Page 1682 – RTO Insider

February 2, 2016February 5, 2025

Legal Challenge Behind it, DR Seeks to Overcome Behavioral Resistance, Varying State Rules

By Rich Heidorn Jr.

Having survived a legal challenge that could have crimped its development for years, demand response now has an opportunity to take a central role in combating climate change and reducing energy bills by taking advantage of the growing spread of advanced metering technology.

But the industry still faces formidable challenges due to varying state regulations and consumer resistance to time-of-use pricing, hurdles the Supreme Court’s Jan. 25 ruling upholding FERC’s authority to regulate wholesale DR did nothing to eliminate. (See Supreme Court Upholds FERC Jurisdiction over DR.)

“While the Supreme Court ruling puts federal regulators at the helm of modernizing the electric grid — at least for the 70% of the country operating in deregulated electric markets — individual states can still restrict or set strict criteria for participation in those DR markets, which in some cases are increasingly restrictive,” said EnerKnol policy analyst Erin Carson in a research report released Monday.

Reflecting that sober assessment, shares of DR provider EnerNOC, which jumped 70% on the day of the ruling, retreated soon after, ending the week up 26%.

“Without establishment of price signals to customers, DR cannot fulfill its potential,” concluded a report released a week before the Supreme Court ruling by the Evolution of DR Project (EDP).

“The vast majority of residential customers are not exposed to price signals,” said the report, the result of a “multi-party dialogue” that included utilities, RTOs, state and federal policymakers, DR providers and other stakeholders.

Impact of Supreme Court Ruling

Although the Supreme Court case dealt explicitly with DR in wholesale energy markets, many observers predicted a rejection by the court would also jeopardize the resource’s participation in the capacity markets, where DR earns most of its revenue. (See related story, Clark Calls for New Look at Order 745.)

Kevin Lucas, director of research for the Alliance to Save Energy, noted that DR revenue is essential to justifying investments in data analytics and building controls. “Fair, market-based compensation in competitive wholesale energy markets is a critical step toward increasing the deployment of energy-saving technologies such as whole-building controls and smart-grid-enabled analytics,” he said in a press release. “With major legal questions now resolved, the direct benefits to consumers of these products and services are sure to follow.”

“Business uncertainty about the outcome of the Supreme Court case has held innovators and implementers in limbo for months,” wrote Denis Du Bois, a clean technology consultant and host of the Energy Priorities radio program. “Not only was the future of demand response in question, but similar ideas for energy efficiency markets also had a foggy outlook. By upholding the order, the court has removed that uncertainty for demand response and clarified the future of energy efficiency as well.”

Smart Meter Deployment

If maximizing DR requires exposing consumers to price signals, it also requires smart meters, devices capable of two-way communication and capturing real-time usage.

The Obama administration spent more than $3 billion in stimulus funds on smart meters and other smart grid investments. And while the spread of the technology has been unmistakable, there is disagreement over the current penetration of smart meters.

Source: American Public Power Association

FERC’s ninth annual Assessment of Demand Response and Advanced Metering report, released in December, cited Energy Information Administration data that put penetration at 30% through 2012. The Edison Foundation’s Institute for Electric Innovation reported that more than 50 million smart meters were deployed as of July 2014, representing more than 43% of U.S. homes.

The EDP report estimates that about 70% of meters have been upgraded to smart meters or are planned for replacement in the near future, in line with projections by research group NPD, which predicted 75% by 2016.

FERC found the Texas Regional Entity leading with penetration of 70%, followed by the Western Electric Coordinating Council at 51%. Bringing up the rear were ReliabilityFirst Corp., which includes portions of PJM and MISO, at 17%, and the Northeast Power Coordinating Council at 12%.

Real-time Pricing

Despite the growing availability of smart meters, EDP noted that “at the residential level, nearly all customers are on retail rates that are fixed and do not vary with time or location.”

“Efficiently integrating new technologies such as storage and electric vehicles may require exposure to time-varying rates/prices to reflect the true marginal cost of power in each interval of time,” it said. “Without such time-varying rates/prices, the customer cannot know when inexpensive electricity should be bought and stored, and when the stored electricity should be utilized to avoid buying expensive electricity.”

But political aversion to price spikes and human nature has made it a challenge to make that vision a reality. Indeed, the FERC report found that enrollment in time-based DR programs dropped by 6.1% between 2011 and 2012.

