CARMEL, Ind. — MISO has declined a request by the Public Consumer Advocates sector for $200,000 to help cover its legal costs in a fight over MISO transmission owners’ return on equity.
The decision was announced Wednesday at the MISO Advisory Committee.
“We don’t have a mechanism to send them money,” said MISO General Counsel Stephen Kozey, adding there was no show of stakeholder support for such funding.
The Public Consumer Advocates sector consists of both non-profit groups and government agencies that represent consumers in utility cases before state regulators.
It decided to enter the ROE battle after settlement talks ordered by the Federal Energy Regulatory Commission between industrial customers and TOs broke down last year. It is the consumer sector’s first-ever litigation in a FERC case.
The consumer sector made the request at the Advisory Committee in February, saying it lacks the deep pockets for legal costs.
Robert Mork, deputy consumer counselor for the Indiana Office of Utility Consumer Counselor, said the Consumer Advocates sector has been supportive of MISO over the years. “We have to say we’re surprised and disappointed by MISO’s decision on this,” Mork said.
He reminded the committee that FERC Order 719 was created in part to improve the responsiveness of RTOs to electric consumers.
Mork didn’t elaborate on the group’s response to the funding denial but said that the consumer sector would have further discussions with MISO, the Organization of MISO States and with FERC.
MISO industrial customers initiated the ROE dispute last year, contending that transmission operators’ current base ROE — 12.38% except for American Transmission Co., at 12.2% — is too high (EL14-12). On April 3, the consumer advocates asked FERC for approval to amend the group’s intervention by adding allies from Arkansas, Kentucky, Louisiana, Montana and Illinois. (See MISO TOs Seek Base ROE of 11.39%.)
The Obama administration’s first Quadrennial Energy Review presents a roadmap for returning the U.S. to a post-World War II level of investment in infrastructure, creating 1.5 million jobs while transforming the nation’s electric grid and oil and gas pipelines, Vice President Joe Biden said Tuesday from PECO Energy headquarters in Philadelphia.
“The U.S. is in the midst of an energy transformation that will allow us to remain the energy epicenter of the world,” Biden said. “To maintain that position, we need a 21st-century infrastructure.”
President Obama ordered the review — similar to the Pentagon’s Quadrennial Defense Review, a widely followed assessment of the nation’s defense — to provide a comprehensive “multi-year roadmap” for U.S. energy policy, with an assessment of current policies and recommendations for additional executive and legislative actions, including priorities for research, development and demonstration programs to support innovation. A White House task force, headed by the president’s top science, technology and climate change advisors and including more than 20 federal agencies, took part in the project, which included public meetings with stakeholders around the country. (See Looking to Build Infrastructure, Moniz Comes to Wall Street.)
The effort is intended “to provide policymakers, industry, investors and other stakeholders with unbiased data and analysis on energy challenges, needs, requirements and barriers that will inform a range of policy options, including legislation.” Each installment of the report will focus on one part of the energy “value chain.”
The 348-page report released Tuesday focuses on the energy transmission, storage and distribution system, which is facing new challenges from climate change, environmental policies and innovations in oil and natural gas production.
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New Sources
Since 2008, solar electricity generation has increased 20-fold, Biden said, and wind energy has more than tripled. In that time, the U.S. has become the world’s No. 1 producer of natural gas, and the nation has reduced its dependency on foreign oil.
Meanwhile, new challenges have emerged regarding national security, increasingly strict clean energy standards and an aging transmission system that isn’t geographically aligned with the needs of renewable generation.
“Changes in the geography of domestic energy production stress the ability of existing infrastructures to move both liquid fuels and electricity from supply regions to demand centers,” the White House said in a fact sheet. “Congestion in the nation’s ports, waterways and rail systems affect the timing and cost of moving not just energy products, but all commodities.”
Aging Infrastructure, Need for Resiliency
Biden noted that half of the nation’s 2.6 million miles of gas pipelines were constructed in the 1950s and 60s, and it would cost about $270 billion to repair them all.
The solution, he said, includes permitting new pipelines more quickly and finding ways for companies to recover their investment without burdening ratepayers.
The system also needs to gird for events such as 2012’s Superstorm Sandy, said Biden, citing it as evidence of climate change.
Between 2003 and 2012, an estimated 679 widespread power outages occurred, he said, costing from $18 billion to $33 billion per year, depending on the nature of the event, he said.
“The threat’s real,” he said. “We’re expecting sea levels to rise by 2030.” In some places, he said, “we will need to literally raise the substation.”
The report cites estimates of billions of dollars to achieve its recommendations. Grid modernization alone is expected to run $3.5 billion annually over 10 years.
Workforce Impacts
Biden stressed the positive effect the investments will have on the workforce.
About 1 million people were employed in energy transmission, storage and distribution jobs in 2013 and over the next five years, about 15% of them will be eligible to retire. The administration says infrastructure spending could add 1.5 million additional energy sector jobs.
“These are middle-class jobs,” he said. “These are the jobs that used to exist at the turn of the 20th century.
“Investing in our infrastructure creates of a virtuous cycle of creating good-paying jobs and attracting companies.”
Accompanying the announcement were two related executive actions.
The U.S. Department of Energy has created the Partnership for Energy Sector Climate Resilience, aimed at strengthening the system against extreme weather and climate change impacts. It will kick off with an April 30 meeting with the CEOs of 17 member companies, including Exelon, Dominion Virginia Power, Pepco Holdings Inc., Public Service Electric & Gas, the New York Power Authority, the Tennessee Valley Authority, National Grid and Entergy.
