State Briefs

PSC Approves Increase in Bloom Energy Subsidy

The Public Service Commission has approved an increase in the subsidy that Delmarva Power customers pay to fuel cell manufacturer Bloom Energy. The surcharge, adjusted periodically, will cost a typical customer about $4.34 a month.

Bloom Energy enjoys a 21-year deal under a 2011 law that guarantees revenue for power generated from its 30-MW fuel cell operation. In exchange, Bloom has to guarantee jobs and an ongoing operation in Delaware. Bloom currently receives about 16.687 cents/kWh, more than Delmarva’s 10.75-cent/kWh advertised rate.

More: The News Journal

ILLINOIS

ComEd Unveils 11th-Hour Clean Energy Bill

Commonwealth Edison supporters have introduced another clean-energy bill into the mix as state lawmakers spar over conflicting visions of renewable power legislation.

ComEd’s bill, introduced by Sen. Kimberly Lightford (D-Maywood) and Rep. Bob Rita (D-Blue Island) aims to foster growth in clean energy for households, such as solar power, and for microgrids to provide greater reliability and resiliency.

The utility also proposes a $100 million program to build 5,000 Chicago-area electric vehicle charging stations.

Some suspect the bill is intended to build support for other legislation backed by ComEd parent Exelon, which would create a ratepayer surcharge to subsidize carbon-free nuclear power. (See Exelon-Backed Bill Proposes Surcharge to Fund Illinois Nukes.) Environmentalists and green energy advocates are supporting a third bill they say would create tens of thousands of new jobs by boosting state goals for renewable power and energy efficiency.

More: Crain’s Chicago Business

IOWA

Senate Likely To Allow IUB Selection to Stand Without Investigation

Senate Democrats say they won’t challenge the appointment of Geri Huser to chair the Utilities Board.

Gov. Terry Brandstad picked Huser, identified as a business-friendly former state representative, to succeed Republican Libby Jacobs as board chairwoman. Jacobs will remain on the three-person board. Sheila Tipton, a Democrat with a legal background in utilities regulation, was not reappointed.

Huser’s appointment came a month after the board ordered MidAmerican Energy to refund $2 million to customers. A MidAmerican Energy executive confirmed that the company recently met with the governor and criticized the refund decision. (See MidAmerican’s Fingerprints on Shakeup of Iowa Utilities Board?)

More: The Des Moines Register

KANSAS

Renewables’ Tax Exemption to be Limited to 10 Years

A bill before the Senate Assessment and Taxation Committee would put a 10-year limit on property tax exemptions for renewable power projects.

The incentive has been in place since 1999, but the proposal would modify the tax breaks so that they would expire 10 years after the launch date of each project. The Kansas Division of the Budget estimates that existing renewable power projects would pay about $18 million annually in taxes in 2025, which could be used for school funding.

The proposal to end the unlimited tax break amounts to “bait and switch,” said Jeff Riles, manager of regulatory of affairs for Enel Green Power North America. Supporters say the incentive attracted many wind, solar and other renewable energy projects to Kansas.

More: Associated Press

MAINE

Missing “And” Cuts Efficiency Investments by $36 Million

The Public Utilities Commission has reduced the amount utilities are required to pay into a fund that subsidizes energy efficiency programs by about $36 million — and it’s all because of a missing “and” in the statute.

The early version of the bill that created the Efficiency Maine Trust stated that funding would be determined by “total retail electricity and transmission and distribution sales.” The adopted legislation stated funding would be based on “total retail electricity transmission and distribution sales.”

The result is that electricity supply sales are not included, decreasing funding from $59 million to $23 million. Two of the three PUC members say the program should be funded exactly as the legislation stated. Energy efficiency advocates are contemplating a legal challenge to restore the $36 million “and.”

More: Bangor Daily News

MANITOBA

Manitoba Man Can’t Stop Tx Lines Across Property

A Manitoba man who bought 50 acres outside the small town of Richer, Manitoba, is upset that Manitoba Hydro is planning to erect 200-foot transmission towers on his property, part of its proposed Manitoba-Minnesota transmission line.

“It never would have dawned on me that Manitoba Hydro could just come and say, ‘Hey, we’re cutting your property in half and taking some of it and there’s absolutely nothing you can do about it,’” Conrad Thiessen said. A company spokesman said he understood Thiessen’s frustration but that “if it’s moved from his property, it may impact four others down the road, and is that any fairer?”

Thiessen said he has contacted his elected officials but so far hasn’t had any luck.

More: CBC News

MARYLAND

Opposition Growing for Proposed 45-Tower Wind Power Project

Opposition is mounting to the proposed Mills Branch Wind Project, which would place 500-foot-tall wind turbines near the Eastern Shore town of Kennedyville.

Opponents to the project, which developer Apex Clean Energy of Charlottesville, Va., said would include 35 to 45 turbines, gathered for an organizational meeting last weekend. They have also launched a website, Keep Kent Scenic.

