Dayton Power & Light is protesting a $106 million transmission project by Dominion Resources under PJM’s 2015 Regional Transmission Expansion Plan because of a change in how the project’s costs will be allocated (ER15-1344).
The 500-kV Cunningham-Elmont end-of-life project (Project b2582) initially was designated a supplemental proposal, for which Dominion, as the incumbent utility, would bear the full cost.
“That was the correct designation for this project because it is simply a replacement for an existing transmission line for which Dominion has always had 100% cost responsibility,” DP&L said in a March 24 filing with the Federal Energy Regulatory Commission.
But after changing its local planning criteria last year, Dominion asked PJM to study the need for the project and received permission to change its designation to baseline, categorizing it as a new line and allowing Dominion to export more than half of its expense.
The new allocation scheme will charge DP&L about $1 million, the Ohio utility said, noting that larger PJM stakeholders such as Commonwealth Edison and American Electric Power will be expected to pay six to seven times that much. While AEP has filed a motion to intervene in the case, DP&L is the only entity to have submitted a protest.
The Dominion project was described as a supplemental project in a reliability analysis update at PJM’s July 10, 2013, Transmission Expansion Advisory Committee.
The criteria PJM used to redefine the transmission project, DP&L said, “was not developed by PJM for consistent application across PJM, but was instead based solely on ‘Dominion Planning Criteria.’ In other words, Dominion’s unilateral change of its own criteria for construction within its own zone has resulted in a recharacterization of this project from a supplemental project for which it would bear 100% of the costs to a baseline project for which about 52% of costs are exported to other zones.”
DP&L is asking FERC to reject the project or defer consideration to allow PJM transmission owners time to revise the Tariff to prevent them from unilaterally revising local planning criteria to secure baseline status for their projects.
DP&L said Dominion is exploiting what it called a loophole resulting from an Order 1000-related filing by PJM TOs that permits a portion of the costs of new 500-kV baseline projects to be shared by load-serving entities throughout the RTO.
WILMINGTON, Del. — The MRC endorsed the following Thursday:
Manual 11: Energy & Ancillary Services Market Operations — Updates manual to include a method for screening of demand bids by load-serving entities, as approved by the Federal Energy Regulatory Commission in November (ER14-2976). Bids are limited to the LSE’s calculated zonal peak demand reference point for the day plus whichever value is more, 30% of the reference point or 10 MW. PJM said the need for such limits was illustrated by the default of a retail provider in January 2014 after it mistakenly entered a demand bid about 100 times its actual load. (See MIC Briefs.)
Marji Phillips of Direct Energy said the change is requiring her company to confirm its loads daily by phone with Pepco Holdings Inc. because of problems with Pepco’s electronic system. “Every day, we have no idea whether we will be able to meet the obligations we have to meet,” she said. “It is killing all the LSEs in the Pepco area — Delaware, New Jersey, D.C. It’s a tremendous problem.”
Manual 12: Balancing Operations — Revisions describe the required regulation range, specifying that resources are required to symmetrically provide the total amount of regulation assigned. The changes also detail how performance evaluations are conducted and further define the basepoint around which the resource will be regulating.
Non-substantive revisions regarding financial transmission rights. The changes concern clearing deadlines, bilateral trades and Tariff references.
A change to demand response modeling assumptions used in load deliverability analyses for the Regional Transmission Expansion Plan. The new method would use the average of the last three years of committed DR for each zone. (See Change Proposed in PJM Demand Response Modeling.)
Revisions to Manual 18 Address Capacity Performance
The MRC discussed manual changes needed to implement PJM’s Capacity Performance proposal, which is pending before FERC (EL15-29). The proposal would penalize underperforming units and reward those that over-perform. (See PJM Defends Capacity Performance Proposal; Drops Change for LSEs.)
The revisions, which affect Manual 18: PJM Capacity Market, would allow capacity resources to avoid performance penalties by requesting approval of retroactive replacement transactions within three business days after a delivery day that includes a performance assessment hour.
That would allow a participant with over-performing uncommitted capacity to replace underperforming committed capacity in the same account, Vice President of Market Operations Stu Bresler said.
Market Monitor Joe Bowring said the changes present an opportunity for economic withholding. “It is an incentive to withhold, and that is one of our concerns,” he said.
Members will be asked to endorse the revisions at the next MRC meeting if FERC has approved the proposal by then.
Members Committee
CTS Product, Fee for $20M-plus Projects Approved
The Members and Markets and Reliability committees endorsed a $30,000 non-refundable fee for studying proposed transmission improvements with estimated costs of $20 million or more. The fee, which PJM would evaluate for two years, would apply to both greenfield projects and upgrades by incumbent transmission operators. FERC last month rejected an earlier proposal to exempt transmission upgrades from the study fee. (See FERC Rejects Fee on Greenfield Transmission Projects.)
The MC also endorsed Tariff and Operating Agreement revisions to implement Coordinated Transaction Scheduling (CTS) with MISO. The objective is to improve interchange scheduling efficiency by aligning energy scheduling with interface prices and adding the option for market participants to schedule energy transactions using an interface bid. (See PJM, MISO Reach Agreement on New Interchange Product.)
