State Briefs

State, Railroads Mum on Bakken Crude Shipments

State officials know when large shipments of potentially explosive Bakken crude are shipped by rail to a refinery in the state but won’t release that information to the public because of security concerns, The News Journal reported.

CSX Corp. and Norfolk Southern Corp. have begun reporting oil train shipments in compliance with an emergency order issued in May by the U.S. Department of Transportation. Delaware safety officials, however, signed confidentiality agreements to share the information only with state and local emergency management agencies. Other states, including Oklahoma and Pennsylvania, also keep quiet about crude oil shipping details.

At an investor meeting in the spring, a PBF Energy official said its Delaware City refinery receives about 102,400 barrels of crude via rail shipments daily. A Sierra Club of Delaware member has resorted to compiling a map of oil shipments in Delaware based on reports she receives from volunteer observers in order to inform the public. Last July, 47 people were killed and much of a small town in Quebec was destroyed when a train carrying crude derailed.

More: The News Journal

Newark Councilman Faults UD on Data Center Plan

A Newark city councilman said the University of Delaware could have saved everybody a lot of time and trouble had it vetted a data center and power plant plan better earlier in the process. Noting that the 279-MW power plant that was part of the data center plan was what ultimately doomed the project, Councilman Stu Markham said the university could have reached the “no” point long before the city and other groups invested so much time in investigating the plan.

A university official said the plan looked like a good fit at first, but it later became apparent that the data center, with the large power plant, didn’t fit in with the university’s plans. The site is still open for development, but any power plant built there will be smaller, university officials have said.

More: Delaware Online

DISTRICT OF COLUMBIA

PSC Member, Chairman Confirmed in Recent Session

The city council last week confirmed new Public Service Commission member Willie L. Phillips and reconfirmed Betty Ann Kane as chairman. The confirmations mean that for the first time since December, all three commission seats are filled.

Kane was first named to the commission in 2007 and became chairman in 2009.

Phillips, an attorney, comes to the commission with a background in utility regulation and compliance enforcement. He was previously assistant general counsel for the North American Electric Reliability Corp.

More: D.C. Public Service Commission

ILLINOIS

Alternative Suppliers Provide Savings 3 Years Running

The state Commerce Commission’s Office of Retail Market Development issued its annual report, saying that retail electric competition continues to provide savings for residential customers. The report said ComEd residential customers saved an estimated $39 million between June 2013 and May 2014. Residential switching continued in the last year, but at a slower rate than the previous two years, according to the report.

More: Illinois Commerce Commission

INDIANA

IURC Nominating Committee Gets 8 Names to Consider

The nominating committee of the state Utility Regulatory Commission has identified eight candidates to replace Commissioner James Atterholt and will interview them July 30. Nominated were: James L. Adams, Marline R. Breece, Karen E. Caswelch, Carole Sparks Drake, Eric M. Hand, Robert L. Hartley, James F. Huston and David R. Johnston. Atterholt’s seat opened up when Gov. Mike Pence tapped him as his chief of staff. Pence will be presented with three finalists following the interview.

More: Indiana Utility Regulatory Commission

KENTUCKY

Group Sues to Halt 2 Coal Plant Closings

A group of landowners and a coal industry group sued in federal court to block plans by the Tennessee Valley Authority to shutter a coal-fired generating plant. The TVA announced last year that it was going to close the two-unit Paradise Fossil Plant in Muhlenberg County and replace it with a new gas-fired generator.

This month, the Kentucky Coal Association filed suit in U.S. District Court in Owensboro arguing that the TVA didn’t follow federal rules in closing the plants. A group of landowners joined the suit, protesting the planned installation of a 24-inch natural gas pipeline to the proposed new generator. The TVA has said that it followed proper procedures, and the decision to convert to natural gas was designed to meet emissions guidelines.

More: Associated Press

MARYLAND

Somerset Wind Law Sent Back for Review

The Somerset County Commission asked county planners to review a draft ordinance aimed at regulating commercial wind farm development in anticipation of a vote by the commissioners this fall.

The draft was developed in 2012 but never voted on. Now, some landowners and others are taking a second look at it and suggesting revisions, including larger setbacks between proposed facilities and homes, schools and roads. Pioneer Green, a company with a proposal in the pipeline to develop a 50-turbine plant in the county, is urging the county to finalize the ordinance.

More: Delmarva Now

MICHIGAN

Chesapeake Energy to Go to Trial, Judge Says

A state judge ruled last week that the bid-rigging case against Chesapeake Energy will go to trial. Judge Maria Barton of Cheboygan County District Court ruled that there was enough evidence of alleged bid rigging between Chesapeake Energy and Encana Corp. at a 2010 land-lease auction. Barton cited emails between an Encana executive and a man bidding on the company’s behalf that said, in part, “This is a Chesapeake area and we will not be bidding.” Encana settled anti-trust charges against it with a $5 million civil payment to the state in May.

