power to impose a temporary uplift fee of $0.07/MWh for increment offers, decrement bids and up-to-congestion bids. The proposal would expire in six months or upon FERC approval of an alternative. Transactions placed between September 2014 and the effective date of the filing would not be affected.
The proposal is in response to a Section 206 proceeding ordered by FERC to determine whether PJM is improperly treating UTCs differently from INCs and DECs. Sponsor Noha Sidhom, who announced the proposal at last month’s MRC meeting, has removed a provision limiting the fees to netted transactions. (See Cool Response to 7-Cent Fee on Virtual Transactions.)
ISO-NE’s average real-time prices rose 13% to $63.32/MWh in 2014, the RTO’s Market Monitor reported Wednesday.
Natural gas generation was marginal in about 70% of hours in 2014, about equal to 2013 but down from 80% in 2012.
The 2014 Annual Markets Report said the increase was largely driven by higher fuel costs in the first quarter. Prices of natural gas, which was the marginal fuel for the RTO in 70% of the hours in 2014, rose 15% last year, to $7.99/MMBtu from $6.97/MMBtu in 2013. Electricity usage dropped 2% to 127,138 GWh.
“Overall, 2014 weather was milder compared with 2013, but the extreme cold in January, February and March and the resulting high natural gas and power prices were the main reason for 2014’s higher annual average power price,” Jeffrey McDonald, ISO-NE’s vice president of market monitoring, said in a statement. “Lower oil and natural gas prices, combined with mild summer weather that contributed to lower energy usage, and the implementation of several ISO market enhancements that helped improve both reliability and market efficiency, brought generally lower wholesale electricity prices during the rest of the year.”
The Monitor repeated a recommendation it has made since its 2010 report: that the RTO relieve virtual transactions from energy market payments — also known as real-time net commitment-period compensation (NCPC) charges — that it said is preventing virtuals from improving day-ahead market liquidity.
Last year, the RTO proposed a partial solution that would have excluded positive load deviations from real-time first contingency NCPC charges. The Monitor said the change would strengthen incentives for load-serving entities, exporters and virtual demand bidders to buy energy in the day-ahead market.
The proposal was unable to win stakeholder support and was not submitted to the Federal Energy Regulatory Commission. The RTO plans to start a new stakeholder process to reconsider the issue this year.
Total reliability payments, including NCPC charges, increased 10% to $173.7 million in 2014. About 62% of the payments stemmed from the need to operate more expensive generation during extreme cold weather in the first quarter.
The total value of the region’s wholesale electricity markets, including electric energy, capacity and ancillary services markets, rose about 12%, from about $8.8 billion in 2013 to about $9.9 billion in 2014. Electric energy comprised $8.4 billion of the total in 2014, up from $7.5 billion a year earlier. The cost of ancillary services jumped 50% to about $410 million.
ATLANTIC CITY, N.J. — The Members Committee last week gave final approval to a measure tightening rules on lost opportunity payments for generators.
Under the new rules, PJM will use the schedule that the resource is committed on for energy as the reference for lost opportunity costs unless it is self-scheduled. For self-scheduled resources, PJM will use the higher of the available cost or price curves.
Adam Keech, PJM’s director of wholesale market operations, said the previous rules either over- or under-compensated generators.
Demand Response Verification
Members also approved Tariff and manual revisions regarding PJM’s use of sampling to measure and verify residential demand response. The new measurement method was originally endorsed by the MC in January. Thursday’s vote approved the inclusion of an additional transition year because of delays in filing the new method with the Federal Energy Regulatory Commission.
With its reliance on demand response and behind-the-meter generation increasing amid generator retirements, MISO plans to update the way it sets prices during emergency resource offers.
The emergency pricing proposal is “one of the key reforms” that MISO is likely to make next year, Jeff Bladen, executive director of market design, told the Markets Committee of the Board of Directors on Wednesday.
“It’s at least plausible, and maybe even likely, that under emergency conditions when we deploy load-modifying resources, we would … depress prices,” Bladen told the committee. “The rule change that we’re pursuing is designed to ensure that the price at least doesn’t go down and may well go up based on the highest offer of economic resource at the time.”
The proposal would involve a price floor, set as the maximum of the emergency resource’s offer cost or the highest available economic offer cost of the last resource cleared prior to the initiation of the maximum generation procedure, MISO said.
