NY Energy Market Summit Tackles DERs

By Michael Kuser

NEW YORK — New York is charting its own course for integrating distributed energy resources into its grid, different from the path trod by states with already high rates of penetration, industry experts said this week.

new york distributed energy resources
Sturgill | © RTO Insider

“California and Hawaii had to be reactive to distributed generation, but New York is taking a more proactive approach in trying to incent greater penetration of clean energy resources,” ScottMadden’s Chris Sturgill said at the New York Energy Market Summit held Aug. 6-8.

Sturgill noted the New York Public Service Commission this spring approved new DER measures as part of the state’s Reforming the Energy Vision initiative, which has enabled market participation for non-wires alternatives and the expansion of energy efficiency, demand response programs and demonstration projects. (See NYPSC OKs Con Ed EV Charging Program, REV Initiatives.)

“It’s easier to bring DER onto the grid now, thanks in part to informed dialogue between the utilities and DER owners,” Sturgill said.

“New York is pursuing aggressive policies to promote renewable energy, preserve competitive markets and resolve regulatory uncertainty,” said Paul A. DeCotis, senior director of West Monroe Partners.

Data First

Conference panelists pointed out that the growth of DERs and electric vehicles is changing once predictable load patterns. Utilities need to ensure continued reliability, recognizing that regulators are not as close to the system as they are, they said.

“I would start with data,” said Stuart Nachmias, Consolidated Edison vice president for energy policy and regulatory affairs. “We continue to support implementation of smart meters, and also the communications infrastructure to make them usable … but price signals are important to get generation closer to load … which is how New England evolved their locational pricing.”

new york distributed energy resources
Left to right: Nachmias, Kemp, Nelson, and DeCotis | © RTO Insider

Con Ed subsidiary Orange and Rockland Utilities, which serves customers in southeastern New York and northern New Jersey, has “seen a lot of solar proposals, which is not where the demand is,” Nachmias said.

Melissa Kemp, Northeast policy director for Cypress Creek Renewables, said New York must have a larger conversation about how to compensate solar projects.

“Initial costs may avoid later costs, such as avoided transmission spending, and a project may have positive health benefits, and those positive attributes should be accounted for, if not compensated,” Kemp said.

new york distributed energy resources
Infocast held its annual New York Energy Market Summit Aug. 6-8. | © RTO Insider

She also pointed to the importance of maintaining the low-income customer perspective and protecting against unnecessary rate increases. She added that those customers would also bear any extraordinary costs in the future, which could be avoided by increased spending now.

New Business Model?

new york distributed energy resources
Kiddie | © RTO Insider

Ross Kiddie, director at West Monroe Partners, noted that New York utilities submitted their second Distributed System Implementation Plans (DSIP) to the PSC a week earlier (Case No. 14-M-0101) and asked what are the must-have technologies to deal with DERs.

If people had controllable toasters, the utility or aggregator could preset a million of them and stagger their times to avoid spikes, said James Pigeon, NYISO manager of distributed resources integration.

new york distributed energy resources
Pigeon | © RTO Insider

“As we move forward, and the aggregators have the ability to control these assets, things will change,” Pigeon said. “The NYISO is not looking to change the business model and apply unique programs to every node on the grid. … We want to apply one model and have those resources respond to NYISO direction, whether for demand management or price signal.”

Damian Sciano, Con Ed director of distribution planning, said the electric system is moving from dozens of large generators to thousands of small-scale residential units, which could go into the millions when every customer’s appliances are connected to the grid.

new york distributed energy resources
Sciano | © RTO Insider

“NYISO looks at New York City as just Zone J, but to us it’s a bunch of distribution lines that have thermal limits and voltage concerns,” Sciano said. “So when an aggregator puts together a bid for say 10 MW, it may completely satisfy what the NYISO is looking for, but it may be 10 MW on a part of the grid where we can only tolerate 2 MW at any given point.”

It goes back to the DER management system, even if someone else is aggregating something for the utility, he said. “We want to know exactly what’s being generated, very much preferably real-time, and understand how it’s affecting our system,” Sciano said.

Emilie Nelson, NYISO vice president for market operations, said she is focused on administering capacity and pricing at the wholesale level.

“If you rewind 15 years, the expectation for natural gas prices was not what they are today, so expectations can shift; reality can shift. A functioning market allows for third parties to bring in new solutions,” Nelson said.

Storage Issues

Sturgill asked how the ISO will consider proposals for energy storage resources in the wholesale market, particularly for those that are dual participation or trying to collect multiple pieces of the value stack. (See NY Releases ‘Roadmap’ for 1,500-MW Storage Goal.)

new york distributed energy resources
DesRoches | © RTO Insider

New York City is dedicated to working with utilities and others to value new DER technologies properly, including storage, said Susanne DesRoches, Mayor Bill de Blasio’s deputy director for infrastructure and energy.