More: PennEnergy

NEW JERSEY

Planned Nuclear Co. Gets $260 Million in Tax Breaks

A company with plans to build nuclear reactors and related equipment at a future plant on the Camden Waterfront was given $260 million in tax credits and other economic subsidies in what is being described as the third-largest subsidy in state history. The state Economic Development Authority awarded the incentives to Holtec International based on its promises to create 235 new jobs and relocate 160 other jobs from other parts of the state.

Once the operation is set up it will get $26 million a year for 10 years. Holtec was also eyeing Charleston, S.C., as a location. It plans a 600,000-square-foot plant to build the reactors.

The award to Holtec, whose board includes Democratic powerbroker George Norcross, was decried by numerous lawmakers, with one calling it “crony capitalism.”

More: NJ.Com

OHIO

Chilicothe Prison Cells to be Warmed with Solar Heating

A $1.7 million solar-power system will heat cells and hot water in a state prison in southern Ohio, saving taxpayers about $245,000 a year. The system uses 400 panels installed on the roof of Ross Correctional Institution. Solar energy is used to heat an antifreeze-like liquid, which is then used to heat eight cell blocks at the prison, according to the Department of Rehabilitation and Correction. The system also produces hot water for prisoners. Ross was opened in 1987 and holds about 2,100 inmates.

More: Columbus Dispatch

PENNSYLVANIA

Court Upholds Towns’ Rights to Regulate Drilling

A state appellate court last week upheld a ruling that gave towns the right to regulate some oil and gas development. The court threw out an argument that the state Public Utility Commission has the authority to overrule local governmental action in regulating where well sites and other facilities can be located.

With its ruling, the court upheld an earlier decision by the state Supreme Court. That decision was challenged by state regulators who saw it as a challenge to their authority. “Local zoning matters will now be determined by the procedures set forth under the [Municipalities Planning Code] and challenges to local ordinances that carry out a municipality’s constitutional environmental obligations,” President Judge Dan Pellegrini wrote in the opinion.

More: Pittsburgh Post-Gazette

WEST VIRGINIA

Delegate Appeals for Fed Help Against AEP Rate-Hike Plan

State Delegate Clif Moore thinks Appalachian Power’s recent request to raise rates 17% is too much, and he is reaching out to federal officials for relief. “Please be advised this correspondence respectfully transmits my utter disdain, shock and amazement with American Electric Power in their quest to seek a 17% increase in already unaffordable electric costs,” Moore wrote. “It is, in my humble opinion, imperative for state and federal regulators to verify that current rates are within legal limits.” He has called on the Federal Trade Commission to intervene. Appalachian, an AEP subsidiary, filed the base rate request with the Public Service Commission, seeking a $226 million increase to go into effect in April 2015.

More: Energy Central

July 22, 2014

FERC: We’ll Have Last Say on Sabotage Rules

The Federal Energy Regulatory Commission tentatively approved a rule to protect the grid against physical threats last week after ordering changes to allow the commission to overrule transmission operators’ definition of “critical” facilities.

The Notice of Proposed Rulemaking (RM14-15) said the North American Electric Reliability Corp.’s draft “largely satisfies” the commission’s March 7 order, which called for developing the standard in an unusually short three months. The order, which was issued under pressure from members of Congress alarmed by the 2013 sabotage of a Pacific Gas and Electric substation.

It will require transmission owners and operators to provide protection for “critical” substations, but it allows each utility to determine what substations are critical.

Veto Rights

The commission ordered NERC to change the rules to allow “applicable governmental authorities” — including FERC, other federal agencies and Canadian provinces — to add or subtract facilities from an entity’s list of critical facilities. “It’s not something we expect to happen frequently but it’s authority that we thought we should have,” acting FERC Chair Cheryl LaFleur said Thursday.

Transmission operators will be required to have their critical facility lists reviewed by third parties; TOs that reject third-party recommendations would be noncompliant unless they provide a “written, technically justifiable” reason for doing so.

The commission also ordered NERC to eliminate references to “widespread” instability, saying the phrase “could, depending on the meaning of `widespread,’ narrow the scope [and number] of identified critical facilities under the proposed Reliability Standard beyond what was contemplated in the March 7 Order.”

It ordered NERC to submit an informational filing after one year evaluating resiliency measures for recovering from a loss of critical facilities.

The commission accepted NERC’s justification for excluding generator owners and operators from the rule, agreeing that a generation facility “does not have the same critical functionality as certain transmission stations and transmission substations due to the limited size of generating plants, the availability of other generation capacity connected to the grid and planned resilience of the transmission system to react to the loss of a generation facility.”

However, it required NERC to do a second informational filing to address whether “high impact” control centers for generators and other non-transmission entities should be covered by the rule.

Reliability Standard CIP-006-5 (Cyber Security—Physical Security of BES Cyber Systems) already requires primary and backup control centers of reliability coordinators, balancing authorities and generator operators to implement some physical security protections, including restrictions on physical access. But the commission said the existing rule “may not be sufficient to `deter, detect, delay, assess, communicate and respond to potential threats and vulnerabilities’” and does not require an unaffiliated third-party review as in the proposed standard.

