Page 1372 – RTO Insider

December 6, 2016

MISO to Study Aging Software; Market Improvements Planned for 2017

By Amanda Durish Cook

CARMEL, Ind. — MISO will spend $1.8 million on consultants to evaluate how its aging market system can be improved to respond to stress and future threats.

miso-pjm coordinated transaction scheduling — Bladen | © *RTO Insider*

Jeff Bladen, executive director of market services, said it was hard to put a date on when MISO’s market system will hit its limits, but if it isn’t overhauled, it could fail in five to seven years.

Bladen told the Market Subcommittee on Nov. 29 that some of the code in the RTO’s late 1990s software platform dates back to the late 1980s. “It’s a very dated software architecture for what it’s used for today,” Bladen said. “You can install airbags into a 1950s Chevy; it doesn’t mean the car is safe. … Frankly, we’re not the only RTO having these challenges.”

Bladen said MISO and consultants will be studying the effects of changes such as increased intermittent and behind-the-meter generation and increased combined cycle units.

“I do want to stress that we see no risk to reliability in the near term,” he said.

The $1.8 million in funding will be used to cover a series of independent and third-party studies from November to April, with the first 30-day study examining if MISO’s planned efforts are enough. MISO plans to spend $1.1 billion on information technology between 2015 and 2019.

Bladen said the aim of the studies is to provide the Technology Committee of the Board of Directors with “a complete and comprehensive view of the limitations and viability of current market systems.” He said MISO will make reports on its findings to the committee during the first three board meetings in 2017. Bladen said he did not expect an immediate “huge” investment to be revealed at the meetings.

Market Improvements Continue in 2017

MISO’s Mia Adams reported that three Market Roadmap projects were completed in 2016 and six projects are planned for 2017.

In 2016, MISO expanded its day-ahead market coordination with PJM with a firm flow entitlement exchange process and introduced pricing floors to its emergency pricing structure.

It also rolled out a product allowing generators to voluntarily set aside ramping capability for fleet flexibility during peak hours compensated by MISO at no more than $5/MWh. Chuck Hansen, of MISO’s market evaluation design group, said the ramp product has been delivering “tangible benefits” since its May launch, with projected annual savings of $4.2 million in resource production costs and reserve shortage price spikes.

For 2017, MISO plans to:

Make improvements to its day-ahead reliability assessment commitment software.
Control power swings caused by market-to-market dispatch.
Improve MISO-PJM interchange modeling and pricing.
Tighten thresholds for uninstructed deviation. Jason Howard, MISO market quality manager, said strengthened thresholds for uninstructed deviation are still under review for their impacts. Proposed changes, draft Tariff language and analysis results will be readied in early 2017. (See Monitor Again Criticizes MISO’s Uninstructed Deviation Rules.)
Introduce the second phase of its extended locational marginal pricing, which will expand price-setting eligibility to online resources with a one-hour start-up time. MISO’s Congcong Wang said the expansion had stakeholder support because it was a change the RTO could adopt without new software and captured about 60% of peaking resources. A FERC filing is planned in the first quarter with testing to begin in the second quarter. (See “MISO to Expand ELMP Price Setting, but not to IMM’s Specs,”MISO Market Subcommittee Briefs.)
Launch MISO-PJM coordinated transaction scheduling. MISO’s Beibei Li said the product should come online in October 2017, after vendor General Electric delivers the software sometime in December and the RTOs spend time testing it. (See “MISO-PJM Coordinated Transaction Scheduling Delayed,”MISO Market Subcommittee Briefs.)

Additionally, MISO research and development adviser Yaming Ma said the RTO will publish a study by July on automatic generation control to better use fast-ramping resources. The project was identified as high priority in 2015’s Market Roadmap classification, and a two-stage study began in September. Ma said design details would likely emerge in late 2017, but first MISO will use a prototype to develop strategies for storage resources that may have limited amounts of power on hand.

DTE Energy market developer Nick Griffin asked how fast resources must be to be included in automatic generation control. Bladen said while MISO would use battery storage as “proxy speed, MISO will test a small gamut of different response speeds.”