A Department of Energy report last June looked at customer response to time-based rates based on studies of 10 utilities.

The utilities in the study ran at least one of four types of time-based rate programs: critical peak pricing (CPP), critical peak rebates (CPR), time-of-use (TOU) pricing and variable peak pricing (VPP).

The report concluded that opt-out enrollment rates were about 3.5 times higher than they were for opt-in programs (93% vs. 24%), but there was no significant difference in retention rates (91% for opt-out, 92% for opt-in).

The department report attributed the results to what social scientists call the “default bias.”

“When facing choices that include default options, people are predisposed to accept the default over the other options offered,” the Energy Department report said. The department said the findings indicate cost-benefit advantages to using opt-out approaches.

The Sacramento Municipal Utility District found, conversely, that peak period demand reductions for opt-in TOU customers were about twice (12%) as large as they were for opt-out customers (6%). Peak period demand reductions for SMUD’s opt-in CPP customers were about 50% higher (24%) than they were for opt-out customers (14%).

The study also found that retention rates were higher for critical peak rebates than for critical peak pricing.

This, the researchers said, was consistent with the theory of loss aversion, which holds that, given a choice, people are more likely to seek to avoid a loss rather than acquire a gain. “The risk from nonperformance during critical events under CPP is greater than under CPR, and this could be a motivating factor that decreases enrollment and retention,” the report said.

State Policies

Some states are attempting to overcome behavioral obstacles.

The California Public Utilities Commission is requiring the three investor-owned utilities in the state to establish default TOU rates for residential customers starting in 2019. The Massachusetts Department of Public Utilities is requiring that load-serving entities implement time-varying rates as smart meters are deployed.

Last June, the Michigan Public Service Commission ordered DTE Electric and Consumers Energy to offer opt-in TOU and dynamic pricing rate structures over the next two years.

The EDP report cited complaints of DR providers and multi-state utilities over inconsistencies in DR rules from state to state and the complications of wholesale market programs that “can underlay or overlay” state DR programs.

It recommended that state-level policies on distribution platforms consider how distribution-level DR will be coordinated with regional wholesale DR. It also called for RTOs to participate in the proceedings that develop distribution-based market systems.

Some others say more action is needed to clarify federal and state jurisdiction. “My take is that [the Supreme Court] decision can guide the development of demand response, but we still need congressional action (and perhaps a broader Supreme Court decision) to update a U.S. electricity market framework that is over 80 years old,” wrote Varun Sivaram, an advisor to New York’s REV initiative.

See related stories:

February 2, 2016

A Half Century of DR

The Evolution of DR Project report provides a succinct history of demand response, beginning in the 1950s and 60s, when utilities began offering incentive-based “interruptible” programs to large commercial and industrial customers.

Between 1980 and 2000, direct load control programs offered savings to smaller customers through radio controls allowing utilities to turn off hot water heaters and air conditioning during peak demand.

The term “demand response” came into use after 2000, when the creation of ISOs and RTOs created “a new platform” for the resource, including market-based DR.

Using new technology and directed by FERC policies, the RTOs “moved beyond emergency programs and began to incorporate DR as a market resource that could compete with supply resources. DR began to be viewed as a dynamic, controllable and dispatchable resource that could help balance supply and demand in a wholesale market.”

DR began providing ancillary services, including operating reserves and regulation.

Potential peak reduction in RTOs and ISOs grew to 6% of peak demand in 2013, from 5.6% in 2012, according to FERC’s annual Assessment of Demand Response and Advanced Metering report in December. (See FERC Report Shows Spotty Growth for Demand Response, Advanced Meters.)

At the same time, utilities began installing advanced metering infrastructure — smart meters — that provided both more precise time-based measurement and two-way communications.

In contrast with traditional energy efficiency — making devices and equipment use less power — DR was “dynamic, controllable and dispatchable.”

A new term emerged — intelligent efficiency — to describe building technology that can respond to price or other inputs automatically.

In the last five years, DR backers have sought to ensure the resource has a role alongside rooftop solar and microgrids in the move to distributed energy resources.

See related stories:

February 2, 2016

From Negawatts to Flexiwatts

An August 2015 report by the Rocky Mountain Institute said that although the Supreme Court ruling would be “immensely important” for demand response, the industry was limited by “traditional, top-down grid paradigms.”

