VALLEY FORGE, Pa. — PJM generators performed much better during this winter’s cold than a year ago, with forced outage rates limited to 12.3% on Feb. 20, when PJM set a new record winter peak load of 143,826 MW. About 22,800 MW of generation was unavailable due to forced outages.
Compared with last year, this winter saw some areas with colder temperatures, and they extended farther south, dispatch manager Chris Pilong told the Operating Committee last week.
About 22% of the outages Feb. 20 were due to gas issues. PJM lost 17,500 MW to forced outages the night before the record was set, of which one-third were gas-related.
No emergency procedures were required, and no demand response was dispatched, during the cold snap. There were no major transmission constraints.
SynchroPhasor Error Rates Greatly Improved
SynchroPhasor error rates have been trending downward in the past few months. In January, five of the 12 companies met the 0.2% error goal, and four others were below 1%.
The phasor measurement unit (PMU) technology is not currently considered a “critical” cyber asset but could become so in about a year. Critical assets are defined as those whose failure would, within 15 minutes, adversely impact systems in a way that would affect the reliable operation of the bulk electric system.
PJM expects the technology to become critical once it is used in solutions by the state estimator or becomes crucial to interconnection reliability operating limit (IROL) determinations.
Emergency Tool Refresh Underway
A revamped emergency procedures tool, which has been in testing since Feb. 19, is expected to go live March 30. Phase 2 enhancements are expected to be rolled out in June.
Fuel Type Posting Rule Takes Effect April 1
Generation operators will be required to enter fields for energy fuel type (and sub type) and start-up fuel (and sub type) in eMKT beginning April 1. Offers lacking the information will be rejected.
The rule change follows the Feb. 23 introduction of new functionality allowing generators to make intraday cost schedule changes in eMKT. The manual process for such changes is no longer being used.
WASHINGTON — Representatives of PJM, ISO-NE and NYISO told the Federal Energy Regulatory Commission last week that they are prepared to implement their states’ plans for complying with the Environmental Protection Agency’s carbon emission rule but that the agency’s deadlines should be flexible to account for delays in building new gas pipelines and electric transmission.
PJM officials also told FERC in the third of four technical conferences on the Clean Power Plan that states that rebuff regional efforts to price CO2 emissions could overwhelm the RTO’s economic dispatch software, undermining reliability.
That’s not an issue for New York and the six New England states, which are members of the Regional Greenhouse Gas Initiative (along with Maryland and Delaware in PJM). Officials of those states see RGGI’s cap-and-trade program as central to their states’ compliance.
Robert Ethier, vice president of market development for ISO-NE, said the RTO’s LMP energy market and forward capacity market, combined with RGGI, gives the region the tools it needs to comply “efficiently.”
RGGI the Right Tool
“RGGI seems like exactly the right mechanism to resolve this issue,” Ethier said.
Andy Ott, PJM’s executive vice president for markets, said the RTO’s regional dispatch can help reduce emissions either through an explicit carbon price or through run-time limitations on generators.
But Ott said PJM officials are concerned that if too many states choose run-time limits, it would result in “discontinuities” in the regional market that could threaten operating reliability.
“If a lot of states decide to put in physical limitations, it could actually create a situation where, more often than not, we can’t solve [dispatch] economically anymore, so then we have to go into … emergency dispatch. … That could affect reliability.”
Despite their concerns, RTO and state officials expressed far more confidence than state and utility officials from the Southeast, who also testified at the hearing. They also were more sanguine than several of the state officials who testified before a U.S. Senate hearing the same day. (See related stories, Debate over Cost, Impact of EPA Plan in Southeast and FERC Seeking Its Role on Carbon Rule ‘Safety Valve’.)
Flexibility on Deadlines
In addition to RGGI, New England will also depend increasingly on wind and Canadian hydropower to comply with the EPA rule, said Steve Rourke, ISO-NE’s vice present of planning. Of the 11,000 MW on the RTO’s generator interconnection queues, 42% is wind and virtually all of the remainder is gas.
Such a change in the generation mix will require a “significant transmission build out,” Rourke said. He noted the combined solicitation planned by Connecticut, Massachusetts and Rhode Island for more than 2,300 GWh of renewable energy annually and transmission to deliver it. (See New England States Combine on Clean Energy Procurement.)
The region’s best wind assets are in Maine and elsewhere in northern New England, many of them 100 miles from the existing transmission network, he said.
