November 26, 2024

Binz Nomination in Doubt with Manchin Defection

Ron Binz’ nomination to the FERC chairmanship was hanging by a thread late last week after coal-state lawmakers took the former Colorado regulator to task at his confirmation hearing and Sen. Joe Manchin (D., W.V.) announced he would oppose the nominee.

Binz testifies
Binz testifies

Binz will need the backing of one Republican and all of the remaining 11 Democrats to win the recommendation of the 22-member Senate Energy and Natural Resources Committee. That will be tough for Democrats to pull off.

Ranking member Lisa Murkowski (R-Alaska) has already stated her opposition and no Republicans spoke in favor of Binz at his confirmation hearing Tuesday. Also in doubt is Sen. Mary Landrieu (D., La.), who has not indicated she will support the nominee.

`War on Coal’ Target

If Binz’ nomination fails, it will be because he became the target for those angry over the Obama administration’s so-called “war on coal.”

Binz would have limited influence over coal’s life or death as FERC chairman: Although FERC policies ensuring transmission access for renewables impacts coal indirectly, the agency has no role in the setting of climate or pollution policy.

But the timing of his confirmation hearing was inauspicious. The War-on-Coal blowback reached a crescendo last week as the EPA issued its long-awaited greenhouse gas limits on new power plants.

Manchin complained at Tuesday’s hearing that Obama’s environmental policies were beating the “living crap” out of his state. On Wednesday, he announced his opposition to Binz, criticizing him for prioritizing “renewables over reliability.

“His approach of demonizing coal and gas has increased electricity costs for consumers,” Manchin said.

Colorado PUC

Binz served as chairman of the Colorado Public Utilities Commission from 2007 through 2011, during which he drew praise from renewable energy advocates and opposition from the coal industry.

Binz participated in the drafting of Colorado’s Clean Air-Clean Jobs Act, which offered utilities incentives for replacing coal-fired power plants with natural gas. The bill, which was opposed by the coal industry, led to the retirement of six coal-fired generators, the addition of pollution controls at two others and the construction of new gas generation at a cost of about $1 billion. See: Who is Ron Binz, And What Will He Do at FERC?

Binz told last week’s hearing he would be “source neutral” and emphasize reliability as FERC chair. He noted that coal provides 40% of Colorado’s electricity, more than any other source. He also acknowledged he had spoken “inartfully” at a forum when he called natural gas a “dead end” fuel.

Norris Allegation

Adding to Binz’ woes last week were comments from FERC Commissioner John Norris, who reported that Senate Majority Leader Harry Reid persuaded President Obama to reject him as FERC chairman because he was too “pro-coal.”

Norris, a Democrat, told TransmissionHub that Reid’s chief of staff cited a vote he made as a member of the Iowa Utilities Board. Reid’s office denied Norris’ account.

Senate Minority Leader Mitch McConnell (R-Ky.) said Thursday that he would actively work against the nomination of what he called the Senate Majority Leader’s “foot soldier in his and this Administration’s War on Coal.”

Company Briefs

Duke-Energy-LogoDuke Energy Corp. is the latest company to end a long-standing practice of insuring its retirees, a cost-saving approach already embraced by IBM, Time Warner, Caterpillar, General Electric and DuPont.

About 14,500 retirees of were informed that the company will no longer provide insurance to supplement Medicare coverage. Instead, Duke will pay retirees an annual stipend toward the cost of insurance.

More: The News-Observer

Most U.S. Firms Ignore Climate Risk Disclosures

Almost 75% of the nation’s publicly traded companies are ignoring a three-year-old Securities and Exchange Commission requirement that they inform investors of the risks that climate change may pose to their bottom lines.

The data, culled from the annual reports of 3,895 U.S. public companies listed on major stock exchanges, found that only 27% mentioned “climate change” or “global warming” in their most recent filing. Nearly all of the 179 energy companies reviewed mentioned climate change.

