Welcome back to EnerKnol Pulse. Last week was full of litigation, complaints, and controversy. Idaho Power wants to take FERC to court, Trump's efficiency delays were found unlawful, PURPA disputes emerged in Michigan and Iowa, and a watchdog goes up against PJM and CAISO. All of this and more is found on the Platform.

February 26, 2018


Featured Topics

Expanding Renewables

Markets and Ratemaking

Modernizing the Grid

Fossil Fuel and Pipeline Actions


Featured Entities

Avangrid

Avista

Blue Planet Renewables

CMS Energy

Con Edison

Consumers Energy

Energy S. Consortium

Energy Transfer Partners

Eversource

FPL

Hydro One

HZ Iowa

Iberdrola

Idaho Power

Interstate Power & Light

Invenergy

Morgan Stanley

PJM Interconnection

Public Citizen

South Kentucky Rural E.

Southwestern

Top News

Trump Administration Unveils Nation's Largest Oil, Gas Lease Sale as It Pursues 'America First' Energy Strategy

The U.S. Interior Department announced that it will hold its second sale under its outer continental shelf oil and natural gas leasing program on March 21, in a move that could reap hundreds of millions more in royalties and put the nation on firmer footing to becoming a major energy exporter. The sale will offer over 77 million acres in the Gulf of Mexico. The Bureau of Ocean Energy Management estimates that the Gulf of Mexico’s recoverable reserves contain over 48 billion barrels of oil and 141 trillion cubic feet of gas.

AEP Reaches Settlement Agreement to Advance $4.5-Billion Wind Farm, Set to be Nation's Largest

A unit of American Electric Power reached an agreement Feb. 20 for the acquisition of the 2,000-megawatt Wind Catcher Energy Connection project in western Oklahoma and associated power lines from developer Invenergy LLC. Under the settlement, Southwestern Electric Power Company will guarantee a cap on construction costs, qualification for 100 percent of the federal Production Tax Credits and a minimum annual energy production from the project. The wind farm, which is set for completion in 2020, is subject to approval by the commissions in Arkansas, Louisiana, Texas and Oklahoma, as well as the Federal Energy Regulatory Commission. AEP, one of the nation’s largest electricity producers with approximately 33,000 megawatts of generating capacity, has increasingly invested in renewables and lower-emitting technologies, cutting its carbon dioxide emissions by more than 44 percent since 2000.

Court Finds Trump Illegally Delayed Energy Conservation Rules in Blow to Administration's Regulatory Roll Back

The U.S. District Court for Northern District of California found that the U.S. Energy Department unlawfully stalled energy efficiency standards finalized under the prior administration, in a win for environmental groups and 11 states that filed the lawsuit. The rules, which establish energy-conservation standards for portable air conditioners, air compressors, walk-in coolers and freezers, and commercial boilers, are estimated to save consumers and businesses $8.4 billion over 30 years. The court decision sets a 28-day deadline for publishing the rules. The ruling deals a setback to the Trump administration’s efforts to weaken or undo Obama’s environmental agenda. The case is Natural Resources Defense Council Inc. v. U.S. Energy Department (17-cv-03404-VC).

Expanding Renewables

New Mexico Legislature Passes Bill to Reinstate Tax Credit for Rooftop Solar

The New Mexico state legislature approved a bill on Feb. 14 that would restore income tax credits to cover the costs of installing solar panels for homeowners, businesses, and farmers. The credit would decline gradually from 10 percent for systems installed before 2021 to 6 percent through 2032. The previous tax credit program ended in 2016. The legislation awaits approval from Republican Governor Susana Martinez. (SB 79)

Michigan Commission Launches Inquiry into Consumer Energy’s Contracts with Small Renewable Producers

The Michigan Public Service Commission is reopening a proceeding to clarify the rates that Consumers Energy Co., a subsidiary of CMS Energy Corp., should pay eligible small generators under the Public Utility Regulatory Policies Act, according to the commission’s Feb. 22 press release. The commission suspended implementation of the so-called avoided cost terms set late last year after the utility sought to freeze its purchase obligations because it doesn’t project a shortfall of supplies for the next decade.

Idaho Power Raises Court Challenge Against U.S. Regulator in Dispute Over Licensing of Western Hydro Plant

Idaho Power Company, a subsidiary of IDACORP Inc., asked a U.S. appeals court to review its request to put in place a federal plan for protecting fish needed to relicense the Hells Canyon Dam in lieu of state plans, which the utility said are uncertain and conflicting. FERC found the request for federal preemption was premature because state and federal actions remain pending. The Hells Canyon Project, a 1,167-megawatt hydropower project located in Idaho and Oregon on the Snake River, has been operating under annual licenses since 2005.

New York Doubles Size of Renewables Eligible for Grid Payment Program in Bid to Spur Larger Projects

The New York Public Service Commission will accept renewable projects with up to five megawatts of generating capacity in its Value of Distributed Energy Resources compensation program, up from the previous limit of two megawatts, according to the agency’s Feb. 22 order. The move reflects what the agency says are the benefits of harnessing the economies of scale of larger projects to stimulate new developments while also lowering costs to consumers. The Value of Distributed Energy Resources compensation method was created to transition beyond net metering to value customer-sited generation in a more granular manner. New York’s Clean Energy Standard will require 50 percent of the state’s electricity to come from renewable energy sources like wind and solar by 2030.

