Presque Isle power plant (Source: Wisconsin Energy)
Michigan officials and members of the state’s congressional delegation urged the Federal Energy Regulatory Commission last week to rethink its approach to replacing the retiring Presque Isle power plant, saying FERC is favoring expensive transmission over cheaper generation.
The officials are seeking new generation to replace Wisconsin Energy’s 430-MW coal-fired plant in Marquette, Mich., rather than a transmission expansion that could cost $600 million or more.
Invenergy Thermal Development is in discussions with Cliffs Natural Resources to build a combined heat and power cogeneration facility that would serve Cliffs’ mining complex in Marquette County and “substantially replace” Presque Isle’s output, Gov. Rick Snyder, Attorney General Bill Schuette and U.S. Reps. Fred Upton and Dan Benishek wrote in a six-page letter to FERC commissioners.
But the officials complained that a transmission alternative is being given a “procedural advantage” because of “jurisdictional lines that prevent holistic consideration of alternatives.”
“Under the federal rubric that has been set up, transmission solutions are the only solutions that MISO can require be funded, and generation solutions can only be considered once they are essentially guaranteed to come into service,” they wrote. “In short, the current structure’s only tool is a hammer, and it is trying to fix every situation with a nail. We believe that sometimes transmission is the appropriate investment. But sometimes it is not, and we need entities that have a full toolbox — both information and regulatory authority — ready to engage in the determination of what solution is the right one.”
The officials also complained that FERC “is repeatedly being asked to assume more of the responsibilities that have been carried out well by state commissioners for years.”
Failed Deal
Wisconsin Energy’s We Energies decided to retire Presque Isle rather than invest in environmental upgrades to keep the plant running.
Last November, Michigan utility Wolverine Power Cooperative struck a deal with We Energies in which Wolverine would spend $135 million on environmental upgrades in return for a one-third ownership stake in the plant.
Michigan officials said that the deal was attractive because it maintained reliability, provided for environmental improvement and would have been “vastly more affordable for ratepayers than any other solution.”
The deal fell apart after Cliffs Natural Resources agreed to buy power from Integrys Energy Services, a subsidiary of Integrys Energy, instead of We Energies. With no other offers available, We Energies decided it would close Presque Isle.
Wisconsin Energy’s proposed merger with Integrys requires the latter to divest its Energy Services unit.
After the merger, the Michigan leaders noted, Wisconsin Energy would own more than 60% of transmission operator American Transmission Co., “which would own and operate any transmission needed to offset [Presque Isle’s] retirement.”
“The new proposed combined company also stands to benefit significantly from the increased transmission that would be needed to be constructed as a result of the [Presque Isle] retirement without generation replacement.”
The Michigan leaders told the commission it should consider whether new transmission, new generation or a combination of both is the best solution for replacing Presque Isle.
“That is unfortunately not the course of action being pursued in the many dockets now before you, nor is it much evidenced in the decisions made to date by FERC, MISO and other federally regulated entities regarding this problem.
“Unfortunately, to date, it appears that all these entities’ processes are designed to favor one possible solution – running [Presque Isle] until a great deal of transmission can be built, and all at ratepayer expense.”
Fourteen coalitions representing more than 80 stakeholders submitted briefing papers to the PJM Board of Managers Tuesday on the RTO’s Capacity Performance proposal. Eight of the groups generally opposed the proposal while six were generally supportive.
Nine stakeholders have joined more than one coalition. (Click to zoom.)
The largest group, with 19 members, is the Transition Coalition, which focused its comments on the impact of the proposed changes on delivery years 2016/17 and 2017/18.
There are two groups representing load interests and seven representing generators, including ones for gas-fired units, hydropower and pumped storage, renewables and independent power producers.
Other coalitions formed around project finance interests, storage developers and companies specializing in energy efficiency and demand response.
Nine stakeholders joined both the Transition Coalition and an additional coalition, including Dominion’s Virginia Electric and Power, which claims membership in three groups.
The Board of Managers will decide on the final proposal submitted to the Federal Energy Regulatory Commission.
Below is a description of each coalition, the name of its spokesperson and a summary of its briefing paper, listed in order of the size of the coalition.
TRANSITION COALITION
Members: 19 members and groups, including the PJM Industrial Customer Coalition, and more than a dozen cooperatives and other load-serving entities (see chart)
Spokesperson: Michelle Gardner, NextEra Energy Power Marketing
The coalition said the proposal would impose $7.9 billion in additional costs to load for delivery years 2016/17 and 2017/18, providing a windfall to generators that cleared auctions for those years and already qualify as CP resources or have already taken steps to improve performance since the winter.
It said the proposal would violate FERC’s order on ISO-NE’s winter incentives, in which the commission said additional payments should not be made “to incent resources to make the same fuel procurement decisions they would have made, and been compensated for, absent the program.”
The coalition also said implementing all of the proposed changes in time for the 2015 Base Residual Auction was too rushed.
The group proposed spending $200 million to $600 million for winter-only improvements.
“PJM has not demonstrated that Capacity Performance would have a material impact on system operations during the Transition Delivery Years,” the group said. “PJM has not presented any evidence showing how paying more to resources that already have capacity obligations (many of which meet the Capacity Performance requirements) will translate into increased security in its control room.”
LOAD COALITION 2 (Load-Serving Entities)
Members: 11 members and groups, including the PJM Public Power Coalition and the Public Power Association of New Jersey
Spokesperson: Carl Johnson, PJM Public Power Coalition
The coalition said that PJM has made good progress on most of the reliability problems from last winter without the need for a market overhaul and that it shouldn’t seek such broad changes in such a short time frame.
The big problem, the challenge of gas-electric coordination, is being addressed by FERC, the coalition said. Thus PJM should await commission action before directing generators to make significant investments.
The coalition urged PJM to continue discussion through 2015, rather than rush a potentially flawed product that may have unintended consequences. It also said that while there would never be a consensus among all PJM stakeholders, more time would allow members “to resolve what we can and enable [FERC] to focus on resolving our differences.”
RENEWABLE COALITION
Members: American Wind Energy Association, Citizens for Pennsylvania’s Future, Community Energy, E.ON Climate & Renewables, EDP Renewables, Everpower Commercial Services, Iberdrola Renewables, Infigen Asset Management, Rock Island Clean Line, SunEdison, Union of Concerned Scientists
Spokesperson: Ryan Leonard, Iberdrola
The Renewable Coalition criticized PJM for overreacting to last winter and warned that the proposal will have unintended consequences for renewable resources. It said that billions were invested in wind and solar resources with the expectation that they would return capacity revenues based on performance during a fixed and known time period, as opposed to being available year-round. It urged PJM to protect renewable capacity that had already cleared in this year’s BRA.
