On Thursday, CAISO became the first region to fully comply with the regional requirements of the Federal Energy Regulatory Commission’s Order 1000.
Now, the commission is starting the process of arbitrating interregional compliance filings, beginning last week with PJM and MISO.
It’s clear the RTOs still have work to do.
FERC conditionally accepted the RTOs’ proposed revisions to their joint operating agreement (JOA), finding that they only partially complied with the requirements of Order 1000. It directed them to modify their interregional cost allocation method for cross-border transmission projects and develop identical language in their Tariffs to describe their interregional transmission coordination procedures (ER13-1944).
Cross-Border Project Cost Allocation
The RTOs filed their own revisions separately last year, mainly because of disagreements over the cross-border project cost allocation issue. While PJM proposed relying on the existing cost allocation methods in the JOA, MISO wanted to remove them for cross-border baseline reliability projects, arguing that tie lines between MISO and PJM transmission owners be designated as reliability projects, with each RTO recovering costs in accordance with its own Tariff. (See PJM in Standoff with MISO, NYISO on Order 1000 Filing.)
MISO based its argument on the fact that FERC had previously accepted the RTO’s proposal in its regional Order 1000 compliance filing to remove regional cost allocation for its baseline reliability projects and assign all of the costs to the pricing zone where the project is located.
FERC rejected MISO’s argument, however. “To the extent that a conflict exists between the existing cross-border baseline reliability project cost allocation in the MISO-PJM JOA and the cost allocation requirements for interregional transmission facilities in Order 1000, that conflict results from MISO’s decision to no longer regionally allocate the costs of MISO baseline reliability projects, not the requirements of Order 1000,” FERC said.
Similar, but not Identical, Language
In their compliance filings, PJM and MISO said they were in agreement over interregional transmission coordination procedures. But owing to their separate filings, the RTOs included language and terms based on their own individual Tariffs. Order 1000 requires neighboring planners to use the same language in their filings.
“Although MISO and PJM state that these minor differences in their respective filings are needed to reflect whether the
discussion is from the perspective of either MISO or PJM, we find that some of the differences do not serve this purpose and therefore are not necessary,” FERC said. The commission directed the RTOs to adopt identical terms in new compliance filings due in two months.
FERC also said that the RTOs’ cost allocation proposals do not explicitly refer to an interregional transmission facility as defined by Order 1000: “a transmission facility that is located in two or more transmission planning regions.” The RTOs’ JOA refers to cross-border baseline reliability projects and cross-border market efficiency projects, but it does not explicitly state that these projects must be located in both PJM and MISO. FERC wants a definition that matches Order 1000’s in the next filing.
“I guess it’s no secret that the somewhat convoluted seams between those two regions have a complicated and lengthy history at the commission, and I’m hopeful that today’s order on the interregional compliance filing will help improve … [the] interregional coordination of transmission across the seams,” FERC Chairman Cheryl LaFleur said. “It does look so far like … interregional coordination [and] cost allocation … will be the [issues] that we have to devote some attention to.”
NIPSCO Complaint
In a separate but related order, FERC addressed a complaint from Northern Indiana Public Service Co. against PJM and MISO regarding the interregional transmission planning provisions in the JOA. NIPSCO, a MISO member, is flanked by PJM in eastern Indiana and Illinois to its west.
The company complained that the MISO-PJM seams there are highly congested and that the RTOs have not approved a single cross-border transmission upgrade project under their JOA.
In response, FERC ordered staff to conduct a technical conference to explore the issues NIPSCO raised (EL13-88).
The Federal Energy Regulatory Commission last week upheld its 2011 rate order for the RITELine transmission project over the opposition of Commissioner Philip Moeller, who opposed the panel’s decision to reduce an incentive adder for risks.
The RITELine Project, a joint venture by Exelon and American Electric Power, is a proposed $1.6 billion 765-kV transmission line stretching from northern Illinois, through Indiana and into Ohio. The companies say it would allow the integration of 5,000 MW of wind generation.
The companies had sought an ROE of 12.7%, which included a base ROE of 10.7% plus certain incentive adders.
FERC’s 2011 order approved a total rate of 11.43%, including some adders and a base rate of 9.93%.
FERC granted only a 100-basis-point adder “to compensate for the risks and challenges associated with investing in new transmission,” rather than the 150 basis points it had previously granted for such risks. The commission said a reduced adder was justified because the incentives it had included reduced the project’s financial risks.