Little Rock Operations Center Opened to Serve MISO’s Southern Expansion
MISO has opened a $22 million regional operations center in Little Rock.
The 50,000-square-foot facility works in concert with MISO’s control facilities in Carmel, Ind., and Eagan, Minn.
The facility was needed after MISO expanded its territory into the Gulf Coast states following Entergy’s decision to join the RTO.
The facility initially will employ 42 people. “We hope to use our presence here not only as a resource to the greater Little Rock community but as a magnet for other energy-sector firms,” MISO President and CEO John Bear said.
Crowd Attends Hearing on Refinery’s Bid for Permit on Cooling Water
More than 500 people showed up for a hearing on Delaware City Refinery’s bid to renew permits governing its cooling water intake and discharge. The majority of the crowd was made up of refinery workers and supporters, although a vocal group of environmentalists — some in fish costumes — gathered outside the hearing room at Gunning Bedford Elementary School. They objected to the state Department of Natural Resources and Environmental Control’s issuance of the permit, which granted refinery owner PBF an extension to assess options.
“DNREC has clearly compromised its ability to be an independent arbiter over this matter,” Delaware Riverkeeper Network Director Maya van Rossum said. “They need to step back and request that the Environmental Protection Agency take the lead in order to remove both the actual and appearance of bias. This sweetheart deal needs independent agency review.”
The Energy and Public Utilities Committee on March 26 endorsed Senate Bill 1585, which would establish a “Low Carbon Portfolio Standard.”
Under the proposed legislation, beginning next year, 70% of the electricity delivered by Commonwealth Edison, which is owned by Exelon, and Ameren would have to be generated by “clean energy” sources: solar, wind, hydro, nuclear, tidal, wave and clean coal.
The fee to customers, which would average $2/month, would fund low-carbon energy credits to be auctioned by the Illinois Power Agency.
The legislation is one of three clean energy measures before the General Assembly. Environmental and consumer advocates are backing the Clean Energy Jobs Bill (SB1485, HB2607).
Meanwhile, ComEd has proposed legislation to foster growth in clean energy for households and microgrids (HB3328, SB1879).
Regulators Again Probing IPL After Two More Downtown Blasts
The Utility Regulatory Commission has opened an investigation into Indianapolis Power and Light’s downtown underground network after blasts sent manhole covers flying downtown.
Two incidents that occurred in March were the latest in several well-publicized explosions dating back four years.
In 2011, the IURC commissioned a study by Atlanta-based O’Neill Management Consulting that found IPL can expect three to five such incidents per year if it didn’t improve maintenance procedures for its downtown electrical network.
Under the nervous gaze of civic leaders, IPL recently installed manhole cover restraining devices in high-traffic areas downtown in anticipation of the NCAA Men’s Basketball Championship in April.
The underground blasts come at a time when IPL is seeking a rate hike that would generate $68 million more in annual revenues. It’s IPL’s first base rate case since 1995.
In light of the recent incidents raising safety and reliability concerns, Citizens Action Coalition, a group representing IPL ratepayers, said it is “unconscionable” that regulators allowed IPL to operate for nearly 20 years without a base rate case.
A former IPL executive, Dwane Ingalls, has alleged that IPL skimped on network maintenance to maximize the dividend the utility sent to parent AES.
House Bill Would Protect Property Owners from ‘Merchant’ Tx Lines
A House committee passed a bill that would protect property owners from losing their land to transmission line developers. The main targets of the bill, offered by House Government Oversight Committee Chairman Bobby Kaufmann, are transmission lines linking out-of-state utilities or companies. Clearly targeted is the Rock Island Clean Line, a proposed $2 billion line that would run from northwest Iowa to Illinois.
House Democrats opposed House Study Bill 222, saying it takes away power from the Utilities Board. “We have a process in place,” Rep. Phyllis Thede said. “We want to make sure people are safe with their land but we also want to make sure the process works.”
Westar Wants Small Generators to Pay Higher Fixed Rates
A case before the state Corporation Commission could mean higher fixed rates for those who produce their own power through solar or wind generation at their homes or businesses. Topeka-based Westar Energy is targeting those smaller generators for higher fixed rates, rather than raising such rates for all customers.
“We just want to make sure it’s fair to any customers, whether they decide to generate some of their own power or not,” said Jeff Martin, the company’s vice president for regulatory affairs.
But solar advocates see it as aimed at small-scale renewable energy. “This is another attempt by the utility to kill solar in Kansas,” said Aron Cromwell, who co-owns a solar installation company.
The Public Service Commission has ordered refunds to some former customers of People’s Power and Gas, a competitive supplier that operated in Emera Maine’s territory in 2013 and 2014. The commission found that People’s charged a $25 monthly “service fee” without notifying customers that it would do so. An investigation revealed that the company collected about $128,070 from about 2,800 customers.
The company filed for bankruptcy shortly after collecting the fees, so the PUC is using People’s security deposit to refund the money.
Another Chicken Poop-to-Power Plan for Maryland’s Eastern Shore
Poultry giant Perdue wants to team with a New Hampshire firm to build a $200 million plant that will be fueled by chicken manure, something that is abundant on the Eastern Shore, a major poultry producing region in the country.
