State Briefs

Court Challenge Slows Wood Plant

EcoPower Generation, developer of a 58 MW wood-burning plant in Perry County, hopes to begin construction this year and qualify for tax credits. The Public Service Commission approved the sale of power from the plant to Kentucky Power, but its order is being challenged by an industrial group.

More: The Hazard Herald

PSC Rebuffs AG on Plant Purchase

The Public Service Commission denied Attorney General Jack Conway’s request to reconsider its approval of Kentucky Power’s purchase of a 50% stake in a West Virginia’s Mitchell coal plant. The purchase will replace supply from a Big Sandy unit set to retire. Conway may take his objections to court.

More: The Hazard Herald

MARYLAND

Photo of EmPOWER MD Bus Ad (Source: MICA Graphic Design) — EmPOWER MD Bus Ad (Source: MICA Graphic Design)

$95 Million for EmPOWER Maryland

The Public Service Commission approved spending almost $95 million on the state’s EmPOWER Maryland program. The program’s goal is a 15% reduction in per capita and per capita peak consumption by the end of 2015. About half of the goal has been reached, but progress is lagging.

More: Baltimore News Journal

Many Locals Like Fair Wind

Most local speakers favored development of Exelon’s 30 MW Fair Wind project for the revenue it would provide to Garrett County. Environmental interests still oppose it, though, as they did when it was owned by Clipper Windpower.

More: National Wind Watch

Potomac Ed Reconstructs Line

FirstEnergy’s Potomac Edison finished a $5.3 million reconstruction of a 138-kV line in western Maryland, a project that replaced more expensive work the utility had planned when it was part of Allegheny Energy.

More: Frederick News-Post

MICHIGAN

University Testing Solar in Snow

A research project is studying snow’s effects on solar power production and how to minimize it. The two-year Michigan Technological University project is testing at the university and at other locations, including in Pennsylvania.

More: Ludington Daily News

NEW JERSEY

BPU Appeals Capacity Ruling

Regulators filed notice that they will appeal the October federal court ruling that called the state’s Long-Term Capacity Pilot Project unconstitutional. The Board of Public Utilities’ legal arguments were not laid out in the notice. The capacity program — similar to one in Maryland that was also rejected by a court — was intended to get cost-effective supply in needed areas where the state said PJM’s capacity market had failed.

More: NJSpotlight

Military Base Gets 1.2 MW of Solar

Trinity Solar has finished installing 12.3 MW of solar generators at the residential facilities for Joint Base McGuire-Dix-Lakehurst. The installation — more than 10,000 modules on 650 rooftops — is expected to provide over 30% of the community’s annual power needs.

More: Trinity Solar

Looking for Ways to Boost CHP

A bill to promote combined heat and power was approved by a state committee, but the way forward for CHP is unclear. Interests are divided on the question of subsidies and the state cut CHP money from its clean energy fund. Board of Public Utilities examination of the issue has made little progress.

More: NJSpotlight

Chivukula Would Revamp BPU

Assemblyman Upendra Chivukula, chair of the Telecommunications and Utilities Committee, wants to cut the Board of Public Utilities’ membership and restructure its operations because he says it is not doing its job.

More: Law360

PSEG Touts ‘Energy Strong’ Support

Eighty-five municipalities and counties have expressed strong support for Public Service Electric & Gas’ controversial Energy Strong program, which would spend $3.9 billion to fortify the utility system. PSE&G now has filed changes that may cut the cost by 15%.

More: PSEG; NJSpotlight

NORTH CAROLINA

Nuclear Worth $20 Billion to Carolinas

The nuclear industry contributes $20 billion to the Carolinas’ economy, according to a Clemson study commissioned by the industry. The impact is attributable to the states’ seven nuclear plants, but also to the associated nuclear industries and facilities housed in the Carolinas.

More: Charlotte Observer

Airport Seeks Solar

The Charlotte Douglas airport is seeking bids to install up to 53 MW of solar panels, which would make it among the largest solar producers in the state. The output probably will be sold to Duke Energy.