In their rehearing request, the companies argued that this represented a substantial change in how FERC grants incentives for transmission projects, and that the commission had failed to adequately explain it.
In last week’s order denying rehearing (ER11-4069), the commissioners rejected the companies’ contention that reduction of the risk adder “represents a departure from commission policy; there is no policy guaranteeing a project 150 basis points, but rather any ROE adder depends on the risks and challenges of that particular project.”
In a partial dissent, Moeller said the commission had made “a significant policy change without justification for that change.” “If we are going to produce less carbon dioxide when generating electricity, we’ll need more transmission lines to move cleaner sources of power to those who need it,” Moeller continued. “This action thus sets up a collision between two federal agencies that regulate the energy industry. That is, while the Environmental Protection Agency is moving to limit carbon dioxide, which will require more transmission lines, this commission is changing its policies on transmission incentives in a manner that actually discourages the very transmission that will be needed to satisfy EPA requirements.”
Attempts to restart the Yucca Mountain Underground Nuclear Waste Repository have hit another snag: the government does not have the necessary water rights to operate at the Nevada site.
A staff report by the Nuclear Regulatory Commission said that despite decades of study and construction, the Department of Energy allowed land-use agreements for the site to expire and would need an act of Congress to renew them.
Sen. Harry Reid, D-Nev., a leading opponent of Yucca Mountain, said the report underscored major weaknesses in the project. “This is just one reason why the Yucca Mountain project will never be built,” he said in a statement.
NRC Puts Callaway’s License Renewal Decision on Hold
Ameren Missouri expected the Nuclear Regulatory Commission to rule by the end of this month on its application for a 20-year license renewal for its Callaway Energy Center, but the company heard last week that the decision is on hold while the commission considers a legal challenge.
The Missouri Coalition for the Environment, which on Dec. 8 requested to intervene in the case, wants to challenge the “legal adequacy” of the commission’s newly revised Continued Storage of Spent Nuclear Fuel rule. Callaway was to be the second nuclear plant to get a license renewal under the new spent-fuel rule, which the commission adopted in October, ending a two-year moratorium on license renewals.
Columbia Gas’ $268.5 million Eastside Expansion Project, which includes 19 miles of new transmission line from Chester County, Pa., into New Jersey, received approval from the Federal Energy Regulatory Commission.
The expansion includes plans to upgrade a compressor station in Forks Township, Pa., to support the pipeline’s added capacity. FERC determined that the upgrade would not have an adverse impact on air quality.
Another NJ Pipeline Expansion Project Approved by FERC
The Leidy Southeast line, an addition to the Transcontinental Pipeline designed to bring Marcellus Shale natural gas to southern markets, was approved last week by the Federal Energy Regulatory Commission.
The $738 million project, a 30-mile series of loops in both Pennsylvania and New Jersey, won the commission’s approval despite objections from environmentalists who said it would cross farmlands and wetlands.
The Great Northern Transmission Line, a 220-mile, 500-kV line being built by Minnesota Power and Manitoba Hydro, has received approval from the Federal Energy Regulatory Commission.
The line will bring power to Minnesota from two hydro stations in northern Manitoba. MISO also voted to include the line in its Transmission Expansion Planning report for 2014.
FERC Grants Native American Hydro Project Exempt Status
The Federal Energy Regulatory Commission exempted a Montana hydro project from having to comply with reporting requirements, the first time such an exemption has been granted. The project will come under the full ownership of Native American tribes next year.
The Confederated Salish and Kootenai Tribes of the Flathead Reservation, which already owns part of the Kerr Hydroelectric Project, are buying the remaining shares from PPL. The tribes and their company Energy Keepers Inc. asked FERC for an order declaring them exempt public utilities under section 201(f) of the Federal Power Act, which would relieve them of obligations to maintain or make available their books and records to the commission.
FERC found that the tribes and their holding company are performing an inherent government function and were exempt. The ruling will allow the tribes to engage in forward power sales before assuming full control of the project.
DOE Releases Environmental Study on 720-Mile Tx Line
A proposed $2 billion transmission line designed to bring wind energy from Oklahoma to Tennessee passed an important regulatory hurdle when the Department of Energy released the draft environmental impact study.
