The SPP Board of Directors elected Mike Ross as senior vice president of government affairs and public relations and Malinda See as vice president of corporate services.
CEO Nick Brown said the two “bring unique perspectives and leadership experiences” to the RTO’s executive leadership.
Ross, a former six-term congressman who served on the House Energy and Commerce Committee, oversees the RTO’s external affairs, media relations and corporate communications. Ross (D-Ark.) was defeated by former Rep. Asa Hutchinson (R-Ark.) in Arkansas’ gubernatorial race in November.
See, SPP’s longest serving employee, is responsible for human resources, payroll, facilities and administrative services.
A federal court in California will hear arguments Feb. 26 in a case pitting the Federal Energy Regulatory Commission against Barclays that could result in the British bank having to pay penalties and disgorge profits of up to $470 million.
FERC alleged that Barclays and four of its traders engaged in so-called swap trades between several western energy hubs from 2006 to 2008. FERC cited the bank in 2012. Barclays had the option of defending itself before a FERC administrative law judge or to have the case heard in U.S. District Court.
Obama Administration Working to Open Up East Coast to Offshore Drilling
The Department of the Interior last week said it was working on a plan to open up vast offshore tracks to oil and gas exploration in the Atlantic Ocean off Virginia, North Carolina, South Carolina and Georgia, while declaring 9.8 million acres in Alaskan waters off limits indefinitely.
The plan, which would open the Atlantic to offshore drilling for the first time, drew protests from New Jersey Democrats. “Opening up the Atlantic coast to drill for fossil fuel is unnecessary, poses a serious threat to coastal communities throughout the region and is the wrong approach to energy development in this country,” Sen. Cory Booker, Sen. Robert Menendez and Rep. Frank Pallone of New Jersey said in a joint statement. The Atlantic leases are for areas more than 50 miles offshore.
Republican Sen. Lisa Murkowski said the withdrawal of the Alaskan offshore tracts amounted to a war against her home state. The Obama Administration said the environmentally sensitive areas in the Beaufort and Chukchi seas, as well as a shallow 30-mile shelf in northwestern Alaska, were important to Alaska natives.
NRC Board Denies Vermont’s Request to Force Entergy to Maintain Emergency Monitoring
The Nuclear Regulatory Commission’s Atomic Safety and Licensing Board rejected Vermont’s request to order Vermont Yankee owner Entergy to maintain various emergency monitoring systems on the shut-down nuclear plant. The board said Vermont’s petition challenged an NRC regulation and was therefore inadmissible.
Entergy closed the plant last year, and asked to reduce on-shift and Emergency Response Organization staff due to the decreased risk. The board said the plant’s Emergency Response Data System requirement was put in place after the 1979 Three Mile Island incident but that plants being decommissioned were exempt.
“Expressly excluded from the proposed rule were those nuclear power reactor facilities that are permanently or indefinitely shut down,” the board’s ruling stated.
Department of Energy to Pay $44K Fine on Hanford Violations
The Department of Energy signed a consent agreement agreeing to pay $44,772 in fines assessed by the Environmental Protection Agency for hazardous waste storage violations at the Hanford Nuclear Reservation in Washington.
The EPA cited the Energy Department for two incidents in 2013 when the department moved 136 drums of waste to an unapproved site and when it submitted a plan to close eight storage sites without required information.
Energy Information Admin’s Short-Term Outlooks Already Out of Date Due to Oil Slowdown
The Energy Information Administration’s short-term energy outlook was out of date less than two weeks after it was released, thanks to the volatile energy markets.
The administration, part of the Department of Energy, is having trouble keeping up with fast-changing energy markets. Its recent forecasts of rig counts and oil and gas operations failed to predict the decline in new drilling operations because of the rapid plunge in energy prices.
DOE Releases $59 Million for Solar Energy Innovation Projects
Moniz
The Department of Energy last week announced it was releasing $45 million in funding for solar manufacturing and putting up $14 million more for 15 new community solar deployment projects.
“As President Obama noted in his State of the Union address, the U.S. brings as much solar power online every three weeks as we did in all of 2008,” Energy Secretary Ernest Moniz said. “As the price of solar continues to drop, the Energy Department is committed to supporting a robust domestic solar manufacturing sector that will help American business meet growing demand and help American families and businesses save money by making solar a cheaper and more accessible source of clean electricity.”