In addition, the U.S. Department of Agriculture introduced a plan to spend $72 million to support six new rural electric infrastructure projects.
CARMEL, Ind. — MISO’s Board of Directors System Planning Committee voted unanimously Tuesday to approve Entergy’s request for $217 million in out-of-cycle transmission projects, setting up a likely approval by the full board Thursday.
The competitive transmission developer and independent power producer segments have steadfastly opposed the largest of the Entergy projects, a $187 million project to serve additional load in the Lake Charles, La. industrial zone in the midst of an economic revival.
They’ve alleged the increased load is speculative, that the project is beyond what is needed for a base reliability upgrade and that there was inadequate stakeholder review. They also would like a shot at competing for the project.
But once again, MISO staff outlined a checklist of steps taken that they say conforms with tariff and business practice manual procedures.
The bulk of the controversial Lake Charles project involves adding a 500 kV tap line that will extend seven miles to a new substation in Lake Charles, where Entergy said numerous industrial customers have committed to adding facilities.
MISO studied alternatives, including upgrading a 230 kV line and providing supply from more distant sources, but concluded they were less effective, said MISO Director of Planning Jeff Webb. “This is a straightforward, and I think ideal, solution,” Webb told the committee.
No stakeholders spoke in opposition.
The committee pointed to an April 2 letter from Louisiana Public Service Commissioner Eric Skrmetta that expressed dissatisfaction with the review of the projects at MISO, calling on MISO to streamline the out-of-cycle approval process.
“Nothing should be permitted to interfere with the location of significant new load in southwest Louisiana and the economic benefits it will bring to the people of this state,” wrote Skrmetta. “…The consideration of these projects has gone on long enough. Second, numerous stakeholders have expressed dissatisfaction with MISO’s out-of-cycle consideration and approval process.”
Webb told the committee that MISO had 16 OOC projects last year and seven in 2013. Director Baljit “Bal” Dail, who is not a member of the committee but sat in on Tuesday’s meeting, asked Webb why Lake Charles was so controversial.
Webb cited the size of the project and said he recalled only one other controversial project over the years — also one of substantial size.
Clearly, large projects would be more lucrative for transmission developers hoping for a competitive project. MISO staff have maintained that Lake Charles is a reliability project, which would be ineligible for competition.
Board Chairman Judy Walsh — who substituted as chair of the meeting due to a medical issue involving chair Mike Evans — said the OOC process is designed to prevent MISO from becoming a “stumbling block” to needed reliability upgrades.
“In order for this process to work it has to be fast. It has to be efficient,” she said.
Operators of an Oklahoma coal-fired generator seeking a temporary reprieve from the Environmental Protection Agency’s mercury rule received an assist from federal energy regulators last week.
The Federal Energy Regulatory Commission told the EPA on Thursday that Unit 1 of the Grand River Dam Authority’s 490-MW Grand River Energy Center near Chouteau, Okla., is necessary to preserve system reliability in SPP.
EPA’s Mercury and Air Toxics Standards (MATS), which took effect in 2012, gave generators three years, until April 16, 2015, to comply. State environmental regulators were permitted to grant one-year extensions, which the Oklahoma Department of Environmental Quality did for the GRDA plant.
GRDA asked EPA to issue an administrative order allowing an additional one-year delay to April 16, 2017, saying it needs the time to complete construction of a new, gas-fired combined-cycle unit at the site.
Without Unit 1, according to the authority, it will be unable to meet SPP’s 12% required reserve margin. The authority also noted that the plant was called on for voltage support six times in 2014.
“The reliability of the bulk power system depends in part on whether utilities meet an appropriate planning reserve margin,” FERC told the EPA. “Absent a significant change in future circumstances, our view is that GRDA’s Unit No. 1 is needed as requested by GRDA to maintain electric reliability.”
The need for Unit 1’s output also was confirmed by SPP. In a letter attached to GRDA’s petition to EPA, SPP said that it “concurs with GRDA’s assessment regarding GRDA Unit 1’s criticality for reliability absent other system changes.”
GRDA said that it sometimes has problems obtaining transmission service to deliver power from outside of the GRDA balancing area when one or both of its existing units are offline.
The final decision on the waiver will be made by EPA.
Delmarva Customers May Have to Wait Months for One-Time Credit
Exelon has promised $40 million for one-time customer credits in Delaware as part of a settlement to get approval for its takeover of Pepco Holdings Inc., but there is no telling when customers will see the credit. Public Service Commission spokesman Matthew Hartigan said the PSC first has to lend final approval to the settlement. The commission is awaiting developments in merger settlements the Chicago energy giant is having with regulatory agencies in Maryland and D.C.
Grain Belt Express Seeks Approval for State Part of 780-Mile Tx Line
Having already received the approval of Kansas and Indiana, the developers of a 780-mile transmission line project that spans the Midwest are going to Illinois for approval. Houston-based Clean Line Energy, which has already garnered the approval of the Commerce Commission for a line that is to run from Iowa to Illinois, is seeking the commission’s ruling on the Grain Belt Express. The line is designed to carry energy produced by vast wind farms in the Great Plains to markets in the East. The Missouri Public Service Commission is expected to release its ruling on the line within the next few months. The Grain Belt Express is expected to be in service by 2019 if it gets the final approvals it needs.