Clean Line Energy Partners, the project’s developer, said the final environmental impact study should be completed next year. Construction on the Plains & Eastern project is expected to begin next year and to be completed in 2018. The line is designed to deliver 3,500 MW of wind energy to its final customer, the Tennessee Valley Authority.
Secretary of Energy Ernest Moniz has given the OK for the Savannah River Site in South Carolina to begin cleaning up radioactive tanks that stored chemicals when the site was part of the nation’s nuclear weapons production system.
Moniz’s decision came after a long study of hazards and preliminary work at the site. The underground tanks of H Tank Farm will be emptied and their interiors will be coated with a cement grouting to stabilize any remaining materials.
“We are now able to move forward to safely, effectively and efficiently clean up and close these tanks in the H Tank Farm, as we work to achieve the key mission of cleaning up the environmental legacy of the Cold War,” Moniz said.
American Electric Power went before the Public Utilities Commission of Ohio last week in a rare oral argument to support its request for a power purchase agreement (PPA) for its share of an aging, coal-fired power plant.
If granted, the costs, or benefits, involved wouldn’t amount to much. But as a precedent, it would be significant.
At issue is AEP’s approximately 435-MW share of the 1,000-MW Kyger Creek plant in Chesire, Ohio. The company said the plant is old and at a disadvantage in the state’s deregulated wholesale power market.
AEP said Kyger Creek needs a guaranteed revenue stream to keep the plant operating and bolster the reliability of the regional power grid.
AEP is seeking permission for a long-term (10 to 15 years) PPA from Kyger Creek at a price that would cover the plant’s operating costs plus a profit (13-2385-EL-SSO).
The plant’s output would then be sold in PJM’s day-ahead and real-time markets. If the market price exceeds the PPA, Ohio customers will receive credits. When it is below the PPA, customers will foot the bill.
Opponents have called the proposal a bailout for a power company that was already given a good deal when the state opened the retail market to customer choice. AEP Ohio received $927 million in stranded-cost recovery as a part of the switch to a deregulated market.
Waiting in the wings are more requests just like it. AEP has another request that would cover four more plants. Duke Energy and FirstEnergy have similar requests before PUCO.
Terri Flora, AEP spokeswoman, acknowledged that it is a difficult argument to make before the commission and customers.
“We are getting a lot of feedback, either for or against, and now it is just wait and see,” she said. “It really comes down to how much of a player Ohio wants to be in generation. It is not about us, really; it is about providing rate stability, as well as economic development, and keeping decent plants alive for the reminder of their lives.”
She scoffed at opponents’ use of the term bailout. “Some of the interveners use words that are intended to scare,” she said. “This is simply a financial hedge. If we had had this PPA in place this time last year, they would have seen a credit to their bills.”
Flora said she thinks PUCO will issue a ruling within two months.
PJM is seeking to reach a consensus with neighboring RTOs on a long-term increase in the $1,000 energy offer cap.
PJM CEO Terry Boston said that he proposed a joint approach to ISO-NE and NYISO at an ISO/RTO Council Markets Committee meeting last week. Boston said he also discussed the issue separately with MISO.
Boston told the Markets and Reliability Committee Thursday he wants to coordinate with the neighboring RTOs “so it doesn’t create a seams problem with people rushing across the border when there is a gas price spike.”
On Dec. 15, PJM asked the Federal Energy Regulatory Commission to raise the cost-based cap to $1,800/MWh through March (EL15-31). PJM made its request to FERC in a Section 206 filing after members failed to reach consensus over the past eight months. (See PJM Board to Seek $1,800 Offer Cap.)
Boston again expressed his disappointment in the deadlock. “Our ability to govern ourselves in the stakeholder process depends in large part on compromise,” he said.
Several members asked what will happen after March.
“We believe this issue is a broader national issue. We are hoping FERC would take this on,” said Andy Ott, PJM executive vice president for markets. “If we don’t see that occurring, we will have to take it up again.”
The Federal Energy Regulatory Commission last week accepted ISO-NE’s plan to increase its scrutiny of energy importers to mitigate market power in its capacity auctions.
FERC had issued a show cause order in September directing the RTO to strengthen market rules that prevented its Internal Market Monitor from fully evaluating the capacity bids of import resources. FERC had expressed concern that a declining capacity surplus had left the RTO vulnerable to market power abuses.
Under the previous rules, the Market Monitor determined only whether an importer’s bid was consistent with its actions in previous capacity auctions, rather than evaluating it against its net risk-adjusted going-forward costs, as is done for internal resources.