More: Charlotte Observer

Duke Files ‘Green Source Rider’

Duke Energy asked regulators to approve a program allowing big customers to offset new power needs with renewable energy or certificates. The green power would come from sources in or out of state not already meeting the state’s renewables requirements.

More: Duke; Charlotte Observer

OHIO

AEP Backs Green Pullback

American Electric Power surprised at least some observers by coming out for a bill that would ease the state’s energy efficiency and renewables mandates. As protests mounted against S.B. 58, a Senate committee cancelled its markup of the measure and an unusual coalition of environmentalists and user groups started trying to work out a compromise.

More: The Columbus Dispatch; The Plain Dealer; Columbus Business First

Iberdrola Could Rethink Wind Farms

Iberdrola Renewables said it will reconsider the two wind farms it is developing in the state if the legislature approves S.B. 58. The company chose Ohio for the new plants, and the 304 MW wind farm it already operates, because of the current law’s requirement that half of the state’s renewables come from in-state resources.

More: Columbus Business First

Lake Erie Wind Farm Scrutinized

Developers of an 18 MW wind farm in Lake Erie were peppered with questions at the state Siting Board’s first public hearing on the pilot project. The six-turbine development, which is vying for a federal grant, would feed its output to Cleveland Public Power.

More: The Plain Dealer

OK for Green Power Amendment Vote

The state Ballot Board said backers of a green-energy constitutional amendment may collect signatures to get their amendment on the November 2014 ballot, but the board’s chairman urged voters to reject it. The amendment would authorize a $1.3 billion annual bond issue to develop renewables.

More: The Columbus Dispatch

PENNSYLVANIA

Photo of Susquehanna Plant (Source: PPL) — Susquehanna Plant (Source: PPL)

NRC Lowers Susquehanna Rating

The Nuclear Regulatory Commission lowered the performance rating of PPL’s Susquehanna Unit 2 after a fourth unplanned shutdown in a year.

More: Citizens’ Voice

Cabot Wells ‘In the Sweet Spot’

Cabot Oil & Gas wells in Susquehanna County may be among the most productive on the planet, resetting geologists’ expectations. The company’s top two wells will produce 14 billion cubic feet over their lifetime, multiples of normal output.

More: Standard Speaker

Graphic of New Material for Solar Panels (Source: Drexel University) — New Material for Solar Panels (Source: Drexel University)

Solar Breakthrough for Penn, Drexel?

Researchers at the University of Pennsylvania and Drexel University have created a material they say would be more efficient and less expensive than those used now to make solar power panels. “A new category of ways of making a solar cell,” one professor said.

More: The Philadelphia Inquirer

PUC Must Release PPL Documents

The Public Utility Commission must release documents it used to reach a $60,000 penalty agreement with PPL concerning 2011 storm-caused power outages, the Office of Open Records said.

More: The Morning Call

WEST VIRGINIA

Lawsuits Mount for Pinnacle Wind Farm

A property developer’s lawsuit adds to more than 30 filed recently against the 23-turbine, 55 MW Pinnacle Wind Farm, whose output is being sold to Maryland. Plaintiffs charge noise and vibration from the 2.4 MW turbines are damaging health and property values. Pinnacle is a unit of Edison Mission Energy.

More: The State Journal

November 26, 2013

Company Briefs

Constellation NewEnergy signed a 25-month power supply agreement with the city of Chicago that saves the city 2% from its last power contract. In accordance with a City Council directive, the deal sources the power from non-coal sources: nuclear and natural gas generation based in Illinois. The rate and annual weighted average price for the fixed facility portion of the contract is $42.67/MWh. The power will supply 450 city facilities as well as street and traffic lights.

More: Constellation; Weekly Citizen

FirstEnergy Adds $2.8 Billion to Plan

FirstEnergy will invest $2.8 billion more in the “Energizing the Future” transmission plan announced last year. Most of the work will be on 69 kV lines and substations in the Ohio Edison, Cleveland Electric Illuminating, Toledo Edison and Penn Power territories.