“We’re sort of far down the road toward meeting the requirements of the Clean Power Plan, but when you look forward there may be a few speed bumps in the road,” Rourke said.
Among those concerns, he said, are retirements of oil- and coal-fired generation, which will create a need for more gas pipeline and storage capacity. He also said the retirement of the Vermont Yankee nuclear plant raises questions about the viability of the region’s four remaining nuclear plants, which produce about one-quarter of its energy. “That’s a big question mark going forward,” he said.
Unrealistic Emission Rate
Rana Mukerji, NYISO’s senior vice president for market structures, said New York’s markets “are well structured to comply” with the rule but that EPA needs to provide the state “a more realistic emission rate.”
Mukerji said EPA’s proposed 549 lb/MWh rate is about half that of neighboring Pennsylvania (1,052 lb/MWh) and the limit on new combined-cycle gas turbines (1,000 lb/MWh).
That is not achievable in downstate New York, particularly New York City, which he said relies on dual fuel fossil units to meet needs on peak days. In 2012, Mukerji said, the city needed dual-fuel units for more than 14 peak days; EPA’s proposed rule envisions such units being called on only three times a year, he said.
Maryland Attorney General Brian Frosh called on state regulators to reject Exelon’s acquisition of Pepco Holdings Inc., while the companies more than doubled their offer of ratepayer incentives.
Frosh told the Public Service Commission the $6.8 billion deal was unlikely to improve reliability and would harm competition.
Maryland Attorney General Brian Frosh
“Post-merger, Exelon will control service to 80% of the state’s ratepayers,” Frosh said. “Internal documents show that Exelon plans to operate its distribution utilities to protect the company’s massive, multi-billion dollar investment in unregulated generation (including its economically challenged nuclear plants) by seeking to control the pace of distributed energy resource penetration in retail service territories.”
Frosh said the deal would only benefit the companies’ shareholders and executives, not ratepayers.
At the same time, the Coalition for Utility Reform and the city of Gaithersburg asked the PSC to require Exelon to up its commitment to renewable energy, energy efficiency and distributed generation. The March 3 filing was made by the coalition’s counsel, energy attorney and Montgomery County Councilmember Roger Berliner, a long-time Pepco critic.
“If the commission chooses to allow one energy company to control 85% of the Maryland market, a company hostile to renewables, distributed energy and energy efficiency among other things, then the commission must insist on a precondition that the merged entity adopt the very best practices in the Pepco service territory as a ‘pilot’ for the rest of the state, practices that simultaneously address the threat to the public interest and are, at the same time, generally recognized as the cornerstone of utilities of the future,” the coalition said.
Increased Rate Credits
Exelon outlined its new offer in a filing March 3 with the PSC.
With Pepco’s agreement, Exelon boosted a reserve that will pay for benefits such as rate credits, energy efficiency and help for low-income customers from $40 million to $94.4 million.
The use of the fund would be at the discretion of the PSC, whose staff had recommended $167 million in credits. Maryland’s consumer advocate, the Office of People’s Counsel, has urged the PSC to turn down the original deal, calling the benefits Exelon offered “either non-existent or woefully deficient.”
Exelon also increased its commitment to reliability, saying performance will be measured on an annual basis beginning next year instead of by a three-year average from 2018 to 2020.
Exelon also said it will offer a one-time amnesty for qualifying low-income families, eliminating unpaid bills that are more than three years past due.
The acquisition would combine Exelon’s electric and gas utilities — Baltimore Gas and Electric, Commonwealth Edison and PECO — with PHI’s Atlantic City Electric, Delmarva Power & Light and PEPCO.
The staff of the Delaware PSC has approved the transaction, as has the New Jersey Board of Public Utilities, the Federal Energy Regulatory Commission and the Virginia State Corporation Commission.
Exelon hopes to close the deal in the second or third quarter of this year.
Environmentalists Say Most Marylanders Against Exelon-Pepco Merger
The Chesapeake Climate Action Network (CCAN) last week released the results of a poll it commissioned that shows 61% of Marylanders share the group’s opposition to Exelon’s acquisition of Pepco Holdings Inc.
The telephone poll, conducted by Annapolis-based research firm OpinionWorks, sampled 594 randomly selected registered Maryland voters from Feb. 26 through March 8. It shows only 22% expressing approval, with 17% unsure. It has a margin of error of ± 4%, according to OpinionWorks.