More: Inside Climate News

Solar panels line the roof top of Walmart 3784 in Franklin, Ohio.  (Source: Wal-Mart)
Solar panels line the roof top of Walmart 3784 in Franklin, Ohio. (Source: Wal-Mart)

Companies Unplug from Grid, Jolting Utilities

The number of electric generation units at commercial and industrial sites has more than quadrupled since 2006, leading utilities such as AEP to consider getting into the on-site power business.

On-site generation still accounts for less than 5% of U.S. electricity production. But it is gaining momentum because of falling prices for solar panels and natural gas, as well as a fear that power outages caused by major storms will become more common. Wal-Mart, which produces about 4% of the electricity it uses, plans to boost that to 20% by 2020 and expects to be paying as little for solar power as utility power in less than three years.

More: The Wall Street Journal

Lobbying Wins Boosts Exelon CEO’s Pay

Exelon-LogoExelon Corp. boosted the stock awards for CEO Christopher Crane to $4.2 million in 2012, 25% above his target, thanks to his work lobbying state and federal officials. The company’s board of directors credited Crane for winning approval of the Constellation merger and for influencing new Environmental Protection Agency regulations and deregulation measures in Ohio.

More: Crain’s Chicago Business

Luis Reyes, ex-NRC, elected to FE Board
Luis Reyes, ex-NRC, elected to FE Board

FirstEnergy Elects Ex-NRC Official to Board

FirstEnergy Corp. announced the election Luis A. Reyes, former administrator of the Nuclear Regulatory Commission’s Atlanta-based Region II, to its board of directors. His term will run until the company’s 2014 annual meeting. Reyes will serve on the board’s Corporate Governance and Nuclear Committees.

More: FirstEnergy Corp.

State Briefs

Panel Rejects Pollution Control Waiver

The state Pollution Control Board rejected a request by Ameren Corp. to transfer permission to delay pollution controls at five coal-fired plants to Dynegy Inc., which is seeking to acquire the plants. The board said Dynegy could submit a new petition for a waiver, requiring the company to prove that it faces a hardship preventing it from cutting emissions.

Meanwhile, Foresight Energy LLC, the largest coal producer in the state, offered to help Dynegy finance the emissions controls or acquire the plants itself. Its goal: To create a new customer for its southern Illinois coal.

More: St. Louis Post-Dispatch

INDIANA

AEP to Close Last Coal-Fired Plant at Tanners Creek

American Electric Power announced it will close the last of its four coal-fired generating units in Lawrenceburg by 2015. AEP previously decided to close the first three of the Tanners Creek units. About 115 employees working at the plant will be affected.

More: Cincinnati Business Courier

MARYLAND

Groups ask O’Malley to Block LNG Plant

More than 100 environmental and community groups have formed a coalition to fight Dominion’s proposed liquefied natural gas (LNG) export facility at Cove Point. The groups asked Gov. Martin O’Malley to oppose the export complex, which they say would accelerate fracking in the region and emit more carbon pollution than most of the coal-burning power plants in the state.

More: Baltimore Sun

Utilities May Charge for “Dumb” Meters

Customers who say “no” to a new smart electric meter could end up paying for it. The Public Service Commission staff recommended that utilities charge customers who keep their existing meters about $75 upfront as well as a monthly fee.

Maryland’s Office of People’s Counsel also supports charges to cover meter reading and other costs incurred by customers who choose to keep their old devices.

More: The Gazette

NEW JERSEY

Carlyle Group Acquires Sayreville Power Plant

The Carlyle Group will buy the Red Oak power plant, an 823 MW combined cycle facility in Sayreville, from Energy Capital Partners.

Carlyle is purchasing Red Oak and five California plants through its affiliate Cogentrix Energy Power Management. Carlyle, an asset manager, has purchased $1.2 billion in generation assets since acquiring Cogentrix in late 2012.

More: The Carlyle Group

OHIO

AEP Seeks $290 Million to Expand Smart Meters

American Electric Power asked the Public Utilities Commission for a $290 million rate hike to expand its smart meter program to 900,000 customers. AEP has deployed smart meters to 110,000 customers to date.

More: The Columbus Dispatch

Bowling Green Outlaws Fracking, Niles Repeals Ban Amid Labor Opposition

The Bowling Green City Council banned fracking and disposal of fracking waste fluids while Niles City Council unanimously repealed its own ban on oil and gas drilling.