The revisions will allow ISO-NE to determine which new import resources have market power and apply mitigation to them in a way similar to what is applied to existing resources.
“ISO-NE’s current proposal represents a significant step to address the problem identified by the commission in the Show Cause Order, namely, the need to prevent resources participating in the FCA [Forward Capacity Auction] from exercising market power and leaving the auction at prices inconsistent with their net risk-adjusted costs,” FERC wrote (ER15-117).
The order is effective for FCA 9, which will be held in February for the 2018/19 delivery year.
Suppliers had asked for an opportunity to provide multiple offers in the auction, but FERC agreed with ISO-NE that there wasn’t enough time to implement required software changes for FCA 9. FERC ordered ISO-NE to implement the changes in time for FCA 10.
FERC also rejected a protest filed by Public Citizen to reopen FCA 8. The group had claimed that participants had used market power to increase prices, a contention the commission had previously rejected.
PJM on Thursday announced a fallback plan to incorporate demand response into the capacity market in the event a D.C. Circuit Court of Appeals ruling limiting the jurisdiction of the Federal Energy Regulatory Commission is allowed to stand.
PJM General Counsel Vince Duane presented the contingency measure to the Markets and Reliability Committee, saying it would go into effect only if the U.S. Supreme Court rejects a request by Solicitor General Donald B. Verrilli to hear the case. Verrilli is expected to file a petition of certiorari on FERC’s behalf by Jan. 15.
Duane said that while the Supreme Court grants only about 1% of all cert petitions, some claim the success rate may be as high as 70% for those filed by the solicitor general. “I haven’t been able to validate that statistic,” Duane said. “But there’s no question that the odds increase significantly when the solicitor general makes a request.”
The plan, which will be submitted to FERC in a Section 205 filing in coming weeks, would allow any “wholesale entity” to submit “curtailment commitment bids” that would reduce the capacity procured in May’s Base Residual Auction. Duane said the term “wholesale entity” is “deliberately vague” and intended to include both load-serving entities and electric distribution companies.
The contingency plan is based largely on a white paper PJM released Oct. 7. That proposal came under criticism for limiting demand-side DR participation to load-serving entities. It is the electric distribution companies that oversee DR programs in several PJM states.
“This is a modest planning exercise to mitigate risk — but it does not avoid risk,” Duane said.
Duane said PJM can expect a decision on whether the Supreme Court will take up the case in March or April.
“If that’s ultimately found to be unlawful, it could undo that auction,” Duane said. “We face the prospect of an unsettled market outcome if the D.C. Circuit decision becomes the law of the land.”
The contingency plan is a “stop-gap” measure to allow time to develop a long-term solution, Duane said.
“We haven’t had an inclusive, broad stakeholder discussion … of what demand response should look like in the future,” Duane said. “We’re not suggesting in this filing we’re charting the future of demand response.”
PJM will request the commission act on the filing by April 1.
The contingency plan is a response to the D.C. Circuit’s May 23 ruling (Electric Power Supply Association v. Federal Energy Regulatory Commission) that overturned FERC Order 745. The court issued a stay on the ruling in October in response to a request from FERC. (See Awaiting FERC action, PJM Floats ‘Trial Balloon’ on DR Post-EPSA.)
The court ruled that FERC’s order, which required PJM and other RTOs to pay DR resources market-clearing prices, violates state ratemaking authority. While the ruling addressed FERC’s jurisdiction over DR in energy markets, PJM wanted to be prepared for it to be applied to FERC-regulated capacity markets.
Depressed coal stockpiles have led to increases in MISO’s off-peak power prices and the cost impacts could increase with a repeat of last winter’s severe cold, officials said last week.
Coal generators in MISO, SPP and ERCOT have complained of difficulty obtaining coal for more than a year due to insufficient railroad capacity.
MISO clearing prices for fall were up 9% compared to fall 2013, with off-peak prices up 16%, due to increased coal-delivery costs and reduced output by generators seeking to conserve fuel due to low supplies, Todd Ramey, MISO vice present of system operations and market services, told the Federal Energy Regulatory Commission during a presentation at the commission’s open meeting Thursday.
MISO’s Market Monitor estimates that more than one-third of coal generation in MISO has implemented some form of coal conservation measures over the last six months, Ramey said.
