New Jersey Governor Phil Murphy, a Democrat, signed legislation on April 20 that prohibits oil and gas drilling off the state’s coast in a direct rebut to the Trump administration’s plan to open up vast amounts of coastal waters to energy development. The bill would prohibit the Department of Environmental Protection from permitting or approving facilities associated with drilling within or outside of New Jersey waters. Proponents of the measure warn that a spill along the coast akin to the 2010 BP Deepwater Horizon Oil disaster in Louisiana would be catastrophic to the state’s $38 billion tourism industry. (A 839)
Get smarter, faster, with the EnerKnol Pulse, the newsletter bringing you the most important news of the past week. All powered by the EnerKnol Platform. In this week's edition, New Jersey's newly minted governor takes a stand against Trump's offshore drilling plans will a ban, Rocky Mountain Power wants more wind farms to replace coal plants, while New York Governor Andrew Cuomo announces the state will ramp up its energy efficiency goals by 40 percent. Make us even better with your feedback at research@enerknol.com
April 23, 2018
Featured Topics
Greening Energy Mix
Evolving Power Markets
Consumers and Ratemaking
Climate and Emissions
Fossil Fuels and Pipelines
Featured Entities
API
Appalachian Power
Columbia Energy
Dominion
Environmental Defense Fund
First Solar
FirstEnergy
FPL
Fresh Air Energy
Great Plains Energy
Gulf Power
Idaho Power
Jordan Cove Energy Project
New Mexico Wind
NextEra
Pacific Power Investments
PJM
PNM Resources
PSC New Mexico
Rocky Mountain Power
San Diego Gas and Electric
SCANA
Sierra Club
Solano 3 Wind Holding
Sunrun
Union of Concerned Scientists
Top News
New Jersey Enacts Offshore Drilling Ban to Thwart Trump’s Plans to Open Atlantic Coast to Oil, Gas Production
Rocky Mountain Power Plans to Replace Over 3.5 Gigawatts of Coal-Fired Generation With Renewables Over 20 Years
The Idaho Public Utilities Commission on April 12 accepted Rocky Mountain Power Inc.’s integrated resource plan to meet electricity demand over the next 20 years. The plan calls for the retirement of over 3,500 megawatts of coal-fired generation that would be replaced largely by wind and solar. The first 10 years of the planning period would add 1,100 megawatts of new wind and 905 megawatts of upgraded wind resources. The plan also anticipates 1,040 megawatts of new solar between 2028 and 2036 mostly installed in Utah. To meet the demand through 2036, the company will also depend on energy efficiency, two new natural gas facilities, and wholesale power purchases. Rocky Mountain Power is a subsidiary of PacifiCorp.
New York Unveils 40 Percent Hike in Energy Savings Goal, Helping State Reach Climate Targets
Governor Andrew Cuomo, a Democrat, announced a goal to slash New York’s annual electricity consumption over the next seven years by the equivalent of the energy used by nearly two million homes, strengthening the state’s current energy efficiency standards by more than 40 percent, according to an April 20 press release. The state said it will seek to meet its energy efficiency goal by incentivizing efficiency improvements by building developers, residents and businesses. The state will commit an additional $36 million to train over 19,500 New Yorkers for clean energy jobs. The more stringent energy efficiency target will deliver about one-third of the state’s goal to cut greenhouse gas emissions by 40 percent by 2030, according to the announcement.
Greening Energy Mix
Sunrun Cleared to Operate in Florida Without Energy Regulator's Oversight, Paving Way for Market Expansion
The Florida Public Service Commission unanimously approved a request by Sunrun Inc. not to treat Sunrun’s residential solar equipment leasing as a sale of electricity, not to deem the solar installer as a public utility under Florida law nor subject Sunrun or its customers to regulation by the commission. The ruling marks a major win for Sunrun, the largest dedicated residential solar company in the U.S., by eliminating regulatory roadblocks and uncertainty for its expansion in the Sunshine state.
First Solar Seeks More Standardized, Coordinated Interconnection Planning for Efficient Grid Expansion
First Solar Inc. underscored the need for more coordinated regional planning in the generator interconnection process in an April 9 filing with the Federal Energy Regulatory Commission, responding to request for comments. The company said that its experience as an integrated solar developer directly working with interconnection planning processes shows that the issues are “persistent and challenging” and encouraged the commission to foster coordination among transmission operators, grid operators, and independent generator developers through a well-defined open access process and standard. The company recommended greater incentives for independent system operators to coordinate with neighboring balancing authorities, and said that host transmission owners should engage in coordination that will provide generators certainty and better siting incentives.