More Reliance on DR, LMR
Generation resources are projected to fall with the retirement of coal-fired plants due to the Environmental Protection Agency’s Mercury and Air Toxics Standards, which took effect in April, and its proposed Clean Power Plan, aimed at reducing carbon dioxide emissions.
MISO projects 2015/2016 total generation at 122.9 GW — down nearly 1.6 GW from 2014/2015.
“What you see is a reduction of about a gigawatt-and-a-half of actual generation supply as being relied on to meet our reliability requirements. It’s effectively being replaced by behind-the-meter generation and by demand response and to a lesser degree by external resources,” Bladen told the committee.
Will They Show Up if Needed?
Because it has had ample generation supplies in the past, MISO has no recent history of deploying load-modifying resources (LMR) — and that’s a challenge of its own.
Bladen told the committee that MISO “has questions about the degree to which we can actually rely on emergency and load-modifying resources,” particularly what’s available on a real-time basis. “The challenge here is we have no recent deployment history.”
To better gauge reliability, MISO staff have been running monthly LMR drills with participants. Participation rate has been increasing significantly since 2014. One problem identified has been that participants sometimes do not provide signals to MISO when their LMR or DR resources have been already deployed, leaving uncertainty as to how much relief MISO can count on.
“There’s no testing protocols currently. Even though people are required to provide availability notifications, there’s no penalty, if you like, for not providing availability notifications, although most are very diligent about doing it. So that leads to real concerns about the reliability and availability of those load-modifying resources,” Bladen said.
Todd Ramey, MISO’s head of real-time operations, said as a control room operator, the bottom line is that “I don’t have situational awareness of 2 to 3 GW of planned capacity resources” claimed by members to meet their firm requirements.
Ramey said he plans to seek development of an issues statement to address the lack of information on such resources.
Director Baljit “Bal” Dail echoed concerns, saying the discussion about the reliability of DR and LMR has been going on for a long time.
“In a market that is tightening, I think we need to have much greater clarity about what is going to show up and what isn’t,” Dail said.
Director Michael Curran underscored the urgency, saying: “Aren’t we at the ‘time-is-of-the-essence’ stage? … Time is essentially running out on us.”
‘Cascade’ Effect
Unlike PJM, most of MISO’s DR assets are administered through state programs. As a result, they would not be directly affected if the U.S. Supreme Court lets stand an appellate court ruling voiding the Federal Energy Regulatory Commission’s jurisdiction over DR in energy markets. (See MISO Ponders Large DR Role.)
But Bladen said MISO could be affected if the court’s ruling results in neighboring systems being unable to certify as much DR as they have in the past to meet their requirements.
“It might well mean that some capacity or other resources that we currently rely upon actually become that much more interested in supplying other systems,” Bladen said.
“Maybe prices go up on other systems and that further encourages exports. So the cascade event is likely the one that we would watch mostly closely,” he said.
ATLANTIC CITY, N.J. – The PJM Members Committee last week elected South Carolina electrical engineer Terry Blackwell to the Board of Managers, where he will serve out the term of William Mayben, who is retiring after eight years.
Mayben’s term expires next year.
Blackwell, who retired in 2013 from his post as senior vice president of power delivery for Santee Cooper, was chosen from 10 candidates with expertise in transmission-dependent utilities, per PJM’s Operating Agreement.
With no other candidates on the ballot, the vote lacked any drama. But board member Jean Kinsey, the non-voting chair of the Nominating Committee, followed the appointments with more surprising news: Going forward, members will be ineligible for re-election once they either turn 75 or have served five terms.
Had the new rule been in place, it would have disqualified Schneider from another term. The term limit will preclude Richard Lahey from seeking re-election when his term expires in 2016. Like Schneider, he has served on the board since its inception in 1997.
Kinsey’s term also expires next year. She joined the board in 2003.
PJM would not disclose the ages of its board members, so it’s unclear who might be affected by that limit.
The Nominating Committee was comprised of eight members, three from the Board of Managers. In addition to Kinsey, Ake Almgren and Susan Riley took part. Participating PJM members and the sectors they represent were: Pati Esposito (Other Suppliers), Ken Foladare (Generation Owners), Lisa McAlister (Electric Distributors), Jackie Roberts (End Use Customers) and Hertzel Shamash (Transmission Owners).
10 Candidates
The committee hired executive search firm Russell Reynolds, which identified 10 candidates, three of whom were interviewed.