ICC Ruling Preserves View at Frank Lloyd Wright House
The Commerce Commission has ruled that Commonwealth Edison’s Grand Prairie Gateway transmission line doesn’t need to abut a Frank Lloyd Wright farmhouse. The ICC said property covenants associated with land sold by the owners of the farmhouse to the Muirhead forest preserve are strong enough to force ComEd to choose a different route. ComEd agreed to shift the path of the $200 million project to move it away from the preserve. The 345-kV line is to run from a substation in Byron to another near Wayne.
The state’s policies on solar energy put it behind its neighbors, advocates say, so proposals to overhaul its approach are intended to help it catch up. A bill sponsored by state Rep. Sara Gideon (D-Freeport) would require 2.5% of the state’s electricity mix to come from solar by 2022 and offer financial incentives to help homeowners and businesses more quickly pay off their solar installations.
But utility representatives, the Office of the Public Advocate and the Energy Office warned that the proposals could add to ratepayers’ bills. Central Maine Power, for instance, estimated that ratepayers would be paying $55 million in solar subsidies by 2022. The state installed 4.5 MW of solar energy in 2014, an 80% increase. Public Advocate Timothy Schneider said that while his office believes adding more solar energy to the state’s grid is positive, the office opposed the bill based on the potential costs to ratepayers.
Premier Greg Selinger said the time is not right for the province to join in a cap-and-trade system with neighboring Ontario and Quebec, but it could happen. “It’s still something we’re looking at,” he said in an interview with the Winnipeg Free Press. “There is a lot of work to get there.”
It has been five years since Selinger said he would introduce cap-and-trade legislation in the province. In 2008, the province committed to cutting total greenhouse gas emissions by 6%, compared with 1990 levels, by the year 2012. But a year after the deadline, the province admitted it wasn’t going to come close to the goal and abandoned the plan.
Lawmakers Pass Bills to Foster Community Solar Projects
A pair of bills aimed to make it easier to plan, develop and activate community solar projects have passed in the House and Senate. If signed by Gov. Larry Hogan, the state will be the 10th in the U.S. to allow community solar projects. The bills would allow multiple parties to invest in a single solar project. Investors or subscribers would become eligible for credits to be used against their electricity bill.
The bills allow for a three-year pilot program permitting construction of community solar projects. A study of the projects will be presented to the General Assembly to consider a permanent program.
Acadia Center Report Outlines Benefit of Solar in State
Acadia Center has released a study that quantifies the grid and societal benefits of solar photovoltaic systems in the state.
Acadia Center assessed the value of six hypothetical solar PV system configurations that determined that the value of solar to the grid ranges from 22-28 cents/kWh, with additional societal values of 6.7 cents/kWh.
Solar PV provides unique value to the electric grid by producing clean energy and avoiding generation and related emissions from conventional power plants. The overall grid value of solar is the sum total of these different benefits.
The benefits vary based on the time and location of output from solar panels. Acadia Center examined these variations in the study, including the impacts of orientation (i.e. west- or south-facing arrays) on the value of solar PV. One key finding is that under traditional net metering, west-facing arrays — which maximize output during periods of peak demand — would receive approximately 20% less credit than a comparable south-facing system, despite the fact that they produce approximately the same overall value to the grid.
DPU Scraps Rule Requiring Bill Recalculations if Switching
In an attempt to reduce confusion for customers switching electric suppliers, the Department of Public Utilities has scrapped a rule requiring utilities to recalculate customers’ bills if they were leaving their “basic service” plans. The rule often resulted in small “surprise” bills — but sometimes credits — for residential and small business customers.
The rule had been in place for the past 15 years, but more light was shed on it as a result of last winter’s higher energy bills that spurred more customers to seek competitive suppliers. The rule called for recalculations to be done if the customer was in the middle of a six-month service period, which sometimes resulted in an additional charge being reflected because of variable costs charges. Some utilities, including Eversource Energy, said the cost of dealing with customer confusion was higher than the cost of eliminating the “true-up” from recalculations.
Group Tries to Get Anti-Fracking Measure on Ballot for 2016
A grassroots organization is trying to get a statewide anti-fracking measure on the ballot for the 2016 election. It will be the third attempt to do so: the group failed to get the necessary 250,000 signatures in 2012 and 2013. “This time we’re going to go all the way,” LuAnne Kosma, chairwoman of the Committee to Ban Fracking, said on Friday. “We have the resources that we need this time to get to 250,000. We’re getting a lot more people involved, and we definitely have more awareness of the issue statewide.” The state’s Board of State Canvassers will review the forms prepared for the collection of signatures, a requirement before the group can begin gathering names.
So far in Michigan, there has only been test drilling for fracking operations.
Sens. Urging US to Oppose Canadian Plan to Bury Nuclear Waste
U.S. Sens. Debbie Stabenow and Gary Peters are asking the Obama administration to oppose a plan by Canadian authorities to bury nuclear waste near the shores of Lake Huron. “Building a permanent nuclear waste dump in such close proximity to Lake Huron could cause significant, lasting damage,” Peters wrote. “The Canadian government should seek out an alternative site, and I urge the State Department to take action to keep this troubling project from moving forward.”
The plan calls for Ontario Power Generation to bury 7.1 million cubic feet of low- and intermediate-level waste from its Bruce Power nuclear generating station about 2,230 feet below ground. Opponents fear the waste could contaminate groundwater, which would then flow into Lake Huron.