Ohio Regulator Approves State’s Largest Solar Projects Totalling 275 Megawatts

The Ohio Power Siting Board on Feb. 15 approved a 125-megawatt solar farm proposed by Blue Planet Renewable Energy LLC, and a 150-megawatt facility proposed by Hardin Solar Energy LLC, a subsidiary of Invenergy Solar Development North America LLC. The projects would be the largest solar power generators in the state.

Iowa Board Probes Complaint Against Alliant Over Lower Rates Paid to Wind Farm

The Iowa Utilities Board is investigating a protest by HZ Iowa LLC in December that Interstate Power and Light Company, a subsidiary of Alliant Energy Corporation, violated federal rules by failing to purchase power from its wind farm at the so-called avoided cost rate agreed to in a power purchase agreement. The utility argued it was no longer subject to those rates after HZ failed to produce energy by the commercial operation date. Utilities have taken issue with the avoided cost that must be paid to small independent power producers considering the significant decline in renewable energy costs in recent years.

Con Edison Paves Way for Expanded Role of Energy Storage on the Grid by Boosting Opportunities for Exports

The New York Public Service Commission announced Feb. 22 that it approved a plan to “significantly increase” the ability of energy storage systems to export power to Consolidated Edison Inc.’s distribution network. The plan is part of an effort to more effectively harness and use renewable energy. New York Governor Andrew Cuomo recently launched an initiative to deploy 1,500 megawatts of energy storage by 2025.

California Commission Proposes Programs to Boost Renewable Installations in Low-Income Communities

The California Public Utilities Commission is proposing multiple programs to spur the installation of renewables on low income houses, including up-front financial incentives towards the installation of solar panels and a “green tariff,” which provides a 20 percent rate discount on current tariffs to provide clean energy options without the need for ownership of the residence. The programs are part of 2013 legislation that requires incentives for renewable adoption among residential customers in low income communities.

Markets and Ratemaking

Sierra Club Urges Connecticut to Adopt Ratepayer Protections, Citing $3.6 Billion in Excessive Energy Costs by Eversource, United Illuminating

The Connecticut Public Utility Regulatory Agency should establish rules to prevent manipulative gas pipeline scheduling, which creates a “false appearance of scarcity” and drives up fuel and electricity prices, according to a Feb. 20 filing by the Sierra Club. The natural gas pipeline operations of Eversource Energy and United Illuminating Company are under review amid allegations that distribution companies may have gamed the gas markets to inflate prices. United Illuminating is a subsidiary of Avangrid Inc., which is owned by Iberdrola SA.

Market Watchdog Asks California Grid Operator to Investigate Penalty Loophole, Set Refunds for Consumers

Public Citizen Inc. asked the California Independent System Operator Corp. to investigate a flaw in market rules that allow a power producer to unfairly lower the penalties owed for failing to meet performance requirements under the grid’s resource adequacy program. The Washington D.C.-based consumer advocacy group is seeking a hearing to determine whether ratepayers were overcharged and are entitled to refunds, according to the group’s Feb. 20 filing with the Federal Energy Regulatory Commission. The grid operator has proposed to amend the method for calculating charges called “non-availability charges” and payments called “incentive payments” to power plants providing generating capacity.

Montana Commission Examines Avista, Hydro One's $5.3-Billion Merger on State Generators

The Montana Public Service Commission is reviewing the impacts to Avista Corporation’s in-state generating plants that may arise from its transfer to Hydro One Limited, a Canadian transmission and distribution service provider. Avista has a share in a coal-fired plant and holds the license to hydroelectric generating assets based in Montana. The commission set a March 7 deadline for testimony on additional issues.

South Kentucky Cooperative Seeks 20-Year Power Purchase Contract from a Unit of Morgan Stanley

The South Kentucky Rural Electric Cooperative Corp. submitted an application with the Public Service Commission of Kentucky seeking approval to purchase about 60 megawatts of supplies from Morgan Stanley Capital Group Inc. for 20 years beginning June 2019. The cooperative also seeks to become a member of PJM Interconnection LLC, which it says is needed in order to take delivery of the power, according to a Feb. 19 order.

Idaho Power Unveils Energy Plan, Seeking to Rely on Imbalance Market, Efficiency to Offset Coal Retirements

Idaho Power Company, a subsidiary of IDACORP Inc., will lean on energy efficiency and supplies of low-cost power accessible through its linkage in the spring with the western Energy Imbalance Market to make up for capacity lost with the retirement of coal plants, according to a press release from the Idaho Public Utilities Commission. The utility projects demand to grow by 0.9 percent annually over the 20-year planning period and the addition of over 200,000 customers through 2036. The utility will also explore options for solar power and storage. Utilities are required to file a resource plan with the Idaho Public Utilities Commission every two years.