“By focusing on DR’s revenue potential in wholesale markets, a huge part of the core value proposition of demand flexibility is lost — namely, the economic benefits of flexible, controllable demand to individual customers,” it said.

The institute’s co-founder, Amory Lovins, is credited with inventing the term “negawatt” — power saved through conservation or efficiency.

The institute’s new report, The Economics of Demand Flexibility, coins a new term, “flexiwatts” — demand that can be moved across the hours of a day or night based on economic or other signals.

The report concludes that residential demand flexibility can save $9 billion per year in spending on transmission investments — a cut of more than 10% of forecast spending — and $4 billion annually in energy production and ancillary services. That could reduce consumers’ electric bills by 10% to 40%.

Flexiwatts can reduce capacity spending by reducing peak loads and flattening aggregate demand profiles of customers. In the energy market it can shift load from high-price to low-price times. They can also reshape load profiles to complement the increasing intermittent generation expected in response to EPA’s Clean Power Plan.

While DR is deployed infrequently and often used only as a last resort during peak demand, demand flexibility can be used continuously and proactively to reduce costs year-round, resulting in direct bill reductions instead of infrequent incentive payments.

Demand flexibility can use automatic controls to reshape a customer’s demand profile in ways that either are invisible to the customer (for example, using storage to decouple the timing of consumption from the grid impact) or minimally affect the customer (shifting the timing of non-critical loads within customer-set thresholds).

It also takes advantage of time-of-use or real-time pricing, demand charges and distributed solar PV export pricing to provide retail price signals directly to customers or through third-party aggregators.

See related stories:

February 2, 2016

SPP Begins Promotional Campaign to Tout Transmission Value

By Tom Kleckner

OKLAHOMA CITY — SPP last week kicked off a yearlong campaign to promote the value that the RTO’s transmission infrastructure brings to end-use customers.

Mike Ross, SPP senior vice president of government affairs and public relations, briefed the Board of Directors and Members Committee last Tuesday on “The Value of Transmission” study and the RTO’s promotional plans, which include use of social media and bill inserts by member utilities.

The study looked at the value provided by 348 transmission upgrades during 2012-2014, involving almost $3.4 billion of capital investment. The upgrades resulted in more than $240 million in fuel-cost savings for SPP members during the first year of its Integrated Marketplace (March 2014-February 2015), according to the study.

The analysis also quantified benefits “associated with reliability and resource adequacy, generation capacity cost savings, reduced transmission losses, increased wheeling revenues and public policy benefits associated with optimal wind development.”

SPP expects the benefits to exceed a net present value of $16.6 billion over the next 40 years, a benefit-to-cost ratio of 3.5. (The $3.4 billion investment has a 40-year NPV of less than $5 billion.)

“We’ve done something we don’t believe has been done before,” Ross told the board and members. “We’ve taken transmission lines put in service between 2012 and 2014, looked at the production costs, compared that to what the production costs would have been without those lines and presented it in a way the general public can understand.”

Conservative Estimate

Ross said SPP’s estimate is a conservative one, noting that much of the new transmission went into service during the fourth quarter of 2014, meaning the study only captured three months of benefits.

The yearlong transmission study includes an endorsement from the economic-regulatory consulting firm, The Brattle Group, which performed an independent assessment of the RTO’s work. Brattle consultants called the report a “path-breaking effort” and suggested the 3.5 benefit-to-cost ratio “is likely understated.”

SPP said previous studies projected the expected future value of transmission construction based on “latest available forecast data,” but the new analysis used “actual historical operating data” to document transmission value realized during the Integrated Marketplace’s first year.

“Transmission … is an enabling resource that paves the way for numerous benefits to our stakeholders and their customers,” SPP CEO Nick Brown said in a statement.

SPP members welcomed the study. They have been asking for a quantitative assessment of the RTO’s value to the region for years to support their rate cases. “The cost of all this transmission is immediate,” said Dave Osburn, the Oklahoma Municipal Power Authority’s general manager. “You see the costs on your bills right away, but the benefits take years to accrue and you sometimes don’t see it. This is a step in the right direction.”

Ross said staff has produced videos, bill-insert templates and a four-page brochure, to which he hopes members will apply their own logos. He also asked members to share success stories, photos and videos.

“We want to partner with members over the course of this year, and we need to do so in the most cost-effective manner possible,” Ross said. “You asked us to tell this story, but we can’t do it alone. I implore you, I beg you, I ask you, share our social media tweets and posts.”