“We see storage being able to support transmission and support the local network … for the complex picture in New York City, which is a bunch of islands with a unique power supply,” DesRoches said. “Storage should be valued properly for the attributes it provides for the system, and also we need clear permitting.”

new york distributed energy resources
Mandelstam | © RTO Insider

Storage needs to be treated fairly on the system, said Peter Mandelstam, executive director for GRID Alternatives Tri-State, the largest solar energy nonprofit in the U.S.

“Having been involved in a lot of regulatory battles over the decades, both at the state and federal level, the most important thing is to get the rules right,” Mandelstam said. “Storage is now here, is now integral to the complete decarbonization of our electric system … the digital age now allows for the metering.”

new york distributed energy resources
Rosales | © RTO Insider

Illinois Commerce Commissioner John Rosales, also vice chair for electricity at the National Association of Regulatory Utility Commissioners, said smart metering “is the catalyst” to put together a microgrid or adopt new technologies such as energy storage.

As a regulator, “you’ll never make everyone happy; there will be winners and losers, and they’ll be so unhappy that they will sue you,” Rosales said. “However, it’s important to remember that not making a decision is a decision.”

MISO Promises External Capacity Zones After FERC Rejection

By Amanda Durish Cook

CARMEL, Ind. — MISO said Tuesday it plans to refile a plan to create external capacity resource zones with FERC by the end of the month.

And the RTO still promises to make zone determinations in time for the 2019/20 planning year capacity auction, officials say.

FERC rejected the proposal earlier this month, saying two aspects of the plan rendered it unreasonable. (See FERC Rejects MISO Plan for External Capacity Zones.) One of the rejected provisions would have allowed external resources bordering two local resource zones to choose in which zone they receive auction credits, while the other would have made holders of evergreen supply contracts eligible for excess auction revenues indefinitely.

miso ferc resource zones
Jacob Krouse | © RTO Insider

During an Aug. 8 Resource Adequacy Subcommittee meeting, MISO attorney Jacob Krouse noted the RTO asked FERC to view the proposal as an integrated package, making the rejection total.

“The commission, under the NRG paradigm, rejected the filing,” Krouse said, referring to the July 2017 D.C. Circuit Court of Appeals ruling that FERC overstepped its authority when it suggested changes to a PJM proposal. MISO stakeholders warned last year that a rejection of the proposal was possible in light of the ruling. (See MISO Members: Court Rebuff May Reduce External Zone Chances.)

But RTO leadership appears undaunted by the rejection, planning to refile the proposal with two revisions Aug. 31.

“MISO believes that with the clear guidance we received from FERC … we are going to be able to refile at the end of the month,” Krouse said. “FERC did not note any concern with the vast majority of MISO’s proposal — just those two parts.”

Under proposed revisions, border resources that have participated in past Planning Resource Auctions will be assigned to the local resource zone in which they previously participated. New external resources that border two or more local resource zones will be assigned to the zone where the unit maintains the greatest electrical connection. MISO said it will measure electrical connectivity through line ratings using a contingency basis.

“MISO is proposing to assign resources to a single [local resource zone] instead of multiple zones,” Krouse explained.

For evergreen supply contracts, MISO now proposes to allow units to collect excess auction revenues only until the end of the original term of the agreement or for two years, whichever is longer. Krouse said the RTO’s filing will also include an option that removes the two-year extension, ending hedge eligibility as soon as the original contract expires. He said MISO intends to let FERC choose the provision it prefers.

Krouse asked for stakeholders to provide reactions to the changes by Aug. 17 and said the RASC will schedule a special Aug. 22 conference call to discuss feedback.

MISO Director of Resource Adequacy Coordination Laura Rauch said the change for border resources will apply only to a small subset of MISO resources.

Some stakeholders said the proposed treatment of evergreen contracts might violate the Mobile-Sierra doctrine, which holds that rates negotiated in a contract should be presumed to be just and reasonable.

“MISO is not changing the terms of the arrangement, so Mobile-Sierra would not apply,” Krouse said, adding that the RTO is not encroaching on the terms of buying and selling power. Rather, such contracts would simply become ineligible for additional hedges from MISO after the original term of the agreement or the proposed two-year transitional period.

“We in no way intend to change or limit the terms of evergreen contracts,” Rauch said. “These contracts were signed without consideration of the capacity construct.”

Others commended the RTO for continuing to pursue external zone designation.

“I really appreciate MISO going in and being aggressive on this. … We’ve been talking about this for half of a decade,” said Coalition of Midwest Power Producers CEO Mark Volpe.

Salem Harbor Operator Seeks Dismissal of ‘False Offer’ Case

By Rich Heidorn Jr.

