The Consumer Advocates of PJM States (CAPS) introduced Dan Griffiths as its first director at the annual meeting of the National Association of State Utility Consumer Advocates.
Griffiths, a former deputy of Pennsylvania’s longtime advocate Sonny Popowski, criticized PJM’s proposed changes to the capacity market as harmful to consumers. (See Members Deadlock on DR in Capacity Auctions) Griffiths said it was difficult to quantify the impact of the changes. “But you can determine whether the arrows point up or down,” he said. “We see a lot of arrows pointing up.”
Griffiths made his remarks as PJM Chairman Howard Schneider sat in the front row.
CAPS President Stefanie Brand, director of the New Jersey Division of Rate Counsel, said advocates needed Griffiths to represent them because individual state offices lack the staff to attend all-day PJM meetings.
West Virginia Consumer Advocate Jackie Roberts, a CAPS board member, agreed: “If you’re not involved in the stakeholder process your influence is minimized.” Once an issue gets to FERC, she said, “it’s too late.”
Griffiths is being funded through CAPS’ $1.2 million share of a FERC settlement with Constellation Energy Commodities Group in a market manipulation case. Griffiths said the group would like a long-term source of funding similar to that of the Organization of PJM States, Inc. (OPSI). OPSI, which represents state regulatory commissions at PJM, receives about more than $600,000 in funding annually from the PJM tariff.
Binz Wins Consolation Prize
Former Colorado regulator Ron Binz, whose nomination to the Federal Energy Regulatory Commission was shot down by opposition from the coal industry, received NARUC Committee on Energy Resources and the Environment’s Mary Kilmarx Award, which honors “good government, clean energy and the environment.”
“This is one more thing for me to defend before the Senate Energy and Commerce Committee,” Binz joked. “The Mary Karl Marx award.”
Binz said he is resuming his consulting practice with a focus on regulatory reform, smart grid, new market entrants such as energy storage, and greenhouse gas emissions. “It was the forces of the status quo who took me down in the FERC battle,” he said.
PTC Extension ‘Reasonably Strong’: AWEA
Tom Kiernan, CEO of the American Wind Energy Association, said chances for an extension of the Production Tax Credit for 2014 are “reasonably strong” but that Congressional action probably won’t happen until after the New Year.
Because of the late renewal of the PTC for 2013, the U.S. added only 1.6 MW of wind capacity in the first half of the year, although activity has been “picking up steam” since, Kiernan said in an interview. A record 13,000 MW of nameplate capacity was added in 2012.
Kiernan said that the trade group would be willing to seek a phase out of the subsidy in six years, if it were accompanied by the elimination of other generation sources’ subsidies. (Unlikely, he acknowledges.)
Beyond the industry’s need for subsidies, Kiernan said it also needs more transmission to continue its growth. “We need to keep our shoulder to the wheel,” he said. “Transmission is still a very limiting factor.”
Kiernan joined AWEA in May after serving 15 years as president of the National Parks Conservation Association.
`Honey pot’ Lures Cyber Attacks
Kyle Wilhoit, a threat researcher with security firm Trend Micro, captivated NARUC members with an account of how he created a “honeypot” to lure hackers as a research project.
The first fictitious water utility, created from the basement of his St. Louis area home, attracted attacks within 18 hours of their creation. Later, he set up 12 servers in eight countries, which were attacked 74 times from sites in Russia, China, Germany, the U.S. and other countries. Eleven of the attacks were critical and would have compromised a real water system by stopping pumps and modifying temperature or pressure
One of the key lessons from the exercise, Wilhoit said, is that critical devices should be on virtual private networks. Attackers can easily discover ICS (industrial control system) and SCADA (supervisory control and data acquisition) devices through search engines, such as Google and SHODAN.
“There’s absolutely zero reason to have them Internet-facing,” he said. (See Wilhoit’s report, Who’s Really Attacking Your ICS Equipment.)
Regulators Consider State Role in FERC Market Enforcement
Rishi Garg, an attorney with the National Regulatory Research Institute, presented the initial results of a study on FERC enforcement of market manipulation rules and said he is working on a second phase to consider whether state regulators should engage in their own enforcement actions.
Garg said recent penalties and disgorgements totaled more than $1 billion. “That suggests there’s a lot of money coming in — and a lot of money being left on the table,” he said.
A paper published in the Energy Law Journal last year argued that consumers are less likely to be made whole when rates are found to be unjust and unreasonable under market-based rates than under traditional cost-based regulation. (See Analysis – JP Morgan Settlement: A Verdict on Electric Markets?)
Founded in 1976, the Institute conducts research for NARUC members.
Dodd Frank Ups Coop-Bank Trading: EEI
Lopa Parikh, of the Edison Electric Institute, told the conference of consumer advocates that cooperatives and municipal power companies are having trouble finding counterparties among utilities — and doing more business with banks – as a result of the Dodd-Frank law.
Parikh, EEI’s director of federal regulatory affairs for energy supply, said EEI members are spending an average of $1 million each for new record keeping systems due to the law and don’t want to incur further costly obligations by being classified as a swaps dealer.
The law says that companies doing $25 million in transactions in the prior year can be considered a swap dealer “That could be one or two PJM wholesale transactions,” she said.
A former consumer advocate in Ohio and the District of Columbia, Parikh beseeched advocates and state regulators to express their concerns to the CFTC. “They see us as trying to avoid rules and regulations,” she said, “so they don’t always take what we say to heart.”
