Pacific Gas and Electric stands to lose millions of dollars in transmission revenues after a federal court this week challenged FERC decisions allowing the utility to include a CAISO participation adder in its transmission rates.
In a 3-0 ruling Monday, the 9th U.S. Circuit Court of Appeals remanded to FERC two previous orders authorizing the adders for 2016 and 2017, saying the commission’s interpretation of its authority to grant incentives “does not reflect thorough consideration, nor is it persuasive in its own right.”
The ruling could shake up FERC’s longstanding practice of routinely granting the 50-basis-point adder to transmission owners, a practice the California Public Utilities Commission has challenged because state law requires investor-owned utilities to be members of CAISO. (See CPUC Contests ISO Incentive for PG&E.) The CPUC has contended the adder provides a $30 million “unjustified windfall” for PG&E but has withdrawn previous challenges as a condition of settlement.
A federal appeals court reversed incentive rates granted to PG&E by FERC for membership in CAISO
The Energy Policy Act of 2005 directed FERC to create the incentives, and the adders were introduced the following year in Order 679. Rather than being included as a “generic” adder to a TO’s formula rate, RTO incentives are subject to commission approval on a case-by-case basis — which the commission has routinely granted PG&E.
FERC last year rejected the CPUC’s request to rehear a decision permitting PG&E to include the adder in its 2017 rates, calling the incentive “longstanding practice.” (See FERC Upholds PG&E ISO Incentive Adder, Rebuffs CPUC.)
But the appeals court took issue with the commission’s approach.
“FERC did not reasonably interpret Order 679 as justifying summary grants of adders for remaining in a transmission organization,” the court said in its ruling. It called FERC’s practice “an unexplained departure from longstanding policy” and said the commission’s rationale for granting the incentives amounted to the creation of generic adder.
“FERC’s interpretation of Order 679 is plainly erroneous and inconsistent with the regulation,” the court said.
“We are disappointed with the ruling and intend to pursue the issue when FERC considers its next steps in the proceedings,” PG&E said.
The CPUC told RTO Insider that “FERC was going against its own longstanding policy that incentives should induce future voluntary conduct. By granting PG&E this incentive adder, FERC was essentially giving PG&E a windfall for action it had already taken and is legally required to do.”
If reversed on remand, the CPUC expects $25 million to be removed from PG&E’s current rate case and $30 million or more in future rate cases.
FERC spokesman Craig Cano said the commission had no comment on the decision.
The CPUC has also filed a separate protest with FERC over similar adders being considered in Southern California Edison’s current rate case, a position that has won sympathy from new Commissioner Richard Glick.
CAISO market participants have many opinions on how the ISO should prioritize the many complex and urgent tasks on its plate for 2018.
The ISO recently announced major initiatives to become a Reliability Coordinator in the West, expand its day-ahead market into the EIM, and implement a new package of resource adequacy enhancements, among a slew of other ongoing market changes listed in the grid operator’s policy initiatives catalog. Renewable integration issues such as flexible capacity needs and regional markets and transmission planning are other topics on the minds of market participants who commented on the CAISO roadmap laying out the schedule for policy initiatives.
The spate of initiatives is emerging as CAISO and California regulators look to overhaul their resource adequacy (RA) programs in the face of rising reliability-must-run (RMR) payments to gas generators. Misalignments in RA procurement between the ISO and the California Public Utilities Commission has increased the ISO’s reliance on backstop processes such as RMR and capacity procurement mechanism (CPM) contracts.
Pace of RMR Overhaul Questioned
In comments filed with CAISO, some stakeholders said they want the ISO to combine and accelerate timelines for initiatives such as its RMR/CPM overhaul, while others questioned whether the ISO is taking on too many issues at one time given the complexities and interplay of the many initiatives already underway going into this year.
PG&E’s 2250-MW capacity DIablo Canyon Power Plant
Pacific Gas and Electric’s Matt Lecar urged quicker action on the RMR/CPM initiative, which kicks off with a Jan. 30 meeting. The company wants CAISO to combine proposed Phases 1 and 2 of the effort into a concurrent process and move on an accelerated timeline to prevent a wave of RMR contracts.
“PG&E is deeply concerned that this schedule and framing of the issue [do] not rise to the level of current challenges in the backstop procurement arena,” he said. The timeline does not allow for policy changes until 2019, leaving little time for FERC approval before the 2020 RMR designations go into effect, he said.
“The CAISO has proposed a timetable that may condemn PG&E customers to bear hundreds of millions of dollars of new RMR contract costs for a minimum of three more years and likely longer. There is no justification for this delay,” Lecar said.
The RMRs and other backstop procurements have become more urgent issues since the CAISO Board of Governors reapproved three RMRs in 2017, which PG&E referenced in its roadmap comments. The CPUC responded by soliciting contracts that would replace the three RMRs with Calpine last year, with a fast-track vote set for Jan. 11. CAISO also last month assigned a CPM designation to more gas-fired plants. (See CPUC Targets CAISO’s Calpine RMRs.)
CAISO-CPUC resource adequacy interactions | CAISO
PG&E, the CPUC, and others have opposed the RMRs, each for their own reasons, and CAISO officials have also expressed they would rather procurements result from market signals than out-of-market mechanisms. The debate also has implications for ratepayers and other market participants such as community choice aggregators, which the CPUC is proposing be brought under its RA procurement requirement.
NRG Director of Market Affairs Brian Theaker said, “The increased use of RMR and CPM is a sign of the growing failure of the RA program to identify and compensate the resources needed to maintain reliability.” NRG also said the RA problems and RMR/CPM initiatives should not be fixed sequentially.
“The perpetual limbo for lesser items must be addressed,” said Theaker.
Carrie Bentley, representing the Western Power Trading Forum (WPTF), said CAISO should take full responsibility for the RA program, which holds the ISO accountable for local and flexible capacity requirements.
“Concurrently, RA reform is being taken up by the CPUC, and the CAISO has stated [it] will need to be coordinated with this effort,” she said. “WPTF believes that both efforts are very large and worthwhile and therefore asks the CAISO to make transparent how [it] will allocate resources to each process.”
EIM Participants Look to Day-Ahead
Integrated resource plans, resource adequacy and CAISO markets must align to meet policy goals | CAISO
Other commenters are focused on CAISO’s Western Energy Imbalance Market (EIM) and regional issues, such as transmission planning and the ISO’s announced expansion of its day-ahead market into the EIM.
The Public Generating Pool (PGP), an association of 10 consumer-owned utilities in the Pacific Northwest with more than 6,000 MW of generation, said CAISO should publish an issue paper on its EIM expansion soon and mentioned the many other initiatives the ISO has underway. PGP thinks CAISO should extend its time frame for working on the day-ahead market enhancements.