The owners of Salem Harbor Power Station have asked FERC to dismiss allegations that the plant misled ISO-NE with supply offers it could not meet because of insufficient fuel.

FERC’s Office of Enforcement filed an Order to Show Cause on June 18, saying that owners Footprint Power should forfeit more than $2 million in capacity payments Salem Harbor Unit 4 received for a period in June and July 2013 during which the plant’s fuel supply prevented it from operating at its offered capacity. Enforcement also sought $4.2 million in civil penalties. (See Salem Harbor Plant Facing FERC Action.)

Footprint power salem nuclear plant ISO-NE FERC
Salem Harbor Power Plant | Tetra Tech

In its Aug. 2 response, Footprint’s attorneys said Enforcement “overstates” what ISO-NE expected from the plant, claiming the RTO was aware that NOx emissions limits prevented it from running at full capacity for an entire day. Enforcement also failed to consider the time it took the plant to reach full output from start-up, the attorneys wrote in a 383-page answer that includes audio recordings of conversations between plant and ISO-NE operators and a passage from Joseph Heller’s “Catch-22” (IN18-7).

“The day-ahead offers reflected [the plant’s fuel] limitations. And as the taped phone calls show, the operators repeatedly caveated their estimates about potential availability as uncertain,” they wrote.

Footprint said Enforcement overstated the maximum amount of fuel the plant could burn by more than 82%. Enforcement staff did not interview plant operators and there is no evidence investigators talked with the RTO’s operators about their expectations, Footprint said.

The company also said Enforcement’s calculations understated the amount of fuel the plant had available to burn.

“Enforcement thus offers a conundrum where every option is a violation. If Salem Harbor offers what it considers to be a good estimate of the projected output of Salem Harbor, that is deceptive because the projection is higher than anything empirically proven to be available in advance. If Footprint offers a lower level of output from Salem Harbor, but one that has been empirically proven to be available in advance, that is physical withholding. This is no idle, after-the-fact thought. The principals of Footprint were veterans of the business and regulatory landscape facing New England independent power producers. They understood the regulatory environment in ISO-NE as well as anyone. And they actually were concerned at the time that under-offering Salem Harbor 4 could expose them to withholding claims.”

The filing acknowledges Unit 4 ran low on fuel in July 2013 but noted that the plant was then less than a year from retirement. “Fuel oil had to be bought in large amounts — a barge of oil cost over $5 million in the summer of 2013. And given that the plant historically ran very infrequently, much of that money might end up wasted.” Unit 4 retired less than a year after the period in question, and it and its fuel tank have since been demolished.

Footprint said Enforcement is attempting to penalize it for running low on fuel because the plant was not hit with ISO-NE’s shortage-event penalties. “If the commission wants to create greater incentives to store fuel oil on site, it obviously can do that prospectively by changing the definition of shortage events in the ISO-NE Tariff so that they occur more frequently. The commission in fact approved just such a change in late 2013. But the commission cannot lawfully change the Tariff to make shortage events more frequent looking backwards. … Viewing things from a broader perspective, the Pay-for-Performance capacity model is not going to work as intended if Enforcement gets to pile on its own chosen sanctions, above and beyond shortage-event penalties, whenever it thinks alleged performance limitations somehow have not already been sufficiently punished.”

Footprint also said the case should be dismissed based on the five-year statute of limitations. It disagreed with Enforcement’s prior claims that the issuance of a show cause order within five years is sufficient.

It requested a meeting with the commissioners and senior staff to discuss its defense, “with or without Enforcement present.”

Wildfires Reshaping Regulator’s Role, CPUC Chief Says

By Hudson Sangree

California’s Public Utilities Commission has increasingly focused on wildfire prevention as electric utilities have been blamed for a series of devastating blazes in recent years, the commission’s president told state lawmakers Tuesday.

CPUC Michael Picker California Wildfires
Picker | © RTO Insider

CPUC President Michael Picker said the commission’s role had shifted significantly from economic regulation to fire safety during years of high temperatures and low humidity “that result in intense fires with 145-mph winds.”

He and others called such conditions the “new normal” in California.

Picker made his comments before a joint committee of state senators and assembly members tasked with ironing out differences in SB 901, which deals with climate change, wildfire prevention and the legal liability of the state’s three investor-owned utilities: Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric.

Passed by the State Senate in June, the bill would require a utility’s wildfire mitigation plan to describe what factors it will consider when determining whether to de-energize lines in the face of fire danger and include procedures for notifying affected customers. (See Calif. Senate OKs Utility Wildfire Cost Recovery.) The mitigation plans are subject to CPUC approval.

The hearing was one of several called to draft a workable bill before the legislature adjourns its two-year session Aug. 31, when the bill would otherwise die.