AgEnergyUSA, a firm that is already building a similar plant in Colorado, said its plant would put the manure to good use and keep it out of the waste stream, where it has been identified as a polluter of the Chesapeake Bay. AgEnergyUSA is teaming up with Perdue and French power company EDF Renewable Energy. The plant would use “anaerobic digestion” to break down 200,000 tons of poultry “litter,” a combination of chicken manure and organic bedding, a year. Methane would be extracted, which could then be used for power generation and other industrial uses. The remaining waste would be mined for its nitrogen and then sold back to farmers as fertilizer.
Wind Energy Translates into 30 Billion Gallons of Water Saved Since 2004
Wind energy continues to grow not only as an important source of emission-free electricity, but as a means of saving water as well.
According to the state Department of Revenue and Department of Natural Resources, wind energy production in the state has saved 30 billion gallons of water since 2003. Studies from the departments say that energy production from fossil fuels needs 541 gallons of water for each megawatt of energy produced. Since 2004, wind facilities in the state have produced more than 56 million MW.
“Minnesota wind development is in many ways attractive, because it’s a form of industrial development where the primary alternatives are typically focused on agricultural processing, which is generally water intensive,” said Mark Lindquist, program manager for Energy and Biofuels with the state Department of Natural Resources. “So here’s a new industry that puts zero pressure.”
Senate Approves Duke’s Purchase of NCEMPA Generating Assets
The state Senate last week approved Duke Energy’s bid to buy the generating assets of the North Carolina Eastern Municipal Power Agency in a deal valued at more than $1 billion. NCEMPA holds partial ownership in a number of Duke power plants in the state. The $1.2 billion deal includes plant shares, fuel and parts inventories at Brunswick Units 1 and 2, Mayo Plant, Roxboro Plant Unit 4 and the Harris Nuclear Plant. Combined, the ownership interests amount to about 700 MW. The deal received approval from the Federal Energy Regulatory Commission in December. NCEMPA said the deal will mean lower electricity prices for its customers in 32 cities and towns in eastern North Carolina. The House is expected to vote on the measure soon.
State’s Rig Count Falls Below 100 for First Time in 5 Years
The slump in oil and gas prices is spurring exploration companies to shut down operating rigs, leading to a drop in the number of rigs operating in the state to fewer than 100 for the first time in five years. A recent count showed 98 rigs drilling in the state, 100 fewer than there were at the same point a year ago. The state is the No. 2 oil producer in the U.S., behind Texas.
Wind Farm Developers Have to Start Over After Applying for Wrong Permits
The developers of a wind farm in Lincoln County will have to start the permitting process over after the county commission ruled that they applied for the wrong permits for five test towers. Dakota Power Community Wind should have applied for a temporary-use permit for its five test towers, not conditional-use permits. The ruling gives opponents of the planned 500-MW wind farm another chance to convince the county commission to rule against the project.
County Fights Plan to Switch Pipelines from Gas to ‘Gas Liquids’
The Greater Dickson County Gas Authority is teaming with other utility districts in the state and in Alabama to fight a plan by a pipeline company to switch its operations from carrying natural gas to “natural gas liquids.”
Tennessee Gas Pipeline Co., a subsidiary of Kinder Morgan, wants to abandon nearly 1,000 miles of natural gas pipeline and then sell them to Utica Marcellus Texas Pipeline, another Kinder Morgan affiliate. The new owners would use the pipelines to transport natural gas liquids, a different product. The switch to natural gas liquids will mean a need to upgrade compressors and other parts of the pipelines, and that would translate into higher costs for customers all along the route, according to the Greater Dickson filing.
The city of Georgetown’s municipal utility announced plans to cut the cord to all fossil-generated electricity and use wind and solar only to meet its energy needs. It will be the state’s first city-owned utility to do so.
The city announced a deal with SunEdison to provide 150 MW of solar starting next year. Last year, it signed a contract that runs through 2039 for 144 MW of wind energy. The city said it recognizes that the two agreements will mean fewer emissions for the region but that it was the numbers that made them appealing. “It was really primarily a price decision,” city spokesman Keith Hutchinson said.
Both the wind and solar agreements locked in cheaper prices than what it was paying to the Lower Colorado River Authority, Hutchinson said. He also said it provides a hedge against increases from fossil generation going forward. “We don’t know what’s going to happen in the future for regulations for fossil-based fuels,” Hutchinson said. “This really removes that element from our price costs going forward.”
PSC Approves Controversial 180-mile Tx Line After Xcel Joins
The Public Service Commission approved a 180-mile, $580 million transmission line that it previously blocked when it was proposed by non-utility company American Transmission Co. Xcel Energy’s Northern States Power Co. joined the 345-kV line project as partner after it was initially rejected, and MISO endorsed it and designated it a critical path for providing power and reliability to the state. Because of that designation, state residents will pay about 15% of the line’s cost. It is to run from Madison to LaCrosse and is crucial for moving wind power generated from Iowa and Minnesota.