“PGP finds the timeline for these initiatives to be very aggressive and is concerned about the impact and unintended consequences implementing these initiatives on such a constricted schedule will have,” PGP said in its comments. While PGP acknowledged the constraints on the ISO’s priorities and resources, it also said “there is currently little transparency around how and when the ISO makes those changes.”
The American Wind Energy Association’s California Caucus said it was concerned that CAISO’s roadmap is focused too much on operational efficiencies and not enough on transmission planning to access renewables. The group said it “implores the CAISO to immediately begin studying transmission expansion to access low-cost renewable resources outside of the current CAISO footprint.”
The Bonneville Power Administration said it was encouraged that the roadmap includes CAISO’s Flexible Resource Adequacy and Must Offer Obligations (FRACMOO2) initiative, which is important to all Northwest hydroelectric producers and can provide fast-acting response to help manage intermittent renewables. (See Power Sellers Urge Action on CAISO Flex Capacity.)
“We look to this initiative in 2018 to explain the objectives driving any limitations for external resources providing flexible RA,” BPA said. It also asked CAISO to prioritize changes to the default energy bid option that address opportunity costs for hydro units.
Clean energy interests in jointly filed comments urged CAISO to prioritize the expansion of the day-ahead market into the EIM and begin outreach to stakeholders this month. They include the Western Grid Group, Islands Energy Coalition, Natural Resources Defense Council, Northwest Energy Coalition, and Vote Solar.
ALBANY, N.Y. — New York power industry stakeholders on Monday debated the merits of a draft work plan designed to guide the implementation of carbon pricing in the state’s wholesale electricity market.
Devised by the Integrating Public Policy Task Force (IPPTF) late last month, the plan consists of six “issue tracks” designed to generate stakeholder recommendations for pricing carbon into the market. The task force, which held its first technical conference Dec. 11, will next month begin meeting nearly every Monday over the course of the year to work through each track. (See New York Hashes out Details of Carbon Policy.)
The objective is to develop a firm proposal by December 2018 — if possible.
The issue tracks include the following: 1) straw proposal development; 2) wholesale energy market mechanics (including “carbon leakage” and how to measure emissions); 3) policy mechanics; 4) interaction with other wholesale market processes (such as the capacity market); 5) interaction with other state policies (such as RGGI); and 6) impacts.
The task force will issue a final work plan by the end of January, said IPPTF co-chair Nicole Bouchez, a NYISO market design economist.
During the Jan. 8 meeting, attorney Kevin Lang of Couch White, representing New York City, quickly questioned the premise of the task force, contending that pricing carbon seemed to be a conclusion built in to the process.
“When will we talk about whether we will price carbon?” Lang said. “It’s not just about how to do it, but whether this is the right way to go.”
IPPTF co-chair Marco Padula, deputy director for market structure at the state’s Department of Public Service (DPS), said Lang was moving too fast and the whole point of a deeper analysis of the issue is to determine whether a carbon charge would work in New York.
Defining the Challenge
The first hour of Monday’s meeting was devoted to discussing Track 1 — developing a straw proposal for carbon pricing, which the IPPTF wants to complete by March.
“What is the rationale, what is the end goal for carbon pricing as means to some end?” asked Benjamin Mandel, renewable energy policy advisor to the New York City mayor’s Office of Sustainability. “We broadly suspect it relates to decarbonizing the energy supply, but as has been brought up multiple times by colleagues, there are concerns about whether this one policy instrument in isolation is sufficient to actually achieve that objective in certain locations within New York state.”
NYISO Senior Vice President for Market Structures Rana Mukerji said he thinks the goal is for the state to get 50% of its power from renewable resources by 2030, which the status quo would attempt to achieve solely with renewable energy credits and zero-emissions credits.
“What we asked Brattle to do was to see, if we use carbon pricing in addition to REC and ZEC, whether you could get the same outcome in a more efficient manner,” Mukerji said. “And you have the result of the Brattle analysis, which included impacts on a zonal basis. For Track 1 we’ll have to see more questions on that, whether carbon pricing is indeed more efficient and cost effective when the [Brattle] study shows it was in the range of being cost-neutral.”
Kelli Joseph, NRG Energy’s director of market and regulatory affairs, said she was surprised by Mukerji’s assessment “because if the goal is really [50% emissions reductions] by [2030], there are fundamental assumptions in that [Brattle] report that need to be challenged, including the marginal emission rate that is assumed over time. The state’s goal of getting renewables on by 2030 will have much less carbon emission in the market and [Brattle is] assuming a 2015 system, and even in 2025 the system is not going to look like that.”
Net Change in Carbon Charge | Daymark Energy Advisors
Mark Reeder, an economist representing the Alliance for Clean Energy New York, said a much more detailed economic analysis would be needed: “We don’t know what the price impacts are because we lack the analysis.”
Sanity Check
Bouchez hit the pause button, reminding meeting participants that “what started this was not the Brattle report [on carbon pricing], it was stakeholders asking if there was a better way of harmonizing wholesale electricity markets with state policy … the fundamental question is, how do our wholesale markets interact with state policy and is there a way of making that a better interaction,” said Bouchez.
Greenberg Traurig attorney Doreen Saia said the Brattle report’s limited review of the issues produced a favorable enough answer to compel NYISO and DPS to develop a proposal showing the benefits of carbon pricing.
“Is it fair to assume, to address the consternation of [stakeholders], that [when Track 1 is ready] you would start to look at the impacts associated with what the proposal does or does not produce, does or not provide, so that by June … you can take a test — a sanity check — to see if where you’re headed seems to be sufficient?” Saia asked.
Three Criteria and Transmission Need
Meeting participants also heard an evaluation of possible pricing mechanisms commissioned by the Department of Public Service’s Utility Intervention Unit (UIU).
Speaking on behalf of the UIU, Marc Montalvo of Daymark Energy Advisors, who conducted the study, said the group determined three criteria for measuring the success of carbon pricing: strategic alignment, technical feasibility, and cost effectiveness.
According to Montalvo, strategic alignment would ensure that a chosen approach furthers the overall public policy aims of reducing greenhouse gases and deploying new renewable energy resources. Technical feasibility would mean meeting minimum grid reliability standards, while cost effectiveness would yield the most benefit at the lowest cost.
The three criteria “allow you to whittle down through the potentially long menu of options in a very systematic way,” Montalvo said.
