The Illinois Department of Commerce and Economic Opportunity took coal-education material off its website after objections that it was unduly pro-coal. The website sections, intended to educate children about energy, sparked a grassroots campaign demanding that the pages be taken down.

(Source: IL Dept. of Commerce & Economic Opportunity)

More: Yes! Magazine; Midwest Energy News

KENTUCKY

Fund Proposed to Move State Past Coal

An eastern Kentucky economic development organization recommended some coal severance tax funds be devoted to a program to diversify the regional economy. But many local needs and dwindling revenue from the tax present tough decisions for the area’s policy makers. Eastern Kentucky has lost more than 5,700 coal jobs in the last two years.

More: Kentucky.com

LG&E, KU Propose Gas Plant, Solar Facility

PPL’s two Kentucky utilities have proposed building a 700 MW combined-cycle plant and a 10 MW solar facility to help replace retiring coal generation. The new projects would make the Louisville Gas and Electric-Kentucky Utilities portfolio 59% coal, 40% gas and 1% renewables.

More: The Morning Call

MARYLAND

Push Harder on Smart Meters, PSC tells BG&E

Baltimore Gas & Electric must try harder to reach customers who have not responded to efforts to switch them to smart meters, the Public Service Commission said, rejecting for now the utility’s suggestion to call these customers meter “opt-outs.” BG&E also may not terminate their service for non-response, the PSC ruled.

More: Maryland PSC

MICHIGAN

Green Group Urges 40% Renewables by 2035

Michigan could get 40% of its energy from renewables by 2035, and do so at half the cost assumed when the state enacted its renewable portfolio standard in 2008, a renewable energy trade group said. The Michigan Energy Innovation Business Council made its comments in response to a draft state report that predicted the state could get 30% of its electricity needs from renewable sources by 2035.

More: CBS Detroit

ATC seeks approval of Upper Peninsula line

American Transmission Co. filed for state approval of a 60-mile 138 kV line to improve reliability of Michigan’s Upper Peninsula grid. The line, which would cost up to $132 million, is part of a larger Bay Lake project. ATC plans to spend up to $3.6 billion over the next decade in Michigan, Wisconsin and neighboring states.

More: Journal Sentinel

NEW JERSEY

Booker May Get Environment Assignment

Newly-elected Sen. Cory Booker, who won the seat made vacant by the death of New Jersey Democratic Sen. Frank Lautenberg, may be assigned to the Environment and Public Works Committee. Lautenberg was an active member of the panel, and Booker has been engaged with climate change issues in New Jersey.

More: The Hill

OHIO

PUC Chief Warns Against ‘Dash to Gas’

Natural gas is a major player right now, but “there is no doubt coal needs to continue to play a major role in our future generation mix,” PUC Chairman Todd Snitchler told a state House committee. He also expressed confidence in advanced coal technologies.

More: Columbus Business First

AEP Chief Says Coal ‘Out of the Picture’

AEP CEO Nick Akins sees coal as a diminishing part of the utility’s portfolio. The company’s future is “natural gas, energy efficiency, smart-grid activities and renewables,” he told a Columbus Metropolitan Club program.

More: Columbus Business First

PENNSYLVANIA

PPL Wants New Bill Rider for Storm Costs

PPL asked the Public Utility Commission to add another new line item to its customers’ bills: a fee that would help it recoup its costs for severe weather and expenses related to the $60 million blow dealt the company by Hurricane Sandy in 2012. The utility has just begun to collect a distribution improvement charge, a first in the state, and the new charge, if approved, would also be a first.

More: The Morning Call

PUC: No Details on PPL Storm Settlement

The Public Utility Commission refused to disclose details of its $60,000 settlement with PPL that resolved allegations that the company improperly transferred a repair crew from a high-priority outage to work on a low-priority outage after a freak snowstorm in October 2011.

The PUC denied a public records request by The Morning Call to review the letter from an anonymous tipster that launched regulators’ investigation. The PUC said its decision was necessary to protect the identity of the whistleblower. The agency also refused to identify the locations involved in the incident.