“With a forest of wind turbines visible up to 25 miles away, Kent County tourism will no longer enjoy its scenic resource, and historic properties and homeowners can expect a big hit on property values,” the organization stated.

More: The Star Democrat

MINNESOTA

Regulators Defer Decision on Xcel’s Request on Solar Gardens

The Public Utilities Commission has denied a request from Xcel Energy to limit the size of community “solar gardens.”

Xcel, which is required under the state’s net-metering law to buy electricity produced by the small solar cooperatives at a set price, argued that solar gardens more closely resemble utility-scale operations, whose output would be put out for a bid at a lower price competitive with wholesale markets.

The commission said it has decided “at this time” not to limit the size of solar gardens. “Potential adjustments, if any, to the program will be fully evaluated” in a few months, said a PUC official.

More: Minneapolis Star-Tribune

MISSOURI

City, Coalition Want to Revisit 40-year Prairie State Contract

Columbia officials and a pro-competition advocacy group want to review the municipal utility’s 40-year power purchase contract with Prairie State Energy Campus in Illinois.

Columbia Water and Light procures about a quarter of its power from the coal-fired Prairie State complex under a 2006 contract. But concerns about energy costs and climate change have caused some advocates to rethink the wisdom of the long-term commitment.

“In addition to locking us into burning fossil fuels for the next 40 years, thereby undermining our ability to transition to clean energy, this contract gives us no ability to negotiate the price of the energy we purchase,” City Councilman Ian Thomas said.

More: KOMU

NEW JERSEY

JCP&L Announces Refund Finally – but Storm Costs Eat it Up

The Board of Public Utilities approved a refund from Jersey Central Power & Light for overbilling its customers, but it offset the reduction by allowing the company to recoup expenses from repairing damage from major storms. The decision has taken two years to settle.

The BPU ordered the utility owned by FirstEnergy to refund $115 million for overbilling the costs of transmission system maintenance. But it cut the proposed rebate to about $35 million to allow the utility to recover costs from storms in 2011 and 2012, including Hurricane Sandy.

“I was happy the board upheld their rate decrease, but I was hoping for more,” said Stefanie Brand, director of the Division of Rate Counsel. Monthly bills for residential customers will decrease by about $1.68 a month.

More: The Record

Henkels & McCoy Agrees to Pay $600,000 in Ewing Gas Explosion

Giant utility contractor Henkels & McCoy will pay a $600,000 penalty to the Board of Public Utilities to settle claims about its role in a fatal gas explosion in Ewing last year.

The company was repairing a power outage for utility Public Service Electric & Gas when its workers drilled through a mismarked PSE&G natural gas main. The crew did not notify emergency responders about the incident, and hours later an explosion killed the resident of a nearby house where the stray gas had migrated underground.

PSE&G has already agreed to pay $1 million in fines.

More: The Princeton Packet

NORTH CAROLINA

Coal Ash I: Groups Urge Supreme Court to Uphold Duke Ash Cleanup Ruling

North Carolina environmental groups last week urged the state Supreme Court to uphold a 2014 lower court ruling that they say requires Duke Energy to immediately halt groundwater pollution from its coal ash pits.

Duke, which is appealing the ruling, says the lower court decision became moot after the legislature created a statewide Coal Ash Management Commission that will prioritize the cleanup of four of Duke’s ash pits. But environmental groups say the decision covered all of Duke’s 14 identified pits and required an immediate total cleanup.

The coal ash issue has been front and center in North Carolina. Duke agreed to pay a $100 million fine related to a massive ash leak last year into the Dan River and a $25 million fine for groundwater contamination from its Dutton plant near Wilmington.

More: News & Observer

Coal Ash II: Judges Back McCrory in Coal Ash Commission Make-up

A three-judge Superior Court panel ruled that the General Assembly erred when it created a commission charged with overseeing the cleanup of Duke Energy’s coal ash pits, ruling that the appointment of the commission’s membership was an executive function, not a legislative role.

The judges said lawmakers ignored the mandate for separation of legislative and executive powers when they formed the commission and appointed six of its nine members. House Speaker Tim Moore and Senate leader Phi Berger said they would appeal the ruling.

If it is upheld, the ruling could mean that Gov. Pat McCrory, a former Duke Energy executive, would choose most or all of the commission’s members.

More: Citizen-Times

NORTH DAKOTA

Company that Spilled 2.2 Million Gallons of Brine Proposes New 14-Mile Oil Pipeline

Summit Midsteam, whose wastewater pipeline leaked 2.2 million gallons of oil-drilling brine in January, is seeking permits to build a new pipeline, this one for oil.