December 6, 2016

Overheard at the ISO-NE Consumer Liaison Group Meeting

BOSTON — New England appears poised to withstand another winter of tight natural gas supplies, an ISO-NE official told the RTO’s Consumer Liaison Group meeting on Thursday. Other speakers debated whether states’ renewable portfolio standards are demanding enough to meet climate goals.

george-rto-insider — George | © *RTO Insider*

Anne George, ISO-NE vice president of external affairs and communications, said the 342,000-dekatherm Algonquin Incremental Market project just went online, and while it’s primarily meant to serve local distribution companies’ natural gas customers, it should ease system constraints for power generators.

“But as we see [the 1,517-MW] Brayton Point station retire [next June], we see the additional gas capacity going away as a large non-gas resource will likely be replaced by more gas generation,” she said.

Bride | © RTO Insider — Bride | © *RTO Insider*

Overall consumer costs for electricity have remained relatively flat for New Englanders over the past six years, even as more charges have been added to the distribution side of the bill. Electric distribution companies and their customers are responsible for funding public policy as renewable standards, including the cost of solar carve-outs, energy efficiency and other programs grow, said Jim Bride, president of Boston-based Energy Tariff Experts.

“Transmission charges have gone up a lot. So, there’s this increasing cost wedge, whether it’s renewables or other mandated charges over transmission that’s taken up a greater portion of the bill. What has allowed that to happen without consumers really noticing is the decrease in natural gas prices. Wholesale market power costs are down significantly,” he said.

Massachusetts lawmakers abandoned an effort to increase the state’s RPS this year to further reduce greenhouse gas emissions.

iso-ne consumer liaison group meeting — Gerwatowski | © *RTO Insider*

Ron Gerwatowski, an advisor on energy policy and utility regulation and former assistant Massachusetts energy secretary, said the renewable energy credit market that has driven clean energy projects needs further study and more recent data, noting that complete regionwide figures are about three years old. Another area worth more study is the impact of high alternative compliance payments in Massachusetts. The $67 cap draws RECs away from neighboring New Hampshire, Connecticut and New York, potentially leaving them short of meeting their own goals.

“Will an increase in annual obligations really achieve emissions reductions? Or, will it just cause a reshuffling of where the RECs are sold over time? I’m not suggesting we eliminate the RPS … but we really do need a comprehensive study before states consider raising them,” he said.

Cunningham | © RTO Insider — Cunningham | © *RTO Insider*

Greg Cunningham, vice president and director of clean energy climate change for the Conservation Law Foundation, said the two largest New England states, Massachusetts and Connecticut, are mandated to reduce greenhouse gas emissions by 80% below 1990 levels by 2050. From that, the Integrating Markets and Public Policy initiative was born to help markets assist all of the states to reach their climate goals.

“We, CLF, have watched as slowly clean energy has been built out, but at a trajectory that doesn’t come close to meeting this essential obligation — that is not only law, but [what] the science dictates we must do — to avoid the worst implications of climate change,” he said.

December 6, 2016

CAISO Monitor Proposes Fixes for EIM Market Power Concerns

By Robert Mullin

CAISO’s internal Market Monitor is proposing new enforcement measures to address market power concerns in the Energy Imbalance Market — an effort that could help participants win market-based rate authority in the West’s only real-time energy market.

The Monitor’s efforts come in response to FERC rulings limiting nearly all of the EIM’s current participants to transacting at cost-based rates — the result of the commission’s ongoing concerns about manipulation in the nascent market.

“We’ve been working with the [EIM] participants and the ISO to address the various concerns that FERC articulated so [participants] could refile and get market-based rates,” Eric Hildebrandt, director of CAISO’s Department of Market Monitoring, told a Nov. 30 meeting of the EIM’s governing body.

Hildebrandt pointed out that FERC now requires all prospective EIM members to file for market-based rate authority before joining the EIM — even if those entities already exercise that authority in the rest of the West.

“At the Market Monitor, we actually think it’s a very good thing — as long as the conditions are competitive — to have the full flexibility of bidding that is afforded entities which have market-based rates,” Hildebrandt said.

That flexibility has so far been elusive for three out of the four current EIM members.

Denials

FERC denied NV Energy and PacifiCorp — both subsidiaries of Warren Buffet’s Berkshire Hathaway Energy — EIM market-based rate authority in a November 2015 ruling that cited the companies’ failure to employ sufficient tests demonstrating their inability to wield economic power in their portions of the imbalance market (ER15-2281). The commission rejected Arizona Public Service in an August 2016 ruling (ER10-2437).

