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July 26, 2017January 26, 2024

Connecticut Governor Orders Financial Analysis of Millstone Plant

By Michael Kuser

Connecticut Gov. Dannel Malloy on Tuesday ordered state regulators to assess the economic viability of the Millstone nuclear power plant and determine whether the state should provide it financial support. Millstone supplies about half of Connecticut’s electricity.

The Connecticut General Assembly in June failed to pass a bill that would have allowed the 2,111-MW nuclear plant in Waterford to bid into the state procurement process (S.B. 106). Millstone owner Dominion Energy had sought the legislation to boost the plant’s revenues, which have suffered from low-priced natural gas. Gas-fired generators often set LMPs in New England.

Malloy’s executive order also directs the state Department of Energy and Environmental Protection and the Public Utilities Regulatory Authority to assess the role of large-scale hydropower, demand-reduction measures, energy storage and emissions-free renewable energy in helping Connecticut meet its ambitious targets to cut its carbon output.

The state’s Global Warming Solutions Act of 2008 mandates cutting greenhouse gas emissions to 10% below 1990 levels by 2020, and to 80% below 2001 levels by 2050.

Show us the Books

The governor’s July 25 order directed DEEP and PURA to use “the best available information, including such facilities’ audited financial statements and such other financial data that is reasonably requested by [regulators]” in their economic analysis of Millstone.

Matt Fossen, spokesman for the Stop the Millstone Payout coalition, said “it is essential that Dominion fully disclose the plant-level financials of Millstone; otherwise the investigation won’t be truly comprehensive or accurate.”

The coalition — sponsored by competitors Calpine, Dynegy and NRG Energy and the Electric Power Supply Association (EPSA) — had argued S.B. 106 would be a burden on ratepayers and an unnecessary handout to a power plant that had not been proven to be unprofitable.

The group in April released a study by energy consultancy Energyzt that showed the Millstone plant has earned at least $3 billion in profits since Dominion bought it in 2001 and will likely earn an additional $2.2 billion in after-tax income from now through 2030. Dominion spokesman Ken Holt criticized the Energyzt report as “loaded with gross assumptions and preposterous claims, with no real data.” (See Millstone No Dead Weight for Dominion, Says Opponents’ Study.)

New York ZEC Suit Dismissed

The legislation would have made Millstone the only eligible nuclear generator in Connecticut’s competitive bidding process and awarded it a five-year contract if it bid lower than competing renewable resources. The bill would have set an annual limit on nuclear energy purchases at 8.3 million MWh, equivalent to half of Millstone’s output.

The Connecticut measure would have been similar in effect to the zero-emission credit programs that EPSA and its members are contesting in New York and Illinois.

Also Tuesday, a federal judge in New York dismissed all claims in the suit against the state’s ZEC program. (See Illinois Zero-Emission Credit Suit Dismissed.)

EPSA and its members in Illinois on July 17 filed an appeal with the 7th U.S. Circuit Court of Appeals. They argued they stood to lose millions because the subsidized nuclear plants would suppress capacity and energy prices. The plaintiffs are expected to also appeal the New York decision to the 2nd Circuit.

July 26, 2017

PJM Monitor Seeks Reversal of MOPR Exemption

By Rory D. Sweeney

PJM’s Independent Market Monitor last week filed a complaint with FERC requesting fast-track revocation of the RTO’s decision to exempt a generator from a rule meant to combat market manipulation.

PJM FERC minimum offer price rule MOPR — Bowring | © *RTO Insider*

The complaint said PJM was “incorrect” in providing an unnamed generating unit with a competitive-entry exemption from the minimum offer price rule (MOPR).

The RTO developed the MOPR to prevent subsidized units from suppressing market prices by offering bids that are below a unit’s competitive operational costs. The rule creates a price floor at which all new units must offer into the market unless they receive one of three types of exemptions from PJM. The competitive-entry exemption allows a unit to offer in at any bid, provided the generator can prove it receives no direct or indirect subsidies. (See PJM: No Change on MOPR Yet; Remand May Have Little Impact.)

“The stakes in this case are high. This generation is clearly not merchant generation, is clearly not competitive generation and represents exactly the type of subsidized generation that the MOPR was intended to address,” the complaint said.

