Page 1700 – RTO Insider

November 25, 2015

Developer Questions Need for PSEG Projects Without ‘Wheel’

A transmission developer is asking PJM to determine if four projects in the Public Service Electric and Gas territory in North Jersey are still necessary if Consolidated Edison of New York makes good on its threat to terminate the “PSEG wheel” to route power into New York City.

Writing on behalf of Linden VFT, GE Financial Services asked PJM Nov. 16 for a reevaluation of the projects, given the “likely termination” of the wheel in 2017.

“We also request that PJM consider directing PSEG to cease work on the projects until careful reconsideration can be completed,” Linden VFT said.

Con Ed told PJM last month it will end use of the wheel when its current term expires on April 30, 2017, if it doesn’t win relief in a cost allocation dispute. (See Con Ed: Cost Allocation Dispute Could End PSEG Wheel.)

The four projects, part of the Regional Transmission Expansion Plan, include the Sewaren storm-hardening project, two sections of the Bergen-Linden Corridor and the Edison Rebuild.

Linden VFT is the owner of a 315-MW merchant transmission line in northern New Jersey that connects to NYISO on Staten Island. PJM has assigned it $100 million as its share of the project costs. “Linden VFT strongly believes it will not receive benefits from the projects [that] are roughly commensurate with the costs it is being asked to shoulder,” it wrote.

Linden also asked that if PJM determines the projects are still needed without the wheel, it should explore if there are less expensive alternatives.

– William Opalka

November 25, 2015

FERC Questions Fairness of Artificial Island Cost Allocation

By Suzanne Herel

FERC ruled Tuesday that PJM’s cost allocation schemes for the Artificial Island and Bergen-Linden Corridor transmission projects may be unjust and unreasonable, ordering a technical conference to probe the issue.

The technical conference will “explore both whether there is a definable category of reliability projects within PJM for which the solution-based DFAX [distribution factor] cost allocation method may not be just and reasonable, such as projects addressing reliability violations that are not related to flow on the planned transmission facility, and whether an alternative just and reasonable ex ante cost allocation method could be established for any such category of projects,” FERC said in its order (EL15-95).

Those wishing to participate may submit their requests by Dec. 18.

FERC accepted PJM’s Tariff changes involving the cost allocations but suspended them pending the outcome of the technical conference.

Under PJM’s rules, the cost of lower voltage facilities such as the Artificial Island and Bergen-Linden projects is computed up using the solution-based DFAX method. For regional facilities or “necessary lower voltage facilities,” only half of the cost is allocated by DFAX, with the remaining expense distributed on a region-wide, postage-stamp basis.

In the case of the Bergen-Linden project, Consolidated Edison of New York and Linden VFT had complained to FERC that the DFAX method was inappropriate and assigned a disproportionate percentage of the cost to Linden, which would receive “negligible benefits.” (See Con Ed Rebuffed Again on NJ Cost Allocation Dispute.)

Similarly, state agencies representing consumers in Maryland and Delaware, along with Easton Utilities Commission, Old Dominion Electric Cooperative and Linden VFT, argued that it was unfair to bill those states’ customers for virtually all of the $146 million price tag of the Artificial Island project, designed to fix a stability issue at the Salem and Hope Creek nuclear plants in New Jersey.

In response to the complaint, PJM conceded that the cost allocation may “appear disproportionate” but said its hands were tied by rules proposed by transmission owners and approved by FERC. (See PJM: Artificial Island Cost Allocation Appears ‘Disproportionate.’)

The DFAX methodology generally identifies reasonable beneficiaries of reliability projects based on power flows, it said. The Artificial Island project, however, is a stability fix, in which power flow is not the derived benefit.

The $1.2 billion Bergen-Linden project intends to upgrade a short-circuit problem in the Public Service Electric and Gas transmission zone outside New York City. PJM assigned $629 million of the cost to Con Ed and $52 million to PSE&G.

Responding to the ruling, PJM said, “FERC has determined that overall, the current method of allocating the costs of transmission projects is just and reasonable. However, in certain instances, the allocations led to complaints that individual results were unjust and unreasonable.

“Therefore, PJM will be pleased to support the FERC’s process to explore alternative cost allocation methods for projects that may not fit into the current process.”

