PJM’s dispatch of demand response helped avoid the need to shed load during the polar vortex Jan. 7, when the RTO set a new winter demand record of about 141,500 MW.
PJM dispatched DR for both the morning and evening peaks. An estimated 2,029 MW responded for hour ending 1800, according to the graphs released by PJM last week (above). Actual reductions will be known after customer meter data is provided.
AEP Transmission Holding Co. is partnering with AltaLink to bid on the Fort McMurray West 500-kV project in Alberta, Canada. The joint venture was selected by the Alberta Electric System Operator as one of five qualified bidders for the 300-mile project, designed to meet large industrial load growth. The company expects to submit its proposal in November and have a decision late in the year. If successful, the project would be developed by AEP Transmission subsidiary Transource Energy LLC.
The other bidders are NorSpan Partners LP (EPCOR Utilities Inc. and LS Power Associates LP); Alberta PowerLine (Canadian Utilities Limited and Quanta Capital Solutions Inc.); TAMA Transmission LP (MidAmerican Energy Holdings Company and TransAlta) and TransCanada/Elecnor (TransCanada PipeLines Limited and Elecnor S.A.).
More: AEP; Alberta Electric System Operator
Dominion named seven new vice presidents effective Jan. 1. Corynne Arnett became vice president for financial management at Dominion Generation; Michael Frederick vice president for LNG Operations; Lee Katz vice president and general auditor, reporting directly to CEO Thomas Farrell; Mark Mitchell vice president for generation construction; Brian Sheppard, vice president for pipeline operations; Alma Showalter vice president for tax; and Chester Wade, vice president for corporate communications.
More: Dominion
New York, Connecticut and a shareholder advocacy group agreed to withdraw their shareholder resolution on the subject after FirstEnergy committed to study and report on ways it could help meet President Obama’s goal of cutting greenhouse gas emissions 80% by 2050. The New York State Comptroller’s Office has won other such settlements with utilities, and has outstanding submissions with CMS Energy and Ameren.
More: The New York Times
Iberdrola USA named an eight-member board of directors as part of a corporate reorganization that structured Iberdrola S.A.’s U.S. business to align with the international company’s other structures. Board member Robert Kump, CEO of Iberdrola USA Networks, has also been appointed chief corporate officer, leading U.S. strategy.
The board, led by Iberdrola Chairman Ignacio Galan, includes four independent members: John Baldacci, former member of Congress and governor of Maine; Jose Fernandez, former assistant secretary of state; Alan Solomont, former ambassador to Spain and Andorra; and Alfredo Ayub, former director general of the Comision Federal de Electricidad in Mexico. Other members are José Sainz Armada, chief financial officer for Iberdrola Group and Pedro Azagra Blázquez, chief development officer for Iberdrola Group.
More: Iberdrola USA
GDF Suez Energy North America named Eric Bradley senior vice president of strategy. In addition to heading the strategy function, Bradley also will oversee acquisitions and financial analysis, communications, government and regulatory affairs and new business incubation.
More: MarketWatch
Stakeholders will hold a formal vote on measures to eliminate speculation in the capacity market this week after narrowing the proposals from seven to five in a lengthy meeting Friday.
Because clearing prices in incremental auctions (IAs) are usually lower than those in the base residual auction (BRA), participants can profit by selling capacity in the BRA and buying out their commitments in the IAs. PJM and the Market Monitor say such buyouts are suppressing capacity prices and could undermine system reliability.
PJM’s proposed solution (#2 in the matrix) would reduce the number of incremental auctions (currently three) and set conditions eliminating the potential to arbitrage between the BRA and IA.