“Construction of the line is critical for the development and delivery of several thousand megawatts of clean, low-cost wind power,” said Beth Soholt, who runs Wind on the Wires, a renewable energy advocacy organization representing clean energy groups and wind energy companies. “The new line will also reduce congestion in the MISO energy market and add to the reliability of the overall MISO grid.”
WILMINGTON, Del. — The PJM Markets and Reliability Committee on Thursday tabled voting until next month on a proposal to tighten rules on lost opportunity costs for combustion turbines.
PJM and Independent Market Monitor Joe Bowring supported the change, saying that current rules provide incentives for units to offer and clear in the day-ahead market but not in the real-time market.
Under the proposal, units with start-up and notification times of no more than two hours and minimum run-times of two hours would be paid lost opportunity costs if they are not dispatched. Resources with real-time startup and notification times or minimum run-times of more than two hours will not receive lost opportunity payments unless PJM bars them from running in real time to avoid transmission overloads.
PJM would use the generator’s energy schedule to calculate opportunity costs except for self-scheduled units, for which the higher of the available cost- or price-based curves would apply.
“The two-hour start notification and two-hour minimum run are designed to be aligned with what the dispatch operators can see,” said Stu Bresler, PJM vice president of market operations.
Bowring called the proposal “clearly an improvement.”
But Ed Tatum of Old Dominion Electric Cooperative raised an objection to limiting LOC compensation to units with minimum run times of two hours or less, saying it was too restrictive.
Susan Bruce of the PJM Industrial Customers Coalition said dropping the restriction would be “cherry picking” on a compromise that stakeholders agreed to at the Energy Market Uplift Senior Task Force, where the proposal won 84% support last month.
With two objections and one abstention, the MRC decided to send the issue back to the task force for additional discussions at its meeting tomorrow. The MRC will vote on the current proposal at its April meeting, considering any friendly amendments or alternate motions developed at the task force meeting.
Separately, members approved a proposal that was unanimously approved by the task force, instructing the Planning Committee to treat uplift as an input to analyses under the Regional Transmission Expansion Plan.
Opponents of a pipeline that would move shale gas from northeastern Pennsylvania to New York and New England markets made good on a promise Friday to go to court to force a rehearing of federal regulators’ approval of the project.
The Federal Energy Regulatory Commission issued a rehearing order on Jan. 27, but the Stop the Pipeline group says that is merely a procedural move as the regulator avoids its petition “to grant, deny or otherwise act on the merits of STP’s Jan. 2, 2015, request.” The group wants FERC to hold a rehearing by May 1, it said in its plea for a writ of mandamus from the U.S. District Court of Appeals for the Second Circuit in New York (15-926). (See Constitution Pipeline: Headed to Completion or to Court?)
The proposed 124-mile Constitution Pipeline won a certificate of public convenience and necessity from FERC on Dec. 2. The commission issued its Final Environmental Impact Statement on Oct. 24.
The actions were taken before the project received other regulatory approvals, including water quality permits under the Clean Water Act’s section 401, which opponents say is a violation of the law.
The project is currently under review by the New York Department of Environmental Conservation, which closed its public comment period on Feb. 27.
Without action on the rehearing, STP says it is in “administrative limbo” while it also is denied the opportunity to challenge FERC’s order in court. STP said Constitution started more than 120 eminent domain proceedings in mid-December, and by Feb. 21 a district court had given Constitution the right to condemn the properties and enter potential pipeline sites without the owners’ permission.
“The commission has caused, and continues to cause, significant injury to STP’s members … before it has even been determined that the pipeline project will ultimately be authorized to proceed,” the petition states.
Constitution is on an aggressive schedule, with construction scheduled to start this year and the pipeline in operation by late 2016. It would connect the Pennsylvania gas fields with an interstate pipeline that runs from the Southwest to New England.
“FERC has already thoroughly evaluated the project and approved this vital infrastructure, agreeing that the plan we have developed minimizes environmental impacts. We are looking forward to obtaining final clearances so we can begin construction this summer,” Constitution spokesman Christopher Stockton said.
Multiple stakeholders have asked the Federal Energy Regulatory Commission for a rehearing of its Feb. 19 ruling involving MISO’s system support resources agreements at a trio of aging power plants in Michigan’s Upper Peninsula.
The February ruling affirmed FERC’s previous finding that MISO could no longer allocate broadly within the American Transmission Co. pricing zone the SSR costs of keeping open three aging plants — most notably the Presque Isle generating station near Marquette. (See FERC Upends MISO’s SSR Cost Allocation Practice.)
The March 23 filings seek rehearing on several parts of the commission’s February order that required MISO to file a new study method to identify entities that benefit directly from the three plants and allocate costs of the agreements directly to them.
Double Recovery
One of the requests was filed jointly by Tilden Mining and Empire Mining Partnership, which last October filed a protest alleging Presque Isle owner We Energies was recovering SSR costs through the utility’s retail rates as well as through MISO’s SSR surcharges. Last November, FERC acknowledged the double recovery issue was raised by several stakeholders. It accepted a replacement SSR but said it would be subject to refund.
But the mines complain FERC declined to address concerns about double recovery of fixed capital costs through We Energies’ retail rates.