In both instances, the commission said it could not rely on CAISO’s market monitoring and mitigation to sufficiently address market power concerns in the EIM. All three utilities were invited to reapply for market-based rate authority once they could provide an additional 12 months of operational data demonstrating whether or not they possess market power.

FERC is concerned about the potential for EIM participants to engage in physical or economic withholding of generating resources in areas of the EIM subject to transmission constraints — wide areas dominated by generation owned by EIM members themselves.

Physical withholding can involve a supplier not bidding lower-cost resources into the market in order to allow higher-cost units to set clearing prices. This risk arises from the fact that the EIM has no must-offer requirement.

Economic withholding occurs when a unit bids into the market above its marginal costs in order to elevate the market price.

Monitor’s Proposals

CAISO has attempted to address this risk through automated bid mitigation procedures that kick in when transmission congestion limits supply into an EIM area. But FERC expressed concern that the ISO might not enforce the market constraints required to trigger mitigation.

To address the commission’s concerns about physical withholding, the Monitor suggests that the ISO improve the EIM’s outage reporting rules by logging when plant outages are submitted by market members for non-physical reasons. In short, the ISO must have more visibility into EIM outages, Hildebrandt said.

To counter economic withholding concerns, the Monitor recommends that the ISO step up enforcement of local market constraints in specific EIM areas and provide FERC an explanation when it decides not to enforce them.

Hildebrandt said the Monitor will heed a commission request that it comment on market-based rate authority proceedings, something the department hasn’t done in nearly a decade, he noted.

Puget’s Success

Lessons can be learned from Puget Sound Energy’s successful effort to obtain market-based rate authority in the EIM, Hildebrandt said (ER10-2374).

The commission determined that Puget provided sufficient evidence that its limited link to other EIM areas would not become constrained frequently enough to create a submarket requiring specific measures to mitigate market power.

A significant factor in gaining approval: Puget’s commitment to providing 300 MW of firm transmission to the market at all times. Other EIM members committed a “less certain” volume of transmission to the market, Hildebrandt said.

“I think the key there is the amount of potential transmission,” Hildebrandt said. “If they can satisfy to FERC that it’s going to be offered or available all hours, that would seem to play a big role.”

Hildebrandt said Puget’s approach could provide a template for how the ISO can work with other members to help them win FERC approval.

The EIM’s continued expansion should go a long way in assuaging FERC’s concerns about the interplay between transmission constraints and local market power, according to Hildebrandt. The Monitor’s own analysis indicates that the addition of NV Energy a year ago created enough additional transfer capacity to ensure competitiveness in all EIM balancing authority areas during nearly all hours.

That additional capacity is translating into increased flows between EIM areas, making the market more competitive, Hildebrandt said.

market-based rate authority caiso monitor — Map illustrates average transfer capacity throughout the Energy Imbalance Market since Arizona Public Service and Puget Sound Energy joined the effort in October. | *CAISO*

“Now with multiple connections between the ISO and the EIM, you really have to have congestion on multiple constraints at the same time to isolate any one area,” he said. If congestion occurs at one constraint, energy can be scheduled around it to supply the affected area.

“You’re really operating as one single market on a system basis throughout most — if not all — of the EIM,” Hildebrandt said.

December 6, 2016

MISO-PJM TMEP Projects Drop to Five

By Amanda Durish Cook

MISO and PJM’s targeted market efficiency project portfolio has dipped from seven projects to five.

The latest project to drop off is the Marysville-Tangy 345-kV upgrade in central Ohio, which was supposed to deliver $122 million in benefits at a “minimal” cost. PJM and MISO staff have since learned that the line’s emergency rating will be increased by the end of this year, eliminating the need for a congestion-relieving fix.

The Klondike-Purdue 138-kV project in north-central Indiana was also scrapped this fall after RTO staff discovered the congestion the project was aimed at relieving was merely outage-driven. (See MISO, PJM Move Forward on TMEPs; 6 Projects Planned.)

The five remaining projects are expected to cost $14.45 million and deliver $100 million in benefits, a 6.9:1 benefit-cost ratio. The original seven-project TMEP package was expected to cost $19 million and deliver $117 million in benefits, a 6.2:1 ratio.

miso pjm tmep market congestion planning — Twelve flowgate projects were initially considered in MISO and PJM’s TMEP analysis.

During the Dec. 2 MISO-PJM Interregional Planning Stakeholder Advisory Committee conference call, PJM engineer Alex Worcester said the RTOs will continue to monitor the Marysville-Tangy project site to see if it could use future improvements.

