Cap-and-trade, appealing to economists but anathema to most in Congress, is likely to be a core compliance plan for many states under the Environmental Protection Agency’s final version of the Clean Power Plan.
“Trading itself got a lot more prominent than” in the draft plan, said Doug Scott, vice president of strategic initiatives at the Great Plains Institute and a former Illinois Commerce Commissioner.
Trading would set a price on carbon much like the cap-and-trade program that helped reduce compliance costs with acid rain regulations in the 1990s and the Waxman-Markey CO2 plan that died in Congress in 2010.
While at least 40 states have been talking about some sort of trading collaboration toward meeting their carbon-reduction mandates, EPA’s initial proposal in mid-2014 set rate-based goals measured in pounds of CO2 per megawatt-hour.
Last fall, EPA provided technical advice explaining how to translate rate-based goals to mass-based equivalents that measure total carbon emissions in metric tons — a measurement more conducive to multistate trading.
The final rule goes a step further and “reduces confusion and ambiguity” for states contemplating trading, said Minnesota Public Utilities Commissioner Nancy Lange.
Essentially, the final rule “sets out elements you need to have for a trading-ready plan,” Lange added.
“I think you’ll find EPA is not only recognizing but embracing trading [plans],” Scott said.
Uncertainty Remains for Clean Power Plan
But Scott and Lange said that how many and which states will make carbon allowance trading a big part of compliance is impossible to say this early into the game.
For one thing, the final rule turned many states’ preliminary compliance planning upside down. EPA in its final rule loosened — or in many cases tightened — carbon-reduction targets in each state.
Kentucky is reeling from the final rule, which is 27% more stringent than the draft rule. Indiana and West Virginia, which also generate a big portion of power from coal, are facing carbon reductions that are 19% more stringent than before.
In addition to having to make big changes to their compliance modeling, some states face uncertain outcomes as their elected leaders vow to fight EPA in court.
The Indiana Department of Environmental Management, for instance, said it is still studying the final rule and doesn’t want to discuss potential options. The agency deferred to Gov. Mike Pence’s office as to how the state is likely to proceed.
Pence has already signaled his intentions. In June, he wrote a letter to President Obama stating that Indiana would not comply unless the rule was significantly changed.
Even with such fighting words in many states, Scott predicts state regulators will continue to discuss carbon-allowance trading scenarios in the months ahead.
“There will be a lot of discussions between states individually,” he said, though predicting it might be a year before anything coalesces.
Scott’s Minneapolis-based Great Plains Institute and the Washington-based Bipartisan Policy Center have been providing staffing support on carbon compliance to the Midcontinent States Environmental and Energy Regulators (MSEER), which includes MISO and SPP states, and to the Midwestern Power Sector Collaborative.
A number of meetings have already been held, including a workshop in Detroit in June.
Trading credits or allowances has lots of potential, says Todd Ramey, MISO’s vice president of system operations. “Trading has the benefits of allowing for a level of price transparency folks need to know. In order to monetize your carbon emissions, there needs to be a general understanding of what that value is in real time,” Ramey told the Detroit workshop.
A number of panelists agreed that multistate trading plans that were “trading-ready” were likely more plausible than formal multistate trading agreements. “Nobody has committed to anything in terms of a multistate effort” so far, Lange said.
She said MSEER has a workshop planned for Sept. 16 in Minneapolis that should be a good forum to discuss trading and other compliance scenarios in light of the final rule.
In the meantime, it’s not just Midwest states thinking more intently about trading plans. Scott said the Great Plains Institute also has been helping advise a number of states in the PJM footprint. His group plans to hold a seminar in October in Little Rock.
Nearly two years after joining MISO — and despite a seams spat between the RTO and SPP — Entergy said it is realizing expected cost savings from the integration.
Entergy and MISO’s Independent Market Monitor told the Entergy Regional State Committee in Little Rock on Aug. 11 that the December 2013 integration has produced substantial benefits and that the transition was well-managed.
Entergy cautioned that its recent review amounts only to an initial snapshot. But, so far, at least, it has identified $236 million in annualized energy related savings since integration in 2013.
MISO had estimated at the time of integration that Entergy customers could see savings of $1.4 billion over a decade.
Six Entergy operating companies operate in four MISO states: Arkansas, Louisiana, Mississippi and Texas.
Entergy vice president Matt Brown said the company would have had to acquire 1,402 MW of additional capacity resources had Entergy not joined MISO.
That’s slightly lower than 1,413 MW of avoided capacity estimated during a May 2011 study Entergy commissioned to look at potential cost savings of joining the RTO.
“The benefits that our customers are realizing from actual participation in the MISO RTO are meaningful and that they are at a level that is on par or better than what we projected in the change of control filings,” Brown told stakeholders.
The study focused on non-baseload resources and did not take into account transmission related benefits.
Broadly, the study looked at changes in costs resulting from the move to Day 2 RTO commitment and dispatch. That includes benefits in generation costs, purchased power costs, net wheeling costs and additional Day 2 production cost savings such as deferred generation investment.
On the other side of the equation were additional costs such as RTO administration and cost allocations for its share of MISO’s regional transmission projects.
“The takeaway here is that the capacity-related savings, the planning reserves, additional production cost [savings], if you will, associated with being in MISO have been in line with what we projected,” Brown said.
Among them was a 9% reduction in the portion of energy provided by Entergy’s legacy generation. “The legacy generation that we are using is being used more efficiently,” Brown said.
He cautioned that the approximately one-year post-integration period studied wasn’t enough time to draw broader conclusions. “But the information that we’re seeing is encouraging. Our customers are realizing meaningful benefits from being in MISO.”
Constraints Mar Integration’s Potential
The results also received some affirmation from MISO’s Market Monitor, Potomac Economics.
“Overall, we found that the market performance in MISO South has been well-managed and has produced substantial benefits,” said Robert Sinclair, a principal at Potomac. “The integration has been efficient.”
But Sinclair said the Operations Reliability Coordination Agreement (ORCA) and the South Region Power Balance Constraint (SRPBC) remain obstacles to transfers between MISO Midwest and MISO South.
The latter was created in response to the need to make transmission payments to neighbors for transfers more than 1,000 MW. MISO began limiting flows last year after SPP complained that MISO breached their joint operating agreement by moving power over its transmission footprint in excess of a 1,000-MW contractual limit.
Currently there’s a hurdle rate of nearly $10/MWh for transfers more than 1,000 MW, causing price separations between the regions. That raises efficiency concerns by limiting transfers more than 1,000 MW and price effects in both regions that don’t reflect physical realities of the network, Sinclair noted.
The best mechanism would be one allowing MISO to eliminate the SRPBC, Sinclair said. Reducing the hurdle rate to zero would support efficient interregional transfers and improved pricing.