Alan Haymes, of FERC’s Division of Energy Market Oversight, said coal stockpiles in the Midwest have declined since last year and are below five-year averages, although a mild summer helped mitigate the deficiency going into this winter.
“If the coming winter presents challenges similar to last year’s experience, the coal inventory problems could result in significant market impacts,” he said.
“It is likely the below-level stockpiles will persist through 2015 as railroads struggle to keep up with overall demand before system upgrades are complete. This is raising concerns among some generators that low stockpiles coming out of the winter could create challenges in the summer of 2015,” Haymes said.
Haymes said 166 power plants that burn coal from Power River Basin Mines in Montana and Wyoming have been struggling to maintain supplies because of insufficient capacity on BNSF Railway.
The railway has been pinched by an increase in shipments of grain and other cargo as the economy has improved. In addition, rail traffic to and from the Bakken oil fields of North Dakota have more than doubled since 2009, BSNF says.
Congestion in the east-west rail gateway in Chicago also has been a problem, said Michael Higgins, deputy director of the Surface Transportation Board.
A BNSF executive said the railroad is boosting capital expenditures and maintenance spending to $6 billion in 2015 from $5.5 billion this year. Last month BNSF said it would add 330 new locomotives to its 7,500-locomotive fleet.
The railroad, which serves 28 states and three Canadian provinces attributed some of the constraints to construction on its northern routes that increased congestion in the central part of its system. It says it expects to be rebuilding its customers’ coal stockpiles through 2016.
“We clearly understand that our service has not met customer expectations,” said Steve Bobb, an executive vice president of BNSF.
Commissioner Tony Clark asked BNSF whether and how the railroad determines which commodity receives priority during periods of tight constraint. Bobb replied that the railroad focuses on customers who report they have 20 days or less of inventory.
The commission also heard from Minnesota Power, which said that it experienced “severe” disruptions at its coal-fired plants last winter and at one point was down to a four-day supply of coal. Some units had to suspend operations; the utility purchased $27 million of higher-priced replacement power.
“The good news is that organized markets like MISO work and work well. We’ve had no electric service disruptions,” said David McMillan, senior vice president of external affairs at Minnesota Power parent Allete. “The bad news is that purchased energy prices were significantly higher than our own self-generation costs.”
A surcharge paid by Delmarva Power & Light customers to subsidize fuel-cell manufacturer Bloom Energy will come in at $3.3 million in January, down slightly from the previous month.
Under rules set by the Public Service Commission, a customer using 1,000 kWh will be assessed $4.52 for the Bloom Energy surcharge, down from $4.86 the previous month.
The PSC allowed Delmarva to collect the surcharge after declaring the natural gas used in fuel cells as renewable energy. The surcharge, which has generated nearly $63 million so far, was part of an economic incentive for Bloom to open a fuel cell manufacturing plant in Newark.
Exelon’s $6.8 billion acquisition of Pepco Holdings Inc. picked up new opposition during the Public Service Commission’s first public hearing on the merger last week.
A coalition including the Sierra Club, Chesapeake Climate Action Network, D.C. Working Families and the D.C. Environmental Network introduced itself during the five-hour session. The group, which calls itself Power D.C., also set up a website that calls Exelon “a Chicago-based utility with a bad record,” whose acquisition of Pepco will not benefit ratepayers or businesses.
The state Supreme Court will hear Commonwealth Edison’s appeal of a Commerce Commission order requiring it to enter into supply arrangements with the non-profit, clean-coal FutureGen 2.0 plant.
The ICC’s order forces ComEd to buy electricity from the plant as part of the state’s renewable energy mandates. The Illinois Power Agency Act requires that a quarter of the electricity consumed in the state by 2025 be generated by cost-effective clean-coal plants.
FutureGen 2.0, a project plagued by construction delays and cost overruns, is one of the only clean-coal power sources in the state. ComEd and other utilities have argued that the ICC’s mandate excludes other out-of-state clean-coal sources. The court is expected to make a decision before the end of 2015.
Consumer Advocate Says Duke Owes Customers $114.8M Refund
Edwardsport IGCC Plant (Source: Duke)
The Office of Utility Consumer Counselor is asking state regulators to force Duke Energy to reimburse customers $114.8 million in costs that it says were associated with the startup of the problem-plagued Edwardsport coal gasification power plant.