The conference committee’s first hearing was held July 25, when one of its co-chairmen, Sen. Bill Dodd (D), said he was primarily concerned with the safety of residents after hundreds in his Napa County district lost their homes, and some were killed, in the catastrophic wine country fires of 2017.

California Department of Forestry and Fire Protection (Cal Fire) probes have blamed 16 of last year’s Northern California fires on “electric power and distribution lines, conductors and the failure of power poles” owned by PG&E.

The nearly 52,000-acre Atlas Fire in Napa, for example, started when a tree limb and a falling tree came into contact with PG&E power lines, Cal Fire said in a June statement. That fire killed six residents and destroyed 783 structures.

PG&E last quarter took a $2.5 billion pre-tax charge for third-party claims related to 14 of the fires.

CPUC Michael Picker California Wildfires
Wildfires, the Atlas Fire, made for a smokey San Francisco sunrise in October 2017 | Bob Dass via Creative Commons

Opening the July 25 hearing, Dodd said the state needs greater regulation of line maintenance, including vegetation removal, inspection and power shutdowns during extreme weather conditions, “so power lines don’t start fires.”

He placed part of the blame on the CPUC, alleging lax oversight.

“That means better utility planning and greater accountability for those who operate the grid, including checking compliance before a fire,” Dodd said on the dais in July. “That’s an area where the CPUC has done quite poorly regulating utilities and ensuring public safety.”

Testifying at the same hearing, Picker said the loss of life and homes from wildfires had been keeping him up nights, though he hadn’t expected fire-prevention to be a major part of his job.

“I have to say that fires are not something I thought I would deal with when I came to the Public Utilities Commission. But it’s obvious they are becoming a bigger and more dramatic issue here in the state of California.”

The CPUC in December approved more stringent wildfire standards for utilities, creating a “high fire-threat” district where correction of fire hazards is to be prioritized through improved vegetation management and increased wire-to-wire clearances. (See CPUC Targets Wildfires, Multifamily Solar, RMRs.)

The next hearing on SB 901 is scheduled for Aug. 9, when the subject will be the liability of investor-owned utilities for the destruction of private property caused by wildfires.

Corporate Buyers Ink Record 3.5 GW in Renewables

By Rich Heidorn Jr.

Nonutility buyers have contracted for more than 3.5 GW of renewable energy thus far in 2018, breaking the annual record of 3.12 GW set in 2015, the Rocky Mountain Institute’s Business Renewables Center (BRC) reported.

The 46 deals so far this year also best the 31 deals totaling 2.89 GW in 2017.

In total, U.S. corporate purchases of renewables have totaled 13.52 GW since 2008, according to the BRC, which says its member companies have been responsible for most nonutility transactions for renewable energy in the country.

| Rocky Mountain Institute

The center says almost 60 companies have participated to date, up from four companies in 2013.

Facebook, which was one of the original four, pushed 2018’s total to the record with its July 18 announcement that it will buy 437 MW of solar power from six projects for its Prineville, Ore., data centers.

Facebook is among 140 companies that pledged to transition to 100% renewables. Other large purchases this year came from AT&T, Walmart, Microsoft and Apple.

“We are bearing witness to unprecedented growth in this market, which is critical to achieving the goal of a clean, prosperous and secure low-carbon economy,” said Jon Creyts, managing director at RMI.

The BRC, which launched in 2015 with about two dozen members, now has 250.

It helps simplify renewable purchases, offering procurement templates, primers and a Market Analysis Platform to identify the most attractive regions for wind or solar projects. BRC’s Marketplace allows corporate buyers to search wind and solar power projects available for off-take and gives developers a way to market their projects and collect information from potential buyers.

BRC’s goal is to facilitate procurement of 60 GW of renewables by 2030.

In addition to providing a way to enhance their green credentials, corporations increasingly see renewables as cost-effective. For example, storage and information management company Iron Mountain signed a 15-year power purchase agreement for wind in 2016 that it says will save it up to $500,000 in power costs annually. (See Cost Trends Favor Renewables Despite Coming Policy Shifts.)

In 2015, corporations passed utilities as the top purchaser of wind power.

However, some corporate buyers have complained their efforts have been hamstrung by insufficient transmission to move Midwest wind. (See Is RTO Tx Planning Hampering Green Corporate Goals?)

MISO Energy Storage Group Seeks Expanded Role

By Amanda Durish Cook

MISO’s Energy Storage Task Force is making a bid to broaden its role by seeking the authority to evaluate storage issues in addition to identifying them.

The group moved to revise its charter during a Tuesday conference, but any proposed changes are subject to approval by the Steering Committee at its next meeting.

The task force is currently limited to only identifying storage issues requiring MISO’s attention. It then forwards its findings to the Steering Committee, which assigns the issues to larger stakeholder committees for decisions. (See MISO Storage Task Force Defines Role, Seeks Plan.)