One analyst said the company’s new focus — after years of investing on its unregulated businesses — has it looking more like rival American Electric Power.

More: Crain’s Cleveland Business; The Columbus Dispatch

Duke CEO on Merger Winners, Losers

Photo of Duke CEO Lynn Good (Source: Duke) — Duke CEO Lynn Good (Source: Duke)

Duke CEO Lynn Good chose her management team after Duke’s merger with Progress Energy based on “capabilities and track record.”

“There is a comfort level with people you’ve known for a long time — you’ve been in the foxhole with them. But when you bring an organization together, you need to be agnostic about background,” she said in an interview.

More: The New York Times

PPL, Banks in Partnership

PPL has set up a partnership with 21 Pennsylvania banks that will provide a $300 million revolving credit facility to support investments, including the $4 billion in utility infrastructure improvements that PPL companies plan to make.

More: PPL

TVA To Shut 2 Ky. Coal Units

Photo of Paradise Fossil Station (Source: TVA) — Paradise Fossil Station (Source: TVA)

The Tennessee Valley Authority will shut Units 1 and 2 at its Paradise coal station near Central City once a new natural gas plant is built at the site. Paradise 3, a 1,100 MW coal unit with mercury-emission controls will remain in operation.

The retirements of the two 700 MW Paradise units were among 3,000 MW of retirements TVA just authorized, bringing its total coal retirements to 5,600 MW. Also being shuttered are six coal generators at two locations in Alabama.

More: The New York Times; TVA

November 26, 2013

Federal Briefs

Senate Democrats’ move last week to abolish the filibuster for judicial nominees clears the way for President Obama to fill vacancies on the appellate court that frequently reviews federal energy and environmental policy.

Photo of the Meade and Prettyman Courthouse (Source: DC Circuit) — Meade and Prettyman Courthouse (Source: DC Circuit)

The U.S. Court of Appeals for the District of Columbia is widely considered second only to the Supreme Court in its influence. Also known as the D.C. Circuit, the court is the frequent forum for oversight of rulemakings by the Federal Energy Regulatory Commission and the Environmental Protection Agency.

The court’s eight current full-time judges are split between Democratic and Republican appointees; five of the six part-time senior judges were appointed by Republicans. With the elimination of the filibuster threat, Obama’s nominees for three vacancies on the court are expected to be confirmed. Cases before the court are often heard by three-judge panels.

More: The Washington Post

FERC Overreaching on Order 1000: Brief

A coalition of utilities, including Public Service Enterprise Group, told the D.C. Circuit that the Federal Energy Regulatory Commission’s Order 1000 mandates for interregional planning and cost sharing amount to “a regulatory sea change” with no basis in law. FERC has no authority “to direct utilities to fund transmission developers from whom they do not take service,” the coalition said in a brief.

More: Coalition for Fair Transmission Policy

Court Halts Waste Fee; Yucca Redux?

The D. C. Circuit stopped collection of Nuclear Waste Fund fees, calling Department of Energy arguments for them no more than “razzle dazzle.” The Nuclear Regulatory Commission resumed work, at a low level, on a study of Yucca Mountain as a depository.

More: Washington Post; Las Vegas Review-Journal

EPA Could Accept State Carbon Taxes

The Environmental Protection Agency is not ruling out the possibility of allowing state-level carbon taxes as a way of complying with the rules it is writing for control of greenhouse gas emissions from existing power plants.

More: The Hill

Poll: CIP Standards Not Enough

A survey of 100 IT professionals working on critical infrastructure protection (CIP) standards showed that 70% believe compliance with standards is only the start of protection.

More: Smart Grid News

Coal being loaded into a hopper (Source: James River Coal)

Coal Still Big in PJM

Coal-fired generators are producing nearly half of the electricity in PJM thanks to cheap supplies from the Illinois Basin. While Ohio and Pennsylvania are shifting to natural gas coal is holding its own in Indiana and Illinois.

More: EIA

November 26, 2013

Manual Changes Endorsed by MRC

Changes to the following PJM manuals were endorsed by the Markets and Reliability Committee on Nov. 21.