RC Cape May Holdings LLC (#3), Old Dominion Electric Cooperative (#4), the Market Monitor (#9) and Exelon (#10) adopt some of PJM’s changes but differ in other details. (See “Incremental Auction Proposals Compared”)
All of the proposals would increase the penalties for failing to deliver promised resources. (See chart, right)
An informal poll conducted last week among 41 respondents representing 206 members and affiliates found overwhelming support for reducing speculative offers in the base auction but a split over the urgency of the issue: 59% of votes called for implementing changes in time for this May’s base auction as PJM has insisted; 34% said stakeholders should take more time to vet the issue. About 7% said there was no need for changes.
PJM’s proposal was the most popular proposal, followed by ODEC and the Market Monitor.
At Friday’s meeting of the Capacity Senior Task Force, Calpine (#7) and Duke (#8) withdrew their proposals, with Duke throwing its support behind the PJM plan. Citigroup Energy (#6) had withdrawn its proposal earlier.
Much of the meeting was spent discussing the Market Monitor’s demand that the new rules bar bidders from buying out of their obligations except under force majeure.
Market Monitor Joe Bowring said the condition wouldn’t be limited strictly to “acts of God.” The reason for buying replacement capacity “has to be out of your control and it can’t be [a] financial” motive, he said.
None of the proposal sponsors were willing to add that condition to their packages Friday although some said they might agree after vetting it with their companies. Stu Bresler, PJM vice president of market operations, said he feared the restriction would be difficult to administer.
Dan Griffiths, executive director of the Consumer Advocates of PJM States, said the RTO risks “overcorrecting” and should wait to evaluate other recent initiatives impacting demand response and the capacity market before making additional changes. (See Members Deadlock on DR in Capacity Auctions; PJM May Seek FERC OK Despite Stakeholder Opposition.)
“Our concern is the pancaking of a variety of issues,” Griffiths said “We’ve repeatedly asked PJM about the impact of these changes and have been repeatedly told: `We don’t know.’”
Carl Johnson, representing the PJM Public Power Coalition, said the changes could result in “a huge number of megawatts whose price is administratively determined” rather than set by the market.
Walter Hall, of the Maryland Public Service Commission, said the PSC is concerned that PJM may not be able to sell excess capacity in incremental auctions if it refuses to sell below the base auction clearing price, as it has proposed.
The task force also discussed the inclusion of development milestones, which Exelon and RC Cape May Holdings LLC proposed using to reduce credit requirements. RC Cape May would also use the accomplishment of milestones to reduce penalties for failing to deliver promised resources.
Hall and a second stakeholder said they supported the concept of development milestones but feared it would make it more difficult to reach consensus. “It just feels like it doubles the complexity of the replacement capacity issue,” the stakeholder said.
The vote on the proposals will run between tomorrow and Friday, with results released next Monday, in time for a first read at the Markets and Reliability Committee Jan. 30. The MRC will vote on Feb. 27, with a Members Committee vote the same day or at a special meeting afterward in time for a mid-March filing with the Federal Energy Regulatory Commission.
Bresler said the Board of Managers may file the PJM proposal with FERC even if it does not receive a two-thirds vote in support.
The Planning Committee last week endorsed manual changes implementing PJM’s new capacity import limits.
Reason for Change: Stakeholders approved the limits in November out of concerns that PJM might lack sufficient transmission to accommodate its growing volume of capacity imports. Cleared imports grew from about 3,000 MW to more than 4,500 MW in 2009-2012 before more than doubling to nearly 7,500 MW this year. The limits are detailed in Manual 14B: PJM Region Transmission Planning Process.
Impact: The revised methodology will limit external generation resources in next year’s base capacity auction to 6,200 MW – a 17% drop from the volume of imports that cleared in the May 2013 auction, while also setting five import zones with their own limits. (See Members OK Capacity Import Limit; Prices May Rise.)
PJM will begin pricing at a new interface near the Seneca pumped storage station in Warren County, Pa., beginning Feb. 1.
RTO officials said they expect to use the pricing point when the 451 MW Seneca plant operates in pumping mode. It will only be used to set locational marginal prices when off-cost generation is necessary to provide voltage support for the Seneca plant to pump. It is not an IROL (Interconnection Reliability Operating Limits) transfer interface.