Lansing Leaders Contemplate Answers to Aging Powerhouse
Lansing city leaders are pointing fingers at former management of the Board of Water & Light’s Eckert Power Plant for letting it deteriorate to the point where at least $100 million will be needed for infrastructure investment over the next six years.
The aging coal-fired plant near the city’s downtown area can’t be replaced without generating capacity and upgrades to the board’s transmission infrastructure, its interim general manager told the city this month.
The Lansing State Journal reported that part of the capital plans include doubling connections to the grid, which would help provide additional resources in the event the plant experienced a generation disruption.
The aging plant supplies power to about 97,000 customers.
Enbridge’s Sandpiper Pipeline Gets Nod from Judge; PUC Ruling Pending
Enbridge’s proposed $2.6 billion Sandpiper pipeline — designed to carry North Dakota crude oil across Minnesota to refineries in the East — has received approval from a state administrative law judge who ruled it was necessary. The project still needs approval from the state Public Utilities Commission, but the recent ruling was seen as a defeat to environmentalists opposing the line. North Dakota already has approved its portion of the 610-mile route.
Lawmakers Ask for Extension for Northern Pass Comment Period
The state’s congressional delegation says a 60-day comment period is not enough time for what is expected to be a voluminous environmental impact report on the proposed Northern Pass transmission project, a 187-mile transmission project that would cut through North Country forest on its way from the Canadian border to a substation in Deerfield with 1,200 MW of new hydroelectricity from Quebec.
The delegation has asked the federal Department of Energy to extend the time to 90 days. Sens. Jeanne Shaheen and Kelly Ayotte, along with Reps. Annie Kuster and Frank Guinta, have written to energy officials in anticipation of the release this spring of a report they say will exceed 2,000 pages. They say it’s “imperative” that the department allow more than the usual 60-day period before the start of public hearings on the report.
The Seacoast Reliability Project being developed by Eversource is nothing like the scale of Northern Pass, but Seacoast community members have labeled the project “the Northern Pass of the Seacoast.” They’ve raised concerns about noise, interference with telephone, television or radio reception, health risks, and effects on real estate values.
The project would follow a 13-mile existing distribution corridor from Madbury to Portsmouth, mostly through Durham. The Eversource right-of-way is now occupied by 40-foot wooden poles, but these would be replaced by larger metal poles ranging in size from 60 to 108 feet, which would support the 115-kV line.
BPU Approves $95 Million More Energy Efficiency Spending by PSE&G
The Board of Public Utilities has approved a plan by Public Service Electric & Gas to spend another $95 million in energy efficiency programs for health care facilities, apartment buildings, small businesses and nonprofits. This is on top of the $227 million already invested on energy efficiency programs in those areas. The utility will be allowed to recover the investment in its rates.
“These three programs are targeted at segments that can achieve significant bill reductions from energy efficiency programs but were held back from making these investments for a number of reasons,” said Joe Forline, vice president of Customer Solutions for the company.
Duke Energy has received a four-week extension to enter its guilty plea to Clean Water Act violations relating to the massive Dan River spill last year. The guilty plea was to be part of the $102 million settlement the Charlotte-based company reached with federal authorities over the incident, in which up to 39,000 tons of coal ash and 27 million gallons of coal slurry gushed into the Dan River in February 2014. Duke filed a motion seeking the extension after saying it was concerned that a guilty plea, and a sentence of probation for the company, could prohibit it from continuing to supply electricity to two military bases in its territory – Fort Bragg and Camp Lejeune.
The company says it is negotiating with the Environmental Protection Agency to have that limitation lifted from the terms of probation. State authorities are continuing to investigate Duke’s role in the environmental disaster, and no settlements or plea deals have been announced. Separately, a federal investigation into possible criminal charges relating to the spill is reportedly ongoing.
Professor Gets $500,000 Grant to Further Wind-borne Energy Research
A University of North Carolina-Charlotte professor researching ways to create electricity by using tethered, wind-borne generators has received a $500,000 grant from the National Science Foundation. Chris Vermillion, an assistant professor of mechanical engineering, is working on ways to develop kite- or wing-borne wind energy systems that would carry turbines into the sky, while remaining connected to the ground. Such technology could generate 30 to 200 kW of energy.
“This is the only platform in the world — at such a small scale — that replicates both the flight dynamics and the control of airborne wind-energy system lifting bodies,” Vermillion said. The professor and students at the college are developing 1/100th-scale models of the lifting bodies and using the university’s water channel facility to test them. The idea is to develop a model that could replace some of the earthbound wind turbines currently used.
State Considers Scratching RPS, Renewable Zone Initiative
Fraser
While other states are increasing their renewable energy sources, the Senate voted to do away with the state’s Renewable Portfolio Standard and end its Renewable Energy Zone initiative. Senate Bill 931, introduced by Republican Sen. Troy Fraser, was passed 21-10 and now goes to the House. Fraser, in defending the bill, noted that the state’s renewable energy goal of 10,000 MW of wind and solar by 2025 was attained in 2010. Texas now boasts having 12,800 MW just in wind. “We’re No. 1 in the nation by a long shot,” he said during a Senate session. “We have the lines there. We can handle another 6,000 or 7,000 MW of wind and solar.”
FERC Approval ‘the Easy Part’ for Wisconsin Energy-Integrys Merger?