But the group now wants the authority to evaluate “issues or topics that are unique to the integration or challenge the realization of benefits of energy storage,” according to the revised charter. It would “also provide ongoing subject matter expertise to MISO entities regarding storage-related issues.”

miso energy storage task force
A MISO Energy Storage Task Force meeting underway. | © RTO Insider

Task force Chair John Fernandes said the initial charter may have been too restrictive.

“That was a very unilateral, one-way mission statement,” Fernandes said. “What we’re saying here is that there’s an opportunity for extended dialogue.”

He said it can sometimes feel as if the group encounters “radio silence” after it identifies an issue taken up by a larger stakeholder committee.

Fernandes said the group will reconvene in September to discuss next steps if the Steering Committee refuses to approve the expanded charter.

Some stakeholders said the revised charter might open the door to two stakeholder groups having the same discussions about energy storage, violating the spirit of MISO’s stakeholder process redesign three years ago that sought to reduce duplicative discussions across different RTO forums. (See MISO Takes Stakeholders’ Temperature on Redesign.)

But Fernandes said there are broad storage subjects that warrant further task force discussions even if a specific issue may have been escalated to another MISO group. He cited hybrid storage facilities as an example, noting the interconnection of such plants is currently under discussion within the RTO, but the general business model requires more evaluation.

Fernandes also questioned the efficiency of stakeholder committees creating new task teams to discuss unique storage attributes when the task force could evaluate them.

He added that the task force plans to continue to stay out of developing commercial business models for storage, as recommended by the Steering Committee.

PJM Stakeholders Search for Capacity Rules FERC Will OK

By Rory D. Sweeney

VALLEY FORGE, Pa. — FERC wants PJM’s capacity rules to be resolved by Jan. 4 and has dispatched staff to help the RTO and its stakeholders adhere to that timeline.

Three FERC representatives attended Thursday’s special session of the Markets and Reliability Committee on responding to the commission’s June 29 ruling rejecting PJM’s “jump ball” capacity filing.

Estes | © RTO Insider

Office of General Counsel attorney Matthew Estes, one of the three FERC representatives, stressed that they were non-decisional and therefore not speaking to or for the commission. He advised all stakeholders to address the commission directly with their interests by filing comments in the docket.

“We’re happy to give our input, but that’s not going to get to the commission,” he said.

He described the representatives’ role as “historians” who could explain what they understand the current situation to be and to provide insight into what stakeholders might consider proposing because it would be “helpful to the commission to have things they can realistically consider.”

FERC rejected both of PJM’s proposals to revise its capacity market (ER18-1314), partially granted a 2016 complaint led by Calpine (EL16-49) and initiated a Section 206 proceeding for a “paper hearing” on an alternative approach in which the RTO would expand its minimum offer price rule (MOPR) to all subsidized resources (EL18-178). (See FERC Orders PJM Capacity Market Revamp.)

Comments prior to the hearing are due on Aug. 28. FERC said that it hoped to issue a final ruling by Jan. 4, 2019, in time for the 2019 Base Residual Auction.

The size of the task led several stakeholders to file for extensions on the Aug. 28 deadline. But PJM staff said they plan to provide comments by the deadline and still accept input from stakeholders. Thursday’s meeting, along with a follow-up scheduled for Aug. 15, are intended for that purpose.

“That doesn’t leave a whole lot of time for extension. I know people want more time,” Estes said.

Keech | © RTO Insider

PJM plans to file a proposal that would follow FERC’s suggestion of combining an expanded MOPR with a unit-specific fixed resource requirement (FRR). The MOPR would have few exceptions and would include units receiving out-of-market payments, such as state subsidies for nuclear units. Such units could then use the FRR option to be removed from the capacity auction, if they can take with them an “appropriate corresponding quantity of load.”

Four Proposals

PJM solicited comments from stakeholders as part of developing its proposal and was surprised to receive four other proposals among the 19 responses. At Thursday’s meeting, representatives of the four proposals outlined their ideas.

Calpine has advocated for a “strong” MOPR with no exceptions, the company’s Sarah Novosel said, but recognizes that other stakeholders don’t agree.

“We’re ready to work on an accommodation, but we think there’s a better accommodation than FRR,” she said, suggesting an approach like ISO-NE’s Competitive Auctions with Sponsored Resources.

LS Power proposed combining the MOPR with a “resource specific requirement” that would be similar to the FRR but remove load based on where the resource’s generation is “electrically delivered” rather than its physical location. It would subject the load and generation that remains in the auction to increased reliability requirements. Those costs would be borne by the resource electing to leave the auction.

Panda Power Funds offered an alternative to FRR that would identify and mitigate subsidized resources and allow those that don’t clear the auction an opportunity to buy capacity commitments in a second auction phase.