Summit subsidiaries Meadowlark Midstream and Epping Transmission asked the Public Service Commission to approve a plan to convert an existing 10-mile “gathering” pipeline to a transmission pipeline. The company said the oil pipeline is made of stronger materials than the water pipeline and would have increased safety systems, including pressure and flow sensors monitored in a control center. The water pipeline was supposed to be monitored by regular patrols, but that system failed to detect the brine leak for several days.

“I think right-of-way patrolling is something we’ve learned to do probably better,” Meadowlark spokesman John Millar said. “We’re still trying to figure out why with the patrols we did have in place we didn’t see this spill. We think that’s going to be a more prominent part of our surveillance.”

More: Prairie Business Magazine

OHIO

Lawmakers Join to Preserve State Parks from Fracking

Democratic and Republican lawmakers collaborated to prohibit oil and gas development in state parks in draft legislation designed to speed up state permitting for hydraulic fracturing operations.

As a result of last-minute discussions, state parks will be protected, but fracking will be allowed in state wildlife areas and in state forests, although surface disturbances will be prohibited. Nature preserves will continue to be protected.

The General Assembly approved fracking on state lands in 2011, but Gov. John Kasich imposed a moratorium by declining to name anybody to the governing authority, the Oil and Gas Commission. The new legislation will enable the commission to be activated again.

More: Columbus Dispatch

Historic Low Prices Don’t Slow Oil and Gas Drilling in State

The Utica Shale region in Ohio continues to be a hotbed of oil and gas production, despite the plunge in energy prices.

According to the federal Energy Information Administration, the Utica region, along with the Marcellus region to the east and north, will continue to show increased production of gas and oil in the coming months.

“The biggest thing that differentiates Utica from the other regions is Utica is relatively young,” said Jozef Lieskovsky, an analyst for the EIA. Younger wells typically produce at a higher rate than mature wells.

More: Columbus Dispatch

PENNSYLVANIA

PUC Judges Recommend Lower Rate Hike for Met-Ed Customers

Administrative law judges have recommended a 10.9% rate increase for Met-Ed customers. The FirstEnergy subsidiary is seeking a 17.8% increase.

The recommendation was part of a larger rate proceeding dealing with FirstEnergy’s four Pennsylvania utilities. The judges recommended increases ranging from 7.4 to 13.1% for West Penn, Penelec and Penn Power.

The Public Utility Commission is set to consider the recommendations at a meeting in May.

More: York Daily Record

VIRGINIA

DEQ Approves NRG’s Cleanup Plan for 17,000 Gallons of Oil at Plant

The state Department of Environmental Quality last week approved NRG’s plan to recover fuel oil and to clean up tons of contaminated soil at a former Pepco power plant in Alexandria on the Potomac River.

Officials estimated that 17,000 gallons of fuel oil leaked from the plant’s tanks. NRG said it plans to complete the cleanup over the next three years, and monitor soil and groundwater for two years after that.

The deputy director of Alexandria’s transportation and environmental services said the contaminated groundwater is not near any wells and poses no health threat.

More: The Washington Post

— Ted Caddell

March 24, 2015

After Delay, Split FERC Accepts ISO-NE Order 1000 Filing

By William Opalka

A divided Federal Energy Regulatory Commission last week accepted ISO-NE’s second regional compliance filing to implement Order 1000, a filing that had languished for more than a year while the commission had only four members (ER13-193, ER13-196).

FERC largely affirmed its May 2013 order accepting ISO-NE’s regional planning and cost allocation process. It found proposed revisions, filed by ISO-NE and the Participating Transmission Owners Administrative Committee in November 2013, largely complied with the directives in its first order, requiring the parties to make additional filings on some provisions.

In a post-meeting news conference, Chairman Cheryl LaFleur was asked if the delay meant the commission had been deadlocked at 2-2 in the time it awaited replacements for former Chairman Jon Wellinghoff, who resigned in November 2013, and John Norris, who stepped down last August. Norman Bay replaced Wellinghoff in August but the commission remained short one member until Colette Honorable was sworn in Jan. 5.

“That’s a reasonable inference,” LaFleur responded. “It was 3-to-2 the first time and it was 3-to-2 this time so it took five people to vote it out,” she said.

Dissents over ROFR

The order affirms the commission’s prior findings that ISO-NE must remove right-of-first-refusal provisions and that the Mobile-Sierra doctrine does not preclude that requirement. The Mobile-Sierra doctrine presumes that freely negotiated wholesale energy contracts are just and reasonable unless they are found to seriously harm the public interest.

Commissioners Phillip Moeller and Tony Clark partially dissented from the order, saying the majority did not adequately address concerns regarding the Mobile-Sierra doctrine.

“On rehearing, the commission again declines to provide the actual quantitative or granular analysis of public interest harm that is required to overcome the Mobile-Sierra protection previously granted. The result in the instant case is thus legally suspect,” Clark wrote. “Moreover, the decision has the unfortunate side effect of calling into question the commission’s commitment to upholding the regulatory certainty provided under our Mobile-Sierra decisions.”