“FERC failed to engage in reasoned decision making and abdicated its statutory responsibility to assure that MISO’s federally regulated SSR rates are just and reasonable in the context of shared state and federal regulatory responsibility,” the mines said (ER14-1242).
“Whether or not the commission likes it, the fact is that the state-authorized recovery of [Presque Isle] costs through [We Energies’] 2014 Wisconsin retail rates included full recovery of the Wisconsin share” of the utility’s Presque Isle costs.
The Sault Ste. Marie Tribe of Chippewa Indians made the same argument in a separate filing (ER14-2952-002).
The City of Mackinac Island also requested rehearing, also citing the mines’ reasoning. The city also alleges that MISO should not have authorized an SSR agreement for Presque Isle because the plant’s owner had not made a “definitive” retirement decision (EL14-103).
Michigan PSC
The Michigan Public Service Commission filed a 20-page request saying FERC should reverse its retroactive allocation of SSR costs for Presque Isle, White Pine and Escanaba plants (ER14-2952). FERC established April 3, 2014, as the retroactive date.
FERC’s Feb. 19 order was a win for the Wisconsin Public Service Commission, which last year alleged MISO improperly allocated SSR costs on a pro rata basis to all load-serving entities in the ATC footprint.
The Wisconsin PSC argued that 92% of the projected $52.2 million in annual fixed costs under the original Presque Isle SSR would be allocated to load serving entities in Wisconsin even though they would receive only 42% of the benefits from the plant’s continued operation.
The city of Escanaba, Mich., asked the commission to clarify that its rejection of MISO’s cost allocation proposal does not bar “a methodology using all or part of either an optimal load shed methodology or some use of [local balancing authority area] boundaries under certain circumstances, if MISO’s compliance process fails to produce a suitable substitute” (EL14-34).
Challenge to Rate Design
But the order has also drawn additional opponents, including Integrys Energy Services. In its rehearing request, it alleges the commission erred by applying a new rate design methodology to the ATC zone different than that applied in MISO previously and by applying that new rate design retroactively (ER14-1242).
“On rehearing, if the commission is going to require a new methodology for allocating SSR costs throughout MISO, it should apply these changes prospectively and only after the methodology has been shown to be just and reasonable,” Integrys said.
The recent filings are just the latest in the ongoing Presque Isle saga. In mid-March officials announced that a deal to sell Presque Isle to Upper Peninsula Power would be scrapped. We Energies will retain the plant now that Tilden and Empire will come back as customers of Presque Isle. The mines decided two years ago to purchase power from other providers under Michigan’s partially deregulated electricity market.
WILMINGTON, Del. — PJM members were asked last week to consider allowing generators to revise their offers hourly to reflect changes in gas prices.
ISO-NE graphical description of self-dispatch unit using pricing flexibility.
PJM is the only RTO in the U.S. that does not allow generators to vary their cost- or market-based offers hourly, GT Power Group’s David Pratzon, representing Calpine, said in a proposed problem statement presented to the Markets and Reliability Committee on Thursday.
That means gas-fired generators must submit a single price for the day-ahead and real-time energy markets even though gas prices can change in midday. More flexible pricing would allow generators to reduce the risk premiums they include in their offers because they would have greater assurance that their prices reflected fuel costs, Pratzon said.
The most recent RTO to allow hourly price changes is the gas-dependent ISO-NE, which adopted the new rules in December.
In addition to benefiting gas-fired generators, Pratzon said, the flexibility also would be useful to energy storage resources and industrial customers whose opportunity costs for cutting loads can vary based on the hour of the day. “I can see a variety of different classes of resources that this would be useful to,” he said. “We don’t know all the ways this optionality could be used.”
PJM currently requires generators to select a single cost schedule for each unit’s day-ahead offer.
In February, PJM introduced an improvement to eMKT allowing gas-fired generators to make limited intraday changes in price schedules.
The change allows generators that did not receive day-ahead commitments and were not picked up in the reliability assessment and commitment (RAC) run to update their fuel prices three hours in advance of the operating hour. Units with day-ahead commitments and those selected in the RAC run can switch prices after the end of their last committed hour. Units committed in real time remain unable to change their cost schedules until released.
Previously, there was no way for generators to change their prices once PJM locked them at 6 p.m. the day before.
Stakeholders at the MRC meeting expressed support for the additional flexibility sought by Calpine.
“We think this is a critically needed improvement to the energy market,” Dominion’s Lisa Moerner said. “It has been working incredibly well” in ISO-NE, she added.
The proposal “will do a lot to harmonize gas-electric coordination that we’ve been trying to achieve,” said Marji Phillips of Direct Energy.
Dan Griffiths, executive director of the Consumer Advocates of PJM States, said his members “don’t have a principled objection” to the potential change but are concerned about generators claiming unreasonably high gas prices.
Independent Market Monitor Joe Bowring echoed Griffiths’ concern. “Let’s not forget what the reason was for the rule requiring only one offer per day by generating units,” Bowring said. “It was to prevent the exercise of market power.
“It’s important this doesn’t become a tool for the exercise of market power, which it easily could be used to do. There are good ways to implement this and bad ways to implement it.” Nevertheless, Bowring said, “it’s clearly a worthy discussion” to have, calling it “potentially efficiency enhancing.”