The new interface is comprised mainly of the 230 kV buses and connected generation buses at Seneca, Glade, Forest, Elko and Shawville in the PN transmission zone. (See full interface definition.) Seneca was among 11 hydroelectric power stations LS Power agreed last year to purchase from FirstEnergy Corp.
The Federal Energy Regulatory Commission and Commodity Futures Trading Commission, after long and difficult negotiations, signed two memorandums of understanding concerning information-sharing procedures and jurisdiction over regulation of energy trading. But, disappointing some attorneys, the MOUs do not address questions of enforcement jurisdiction, which means answers will have to come from the courts.
President Obama directed the administration to conduct what the White House said was the first Quadrennial Energy Review. It will focus on developing a comprehensive strategy for pipelines and the power grid, with issues including changing markets, aging facilities and cyber threats.
More: White House
Natural gas-fired generation will account for 26.8% of generation in 2014, down from 27.5% in 2013 because of rising gas prices, according to the Energy Information Administration. Coal’s share will rise this year, from 39.1% to 40.2%. In 2015, though, coal’s share should drop to 38.6% as federal mercury and air toxics regulations take effect.
In its Short-Term Energy Outlook, EIA estimated total generation averaged 11.1 TWh/day in 2013 and projected it would rise 0.3% this year and 1% in 2015. Per-customer consumption will continue to decline with energy efficiency, but industrial users will increase consumption in 2015, EIA predicts.
More: EIA
Now that the Environmental Protection Agency has published its regulations for greenhouse gas emissions from new power plants, the House Energy and Power Subcommittee has set Jan. 14 to vote on a bill that effectively would block it. The measure introduced by subcommittee Chairman Ed Whitfield (R-Ky.) requires that a standard for coal units must have been achieved for a continuous 12 months, commercially, by a least six units at different plants. This aims at EPA’s requirement for carbon capture and storage.
The measure also requires a separate subcategory for lignite units. Sen. Joe Manchin (D-W.Va.) introduced a companion bill in the Senate.
More: The Hill; Energy and Commerce Committee
Meanwhile, EPA’ Science Advisory Board has scheduled a Jan. 21 teleconference to discuss “whether to review the adequacy of the science” behind the rule.
More: Science Advisory Board; APPA
Democratic Sens. Barbara Boxer of California and Sheldon Whitehouse of Rhode Island have established the Climate Action Task Force to raise the visibility of the issue. Boxer, who chairs the Environment and Public Works Committee, said the group has a dozen members and the backing of Senate leadership. “[W]e want Congress to take off the blindfolds,” she said.
More: National Journal
Four of the five members of the Nuclear Regulatory Commission said they believe spent fuel could continue to be stored safely in pools and did not have to be moved to dry storage, which some experts say would be safer. Chairwoman Allison Macfarlane was the only member whose questions at a commission meeting last week indicated she could be open to moving more fuel to dry casks.
More: The New York Times
Time is growing short for stakeholders hoping to reach consensus on rules banning capacity market speculation before May’s auction.
After two meetings last week, the Capacity Senior Task Force was still debating nine “replacement capacity” proposals — almost as many as the 11 packages the panel was considering when it failed to reach consensus in November.
Since Nov. 21, when the Markets and Reliability Committee returned the issue to the CSTF, the task force has held four meetings, including two last week. (See Arbitrage Fix Returned to Committee.)
PJM officials want to submit a plan to the Federal Energy Regulatory Commission by mid-March in order win approval in time for the Base Residual Auction. The schedule laid out by CSTF Chair Scott Baker calls for a CSTF vote after its meeting Friday, with a first read before Markets and Reliability Committee Jan. 30.
The odds of reaching an agreement may become clearer as a result of a poll CSTF Chair Scott Baker submitted to task force members yesterday.