Sinclair also reiterated the Monitor’s call to develop a reserve product that will reflect operating reserve needs in MISO South, in particular.
“We believe that if that constraint was released, we would have more instances where the power flows were above 1,000 MW and that would be more efficient because we would be experiencing more production cost savings,” Sinclair added.
$844M in Tx Projects for MISO South
Meanwhile, stakeholders received an update from MISO about its 2015 Transmission Expansion Plan, which proposes 352 projects totaling $2.4 billion.
Of those, 79 projects totaling $844 million are proposed for MISO South:
Arkansas: 15 projects totaling $159 million;
Louisiana: 34 projects ($473 million);
Mississippi: Seven projects ($30 million); and
Texas: 23 projects ($182 million).
However, the list is expected to be whittled down prior to board consideration in December.
The nine states participating in the Regional Greenhouse Gas Initiative released the “CO2 Emissions from Electricity Generation and Imports in the Regional Greenhouse Gas Initiative: 2013 Monitoring Report.” This report is the fifth in a series of annual monitoring reports called for in the 2005 RGGI Memorandum of Understanding. The report summarizes data for electricity generation, electricity imports and related carbon dioxide emissions for the RGGI states.
New Englanders are using less on electricity because of the mild summer. An abundance of natural gas and more efficient power plants have also helped reduce the wholesale price of energy, a respite from soaring heating costs in the winter, ISO-NE said.
The average wholesale price in June was 1.96 cents/kWh, down nearly 50% since June 2014. The decline continued in July, dropping by more than 27% year over year, the RTO said. Costs are falling for some ratepayers, but it’s uneven among New England states. The U.S. Energy Department said retail prices in New England were higher in June and July than in the same months last year.
The price for customers of Central Maine Power dropped by more than 13% in March 1. In Massachusetts, a reduction of more than 20% kicked in May 1.
Consumption Breaks Record in MISO South but Lights Stay on
The four states in MISO’s southern region set an all-time record for power usage of 32,618 MW on July 29, but the RTO didn’t have to declare emergency operations. MISO issued several hot weather notifications, which apparently worked. “Not only was this a big success for MISO and our members, but it was the first time our South Region Operations Center was truly tested,” said Katherine Prewitt, senior director of MISO’s South Region Operations, in Little Rock. The region consists of all or parts of Arkansas, Louisiana, Mississippi and Texas.
The previous peak for the region was 31,789 MW on Aug. 3, 2011.
Three solar projects could soon be online in the state, and additional installations could follow, induced by environmental regulations reducing carbon emissions and a 30% federal tax credit that will be reduced by 2017.
Arkansas Electric Cooperative Corp. announced plans for a 12-MW solar generation facility in February. Entergy in April announced an 81-MW facility. More recently, Ozarks Electric Cooperative said it would build a small facility in the northwest part of the state.
Any utility seeking to recoup costs from a state solar project through rate increases must obtain regulatory approval from the Public Service Commission. A decision is expected in Entergy’s case by the end of September.
State Senate President Martin M. Looney and New Haven officials are urging prospective merger partners UIL Holdings and Spanish energy giant Iberdrola to commit to paying the cost of cleaning up the mothballed English Station power plant.
The two merger partners are in negotiations with Attorney General George Jepsen and the Department of Energy and Environmental Protection to play a significant role in the cleanup of the 9-acre power plant site. A regulatory filing by the two companies said both would be involved in the cleanup, the cost of which has been estimated at $30 million. (See Iberdrola Refiles Acquisition Bid for UIL Holdings.)
Two out-of-state entities, Asnat Realty and Evergreen Power, bought the plant from UIL, but they failed to follow through on promises to clean it up.
Judge Denies Watchdog’s Request for Legislative Correspondence
Osborn
Marion County Superior Court Judge James Osborn turned down a request by Indianapolis-based Citizens Action Coalition to force a legislator to reveal his correspondence with utility executives, ruling that the separation of powers doctrine forbids the courts from getting involved in legislative affairs.
CAC filed suit after state House leaders denied its public records request for emails between House Energy Chairman Eric Koch (R-Bedford) and Duke Energy and Indianapolis Power & Light. The group sought correspondence that concerned a net metering bill that would have changed the way customers with solar panels are billed. That bill eventually was killed.
A Senate committee last week questioned former Consumers Energy executive Norm Saari whom Gov. Rick Snyder nominated to serve a six-year term on the Public Service Commission.
Saari appeared Aug. 13 before the Senate Energy and Technology Committee, where some members said that while they respect him, they were wary of his appointment by Snyder. Saari tried to assure them that while he worked nearly 30 years for Consumers Energy, he had no financial interest in Consumers or any other utility in the state.
Most recently Saari, a Republican, was chief of staff for the state House of Representatives. If affirmed, Saari would replace Commissioner Greg White, who is retiring.
Couple’s Complaint of Connection Fee Spurs Commission-Ordered Review
A letter written by a Stewartville couple to the Public Utilities Commission complaining of a $5 monthly fee they had to pay for their small wind generator has spurred the commission to order a review of the state’s electric utilities to see if they charge similar fees.
Alan and Kris Miller installed a small wind generator to power their hobby farm and were surprised when People’s Energy Cooperative charged them the monthly fee. People’s has since offered to refund Miller and about 30 other customers who faced similar monthly charges for wind or solar facilities.
After a five-month investigation, the commission last week declared the fee illegal and ordered a state-wide review of so-called net metering charges. Renewable advocates say such fees, which so far are unregulated, sap the incentive of those considering installing solar or wind generation for their homes or small businesses.
“They have no idea what the fee is going to be,” said David Shaffer, general counsel for the Minnesota Solar Energy Industries Association. “Maybe it is going to be $5 and maybe it is going to be $85 — until they know, they can’t make an informed purchasing decision so they choose not to buy.”
Gov. Nixon Appoints Former Aide to Chair State’s PSC
Gov. Jay Nixon has appointed former aide Daniel Hall to chair the Public Service Commission. Hall has served on the five-member PSC since 2010; he replaces Robert Kenney, whose six-year term expired Aug. 7.
Hall served under Gov. Bob Holden and House Speaker Steve Gaw before becoming a legislative aide to Nixon when he was attorney general. Kenney will join San Francisco-based Pacific Gas and Electric as its vice president for regulatory relations.
Witnesses Testify Against Federal Coal Royalty Payments
An overflow crowd packed a U.S. Interior Department meeting in Billings to discuss its policy of allowing private coal mining on government land. It was one of five sessions scheduled by Interior Secretary Sally Jewell, who has pledged a review of the government’s coal leasing program.