FERC’s order was welcomed by Delaware Gov. Jack Markell.

“This FERC decision is an important first step to protect Delawareans from a significant electric rate increase,” he said in a statement. “I want to thank the FERC for its review and very sensible conclusion that the costs of a project designed to maximize power production and improve reliability in New Jersey should not fall entirely on Delaware and Maryland consumers.”

November 25, 2015

Connecticut Regulators Poised to OK Iberdrola Acquisition of UIL

By William Opalka

Connecticut regulators released a draft decision Tuesday approving Iberdrola USA’s $3 billion acquisition of UIL Holdings, adding a requirement that UIL’s headquarters remain in the state indefinitely.

With its “proposed final decision,” the Connecticut Public Utilities Regulatory Authority appears poised to give final approval next month to the Spain-based conglomerate’s second try to acquire UIL. The companies withdrew their initial application in June when PURA indicated it was likely to deny it.

“The authority concludes that the applicants have met their burden of proof that the proposed transaction, as presently structured, is in the public interest,” PURA wrote in the draft. UIL is comprised of The United Illuminating electric distribution company and two natural gas distribution companies in Connecticut, and two natural gas distribution companies in Massachusetts.

The regulators required Iberdrola to amend its settlement agreement with the state Office of the Consumer Counsel to include a promise to keep UIL’s headquarters in Connecticut for as long as it owns it. The companies had committed to a minimum of seven years.

“The authority sees the applicants’ commitment to maintaining its headquarters in Connecticut as meaningful and an integral aspect of this approval. Having a physical presence in the state enables more effective local management of the day-to-day operations of Connecticut-based utilities,” PURA said.

Otherwise, the draft largely mirrors the settlement agreement, which was filed in September. The companies agreed to “ring-fencing” to protect the Connecticut operations from any financial risks from Iberdrola’s other domestic or international operations — addressing a concern that helped doom the initial filing. (See Iberdrola Refiles Acquisition Bid for UIL Holdings.)

PURA also required the companies to provide a more detailed post-merger plan on their commitment to hire 150 people in Connecticut, saying “the details of the hiring plan are weak at this time.”

The settlement provides $40 million in ratepayer credits to existing electric and gas customers; approximately $45.4 million in rate freezes and avoided costs related to pipeline upgrades and system hardening; and approximately $39 million in public benefits from environmental remediation, charitable contributions and customer disaster relief, the draft says.

The companies previously agreed to a consent order with the state’s Department of Energy and Environmental Protection that would allow the contaminated English Station site in New Haven to be cleaned up for reuse. (See Iberdrola, UIL Would Clean Up Site if Connecticut Acquisition Approved.) The draft reiterates that the estimated $30 million in cleanup costs will come from shareholders and not ratepayers.

Parties to the PURA proceeding have until Dec. 1 to submit written comments on the proposed decision. The PURA commissioners are scheduled to hear oral arguments on the case on Dec. 3 and plan to render a final ruling on Dec. 9.

Iberdrola said last week it plans to change its U.S. holding company’s name to Avangrid following the UIL merger, but the names of the local distribution companies, including New Haven-based United Illuminating, would not change.

November 24, 2015April 7, 2025

Ontario: Clean — and Expensive

Ontario’s Independent Electricity System Operator serves a population of 13.8 million, almost 40% of Canada’s total population, making it nearly equivalent in population and peak demand to ISO-NE.

After peaking about a decade ago at almost 160 TWh, Ontario’s annual electricity use has dropped to 140 TWh — equivalent to that in 1990 — as growth has been offset by conservation, distributed generation and a decline in the pulp and paper industry. Loads are not expected to rise until 2028.

Nuclear power, now 60% of the province’s generation output, is expected to drop to 40% by 2025 following the retirement of the 3,252-MW Pickering plant. Two other nuclear plants with a combined 8,400 MW of capacity, Bruce and Darlington, are scheduled to be refurbished from 2016 to 2032.

Because of the lost nuclear output, the province will need to add as much as 3,000 MW of capacity between 2021 and 2032.

Prices

As in New England, prices are relatively high, and that has prompted frequent interventions from government.

Sergio Marchi, president of the Canadian Electricity Association, lamented that Canada’s electric rates are much more politicized than in Europe. “Electric rates, rightly or wrongly, have become a go-to tool to clobber the incumbent government.”