February 2, 2016June 17, 2024

SPP Adds Ex-MISO CEO, NERC Trustee to Board

By Tom Kleckner

OKLAHOMA CITY — SPP last week added two additional members with high-level industry expertise to its Board of Directors with the election of former MISO CEO T. Graham Edwards and former NERC trustee Bruce Scherr.

SPP CEO Nick Brown told members last Tuesday the board’s expansion was necessary for succession purposes. The board now consists of Brown and eight independent directors.

FERC approved SPP’s request to add up to three more independent board members in August (ER15-1924).

Working with the Russell Reynolds Associates executive search firm, SPP’s Corporate Governance Committee whittled 25 initial applicants to eight before selecting Edwards and Scherr as finalists. Their appointments became effective immediately, and the two new directors joined the board for last week’s January meeting.

Kelly Harrison, Westar Energy’s vice president of transmission, expressed disappointment with the selections, saying it is “painfully obvious we’re not making progress on diversity.” The nine-person board now includes seven white men and two African Americans, Phyllis Bernard and Josh Martin.

SPP board Chair Jim Eckelberger responded by noting the eight finalists included one minority and one woman.

“We think we chose the best two of the eight we interviewed,” Eckelberger said. “Most members of the committee would agree we picked the best two.”

Brown welcomed Graham and Bruce in a statement, referencing their broad industry experience with grid operators, compliance and critical infrastructure protection.

Edwards, 62, was CEO of North Carolina-based ElectriCities from 2009 until his retirement in November. He served on MISO’s board from 2001 to 2009, the last three years as CEO.

Edwards was CEO and board chair for Santee Cooper in South Carolina, and one of the founders of The Energy Authority, a wholesale energy and marketing company. He served on the Western Electricity Coordinating Council’s board. He currently serves on the board of directors for Peak Reliability, which is responsible for reliability coordination for the Western Interconnection.

Edwards holds a bachelor’s degree in business administration from Francis Marion University in Florence, S.C., and an MBA from The Citadel.

Scherr, 67, is the board chair and CEO emeritus of Informa Economics, a research and consulting firm specializing in agriculture and commodities. He has been with the company since 1987.

Scherr served on NERC’s board of trustees from 2002 to 2015 and was also a member of the Global Strategy Institute Advisory Council of the Center for Strategic and International Studies. He sits on the boards of E. Ritter & Co., Santa Energy Co. and J. D. Heiskell & Co.

Scherr holds a bachelor’s degree from Rutgers University, and a master’s degree and doctorate from Purdue University, all in agricultural economics.

February 2, 2016

FERC Upholds Constitution Pipeline OK

By William Opalka

FERC set back efforts to stop a natural gas pipeline in New York on Thursday when it refused to rehear its December 2014 approval of the project. (CP13-499)

In a separate ruling Friday, the commission allowed limited tree cutting along the Pennsylvania section of the pipeline route.

FERC dismissed a challenge by project opponent Stop the Pipeline to thwart the Constitution Pipeline project and a related compression station in Wright, N.Y. The project is designed to transport shale gas from the Marcellus region of Pennsylvania, connecting with existing pipelines that serve eastern New York and New England.

“In the 2014 order, the commission found that the benefits the Constitution Pipeline and Wright interconnection projects will provide to the market outweigh any adverse effects on existing shippers, on other pipelines and their captive customers, and on landowners and surrounding communities,” FERC wrote.

FERC had agreed to reconsider the ruling almost a year ago. In the intervening months, the 2nd Circuit Court of Appeals denied a March 2015 petition by STP to force timely action by FERC. (See Constitution Pipeline Opponents Asks Appeals Court to Force FERC Action.)

The commission rejected complaints that the project failed to demonstrate a public benefit, that there was a lack of opportunities for public input and that the final environmental impact statement was incomplete.

Much of the opposition to the pipeline is now centered on FERC’s approval of the project without a completed permit by state environmental officials under Section 401 of the federal Clean Water Act.

FERC said the lack of a permit is not an “absolute bar” from development activities and that its conditional approval of the project does not allow activities that impair waterways.

At a joint legislative budget hearing at the New York State Capitol in Albany on Thursday, Department of Environmental Conservation Acting Commissioner Basil Seggos noted Constitution is a significant project with a large number of stream crossings. “I’m not going to pressure my department to move more quickly than they believe is warranted,” he said.