The majority wrote that “the commission must determine whether the instrument or provision at issue embodies either (1) individualized rates, terms or conditions that apply only to sophisticated parties who negotiated them freely at arm’s length; or (2) rates, terms or conditions that are generally applicable or that arose in circumstances that do not provide the assurance of justness and reasonableness associated with arm’s-length negotiations.”

In granting a partial rehearing, ISO-NE is permitted to restore certain provisions that recognize the transmission owners’ rights to retain use and control of their existing rights of way.

The commission found just and reasonable the proposal to allocate costs of public policy transmission upgrades 70% to the region based on load-ratio share and 30% to those states whose public policy necessitated the project. FERC gave ISO-NE 60 days to file additional modifications.

Additional Filings Required

The commission also required ISO-NE and the Participating Transmission Owners Administrative Committee to make additional compliance filings that:

Specify a process for transmission providers to enroll in the transmission planning region;
Describe the process through which participating transmission owners will identify transmission needs driven by federal public policy requirements that will be evaluated in the local transmission planning process and how they will be evaluated;
Revise the definition of a nonincumbent transmission developer in the ISO-NE Tariff to require that a participating transmission owner that proposes to develop a transmission facility not located within or connected to its existing electric system enter into a nonincumbent agreement;
Modify study deposit provisions to provide a description of the costs to which the deposit will be applied, how those costs will be calculated and an accounting of the actual costs; and
Revise the ISO-NE Tariff and Operating Agreement to provide a consistent definition of the term “backstop transmission solution” and remove language that would require a Participating Transmission Owner to continue developing a backstop transmission solution beyond what was originally proposed.

March 24, 2015

FERC Accepts Formula Rate Protocols from MISO, SPP, PJM Utilities

The Federal Energy Regulatory Commission last week accepted revised transmission formula rate protocols by four SPP and MISO utilities that had deficient protocols.

The commission also accepted a new protocol from Louisville Gas & Electric and Kentucky Utilities, a PJM member in Kentucky and Virginia.

While accepting the filings, FERC required further compliance filings within 60 days from Black Hills Power, which serves parts of South Dakota, Wyoming and Montana; Empire District Electric Co., with territory in Missouri, Kansas, Oklahoma and Arkansas; Kansas City Power & Light and KCP&L Greater Missouri Operations, with customers in Missouri and Kansas; and Westar Energy, which serves parts of Kansas.

The commission ordered the revisions for the SPP in July 2014, saying the existing protocols had impeded the ability to review and appeal transmission owners’ cost claims. The commission ordered similar revisions for MISO transmission owners in 2013. (See FERC OKs MISO, TO Rules on Formula Rate Challenges.)

The commission found that the provisions related to rate challenge procedures and transparency in all of the filings generally comply with directives in the July 2014 orders, but they required some additional modifications.

March 24, 2015

FERC Rejects Dominion Rate Request

By Michael Brooks

The Federal Energy Regulatory Commission last week rejected Dominion Virginia Power’s request to push back the effective date for a rate revision by more than year, a change that would have cost transmission customers $11.1 million (ER15-856).

Dominion had asked FERC to change the effective date of revised transmission depreciation rates from April 1, 2013, to Jan. 1, 2012. FERC approved the revised rates last April.

FERC said changing the date would violate its rule against retroactive ratemaking, a charge the North Carolina Electric Membership Corp. made in a February protest to the request. (See NCEMC: Dominion Request is ‘Retroactive Ratemaking’.)

“The filed rate and retroactive ratemaking doctrines both bar a public utility from charging a rate other than the rate properly filed with the commission, and similarly bar the retroactive imposition of an increased rate for service already provided,” FERC said. “However, this is precisely what Dominion proposes to do in the instant filing … by now proposing to charge customers an additional $11.1 million from Jan. 1, 2012, through March 31, 2013.”

Dominion said it requested the extension because of a Virginia State Corporation Commission ruling that increased its depreciation expense and accumulated depreciation effective Jan. 1, 2012 — the date of a depreciation study commissioned by Dominion. The SCC told FERC it supported Dominion’s request, saying it is standard practice to use the date of the study as the effective date for changes in depreciation rates.

FERC responded that “we are not suggesting that a Jan. 1, 2012, effective date would be inappropriate for retail rates, which is within the purview of the states. In this case, however, Dominion will receive all of its transmission operations and maintenance expenses through its formula rate, and its allowed rate of return and associated income taxes on all unrecovered plant balances. Furthermore, the commission has previously accepted rates that reflect regulatory differences from what this commission requires for accounting purposes and what state commissions require for state rate purposes.”

March 24, 2015June 15, 2023

FERC Rejects Order 1000 Waiver on SPP-SERTP Seam

By Chris O’Malley

The Federal Energy Regulatory Commission said last week that SPP must engage in interregional coordination and cost allocation with the Southeastern Regional Transmission Process region (SERTP), rejecting the RTO’s request for a limited waiver of Order 1000 requirements.