“I’m really surprised that Ontario ratepayers aren’t up in arms with pitchforks and the like,” said Jason Chee-Aloy, a consultant and former director of generation procurement at the Ontario Power Authority. “I think that is going to be an issue in the next election because we’ve baked in a lot of these costs.”

Jasmine Bertovic, vice president and general manager for eastern energy at TransCanada, said opening the market to more imports would provide price discipline.

The province is a net exporter with Michigan (46%) and New York (39%) its biggest export markets. About 85% of its imported power comes from Quebec.

“When you tie yourself to another jurisdiction and now you’re competing beyond Ontario … it is another check on your market. … It can’t be a check valve. It has to be open seams, open import-exports.”

Cap and Trade

Canada’s electricity system is among the cleanest in the world, says Marchi, noting that 80% of its generation does not emit greenhouse gases. That compares, he said, with Germany (41%), the U.S. (31%) and Japan (15%).

In 2017, Ontario plans to begin trading emissions through cap-and-trade auctions. The first auction will be for the province only, but Ontario plans to link its prices to those of California and Quebec, which already trade allowances. The province’s goal is to reduce CO₂to 15% below 1990 levels by 2020.

— Rich Heidorn Jr.

November 24, 2015February 5, 2025

Ontario Grid Looks Like the Past — and the Future — of the US

By Rich Heidorn Jr.

TORONTO — On April 8, 2014, the Thunder Bay Generating Station belched out the last kilowatt of coal-fired electricity in Ontario, a signature achievement for Canada’s most populous province. “The single largest climate change initiative in North America,” the Ontario Power Authority boasted.

Ontario’s carbon emissions have dropped by almost 90% over the last decade as it eliminated coal. Ontario Power Generation added silos to convert its Atikokan Generating Station (background image) from coal to wood pellets. The company, Ontario’s largest power producer, produced a quarter of its electricity from coal as recently as 2003.

While the province is far ahead of its U.S. counterparts in reducing its CO₂emissions, it is in other ways trying to catch up to the U.S. Provincial and local governments own most of the generation, and most of the non-government generation is under long-term contracts. Hourly prices are set province-wide with no locational pricing. It began regional planning in 2013 and is only now considering a capacity market.

It was against this backdrop that about 650 industry participants gathered here last week for the Association of Power Producers of Ontario’s (APPrO) 27th Annual Canadian Power Conference & Networking Centre.

Many of the discussions would be familiar to those in the U.S.: flat load growth; the threat and promise of distributed generation and storage; the need to improve coordination between generators and gas pipelines; and concern over the future of an aging nuclear fleet.

Speakers at the conference included Dan Dolan, president of the New England Power Generators Association, and Gavin Donohue, president of the Independent Power Producers of New York, who commiserated with their Canadian counterparts over what they view as government interference in the markets.

But “New York and New England don’t have as much political intervention in picking winners and losers” as Ontario, said Jason Chee-Aloy, former director of generation procurement at the Ontario Power Authority.

Like Moths to Light

Evan Bahry, executive director of the Independent Power Producers Society of Alberta, said the result has been “cross-threaded policies.” Government has “this reflexive instinct to jump in and solve it for us,” he said. “They can’t help themselves. They’re attracted like moths to light.”

Several speakers lamented the fact that Canada lacks FERC and the Federal Power Act to clearly establish independent regulatory control over the sector and limit tinkering by elected officials.

APPrO Executive Director Jake Brooks says Canada’s electric industry is operating under a fragmented governance structure, with each province and territory, as well as the federal government, having its own energy legislation, its own energy ministry and its own energy regulator. As a result, he said in an editorial, “many viable projects never get financed because benefits are viewed myopically by each level of government without considering the gains being delivered to other levels of government.”

Capacity Market

The shortcomings are evident, speakers said, in policymakers’ consideration of a capacity market.

The Independent Electric System Operator (IESO), which has managed the grid since 1999, merged in January with the Ontario Power Authority, combining short-term and long-term resource planning for the province, whose electric market is about the size of ISO-NE. (See related story, Ontario: Clean — and Expensive.)

IESO inherited from the OPA fixed term contracts for about 19 GW of operating capacity for a region whose peak is less than 22 GW.