Most of the comments concerned the 12.5% royalties that the government collects on coal. “It’s time that you crack down on coal companies that have been getting sweetheart deals for too long,” said Renette Kaline, a Northern Cheyenne tribe member.
But some who depend on the mining said they were afraid that additional regulatory burdens could put their livelihoods at risk. “I’m scared,” said Ryan White, a miner. “I’m fearful of my future. I go to work every day wondering when the federal government will put my employer out of business.”
The Greycliff Wind Energy project, a 12-turbine project in central Montana that was proposed five years ago, continues to battle regulatory headwinds.
The project’s developers, Minnesota-based National Renewable Solutions, must persuade the Public Service Commission that the company has enough Montana owners to qualify as a Community Renewable Energy Project. The PSC rejected Greycliff Wind in June because it wasn’t convinced that local owners had a 50% stake in the company’s income, equity and voting rights.
National Renewable Solutions representatives spent last week in Sweet Grass County assuring the county commissioners “the project isn’t going away,” said the company’s Pat Pelstring.
Senior executives for Eversource Energy say the power company is willing to bury more of the transmission lines for the Northern Pass hydroelectric project, but not the entire 187-mile route from the Canadian border through northern New Hampshire to Deerfield.
“Full undergrounding is unnecessary and prohibitively expensive,” Lee Olivier, Eversource executive vice president, said in a conference call with financial analysts on July 31. “But some project modifications could be done with some additional undergrounding.”
The company is reviewing the environmental impact statement with an eye toward burying more of the line, he said. The most likely area for additional burial would be through 10 miles in the White Mountain National Forest, where the environmental report suggests overhead lines would not be allowed.
The state has reopened the Renewable Energy Fund, although with new restrictions and less money than was initially anticipated.
The freeze on REF applications, imposed on July 20, continues on applications for solar projects in the 100- to 500-kW range. Those projects have mostly been popular with businesses, according to Kate Epsen, executive director of the New Hampshire Sustainable Energy Association, a trade organization representing the renewable energy industry.
“It’s a really good category and a real shame that it’s being cut out, hopefully not forever, but even temporarily is a problem,” she said. “This was hitting an important market gap for these mid-sized projects. A lot of companies have been putting together good proposals, and there has been some good groundwork and business interest. Now that’s been taken away, or at least temporarily halted.”
Gov. Christie Signs Bill Boosting Net Metering Cap for Solar
Christie
Gov. Chris Christie has signed a bill that increases the cap under which utilities can stop paying owners of distributed solar for electricity their systems generate. The previous cap allowed utilities to stop paying when net metering systems recorded 2.5% of the state’s peak demand.
That level has already been reached. The new bill, sponsored by Sen. Bob Smith (D-Middlesex), boosted the cap to 2.9%. It is estimated that it will take another three years for that level to be reached. The new limit is designed to ensure economic incentive for the home solar industry in the state. The new level leaves room for another 700 MW of solar to be installed in the state.
“This is an important bill that moves solar forward in New Jersey,” Jeff Tittel, director of the New Jersey Sierra Club, said. “This is a ray of sunshine for the solar industry and will create clean energy and more green jobs.”
Coalition Opposes Utility Ownership of Large Renewables
Power plant owners and energy groups have joined forces to oppose utilities directly owning large-scale renewable energy projects such as wind farms. The Independent Power Producers of New York, Alliance for a Clean Energy New York, the Electric Power Supply Association and the New York Affordable Reliable Electricity Alliance said the concept would raise wholesale electric rates.
“New York cannot afford to overlook the benefits and tremendous successes of competitive wholesale energy markets by allowing utilities to once again put ratepayers directly on the hook for costly electricity investments — especially when the private sector has been successfully developing and operating large-scale renewable electric generation facilities for more than a decade,” Gavin Donohue, CEO of IPPNY, said in a statement.
The New York State Energy Research Development Authority countered that its ideas for utility ownership are just one of many options it listed in a June study to give the state new ideas on how to promote large-scale renewable energy projects.
Power Siting Board Moves Ahead on Clean Energy Future Plant
An administrative judge has ruled that a plan to build an 800-MW gas-fired power plant can go ahead to the Power Siting Board for the next step in the approval process. The judge noted that board staff have already determined the plant, proposed by Clean Energy Future, complies with applicable state law. CEF plans to spend $800 million on the plant, which would be built in an industrial park near Lordstown.
The next hearing of the board, which is overseen by the Public Utilities Commission, will be in September. If approved, the plant would begin operations in 2018.
Oklahoma Gas and Electric is pressing ahead with upgrades to its generating plants and preparing for a general rate case as it awaits a decision from state regulators in a $1.1 billion environmental compliance and replacement generation case. If approved, the OG&E request would increase customer bills by 15 to 19% by 2019, with the increases phased in each year as a separate line item on customer bills.
The Corporation Commission has not come to an agreement for a final order in the case. However, two commissioners indicated they would prefer to issue a final order within the next 30 days.
OG&E said it expects to spend about $700 million on an environmental plan to meet federal emissions regulations for regional haze and mercury and air toxics standards. It also estimates it will need about $410 million to modernize its aging Mustang natural gas plant in western Oklahoma City.
Corporation Commissioner Dana Murphy has been appointed to the Electric Power Research Institute’s Advisory Council to the Board of Directors. Murphy chairs SPP’s Regional State Committee.
The Advisory Council advises EPRI management and its board and assists in prioritizing relevant and balanced research to serve the public interest. The appointment was made by Lisa Edgar, president of the National Association of Regulatory Utility Commissioners, who said Murphy’s active service on the EPRI Advisory Council is “important to the cause of strengthening effective public regulation.”
PennFuture Names New Operating, Communications Officers
The environmental advocacy organization PennFuture has named a new chief operating officer and a new director of communications. The statewide organization said Jacquelyn Bonomo, who has experience with other environmental organizations, will become chief operating officer and vice president. She comes to PennFuture from Chesapeake Bay Funders Network, where she was executive director. She also has held upper positions in the National Audubon Society, the Western Pennsylvania Conservancy and the national Wildlife Federation.
Lauren Fraley, a legislative communications professional and former president of the Greater Pittsburgh Chamber of Commerce, will become PennFuture’s director of communications. She is taking the place of Elaine Lablame, who has moved to become the organization’s strategic campaigns director.
Invenergy says its proposed $700 million natural gas-fired Clear River Energy Center in Burrillville would be the most efficient fossil fuel power plant in New England. The plan was announced by Gov. Gina Raimondo and Invenergy CEO Michael Polsky.
If the project is approved by the Energy Facility Siting Board, construction of the 900-MW combined-cycle generator in the northwest corner of the state would start next year and the facility would begin selling power to the New England electric grid in 2019.
