The Federal Energy Regulatory Commission said last week it will no longer allow protesters to read statements before its open meetings.
Borrowing language from the Federal Communications Commission, FERC issued an order modifying the Code of Federal Regulations “to clarify that the term ‘observe’ does not include disruptive behavior.”
Over the past year, FERC has been the target of environmental activists over its approval of natural gas pipelines and export terminals. At the commission’s January open meeting, protesters continually interrupted Chairman Cheryl LaFleur as she tried to begin proceedings, leading her to adjourn the meeting while security cleared the floor. (See Protesters Interrupt FERC Open Meeting.) Protesters were also escorted out after disrupting a FERC technical conference on proposed carbon emission rules in February.
While LaFleur has previously allowed protesters to read statements before she begins open meetings, the new order makes it clear that this will no longer be tolerated. According to the order, “communications made or presented by unscheduled presenters will not be considered by the commission.”
One protester, Ted Glick, said FERC should have public comment periods at open meetings.
FERC is in “drastic need for some doses of reality to the impact of their decisions,” said Glick, national campaign coordinator at the Chesapeake Climate Action Network. “We think the commissioners really need to hear from the public.” He said he did not think the order expressly prohibited unscheduled speakers.
Beyond Extreme Energy, the organization that coordinated the January meeting interruptions, said it is hoping to attract more than 500 demonstrators to protests at FERC in May.
FERC also amended its rules concerning recording open meetings to allow photography, which was previously prohibited. FERC said it recognizes that its “existing regulations concerning recording open meetings are unduly complex and out of date.” It said it was adopting language used by the Consumer Product Safety Commission, which allows members of the public to record meetings as long as they remain seated.
Opponents of a 124-mile natural gas pipeline that would provide New York and New England access to Pennsylvania shale gas have threatened to go to court next week to force federal regulators to reconsider their approval of the project (CP13-499, CP13-502).
The proposed Constitution Pipeline won a certificate of public convenience and necessity from the Federal Energy Regulatory Commission on Dec. 2.
Stop the Pipeline, a citizens group intervening in the case, said it will go to court if FERC does not consider its request for a rehearing “on the merits” by Friday. The group is being assisted by the Pace Environmental Litigation Clinic, which lists environmentalist Robert F. Kennedy Jr. as a supervising attorney.
FERC issued a procedural order for rehearing on Jan. 27 but has not taken any further action. Pace said this amounts to a “constructive denial,” a de facto refusal to rehear the case without an actual order saying so.
Stop the Pipeline said in its request for a rehearing that the certificate of public convenience was illegally granted before the New York State Department of Environmental Conservation had issued water quality permits and before constitutional questions of affected property owners were resolved. It also said that FERC violated federal law by separating this project from other gas infrastructure projects in New York that should have been reviewed in total.
ISO-NE says inadequate natural gas infrastructure has threatened reliability and driven up power costs as New England has become increasingly reliant on gas as fuel for electric generation. The region, which now relies on gas for about half of its power generation, sees prices spike on cold days when more gas is needed for home heating and the grid operator has to turn to expensive fuel oil.
The Constitution Pipeline, which is entering the final phase of environmental reviews by New York regulators, would start in Susquehanna County, Pa., and travel northeast through New York, where it would connect with the Tennessee Gas and Iroquois Gas pipelines.
Kinder Morgan’s Tennessee pipeline is a major east-west natural gas artery that supplies Texas and Gulf Coast gas to upstate New York and New England.
The Iroquois pipeline heads to the southeast, serving New York City and its environs. An expanded compressor would be added by Iroquois in nearby Wright, N.Y., at the terminus of the Constitution line.
Constitution’s path includes a section of New York that has its own potential for fracked shale gas. However, in December, New York Gov. Andrew Cuomo effectively banned the practice due to health concerns. (See Cuomo Bans Fracking in New York.)
Williams, Cabot Oil & Gas, Piedmont Natural Gas and WGL Holdings are partners in the Constitution project.