The complaint asks FERC to rescind the exemption before the generator submits “a noncompetitive offer” into any of PJM’s Reliability Pricing Model auctions. The RTO holds annual Base Residual Auctions for capacity required three years into the future, along with incremental auctions each year leading up to the delivery year.

The Monitor declined to name the exempted generator to avoid disclosing market-sensitive information, but it described it as “a non-regulated company wholly owned by a parent company that wholly owns a regulated, vertically integrated electric utility.” The Monitor told both the generator and PJM that the generator wasn’t eligible for the exemption because it indirectly recovers costs from customers through a non-bypassable charge, according to the complaint.

Because the generator’s construction was financed entirely by the parent, the cost of capital was lower than if the generator’s operating company had sought financing on its own, the Monitor said, and that difference is the cost the generator indirectly recovered from customers through a non-bypassable charge.

However, PJM still granted the exemption.

The Monitor contended that allowing an exemption in this situation “would create a significant loophole” in the MOPR that would render it “ineffective” in similar situations because the unit is not “purely a merchant resource” as the exemption rule requires.

“Competitive market participants who invest in new generating facilities without the backing of a regulated utility or other nonmarket support” receive “essential protection” from the MOPR and would be “inappropriately disadvantaged” by the loophole, the complaint argues.

The issue was amplified by a July 7 decision from the D.C. Circuit Court of Appeals that vacated PJM’s current MOPR provisions and remanded the order back to FERC. Among the topics at issue is one of the three MOPR exemptions, which PJM and its stakeholders had jointly requested that FERC eliminate.

If FERC reverses its position and now decides to approve the request, that would make having an exemption more advantageous and the precedent of an approved loophole more problematic, the IMM said. There would be just two exemption types, and the second — known as the “self-supply exemption” — is very limited.

“This would enhance the need for an effective MOPR and correct application of categorical exemptions to the MOPR,” the complaint argues. “If the requested application of the competitive-entry exemption were approved, it would provide an easy way to avoid the defined limits on the self-supply exemption that applies to regulated utilities and to the utility in this case.”

July 26, 2017

UPDATED: Aliso Canyon Resumes Injections

By Jason Fordney

Southern California Gas Co.’s Aliso Canyon gas storage facility resumed injections Monday, despite Los Angeles County officials’ request that a state appeals court prevent the reopening.

“SoCalGas must begin injections to comply with the [state’s] directive to maintain sufficient natural gas inventories at Aliso Canyon to support the reliability of the region’s natural gas and electricity systems,” the company said in a statement sent to Porter Ranch residents, according to the Los Angeles Times.

Following a series of back-and-forth court rulings over the weekend, the county filed a petition with the 2nd District Court of Appeal for a stay preventing gas withdrawals until more analysis is done. A judge on Saturday ruled that operations can resume.

The volley of court actions occurred after the California Division of Oil, Gas and Geothermal Resources (DOGGR) issued an order July 19 allowing SoCalGas to resume injections into the facility. The county does not object to withdrawals on an emergency basis, which is currently allowed.

Location of Aliso Canyon Storage Facility

The county wants the court to forestall any withdrawals until it can determine whether DOGGR complied with the law in clearing the facility to resume operations. SoCalGas refused the county’s request.

“Before the prohibition on injections can be lifted, SoCalGas must show — and DOGGR must determine — that all necessary steps to ensure the safety of the facility have been completed,” the county said in its original filing in Los Angeles County Superior Court last week. Conditions have not been met regarding a risk-of-failure review and emergency response plan, the county contended.

Withdrawals were halted at the facility following the massive methane release there, detected in October 2015 and finally plugged in February 2016. DOGGR and other state agencies recently issued findings that it is safe to resume withdrawals. (See California Officials: Aliso Canyon Safe to Open.)

The court filing says county officials met with DOGGR and SoCalGas on July 20, when the company refused to refrain from withdrawals and to disclose when they would resume. SoCalGas did not immediately return a request for comment.

Residents near Aliso Canyon still report health problems they say are related to the leak, including headaches, nosebleeds and nausea. A few dozen residents recently protested resuming gas withdrawals in roadside gatherings reported on local news stations.