More: The Morning Call

PUC Approves Two Retailer Settlements

The Public Utility Commission approved settlements with IDT Energy and AP Gas & Electric on complaints of “slamming” and other illegal practices. The companies will pay civil settlements and take steps to comply with the state’s regulations. They admitted no wrongdoing.

More: Pennsylvania PUC

Enviros Take State to Task on Renewables

PennFuture, an environmental group, criticized state officials for refusing to consider raising Pennsylvania’s alternative energy standard above the current target of 8% by 2021. “While other states in the region and around the country recognize the multiple benefits of renewable energy and have increased the requirements in their state portfolios, [the Department of Environmental Protection] is telling us upfront that they won’t consider the idea of increasing renewable energy in Pennsylvania,” the group said.

More: PennFuture

VIRGINIA

Dominion Would Lower Fuel Charges

Dominion Virginia Power proposed lowering average customer bills 3.3% because of the unexpectedly lower cost of fuel. The fuel adjustment, which Dominion wants to make earlier than scheduled, would cut an average residential bill about $3.70. Overall rates would be about where they were five years ago, the company said.

More: Richmond Times-Dispatch

October 17, 2013

PJMNet Access to Expand

Generation owners that do not qualify for a connection to the PJMNet private communication network would be able to purchase as many as five under a proposal approved by the Operating Committee.

PJM currently pays for at least one PJMNet connection for each transmission owner considered important to system reliability and for generation owners with resources of at least 100 MW. Entities that do not have a PJMNet link connect to PJM by Internet SCADA, which is less reliable.

The committee approved a proposal that would let smaller generating members, and those that already have a PJMNet connection, buy up to five connections. Members rejected a proposal to allow smaller generators to buy only one connection and another that would have required all members to buy their first connection.

PJM says the monthly cost for a non-redundant connection will be about $2,600. Installation will cost about $12,000 or $22,000, depending on the type of protocol used. Redundant connections would cost more.

October 15, 2013

October 2013 Operating Committee Manual Changes

The Operating Committee last week endorsed changes to Manuals 3, 10 and 14D.

Manual 3: Transmission Operations – Adds language regarding approval of emergency rating changes; added applicability for individual generators greater than 20 MVA; clarified reference to voltage coordination; revised outdated references.
Manual 10: Pre-Scheduling Operations – Annual Review. Minor updates for clarity; added references to forecasted planned outages and reporting outages on synchronous condensers.
Manual 14D: Generator Operational Requirements – Changes made at RFC request, and for consistency. Includes changes to reactive capability testing; replaces outdated references; requires generators operating or scheduled for PJM to operate to notify PJM prior to attempting a restart following a trip or failure to start.

October 15, 2013

Short Circuit Analysis to be Changed

The Planning Committee last week endorsed changes to Manual 14B: PJM Region Transmission Planning Process to improve the procedure for analyzing and addressing short circuits.

Reason for Change: PJM currently analyzes short circuit cases for the current year +1 and +5. System modifications are difficult for transmission owners to implement with a one-year lead time.

Impact: The annual Regional Transmission Expansion Plan will analyze short circuit base cases for the current year +2.

PJM contact: Mark Sims

October 15, 2013

State Briefs

Delmarva Proposes Four-Year Rate Plan

Delmarva Power filed a proposed four-year rate plan with the Public Service Commission that would add $2.40 a month to average customer bills. Rather than the company seeking reimbursement for past expenses, the “forward-looking” plan would create a budget for future spending.

More: WHYY; Delaware State News

INDIANA

Lawmakers Eye Modular Reactors

No proposal is on the table, but a General Assembly committee started examining pros and cons of small modular reactors.

More: nwitimes.com

KENTUCKY

Mitchell Power Plant (Source: FirstEnergy)

Ky. Power OK’d to Buy 50% of Mitchell Plant

AEP subsidiary Kentucky Power won Public Service Commission approval for the utility’s purchase of half of the 780-MW Mitchell plant from sister company Ohio Power. Meanwhile AEP unit Appalachian Power awaits West Virginia approval to buy the other half.