The coalition also said that PJM should take more time to discuss and work on the proposal given the EPA’s proposed carbon emission rules will likely increase the need for more renewable resources.
CONSUMER COALITION (Load Coalition 1)
Members: PJM Industrial Customer Coalition, the Delaware Public Service Commission and public advocates for Delaware, D.C., Illinois, Indiana, Kentucky, Maryland, New Jersey, Ohio, Pennsylvania and West Virginia
Spokesperson: Susan Bruce, PJM Industrial Customer Coalition
The group called the proposal “a far-reaching overhaul of the PJM capacity construct that is far too costly and not justified in its current form.”
“The Consumer Coalition believes the abrupt overhaul contemplated by the CP Updated Proposal, as currently constructed, will adversely affect consumers by sharply increasing the cost of capacity with questionable additional reliability benefits and further restricting demand-side participation. PJM staff has failed to show that such drastic changes are warranted or, if warranted, that these changes are the correct changes. Adding to the Consumer Coalition’s concerns is the extremely short timeframe that has greatly limited the opportunity for stakeholder review.”
GAS GENERATORS COALITION
Members: Competitive Power Ventures, Dynegy, Essential Power, Invenergy, Moxie Energy, Northampton Generating Station, Panda Power Funds, Rockland Capital, Tenaska, Veolia Energy
Spokesperson: M.Q. Riding, Essential Power
The Gas Unit Owner’s Coalition generally praised the changes PJM made in its revised proposal. The coalition supports a number of changes included in the proposal, such as the elimination of the Short-Term Resource Procurement Target and “a reasonable and proactive transition for DR out of PJM’s supply mix.”
The coalition also supported PJM’s idea that clearing prices reflect long-run marginal costs. But it urged PJM to include language in the proposal that “unequivocally states that offers reflective of long-run marginal costs are permissible and not the subject of enforcement investigations.”
The coalition criticized PJM’s penalty structure for generators whose RPM prices fail to mirror long-run marginal costs. It proposed that PJM set the maximum penalty at 150% of the CP product clearing price and eliminate the shortage hours pricing penalty. “This construct is optimal because supply would be subject to a single penalty rate that is not dependent on scarcity events, while also recognizing that risk should be tangibly linked to revenue opportunity,” the coalition said.
The coalition also criticized PJM’s definition of outside management control events as too restrictive.
ADVANCED ENERGY MANAGEMENT ALLIANCE
Members: AEMA, Clear Choice Energy, EnergyConnect, EnerNOC, Enerwise, MidAtlantic Power Partners, Opower, Texas Retail Energy
Spokesperson: Bruce Campbell, EnergyConnect
The AEMA Coalition said the proposal would effectively eliminate demand response from the market. It called on PJM to remove new non-performance penalties on DR, noting the recent changes on the resource.
“It is manifestly unjust and unreasonable to move the goal posts yet again to now categorically exclude customers that have proven reliable and made investments to support PJM system reliability,” it said. It proposed increasing the limit on the amount of Base Capacity DR permitted, saying that the proposal adds “what effectively amounts to an anticompetitive cap on DR.”
The coalition also questioned the timing of the proposal. It said PJM should wait until directed by FERC to respond to the uncertainty resulting from the EPSA decision and FirstEnergy’s complaint over DR participation in wholesale markets (EL14-55).
The coalition also said that the proposal would eliminate renewables from the market, as coal, natural gas and nuclear are the only resources that would be able to meet the proposal’s standards for year-round, 24/7 dispatch. Instead, the coalition suggested focusing market changes on resources that failed to perform during the polar vortex.
ENERGY EFFICIENCY COALITION
Members: EMC Development, Encentiv Energy, EnergyConnect, greeNEWit, Juice Technologies, Keystone Energy Efficiency Alliance, Piedmont Environmental Council, Union of Concerned Scientists
Spokesperson: Tom Rutigliano, EMC Development
The Energy Efficiency Coalition’s main complaint with the proposal is that energy efficiency resources, normally handled by electric distribution companies, would be limited to participating in the reliability pricing model auctions through LSEs.
Because PJM’s measurement and verification process is so complicated and technical, requiring each LSE to administer its own EE program would increase costs and deter LSEs from making the investments needed, the coalition predicted. The group said this raises “the classic problem of why LSEs should pay their customers to use less of their product.”
The coalition said PJM is needlessly linking EE to the EPSA ruling when it only concerned DR.
Finally, the coalition also criticized the Enhanced Liaison Committee process PJM is using to redesign the capacity market. The coalition said that EE is too detail-oriented and technical to be handled by anything but a deliberative rulemaking process by stakeholders before it goes before the Board of Managers.
ENERGY STORAGE COALITION
Members: AES, Demansys, Energy Storage Association, Piedmont Environmental Council, RES Americas, S&C Electric, Union of Concerned Scientists, Viridity Energy
Spokesperson: Tom Rutigliano, Demansys
The Energy Storage Coalition broadly agreed with PJM’s treatment of energy storage in the proposal, but it said it wanted PJM to provide more details and better define storage’s requirements for participating in the market.
The coalition urged PJM to begin a stakeholder process for developing cost-based offer rules for storage, specifically ones that allow for variable intraday costs. It also said that PJM should treat storage’s physical limitations, such as start-up time, similar to how it treats other resources.
CENTRAL SUPPLIERS COALITION (Generation Coalition 2)
This coalition represents capacity mostly located in PJM’s Rest of Market zone. These companies contend that suppliers in the zone have not been adequately compensated since PJM put its RPM in place.
It asked PJM to add a multi-year pricing mechanism and to change the penalty structure to one based on market revenue rather than net cost of new entry. Without these revisions, the companies said they will oppose the proposal.
GENERATION COALITION 1
Members: NRG, Dynegy, Topaz Power Marketing, Northampton Generating Station, Invenergy
Spokesperson: Neal Fitch, NRG
The coalition generally supports PJM’s Capacity Performance product and was pleased by the RTO’s revisions. However, the companies are concerned about the long-term costs associated with the infrastructure needed to meet PJM’s standards. These investments include operational and equipment improvements for cold-weather performance and increases in on-site fuel storage. The companies said these can only be justified if PJM, and FERC, approve a pricing scheme “that allows generators to fully reflect their long-run operational, maintenance, investment and risk costs into their bids.”
The companies are also concerned about the risk of non-performance penalties.
HYDRO-PUMPED STORAGE COALITION
Members: American Electric Power, American Municipal Power, Virginia Electric and Power, Brookfield Energy Marketing, Olympus Power
Spokesperson: Dennis O’Donnell, Olympus Power
The group says proposed changes to the calculation of unforced capacity (UCAP) threatens the viability of hydro resources, which it said were not contributors to the capacity shortage experienced last winter. “Unlike gas generators that were not able to generate any energy, hydro generators did generate as expected. In some cases hydro generators exceeded expectations,” the coalition said.