The poll, which closes at 5 p.m. Wednesday, is an effort to thin the candidates by identifying consensus on core concepts. One question, for example, seeks to measure support for proposals eliminating the ability to profit in cleared buy bids in incremental auctions. The question then seeks to parse support for addressing the issue in time for this year’s auction or whether the task force should take more time to vet solutions.
Versions of this “IA Settlement Agreement” are featured in packages proposed by PJM, J.P. Morgan Ventures Energy Corp., Citigroup Energy and Duke Energy. Taking different approaches are proposals by Market Monitor Joseph Bowring, Old Dominion Electric Cooperative, Calpine, Exelon and Gabel and Associates. Bowring would eliminate replacement of capacity in incremental auctions except for capacity lost to force majeure events.
The poll also will gauge support for using development milestones to reduce credit obligations or capacity deficiency penalties. Another set of questions focuses on proposed requirements that bidders certify their intent to provide physical resources and not plan to buy out of their obligations in the incremental auctions, when prices are much lower than in the BRA.
An earlier poll found 90% support for raising the Capacity Resource Deficiency Charge (currently the greater of 1.2 times the Resource Clearing Price or the Resource Clearing Price + $20). A proposal to make the penalty the greater of 1.5 times the Resource Clearing Price or the Resource Clearing Price + $50 also had strong support at 86%
The same percentage of respondents endorsed changing the PJM sell offer price (currently an upward sloping offer curve with a starting price equal to the intersection of the updated VRR curve and current commitment level). A proposal to switch to an upward sloping offer curve with the starting price floored at the BRA clearing price won almost 73% support, although that could drop in a binding, sector-weighted vote.
Cutting the number of incremental auctions from three to two won 83% support while only 67% backed a cut from three to one.
American Electric Power moved its Ohio generation into a separate subsidiary in December and acknowledged that it could consider selling the assets. “They’re ahead of their pack in terms of jumping on the transmission bandwagon,” said a UBS Securities analyst.
Meanwhile, President and CEO Nick Akins assumed the position of chairman as well.
More: The Columbus Dispatch; AEP
Jim Rogers’ seven-year run atop Duke Energy ends this month in a rush of industry tributes, legacy look-backs and, like a retiring Super Bowl champion, a trip to Disney World.
“My best guess is that Jim Rogers is someone who wanted to do more toward clean energy than he ever found a way to make happen during his time,” environmentalist Jim Warren said. “I favor that over a more cynical approach that he was more a figment of corporate PR or greenwashing.”
More: The Charlotte Observer
University of Delaware wind power researcher Cristina Archer sees the Great Plains as an ideal place for airborne wind turbines in the summertime because of the presence of something called “wind speed maxima,” strong currents of wind that resemble the jet stream but occur at much lower altitudes.
Airborne wind turbines are devices resembling blimps or gliders that can generate electricity as they are flown like kites in the lower atmosphere. Activity on the concept has accelerated in the past five years with at least 20 startup companies working on various concepts, including Makani Power, which was acquired by Google in May.
More: Midwest Energy News
Big Rivers Electric’s proposal for a rate increase is generating opposition in the state. The hike — about 21% for residential customers and 25% for industry — is meant to make up for revenue the cooperative will lose when a second aluminum smelter leaves its system this month. The increase would “cause us to think about generating our own power,” a Kimberly Clark plant manager said at a Public Service Commission hearing.
More: Kentucky.com
A dispute between the Office of People’s Counsel and FirstEnergy’s Potomac Edison about meter reading and billing could go to a Public Service Commission law judge if the parties do not reach a settlement by this week. Customers allege overbilling because the utility did not read their meters as often as required.
More: Herald-Mail
The Pinelands Commission was evenly split, 7-7, Jan. 10 when it surprised onlookers by voting down South Jersey Gas’ politically hot proposal for a 22-mile pipeline through the protected area to the BL England power plant. With 8 votes required, the proposal failed, and it is unclear what steps will come next from its supporters, who include Gov. Chris Christie as well as numerous officials who back converting BL England to gas from coal.