Manual 13: Emergency Procedures

Reason for Change: Updates to terms, procedures and day-ahead scheduling reserve components.

Impacts: Sets Load Forecast Error and Forced Outage Rate effective Jan. 1. References to interruptible load for reliability (ILR), no longer a valid term, are removed. Revised order of emergency procedures so that curtailment of non-essential plant and building load is curtailed as step 6, prior to issuing a manual load dump warning (step 7) and voltage reduction (step 8).

PJM Contact: Chris Pilong, Tom Hauske

Manual 14A: Generation and Transmission Interconnection Process

Reason for Change: Align cost allocation rules for new service customers with Tariff.

Impacts: Changes terminology.

PJM Contact: Aaron Berner

Manual 14B: PJM Region Transmission Planning Process

Reason for Change: Need to alert transmission interconnection customers sooner of potential upgrade requirements.

Impacts: Commercial probability multipliers changed. (See Transmission Studies to Flag Upgrades Earlier.)

PJM Contact: Aaron Berner

Manual 15: Cost Development Guidelines

Reason for Change: A problem statement concerning cyclic peaking and starting factors was referred to CDS by the MRC. CDS came to consensus on the issue at their September 2013 meeting.

Impacts: Resource owners shall use Original Equipment Manufacturer (OEM) values if available and grandfather in OEM values for technologies no longer being built. Section 11.5 changed to read “Battery and Flywheel Units do not have No Load costs.”

PJM Contact: Jeff Schmidt

Manual 18: PJM Capacity Market

Reason for Change: Conforming revisions to reflect filings ER12-513, ER13-535, ER13-2140, ER13-1023.

Impacts: Updates Cost of New Entry (CONE) values; revises Minimum Offer Price Rule (MOPR); changes deadline for submission of must-offer exemption request; corrects NEPA qualification calculation; other changes.

PJM Contact: Jeff Bastian

Manual 41: Managing Interchange

Reason for Change: Both Manual 41 and the Regional Practices Document cover topics related to interchange scheduling.

Impacts: The content of Manual 41 will be merged into the Regional Practices document and Manual 41 will be retired.

PJM Contact: Chris Pacella

November 26, 2013

Regulation Task Force Sunset

The Markets and Reliability Committee approved the sunset of the Regulation Performance Senior Task Force, which has completed all of the tasks in its charter. The task force was created in 2011 to create ways to grade and compensate regulation sources based on performance as well as optimizing their deployment.

November 26, 2013

Stakeholders Select Committee Members

The Members Committee selected Jim Jablonski, representing the Public Power Association of N.J., as committee vice chair for 2014. Dana Horton, of AEP, moves from vice chair to chair, replacing Neal Fitch of NRG Energy.

The committee also selected members of the Nominating and Finance committees as well as sector whips:

Nominating Committee (one-year term)

Electric Distributors — Lisa McAlister, American Municipal Power

End Use Customers — Jackie Roberts, West Virginia Consumer Advocate Division

Generation Owners — Reem Fahey, Edison Mission

Other Suppliers — Joe Wadsworth, Vitol

Transmission Owners — Paul Napoli PSEG

Finance Committee (three-year term)

Electric Distributors — Charlie Bayless, NCEMC

Generation Owners — Joe Kerecman, Calpine

Sector Whips (one-year term)

Electric Distributors — Steve Lieberman, ODEC

End Use Customers — Susan Bruce, PJM Industrial Customer Coalition

Generation Owners — Joe Kerecman, Calpine

Other Suppliers — Katie Guerry, EnerNOC

Transmission Owners — John Horstmann, Dayton Power & Light

November 26, 2013

MIC to Consider Real-Time Pricing Changes

The Market Implementation Committee will consider changes to PJM’s real-time pricing mechanism, which RTO officials say is depressing energy and reserve prices.

The Markets and Reliability Committee approved PJM’s request for a problem statement and issue charge by acclamation Thursday.