Blackwell retired in 2013 after 35 years with Santee Cooper, the last four and a half as senior vice president of power delivery. He is a senior consulting engineer with McCall-Thomas Engineering, in Orangeburg, S.C. He also is a former board member and chairman of the Southeastern Electric Reliability Corp.
“He is regarded not only for his technical acumen but is widely praised in the industry for his character and collaborative working approach, both as a representative of public power, and with other industry and regulatory interests focused on the challenges of power system reliability,” outgoing CEO Terry Boston said in a letter to PJM members announcing the committee’s choice.
The board also includes Boston, who will cede his seat to incoming CEO Andy Ott, and Charles Robinson, who did not attend the Annual Meeting.
ATLANTIC CITY, N.J. — Consumer environmental advocates told the PJM Board of Managers last week that the Capacity Performance proposal could saddle ratepayers with excessive costs because of its treatment of renewable energy. They made their case during their annual meeting with the board last week, at which they also delivered a wish list on issues ranging from cost allocation to load forecasts.
Mike Jacobs, of the Union of Concerned Scientists, said wind and solar resources will be unable to qualify as Capacity Performance resources due to their intermittent nature.
Mike Jacobs, UCS
“There’s a real possibility that capacity needs will be overstated, misallocating capital and overcharging users,” he said, explaining that while the renewable resources won’t be in the capacity auction, they will be added as a result of state renewable portfolio standards. Thus, he said, “consumers will pay twice” for that capacity.
The consumer advocates said they doubt the need for the “vast changes” in the proposal, which they said will be “a dominant focus” of their cost concerns. The advocates asked the board to limit future changes to permit “a period of stability in the capacity markets.”
“I think many of us think of our grandmothers or others in our lives who depend on energy and for whom price increases that seem maybe to us the cost of an extra latte at Starbucks really do make a difference,” said Robert Mork, deputy consumer counselor for the Indiana Office of Utility Consumer Counselor.
The Federal Energy Regulatory Commission is expected to decide by June 9 on the proposal.
Demand Response
The consumer advocates said they were “heartened, but not over-optimistic” by the Supreme Court’s decision to reconsider the D.C. Circuit Court of Appeals’ ruling vacating FERC’s authority over demand response in wholesale energy markets. The court said DR is a retail product and thus subject to state, not federal, jurisdiction. (See Supreme Court Agrees to Hear Demand Response Appeal.)
“Should the Supreme Court uphold the Circuit Court order, we urge the board to limit PJM’s response to the energy market until FERC rules on any further implications” regarding regulation of DR in capacity markets, the advocates said.
Artificial Island Cost Allocation
The cost allocation issue was sparked by PJM planners’ recommendation of a stability fix for New Jersey’s Artificial Island nuclear complex.
While one transmission solution considered by PJM would have spread costs among two dozen transmission zones and merchants, the proposal selected may be assigned entirely to the Delmarva Power & Light zone in Delaware. (See Delaware Unhappy with Artificial Island Cost Allocation.)
“The potential allocation of all costs to a single zone suggests, to us, that cost allocation rules should be revisited,” the consumer advocates said in their presentation.
Clean Power Plan
The environmentalists focused largely on the Environmental Protection Agency’s Clean Power Plan, which the agency is expected to finalize this summer.
Clements said that while most RTOs’ studies of the plan have not met minimum modeling requirements, PJM’s have been good.
“There’s not a doubt in my mind that a multi-state plan will save millions of dollars,” said outgoing CEO Terry Boston. But, he said, “In any multi-state plan, there will be winners and losers. How can we collectively work so there can be economic benefit for those states that lose? How can we work together to show these benefits are real and can be traded?
“This is something for you as a group to be thinking about and working with your states on,” he said.
Jackie Roberts, director of the West Virginia Public Service Commission’s consumer advocate division, said the best way to persuade political leaders opposed to the plan to join in regional compliance is to “show them the economics of it. That’s what’s going to be persuasive to the governors and their environmental departments.”
Richard Lahey, PJM Board
Board member Richard Lahey asked the environmentalists about their opinion on nuclear power’s role in meeting compliance. Nuclear power provided more than one-third of PJM’s generation in 2014.
“If we lose that, we’re really worried about the stability of the grid and there would be a huge increase in CO2. It would be irreversible,” Lahey said.
Clements said there is “no consensus” among environmentalists on the subject. As a result, she said, Sustainable FERC Project has focused on “cheap, clean and quick” resources such as energy efficiency and renewables.