The commission’s deliberations on the pipeline have been fraught with charges of political interference, and one columnist linked the dynamics to those involved in the George Washington Bridge lane-closing scandal.
More: StarTribune; The New York Times
The Assembly’s Telecommunications and Utilities Committee approved a bill sponsored by Chairman Upendra Chivukula aimed at increasing the amount of retail power shopping by residential and small business customers. Utilities oppose the measure. While the bill cannot pass the legislature this session, it is a welcome “beginning of a conversation” about the issue, said Jay Kooper of the Retail Energy Supply Association.
More: NJSpotlight
Closing arguments in Fishermen’s Energy case at the Board of Public Utilities ended late in December, and the offshore-wind company is waiting to see if the regulators will approve the state’s first offshore renewable energy certificates to fund the project. Fishermen’s 25-MW demonstration project offshore Atlantic City first went before the BPU three years ago; several months ago the company worked out a deal with the Division of Rate Counsel to lower the cost to customers.
More: Press of Atlantic City
The Board of Public Utilities begins this week to consider Jersey Central Power & Light’s request to recover $640 million in storm costs. The case is one of a number involving more than $1 billion in costs for the state’s utilities.
More: NJSpotlight
American Electric Power proposed to the Public Utilities Commission a retail rate cut of 9% over three years, beginning in 2015. It attributed the reduction to oversupply and sluggish demand. The state’s ratepayer watchdog says the cut should be bigger.
More: Akron Beacon Journal
The Public Utilities Commission spent $34,660 to send all five commissioners and 15 staffers to the Orlando annual meeting of the National Association of Regulatory Utility Commissioners – a sum that some believe is excessive. “Twenty people to Orlando. There is no excuse for that,” one former commissioner said. Documents released to the Dayton Daily News show the PUC has paid $156,082 in commissioners’ travel since 2009.
More: Power Engineering
KW River Hydroelectric, a firm that has developed a device to capture power from low-head dams, has opened an office in Hamilton and is seeking investors and grants. The start-up was launched by a former Duke Energy executive and an Air Force retiree who invented the device, a prototype of which is to be tested on the nearby Great Miami River.
More: Journal-News
The Ohio Energy Initiative Commission LLC, a private group whose members and backers are not identified, said it would begin this month to accept early green-energy project proposals for $1.3 billion in annual funding that would be created if state voters approve the Ohio Clean Energy ballot initiative. Supporters need to collect 385,247 signatures by July 4 to get the issue on the November ballot.
More: Associated Press; Yes for Ohio’s Energy Future
Potential appointees have until Jan. 16 to apply for Public Utilities Commission Chairman Todd Snitchler’s position. Snitchler announced this morning that he will not seek reappointment. During his tenure the PUC has pushed utility restructuring and electricity competition.
More: The Columbus Dispatch, PUC of Ohio
Scott Nally, director of the state Environmental Protection Agency, created a stir by resigning abruptly Jan. 7 after three years in the post. He was replaced on an interim basis by Craig Butler, Gov. John Kasich’s senior director of energy and environmental policy. A cryptic resignation letter from Nally provided no reason for his departure, leading to speculation.
More: The Columbus Dispatch
Former employees of Ormet’s Hannibal aluminum smelter picketed American Electric Power headquarters Jan. 8 to call attention to the power rates they say forced bankrupt Ormet to shut the facility. Ormet shut the plant in October, blaming its decision on a Public Utilities Commission ruling that did not approve as large a rate discount as Ormet said it needed.
More: The Columbus Dispatch;
Two wind turbines began operating at Honda Transmission Manufacturing in Russells Point. The company says the turbines’ 10,000 MWh/year will supply about 10% of the plant’s needs, making it the first automotive company in the U.S. to get a substantial amount of its power from onsite wind.