Consultants Rob Gramlich of Grid Strategies and James Wilson of Wilson Energy Economics presented a proposal for the Resource Specific FRR developed for the Sierra Club, Natural Resources Defense Council, D.C. Office of the People’s Counsel and American Council on Renewable Energy. They characterized it as “very close” to PJM’s proposal and said it makes the process “as usable as possible” for states. [Editor’s Note: An earlier version of this story incorrectly quoted the consultants as favoring an expanded MOPR.]

Joe Bowring, PJM’s Independent Market Monitor, warned that the unit-specific FRR results in price suppression if the

subsidized resource would not clear in the auction without FRR — and could affect clearing prices either up or down if it would have cleared.

Estes confirmed that FERC had not required an FRR to be part of any proposal, nor has it ruled on whether self-supply units should get a MOPR exemption. He advised stakeholders to file their requests along with substantiation that goes beyond assuming the way things have been traditionally should continue because “FERC found the way it’s always been to not be just and reasonable.”

PJM’s Jen Tribulski agreed with Estes’ analysis on FERC’s FRR proposal.

“We don’t view it as a strict mandate, but we do view it as the commission looks at it as a viable option to accommodate state actions,” she said.

Calpine also agreed.

“I think it’s clear that we at Calpine do not believe that the partial FRR was a mandate, just a suggestion. We think they’re open to other alternatives as well,” Novosel said.

New England Clean Energy Legislative Roundup

By Michael Kuser

BOSTON — This year’s legislative sessions in New England produced clean energy developments ranging from Connecticut’s “most important energy bill” in seven years, to Massachusetts taking “baby steps,” to Rhode Island taking what might turn out to be a “regrettable pause.”

Vermont even passed a bill requiring the installation of electric aircraft charging stations at state-owned airports.

necec net metering clean energy
Besser | © RTO Insider

One unresolved issue among most of the six states in the region relates to the siting of renewable energy resources, Northeast Clean Energy Council (NECEC) Executive Vice President Janet Gail Besser said Thursday at the group’s annual legislative roundup, hosted by Boston-based law firm Pierce Atwood.

“Should there be different siting standards for renewables than for other kinds of development?” Besser said before the group’s state coordinators provided an overview of new clean energy legislation in New England. “How do you preserve farmland and forestland and how do you have compatible uses of land?”

Connecticut Expands RPS, GHG Targets

Mike Martone, of law firm Murtha Cullina, said one new Connecticut law, SB9, “was hotly contested throughout the year… [and] was the most important bill this session and arguably the most important clean energy bill since Public Act 11-80 was enacted seven years ago,” which established the state’s Department of Energy and Environmental Protection.

necec net metering clean energy
| © RTO Insider

The law revoked net metering guarantees that ensure rooftop solar owners earn retail prices for their excess electricity. (See Connecticut Energy Bill Draws Mixed Reviews.) It calls for the state’s Public Utilities Regulatory Authority to set up a docket by Sept. 1 “to select the netting time between real time, one day or a fraction of a day, which is still going to be very problematic,” Martone said.

But it also increased the state’s renewable portfolio standard to 40% by 2030; extended the low- and zero-emission renewable energy credits program an additional year; and established a new tariff-based program for low- and zero-emissions projects, shared clean energy, and virtual net metering. The legislature also restored $10 million in energy efficiency funding to the 2019 state budget, Martone said.

Another new law (Public Act 18-82) establishes an interim target of reducing greenhouse gas emissions to 45% below 2001 levels by 2030, and updates Connecticut’s Comprehensive Energy Strategy, the state’s triennial plan to meet its energy needs, to include planning for climate change and a strategy to meet the new GHG target.

It also established the Connecticut Council on Climate Change, which is charged with coordinating the efforts on emissions among businesses, state and municipal agencies, and nonprofits.

Massachusetts on Track

Massachusetts concluded its two-year legislative session July 31 by passing a bill (H. 4756) to increase renewable energy usage and reduce high-cost peak hours. The bill includes a clean-peak standard, the first in the nation to promote the use of renewable resources to shave peak loads.

The bill, one of 175 energy-related ones considered in the session, also allows the Department of Energy Resources to solicit an additional 1,600 MW of offshore wind by 2035 and increases the state’s energy storage target to 1,000 MW by 2025.

necec net metering clean energy
Bosley (left) and Winne | © RTO Insider

“I don’t want to say we had a good two years, but we had a great 48 hours at the end of the session,” said Dan Bosley of NECEC. “A lot of people were disappointed, but the more we looked, the more we realized we got a lot of our initiatives in this bill.”

The legislation mandates that clean energy sources supply an additional 2% of the state’s electricity each year, dropping to 1% in 2030 in order to “bring the business groups on,” he said.

