INDIANAPOLIS — The Clean Power Plan, Order 1000, FERC enforcement and distributed generation were favorite topics at last week’s annual meeting of the Energy Bar Association’s Midwest chapter. Here’s a sampling of what we heard.
“Let’s not talk about how the stay will halt work” on the Clean Power Plan, FERC Commissioner Colette Honorable said. “The industry was moving toward a more renewable future long before the Clean Power Plan came along. Let’s continue our work regardless of the stay. It’s a stay. It’s not a decision on the ultimate merits of the plan.”
Honorable also asked the Energy Bar Association for feedback on whether Order 1000 could be improved. “I know it’s not perfect. … We know that the sticky part is interregional planning. I want Order 1000 to aid in the development of these very important interregional projects and not be a barrier.”
Steve Allen, pipeline safety director at the Indiana Utility Regulatory Commission, commented on the trend of electric utilities acquiring gas businesses to feed their gas turbines. “You can have a good safety culture without having a good pipeline safety management system in place, but you can’t have a good pipeline safety management system without a good safety culture.”
John Tsoukalis, an associate with The Brattle Group, said if FERC prohibits virtual trades at nodes with financial transmission rights in order to stop participants from taking losses on virtuals to increase the value of their FTRs, it would also end legitimate trading and harm the market. “FERC is growing aggressive on how they [prove intent],” he said. “But that’s still a question: How heavily does intent versus economic evidence weigh in FERC’s investigation?”
John Parsons, of the MIT Sloan School of Management, discussed the bidding strategy that landed J.P. Morgan in FERC’s crosshairs for market manipulation in California and Michigan in 2013. “From 10 to 11 p.m., their bid price was negative $30/MWh; from 1 to 2 a.m., their bid price was $999/MWh. What they were trying to do was exploit a seam in the algorithm. [The unit] got paid $999/MWh for the two to three hours it took to ramp down,” he said.
Jim Cater, director of economic and financial policy for the American Public Power Association, questioned the appeal of customer-owned distributed energy resources such as rooftop solar. “There’s a notion that somehow there’s a customer groundswell of this, but I don’t know that many people who are involved with this at home,” he said. “I don’t want to be perceived as a naysayer … but this has got momentum behind it that could benefit from a bit of cost-benefit analysis.”
Donna M. Attanasio, senior advisor for energy law programs at George Washington University Law School, talked about the genesis of the e21 Initiative, which the university launched in 2014 along with the Great Plains Institute, Xcel Energy and others to plot a new regulatory model in Minnesota. “Customers want green power; they want more flexibility. If the utilities aren’t going to provide these, customers are going out and getting it themselves. This is where the e21 Initiative started.”
Stacy Stotts, a partner and member of the environmental and natural resources division at Stinson Leonard Street, commented on the Supreme Court’s stay of the Clean Power Plan. “To say the stay is unprecedented is an understatement. The biggest argument [against the CPP] is that utilities are already regulated under the Clean Air Act. If this argument prevails, the rule is gone, it’s going to be vacated … I think that’s a strong argument. Now, what if the rule is vacated? An important thing to remember is the EPA [still] has to regulate emissions — the Supreme Court told them to in Massachusetts v. EPA.”
Stotts also predicted President Obama’s effort to win Senate approval of a replacement for Justice Antonin Scalia “will be a brutal appointment process.”
– Amanda Durish Cook