Rejecting Sabotage Rule Not an Option

NERC stakeholders approved the draft rule in April despite criticism by some that the standard was rushed and poorly defined. (See Grid Security Rules Win NERC Stakeholder OK Despite Criticism.)

Commissioner Tony Clark acknowledged the criticism Thursday but said the standard was “a very solid first step” and that rejecting it was not an option.

“Some have noted that the proposed standard would not provide enough visibility across the interconnection given that the identification of facilities would be done as a `bottom-up’ exercise. I believe there is a grain of truth in those concerns,” he said in a statement issued after the commission meeting.

“I encourage all stakeholders to view this as an iterative process that will continue to be improved. I view our proposed modifications and informational filings as avenues for further discussion and development to ensure that total grid awareness is considered when selecting assets to be further protected by enhanced physical security.”

Comments on the standard will be due 45 days after publication in the Federal Register, with reply comments due 15 days after that.

“I just would plead with folks to be rational,” said Commissioner John Norris, who had expressed concern that the expedited deadline and the commission’s ex-parte rules would inhibit the development of intelligent rules. (See FERC Orders Rules on Grid’s Physical Security.) “We can’t barricade our way out of this.”

Other Standards OK’d

The commission also gave preliminary approval to the Protection System Maintenance Reliability Standard (RM14-8), which requires applicable entities to include certain autoreclosing relays as part of their protection system maintenance programs.

The NOPR requires NERC to submit a report in two years based on actual performance data and simulated system conditions from planning assessments to recommend whether the standard is covering all relays necessary to ensure reliability. It also requires NERC to amend the standard to include maintenance and testing of supervisory devices associated with applicable relays.

FERC also gave final approval to the Generator Relay Loadability reliability standard and revisions to the Transmission Relay Loadability standards (RM13-19-000 and RM14-3-000). The commission said the generator relay standard will reduce the likelihood of premature or unnecessary tripping of generators during system disturbances. The commission ordered revisions to the current standard governing transmission relay loadability to prevent “compliance overlap” by eliminating potential inconsistencies between the two standards.

July 22, 2014

Federal Briefs

The American Bird Conservancy is suing the Department of the Interior over an agency regulation that allows wind energy companies to obtain 30-year permits to kill eagles. The group told Interior and the Fish and Wildlife Service that it was going to sue based on what it saw as violations of the National Environmental Policy Act and the Bald and Golden Eagle Protection Act, among other laws.

The current rule replaced an earlier regulation allowing energy companies to kill eagles for five years.

“Eagles are among our nation’s most iconic and cherished birds. They do not have to be sacrificed for the next 30 years for the sake of unconstrained wind energy,” said Michael Hutchins, a conservancy spokesman. “Giving wind companies a 30-year pass to kill bald and golden eagles without knowing how it might affect their populations is a reckless and irresponsible gamble that millions of Americans are unwilling to take.”

More: Wisconsin Gazette

Feds Open 344K Acres Off Jersey to Wind Power

The Department of the Interior and the Bureau of Ocean Energy Management last week announced that more than 344,000 acres of sea floor will be open to commercial wind power. Federal authorities propose to auction off the lots, about seven miles off Atlantic City, in two designated areas. A 60-day public comment period will end Sept. 19, after which the lease sale date will be set. The Bureau of Ocean Energy Management estimates that the two areas could support up to 3.4 GW of wind energy.

More:North American Wind Power

East Coast Area Open To Seismic Testing

Federal regulators approved seismic testing in areas up to 400 miles offshore between Delaware and Florida, in a move hailed by oil and gas exploration proponents. The Department of the Interior announced the move, saying that it was time to update the 40-year-old seismic information on offshore oil and gas reserves. It said steps would be taken to protect marine life during the testing. Estimates based on earlier seismic studies point to 1.9 billion barrels of oil and 21.4 trillion cubic feet of natural gas in the Mid-Atlantic to South Atlantic coasts. Environmentalists are still concerned that seismic testing will disturb or kill marine life.

More: The Baltimore Sun

Louisiana LNG Plant Site Gets Next FERC OK

The Federal Energy Regulatory Commission has cleared the way for Sempra Energy to begin preliminary site clearance work for its proposed LNG facility near Lake Charles, La. The authorization allows preliminary work and equipment storage on the site. Sempra said construction on the $10 billion project is set for this fall. When completed, it will allow for the export of up to 12 million metric tons of LNG per year.

More: The Advocate

U.S. Electric Grid Fails More than Most Others

U.S. electric consumers experience more power interruptions than those in any other developed nation, according to a study by a University of Minnesota professor. Massoud Amin, director of the Technological Leadership Institute at the university, said data from the Department of Energy and the North American Electric Reliability Corp. show that the U.S. grid now loses power 285% more often than it did in 1984.

The interruptions cost businesses approximately $150 billion a year, he said. He said customers in Japan lose power for an average of four minutes per year while those in the American upper Midwest go dark for an average of 92 minutes. The analysis excluded interruptions caused by severe storms or fires.

