State Briefs

Story on ComEd Contributions Spurs Call for Investigation

A state senator called for an investigation of Commonwealth Edison after the Chicago Tribune reported that the utility spent $60 million in ratepayer money over seven years on politically influential charities.

“The allegations in the Tribune article are serious and call for immediate action,” state Sen. Dan Duffy said in a letter to Attorney General Lisa Madigan. “ComEd should be required to disclose these contributions to ratepayers. At best, ComEd shareholders, not ratepayers, should bear the burden of funding these contributions.”

A 1987 law allows ComEd, the state’s largest utility, to pass on the cost of its charitable contributions to ratepayers. The Tribune article listed instances where some charities that received ComEd assistance were in the position to aid it.

More: Chicago Tribune

County Emergency Management Agency Uses Dresden’s Cooling Pond Water to Battle Ice

Warm water from Dresden nuclear plant is being used to melt down ice flows on the Kankakee River to prevent flooding and damage to homes and docks.

The Will County Emergency Management Agency has devised a system to siphon the 70 F water into the Kankakee River. “The warm water from Dresden’s pond helps break up the ice so it can flow freely downstream,” said Harold Damron, the agency’s director.

More: GenerationHub

INDIANA

Challenges to NIPSCO’s $1.1 Billion Modernization Plan Heard in Court

In a case before the state Court of Appeals, the Office of Utility Consumer Counselor and a group of industrial customers are challenging Northern Indiana Public Service Co.’s $1.1 billion electric modernization plan as too costly.

“These plans can cost ratepayers hundreds of millions, even billions, of dollars,” said Utility Consumer Counselor David Stippler. The Utility Regulatory Commission approved the plan in 2013, which would be funded by yearly rate increases that will total 4.9% by 2020.

A NIPSCO attorney said the improvements are necessary. “The commission determined the plan is beneficial to consumers, and no one has disputed that,” said Brian Paul. The court decision could affect improvement plans proposed by other state utilities.

More: The Times

KENTUCKY

Kentucky Power Appeals PSC Ruling on ‘Unreasonable’ Fuel Costs

Kentucky Power is appealing a Public Service Commission order requiring it to refund $13 million to customers after the commission determined some of its fuel costs last year were unreasonable.

The American Electric Power subsidiary says the commission disallowed charges associated with having both the Mitchell power plant and Big Sandy Unit 2 in operation simultaneously. Kentucky Power said it was necessary to run both units in Louisa to maintain system reliability and to meet demand, especially during last winter’s polar vortex.

Big Sandy Unit 2 is being retired later this year.

More: WOWK TV

MICHIGAN

City Upset That DTE Rate Hikes Would Kill LED Lighting Incentive

The city of Ypsilanti says a proposed DTE Energy rate increase for LED street lighting, combined with a cut in charges for conventional sodium-vapor streetlights, would undermine the incentives that prompted the city to spend $500,000 last year to convert its streetlights to the more efficient LED technology.DTE’s proposal would increase the cost of powering a 65-W LED bulb from $138 to $154 a year, while the cost of running a 100-W sodium bulb would drop from $184 to $129. “If this rate hike happens, we’ll really feel like this was a bait and switch,” said Ypsilanti City Council Member Brian Robb.

The utility said the old LED rate was experimental. “As we gained more experience with LED technology, we changed the pricing to reflect a more complete understanding of the costs associated with it,” said DTE spokesman Scott Simons.

More: MLive

University Report IDs Ways State Could Improve Fracking Oversight

A University of Michigan report suggested the state take a number of steps to strengthen its oversight of hydraulic fracturing, including better monitoring of surface and groundwater and mandating more emergency planning by natural gas exploration companies.

The recommendations were included in a 277-page report compiled by scientists, lawyers and other University of Michigan faculty. “The purpose of the study is to pull together a massive amount of information and analyze the options in a way that is clear, so the state can look at these options and decide which if any they might want to adopt,” said Sara Gosman, one of the report’s authors.

More than 12,000 fracked wells have been drilled in Michigan since the late 1940s, but high-volume fracking of deep shale deposits is a new phenomenon. Michigan has 13 producing wells in the Utica-Collingwood shale formation, but drilling companies have leased hundreds of other sites.

More: PennEnergy

MISSISSIPPI

Mississippi Power’s CEO Warns Kemper Ruling Could Result in Rate Hikes of 35%

Mississippi Power CEO Ed Holland said a state Supreme Court ruling that orders the company to refund customers $271 million for plant construction costs will almost certainly lead to higher rates.

Holland, in a Sun Herald op-ed, said the court’s ruling effectively voids a plan the company and the Public Service Commission developed to keep down rate hikes associated with construction of the Kemper County integrated gasification combined-cycle plant. “If the court’s opinion stays in place and the refund is required, we will have little choice but to seek at least the original estimated amount of approximately 35% in rate increases,” he wrote.

The court threw out a PSC decision to allow $281 million in rate recovery for costs associated with the plant’s construction. The court said the PSC never found that the funds were “prudently incurred,” a requirement for recovery. Mississippi Power is challenging the court ruling.

More: Sun Herald

MISSOURI

PSC Approves Ameren’s Efficiency Plan Allowing 2013 Recovery Calculations

The Public Service Commission approved a settlement that determined Ameren Missouri’s energy efficiency programs saved 347 GWh in 2013. The amount will determine how much money the utility can recover from ratepayers.