The MRC will vote on the problem statement next month. Pratzon suggested a new senior task force consider the issue.
Pratzon said it took ISO-NE about 18 months to implement its changes from the beginning of discussions. By learning from the RTO’s experience, he said, PJM might be able to make the change before next winter.
However, even if stakeholders agree quickly on new rules, Pratzon acknowledged, required software changes could delay implementation.
A 17-month Minnesota rate case covering 2014 and 2015 gives Xcel Energy the rate hike it was looking for, but it will also provide a small refund to electric customers who were paying a 4.6% interim rate hike from last year. The Public Utility Commission approved the hike, but due to the complexity of the case, and the fact that it covers two years, a final ruling on just how much the hike will be won’t be decided for several more weeks.
It will be the fifth successive rate hike for Xcel’s Minnesota customers. The company said it may seek another hike next year, as well, because the PUC rejected its proposal that would have rolled all the hikes into one. Xcel sought a 10.4% hike, which would have translated into $291 million. The final hike is expected to be close to a 9.72% return on equity, or about $191 million. The PUC also denied the utility’s request for money to cover cost overruns at its Monticello nuclear plant.
Exelon’s Oyster Creek Station Goes Back Online After 6 Days
Oyster Creek (Source: Exelon)
Exelon Nuclear’s Oyster Creek Generating Station resumed full power on Saturday after being offline since the previous Sunday. The plant automatically shut down after problems were discovered in a system that controls the plant’s steam pressure. Technicians worked through the week and corrected the problem Friday.
The company didn’t give any further details on the problem. The 636-MW station is the oldest in the company’s fleet, and is scheduled for decommissioning in 2019. The plant received a “white” performance indicator from the Nuclear Regulatory Commission because of four unplanned shutdowns, or “scrams,” in 2013 and 2014. It received a “yellow,” or more serious, finding last month after problems were found with two of five reactor pressure valves.
American Electric Power says it has hired Morgan Stanley to explore alternatives for its competitive barge transportation subsidiary, AEP River Operations, which operates river barges serving its unregulated power plants.
GE to Auction 315 MW of TSRs in Linden VFT in April
GE Energy Financial Services in April will auction 315 MW of bi-directional electricity transfer capacity across its Linden Variable Frequency Transformer smart grid project.
It will sell 90 MW of transmission scheduling rights that will become available on June 1, 2016, and 225 MW of TSRs available as of June 1, 2018.
The TSRs can be used to sell energy and capacity sourced in PJM into NYISO and vice versa.
In an agreement with the staff of the Public Utilities Commission of Ohio, American Electric Power has agreed to cut the cost of refusing its smart meters from $31/month to $24. The commission still needs to sign off on the agreement after public hearings. If the agreement is finalized, it will mean customers will be paying $288/year to keep an old-style analog meter, as opposed to AEP’s initial plan, which would have cost $382/year. One party that didn’t sign on to the agreement was the Office of Ohio Consumer’s Counsel, which feels the charge should be just $10.49/month. So far, the company has installed 132,000 meters. It plans to expand its GridSmart system to 894,000 homes and businesses. It said the price of refusal covers the cost for the time and travel it takes for employees to read the old-style meters.
PECO Seeks $190 Million Rate Hike for Improvements
PECO has filed a request with the Public Utility Commission to raise rates about 4.4%, or $190 million, to pay for system upgrades. If approved, it would mean an increase of about $6.55/month for the average residential user. PECO says its system needs about $300 million in work each year, which includes equipment replacement and upgrades. It said it is spending an additional $275 million over the next five years to make the system less vulnerable to storm damage.
Dominion to Build $1 Billion, 1,600-MW Plant in Virginia
Dominion Virginia Power has announced the planned construction of a 1,600-MW natural gas-fired, combined-cycle generating plant in Greensville County, Va. It said the plant will cost about $1 billion and should go into operation in 2019. It has already filed for zoning permit applications, and more regulatory applications will be filed by July. Greensville County is in southern Virginia.
Work Starts on ComEd’s Grand Prairie Gateway Tx Line
Commonwealth Edison contractors began clearing trees along the route of the Grand Prairie Gateway transmission line this month. “We’re clearing the route in areas where we will be installing structures this summer and fall,” ComEd spokesman David O’Dowd said. The project was approved over vocal opposition in October by the Illinois Commerce Commission.
The line will run 60 miles through Ogle, DeKalb, Kane and DuPage counties. While construction has started, several groups have petitions to intervene and hope the ICC will force ComEd to change the line’s route. But ComEd doesn’t see that happening.
“We anticipate that certain parties will challenge various aspects of the ICC order in the appellate court, but the ICC decision is well-reasoned and consistent with Illinois law,” O’Dowd said. “We’re proceeding to implement the ICC order as required.”
Complaint: Direct Energy’s Procedures Kept Unhappy Customers from Switching
A ruling by the Canadian Competition Tribunal gives the country’s Competition Bureau the green light to pursue a case against Direct Energy Marketing for water heater return policies and procedures that were aimed at preventing consumers from switching to competitors.
The action against Direct Energy alleges that many Ontario-based customers had little choice but to continue their rental agreements even if they wanted to purchase a water heater or switch to another rental provider.