Opposition was strongest in Baltimore City, where 73% opposed the merger. CCAN noted that Baltimore ratepayers have seen four rate hikes in the three years since Exelon acquired Baltimore Gas and Electric.
The pollsters prefaced the question with a statement noting that the Maryland Energy Administration “is opposed to the merger, saying it would create a large monopoly that would be costly for consumers.”
“We now know that this merger is not only a bad deal for Marylanders, but a highly unpopular one as well,” CCAN Director Mike Tidwell said in a statement. “… This deal would harm ratepayers and harm our future ability to generate local, renewable energy.”
On March 3, CCAN and the Sierra Club filed a joint brief with the Maryland Public Service Commission opposing the merger.
Exelon spokesman Paul Elsberg called the poll “fundamentally flawed.”
“The poll was conducted for a group that opposes the merger, not for an unbiased organization. Many of the respondents are not even customers of BGE or Pepco Holdings utilities,” he said. “Testimony provided at community hearings and directly to the PSC shows that there is broad support for the merger in the community.”
NEW ORLEANS — MISO stakeholders last week indicated widespread support for moving to a seasonal measurement of resource adequacy, with supporters saying it would improve reliability and efficiency.
MISO currently assesses resource adequacy annually, based on meeting the summer peak. But in a “hot topic” discussion at last week’s Advisory Committee meeting, all sectors except the Power Marketers and Independent Power Producers indicated support in adopting, or at least studying, a change to allow seasonal products.
“Under the current annual construct, seasonal demand is unaccounted for, seasonal resource capability and availability (most notably gas) is not recognized and seasonal transmission differences are not taken into consideration,” Manitoba Hydro, representing the Coordinating Sector, said in its written comments.
Flexibility
“An annual construct may result in reliance on resources when they are unlikely to be available and may underestimate the risk of loss of load other than at summer peak,” the company continued. “In addition, lack of flexibility for load to procure capacity (or be forced to over-procure for all months of the year) to meet variable seasonal demand is simply less efficient and cost effective.”
The company called not for a summer-winter construct but one that used four seasons, which it said would align with commercial contracts, financial transmission rights auctions and quarterly data submittals to the North American Electric Reliability Corp.
Steve Dahlke of the Great Plains Institute, representing the Environmental sector, said a seasonal construct would add more “granularity,” capturing, for example, wind’s increased production in the winter.
“We’ve seen wind resources helping out during this winter’s events,” he said, noting that wind generation set an all-time record Jan. 8, the peak demand day for the RTO this winter. He said it would also capture demand response not available in the summer.
The Transmission Dependent Utilities said a seasonal construct is “the most significant improvement” MISO could make to improve resource adequacy and urged MISO to implement it as soon as the 2016/17 planning year.
“The concept of a seasonal construct has been raised in a number of different forums over the past few years; however, MISO’s commitment to explore and pursue a seasonal construct still remains unclear,” it said. “… Stakeholders in the Supply Adequacy Working Group (SAWG) are still waiting for MISO’s views on this topic after formal discussions related to a seasonal construct began in early 2014.”
No Immediate Help
The IPP sector, however, said that such a change would not help MISO address expected capacity shortages in MISO North and Central next year. It noted that MISO has indicated a transition to a seasonal product could not happen before the 2017/18 planning year.
The IPPs said they were reserving judgment on the concept and that no discussion should occur until MISO publishes a promised white paper examining potential risks and opportunities.
“The IPP sector remains concerned that MISO has already pre-committed publically to state regulators to moving to a seasonal resource adequacy construct and without a fully vetted stakeholder process,” it said. “Such a process could prove lengthy, as already demonstrated when the current resource adequacy construct evolved from a monthly to an annual process. The MISO stakeholder process and regulatory process at [the Federal Energy Regulatory Commission] took almost four years before changes were accepted.”
“I don’t think it’s a forgone conclusion that we should move to a seasonal construct,” Dynegy’s Mark Volpe, representing the IPPs, told the committee.
The Power Marketers, meanwhile, said the idea was a solution in search of a problem. “Resource adequacy must be achieved every day, so having less capacity committed to the footprint on any given day will only serve to reduce reliability,” they said. “Subsequently, the economic efficiency of the energy market will suffer by reducing the number of resources that are available to be committed on a day-ahead and real-time basis.”