Ameren had claimed that its program saved nearly 400 GWh. The Office of the Public Counsel estimated the savings at 300 GWh. They settled on 347 GWh.

More: St. Louis Today

NEBRASKA

2nd State Judge Signs Injunction Against Keystone XL Eminent Domain Actions

A York County District Court judge became the second state judge to grant an injunction halting TransCanada’s use of eminent domain to secure a route for its controversial $8 billion Keystone XL Pipeline.

The judge ruled in favor of a group of landowners who are challenging a state law that gave TransCanada eminent domain powers to build its crude-oil pipeline to Gulf Coast refineries and terminals.

“I know the war is not won yet, but it’s a start,” property owner Susan Dunavan said after the ruling.

More: Journal Star

NEW JERSEY

JCP&L Planning $267 Million on System Improvements; Rate Counsel Endorses $107 Million Rate Cut

Jersey Central Power & Light said it will spend $267 million on transmission and distribution improvements this year, including a new transmission line in Middlesex County.

Among the projects planned are nearly $6 million in distribution circuit upgrades, $24 million in tree trimming, and money for planning and constructing a 230-kV transmission line in Monmouth County.

JCP&L’s reliability record has been a recent target of regulators and consumers. The Division of Rate Counsel last month endorsed a decision by an administrative law judge that would force the company to cut rates by $107 million, saying that the utility’s reliability record is poor.

The Rate Counsel argued that the company had earned profits in excess of the amount allowed by the Board of Public Utilities. About 90% of its customers were left without power after Hurricane Sandy.

“JCP&L customers have suffered poor reliability too long and should be provided a remedy immediately,’’ the Rate Counsel argued.

More: JCP&L; NJ Spotlight

NORTH DAKOTA

Hearing Scheduled for New Power Plant near Williston

The Public Service Commission will hold a hearing this week on the proposed $161 million expansion of the Pioneer Generation Station near Williston to meet growing electricity demands from the state’s oil and gas industry.

Basin Electric said the proposed expansion is needed to meet a forecasted 1,600-MW increase in load by 2035. The company wants to add 12 reciprocating gas-fired internal combustion engines generating up to 111 MW.

More: Grand Forks Herald

OHIO

PUCO Rejects AEP’s Guaranteed Income Plan for Coal Plants

The Public Utilities Commission last week rejected American Electric Power’s request for a guaranteed income for two of its coal-fired plants, saying the proposal wasn’t in the best interest of ratepayers.

While PUCO rejected the proposal, it ruled that the power purchase agreement was legal. That gave AEP a kernel upon which to press forward with a similar request for other plants. It has argued that customers would benefit from supply stability if the plants received a guaranteed rate. Critics say its proposal would represent a retreat from market-rate pricing.

“Further delays in deciding this issue will postpone our customers’ ability to take advantage of the financial benefits of what we proposed,” AEP Ohio President Pablo Vegas said in a statement. “We will work with the PUCO to address their outstanding issues with our problems.”

More: Columbus Business First

Rumors Surround Porter’s Move to PUCO, Johnson’s Tenure

Gov. John Kasich’s choice of Andre Porter, the state commerce director, to fill a vacancy on the Public Utilities Commission has sparked speculation that Chairman Tom Johnson’s reign may be ending.

Some observers wonder why Porter, who served previously on the commission, would want to make the move back to PUCO if he wasn’t angling for the chair. Johnson, who has been the commission’s chair for less than a year, has faced several controversial issues, including proposals to guarantee prices for merchant power and a legislative proposal to freeze the state’s renewable and energy efficiency standards.

The governor’s office did not comment on his plans for the commission.

More: Columbus Business First

PENNSYLVANIA

PUC Orders FirstEnergy’s Pa. Companies to Give More Details on Improvement Plan

The Public Utilities Commission ordered FirstEnergy’s four companies in the state — Met-Ed, Penelec, Penn Power and West Penn Power — to provide more details on how they intend to address issues raised in a PUC management audit.

The PUC’s Bureau of Audits identified 28 areas of improvement in the companies’ management practices that could produce one-time efficiency savings of $19.2 million and annual savings of up to $3.8 million. The PUC said FirstEnergy’s response was short on specifics and directed the company to devise a more detailed implementation plan.

“Because we have received similar responses to previous audit recommendations in the past with little meaningful improvement, it is imperative that FirstEnergy develop more robust responses to these recommendations,” Commissioner James H. Cawley said in a motion approved by the commission.

More: PUC

WEST VIRGINIA

Tomblin Vetoes Net Metering Bill, Solar Advocates Applaud

Gov. Earl Ray Tomblin vetoed a bill that would have prohibited utilities from subsidizing solar customers by charging other ratepayers for costs associated with installing and administering solar net-metering systems.

Solar advocates said the bill would have allowed utilities to raise costs for owners of solar installations, reducing incentives for renewable power.

“This bill was fatally flawed,” said Rhone Resch, president and CEO of the Solar Energy Industries Association. “Did it end up that way for political reasons? Or was it a case of sloppy drafting? Whichever the case, Gov. Tomblin did the right thing by vetoing the bill and sending it back to the drawing board.”