More: International Business Times

New Energy Dev. Could Eat Up Area of Two Maines

Researchers for the environmental group North America Congress for Conservation Biology estimate that at its current rate, energy development in the U.S. could consume an area twice the size of the state of Maine by 2040.

They said new mines, oil and gas wells and solar and wind farms could consume 175,000 to 250,000 square kilometers, complicating efforts to preserve wildlife habitat. “There is going to be a very large challenge in siting all of this energy infrastructure,” said landscape ecologist Anne Trainor of Yale University.

More: Science Magazine

Energy Growth: 351 GW by 2040

The Department of Energy estimates that 351 GW of new generation will be constructed in the U.S. by 2040. That’s equivalent to 100 plants the size of NRG’s W.A. Parish plant near Houston. But while plants are still being built, the rate is slowing. DOE estimates that 16 GW of generation will be added per year through 2016, slowing to 9 GW per year through 2022, then rising again to 14 GW annually through 2040. Future plants will be 73% natural gas, 24% renewable and 3% nuclear, DOE projects.

More: Houston Chronicle

McCarthy: New Rules are Guides to Energy Investing

Environmental Protection Agency Administrator Gina McCarthy told a group of state regulators that they should see the EPA’s recently announced emissions rules as a guide to energy investment, rather than a set of pollution control rules. “We really wanted this to be an opportunity to look at a short- and long-term investment strategy, not a pollution control strategy,” she told a meeting of the National Associate of Regulatory Utility Commissioners in Dallas. Emissions “can be reduced in the electricity sector in ways that are very far from pollution-control technologies.”

More: E&E Publishing

July 15, 2014

Senate Confirms Bay, LaFleur

WASHINGTON — The Senate today narrowly confirmed Norman Bay to the Federal Energy Regulatory Commission while easily approving a new term for Acting Chair Cheryl LaFleur.

Bay cleared on a 52-45 party-line vote following a deal with the White House that will delay his ascension to the FERC chairmanship for nine months after he joins the panel.

The deal was a concession to those who questioned why Bay — who has served as director of FERC’s Office of Enforcement since 2009 but has never served as a state utility regulator — would be appointed directly to the chairmanship over LaFleur, a former utility executive who has served on the commission since 2010.

The compromise wasn’t enough to win the support of Republicans. Sen. Lisa Murkowski (R-Alaska), ranking member on the Senate Energy and Natural Resources Committee, questioned whether Bay would undermine LaFleur as a “shadow chairman.”

Senator Mary Landrieu — Sen. Mary Landrieu

“FERC is too important a commission … for appointees to be handled like this,” she said.

The Department of Energy Organization Act gives the Senate authority to confirm members of FERC but gives it no say over which one of the commissioners is appointed chair by the president.

Senate Minority Leader Mitch McConnell (R-Ky.) said Bay would be a “rubber stamp for the administration’s anti-coal agenda.”

Energy Committee Chair Mary Landrieu (D-La.) cited former committee chair Pete Domenici’s (R-N.M.) support for Bay, saying it was “very influential” in her own decision to support Bay.

LaFleur had sailed through her confirmation hearing May 20 while Bay was forced to defend his limited policy experience. (See LaFleur Cruises, Bay Bruises in Confirmation Hearing.)

Of the 15 FERC commissioners who have served since 2000, 10 served as commissioners or staffers at state regulatory agencies prior to their appointments. Four of the others worked in energy-related posts in state or federal legislative committees or executive agencies; one was a former utility executive. The last five chairmen served a median of 30 months before becoming chair.

Bay also came under fire for what some energy lawyers and legislators called his heavy-handed running of the commission’s enforcement division.

LaFleur was confirmed today by a 90-7 vote, a bittersweet victory with the knowledge that she will be a lame duck as chair.

“I want to thank President Obama and the Senate for giving me the opportunity to serve another term,” she said in a statement immediately after the vote. “I look forward to continuing to work with my colleagues to maintain a reliable and secure grid and help ensure our energy markets and infrastructure adapt to the nation’s changing resource mix.”

July 15, 2014

Operating Committee Briefs

Commonwealth Edison briefed the Operating Committee on the removal of three special protection schemes (SPS):

An SPS designed to prevent low voltage on the Wolfs Crossing-Sandwich 138-kV line (#14302) is no longer needed because of a new TSS 167 Plano 345/138-kV autotransformer and 138-kV buses. Before reinforcement, an open breaker at TSS 143 Wolfs Crossing made L14302 radial, causing low voltage. The new autotransformer provides an alternate source for L14302. The SPS will be removed after a briefing of the Markets and Reliability Committee July 31.
The Waukegan SPS will be removed in the fourth quarter of 2014 when the bus tie 4-14 circuit breaker is removed. The SPS was initiated to prevent low voltage or transmission-line overloads in case of the loss of a 138-kV line concurrent with an outage at Unit 16 of the Waukegan coal-fired plant. It is triggered when Waukegan units 7 or 8 trip off line. The protection won’t be needed after the addition of two 345/138-kV autotransformers and connection of four 345-kV lines to the generating plant, which will provide redundancy.
The Zion Energy Center SPS will be removed in summer 2015 as the result of a new 345-kV line from Pleasant Prairie (PLPL41). The SPS was initiated to address the instability of the Zion generator for certain faults cleared in delayed time. An analysis determined that the generator will remain stable with the new line.