It requested that PJM retain certain OMC codes that the RTO is discontinuing in the proposal and revise them to be hydro-specific. For example, the code for “Flood” would be revised to mean “high water conditions,” while “Other miscellaneous external problems” would be changed to “Debris.” OMCs are excluded when PJM calculates a unit’s UCAP.
The coalition said PJM should cap the penalty exposure for pumped storage at 10 hours in order to fully value these resources.
“Given PJM’s load profile, the value of flexibility over 10 hours greatly exceeds the value provided by extending operation past 10 hours at a lower, fixed capacity level (i.e., running in a manner similar to less flexible resources) … While PJM has stated that they would try to limit pumped storage runs to 10 hours, they make no promises and have stated that if PJM wants pumped storage longer than 10 hours, the penalty exposure extends to whatever that duration happens to be. This uncertainty is both inconsistent with optimal use of pumped storage and creates a lack of clarity that will cause unnecessary derating of pumped storage facilities due to penalty risk.”
The group also asked PJM to revise its Tariff to allow LSEs to use pumped storage for peak shaving and reducing the LSE’s capacity obligation. “An LSE willing to take peak shaving performance risk with its pumped storage resource should not be constrained to just the capacity market as the vehicle to derive value from the pumped storage resource.”
PROJECT FINANCE COALITION
Members: Competitive Power Ventures, Moxie Energy, Panda Power Funds
Spokesperson: Nate Rushing, CPV
The Project Finance Coalition mostly supports the proposal, but it expressed concern that generators would be forced to pay unreasonably high penalties in a short amount of time. It suggested that instead of paying penalties, non-performing resources should be required to simply forfeit capacity revenue. Additionally, the coalition feels the “stop-loss” provision in the revised proposal, which caps the amount a non-performing resources can be penalized, does not go far enough.
“These penalties could easily cause a default under lending agreements and jeopardize the project’s continued viability to operate, having adverse impacts not just on the project but on PJM’s reliance on that project to operate to meet PJM’s needs,” the coalition said. It proposed an alternative stop-loss cap and echoed other coalitions’ calls for penalties to be tied to revenue and not net CONE.
IPP COALITION
Members: LS Power, Homer City Generation, Tenaska Power
Spokesperson: Tom Hoatson, LS Power
The IPP Coalition generally supports the revised proposal. The coalition also supports PJM’s efforts to introduce the product as soon as possible to prevent a recurrence of last winter.
However, the coalition cautioned against implementing the proposal before the RTO fixes the mechanisms that will transition its members into the new market structure. The coalition said that the proposal fails to take into account the investment and improvement costs that have already been incurred in response to last winter for the transitional delivery year. “As a result, the proposed transition mechanisms will result in the procurement of excess capacity at a higher cost to consumers,” the coalition said.
Similar to other generation coalitions, the IPP Coalition wants it made clear that companies will be able to recover their investments.
GENERATION COALITION 3
Members: Calpine, Exelon, PSEG
Spokesperson: Jason Barker, Exelon
The coalition also broadly supports the proposal. The companies want PJM to make sure that the penalties in the proposal are adequate enough to incentivize investment in cold-weather improvements. They expressed support for a proposal that PJM initially put forth in an Aug. 20: the RTO would institute a requirement that CP resources be able to perform 16 hours per day for three consecutive days under extreme weather conditions. This would ensure only reliable generators offer a CP product.
This coalition supports the penalty based on net CONE, but it also suggested that generators be penalized further when they knowingly fail to make investments in firm-fuel supply or capital improvements.
FINANCIAL INSTITUTIONS COALITION
Members: Morgan Stanley, BTG Pactual Commodities, J. Aron.
Spokesperson: Harry Singh, J. Aron.
No briefing paper was submitted by this group.
Next Steps
On Nov. 4, the coalitions will make oral presentations to the PJM board at an “Enhanced” Liaison Committee meeting at the Cira Centre in Philadelphia. The meeting will be teleconferenced for PJM members and state commission and FERC representatives, but no members of the public or the media will be permitted and none of those who attends is permitted to talk about what transpired.
David Owens, left, of the Edison Electric Institute and Ralph Cavanagh of the Natural Resources Defense Council.
WASHINGTON — Nowhere is the issue of rooftop solar subsidies more acute than in Hawaii, where state and federal tax credits and net metering means that about 85% of the cost of rooftop solar is subsidized. “Which is why we have five times the [solar] penetration of any place in the nation,” Richard M Rosenblum, recently retired CEO of Hawaii Electric, told PJM’s Grid 20/20 conference last week.
About 12% of the utility’s customers have rooftop solar, and one-third of distribution circuits run “backwards” at least some of hours of the year, Rosenblum said. By 2030, the company expects 30% of customers to be generating solar power, “and virtually every one of our circuits will run backwards.”
“The problem, of course, is that it distorts the market and brings on resources that are not truly cost-effective for all consumers and leads to massive shifting of costs from one set of customers to another set of customers.”
Rate Design
Evolving the system in a way that is fair will require real-time pricing and fair compensation for net-metered solar generators, David Owens, executive vice president of the Edison Electric Institute (EEI), told the conference. Basing solar compensation on the cost of carbon (a price above the current cost of power), as some solar tariffs propose, is “totally absurd,” he said, and results in a “false and distorted price signal.”
Ralph Cavanagh, co-director of the Natural Resources Defense Council’s energy program, opposes an “all-you-can-eat approach” in which a high fixed charge reduces incentives for saving energy.
Instead, he favors a “minimum bill” approach in which customers pay based on consumption — after satisfying a minimum to cover fixed costs. “The difference between [the minimum bill] and a high fixed charge is that once you get above that very small threshold of consumption, you’re back paying based on how much you use again and the rewards for saving energy are unaffected,” he said in a lunchtime discussion with Owens.
David Kolata, executive director of the Illinois Citizens Utility Board, said solar power has been unfairly targeted for criticism over cost-shifting.
“It is a little bit revealing that this sort of reverse Robin Hood perspective focuses solely on solar and not on general rate design,” he said. “In Illinois right now, our rate design — because of the way we cover capacity costs — has the exact reverse effect and we don’t hear about that. I’m not saying there’s not an issue, but I do think it’s unfairly picking on solar and unfairly overlooking a lot of the value it provides.”
3M is offering discounts of 30 to 35% for employees who want to install solar panels on their homes. The Solar Community Initiative will also provide help with planning and installation, the company said.
“Renewable energy is an interest to employees, we know, and we want to increase our engagement with employees around sustainability in general,” said 3M’s global sustainability advisor, Keith Miller, who helped develop the program for the company’s more than 35,000 North American employees.
3M joins two other North American companies offering similar programs: Cisco of San Jose, Calif., and Kimberly-Clark of Irving, Texas.