“Ontario is in an awkward spot,” said Linda Bertoldi, chair of the National Electricity Markets Group for law firm Borden Ladner Gervais. “[It’s] so heavily contracted [that] there’s little liquidity for a capacity market.”

“It’s really hard to be half pregnant on markets,” agreed Dolan. “If you do go down the path of capacity markets, you pretty much have to be all in. I don’t think you can say we’re only going to do it for this portion and not that portion.”

APPrO President David Butters said the province must address its governance issues if it is to adopt a capacity market. “How do we limit the ability of government to interfere in markets and to undermine the value of investments and contracts?” he asked. “That is the really big issue to me.”

Jasmine Bertovic, vice president and general manager for eastern energy at TransCanada, said the market’s current price signals are muted. And he’s not sure the changes being contemplated will be improvements.

“I’m worried that we may be introducing new signals that just add complexity without changing behavior, or have some purpose or some cost-benefit.”

He likened “bolt-ons” to the market to the “Whac-a-Mole” arcade game, with unintended consequences popping up. “These things have to be part of an overall framework,” he said.

Regarding a move to LMPs, he said: “Every little piece that’s connected to the grid has a separate price. It’s all nice to know that information, but if it’s not leading to improved transmission infrastructure or transmission does not participate in locational pricing, then why have that signal?”

Going to War Without a Target

Adam White, president of the Association of Major Power Consumers, also expressed reservations.

“Planning without a vision is like going to war without a target. What are we planning for? Market evolution is inexorable. It’s inevitable. Evolution is all the [stuff] that happens over time. But that’s not a plan. That’s not a vision for the future we want,” he said. “The Ontario market’s evolved quite a lot in the years since it’s been opened … but it’s still sort of a 1.0 version of the market.”

Version 2.0, he said, needs to acknowledge the shift to distributed energy systems.

JoAnne Butler, IESO vice president for market development, also cited the growth of distributed generation, along with solar power and storage, as drivers for the future. “The change we’re going to see in the next 10 years — going off coal pales in comparison,” she said.

The Ontario Electric Board, which regulates prices for small consumers, last week issued a Regulated Price Plan Roadmap that seeks to address those changes, calling for phasing in fixed distribution rates and decoupling for commercial and industrial customers.

“I’m confident that regulation won’t disappear, at least not in the short term,” said Rosemarie Leclair, chairman of the board. “But what we regulate and how we regulate will change. It has to.”

Bill 135

Some worry, however, that the OEB’s efforts to pursue its plan will be undermined by a bill the provincial legislature is considering.

George Vegh, former general counsel of the OEB, said Bill 135 would effectively give the province’s minister of energy IESO’s responsibility for electricity planning and procurement and the OEB’s authority for approving transmission. It also would extend the government’s procurement authority to energy storage and transmission.

“The net result of Bill 135 is therefore to ensure that the main energy institutions — the IESO and the OEB — are focused almost exclusively on implementing government plans and directives,” Vegh, now head of the Toronto energy regulation practice for law firm McCarthy Tétrault, wrote in a commentary. “The government has always been steering the direction of energy policy. It is now rowing as well: It is in direct control of every policy instrument available.”

Chee-Aloy, now a consultant with energy management firm Power Advisory, said the government is “doubling down” on its “command and control” oversight.

“Of course the government could say: ‘IESO, use a capacity market to procure those resources.’ But it’s kind of hard for a market to work as a market when you don’t have a lot of participants competing to build or to upgrade those resources,” he said.

IESO CEO Bruce Campbell said he disagreed with those who think the bill will constrain the ISO. “I’d like to argue the exact opposite — that with the directing authority being taken away from the minister and going up to the cabinet level, it will inevitably be a much more policy-oriented framework. I view us as having a great future within that framework in implementing policy in the best possible way.”

Jack Burkom, senior vice president of commercial development for Brookfield Energy Marketing, said that while he hopes for “more significant market price signals … we’ll also continue to use contracting mechanisms.”

He urged IESO to act more quickly.

“The IESO shouldn’t wait for a trigger. The trigger is here. There’s existing infrastructure in the province that should be given the opportunity to compete to provide services when they come off of contact,” he said. “As JoAnne [Butler] said, ‘it’s not either/or.’ We’re not going to turn into PJM overnight.”