The Brattle report wanted “to get a sense of [the] magnitude and direction if one were to implement a carbon charge with a certain structure, what would that mean for rate trajectory for consumers inside New York generally, as an aggregate,” Montalvo said.
Net Change in Carbon Charge | Daymark Energy Advisors
But now the exercise is to understand all the factors that actually contribute to the evolution of New York’s power sector, the necessary investments in generation and transmission, the response of consumers to changing rates “and what … that [means] for the broader economic issues inside the state, and ultimately for the goals that we have around carbon dioxide emissions and renewable buildout,” Montalvo said.
As a starting point, the UIU study ran a few sensitivities and hypothesized several scenarios in the years 2020, 2025, and 2030.
“One of the interesting things in looking at 2020 is that a lot of the dynamics that are built in to the model for 2025 don’t show up by 2020 because it’s two years away, so a lot of the market response is not yet motivated because there’s not enough time for things to happen,” Montalvo said.
Similarly, some of the issues around demand elasticity are a little different, depending on the year chosen, he said.
Under the model, 2020 is the year when prices tend to be highest and the impacts are greatest because the market has not had time to adjust to carbon pricing, Montalvo said.
“If one is to impose a carbon charge of this sort, is it appropriate and should one consider some kind of mechanism to transition the marketplace into it so you don’t have a great disruption among certain sectors of the economy?” Montalvo asked.
“All other things being equal, there’s a lot of economic interest in constructing a new plant, but there’s really no way to connect that plant to load in the model,” he said. “That’s something to be aware of, that you can’t just add generation to New York’s power system without ever accommodating it with additional transmission and expect prices to go down uniformly across the region.”
[Editor’s Note: An earlier version of this story incorrectly attributed Doreen Saia’s comments to Doreen Harris, director of large-scale renewables at the New York State Energy Research and Development Authority.]
ISO-NE asked for FERC approval of its two-stage capacity auction Monday following months of negotiations that left the RTO’s stakeholders split.
The RTO filed for approval of its Competitive Auctions with Sponsored Policy Resources (CASPR) proposal even though it fell short of the 60% support needed to win endorsement in a Participants Committee vote on Dec. 8 (ER18-619).
CASPR received a sector-weighted vote of 57.75%, with the strongest support coming from the Generation, Transmission and Supplier sectors and virtually no support from End Users. Publicly Owned Entities voted 45-0 in opposition.
‘Cash for Clunkers’
CASPR arose out of the New England Power Pool’s Integrating Markets and Public Policy (IMAPP) initiative, launched in August 2016 in response to state regulators’ concerns over funding of their procurements of renewable generation and generators’ fears that out-of-market resources will suppress capacity prices. Massachusetts, Connecticut and Rhode Island plan to procure more than 3,600 MW of nameplate renewable generation.
“The New England states have expressed concern that the [minimum offer price rule] may cause electricity consumers to ‘pay twice’: once for the cost of the capacity procured in the [Forward Capacity Market], and a second time for the additional generation capacity obtained through the out-of-market contracts with preferred policy resources,” the RTO explained in its filing. “In other words, the region could develop more generation resources than the ISO requires to operate the power system — at an unnecessarily high total cost to consumers.”
| ISO-NE
In the first stage, ISO-NE would clear the auction as it does today, applying the MOPR to new capacity offers to prevent price suppression. In the second Substitution Auction (SA), generators with retirement bids that cleared in the primary auction would transfer their obligations to subsidized new resources that did not clear because of the MOPR.
Because the SA will not use the MOPR, it will clear at lower prices than the primary auction, enabling existing resources to buy out their obligations at a lower cost in return for retiring. The savings would in effect be a “severance payment” to the retiring resources, ISO-NE said. The RTO has explained the SA as akin to a “‘cash for clunkers’ secondary market,” referring to the Obama administration’s 2009 program to encourage the retirement of older, gas-guzzling automobiles.
The proposal would phase out the current Renewable Technology Resource exemption, which has allowed ISO-NE to clear 200 MW of renewable generation in its capacity auction annually without regard for the MOPR.
The RTO asked that most of the CASPR rules become effective on March 9, 2018, when it will begin its planning for FCA 13 in 2019. “This auction is the first opportunity for FCM participation by up to 1,200 MW of nameplate clean energy supply to be procured by Massachusetts pursuant to statute,” the RTO said.
States Split
Although state regulators have no votes in NEPOOL, they were engaged in the negotiations — and split over the result.
Vermont, Connecticut and Rhode Island opposed the final proposal, while Massachusetts, New Hampshire and Maine supported it, according to the New England States Committee on Electricity (NESCOE).
Massachusetts, New Hampshire and Maine are supporting the CASPR proposal “primarily based on the view that CASPR is not expected to have an adverse impact on their ratepayers, and they don’t have the same requirement of state law to satisfy,” NESCOE said in a statement read at the Dec. 8 meeting.
For Vermont, Connecticut and Rhode Island, on the other hand, “the assertion ISO-NE made at the outset — that CASPR is better than what was in place — has not been proven out,” NESCOE said.
Change to Definition
ISO-NE upset many stakeholders when it agreed to a proposal by the Natural Resources Defense Council and Conservation Law Foundation to limit eligibility in the SA to renewable or clean energy resources receiving out-of-market revenue under state rules enacted before Jan. 1, 2018.
“We thought that the original SA supply definition was incommensurate with the goal of IMAPP, which was to integrate big purchases of low carbon/renewable purchases by states,” CLF’s David Ismay told RTO Insider. “As originally proposed, CASPR would have allowed any generation — including traditional fossil fuel generation — to qualify in the new, second auction (as SA supply) as long as it was deemed desirable for some/any reason by some/any public entity.”
But the change alienated the Public Power sector. In a memo to NEPOOL, Public Power representative Brian Forshaw said the revised definition abandoned ISO-NE’s pledge to be “technology-neutral,” which would have allowed it to cover resources meeting “broader policy objectives including fuel diversity, local area resiliency, maintaining competitive electric rates, and mitigating the volatility of capacity costs in addition to environmental stewardship objectives.”
Connecticut also opposed the change, according to meeting minutes, saying the RTO’s proposal did not “definitively allow” large-scale hydro the state may procure “through existing or future state law or regulations” to qualify for the SA.
Lack of ‘Backstop’
The dissenting states also said the RTO’s proposal was unacceptable without a proposed “backstop” provision that would have allowed up to 200 MW of state-procured renewables to enter the market annually even if there were no corresponding retirements in that year.
FERC on Monday rejected Energy Secretary Rick Perry’s call for cost-of-service payments to coal and nuclear generators, instead initiating a broader review of grid operators’ efforts to ensure “resilience.”