Opposition to Mandatory Capacity Market
There was almost as much consensus among stakeholders in opposition to a move to a mandatory capacity market such as PJM’s.
“MISO is not PJM,” said Justin Joiner of Vectren. “The concerns there do not exist in MISO.”
Alcoa and other members of the End-Use Customers sector also rejected the idea, also noting the differences between MISO, PJM, NYISO and ISO-NE.
“There has been a vibrant bilateral capacity market in place within the MISO footprint that has allowed end-use customers in MISO that do have retail choice (as well as municipal and cooperative electric utilities) the ability to contract for capacity at fixed prices at least three years into the future at reasonable prices significantly lower than in these other ISOs and RTOs,” it said.
The Organization of MISO States said it opposed imposition of a downward sloping demand curve or a minimum offer price rule, or the elimination of fixed resource adequacy plans.
No ‘Missing Money’ Problem
“To the extent there is a ‘missing money problem’ in MISO it is negligible and addressing the supposed problem will provide little benefit to the vast majority of the footprint,” OMS wrote. “For the majority of MISO generation — traditional, vertically-integrated, state-regulated generation — there is no missing money problem.”
OMS also said it opposed a mandatory resource adequacy construct. “If the [Planning Resource Auction] were mandatory, it would be the sole arbiter of MISO capacity prices, not state and local regulators.”
The IPPs called for both a sloped demand curve and a three-year forward commitment, saying that without them the “reliability of the grid is threatened.”
“MISO neither has an efficient capacity market, nor has enough capacity to meet reserve requirements,” they said. “This is not a coincidence.”
Niagara Mohawk Power has agreed to reduce its return on equity in a settlement with groups representing public power and municipal utilities.
If accepted by the Federal Energy Regulatory Commission, the settlement would reduce the ROE in Niagara Mohawk’s transmission service charge to 10.03% from the current 11.5%. The new rate would be backdated to Nov. 2, 2012, resulting in a refund of $3.16 million.
The Municipal Electric Utilities Association of New York, the New York Association of Public Power and Niagara Mohawk, a unit of National Grid, filed the settlement with FERC last week.
The settlement arose from complaints filed by the associations against the transmission owner and NYISO claiming that the current rate was too high (EL12-101, EL13-16 and EL14-29). FERC consolidated the cases and an administrative law judge facilitated negotiations.
The case began in September 2012, when the public power association filed complaints to reduce the current 11.5% ROE to 9.49%, including a 50-basis-point adder for participation in NYISO. The municipal utilities filed a similar complaint two months later seeking to reduce ROE to 9.25%, also including the participation adder. Last year, the public power group filed another complaint seeking a further reduction from its original complaint to 9.36%, citing the fall in interest rates.
The Federal Energy Regulatory Commission last week increased its pressure on PJM and MISO to resolve their longstanding boundary disputes, saying it was considering taking action “to improve the efficiency of operations” at the RTOs’ seam.
Despite 12 years of joint meetings that have resolved some issues, the two RTOs remain locked in a standoff over issues such as interface pricing, which MISO Market Monitor David Patton says is costing consumers millions.
At a presentation during FERC’s Jan. 22 meeting, Patton asked the agency to help resolve the disputes.
On Tuesday, FERC ordered the RTOs and their market monitors to answer questions on eight unresolved issues by April 10 (AD14-3). The commission indicated it is considering its own solutions to at least two of the issues.
FERC Solutions?
On the issue of capacity deliverability, the commission told the RTOs to identify “any reliability problems associated with modeling capacity in each RTO as a single product across the two markets.”
FERC also required the RTOs to report on what they “would need to do to implement day-ahead market coordination.”
At Thursday’s Board of Directors meeting, MISO Director Michael Curran said he was surprised by FERC’s action. “Are we moving into a phase where if we don’t fix it, [FERC will] fix it for us?” he asked .
The commission ordered the RTOs to report on proposed solutions, obstacles to solutions, and a timeline for overcoming them and making filings at the commission on the issues of:
Interface pricing
Capacity deliverability
Day-ahead market coordination
Firm-flow entitlement freeze date
Use of commercial flow in the market-to-market process
Modeling of the Ontario/Michigan phase angle regulators for congestion management
Room for Improvement
The commission noted the RTOs’ progress in areas such as RTO-to-RTO data exchanges and financial transmission rights market coordination. It also acknowledged that the RTOs are moving to improve interchange optimization through coordinated transaction scheduling. (See related story, PJM MRC/MC Briefs.)