Aliso Canyon protest | *Food and Water Watch*

California Energy Commission Chairman Robert Weisenmiller and Gov. Jerry Brown have asked for the state to explore permanent closure, and the California Public Utilities Commission has a proceeding underway that is analyzing whether the facility is needed for system reliability. (See Study to Weigh Aliso Canyon Shutdown.)

On July 19, SoCalGas issued a statement that it has completed the state’s required safety reviews and has implemented a host of safety measures and procedures. The company argues that loss of the facility will create reliability problems in times of severe weather and peak electricity usage.

The county also argues that there is a risk of gas leaks caused by seismic activity in the area, which is prone to earthquakes. “DOGGR and SoCalGas have acknowledged the well-known and very serious risk of a catastrophic earthquake shearing multiple wells at Aliso Canyon,” county officials said.

Although the appeals court did not issue a stay, Deputy County Counsel Scott Kuhn told the Times on Monday that the courts have yet to rule on the county’s request that the state complete their analyses before continuing injections. “We hope that some court will get to the merits and when they do get to merits, they will see that further study of the seismic risk and the environmental risk is necessary before [the utility] can proceed with business as usual,” Kuhn said.

July 26, 2017

New York ZEC Suit Dismissed

By Michael Kuser

A federal judge on Tuesday dismissed all claims in a suit against New York’s zero-emissions credit program, the second such victory for state nuclear subsidies after a complaint over the Illinois ZEC program was thrown out July 14.

Judge Valerie Caproni of the U.S. District Court for the Southern District of New York granted motions to dismiss the case from the Public Service Commission, the defendant, and intervenor Exelon, owner of the three New York nuclear plants that would receive ZEC payments (16-CV-8164).

“Although no individual state can reverse the trend all by itself, New York and many other states have decided that they will do their part to reduce the emissions that contribute to global warming,” Caproni said. “The issue in this case is whether the method New York has chosen to facilitate its doing so is constitutional. … The court concludes that the New York [ZEC] program is constitutional.”

Her 47-page decision rejected every one of the plaintiffs’ arguments, including claims that the program intruded on FERC’s authority to regulate wholesale prices, and that New York violated the Constitution’s dormant Commerce Clause by favoring in-state generators.

The Electric Power Supply Association (EPSA), which filed the New York challenge with several members, said it will appeal the ruling. “We’ll continue to fight these nuclear bailouts, which cost ratepayers billions, crowd out investments in true renewables, and distort and could eventually destroy the established wholesale power markets,” said David Gaier, spokesman for EPSA member NRG Energy. On July 17, EPSA and its members appealed the dismissal of the Illinois suit to the 7th U.S. Circuit Court of Appeals. (See Illinois Zero-Emission Credit Suit Dismissed.)

Affirmation of CES

Gov. Andrew Cuomo praised Tuesday’s ruling in a statement: “The court forcefully ruled that the Clean Energy Standard (CES) and its zero-emissions credit program are valid tools to use to combat climate change. At a time when the federal government has abdicated its leadership on climate change, New York will continue to do all that we can to ensure that current and future generations have a clean and safe environment in which to live and prosper.”

The ZEC program, initiated as part of the CES last August, requires utilities in New York to procure ZECs that are generated by Exelon’s three in-state nuclear power plants. The PSC claimed that the program helps avoid the closure of the upstate nuclear plants, which the state needs to meet its goal of reducing carbon emissions and having 50% of energy produced by renewable resources by 2030.

New York Zero-Emission Credit ZEC — Nine Mile Point Nuclear Plant | *Constellation Energy Nuclear Group*

EPSA, and members Dynegy, Eastern Generation and NRG Energy, joined Roseton Generating and Selkirk CoGen Partners in arguing they would lose millions because the subsidized nuclear plants would suppress capacity and energy prices.

Caproni used colorful language to frame her decision, citing President Trump’s description of climate change as a “hoax” and paraphrasing a famous line from “Romeo and Juliet”: “A rose by any other name still smells as sweet.”

On the plaintiffs’ argument that the ZEC program is directly tied to NYISO’s wholesale markets, Caproni said: “This argument is no more than an attempt to fashion a ‘tether’ by jamming a square peg into a round hole; plaintiffs’ argument rewrites the CES order. The CES order itself does not require the nuclear generators to sell into the NYISO auction.”