Invenergy expects the low-cost plant to displace older, less-efficient power plants that burn oil, coal or gas.
According to a report by the Texas Coalition for Affordable Power, 85% of the state’s customers served by the competitive electricity market pay more for power than those served by municipal utilities in Austin and San Antonio.
The report analyzed U.S. Energy Information Administration data on residential prices since 2002, the first year most residents were allowed to choose their electricity provider under deregulation. According to the study, residents in deregulated areas paid lower electric bills than most Americans for the first time in 2012 and 2013. However, the analysis found the average Texas household in deregulated areas paid about $4,800 more than residents of Austin, San Antonio and other cities served by just one municipal utility or by electric cooperatives from 2002 to 2013.
The state was the 18th cheapest state for homeowners over that 12-year period. Residents in nine states saw cheaper prices than Texans in regulated areas, while 26 states averaged cheaper prices in the competitive market.
State and RTO officials have had two weeks to digest the Environmental Protection Agency’s final power plant carbon emission rule and the battle lines — and paths to compliance — are developing.
While states in the Northeast say they are well on the way to compliance, many in the South and Midwest have already joined in the first set of legal challenges — even as other officials in the Midwest consider carbon trading plans.
Change in state carbon emission targets from draft rule to final
The 15 states who joined in the request for a stay included half of those in SPP, six of those in MISO and five of those in PJM. No Northeastern states were among them. More states may join once the clock on legal challenges begins with publication of the rule in the Federal Register.
PJM, meanwhile, remains concerned about the time required to build transmission to deliver wind power to eastern load centers.
RTO Insider’s follow-up coverage of EPA’s Clean Power Plan includes reports from throughout the Eastern Interconnection:
PJM is concerned that the Environmental Protection Agency was too optimistic about how quickly it can add transmission and how much help its states will receive from wind resources in meeting the Clean Power Plan.
The RTO released a report on the impact of the proposed carbon rule on July 31 — days before EPA issued its final rule — that challenged the agency’s assumptions on the pace of both generation additions and transmission expansion.
“Under some CPP scenarios — particularly in the early years of compliance — generators could retire at a faster rate than replacement generation, or the new transmission needed to solve reliability problems, could be built. These scenarios potentially could put a much greater strain on the existing transmission system,” the report said.
The report, the second of two produced in response to a request from the Organization of PJM States Inc. (OPSI), builds on the economic analysis from PJM’s first report for the group to determine the range of transmission that would be required under three scenarios for coal plant retirements: 6 GW, 16 GW and 32 GW.
“Generation needs could exceed available resources by 2024 in a 32-GW at-risk future scenario, in which units retire evenly across each year from 2020 to 2029. If retirements occurred earlier in the 2020-2029 compliance period, resource adequacy needs could exceed resources for a 32-GW scenario by 2022 and by 2028 under a 16-GW at-risk scenario,” the report said.
Final Rule Lessens Reliability Concerns
PJM COO Mike Kormos said Monday that several changes in the final rule — relaxing the initial deadlines by two years, creating an easier path to interstate trading and the inclusion of a reliability safety valve — made the regulations less of a threat to reliability. He said the RTO will likely run additional sensitivity analyses based on its observations and requests from states.
But Kormos said it was too soon to tell how the changes in the final rule would affect the conclusions PJM made in the July 31 report.
“We’ll look to do some refinements and some additional scenarios,” he said in an interview. “I can’t tell you definitively whether anything is going to dramatically change.”
Kormos said that while some states face tighter or looser emission caps under the final rule than under the draft, “they were not drastically different in aggregate.”
‘Informal’ Discussions on Trading
Kormos said PJM has thus far had only “informal” discussions with stakeholders about the prospect of interstate emissions trading as a compliance measure. “I’m unware of any specific initiatives,” he said. (See related story, Final Clean Power Plan More Suited to Carbon Trading, Experts Say.)
PJM already collects data on emissions and renewable energy credits for states and others under its Generation Attributes Tracking System and stands ready to perform a similar role under an interstate CO2 trading program. “If there’s a desire, I’m sure we would be open to having those discussions,” Kormos said.
Timelines
Between the submission of state implementation plans and EPA’s interim deadline, PJM said, generation owners would need to announce retirement decisions, replacement generation would have to be identified, reliability violations must be identified and transmission solutions developed, designed, sited and constructed.
“Once the PJM board approves transmission upgrades, historical experience shows that the pace at which transmission can be completed can range from five years (the Carson-Suffolk 500-kV line) to more than 16 years (the Wyoming-Jackson’s Ferry 765-kV line),” the study said. “Moreover, if a number of large-scope transmission projects are required across the United States, the lack of equipment availability could increase lead time substantially.”
Moving Target
The location and size of both retiring generators and replacement resources will be uncertain for some time and will “remain a moving target” for transmission planners, the report said.
It notes that generation interconnection projects typically enter the queue three to five years before their desired in-service dates and that more than 80% of projects that enter the queue withdraw before reaching commercial operation.
“A successful replacement resource would have to anticipate the retirement of at-risk generators,” the report said. “Otherwise, the grid will face the likelihood of significant delays between the retirement of at-risk generators and the completion of replacement resources. Reliability studies that look more than three years out must hypothesize build rates, locations and fuel sourcing.”
The study identified reliability violations requiring new transmission in areas where deactivating coal-fired generators are less likely to be repowered with natural gas, such as those far from pipelines.
More Challenging than MATS?
PJM said its experience with EPA’s Mercury and Air Toxics Standards (MATS) “suggests that build rates may not ensure that the necessary transmission will be in service before retirements occur.”
Most transmission improvements resulting from MATS were upgrades to existing facilities. In contrast, the carbon plan will likely require more greenfield transmission to connect wind resources in western PJM to load centers in the eastern portion of the RTO.
Because they require new rights of way, greenfield projects require more time to reach commercial operation.
How much states will count on renewable resources to meet their compliance goals is a big source of uncertainty, PJM said.
“The EPA renewable portfolio standard reliance assumptions differ from PJM’s historical queue experience,” the report says. “It is likely that all the wind-powered facilities that the EPA anticipates to be available will not make it online as shown in the economic analysis. Moreover, historical transmission build-out rates are not likely aggressive enough to meet the EPA’s wind penetration rate assumptions.”
“Scenario studies suggest that overloads clustered along specific corridors would require additional review to assess the feasibility of certain types of upgrades. That, in turn, would impact both the cost of solving identified reliability criteria violations and the ability to complete construction of facilities in time to simultaneously comply with the CPP while avoiding those reliability violations.”
A Maryland circuit court judge Wednesday declined to stay Exelon’s acquisition of Pepco Holdings Inc. while it considers an appeal from the state’s Office of People’s Counsel.