More: GreenTech Media

Compiled by Ted Caddell

March 3, 2015June 15, 2023

MISO Board of Directors Briefs

NEW ORLEANS — MISO last week signed a new Operations Reliability Coordination Agreement (ORCA) with its southern neighbors, increasing the flow limits within the MISO footprint.

MISO reached this agreement with SPP and the so-called “Joint Parties” — neighboring systems including Southern Co., Tennessee Valley Authority, Associated Electric Cooperatives, Louisville Gas & Electric, Kentucky Utilities and the PowerSouth Energy Cooperative.

Jennifer Curran, vice president of system planning and seams coordination, told the Board of Directors that the new agreement, which was filed with the Federal Energy Regulatory Commission on Feb. 27, increases MISO’s ability to flow from 2,000 MW to a total of 3,000 MW in the area (ER15-1141).

MISO said the signing of the new agreement will allow it and its neighbors to continue work on a long-term, market-based solution. The original ORCA was due to expire April 1. The new pact will expire on April 1, 2016, or earlier if FERC approves a replacement arrangement sooner.

MISO “continues to believe that current industry-wide reliability measures more than sufficiently protect system reliability and coordination,” the RTO said in a statement. “However, MISO is pleased to have developed a cooperative agreement to accommodate the desire for greater experience for its neighbors.”

No Rush on Review of Entergy Out-of-Cycle Tx Projects

The board will rule “no earlier than April” on Entergy’s request for approval of six out-of-cycle transmission projects totaling $220 million, Director Michael Evans said. Evans said the board would begin its review this month.

Entergy’s request for a $187 million transmission upgrade near Lake Charles, La., has become a lightning rod for transmission developers, who have accused the company of seeking an out-of-cycle designation to avoid opening the project to competition.

The Lake Charles project and five smaller out-of-cycle proposals failed to win unanimous support at the Planning Advisory Committee last month, setting up a “full” review by the board. (See MISO Board to Review Entergy Lake Charles Project Following Stakeholder Pushback.)

New MISO Chair Plans Changes on Governance; Higher Board Profile

New MISO Board Chair Judy Walsh said last week she will seek a review of the RTO’s governance principles while increasing the board’s visibility with state regulators.

Walsh, a former Texas Public Utility Commissioner who took the gavel in January, said the RTO has “looked mostly inward” in the past but needs to increase its outreach because of challenges such as the Environmental Protection Agency’s proposed carbon emission rule.

She asked Director Eugene Zeltman, chair of the Governance Committee, to review the term and role of the chair. “If the board will represent MISO before [the National Association of Regulatory Commissioners] and state regulators, perhaps more visibility and continuity may be desirable,” she said.

In the interim, she said, Director Michael Curran will continue to represent the board with outside parties, building on the relationships he developed during his recently completed two-year term as chairman.

Walsh asked the Governance Committee to review “all principles of governance,” including stakeholder relations, conflicts of interest standards and the Nominating Committee process, saying she hoped to have changes ready for adoption by the end of the year.

She said MISO management “has challenged itself to look at all operations and processes [to] ensure we are consistent and that a policy adopted for one purpose does not get in the way of us accomplishing our overall goals.”

She also said the Advisory Committee should consider reducing the number of subcommittees it has and the time spent in meetings.

MISO Names New Security Chief; Plans Additional Cybersecurity Spending

MISO will increase its technology budget “by a confidential amount” in order to eliminate the use of shared infrastructure between critical and non-critical assets, Director Baljit Dail said.

The spending is necessary to comply with tightened Critical Infrastructure Protection standards that will take effect in 2016.

The spending will be overseen by the RTO’s newly appointed Chief Information Security Officer Mark Brooks, who joined the RTO several weeks ago.

Incentive Payout: 68.8%

The board awarded MISO employees 68.8% of their potential incentive awards under its short-term incentive program for 2014.

The incentives are based on achievements measured against a weighted list of seven metrics: reliability standards, unit commitment efficiency, market efficiency, compliance with operations and capital spending budgets, customer satisfaction and strategic initiatives.

The board judged staff’s performance “excellent” for capital budgeting and “mid-range” for most other measures.

— Rich Heidorn Jr.

February 24, 2015June 15, 2023

Ex-Minnesota Commissioner Joins MISO

Former Minnesota Public Utilities Commission Chairman David C. Boyd has joined MISO as vice president of government and regulatory affairs. Boyd, who served eight years on the commission, will be MISO’s primary liaison with the governors and state regulatory and legislative policymakers in the 17-state region.

February 24, 2015

PJM Wins OK on Multi-Driver Tx Projects

PJM and its Transmission Owners won federal regulators’ conditional approval for their plan to integrate multi-driver projects into the regional transmission expansion plan (RTEP).

The Federal Energy Regulatory Commission’s Feb. 20 ruling (ER14-2864, ER14-2867) requires PJM to revise its Tariff to include the criteria it will use to determine whether and how to divide a multi-driver project that combines two or more proposed projects and two or more transmission developers.

The commission also ordered PJM to clarify its definition of multi-driver projects. PJM proposed to define such projects as “a transmission enhancement or expansion that addresses more than one of the following: reliability violations, economic constraints or public policy requirements.”

FERC said the definition “might be read to include reliability or economic transmission projects that also address public policy requirements for which PJM planned during the assumptions stage of the RTEP process,” which would conflict with PJM’s Order 1000 compliance filing.