More: The Intelligencer

MICHIGAN

ITC Activates Thumb Loop Phase 1

ITC Holdings Corp. put the first phase of its Thumb Loop, a 62-mile 345 kV line between Tuscola County and Huron County, into service. It said the rest of the 140-mile project is on schedule for completion in 2015. Designed to deliver wind power from the Thumb region, the project will have a capacity of about 5,000 MW.

More: CBS Detroit

Utility Wind Contracts Draw Criticism

Critics say a lack of competition and transparency in utility wind power contracts utilities leaves the public ignorant of whether the deals are good for ratepayers.

More: Midwest Energy News

NEW JERSEY

BPU Seeks Input on Auction Changes

The Board of Public Utilities is taking a survey on whether to carve renewable energy out of the auction for basic generation service as a report shows ratepayers have paid $388 million for the clean energy program.

More: NJSpotlight

OHIO

Blame Makes Rounds in Ormet Shutdown

Ohio officials traded blame after Ormet said it will shut down its aluminum manufacturing plant because the Public Service Commission approved an electricity rate break smaller than the company had sought. About 750 jobs will be lost.

More: News and Sentinel

PENNSYLVANIA

Brown Takes Seat on PUC

Former state Senate aide Gladys Brown was sworn in to the Public Utility Commission after unanimous Senate confirmation. Brown has served since 1991 as counsel to the Senate Democratic Leader, where she worked on many major utility issues.

More: Pa. PUC

VIRGINIA

Dominion Signs Offshore-Wind Lease

Dominion Virginia Power signed the lease and sent the government a check on 113,000 offshore acres intended for wind power development. The utility won the lease with a $1.6 million bid. (See Will an Old Utility Learn New Tricks?)

More: Richmond Times-Dispatch

WEST VIRGINIA

FE Accepts WV Terms

FirstEnergy agreed to West Virginia’s terms for approval of the company’s proposed generation asset transfer. The company’s Mon Power unit will own the Harrison Power Station and use local coal. Average customer bills will drop by about $1.50 per month. A citizen group said it would challenge the transfer approval.

More: The State Journal

October 15, 2013

Demand Response Changes Could Cost $1B Annually

PJM and generators squared off against load-serving entities and industrial customers last week in a debate over the RTO’s proposal to change the way demand response clears in capacity auctions. The proposal could cost PJM load $1 billion a year.

The Capacity Senior Task Force last week heard three proposals regarding how offers for Limited, Extended Summer, and Annual demand response are cleared in the Base Residual Auction.

Had PJM’s proposal been in place, according to a simulation by PJM, the 2015/16 Base Residual Auction would have resulted in total costs of $28.9 million per day versus $26.6 million under the current rules, an annual increase of about $840 million (8.6%). For 2016/17, the PJM proposal would have increased total costs by $1.02 billion, a jump of almost 19%.

$1 Billion Hit

PJM’s proposal “is a $1 billion hit” for load, said Dave Mabry, representing the PJM Industrial Customer Coalition. “If generation bid cheaper than DR I don’t know that we would be here” discussing changes.

Paul Sotkiewicz, PJM’s chief economist for markets, insisted “it is not a pocketbook issue, per se. It’s a reliability issue.”

All three proposals would include a cap — or “reliability target” — on the amount of Limited DR permitted to offer into the auction.

PJM’s proposal would subtract all of the 2.5% Short-term Resource Procurement Target (STRPT) from the Limited DR cap. The proposal would have reduced the volume of Limited DR clearing by nearly two-thirds for 2015/16, according to the simulation.

An alternative submitted by James Wilson on behalf of consumer advocates in New Jersey, Maryland and Delaware would subtract only a portion of the 2.5% STRPT “holdback” from the cap on Limited DR.

Another alternative by the Southern Maryland Electric Cooperative (SMECO) does not address the holdback but does ask PJM to consider increasing the DR caps to reflect the increased operational flexibility that DR resources are being asked to provide under separate CSTF initiatives.