Niles reversed the “Community Bill of Rights” it enacted in August in a meeting packed with anti-drilling advocates pleading to keep the ban and labor unions encouraging its repeal. Opponents of the ban said the law might not withstand a legal challenge because the state Department of Natural Resources claims only it can license drilling.

But Bowling Green’s attorney said his city’s ban is part of the city’s criminal code, not its zoning code. The city is an unlikely target for drilling because of a high water table and unsuitable geology.

More: Toledo Blade; The Vindicator

Sierra Club Launches Boycott of FE

The Sierra Club launched an advertising campaign urging Ohioans to boycott FirstEnergy Corp. to protest what it says are efforts by the company to undercut Ohio’s renewable energy and efficiency standards. The target of the boycott is FE’s retail arm, FirstEnergy Solutions.

The environmental group paid for an electronic billboard across from the Statehouse, where lawmakers may soon revisit Ohio’s 2008 law requiring utilities to find at least 25% of their power from renewable or advanced technology sources by 2025. A FirstEnergy spokesman called the campaign “misleading.”

More: The Blade

PENNSYLVANIA

PJM Clears Hatfield’s Ferry, Mitchell Closings

FirstEnergy’s Hatfield’s Ferry and Mitchell power plants can shut down Oct. 9 without affecting grid reliability, an analysis by PJM has concluded. PJM told FirstEnergy of its conclusions in a letter dated Sept. 19, saying that the impact of the closures “can be handled by transmission upgrades and the implementation of temporary operating measures.”

FirstEnergy said it’s shutting down the plants because they’re losing money. The move will displace 380 workers.

More: Reuters

Med-Ed Suspending Energy-Saving Program

Met-Ed is suspending its energy-saving Easygreen program while it awaits the result of a Public Utility Commission cost/benefit analysis. Last year, about 20,000 Met-Ed customers participated in the program, which allows the utility to remotely control their air conditioners and pool pumps when demand for power peaks.

The PUC expects to complete the study on the programs of Med-Ed and other Pennsylvania utilities this summer.

More: York Daily Record

PA EDC Satisfaction Survey (Source: PA PUC)
PA EDC Satisfaction Survey (Source: PA PUC)

Customers Mostly Satisfied with Their EDCs

87% of electric distribution company customers reported they were either somewhat or very satisfied with the overall quality of service they received from their providers in 2012, down slightly from 89% in 2010 and 2011. PPL and Penn Power led the rankings with a 90% satisfaction rating; Peco had the lowest overall score at 84%.

More: Pennsylvania Public Utility Commission

VIRGINIA

Solar Donation Fund is a Bust

The state’s voluntary donation fund to make loans for solar energy projects has attracted virtually no interest and made no loans. Through April 26, contributions to the fund amounted to $319.54, but the monthly transaction fees to accept online donations totaled $319.00, leaving a balance of 54 cents.

More: Richmond Times-Dispatch

Dominion Rate Hearing Opens

The State Corporation Commission began a public hearing on a proposal from Dominion Virginia Power that would keep base rates flat for at least two years. Customers may still see increases for the costs of fuel, constructing new plants and environmental compliance. Regulators have until November to decide.

More: Associated Press

FERC Rejects Settlements over ATSI, Duke Moves to PJM

WASHINGTON – The Federal Energy Regulatory Commission today rejected settlements by FirstEnergy and Duke Energy affiliates over their moves to PJM, ruling that the companies unfairly imposed transition costs on transmission customers who were not party to the agreements.

The orders involve FirstEnergy’s American Transmission Systems Inc. (ATSI), which moved from MISO to PJM in June 2011, and Duke Energy’s Ohio and Kentucky utilities, which moved to PJM in May 2010.

In both cases, the commission ruled that the settlements improperly reinstated transition costs that the commission previously ruled should be borne by the utilities, unfairly leaving non-settling parties liable.

The cases originated from the companies’ filings of revised transmission tariffs that reflected their revenue requirements as PJM members. American Municipal Power Inc. (AMP) challenged both Duke and ATSI’s rate filings.

