The EnerKnol Pulse is back with more energy policy highlights, powered by the EnerKnol Platform. In today's roundup, Colorado paves the way for utilities to invest in energy storage, Xcel unveils its $2.5-billion plan to shift to more renewables, and the $5.3-billion Avista-Hydro One merger wins another regulatory approval, and much more. Tell us what you think at research@enerknol.com

June 11, 2018


Featured Topics

Greening Energy Mix

Rates and Power Markets

Grid Modernization

Climate Change & Emissions

Fossil Fuels and Pipelines


Featured Entities

Alaska Electric

Alaska Energy and Resources

Avista

Cheniere Energy

Corpus Christi Liquefaction

Emera

FPL

Geronimo Energy

Hydro One

National Grid

NextEra

PJM

Public Service Company of Colorado

Sempra Energy

Southern California Gas

Tampa Electric

Xcel

Top News

Colorado Enacts Legislation to Pave Way for Utilities to Invest in Energy Storage

Colorado Governor John Hickenlooper, a Democrat, signed legislation on June 1 ordering the utility commission to establish a process by February 2019 for electric utilities to evaluate and invest in energy storage as the state looks to harness the emerging technology. The bill allows electric utilities to file applications for rate-based projects of up to 15-megawatts capacity by May 2019. In March, the state enacted bipartisan legislation to limit barriers to customer-sited storage. Regulators seek to spur investments to leverage the multiple benefits of batteries, including the ability to add large amounts of intermittent renewable generation to the system, and to defer or eliminate the need to build new transmission projects and generators to accommodate spikes in electricity demand.

Xcel Energy Unveils $2.5 Billion Plan for Renewable Energy Shift, Coal Plant Closures

Public Service Company of Colorado, a unit of Xcel Energy Inc., filed its Colorado Energy Plan, a blueprint for the utility to source over half of its electricity supply from renewables and cut carbon emissions by 60 percent by 2026. The plan, filed June 6 with the Colorado Public Utilities Commission, directs the company to add 1,100 megawatts of wind power, 700 megawatts of solar power, and 225 megawatts of energy storage paired with solar. It would close 660 megawatts of coal-fired generation at the Comanche power plant ahead of schedule and retain 380 megawatts of flexible gas-powered generation to ensure system reliability. The plan is projected to save customers about $215 million. The company proposes to own 27 percent of the renewable generation, down from the 50 percent it had initially sought. The company said it received an overwhelming 450 bids in response to its power supply solicitation last year including an unexpectedly high number of low-cost bids.

Avista, Hydro One's $5.3-Billion Merger Clears Review by Alaska Regulators

The Alaska Regulatory Commission on June 4 authorized Hydro One Limited and Avista Corporation to acquire a controlling interest in Alaska Electric Light and Power Company, a vertically integrated electric utility serving Juneau, finding that the transaction is in the public interest. The approval contains conditions that customers are shielded from costs tied to the acquisition and that Alaska Electric Light and Power maintains its independent operations post-acquisition. The merger deal, authorized by the federal energy regulator in January, still requires approvals from state regulators within Avista’s territory covering Washington, Idaho, Oregon and Montana. Hydro One is a Canadian transmission and distribution service provider and Avista is a Washington-based electricity and gas utility. Alaska Electric Light and Power is a subsidiary of Alaska Energy and Resources Company, which is owned by Avista.

Greening Energy Mix

Florida Regulator Approves Funding for First Phase of Tampa Electric's 600-Megawatt Solar Plan

The Florida Public Service Commission authorized Tampa Electric Company to collect rates effective September 2018 for 140-megawatts of solar generating capacity after finding the two projects fall under the cost caps, according to a June 5 order by the agency. The commission approved the $1,324 per kilowatt project cost for the 70-megawatt Payne Creek Solar project in Polk County, and the $1,480 per kilowatt cost of the 74-megawatt Balm Solar project in Hillsborough County, both under the cost cap threshold of $1,500 per kilowatt. The projects are the first of four tranches under TECO’s 600-megawatt solar expansion, with the remaining projects scheduled to reach completion by 2019, 2020 and 2021. When complete, solar will account for almost seven percent of the utility’s electricity generation. Tampa Electric Company is a subsidiary of Emera Incorporated.