The initiative would allow system operators to increase reserve requirements under certain circumstances, such as when operators are carrying additional resources to cover units at risk of being shut down because of environmental limitations or mechanical problems. Requirements also could be boosted when operators have data quality concerns or are uncertain about load or interchange.

Chart comparing actual vs. projected load on 9/11/13 (Source: PJM Interconnection, LLC) — (Source: PJM Interconnection, LLC)

The revised methodology could increase reserve and real-time energy prices while reducing uplift.

Officials said the need for changes was illustrated during the September heat wave. On Sept. 10, operators under-forecast load by more than 4,000 MW and overestimated the availability of Tier 1 Synchronized Reserves.

On the 11th, uncertainties over the load forecasts and availability of reserves led operators to deploy more demand response than was ultimately needed. Load rose sharply in the morning of the 11th, exceeding forecasts through early afternoon but peaking earlier and much lower than expected.

Adam Keech, director of wholesale market operations, said PJM staff hopes to implement at least some changes by May 1. “We need to draw a line in the sand and say we need to make changes before next summer,” he said.

See: PJM: Change Real-Time Pricing

November 26, 2013

NARUC NACUSA Snapshots

The Consumer Advocates of PJM States (CAPS) introduced Dan Griffiths as its first director at the annual meeting of the National Association of State Utility Consumer Advocates.

Griffiths, a former deputy of Pennsylvania’s longtime advocate Sonny Popowski, criticized PJM’s proposed changes to the capacity market as harmful to consumers. (See Members Deadlock on DR in Capacity Auctions) Griffiths said it was difficult to quantify the impact of the changes. “But you can determine whether the arrows point up or down,” he said. “We see a lot of arrows pointing up.”

Griffiths made his remarks as PJM Chairman Howard Schneider sat in the front row.

CAPS President Stefanie Brand, director of the New Jersey Division of Rate Counsel, said advocates needed Griffiths to represent them because individual state offices lack the staff to attend all-day PJM meetings.

West Virginia Consumer Advocate Jackie Roberts, a CAPS board member, agreed: “If you’re not involved in the stakeholder process your influence is minimized.” Once an issue gets to FERC, she said, “it’s too late.”

Griffiths is being funded through CAPS’ $1.2 million share of a FERC settlement with Constellation Energy Commodities Group in a market manipulation case. Griffiths said the group would like a long-term source of funding similar to that of the Organization of PJM States, Inc. (OPSI). OPSI, which represents state regulatory commissions at PJM, receives about more than $600,000 in funding annually from the PJM tariff.

Binz Wins Consolation Prize

Former Colorado regulator Ron Binz, whose nomination to the Federal Energy Regulatory Commission was shot down by opposition from the coal industry, received NARUC Committee on Energy Resources and the Environment’s Mary Kilmarx Award, which honors “good government, clean energy and the environment.”

“This is one more thing for me to defend before the Senate Energy and Commerce Committee,” Binz joked. “The Mary Karl Marx award.”

Binz said he is resuming his consulting practice with a focus on regulatory reform, smart grid, new market entrants such as energy storage, and greenhouse gas emissions. “It was the forces of the status quo who took me down in the FERC battle,” he said.

PTC Extension ‘Reasonably Strong’: AWEA

Tom Kiernan, CEO of the American Wind Energy Association, said chances for an extension of the Production Tax Credit for 2014 are “reasonably strong” but that Congressional action probably won’t happen until after the New Year.

US Wind Capacity Growth Chart (Source: AWEA) — (Source: AWEA)

Because of the late renewal of the PTC for 2013, the U.S. added only 1.6 MW of wind capacity in the first half of the year, although activity has been “picking up steam” since, Kiernan said in an interview. A record 13,000 MW of nameplate capacity was added in 2012.

Kiernan said that the trade group would be willing to seek a phase out of the subsidy in six years, if it were accompanied by the elimination of other generation sources’ subsidies. (Unlikely, he acknowledges.)