Once the Minimum Annual Resource Requirement is satisfied, both the Consumer Advocate and SMECO alternatives would allow Extended Summer and Annual DR to compete until the intersection with the Variable Resource Requirement curve.

1994 Rolling Blackouts Invoked

Sotkiewicz said neither of the two alternatives addressed PJM’s concerns that the increasing volumes of DR are undercutting capacity market prices and reducing incentives for new generation. Sotkiewicz invoked the memory of January 1994, when PJM was forced to order rolling blackouts because of a generation shortage as subzero temperatures reduced fuel supplies and caused increased plant breakdowns.

“What you’re doing here is exactly what we’re trying to get away from: a vertical demand curve for annual resources,” Sotkiewicz said regarding the SMECO proposal.

Sotkiewicz and generators said the two non-PJM proposals increase the risk of “boom-bust cycles.”

“I really think that under current circumstances that argument doesn’t work very well,” responded Wilson.

DR vs. Generation

Impact of PJM's Proposed Changes (Source: PJM Interconnection, LLC) — Impact of PJM’s Proposed Changes (Source: PJM Interconnection, LLC)

The task force session was part of a broader debate over the reliability value of excess capacity and the fairness of PJM’s treatment of demand response versus generation.

One generator representative said demand response has an unfair advantage in competing against generation in the capacity market. “I have a must-offer requirement for every megawatt I have and I have to offer at a capped rate. We’ve had a lot of new [generation] entry but we’ve had a lot more retirements” because the capacity market is not sending the right price signals, he said.

Ken Jennings, of Duke Energy, said that although demand response offers into the capacity market at lower prices than generation those savings could be offset by DR’s impact on the energy market. He noted that DR set prices at $1,800/MWh in some zones during the heat waves in July and September. DR’s effective maximum price is scheduled to rise to $2,700/MWh by 2015.

In contrast with DR role in reducing consumption, Jennings added, “It is the generators that tend to spur economic development.”

October 15, 2013

Federal Briefs

Former Colorado regulator Ron Binz withdrew from consideration as chairman of the Federal Energy Regulatory Commission because opponents had succeeded in painting him as an environmental extremist, he said. Binz abandoned his candidacy Oct. 1 after he was unable to win any Republican support within the Senate Energy and Commerce Committee and West Virginia Democrat Joe Manchin announced he would oppose his confirmation.

“The caricature that they created had nothing to do with who I am and nothing to do with what I might’ve brought to FERC. It was just a blood sport,” Binz told POLITICO.

Arkansas Public Service Commission Chairwoman Colette Honorable; Edward Finley, chairman of the North Carolina Utilities Commission and Regina Speed-Bost, an attorney with Schiff Hardin and a former FERC staffer, are reportedly among those being considered for the vacant fifth seat on the commission. Some observers say President Obama will name one of the two other Democrats on the commission, Cheryl LaFleur or John Norris, as chairman.

More: Politico; National Journal, Utility Dive

Renewable Tax Credits Seen Likely to Die

Federal tax credits for wind, geothermal and closed-loop biomass are due to expire in December, and many see little sign they will be renewed. Even if they are reinstated retroactively later, it would continue the credits’ longtime pattern of uncertainty.

More: BloombergBNA

Windmills (Image credit: Pedrosala / 123RF Stock Photo)

Murkowski Laments Efficiency Bill Blockage

The Senate should be embarrassed by its failure to pass a simple energy efficiency bill, says Sen. Lisa Murkowski, the top Republican on the energy committee. “There is so much blame to go around here,” she said. Bill backers are contemplating ways of getting past roadblocks.

More: Politico

Chambers of Commerce Want Fracking Regs Left to States

Chambers of Commerce in 17 states told the Environmental Protection Agency they want regulation of fracking left to states. Differences among states make uniform federal regulation problematic, they said.

More: Midwest Energy News

October 15, 2013

Task Force Sunset Approved

The Market Implementation Committee last week endorsed the sunset of a task force created in 2012 to develop a process for limiting compensation when resources do not operate within reliability limits.