While the bill did not raise the cap on solar net metering, it did modify language related to the monthly minimum reliability contribution charge, which will compel everybody to refile with state regulators, Bosley said.

necec net metering clean energy
Rothstein | © RTO Insider

NECEC President Peter Rothstein called the bill “a step in the right direction,” but the state’s Sierra Club director, Emily Norton, said it represented “baby steps on clean energy legislation when what is needed are giant strides.”

The environmental bond bill (H.4599) authorized $211 million to be spent on climate programs and state hazard mitigation, Bosley said. (See New England Women Talk Climate Change, Resilience.) That includes $10 million for a clearing house “to monitor, project and collate information so that we can do things that we want in an intelligent way,” Bosley said.

The bills have not been signed into law yet.

Rhode Island Pauses

Rhode Island had two landmark years for clean energy legislation in 2016 and 2017, and an exciting time this year in procuring 400 MW of offshore wind, but it was “not a banner year for legislation,” NECEC Policy Analyst Jamie Dickerson said.

“I think it’s going to shape up as a regrettable pause in what has otherwise been a tremendous three or four years of strong and steady growth,” he said.

Legislation that failed to pass would have tweaked the state’s renewable energy growth program to allow additional megawatts to be allocated to the residential solar, Dickerson said. In the 2017 program year, 6.5 MW were allocated for residential solar, and that capacity sold out in six months.

Other bills on the siting of renewables, harmful forest siting, capping energy efficiency program investments, and carbon pricing were either not taken up before the end of the session or referred to committee.

A substitute version of one bill, providing for independent review and verification of ongoing energy efficiency programs, was passed and signed by the governor, Dickerson said.

Northern New England

Kate Epsen, executive director of the New Hampshire Sustainable Energy Association, provided an overview of the conclusion of the Granite State’s second year of a biennium session.

SB 321, signed into law in June, removed the requirement that members of a net-metering group use the same default supplier as the group’s host, allowing residents to use both net metering and retail choice. “This is really helpful because it allows a lot of those larger end users who clearly shifted to competitive supply years ago, and don’t want to go back, to also engage in rural renewable energy projects through net metering,” Epsen said.

necec net metering clean energy
Anderson (left) and Epsen | © RTO Insider

On the other hand, Gov. Chris Sununu vetoed SB 446, which would have raised the net metering cap to 5 MW from 1 MW and set the price at the default rate, which changes every six months. The Senate already has the two-thirds majority needed to override the veto on Sept. 13, “Override Day,” she said.

“The veto was unfortunate, for the Republican governor had a lot of cover, with many Republicans favoring it, so this veto happened for about five people in one company,” Epsen said. “That’s how local some of these relationships can get.”

In Maine, Gov. Paul LePage in his two terms since 2010 has vetoed more bills, 642, than all other Maine governors in the past century combined, said Melissa Winne, executive director of the Environmental & Energy Technology Council of Maine.

All energy-related bills, save one, either died in committee, died in special session or were vetoed. The exception was a bill, enacted without the governor’s signature, that extends Maine’s participation in the Regional Greenhouse Gas Initiative through 2030.

Olivia Campbell Andersen of Renewable Energy Vermont highlighted H.676, a law eliminating state fees for rooftop solar and removing mandatory setbacks for solar parking lot canopies, as well as a law that maintained net metering for up to 500 kW.

“Utilities have made it very clear that they would like to have net metering only go up to 150 kW,” Andersen said.

NRG Earnings Rebound on Cost-Cutting, Asset Sales

By Michael Kuser

nrg energy genon q2 2018 earnings

NRG Energy reported net income of $24 million ($0.23/share) in the second quarter, compared with a $16 million loss (-$1.98/share) a year earlier. Earnings from continuing operations were $121 million in the quarter, up 22% from the same period last year.

The company credited cost-cutting measures, the sale of assets and the consummation of a settlement with its spun-off GenOn Energy business. “Our portfolio is demonstrating once again the value of integration between retail and generation during the volatile summer months, particularly in Texas,” CEO Mauricio Gutierrez said during an earnings call Thursday.

The company has realized $225 million in cost savings through the second quarter of 2018 and is on track to close up to $3 billion in asset sales this year.

Record Peak in Texas

Gutierrez noted that the supply/demand balance in ERCOT is the tightest it has been in many years because of steady load growth and the retirement of nearly 5 GW of generation in the past 12 months.

nrg energy genon q2 2018 earnings

| NRG

“This market tightening led to an increased probability of scarcity conditions this summer, which was reflected in higher forward prices,” he said. “So far, demand has not disappointed, setting a new record peak of over 73 GW in July. However, this record load was met with equally impressive reliability across the grid, which tempers real-time pricing.” (See ERCOT Sets New All-time Demand Record; Prices Spike.)