PJM said the multi-driver concept could lower the cost of states’ public policy transmission projects by incorporating them in upgrades that address market efficiency or reliability.

FERC initially responded to the RTO’s filing with a deficiency notice asking for additional information on definitions, processes and cost allocation. (See PJM, TOs Respond to Deficiency Notice on Multi-Driver Projects.)

February 24, 2015

PJM MRC Preview

Below is a summary of the issues scheduled to be brought to a vote at the Markets and Reliability Committee on Thursday. Each item is listed by agenda number, description and projected time of discussion, followed by a summary of the issue and links to prior coverage in RTO Insider.

RTO Insider will be in Wilmington covering the discussions and votes. See next Tuesday’s newsletter for a full report.

2. PJM Manuals (9:10-9:40)

Members will be asked to endorse the following manual changes:

Manual 02: Transmission Service Request — Changes aim to clarify and more accurately describe the Available Transfer Capability (ATC) processes and the Initial Study process for long-term firm transmission service requests. They include a grammatical cleanup; updated references to the Joint Operating Agreement; and links to the deliverability analysis in Manual14A and Manual 14B.
Manual 14A: Generation and Transmission Interconnection Process — Adds Feasibility Study data form and Impact Study data form.
Manual 14B: PJM Regional Transmission Planning Process — Updated to reflect existing long-term deliverability analysis procedures and cleanup language regarding voltage drop analyses, generator deliverability analyses, load deliverability analyses and cost allocation.
Manual 40: Training and Certifications Requirements — Revisions resulting from the annual review required by North American Electric Reliability Corp. standard PER-005-2; includes a new section on training of operations support personnel.

3. PJM/MISO Coordinated transaction scheduling (9:40-10:00)

Members will be asked to approve the proposed PJM-MISO Coordinated Transaction Scheduling (CTS) product, which is intended to reduce uneconomic trading across the RTOs’ seam. (See PJM, MISO Reach Agreement on New Interchange Product.)

— Suzanne Herel

February 24, 2015

PJM Wins on 2,000 MW Capacity Waiver; Purchase Plan Rejected

The Federal Energy Regulatory Commission approved PJM’s request to retain 2,000 MW of capacity in yesterday’s third Incremental Auction for 2015/16 but rejected its request to purchase capacity outside of the Reliability Pricing Model, calling it “unreasonably vague and ill-defined” (ER15-738).

PJM had requested the one-time waiver on rules that would otherwise require it to release 2,000 MW of capacity, saying it feared that it might run short due to retirements of coal-fired generation.

In approving the request, FERC rejected arguments by interveners who said the RTO’s concerns were speculative. (See PJM Responds to Critics on Capacity Release Filings.)

“The release of approximately 2,000 MW of committed capacity could yield a reserve margin below the established installed capacity needed to assure reliable service to loads,” the commission said. “Moreover, given PJM’s reliance on committed capacity resources, the poor performance of generating capacity resources last year and the expected high level of generation retirements, absent granting the waiver, PJM would face increased risks of being unable to serve load.”

The commission, however, rebuffed PJM’s request for permission to obtain additional capacity outside of its auctions.

“Capacity procured under the proposed Tariff provision would be in addition to the 2,000 MW procured at competitive prices under the waiver, and PJM has not provided just and reasonable Tariff provisions that specify the criteria for determining how much additional capacity it requires, nor how to determine whether those contracts are at just and reasonable prices,” the commission ruled.

It said PJM could refile its request with more specifics to address the shortcomings in the initial filing.

February 24, 2015

Retiring PJM CEO Boston Lauded for Efficiency Improvements, Management Style

By Suzanne Herel

When Terry Boston took the helm of PJM seven years ago, the RTO was in turmoil, its reputation as the model for running competitive deregulated electricity markets in the balance.

Top management was battling allegations by PJM’s electricity price watchdog that the system was allowing generators to inflate rates. Amid the clash, Chief Operating Officer Audrey Zibelman and Chief Executive Officer Phil Harris abruptly resigned within months of each other, leaving the RTO rudderless.

In stepped the former executive vice president for the Tennessee Valley Authority, who early on in the deregulation of the market had focused on the importance of reliable transmission when the conversation — and profits — had drifted toward the generators.

“Terry brought PJM through a difficult period,” said Joe Bowring, the employee who challenged PJM’s credibility under former management and is now Independent Market Monitor for the RTO. “When he first got to PJM, he actively reached out to the Market Monitor unit, which we appreciated very much. He listened to us and all market participants.”

Now, North America’s largest power grid operator finds itself at the edge of another major change as Boston, 64, prepares to retire by the end of the year.

“I’ve been working in the utility industry for 43 years. It’s been a wonderful and rewarding career, but all good things must come to an end,” Boston told RTO Insider. “I am looking forward to spending more time visiting our kids, helping out our daughter Rachel with her career as an actress and getting out on our boat, which I haven’t been on in two years.

“I will continue on several boards and industry/professional groups. Most recently I’m involved with the Bipartisan Policy Center on energy policy and grid security and the National Academy of Engineering working on energy and the environment and improved analytics for the power system. I hope to remain engaged with the industry at a somewhat less demanding pace than working half days — that’s 12 hours per day,” Boston said.