Construction Starts on 1,000-MW Combined-Cycle Plant in Md.
Construction has started on a 1,000-MW combined-cycle power plant at the site of an existing Old Dominion Electric Cooperative plant in northeastern Maryland.
The natural gas-fired Wildcat Point Generation Facility will be adjacent to ODEC’s 672-MW Rock Springs Generation Facility near Rising Sun. The $675 million Wildcat Point facility received Maryland regulatory approval in May. It is expected to go into operation in 2017.
Utilities Serving Pot Growers: Don’t Ask, Don’t Tell
Indoor marijuana growers expanding to meet the now-legal recreational pot market in Washington state are cranking up the lights and heaters, and utility companies are trying to plan for increased load growth. But marijuana is still an illegal drug by federal standards, and utilities are wary of working directly with growers.
“There are definitely some concerns,” said Bryan Jungers, a research analyst. But he said utilities don’t want to ask too many questions. “They’re still supplying the power, but it’s sort of a ‘don’t ask, don’t tell’ approach.”
A study by the Northwest Power and Conservation Council estimates marijuana operations could increase demand for power in Washington by 60 MW, to 160 MW over the next 20 years. It said regional demand from growers could climb to 250 MW by 2035.
GM to Build 2.2-MW Solar Facility Atop Ohio’s Lordstown Plant
General Motors is building a 2.2-MW rooftop solar facility at its Lordstown assembly plant, the largest photovoltaic system in the company’s U.S. inventory.
The project will install 8,500 solar panels on the roof, part of GM’s plan to roll out 125 MW of worldwide solar production by 2015. It has an 11.87-MW solar facility at a plant in Spain and a 1.8-MW solar array on the roof of its Toledo Transmission plant.
“GM has made a commitment in terms of increasing our use of renewable energy by 2020,” said Sharon Basel, communications manager of GM Energy, Environment and Sustainability. Solar “reduces the impact on the environment and provides a reduction in carbon emissions and lessens the impact on the climate change.”
The Lordstown project is scheduled to be completed by the end of this year.
Delmarva Issues RFPs for 465 MW for Standard Offer
Delmarva Power & Light, which no longer owns any generation, is looking for up to 465 MW of power supply to meet its Standard Officer Service obligations in Delaware.
Delmarva, a subsidiary of Pepco Holdings Inc., is seeking peak load contributions by customer class, including 275 MW for combined residential, small commercial and industrial customers, 145 MW for medium general service-secondary customers, 20 MW for large general service-secondary and 25 MW for general service-primary customers.
The first round of bidding is to begin Dec. 1, and the final round should conclude in early February of next year. Winning bidders start supplying electricity on June 1.
Michigan’s Lower Peninsula Getting New Power Plant
Wolverine Power Cooperative said it plans to build a $100 million natural gas-fired power plant in Michigan’s northern Lower Peninsula.
The site, near the town of Gaylord, was chosen because of the proximity of natural gas pipelines and transmission lines. It said it will soon apply for necessary state and local permits, and plans to get the plant online by 2016.
The co-op said the plant will complement Wolverine’s other generating facilities in the region and help preserve reliability of the regional power grid. Wolverine supplies wholesale power to six Michigan electric cooperatives.
Southern Company Acquires 150-MW Solar Plant In Calif.
Southern Power, a subsidiary of Southern Co., will boost its solar fleet to 338 MW with the acquisition of the Solar Gen 2 plant in California from First Solar.
Solar Gen 2 is comprised of three, 50-MW systems on 1,450 acres in Imperial County. Construction began in 2013. First Solar is building it and will operate it for Southern. San Diego Gas & Electric has agreed to buy its power for 25 years.
Duke Energy Establishes $20M Energy Assistance Plan in NC
Duke Energy’s two North Carolina utilities have launched a $20 million energy assistance fund for low-income residents. The company said up to 4,000 households could qualify.
The fund, established as a result of a 2013 Duke Energy Progress and Duke Energy Carolinas rate case, will provide up to $10,000 for individual energy-efficiency upgrades. The Helping Home Fund will pay for energy assessments, heating and cooling replacements, appliance replacements and weatherization upgrades. The N.C. Community Action Association, which is administering the program, will begin distributing the funds in January.
Duke has agreed to pay for the programs out of corporate funds rather than ratepayer money.
Constellation Energy to Build Solar Farm on Eastern Shore
Constellation Energy Resources is building a 4.3-MW solar project that includes a 25-year supply agreement with the National Aquarium in Baltimore.
The project, to be built on 22 acres near Cambridge, Md., is expected to supply 40% of the aquarium’s energy needs. Constellation will supply the other 60% through wholesale power purchases. The aquarium will get solar renewable energy credits.
Constellation, a subsidiary of Exelon, said the solar farm will offset about 4,409 tons of carbon dioxide emissions each year. The project is expected to be completed in March.
Judge Rules Against Ameren in Missouri Tx Line Dispute
A Missouri judge says he will reject Ameren Transmission’s request to build a transmission line across northeast Missouri without a certificate from the Missouri Public Service Commission.
Ameren said it doesn’t need the commission’s approval because it isn’t regulated by the commission. Landowners have intervened to try to block construction of the line.
Cole County Circuit Court Judge Dan Green noted that the PSC hasn’t taken action yet, and so he said he would refrain from making a “hypothetical advisory opinion.” The 100-mile line is part of a longer, 480-mile line to run from Ottumwa, Iowa, to western Indiana.
A group of 12 large commercial American Electric Power customers is urging the Public Utilities Commission of Ohio to refuse the utility’s request for guaranteed prices for some of its power plants. The large customers said AEP’s proposal is “unfair to shopping customers and harmful to competitive markets.”
AEP, along with FirstEnergy, has asked PUCO to allow it to enter into power-purchase agreements with some of its plants. It says the price guarantees are necessary to keep the plants profitable and running, and therefore are in the public interest.
But Compete Coalition, which includes companies such as Staples, Macy’s, Lowe’s Home Improvement and Boston Market, said the utility’s proposal would amount to an unfair tax and will “deny Ohio businesses the right to purchase electricity at the lowest possible price.”
FirstEnergy Dropping Customers, but Charging them if they Drop First
FirstEnergy Solutions is dropping its retail residential customers in Pennsylvania as the company reevaluates is participation in the retail market.
But the FE subsidiary, in letters mandated by the Pennsylvania Public Utility Commission, also reminded customers that they may face an early termination fee if they choose to leave FirstEnergy before their contract terms expire. The fees are as much as $295.
“Please note that if you cancel your existing contract with us before your December meter read date, you may incur a … termination fee,” say the letters sent to residential customers. “You can avoid this fee by remaining a valued FirstEnergy Solutions customer until the end of your agreement.” Many of those agreements expire at the end of the year.