Beyond the industry’s need for subsidies, Kiernan said it also needs more transmission to continue its growth. “We need to keep our shoulder to the wheel,” he said. “Transmission is still a very limiting factor.”

Kiernan joined AWEA in May after serving 15 years as president of the National Parks Conservation Association.

`Honey pot’ Lures Cyber Attacks

Kyle Wilhoit, a threat researcher with security firm Trend Micro, captivated NARUC members with an account of how he created a “honeypot” to lure hackers as a research project.

The first fictitious water utility, created from the basement of his St. Louis area home, attracted attacks within 18 hours of their creation. Later, he set up 12 servers in eight countries, which were attacked 74 times from sites in Russia, China, Germany, the U.S. and other countries. Eleven of the attacks were critical and would have compromised a real water system by stopping pumps and modifying temperature or pressure

One of the key lessons from the exercise, Wilhoit said, is that critical devices should be on virtual private networks. Attackers can easily discover ICS (industrial control system) and SCADA (supervisory control and data acquisition) devices through search engines, such as Google and SHODAN.

“There’s absolutely zero reason to have them Internet-facing,” he said. (See Wilhoit’s report, Who’s Really Attacking Your ICS Equipment.)

Regulators Consider State Role in FERC Market Enforcement

Rishi Garg, an attorney with the National Regulatory Research Institute, presented the initial results of a study on FERC enforcement of market manipulation rules and said he is working on a second phase to consider whether state regulators should engage in their own enforcement actions.

Garg said recent penalties and disgorgements totaled more than $1 billion. “That suggests there’s a lot of money coming in — and a lot of money being left on the table,” he said.

A paper published in the Energy Law Journal last year argued that consumers are less likely to be made whole when rates are found to be unjust and unreasonable under market-based rates than under traditional cost-based regulation. (See Analysis – JP Morgan Settlement: A Verdict on Electric Markets?)

Founded in 1976, the Institute conducts research for NARUC members.

Dodd Frank Ups Coop-Bank Trading: EEI

Lopa Parikh, of the Edison Electric Institute, told the conference of consumer advocates that cooperatives and municipal power companies are having trouble finding counterparties among utilities — and doing more business with banks – as a result of the Dodd-Frank law.

Parikh, EEI’s director of federal regulatory affairs for energy supply, said EEI members are spending an average of $1 million each for new record keeping systems due to the law and don’t want to incur further costly obligations by being classified as a swaps dealer.

The law says that companies doing $25 million in transactions in the prior year can be considered a swap dealer “That could be one or two PJM wholesale transactions,” she said.

A former consumer advocate in Ohio and the District of Columbia, Parikh beseeched advocates and state regulators to express their concerns to the CFTC. “They see us as trying to avoid rules and regulations,” she said, “so they don’t always take what we say to heart.”

November 26, 2013

EPA: Open Mind on Greenhouse Gas Rules

ORLANDO — A top EPA official told state regulators the agency is still in listening mode in drafting its greenhouse gas rules on existing power plants, while some regulators said their customers could face double-digit rate increases as a result.

The Environmental Protection Agency is expected to issue its proposed rules by June. In September, EPA issued GHG rules that effectively banned new coal generation that lacks carbon capture and sequestration (CCS), an expensive and unproven technology.

But Janet McCabe, Acting Assistant Administrator for EPA’s Office of Air and Radiation told the audience at a joint FERC-NARUC panel that the agency will not require CCS for the existing fleet.

Section 111 (d) of the Clean Air Act requires states to develop implementation plans to meet the standard EPA sets.

McCabe said EPA is using a “bottom-up approach” in developing the standard that will acknowledge the varying fuel mixes by state and the remaining life of fossil fuel plants.

“People are asking `What’s the target?’ We will ultimately [answer] that,” McCabe said. “But we keep pushing back. We’re not ready to do that until we have more discussion and see what’s reasonable to do.”

In recognition that the transmission grid crosses state lines and that power companies own plants in multiple states, EPA will encourage states to join in regional solutions, McCabe said.