The Federal Energy Regulatory Commission earlier this month approved Wisconsin Energy’s $9.1 billion purchase of Integrys Energy Group — but that approval may have been a cakewalk compared with the uproar before state regulators, who still must vote on the deal.
The Wisconsin Paper Council and Wisconsin Industrial Energy Group, along with retail ratepayer watchdog Citizens Utility Board, have told the Public Service Commission they’d like to see a guarantee of monetary concessions for ratepayers in light of relatively high rates.
The Milwaukee Journal Sentinel reported that a consultant for Wisconsin Energy has estimated that the merger could result in annual savings to customers of $78 million to $138 million after five or 10 years.
But the utility stopped short of offering a guarantee and said such concessions would amount to overreaching and illegally penalizing shareholders.
The Citizens Utility Board told the state commission Wisconsin Energy has shown “outsized influence, hubris and preference for protecting shareholders at the expense of customers … particularly when it expresses gall at customers’ attempts to secure actual, quantifiable benefits and meaningful protections from the transaction.”
Former Public Service Commission Chairman Eric J. Callisto has become a partner at the Madison office of Michael Best & Friedrich.
Callisto will represent client interests in energy-related legislation in Congress. Callisto has served as president of the Organization of MISO States and held leadership positions in the National Association of Regulatory Utility Commissioners.
“His extensive background in regional and national energy matters and his recognition as a thoughtful regulator provide him with unique experience and perspective that will benefit the firm’s present and future energy clients,” said Dan Sanford, managing partner of Michael Best’s D.C. office.
PJM’s request to delay May’s Base Residual Auction has drawn more than two dozen comments — mostly from supportive stakeholders, but also from critics who say a postponement would create more market uncertainty than it is seeking to quell.
Among those opposing the delay are American Municipal Power, Old Dominion Electric Cooperative and Southern Maryland Electric Cooperative. “The commission should not allow PJM to create destabilizing market uncertainty by holding the BRA hostage until it secures a Capacity Performance ruling to its liking,” they said in a joint filing.
“Indeed, PJM’s transparent attempt to blame the commission for the uncertainty — by requiring that PJM provide additional support for its deficient Capacity Performance proposal — only underscores that it is PJM, through the filing of its waiver request, that has created the very uncertainty it now asks the commission to cure.”
Supporters, however, not only urged FERC to grant the waiver, but to approve the Capacity Performance proposal in time for a delayed BRA. The proposal would increase capacity payments for over-performing participants and penalties for non-performers.
AES, Calpine, Dynegy, Exelon, FirstEnergy, PPL, Public Service Enterprise Group, Topaz Power Management, AEP Generation Resources, East Kentucky Power Cooperative and NRG Energy filed a joint statement saying that holding the auction under the current Tariff “will expose our customers and the PJM market to unacceptable reliability risks.”
“Additionally, further delay in approving these reforms creates significant market uncertainty given the myriad business decisions that depend on clear market rules and price signals,” they said. “State default procurements, retail contracts and capital investment decisions all hinge on knowing both when to expect commission resolution and what the commission has decided.”
Transitional Incremental Auction
Rockland Capital and others opposing the delay suggested that if FERC approves a version of the Capacity Performance plan, it should allow PJM to hold a transitional Incremental Auction for the 2018/19 delivery year.
“At bottom, protestors ignore the essential ‘phase-in’ nature of the transition auctions and are in reality simply seeking to put off Capacity Performance reforms for at least another year. That patently does not achieve the purposes of PJM’s requested waiver of preserving a genuine opportunity to implement Capacity Performance for the 2015 BRA and therefore should not be deemed an acceptable alternative to the waiver,” PJM said.
In its protest to the waiver, Panda Power Funds said it would create “significant uncertainty not only as to the timing of the BRA, but also as to the capacity products to be offered in the BRA, the costs of participating in the BRA and other rules related to the BRA. Postponement of the BRA also threatens to delay the completion of needed new capacity and thus prevent PJM from meeting its own reliability objectives.”
Others opposing the waiver request include several environmental organizations, the Advanced Energy Management Alliance, energy trading companies, state regulators in Maryland and New Jersey and some consumer advocates. Utilities largely supported PJM’s request.
“By granting PJM’s waiver request, the commission mitigates market uncertainty by allowing market participants to know what the performance requirements are in order to value risk accordingly,” said the Public Utilities Commission of Ohio.
Shell Energy took the opportunity to urge FERC against a “hasty roll-out” of PJM’s plan, while noting it does not oppose “these much-needed reforms.”
“In addition to the direct effects of the Capacity Performance proposal, the commission must provide a fair opportunity for market participants to assimilate the indirect effects of the proposal as approved on bilateral transactions, such as off-take agreements or agreements involving long-term hedges of retail electric supply,” it said.
Shell requested a technical conference in which PJM and the Independent Market Monitor would make presentations on the details of the program and answer questions on the record.
In its filing, PJM said that if FERC does not respond by April 24, it will consider the waiver withdrawn and proceed with the May 11 BRA as scheduled.
TULSA, Okla. — SPP members last week rejected a request from Western Farmers Electric Cooperative for a waiver from a rule barring base plan transmission funding for wind generation projects that push wind’s share of capacity above 20% of summer peak load.
Members of the Markets & Operations Policy Committee agreed with a staff recommendation, which found that Western Farmers’ plan to add 100 MW of wind generation did not qualify for the waiver.