Also, on Friday, the commission granted partial permission to Constitution to proceed with limited tree felling in Pennsylvania only, in a letter from FERC’s Division of Gas – Environment and Engineering. About 25 miles of the 124-mile route is within Pennsylvania, but FERC delayed similar operations in New York. (See New York AG: No Tree Cutting for Pipeline Without Water Quality Permits.)

The letter notes that permission from landowners in Pennsylvania has been granted but does not address the controversy in New York, nor does it explain the prohibition there.

“This letter does not authorize tree felling in New York nor does it authorize the workspace variances in Constitution’s May 19, 2015, and Jan. 8, 2016, requests in New York at this time,” it states. The variances were requested to avoid wetlands or improve work site access.

February 2, 2016

MISO’s December Energy Prices Hit 7-Year Low

December marked a return to energy prices not seen since 2009, MISO officials reported during Tuesday’s Markets Committee of the Board of Directors meeting. December’s average day-ahead and real-time energy prices were the lowest since MISO implemented the ancillary services market in January 2009.

“December was a relatively mild month,” said David Patton, MISO’s Independent Market Monitor. “The most notable thing that happened this month is the continued low gas prices… In addition to gas prices dropping, oil has continued to drop.”

Patton said languishing prices were driven by low loads, low natural gas prices, strong wind output and the return of nearly 15 GW of generation from the fall outage season.

December’s average real-time energy price was $21.23/MWh, representing a 31% drop when compared to December 2014. Load averaged 72.6 GW, which was lower than last December’s average of 76.6 GW. On Dec. 17, load peaked at 87.1 GW, down from last December’s peak of 93.1 GW.

Wind power alone produced 4,133 GWh, almost double the 2,461 GWh needed to satisfy combined state renewable portfolio standards.

Todd Ramey, vice president for system operations and market services, said temperatures in the footprint were 5 to 8 degrees above normal during December. He said unusually high temperatures complicated day-ahead forecasting and led to a mid-term load forecast that exceeded the 2% error threshold for eight days during the month.

The low energy prices caused capacity factors of coal-fired resources to drop to 45%, down from December 2014’s 60%. Patton said the reduced utilization could accelerate coal retirements. “We’re seeing some pretty significant changes in terms of types of dispatches,” Patton said.

— Amanda Durish Cook

February 2, 2016

MISO Plans Expansion of Carmel HQ

By Amanda Durish Cook

CARMEL, Ind. — MISO revealed Thursday that it plans to increase its employee headcount and invest $30 million to update its Carmel, Ind., headquarters. The grid operator said it’s in need of an expansion because it has outgrown the 133,409-square-foot facility that has served as its headquarters for more than a decade.

Over the next four years, MISO said it could add more than 80 employees to its workforce. The RTO hopes to gradually open 84 new positions by 2020 in order to qualify for $1.6 million in conditional tax credits and up to $100,000 in training grants offered by the Indiana Economic Development Corp. Final approval on both the employee additions and building expansion rests with MISO’s Board of Directors.

MISO spokesperson Andy Shonert said MISO’s investment plans are based on projections that are subject to performance-based checks. He noted that “future investment and headcount decisions are approved by the Board of Directors during the annual budget process.”

“The investment numbers cited encompass a number of priorities that MISO has worked on with stakeholders, including reconfiguring our Carmel location to better support our workforce, meeting critical technology needs and lease payments for our office building,” Shonert said, adding, “MISO always seeks to ensure we are good stewards of our members’ resources.”

A large portion of the expansion investment will go toward updating MISO’s facilities and IT and computer networking systems.

If the employee goal is reached, the city of Carmel said it would consider additional incentives, although the “city rarely offers additional benefits,” according to the Indianapolis Business Journal.

MISO’s decision followed deliberations that began last fall on whether to expand or move into new headquarters.

“Indiana has been our home since we first started, and we are proud to continue that investment,” MISO CEO John Bear said in a press release issued by the Indiana Economic Development Corp. “Fulfilling our mission of ensuring reliable operation of the electric grid requires the best and the brightest. This commitment to our Carmel facility will ensure that we have the people and technology to continue that mission in a way that provides value to our region.”

Of MISO’s 940 employees nationwide, more than 700 work in Indiana.

“We congratulate MISO on its big news today and we celebrate the fact that they chose to expand here in Carmel,” said Carmel Mayor Jim Brainard. “MISO has been a part of Carmel’s corporate family of 100-plus headquarters since the late 1990s and we look forward to watching their continued growth.”