In June, OPC appealed the Maryland Public Service Commission’s 3-2 decision to approve the $6.8 billion deal in Queen Anne’s County Circuit Court. It was joined by Public Citizen, the Sierra Club and the Chesapeake Climate Action Network. In late July the parties jointly filed a motion to stay the deal while the appeal process continued.
“It’s a denial of the motion to stay, but our appeal obviously goes forward,” People’s Counsel Paula Carmody told the Baltimore Business Journal.
“We are pleased the judge agreed with our view that the requests for a stay had no merit,” Exelon spokesman Paul Adams said in a statement.
Along with the Maryland PSC, regulators in Delaware, New Jersey and Virginia have approved the acquisition, as has FERC. Only the D.C. Public Service Commission has yet to rule on the deal. Exelon has said it expects the deal to close by the end of the third quarter this year.
Carmody told the Journal that oral arguments in the appeal are scheduled in December and acknowledged this would mean that arguments could take place after the deal is closed.
Iberdrola USA has refiled its acquisition plan for UIL Holdings with Connecticut regulators, attempting to address objections that scuttled the previous plan.
The plan, filed Friday with the state Public Utilities Regulatory Authority, promises more ratepayer benefits, increased employment in Connecticut and protections for the state subsidiaries from any financial difficulties encountered by Iberdrola’s other U.S. or international operations (15-07-38).
The lack of “ring-fencing” protection for the electric distribution company, United Illuminating, in the original February filing was one of the deal-killers that PURA staff cited in its draft decision that recommended rejection of the deal. (See Iberdrola Withdraws UIL Acquisition; Plans to Refile.) “Ring-fencing measures will protect the UIL utilities from unforeseen potential future events affecting the IUSA affiliates or their other affiliates, including utilization of a special purpose entity and a ‘Golden Share,’” the filing states. The Golden Share would be held by an independent director from outside the company who would essentially hold veto power over any voluntary bankruptcy petitions filed by UIL.
The proposal also says the utility units will be rated by the credit rating agencies and will issue their own debt. “As a result, UIL and the UIL utilities will be maintained as separate entities and be afforded with important financial and bankruptcy protections.”
“With this new application, we believe that we’ve effectively addressed all of the points of concern that were outlined in PURA’s draft decision relating to the original application,” James P. Torgerson, UIL’s president and CEO, said in a statement. “We are fully prepared to move forward in this process.”
Other proposals to smooth the approval include:
Customer rate credits of $20 million in the first year following the closing, or greater amounts spread over longer time periods;
A new management position drawn from the ranks of existing local management and based in the state, titled president of Connecticut operations;
Connecticut operations would be headquartered in the state for at least seven years;
No involuntary terminations, except for cause or performance, in Connecticut for at least three years following closing of the deal, along with a commitment for 150 new employees;
A freeze of electric distribution rates until Jan. 1, 2017; and
$6 million over three years for the state’s clean energy initiatives.
Under Connecticut law, regulators have 120 days to act on the filing.
The Environmental Protection Agency’s final Clean Power Plan provoked howls of outrage from coal interests, praise from environmentalists and cautious optimism from regulators and grid operators.
The rule was a mixed bag for the nuclear industry but a win for wind and solar power advocates. Natural gas proponents were miffed by an unexpected change that means they may benefit less than expected from coal’s decline.
On Wall Street, traders punished coal companies while many utility stocks were up modestly.
Below is a summary of the initial reactions to the final rule.
Coal: Rule is Illegal
“Even in the face of damning analyses and scathing opposition from across the country, EPA’s final carbon rule reveals what we’ve said for months: This agency is pursuing an illegal plan that will drive up electricity costs and put people out of work,” said Mike Duncan, president and CEO of the American Coalition of Clean Coal Electricity.
Arch Coal, whose shares plunged 90% on bankruptcy fears, echoed the sentiment.
“The administration seems increasingly desperate to salvage an ill-advised and poorly designed rule which won’t work, won’t pass muster with states and won’t stand up to legal scrutiny,” said Deck Slone, Arch’s senior vice president of strategy and public policy.
Regulators, RTOs: Cautiously Optimistic on Reliability Safety Valve
Federal Energy Regulatory Commission Chairman Norman Bay, a Democrat, praised EPA’s “willingness to consider potential reliability concerns and its efforts to address those concerns by adding time and flexibility for compliance, adopting a reliability safety valve and requiring state plans to be reviewed for reliability.”
Republican Commissioner Tony Clark also praised EPA’s engagement but struck a less optimistic view, warning of “the difficult path that now lies ahead.”
“The regulation makes it likely consumers will be required to bear the burden of stranded costs of investments forced to retire years before the useful life of the asset has expired,” he said. “Whatever EPA believes are the environmental benefits of this regulation, it cannot be said that it will be easy or inexpensive. Such is the stuff of unicorns and leprechauns.”
The National Association of Regulatory Utility Commissioners said it would conduct a detailed review to determine how the rules will affect states. “Although NARUC has taken no position on whether the EPA should establish these rules, we have stated that if the agency does issue rules, it should provide states with maximum flexibility to respond,” President Lisa Edgar said.
MISO said it is conducting a regional and state-by-state analysis of the rule. “We will work now on modeling the final rule and run the analysis to help stakeholders better understand compliance options,” the RTO said in a statement.
PJM said it will analyze the reliability safety valve EPA offered in response to grid operators’ concerns.
Environmental Groups Generally Pleased
Environmental groups were generally pleased, though some expressed disappointment with the delay in the initial deadlines, which were pushed from 2020 to 2022.
“For too long the United States has failed to take action on climate change, held hostage by climate deniers in Congress and by industry laggards unwilling to limit pollution that threatens the U.S. and global environment,” Conservation Law Foundation President Bradley Campbell said. “Now we finally have a plan that’s right for our environment and our economy, encouraging states to work together to reduce carbon emissions on a national scale.”
Jordan Stutt, a policy analyst at the Boston-based Acadia Center, said the experience of states participating in the Regional Greenhouse Gas Initiative has shown that a market-based program can reduce CO2 emissions while driving economic growth and innovation. “EPA has recognized this potential for low-cost emissions reductions and has designed the Clean Power Plan in a way that supports widespread implementation of RGGI-like trading programs.”
Allison Clements, director of The Sustainable FERC Project, said the plan “provides states with achievable goals to cut carbon pollution and builds upon the ample flexibilities provided in the original proposal. The final rule’s extra time for initial compliance, requirement that states consider reliability implications and limited ‘reliability safety valve’ put to bed any concerns that the rule will cause grid reliability problems.”