The bureau is seeking a $15 million penalty and an order prohibiting Direct Energy from engaging in anti-competitive conduct in the future.
The Federal Energy Regulatory Commission last week approved MISO’s proposal to exempt some owners of retiring coal plants from capacity deficiency penalties, rejecting complaints that the Tariff change would undermine reliability and result in market power abuses.
MISO’s Tariff change applies to generation operating during the Planning Resource Auction offer window that will retire or suspend operations between the March 31 end of the window and the end of the 2015-2016 planning year on May 31, 2016.
The change will allow generators the option of not making offers into the PRA without facing liability for physical withholding. It will apply only to the 2015-2016 planning year and only to generators for which MISO has determined a system support reliability agreement is not necessary. (See MISO Seeks to Ease Coal Retirement Conundrum.)
Last year, several generators complained to FERC that there was no clear mechanism within the MISO Tariff that would permit them to buy replacement capacity through the auction to cover the six-and-a-half-week period between the planned retirement of the coal units and the end of MISO’s planning year.
In its March 24 ruling, the commission called MISO’s proposal “a reasonable solution for resources that cannot offer a full-year capacity product” in the upcoming auction and that it had demonstrated that it will not harm reliability (ER15-918).
The commission rejected Indianapolis Power and Light’s argument that the changes could effectively move up the retirement date of units scheduled to retire during the 2015-2016 planning year.
“Market participants with units affected by the proposed Tariff language have already submitted proposed retirement or suspension dates in their respective Attachment Y notifications,” the commission said. “There is no evidence in the record that these market participants will accelerate their respective retirement dates, nor do we see an incentive to do so if they are still participating in the daily energy and ancillary service markets.”
The order also dismissed requests by the Wisconsin Public Service Commission and the Illinois Commerce Commission that the change be rejected because it could cause capacity prices to increase or provide an incentive to exercise market power.
“We note that auction prices would likely increase even in the absence of MISO’s proposal, as the market participants owning these partial-year resources would have to obtain other resources for the remainder of the year — and factor the costs of the replacement resource into their offers,” the commission said. “Inasmuch as the Illinois Commission has not demonstrated how resources not offered into the auction under MISO’s proposal would result in significantly higher revenues than would occur if they offered their capacity including higher cost replacement capacity, we find no basis for its claim that the MISO proposal incentivizes generators to exercise market power.”
Resources that do not offer into the 2015-2016 PRA, but continue to participate in MISO’s energy and ancillary services markets during the portion of the year that they remain in service, will remain subject to MISO mitigation rules, the commission added.
In a related order, the commission rejected Wisconsin Power and Light’s request for a waiver of MISO’s must-offer requirement over its retirement of its 200-MW Nelson Dewey coal-fired units in southwestern Wisconsin (ER15-872). The units must retire by Dec. 31 under the terms of a 2013 consent decree with the Environmental Protection Agency and the Sierra Club.
The commission said its approval of the MISO Tariff changes “provide Wisconsin Power relief from the misalignment between [its] … retirement deadline and the timeline of the 2015-2016 planning year.”
A 277-page report on an explosion at the Department of Energy’s Waste Isolation Pilot Plant last year concludes that the incident was caused by … cat litter.
That’s right: Workers at Los Alamos National Laboratory have long used cat litter to absorb liquid nuclear waste. But not all cat litter is alike, as pet owners around the world have long known. Instead of using inorganic clay litter, workers apparently used Swheat Scoop organic litter inside troubled drum 68660.
And while Swheat Scoop may appeal to those seeking a green solution to cat cleanup, it does not work well in certain industrial settings. “Experiments showed that various combinations of nitrate salt, Swheat Scoop, nitric acid and oxalate self-heat at temperatures below 100 C. Computer modeling of thermal runaway was consistent with the observed 70-day birth-to-breach of drum 68660,” according to the report.
The incident caused the drum to burst open, spreading radioactive plutonium, americium and uranium throughout the facility. The plant closed after the incident, but the department hopes to open it next year.
DOE Pledges $450 Million for Modular Reactor Design
The Department of Energy has said it will provide $450 million for design studies for small modular reactors. It said the money will go toward engineering, design certification and licensing for up to two SMR designs over the next five years. SMR designs call for reactors about a third of the size of the current 1,000-MW designs now in use. Experts say the smaller size translates into lower construction costs and increased safety and siting potential. The latest funding announcement is aimed at pushing forward designs by 2022 that have the commercial potential.
The Nuclear Regulatory Commission is questioning some of Entergy’s proposed uses of the Vermont Yankee decommissioning funds. Entergy has said it wants to use some of the $660 million in the fund to pay for its property taxes, some insurance and security costs, as well as its membership in the Nuclear Energy Institute.
“We have identified several line-item expenditures that, at least at first glance, do not appear to be permissible under NRC regulations in this area,” NRC spokesman Neil Sheehan said. NRC is asking Entergy for more information before making a ruling on the spending. Any disbursements from the fund in the early stages of decommissioning mean it will take longer for it to reach $1.2 billion, the estimated total cost of dismantling and cleaning up the reactor site.