November 24, 2015

Company Briefs

NextEra Energy has offered to buy Energy Future Holdings’ Oncor transmissions business, which is slated to be sold to an investment group led by Hunt Consolidated. NextEra made the offer in a filing with the U.S. Bankruptcy Court in Delaware, which is reviewing EFH’s Chapter 11 exit plan.

The sale of Oncor is at the heart of EFH’s $42 billion reorganization strategy, but the company has chosen the Hunt-led group as the buyer.

“NextEra’s alternative transaction is the only proposal that can provide several significant benefits to Oncor, its customers, its creditors and EFH,” NextEra wrote in its bankruptcy court filing.

More: Wall Street Journal; Reuters

Duke Completes Storage System on Site of Retired Coal Plant

Duke Energy, working with two other companies, has installed a 2-MW battery storage system on the grounds of its retired W.C Beckjord coal-fired plant near New Richmond, Ohio. Duke said the Beckjord site allowed the company to take advantage of existing transmission infrastructure that connected the battery system to the grid.

The battery storage system will be used in grid frequency regulation — to either release energy onto the grid instantaneously or absorb excess energy — without the grid operator having to dispatch a generator. The battery system is faster and cheaper than a power plant, which could take 10 minutes or more to ramp up.

Duke worked with LG Chem, which provided the lithium-ion batteries, and Greensmith, which provided the software necessary for the frequency synchronicity. It is Duke’s third battery storage system.

More: Duke Energy; Charlotte Business Journal

Susquehanna Unit 1 Back Online After Nov. 12 SCRAM

Talen Energy’s Susquehanna Unit 1 in Pennsylvania came back online Thursday night after being off for a week following an unscheduled automatic shutdown.

Talen reported that during routine testing of equipment on Nov. 12, one of eight large valves controlling steam from the reactor to the generator closed. The unit automatically shut itself down.

The company said it conducted other maintenance tasks while the unit was down. “We made the choice, while the unit was out of service during a period of mild fall weather and lower wholesale power prices, to advance some maintenance tasks we had planned for the refueling outage next spring,” said Jon Franke, Susquehanna site vice president.

More: Talen Energy

Retired Talen Coal Plant Site Has Potential Buyers

Talen Energy is in talks with potential buyers of a site in Billings, Mont., where the defunct J.E. Corette coal-fired power plant is being dismantled.

The 153-MW plant, which operated for 47 years, was closed in April because it didn’t meet mercury pollution standards.

Talen, which acquired the site during its spinoff this year from PPL, did not identify the prospective buyers.

More: The Billings Gazette

NRG Names Frotte Treasurer as Stock Continues to Plummet

NRG Energy announced a small management shakeup Nov. 19 as its stock value closed below $12/share for the first time in 11 years.

NRG named Gaetan Frotte as senior vice president and treasurer. Frotte, who served as the senior vice president of finance and strategy of NRG Yield, replaces G. Gary Garcia, who left the treasurer position for undisclosed reasons at the end of June. Chad Plotkin, vice president of investor relations, will fill in for Frotte at NRG Yield.

The company is in the midst of cutting costs and shifting away from its renewable-power businesses. Although NRG turned a small profit in the third quarter, the company is struggling with declining revenues from its coal-fired power plants, while its solar business is draining money and still finding its footing.

More: Houston Chronicle

PSE&G Gets OK to Replace 510 Miles of Gas Mains with Plastic

Public Service Electric and Gas has received regulatory approval for a $905 million plan to replace more than 500 miles of cast iron and steel gas mains with plastic mains over the next three years.

PSE&G said it wants to pursue the project while the price of natural gas remains low.

The work, set to begin after the ground thaws early next year, is expected to raise gas rates by about 1.5% annually for four years.

More: Associated Press

Oil Rig Counts Continue to Fall in Conjunction with Prices

The number of working oil rigs fell by 10 this week to 564, down more than 1,000 in a year, according to oil field services company Baker Hughes.

Some of the rigs will go back into operation if the price of oil climbs, but for now, it is becoming common for companies to idle them.

More: Houston Chronicle; Baker Hughes

Eversource Customers in Mass. to See Cut in Electric Rates

The Massachusetts Department of Public Utilities approved a 28% rate decrease for some Eversource Energy customers. The residential rate on Jan. 1 will be set at 10.804 cents/kWh, compared to last winter’s price of 15.046 cents/kWh.