“There is this supply of stranded gas that is needed in New England that can’t get there because the infrastructure hasn’t kept up,” said Christopher Stockton, a spokesman for Constitution. If permits are granted, construction would start this summer and take about a year, with the pipeline in operation by mid- to late 2016.
He added that the Pennsylvania supply, closer to where it is ultimately used, would cut fuel costs by half. Most of the natural gas currently used in New York and New England originates in the Gulf Coast and Texas.
The Constitution project is now before the New York DEC, where an extended comment period ended in late February. Opponents said they delivered 5,000 comments to the department office in Albany on the final day and now believe the project is in trouble.
DEC permits and approvals are required for construction and operation of the pipeline. Additional permits from the U.S. Army Corps of Engineers and the U.S. Fish and Wildlife Service are also pending.
The 30-inch pipeline would deliver 650,000 dekatherms of gas per day. The pipeline was first proposed in April 2012.
This pipeline is essentially parallel to the New York section of Kinder Morgan’s proposed Northeast Energy Direct pipeline. The Kinder Morgan project is two years behind Constitution in the regulatory and planning cycle, with proposed operations in 2018.
WASHINGTON — The Federal Energy Regulatory Commission needs to do more to ensure Order 1000 opens transmission development to competition and results in interregional projects, developers said last week.
“FERC needs to go back to the drawing board,” Kristine Schmidt, vice president of regulated development for ITC Holdings, told Infocast’s 18th annual Transmission Summit, which drew more than 80 industry officials over three days. (Presentations from the conference are available here.)
Schmidt, a one-time aide to former FERC Commissioner Nora Mead Brownell, said Order 1000’s intent has been “watered down” since former Chairman Jon Wellinghoff left the commission in 2013, as a result of compromises to accommodate regional differences and “carve outs” on the original order’s prohibition against transmission owners’ rights of first refusal (ROFRs).
Schmidt said that while competition may eventually take hold as it did for independent power producers under FERC Orders 888 and 890, “we’re far away from that” now.
Randy Satterfield, executive vice president for Duke-American Transmission Co., agreed. “ROFR laws are in the way,” he said. “That has to be taken care of through FERC or the courts.”
Last May, FERC ruled that transmission planners may exclude consideration of non-incumbent proposals on projects subject to state ROFRs. FERC had previously required transmission providers to remove from commission-approved tariffs and agreements ROFRs giving incumbent utilities preferences to build transmission facilities selected in the regional transmission plan.
The commission ruled 3-1 that its previous position would require planners to evaluate non-incumbent proposals that had no chance of getting built because of state rules assigning them to incumbent utilities. (See Order 1000 Reversal: Reality Check or Surrender to Incumbents?)
‘Evolution’ in the RTOs
Kristine Schmidt and Todd Fridley
Satterfield said “the process is still evolving,” noting that while PJM has opened several “windows” for competitive proposals, SPP hasn’t identified any projects for competition and MISO has said it doesn’t expect to open any windows before 2016 at the earliest.
“So we’re being held back in that the opportunities in some of the RTOs are not yet there,” he said. He said that his company is “doing a fair amount of work in California,” which he said is “leading the pack.”
Although FERC has approved RTOs’ Order 1000 regional planning and cost allocation rules, “there’s still things that need to be buttoned up and tightened down” to ensure fair competitive processes, said Todd Fridley, vice president of Transource Energy. “We in the industry understand there will be growing pains as the market emerges.”
Schmidt said SPP made a wise decision in appointing an independent panel to judge competitive proposals and not leaving it to RTO planning staff, as in PJM. The panel’s recommendation would be submitted to SPP’s board of directors for review and approval.
“The RTOs were never formed to be the ones to choose winners and losers,” she said, adding, “RTOs have a long way to go to prove they have the discipline to evaluate proposals.”
Artificial Island
PJM’s April 2013 solicitation for a fix for stability problems at Artificial Island has proven a cautionary tale.