The commission’s unanimous order terminated the rulemaking initiated by Perry (RM18-1), saying he had not shown that existing RTO tariffs were unjust and unreasonable. The order also opened a new docket (AD18-7) and gave RTOs and ISOs 60 days to respond to more than two dozen questions on their efforts.
“The [Federal Power Act] is clear: In order to require RTOs/ISOs to implement tariff changes as contemplated by the proposed rule, there must be a demonstration that the specific statutory standards of Section 206 of the FPA are satisfied. Thus, there must first be a showing that the existing RTO/ISO tariffs are unjust, unreasonable, unduly discriminatory or preferential,” the commission said. “Then, any remedy proposed under FPA Section 206 must be shown to be just, reasonable, and not unduly discriminatory or preferential. … The proposed rule did not satisfy those clear and fundamental legal requirements under Section 206 of the FPA. Given those legal requirements, we have no choice but to terminate Docket No. RM18-1-000.
“Although we terminate the proposed rule … we are not ending our work on the issue of resilience. To the contrary, we are initiating a new proceeding to address resilience in a broader context and are directing the RTOs/ISOs to provide information — followed by an opportunity for comment by any other interested entity — that will inform us as to whether additional actions by the commission and the ISOs/RTOs are warranted with regard to resilience issues.”
The 18-page order included a brief history of how the electric system has changed with the advent of organized markets and the transition away from fossil fuels and toward renewables. The commission also noted steps it has taken to ensure the grid’s stability, including tougher capacity market rules in PJM and ISO-NE, mandatory NERC reliability standards, improvements to gas-electric coordination and requirements that new renewable generation provide reactive power.
“While none of the commission’s efforts described above were specifically targeted at ‘resilience’ by name, they were directed at elements of resilience, in that they sought to ensure the uninterrupted supply of electricity in the face of fuel disruptions or extreme weather threats,” the commission said, adding, “The commission’s endorsement of markets does not conflict with its oversight of reliability, and the commission has been able to focus on both without compromising its commitment to either.”
Perry’s Proposal
The Department of Energy’s proposed rule, issued Sept. 29, would have required RTOs and ISOs with energy and capacity markets to make cost-of-service payments to generators that have a 90-day on-site fuel supply and are able to provide “essential reliability services.”
Citing the high rate of generation outages in PJM during the 2013/14 cold snap, Perry contended the grid was at risk because of retirements of coal and nuclear generation. Perry ordered the commission to respond within 60 days, a deadline he extended for a month at the request of new FERC Chair Kevin McIntyre.
In addition to failing to demonstrate that current RTO/ISO tariffs are unjust and unreasonable, the commission said, Perry’s proposed solution was also wanting. “The proposed rule would allow all eligible resources to receive a cost-of-service rate regardless of need or cost to the system,” the commission said. “The record, however, does not demonstrate that such an outcome would be just and reasonable. It also has not been shown that the remedy in the proposed rule would not be unduly discriminatory or preferential. For example, the proposed rule’s on-site 90-day fuel supply requirement would appear to permit only certain resources to be eligible for the rate, thereby excluding other resources that may have resilience attributes.”
New Proceeding
FERC said the new proceeding would document how each RTO and ISO assesses resilience and use the information “to evaluate whether additional commission action regarding resilience is appropriate.”
The commission also said it will seek to develop a common understanding “of what resilience of the bulk power system means and requires.”
“There seems to be a general consensus that grid reliability and grid resilience are related but separate concepts, with the elements of grid reliability being better understood and defined. It also is evident that there is currently no uniform definition of resilience used across the electric industry,” FERC said.
It invited comment on its own proposed definition: “The ability to withstand and reduce the magnitude and/or duration of disruptive events, which includes the capability to anticipate, absorb, adapt to and/or rapidly recover from such an event.”
Questions for RTOs
The order asked RTOs to identify their resilience risks; whether they should assess their resource portfolios against contingencies from the loss of key infrastructure; and the bulk power system attributes that contribute to resilience.
It also asked RTOs to address how extreme weather, drought, and physical and cyber threats affect generation technologies differently. Large nuclear and coal plants can face curtailments if they lose their cooling water supplies because of drought.
“Each RTO/ISO should take a proactive stance on addressing and ensuring resilience,” the commission said. “We are encouraged by efforts underway in PJM and ISO-NE to better understand vulnerabilities in their systems, and support similar efforts in other regions where analyses of potential resilience issues could be helpful. We also are encouraged by the ongoing work in MISO to develop a long-term plan to address changing system needs in light of an evolving resource mix.”
Broader Look at Resilience
The commission said that while Perry’s proposal focused only on on-site fuel, its inquiry would be broader, including market rules, planning and coordination, NERC standards, and transmission system outages.
It also noted that RTOs and ISOs share resilience concerns with transmission providers in areas that do not have centralized wholesale electricity markets, but it said “hearing from the RTOs/ISOs on this topic is an appropriate place to begin.”
Although the commission ruled unanimously, Commissioners Cheryl LaFleur, Richard Glick and Neil Chatterjee issued concurring statements spelling out their own views of the issue.
Praising Perry’s “bold leadership,” Chatterjee, a Republican, reiterated his call for “interim compensation” of generation facing retirement during the commission’s inquiry.
“Current RTO/ISO market design mechanisms are intended to incent generation resource owners to manage the fuel supply risks they can control — not the spectrum of fuel supply risks beyond their control,” Chatterjee wrote, citing the risks of gas pipeline outages.
“The record clearly suggests that the latter class of risks are increasingly significant due to shifts in the generation mix and the fast-evolving national security threat environment. Neither current RTO/ISO tariffs nor the NERC reliability standards require RTOs/ISOs to assess these fuel supply risks or other significant resilience risks and mitigate their potentially significant impact on the bulk power system. This suggests that existing RTO/ISO tariffs may be unjust and unreasonable insofar as they may not adequately compensate resources for their contributions to bulk power system resilience.”
LaFleur and fellow Democrat Glick were far more critical of the DOE proposal.
“The proposed rule … did not make a factual showing of a defined resilience need or allow a market- or standards-based solution to solve that need. Rather, it presumed a resilience need and proposed a far-reaching out-of-market approach to ‘solve’ it,” LaFleur wrote. “This proposed remedy, which simply designated resources for support rather than determining what services needed to be provided, would be highly damaging to the ability of the market to meet customer needs — including any demonstrated resilience needs — fairly, efficiently and transparently. In effect, it sought to freeze yesterday’s resources in place indefinitely, rather than adapting resilience to the resources that the market is selecting today or toward which it is trending in the future. I believe the commission should continue to focus its efforts not on slowing the transition from the past but on easing the transition to the future.”