The Illinois and New York decisions are the latest in a string of federal court cases testing the boundaries between state and federal jurisdiction over electricity markets.

“Under current law, states have broad authority to advance a cleaner electric grid,” said Ari Peskoe, senior fellow in electricity law at Harvard Law School, who tracks constitutional challenges to state energy policies. “If courts rule against the states on appeal, their decisions might limit the scope of future state clean energy programs.”

July 25, 2017

MISO Adopts New Dispatch Model for Queue Studies

By Amanda Durish Cook

MISO will begin using its Transmission Expansion Plan dispatch modeling in interconnection queue studies beginning Aug. 1, when the first cycle of definitive planning phase (DPP) studies is set to begin.

miso interconnection queue dispatch model — Indiana transmission lines | © *RTO Insider*

“The decision to move to a new methodology was my decision, so if you want to throw tomatoes, it’s me,” Patrick Brown, executive director of transmission asset management, said at a July 18 Interconnection Process Task Force (IPTF) meeting.

The new method moves MISO from modeling dispatch at a generator’s expected level of output to its maximum requested interconnection service level.

The decision made sense because the models are already “well vetted through the stakeholder process” and used for NERC reliability assessments, according to Brown.

“It’s hard for me to explain why we weren’t already using them in the interconnection process,” Brown said.

Great River Energy’s Mike Steckelberg pointed out that the dispatch question runs into an issue of reliability and therefore should be put before another committee. “You can’t really implement that without putting it to the Planning Subcommittee,” he said.

Planning Advisory Committee Chair Cynthia Crane said the change should be presented to her group. “This is a policy-level change that should be brought forward to the PAC,” she said. Wisconsin Public Service’s Chris Plante agreed.

Brown said the change will be presented to the PAC at the August meeting. “As far as it being a policy change … MISO has the purview to develop the models as we see fit,” he added.

Michigan Public Service Commission staffer Bonnie Janssen said she appreciated MISO’s effort make interconnection and MTEP modeling consistent with each other.

Entergy’s Yarrow Etheredge said the RTO is not allowing enough time for local transmission owners to adjust their planning criteria and suggested a stakeholder workshop on adopting the new methodology.

MISO Director of Resource Utilization Vikram Godbole said local planning criteria would be unchanged.

“We’re only changing the starting point of a study. Nothing else,” he said. “Is it a perfect solution? I don’t know. It’s a step in the right direction to accommodate all new queue generators.”

Interconnection Rights Transfer

MISO is also mulling how it should allow generator owners to retain and transfer interconnection rights when retiring older generation and building new units.

MISO engineer Brett Furuness said the RTO and stakeholders could pursue a “nuclear” option that would entirely prohibit the practice, requiring interconnection rights to be “released back into the wild” to other takers in the interconnection queue.

But MISO is instead proposing to implement rights transfer based on an interconnection request and out-of-cycle study. Any unused rights found after the study will be “permanently relinquished,” and the RTO would initiate a full DPP study cycle if it finds a significant change between the original and replacement generation, which must use the same point of interconnection and commence operation within three years.

The three-year timeline is important because it aligns with the maximum amount of time allowed for a generator suspension, Furuness said.

Some stakeholders questioned the three-year limit, pointing out that it can take longer to build new generation.

Furuness agreed that resource owners actively working through a construction plan would probably be given more time than an owner with a less distinct plan.

“But that’s about step 700, and we’re at step 2 here,” Furuness said.

IPTF Future

During its July 26 meeting, MISO’s Steering Committee will decide whether to extend the life of the nearly four-year-old IPTF until December or convert it into a working group. The IPTF was supposed to sunset this month, but PAC members voted in June for an extension. As part of the RTO’s stakeholder redesign, all task force sunsets or extensions are put before the Steering Committee for final approval.

July 25, 2017

NARUC: Growth in DER Creates New Challenges

By Jason Fordney

SAN DIEGO — CAISO expects new aggregated distributed energy resources to enter its markets this year, creating new technical and regulatory challenges as the grid operator works to integrate them without affecting reliability.

Industry officials discussed the development in detail at a July 17 panel at the National Association of Regulatory Utility Commissioners Summer Policy Summit.