In December, the commission ordered a technical conference on Northern Indiana Public Service Co.’s complaint over the interregional transmission planning provisions in the RTOs’ joint operating agreement (EL13-88). NIPSCO, a MISO member that is flanked by PJM in eastern Indiana and Illinois to its west, complained that the MISO-PJM seam is highly congested and that the RTOs have not approved a single cross-border transmission upgrade project under the JOA.
The commission also said the RTOs have completed a coordinated study on deliverability despite their differing modeling approaches. The study concluded that “more than 96% of MISO and PJM units are jointly deliverable to the aggregate MISO and PJM load footprint and [that] the total transmission capability between the two systems is quite significant.”
The RTOs found that the transmission capacity in the MISO-to-PJM direction is fully subscribed, while capability in the PJM-to-MISO direction is “minimally utilized for capacity.”
“Therefore, there could be benefit in the PJM-to-MISO direction, even in the near-term,” the commission said.
FERC ordered the RTOs and their market monitors to respond to the commission’s questions within 45 days with reply comments from stakeholders due April 27.
Interface Pricing
PJM and MISO have been working for two years to resolve differences in the way they price transactions at interface buses. Patton told FERC in January that transactions are overcompensated when expected to relieve a constraint and overcharged when expected to contribute to congestion. (See Patton Asks FERC to Set Deadline on PJM-MISO Interface Pricing Dispute.)
The RTOs agree that current methods are inaccurate because they both model the same constraints, resulting in double-counting. But they have been unable to agree on a solution.
Bowring told the commission that there will continue to be issues between the RTOs “as long as there are very substantial differences between the design for procuring capacity in MISO and the design for procuring capacity in PJM.”
Meetings of the Maryland Public Service Commission may get a lot livelier if Gov. Larry Hogan’s pick to replace Lawrence Brenner is confirmed.
Hogan nominated Montgomery County Republican Party Central Committee Chairman Michael L. Higgs Jr., an attorney with Shulman Rogers specializing in telecommunications and media regulations.
Higgs is an unabashed conservative who has used his now-deactivated Twitter account to compare President Obama’s advisor Valerie Jarrett to Rasputin and speculate that former Secretary of State Hillary Clinton had disappeared for several weeks to receive a facelift.
Higgs would be joining a commission that has been one of the most outspoken defenders of the Environmental Protection Agency’s proposed carbon emission rule.
Hogan submitted Higgs for state Senate approval on Feb. 20 to replace Brenner, a former administrative law judge with the Federal Energy Regulatory Commission whose five-year term expires June 30.“I’m thrilled with the trust that the governor has placed in me and I look forward to serving the people of Maryland once I’m confirmed,” Higgs told the Gazette.
The Rockville resident is a graduate of the University of Maryland, with a bachelor’s in government and politics, and received his law degree from the George Washington Law School.
While attending law school, he worked for several firms where he gained experience learning the rules and policies of the Federal Communications Commission. At Shulman Rogers, Higgs’ clients include Internet service providers and radio and TV broadcasters. According to his LinkedIn profile, Higgs has no experience in the electricity industry.
In November’s gubernatorial election, Republican Hogan beat Democrat Lt. Gov. Anthony Brown, a big upset in a state where Democrats outnumber Republicans 2-1.
NEW ORLEANS — Independent Market Monitor David Patton told the MISO Board of Directors on Wednesday that MISO members are paying outsized premiums as a result of transmission loading relief actions (TLRs) called by neighboring SPP, PJM and the Tennessee Valley Authority.
Patton said day-ahead binding on a TVA flowgate caused more than half of the price divergence at the Michigan Hub and much of the premiums in Arkansas in January.
Binding constraints that result in TLRs “tend to be very costly to MISO,” Patton said, blaming SPP TLRs for 20% of the congestion pricing at generator locations in January. Much of that was due to a single constraint that priced 10 times higher in MISO than in SPP, he said.
Patton said the problem should decline with the beginning of market-to-market coordination with SPP on Sunday and the introduction of Coordinated Transaction Scheduling with PJM. (See related story, PJM MRC/MC Briefs.) A joint operating agreement with TVA also would help, he said.
Patton said he will “investigate whether the TLRs are in all cases justified” and what else can be done to moderate price volatility.