“We’re still looking at a $100 million benefit for [less than] $15 million in this portfolio of projects,” Worcester added.

There are no recommended changes to the other five projects, MISO and PJM staff said.

WPPI Energy’s Steve Leovy said he wanted more information on how the TMEP costs and benefits were calculated. “Based on [the dropped projects], the benefit metric could have changed significantly,” Leovy said.

Leovy also said he would like the TMEP cost-benefit calculation to resemble the benefit analysis used in MISO’s Market Congestion Planning Study. Leovy said when the TMEP project creation is filed with FERC, he will recommend WPPI make a filing asking the commission to consider making MISO use the Market Congestion Planning Study’s benefit analysis for TMEPs.

MISO engineer Adam Solomon disagreed, replying, “We think having separate benefits metrics is OK.”

December 6, 2016

Stakeholder Soapbox: The Ripple Effects of Subsidizing Monopolies

By Dick Munson

environmental defense fund — Munson | *Environmental Defense Fund*

Ohio regulators recently provided $600 million to FirstEnergy, the state’s largest utility. Although the decision was labeled as a “distribution modernization rider,” the money seemingly came with no strings attached, meaning the utility giant need not do anything to update or improve its system of wires and transformers.

Even the chairman of the Public Utilities Commission of Ohio, Asim Haque, described the decision as “undoubtedly unconventional.” His rationale for the subsidy was that FirstEnergy could not modernize its grid until it reduced its debt, which would allow it to obtain a better credit rating, which, in turn, would lead to lower financing costs for future grid investments — if they occur.

That line of thinking led to the $600 million decision, raising six questions.

First, rather than advance grid modernization in the state, has the decision actually set it back? FirstEnergy will not spend any of the money on near-term upgrades. Plus, other electricity companies will avoid investing in Ohio, as regulators are showing a preference for the incumbent utility monopolies. Innovative entrepreneurs will not risk their capital when regulators have stacked the market against them.

Second, should we reward a utility’s poor management? FirstEnergy needed to reduce its debt because its executives made bad business decisions, particularly buying up old coal-fired power plants at the very time the price of natural gas was falling, making those plants uneconomic. Rather than reduce executive bonuses or trim generous dividends to shareholders, regulators sent the tab to customers, every one of whom must pay $36 more per year to cover FirstEnergy’s mistakes. Regulators are signaling more interest in a utility’s pleas than its performance.

Third, how much will Ohioans really have to pay? Since every other utility in the state is now lining up to get the same deal regulators gave to FirstEnergy, the cost will certainly be much more than $600 million.

Fourth, doesn’t the subsidy distort regional power markets? FirstEnergy originally asked for money to cover power purchase agreements that would support the continued operation of its uneconomic (and dirty) power plants. Federal regulators objected, saying such a subsidy would distort competitive markets. To skirt those objections, the utility then asked for the subsidy to go to a different subsidiary instead. The effect, however, is the same — state regulators have provided a competitive advantage to FirstEnergy’s generators. As a result, FERC will need to decide if such a “virtual PPA” also illegally disrupts regional markets.

Fifth, is there true corporate separation between FirstEnergy’s generation and distribution subsidiaries, as required by Ohio’s deregulation law? As mentioned, FirstEnergy diverted the subsidy, directing the money away from its generation units to its distribution companies. Those subsidiaries, ironically, are doing very well financially, largely because they are monopolies that enjoy guaranteed profits. Although state law requires arms-length dealings among the utility’s subsidiaries, the subsidy came in through a different door but ended up in the same house. In effect, it is still propping up FirstEnergy’s economically challenged generation units that are not able to compete in regional power markets.

Sixth, should utilities get something for nothing? Ohio regulators did “not place restrictions on the use” of the subsidy and said FirstEnergy could use the funds to cover “outstanding pension obligations, reducing debt or taking other steps to reduce the long-term costs of accessing capital.” Almost as an afterthought, PUCO also said FirstEnergy could use the subsidy “to indirectly support grid modernization investments.” The operative word, of course, is “indirectly,” noting the utility need not show any connection to grid modernization efforts. Put another way, Ohioans are paying millions of dollars for something they have no guarantee of receiving.

Such questions suggest a simple subsidy prompts ripple effects that set back grid upgrades, hurt customers and distort competitive markets. The PUCO chairman has said he wants to move beyond the subsidy debate so regulators can focus on modernizing the grid. Perhaps the question he should be considering is, what are the investments and innovation needed to build a cleaner, more affordable energy system?