Duke Settlement

In February 2013, Duke Energy Ohio and Duke Energy Kentucky filed a settlement agreeing to reimburse AMP for any transition costs resulting from Duke’s move to PJM. The companies also agreed to reimburse AMP for 75% of “legacy” transmission expansion costs — Duke’s share of MISO transmission projects approved before the company joined PJM. Duke estimated the transition costs and legacy costs at $518 million.

The settlement also reduced the return on equity included in Duke’s wholesale rates from 12.38% to 10.88% percent (plus 50 basis points for its membership in a regional transmission organization). AMP — which buys transmission from Duke on behalf of Hamilton and Lebanon, Ohio and Williamstown, Ky. — agreed not to seek a lower ROE before 2016.

In today’s order (docket # ER12-91), the commission ruled that Duke had “not shown why it is not unduly discriminatory for AMP, but not other customers, to be exempted from paying” the transition costs.

ATSI Settlement

ATSI’s rate filing sought recovery of $38 million in transition costs while agreeing to forgo recovery of $360 million in legacy transmission expansion charges.

The company’s settlement, filed in December 2012, exempted AMP and Buckeye Power Inc., from paying any costs of the utility’s move to PJM but left it to the Ohio Public Utility Commission to determine what costs would be passed on to retail customers served by other distribution companies.

Buckeye Power is a generation and transmission cooperative owned by 25 electric distribution cooperatives in Ohio.

“While other wholesale customers may not have objected to the [AMP, Buckeye] settlement, these customers are largely served by ATSI’s distribution affiliates,” the commission ruled (docket # ER11-2814). “Thus, the lack of objection from these affiliates … has no bearing on the justness and reasonableness” of the agreement.”

The ruling was a victory for the Ohio Consumers’ Counsel (OCC), the lone challenger to the ATSI settlement.

OCC contended that ATSI was seeking to use the settlement as an “end-run” to include in its transmission rates charges prohibited by FERC in a May 2011 order.

Next Steps

The commission said ATSI and Duke could attempt to recover their transition costs through section 205 filings. Those filings would have to demonstrate that the benefits received by the companies’ customers as a result of the move to PJM exceeded the transition costs assigned to them.

FERC also remanded the issue of Duke’s ROE for further hearing and settlement judge procedures. The commission said that although the reduced ROE provisions “appear just and reasonable,” it was unable to accept them because of a “non-severability” clause in the settlement.

State Briefs

Coal Plants’ Fate Hinges on Waiver

Ameren Corp. and Dynegy Inc. will face off with environmental groups next week in a hearing that could decide the future of some of Illinois’ largest coal-fired power plants. The companies are seeking a waiver from the Illinois Pollution Control Board that would provide five additional years to meet stricter air pollution limits for Ameren’s coal plant fleet in central and Southern Illinois.

More: St. Louis Post-Dispatch

Smart Grid Creating Jobs in Illinois

Commonwealth Edison’s smart grid program created more than 1,000 direct full-time equivalent jobs at the utility and its contractors, in the second quarter, the utility reported to the Illinois Commerce Commission. “Grid modernization is proving to be an even stronger economic engine than we anticipated,” the company’s CEO said.

More: Fierce Energy

INDIANA

IURC Reverses Course, Won’t Take Industry Cash

Indiana’s top utility regulator said his agency won’t solicit or accept money from utility trade groups to help fund a conference of energy regulators from 14 states next year. The announcement came after The Indianapolis Star reported details of the effort by the Indiana Utility Regulatory Commission to raise tens of thousands of dollars from the nation’s largest utility trade groups.

At issue is who should pay for the Mid-America Regulatory Conference in Indianapolis next June. At last year’s conference in Little Rock, Ark., industry groups contributed about $50,000 toward the total cost of $73,000.

More: The Indianapolis Star

Sierra Club: Reverse Edwardsport Rate Order

Edwardsport Plant (Source: Duke Energy)
Edwardsport Plant (Source: Duke Energy)

The Sierra Club and several citizens asked the Indiana Court of Appeals to overturn Indiana Utility Regulatory Commission (IURC) orders that raised electricity rates to pay for construction of Duke Energy’s Edwardsport coal gasification power plant.