The Utility Regulatory Commission allowed Duke to collect up to $2.6 billion from customers to offset the plant’s construction costs, but it prohibited Duke from passing on any costs relating to testing and startup.
Duke said the plant was operational in June 2013. But the consumer counselor contends the plant didn’t officially go into commercial operation until March 2014 and that Duke improperly passed on startup costs between 2013 and 2014.
The Public Service Commission will hold two public hearings to investigate future investments in smart grid technology.
Advocates say smart grid technology, including smart meters, can allow utilities and customers to better gauge electricity consumption and to induce customers to conserve energy. None of the four investor-owned utilities in Kentucky – Louisville Gas & Electric, Kentucky Utilities, Duke Energy and Kentucky Power – have launched smart meter programs yet.
The PSC will record comments at the hearings and accept written comments until Feb. 27 before releasing recommendations sometime next year.
Abigail Ross Hopper, director of the Maryland Energy Administration, has been named the next director of the federal Bureau of Ocean Energy Management, whose duties include managing offshore wind development.
Secretary of the Interior Sally Jewell announced Hopper’s appointment last week. “Abigail Hopper’s knowledge of the energy sector, experience working with a wide variety of stakeholders and her legal expertise will be valuable assets to the bureau and the department as we continue to ensure the safe and responsible development of our domestic energy and mineral resources and [create] an offshore wind program,” Jewell said.
Hopper was an energy adviser to Gov. Martin O’Malley before she became head of the Energy Administration in 2012. She was involved in helping the state pass the Maryland Offshore Wind Energy Act of 2013.
DTE is seeking a 3.2% rate increase – about $9.75 for an average customer’s monthly bill – to pay for system upgrades and power purchases, the company said in a filing with the Public Service Commission. The request would increase revenue $370 million for the Detroit company.
DTE said the rate increase would apply only to residential customers because the commission has already approved rate decreases for businesses and industrials. DTE said that commercial customers have been subsidizing residential customer rates for years.
DTE, which has about 2.1 million customers, said it has made about $3.5 billion in system upgrades in the past three years. DTE’s last residential rate increase was in 2010, when it asked for $444 million, and the PSC allowed $188 million.
JCP&L Rate Case Drags on for 3 Years, Lawmakers Angry
Consumer advocates and lawmakers say it is time for the Board of Public Utilities to make a decision in a three-year-old case involving Jersey Central Power & Light, the state’s second largest utility.
The Division of Rate Counsel in 2011 asked the BPU to force JCP&L to file a rate case, arguing that the utility was charging at least $200 million too much. The utility, whose parent company is FirstEnergy, filed a request in 2012 seeking a $31 million rate increase. An administrative law court judge has granted several delays but is expected to announce a recommendation on Dec. 29.
“This is simply too much,’’ said Ev Liebman, associate director of AARP’s New Jersey chapter. “It is actually worse that the BPU has failed to act on the petition to establish provisional rates.’’
“JCP&L has been shamelessly collecting too much money (from customers) for too many years,’’ state Sen. Linda Greenstein said.
The Public Utility Commission is considering a ban on utilities assessing a charge on customers who want a paper bill, rather than an electronic accounting of their charges.
A four-year investigation into paperless billing found that paper billing invoice fees constitute “unreasonable and inadequate service.”
To date, no electric or gas utilities have separate charges for mailing a paper bill, a practice that has been limited to a few telecommunications companies. A rule prohibiting charging for a paper bill will be introduced next month.
SunCoke Cutting Coal Production by Half in ‘Challenging Environment’
SunCoke Energy, the largest independent producer of coke used in U.S. steelmaking, announced last week that it was cutting coal production by 50% and laying off 175 workers.
The company, based near Chicago, said it is cutting production from 1.1 million annual tons to about 500,000 annual tons and could be shutting some of its Appalachian coal mines completely.
“While we plan to continue pursuing opportunities to sell all or a portion of our coal mining business, the challenging coal price environment has led us to make these hard decisions,” Fritz Henderson, SunCoke chairman and CEO, said in a statement.
Public Service Commission member Jon McKinney is stepping down at the end of the month, leaving only one member of the three-member commission available to hear any issues regarding the 2013 chemical spill that shut down part of the West Virginia American Water system.
First appointed in 2005, McKinney’s term officially ended in 2011, but a law allowed him to continue serving until officially replaced.