PJM Seeks Feedback on Website Usability

PJM is seeking volunteers to provide feedback on how it can improve the PJM.com website. In the recent member survey, PJM received numerous complaints that the website was “overwhelming” and “confusing,” and that information was difficult to find.

To address the complaints, PJM plans to conduct confidential interviews via WebEx with members who use the Markets & Operations section of the website. The interviews will not cover PJM’s tools (e.g., eMKT).

PJM’s Tom Zadlo promised any changes will not disrupt data “scraping” feeds companies have developed to automate data collection. “We know we can’t break what’s out there,” he said.

Those interested in participating should contact Melissa Visintin (Melissa.visintin@pjm.com; 610-666-4426).

PJM to Change Reactive Testing to Incorporate NERC Rules

PJM will change its reactive testing procedures to accommodate the North American Electric Reliability Corp.’s new MOD-025-2 reliability standard. The new rules will result in changes to attachment E of Manual 14D, which will be brought before stakeholders beginning in August. Among the changes, individual generators of more than 20 MW connected to the bulk electric system will now be tested (down from a threshold of 70 MW). All hydropower units will also be required to do testing.

PJM’s Dave Schweizer, who gave the OC a preview of the changes, said PJM’s rules will be at least as conservative as the NERC standards.

July 15, 2014

Utilities, Solar Industry Square Off in Other States

Disputes between utilities and solar providers aren’t limited to North Carolina. (See story, Solar Industry at Crossroads in N.C.) Among the battlegrounds are Iowa, Wisconsin, Arizona and Missouri.

On Friday, the Iowa Supreme Court came down on the side of solar, ruling that a solar company was not violating state law by selling electricity generated by a rooftop installation to the city of Dubuque. Utilities Alliant Energy and MidAmerican Energy unsuccessfully argued that third-party purchase power agreements such as the one involving Dubuque violate state laws giving them exclusive energy sales rights.

In Wisconsin, We Energies has filed a proposal with state regulators to bar its customers from leasing solar arrays. The company also seeks a surcharge on customers who are generating their own power.

Arizona Public Service Company wants the change the state net metering rules, offsetting a solar credit with a monthly charge, and state lawmakers there are considering a tax on rooftop installation.

In Missouri, Ameren and Kansas City Power & Light are asking the state Public Service Commission to end all solar rebates.

The Wisconsin, Arizona and Missouri cases await resolution.

July 15, 2014

Federal Briefs

The Bureau of Ocean Energy Management will take bids Aug. 19 for the rights to lease nearly 80,000 acres of the Atlantic Ocean off the coast of Maryland for wind energy projects. It will be the sixth commercial offshore wind energy lease awarded by the federal government, after three off of New England and one each off Virginia and Delaware. Sixteen companies have been qualified to bid on the Maryland Wind Energy Area, which could support between 850 MW and 1,450 MW of commercial wind generation. The area is about 10 miles off the coast of Ocean City, Md.

More: Bureau of Ocean Energy Management, The Baltimore Sun

FERC OKs Settlement in 2011 Southwest Blackout

Arizona Public Service Co. will spend $3.25 million in a settlement with the Federal Energy Regulatory Commission over its role in a Sept. 8, 2011 blackout that left more than 5 million people in California, Arizona and Mexico without power for up to 12 hours.

A joint FERC/North American Electric Reliability Corporation (NERC) examination of the incident found that APS violated NERC reliability standards. Since the event, APS has worked with regulatory and industry organizations to make improvements, FERC said.

The company will pay $1 million each to the U.S. Treasury and NERC, and spend $1.25 million on reliability investments. “APS’ reliability enhancements will improve the reliability of the Western Interconnection and are valued at substantially more than the $1.25 million credit granted,” Acting FERC Chairman Cheryl LaFleur said.

More: FERC

SCOTUS Declines to Hear Mo. Cost-Recovery Case

The Supreme Court said it will not consider Kansas City Power & Light Co.’s appeal of a lower court ruling that denied the company federally approved transmission costs.

The company incurred the costs in moving power 500 miles from a natural gas-fired plant in the Mississippi Delta to customers in western Missouri. At issue are transmission costs associated with the Crossroads plant, which was originally built as a merchant generator but was folded into the rate base after KCP&L’s parent company was unable to sell it.

The plant only operates in the summer, but the Missouri Public Service Commission earlier ruled that it had to pay transmission access fees on a year-round basis. The commission approved the purchase of power from the plant but wouldn’t approve the estimated $5 million annual transmission costs, saying they were not just and reasonable.

More: E&E Publishing

House Approves Move to Stop NYISO Capacity Zone

The House passed a bipartisan amendment to block a new capacity zone in the New York ISO last week as part of the 2015 Energy and Water Appropriations Bill.