RTO planners recommended the selection of Public Service Electric and Gas last June. But objections by environmentalists and disappointed bidders led the PJM board to reopen the competition to four finalists. With the process still incomplete, PSE&G is now fighting PJM before FERC. (See related story, PJM: PSE&G’s Remedy for Artificial Island Bid Process ‘Draconian,’ ‘Self-Serving‘.)
“It’s not ideal. This is PJM’s first attempt at this,” said R. Mihai Cosman, a principal in Exelon’s corporate transmission development unit. “They’re trying to do the right thing. We in the future will have some sort of a standard process.”
Robert Daileder, a partner in law firm Nixon Peabody, said the unwieldy solicitation increased costs for competitors. “At the end of the day, the [winner] will probably be the best project … but the process may be much more expensive than anybody anticipated because of the changing goalposts,” he said.
“I think PJM has learned that maybe they didn’t scope it tightly enough,” said James Nicholas, who specializes in siting and licensing for CH2M Hill, an environmental and engineering consulting firm.
Interregional Projects
Brian Thumm
Developers also criticized the lack of interregional projects under Order 1000. The order requires transmission providers only to “consider” whether the needs identified in their local and regional transmission plans could be addressed most cost-effectively through joint projects with a neighboring region.
Satterfield said another obstacle to interregional projects is the disparities in competitive processes and cost allocation between regions.
“There can be great projects that cross seams and right now there is not a way to ensure those projects can proceed,” he said. “That’s got to get fixed.”
Schmidt said SPP’s northern expansion to Canada means its seam with MISO is growing. “It’s costing us a lot of money not having these projects on the table,” she said.
“Order 1000 did no favors to interregional planning. In fact, it’s not interregional planning, it’s interregional coordination,” said George Dawe, vice president of Duke-American Transmission Co.
“The RTOs, frankly, are doing what they’ve been required to do,” which is sharing information. He said the RTOs are conducting “quick-hit” studies that are not resulting in actionable projects.
Diana Rivera, director of market development and regulatory affairs for Clean Line Energy Partners, said interregional coordination is only occurring between neighboring regions, with much of the focus on seams issues. “Transmission needs that are broader in scope, like how do we move renewables to market, are not being addressed by interregional planning or cost allocation processes,” she said.
Brian Thumm, director of planning for ITC Holdings, compared Order 1000 to Aesop’s fable “The Monkeys and Their Mother,” in which the mother accidentally smothers one of her sons due to overly nurturing it.
The moral of the story is “The best intentions will not always ensure success.”
“I can think of no greater paradigm for what I’ve seen in the planning processes than to say that the best intentions of the industry have not guaranteed success in anything that we’ve done with respect to Order 1000,” Thumm said.
Flat load growth, the lapse in federal subsidies for wind generators and a slowdown in coal plant retirements have caused PJM to reduce its transmission construction plans by $3.2 billion.
Generator deactivations announced in 2014 (left) and selected baseline upgrades driven by retirements (right).
PJM’s 2014 Regional Transmission Expansion Plan report, released last week, provides details of the $1.7 billion in transmission projects approved by PJM’s Board of Managers. The board approved 197 baseline projects totaling $1.1 billion and 148 network upgrades to address reliability criteria violations at a cost of $605 million.
But these new projects were more than offset by the removal of 651 network upgrades totaling $4.7 billion and 40 baseline projects estimated at $177 million, resulting in a net reduction of $3.2 billion from the spending anticipated at the end of 2013.
Generation Withdrawals
PJM said the network upgrade cancellations resulted from the withdrawal of 212 generation interconnection requests totaling 15,302 MW, one-quarter of them for wind turbines.
Generation withdrawals can reflect developers’ response to capacity auction prices. PJM also took note of the boom-bust cycle of wind development, based on the availability of the federal Production Tax Credit. The most recent iteration of the PTC covered only projects under construction by the end of 2014.
Network upgrades allow customers to interconnect to the PJM grid and obtain capacity rights. Such upgrades are recommended to the PJM board based on system impact studies, after developers receive facility study agreements.