At the same time, members agreed that the 20% threshold — set years ago when SPP was comprised of smaller balancing authorities and there was concern over being able to balance large swings in wind generation — should be revisited now that is operating a vast area as a single balancing authority.
“I think some of the concerns about the operational challenges don’t exist or the limit could be higher,” said Antoine Lucas, director of planning. “But until there’s a new standard, we need to follow the 20%.”
Steve Gaw, representing The Wind Coalition, said the justification MISO presented to the Federal Energy Regulatory Commission for the limit was “entirely about reliability.” Continuing the 20% limit now, he said, is “hard to justify.”
Mitchell Williams, representing Western Farmers, said the cooperative needs to add more baseload generation because it may turn its one baseload coal plant into a peaking unit under the Environmental Protection Agency’s Clean Power Plan. The 100 MW from the Balko wind project — which the cooperative said was the most competitive resource available — would push wind from 19% to 25% of Western Farmers’ peak load over the next decade.
“We don’t think [the base plan funding] is a lot of money, but it’s still money and I would not be responsible to my board if I didn’t ask,” Williams said.
American Electric Power’s Richard Ross was unsympathetic. He suggested Western Farmers should have used the SPP screening study process so it could have considered the transmission costs before agreeing to purchase the wind capacity.
Although the waiver request won only 33% support, there appeared to be consensus among members on the need to revisit the limit as more wind is expected to be added under the EPA rules.
“This is not going away,” said Bill Grant of Southwestern Public Service. “It’s coming at us like a freight train.”
The Obama administration has received more than 100 pages of letters from Native Americans calling for a rejection of the proposed $8 billion Keystone XL Pipeline, claiming that the project would infringe on their water rights and damage sacred land, according to The Hill. The news service sought the letters through Freedom of Information Act requests with the Department of the Interior and found they were nearly unanimous in opposition of the project. The letters arrived just before the department is scheduled to file its own comments with the State Department on the pipeline. The Oglala Sioux Tribe wrote that it “continues to fully and completely oppose” the pipeline, as did the Northern Arapaho Tribe, the Ponca Tribe of Nebraska, the Blackfeet Tribe and the Yankton Sioux Tribe.
TransCanada, the company behind the project, said it has worked with the tribes, changed plans to address their concerns, and spent thousands of hours meeting with them. “We share a deep respect for the land and we deal with the concerns expressed by tribes and other landowners respectfully,” a company spokesman said. The final decision will come from the State Department.
Judges Appear Skeptical of Challenge to EPA Air Rules
A panel of judges of the D.C. Circuit Court of Appeals heard arguments from a platoon of attorneys arguing that the Environmental Protection Agency’s Clean Power Plan is already costing states money and if upheld could lead to the closing of hundreds of coal plants.
But the questions from the judges, especially Thomas Griffith and Brett Kavanaugh, seemed aimed less at the effect of the Clean Power Plan than on the plaintiff’s strategy to attack the plan in court, even before the rules are finalized.
“Do you know of any case in which we’ve halted a proposed rule-making?” Griffith asked. “Why in the world would we resort to extraordinary writ, which we’ve never used before?
“It’s a proposed rule,” Griffith went on. “We could guess what the final rule will be. But we’re not in the business of guessing. We typically wait to see what the final rule will be.”
Fourteen states and two of the country’s largest coal companies are challenging the rule, which requires states to come up with plans to meet emissions reduction goals. However, EPA has already indicated that they could revise the rules based upon feedback from the states.
“For us to get in the middle of it before it happens seems highly unusual,” Kavanaugh said.
“While we have always said that it is unusual to set aside a proposed rule, we believe that it is legally justified and appropriate in this case,” said West Virginia Attorney General Patrick Morrisey after the hearing. “The EPA has made clear that it plans to finalize this rule and regulate based upon a section of the Clean Air Act where it lacks legal authority to do so.”
NRC Begins Special Inspection of Calvert Cliffs Plant After SCRAMS
The Nuclear Regulatory Commission has sent a special team of investigators to Exelon’s Calvert Cliffs nuclear station to determine why both units tripped offline during the April 7 transmission line failure that resulted in regional power failures. On that day, the failure of a transmission line in Southern Maryland caused both units at the 1,700-MW site to trip offline as designed. However, the diesel backup generator at one of the units failed after 11 seconds. It was the second time in five years that a diesel backup generator failed.
A report of the team’s inspection will be provided in 45 days.
EPA 2013 Greenhouse Gas Report Shows 2% Increase in a Year
U.S. power plants continue to be the largest emitters of greenhouse gas, accounting for 31% of all emissions in 2013, according to the Environmental Protection Agency’s 20th Inventory of U.S. Greenhouse Gas Emissions and Sinks. The report showed a 2% increase in emissions from 2012 to 2013, but a 9% drop since 2005. The agency said the rise was due to increased energy use across all sectors as well as a greater use of coal for generation overall in that period (see “Coal-fired Generation to Keep Rising” below). The agency is providing the full report, along with tools to work with the data.
Coal-fired Generation to Keep Rising Through 2025, EIA Says
The U.S. Energy Information Administration says electricity produced by existing coal-fired stations will increase from 2012 through 2025, according to its Annual Energy Outlook 2015. Using different economic scenarios, the report predicts energy production and usage. It indicates that while coal’s share of generation will fall from 39% in the U.S. to 34% in 2040, it will remain the largest share of total U.S. generation. The report shows renewable generation exhibiting the largest uptick, ranging from 50 to 121%, depending on the scenario. Construction costs continue to keep nuclear’s share from rising much, according to the predictions.