Encouraging Team-Building

Boston is widely regarded by those who have worked with him during his time at PJM as a forward-thinking, approachable leader, a straight-shooter who strives for consensus and encourages team-building. The Tennessee native also enlivens meetings with his quirky sense of humor: To invoke the feel of a “fireside chat” at PJM’s General Session in February 2014, he propped up a tablet showing a video of a burning yule log on the stage.

“He’s been a real positive player in terms of a stable presence at PJM, with the vision of trying to see where it’s going. Particularly in the last year they’ve been very helpful in, No. 1, admitting they didn’t take gas-electric [coordination] as seriously as they should have, and No. 2, doing something about it,” said Federal Energy Regulatory Commissioner Philip Moeller. “He’s a great guy — he’ll be missed. But he deserves a lot of accolades as he winds it down.”

Sonny Popowsky, a former Pennsylvania state consumer advocate, sat with Boston on the board of the North American Electric Reliability Corp.

“He came in to PJM at a time of some turmoil with what direction we were headed and what the role of the markets was in terms of maintaining reliability,” Popowsky said. “When he came from TVA, he came with a strong background that focused on engineering and reliability. But he also came with an openness to the kind of market solutions that PJM is famous for. He’s been able to combine that really well.

“I think he’s just added a real level of stability and openness,” he said.

A Vocal Proponent of Consensus

Boston has publicly expressed his frustration with the number of Section 206 filings — used when stakeholders fail to reach consensus — submitted to FERC last year, including the request to raise the price-based energy offer cap from $1,000 to $1,800.

“Our ability to govern ourselves in the stakeholder process depends in large part on compromise,” he told the Markets and Reliability Committee at its year-end meeting. He opened the first MRC meeting of 2015 with another plea for consensus. The year ahead will hold a number of challenges, he said, especially as the RTO faces “the fastest fuel change in industry history” from coal-fired plants to natural gas.

In announcing Boston’s plans for retirement last week, Board of Managers Chairman Howard Schneider said on behalf of the group, “Terry’s deep knowledge of the electricity industry, strong business ethics and ability to forge strong relationships with PJM’s stakeholders have been instrumental in the success of PJM.”

During Boston’s tenure, PJM increased its billings from $30.6 billion in 2007 to more than $42 billion in 2014 while the RTO’s membership grew from 500 to more than 900 companies.

In 2008, Boston implemented “perfect dispatch,” a metric denoting the lowest production cost possible while maintaining reliability, which the company uses as a baseline to analyze and improve dispatch efficiency. According to PJM, the process has saved a cumulative $842 million — three times the cost of PJM’s annual operating budget.

At TVA, Boston ran the storm center for 20 years, and while at NERC he sat on the steering committee that investigated the 2003 Northeast blackout.

“I’m proud that PJM and our members met three one-in-100-year weather events in the last four years — and the polar vortex was not one of them,” Boston said. “They were the hottest day of record in 2011, followed by the derechos and Hurricane Sandy in 2012. In addition, we’ve met back-to-back all-time winter peaks in January 2014 and February 2015.”

Who Will Take Boston’s Place?

As for who will take the top spot, PJM says a “rigorous succession process” has been underway. “Candidates to succeed Boston will be considered on demonstrated leadership abilities, industry expertise and reputation, as well as commitment to electric system reliability and fair, efficient electric markets,” it said in a press release.

Among potential in-house candidates are Executive Vice President for Operations Mike Kormos and Executive Vice President for Markets Andy Ott, who frequently represent PJM before FERC and in industry forums. With higher titles, but lower public profiles, are Chief Financial Officer Suzanne Daugherty and General Counsel Vince Duane, both of whom hold the rank of senior vice president.

During a break at FERC’s technical conference on the Environmental Protection Agency’s proposed carbon rule last week, Kormos told RTO Insider that he was “absolutely” interested in the job.

His colleagues on the executive team did not respond to requests for comment on their interest in the position.

While the Board of Managers has identified no candidates, stakeholders are firm in the type of person they’d like to see assume the role.

“Somebody similar, with not only the ability to have a vision but to also manage a diverse set of stakeholders that range from, obviously, members of PJM to state commissions and state governments and FERC,” Moeller said. “It’s a lot of relationships to manage, and so you’ve got to have the right personality as well.”

Popowsky suggested that the board choose someone ideologically open, as he said Boston has been.

“Someone who says, ‘What’s the best combination of markets and regulation to produce the paramount goal of a reliable electric system that’s affordable to the folks who depend on it?’” he said.

Boston said his successor will face a number of challenges.

“Certainly, dealing with the largest and most rapid fuel shift in history has many downstream impacts. I believe it’s manageable, but it will take a lot of work to get through it,” Boston said. “The future of demand response and renewables, the introduction of new technologies and new consumer-use patterns, grid security and the growing complexity of the business all are challenges that I expect will keep my successor and the entire PJM team very busy.”

College Classmate-Turned-Sweetheart, Family Life

Boston has served on numerous industry boards and is the immediate past president of the GO15 international association of large grid operators. Last year, he was elected to the National Academy of Engineering.

He holds a bachelor’s degree in engineering from Tennessee Technological University and a master’s degree in engineering administration from the University of Tennessee.