FERC’s ruling came in a 94-page order that approved Order 1000 compliance filings by SPP and the SERTP utilities, subject to additional filings (ER13-1939).

SPP had argued its only interconnection to SERTP was via Associated Electric Cooperative Inc. (AECI), which supplies 51 local electric cooperatives in Missouri, Iowa and Oklahoma.

Because AECI is “a non-commission jurisdictional utility” that does not intend to revise its Open Access Transmission Tariff to implement Order 1000, SPP argued, it was impossible for the RTO to comply with Order 1000’s requirements regarding the SERTP seam.

A waiver is also appropriate, SPP argued, because it and AECI already engage in interregional coordination through a joint operating agreement. The two regions have been exploring revisions to the JOA to provide “similar benefits that the requirements of Order No. 1000 intend to provide,” SPP said.

FERC noted, however, that AECI voluntarily enrolled in the SERTP region. “As a result, SPP and SERTP are neighboring transmission planning regions,” the commission said.

Large Number of Interconnections

FERC also said the RTO is connected to AECI “to a greater degree than SPP suggests” because of the large number of interconnections between AECI and 10 SPP members, including Kansas City Power & Light and Westar Energy.

The commission also rejected SPP’s claim that FERC had set a precedent for its request when it granted a waiver to Maine Public Service Co. FERC noted that Maine Public Service is not interconnected to the United States but rather to Canada. That unique situation made it impossible to join a transmission planning region consistent with Order 1000.

The commission accepted interregional cost allocation filings by SERTP members Southern Co., Duke Energy Carolinas, Louisville Gas & Electric, Kentucky Utilities and Ohio Valley Electric Corp. with a few caveats.

FERC ordered the companies to provide identical language in provisions on cost allocation, data exchange and the identification of interregional transmission facilities.

March 20, 2015June 15, 2023

Protests Continue — on Camera — at FERC

By Rich Heidorn Jr.

WASHINGTON — About 10 protesters were led or carried out of the Federal Energy Regulatory Commission’s open meeting Thursday after defying the commission’s “no interruptions” rule with chants of “Stop construction at Cove Point!”

Last week, the commission issued an order saying it no longer will allow protesters to read statements before its meetings, as Chairman Cheryl LaFleur previously had permitted since the activists began appearing regularly at commission meetings last fall.

The new policy came after protesters — no longer content to read a statement before the session — disrupted January’s open meeting and a February technical conference on the Clean Power Plan. (See FERC Cracks Down on Protesters.)

Last week’s order also ended the commission’s ban on the use of cameras — which meant that the first test of the new policy was captured by photographers, including those from Politico and RTO Insider.

Protester briefly resists security guards attempting to escort him out of FERC meeting. — Ted Glick, national campaign coordinator at the Chesapeake Climate Action Network, briefly resists security guards attempting to escort him out of the FERC meeting. © RTO Insider

The commission’s secretary began the meeting by reading a summary of the new policy, which also was posted on a large sign outside the meeting room.

Immediately thereafter, two protesters stood up, facing the commissioners, but were confronted by security as they attempted to speak. One of the protesters was Ted Glick, national campaign coordinator at the Chesapeake Climate Action Network. Glick had previously said he did not think the order expressly prohibited unscheduled speakers.

As the two were being ejected, seated protesters — like the others, wearing red T-shirts with slogans such as “FERC Doesn’t Work” — took up the chant and were led from the room.

Finally, a group that had taken seats on the floor in front of the audience were forced to leave.

The commission briefly left the meeting room during the episode, which lasted for about four minutes. Security guards said later that the protesters were escorted out of the building. No one was arrested.

Over the past year, FERC has been the target of environmental activists over its approval of natural gas pipelines and export terminals, including Dominion’s Cove Point site on the Chesapeake Bay near Lusby, Md., which is now under construction.

The challenge of dealing with the protesters now falls to Commissioner Norman Bay, who is scheduled to replace LaFleur as chairman on April 15. Beyond Extreme Energy, the organization that has been coordinating the protests, said it is hoping to attract more than 500 demonstrators to FERC in May.

In November, about 100 climate change protesters blockaded FERC headquarters, snarling traffic on First St. N.E. About 25 were arrested. (See Federal Briefs.)

March 18, 2015

Exelon, Pepco Ink Deal with Md. Counties, but Critics Stand Firm – UPDATE

By Suzanne Herel

Two key Maryland counties have agreed to support Exelon’s controversial takeover of Pepco Holdings Inc. in return for promises to fund customer bill credits, grid reliability improvements, renewable energy projects, energy efficiency programs and help for low-income consumers.

Montgomery and Prince George’s counties, suburbs of D.C., represent three-quarters of Pepco’s customers in Maryland, where Attorney General Brian Frosh, consumer advocacy groups and environmentalists have been urging the Public Service Commission to reject the $6.8 billion deal. (See Exelon ups Merger Offer in Maryland as AG Calls for Rejection.)