The typical monthly residential bill in the Greater Boston and MetroWest areas will be about $101, compared to $122 last winter. Average residential bills in the South Shore, Greater New Bedford and Cape Cod regions will fall from $124 to about $103.

More: WCVB

Equinix Partners with NextEra, Invenergy to Power Data Centers

Equinix, a provider of interconnection and data center services, has signed power purchase agreements with affiliates of NextEra Energy Resources and Invenergy for wind energy in Oklahoma and Texas.

Equinix said the agreements will provide a combined 225 MW of capacity, fully powering all of the company’s data centers in North America by the end of 2016, and nearly doubling its worldwide purchases of renewable energy.

A NextEra affiliate will supply 125 MW of wind capacity that is expected to produce 556 GWh a year from the Rush Springs Renewable Generation Facility in Oklahoma.

More: Equinix

Iberdrola USA Name to Change

Iberdrola USA plans to change its name to Avangrid following its merger with UIL Holdings, according to a filing with the Securities and Exchange Commission.

The subsidiary of Spanish energy giant Iberdrola indicated when it announced the merger with UIL that it would take on a new name. UIL owns United Illuminating in Connecticut and three New England gas distribution companies. Iberdrola USA, which has a large wind energy business, also owns Central Maine Power, Maine Natural Gas, New York State Electric and Gas and Rochester Gas and Electric.

Michael West, a spokesman for UIL, said the new name involves only the U.S. holding company. The utilities will continue to operate under their familiar names.

More: New Haven Register

GE Moves Renewable Energy Unit to Paris

General Electric has officially moved its renewable energy headquarters from New York state to Paris following its $10 billion acquisition of the energy business of French conglomerate Alstom SA.

The move was a concession to the French government, and Alstom’s offshore wind business was regarded as the stronger business unit. The new renewable energy business will focus increasingly on offshore wind. GE’s onshore wind unit will remain in Schenectady.

More: Albany Times Union

November 24, 2015

FERC Orders RTOs to Report on Out-of-Market Actions, Uplift

By Rich Heidorn Jr.

FERC last week ordered RTOs and ISOs to file reports detailing their current practices and planned changes on five price formation issues, saying it needed more information before taking substantive action.

The order (AD14-14) continues an initiative the commission began in 2014 with the first of three workshops. (See FERC to Tackle RTO Uplift, Price Formation.)

In September, the commission issued a Notice of Proposed Rulemaking that would require RTOs and ISOs to align their settlement and dispatch intervals, saying it was the first of a number of proposals on which the commission plans to act. (See NOPR Requires RTOs Switch to 5-Minute Settlements.)

FERC said last week that the RTO/ISO reports, due in 75 days, will help it identify best practices and inform its future actions. It asked for information on:

pricing of fast-start resources;
commitments to manage multiple contingencies;
look-ahead modeling;
uplift allocation; and
transparency.

“Identifying best practices for these five areas should provide incentives to maintain reliability, to facilitate accurate and transparent pricing, to reduce uplift, and for market participants to operate consistent with dispatch signals,” the commission wrote. “We have selected these areas because the discussion at the price formation workshops and the comments received after the workshops suggest that a number of RTOs and ISOs have sufficient experience with these areas such that we may be able to discern best practices and understand unintended consequences.

“The commission seeks this information not only to answer technical questions regarding how each RTO/ISO addresses these topics, but also to understand the reasons why each RTO/ISO has made its set of policy choices,” it added.

Commissioner Cheryl LaFleur said the issue is one of the commission’s most important initiatives, particularly because of the shift from coal to lower carbon resources. “I know there’s been a lot of anticipation and even impatience for action in this area,” she said. “This is the second in a series of orders; I don’t believe it will be the last.”

Commissioner Tony Clark said the energy markets “are our best performing and most mature markets.”

“So it seems to me that this is an appropriate manner in which to deal with this … so that we take it one bite at a time and we don’t have secondary unintended effects [that might occur] if we were to act all at once.”

Commissioner Colette Honorable noted that some have complained that work on price formation issues has “stalled” in RTO stakeholder processes.