The department said the new round of funding is aimed at helping the country reach the administration’s goal of doubling renewable energy by 2020.
Lawrence Livermore Lab Signs 20-Year Solar Deal with juwi
In what is billed as the Department of Energy’s largest solar purchase from an on-site facility, the department’s National Nuclear Security Administration signed an agreement with a solar developer to provide 6,300 MWh per year for the Lawrence Livermore National Laboratory in Livermore, Calif.
The facility, to be developed by juwi solar subsidiary Whitethorn Solar, will be a 3-MW ground-mounted photovoltaic system. The Whitethorn facility will sell into the Western Area Power Administration through a 20-year power purchase agreement with the department.
The Illinois Commerce Commission and PJM’s Independent Market Monitor said last week they oppose the Illinois Municipal Electric Agency’s request for a waiver from the rules for May’s Base Residual Auction.
IMEA asked the Federal Energy Regulatory Commission last month for a waiver that would allow it to use capacity resources outside of the Commonwealth Edison Locational Deliverability Area to meet its internal resource requirement in serving its Naperville, Ill., load (ER15-834).
Last May, FERC granted IMEA such a waiver for the 2017/18 delivery year (ER14-1681). Neither the ICC nor the IMM weighed in on last year’s waiver request.
“Despite the small size of IMEA’s [fixed resource requirement] load relative to total load in the ComEd LDA, the financial impact of granting IMEA’s requested waiver could be significant for the other [load-serving entities] if PJM models the ComEd LDA separately in the May 2015 Base Residual Auction and the ComEd LDA subsequently binds on the [Capacity Emergency Transfer Limit],” the ICC said.
“Moreover, as the commission noted in its Jan. 22 Order, IMEA has had sufficient time to address any consequence of its decision to take the FRR option for the 2018/2019 delivery year.”
The ICC offered two alternatives.
The first — also suggested in the Jan. 22 order — was for IMEA to request to be excused from the five-year stay-in provision for FRR participants so that it could participate in the capacity auction.
Alternatively, the ICC said, FERC could order PJM not to model the ComEd LDA separately.
“If the commission does choose to grant the waiver requested by IMEA, then the ICC requests that the commission also direct PJM to adjust the LDA reliability requirements upon which a separately stated [variable resource requirement] curve for the ComEd LDA would be calculated downward by the amount of internal reliability requirements that IMEA is excused from providing,” it said.
The Market Monitor also said IMEA’s waiver request could have adverse effects on other entities.
“IMEA made certain investments in external units to meet its capacity needs. IMEA made a voluntary election to submit an FRR plan,” the Monitor said. “IMEA made these decisions based on expectations that were not realized. IMEA’s unrealized expectations do not justify waiving the rules.”
PJM Not Opposed
PJM filed comments last week saying it does not oppose IMEA’s current waiver request. It noted that stakeholders have begun a review of the underlying issue regarding historical transfer rights. (See PJM MIC OKs Capacity Transfer Rights Query.)
“PJM cannot predict with certainty if and when a resolution will be reached through the stakeholder process,” the RTO said. “However, PJM anticipates that the stakeholder process will not have run its course in time to culminate in a filing with the commission to resolve the identified issue prior to the 2015 BRA.”
The Nuclear Regulatory Commission is investigating the failure of two transmission lines at Entergy’s Pilgrim nuclear station in Massachusetts, which forced the plant to shut down during last week’s blizzard.
The lines leading out of the plant failed at about 4 a.m. Tuesday, and service was restored two days later. The Plymouth power station remains shut down for maintenance work, an Entergy spokesman said. Entergy officials said there was no threat to public safety and that it is continuing to investigate.
Scram at Entergy’s River Bend Plant Prompts Special NRC Inspection
An emergency shutdown and a series of subsequent pump failures at Entergy’s River Bend nuclear station near Baton Rouge, La., on Christmas morning has resulted in a special inspection by Nuclear Regulatory Commission officials.
The NRC said it was sending a team of inspectors to oversee Entergy’s analysis of a series of failures that required plant workers to manually align valves to restore normal water levels in the reactor vessel.
River Bend’s woes began when an electrical failure in a turbine valve triggered an automatic shutdown. A series of failures in feed-pump controls caused overly high water levels in the reactor vessel, and another pump failure and monitor failures led workers to use backup equipment to restore coolant to the proper height.