Shale Oil Boom May Be Over, Energy Information Admin Says
The oil output from seven of the country’s most productive shale formations is declining, the first indication that the oil shale boom may be over, according to the U.S. Energy Information Administration. The agency said production from the Bakken Eagle Ford, Haynesville, Marcellus, Niobrar, Permian and Utica formations will show a dip in production in May compared to April figures. April output for all seven regions was to be 5.62 billion barrels per day. Projected May output was tagged at 5.56 billion barrels, according to the Drilling Productivity Report.
The report already has some analysts putting on their doom-and-gloom glasses.
“We’re going off an inevitable cliff” because of the shrinking rig counts, Carl Larry, head of oil and gas for Frost & Sullivan, told Bloomberg News. The number of rigs in production, 802, is the lowest since March 2011. “The question is how fast the decline is going to go. If it’s fast, if it’s steep, there could be a big jump in the market.”
House Bill Gives States Right to Regulate Coal Ash
The House Energy and Commerce Committee has approved a bill that would allow states to largely bypass a recent Environmental Protection Agency rule on the storage and disposal of ash from coal-fired power plants. The EPA rule, promulgated last year, stopped short of declaring coal ash a hazardous substance and set rules for storage and disposal, but largely left it up to the states to enforce the rules.
The bill, introduced by Rep. David McKinley (R-W.Va.), would set up a coal ash permit system to be administered by states, Enforcement in states that do not institute a permit system would revert to EPA. McKinley said EPA left open the possibility that coal ash would be designated hazardous and that his bill would provide regulatory certainty for those tasked with overseeing coal ash storage and disposal.
“The science has been determined — coal ash is not a hazardous material,” he said. “But as a result of this administration’s executive actions, we have uncertainty” for more than 300,000 workers employed by industries that use coal for beneficial uses and other recyclers.
The Department of Energy is paying more than $5 million in scholarships and fellowships to 91 college students studying in nuclear energy fields. Since 2009, the department has given $25 million in scholarships to more than 500 students. The office said the scholarships are part of the Obama administration’s effort to support clean energy innovation. “By helping promote cutting-edge nuclear science and engineering,” Secretary Ernest Moniz said, “the department is helping advance American leadership in the safe, secure and efficient use of nuclear energy here and around the world.”
CARMEL, Ind. — Stinging from objections to Entergy’s proposed Lake Charles transmission upgrade, MISO has launched discussions that could lead to refinements in its procedures for handling out-of-cycle requests.
The procedural review was initiated after transmission developers and independent power producers objected to staff recommendations that the MISO Board of Directors approve Entergy’s six out-of-cycle requests. The largest and most controversial request is a $187 million transmission upgrade that it says is needed to support new industrial development around Lake Charles, La. (See MISO Staff Hold Firm on Entergy Out-of-Cycle Request.)
The MISO board could vote on the requests Thursday.
“We really want you guys to dig in and really tell us how you believe things should be,” Matthew Tackett, a MISO principal advisor, told the Planning Advisory Committee on Wednesday.
Stakeholders have challenged Entergy’s load projections and questioned its assertion that the projects were needed to meet base reliability needs. They’ve also alleged that MISO failed to follow its Business Practices Manual and that it provided only limited opportunity for stakeholder review.
Entergy said the need to serve additional industrial load wasn’t realized until after the conclusion of the annual MISO Transmission Expansion Plan (MTEP) process. MISO officials said Entergy’s out-of-cycle request was consistent with publicly announced industrial plant expansions and economic growth data for Lake Charles. MISO said Entergy has not shared some specifics about the projected new load growth, citing customer confidentiality.
Ambiguities?
One issue rising out of the Entergy request is tariff language that states that an out-of-cycle project review must be driven by “urgent” needs that require an expedited review.
MISO’s Business Practices Manual states that such out-of-cycle projects have a need date within three years and an expected in-service date within four years of an OOC project submission. George Dawe of Duke-American Transmission Co., who represents the Transmission Developers sector, sought a rationale for the difference between need date and in-service date.
“I agree that the language as written could use some improvement,” Tackett said.
The term “urgent” could “be a little bit ambiguous,” said Tia Elliott, director of regulatory affairs at NRG Energy.
Tackett said the review ultimately comes down to striking a balance between adequate stakeholder vetting and successfully addressing the need “in a timely manner.”
Dawe has complained that MISO’s review of Entergy’s request seemed rushed and predestined for approval.
Tackett stressed that the out-of-cycle approval process is designed for special circumstances, not for long-term projects that ordinarily would be reviewed within MTEP.
He also said MISO has limited authority to override or invalidate a distribution company’s load forecasts. He noted, however, that load modifications often have to be reviewed by state utility regulators.
Steve Leovy, a transmission engineer at WPPI Energy, suggested MISO could perform studies during the MTEP process that anticipate and model future expansions so that it could be better prepared for significant demand-forecast changes.
Tackett invited stakeholders to offer comments and to provide redlined versions of the Business Practices Manual by May 15.
A summary of comments and suggestions will be presented at the June Planning Advisory Committee meeting.
The Federal Energy Regulatory Commission on Thursday issued new reliability standards, denied rehearing on business practices and communication protocols and ordered a new format for electronic filing of required reports. The commission also outlined a plan for measuring the effectiveness of its initiatives to spur transmission spending.