Glick said Perry’s proposal “had little, if anything, to do with resilience, and was instead aimed at subsidizing certain uncompetitive electric generation technologies.”
“The record demonstrates that, if a threat to grid resilience exists, the threat lies mostly with the transmission and distribution systems, where virtually all significant disruptions occur,” Glick wrote.
He noted the resilience challenges coal generators face, such as frozen and flooded fuel supplies. “Initial reports indicate that coal-fired facilities accounted for nearly half of all forced outages in PJM during last week’s period of extreme temperatures. Similarly, during the same period, the Pilgrim Nuclear Power Station was manually removed from service, complicating efforts to serve load within ISO-NE.”
Glick also noted the “irony that the department’s proposed rule would exacerbate the intensity and frequency of … extreme weather events by helping to forestall the retirement of coal-fired generators, which emit significant quantities of greenhouse gases that contribute to anthropogenic climate change.”
The commissioner expressed sympathy for coal miners who have lost their jobs because of the fuel’s declining share of the generation mix.
Lignite coal conveyor at plant | FEECO International
“We have a history in this country of helping those who, through no fault of their own, have been adversely affected by technological and market change,” he said. “But that is the responsibility of Congress and the state legislatures. It is not a role that the Federal Power Act provides to the commission.”
Glick concluded: “If the RTOs and ISOs demonstrate that the resilience of the bulk power system is threatened, we should act. If not, we should move on.”
Praise from Green Groups, Dismay from Coal and Nuclear Interests
Trade groups and other energy stakeholders wasted no time offering their opinion of FERC’s rejection of Energy Secretary Rick Perry’s call for cost-of-service payments to coal and nuclear generators. Here’s a sample:
Paul Bailey, CEO of the American Coalition for Clean Coal Electricity: “We are disappointed by FERC’s decision because the electricity grid could become less reliable and less resilient while more information is being collected. Nonetheless we will continue working with FERC and ISO/RTOs to assure that wholesale electricity markets value the attributes of the coal fleet. The recent bomb cyclone is a reminder why we need a healthy coal fleet. Several grid operators relied on the coal fleet for more than 40% of the electricity this past week.”
Maria Korsnick, CEO of the Nuclear Energy Institute: “We are disappointed that FERC did not take affirmative action that would preserve our nation’s nuclear plants. America’s nuclear fleet must remain a strategic asset contributing to energy security, resilience, reliability, economic growth and environmental protection. The status quo, in which markets recognize only short-term price signals and ignore the essential role of nuclear generation, will lead to more premature shutdowns of well-run nuclear facilities. Once closed, these facilities are shuttered forever. … We are committed to working with FERC, the Department of Energy and other federal and state policymakers to ensure that America’s nuclear fleet continues to deliver electricity reliably and affordably. We believe the direction to the RTOs/ISOs to ‘take a proactive stance on addressing and ensuring resilience’ must lead to prompt and meaningful action, including on issues such as price formation.”
John E. Shelk, CEO of the Electric Power Supply Association: “This decision is a victory for the independence of FERC as the regulatory agency charged by Congress with implementing the Federal Power Act. EPSA applauds FERC for reaffirming its commitment to well-functioning wholesale power markets.”
Malcolm Woolf, SVP for Policy, Advanced Energy Economy: “We commend the FERC commissioners for rejecting an unwarranted bailout of uneconomic power plants in order to solve a problem that doesn’t exist. We look forward to engaging in a holistic look at what it takes to keep the lights on, and to demonstrating the contribution of advanced energy technologies to an affordable, reliable, resilient grid.”
Jim Matheson, CEO of the National Rural Electric Cooperative Association: “We support FERC’s commitment to continuing this conversation on improving the resilience of the electric grid. This will be an important dialogue, and we appreciate Energy Secretary Perry for jump-starting the discussion. Electric co-ops put a premium on maintaining a diverse, affordable and reliable power supply for their members.”
Former FERC Commissioner Tony Clark: “On the spectrum of next steps, the path FERC chose is relatively informal. No [Notice of Inquiry]. No [Advanced] NOPR. No further NOPR. No Section 206. No specific price formation reforms.”
American Council on Renewable Energy, American Wind Energy Association, Energy Storage Association, Natural Gas Supply Association, Solar Energy Industries Association: “We are very encouraged by the action taken by FERC today. We look forward to engaging with FERC, DOE and grid operators in an examination of what resilience of the electric power system means and requires, and to demonstrating the contribution of our industries to ensuring reliable power for all.”
Mary Anne Hitt, director of Sierra Club’s Beyond Coal campaign: “This entire NOPR process has been a comically orchestrated ploy by unscrupulous coal and nuclear executives to handicap their competition because they were foolish enough to think that American electricity customers wanted their dirty, expensive power plants when cheaper, cleaner alternatives are available. We doubt that this will be their last attempt to bailout their failing plants, so we are preparing for their next round of dangerous proposals.”
A “long-term systemic failure” of regulatory and industry practices caused the Oroville Dam crisis in February 2017, an independent forensics team said in a new report that recommends a reworking of broader dam safety practices across the country.
Oroville Dam on February 17, 2017 | California Department of Water Resources
There was no single cause or chain of events that provoked the failure of the dam’s spillway, which was completed in 1968, the report says. The California Department of Water Resources (CDWR) was forced to use the dam’s emergency spillway on Feb. 12 after the dam’s main spillway failed, requiring the evacuation of 188,000 residents near Oroville in Butte County, about 75 miles north of Sacramento.
“The incident was caused by a complex interaction of relatively common physical, human, organizational and industry factors, starting with the design of the project and continuing until the incident,” the report said.
FERC required CDWR to engage with a forensic team to study the incident, with members recommended by the Association of State Dam Safety Officials and the United States Society on Dams. The team studied design and construction records, inspections, maintenance reports, investigations and other records.
Physical factors contributing to the failure included inherent vulnerabilities in spillway designs and construction of the dam, and the poor condition of the foundation rock underneath some spillway locations. There has also been inadequate attention paid to spillways, the report said, because spillway incidents don’t usually lead to loss of life and spillway incidents have been under-reported. CDWR might have also become complacent because of a lack of previous failures outside of the state, but the department should have been aware of accidents in other states and countries, the report said.
The main spillway had problems right after construction, according to the report, including a large crack in the concrete chute slab, and high underdrain flows were observed. The cracking and underdrain flows were considered normal, but repairs were “ineffective and perhaps detrimental.”