Duke Ash Ponds Still Leaking Up to 3 Million Gallons a Day
Duke Energy, still cleaning up a disastrous discharge of coal ash from its Dan River plant, reported that its coal ash ponds across North Carolina may be leaking up to 3 million gallons a day.
According to filings with state regulators, Duke has identified 200 seeps at 14 of its coal-fired plants. Two of those plants — Asheville and Lee — leak up to 1 million gallons of ash-contaminated water daily.
Those leaks appear to be illegal under new state laws enacted after the Dan River disaster. That leaves Duke with two options: repair the leaks or include them in updated wastewater discharge permits. “Our objective is to include seeps in the permits so we can follow the appropriate monitoring protocol or next steps regulators prescribe,” Duke spokeswoman Erin Culbert said.
Duke Energy Spending on Lee Nuclear Station Approaches $45 Million
Duke Energy’s investment in its proposed W.S. Lee Nuclear Generating Station near Gaffney, S.C., continues to climb.
Duke said it spent nearly $45 million on the plant last year. Since Duke applied for a license in 2007 for the 2,234-MW plant, the company has spent $426.6 million, according to company filings. Duke expects to get a construction and operating license from the Nuclear Regulatory Commission next year.
The company could file to recover the costs whether or not the plant is ultimately built, if regulators determine the costs are reasonable.
Duke Exploring Storage Battery Technology, More Projects Coming
Duke Energy sees a future in utility-scale battery storage and said it already has six battery projects in operation.
Duke Energy Technology Development Manager Thomas Golden said in an interview with Smart Grid Today that the company is experimenting with various technologies, from chemical makeup to interconnection systems, to adapt battery storage for large utility systems.
“We believe the batteries are here to stay,” he said. One project is to install a storage battery to smooth out peaks from its growing solar generation fleet.
France’s UniStar Asks for Delay in Preparing Report for New Calvert Cliffs Reactor
Electricite de France’s UniStar Nuclear Energy, which has proposed building a third reactor at Exelon Nuclear’s Calvert Cliffs plant in Lusby, Md., has asked the Nuclear Regulatory Commission for more time to submit a Facility Safety Report.
The plans for a third Calvert Cliffs reactor go back to 2008, when then-partners Constellation Energy Group and EDF announced plans to build a new 1,600-MW reactor. Constellation has since merged with Exelon, and EDF purchased UniStar. EDF now owns the plans for the new reactor outright.
Its request for an extension to file the safety report indicates that the project is still alive.
NextEra Promises $60 Million in Savings for Hawaiian Electric Customers
NextEra told regulators that customers of Hawaiian Electric Companies will save $60 million if its acquisition of the company is approved.
NextEra said it will not seek a base-rate increase for at least four years after the acquisition. The company also vowed that it will not seek to recover any costs associated with the acquisition. It said it hopes to finalize the deal, pending regulatory approval, by the end of this year.
ALLETE Pays $168 Million for Majority Stake in US Water Services
ALLETE is spending $168 million to gain a majority stake in U.S. Water Services, an industrial water management company based in St. Michael, Minn., with operations throughout the U.S.
The company said it will gain an 87% ownership and plans to buy the remaining shares later.
ALLETE also owns Minnesota Power; Superior Water, Light and Power of Wisconsin; ALLETE Clean Energy in Duluth; and BNI Coal in Center, N.D.
Synch and Primary reserve changes (Source: PJM Interconnection LLC)
The Federal Energy Regulatory Commission issued a deficiency letter last week asking PJM to justify its proposal for pricing reserves in emergencies (ER15-643).
The Jan. 27 letter from FERC’s Office of Energy Market Regulation gave PJM 15 days to respond to a series of questions about the RTO’s effort to reduce uplift and ensure that energy prices better reflect operator actions. (See PJM MRC OKs Change on Reserves; Interchange Limit Falls Short.)
The letter questioned PJM’s rationale in valuing extended reserves — reserves procured in addition to primary and synchronized reserves — up to $300/MWh. It also asked PJM how it plans to calculate additional reserve requirements for the day-ahead and real-time markets.
The changes outlined in PJM’s Dec. 17 filing were unanimously approved by the Members Committee on Nov. 21.
“PJM’s proposal merely ensures that the additional reserves already scheduled by PJM’s system operators are included in the updated reserve requirement used by PJM’s market clearing engines,” PJM said. “In this way, PJM will be better able to align market clearing prices with its system operators’ actions, while the total production cost of providing reserves will remain the same.”