The acquisition, which would give Exelon control of more than 80% of the state’s electricity customers, also faces opposition from detractors in D.C. (See Exelon Sweetens the Deal for DC in Pepco Takeover.)

“We believe the agreement is significant because it was signed by a large consortium of low-income consumer advocates and recreational interest groups, in addition to Montgomery and Prince George’s counties,” Exelon spokesman Paul Adams told RTO Insider.

The agreements, filed with the PSC, bring with them a delay in a decision while the public is given time to weigh in.

The parties involved can submit testimony on the settlement until March 30. This is also the deadline for testimony on another settlement with The Alliance for Solar Choice filed March 2. Written public comments may be submitted through April 9.

Hearings Set for April

Evidentiary hearings are set for April 7-9. The PSC had planned to issue its decision on April 8; now it is shooting for April 29.

In a statement announcing the new schedule, the PSC said, “According to the request, the joint applicants have entered into two settlement agreements that they believe resolve all contested issues in this proceeding.”

The Maryland Office of People’s Counsel, however, continues to urge the PSC to reject the deal.

“Generally, we disagree with that,” People’s Counsel Paula Carmody told RTO Insider on Tuesday. “Our perspective is that the transaction is not good for our state, not good for ratepayers and not in the public interest.”

Carmody noted the number of parties yet to be won over — among them the Maryland Energy Administration, the staff of the PSC and groups including the Coalition for Utility Reform.

That organization’s counsel, Montgomery County Councilmember Roger Berliner, submitted a filing March 3 asking the PSC to require Exelon to increase its commitment to reliability, renewable energy and distributed generation.

“Exelon is trying to pick folks off, but appreciate the dynamic they face,” Berliner said in an interview, echoing Carmody’s list of critics.

In a brief filed with the PSC, the OPC said, “Nothing in the revised commitments or in the joint applicants’ initial brief overcomes the substantial harms and risk that will result if the subject acquisition is approved.”

It added, “The joint applicants’ commitments that supposedly provide benefits — those concerning reliability, the Customer Investment Fund and low-income assistance — also provide little, if any, value.”

The proposed conditions, OPC said, don’t address what Maryland stakeholders will lose: “the ability and right to compare the policy proposals and performance of two investor-owned utilities serving customers in Maryland that are subject to the same laws and regulations.”

“The concern about Exelon is that it will favor its nuclear power plants at the expense of renewable energy. In the absence of Exelon making a commitment to renewable and distributed energy in Maryland, I don’t think this merger will be found in the public interest.”

‘Necessary but not Sufficient’

Berliner commended some of the settlement’s aspects, in particular Exelon’s agreement to pay $500,000 for the PSC to retain a consultant to study how to transform the electric grid; a commitment to improve reliability by 2018; and the creation of a $50 million “Green Sustainability Fund” to stimulate investment in solar, energy storage and other distributed generation.

“There are good things in the settlement with the counties,” Berliner said. “But to use legal terminology, they are necessary but not sufficient. The bar is a little higher for this merger to be found in the public interest.

“I think they need to do more.”

In the meantime, Gov. Larry Hogan has delayed the appointment of two new members of the PSC until after the five-member board rules on the Exelon deal. The governor has nominated Michael L. Higgs Jr., a telecommunications attorney, and Jeannette M. Mills, former chief customer service officer for Exelon’s Baltimore Gas and Electric.

DC Opposition

Meanwhile, three members of the D.C. Council have penned a letter to the District’s PSC urging the commission to reject the deal, saying that it is not in the public interest, as required by law.

Mary Cheh, Elissa Silverman and Charles Allen said the transaction creates a conflict of interest between Exelon, a producer of electricity, and Pepco, which buys electricity and distributes it.

“A producer looks for the highest prices for its product, but a buyer looks for the lowest prices,” they said.

They cited the commission’s 1999 approval of Pepco’s proposed divestment of its generation assets as being in the public interest and yielding “non-monetary, but no less important, benefits to District ratepayers.”

“With Pepco substantially out of the generation business,” the PSC wrote at the time, “there will be less motivation for the company to act as an inhibitor to the development of a competitive generation market in the District.”

The councilmembers concluded that “the only real beneficiaries of the takeover will be Pepco shareholders (Exelon is buying them out at a more than 24% premium over market value) and Exelon Corp. (which will capture a steady, reliable stream of revenue to offset its riskier generation assets).”

The D.C. Office of People’s Counsel, who also is critical of the proposed deal, said last week that it was too early to tell if the settlement proposed in Maryland would benefit D.C. consumers.

“At this time, the Office of People’s Counsel is focused on the evidentiary hearings” set for March 30 through April 8, People’s Counsel Sandra Mattavous-Frye said. “There may be terms in the Maryland settlement proposal that may be of benefit to District consumers, but I still need more time to carefully examine the details and to determine whether any of these have value to the District of Columbia.”