The Reliability Limited Generator Compensation Task Force (RLGCTF) completed its work after developing Tariff and Operating Agreement language limiting lost opportunity costs and tightening rules on generators’ behavior. FERC approved the changes in an order May 29.

October 15, 2013

PJM Eyes Reduced Synch Reserve Estimates

PJM is planning changes to the way it estimates Tier 1 synchronized reserves after SR performance fell far short of expectations during the Sept. 10 heat spike. The RTO wants to make at least some of five proposed changes by the end of the year.

On Sept. 10, PJM received only 200 MW of Tier 1 reserves in the RFC region (the RTO excluding the Dominion zone), less than one-fifth of the 1,435 MW estimated by system operators. Members had claimed 4,000 MW of reserves, PJM staff told the Operating Committee last week.

“Wacky,” remarked one member.

Generator Response During 9/10/13 SR Event (Source: PJM Interconnection, LLC) — (Source: PJM Interconnection, LLC)

Operators’ lack of confidence in reported reserves led PJM to call on a record amount of demand response on Sept. 11. Gaps are not critical most days, but referring to the stressful September event, a staff member said, “These are the days we need to worry about.” (See Big To-Do List from September Heat Wave)

If all five changes that staff has proposed had been in place, the Sept. 10 estimate would have been about 301 MW, about 100 MW above the actual response, according to Senior Reliability Engineer Chris Pilong.

Pilong said staff wanted feedback on the changes although it does not need member approval to implement them. PJM plans to “nail down” their changes at the next OC meeting, Nov. 5.

The changes being considered would:

Cap Tier 1 estimates based on the lowest of EcoMax, SpinMax or Emergency Max. An analysis of the last 42 spinning-reserves events found less than 4% of units outperformed their EcoMax, Pilong said.
Remove from Tier 1 estimates hydro and combined-cycle units, most of which do not respond to Tier 1 spin events because they lack required equipment such as duct burners and fuel guns. The units would still be eligible for Tier 2 assignments.
Exclude units providing regulation from the Tier 1 estimates. Manual 12 allows such units to respond to spin events as long as they return to their regulating band within 10 minutes.
Remove from the Tier 1 estimate any units being backed down for constraint control.
Cap units’ Tier 1 estimates based on the degree of generator performance (DGP) modifier, which measures how units respond to dispatch instructions and estimates their future response. Staff is conducting additional analysis to determine whether to implement this change 24×7 or just during peak load periods and emergency procedures. Two committee members recommended applying this change only in emergency situations to assess its impact on reserves and shortage pricing.

Staff said the proposed changes would likely result in more Tier 2 clearing than did this summer.

Pilong said he also plans to propose rule changes to make PJM more confident it has enough of a synchronized-reserve requirement. He plans to bring the matter up at November’s meeting, taking into account the feedback he received from generator representatives.

“Market participants need to have a good feel for when PJM will be raising the SR requirement, or the triggers for it,” one generator representative said. When generators know they will be held back, he said, they won’t “chase LMP because PJM will compensate them for reserves.”

October 15, 2013

Sponsors Propose Relief for 15 Congested Facilities

Projected Annual Congestion - Top 10 Locations (Source: PJM Interconnection, LLC) — (Source: PJM Interconnection, LLC)

Six sponsors submitted proposals to relieve 15 transmission constraints in the “market efficiency” window that closed Sept. 26, officials told the Transmission Expansion Advisory Committee last week.

To win approval, developers of regional market efficiency projects must produce at least $1.25 in savings for every $1 in project cost. (See PJM Invites Transmission Projects to Reduce Congestion)

PJM said it will release a list of the proposed regional projects this week along with any interregional proposals for relieving congestion on market-to-market (M2M) and other congested facilities serving paths between PJM and MISO. The window for interregional projects closed Oct. 11.

PJM’s top 25 “congestion events” are projected to cost $237.8 million in 2017 (97% of all congestion for the year), rising to $514 million (95% of the total) in 2023. Eight of the 25 locations are market-to-market flowgates. Three spots are located in Commonwealth Edison and two each in Dayton Power & Light, MetEd and PECO.