Florida Power & Light Seeks to Recover $317 Million in Restoration Costs for Storm Repairs

Florida Power & Light Company, a subsidiary of NextEra Energy Inc., requests approval from the Florida Public Service Commission to collect funds to repair damage to the grid caused by Hurricane Matthew in 2016. Last March the commission approved an interim charge that applied to customer bills for a twelve-month period concluding on Feb. 28.

Illinois Bill Would Set Separate Power Capacity Market for State to Address Price Swings

Illinois state Senator James Clayborne, a Democrat, introduced legislation on Feb. 16 that would authorize the Illinois Power Agency to run a competitive process to procure generating capacity to ensure reliability in the southern portion of the state served by Midcontinent Independent System Operator Inc. called Zone 4. The bill aims to address swings in prices, which have fluctuated from $150 per megawatt-day in 2015 to $1.50 per megawatt-day in 2017. (SB 3292)

Modernizing the Grid

Maine Commission Resumes Review of Avangrid Power Line as Outlook for Massachusetts Energy Contract Brightens

The Maine Public Utilities Commission will hold a conference March 1 to consider permitting for Avangrid Networks Inc.’s 1,200-megawatt New England Clean Energy Connect transmission line, a project designed to import supplies of Canadian hydro power into the Northeast grid. Massachusetts regulators signaled that New England Clean Energy Connect is next in line for winning a state energy contract to supply renewable energy after New Hampshire regulators denied a permit for the leading contender, the Northern Pass power line. Massachusetts set a March 27 deadline for Northern Pass to obtain regulatory approvals. Avangrid is owned by Iberdrola SA.

New York Commission Urged to Require Utilities to Lay Out Plans for Electric Vehicle Build Out

A 40-member coalition of industry and environmental groups petitioned the New York Public Service Commission to set an April 1 deadline for state utilities to submit projects, programs, and investment plans to accelerate the deployment of charging stations and support electric vehicles. Governor Andrew Cuomo recently expanded the state’s Charge NY goal to deploy 10,000 charging stations by 2021 from the previous goal of 3,000 stations by 2018. The state is part of a 2013 multi-state action plan that committed to a collective goal of 3.3 million zero-emission vehicles by 2025.

Watchdog Group Seeks Investigation into Mid-Atlantic Grid Operator’s Electoral Campaign Contributions

Public Citizen Inc., a Washington DC-based consumer advocate, filed a complaint with the Federal Energy Regulatory Commission alleging that PJM Interconnection LLC, the nation’s largest grid operator, failed to disclose millions of dollars spent on electoral campaigns and lobbying expenditures, according to the group’s Feb. 20 filing with the commission. The group identified at least $456,500 in undisclosed funding from 2007 to 2017 for electoral politics, and asks that the commission require PJM to itemize and disclose such spending and document expenses funded through filed rates.

Fossil Fuel and Pipeline Actions

Congress Launches Inquiry into Energy Transfer's Rover Gas Line Over 'Troubling Environmental Record'

U.S. House and Senate Democrats asked the Federal Energy Regulatory Commission for a special briefing of Energy Transfer Partners LP’s Rover natural gas line, a project that has drawn heightened scrutiny from regulators and has had construction suspended after incurring over a dozen environmental violations. The 713-mile, $4.2 billion link is designed to ship 3.25 billion cubic feet per day of natural gas from the Marcellus and Utica Shale reserves to markets in the Midwest, Northeast, East Coast, Great Lakes and Gulf Coast. Rover is expected to be in full service by the end of the first quarter of 2018, according to a project website.

U.S. Energy Department Announces Funding for Carbon Capture Technologies to Aid Fossil Fuel Generation

The U.S. Energy Department announced the selection of seven projects to receive $44 million to advance next-generation carbon capture technology, including solvent- or membrane-based technology as well as post-combustion capture technology used for existing coal-fired generators. The department also announced the selection of nine projects to receive $6.5 million to develop transformational coal technologies. The projects support the Trump administration’s efforts to revive the ailing coal industry.

U.S. Coal Production Jumped First Time in Four Years in 2017 on Stronger Global Demand: EIA

The nation’s production of coal last year advanced 5.8 percent to 773 million short tons, posting the largest increase since 2001, according to a Feb. 16 report from the U.S. Energy Information Administration. This came as exports of the fuel gained by about 60 percent on the back of higher global demand, particularly from markets in Asia and Europe. Meanwhile, consumption of the fuel in the U.S. for power generation, where 90 percent of coal is used, is on a downward spiral and is projected to slip to a record low of 30 percent last year.

West Virginia Clears Developer to Build $900-Million Natural Gas Plant, Marking First for the State

The West Virginia Public Service Commission issued an order on Feb. 20 granting Energy Solutions Consortium’s subsidiary, ESC Brooke County Power LLC, a siting certificate for the construction and operation of an 830-megawatt natural gas-fired generating facility. Construction is expected to be complete in late 2020, with the plant in service by Jan. 2021. West Virginia, which relies on coal plants for 85 percent of its generation, has no new combined-cycle gas-fired units financed or in construction, according to the agency.