More: Fierce Energy

MARYLAND

Delmarva Power Wins 3.6% Rate Hike

The Public Service Commission awarded Delmarva Power a 3.6% increase in delivery rates. A residential customer using 1,000 kWh will see their monthly bill increase from $140 to $145.

More: The Baltimore Sun

PSC Vows to Monitor BGE on Howard Outages

The Public Service Commission ordered Baltimore Gas & Electric to improve service or risk penalties. BGE’s work plan includes more vegetation trimming, burying some lines and installing more automatic switching to keep power flowing when outages occur.

The commission can fine the company up to $25,000 a day for failing to comply.

More: The Baltimore Sun

OHIO

Coal Cos. Complained to Kasich before Regulator’s Ouster

Coal-industry officials repeatedly complained about new water-pollution limits to Gov. John Kasich before the governor allegedly forced out a top regulator, documents obtained by The Columbus Dispatch show.

More: The Columbus Dispatch

Duke Pledges to Exceed State Efficiency Targets

Duke Energy agreed with environmental and consumer groups on a five-year efficiency plan that will exceed the energy savings required by state law. The company filed a plan with the Public Utility Commission pledging to reduce customers’ electricity use 5.7% by the end of 2018, above the state standard of 4.9%.

More: Midwest Energy News

FirstEnergy Seeks Renewable Credits

FirstEnergy Corp. is looking to purchase 265,000 Renewable Energy Credits (RECs) and 6,600 Solar Renewable Energy Credits (SRECs). FirstEnergy need the credits to meet state renewable energy targets for its Ohio Edison, Cleveland Electric Illuminating and Toledo Edison utilities.

More: FirstEnergy

PENNSYLVANIA

Criminal Charges Anger Drilling Industry

Attorney General Kathleen Kane’s decision to prosecute Exxon Mobil’s XTO Energy Inc. for a 2010 wastewater spill angered industry officials, who said the case creates a hostile business environment. Environmentalists called the prosecution a welcome change from the lenient treatment they say the industry has received from state regulators.

Kane filed charges against XTO Energy for discharging more than 50,000 gallons of toxic wastewater from storage tanks at a gas-well site in Lycoming County. XTO settled federal civil charges over the incident in July by agreeing to pay a $100,000 fine and deploy a plan to improve wastewater-management practices.

More: The Philadelphia Inquirer

VIRGINIA

Bremo Coal Plant (Source: Dominion)
Bremo Coal Plant (Source: Dominion)

Dominion OKd to Switch Coal Plant to Gas

The State Corporation Commission approved the conversion of Dominion Virginia Power’s Bremo coal plant to a 227 MW natural gas generator. Opened in 1931, it is Dominion’s oldest coal-fired power plant. The conversion is expected to cost more than $50 million.

More: Electric Light & Power

Notification, Startup Rules to Take Effect Sept. 26

Generator start and notification rules will be implemented in eMKT beginning Sept. 26, PJM told the Market Implementation Committee last week.  The Operating Committee last week endorsed related changes to Manual 14D: Generator Operational Requirements.

Reason for change: The changes were approved in 2012, following a January 2011 problem statement by PJM and the Market Monitor that noted there were no rules governing unit start and notification times. This made scheduling more difficult for PJM staff, left units unavailable for lengthy periods and permitted the exercise of market power, officials said.

Impact:

  • During the Peak Period (Jan., Feb., June, July and Aug.) the notification plus startup time must not exceed six days. Units will be in forced outage status until they can operate within the six-day limit.
  • During Off Peak months (March, April, May, Sept., Oct., Nov. and Dec.) units may offer extended notification times that accurately reflect the physical time to bring the unit to the beginning of the startup sequence.
  • Manual 14D: Generator Operational Requirements was revised: Added applicability for individual generating units greater than 20 MVA; replaced outdated reference to NERC Guidelines with reference to NERC Reliability Standards; Added requirement for generators operating or scheduled to operate for PJM to notify PJM prior to attempting a restart following a trip or failure to start.