Dick Munson is director of Midwest Clean Energy for the Environmental Defense Fund.

December 6, 2016

MISO Market Subcommittee Meeting Briefs

CARMEL, Ind. — MISO will likely add new details to its monthly operations reports as a result of an annual review, engineer Oluwaseyi Akinbode told the Nov. 29 Market Subcommittee meeting.

Photo: Akinbode | © RTO Insider Chart: | MISO — Akinbode | © *RTO Insider*

Akinbode said MISO will add a market efficiency metric based on the alignment of the financial transmissions rights, day-ahead and real-time markets. (FTR shortfalls plus real-time excess congestion funds divided by FTR target credits.)

Market efficiency is expected to maintain a 12-month rolling average of at least 94%. If the rolling average falls to 92% or lower, or the monthly average falls below 87%, the issue will be flagged for review by MISO staff.

Jeff Bladen, executive director of market services, said the metric will help the Board of Directors understand the reasoning behind future proposals for market improvements. “It’s intended to be a broad indicator and not a surgical tool to identify improvements with,” he said.

WPPI Energy economist Valy Goepfrich said the new metric is difficult to understand and asked how MISO calculates FTR shortfalls.

Akinbode also said MISO will add charts depicting transfer trends between the RTO’s North and Central regions and MISO South. He asked for comments through mid-December and said MISO would respond to stakeholder suggestions in January.

Run Reason Requirement Shelved

MISO has canceled plans for a mechanism to track the reasons behind commitment decisions because of a lack of stakeholder interest.

The mechanism would have tracked information including start and stop times, run reasons and sources of commitments. A similar project was shelved in 2012. At that time, MISO’s market communication system provided the information, but it is no longer “the system of record,” the RTO said.

Constellation Energy requested the tracking mechanism in May 2016. But Bladen said MISO’s request for feedback on the possible data collection yielded only four stakeholder responses, half of them expressing low interest and the other half asking the project not be taken up.

“So, on the basis of that, we are not pursuing this item,” Bladen said. He added that stakeholders may raise the topic again using the Steering Committee’s issues introduction process.

The initiative is expected to be closed at the December Steering Committee meeting.

— Amanda Durish Cook

December 6, 2016

MISO to Continue Gas-Electric Coordination Efforts in 2017

By Amanda Durish Cook

CARMEL, Ind. — MISO will continue its efforts to improve gas-electric coordination in 2017, revealing a plan for the year that includes more data sharing, modeling and outreach.

The top 2017 goals include disclosing generators’ hourly gas usage profiles to gas system operators and improving modeling to identify future electric transmission and pipeline expansion needs. The RTO also plans on continuing to issue market updates to stakeholders and communicate with gas industry officials and regulators.

MISO Pipelines | MISO and MISO Fuel Survey Results | MISO — Pipelines | *MISO*

Other tasks include creating a gas generator database and NERC studies on gas contingencies, MISO strategy adviser Scott Wright told the Resource Adequacy Subcommittee on Nov. 30.

MISO will launch a pilot project to share two or three generators’ day-ahead gas usage profiles with gas system operators. The RTO will use its day-ahead clearings to forecast hourly gas usage. Wright noted that FERC Order 787 enables sharing of nonpublic operational information with gas pipelines for “reliability and operational planning.”

Indianapolis Power and Light’s Lin Franks said the RTO has done “a fine job” so far in getting pipeline and gas resource owners to communicate, such as providing real-time pipeline restrictions and notifications.

But she cautioned the RTO against involving itself in fuel contracts between gas suppliers and generators and said MISO’s gas role should be limited to providing operational data transparency and not influencing new products or rules.

“None of these contracts are exactly alike,” Franks said. “Managing our fuel supply is our obligation, not MISO’s. We’ve got to be very careful here that MISO doesn’t insert itself in our ability to manage our fuel supply. It is our job to ensure adequate supply to our generation. This one seems to be ripe for a fight on jurisdiction.”

Wright said the main thrust behind the coordination is fuel assurance. “By no means [are we] thinking that we’re going to get in between a generator and its pipeline. It’s, ‘Are there ways to unlock efficiencies in the gas coordination market?’”