Winter Forced Outage Rates Return to Normal
Forced outage rates have returned to typical levels during cold days this winter, with 15,000 to 18,000 MW out or derated, compared with more than 40,000 MW at the peak in January 2014, said Todd Ramey, vice president of system operations and market services.
Director Baljit “Bal” Dail asked whether there was any evidence of generators improperly claiming outages to withhold supply.
“That is something that we are investigating,” responded Patton, who said he would provide a report in March. “We are looking at some of those outages.”
The Board of Directors is considering reducing its Markets Committee meetings from monthly to the seven times a year that the full board meets. MISO staff created a proposed schedule at Director Michael Curran’s request.
“There is an opportunity to tighten up the agenda,” Curran said.
“We tried to do it before, but the members said they like it every month,” cautioned Director Paul Feldman.
The board will discuss the matter this month after getting stakeholder feedback.
Extended LMP Starts
Uplift rises each time a new unit is committed but does not rise dramatically at high levels of demand, because ELMPs are also rising.
MISO launched extended locational marginal pricing (ELMP) Sunday, a new calculation method that the RTO says will allow it to better capture fast-start gas turbines and emergency demand response in clearing prices.
It will allow fast-start resources that are either offline or scheduled at limits to set prices, which was previously impossible because of limitations in the RTO’s algorithm.
Emergency DR will also be able to set prices in the real-time energy and operating reserve markets.
MISO says the changes should minimize price spikes during shortages, provide more accurate price signals and reduce uplift charges.
Patton called it a “very important” initiative that should also allow price-responsive demand.
ELMP was one of four market changes introduced Sunday:
Market-to-market coordination with SPP, which allows the two RTOs to use economic dispatch to improve the cost effectiveness of their congestion management along the seam. The Federal Energy Regulatory Commission approved the initiative in January (ER13-1864). (See SPP, MISO Move Ahead on Flowgate Rules.)
DR will be allowed to provide multi-part offer curves and maximum regulating reserve and contingency reserve limits daily. It removes the host load zone association for some resources.
External asynchronous resource (EAR) market participation: Market resources connected to the main MISO market by a direct-current tie, such as Manitoba Hydro, were previously able to offer only generation into the market. Now, a bidirectional EAR will allow participants to submit price sensitive bids and offers. It also will allow dispatch of flexible hydro facilities in response to changes in supply and demand.
Pepco Holdings Inc. reported fourth-quarter earnings of $35 million ($0.14/share), a drop from the $58 million ($0.23/share) it earned for the same period last year.
Earnings for the year were up, however, rising to $242 million ($0.96/share) from $110 million ($0.45/share) in 2013.
Pepco CEO Joseph M. Rigby attributed the increase in annual earnings to higher electric distribution and transmission revenue. The decrease in fourth-quarter earnings compared with 2013 was due to higher operation, maintenance and depreciation expenses, he said.
Because of the company’s pending acquisition by Exelon, it provided no earnings guidance for 2015. (See related story, DC Consumer Advocate Seeks Delay in Exelon-Pepco Proceedings.)
Story on ComEd Contributions Spurs Call for Investigation
A state senator called for an investigation of Commonwealth Edison after the Chicago Tribune reported that the utility spent $60 million in ratepayer money over seven years on politically influential charities.
“The allegations in the Tribune article are serious and call for immediate action,” state Sen. Dan Duffy said in a letter to Attorney General Lisa Madigan. “ComEd should be required to disclose these contributions to ratepayers. At best, ComEd shareholders, not ratepayers, should bear the burden of funding these contributions.”
A 1987 law allows ComEd, the state’s largest utility, to pass on the cost of its charitable contributions to ratepayers. The Tribune article listed instances where some charities that received ComEd assistance were in the position to aid it.
County Emergency Management Agency Uses Dresden’s Cooling Pond Water to Battle Ice
Warm water from Dresden nuclear plant is being used to melt down ice flows on the Kankakee River to prevent flooding and damage to homes and docks.
The Will County Emergency Management Agency has devised a system to siphon the 70 F water into the Kankakee River. “The warm water from Dresden’s pond helps break up the ice so it can flow freely downstream,” said Harold Damron, the agency’s director.
Challenges to NIPSCO’s $1.1 Billion Modernization Plan Heard in Court
In a case before the state Court of Appeals, the Office of Utility Consumer Counselor and a group of industrial customers are challenging Northern Indiana Public Service Co.’s $1.1 billion electric modernization plan as too costly.