Transmission Investment Metrics
FERC said it will begin collecting data on six transmission metrics in an effort to measure the effectiveness of Order 1000 and other transmission initiatives (AD15-12).
The metrics are intended to measure levels of transmission infrastructure by region and permit analysis of the impact of commission transmission policies.
They include two measures of persistent congestion, which FERC said would provide an indication of whether regions have invested enough in transmission to ensure reliability and reduce costs:
Annual number of Transmission Loading Relief (TLR) or unscheduled flow events, normalized based on retail load. This metric would apply in bilateral markets.
Persistence, in years, of price differentials between RTO/ISO market nodes and market-to-market flowgates. LMPs, forward capacity prices and trading hub prices will be used.
To gauge the impact of policy changes, three other metrics will measure relative transmission investment and the cost-effectiveness of that spending:
Circuit-miles of transmission added to the grid, normalized by retail load. Population density and other factors may need to be considered in using the metric to compare regions.
Load-weighted transmission investment, defined as the amount spent on new capital additions in a given year, weighted by retail load. Population density must be considered in comparisons.
Circuit-miles per dollar of investment, defined as the number of circuit-miles added in a year, divided by the total invested — a measure of cost effectiveness.
The final metric will attempt to measure the impact of Order 1000, which sought to open transmission development to competition. It would divide the number of bids or proposals from non-incumbents in a region by the total number of bids and proposals annually.
“This is important work that you’re doing,” Chairman Norman Bay told Ben Foster, an Office of Energy Policy and Innovation staff member who presented the metrics study to the commission. “The metrics presented by staff today will allow the commission and its staff to better see what works and what needs further improvement.”
FERC staff will consider whether to add more metrics as it gains experience with the initial six.
“This is an initial feasibility study,” Foster said in response to a question from Commissioner Philip Moeller on a timeline for further developments. “We’ve done an initial pass, but we want to look more deeply into it to see if in fact it will yield meaningful insights. So we don’t have a particular timeline for releasing any kind of analysis at this point.”
FERC spokeswoman Mary O’Driscoll said the effort will not impose any additional reporting requirements on RTOs or others, at least not immediately.
“This is the very beginning of the process,” she said. “If [FERC staff] need additional data they will seek it out at the time. For now, it’s all public data.”
Commissioner Cheryl LaFleur asked Foster if there was anything RTOs could do to help FERC get meaningful data.
Foster replied that staff is attempting to rely on publicly available data. “But we may well have questions, and if the people who compile that data would be open to helping to walk us through [it] … that would be the most helpful to us at this point,” he said.
Electronic Filing Protocols for Commission Forms
Electric utilities and others will be required to file FERC reports in XML (Extensible MarkUp Language), a replacement for the current software, Visual FoxPro, which is no longer supported by its developer, Microsoft.
Affected are four forms used by electric utilities:
Form 1: Annual Report of Major Electric Utilities, Licensees, and Others;
Form 1F: Annual Report of Nonmajor Public Utilities and Licensees;
Form 3Q: Quarterly Financial Report of Electric Utilities, Licensees, and Natural Gas Companies; and
Form 714: Annual Electric Balancing Authority Area and Planning Area Report.
Forms for natural gas companies and oil pipelines also are affected by the change (AD15-11).
Standards for Business Practices and Communication Protocols for Public Utilities
FERC denied a request by the Edison Electric Institute for rehearing of Order 676-H, which specified business practices and communication protocols for electric utilities. The order addressed redirect policies and included a requirement that transmission providers post on their Open Access Same-time Information Site (OASIS) explanations on their calculation of available transmission capacity (ATC) within one day (RM05-5-024). Compliance is required effective May 15.
Reliability Standards
The commission gave final approval to the following reliability standards developed by the North American Electric Reliability Corp.:
COM-001-2 (Communications) and COM-002-4 (Operating Personnel Communications Protocols). The rules require adoption of predefined communication protocols, including use of three-part communications, and an annual assessment of them. The commission ordered NERC to modify COM-001-2 to address internal communications that could have an impact on reliability (RM14-13).
BAL-001-2 (Real Power Balancing Control Performance) and four new definitions. The standard is intended to ensure that the grid maintains consistent system frequency. It adds a frequency component to the measurement of a Balancing Authority’s area control error (ACE). The commission ordered NERC to submit an informational filing on the potential impact of the standard and to revise one definition (RM14-10).
The commission also gave preliminary approval to, and invited comment on, two Notices of Proposed Rulemaking:
PRC-005-4 (Protection System, Automatic Reclosing and Sudden Pressure Relaying Maintenance), which requires testing and maintenance of certain sudden pressure relays. The commission said it plans a new definition and four revised definitions in the proposed standard (RM15-9).
PRC-002-2 (Disturbance Monitoring and Reporting Requirements), designed to ensure the availability of adequate data to allow analysis of bulk electric system disturbances (RM15-4).
Tech Conference on Reliability of Bulk Power System
FERC will hold its annual technical conference on the reliability of the bulk-power system on June 4 (AD15-7). The conference, which will be held at FERC headquarters, will be webcast. FERC said a detailed agenda will be issued later.
It decided to enter the ROE battle after settlement talks ordered by the Federal Energy Regulatory Commission between industrial customers and TOs broke down last year. It is the consumer sector’s first-ever litigation in a FERC case.