“In other words, it took nearly perfect systemwide reliability to meet the summer peak demand,” he said.

“These conditions create an opportunity for both sides of our business and highlight the longer-term value of our integrated approach.”

Big East

Results from the PJM capacity auction this past May reflected fewer new builds and significant amounts of uncleared capacity, signaling more disciplined development and bidding behavior, Gutierrez said. On a “same-store” basis, NRG cleared more megawatts at higher prices than the previous auction, he added.

nrg energy genon q2 2018 earnings

| NRG

Going forward, the company will seek assets in “premium locations,” Gutierrez said, noting that NRG now has 85% of its PJM fleet in the ComEd zone, which separated to clear at $196/MW-day.

“Throughout the East, we are encouraged by the multiple regulatory avenues for market reform that could benefit both our generation and retail businesses,” Gutierrez said.

NRG increased its bet on retail sales in June, when it completed its acquisition of XOOM Energy, an electricity and natural gas provider with more than 300,000 customers primarily in the East, for $208 million. The company expects XOOM to add $11 million of net income and $45 million of adjusted EBITDA annually.

Faster Asset Sales

nrg energy genon q2 2018 earnings
NRG Headquarters in Princeton, NJ. | NRG

The company also highlighted its progress in unwinding its relationship with GenOn, the product of the merger of RRI Energy and Mirant, which NRG purchased in 2012 for $1.7 billion. GenOn filed for Chapter 11 bankruptcy in 2017. NRG executed a settlement in July that included releases from GenOn and will terminate shared services on Aug. 15. Other than certain pension and post-retirement obligations and certain claims for REMA, an indirect GenOn subsidiary, the settlement provides NRG full releases from GenOn and its debtor and non-debtor subsidiaries.

GenOn is planning to exit bankruptcy on Oct. 1.

NRG closed on the sale of Boston Energy Trading and Marketing, as well as on its Spanish Town asset, a solar facility in the Virgin Islands, while reaching an agreement to sell its interest in two additional assets, the Keystone and Conemaugh coal-fired power plants in Pennsylvania.

“We actually had anticipated selling these assets in 2019, but we were able to accelerate this timeline and execute on the opportunity to monetize these assets ahead of schedule,” Gutierrez said.

The sale of NRG Yield has received all necessary regulatory approvals and should close in the third quarter, he said. The company’s sale of its South Central portfolio — 3,555 MW of gas- and coal-fired generation on the Gulf Coast — is also expected to close in the second half of this year.

Analyst call transcript courtesy of Seeking Alpha.

Con Ed Q2 Earnings Rise 7%

By Michael Kuser

consolidated edison con ed q2 2018 earningsConsolidated Edison earned $188 million ($0.60/share) in the second quarter, a 7% increase from $175 million ($0.57/share) in the same period last year.

The company reported about $2.7 billion in revenue for the quarter, a 2% increase over last year.

Adjusted earnings, which exclude the effects of a gain on the sale of a solar electric production project in 2017 and the net mark-to-market effects of Con Edison Clean Energy Businesses, were $189 million ($0.61/share) compared with $178 million ($0.58/share) in 2017.

Following a proceeding investigating a New York City subway power outage (Case 17-E-0428), the state Public Service Commission last year required Con Ed’s primary utility subsidiary, Consolidated Edison Company of New York (CECONY), to upgrade electrical equipment that serves the system. Costs related to that matter totaled $180 million, including $30 million in capital and operating and maintenance costs reflected in the company’s electric rate plan and $150 million deferred as a regulatory asset.

consolidated edison con ed q2 2018 earnings
Following a settlement with state regulators over a New York City subway outage, CECONY has spent $180 million upgrading equipment serving the system. | Joren via Unsplash

Through June 30, CECONY’s costs related to March 2018 storms amounted to $126 million, while fellow subsidiaries Orange and Rockland Utilities (O&R) and Rockland Electric Co. had storm-related costs of $48 million and $18 million, respectively. Recovery of those costs is subject to review by the PSC and the New Jersey Board of Public Utilities. Con Ed and CECONY are unable to estimate the amount or range of their possible loss in connection with the storms, they said.

consolidated edison con ed q2 2018 earnings
(a) average rate base for 12 months ended 6.30.2018 | ConEd

In May 2018, PSC staff recommended a $10.6 million increase in O&R’s electric rates and a $6.7 million decrease in O&R’s gas rates, both reflecting an 8.6% return on equity. In June 2018, O&R filed an update to its requested rate increases, changing its request to a $30.4 million increase for electric and a $0.5 million decrease for gas, seeking a 9.75% ROE.

Con Ed reported its Clean Energy Businesses having 1,383 MW of renewable energy production projects in service and 218 MW under construction.