Virginia Electric and Power Co. will initiate its biennial rate review by the Virginia State Corporation Commission in late March and file a revised transmission cost rider in May. Separately, the commission issued an order Feb. 28 changing the beginning of the calendar year for future base rate cases to Jan. 1 from Dec. 1.
Virginia: Testimony Due on Renewable Pilot
March 19 is the deadline for filing testimony in the Virginia State Corporation Commission’s review of Virginia Electric’s proposal to create renewable generation pilot program for large non-residential customers.
The pilot would allow customers under Rate Schedule GS-3 or GS-4 with demands greater than 500 kilowatts and purchases of renewable energy of between one million and 24 million KWh annually to purchase a larger portion of their energy from renewable sources than available in the company’s existing generation mix.
The plan would be limited to planned deliveries of 240 million KWh annually in aggregate, or 100 customers, whichever is reached first.
Hearing: May 7, 10 a.m. Commission’s Courtroom, Second Floor, Tyler Building, 1300 East Main Street, Richmond. Written comments from non-witnesses are due by April 30.
Delaware: Delmarva IRP Case Delayed
The Delaware Public Service Commission March 4 approved a four-month delay in the procedural schedule for the review of Delmarva Power and Light Co.’s Integrated Resource Plan (IRP). A commission hearing examiner approved the delay, proposed by the company and PSC staff to allow scheduling of workshops and settlement efforts with stakeholders. The company’s IRP, filed Dec. 6, concluded that “the combination of available generation resources and transmission import capability into the PJM DPL Zone” will be sufficient to meet the company’s power demands through 2022. Docket #12-544
Kentucky Fuel Hearing Set
Witnesses for Kentucky Power Co. will testify before the Kentucky Public Service Commission April 9 in an examination of the company’s Fuel Adjustment Clause. The hearing will focus on the company’s coal procurement practices for November 2010 through October 2012. In a filing March 1, the company said it was not seeking a change in its base fuel cost.
Hearing: April 9, 2013, 10:00 a.m., Hearing Room 1 of the Commission’s offices at 211 Sower Boulevard, Frankfort, KY.
Indiana Rate Bill Wins OK
Lawmakers gave preliminary approval Wednesday (March 13) to a bill that would allow electric utilities to obtain rate increases for transmission and distribution upgrades outside of a base rate case.
The House Utilities & Energy Committee approved Senate Bill 560 after adding amendments limiting utilities’ transmission and distribution rate hikes under the revised “tracking” process to 2% of its total revenue. Read more in The Indianapolis Star.
Ohio Consumers Rep Fights Duke Request for Depositions
The Office of the Ohio Consumers’ Counsel Wednesday asked the Ohio Public Utilities Commission to overturn a motion to compel depositions from the OCC’s witnesses in Duke Energy Ohio’s pending electric and gas distribution rate cases.
The OCC said Duke filed its request for depositions on Feb. 28, nearly six weeks after the Jan. 18 discovery deadline set by PUC rules. The OCC is asking the PUC to overturn an order by Attorney Examiner Katie L. Stenman compelling the depositions.
Duke filed a request in June 2012 seeking an $86 million increase in electric distribution rates and a $44 million increase in gas rates. The company’s last electric base rate increase was in 2009.
Maryland OKs Offshore Wind Bill
The House Monday night (March 18) gave final approval to Gov. Martin O’Malley’s bill to subsidize development of offshore wind energy. The legislation will raise residential bills by $1.50 per month; most businesses would see a 1.4% increase in rates. Read more in the Baltimore Sun.
Maryland PSC to Archive Meeting Broadcasts
The Maryland Public Service Commission will begin archiving live-stream broadcasts of its proceedings over the Internet beginning May 1. The archives will be kept for six months.
Company News
- Duke Energy told analysts Feb. 28 that it expects adjusted diluted earnings per share of $4.20 to $4.45 in 2013 and has set a target EPS growth of 4% to 6% percent through 2015. The company said its 2013 results, the first full year of operation since Duke’s merger with Progress Energy, will serve as the base year for the company’s long-term EPS growth projections.
- John T. Herron, CEO, president and chief nuclear officer of Entergy Nuclear, joined Duke Energy’s board of directors effective March 1, 2013. Herron will retire from Entergy on March 31.