FERC in June 2016 conditionally approved CAISO’s proposed rules to allow aggregated resources to participate in the wholesale markets. (See CAISO Tariff Change Would Extend Market to DER.) Later in November, the commission also issued a separate Notice of Proposed Rulemaking (RM16-23, AD16-20) that would allow DER to participate in other wholesale electricity markets across the country.

NARUC distributed energy resources DER — AES energy storage facility | *SDGE*

CAISO is ironing out implementation policies so that DER aggregators can begin operating in its markets this year. DER aggregators can be generators, load-side participants, storage devices or a mixture, and they can also participate as scheduling coordinators that distribute CAISO dispatch instruction from their individual energy sources.

DER is dispatched without knowledge of the exact impact on grid operations, and the effect on the system is difficult to quantify because of many different interconnections and ways to connect, said Mark Esguerra, director of integrated grid planning for Pacific Gas and Electric. It also requires more coordination between the transmission and distribution system operators.

Visibility into DER behavior “is something we are trying to wrap our arms around,” Esguerra said, adding that DER “creates new operational challenges that we all have to consider here.”

Manal Yamout, vice president of policy and markets for Advanced Microgrid Solutions, said DER can provide a suite of services at the transmission and distribution levels. The company is developing 50 MW of DER with Southern California Edison, among other projects.

“This is happening now,” she said, saying the discussion around DER is often conceptual or forward-looking. “Even though this might seem far away … these projects are here, and in many ways, we are kind of breaking down the barriers as we go. … This isn’t just about California.”

DER is often discussed in the context of balancing intermittent renewables, but they can also provide capacity, ancillary services, resource adequacy to the utility and demand-side management to energy customers, Yamout said.

D.C. Public Service Commissioner Willie Phillips said he is often asked about the reliability impacts of DER and aggregation.

Esguerra said that reliability officials are looking at the integration of DERs, and that there is an ongoing shift from the central power station model.

“I think there is work that still needs to be done, in terms of certifications and standards,” if the grid is going to rely more on DER, Esguerra said.

So far, Apparent Energy, Galt Power, Olivine and San Diego Gas & Electric have applied to become DER providers in California, according to CAISO.

July 25, 2017

Trump DOE, EPA Budget Cuts Scaled Back by Congressional Panels

Congress last week rejected President Trump’s proposal for deep spending cuts at EPA and the Department of Energy.

On Thursday, the Senate Appropriations Committee voted 30-1 to approve $38.4 billion in funding for the department and water programs, a $4 billion increase over the administration’s proposal.

trump doe budget cuts EPA — Left to right: Zinke, Pence, Trump, Perry and Pruitt

The Advanced Research Projects Agency-Energy, which Trump had proposed eliminating, instead won $330 million, its highest ever. The department’s energy efficiency and renewable energy program received $1.94 billion; Trump would have slashed it to $740 million.

“This is an incredible demonstration of bipartisan support for energy-efficiency programs and for the value they deliver to American consumers and businesses,” said Kateri Callahan, president of The Alliance to Save Energy.

The Senate bill includes funding for an interim storage site for nuclear waste, but unlike the House of Representatives’ version, does not fund the restart of Yucca Mountain as a permanent repository.

The committee’s action came two days after the House Appropriations Committee voted 30-21 to approve a $31.4 billion funding bill for EPA, the Interior Department and other programs — $824 million less than current levels but $4.3 billion more than Trump had sought. EPA would see a $528 million cut, about 6.5%. Most Democrats opposed the bill.

On Wednesday, EPA Administrator Scott Pruitt said he agrees with a bipartisan House proposal to reject Trump’s plan to end spending on the Great Lakes Restoration Initiative. The House would authorize $300 million in fiscal 2018, maintaining the project’s current funding.