Ultimate damage at the service spillway | California Department of Water Resources
“The seriousness of the weak as-constructed conditions and lack of repair durability was not recognized during numerous inspections and review processes over the almost 50-year history of the project,” the report said.
It faulted the dam safety culture and program within CDWR, overconfidence and complacency regarding the dam’s condition, inadequate usage of industry knowledge, and bureaucratic constraints on staffing and expertise. The report suggested CDWR was also under pressure from the State Water Contractors, a group of 29 California public agencies, to control costs.
Environmental groups had warned CDWR and FERC about the facility, requesting during its 2005 relicensing that the hillside below the spillway be paved, but those pleas were rejected.
The report said CDWR has been too dependent on regulators and the regulatory process, and more broadly, the report recommends a strong “top down” safety culture at dams, with one executive charged with condition awareness and new expert staffing. More frequent physical inspections are not always sufficient, and CDWR has been a “somewhat insular” organization, inhibiting technical expertise, it said.
The report also recommended periodic reviews of original designs, construction and performance — more in-depth than the current reviews mandated by FERC every five years. It noted that in regular inspections by CDWR, FERC and others, the spillway was observed only from the headgate structure where only the upper, flat portion of the spillway could be seen. Repairs conducted in 2009 and 2013 were seen as routine and were not submitted for regulatory approval.
Corroded and ruptured steel reinforcing bars at a slab crack | Independent Forensic Team Report by Association of State Dam Safety Officials
“The [independent forensics team] believes that both the California state and FERC dam safety regulations have been somewhat ambiguous regarding how comprehensive the five-year reviews were intended to be, which likely contributed to these reviews being overly relied upon but not sufficiently funded to serve as comprehensive reviews,” the report said.
It also said that prior to the incident, “the geology of the right abutment of the dam, including the hillside downstream of the emergency spillway crest structures, was fundamentally misunderstood by DWR, its consultants, [the California Division of Safety and Dams] and FERC.”
The 770-foot-high dam is part of the Oroville-Thermalito complex, which includes the Hyatt and Thermalito power plants totaling 933 MW, which had to be shut down during the incident, as well as power canals, afterbays and other facilities. The dam is part of the State Water Project, which provides water to 25 million people and 750,000 acres of irrigated farmland in California. It is the tallest in the U.S. and impounds one of California’s largest manmade lakes.
FERC has an open proceeding on the incident and in June ordered inspections of dam spillways to be completed by the end of 2017.
Grid operators turned to coal- and oil-fired generation last week as Arctic air sent temperatures plunging to record lows from the Great Plains to the Deep South.
The frigid temperatures caused a spike in demand for electricity, with ERCOT and SPP recording new winter demand peaks.
The most severe test of the grid since 2014, the cold blast came a week before FERC is set to respond to Energy Secretary Rick Perry’s call for price supports for struggling coal and nuclear plants in organized markets. Grid operators have managed to endure the cold weather and pinched fuel supplies, thanks in part to rule changes and winter preparations put in place after the cold snap of 2013/14.
The weather brought snow as far south as Florida and Texas, and a Nor’easter at the end of week caused blizzard conditions and coastal flooding from New Jersey to New England.
This VIIRS thermal infrared image, from the NOAA-20 polar-orbiting satellite on January 4, 2018, captured the cold clouds (blue and white) of the blizzard striking the eastern U.S. | NOAA
Temperatures were as low as minus 45 F, in Minnesota and North Dakota. The weather broke low-temperature records in several areas of the country. Wind chill records were also shattered. Mount Washington, N.H., recorded a temperature in the minus 30s, but with hurricane-force winds in place, wind chills were in the 80s and 90s below zero on Saturday morning. Wind chill warnings were in effect through Sunday morning in parts of the Northeast, with values expected as low as 45 degrees below zero.
On Thursday, natural gas prices at Transco Zone 6 New York hit a record $175/MMBtu, according to Natural Gas Intelligence, and averaged $140, up almost $92 from the day before. Prices at other trading hubs in New York and New England also exceeded $100 on Thursday, Bloomberg and NGI reported, with New England Internal Hub prices topping $300.
By contrast, gas futures have averaged less than $3 on the New York Mercantile Exchange this winter.
The New England grid was most challenged by the low temperatures. A combination of factors led ISO-NE to begin “posturing” generation units, in which the RTO staggers their operation in an effort to conserve fuel.
Nonetheless, the grid operated reliably throughout last week, according to spokesperson Marcia Blomberg.
From Friday to Sunday, ISO-NE sent out Cold Weather Watches, issued when extreme cold weather is in the forecast but the RTO still expects a capacity margin of 1,000 MW or greater.
By Monday, temperatures in the Mid-Atlantic and Northeast began to normalize and are expected to continue rising to above-average levels later this week. ISO-NE reported 1,381 MW of surplus capacity to meet Monday’s expected peak of 20,000 MW.
But the cold, and the high demand for heating, led to pipeline constraints and a spike in natural gas prices, forcing the RTO to rely on oil-fired and dual-fuel resources. Oil was providing one-third of ISO-NE’s electricity as of Saturday afternoon, with natural gas at 24%, nuclear 22% and coal at 5%. For all of 2016, by contrast, coal and oil generation together accounted for 3% of total energy production, with capacity factors of 15% for coal and 2% for oil. Gas-fired plants normally account for about half the region’s generation.
“During this extreme cold, some power plants have either tripped offline or had to reduce their output, while other oil-fired and dual-fuel generators are quickly depleting their fuel supply,” Blomberg said Sunday.
One of those plants was Entergy’s Pilgrim Nuclear Power Station in Plymouth, Mass. It went offline Thursday after one of its interconnections failed during the storm, but the outage did not affect reliability, ISO-NE said.
Some oil units were also nearing their emission limits Sunday, Blomberg said.
As a precautionary measure before the storm, the RTO on Wednesday issued a Master/Local Control Center No. 2 alert, which requires generation and transmission owners to stop any routine maintenance, construction or test activities on their equipment.
NYISO experienced similar conditions as ISO-NE: increased natural gas prices and a reliance on oil generation. But the ISO also said it did not have any reliability problems, and it did not experience concerns of fuel scarcity or emission limits.
“We’ve had no forced outages of the high-voltage direct current transmission system,” Vice President of Operations Wes Yeomans told reporters during a teleconference Thursday afternoon.
“The transmission system between central and eastern New York is fully loaded, as expected, bringing the less expensive energy from the western parts of the state to the high demand zones in and around New York City,” Yeomans said. In addition, the ISO was reaching out to TOs in the southeastern part of the state, which was bearing the brunt of a blizzard.