It was at Tennessee Tech that Boston met his wife-to-be, Brenda, when they shared an organic chemistry class. The couple have three children: Rachel, a prolific actor who most recently played Ingrid Beauchamp in the TV series “Witches of East End;” Andrew, who earned a master’s in business administration from Harvard and now is an investor with Founders Circle Capital in San Francisco; and Brian, a graduate student at the University of Hawaii, where he is earning his doctorate in geophysics.

“Andrew was a world-class rower for Harvard and Oxford,” Boston said. Andrew worked on and sold a high-tech startup to a London company before going to Harvard.

“Brian, our youngest, will be the first Ph.D. in the family when he graduates this year from the University of Hawaii in geophysics. Last year, he worked on a Japanese research ship to collect data from the deepest research hole ever drilled through two tectonic plates to better understand the Fukushima earthquake zone off the coast of Japan.

“The kids were always busy with school and sports. They learned a strong work ethic and found that hard work pays off,” Boston said.

February 24, 2015

ISO-NE: Reverse Market-Solution Order

By William Opalka

ISO-NE asked the Federal Energy Regulatory Commission last week to reverse its order directing a market-based solution for the next winter reliability program.

The RTO said that mandating a market-based solution now, instead of in three years as it originally contemplated, is premature. “The options for developing a market-based solution in the context of existing obligations are, at best, potentially less effective than the winter reliability programs and, at worst, less effective, inefficient, controversial and expensive to implement,” ISO-NE wrote in a Feb. 19 filing (ER14-2407-003).

ISO-NE’s Pay-for-Performance program is set to debut in late 2018. The RTO has relied on out-of-market solutions to ensure reliability over the past two winters and said it needed the interim time to develop more permanent fixes.

However, power generators in New England argued that the most recent FERC order accepting the temporary fix meant that a market-based solution should be in place for the 2015-2016 season (ER14-2407). FERC agreed in a clarification of that order issued on Jan. 20. (See FERC Orders Market-Based Reliability Program Next Winter in ISO-NE.)

New England has experienced severe natural gas pipeline constraints as the region’s power market switches to gas for power generation. Recent retirements of the Vermont Yankee nuclear station and coal-fired plants have also tightened supplies. The RTO has encouraged the development of dual-fuel generators with fuel oil as a back-up.

ISO-NE said the program to ensure adequate fuel supplies has succeeded, as demonstrated in recent weeks as New England endures a prolonged cold spell.

It also said that power generators have not advanced any potential solutions in the January or February Markets Committee meetings and that the passage of time means that developing a market-based approach for next winter is infeasible.

ISO-NE wants to have the rehearing question resolved by June 1.

February 24, 2015

US Business Softens Iberdrola Slump

By William Opalka

Earnings from U.S. operations were a bright spot for Spanish utility conglomerate Iberdrola SA, as the company coped with the effects of slashed government subsidies for renewable energy in its home country.

Iberdrola said 2014 profits fell to 2.33 billion euros ($2.66 billion), from 2.57 billion euros in the same period last year. The Spanish government’s cuts in renewable-power subsidies and distribution reduced earnings by 617 million euros, the company said.

U.S. earnings, however, grew. “Our U.S. businesses grew EBITDA by 7.2% over last year, which enabled us to contribute more than $1.6 billion (1.2 billion euros) of EBITDA to the [Iberdrola] Group’s strong performance,” said Bob Kump, chief corporate officer of Iberdrola USA.

Subsidiary Iberdrola USA is the parent of New York State Electric & Gas, Rochester Gas & Electric, Central Maine Power and other natural gas units in Maine and New Hampshire, with a combined customer base of about 3 million.

Iberdrola officials pointed to a rate case in Maine that raised distribution rates by $24.3 million. Looking ahead, the company said it is on schedule and within budget for the Maine Power Reliability Program (MPRP), a $1.4 billion upgrade that includes 40 substations and 440 miles of transmission lines with links between Maine and New Brunswick, Canada.

The company is also due to file a rate case in the RG&E territory, which will positively affect earnings, it said. Other transmission investments are expected to pay dividends in the coming years.

“In New York now we’re already involved in two projects, transmission projects, to inject electricity into New York City,” CEO Ignacio Galan told analysts in the earnings call.

Through NYSEG and RG&E, Iberdrola is a partner in New York Transco, a joint venture designed to bring upstate power generation to the New York City area. It is also a partner in the Champlain Hudson Power Express project, which would ship hydropower from Quebec. (See NYISO Supports TO Exemptions to BSM Rules.)

February 24, 2015June 15, 2023

State Briefs

DNREC Taking Public Comment on Controversial Refinery Water Permit

A plan by the Delaware City Refinery to upgrade its cooling water intake and discharge will be the subject of a public comment session on March 24.

The Department of Natural Resources and Environmental Control in December said it had reached a draft agreement with refinery owner PBF Energy that calls for the company to spend up to $10 million to reduce aquatic life deaths at its water intakes. Environmentalists, however, have called for measures to force the company to build a more expensive cooling tower system for the refinery to recycle cooling water, rather than the current method of drawing and discharging water directly from the Delaware River.

More: The News Journal

ILLINOIS

Lawmakers Introduce Bill to ‘Fix’ RPS, Set New Standards

Illinois lawmakers have introduced a bill that would increase the state’s renewable portfolio standard to 35% by 2030. The current standard calls for 25% of the state’s energy to be generated by renewable sources by 2025.