Slowdown in Retirements
Baseline upgrades include both market efficiency projects to reduce congestion and reliability projects needed to correct violations, such as those identified in thermal and voltage analyses.
PJM said the reduction in baseline upgrades reflects flat load growth and a slowdown — perhaps temporary — in retirements of coal-fired generation. The RTO received 31 generator deactivation requests in 2014, totaling about 4,300 MW, down from 14,444 MW in 2012 and 7,745 MW in 2013.
The retirements were largely driven by the Environmental Protection Agency’s Mercury and Air Toxics Standards, which take effect this year. PJM has begun analyzing the impact of EPA’s proposed limits on generator CO2 emissions, which are expected to create a new wave of retirements. (See related story in PJM Transmission Expansion Advisory Committee Briefs.)
The 2014 RTEP includes 27 transmission upgrades in PJM’s Mid-Atlantic and Western regions to address retirements. The upgrades include both new and upgraded transmission lines, transformers, shunt capacitors and substation improvements.
Since 1999, PJM’s board has approved almost $25.7 billion in transmission projects, including $21.5 billion of baseline transmission upgrades and $4.1 billion in facilities needed to connect more than 60,000 MW of new generation. Almost $10 billion of those projects are in service with an additional $4.2 billion under construction.
The Federal Energy Regulatory Commission last week approved a much-needed natural gas pipeline expansion project to supply New England.
Spectra Energy’s Algonquin Incremental Market Project, which will run from New York to Massachusetts through Connecticut and Rhode Island, still needs approval from the New York Department of Environmental Conservation before construction can begin.
FERC discounted opponents’ concerns about the pipeline’s proximity to Entergy’s Indian Point nuclear generating station. “I’m dumbfounded that FERC could just be blithely going ahead,” said Susan Van Dolsen of the group Stop the Algonquin Pipeline Expansion.
Sen. Alexander Blasts NRC for Not Asking for More Yucca Mountain Funding
Alexander
U.S. Sen. Lamar Alexander (R-Tenn.) criticized the Nuclear Regulatory Commission for failing to request additional funding that he says will be required to license the Yucca Mountain nuclear waste repository in Nevada.
Alexander said in a Senate Appropriations subcommittee hearing last week that the NRC has unspent funds in its budget to start the licensing process, but will need more resources. “So I think it’s fair to ask the question: Knowing that there are additional steps and they will cost money, why would you not request additional funds in your budget?”
Alexander, a nuclear power proponent, has said it is crucial to break the “25-year stalemate” over nuclear waste.
Judge Criticizes EPA’s Response to Foundation’s Records Request
A federal judge criticized the Environmental Protection Agency’s “fumbled” response to a Freedom of Information Act (FOIA) request by a conservative group, but ruled that the group failed to prove the agency acted in bad faith and declined to award damages.
Judge Royce Lamberth in D.C. said the EPA allowed some records, including emails, to be destroyed in spite of pending discovery requests from the Landmark Legal Foundation, which sought the records to determine if the agency delayed issuing regulations before the 2012 election for political purposes.
“Despite admonitions from this court and others … EPA continues to demonstrate a lack of respect for the FOIA process,” Lamberth wrote in his opinion. “Neither EPA nor its counsel has offered Landmark or this court any indication of regret.”
PennEast Pipeline Opponents Say FERC Consultant has a Conflict of Interest
The mayor of a New Jersey town in the path of the proposed PennEast Pipeline has called on the Federal Energy Regulatory Commission to replace an environmental consultant hired to review the project, saying the consultant’s ties to the shale-gas industry present a conflict of interest.
Hopewell Township Mayor Harvey Lester says the FERC consultant, Tetra Tech, is a paid member of the Marcellus Shale Coalition, an industry trade group that supports the proposed 114-mile pipeline to carry natural gas from the Marcellus Shale region in Pennsylvania into New Jersey.
The New Jersey chapter of the Sierra Club also objected to FERC’s hiring of Tetra Tech to review the project’s environmental impact statement. “This is an outrageous conflict of interest and a violation of the FERC rules,” wrote Director Jeff Tittel.