“PJM’s changes will reduce uplift, decrease price suppression and allow for reserves to be priced consistent with market conditions,” P3 said.
The group added, “The broad support for the proposal is an indication of the importance of getting reserve pricing correct and, perhaps more importantly, recognition of the need to procure additional reserves during times of system stress.”
Public Service Electric and Gas and two sister companies offered limited support.
“While a step in the right direction in improving the Tariff provisions concerning shortage pricing, the PJM filing is not a complete solution to achieve PJM’s stated objective — ‘to enhance PJM’s market rules to better capture actions into energy and reserve pricing.’”
PSE&G also said it disagreed “with PJM’s claim that the reliability contribution of primary reserves is necessarily greater than reliability value of ‘extended reserves’ deemed necessary by PJM’s own operators during times of system stress.”
The Federal Energy Regulatory Commission issued an order to show cause against Maxim Power yesterday, telling the Canadian independent power producer to explain why it shouldn’t have to pay a $5 million fine for allegedly misrepresenting the output of three of its generators in ISO-NE (IN15-4).
FERC says that in July and August of 2010, when asked about the company’s offers on the day-ahead market, Maxim employee Kyle Mitton told ISO-NE’s Market Monitor that the generators were unable to procure gas, so it was forced to burn more expensive oil.
FERC says, however, that Maxim purchased large quantities of gas before submitting its offers at the price of oil the same day. FERC assessed Mitton a $50,000 proposed penalty separately from the company.
FERC’s Office of Enforcement issued a Notice of Alleged Violations in November. (See FERC Staff Accuses Maxim Power of Cheating ISO-NE.) The notice included two other alleged schemes by Maxim: gaming ISO-NE market mitigation rules in 2012 to 2013, and boosting its generators’ outputs during testing using “extraordinary measures” in order to collect inflated capacity payments from 2010 to 2013. The order to show cause does not mention these allegations.
Commissioner Tony Clark dissented, saying he did not think the Enforcement staff report and Maxim’s responses justified the order. “Nonetheless, in the next phase of the proceeding, both FERC Enforcement staff and the respondents will have an opportunity to more fully develop the record,” he wrote. “As such, I make no prejudgment as to the final disposition of this case.”
Commissioner Norman Bay, who headed the Office of Enforcement during most of the investigation, did not participate in the decision.
PPL and Riverstone Holdings have agreed to satisfy market power concerns over the spinoff of their generation by making only cost-based offers for the more than 650 MW that their new company will keep in eastern PJM.
The use of cost-based offers was one of two mitigation options the Federal Energy Regulatory Commission said it would accept in its conditional approval of the companies’ plan to combine their generation assets into a new company, Talen Energy.
The mitigation is intended to address market power concerns in PJM’s 5004/5005 submarket in eastern Pennsylvania, New Jersey and Maryland. (See FERC Gives Conditional OK to Talen Energy.)
The companies revealed their response to FERC’s options in a Jan. 27 informational filing (EC14-112).
“After full evaluation, both parties believe the enhanced mitigation will not have a materially different impact on the future operating results of Talen Energy than the original proposal,” the company said in a news release.
In their application, the companies proposed two mitigation packages. One involved divestiture of six Riverstone plants and one PPL plant in New Jersey and Pennsylvania — all combined-cycle plants — for a total of 1,315 MW. The second involved the same six Riverstone plants, plus a 399-MW coal-fired plant in Maryland and two PPL hydro plants in Pennsylvania, for a total of 1,346 MW.
FERC’s Dec. 18 order said the companies would have to sell all of the plants in the two options — totaling about 2,000 MW — or limit energy and regulation market offers for the approximately 650 MW Talen would retain under either package to cost-based rates.
The companies said they would not decide on which of the sets of power plants they will sell until the closing of the PPL-Riverstone spinoff, which is expected in the second quarter of this year. Post-divestiture, Talen will be the seventh-largest generation owner in PJM.
“We have 12 months from the closing date to announce the divestitures, and they may take somewhat longer than that to close on those,” PPL spokesman George Lewis said Thursday.
The companies said that no company with more than 10% of PJM’s summer installed capacity would be permitted to bid for the plants. That would leave out Public Service Enterprise Group, Exelon and NRG Energy.
Talen Energy will own almost 14,000 MW of capacity — about 11,000 MW in PJM — after the divestitures.