Wright said he didn’t understand stakeholder concerns that gas was being treated differently than coal in terms of fuel assurance. “Why gas and not coal? I find it befuddling the references to the coal pile,” Wright said. “Gas is different. All of these pipelines are FERC-regulated. Coal is off by itself.”

MISO houses about 200 gas-fired generators and more than 30 pipelines. Gas resources, which currently comprise 42% of its generation fleet, will rise to 50% in the coming years, according to the RTO.

In October, gas was 12.8% of the dispatched generation fuel mix in MISO’s Central Region, versus 5.4% of the mix in MISO North and 63.4% of that in MISO South.

“The outlook of gas is it will grow, and in some ways MISO is catching up. There’s going to be a lot of gas demand growth in MISO North and Central,” predicted Wright.

Gas Generators Ready for Winter

Gas system operators reported a “high level” of winter preparedness in The RTO’s third winter generator fuel survey. MISO Electric Gas Operations Coordinator Mark Thomas said 174 gas-fired facilities (representing 63,600 MW, 87% of the RTO’s gas-fired capacity), participated in the survey.

miso gas-electric coordination — Fuel Survey Results | *MISO*

The survey reported connections to more than 30 gas systems in the footprint, with approximately 46,550 MW, or 65% of MISO gas capacity, connected directly to intrastate and interstate pipelines. About 70% of MISO North/Central gas capacity is connected to just five pipelines through direct connect or local distribution companies. MISO found 40% of gas-fired capacity (28,900 MW) had firm transportation and/or dual-fuel capability. “Though an increase from the previous survey, questions remain as MISO expects gas reliance to grow,” the RTO said.

The RTO also found that 42% of responding capacity (30,850 MW) subscribes to no-notice services and 37% of capacity (27,340 MW) has access to firm or interruptible storage.

However, Thomas said 11% of responding generators said they did not have a detailed weatherization plan, including insulation, wind breaks and equipment shelters. He said it was “surprising” that so many did not have a plan in place and wondered whether the question was worded clearly enough.

December 6, 2016

Third Quarter is a Charm for RTO Insider Top 30

The third quarter was a good one for the RTO Insider Top 30, as companies reported a 4% increase in revenues over a year earlier and a 22% increase in net income.

Six companies — Avangrid, Calpine, CenterPoint Energy, DTE Energy, Exelon and Great Plains Energy — reported at least a 10% increase in year-over-year revenue. Centerpoint and Entergy rebounded from losses a year earlier.

American Electric Power, which wrote down the value of its Ohio merchant generation by $2.3 billion, was the only company to report a loss for the quarter. (See related story, AEP Ohio Rate Plan Excludes Merchant Generation.)

Consolidated Edison, Pinnacle West Capital, NextEra Energy, FirstEnergy, Entergy, Public Service Enterprise Group and NRG Energy all reported drops in revenue.

NRG reported a six-fold increase in net income despite a nearly 11% drop in revenue, thanks largely to a $266 million gain on sale of assets in the third quarter. Excluding the sale, and $263 million of impairments in the third quarter of 2015, net income declined $203 million because of lower energy margins and increased debt costs, the company said. (See NRG Continues to Pare Down Businesses, Affirms Guidance.)

Sempra Energy and Avangrid each saw profits more than double over 2015.

Company	Market Cap ($ billions)	Revenue Q3 2016 ($ billions)	% change vs. 2015	Net income Q3 2016 ($ millions)	% change vs. 2015
NextEra Energy	54.15	4.81	-3.01	789.00	-10.54
Duke Energy	51.05	6.82	5.21	1181.00	26.31
Dominion Resources	46.57	3.13	5.42	690.00	16.36
American Electric Power	31.57	4.65	4.98	(765.80)	-247.67
Exelon	30.74	9.00	21.63	526.00	-16.38
PG&E	29.59	4.81	5.71	391.00	26.13
Berkshire Hathaway Energy	NA	5.09	0.45	1047.00	18.44
Sempra Energy	26.80	2.54	2.18	622.00	150.81
Edison International	23.54	3.77	0.11	449.00	0.22
PPL	23.48	1.89	0.59	473.00	20.36
Consolidated Edison	22.95	3.42	-0.76	497.00	16.12
Public Service Enterprise Group	21.18	2.45	-8.85	327.00	-25.51
Xcel Energy	20.90	3.04	4.79	457.80	7.35
WEC Energy Group	18.90	1.71	0.81	217.30	19.07
Eversource Energy	17.19	2.04	5.51	267.20	12.36
DTE Energy	16.81	2.93	12.70	325.00	23.11
FirstEnergy	14.08	3.92	-5.00	380.00	-3.80
Entergy	13.74	3.12	-7.32	388.17	-153.69
Avangrid	12.91	1.42	35.31	109.00	101.85
Ameren	11.93	1.86	1.42	369.00	7.58
CMS Energy	11.72	1.59	6.80	186.00	25.68
CenterPoint Energy	10.00	1.89	15.89	179.00	-145.78
Alliant Energy	8.72	0.92	2.86	131.00	-28.22
Pinnacle West Capital	8.46	1.17	-2.69	263.03	2.30
Westar Energy	8.04	0.76	4.34	158.55	12.80
NiSource	7.78	0.86	5.40	27.20	-655.10
OGE Energy	6.31	0.74	3.35	183.60	65.11
Great Plains Energy	5.88	0.86	9.65	133.60	5.36
Calpine	4.54	2.36	20.89	301.00	7.89
NRG Energy	3.54	3.95	-10.87	402.00	509.09
TOTAL		$87.51	3.9%	$10,704.64	21.6%