Donald Gaston, fossil generation director of Public Service Enterprise Group, is leaving to run Prairie State Generating Company.
Gaston, who has worked in the generation industry for more than 30 years, will become CEO of Prairie State, which operates a two-year-old, 1,600-MW coal plant and adjacent coal mine. Prairie State has been through several CEOs since May. The plant has been plagued by construction delays, cost overruns and the defection of power purchasers trying to escape contracts.
The hedge fund twins accused of gaming up-to-congestion trades in PJM abruptly ended their public relations campaign against the Federal Energy Regulatory Commission last week, announcing they had taken down their website and would no longer talk to the media or at industry conferences.
Despite their earlier vow not to settle with FERC over the allegations, the move by Rich and Kevin Gates suggests that — after spending more than $1.5 million on lawyers and consultants fighting the investigation — they may be seeking to end hostilities.
Reached by phone Friday, Kevin Gates and Larry D. Gasteiger, acting director of FERC’s Office of Enforcement, both declined to comment.
Going on Offense
In March, after being the subject of a FERC investigation for more than three years without being charged, the brothers had decided to go on offense by launching a website on which they posted correspondence with FERC and opinions from energy experts that they said proved they were being unfairly hounded. The dispute became a case study for critics, including some former FERC officials, who say the agency has sought to punish legitimate, if opportunistic, trading.
The brothers hounded now-Commissioner Norman Bay, FERC’s former enforcement chief, through his Senate confirmation, spoke at industry conferences and won support from The Wall Street Journal editorial board.
In August, the day after Bay was sworn in as commissioner, FERC staff issued a notice of alleged violations accusing the brothers and their partners in the Powhatan Energy Fund of engaging in “manipulative” up-to-congestion trades in PJM in 2010. (See PJM UTC Case Likely Headed to Court After FERC Notice.)
FERC alleged that the brothers’ investment funds placed “millions of megawatt-hours of offsetting trades between the same two trading points, in the same volumes and the same hours” to capture line-loss refunds without facing any risk from the underlying trades.
Although FERC’s confidential preliminary findings challenged $4.7 million in profits the investors made between February and August 2010, the notice cited only trades made after June 1.
The Gates brothers said their trades were legal until the loophole they exploited was closed later in 2010. They vowed to fight the allegations and said they had rejected a previous settlement offer from FERC.
With the facts not in dispute, the case would have turned on legal interpretations: Were Gates’ trades riskless, and thus improper, “wash” trades, as FERC contends, or permissible “spread” trades? Did FERC provide proper notice that seeking profits through the line-loss rebates alone was improper? And if FERC thought it had a strong case, why did it wait nearly four years to bring it?
If there is no settlement, the next major step would likely be a commission vote on whether to issue an order to show cause. (On Oct. 6, the Gates brothers filed a motion seeking to force Bay to recuse himself from the case.)
William M. McSwain, attorney for the brothers, told RTO Insider in August that if the commission decided to proceed, the case would end up in a U.S. District Court where he said the merits would be reviewed by a “neutral decision maker.”
Based on last week’s disarmament, however, it appears the brothers may never get their day in court.
One company that engaged in similar trades, Oceanside Power, agreed to settle the charges against it by disgorging profits of $29,563 and paying a fine of $51,000 (IN10-5).
FERC staff also filed a notice of alleged violations in August against City Power Marketing and its principal, K. Stephen Tsingas, for a similar trading scheme. Tsingas and his attorney have declined to comment.
Allison M. Macfarlane, chairman of the Nuclear Regulatory Commission, is leaving at the end of the year to become director of the Center for International Science and Technology Policy at George Washington University.
Observers credit Macfarlane with bringing peace to the five-member commission, which was embroiled in controversy under the previous chairman, Gregory B. Jaczko. Macfarlane helped push for safety improvements at U.S. nuclear plants following the 2011 Fukushima disaster in Japan. But she lost a battle to expedite transfer of used fuel rods from on-site cooling ponds to dry cask storage.
“I came to the commission with the mission of righting the ship after a tumultuous period and ensuring that the agency implemented lessons learned from the tragic accident at Fukushima Daiichi, so that the American people can be confident that such an accident will never take place here.”
Before becoming NRC chair in 2012, Macfarlane was a professor at George Mason University. “I accomplished what I wanted to do at the NRC and I really miss academia,” she said. There is no word on her replacement yet.
DOE Eyeing New Conservation Standards for Water Heaters, Lamps
The Department of Energy said it is developing updated energy-efficiency standards for water heaters and fluorescent lamps.
The department is examining the standards for fluorescent ballasts, as well as new energy conservation standards for solar-thermal water heating systems, commercial water heaters, hot water supply boilers and hot water storage tanks.
MOX Recycling Plant Asks NRC for 10-Year Extension
The contractor working on a project to recycle Russian nuclear warheads into reactor fuel at the federal Savannah River site has asked for another 10 years to get up and running, the Nuclear Regulatory Commission said.
Shaw AREVA MOX Services said the South Carolina facility is about 60% complete, but the company said it still needs to construct several buildings and safety systems. The plant was started in 2007, part of a plan to repurpose weapons grade plutonium into nuclear reactor fuel in a process called mixed-oxide fuel, or MOX.
The facility was supposed to have been completed by 2015. The company blamed budgetary constraints, vendor shortages and difficulty finding qualified construction workers for the delays. Cost overruns are already into the billions of dollars. President Obama placed the project in “cold standby” earlier this year, but it was rescued by Senate and House committees that found millions of dollars to keep it going.
Limerick Security Problem Results in Closer NRC Oversight
The Nuclear Regulatory Commission said it will perform an inspection of Exelon’s Limerick Generating Station to “ensure Exelon fully understands the root causes … and has implemented long-term corrective actions” following an unspecified security issue.
The security issue occurred between June 16 and June 20, but no details were given. The NRC doesn’t provide specifics of security problems at plants, a change that occurred after the 9/11 attacks. Plant spokeswoman Dana Melia said the problem has been corrected.
“Due to security precautions, we are unable to provide additional details, but Limerick stakeholders should know that at no time was the security of the facility, our workers or local residents compromised,” she wrote. “Our comprehensive corrective action program ensures that we identify and correct issues, including those of low safety significance.”
The announcement came just three days after the commission granted the two Limerick units 20-year license extensions, allowing operations until June 2049.
DOE Says URS, Bechtel Refuse to Turn Over Hanford Documents
Department of Energy Inspector General Gregory Friedman says two contractors at the center of a whistleblower dispute concerning the Hanford site cleanup are refusing to turn over more than 4,500 documents that investigators requested.