In addition to the plant sales and cost-based offers, FERC also required Talen to offer into PJM markets the same plants and output as PPL did, prohibiting it from holding back generation to drive prices up.
The deal still needs approvals from the U.S. Department of Justice, the Nuclear Regulatory Commission and the Pennsylvania Public Utility Commission.
Failed Data Center Project on Hook for $1.4 Million, Court Rules
The Data Centers LLC must pay three consultants $1.4 million in fees and interest related to the company’s failed bid last year to build a power plant and data center on University of Delaware property, according to a recent Superior Court ruling.
The university rejected the project after community opposition arose. The Data Centers recently said it was eyeing a similar project in the greater Baltimore area.
Clean Line Unveils Proposed Routes in Series of Public Meetings
Clean Line Energy, which wants to build a 750-mile overhead direct-current transmission line from Kansas to Indiana, is holding a series of public meetings on the project.
The Grain Belt Express, designed to bring wind power from west to east through Missouri and Illinois, is similar to the company’s Rock Island Line, which will run through northern Illinois. The Rock Island Line has already gained the approval of the Illinois Commerce Commission. Clean Line said it hopes to get ICC approval for the Grain Belt Line this year.
IURC Approves Vectren’s Emissions Plan for SW Indiana Coal Plants
The Utility Regulatory Commission has approved a plan by Vectren Energy Delivery of Indiana to install new emissions controls on its plants in the southwestern part of the state. Vectren plans to spend $70 million to $90 million on the project and to defer recovery of the costs until 2020.
“With today’s ruling, we can avoid an immediate impact to our customers’ electric bills yet still fulfill our obligation to comply with these additional, federally imposed environmental requirements,” said Carl Chapman, Vectren’s chairman, president and CEO.
MoCo Wants Opening of Pepco Lands as Condition of Approving Exelon Deal
The Montgomery County Council urged the state Public Service Commission to require Pepco Holdings Inc. to provide recreational access to its transmission rights of way as a condition of approving the utility’s pending $6.8 billion acquisition by Exelon.
The council’s resolution, the latest in a series of conditions set by various groups on the merger, would force Pepco to allow hikers to access trails crossing the utility’s transmission easements. County Planning Chairman Casey Anderson said there are laws already in place to insulate utilities from liability for recreational use of their land. He said talks with Pepco officials in the past have not been productive.
“It’s frustrating that we have generally tried to be cooperative with Pepco in the past in giving them the access they need to provide utility service, but they are not seeming to be inclined to reciprocate by giving us access when we need it,” he said.
State Faces Barriers to Fulfilling Renewable Energy Potential
A weak renewable energy portfolio standard and a lack of incentive to adopt new technology is blocking the state from reaching its full renewable energy potential, according to a recent report by the Institute for Energy Innovation.
The report noted that state lawmakers declined to adopt a standard that would require utilities to get 25% of their electricity from renewables by 2025. The current goal is 10% by the end of this year.
Hundreds Attend PSC’s Rate Hike Hearing for Ameren Missouri
Hundreds turned out last week for a Public Service Commission meeting to debate Ameren Missouri’s 10% rate increase request, its sixth since 2007.
Ameren said it needs the increase to help it meet oncoming federal emissions standards. If approved, Ameren will have raised rates by 57% in seven years, according to the Fair Energy Rate Action Fund.
Loup Public Power District has approved the purchase of electricity from a new wind farm, its first wind energy purchase.
The 19,000-customer district currently obtains its electricity from nuclear, hydro and fossil sources. Last week, it added wind generation from Bluestem Energy Solutions. Bluestem’s wind farm, when completed, will have four turbines, each capable of generating 1.7 MW.
Although wind will provide only about 2% of the district’s needs, “it gives us a chance to show that we’re doing a little something for the environment in addition to the hydroelectric power,” Loup president Neal Suess said.
Bills Aimed at Pushing Offshore Wind Power Pass Senate Panel
The state Senate Environment and Energy Committee last week approved two bills that could break a Board of Public Utilities logjam over offshore wind farms.
One bill would require the BPU to approve any qualified wind energy project and relax the current requirement for projects to submit cost-benefit analyses. The second would urge the BPU to finalize regulations needed to implement the “Offshore Wind Economic Development Act,” enacted in 2010.
The BPU has repeatedly denied approval to a pilot project to build turbines near Atlantic City, saying it would be too costly for electricity customers.