House Committee Chair Seeks Deleted EPA, McCarthy Texts
U.S. Rep. Lamar Smith (R-Texas), chairman of the House Science Committee, said he’ll seek a subpoena to obtain text messages to and from Environmental Protection Agency Administrator Gina McCarthy if the agency doesn’t give them up voluntarily.
Smith said the agency declined to provide the text messages to the Competitive Enterprise Institute in response to a public records request. The agency provided emails but has said it did not believe that text messages were required to be retained.
NRC’s Annual Reviews Show 94% of US Reactors in Top Performance Categories
The Nuclear Regulatory Commission’s annual assessment letters show that 75% of the nation’s 100 nuclear reactors met all safety and security objectives in 2014, and 94 of those reactors were in the top two performance categories.
Nineteen reactors were identified as needing one or two “low significance” items. They are Calvert Cliffs 2 (Maryland); Clinton (Illinois); Davis-Besse (Ohio); Diablo Canyon 1 and 2 (California); Fermi 2 (Michigan); Fitzpatrick (New York); Limerick 1 and 2 (Pennsylvania); Millstone 3 (Connecticut); Oconee 1 (South Carolina); Oyster Creek (New Jersey); Palisades (Michigan); Point Beach 2 (Wisconsin); River Bend (Louisiana); Salem 1 (New Jersey); St. Lucie 1 (Florida); Waterford (Louisiana) and Wolf Creek (Kansas).
Two reactors — Pilgrim (Massachusetts) and Point Beach 1 (Wisconsin) — fell into the “degraded” performance category and will be the subjects of increased oversight. The twin-unit Arkansas Nuclear One reactors fell into a fourth category of oversight after the NRC made safety findings of “substantial significance.”
The Environmental Protection Agency has designated the Mahomet Aquifer system in east-central Illinois as a “sole source” aquifer, raising the possibility of heightened federal review of projects in an area that may be targeted for natural gas development involving hydraulic fracturing.
The “sole source” designation, which means more than half of the population depends on the aquifer as its drinking water source, allows the EPA to review the effect that any federally funded project might have on the aquifer.
Gas exploration companies have leased mineral rights in the region, although the amount of drilling is less than the state first anticipated.
DOE Report Sets National Wind Energy Goal of 35% by 2050
A Department of Energy report says that wind energy could provide 35% of the nation’s electricity by 2050, up from the current 4.5%, if the cost of wind turbines comes down and new territories are opened up for development.
The report, “Wind Vision: A New Era of Wind Power in the United States,” makes no policy recommendations, but it does provide what it calls a “roadmap of targeted actions.”
The American Wind Energy Association said the goal is within reach. “We can do this,” said Tom Kiernan, CEO of the association. “The industry stands ready to achieve these numbers.”
NRC’s Burns Touts Safety Improvements, but Public Citizen Accuses it of ‘Sluggishness’
Stephen Burns
The chairman of the Nuclear Regulatory Commission said the agency and the nuclear industry have improved safety at U.S. reactors since the 2011 Fukushima disaster, but a watchdog group accused the NRC of “sluggishness” in improving standards.
NRC Chairman Stephen Burns said that “both the NRC and the U.S. nuclear industry took swift and decisive action to address many of the key lessons learned from that event.” He said the main safety improvements would be completed by the end of 2016.
But Allison Fisher, outreach director of Public Citizen, said the NRC “has yet to require nuclear power plant operators to complete implementation of a single one of the post-Fukushima safety upgrades recommended by the agency’s own staff.”
NRC to Review Korea Electric’s APR1400 Nuclear Reactor
The Nuclear Regulatory Commission announced that it will conduct a full design certification review of the APR1400 nuclear reactor design from Korea.
The NRC said a design for a 1,400-MW reactor submitted in December by Korea Electric Power Corp. and Korea Hydro and Nuclear Power met the requirements for a full certification review. The agency’s review will determine whether the reactor design meets U.S. safety requirements.