Friedman said in a memo to Energy Secretary Ernest Moniz that Bechtel National and URS Energy Construction have withheld documents that his office sought to determine whether URS employee Donna Busche was terminated in retaliation for disclosing problems with a plan to treat radioactive waste at the Washington state site.
“[W]e did not have access to the full inventory of documents, which we felt were necessary to conduct our review,” Friedman wrote. “Thus, we were unable to complete our inquiry and accordingly disclaim any opinion regarding the circumstances of Ms. Busche’s termination.”
Bechtel said that it had gone “above and beyond in cooperating with the … investigation” and blamed its subcontractor, URS, for the firing decision. URS said the employee’s claim of wrongful termination is “without merit.”
Moniz Announces $53 Million in Solar Research Funding
Energy Secretary Ernest Moniz announced more than $53 million in grants for research aimed at driving down the cost of solar energy.
Moniz, speaking at the Solar Power International 2014 conference in Las Vegas, said the projects are investigating next generation photovoltaic cells, new manufacturing processes and the “soft” costs of solar installation.
“The projects announced today will help the U.S. solar energy industry continue to grow, ensuring America can capitalize on its vast renewable energy sources, cut carbon pollution and continue to lead the world in clean energy innovation,” Moniz said.
The Federal Energy Regulatory Commission published its final environmental review of the Constitution Pipeline, a 124-mile line connecting the Marcellus Shale natural gas region in northeastern Pennsylvania to New York. The action is a key step toward the commission’s decision on the project, which is expected as early as November.
“FERC’s Final Environmental Impact Statement confirms that the Constitution Pipeline can be constructed in a manner that minimizes environmental impacts, while adding a key piece of natural gas infrastructure to the U.S. Northeast,” the project sponsors, Constitution Pipeline and Leatherstocking Gas, said in a joint statement. The pipeline will allow interconnection with two other major gas pipelines, the Iroquois and Tennessee pipelines.
The pipeline’s builders say it could deliver natural gas to New York and New England for the winter 2015-2016 season.
ALBANY — Chastened by January’s price spikes, New York’s electric utilities are hedging 70% of their natural gas purchases this winter, up from 55% last year.
Last year, about 35% of gas was bought on the spot market; this year, utilities intend to cut that down to 20%. The change is intended to insulate the companies from price volatility as natural gas demand for home heating and power generation continues to rise.
“Utilities are better prepared and have modified their portfolios,” said Raj Addepalli, the New York Public Service Commission director of the Office of Electric, Gas and Water, during a briefing at last week’s commission meeting.
After the havoc wrought by last winter’s polar vortex, New York officials say they are ready for severe weather that may come.
New York set a winter peak of 25,738 MW last year, breaking a record set a decade before. The PSC is reporting a capacity margin of 10,400 MW for this winter.
Last year’s cold weather caused electricity prices to rise to unprecedented levels in New York.
Average prices for customers receiving default service or on variable rate contracts with competitive suppliers jumped by an average of almost 12 cents per kWh from December 2013 to January 2014, a 175% increase. Gas prices have stabilized as new production from the Marcellus Shale in Pennsylvania and Utica Shale in Ohio has reached eastern markets. Price projections are 21% to 27% lower than last winter’s forecasts.
That could change some of the fuel mix in New York. Dual-fuel capable power plants frequently switched to oil last winter as natural gas prices jumped above oil 18 times in January.
PSC staff said the Department of Environmental Conservation has promised faster response to requests for fuel waivers needed to switch from natural gas to the more polluting oil. The department took longer to grant waivers than generators and power market officials would have liked last winter, according to PSC officials.
The PSC said it is looking at neighboring regions for long-term policy refinements. “The incentives in place may not be enough” to ensure reliability, Addepalli said, mentioning New England’s pay-for-performance program as a possible model.
ALBANY — The New York Public Service Commission Thursday reiterated its approval of NRG Energy’s request to convert the Dunkirk coal-fired generator to natural gas.
The commission unanimously rejected a rehearing request by the Sierra Club and a community group, which contended the state’s environmental review was deficient and that ratepayers would be unfairly subsidizing the plant’s owner (12-E-0577).
The Sierra Club and the community group also filed suit in the state Supreme Court last month to block the $140 million conversion. The PSC approved the repowering in June.
Just one of the four coal units at the 635-MW plant is currently in use. NRG plans to convert three of the units to natural gas, to bring its total generating capacity to 475 MW.
State and NYISO officials say Dunkirk, 47 miles southeast of Buffalo, is needed to maintain the reliability of the transmission system in western New York.
Wisconsin’s 18 MW of solar power represents only one-tenth of 1% of the state’s installed generation capacity. But the state’s utilities are joining those in sunnier climes in treating distributed solar as an existential threat.
Milwaukee-based We Energies is among three utilities facing pushback over proposals to increase fixed costs and reduce how much the company pays customers for their own solar generation fed back to the grid.
Madison Gas & Electric this summer asked the state Public Service Commission to more than double its fixed charge from $10.44 a month to nearly $22 for a typical residential customer. After an earful from consumer and environmental groups, MG&E lowered its request to $19 a month, an 82% increase.
In Green Bay, Wisconsin Public Service also proposed more than doubling its fixed charge, to $25 a month from $10.40.
We Energies has proposed increasing monthly fixed charges by more than 75%, to $16 a month from $9. It also proposed a new “capacity demand” charge and restrictions on solar energy financing options. (Docket #5-UR-107)
Environmental group Renew Wisconsin said the capacity charge would offset nearly 30% of a customer’s savings from solar. It also complains that the utility would pay those who generate their own solar just 4.2 cents for each extra kilowatt-hour of electricity they create, while reselling the electricity to other customers for as much as 28 cents during peak summer hours.
The utilities argue they need more revenue to cover their fixed costs as customers improve energy efficiency and generate more of their own power.
NRDC-EEI Agree on Decoupling
At least some renewable advocates, such as the Natural Resources Defense Council, agree with the idea of “decoupling” revenue from consumption. In February, the NRDC and the Edison Electric Institute, lobbying arm of the nation’s investor-owned utilities, issued a joint statement urging state regulators to adopt new rate designs to protect utilities’ finances when they accommodate distributed generation and prevent cost shifts. (See related story, Postcards from the Future.)
Agreeing on the details of those new rate designs has proven far more difficult.
About half the states have decoupled revenue from consumption, often after “ferocious” fights, says Ralph Cavanagh, co-director of NRDC’s energy program.
The battle was on display at a public hearing in Milwaukee earlier this month on We Energies’ proposal. More than 200 people attended the session, at which both the utility’s supporters and opponents claimed to be protecting the poor.
We Energies says that only 25% of its fixed costs are covered by the “facilities” charge on customers’ bills. The increased fixed charges, it says, would eliminate the cost shift that has low-income consumers subsidizing wealthier homeowners’ rooftop solar panels.