The bill, sponsored by state Sen. Don Harmon and Rep. Elaine Nekritz, directs the Illinois Power Agency to develop a long-term plan for renewables. The bill also provides guarantees that utilities will support residential and community solar installations, and encourages construction of utility-scale solar to be built on brownfields.

The legislation also directs the state Environmental Protection Agency to develop market-based strategies to reduce carbon emissions in the state.

More: Midwest Energy News

INDIANA

House Committee Passes Bill Limiting Payments for Solar, Wind

A House committee last week passed a bill that would establish a fixed rate that utilities pay residential renewable energy owners, drawing protests from advocates.

The bill, HB 1320, would set a fixed rate that utilities would have to pay for electricity that small-scale solar and wind generators feed back to the grid. Opponents of the bill say they are worried that it would reduce incentives for small solar producers and that it could allow utilities to unfairly profit from reselling the power to other customers on their systems.

“For the last 10 years of my career, I’ve been working hard to develop a solar energy market in southern Indiana,” said Brad Morton, an Evansville resident and owner of Morton Solar. “HB 1320 takes away any little bit of economic incentive for rooftop solar and puts it right into the pockets of the utility companies.”

More: Indianapolis Business Journal

IOWA

Utilities Board Turns Down Request for Separate Clean Line Hearing

The Utilities Board turned down a request from Clean Line Energy Partners to hold a special hearing to examine eminent domain issues associated with the company’s planned 500-mile Rock Island Line transmission project.

The commission, which needs to grant eminent domain rights as part of its approval process, said a separate hearing on eminent domain would inconvenience property owners along the transmission line’s route while providing a benefit to the company.

The company said the $2 billion project is going forward. The line would run from northwestern Iowa to Illinois. The project has already received approval from the Illinois Commerce Commission and the Federal Energy Regulatory Commission.

More: The Gazette

MANITOBA

Public Utilities Board Denies Manitoba Hydro’s Rate Hike

The Public Utilities Board rejected Manitoba Hydro’s application for a 3.95% rate hike that would have gone into effect April 1.

It was good news for those who think the company’s rate hike requests are too frequent. “We are pleased the PUB has taken the side of Manitobans who pay the bills,” said Hydro critic Ralph Eichler. “We see Hydro as an asset owned by all Manitobans that must be managed thoughtfully and it appears the PUB agrees with us on this.”

Manitoba Hydro may still apply for a rate hike later in the year, however.

More: The Reminder

MARYLAND

Bill Would Stop Fees for Customers Who Don’t Want Smart Meters

Two Maryland lawmakers are filing bills that would prohibit utilities from charging customers who don’t want smart meters on their homes or businesses.

Currently, the Public Service Commission allows customers to opt out of the various smart meter programs in the state, but it allows utilities to charge those customers fees to pay for the manual reading of their meters. Pepco charges an upfront fee of $75 for not getting a smart meter and a monthly charge of $11 to $17. Baltimore Gas & Electric, Delmarva Power & Light and Southern Maryland Electric Cooperative also charge to opt out of the programs.

A bill sponsored by Sen. Nathaniel J. McFadden and Del. Glen Glass would stop the fees, and also require utilities to notify customers before smart meters are installed. Pepco indicated that it would fight the bill.

More: The Gazette

MASSACHUSETTS

Report: Death of Cape Wind Project Shows States Need to Work Together

The death of the Cape Wind project is an illustration of everything wrong with U.S. wind energy policy, according to a report commissioned by the Clean Energy Group.

The $2.6 billion project off Cape Cod was becalmed last month when two utilities with power purchase agreements backed out after Cape Wind missed financing deadlines.

The report said that instead of securing approval by one state, future projects should get an entire region to support the projects. “While the Cape Wind project floundered amidst fierce local opposition, the project’s difficulties highlight a larger policy problem — it is difficult, if not impossible, for any single state to jumpstart the offshore wind industry,” the report states.

More: FierceEnergy

MISSISSIPPI

Supreme Court Orders Mississippi Power to Return Kemper-Related Rate Increase Money

The state Supreme Court has ordered Southern Co. subsidiary Mississippi Power to refund $271 million in rate increases that it said the Public Service Commission improperly imposed to pay for a costly power plant.

The court’s decision concerns the PSC’s decision to allow rate recovery of Mississippi Power’s over-budget Kemper County integrated gasification combined-cycle plant. The commission allowed Mississippi Power to collect $125 million for construction costs in 2013 and another $156 million in 2014. The 582-MW plant has been plagued by cost overruns and delays.

The PSC, according to the ruling, never found that the funds were “prudently incurred,” a requirement for recovery. It also found that the PSC erred in not giving proper notice to the public about the company’s request for recovery, and by keeping confidential related information. “The commission’s decision to govern in a cloak of secrecy and grant confidentiality to rate-impact information was arbitrary and capricious,” the ruling said.

More: Power Magazine

MISSOURI

PSC Wants More Info from Clean Line on Grain Belt

The Public Service Commission wants more information from Clean Line Energy Partners about its proposed 700-mile Grain Belt Express transmission line project before it will consider approving it.

The PSC said new questions arose after a series of technical hearings in Jefferson City about the project, which would deliver electricity from Midwestern wind farms in the east.