Until Gov. Earl Ray Tomblin appoints a replacement, McKinney’s departure will leave only Brooks McCabe, who joined the commission just last month, to decide on the ongoing American Water issues. PSC Chairman Michael Albert has recused himself from that case.
XTO Energy to Pay $5M for Damaging Wetlands in Fracking Operations
The U.S. Environmental Protection Agency and the Department of Justice announced yesterday that XTO Energy will spend an estimated $3 million to restore eight sites damaged by unauthorized discharges of fill material into streams and wetlands during fracking operations in the state.
The company was also fined $2.3 million for violations of the Clean Water Act, which prohibits the filling or damming of wetlands and streams without permission of the U.S. Army Corps of Engineers. Half of the penalty will go to the state Department of Environmental Protection, a co-plaintiff in the settlement.
Officials said that the company, a subsidiary of ExxonMobil, dumped sand, dirt, rocks and other fill material into streams and wetlands to construct well pads, road crossings, freshwater pits and other facilities during fracking operations in Harrison, Marion and Upshur counties. More than 5,300 linear feet of stream and 3.38 acres of wetlands were affected. The EPA said it was alerted to some of the violations by the state and discovered others through routine joint inspections conducted with the Corps. The company also disclosed violations at five sites following an internal audit.
PSC to Maintain Vote Timeline on Wisconsin Energy-Integrys Deal
The Public Service Commission rejected a request by consumer groups and businesses to delay a vote on Wisconsin Energy’s acquisition of Integrys Energy Group. The commission plans to vote on the deal on March 20.
Merger opponents had encouraged Wisconsin regulators to follow the lead of Michigan regulators, who postponed their vote on the $9.1 billion deal while it works with Wisconsin Energy’s utility, We Energies, to address energy supply concerns on the Upper Peninsula.
“We are not sticking our heads in the sand,” PSC Chairman Phil Montgomery said. “We are aware that the decisions in other jurisdictions may affect Wisconsin ratepayers.” Montgomery said the commission could attach conditions to the agreement later.
A North Carolina environmental group last week asked the Federal Energy Regulatory Commission to force Duke Energy and other utilities in the Southeast to form a regional transmission organization to share power reserves, rather than keep building new generating plants and boosting prices to pay for them.
The North Carolina Waste Awareness and Reduction Network (NC WARN), a frequent critic of Duke, noted that the merger of Duke and Progress Energy resulted in Duke supplying 95% of the electricity in North Carolina either directly or through municipal providers or cooperatives.
“Duke Energy manipulates the electricity market by constructing costly and unneeded generation facilities, directly leading to generating capacity far above what is reasonable or necessary to meet demand,” NC WARN’s complaint (EL15-32) said.
NC WARN also said Duke, in “not effectively connecting” its transmission system with neighboring utilities, has not complied with Order 1000.
The group said those utilities, including Dominion Resources, Southern Co. and the Tennessee Valley Authority, also have excess reserve margins. “The excess capacity throughout the Southeast region can and should be used among the various utilities to supplement each other’s generation requirements, rather than to duplicate the waste of unneeded or underutilized generation,” the group said.
The group cited the North American Electric Reliability Corp.’s 2014 Summer Reliability Assessment, which showed reserve margins of 24% in SERC-E (the Carolinas), 26% in SERC-N (primarily TVA), 37% in SERC-SE (primarily Georgia and Alabama) and 29% in the Florida Reliability Coordinating Council.
“The resulting total for [the] Southeast is much greater than the [NERC] reference margin of 14.8%,” the group said.
Duke said in a statement that it is following a responsible building program, and that its natural gas plants are necessary, replacing older, coal-fired plants.
“The North Carolina Utilities Commission has repeatedly rejected NC WARN’s similar arguments in the past,” Duke said. “In addition, the North Carolina Public Staff — which represents customers and the public — has repeatedly supported, as reasonable, Duke Energy’s investment in power plants and electricity reserves to meet customer needs at all times.”
NC WARN asked FERC to hold hearings in Raleigh, investigate Duke’s building plans and order Duke and its neighbors to form an RTO.
FERC has repeatedly ruled that RTO membership is voluntary. However, it has pushed Duke to join with its neighbors in interregional planning under Order 1000. (See FERC Rebuff of Duke Could Mean Closer Ties with PJM.)
On Thursday, CAISO became the first region to fully comply with the regional requirements of the Federal Energy Regulatory Commission’s Order 1000.