In the meantime, and as part of the improvements, MISO is undergoing an audio-visual overhaul at its Carmel location. MISO Conference Services Manager Mike Barber said the top priority is to “enhance the stakeholder experience” of meetings. Barber said MISO is installing state-of-the-art audio-visual equipment that will include allowing telecommuting stakeholders a presentation view of meetings.

The audio-visual improvements will extend to MISO’s Eagan, Minn., location as well. Barber said construction at the Eagan facilities will begin on March 28 and last until May, while improvements to the Carmel facility began in late January and will last until April 11. Until then, meetings will be conducted offsite via telephone or at MISO’s Little Rock and Metairie, La., locations.

During a Tuesday meeting of the Markets Committee of the Board of Directors, Wisconsin Public Service’s Chris Plante asked if stakeholders will be required to use different software to view presentations online after the upgrade. Barber said that was something he couldn’t answer until pilot testing the new equipment.

At the MISO Steering Committee on Jan. 27, MISO Stakeholder Relations Specialist Alison Lane said a new conference call operator is coming on board in March. With the change, there will be no limit to how many callers can call into MISO meetings; currently the number is capped at about 150 callers. “That is all being folded into our AV update, which is slowly underway,” Lane said.

Lane said Board of Directors meetings and Advisory Committee meetings will continue to be operator-assisted, while all other meetings will not require an operator, “unless an issue arises.”

February 2, 2016

Company Briefs

Dominion Resources announced Monday that it is buying the Utah-based natural gas distributor Questar for $4.4 billion in cash in a deal aimed at expanding its gas business into the West.

Dominion said it expects to complete the acquisition by the end of the year. The company also said it would be assuming Questar’s approximately $1.31 billion in long- and short-term debt.

Like Duke Energy, which announced in October it would purchase Piedmont Natural Gas, Dominion expects the value of natural gas to increase as more and more states switch to the fuel for electric generation in order to meet state and federal emissions mandates.

It is Dominion’s latest big natural gas play. The company is one of the majority owners of the Atlantic Coast Pipeline project, a $5 billion, 550-mile pipeline that would bring natural gas from the shale fields in Pennsylvania, West Virginia and Ohio to markets and terminals in Virginia and North Carolina. It also has invested $3.8 billion to convert its liquefied natural gas import terminal at Cove Point, Md., on the western shore of the Chesapeake Bay into an export facility.

More: Wall Street Journal (subscription required)

GPI Names Bilek to Govt. Affairs and Communications

Amanda Bilek, who has held various positions at the Great Plains Institute since 2008, will become the director of government affairs and communications for the energy think tank.

“I look forward to the challenge of ensuring that our government affairs and communications efforts enhance the impact of our programs,” she said.

“Amanda’s extensive legislative and policy experience coupled with her management and communications skills make her a perfect fit for this new role,” said GPI President Rolf Nordstrom.

More: Great Plains Institute

Invenergy Cuts Deal to Sell Wind Energy to Google

Invenergy announced it has signed a deal with Google to provide the Internet giant with 225 MW of wind energy. Craig Gordon, Invenergy’s vice president of sales and marketing, said the power will be generated at the company’s proposed wind facility near Lubbock, Texas, and will be transmitted through SPP to Google’s energy-hungry data centers.

“They are always looking to partner up with folks like us to green up their energy supply,” Gordon said. “Their needs are growing by leaps and bounds every year, and as a result their energy needs are growing by leaps and bounds every year.” A price was not disclosed.

The agreement is part of a plan Google announced in December to partner with six companies in the U.S., Sweden and Chile to obtain 842 MW of clean energy.

More: Chicago Tribune

Duke Starts Coal Ash Removal from Riverbend Steam Station

Riverbend Steam Station (Source: Duke Energy)

Duke Energy began loading coal ash from its retired Riverbend Steam Station in Gaston County, N.C., using a rail spur it had built for the purpose. The company said each train can carry as much coal ash as 420 dump trucks, alleviating some of the community’s traffic concerns.

Riverbend, on the Catawba River, was retired in 2013, but the coal ash dump there is one of four high-priority sites that have to be cleaned up by 2019. Duke says it will clean up all its coal ash sites by 2029.

More: WSOC TV

Montana Co-ops May Be Facing $5B Bill to Comply with CPP

Montana’s electric cooperatives will likely share in a $5 billion bill to comply with the federal Clean Power Plan, officials said recently.