News of the new zone, which would increase residential energy costs, sparked protests after the Federal Energy Regulatory Commission approved it in January. Republican Rep. Chris Gibson said he and Democratic Rep. Sean Maloney introduced the amendment to protect residential consumers. “We will not relent in our efforts to prevent this agency from doing further damage to families and the economy of the Hudson Valley, where people are already struggling to make ends meet,” Gibson said in a news release. A Senate vote is expected in the fall.

Proponents of the new capacity zone, which went into effect May 1, hope it will spur the construction of new generation below a transmission bottleneck.

More: Register-Star

Nuclear Expert Tapped for DOE Slot

Elizabeth Sherwood-Randall participates in a video conference with President Obama and French President Nicolas Sarkozy in 2012. (Source: White House)

President Obama has nominated Elizabeth Sherwood-Randall, a nuclear proliferation and defense policy official, for Deputy Secretary of Energy. Sherwood-Randall is currently the White House coordinator for defense policy and has also acted as a foreign policy expert. In addition to working on nuclear weapons policy and strategy, she also will be wading into the issues surrounding hydraulic fracturing.

More: The New York Times

DOE to Start Cleanup of Hanford’s “Atomic Man” Site

Clay Rowan, a health physics technician, in the McCluskey Room to take radiation readings in June 2005. (Source: Department of Energy)

The site of a 1976 plutonium explosion at the Hanford Nuclear Reservation in Washington state is slated for cleanup this summer. Worker Harold McCluskey was exposed to the highest dose of radiation from the chemical element americium on record — 500 times the safe standard — in the accident. Americium is a byproduct of plutonium.

McCluskey, then 64, became known as the “Atomic Man” after the incident. He was put into an isolation unit, where he stayed for five months. His body’s radiation level fell by 80 percent within a year. He died in 1987 of heart disease, said to be unrelated to the accident. Cleanup of the “McCluskey Room” is expected to be completed by 2016.

More: Prince George Citizen

Missouri Rep. Files Bill to Hobble EPA Rulemaking

Rep. Sam Graves (R-Mo.) last week filed a bill that would halt every Environmental Protection Agency regulation now in the works and mandate the review of all other EPA rules. If passed, the bill would effectively halt EPA action on any of its rules until after the review.

Graves, chairman of the Small Business Committee, is incensed over the EPA’s proposed “Waters of the United States” rule, which would redefine federal jurisdiction over lakes and streams covered by the Clean Water Act. Many of Graves’ constituents are farmers who could be impacted by any change in water laws. Graves’ “Stop the EPA Act,” would also hamstring the EPA’s recent emissions rules covering power plants.

More: The Hill

Senate to Consider Bay, LaFleur

The Senate is scheduled to vote today on the confirmation of Norman Bay to the Federal Energy Regulatory Commission and a new term for Acting Chair Cheryl LaFleur. The Senate Energy and Natural Resources Committee approved Bay’s nomination last month under a deal with the White House that would delay Bay’s ascension to the chairmanship for nine months.

More: LaFleur to Remain Acting FERC Chair for up to 1 Year in Senate Deal with White House

July 15, 2014

Company Briefs

Southern Company’s 25-MW demonstration carbon-capture plant at Alabama Power’s Plant Barry near Mobile, Ala., won the Southeastern Electric Exchange’s 2014 Industry Excellence Chairman’s Award. The project, demonstrating carbon capture and sequestration at a pulverized-coal plant, captures about 150,000 tons of carbon dioxide annually. The carbon dioxide is sent through a 12-mile pipeline to an oil field and injected into a geologic formation 9,500 feet below the surface.

More: Fierce Energy

Exelon’s Oyster Creek Nuke Shut Down Twice in a Week

Two unplanned shutdowns at Exelon Nuclear’s Oyster Creek Generating Station in New Jersey last week prompted the Nuclear Regulatory Commission to change the plant’s performance ranking from “green” to “white.” Both the company and the NRC said there were no immediate safety concerns from either event.

The first shutdown occurred last Monday, when the plant went down to fix safety equipment inside the reactor’s dry well. The second occurred Friday, as the reactor was powering up after the first incident, due to a problem in the plant’s condenser. “It is crucial that during start-up, every system operates flawlessly. If anything is not as expected, operators stop the startup process and address the issue,” company spokeswoman Suzanne D’Ambrosio said. The aging plant is due to shut down permanently in 2019.

More: The Star-Ledger

PSE&G Unveils New Online Outage Management Tool

Public Service Electric & Gas launched a new menu of online tools designed to give customers more information about outages and how long it will take to restore power.

The new tools are a response to the company’s experience during Hurricane Sandy, when millions were left without power and customers complained about being unable to get through to the company or get good information about restoration times. The new tools — at outagecenter.pseg.com — let customers see how many outages there are, and where, down to the neighborhood level. It will also give up-to-date restoration times, the company said. Information on the site will be updated every 15 minutes.

More: NJ.Com

Indiana Michigan Power Plans 16 MW of Solar

Indiana Michigan Power says it will ask state regulators for permission to construct five solar plants in Indiana and Michigan for its Clean Energy Solar Pilot Project. The company hasn’t released information on locations or sizes of the individual plants, but it said they will cost about $38 million to build. The project could be under construction by 2016, depending on how long it takes to get regulatory approval, the company said.