“These plans can cost ratepayers hundreds of millions, even billions, of dollars,” said Utility Consumer Counselor David Stippler. The Utility Regulatory Commission approved the plan in 2013, which would be funded by yearly rate increases that will total 4.9% by 2020.
A NIPSCO attorney said the improvements are necessary. “The commission determined the plan is beneficial to consumers, and no one has disputed that,” said Brian Paul. The court decision could affect improvement plans proposed by other state utilities.
Kentucky Power Appeals PSC Ruling on ‘Unreasonable’ Fuel Costs
Kentucky Power is appealing a Public Service Commission order requiring it to refund $13 million to customers after the commission determined some of its fuel costs last year were unreasonable.
The American Electric Power subsidiary says the commission disallowed charges associated with having both the Mitchell power plant and Big Sandy Unit 2 in operation simultaneously. Kentucky Power said it was necessary to run both units in Louisa to maintain system reliability and to meet demand, especially during last winter’s polar vortex.
Big Sandy Unit 2 is being retired later this year.
City Upset That DTE Rate Hikes Would Kill LED Lighting Incentive
The city of Ypsilanti says a proposed DTE Energy rate increase for LED street lighting, combined with a cut in charges for conventional sodium-vapor streetlights, would undermine the incentives that prompted the city to spend $500,000 last year to convert its streetlights to the more efficient LED technology.DTE’s proposal would increase the cost of powering a 65-W LED bulb from $138 to $154 a year, while the cost of running a 100-W sodium bulb would drop from $184 to $129. “If this rate hike happens, we’ll really feel like this was a bait and switch,” said Ypsilanti City Council Member Brian Robb.
The utility said the old LED rate was experimental. “As we gained more experience with LED technology, we changed the pricing to reflect a more complete understanding of the costs associated with it,” said DTE spokesman Scott Simons.
University Report IDs Ways State Could Improve Fracking Oversight
A University of Michigan report suggested the state take a number of steps to strengthen its oversight of hydraulic fracturing, including better monitoring of surface and groundwater and mandating more emergency planning by natural gas exploration companies.
The recommendations were included in a 277-page report compiled by scientists, lawyers and other University of Michigan faculty. “The purpose of the study is to pull together a massive amount of information and analyze the options in a way that is clear, so the state can look at these options and decide which if any they might want to adopt,” said Sara Gosman, one of the report’s authors.
More than 12,000 fracked wells have been drilled in Michigan since the late 1940s, but high-volume fracking of deep shale deposits is a new phenomenon. Michigan has 13 producing wells in the Utica-Collingwood shale formation, but drilling companies have leased hundreds of other sites.
Mississippi Power’s CEO Warns Kemper Ruling Could Result in Rate Hikes of 35%
Mississippi Power CEO Ed Holland said a state Supreme Court ruling that orders the company to refund customers $271 million for plant construction costs will almost certainly lead to higher rates.
Holland, in a Sun Herald op-ed, said the court’s ruling effectively voids a plan the company and the Public Service Commission developed to keep down rate hikes associated with construction of the Kemper County integrated gasification combined-cycle plant. “If the court’s opinion stays in place and the refund is required, we will have little choice but to seek at least the original estimated amount of approximately 35% in rate increases,” he wrote.
The court threw out a PSC decision to allow $281 million in rate recovery for costs associated with the plant’s construction. The court said the PSC never found that the funds were “prudently incurred,” a requirement for recovery. Mississippi Power is challenging the court ruling.
PSC Approves Ameren’s Efficiency Plan Allowing 2013 Recovery Calculations
The Public Service Commission approved a settlement that determined Ameren Missouri’s energy efficiency programs saved 347 GWh in 2013. The amount will determine how much money the utility can recover from ratepayers.
Ameren had claimed that its program saved nearly 400 GWh. The Office of the Public Counsel estimated the savings at 300 GWh. They settled on 347 GWh.
2nd State Judge Signs Injunction Against Keystone XL Eminent Domain Actions
A York County District Court judge became the second state judge to grant an injunction halting TransCanada’s use of eminent domain to secure a route for its controversial $8 billion Keystone XL Pipeline.