More: Automotive World
Officials in Bethel are fighting a citizen petition to have the village disband its utility. Sponsor Jeff Coulter wants the village to turn over its electric operations to a company like Duke Energy or American Electric Power, from which the village currently buys its electricity. Coulter says cutting out Bethel Utilities as the “middle man” will save residents money. Town officials disagree.
More: Cincinnati.com
The Public Utility Commission voted to let customers in PECO’s CAP Rate program sign up with competitive suppliers. Consumer advocates worry that suppliers might win these low-income customers initially and later boost their rates. But the PUC rejected a proposal to limit the suppliers from charging more than PECOs default rate.
More: The Philadelphia Inquirer
Pittsburgh-based Aquion Energy, maker of batteries and energy storage systems, closed a $55 million financing round that includes an investment from Microsoft founder Bill Gates. “We are expecting Aquion Energy’s commercial launch in 2014 to be disruptive to the world of stationary energy storage,” said Ray Lane, partner emeritus at Kleiner Perkins, the first firm to invest in Aquion.
More: Aquion Energy
Beacon Power’s 20-MW flywheel storage project at the Humboldt Industrial Park is operating at about half capacity and plans to be at full strength by summer, the company said. The project was among those identified in a recent “60 Minutes” segment about ventures that received Department of Energy stimulus funding and then went bankrupt. Beacon reformed after its bankruptcy, and completed a 20-MW facility in New York state and undertook the Humboldt construction.
More: The Standard Speaker
The Public Utility Commission approved PPL Electric Utilities’ proposal for a $335 million transmission line expansion and upgrade in the Poconos. The company will build three new substations and 60 miles of new 230 kV lines, and rebuild 20 miles of existing 69 kV lines in parts of Lackawanna, Monroe, Wayne, Pike and Luzerne counties.
More: The Morning Call
Duquesne Light plans to install its first 5,000 smart meters this year, after the Public Utility Commission approved the installation last week. Duquesne is the third utility to receive final PUC go-ahead, following PECO and PPL. By 2020, a spokesman said, all 585,000 customer meters are to be replaced.
More: Tribune-Review
Dominion Resources’ four nuclear plants posted a record efficiency rate in 2013, with an average capacity factor of 93.7%, up from a 2009 record of 93.1%. In Virginia, the company’s two nuclear plants supply about 42% of its customer load.
More: Richmond Times-Dispatch
The State Corporation Commission reopened its case involving Dominion Virginia Power’s proposed Surry-Skiffes Creek power line after the utility was unable to get a right-of-way agreement with the James City County Economic Development Authority. The SCC, which approved a route in November, reopened the case not to have it reargued but to allow further review of the on-land portion of the route. It has scheduled a hearing Jan. 29
Members agreed last week to move forward with an initiative that could result in reduced restrictions on up-to congestion transactions.
About 70 percent of stakeholders at the Market Implementation Committee voted in favor of an issue charge to consider lifting the UTC bid cap and restrictions on the nodes that are eligible for such trades.
The measure passed over opposition from the Market Monitor and several stakeholders, who said the product is already exacerbating the underfunding of Financial Transmission Rights.
A UTC combines a day-ahead offer to sell energy at a source with a bid to buy the same quantity at a sink. The transaction is only executed if the difference between the Locational Marginal Prices at the source and sink are under a threshold set by the bidder. Current market rules limit such bids to differentials of $50 or less.
Noha Sidhom, of Inertia Power LP, proposed the review in a problem statement last month, saying the bid cap forces traders to place price insensitive bids that don’t reflect market conditions. (See PJM to Consider Relaxing UTC Rules.)
The current rules also limit such transactions to nodes historically available for interchange transactions, excluding those load buses below 69 kV and buses for generators below 100 MW. “Expanding nodes would make [UTCs] a true hedge when the market is more volatile,” Sidhom said.
The issue charge directs the MIC to consider alterations to UTCs during special sessions in the first quarter of 2014, with a FERC filing for approval of Tariff changes anticipated in July.