Clements lauded adjustments PJM is making in its load forecasting to reflect the impact of energy efficiency. She urged planners to broaden their efforts to capture the impacts of distributed generation and price-responsive demand. “Traditional GDP-related variables no longer correlate well with load growth,” she said.
Pledge to Seek Consensus
While they mostly made requests, the consumer advocates also pledged to do their part to help reach consensus in the stakeholder process — a response to requests by Boston and Board Chairman Howard Schneider.
Ruth Ann Price, Delaware Division of the Consumer Advocate
The federal government’s energy statisticians last week released their analysis of the Environmental Protection Agency’s proposed Clean Power Plan, concluding it will hasten the shift from coal-fired generation and ultimately reduce electric bills.
The Energy Information Administration’s report concludes that:
The switch from coal- to natural gas-fired generation will be the most used compliance strategy in the early years of the new rules. At 90 GW, coal plant retirements through 2040 are more than double the 40 GW in EIA’s 2015 Annual Energy Outlook (AEO2015) reference case, with nearly all retirements occurring by 2020. The Clean Power Plan is not expected to impact natural gas prices significantly except during the first two to three years of implementation.
Renewable power and energy efficiency will become the more important compliance method by about 2025.
Nuclear capacity would grow if new nuclear generation receives the same treatment as new renewable generation in compliance calculations.
Retail electricity prices will rise by 3 to 7% during 2020-25 due to spending on new generation and increased use of natural gas. Prices return to near-baseline levels by 2030 in many regions but remain higher in some regions, with prices in Florida, the Southeast, the Southern Plains and the Southwest regions remaining about 10% above the baseline in 2030. By 2040, total electricity expenditures under the Clean Power Plan are slightly below those in the AEO2015 reference case, as decreases in demand more than offset the price increases.
State Calls for More NRC Oversight at Indian Point Nuclear Station
New York state is calling for the Nuclear Regulatory Commission to step up oversight of Entergy’s Indian Point nuclear station after a May 9 transformer explosion, fire and oil leak into the Hudson River. Entergy is seeking a license renewal, which the state has opposed.
“As the history of explosions and fires at Indian Point make clear, transformers play an important role in nuclear plant safety,” state Attorney General Eric Schneiderman said. “The time has come to require that transformers be closely and frequently monitored as a part of the facility’s aging management program as I have raised in the re-licensing proceeding.”
A recent NRC inspection found that the plant met all requirements. The commission will hold a public meeting to discuss the plant’s performance.
Utilities Call for NRC Review of New Metallic Fuel Design
Four energy producers, representing the operators of nearly half of the country’s nuclear reactors, are asking the Nuclear Regulatory Commission to review a new design for metallic fuel components. Lightbridge Corp. has devised a new design for metallic fuel for use in pressurized water reactors. The design operates at lower temperatures, has increased heat transfer rate and fluid flow and increased structural strength, according to Lightbridge. The company also boasts that the design could provide 30% more power with the same fuel cycle length.
Dominion Generation, Exelon Generation, Southern Co. and Duke Energy all have asked for federal refuel of the new type of fuel assemblies. Lightbridge said they could be ready as soon as 2020.
DOE Report Says Wind Energy Possible in All 50 States
A Department of Energy report examining the rise of wind energy in the U.S. said advances in turbine technology make wind power feasible for all 50 states, instead of the 39 that already have wind farms. The advances, according to the report, “enable wind to be a true nationwide economic resource.”
Higher turbine tower — up to 110 meters tall, as opposed to the current 80-meter heights — would enable a 54% increase in wind power deployment because it would enable the turbine blades to reach faster wind speeds that are at greater heights. Building 140-meter towers would boost the increase to 67%, according to the report.
“Regions primarily affected by this increased technical potential include the Southeast, states bordering the Ohio River Valley, the Great Lakes Region, the Northeast, and portions of the Interior West and Pacific Northwest,” according to the study.
The taller towers require stronger supports and foundations, higher costs and transportation challenges getting components to the sites.
Senators Call on Obama to Name Pipeline Safety Head
Two days after a pipeline leaked more than 100,000 gallons of crude oil into the Pacific Ocean, 10 U.S. senators urged President Obama to name a new head of the Pipeline and Hazardous Materials Safety Administration.