Opponents say the proposed increase in fixed charges is too high. Because low-income consumers generally use less electricity, they say, the proposed change is regressive. The Chicago-based Environmental Law & Policy Center says the Wisconsin utilities would have by far the highest fixed costs in the Midwest if the proposed increases are approved. (See chart.)
Opponents also contend the change would discourage rooftop solar and cripple the state’s budding solar industry. The Environmental Law & Policy Center says there are more than 12,000 Wisconsin jobs tied to about 300 solar and wind power supply chain businesses.
Brad Klein, senior attorney at the center, said utilities are attempting “to support and protect an outdated business model.”
In an Oct. 10 editorial, the MilwaukeeJournal Sentinel recommended a smaller increase, noting that less than 700 of the company’s 1.1 million customers have distributed generation systems. The shortfall from subsidizing those customers is $116,000, a rounding error compared to We Energies’ $4.52 billion in revenue.
“The harm that’s being caused by the unfairness in the current system is too small right now to warrant the changes in the proposal by the utility (and similar proposals by two other utilities),” the paper wrote. “Some increase in the monthly charge for fixed costs makes sense, but that increase should be more modest than the proposed increase.”
Solar’s Growth
While solar is barely a blip in Wisconsin, the number of installations nationwide have soared by 1,600% since 2006, according to the Solar Industry Association. Distributed residential installations increased 61% in 2012, most of them leased from companies such as Solar City rather than through electric utilities.
Some experts say that by as soon as 2016, installed distributed solar photovoltaic capacity could reach 30 GW, nearly one-third the U.S. nuclear generation capacity.
Steven Kihm, director of market research and policy at the Energy Center of Wisconsin, warns that utilities fighting solar firms that threaten their monopolies may no longer be able to count on sympathetic state regulators, as some of their battles are finding their ways into the courts.
In July, the Iowa Supreme Court shot down objections posed by Alliant Energy and Iowa regulators over Eagle Point Solar’s plans to install panels on the roof of a Dubuque government building. The utility argued the solar company was unfairly competing with Alliant’s monopoly footprint, but the court ruled in favor of the solar company.
Strategic Choices
In a recent Energy Law Journalpaper co-authored with Arizona State University professor Elisabeth Graffy, Kihm says that utilities face “two very different strategic choice pathways.”
One reaction can be to take “backward-looking, defensive” positions to protect past infrastructure investment. The other would be to look for new ways to create value in seeking opportunities in the renewables market.
They point to cable television companies that were wise enough to capitalize on the coaxial cable’s wide bandwidth that satellite couldn’t deliver. Those companies added high-speed Internet and other services that helped them thrive in the more competitive new environment.
Kihm argues that utilities that take defensive positions to discourage their customers from adding solar panels run the risk of alienating them such that they sever connections to the grid all together — particularly as solar providers offer them more advanced and compelling product offerings.
“There is no imminent death spiral or disruption,” agrees Cavanagh. “There is no reason why utilities cannot be engaged and effective partners in the clean-energy [future].”
Theodore F. Craver Jr., CEO of Edison International, parent of Southern California Edison, told PJM’s Grid 20/20 conference last week that maximizing the best features of distributed resources — flexibility, resiliency and customer engagement — with the efficiency and installed base of the bulk power system is a central task for his company. “There’s a seam between those two systems that can certainly be problematic.”
David Owens, executive vice president of the Edison Electric Institute (EEI), sees distribution utilities assuming a role akin to RTOs as “distribution system operators” to integrate the two and make decisions about planning and building the system. “There’s got to be an architect of that distribution system that Wall Street understands” to ensure sufficient investment, he said.
If You Can’t Beat ‘Em…
Some traditional electric utilities are now treading on the turf of solar firms. For example, Arizona Public Service recently said it plans to install solar panels on up to 3,000 homes in Phoenix.
We Energies is looking for the upside. We Energies’ parent, Wisconsin Energy, will acquire a rooftop solar business if it wins regulatory approval for its acquisition of Integrys Energy Group, of Chicago. (See related story, Michigan Gov.: Wisconsin Energy-Integrys Merger Could Stifle Competition.)
“We’s strategy would be to do renewable — on their side of the meter,” Kihm said.
State Holds Delayed Hearing on PSEG New Nuke Plans
The state’s Congressional delegation arranged for a public comment session on a possible new reactor at Public Service Enterprise Group’s Artificial Island site in New Jersey after lawmakers realized that only Garden State residents had been given the opportunity to talk. A session was held Thursday in Middletown to let residents speak out about the Nuclear Regulatory Commission’s draft environmental impact review. Although PSEG has not made firm plans for a new reactor at the site – home of the Salem and Hope Creek reactors – it is pursuing NRC site approval.
Richard Cathcart, manager of Delaware City and a former state representative, said he supports construction of a new reactor on the Artificial Island site across the state line. “We know that the construction workforce could grow to over 4,000 jobs, many of which could go to Delawareans,” he said, noting that he was speaking as a private citizen. “And we know new construction could bring a much-needed and major boost to the economy.”
But environmentalists question how an early site approval can be given when PSEG hasn’t even determined what type of reactor design it would deploy.
New Office of Consumer Services Chief Named by Public Service Commission
The Public Service Commission appointed a program analyst as the interim Director of the Office of Consumer Services.
Susan Nelson, who started as an analyst in the PSC’s Office of Technical and Regulatory Analysis in May, was elevated to fill the position after Linda Jordan retired earlier this month. The Office of Consumer Services handles consumer complaints and inquiries and operates outreach programs. Nelson held numerous customer care and billing positions in the telecommunications industry before joining the PSC.
The Commerce Commission approved Commonwealth Edison’s Grand Prairie Gateway Project, a 70-mile transmission line running across four Illinois counties. Construction of the $251 million project is scheduled to begin next year and be completed in 2017.
The 345-kV line “would allow greater access to renewable energy west of Illinois, which should enhance competition in the electricity markets,” a commission news release said. Terence Donnelly, ComEd executive vice president, said the line will relieve congestion that impedes the flow of low-cost energy, and reduce costs for delivering energy to customers.
The line would start from a substation near Byron Nuclear Generation Station and continue to a substation near Wayne. Byron is owned by ComEd’s parent company, Exelon.
Droves of Vectren customers have applied for energy assistance after many complained about dramatically higher bills to make up for underpayments in previous months.
The Utility Regulatory Commission is monitoring Vectren’s action plan after hundreds of customers complained. Vectren officials say that the problem stems from inaccurately estimated bills. The company has been swamped with requests to meet with customer service representatives, and community service organizations say they’re experiencing record numbers of requests for emergency energy subsidies.
A single mother of three children said her Vectren bill was around $11 for three straight months then jumped to more than $700.