- Duke announced the appointment of Dhiaa Jamil as president of Duke Energy Nuclear, which operated 12 nuclear units in the Carolinas and Florida. Jamil previously served as Duke Energy’s executive vice president and chief nuclear officer. Bill Pitesa, senior vice president of Duke Energy’s nuclear operations for the Brunswick and Robinson nuclear plants, will become chief nuclear officer reporting to Jamil.
Dominion Resources, Inc.
- Dominion Resources will hold its annual shareholders meeting May 3, 2013, at 9:30 a.m. ET.
- Dominion appointed Pamela J. Royal, M.D., to its board of directors effective March 1. Dr. Royal, 50, is a board-certified dermatologist and the owner and president of Richmond skin care company.
Stakeholders Back PJM on FTR Forfeiture Rules
The Market Implementation Committee voted overwhelmingly March 6 to endorse PJM’s proposals for applying forfeiture rules to virtual transactions, rejecting the Market Monitor’s alternatives.
The PJM proposals create criteria for applying the existing forfeiture rule for increment offers and decrement bids and extends application of the rule to Up to Congestion (UTCs) transactions, previously not covered.
PJM’s package was backed by about 90% support of MIC members voting and will be forwarded to the Markets and Reliability Committee. Market Monitor Joseph Bowring’s alternative proposals won support from only a quarter of the members.
The rules address companies (including affiliates) that submit virtual bids that affect the value of the companies’ Financial Transmission Rights (FTRs). Forfeiture rules would apply when those transactions result in a higher LMP spread in the day-ahead market than in the real-time market.
Radical Change
Bowring called the PJM proposals “a radical change” that should have been subjected to more discussion through issuance of a problem statement. Bowring said PJM’s load-weighted reference bus method would inappropriately penalize some transactions and fail to apply the forfeiture in others when it should apply.
In December 2012, for example, PJM penalized 65 companies a total of about $75,000. The new method would have issued penalties on a single company for only $1,500, a 98% reduction, Bowring said.
Stu Bresler, PJM vice president of market operations, acknowledged that PJM’s changes would reduce the triggering of the rule — which is now applied in less than one-tenth of 1% of transactions — but said the RTO has not quantified the impact.
‘At or Near’
Bresler said PJM’s proposal simply clarifies how the RTO determines whether a company’s virtual bid is “at or near” the delivery or receipt buses of its FTR.
Under the PJM plan, companies will lose any profit for an FTR if 75% or more of the energy injected or withdrawn is reflected in a constrained path between FTR source and sink points. “We don’t believe this is a radical change,” he said.
PJM proposed using a similar test for UTCs. Bowring’s proposal would have applied the penalty on UTCs based on their net impact. He said the full impact of UTCs are not captured by the PJM proposal.
Net Impact
PJM’s Tim Horger, who presented the RTO’s proposal, said it is not appropriate to use the same “net” impact rule for UTCs because increment and decrement transactions don’t involve a second bus. Increment officers have only a source, and decrement bids have only sinks. UTC transactions include both source and sink.
David Mabry, consultant to the PJM Industrial Customers Coalition, said his group fears the PJM proposal weakens preventions against abuse.
Legitimate Hedging
Pat Sunseri, of Twin Cities Power, LLC, countered: “We don’t want to see more forfeitures when the activity might not be market manipulation but legitimate hedging.” Sunseri said the FTR forfeiture rule was created to stop participants from making small virtual transactions as low-cost leverage to impact much larger FTR positions.
Carol Smoots, counsel to the Financial Marketers Coalition, said that the PJM proposal was more reasonable than Bowring’s because it reflects the differences between UTCs and increments and decrements. “It’s very troubling to have this guilty-until-proven-innocent always come up when it comes to these transactions,” she said of Bowring’s proposal.
PJM’s proposed new criteria will be in a new section (8.6) of Manual 6: Financial Transmission Rights. It will also amend Section 5.2.1 of Appendix K to the PJM Tariff and require changes to the Operating Agreement.
The MRC is expected to defer action on the UTC proposal for up to two months pending a discussion to better define UTCs. (See “Facing Opposition, PJM Delays UTC Cap Pending Broader Review.”)