More: Indianapolis Business Journal

Offshore Drill Ship Appears Off Va. Coast

A ship that drills for ocean floor core samples has set up off the coast of Virginia Beach, giving beachgoers their first glimpse of the possible future of offshore wind towers. The 110-foot “offshore construction jackup” ship steamed from the Gulf of Mexico to the Virginia coast and began drilling about 300 yards offshore of Camp Pendleton, where transmission lines would be laid.

The ship will also drill at the proposed wind farm site about 24 miles offshore. Drilling will be completed by July 20, according to Dominion Virginia Power, the company that plans to build the offshore wind farm.

More: Daily Press

July 15, 2014

PJM Sets Sub-Zonal Pricing Interface for Demand Response at New Castle

PJM has created a closed loop interface to capture the pricing of demand response in a transmission sub-zone spanning the Pennsylvania-Ohio border near New Castle, Pa. The interface, which took effect July 1, will be used in real-time when load management is deployed in the area, part of the ATSI zone.

PJM officials said DR may be necessary during outages anticipated with the construction of system upgrades. The upgrades, a result of plant retirements in the area, are expected to be completed in spring 2015.

The interface won’t be used in Financial Transmission Rights auctions or other modeling.

Difficult to Forecast

PJM’s Rebecca Carroll told the Operating Committee that operators will attempt to model the interface in the day-ahead market when possible. “But being able to forecast that is going to be very difficult,” she said, noting that operators generally don’t know whether they will be dispatching DR until a few hours before it is needed.

PJM’s Joe Ciabbatoni said PJM now has a formally documented process for establishing pricing interfaces. “`There should be more of these [interfaces] bubbling up” in the future, he said.

Mike Bryson, executive director of system operations, said that based on the lessons of the unexpected September 2013 heat wave, PJM will be more “proactive” in identifying areas where it may declare subzones for pricing DR. PJM created a closed loop interface in ATSI to capture DR prices that hit the maximum of $1,800/MWh on Sept. 10, when the RTO found itself unprepared for a late summer heat wave that pushed demand over 144,000 MW. (See PJM Surprised by September Heat Wave.)

Bryson said officials also will consider recalling and rescheduling planned outages related to the New Castle upgrades when it anticipates high load days.

In May, the Federal Energy Regulatory Commission rejected PJM’s call for sub-zonal dispatch inside an operating day, saying the RTO had failed to prove the change would not result in “prohibitive costs” to DR providers. Bryson said the order allows sub-zonal dispatch ordered the day before and voluntary compliance with in-day dispatches.

On July 8, the commission said it will take another look at the issue after DR providers Comverge and EnergyConnect contended even next-day sub-zonal dispatch would be a hardship.

Notification Process Sought

At the Market Implementation Committee Wednesday, Bruce Bleiweis of DC Energy and Barry Trayers of Citigroup Energy asked PJM to provide more lead time and transparency when it considers new pricing interfaces.

Bleiweis said PJM should post a public notice when it identifies an issue that may result in an interface. “We feel that’s a superior process to not knowing there was an issue internally discussed,” he said.

Trayers suggested a formal notification process similar to that for creation of special protection schemes.

July 15, 2014

Growing Solar Industry at Crossroads in N.C.

RALEIGH, N.C. — Far from the sunny Southwest, North Carolina has unexpectedly become one of the fastest-growing destinations for solar energy developers in the nation. But a battle pitting the state’s largest utilities against environmentalists could stop that growth in its tracks.

At stake is the way solar energy is sold in the state. The state Utilities Commission currently requires Duke Energy, Duke Energy Progress and Dominion Power North Carolina to enter into 15-year contracts with solar producers of any project 5 MW or smaller. Duke and Dominion have asked the commission to cut the length of the contracts to five years and reduce the size of qualifying facilities to 100 kW — 2% of the current size.

Solar power companies and environmentalists countered by asking that plants producing up to 10 MW be included and that the contract term be lengthened to 20 years.

How North Carolina Got Bright

The contracts for such qualifying facilities (QFs) are priced at avoided costs, currently set at about 6.5 cents per kWh.

The commission meets every two years to set the rates. At the most recent proceeding in February, the commission asked all parties to reexamine the contract rules to determine if they should be adjusted.

The current rules were set when the solar industry was just getting on its feet. It was designed to provide a ready market for the nascent industry by encouraging utilities to add renewable energy to their portfolios.

At 750 MW, North Carolina ranks fourth among states with installed solar capacity, behind only California, Arizona and New Jersey, according to the Solar Energy Industries Association (SEIA). The state added 335 MW last year, ranking third in the U.S.

In 2007, North Carolina enacted a renewable portfolio standard that called for utilities to obtain 12.5% of their electricity from renewables by 2021. The state has also subsidized renewables through a tax credit.