Louisville Gas & Electric and Kentucky Utilities updated plans with the Public Service Commission, telling the PSC they will need to build between 368 MW and 737 MW of natural gas generation starting in 2020. The PPL subsidiaries filed the updated resource assessment report with the PSC last week.
The companies said they plan to retire two units at the E.W. Brown coal-fired plant and still plan to go forward with a 10-MW solar project on the plant site. Uncertainty about the effect of the recent Environmental Protection Agency emissions rules make it difficult to be more specific, the utilities said. Further load growth studies could force them to consider building more natural gas-fired generation before 2020.
PSC Holding Public Sessions on BGE’s Rate Increases
Baltimore Gas and Electric is asking for its fourth rate hike in four years. The Public Service Commission has scheduled several public hearings.
The company wants to raise distribution charges to both gas and electric customers by about $15 a month. BGE says it needs the increase to pay for infrastructure upgrades. If approved, the rates would go in effect in January.
Sens. Carl Levin and Debbie Stabenow have asked the Federal Energy Regulatory Commission to reconsider its decision to force We Energies customers in the state to absorb a $97 million rate increase to pay for the company’s power plant in Marquette.
We Energies wanted to shut its Presque Isle Power Plant after its largest industrial companies switched to another provider. But MISO determined the plant was crucial to system reliability and ordered that it stay in operation. The Wisconsin Public Service Commission later ruled that a large number of Wisconsin customers should be freed from paying the plant’s costs, shifting the bill to Michigan customers. FERC upheld its ruling.
Levin and Stabenow said the rate impact on customers in the Upper Peninsula is unjustified.
Report: Utilities Need to Give BPU More Storm Info
The Board of Public Utilities needs more information on storm responses to determine how to best improve resiliency, according to a consultant’s report.
The report, prepared by GE Energy Consulting, says the state fails to get enough information before and during storms to help it determine the most cost-effective solutions.
It also called on utilities to harden portions of the grid, especially substations. During Superstorm Sandy, 40% of Public Service Electric & Gas substations were shut down by flooding. Since then, the company has started a program to raise substations above the 100-year flood zones or to protect them with walls.
Utilities Spent $1.25B on Storms in 2011 and 2012, Study Shows
The Board of Public Utilities said utilities in the state spent $1.25 billion to restore and repair systems after the storms of 2011 and 2012, including Superstorm Sandy. The tally was part of the board’s review of storm costs to determine what should be recovered from ratepayers.
The board approved a New Jersey Natural Gas request to recover $48.7 million, including the costs to replace sections of natural gas distribution mains washed away by Sandy. Jersey Central Power & Light said it spent $736.1 million in storm costs. Public Service Electric & Gas said it spent $366.3 million. Atlantic City Electric put its costs at $70 million.
ACE has already received permission to increase rates to cover its costs. JCP&L has a request pending. PSE&G hasn’t asked to raise rates.
Duke Won’t Charge Customers for Corporate Taxes it Doesn’t Pay
Duke Energy said it will not charge customers $19 million for corporate income taxes that it doesn’t actually have to pay, even though the Utilities Commission approved the practice.
The NCUC ruled earlier this month that utilities can continue to charge customers a 6.9% tax, even though the state legislature recently cut the corporate tax from 6.9% to 5%. Duke said it could have extracted $19 million a year more from Duke Energy Carolinas and Duke Energy Progress customers under the ruling.
“Duke Energy supports the NCUC’s Oct. 9 decision that explains the state of the law in North Carolina,” Duke said. “However, in this case, we have already reduced rates to reflect the decrease in corporate income taxes.”
The ruling gave utilities the option to adjust rates and set an Oct. 24 deadline for them to decide. Republican commission members said the over-collections are negligible for individual bills, but the Democrats said the state’s four utilities would generate an additional $21 million a year.
Utilities in the state no longer have to find in-state sources for half of their renewable energy supply, the Public Utilities Commission ruled.
While making it easier for companies to reach renewable targets, the decision is another blow to the state’s solar industry, which is already feeling a downturn after legislators froze renewable targets earlier this year. “Pure financial projects are on hold right now,” said Geoff Greenfield, president of Third Sun Solar.
PUC Eyes Extension of Utility-Based Energy-Efficiency Conservation
The Public Utility Commission opened a study to consider extending state-directed energy-efficiency and conservation targets for utilities beyond 2016.
The current programs, authorized by a 2008 law called Act 129, set targets for reductions in consumption and peak demand. The targets expire in May 2016. The law requires the PUC to re-evaluate the costs and benefits of energy-efficiency and conservation programs every five years and to consider extending the goals.
EDCs to Provide Customers Look at What Info is Given to Suppliers
The Public Utility Commission directed the state’s electric utilities to reach out to customers every three years to give them the opportunity to review the marketing information being provided to third-party electric generation suppliers. The information includes historic usage and customer addresses.
The PUC’s order directs electric distribution companies to allow customers to access the information and to restrict it if they want. The commission’s action calls on all distribution companies to remind customers of their right to access the information.
PUC’s Audit of PECO Shows Possible Millions in Savings
A Public Utility Commission audit of PECO’s management and operations suggested ways the company could save up to $5.7 million a year and up to $3.1 million in one-time savings. The commission’s Bureau of Audits report was made public by a 5-0 vote of the commission.
The report provided 28 recommendations for the company to improve performance and save money, including reducing non-storm response overtime, improving the mapping of its natural gas lines to cut down on gas line hits and improving oversight of contractors. PECO has agreed to implement all of the recommendations by the first quarter of 2017.
Appalachian Power Files for 6 Energy-Efficiency Plans
Appalachian Power has filed with the State Corporation Commission for approval for four residential energy-efficiency programs and two programs for commercial and industrial customers.
The residential programs include home energy assessments, incentives for customers to give up second refrigerators or freezers, new construction energy-efficiency standards and retail rebates for high-efficiency lighting and appliances. The C&I plans provide incentives for high-efficiency lighting and heating and cooling equipment, and rebates for larger energy-efficiency projects.
The programs are designed to help the company reach mandated energy reduction targets.
Possible to Meet EPA Standards with Mix of Methods, Report Says
The state could meet the Environmental Protection Agency’s proposed carbon emissions standards with a combination of more renewable generation, power plant modification and energy-efficiency programs, according to a report released last week.
The report identified several areas necessary to meet the targets, including modifying existing power plants; dispatching low-emitting plants first; increasing renewable energy generation; expanding energy-efficiency programs; and building lower-emitting, natural gas-fired plants to take advantage of the state’s shale gas production. The report was prepared by the West Virginia University College of Law’s Center for Energy and Sustainable Development, the Morgantown-based consulting firm Downstream Strategies and the Appalachian Stewardship Foundation.
Given the available options, the report said the state can develop a plan to meet its emission targets while also enhancing social, economic and environmental benefits.