NextEra Wins U.S. Approval of Lease Transfers Tied to Repowering of New Mexico Energy Center
The Federal Energy Regulatory Commission on April 17 authorized a transaction allowing FPL Energy New Mexico Wind LLC to transfer to New Mexico Wind LLC its future lease interests in the New Mexico Energy Center, a power purchase agreement with the Public Service Company to New Mexico LLC, and membership interests in its subsidiary Pacific Power Investments LLC. The transaction is the result of an upcoming repowering of the 204-megawatt New Mexico Energy Center financed through industrial revenue bonds under a purchase agreement of FPL’s subsidiary with De Baca and Quay counties. The existing leases were entered into in 2002. FPL Energy and New Mexico Wind are indirect subsidiaries of NextEra Energy Inc.
U.S. Energy Regulator Approves Sale of 128-Megawatt Wind Facility to Sacramento Municipal Utility District
The Federal Energy Regulatory Commission on April 17 authorized a transaction allowing a unit of Solano 3 Wind Holding LLC to sell facilities related to a 128 megawatt wind farm to Sacramento Municipal Utility District, a customer-owned municipal utility serving about 1.5 million customers in Northern California. The output of the project, which is interconnected with the California transmission grid, is committed to the municipal utility under a long-term power purchase agreement. Solano Holding is owned by Forsyth Street Renewables I LLC and Citibank N.A.
Fresh Air Energy Wins North Carolina Approval for 112 Megawatt Solar Facilities
The North Carolina Utilities Commission on April 9 authorized Fresh Air Energy II LLC to construct a 30-megawatt solar facility in Stanly County and a 72-megawatt solar facility in Robeson County, North Carolina. The facilities will sell their output to Duke Energy Progress LLC, a subsidiary of Duke Energy Corporation.
U.S. Energy Department to Invest $106 Million to Enhance Integration of Solar Technologies
The U.S. Energy Department’s Solar Energy Technologies Office will fund about 70 projects with a focus on advancing photovoltaics and concentrating solar power technologies, seamless grid integration of solar, and workforce initiatives to meet future needs, according to the department’s April 17 news release. The department seeks to explore innovative ways to speed up integration of new technologies and to attract more private sector involvement to support financing and commercialization.
Colorado State Lawmaker Introduces Bill to Ease Renewable Energy Standards for Cooperative Electric Associations
Colorado state Senators John Cooke and Ray Scott, both Republicans, introduced legislation on April 16 that would repeal hikes to the renewable portfolio standard for cooperative electric associations, returning the standard to 10 percent by 2020 from 20 percent, and restoring the permissible retail rate impact to one percent from two percent. The bill would remove additional carve-outs for distributed generation, eliminate reporting requirements, and reinstate a formula for calculating credits used to accelerate construction new solar facilities. It would remove synthetic gas produced from municipal waste from the definition of eligible resources, but retain coal mine methane found to be greenhouse gas neutral, and further include large and existing hydroelectric generation facilities. (SB 18-246)
Evolving Power Markets
American Petroleum Institute Contests Emergency Support for FirstEnergy’s Ailing Nuclear, Coal Plants to Preserve Market Competition
The American Petroleum Institute underscored the need to “let the markets work” in in its opposition to FirstEnergy Solutions’ request for emergency relief for its struggling nuclear and coal generators, according to an April 13 letter to President Trump. The group highlighted the shale gas revolution as a standing example of the success of market competition. FirstEnergy Corp.’s coal and nuclear power plant units filed for bankruptcy court protection with the U.S. Bankruptcy Court for the Northern District of Ohio on March 31, days after asking the U.S. Energy Department to use its emergency powers to keep the plants operating.
U.S. Household Electricity Spending to Rise by 3 Percent This Summer on Higher Prices, Cooling Demand: EIA
Average U.S. household electricity spending for this summer, from June through August, are projected to rise by 3 percent over the year-ago period due to higher retail prices and higher consumption to meet increased cooling demand, according to an April 17 report from the Energy Information Administration. The agency expects 2 percent more cooling degree days, an indicator of cooling demand, compared to the milder summer of 2017, and a one percent increase in average residential electricity consumption. Natural gas is expected to provide 37 percent of total generation, up from 35 percent last summer, while the share of coal is projected to average 29 percent, down from 31 percent.