Wind, Solar Celebrate
Renewable energy advocates were quick to praise the plan, with the wind industry saying it could provide a majority of the clean power states will need.
“Low-cost wind energy reduced carbon emissions by 5% in 2014, and we’re capable of doing a lot more. We can build a more diverse, reliable, cleaner energy mix for America, while creating jobs and keeping money in consumers’ pockets,” said Tom Kiernan, CEO of the American Wind Energy Association.
Not to be outdone, the solar industry said that it can provide a 50-state solution.
“Solar energy is the most sensible compliance option for states under the Clean Power Plan. Solar works in all 50 states, has zero carbon emissions, creates more jobs per megawatt than any other technology and can be deployed cost-effectively and quickly — all while improving grid reliability,” said Rhone Resch, CEO of the Solar Energy Industries Association.
Mixed Emotions for Nuclear
The Nuclear Energy Institute said it was pleased that the final rule will count nuclear plants under construction and plant uprates toward compliance rather than the starting point for goal-setting calculations.
“Based on our preliminary review, the final rule appears to require larger carbon reductions than the proposed rule and places a greater emphasis on mass-based compliance approaches. Those two factors alone should drive increased recognition of the value of existing nuclear power plants,” it said.
The group said it was disappointed, however, that EPA did not incorporate the “carbon-abatement value” of existing nuclear power plants.
Exelon says its Clinton nuclear plant has been losing money due to low natural gas prices and competition from wind. The Nuclear Energy Institute expressed mixed feelings about the final EPA rule. (Pictured above: Clinton nuclear plant. Source: Exelon)
“EPA notes correctly that ‘existing nuclear generation helps make existing CO2 emissions lower than they would otherwise be but will not further lower CO2 emissions below current levels.’ What the final rule fails to recognize is that CO2 emissions will be significantly higher if existing nuclear power plants shut down prematurely.”
Natural Gas: Half a Loaf
Calpine, the country’s largest generator using natural gas, called the plan “a workable and achievable approach to control CO2 emissions that will benefit generations to come.”
“This flexible, market-based solution will reward the companies that invest and have invested smartly in cleaner generation,” CEO Thad Hill said.
America’s Natural Gas Alliance took issue with changes from the proposed rule that mean natural gas will fill less of the void left by retiring coal generators.
“The White House is ignoring market realities and discounting the ability of natural gas to achieve the objective of emissions reductions more quickly and reliably while powering growth and helping consumers,” said the group, which represents independent gas exploration and production companies. “We believe the White House is perpetuating the false choice between renewables and natural gas. We don’t have to slow the trend toward gas in order to effectively and economically use renewables.”
The Edison Electric Institute said its primary concern “remains the overall timing and stringency of the near-term reduction targets.”
“Until we review the final guidelines in their entirety, it is difficult to assess whether they address the range of concerns we have raised over the past year. Ultimately, it is imperative that the final guidelines respect how the electric system works and provide enough time and flexibility to make the necessary changes to achieve carbon emission reductions.”
Business and Industry Split
Businesses outside the electric industry were split.
Last week, 365 companies and investors sent letters to more than two dozen governors voicing their support for the plan and encouraging the states’ “timely finalization” of implementation plans to meet the new standards.
“Our support is firmly grounded in economic reality,” wrote the businesses, including industry giants such as General Mills, Mars, Nestle, Staples, Unilever and VF Corp. “Clean energy solutions are cost-effective and innovative ways to drive investment and reduce greenhouse gas emissions. Increasingly, businesses rely on renewable energy and energy efficiency solutions to cut costs and improve corporation performance.”
“Having access to clean energy choices, whether efficiency or renewable energy, helps us manage our energy-related costs while also reducing our environmental impact,” said Letitia Webster, senior director of global sustainability at VF Corp., a North Carolina-based apparel company whose brands include The North Face and Timberland.
The American Iron and Steel Institute said, however, that the rule will raise electricity costs for domestic steel companies and threaten the industry’s ability to remain competitive with foreign suppliers.
“The leading steel-producing states in the U.S. are heavily dependent on coal for electricity production. This rule will have a disproportionate impact on coal-fired utilities and, in turn, impede economic growth for steelmakers,” CEO Thomas J. Gibson said.
Gibson added that the domestic steel industry competes with steel producers in countries where energy costs are often subsidized. “Limitations on CO2 emissions instituted in the U.S. must also apply at the same level of stringency to other major steel-producing nations, such as China. Otherwise, steel production and manufacturing jobs will shift to other nations with higher rates of greenhouse gas emissions.”
Stock Market
While the Dow Jones Industrial Average closed down 91.66 points (a 0.52% drop), electric utility stocks generally fared well. Nuclear-heavy Exelon was up 1.1%, while coal-dependent companies fared slightly worse, with Duke Energy gaining 1%, American Electric Power up 0.85%, Southern Co. up 0.51% and Entergy up 0.4%.
Not unexpectedly, major coal companies suffered through a tough Monday. Arch Coal saw its shares drop from $1.80 to 18 cents, while Peabody Energy was down 9.2%. Consol Energy, a coal, oil and natural gas company with a mining business focused in the Appalachian Basin, dropped 7.6%.
After sifting through 4.3 million comments and attending months of meetings with state regulators, utilities and RTO officials, the Environmental Protection Agency yesterday released a final Clean Power Plan that relaxes some controversial proposals while increasing its target for emission reductions.
As expected, EPA bowed to nearly universal opposition to a requirement that states meet interim goals as soon as 2020, replacing that with a 2022 target while leaving 2030 as the deadline for full compliance. As also expected, the rule incorporates a reliability “safety valve.”
At the same time, the Obama administration upped its ultimate target, saying it will require a 32% reduction in power plant CO2 emissions from 2005 levels, up from 30% in the draft rule.
EPA said it will permit all low-carbon resources, including renewables, energy efficiency, natural gas, nuclear and carbon capture and storage to have roles in compliance.
Natural gas generators will play a smaller role in replacing retiring coal plants under the final rule than EPA projected in its draft plan. Source: Duke Energy
But the final plan anticipates less switching from coal to natural gas and more reliance on — and incentives for — renewables. EPA projects renewables will account for 28% of generating capacity by 2030, up from 22% in the proposed rule, an increase of nearly one-third.
EPA said it increased renewables’ role in part because of the falling cost of solar and wind power and expectations of additional reductions in the future. The agency will seek to take advantage of those economics while offering pollution credits for states that add renewables before 2022, with similar incentives for those that make early energy efficiency investments in low-income communities.
Trading-Ready State Plans
In addition to delaying initial compliance by two years, EPA said the final rule also grants states more flexibility in meeting their targets, allowing them to develop trading-ready compliance plans for participating in emission credit markets with other states without the need for complicated interstate agreements.