The APR 1400 is a pressurized water reactor based on the Korean Optimized Power Reactor 1000.
McConnell Urges US Governors to Defy Clean Power Plan
McConnell
U.S. Sen. Mitch McConnell (R-Ky.) wrote an op-ed urging governors to refuse to implement the Environmental Protection Agency’s proposed emissions reduction regulations, calling the regulations an “attack on the middle class.”
McConnell, a coal proponent and Obama administration foe, said governors could simply refuse to submit their state plans to the government.
“Think twice before submitting a state plan — which could lock you in to federal enforcement and expose you to lawsuits — when the administration is standing on shaky legal ground and when, without your support, it won’t be able to demonstrate the capacity to carry out such political extremism,” he wrote in the Lexington Herald-Leader.
PJM stakeholders face the greatest potential disturbance in the use of demand response in the wholesale capacity market if a D.C. Circuit Court of Appeals ruling limiting the jurisdiction of the Federal Energy Regulatory Commission is allowed to stand, according to a report released by EnerKnol Research, an energy policy analytics company.
However, the study concluded DR resources would continue to grow. “Demand response resources could still thrive in retail and ancillary markets if Order 745 is vacated, but with varying impacts to industry,” Chief Policy Strategist Erin Carson said in the report, “Demand Response to Grow Under Alternate Scenarios Regardless of FERC Order 745.”
PJM is set to receive more than $20 billion in demand response value through future capacity commitments.
FERC and PJM have petitioned the U.S. Supreme Court to hear the case. (See FERC Files EPSA DR Appeal with Supreme Court.) The RTO in January submitted to FERC a contingency plan to incorporate DR in May’s Base Residual Auction if the Supreme Court allows the ruling to stand.
CROMWELL, Conn. — Hydro-Quebec is looking to expand its exports to its long-standing customers in the Northeast power markets, Marianne Bonnard, spokeswoman for the Quebec Government Office in Boston, told the winter meeting of the Connecticut Power and Energy Society on Wednesday.
From 2008 to 2013, the provincial utility doubled its net exports of hydroelectricity. “In 2013, out of 32.2 TWh of electricity exported out of Quebec, HQUS [HQ Energy Services U.S.] delivered 15.7 TWh of power here to New England. This is a figure which represents about half of Connecticut’s annual electricity consumption,” Bonnard pointed out.
Increasing exports further will require more transmission.
HQ is a partner with Eversource Energy on the proposed 1,200-MW Northern Pass transmission line from Quebec to New Hampshire.
In addition, the proposed Champlain Hudson Power Express, a 1,000-MW merchant transmission line, would connect Quebec with New York City. The line would run underneath Lake Champlain for part of its 330-mile route.
Bonnard noted that New England and the Eastern Canadian provinces share climate goals, with a common target of reducing emissions by 10% below 1990 levels by 2020.
The province is already one of the most active governments on the continent in a nascent carbon market. Quebec began a cap-and-trade system for CO2 emissions linked to California at the beginning of 2014. “This is the first market ever to be run by sub-national governments of different countries,” she said.
The first joint carbon auction in November delivered $33 million for initiatives in the province’s Climate Change Action Plan. The second joint auction, Feb. 18, produced more than $190 million for Quebec.
FERC Chairman Cheryl LaFleur says the commission is seeking a way for it to help ensure reliability is not threatened by EPA’s carbon plan. “You get on thin jurisdictional ice pretty fast,” she said.
WASHINGTON — Members of the Federal Energy Regulatory Commission said last week they are trying to craft the commission’s role in administering a “safety valve” to ensure reliability is not threatened by the Environmental Protection Agency’s proposed carbon emission rule.
Speaking at the third of four FERC technical conferences on the EPA Clean Power Plan, Commissioner Philip Moeller said he hopes the commission will reach consensus on a “very specific” safety valve proposal to the agency.