Environmental Groups Seek More Time to Weigh on PJM's Proposed Capacity Market Reforms
The Environmental Defense Fund, the Natural Resources Defense Council, Sierra Club, and the Union of Concerned Scientists asked the Federal Energy Regulatory Commission for a 30-day extension of the 21-day period for submitting comments on PJM Interconnection LLC’s April 9 proposal to overhaul the nation’s largest capacity market in response to the growing competition from state-sponsored resources. The groups noted that PJM acknowledged that some elements of each proposal would benefit from additional stakeholder input and that the grid operator’s “jump ball” approach necessitates sufficient time to provide thoughtful input on two proposals whose details were made publicly available only at the time of filing.
San Diego Gas and Electric Failing to Meet Energy Storage Procurement Targets: Trade Group
The California Energy Storage Alliance said that San Diego Gas and Electric Company exceeded the 50 percent allowable limit of utility-owned storage procurement required under the state’s 2010 storage mandate, and is relying too much on that procurement to count towards the level of megawatts needed to meet its full obligations. The group asserted that the company should continue to procure third-party owned projects to ensure compliance, according to an April 10 filing with the California Public Utilities Commission protesting the company’s 2018 procurement plan.
Consumers and Ratemaking
South Carolina Legislature Passes Resolution for SCANA Rate Cuts to Ease Consumers' Payments for Failed Reactor Project
The South Carolina legislature on April 18 passed a resolution to provide an interim rate reduction for customers who are paying the costs associated with the abandoned V.C. Summer nuclear plant expansion until the public service commission makes a final ruling resolving pending issues regarding the project. SCANA subsidiary South Carolina Electric & Gas Co. and Santee Cooper scrapped the project last July after spending about $9 billion. Customers continue to pay approximately $37 million per month and have already paid more than $2 billion for the abandoned project. A recent Senate-commissioned study shows that SCANA can cut electric rates temporarily by at least 13 percent without going bankrupt. The measure deals a setback to Dominion Energy Inc.’s proposed $7.9 billion all-stock merger with SCANA and the assumption of its debt, valued at $14.6 billion. (S 954)
Dominion Energy, Appalachian Power to Pass on $175 Million in Federal Tax Cut Savings to Virginia Customers
Dominion Energy Virginia and Appalachian Power Company will cut customer power rates by $125 million and $50 million, respectively, in July to reflect savings from federal tax cuts passed late last year, according to an April 16 press release from the Virginia State Corporation Commission. Dominion Energy will also provide credits for customers said to be overcharged. The utilities will make additional submissions next year to ensure that the tax savings are correctly accounted for in rates as of April 1, 2019. In December the Trump administration enacted legislation that cut the corporate income tax rate to 21 percent from 35 percent.
New Mexico Strikes Down PNM's $121 Million Smart Meter Program Citing Excessive Burden for Consumers
The New Mexico Public Regulation Commission rejected the Public Service Company of New Mexico’s proposal to install smart meters due to the potential for rate increases, an extortionate opt-out fee, and layoffs of 125 meter reading employees, according to an April 11 press release from the agency. The commission said that the costs would exceed savings and force a rate increase of at least $5.9 million in the first year to the benefit of shareholders. Public Service Company of New Mexico is a subsidiary of PNM Resources Inc.
Kansas Regulator Allows Great Plains Energy to Collect More Details from Net Metering Customers to Streamline System Design
The Kansas State Corporation Commission on April 17 approved a request by Kansas City Power & Light Company, a subsidiary of Great Plains Energy Inc., to require new customer-generators applying for the company’s net metering program to provide the direct current rating of their generating systems in addition to the alternative current rating that is already required under the current tariff. The company said that the additional information will reduce uncertainty in system design and help in its ongoing evaluation of the impact of distributed generation on the distribution system.
Gulf Power to Pass on $103 Million in Savings from Federal Tax Law to Florida Customers Following Settlement
The Florida Public Service Commission on April 12 approved Gulf Power Company’s settlement with the Office of Public Counsel, Florida Industrial Power Users Group, and Southern Alliance for Clean Energy, to ensure savings from the federal tax law passed in December are reflected in rates. Under the settlement, ratepayers will benefit this year from a $103.2 million slash in charges including a $18.2 million cut in base rates. The settlement includes a refund of $69.4 million through fuel cost recovery for excess deferred taxes that would normally be paid off over a longer period, as well as $15.6 million cut in the environmental cost recovery which would not have been considered until next year. The reforms trimmed the corporate income tax rate to 21 percent from 35 percent effective January 1. Gulf Power Company is a subsidiary of the Southern Company.