Virginia Senator Questions FERC on Pipeline Hearing Rules
Warner
Virginia Sen. Mark Warner has written a letter to the Federal Energy Regulatory Commission after opponents to a proposed pipeline through the rural central part of the state said they felt short-changed by the public input process.
Warner asked FERC Chairman Cheryl LaFleur to make clearer the process for signing up to comment during public meetings. The request came after opponents to the proposed Atlantic Coast Pipeline showed up at a scoping meeting in Nelson County earlier this month. They had been told to show up a little before the 7 p.m. meeting to sign up to comment, and found that Dominion Resources, one of the pipeline’s owners, had already signed up dozens of supporters to speak.
Friends of Nelson member Ernie Reed said the public comment process needs to slow down and allow all members who want to talk a chance to be heard. “To just give it the time required and the time that’s necessary is all we’re asking, but it’s the type of an ask that Sen. Warner has now made, and we’re hoping FERC responds in a positive way and gives us and the rest of the public the opportunities that we deserve,” he said.
FERC Tells Planners of Ohio Pipeline to Find Less Populated Route
The Federal Energy Regulatory Commission told the company planning to build a 103-mile natural gas pipeline through northeastern Ohio to find a less populated area for the project’s path. Texas-based Nexus Gas Transmission said it will consider the request, which came a day after the city of Green proposed the pipeline be moved away from heavily populated areas.
The proposed pipeline is being built to move gas from Ohio’s Utica Shale fields. FERC noted in its letter to Nexus that the project is generating “a large volume of public comments.” The city, in its filing with FERC requesting that the pipeline route be adjusted, said the route was “hastily drawn and ill-conceived with no respect to the human and environmental concerns.”
Departure of Harry Reid Could Spell Rebirth of Yucca Repository
The announcement by Sen. Harry Reid (D-Nev.), long an opponent of the Yucca Mountain nuclear waste repository, that he would not seek reelection in 2016 could signal a rebirth for the project. According to Bloomberg, Senate Democrats who had been loath to vote against Reid on the project may be more likely to with him gone. The project, which has so far cost U.S. taxpayers $15 billion, went dormant after the Obama administration said it wasn’t a “workable option” and cut funding.
IG Investigating NRC Actions in PG&E Quake Standards
The Nuclear Regulatory Commission’s Office of the Inspector General is reviewing the agency’s actions in allowing Pacific Gas & Electric to make changes to its earthquake safety standards without a public hearing. PG&E made the changes in response to a discovery of more nearby fault lines than originally thought.
Fault lines were discovered after construction of the plant began in 1968, but more were found in 2011, and in 2013 PG&E changed the plant’s final safety report to use a less conservative method of making seismic-damage calculations.
Investigators are looking into that change of procedure, as well as charges by a former NRC inspector at the plant. That inspector, Michael Peck, said the plant was no longer operating within the parameters of its license. Peck has said his concerns were ignored by both NRC and PG&E. “The ground motion is way beyond what was analyzed in the original license,” he said in an interview Wednesday. “They basically bypassed that whole process. We’re not enforcing it, and I don’t know why. We gave them a pass.”
PG&E said the plant is observing all NRC regulations and is safe.
First Ocean Wind Energy Research Facility to be Built off Va. Shore
A 12-MW offshore wind energy test facility will be built off the coast of Virginia Beach, the first research lease to be executed in federal waters. The Bureau of Ocean Energy Management announced that two 6-MW wind turbines will be installed and operated by Dominion Virginia Power. Information gathered by the test facility will be used to help researchers and developers of future wind energy facilities offshore, according to BOEM.
The towers will be built about 24 miles off Virginia Beach. Power is to be delivered to the grid through subsea cables.
Environmentalists applauded the news. “Full-scale development of offshore wind can create thousands of clean energy jobs and address climate change while displacing Dominion’s plans for new gas power plants and an unwise investment in a new nuclear reactor at North Anna,” said Glen Besa, director of the Virginia Chapter of the Sierra Club.
The Illinois Municipal Electricity Agency will not be able to use capacity resources outside of the Commonwealth Edison locational delivery area to fulfill its internal capacity requirement for the 2018/19 delivery year, the Federal Energy Regulatory Commission has decided.
In its ruling, FERC distinguished IMEA’s waiver request from a similar one it granted last year (ER14-1681). In that decision, FERC deemed IMEA did not have adequate notice to prepare for its ComEd LDA being modeled for the first time with a separate variable resource requirement curve.
“PJM and IMEA note that the treatment of IMEA’s external resources is being addressed through the PJM stakeholder process, which will allow for concerns related to reliability and harm to third parties to be vetted and, as appropriate, inform any proposed changes to the Reliability Assurance Agreement or other PJM governing documents,” FERC said.
“We recognize that denial of IMEA’s waiver for the 2018/2019 delivery year will require IMEA to adjust its capacity portfolio for the planning year, but we encourage IMEA and PJM to continue to work on a longer term solution.”
Dayton Power & Light is protesting a $106 million transmission project by Dominion Resources under PJM’s 2015 Regional Transmission Expansion Plan because of a change in how the project’s costs will be allocated (ER15-1344).