Opponents seeking to thwart the project declared victory. The commission’s order for more information is “a very tall order and will take considerable time and funds to produce,” said a group called Block Grain Belt Express. “We interpret this as an extremely promising sign.”

More: News Press

NEBRASKA

Keystone Opponents Vow to Keep Fighting No Matter What Feds Do

Keystone XL pipeline opponents said they will continue to fight a change in state law that allowed former Gov. Dave Heineman to approve the pipeline’s route, bypassing the Public Service Commission.

A group called Bold Nebraska has filed suit in state court to overturn the law and to give the routing decision back to the PSC. Opponents are also pressuring lawmakers to overturn the law.

TransCanada, the company seeking to build the pipeline, said it was temporarily halting efforts to seek route approvals in Nebraska. That move came a week after a Nebraska district court judge issued a temporary injunction barring the company from invoking eminent domain along the northern Nebraska pipeline route.

More: Grand Island Independent

NEW YORK

Cuomo Calls to Boost Oil Spill Fund from $25 Million to $40 Million

A day after a train carrying crude oil derailed and burst into flames in West Virginia, Gov. Andrew Cuomo’s administration proposed raising New York’s soil spill fund from $25 million to $40 million and shifting its control from the state comptroller to the Department of Environmental Conservation.

The fund is used for immediate payment of cleanup costs and is financed by penalties paid by violators. Albany has become an important oil-train hub since the boom in Bakken crude.

More: PennEnergy

NORTH CAROLINA

Supreme Court Sides with Duke on 2 Challenges to Rate Hike

The state Supreme Court on Wednesday upheld the Utilities Commission’s approval of a 2013 Duke Energy Carolinas rate hike, turning away challenges by the state Attorney General and NC WARN, a solar advocacy group.

The rate increase was based partly upon a 10.2% return on equity that the commission allowed Duke. NC WARN had argued that the company’s allocation of costs discriminated against residential customers. In December, the court upheld the company’s 2012 rate case. Attorney General Roy Cooper, who is eyeing a 2016 gubernatorial bid, has challenged several Duke rate increases.

More: Charlotte Observer

NORTH DAKOTA

TransCanada Proposes Another Pipeline – This One to Send Oil into Canada

The company that wants to build the Keystone XL pipeline is now proposing a second pipeline — this one to deliver oil from the state into Canada.

TransCanada is proposing to build a $600 million pipeline to go from northwestern North Dakota to Saskatchewan. The Upland Pipeline will need approval from the U.S. State Department, the Public Service Commission and Canada’s National Energy Board.

More: WDIO

OHIO

Supreme Court Rules States have Exclusive Authority over Fracking

The state Supreme Court has ruled that states have “exclusive authority” over hydraulic fracturing, and that cities and counties cannot regulate or ban the practice.

The 4-3 vote held that the Department of Natural Resources in 2004 was given the power to license and regulate where the state’s wells can be drilled. The ruling was seen as a victory for oil and gas producers, who often faced local opposition.

“We have consistently held that a municipal-licensing ordinance conflicts with a state-licensing scheme if the local ordinance restricts an activity which a state license permits,” wrote Justice Judith L. French in the majority opinion.

More: The Columbus Dispatch

PENNSYLVANIA

State Audit IDs Millions in Possible FirstEnergy Savings

A performance audit of FirstEnergy’s four utilities in the state identified ways to save nearly $20 million in one-time savings and a further $3.7 million annually.

The state audit made 28 recommendations. FirstEnergy has accepted 25 of them and is working to put new procedures in place by the end of 2019. The audit looked at 14 areas such as customer service, emergency preparedness and inventory management. The auditors said West Penn Power could save $8.4 million in inventory control improvements alone.

More: Pittsburgh Post-Gazette

VERMONT

Public Service Department Asks for NRC Hearings on Yankee Plan

The Department of Public Service asked federal regulators to hold hearings on Entergy’s plan to cut back on emergency responsibilities now that its Vermont Yankee nuclear generating station has been permanently shut down.

The Nuclear Regulatory Commission said last week that it is setting up an Atomic Safety and Licensing Board panel to review the proposed changes. Entergy has said it wants to reduce its emergency responsibilities to reflect the plant’s lower risk profile.

More: Manchester Journal

WEST VIRGINIA

PSC Approves New 549-MW Combined-Cycle Plant

The Public Service Commission issued a siting certificate to Moundsville Power for a 549-MW combined-cycle natural gas plant in Marshall County that will also be the first U.S. plant able to burn ethane.

The certificate allows Moundsville to seek financing for the $815 million project. When completed in early 2018, the plant will become a wholesale generator in the PJM market. In addition to helping offset carbon emissions from coal-fired plants, the Moundsville project will secure its natural gas and ethane from state sources.

More: PowerMag

WISCONSIN

Walker Appoints Ex-MG&E Exec to Cabinet Position

Gov. Scott Walker named a former Madison Gas & Electric executive to head the state Department of Administration.

Scott Neitzel was named as the department’s new secretary a week after he abruptly resigned from a senior vice president position at MG&E. He is replacing Mike Huebsch, who is moving to the Public Service Commission.

Neitzel gave no reason for leaving MG&E, where he’d worked since 1997. He left behind a $315,180 salary. Before working at MG&E, he served a five-year term with the PSC.

More: Wisconsin State Journal

Compiled by Ted Caddell