State plans are due in September 2016, but states that need more time can make a preliminary filing and request extensions of up to two years for submitting a final plan.
Litigation Expected
EPA also released a federal implementation plan that it said can provide a model for states while also serving as a “backstop” for states that balk at compliance.
The solar industry says it offers a “50-state” solution to replacing coal-fired generation.
EPA will have to use that backstop if some states stand firm in their pledges to refuse to comply, as Senate Majority Leader Mitch McConnell, a Republican from coal-producing Kentucky, has urged. About two dozen states have indicated they may challenge the plan in court.
EPA, however, says that many states are already on the path to compliance, noting that all states have demand-side energy efficiency programs and all but 13 have renewable portfolio standards or goals. Half of the states have energy efficiency standards or goals.
“The idea of setting standards and cutting carbon pollution is not new. It’s not radical,” President Obama said at a White House ceremony announcing the plan. “What is new is that, starting today, Washington is starting to catch up with the vison of the rest of the country.”
Reliability ‘Safety Valve’
The rule seeks to ensure sufficient generation resources by requiring states to address grid reliability in their plans and includes a “safety valve” that could buy some retiring generators additional time to address any reliability concerns.
EPA noted that — unlike the Mercury and Air Toxics (MATS) rule — the Clean Power Plan does not impose plant-specific requirements, allowing states flexibility to “smooth out” their emission reductions over time and across sources.
International Audience
The Clean Power Plan is the latest of the Obama administration’s initiatives — which includes the controversial loan guarantees for clean energy technologies, a doubling of fuel economy standards for cars and light trucks, and a separate rule limiting emissions from new power plants — directed at climate change.
By now addressing power plant emissions — the largest source of greenhouse gases (32% of the U.S. total) — the Clean Power Plan will give the Obama administration a platform for urging other nations to cut their emissions at a United Nations climate change conference in Paris in December.
“I am convinced that no challenge poses a greater threat to our future and future generations than a changing climate,” Obama said in a 25-minute speech that was frequently interrupted by applause from supporters.
Obama also quoted the observation of Washington Gov. Jay Inslee: “We’re the first generation to feel the impact of climate change and the last generation that can do something about it.”
“We only get one planet,” Obama continued. “There’s no plan B.”
What Changed in the Final Rule?
The Environmental Protection Agency made a number of significant changes to the final Clean Power Plan based on feedback to the preliminary plan released last year. Here is a summary of the most important changes:
Source‐specific CO2 emission performance rates: The plan uses two different CO2 emission rates to define the “best system of emission reduction” (BSER), one for coal-steam and oil-steam plants and a second for natural gas plants.
Rate‐ and mass‐based state goals: The plan uses the CO2 performance rates to set both rate‐based (CO2 lbs/MWh) and mass‐based goals (total CO2 metric tons) for states. The draft rule used only rate-based targets; the mass-based targets were added to accommodate states that want to take part in emissions trading.
Energy efficiency building block eliminated: The final plan eliminates building block 4, relying on demand‐side energy efficiency, reportedly due to concerns it might be unenforceable: utilities can’t control their customers’ efficiency. “EPA nonetheless anticipates that, due to its low costs and potential in every state, demand‐side EE will be a significant component of state plans,” the agency said.
Refinements to the three remaining building blocks:
Building block 1: Improved efficiency at power plants. EPA originally proposed heat rate improvements of 6% for coal and oil generators, which industry officials said was unachievable. The final rule anticipates improvements of 2.1 to 4.3%, depending upon the region.
Building block 2: Shifting generation from higher emitting coal to lower emitting natural gas power plants. The final rule assumes natural gas plants will run at 75% of net summer capacity. The draft expected natural gas units to run at 70% of their nameplate capacity, a metric that many commenters said was incorrect because it doesn’t reflect real operating conditions.
Building block 3: Shifting generation to zero‐emitting renewables. The final BSER analysis does not include existing or under‐construction nuclear power or existing utility‐scale renewable energy generation as part of building block 3. EPA expects a bigger role for renewables than originally proposed “based on up‐to-date information clearly demonstrating the lower cost and greater availability of clean generation than was evident at proposal. It takes into account recent reductions in the cost of clean energy technology, as well as projections of continuing cost reductions.” Generation from under‐construction nuclear facilities and nuclear plant uprates can still be incorporated into state plans and count towards compliance. “Nuclear power competes well under a mass‐based plan, as increased nuclear generation can mean that fossil fuel units are operating less and emitting fewer tons of CO2,” EPA said.
Grid reliability measures: States must show they have considered reliability in developing their compliance plans, “such as consultation with appropriate state reliability or planning agencies.” To address unexpected reliability concerns, states can amend their approved plans or seek temporary relief under a reliability safety valve.
Trading‐ready mechanisms: In response to concerns that requiring formal, up‐front agreements between states would deter use of trading as a compliance mechanism, the final rule allows states to design rate‐based or mass‐based trading-ready plans permitting individual power plants to use out‐of‐state reductions to achieve required CO2
Clean Energy Incentive Program: EPA will reward states making investments in renewable energy and demand‐side energy efficiency projects implemented in low‐income communities during 2020 and 2021 by awarding them emission rate credits (ERCs) or allowances.
Relaxed initial deadlines: The plan allows states a two‐year extension to submit compliance plans. By September 2016, states must submit either a final plan or an initial plan with a request for an extension to September 2018. Initial compliance goals will go into effect in 2022, not 2020.
The new owner of Peoples Gas, WEC Energy Group, told the Illinois Commerce Commission that it has fired the contractor in charge of the natural gas main replacement project in Chicago — this after the project’s price has quadrupled to $8 billion.
WEC Energy Group, formed after Wisconsin Energy purchased People’s Gas parent Integrys Energy Group, said that Jacobs Engineering Group was no longer in charge of the accelerated gas main replacement project. It shouldn’t come as a surprise, though. One of the conditions the ICC placed on its approval of the acquisition was a promise that WEC take firm control of the problem-plagued project.
When the project was first unveiled in 2009, Peoples said the cost of replacing about 2,000 miles of pipe over 20 years would be about $2.2 billion. The ICC approved a customer surcharge to finance the replacements. The cost estimate then went up to $2.6 billion, and then $4.6 billion. When the ICC sought more information in June from Peoples’ management, top managers called before the commission were unable to provide any firm guidance. That management team has since largely been replaced.
Wildfires, Market Shifts Cutting Rail Traffic to Delaware Refinery
The number of tank cars delivering crude to the Delaware City Refinery has been cut in half because of wildfires in the west and shifting markets, according to the refinery’s owner. The refinery received an average of about 125,000 barrels per day during the first quarter of the year, according to Tom Nimbley, CEO of PBF Energy, which owns the facility on the banks of the Delaware River near Delaware City. In the second quarter, that number dropped to about 60,000 barrels per day.