NOTE: Net Income figures include minority interests; exclude income not available to common shareholders.

Aliso Canyon Injections by Year-end?

Sempra reported third-quarter 2016 earnings of $622 million, up from $248 million a year earlier. Its California utilities saw earnings rise by $21 million, primarily because of higher margins.

San Diego Gas & Electric won state regulators’ approval to own and operate 37.5 MW of energy storage expected to enter commercial operations in the first quarter of 2017.

The company said its Southern California Gas unit “has made significant infrastructure technology and safety enhancements” to the Aliso Canyon gas storage facility and hopes to win regulators’ approval to resume injections by the end of the year.

Avangrid Adding 2,350 MW of Wind Capacity

Avangrid, formerly Iberdrola USA, said it earned net income of $109 million versus $54 million a year ago ($76 million if the costs of the company’s merger with UIL Holdings are excluded.)

CEO James P. Torgerson credited the improvement to “solid earnings” in its networks and renewables businesses, thanks to a rate settlement in New York, higher wind production and the “extension of the useful life of certain wind assets.” The company’s networks unit includes electric and gas utilities in New York, Maine, Connecticut and Massachusetts. Its renewable unit owns 53 wind farms with 5,643 MW of capacity in 18 states.

The company said it will purchase equipment for up to 2,000 MW of additional wind generation and more than 350 MW to repower existing wind turbines by the end of the year to obtain the full value of production tax credits.

“Also, we are contracting additional power purchase agreements as we continue to manage our merchant exposure,” Torgerson said.

Previous stories on third-quarter earnings:

Westar Boosts Earnings Amid Pending Acquisition

PJM Third-Quarter Earnings Roundup

CenterPoint Energy Fine-Tunes its Gas Businesses

AEP Turns Away from Generation to Transmission, PPAs

FirstEnergy Wants out of Competitive Generation

Earnings Up, Xcel Touts ‘Steel-for-Fuel’ Strategy

Entergy Earnings Surpass Expectations; Wall Street Unimpressed

– Rich Heidorn Jr.

December 6, 2016

ISO-NE Study Sees Little Savings from Keene Road Tx Upgrade

By William Opalka

WESTBOROUGH, Mass. — A transmission project intended to release bottled wind resources in Maine may not be cost-effective, according to a draft report issued at the ISO-NE Planning Advisory Committee meeting last week.

The needs assessment for the Keene Road market efficiency transmission upgrades showed relatively small annual savings in energy production costs of $1.35 million to $1.38 million (2015 $) if the export limits were raised from the current 165 MW to 195 MW.

iso-ne market efficiency project keene road — Detail of Keene Road Constrained Area | *ISO-NE*

An additional increase to 225 MW would save another $100,000 to $180,000. No additional savings are realized if the limit is further raised to 255 MW. The assessment measured the four export limits for the years 2020, 2025 and 2030.

A preliminary economic study from last year estimates the project could save ISO-NE ratepayers $1.4 million to $5.7 million by allowing additional wind development in the area and displacing more expensive hydropower.

The PAC set the parameters for determining if Keene Road could qualify as a market efficiency project in September. (See ISO-NE Outlines Keene Road Tx Upgrade Study.)