State Official Puts Brakes on $2 Billion SunZia Tx Line
State Land Commissioner Aubrey Dunn put a 60-day suspension on construction of a $2 billion SunZia Southwest Transmission Project to allow her office time to review the transmission line, which would deliver electricity generated from renewable sources in New Mexico and Arizona to western markets.
“Eighty-nine miles — nearly 30% — of the proposed transmission line will cross state trust land,” Dunn said in a news release. “The suspension will allow our office time to ensure all necessary agreements are in place to protect state trust land and ensure state beneficiaries are receiving fair consideration by SunZia.”
The company said it will work with Dunn’s office to address any concerns.
New Subpoenas Come to Light in Fed Investigation of Duke Spill
A Federal grand jury is investigating last year’s coal ash spill from Duke Energy’s Dan River plant, apparently to determine if the discharge of 39,000 tons of coal ash involved any criminal violations.
A newly unveiled federal subpoena of the state Utilities Commission sought communications between the commission and “Duke Energy or its employees, agents or consultants” regarding engineering reviews of the Dan River ash ponds. Investigators also sought all communication between the commission and state environmental regulators about periodic ash inspections.
“An official criminal investigation of a suspected felony is being conducted by an agency of the United States and a federal grand jury,” Assistant U.S. Attorney Banumathi Rangarajan wrote in a cover letter accompanying the June 24 subpoena. The subpoena was disclosed as a result of a public records request by the News & Record.
The Public Service Commission approved projects totaling $2.7 billion in 2014, up from about $1 billion the year before. The projects included transmission lines, power generating stations and pipelines, the commission said.
Ohio Edison Area Gets $690 Million in Transmission, Distribution Improvements
FirstEnergy says it invested nearly $690 million in transmission and distribution improvements last year in Ohio Edison territory, allowing it to exceed reliability standards set by the Public Utilities Commission.
More than $581 million was spent on new transmission projects, the company said, including a new 100-mile, 345kV line from the Bruce Mansfield plant to northeast Ohio.
Gov. Corbett’s Energy Advisor Leaves for Gas Industry Job
Henderson
Patrick Henderson, former Gov. Tom Corbett’s energy executive, has become a lobbyist for the Marcellus Shale Coalition, an industry trade group.
Henderson confirmed that he will be the MSC’s next director of regulatory affairs. MSC President Dave Spigelmyer praised Henderson’s “deep understanding of energy-related regulatory and legislative issues.”
But Barry Kauffman of Common Cause PA said Henderson’s move to represent the industry “elevates cynicism about how government operates.” Sierra Club representative Joanne Kilgour was even more blunt: “We always suspected he was working for the interests of polluters rather than the people of Pennsylvania,” she said. “Now he just has the title to prove it.”
PSC Will Allow TransCanada to Argue to Use 2010 Permit for Keystone
The Public Service Commission ruled that it will allow TransCanada to try and convince the panel why a 2010 construction permit issued for the Keystone XL pipeline should still be valid.
The Yankton Sioux Tribe and the Rosebud Sioux Tribe, backed by other tribal and landowner organizations, wanted the commission to dismiss TransCanada’s application. Their central argument was that 30 changes identified by TransCanada require a new permitting process. The PSC, by a vote of 3-0, denied the tribes’ requests.
Lawmakers Debate Impact of EPA Emissions Plans on State
Wisconsin could spend as much as $13 billion to comply with new Environmental Protection Agency emissions mandates, according to Ellen Nowak, a member of the Public Service Commission.
Nowak, one of several speakers at a joint committee hearing in Madison last week, said the new emissions rules could hurt Wisconsin because of the state’s heavy reliance on coal-fired power plants. Others said they felt the mandates are being unfairly thrust on the state. “What we have here is an unfunded mandate from the federal government, the Obama administration,” state Sen. Rick Gudex (R-Fond du Lac) said.
But Keith Reopelle, of the environmental group Clean Wisconsin, was more upbeat. He said current renewable requirements, as well as energy efficiency programs, leave Wisconsin well positioned to meet the new rules.
The Federal Energy Regulatory Commission will have a vital role in implementing the Environmental Protection Agency’s proposed carbon emission rules but won’t take sides in ideological debates over the regulations, Chairman Cheryl LaFleur said last week.
“People both for and against the Clean Power Plan are looking to us to publicly validate their views,” LaFleur said during a National Press Club luncheon. “I’ve taken a pretty firm line that I don’t think that’s FERC’s role. FERC is not an environmental regulator. … But make no mistake, I think FERC will have an essential role to play as the Clean Power Plan and our response to climate change is implemented.”