Growing Clout

Solar also grew as a result of North Carolina’s efforts to lure energy-gobbling data centers to the state. Apple’s data center in Maiden came with its own 20-MW solar farm. Google and other companies pressed Duke to win approval of a Green Source Rider allowing companies to pay the utility a slightly higher rate in return for renewable energy.

The state’s QF program became an unexpectedly large contributor to the industry’s growth, according to Ivan Urlaub, executive director of the North Carolina Sustainable Energy Association (NCSEA), an umbrella group of sustainable energy providers. “Those small regulatory rules, combined with a renewable energy tax credit, were sufficient to take what was otherwise a small market and carve out a space for entrepreneurs to jump in and compete on price and quality,” Urlaub told Slate.

The state now has 570 green energy firms employing 18,400 people, according to Urlaub. The SEIA says $787 million was invested in solar plants in the state last year.

That growth has given the industry the clout to be a credible opponent to utilities. A bill that would have repealed the state’s renewable portfolio standard died in committee last year.

Duke Hearts Solar?

NC WARN's ad attacking Duke's position on solar power. Note: not actually clickable on our site. — NC WARN’s ad attacking Duke’s position on solar power. Note: not actually clickable on our site.

In the run up to four days of hearings on the contract issue last week, combatants filed expert testimony and the environmental group NC WARN launched a state-wide ad campaign.

“Why does Duke Energy Hate Solar?” its website and full-page ads asked. “Duke actually likes solar — just not for North Carolina solar companies.”

In an interview, NC WARN Executive Director Jim Warren explained his organization’s support for the solar groups’ position. “We think it’s good for the community, the solar industry — and even for the utilities, since they’re facing a corporate death spiral if they don’t adapt to the fast shift toward distributed energy,” he said.

“More solar installations added to the grid would further reduce the need for Duke to build new power plants and raise rates. So, while more solar on the grid has tremendous benefits to all customers, it is an existential threat to Duke Energy’s business model and profits.”

Duke spokesman Randy Wheeless insisted the company doesn’t hate solar. In fact, he said, Duke has been a major proponent of solar energy all along, and continues to be. The company owns 140 MW of solar at 20 sites in eight states, about 3% of its 49,626 MW of generation capacity.

“Duke and Duke Progress were in the top 10 [nationally] in bringing on new solar” projects in 2013, he said. “Duke Energy has wind and solar [facilities] in 12 states. When you add all those facts together, it’s hard to say Duke is anti-solar or trying to kill solar. I think Duke has a pretty good story to tell.”

Wheeless noted that most of the solar projects in North Carolina were 5 MW or lower “because the standard offer is the most attractive one” for producers. He said the utilities’ sought to decrease the QF size to allow them the “flexibility to negotiate the contracts.”

Pass Through to Consumers

Shortening the length of purchase power agreements with solar producers will benefit consumers, Wheeless said. “We basically say, ‘Look, the PPA is a pass through to consumers.’ When you throw a contract out 15 years to 20 years, and you look at that curve, we think most of the risk is being borne by the customers. The odds are better that over the course of the longer contract, the customers will pay more, not less. We feel [customers] would benefit if they were 10 years. Customers would be less likely to overpay.”

Betsy McCorkle, government affairs director for the NCSEA, declined to be interviewed on the issue Friday.

But the NCSEA lined up experts to file written testimony. R.T. Beach, an energy consultant from California, filed a lengthy response with the commission outlining why solar projects benefit both utilities and customers.

Lumpy Additions

“Most of the QFs in North Carolina are 5 MW or smaller. In contrast, typical utility additions of capacity are in increments of at least 100 MW, and often more, as shown by the utilities’ current resource plans,” Beach wrote. “These large central station units require significantly longer time to develop, permit and build.

“As a result of the long lead times and the large, ‘lumpy’ nature of utility capacity additions, new utility plants must be sized to provide much more than the amount of capacity [that] the utility needs in the year in which the new plant enters service. The result is that ratepayers may have to pay for years of excess capacity until demand ‘catches up’ to the last major addition,” Beach wrote.

Off Switch

NCSEA witnesses and other solar proponents say that decreasing the QF size and PPA length would pose an existential threat to the solar generation industry. Beach said the change would press an “‘off switch’ that would be likely to significantly slow, if not halt, QF development.”

Banks would be less likely to finance larger projects if they were not QF-rated, and shorter PPAs would also result in more difficulty obtaining financing. It has already happened in other markets, solar proponents say.

Beach cited Idaho regulators’ decision to allow Idaho Power to reduce its standard contract size to 100 kW from 10 MW. “The practical result of this order has been to halt further wind development in Idaho, even though wind QFs are entitled to negotiate with the Idaho utilities,” he said. (See related story, Utilities, Solar Industry Square Off in Other States.)

Consumer Response

The battle has captured the attention of North Carolina residents. The docket includes dozens of emails and letters from consumers.

“Duke Energy’s claims of sensitivity to environmental concerns must be viewed with skepticism, given their recent and historical performance in environmental protection,” wrote Sharon Fortner of Winston-Salem. “This regulated monopoly will have to be forced to treat solar generation fairly; it will not do it on its own.”

A decision is expected before the end of the year.