“This has the look of providing a de minimis benefit, so you have to ask if it’s worth doing,” said Bob Stein of Signal Hill Consulting Group, who represents Hydro-Quebec and other power generators.

Michael Henderson, ISO-NE’s director of regional planning and coordination, said those were “questions more properly dealt with at a later date.”

The RTO has not released any estimates on the cost of the upgrades, which would be eligible for competitive bidding under FERC Order 1000.

Rollins Wind Farm in Maine | Reed & Reed, Inc. — Rollins Wind Farm in Maine | *Reed & Reed, Inc.*

Under the RTO’s Tariff, the cost of a market efficiency project must be less than the resulting production cost savings. “If the ISO does issue a request for proposals and no developer provides a proposal that meets this cost threshold, then no regionally funded transmission project would move forward,” ISO-NE spokeswoman Marcia Blomberg told RTO Insider on Thursday.

A final discussion of the results will be held at the December PAC. In January, the committee will discuss whether to move toward a competitive solicitation for bids from potential developers.

December 6, 2016

NY Regulators Call for Overhaul or End to Mass-Market Retail Choice

By William Opalka

Eighteen years after opening retail electric and gas choice, New York regulators concluded Friday that the initiative has failed, launching a proceeding that could bar energy service companies (ESCOs) from operating in the state.

“After considerable experience with the offering of retail service to mass-market customers by ESCOs, the [New York Public Service Commission] has determined that the retail markets serving mass-market customers are not providing sufficient competition or innovation to properly serve consumers,” the commission wrote in its notice (98-M-1343). “Despite efforts to realign the retail market, customer abuses and overcharging persist, and there has been little innovation, particularly in the provision of energy efficiency and energy management services.”

The commission has attempted to revamp consumer protections in the program, including a guarantee of savings for customers not enrolled with green energy suppliers, but it has been thwarted by the courts. (See Marketers Seek Rehearing on NY Low-Income Moratorium.)

Two-Track Process

The notice sets out a two-track process, one an evidentiary process to determine “whether ESCOs should be completely prohibited from serving their current products to mass-market customers” or whether reforms could save it. Evidentiary hearings will follow written submissions from energy marketers, consumers and PSC staff on a list of 20 questions posed in the notice. Responses are due April 7, 2017.

The commission defines “mass-market” customers as residential and small commercial customers — those whose bills do not include a demand rate element.

Among the questions is whether the commission currently has authority to penalize ESCOs for abuses and whether it should revisit its decision to exempt them from Article 4 of the Public Service Law. Another asks whether ESCOs should be required to offer value-added energy efficiency and energy management services as a condition of selling gas and electricity.

The second track would include “collaborative” meetings of interested parties to develop proposals on what new practices or products “would provide sufficient real value to mass-market customers … [and] ensure just and reasonable rates.”

“For too long, [the PSC] has seen substantial overcharges and deceptive practices by the ESCO industry harming New York consumers,” the commission said in a press release. “As part of these hearings and by obtaining testimony under oath, we will give ESCOs the opportunity to explain their pricing practices and to hear from consumers who have been harmed by these practices. We will then push ahead with reforms to ensure that ESCOs provide useful, value-added, economical services to New York consumers, particularly as part of our efforts under Reforming the Energy Vision.”

ESCOs Cry Foul

ESCOs have said the state’s approach to reform has been heavy-handed and has not given them a proper chance to respond to the allegations. They have also challenged the state’s data.

“The Retail Energy Supply Association believes that a fair and impartial review of New York’s competitive energy markets will show clear and unambiguous benefits for consumers and the state’s economy,” spokesman Bryan Lee said Monday. “RESA seeks to keep the competitive markets for electricity and natural gas open to all consumers. RESA intends to actively participate in this Public Service Commission proceeding to achieve that goal. Consumers enjoy and demand choices in every aspect of their daily purchasing decisions, from car insurance and cell phone providers to doctors and vacation destinations. Any policy changes ultimately identified by the commission must preserve opportunities for choice by consumers in their energy supply decisions.”

Retail choice was phased in by utilities on different schedules, beginning with Consolidated Edison in 1998.

More than 20% of New York’s residential and small commercial customers currently receive energy from one of the approximately 200 ESCOs operating in the state. Regulators have previously cited several examples of unacceptable conduct, including companies that charged more than double or triple the rates of incumbent utilities. The commission has also cited examples of companies falsely representing themselves as local utilities.