The $5 billion is what Basin Electric Power Cooperative, an SPP member, estimates it will need to cut greenhouse gases from its coal-fired power plants while also adding wind farms and gas-fired generators as replacement energy sources.

More: Billings Gazette

Basin Electric Growth Rate Projected to Drop to 1.4% Annually

Basin Electric Power Cooperative forecasts new load will increase 1,350 MW over the next 20 years, 739 MW lower than its forecast last year.

The forecast projects a 1.4% annual growth rate across Basin’s membership, down from the previous year’s estimate of 2.5 to 2.9% annually. The cancelled Keystone XL pipeline and oil price fluctuations account for much of the difference.

The load forecast show Basin Electric’s service area growing at twice the rate of the rest of the U.S., even with oil prices at 12-year lows.

More: Basin Electric Power Cooperative

PNM Opens 3rd Solar Facility This Year, Adding 9.5 MW

Public Service Company of New Mexico opened a 9.5-MW solar facility south of Santa Fe, its 15th in the state.

The 40,000-panel solar center is part of the utility’s much debated and critiqued energy portfolio, 15% of which is required by the state to be derived from renewable sources.

In December, the state Public Regulation Commission approved PNM’s plan to close two of four coal-burning units at the aging San Juan Generating Station and replace that power with energy from nuclear and natural gas plants, additional coal power and some solar energy.

More: The Santa Fe New Mexican

Nonprofit Says PNM Broke Law with 64-MW Palo Verde Purchase

An advocacy group is fighting a requested rate increase by Public Service Company of New Mexico, which it says quietly purchased a 64-MW share of the Palo Verde Nuclear Generating Station in Arizona for $163.3 million without getting prior approval from state regulators. PNM previously had leased the capacity from the nuclear plant.

The nonprofit New Energy Economy filed a motion Jan. 20 with the state Public Regulation Commission, along with Bernalillo County, to dismiss a third of the utility’s requested $123.5 million rate hike that would cover the $40 million cost of operating Palo Verde’s Unit 2 for a year, including taxes, maintenance and fuel.

The advocacy group, which has been at odds with PNM for years, said that the utility should have submitted its proposed purchase first to the state commission. PNM said it filed the request in March with FERC, and no public comments were submitted.

More: The Santa Fe New Mexican

Austin Energy Proposes Rate Cut for Most Businesses

Austin Energy has proposed cutting rates for most business customers to reduce revenue by $17.5 million a year.

Austin Energy officials publicly released their suggested rates Jan. 25 in what is shaping up to be a contentious discussion about reallocating costs among different customer classes.

The utility, which has 448,000 customers, says that residential customers as a whole are paying $53 million less than it costs to serve them, while businesses collectively are paying about $62 million more. Its new rates require City Council approval.

More: Austin American-Statesman

Akron Delves into Battery Storage with Solar Project

Smart battery builder Design Flux Technologies, a University of Akron spinoff, is building a battery-management system for a rooftop solar array being built in Akron, Ohio.

The facility will be built by Prism Solar Technology of Highland, N.Y., and will be affixed to the roof of the former B.F. Goodrich Tire plant, a 19th century building that now houses the Akron Global Business Accelerator, a business development organization. Design Flux Technologies is a resident company of the Akron Global Business Accelerator.

The city of Akron’s $173,000 investment in the solar panels and storage equipment is expected to be recovered within five years, with power cost savings estimated between $30,000 and $40,000 annually.

More: Crain’s Cleveland Business

WEC Energy to Replace Retiring CEO with Current President

WEC Energy Group announced last week that current president Allen Leverett will succeed Gale Klappa as chief executive on May 1.

Klappa, 65, is retiring and will serve as nonexecutive chairman. Leverett, 49, was recruited to WEC by Klappa in 2003 after the two worked together at Georgia Power in Atlanta.

The incoming CEO said his priorities will include the continued transition of the Integrys merger, working on upgrades as needed to WEC’s natural gas distribution infrastructure and compliance with Wisconsin’s Clean Power Plan strategy.

More: Milwaukee Journal Sentinel

Exelon Appoints Gioia to Board of Directors

Nancy Gioia, retired director of global connectivity, electrical and user experience for Ford Motor Co., has been appointed to Exelon’s board of directors, effective Feb. 1.