NYISO’s marginal cost of energy spiked to $229.62/MWh last Tuesday, up from $15.87 on Dec. 24. The ISO’s real-time LMP zonal map showed power from Hydro-Québec priced at $226.87/MWh, compared with $15.41 a week earlier.
Gov. Andrew Cuomo on Thursday declared a state of emergency for the city, Long Island and Westchester County because of the storm. Meanwhile, Upstate saw lake-effect snow, followed by subzero temperatures. A wind chill advisory warned that temperatures could feel as low as minus 42 F.
PSEG Long Island on Thursday reported that about 3,818 of its approximately 1.1 million customers across Long Island and the Rockaways were without service. By Monday, that figure had dropped to about 100.
NYISO Executive Vice President Rich Dewey said during the press conference that Albany had endured six consecutive days during which the low temperature fell below zero and the average was 10 F. Such weather is not unusual, but extended periods of it are, he said.
Nearly 50% of New York’s generating fleet is able to switch to oil, which helps grid reliability, Dewey said, adding that operational enhancements made after the 2013/14 cold snap include increased surveys of generators to ensure they have adequate fuel supplies. The storms also kept the 100 MW of nameplate wind running strong, he said.
PJM
PJM’s peak demand hit 138,465 MW at 7 p.m. Friday, the fourth-highest peak on record. The RTO said demand was about 2,500 MW above the forecast because temperatures and wind chill factors were lower than expected.
Demand had hit 136,206 MW Friday morning and 136,125 MW on Wednesday, the eighth- and 10th-highest, respectively.
Coal supplied 39% of PJM’s generation between Jan. 1 and 6, with a peak of 44% early Jan. 4. Nuclear provided 29%, with natural gas kicking in 21%, oil 5%, wind 3%, hydro 1% and other renewables 1%.
| PJM
During all of 2017, nuclear led with 36% of generation, with coal representing 32%, and natural gas and oil at 27% and 0.3%, respectively.
Real-time LMPs were consistently above $250/MWh during the week and briefly exceeded $750/MWh in some zones.
PJM said it had been preparing for cold weather since the fall, when the National Weather Service noted that a dip in the polar vortex, which caused an unseasonably mild August, would likely return during the winter. Chris Pilong, who manages PJM’s dispatch, said the long-range forecast called for a mild winter overall with periods of extreme cold.
The RTO started issuing cold-weather alerts prior to the holiday break to ensure generators and transmission operators were prepared for frigid conditions. Communication is central to PJM’s response, Pilong said.
PJM issued a heavy load voltage schedule warning Thursday as a precautionary measure to help maximize power transfer capability and reactive reserve for the evening peak. Despite the warning, the RTO reported having maintained adequate power supplies and operating reserve margins during the cold weather.
The RTO reported no concerns with fuel availability or reliability issues through the weekend.
ERCOT
ERCOT reported a new winter peak demand of 62.86 GW between 7 and 8 a.m. Wednesday, when freezing temperatures covered much of the state, exceeding last Tuesday’s evening peak of 61.95 GW. Both broke the previous winter mark of 59.65 GW, set a year ago on Jan. 6.
ERCOT had more than 70 GW of capacity available during the morning hours. The ISO in November projected a winter peak of slightly more than 61 GW and said it would have as much as 81 GW of total resource capacity on hand to meet demand.
Wholesale prices peaked at $70.02/MWh during the interval ending at 9:30 a.m. but were as low as $32.40 in the early morning hours. Last Tuesday’s prices peaked at $72.26 during the interval ending at 6 p.m.
ERCOT did not take any extreme measures in meeting the winter demand.
MISO
MISO on Monday said it navigated the extreme weather event without a single reliability issue. The RTO recorded a peak load of 104.7 GW during the week, set on Jan. 2.
“Lessons learned and applied since the polar vortex — including increased electric-gas coordination — improved MISO’s ability to respond to challenging situations,” spokesperson Mark Brown said.
The extended cold snap prompted MISO last Tuesday to issue a conservative operations order until Jan. 5. A cold-weather alert remained in place until Sunday “due to very cold temperatures, high system load and uncertainties in gas pipeline fuel supplies.”
MISO’s all-time winter peak demand was 109.3 GW on Jan. 6, 2014.
Last Tuesday, coal generation made up a 48% share of MISO’s fuel mix, with natural gas supplying 22% and nuclear and wind generation contributing about 14% each. The RTO’s mix is typically 34% coal, 41% gas, 8% nuclear and 14% renewables.
SPP
SPP on Monday reported a new winter peak demand record of 41,014 MW, set the morning of Jan. 2. The previous record was 40,322 MW.
The RTO issued a cold-weather alert for Dec. 29 to Jan. 4. Spokesman Dustin Smith said member companies were experiencing “slower-than-normal” start times and other temperature-related start-up issues at some units.
While the cold temperatures had some impact, SPP has not “encountered anything unmanageable,” Smith said. Some gas units have been unable to procure fuel, resulting in outages and switches to more costly oil.
Michael Kuser, Rory D. Sweeney, Amanda Durish Cook, Tom Kleckner, Rich Heidorn Jr. and Michael Brooks contributed to this report.
Although electric utilities will see their tax rate fall from 35% to 21% under the Tax Cut and Jobs Act signed by President Trump last month, few are making plans to spend their savings.
State officials across the country are calling for utilities to pass the savings to their ratepayers, and some utilities already have said they will.
The Organization of PJM States Inc. (OPSI) said in a letter to FERC that it has “unanimously and continuously advanced the need to ensure cost containment in transmission rates, which should directly benefit ratepayers.”
“The large reduction in the corporate tax rate effective Jan. 1, 2018, provides an opportunity to reduce rates to customers,” OPSI said in its letter. “While the commission examines whether the tax changes will impact FERC accounting forms/procedures and how these changes might affect transmission formula rates in PJM, OPSI unanimously supports all efforts by the commission to flow this cost reduction back to consumers.”
Of the 14 utility regulatory commissions in OPSI, at least three (Kentucky, Michigan and West Virginia) have started proceedings related to the tax bill, and at least one other (Indiana) is evaluating how the bill will affect utilities.
In Delaware, more than two dozen General Assembly members have sent the Public Service Commission a letter saying it should grant “in its entirety” a petition filed by the Division of the Public Advocate that utilities should pass their tax savings on to ratepayers.
Regulatory bodies have opened proceedings or taken other actions related to the tax bill in at least eight states outside PJM — Connecticut, Louisiana, Michigan, Minnesota, Missouri, Montana, Oklahoma and South Dakota.