Janet McCabe, EPA’s acting Assistant Administrator for the Office of Air and Radiation, repeated her promise — also made at FERC’s first conference Feb. 19 — that the agency’s final regulations this summer will be responsive to criticism of its initial proposal. (See EPA on Carbon Rule: We’re Listening.)
Responding to Moeller, McCabe said that although she couldn’t yet provide specifics on a safety valve, she expected “that we will be able to have a conversation as the rule moves closer to final on how to handle that both within the rule and … as we look at implementation expectations.”
FERC Chairman Cheryl LaFleur said the commission could work with RTOs and the North American Electric Reliability Corp. to “develop a record” on the reliability impact of shuttering individual power plants and the time needed to construct pipelines or transmission.
But she said she had misgivings about the commission having a formal adjudicatory role in disputes between state officials seeking deadline extensions and environmental groups pushing them to do more. “I don’t see us comfortably looking at, ‘How good is your rooftop solar program? Have you really maximized [it]? What are you doing with energy efficiency?’” she said. “… You get on thin jurisdictional ice pretty fast.
“I think we either need to develop a list of questions we’ll answer and stick to those questions and the EPA will, I guess, weigh them, or work out an approach with others such as the states which have their fingers on other parts of it,” she added.
The ISO-RTO Council has said that EPA’s final rule must include provisions for reliability reviews to address problems that may arise during implementation.
“Because of the limited nature of the scenarios we studied — and the fact that the rule itself is not yet final, nor have state plans been developed — we are simply not in a position to make definitive conclusions as to the reliability impacts of the Clean Power Plan on the PJM footprint,” Mike Kormos, PJM executive vice president of operations, said in written testimony. “… The answer to the question, ‘is it reliable?’ is not a ‘once-and-done’ inquiry.”
Ohio Public Utilities Commissioner Asim Haque said he supports the concept of FERC, NERC or RTOs performing a “reliability check” on state implementation plans. But he said the third-party review must be one of “mediation” rather than mandatory.
“If the states cannot [resolve the reliability concerns], then in my mind the [emission] rates need to be adjusted … so that the reliability concern is allayed,” he said.
Gov. Terry Branstad last week shook up the Iowa Utilities Board, demoting Chairman Elizabeth “Libby” Jacobs and removing board member Sheila Tipton.
The unexplained move came after officials of MidAmerican Energy met with the governor to complain about the board’s February ruling requiring the company to refund $2 million annually to consumers over a wind project.
Branstad appointed Iowa Finance Authority official Geri Huser to replace Jacobs, whose term as chair was set to expire next month.
Jacobs, appointed by Branstad in 2011, declined to comment on the reason for the governor’s actions, but she told RTO Insider she plans to complete her term on the three-member board, which runs through April 2017.
“I’ll continue as [Organization of MISO States] president through Dec. 31, 2015, and I’ll also continue to serve [the National Association of Regulatory Utility Commissioners] as the co-vice chair of the Electricity Committee and as a member of the Task Force on Environmental Regulation and Generation,” she said.
Tipton was appointed by Branstad in 2013 to fill an unexpired term ending next month.
In February, the board ordered MidAmerican Energy to return $2 million annually to customers following a review of a $280 million wind turbine project that had been publicly praised by Branstad.
The board said the rewards of the project were “skewed too much towards MidAmerican” without the extra payment. The order modified a settlement that MidAmerican had negotiated with the Office of Consumer Advocate.
MidAmerican has confirmed that it met with Branstad to complain about the board’s decision but insisted it did not press the governor for personnel changes.
Branstad’s spokesman, Jimmy Centers, declined to discuss the speculation. He said Huser, a former state legislator, was chosen by the governor “because he’s been impressed with her career in public service.”
Clearing prices for the latest Regional Greenhouse Gas Initiative CO2 allowances auction rose 4%, continuing a recent upward trend while the number of bidders declined.
The 27th auction, held on Wednesday, showed a clearing price of $5.41/ton for the 15.3 million in allowances offered and sold. The auction netted more than $82 million, putting the total proceeds over the $2 billion mark for the nation’s first cap-and-trade program, which has held quarterly auctions since late 2008.