Mid-Atlantic Grid Projects Dramatic Growth in Rooftop Solar, Helping Balance System During Peak Demand

The contribution of customer-sited rooftop solar panels to meeting peak demand in the mid-Atlantic grid during the hottest months of the year is projected to reach three gigawatts by 2030, more than double existing levels, according to a June 4 report by PJM Interconnection LLC using data from IHS Markit. The report, used for the grid operator’s long-term plans, finds that the rooftop panels run between 25 percent and 32 percent of nameplate capacity during the hour ending at 5 p.m., when consumption typically hits its highest level. The dramatic growth in renewable energy supplies poses a threat to rival fossil fuel-fired plants and nuclear reactors, which count on higher prices during periods of elevated electricity demand to drive revenues.

South Dakota Approves Geronimo Energy's 400 Megawatt Crocker Wind Farm

The South Dakota Public Utilities Commission voted to grant a permit to Crocker Wind Farm LLC for the construction of a $600-million, 120-wind turbine project in the eastern part of the state, according to a June 8 press release. The project initially faced strong opposition from local residents and will have to comply with 40 conditions related to road protections, decommissioning and aircraft detection before it can begin commercial operation by the fourth quarter of 2019. Crocker Wind is a subsidiary of Geronimo Energy LLC.

U.S. Energy Department Starts Solar Manufacturing Contest to Revitalize Struggling Industry

The U.S. Energy Department announced the launch of a contest with $3 million in prizes to attract the best ideas to strengthen the competitiveness of America’s solar manufacturers, which have been battered by a barrage of cheap imports from state-backed foreign rivals. The “American-Made Solar Prize” calls on entrepreneurs to solve challenges to the nation’s solar competitiveness with transformative concepts and prototypes. Participants will have access to national labs, incubators, investors, and industry experts. The Trump administration most notably sought to give a boost to domestic panel manufacturers through tariffs on imported silicon solar cells and modules for a four-year period following complaints by the industry.

Rates and Power Markets

New England Grid Operator Adds Demand Response into Wholesale Electricity Markets, Starts Performance Program

ISO New England Inc., operator of the six-state market, announced it completed integration of demand response into its wholesale electricity markets on June 1, satisfying a mandate set by the Federal Energy Regulatory Commission in March 2011 that such resources be paid at market prices, according to a June 6 press release. The New England ISO said that it is the first regional grid operator to complete full integration. Under the new price-responsive demand structure, demand response that helps balance real-time supply and demand is eligible to receive payments comparable to generating resources for providing energy, operating reserves, and capacity services, and may also set the price for wholesale electricity. Demand response refers to resources capable of responding in real time to dispatch instructions by switching to on-site generators or storage devices, as opposed to passive demand resources that reduce consumption and are not dispatchable. June 1 also marked the start of ISO-NE’s “pay-for-performance” market design, which penalizes or rewards power resources based on their performance relative to the demand on the system.

Southwest Power Pool Announces Expansion of Reliability Services to the West

Southwest Power Pool Inc., the grid operator for 14 states in the central U.S., plans to expand reliability coordination services to the Western Interconnection late next year, according to a June 5 press release. The grid operator said that 28 western utilities have showed interest in its reliability coordination services, and negotiations are underway with entities seeking full membership to participate in its wholesale power markets, transmission planning, and governance structure. The expansion is expected to lower costs for existing members while providing reliability and cost savings to western utilities. Southwest Power Pool’s service territory spans from the Canadian border to the Texas panhandle.

NextEra Unit Wins Florida Approval of $185 Million Deal to Buy Vero Beach Electric Utility

The Florida Public Service Commission on June 5 gave final regulatory approval for Florida Power & Light Company to purchase Vero Beach’s electric utility, culminating a decade long process to bring the city’s 35,000 customers into its system in October. The city’s customers are expected to see immediate rate cuts as Florida Power & Light’s typical residential bill is about 20 percent lower. The deal is anticipated to provide long-term savings of over $100 million for the company’s existing customers. Since 2009, the duo worked with state and federal regulators, Orlando Utilities Commission, Florida Municipal Power Agency and its member cities, and other stakeholders to bring the deal to fruition. Florida Power & Light is a subsidiary of NextEra Energy Inc.