Ozone, Cybersecurity, Hydropower Bills Advance

Meanwhile, the full House approved two bills last week changing the federal government’s permitting and siting policies for oil and natural gas pipelines and four bills on hydropower, energy security and EPA’s ozone standards:

The Promoting Cross-Border Energy Infrastructure Act (H.R. 2883) would eliminate the need for presidential approval for pipelines or electric transmission lines that cross a border with Canada or Mexico. It was cleared 254-175. It would end the State Department’s role in the process.
The Promoting Interagency Coordination for Review of Natural Gas Pipelines Act (H.R. 2910), approved 248-179, would make FERC the lead agency for approving interstate pipelines and require other agencies to conduct simultaneous reviews. Of the hundreds of pipelines FERC has reviewed in the last 30 years, it has only rejected two, the Center for Public Integrity and StateImpact Pennsylvania reported last week.
The Ozone Standards Implementation Act of 2017 (H.R. 806) would give states flexibility in implementing National Ambient Air Quality Standards for ground-level ozone. It passed 229-199. The National Parks Conservation Association opposed the bill, saying it would allow companies seeking air pollution permits to ignore new ground-level ozone (smog) health standards for 10 years.
The House voted 420-2 to amend the Federal Power Act to streamline the federal review of qualifying conduit hydropower facilities (H.R. 2786). The bill eliminates the 5-MW cap on such projects and revises the time frame for an entity to contest whether its hydroelectric facility meets the qualifying criteria.
Enhancing State Energy Security Planning and Emergency Preparedness Act of 2017 (H.R. 3050) would provide financial assistance to states for implementing and revising energy security plans. The state plans must include a risk assessment of energy infrastructure and cross-sector interdependencies, and address potential hazards to each energy sector or system, including physical and cyber threats. It passed by voice vote.
H.R. 2828 would extend the deadline for beginning construction of the Enloe hydroelectric project on the Similkameen River about 3.5 miles northwest of the City of Oroville, in north-central Washington. It passed by voice vote.

In other action, the House Energy and Commerce Committee’s Digital Commerce and Consumer Protection subcommittee approved bipartisan legislation on self-driving cars by voice vote. The bill allows automakers to deploy up to 100,000 self-driving vehicles without meeting existing auto safety standards and prevents states from imposing rules on them.

Upton to Join Bipartisan Climate Group?

The former chair of the committee, Rep. Fred Upton (R-Mich.), said he may join the bipartisan Climate Solutions Caucus. Upton, now chair of the Subcommittee on Energy, was among 46 Republicans who voted last week to support the designation of climate change as a national security threat in the National Defense Authorization Act.

While these were welcome developments for those concerned about climate change, they were tempered by news that Trump plans to nominate coal lobbyist and former Senate aide Andrew Wheeler as EPA deputy administrator.

And Joel Clement, until recently the director of the Office of Policy Analysis at the Interior Department, claimed in an op-ed in The Washington Post that he was reassigned to a job in an accounting office for talking about the effects of climate change on Alaska Native communities. Clement, one of dozens of senior department officials reassigned to positions where they had no background, filed a whistleblower complaint with the U.S. Office of the Special Counsel.

Also last week, congressional Republicans said they will attempt to change the Endangered Species Act by allowing regulators to use economic costs to deny listing a species as threatened.

— Rich Heidorn Jr.

July 25, 2017

Opinion: NARUC App Would Conflict with Privacy Rules

By Michael Murray

At last week’s National Association of Regulatory Utility Commissioners Summer Policy Summit in San Diego, attendees were encouraged to download an app to facilitate in-person meetings. There’s just one problem: Were it subject to the privacy rules adopted by commissions in several states, the app would be in violation.

Privacy rules prevent electric and gas utilities from selling or disclosing personal information except under certain, carefully monitored circumstances. Customer protections, such as clear notices to users about what data are being collected, are absent from the app. This leads to an embarrassing double standard for some state regulators. While commissioners enjoy the conveniences provided by the “NARUC 2017” app, their own rules would outlaw similar practices in their home states.

For example, take California’s rules. In 2011, the Public Utilities Commission issued a lengthy privacy decision that requires software companies that access customer data held by a regulated utility to provide written privacy policies that are “meaningful, clear, accurate, specific and comprehensive.” But, confusingly, the app links to two privacy policies that are sometimes in conflict with one another. The policies also do not explain what personal information is captured by the user’s mobile device — a clear violation of California’s rules.

Another California requirement is for software companies to distinguish “primary purposes” from “secondary purposes” of the personal data used. A primary purpose could be “to help you save energy and money in your home with tailored recommendations on your smartphone,” while a secondary purpose could be, for example, selling the data to make extra money. Secondary uses are explicitly prohibited without the prior written consent of the customer. Unfortunately, NARUC 2017’s terms say vaguely, “We will collect and use of [sic] personal information solely with the objective of fulfilling those purposes specified by us and for other compatible purposes.” Thankfully, the app’s developer has an agreement with NARUC not to sell any users’ personal data, according to the company’s CEO. But if a complaint were filed in California against a similar app maker, the commission would likely find the software unlawful.