In a letter to the president, the lawmakers — Jon Tester, Dianne Feinstein, Heidi Heitkamp, Patty Murray, Debbie Stabenow, Tammy Baldwin, Maria Cantwell, Gary Peters, Joe Manchin and Barbara Boxer — cited an increase in pipeline failures across the country.
The administration has not had a permanent head since October. “Given PHMSA’s responsibilities of regulating approximately 2.6 million miles of pipelines that carry natural gas, crude oil, gasoline and other hazardous liquids all over the country, and the critical role the agency plays in regulating crude-by-rail,” the senators wrote, “we are concerned that we still do not have a permanent administrator to head the agency.
“Additionally, several of our states have experienced crude-by-rail accidents in recent years, emphasizing the need to work to prevent future accidents.”
Jeb Bush Acknowledges Climate Change, but Says Science ‘Convoluted’ as to Cause
Jeb Bush, speaking at a New Hampshire house party last week, began to frame a position on climate change during the run up to the 2016 election. Asked to comment on President Obama’s characterization of climate change as a “serious threat” to national security, the former Florida governor acknowledged that Earth’s climate is changing, but he stopped short of attributing it to human causes.
“The climate is changing,” he said. “I don’t think the science is clear on what percentage is man-made and what percentage is natural. It’s convoluted. And for the people to say the science is decided on this is just really arrogant, to be honest with you.”
Senate Energy and Water Bill Lacks Yucca Mountain Funding
The Senate Appropriations Committee has stitched together a $35 billion energy and water spending bill, but the proposed funding includes nothing for the Yucca Mountain nuclear waste repository. While Republicans still vow to get legislation to include the controversial Nevada project, keeping it out of the appropriations stage helps ensure that it doesn’t get caught up in committee.
Some Republicans, including Sen. Lamar Alexander (R-Tenn.), say the way to assure funding for Yucca Mountain is through an amendment.
“Putting an end to our decades-long nuclear waste stalemate will involve completing Yucca Mountain,” said Alexander, the chairman of the Appropriations Committee’s energy and water panel. “I look forward to an open amendment process in the U.S. Senate and to working with the House to remove obstacles to nuclear power.”
Republican lawmakers have argued that the Nuclear Regulatory Commission has a commitment to complete a full review of the project. A House version of an energy and water funding bill includes $50 million for a review. The NRC has said it has only a small fraction of the necessary funding for the review.
EPA Tells States to Crack Down on Emissions from Start-ups and Shutdowns
Regulators have typically allowed some pollutants emitted by industrial facilities during the start-up and shutdown periods and equipment malfunctions, but the Environmental Protection Agency is urging states to cut down on emission limit exemptions. The agency on Friday formally issued a regulation that tells 36 states to stiffen pollution standards in the Clean Air Act. Under the new rule, the states have until November 2016 to make the changes.
Environmentalists see the agency’s move as a long-needed closure of loopholes. “For too long, neighborhoods adjacent to dirty oil refineries, coal plants and other sources of pollution have been left with little recourse to protect their families from toxic pollutants such as sulfur dioxide and soot,” Sierra Club Executive Director Michael Brune said. “More often than not, the communities that face the worst of this pollution are low-income communities or communities of color,” he said.
Fed Study Shows Dolphin Deaths Tied to Deepwater Horizon Spill
A study overseen by the National Oceanic and Atmospheric Administration concludes that 46 dolphins that washed up on Gulf of Mexico beaches between 2010 and 2014 died from ailments caused by oil from the 2010 Deepwater Horizon spill. The study said the dolphins died of bacterial pneumonia, adrenal disease and lung lesions, all caused by the Deepwater Horizon spill.
“These dolphins had some of the most severe lung lesions I have ever seen,” said Kathleen Colegrove, a veterinary pathologist who worked on the study. “The dolphins were swimming in oil,” said Stephanie Venn-Watson, National Marine Mammal Foundation, the study’s lead author.
WASHINGTON — It’s Friday afternoon at St. Stephen and the Incarnation Episcopal Church in the Columbia Heights neighborhood in D.C. and, to anyone who’s attended a Federal Energy Regulatory Commission open meeting over the past year, there are a few familiar faces.
There’s Ted Glick, national campaign coordinator for Chesapeake Climate Action Network, who was among the first to test FERC’s new rules regarding disruptive behavior in March — as well as the first protester to speak at Norman Bay’s first meeting as the commission’s chair in April.