Grid Modernization

National Grid Unveils 'Power Sector Transformation' Grid Investment Plan, Rate Hikes

A unit of National Grid plc filed a plan to invest in renewable generation, electric vehicle infrastructure and energy storage, as well as hike rates to cover the cost of the initiatives, as the utility looks to adapt its system to emerging technologies and cut emissions of greenhouse gases. To pay for the program, National Grid subsidiary Narragansett Electric seeks to boost revenues by $31.4 million, or 11.2 percent, for the three-year term starting Sept. 1, with hikes for natural gas rates as well, according to a June 5 filing with the Rhode Island Public Utilities Commission. Low-income customers would benefit the most under the plan with a 15.7 percent cut to electric bills in the first year. The plan, reached under a settlement, also provides for performance incentives associated with the capital investments and clean energy investments.

U.S. Senator Introduces Trio of Bills to Boost Funding for Grid Security, Energy Storage, Carbon Capture

U.S. Senator Michael Bennet, a Democrat representing Colorado, introduced legislation on June 5 that would provide $5 billion in financing under the U.S. Agriculture Department’s rural utility service program for cybersecurity and grid security enhancements. A second bill would include energy storage under the department’s Rural Energy for America Program, providing financial support for agricultural producers and rural businesses to install renewable energy technologies and to make energy efficiency improvements. A third bill would expand the department’s loan guarantees, loans, and research programs to new technologies for the capture and use of carbon dioxide in the production of renewable fuels, chemicals, and bio-based products.(S.2993, S.2997, S.2991)

U.S. Agriculture Department to Invest Over $300 Million to Upgrade Rural Electric Utilities

The U.S. Agriculture Department announced $309 in loans and loan guarantees for 16 grid projects aimed at improving the efficiency and resiliency of the rural electric system across 12 states, according to a June 7 press release. The funds will go toward building or improving 1,660 miles of electric lines, installing smart grid projects featuring advanced meters, and developing energy conservation projects. Alabama, Arizona, California, Colorado, Iowa, Kansas, Missouri, North Carolina, New Mexico, Ohio, South Dakota, and Washington will receive the grand funding through the department’s Electric Infrastructure Loan and Loan Guarantee program.

Climate Change & Emissions

Hawaii Signs Bills Setting Zero-Emissions Goal, Reinforcing Climate Mitigation Efforts

Hawaii Governor David Ige, a Democrat, signed legislation on June 4 committing to make the state carbon neutral by offsetting all of its emissions by 2045. The second bill establishes a framework for a program to use carbon credits to fund projects that enhance the state’s climate mitigation and adaptation efforts, such as carbon capture through reforestation and carbon farming. The third bill mandates a sea level rise analysis in environmental review of projects. Hawaii has a goal to get 100 percent of its energy from renewables by 2045. Last year, Hawaii became the first state to enact legislation committing to the goals of the Paris climate agreement. (HB2182, HB1986, HB2106)

Connecticut Enacts Bill Ordering Utilities to Make Deeper Cuts in Greenhouse Gas Emissions

Connecticut Governor Dannel Malloy, a Democrat, signed legislation on June 6 tightening the greenhouse gas emissions targets utilities must meet, in the latest move by the state to shift away from its dependency on fossil fuels. The measure calls for electricity producers to slash emissions by 45 percent below 2001 levels by 2030, ratcheting down from the current goal of 10 percent below 1990 levels by 2020. Under the legislation, emissions requirements must be integrated into electric utilities long-term plans for procuring generation.

U.S. Energy Department Funds Next Generation Reactors in Bid to Preserve Struggling Power Source

The U.S. Energy Department announced up to $24 million in investments for ten advanced reactor projects as part of the administration’s efforts to give a technological edge to future nuclear plants. The winners include a project to develop lower-cost transportable, gas-cooled nuclear reactors, and a project to develop molten salt reactors featuring enhanced safety designs. The Trump administration and states, which prize nuclear plants for their zero carbon emissions and resilient operations, are looking to help carve out a future for the technology amid projections that slumping revenues could force as much as 20 gigawatts of nuclear capacity into retirement by 2050.