Florida Commissioner Eduardo Balbis told the audience at another panel discussion that the regulations could increase monthly bills by as much as $38 for customers of coal-dependent Gulf Power. For fixed income customers, he said,”even a $1increase is something that’s untenable.”

Kentucky Commissioner Jim Gardner also warned of “incredible increases” for some customers in his state, which got 97% of its electricity from coal last year.

Len Peters, who heads Kentucky’s Energy and Environment Cabinet, said a 25% increase in the state’s electric rates (currently in the bottom 10 nationally) will cost 70,000 jobs because it is has the most energy-intensive economy in the U.S., with half of its electricity used by manufacturers.

Skiles Boyd, vice president of environmental management and resources at DTE Energy, predicted a big workload for lawyers.

“The Clean Air Act was not written to handle greenhouse emissions … We’re going to be pounding a whole lot of square pegs into round holes,” he said. “If it’s done wrong there will be stranded costs and that will cost customers. They’ll be mad at us. They’ll be made at [state regulators] and they’ll be mad at the administration.”

Rate-Based Versus Mass-Emissions Standards

Kentucky has asked EPA to allow it to pursue a “mass-emissions” approach to reducing total average emissions rather than a standard that sets an emissions threshold of tons per MWh.

“We can work with the utilities in the state to develop retirement plans,” Peters said. “Whose feet do you [EPA] hold to the fire? You hold the state’s feet to the fire.”

But Steve Schleimer, vice president of governmental and regulatory affairs for Calpine, said a market-based approach, such as the cap-and-trade program used by the nine states in the Regional Greenhouse Gas Initiative is cheaper and fairer. “You can’t draw a border around Kentucky in the electric market,” he said.

Reliability Issues

Gerry Cauley, CEO of North American Electric Reliability Corp., said NERC expects plant retirements will cause particular reliability challenges in Texas, the Midwest and New England.

Cauley said NERC is less concerned with having sufficient capacity than in having capacity that can provide grid stability. Renewable resources lack the inertia that allows large traditional generators to help stabilize the grid, Cauley said.

“This is not the usual utility whining,” Cauley said. “Once you get to 20%-30% integration of renewables and distributed generation this problem is real.”

PJM Executive Vice President for Markets Andy Ott echoed Cauley’s concern, asking “should we be compensating for some of these basic services we’ve taken for granted?” he asked.

Roles for Nuclear, Renewables, Efficiency

Several speakers at the conference said the new regulations will require the U.S. to make a renewed commitment to nuclear power. “If you want to sustain these gains it can’t be simply a reliance on low natural gas [prices] and the [weak] economy,” said Chris Hobson, chief environmental officer for Southern Co.

“Renewables can’t provide baseload” power, said Kentucky’s Peters.

Massachusetts Commissioner David Cash disagreed. “I actually can see a future when renewables are the bulk of that,” Cash said, citing the potential of offshore wind. Cash acknowledged renewables will have to be supported by storage to overcome their intermittency.

Peters and Cash also disagreed over how much “low-hanging fruit” remains in the form of energy efficiency.

Cash said benefit cost ratios for efficiency investments are still in the range of 3- to 5-to-1. “I still think there’s a huge amount of low-hanging fruit,” he said.

November 26, 2013

FERC OKs Gas-Electric Talk

Gas pipelines (Williams Partners LP) — (Source: Williams Partners LP)

Gas pipeline operators can exchange non-public operational information with PJM and other RTOs under a final rule approved by the Federal Energy Regulatory Commission.

The rule, approved Nov. 15, is the first regulatory change by FERC since it began an inquiry on gas-electric interdependence in February 2012 (AD12-12-000).

The order includes a No-Conduit Rule that prohibits recipients of the information from disclosing it to an affiliate or a third party. The No-Conduit Rule does not affect current communications among pipelines, local distribution companies and gatherers regarding conditions affecting gas flows between them.

In response to comments, the final rule allows transmission operators to seek commission authorization if they wish to share information from an interstate pipeline with a local distribution company.

(See Talk among Yourselves: FERC Urges Gas-Electric Communication.)