Idaho Power Proposes 3.6 Percent Cut in Rate Adjustment Due to Higher Energy Consumption
Idaho Power Company, a subsidiary of IDACORP Inc., requested authorization to lower its annual rate adjustment mechanism by 3.6 percent for residential customers and 3.73 percent for small general service customers from June 1, according to an April 13 filing with the Idaho Public Utilities Commission. The move comes after customer energy consumption was higher last year than in 2016, despite a 12 percent increase in energy efficiency. The proposal would lower the residential monthly power bill by $3.60. The mechanism allows the utility to recover a commission-authorized amount of fixed costs when sales decline and is designed to eliminate the disincentive of supporting energy efficiency by separating energy sales from revenue without affecting recovery of fixed costs.
Climate and Emissions
Presidential Memorandum Directs EPA to Ease Key Air Pollution Standards to Support Manufacturing
President Donald Trump issued a memorandum on April 12 directing the Environmental Protection Agency to reform key air pollution regulations called National Ambient Air Quality Standards for certain common air pollutants considered harmful for health. The reforms aim to reduce barriers that are restraining manufacturing and business growth and provide states with regulatory certainty and flexibility to implement the standards. The memo said that emissions have declined dramatically under the standards, which are revised every five years requiring states that are not in compliance to submit state implementation plans. The memo said that delays in processing these plans causes backlogs and uncertainty for states, localities, and regulated entities. To ease compliance, the memo sets new deadlines for reviewing state plans and permit applications, and directs timely processing to provide relief to states addressing emissions beyond their control and international emissions.
California Regulators Launch Proceeding to Integrate Climate Adaptation Strategies in Utility Operations
The California Public Utilities Commission is planning to consider ways to integrate climate change adaptation issues in commission proceedings and activities finding that climate adaptation planning is a “prudent next step” for safe and reliable operations of investor-owned public utilities, according to an April 16 draft order. Phase I of the proceeding will focus on climate-related risks facing electricity and natural gas utilities and explore data, tools, and resources needed to incorporate climate adaptation in utility planning and operations. California is a leader in climate policy with an ambitious goal of slashing emissions 40 percent below 1990 levels by 2030.
Fossil Fuels and Pipelines
SCANA Wins U.S Approval to Buy 540-Megawatt Gas Plant Needed to Meet Power Demand After Reactor Project Scuttled
The Federal Energy Regulatory Commission on April 17 authorized South Carolina Electric & Gas Company, a subsidiary of SCANA Corp, to acquire the Columbia Energy Center, a 540-megawatt cogeneration facility owned by Columbia Energy, a subsidiary of LS Power Development LLC. Last December, the companies entered into a $180 million purchase agreement. The acquisition is expected to help SCANA partially replace the electricity supplies that would have been provided by the failed V.C. Summer Nuclear plant expansion.
Oklahoma Regulator Directs Oil, Gas Well Operator to Cut Disposal Volumes by More Than Half Due to Earthquakes
The Oklahoma Corporation Commission’s Oil and Gas Conservation Division directed a wastewater disposal well in the Garfield County area to reduce disposed volumes injected into the Arbuckle formation to 5,000 barrels a day from 17,000 barrels due to strong seismic activity, according to the commission’s April 9 press release. The commission said that the situation is ongoing and more actions may follow. Last month, the commission issued new regulations to reduce the risk of earthquakes from hydraulic fracturing in the state’s most abundant shale formations known as the SCOOP and STACK plays.
Jordan Cove Seeks U.S. Approval to Boost Liquefied Natural Gas Exports, Push Back Start of Operations
A unit of Veresen Inc. asked for approval from the U.S. Energy Department to export 1.08 billion cubic feet per day of liquefied natural gas to non-free trade nations, up from a previous request of 0.96 billion cubic feet, from its planned Jordan Cove LNG production plant in Coos Bay, Oregon, according to the agency’s April 19 notice. The amendment would conform the requested export volume to its proposed production capacity in its current application at the Federal Energy Regulatory Commission. The company also asked to reset the commencement date to reflect that exports are not expected to begin until the first half of 2024, from the earlier scheduled start of March 2021.