Other commission-approved rules require companies to make informational disclosures to consumers prior to releasing personal data. By standardizing disclosures, the idea is that companies are prevented from writing their own vague or misleading language that exploits customers. For instance, Pacific Gas and Electric’s form for demand response is four pages long, and deviations from the form are not allowed.

Outside of California, Colorado and Illinois regulators have approved standardized disclosure language. But the NARUC 2017 app does not ask for any specific authorization at all, and, when it does, the authorization language is fluid. Both of its policies say that the app maker “may revise these terms of use at any time without notice.” Changing terms without notifying users is anathema to privacy advocates and consumer groups who fought for rules that ban the practice.

Finally, California’s rules enshrined the principle of “data minimization,” the idea that only the personal data necessary for the task should be collected. Presumably, an app to help people at conferences meet face to face would need information like your name, title, organization, location and which sessions you want to attend. However, the NARUC 2017 app requires users to give it permission to much more, such as the right to read and modify any file stored on your device; to create new Bluetooth connections; and to control the phone’s networking settings — none of which are clearly tied to helping people meet at a conference.

It is ironic that many state commissions publicly take a “tough on privacy” stance that is at odds with their national association’s practices at its summer conference. But the double standard is not altogether surprising. Since the advent of smartphones, consumers have routinely traded their personal data for access to free services. Commission requirements for paper forms appear increasingly out of step with modern technology.

Over time, as sharing personal data such as banking transactions and health data with tech companies becomes easier, it is worth re-examining the utility industry’s practices. Is it reasonable to give away the data on your phone with a single click, while your utility bills require filling out a four-page legal form?

To be clear, the NARUC 2017 app would only violate commission rules if it accessed users’ energy information or customer account information held by utilities. Apps that do not request data from a utility operate without commission oversight.

Nevertheless, as leaders in the public sector, state commissioners and their national association should lead by example. Entrepreneurs in software and energy management have a saying: “Eat your own dog food.” It means that entrepreneurs should use their companies’ products in their personal lives, to live by their creed. We encourage NARUC to do so as well.

Michael Murray is president of Mission:data Coalition, a national coalition of more than 40 innovative technology companies that empower consumers with access to their own energy usage data. We strongly believe that energy management technologies can flourish while simultaneously protecting customer privacy. For more information about privacy and state private rules about energy, see our whitepaper, “Got Data?”

July 25, 2017

NYISO Business Issues Committee Briefs: July 24, 2017

NYISO reported Monday that locational-based marginal prices (LBMPs) for June averaged $31.76/MWh, nearly unchanged from May but up 16% from June 2016. Year-to-date monthly LBMPs averaged $36.01/MWh through June, a 20% increase from a year earlier.

In a July 24 Market Operations Report to the ISO’s Business Issues Committee, Rana Mukerji, senior vice president for market structures, said natural gas and distillate prices fell from the previous month but gained 27.5% year-over-year. Natural gas prices at Transco Z6 NY averaged $2.35/MMBtu in June, down from $2.80 the previous month.

Gulf Coast jet kerosene for the month came in at $9.59/MMBtu, down from $10.47 in May, while ultra-low sulfur No. 2 diesel at NY Harbor was $10.14/MMBtu, compared with $10.82. Distillate prices dropped 5.4% from a year ago.

On Capacity Exchange, Probabilistic Method not Better

A new probabilistic method to limit capacity price increases caused by exports from an import-constrained area would complicate the process and offer results no better than the current deterministic method, according to an analysis conducted for NYISO by GE Energy Consulting.

Mukerji shared the analysis from the monthly Broader Regional Markets Report as the latest development arising from FERC’s January acceptance of the ISO’s capacity revisions while rejecting a proposed one-year transition as lacking an “analytical basis” (ER17-446). A NYISO analyst briefed stakeholders on the outlines of the study at the April Business Issues Committee meeting. (See NYISO Provides Update on Capacity Export Concerns.)

business issues committee LMBPs NYISO — Probabilistic Locality Exchange Factor Analysis | *GE Energy, NYISO*

NYISO proposed the plan last fall to address anticipated price spikes in the capacity market in the Lower Hudson Valley and New York City zones expected after the commission in October allowed a New York plant in a constrained zone to export into ISO-NE. (See FERC Sides with ISO-NE in Capacity Dispute with NYISO.)