The acquisition has been approved by the staff of the Delaware PSC, the New Jersey Board of Public Utilities, the Federal Energy Regulatory Commission and the Virginia State Corporation Commission.

Exelon hopes to close the deal in the second or third quarter of this year.

March 17, 2015June 15, 2023

PJM Planning Committee Briefs

VALLEY FORGE, Pa. — Demand response forecasts used in PJM planning studies will drop in all but two of 22 transmission zones under a methodology change endorsed by the Planning Committee last week.

According to a PJM analysis, 10 zones will see drops of 25% or more for delivery year 2020, with the Dayton Power and Light (DAY) and Duquesne Light (DQE) zones falling by almost half (see chart). RTO-wide, forecast DR for delivery year 2020 would drop by one-quarter to 8,200 MW from 11,100 MW.

The current load deliverability analysis uses the amount of DR that has cleared in the last base residual auction to project DR available five years in the future. But PJM officials say that a significant amount of DR that clears the auction is replaced by other resources before the delivery year arrives. In the 2014/15 year, 46.5% of the DR assumed to be available had been replaced by non-DR resources. (See Change Proposed in PJM Demand Response Modeling.)

The new method will base future forecasts on an average of the final amount of committed DR for the most recent three years. The average would be expressed as a percentage of the zone’s 50/50 summer peak forecast for application to future years’ demand.

“All that matters in this method is what has historically committed, not what has cleared in any particular auction,” said Tom Falin, PJM manager of resource planning.

If approved by the Markets and Reliability Committee this month, PJM will begin using the new methodology in the 2015 Regional Transmission Expansion Plan.

Falin said the new method is unlikely to have much practical impact, at least in the short term.

A reduction in forecast DR will increase the assumed load of locational deliverability areas (LDAs), resulting in an equivalent increase in the LDA’s capacity emergency transfer objective (CETO) — the amount of power it must be able to import during a localized capacity emergency while remaining within a loss-of-load expectation of one event in 25 years.

Planners compare the CETO level with the LDA’s capacity emergency transfer limit (CETL), the maximum amount of power the transmission system can deliver into the LDA.

For the May 2015 capacity auction, all LDAs have CETO/CETL margins in excess of 115%, large enough that the DR forecast changes are unlikely to impact the areas’ reliability requirements.

“We seem to have very healthy CETO/CETL margins,” Falin said. “The practical impact of this change may not be all that great.”

Change Would Shift Baseline Upgrades to Network Customers

PJM wants to change how it studies long-term firm transmission service requests to ensure individual requesters share in the cost of transmission upgrades required to serve them.

PJM’s Aaron Berner told the Planning Committee on Thursday that the “pancaking” of individual requests sometimes results in a need for reinforcement projects but that the current study process results in the cost of such improvements being assessed broadly on load customers and transmission owners through baseline upgrades rather than on individual requesters through network upgrades.

Berner outlined a proposed problem statement that will be brought to a vote at next month’s committee meeting.

Changes Proposed for Light Load, Wind Modeling

PJM planners are considering lowering the light-load modeling assumption from 50% to 35% of the summer peak based on an analysis that showed a significant number of hours of lower load.

PJM’s light-load period is 1 a.m. to 5 a.m. from Nov. 1 through April 30 of each planning year. Planners said their analysis of three years of data found loads in the MAAC, ComEd and Dominion zones are only 35% of peak load during a significant number of hours.

At the same time, planners are considering increasing the maximum wind ramping from 80% to 100%, which is consistent with the modeling in its neighbor MISO. Five transmission owner zones — AEP, APS, COMED, PENELEC and PL — contain wind generation. Between 2001 and 2014, average maximum wind capacity for the five zones was 92.5%.

PJM will conduct sensitivity analyses on the proposed changes and report back to the Planning Committee. (See Light-Load Study: Generation Up, Load Down.)

PJM Seeks to Revise Definitions in Merchant Network Upgrades

PJM will seek to revise three definitions in the Tariff that it says are making it difficult to properly process requests for merchant network upgrades. Under a problem statement endorsed by the PC, PJM would consider changes to the definitions of “Upgrade Request,” “Customer-Funded Upgrade” and “Merchant Network Upgrades.”

Planners said the current definitions have sometimes resulted in higher-priority interconnection projects negating a merchant network upgrade request.

— Suzanne Herel

March 17, 2015June 15, 2023

FERC Cracks Down on Protesters

By Michael Brooks

The Federal Energy Regulatory Commission said last week it will no longer allow protesters to read statements before its open meetings.

Borrowing language from the Federal Communications Commission, FERC issued an order modifying the Code of Federal Regulations “to clarify that the term ‘observe’ does not include disruptive behavior.”