Nimbley said North American crude oil — the type it receives by rail from the Midwest and Canada — has become too expensive compared with crude it can receive by water from other sources. “Factoring in transportation costs, it is plainly evident that these barrels cannot find an economic home on the East Coast, or a lot of other places” at current price levels, Nimbley said during a conference call with analysts.
Nimbley said rail deliveries could continue to fade, to 45,000 to 50,000 barrels per day, if the same market conditions persist. “We buy our crude basically two to three months early, so the crude we’re running in the third quarter is based on prices that exist in the second quarter, and those prices did not support rail economics,” Nimbley said.
SolarCity, the solar development and financing company run by Tesla CEO Elon Musk, reported strong results in its second-quarter earnings, saying it booked 395 MW of solar projects and installed 189 MW. That’s a healthy rise from the previous quarter, when the company booked 237 MW and installed 153 MW.
SolarCity also said it produced 1.25 TWh of energy in the quarter. Through the end of the quarter, the company had installed 1,418 MW, an increase of 86% over the same period in the previous year, and said it had a total of 262,495 customers. The company said favorable regulatory rulings in California and Arizona contributed to its success.
Duke Energy Progress Completes NCEMPA Asset Purchase
Duke Energy Progress has completed the purchase of North Carolina Eastern Municipal Power Agency’s generating assets for $1.25 billion. The purchase includes ownership of about 700 MW of generation at Brunswick Nuclear Plant Units 1 and 2 in Brunswick County, Mayo Plant in Person County, Roxboro Plant Unit 4 in Person County and the Harris Nuclear Plant in Wake County.
The sale gets NCEMPA out of the generation business. It has entered into a 30-year power purchase agreement with Duke.
SunEdison has been named the “Official Solar Energy Partner of NASCAR Green.” The partnership intends to build on the expanded use of solar technology at race-team shops and race tracks across the country.
“Our strategic partnership with SunEdison will help NASCAR further reduce the sport’s environmental impact and help continue to educate our fans on renewable energy,” said Steve Phelps, NASCAR’s chief marketing officer.
NASCAR says a study it commissioned in 2014 found that four out of five NASCAR fans believe the earth is going through a period of climate change, and that two out of three of those fans feel a personal responsibility to do something about it.
Xcel Energy CEO Ben Fowke said last week that the Minneapolis-based utility supports development of large, attractively priced solar power projects, but it will keep pushing to limit more costly rooftop and subscriber-based community solar gardens. Xcel recently won approval from Minnesota regulators to develop its first three utility-scale projects in the state, the largest of which will generate 100 MW.
Fowke said recent studies have confirmed that large solar development “is far more cost-effective for consumers than smaller applications” and solar policy needs to be based on “sound economics.”
“While solar gardens and rooftop solar have a place in our portfolio as an option for consumers, because they require heavy, heavy subsidization of non-participants, you’ll continue to see us advocate that the primary focus be utility-scale solar so that we can keep energy costs affordable for consumers,” Fowke said.
American Electric Power has named Bruce Evans as the new president and chief operating officer of AEP Texas. He is replacing Wade Smith, who is now senior vice president of grid development for AEP Transmission. Evans was vice president of distribution operations for AEP Texas.
Evans has a bachelor’s degree in finance from Hardin Simmons University in Abilene and a master’s degree in finance from Dallas Baptist University. He also attended the Advanced Management Program at Harvard University. He has built his career in utilities, spending the first 21 years at West Texas Utilities, Central Power & Light, Central & South West and AEP. He was president and CEO of the former CPL from 1996 to 1998.
After a failed attempt at Arctic exploration last year, Royal Dutch Shell plunged a drill bit into the mud at the floor of the Chukchi Sea. The exploratory well will be Shell’s first action in the search for oil reserves that may measure in the billions of barrels. And even as the first well was being drilled, protests against Shell’s Arctic explorations continued. The icebreaker Fennica — in Portland, Ore., for repairs after gashing open its hull — steamed past protesters on its way to join the rest of the marine drilling fleet.
Shell is betting big on this Chukchi Sea attempt, but it is racing the clock as winter is already starting to bear down on the drill site. A previous attempt had to be halted when an iceberg drifted toward a drill ship in 2012.
But Shell said it is committed to this year’s attempt, and for good reason. The Arctic prospect “has the potential to be multiple times larger than the largest prospects in the U.S. Gulf of Mexico, so it is huge,” CEO Ben van Beurden said. But its potential is also far off. “If, indeed, we do find oil, and if we find an acceptable path to develop it, it will start to produce in 2030,” he said.
EDP Renewables Planning to Build 250-MW Wind Farm in Maine
EDP Renewables has applied to build a 119-turbine, 250-MW wind farm near Bridgewater, Maine. If the Spanish company’s first project in the state gains approval and is built, it will eclipse what is now the largest wind facility there, the 185-MW SunEdison wind farm now under construction near Bingham.
EDP is proposing to build a 50-mile transmission line to connect the project to the regional power grid. In order to quiet opposition, EDP has already promised up to $2 million in energy efficiency projects for area residents and businesses.
Clean Line Energy Asks Missouri PSC to Reconsider Nixed Project
Clean Line Energy Partners is asking the Missouri Public Service Commission to give it another chance to get a permit to build a $2.2 billion transmission line that would run from Kansas wind farms to markets in the east. The PSC denied a permit to the Grain Belt Express project in July.
“The project is too important to Missouri’s energy future not to pursue,” a company official said. The transmission line would run from Dodge City, Kan., across Missouri, through Illinois, to a substation in Indiana. Three of the commission’s five members voted against the project, questioning whether the line was needed to help Missouri meet its renewable energy mandate by the 2021 deadline.
UIL Holdings will invest $80 million in the Northeast Energy Direct natural gas transmission line project being proposed for New York, Massachusetts and New Hampshire. The investment will give UIL a 2.5% ownership stake in the pipeline project proposed by Kinder Morgan. Plans call for the natural gas transmission line to extend 188 miles from upstate New York, through western Massachusetts and southern New Hampshire, before terminating in Dracut, Mass.
Construction of the $3 billion project is expected to start in 2017, with the pipeline becoming operational in November 2018. Northeast Energy Direct is part of a larger, 412-mile project that would bring natural gas from the Marcellus Shale deposits of north-central Pennsylvania to the population centers in southern New England.
Michael West, a UIL spokesman, said the company’s deal with Kinder Morgan gives it the opportunity to purchase an even larger ownership stake in the transmission line project.