LaFleur said state-by-state compliance with the regulations would be more complicated than a regional approach. Dispatching power based on a state’s portfolio needs, rather than the current least-cost model, would require FERC to change the way RTOs work to support the state plans, she said. “I think it’s going to be a lot more than tinkering around the edges.”
She called a regional approach “the obvious solution,” noting that the EPA gave “extra credit” for regional cooperation. LaFleur highlighted the success of the Regional Greenhouse Gas Initiative but said that FERC will still have to work with states and RTOs to come to agreements and compromises about goals, saying the commission needed to be “an honest broker for discussion.”
“This is the kind of hard, boring, unsexy, technical, dirt-under-the-fingernails work that FERC does,” she said. “… We work on the unsexy underbelly of every energy issue.”
Under pressure from the new Republican majority in Congress, FERC has scheduled four technical conferences in February and March on the reliability impact of the EPA regulations. LaFleur said more sessions will probably be added due to the number of stakeholders who have asked to speak. The first conference will be held Feb. 19 at FERC headquarters.
Asked whether she was disappointed Congress hadn’t passed new major energy legislation recently, she said she doesn’t worry about what those on the Hill are doing or not doing.
“I live by the rules they’ve given us,” she said. “If they pass new legislation, I’ll live by that.”
The Michigan Public Service Commission wants federal regulators to force MISO to turn over a study used to identify areas that require the operation of system support resources (SSR) in the state’s Upper Peninsula.
The load-shed study is “essential” to determining whether MISO’s analysis accurately identifies the local balancing authorities (LBA) that require the SSR units and — if not — how it should be modified to do so, the Michigan PSC said in a filing to the Federal Energy Regulatory Commission (ER14-2952).
In 2014, the Wisconsin Public Service Commission complained to FERC that Wisconsin ratepayers would pay a disproportionate share of SSR costs (ER14-2860, ER14-2862). FERC agreed, and MISO responded in September with revised rate schedules that shifted the costs of the Presque Isle, White Pine and Escanaba SSR units more heavily to Michigan.
Michigan regulators are protesting MISO’s allocation of SSR costs on the basis of the reduced LBA boundaries created by Wisconsin Electric Power Co. (WEPCo) as a result of Wisconsin’s challenge.
Michigan has argued that WEPCo’s LBA boundary changes “produce an unduly discriminatory and disproportionate allocation” of SSR costs.
As examples it cited Cloverland Electric Cooperative, whose SSR costs are estimated to rise by 800%, from $2.6 million to $21.9 million, and WEPCo’s load in the Michigan U.P., which the PSC says will increase by 1,000%, from $7 million to $70 million.
The Michigan PSC said it wants FERC to reject the use of WEPCo’s modified LBA boundaries to assign cost responsibility.
With the study data in hand, the PSC said, it could not only demonstrate the inaccuracy of MISO’s “optimal” load-shed study in identifying the load-serving entities that require SSR units, but also demonstrate the larger area of LSE loads that benefit from operation of the units at issue.
MISO’s Dec. 17 response to a FERC deficiency notice described the load-shed study as based on “optimal contingents” designed to “minimize” the volume of load identified as needing the SSR unit. “MISO admits that the impact area identified in the load-shed study ‘is not an all-inclusive identification of load that can reasonably be expected to benefit under every circumstance,’” the Michigan PSC wrote.
After reviewing the response, the PSC said it asked MISO for a copy of the unredacted load-shed study. MISO refused, the PSC said, saying it was only available to MISO staff and transmission owners.
“The Michigan PSC has reason to believe that the ‘optimal’ load-shed study does not accurately identify load that requires operation of the SSR units,” the PSC said. “For this reason, the Michigan PSC desires to conduct alternate studies that are designed to identify loads that require operation of the SSR units under more realistic conditions.”
Presque Isle Deal
Regardless of how the PSC’s request plays out at FERC, Michigan ratepayers may get some relief as a result of Upper Peninsula Power Co.’s agreement to purchase Wisconsin Energy’s Presque Isle generator. UPPCO said last month it would “step into” the existing rates but eliminate the SSR agreement, relieving U.P. ratepayers of its $97 million annual cost. (See Sale Would End SSR, Clear Way for WE-Integrys Deal.)