More information: Members can review a summary of the changes in the eMKT Enhancements section and test the changes in the “sandbox” environment prior to implementation.

Additional information can be found in the Issue Tracking section of PJM.com. PJM will answer questions through the PJM Markets Hotline and via phone at 610-666-8998.

SPS Removals in PPL, Dominion

Three special protection schemes (SPS) are being removed from the PPL and Dominion zones, the Market Implementation Committee was told Wednesday:

  • Dominion Harmony Village: The SPS was installed in 2007 to prevent overloads on line #65 during the loss of a tower carrying lines #2016 and #85. The SPS is no longer needed as a result of the completion of a new 230 kV line #2122 from Hayes to Yorktown (B0779).
  • Dominion Virginia Beach: The SPS was installed in 2007 to prevent line #27 from overloading due to the loss of two other feeds to Virginia Beach. The SPS is no longer needed due to the completion of a new 230 kV line #2118 from Landstown to Virginia Beach (S0375).
  • PPL West Shore 230 KV Automatic Load Shedding SPS: The SPS was installed in 2010 to alleviate an N-1-1 summer peak overload at the Steelton Tap on the Hummelstown-Middletown Junction #2 230 kV line. The SPS is no longer needed due to the energization of a second Brunner Island–West Shore 230 KV line (B0717).

Federal Briefs

Coal Burning Plant danicek / 123RF Stock Photo
danicek / 123RF Stock Photo

The EPA’s proposed greenhouse gas limits on new power plants will not be as strict as initially proposed, but will still effectively prohibit the construction of new coal-fired plants, according to news reports.

Plants burning natural gas reportedly will be permitted to emit about 1,000 pounds of carbon dioxide per megawatt-hour, easily within reach of modern plants. Coal-fired plants would be limited to 1,400 pounds per MWh, requiring carbon capture, a technology not yet commercially viable. The American Public Power Association is asking the White House for a looser limit on coal plants, calling a standard requiring carbon capture “unrealistic.” The rules are expected to be released this week. More: The New York Times; The Washington Post; The Hill

Ron Binz - Consultant & FERC Nominee (Source - Public Policy Consulting)
Ron Binz – Consultant & FERC Nominee (Source – Public Policy Consulting)

Unusual Public Battle over FERC Nominee

Threatened by federal policies, the coal industry has opened a counterattack by opposing President Obama’s nomination of a renewable electricity advocate to head the Federal Energy Regulatory Commission. The Senate Energy Committee is expected to hold a hearing today on the nomination of Ronald J. Binz. The fight over Binz has been unusually public, considering that the job at stake is at an agency most people cannot name. Environmental groups have rushed to Binz’s defense. More: The New York Times

GOP Amendment on Efficiency Bill Would Block EPA Carbon Regulations

A bipartisan energy efficiency bill on the Senate floor is fast becoming a magnet for politically controversial amendments on climate change and ObamaCare. The bill contains measures to boost building codes, train workers in energy efficient building technologies, help manufacturers become more efficient and bolster conservation efforts at federal agencies. More: The Hill; E2 Wire

White House May Loosen Rules on Eagle-Turbine Collisions

The White House is considering whether to loosen rules limiting the number of eagle deaths permitted from wind turbines. A new study reported that turbines killed at least 67 golden and bald eagles in the last five years. More: Associated Press

Rep. Fred Upton
Rep. Fred Upton

Upton Foe Campaigning on Climate Change

A political science professor is focusing on climate change in a longshot bid to unseat Rep. Fred Upton (R), chairman of the House Energy and Commerce Committee. More: E&E Daily

 

 