“While we are working, I want to gently ask that [stakeholders] continue working, too, and that if you identify market flaws and other issues that need to be addressed, please continue to demonstrate your leadership.”

November 24, 2015

FERC Accepts NYISO Compliance Filing

FERC last week accepted a compliance filing by NYISO regarding its revised compensation methodology governing the provision of frequency regulation service under Order 755. “We believe that NYISO has demonstrated that its interim market power mitigation measures have successfully limited opportunities for firms to benefit from bidding regulation movement above marginal costs, and therefore meet the requirements of Order No. 755,” FERC wrote (ER12-1653).
Divided FERC Trims ROE on NY Tx Projects, Orders Hearing.)

–William Opalka

November 24, 2015

Northeast Energy Direct Files for FERC Certificate

By William Opalka

Tennessee Gas Pipeline on Friday filed an application with FERC for a certificate of public convenience and necessity for the Northeast Energy Direct pipeline (CP16-21).

Tennessee Gas, a unit of Kinder Morgan, is seeking FERC approval in the fourth quarter of 2016, with construction starting in January 2017 and an in-service date of Nov. 1, 2018. The company estimates the project will cost $5.2 billion.

“Adding the NED project capacity to transport incremental natural gas supplies will ease natural gas capacity constraints and is expected to provide significant benefits to energy consumers in the region in the form of lower natural gas and electricity prices,” the application says.

The project consists of two components that will transport natural gas from the Marcellus shale gas region of Pennsylvania to New England.

The supply path component is a 174-mile segment from Bradford County in northern Pennsylvania to an existing compressor in Wright, N.Y. The segment can transport 1.23 million dekatherms per day, of which Tennessee Gas says it has long-term contracts for 552,262 dekatherms per day.

The market path component continues from Wright for 188 miles through New York and Massachusetts, turning slightly north into New Hampshire and then moving south to its end in Dracut, Mass. This route has a capacity of 1.3 million dekatherms per day, with contracts for 751,650 dekatherms per day.

The staff of the New Hampshire Public Utilities Commission has released a report that said Northeast Energy Direct is its preferred project of several proposed natural gas pipelines to ease supply constraints. (See NH PUC Staff: Northeast Energy Direct Pipeline Would Lower Power Prices.)

November 24, 2015

SPP Briefs

SPP has responded to stakeholder feedback by making several tweaks to its redesigned website.

Many of the improvements were to the site’s search function, which now returns results sorted with the most recently posted documents first and includes the ability to filter results by file type.

After logging in to their profiles on the site, users are now returned to the page they were previously viewing, rather than being taken to their profile page. Changes have also been made to simplify registration for meetings and other events.

Calendar (ICS) files sent to users after meeting registrations now include hotel information and have been reformatted to display all information in a more readable manner.

The RTO is accepting feedback on the revamped website, which went live last month, via email. (See SPP Unveils Redesigned Website.)

The RTO said its website project team is already at work on another set of improvements, to come in the next several weeks.

ECC, Gas-Day Testing to Begin with ‘Big Bang’

SPP staff told stakeholders last week to expect a “big bang” testing approach — an apparent reference to the complexity and breadth of the systems involved — next summer and fall as it continues to develop the markets system’s enhanced combined-cycle (ECC) software. (See “Enhanced Combined-Cycle Project Moves Forward” in SPP Board of Directors/Members Committee Briefs.)

The ECC project, intended to provide more sophisticated modeling that captures combined-cycle plants’ flexibility, is being conducted in conjunction with improving gas market-clearing logic. SPP anticipates market participants will be able to begin gas-day testing in August and ECC testing in December.

The testing will involve more than a dozen systems or interfaces, four different vendors and seven SPP departments. At least two other system revisions will be released in addition to the ECC/gas-day releases.

Staff told SPP’s Change Working Group — which is responsible for implementing changes affecting markets and members — said it would deliver quarterly releases of the markets systems through 2016, making incremental improvements to the ECC functionality. One project manager said the team will have to see how downstream systems are affected as it gathers upstream system requirements.

Adding to the project’s complexity is the market-clearing engine, or, as SPP’s Jim Gonzalez said, “The actual calculator.” The ECC logic is so complex, Gonzalez said, the clearing engine has to run 20 times to produce a good solution.

– Tom Kleckner