The judge ruled in favor of a group of landowners who are challenging a state law that gave TransCanada eminent domain powers to build its crude-oil pipeline to Gulf Coast refineries and terminals.
“I know the war is not won yet, but it’s a start,” property owner Susan Dunavan said after the ruling.
JCP&L Planning $267 Million on System Improvements; Rate Counsel Endorses $107 Million Rate Cut
Jersey Central Power & Light said it will spend $267 million on transmission and distribution improvements this year, including a new transmission line in Middlesex County.
Among the projects planned are nearly $6 million in distribution circuit upgrades, $24 million in tree trimming, and money for planning and constructing a 230-kV transmission line in Monmouth County.
JCP&L’s reliability record has been a recent target of regulators and consumers. The Division of Rate Counsel last month endorsed a decision by an administrative law judge that would force the company to cut rates by $107 million, saying that the utility’s reliability record is poor.
The Rate Counsel argued that the company had earned profits in excess of the amount allowed by the Board of Public Utilities. About 90% of its customers were left without power after Hurricane Sandy.
“JCP&L customers have suffered poor reliability too long and should be provided a remedy immediately,’’ the Rate Counsel argued.
Hearing Scheduled for New Power Plant near Williston
The Public Service Commission will hold a hearing this week on the proposed $161 million expansion of the Pioneer Generation Station near Williston to meet growing electricity demands from the state’s oil and gas industry.
Basin Electric said the proposed expansion is needed to meet a forecasted 1,600-MW increase in load by 2035. The company wants to add 12 reciprocating gas-fired internal combustion engines generating up to 111 MW.
PUCO Rejects AEP’s Guaranteed Income Plan for Coal Plants
The Public Utilities Commission last week rejected American Electric Power’s request for a guaranteed income for two of its coal-fired plants, saying the proposal wasn’t in the best interest of ratepayers.
While PUCO rejected the proposal, it ruled that the power purchase agreement was legal. That gave AEP a kernel upon which to press forward with a similar request for other plants. It has argued that customers would benefit from supply stability if the plants received a guaranteed rate. Critics say its proposal would represent a retreat from market-rate pricing.
“Further delays in deciding this issue will postpone our customers’ ability to take advantage of the financial benefits of what we proposed,” AEP Ohio President Pablo Vegas said in a statement. “We will work with the PUCO to address their outstanding issues with our problems.”
Rumors Surround Porter’s Move to PUCO, Johnson’s Tenure
Porter
Gov. John Kasich’s choice of Andre Porter, the state commerce director, to fill a vacancy on the Public Utilities Commission has sparked speculation that Chairman Tom Johnson’s reign may be ending.
Some observers wonder why Porter, who served previously on the commission, would want to make the move back to PUCO if he wasn’t angling for the chair. Johnson, who has been the commission’s chair for less than a year, has faced several controversial issues, including proposals to guarantee prices for merchant power and a legislative proposal to freeze the state’s renewable and energy efficiency standards.
The governor’s office did not comment on his plans for the commission.
PUC Orders FirstEnergy’s Pa. Companies to Give More Details on Improvement Plan
The Public Utilities Commission ordered FirstEnergy’s four companies in the state — Met-Ed, Penelec, Penn Power and West Penn Power — to provide more details on how they intend to address issues raised in a PUC management audit.
The PUC’s Bureau of Audits identified 28 areas of improvement in the companies’ management practices that could produce one-time efficiency savings of $19.2 million and annual savings of up to $3.8 million. The PUC said FirstEnergy’s response was short on specifics and directed the company to devise a more detailed implementation plan.
“Because we have received similar responses to previous audit recommendations in the past with little meaningful improvement, it is imperative that FirstEnergy develop more robust responses to these recommendations,” Commissioner James H. Cawley said in a motion approved by the commission.
Tomblin Vetoes Net Metering Bill, Solar Advocates Applaud
Gov. Earl Ray Tomblin vetoed a bill that would have prohibited utilities from subsidizing solar customers by charging other ratepayers for costs associated with installing and administering solar net-metering systems.
Solar advocates said the bill would have allowed utilities to raise costs for owners of solar installations, reducing incentives for renewable power.
“This bill was fatally flawed,” said Rhone Resch, president and CEO of the Solar Energy Industries Association. “Did it end up that way for political reasons? Or was it a case of sloppy drafting? Whichever the case, Gov. Tomblin did the right thing by vetoing the bill and sending it back to the drawing board.”