Bids for the CO2 allowances ranged from $2.05 to $12.50 per allowance. The ratio of bids to initial supply was 2.8, up from 2.5 in the December 2014 auction.
The auction proceeds will fund various programs, including energy efficiency, renewable energy, direct bill assistance and greenhouse gas abatement in the nine Northeastern and Mid-Atlantic states participating.
All of the allowances were purchased by compliance entities — electric generators of 25 MW or larger — and their corporate affiliates. Compliance entities and affiliates have purchased 78% of allowances over the history of the auctions.
Auction 26, which offered 18.2 million allowances, cleared at $5.21/ton, generating $95 million.
The 2015 RGGI cap is 88.7 million tons. The RGGI cap declines by 2.5% annually until 2020.
A regulated power plant must hold CO2 allowances equal to its emissions for each three-year control period. RGGI’s third control period began on Jan. 1, 2015, and extends through Dec. 31, 2017.
FERC accused Maxim Power of overcharging ISO-NE for power from its Pittsfield, Mass., generator in 2010.
Maxim Power says market manipulation allegations by the Federal Energy Regulatory Commission are an attempt to gain leverage for a settlement of charges from subsequent, unrelated cases.
In a 57-page response to FERC’s Order to Show Cause, the Canadian-based generation owner said allegations that it overcharged ISO-NE in 2010 were revived only after later disputes were unresolved (IN15-4).
FERC issued the order last month, accusing the company of billing the RTO for more expensive oil at its 181-MW plant in Pittsfield, Mass., while actually burning cheaper natural gas. The order, on which Commissioner Tony Clark dissented, seeks a $5 million fine. (See FERC Seeks $5M from Maxim Power; Clark Dissents.)
The company said it offered its Pittsfield plant into the day-ahead market on oil due to pipeline restrictions that indicated it would not be able to obtain enough gas if ISO-NE ordered it to run for 24 hours.
When asked by ISO-NE’s Internal Market Monitor, Maxim said it later acknowledged having burned gas. It said the IMM recovered $3 million over the incident but declined to forward the case to FERC for investigation though it was “certainly cognizant of its Tariff obligation to refer manipulative conduct to [Office of Enforcement] staff.”
“This was no fraud, but … a simple hedge against the possible financial exposure associated with a receipt of a day-ahead award,” Maxim said.
In 2013, however, Maxim said FERC Enforcement staff began an unrelated investigation. “In what certainly looks like an effort to gain leverage in that investigation, OE staff decided to resurrect the 2010 fuel-burn issue,” the company wrote. “Then, in late 2014, when Maxim declined to enter into a tolling agreement, OE staff decided to pursue the 2010 issue separately and on a fast track.”
These are apparent references to allegations contained in the Office of Enforcement’s Notice of Alleged Violations issued in November, which accused Maxim of collecting “millions of dollars of inflated make-whole payments” from ISO-NE between 2012 and 2013 by gaming market mitigation rules for generators needed for reliability. The notice did not elaborate on how this was allegedly done.
The November notice also alleged that Maxim collected inflated capacity payments between 2010 and 2013 by using “extraordinary measures” to boost the output of its three New England plants during testing.
February’s Order to Show Cause did not mention either of these allegations.
Maxim called on the commission to terminate the case, saying that if it proceeds, “OE staff will have to present its case before a neutral federal district court judge based on a novel theory, old incomplete facts and an alleged ‘omission’ that allegedly left the wrong ‘impression’ even though Maxim had no duty to disclose what was allegedly omitted and did not hesitate to provide such information when asked! And it will have to explain why the mitigation imposed over four years ago was insufficient.”
In addition to the Pittsfield plant, Maxim operates two other plants in ISO-NE: CDECCA, a 62-MW cogeneration plant in Hartford, Conn., and Pawtucket Power, a 63.5-MW cogeneration plant in Pawtucket, R.I.
The Federal Energy Regulatory Commission said last week it will no longer allow protesters to read statements before its open meetings.