EIA Low-Balling Renewable Growth: Green Groups

Green energy and environmental groups say the Energy Information Administration’s closely watched “Annual Energy Outlook” is using “unreasonably low” renewable power growth forecasts that could inhibit investment in the industry. The groups notes that the EIA’s 2013 annual outlook projects renewables’ share of U.S. electricity will grow from 13% percent in 2011 to 16% in 2040. But a separate EIA report in August showed that renewables had reached 14.2% of net generation during the first six months of 2013. “It seems highly implausible that it will now take another 27 years to grow from 14.2% to 16%,” the groups said in a letter to the agency last week. More: The Hill

gridlock-book-coverEx-Senator Imagines Attack on Grid in New Novel

Former U.S. Senator Byron L. Dorgan (D-ND) says his new novel, which envisions a cyberattack that takes out the North American power grid, is based on real concerns about the vulnerability of the system. “‘Glass jaw’ is a pretty good description of the grid system,” Dorgan said. More than 200 utilities and government agencies are expected to participate in the largest emergency drill to test the electricity sector’s preparation for a cyberattack. The drill, scheduled for November, will simulate an attack that takes down large sections of the power grid for weeks. More: The New York Times

Installed Reserve Margin May Increase for 2014

PJM’s recommended Installed Reserve Margin (IRM) will increase slightly because of the increasing alignment of the RTO’s peak demand with demand outside of the region, according to a preliminary analysis presented to the Planning Committee Thursday.

The analysis recommends an IRM of 16.2% for delivery year 2014/15 (up from 15.9% in the 2012 analysis) and margins of 15.7% for delivery years 2015 through 2017.

Recommended Installed Reserve Margin (Source: PJM Interconnection, LLC)
(Source: PJM Interconnection, LLC)

The IRM is increasing despite a small reduction in the average Effective Equivalent Demand Forced Outage Rate (EEFORd).

PJM’s Tom Falin told members the reason for the increased IRM was an increase in the “World Peak” — the world’s share of its annual peak coincident with the PJM annual peak — to 96.4% from 95.4% last year. “We’re seeing a little less help coming in from the other regions,” Falin explained.

The study results will re-set IRM for the 2014/15 through 2016/17 delivery years and establish the initial IRM for 2017/18.

The IRM must be finalized by February 1 prior to its use in next year’s capacity auction.

PJM Likely to Limit Capacity Imports

PJM will seek to set a limit on capacity imports before next year’s Base Reliability Auction under a problem statement approved Thursday by the Planning Committee. The problem statement, proposed by PJM, was approved without objections or abstentions.

PJM officials said they are concerned that some of the external resources that cleared in May’s base capacity auction might not be deliverable.

Growing Imports

Capacity-sources-2016-17In the last five base capacity auctions, cleared imports have grown from about 3,000 MW to more than 7,400 MW. PJM officials were especially concerned because most of the cleared imports in this year’s auction came from MISO and other points west, with very little from the north or south. (See Capacity Auction: New Generation, Imports Up, Prices, DR down)

To clear in the auction, external generators currently need nothing more than a request for firm transmission service in the transmission queue, a very low hurdle, say PJM officials.

PJM hopes to win member approval on limits in time to use them in the May 2014 auction. That will require winning FERC approval for changes to PJM’s Reliability Assurance Agreement (RAA) — which governs procedures for maintaining system reliability — before PJM posts its planning parameters on Feb. 1. The RAA changes would have to be filed with FERC by the end of November.

Aggressive Schedule

“It is a very aggressive schedule,” PJM’s Mark Sims acknowledged. Because of the tight timeline, Sims said members should provide feedback on PJM’s Key Analytical Assumptions before the next Planning Committee meeting Oct. 10. Comments can be submitted to RTEP@PJM.com

The assumptions include consideration of monitored facilities, simulated contingencies, existing commitments (long term firm transmission agreements), distribution factors (DFAX) and outage transfer distribution factors (OTDF).

Conflicting Interests

Restricting imports could benefit PJM generators who have been dismayed by falling capacity prices. But it could be challenged by MISO officials, who have complained to FERC that PJM’s modeling of cross border transmission deliverability is unfairly limiting its generation from competing in PJM’s capacity market. (See FERC Likely to Increase Pressure on PJM-MISO Joint Market Talks)

The Planning Committee will consider both an overall capacity import limit and path-specific limits. In addition to potentially reducing export participation in the capacity auction, the limits would be inputs in planning analyses.