There’s Jimmy Betts, who started a chain of interruptions at FERC’s meeting in January, leading then-Chairman Cheryl LaFleur to call a recess while security cleared the floor of protesters.
And there’s Lee Stewart, who was carried out of April’s meeting by security.
But there are more unfamiliar faces, some of them FERC is seeing for the first time.
They all have taken up temporary residence at the church for a week’s worth of protest activities: marches, workshops, training and, of course, rallying outside of FERC headquarters. It is a somewhat homogenous group, mostly from the Northeast U.S., but with a variety of concerns, ranging from climate change to eminent domain to hydraulic fracturing’s effects on the environment. But all of them agree: FERC is a rogue agency that is beholden to the natural gas industry, insulated from public scrutiny and unconcerned with the long-term effects of fossil fuels on the planet’s climate.
Beyond Extreme Energy
Called “Stop the FERCus,” the events scheduled through May 30 were planned months ago. They were intended to begin on Thursday to coincide with this month’s FERC meeting. But the commission rescheduled it a week earlier in an effort to avoid any major disruptions. Instead, there were only minor ones. (See Another Meeting Day, Another Drama at FERC.)
The protests against FERC are often attributed to a single group, called Beyond Extreme Energy. Glick calls BXE a “coalition” of about 70 groups, mostly local alliances created to stop individual pipeline projects.
BXE’s mission now is to fundamentally change FERC’s structure and purpose. It doesn’t have an active roster of members nor any centralized leadership. While Glick is often the de facto leader — starting chants and kicking off the disruptions at open meetings — Stewart was identified as the coordinator for this week’s activities. Anyone can join, so long as they are committed to peaceful, nonviolent protests, multiple activists said.
About 500 activists will be coming and going throughout the week, according to Stewart. About 25 gathered on a soggy Thursday morning outside FERC, “a good, solid start,” said Melinda Tuhus of New Haven, Conn., who is handling media relations for the group. On Friday — sunny, with a light breeze — there appeared to be less than that.
Protesters described a “cat-and-mouse game” with police, starting with a sit-in outside FERC headquarters as employees arrived at work, then a stop at the Department of the Interior to protest Arctic drilling. Later, they returned via Metro to FERC.
The turnout was a far cry from last June, when two dozen activists protesting Dominion Resources’ Cove Point liquefied natural gas export terminal were arrested for blocking the main entrance to FERC, making the national news. Three protesters were arrested and charged with a misdemeanor for unlawful entry at this month’s meeting on May 14, but no one protesting last week was arrested. “That may change” this week, Tuhus said.
Police had the main entrance barricaded last week, directing some FERC staff members to use side entrances while chatting with others who came outside to catch a glimpse of what was going on.
At St. Stephen, sleeping bags and backpacks line a wall in an auditorium, where protesters sleep for $5 per person per night. The church, known for being among the first to allow women to be ordained as Episcopalian ministers, has been allowing activists to rent sleeping space since the 1960s. Some immediately take a nap after arriving back from Friday’s morning rally, before a private meeting is held to discuss the schedule for next week as well as long-term plans.
While they come from different areas and cited different priorities, each of the activists shares similar concerns. (See related story, Organic Farmer Turned Protester.)
“We’re not crazies. We’re not irrational. We are deeply concerned about the future of this country and the world and our children and our grandchildren and what kind of world they’re going to inherit,” Glick said. “We wish the FERC commissioners took much more seriously what so many people from all over the world and walks of life are saying about the necessity of moving off of fossil fuels.”
“I’m here for my children,” said Don Weightman of Philadelphia. “I worry desperately that the climate will be unlivable in 100 years.”
Jane Kendall of New York — where Gov. Andrew Cuomo recently announced plans to ban fracking — came to show solidarity with those wanting to end the technique. She has long been involved in opposing local gas projects, including Port Ambrose, a proposed LNG import facility off the coast of Long Island. “FERC is like the bogeyman in my house,” she said.
Every activist interviewed on Friday said they wanted to see FERC become more transparent, with more public input. Some talked about their initial confusion when attending their first open meeting, expecting to be given a chance to speak.
Painting a banner at St. Stephen’s (Source: Beyond Extreme Energy)
The BXE website lists nine changes it says are needed at FERC. One of them is “FERC monthly meetings must include time for public comments.” Another one: “FERC must make its website easier to navigate.”