The new rules use a locality exchange factor to reflect how much capacity from “rest of state” can replace capacity exported from an import-constrained locality. The prior rules assumed that 100% of a generator’s exports from an import-constrained area must be replaced with generation in that locality.

“The probabilistic method introduces uncertainty and does not give results which differ significantly from the 47.8% found using the current deterministic method,” the analysis said. That figure represents an estimate of the percentage of exports from NYISO zones G-J to ISO-NE that could be expected to be replaced by “rest of state” capacity. NYISO compromised with an 80% figure.

Stakeholder comments on the methodology analysis were due by July 14. FERC in its January order encouraged a robust stakeholder-driven process but said “we cannot accept NYISO’s proposal for a one-year transition based solely on stakeholder support.”

— Michael Kuser

July 25, 2017

Overheard at NARUC

SAN DIEGO — More than 1,000 people attended the National Association of Regulatory Utility Commissioners’ Summer Policy Summit last week. Here’s some of what we heard.

Sunrun CEO Lynn Jurich said that the task for regulators and industry is to figure out what value distributed energy resources bring to the grid, and which business models and rate designs would work best. She said rooftop solar could be connected directly at the utility level to be dispatched when it is needed.

“Too often we are stuck fighting rate designs that appear to slow the growth of the rooftop solar,” Jurich said. “Let’s work together to actually maximize the value of these assets to the entire system.” Solar companies know how to market the technology to consumers, but utilities best know how to integrate the systems in the most efficient way, she said.

NuScale Power Vice President Jack Bailey said that the Nuclear Regulatory Commission is reviewing the company’s small modular reactor design, but it will take 46 months to approve the 12,000-page application. Oregon-based NuScale is the first small modular reactor company to seek approval of the technology. The company filed for approval of its design in January, an effort that took more than 800 people over two years. The 12 50-MW modules — 600 MW in total — are planned to be built on the site of the Idaho National Laboratory, owned by Utah Associated Municipal Power Systems and operated by Energy Northwest.

Asked what the reaction has been from the environmental community, Bailey said, “I would say it’s a mixed bag overall, but we are seeing some support.” He is also hopeful that the federal government will take steps to solve the problem of where to store spent nuclear fuel.

NARUC yucca mountain nuclear power — NARUC Panel left to right: Sunrun CEO Lynn Jurich (speaking), NARUC President Robert Powelson, PG&E CEO Geisha Williams, Nuclear Energy Institute Director Maria Korsnick, American Water CEO Susan Story | © *RTO Insider*

Katrina McMurrian of Nuclear Waste Strategy Coalition said she is hopeful the federal government will revisit the stalled Yucca Mountain nuclear waste disposal site in Nevada. The U.S. Nuclear Waste Fund contains more than $40 billion, accruing interest of $1.5 billion/year, but fee collection has stopped because of a suit brought by NARUC and others.

President Trump proposed to restart Yucca with $100 million in his budget proposal, and $10 million for an interim storage program to a private or federal facility while Yucca is completed.

The Senate last week approved funding for an interim storage site for nuclear waste, but unlike the House of Representatives, did not include money for restarting Yucca. “The hope is to see both sides put something together that they can conference and actually fund both of these priorities,” McMurrian said. Rep. John Shimkus (R-Ill.) has introduced legislation that would set a time limit for NRC to approve Yucca and allows the Energy Department to permit an interim facility while the facility is licensed.

Dipka Bhambhani, communications director of the United States Energy Association, said her group is working with the International Gas Union to support the 27th World Gas Conference in D.C. on June 25-29, 2018. It will be the first time in 30 years that the U.S. has hosted the triennial event, which has been held since 1931, and the first time that the host country is both the largest producer and consumer of natural gas, she told the NARUC Gas Committee. USEA is a liaison to the Energy Department for the conference and is helping to manage communications for the event.

— Jason Fordney