Over the past year, FERC has been the target of environmental activists over its approval of natural gas pipelines and export terminals. At the commission’s January open meeting, protesters continually interrupted Chairman Cheryl LaFleur as she tried to begin proceedings, leading her to adjourn the meeting while security cleared the floor. (See Protesters Interrupt FERC Open Meeting.) Protesters were also escorted out after disrupting a FERC technical conference on proposed carbon emission rules in February.

While LaFleur has previously allowed protesters to read statements before she begins open meetings, the new order makes it clear that this will no longer be tolerated. According to the order, “communications made or presented by unscheduled presenters will not be considered by the commission.”

One protester, Ted Glick, said FERC should have public comment periods at open meetings.

FERC is in “drastic need for some doses of reality to the impact of their decisions,” said Glick, national campaign coordinator at the Chesapeake Climate Action Network. “We think the commissioners really need to hear from the public.” He said he did not think the order expressly prohibited unscheduled speakers.

Beyond Extreme Energy, the organization that coordinated the January meeting interruptions, said it is hoping to attract more than 500 demonstrators to protests at FERC in May.

FERC also amended its rules concerning recording open meetings to allow photography, which was previously prohibited. FERC said it recognizes that its “existing regulations concerning recording open meetings are unduly complex and out of date.” It said it was adopting language used by the Consumer Product Safety Commission, which allows members of the public to record meetings as long as they remain seated.

March 17, 2015

Constitution Pipeline: Headed to Completion or to Court?

By William Opalka

Opponents of a 124-mile natural gas pipeline that would provide New York and New England access to Pennsylvania shale gas have threatened to go to court next week to force federal regulators to reconsider their approval of the project (CP13-499, CP13-502).

The proposed Constitution Pipeline won a certificate of public convenience and necessity from the Federal Energy Regulatory Commission on Dec. 2.

Stop the Pipeline, a citizens group intervening in the case, said it will go to court if FERC does not consider its request for a rehearing “on the merits” by Friday. The group is being assisted by the Pace Environmental Litigation Clinic, which lists environmentalist Robert F. Kennedy Jr. as a supervising attorney.

FERC issued a procedural order for rehearing on Jan. 27 but has not taken any further action. Pace said this amounts to a “constructive denial,” a de facto refusal to rehear the case without an actual order saying so.

Stop the Pipeline said in its request for a rehearing that the certificate of public convenience was illegally granted before the New York State Department of Environmental Conservation had issued water quality permits and before constitutional questions of affected property owners were resolved. It also said that FERC violated federal law by separating this project from other gas infrastructure projects in New York that should have been reviewed in total.

ISO-NE says inadequate natural gas infrastructure has threatened reliability and driven up power costs as New England has become increasingly reliant on gas as fuel for electric generation. The region, which now relies on gas for about half of its power generation, sees prices spike on cold days when more gas is needed for home heating and the grid operator has to turn to expensive fuel oil.

The Constitution Pipeline, which is entering the final phase of environmental reviews by New York regulators, would start in Susquehanna County, Pa., and travel northeast through New York, where it would connect with the Tennessee Gas and Iroquois Gas pipelines.

Kinder Morgan’s Tennessee pipeline is a major east-west natural gas artery that supplies Texas and Gulf Coast gas to upstate New York and New England.

The Iroquois pipeline heads to the southeast, serving New York City and its environs. An expanded compressor would be added by Iroquois in nearby Wright, N.Y., at the terminus of the Constitution line.

Constitution’s path includes a section of New York that has its own potential for fracked shale gas. However, in December, New York Gov. Andrew Cuomo effectively banned the practice due to health concerns. (See Cuomo Bans Fracking in New York.)

Williams, Cabot Oil & Gas, Piedmont Natural Gas and WGL Holdings are partners in the Constitution project.

“There is this supply of stranded gas that is needed in New England that can’t get there because the infrastructure hasn’t kept up,” said Christopher Stockton, a spokesman for Constitution. If permits are granted, construction would start this summer and take about a year, with the pipeline in operation by mid- to late 2016.

He added that the Pennsylvania supply, closer to where it is ultimately used, would cut fuel costs by half. Most of the natural gas currently used in New York and New England originates in the Gulf Coast and Texas.

The Constitution project is now before the New York DEC, where an extended comment period ended in late February. Opponents said they delivered 5,000 comments to the department office in Albany on the final day and now believe the project is in trouble.

DEC permits and approvals are required for construction and operation of the pipeline. Additional permits from the U.S. Army Corps of Engineers and the U.S. Fish and Wildlife Service are also pending.

The 30-inch pipeline would deliver 650,000 dekatherms of gas per day. The pipeline was first proposed in April 2012.

This pipeline is essentially parallel to the New York section of Kinder Morgan’s proposed Northeast Energy Direct pipeline. The Kinder Morgan project is two years behind Constitution in the regulatory and planning cycle, with proposed operations in 2018.