To the activists, these aren’t just common sense requests; FERC is structured to specifically exclude public input and favor industry insiders, they say.
“I think that FERC is used to operating in the darkness, and they rely on a lack of public scrutiny,” said the 28-year-old Stewart, a D.C. resident. “And one function of these actions is to shine a spotlight on FERC, to bring attention to what this agency does.”
For Thomas Parker, 19, of western Massachusetts, an open comment period isn’t enough. “I would like to see community members hold chairs” — that is, become commissioners.
“I think you start out getting pissed off by the climate change but end up realizing it’s a democracy issue as much as a climate change issue,” explained Theo Talcott of Manchester, Vt.
Natural Gas
At the top of the BXE list: “Enact a moratorium on new gas infrastructure and export terminals until FERC has been reorganized with independent funding and a clearly defined mission of playing a leading role in reducing greenhouse gas emissions, and shifting to renewables and an energy-efficient power grid.”
Protesters say that, despite the increasing demand for natural gas due to lower prices, coal plant retirements and harsher winter weather, there is already plenty of pipeline infrastructure in the country.
“I would say that if we continue to invest in fracked gas infrastructure, it’s ultimately going to be costly to everyone because of the climate change impacts of these projects,” Stewart said. “And it will only become increasingly clear as time goes on.”
That was the question Independent Market Monitor Joe Bowring posed during his Year in Review presentation at PJM’s Annual Meeting last week, setting off a lively debate with one of the consultants that Richard and Kevin Gates, enlisted in their high profile defense against market manipulation allegations.
“If the rules are imperfect, is it OK to do anything not explicitly prohibited?” Bowring asked.
He quickly provided his own answer. “It is not permissible,” he said, citing what he called the “duty” of market participants to inform RTO officials and federal regulators of such “money trees.”
Bowring referred to PJM’s poorly designed rules on rebating excess line losses, which allowed the Gates brothers’ Powhatan Energy Fund and a handful of other traders to profit through what the Federal Energy Regulatory Commission later called riskless, back-to-back up-to-congestion trades. The rules were later changed. The Gates brothers and their associates — despite stopping the practice after being warned by Bowring — are now facing up to $29.8 million in fines. (See FERC Staff Seeks $30 Million Fine in Powhatan Case.)
“Almost all of the market knew these opportunities existed and chose not to take advantage of them,” Bowring said. “That raises the question: Who’s the smartest guy in the room? The guy who took advantage or the guy who didn’t?”
That brought a response from consultant Roy Shanker, who is quoted on the Gates’ brothers’ website criticizing FERC’s case. “It’s really unfair to have an ill-defined affirmative obligation to do something,” Shanker said.
On the website, Shanker says he believes the Gates and their associates “were simply engaging in rational economic decision making.” He rejected FERC’s contention that the trades were riskless “wash trades.”
In response to Bowring, Shanker cited traders that schedule power deliveries through the IMO interface with Ontario’s Independent Electricity System Operator. Bowring has identified the interface as a location where traders can manipulate PJM’s pricing rules by breaking transactions into multiple “back-to-back” transactions, a practice he has called “sham scheduling.” (See Monitor Gives Lukewarm Review to PJM ‘Sham Scheduling’ Fix.)
“It may be a money tree or there just may be [ambiguity] about the rules,” Shanker said. “We know that ambiguity is out there. It sits like a heavy stone on everyone.”
“When you find something, [the RTOs should] identify it, post it and try to change the rules,” Shanker said. “Because you can’t hit every [possibility] that doesn’t mean that you do not try to address some.”
“Would you be supportive if we proposed such [an affirmative obligation] rule?” Bowring asked.
“Yes,” Shanker responded.
He later explained that he would support “the coupling of an affirmative obligation on market participants” with a “safe harbor” that would protect traders from manipulation charges as long as they stop activity of concern after being specifically warned. “Then it is up to RTO or IMM to act to clarify or change rules,” he said, adding that he was speaking for himself and not the Gates brothers.
Andy Ott, senior vice president for markets, said he, too, would support such a rule. As long, he said, as it was not seen as an “inoculation” for traders that have done something not explicitly listed.
In 2007, the 51-MW co-firing Niagara Generating Facility (NiGen) in Niagara Falls won a $21.6 million contract to provide up to 180,500 MWh of energy per year from renewable-eligible biomass for 10 years. The contract was awarded under the main tier of New York’s renewable portfolio standard following a competitive bidding process.