Massachusetts Bill Seeks to Promote Fleet Electrification Projects, Establish Fast Charging Rate Designs

The Massachusetts legislature’s Joint Committee on Telecommunications, Utilities and Energy unveiled legislation on June 7 that would establish a competitive program called “UMass Fleet Electrification Grant Program” to provide financial and technical assistance to universities for innovative transportation planning and fleet electrification projects. The bill would give priority to studies assessing the viability of replacing light-duty vehicles and bus fleets with electric vehicles. It would facilitate faster-charging rate designs by requiring distribution companies to file pilot commercial tariffs and evaluate the benefits of different rate designs. It would establish a program to provide rebates to dealerships that sell or lease electric vehicles or electric motorcycles. (H 4578)

Fossil Fuels and Pipelines

U.S. Energy Regulator Divided in Approving NextEra's Florida Gas Line as Climate Concerns Persist

The Federal Energy Regulatory Commission approved a unit of NextEra Energy Inc. to build and operate the Okeechobee gas line, but not without the opposition from Commissioner Richard Glick, a staunch advocate for stronger climate impact assessments. On May 30, NextEra was granted a permit for the Okeechobee Lateral, a project to provide up to 400,000 dekatherms per day of capacity to Florida Power & Light’s 1,778-megawatt Okeechobee Clean Energy Center. Glick said the agency failed to adequately consider climate change impacts in determining whether the project is in the interest of the public, and he said that reliance on contracts from affiliates is insufficient for establishing the need for the project. Commissioner Cheryl LaFleur, while concurring with the majority, disagreed with the commission’s determination that it is unable to assess the impact of downstream greenhouse gas emissions, according to a statement on June 4. Florida Power & Light is a unit of NextEra Energy Inc.

Cheniere Energy Seeks U.S. Approval to Start Commissioning at Corpus Christi Natural Gas Liquefaction Facility

Corpus Christi Liquefaction LLC, a subsidiary of Cheniere Energy Inc., filed an application with the Federal Energy Regulatory Commission on June 7 seeking permission to introduce fuel gas to commission Train 1 of its liquefied natural gas project in Texas. The Corpus Christi facility, a five-train export plant with capacity to produce 22.5 million tonnes per year of LNG, won a construction permit from the commission in December 2014. With the start up of the Corpus Christi facility and other production plants along the Gulf and Atlantic Coasts in the next few years, the U.S. is poised to become a top supplier of the super-chilled fuel to global markets, rivaling Australia and Qatar.

Southern California Braces for Natural Gas Shortage as Pipeline Capacity Drops By Half: EIA

Natural gas deliveries to electric generators in Southern California may need to be curtailed if daily demand exceeds 3.6 billion cubic feet per day thanks to bottlenecks in the system originating from a major gas leak at the Aliso Canyon storage facility in October 2015, according to a June 8 report from the U.S. Energy Information Administration. The facility operator Southern California Gas Company lacks sufficient capacity to meet customer demand, as well as refill storage inventories – which are typically done in summer – potentially impacting the upcoming winter. The agency said that system deliverability capacity is 0.2 billion cubic feet per day lower than last summer when pipeline outages resulted in curtailments. The capacity of Aliso Canyon dropped to about 25 billion cubic feet from 86 billion cubic feet after the leak. The total capacity in the company’s service territory dropped by nearly half from 136 to 74 billion cubic feet. Recommendations to address the reliability risks include importing liquefied natural gas, accelerating electric transmission upgrades, and deploying demand response. Southern California Gas Company is a subsidiary of Sempra Energy.

Lawmaker From Pennsylvania Shale Country Floats Bill to Counter Threat of Fracking Ban

A Republican state senator hailing from northeastern Pennsylvania, the epicenter of the U.S. natural gas production boom, proposed legislation June 1 that would require a regional commission to pay property owners for the value of their energy reserves should the commission move forward on a proposed ban on hydraulic fracturing. Sponsor of the bill, state Senator Lisa Baker, says a prohibition on the advanced drilling technique, also known as fracking, proposed by the Delaware River Basin Commission in September 2017 would render the affected properties “worthless,” so landowners should get compensated. Hydraulic fracturing has unleashed a startling surge in natural gas production from the Marcellus and Utica shale gas formations that run through the state, positioning the U.S. as a major exporter of the fossil fuel.

Pennsylvania Lawmaker Calls on U.S. Congress to Back Natural Gas Storage Project, Citing $35 Billions in Investments

Pennsylvania state House representative Jim Christiana, a Republican, introduced a resolution on June 5 that urges federal lawmakers to support legislation to develop a natural gas storage hub in the Appalachian region spanning Kentucky, Ohio, Pennsylvania and West Virginia, noting that the region contains enough feedstock supplies to attract $35 billion in investments for the chemical and plastics industry. U.S. lawmakers are already weighing measures to streamline pipeline approvals, to qualify natural gas liquids storage hubs for U.S. Energy Department loan guarantees, and to study the viability of an ethane storage and distribution hub in the region, the resolution notes. (HR 952)