In Oklahoma, the Corporation Commission’s administrative law judges have recommended that utilities pass the savings along to their customers. South Dakota’s Public Utility Commission has determined that investor-owned power and natural gas utilities should share the savings from the tax bill with customers.
Regulators have opened proceedings in Connecticut and Missouri, while the Louisiana Public Service Commission is reviewing utilities’ rates to see if they can be cut in light of the bill. The Michigan Public Service Commission ordered utilities to study the tax cuts’ impact and how they will pass the savings along to consumers. The Minnesota Public Utilities Commission plans to analyze how the law affects utilities and said it could undertake proceedings based on its findings. And the Montana Public Service Commission ordered utilities to calculate the change in their tax liabilities and come up with proposals for applying their savings.
In at least two other states, elected officials have called on regulators to take action.
Massachusetts Attorney General Maura Healey asked the Department of Public Utilities to recalculate rate increases it had granted Eversource | Massachusetts Attorney General’s Office
Massachusetts Attorney General Maura Healey asked the Department of Public Utilities to recalculate rate increases it had granted Eversource Energy in November. The company responded by saying it would pass on almost $56 million in savings from the tax bill to its 1.4 million customers in the state. That inspired Rhode Island Lt. Gov. Dan McKee to send his state’s Public Utilities Commission a letter saying National Grid should use its savings to lower its rates.
Rhode Island Lt. Gov. Dan McKee sent the Public Utilities Commission a letter saying National Grid should use its savings from the tax bill to lower rates | Rhode Island Lt. Governor’s Office
In New Hampshire, Consumer Advocate Maurice Kreis filed a complaint with the Public Utilities Commission to make sure the savings that the state’s 13 IOUs realize from the tax bill flow back to their customers.
In some states, utilities are taking it upon themselves to proclaim they’ll pass their savings from the tax bill on to ratepayers. The Edison Electric Institute called the tax bill “a huge win for customers as the drop in the corporate rate is mostly flowed back to them over time in rates.”
In Maryland, Exelon’s Baltimore Gas and Electric, Pepco and Delmarva Power subsidiaries said they intended to file requests with the Public Service Commission to cut their rates.
In Illinois, Commonwealth Edison, also an Exelon subsidiary, asked the Commerce Commission for approval to pass along approximately $200 million in tax savings to its customers this year.
In Utah, Rocky Mountain Power said it will pass the benefits of the tax bill on to customers, though it wouldn’t commit to doing so by cutting rates.
And in Oregon, the Public Utility Commission said four electric and gas utilities had applied with it to track the tax bill’s impacts so they could be accounted for in ratemaking, and two other utilities are expected to join.
FERC has allowed MISO to waive its $1,000/MWh offer cap for the fourth straight winter, two months after the commission rejected the RTO’s plan to permanently double its hard offer cap.
The commission on Friday said it had “good cause” to allow resources with incremental energy costs above the current $1,000/MWh offer cap to recover costs from Dec. 1, 2017, through April 30, noting that “some resources could face the untenable position of being forced to offer electricity at levels below their actual cost” if MISO wintertime demand spikes occurred when gas supplies were pinched (ER18-300).
A truck responds in snowy conditions Jan. 2, 2018 | Entergy Louisiana
MISO announced it would seek the waiver in November, days after FERC rejected MISO’s Order 831 compliance filing, saying it wrongly prohibited resources from submitting cost-based offers above the required $2,000/MWh hard cap. (See MISO to Seek Waiver After FERC Rejects Offer Cap Plan.) The commission last week acknowledged that once MISO files an acceptable “long-term solution,” it will no longer need temporary waivers.
Linemen respond on Dec. 27, 2017 | Consumers Energy
FERC issued Order 831 in response to the unusually cold winter of 2013/14 that sent natural gas prices soaring and left generation owners complaining they could not recover fuel costs. MISO claims that offers above $1,000/MWh are a possibility when natural gas prices climb above $67/MMBtu.
In mid-December, the RTO asked FERC for clarification and rehearing of its offer cap filing, arguing that it should be permitted to exempt proxy offers of fast-start resources from the required offer caps because such offers are only used during emergency operating procedures. It contended that applying a raised offer cap to those resources is “inconsistent with previously adopted and articulated commission policies on price efficiency and reduction of uplift” (ER17-1570).
MISO’s markets have yet to experience an energy offer exceeding $1,000/MWh. However, in March 2014, generation resources offered approximately 900 MW at the $1,000/MWh offer cap in both the day-ahead and real-time markets, “indicating that the offer cap may have constrained those offers,” according to the RTO. Last week, the RTO’s Midwest and South regions were tested with temperatures about 20 to 25 degrees below normal, and it issued a cold-weather alert and conservative operations instructions that it kept in place for most of the week. (See Frigid Weather Tests Grid Operators.)
FERC has given a small Michigan hydropower company until March 1 to correct serious violations of federal safety regulations or once again face an order to shut down.
Boyce Hydro Power last month filed an emergency motion for a permanent stay of FERC’s November order that the 4.8-MW Edenville Dam in northern Michigan cease operation. On Friday, the commission denied the motion, citing Boyce’s “lengthy, extensive record of noncompliance” with safety and other regulations, but it did hand the company a March deadline, allowing flows to continue through the powerhouse in order to safely control reservoir levels in the face of heavy ice (10808-057).
FERC said the violations for the dam, located between Wixom Lake and the Tittabawassee River, include failing to increase spillway capacity to address the increased likelihood of more frequent flooding; performing unauthorized dam repairs and excavation; neglecting to file a public safety plan or follow its own water monitoring plan; failing to acquire all property rights; and failing to construct required recreation facilities near the dam. The commission said it has spent more than 13 years trying to get Boyce, which has owned the dam since 2004, to increase spillway capacity, the most serious of the safety violations. The company only began abiding by its water quality monitoring plan last July.
Edenville Dam spillway
The Office of Energy Projects’ Division of Dam Safety and Inspections “has determined that the failure of the project dam could result in the loss of human life and the destruction of property and infrastructure,” FERC warned. It has repeatedly asked Boyce to construct two auxiliary spillways to reduce the risk of flooding. In return, Boyce last month filed a proposed funding plan for spillway construction and new draft maintenance plans.
The commission was unimpressed: “Boyce has repeatedly failed to comply with requests by the regional engineer and other commission staff to develop and implement plans and schedules to address the fact that the project spillways are not adequate to pass the probable maximum flood, thereby creating a grave danger to the public. … The public interest in ensuring that the dam is safe outweighs the potential economic harm to Boyce. We take our duty to protect the public extremely seriously.”