Gioia, 55, will serve on the generation oversight and finance and risk committees.

In more than 30 years at Ford, Gioia led global electrification efforts, working closely with the Edison Electric Institute and the Department of Energy.

More: Exelon

PECO: Smart Ideas Program Increasing Energy Efficiency

PECO Energy customers have received more than $500 million in energy savings, incentives and rebates in the past seven years using the Smart Ideas program, the Philadelphia utility says.

The program provides 15 ways to help residential and business customers save energy and money.

Smart Ideas is part of the company’s effort to increase energy efficiency and demand response capability under the Pennsylvania Public Utility Commission’s Act 129, which requires electric utilities to increasingly reduce their customers’ energy usage through 2021.

More: PECO

FirstEnergy: Lake Shore Power Plant to be Demolished

FirstEnergy engineers say the architecturally significant, defunct Lake Shore power plant in Cleveland is too degraded to restore and will be demolished.

The coal-fired plant, which first generated power in 1911, sits on 57 acres overlooking Lake Erie.

FirstEnergy hopes to begin the $15 million demolition in late spring or early summer, and then offer the cleared site for sale. But the utility can’t proceed with demolition until the city’s Downtown/Flats Design Review Committee issues a permit.

More: The Plain Dealer

$1B Privately Funded Plant will Power 1M Ill. Homes

Competitive Power Ventures plans to open a 1,100-MW combined cycle generating facility in the Three Rivers area of Grundy County, Ill.

The $1 billion CPV Three Rivers Energy Center will consist of two General Electric turbines and one steam turbine. It will be fueled by an existing 36-inch natural gas pipeline on the 80-acre site. The site is near Exelon’s Dresden Generating Station in Goose Lake Township.

Construction is expected to start in 2018, with the facility in operation by 2021.

More: Morris Herald-News

Entergy Names 30-Year Industry Vet to Lead its Nuclear Operations

Chris Bakken will become Entergy’s executive vice president and chief nuclear officer, effective April 6. Bakken replaces Jeff Forbes, who announced his retirement last year, and will report to Leo Denault, Entergy’s chairman and chief executive.

Bakken will be responsible for oversight of New Orleans-based Entergy’s 10 nuclear units at eight sites, which have nearly 10,000 MW of capacity. He will also be responsible for the company’s management services to the Cooper Nuclear Station for the Nebraska Public Power District.

Bakken’s career began in 1982 as a test engineer at Duquesne Light in Pittsburgh. He was most recently executive director for EDF Energy’s nuclear new build group and has also worked for American Electric Power, Public Service Enterprise Group and British Energy.

More: Entergy

February 2, 2016February 27, 2025

ISO-NE Could See Worse Supply Crunch in 2 Years

By William Opalka

New England’s winter energy supply crunch could be worse in two years because the closure of the Brayton Point coal-fired plant and the potential retirement of the Pilgrim nuclear plant will come before additional natural gas pipelines can fill the gap.

“The winter of 2017-2018 is the one that worries me the most, because we will have lost Brayton Point at that point, [and] there’s a question mark about whether Pilgrim is available,” said CEO Gordon van Welie during ISO-NE’s annual “State of the Grid” media briefing last week.

Entergy Closing Pilgrim Nuclear Power Station.)

The RTO’s performance incentives to make additional generation available won’t go into effect until mid-2018. Two proposed large-capacity natural gas pipelines, Northeast Energy Direct and Access Northeast, won’t be ready to serve New England until 2018 at the earliest.

“This will be a period of vulnerability,” van Welie added.

Non-gas generation is finding it increasingly difficult to compete in the energy market, van Welie said.

“During most of the year, the low price of natural gas is setting the wholesale price of electric energy, so power plants using more expensive fuels are getting squeezed financially. As a result, more and more non-natural gas-fired generators are retiring,” he said.

Van Welie

For the third consecutive year, the RTO will use its winter reliability program, which rewards dual-fuel gas/oil generators.

Meanwhile, higher capacity prices have attracted new investment. Capacity auction revenues have quadrupled from about $1 billion three years ago to $4 billion last year. Since auctions for those supplies are held three years in advance, customers have so far been shielded and will not see those price hikes for another year, he said.

Forward Capacity Auction 10, for the 2018/19 period, will be held Feb. 8. Van Welie said 147 new resources, totaling 6,700 MW of new generation, demand response and energy efficiency capacity, have qualified to participate.