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Welcome back to the EnerKnol Pulse. This week's roundup includes New Jersey's controversial nuclear handout, PJM's move to tackle state subsidies, and an unexpected Trump administration affair with offshore wind. All of this and more made possible by the EnerKnol Platform. We welcome your feedback at research@enerknol.com

April 16, 2018

Featured Topics

Greening Energy Mix

Evolving Power Markets

Maintaining the Grid

Fossil Fuels and Pipelines

Featured Entities

Appalachian Power

Amber Infrastructure

American Transmission

Bloom Energy

Cloverland Cooperative

Cypress Creek





Flint Mine Solar

Hudson Energy

ISO New England

Longview Power


Mountain Valley Pipeline

National Grid






Public Citizen

Southern Renewable

SP Solar


Tennenbaum Partners

Top News

New Jersey Legislature Passes Bills to Establish Nuclear Subsidies, Boost Renewable Target to 50 Percent

The New Jersey legislature on April 12 passed legislation that would create zero emission certificates to compensate the fuel diversity and zero-carbon attributes of nuclear power, potentially making New Jersey the third state to prop up at-risk nuclear generators following New York and Illinois. Lawmakers also passed legislation that would expand the state’s renewable portfolio standard to 50 percent by 2030 and set an energy storage goal of 2 gigawatts by 2030. (S 2313, A 3723)

Mid Atlantic Grid Operator Files Proposals to Tackle Market Distortion from State-Backed Subsidies

PJM Interconnection LLC asked the Federal Energy Regulatory Commission on April 9 to consider both its capacity repricing proposal and its Market Monitor’s proposal to expand the minimum offer price rule to address price distortion in its markets as participation of sources receiving out-of-market state revenues continues to grow. PJM has strongly supported its capacity repricing that would reprice subsidized offers in the second stage of a two-stage auction to remove the effects of the subsidy and ensure competitive prices. The market monitor’s proposal would apply a screening process to subsidized offers to reflect the actual cost of the resource type in the absence of a subsidy, but PJM says that the plan could deprive subsidized units of a capacity commitment. PJM requested an order by June 29 with changes to take effect in January 2019, so that it has enough time to implement the changes for the May 2019 annual capacity auction.

Trump Administration Advances Offshore Wind Development

The U.S. Department of the Interior on April 11 issued a notice of its proposal to auction two lease areas offshore Massachusetts totaling nearly 390,000 acres for commercial wind energy development. The department’s Land Management Bureau has requested information and nominations for offshore wind leases in the New York Bight Region between Long Island and the New Jersey coast. The bureau is also seeking input on a high-level assessment of waters offshore the Atlantic Coast for future wind lease locations.

Greening Energy Mix

Virginia Regulators Question Legality of State’s New Renewable Procurement Overhaul in Appalachian Power Rate Case

The Virginia State Corporation Commission has raised concerns regarding the recently enacted Senate Bill 966, in an order denying Appalachian Power’s request to raise rates for the acquisition of out-of-state wind farms. The law requires the commission to consider the construction or purchase of power generated from solar and wind facilities up to certain quantities as being “in the public interest”. However, in its April 2 order, the commission highlights language in the law which seems to put out-of-state renewable projects at a disadvantage, a violation of the Constitution. Appalachian Power is a subsidiary of American Electric Power Company Inc.

National Grid Wins Rhode Island Approval for Eight Long-Term Contracts to Meet Renewable Energy Goals

The Rhode Island Public Utilities Commission on April 9 approved eight long-term renewable energy contracts filed by Narragansett Electric Company, a subsidiary of National Grid, as part of the Long-Term Contracting Standard which requires electric distribution companies to enter into 90-megawatt long-term renewable energy contracts. The contracts, each having a twenty-year term, were executed in May 2017 by parties in Rhode Island, Connecticut, and Massachusetts. Rhode Island’s share would be 12.9 megawatts, still leaving the company 5.4 megawatts short of the 90-megawatt goal.

New York Highlights Success of $1.4 Billion Renewable Energy Investment in Progress Report

The New York State Energy Research and Development Authority issued its annual Clean Energy Standard procurement report, highlighting the 22 utility-scale solar farms, three wind farms and one hydroelectric project which won contracts to supply renewable energy in the first solicitation under the state’s Clean Energy Standard. The projects will add over 1,380 megawatts of capacity, or enough power to meet the energy needs of nearly half a million homes, putting the state closer to meeting its goal to source half its electricity supplies from renewable sources by 2030.

Flint Mine Solar Advances Public Outreach Plan for 100 Megawatt Solar Facility in New York

Flint Mine Solar LLC filed a public involvement program plan with the New York State Public Service Commission for its proposed 100 megawatt photovoltaic solar generation facility in Greene County, New York, according to an April 9 filing. The proposed Flint Mine Facility, expected to be among the largest utility-scale solar power plants in the state, will help New York reach its goal of 50 percent renewables by 2030. The public outreach program is part of the siting review process required for major generating facilities to introduce the facility to the community and other stakeholders. The facility is owned by Hudson Energy Enterprises LLC, a subsidiary of Hudson Energy Development, and Amber Infrastructure Group Limited.

New York State Unveils Indicators for Measuring Success of $58 Million Energy Storage Investment Plans

The New York State Energy Research and Development Authority has released a report setting out data collection methods which will allow the agency to measure the success of two energy storage focused chapters of the Clean Energy Fund Investment Plan, the Energy Storage Chapter and the Renewables Optimization Chapter. The fund, which is a key part of New York’s ambitious Reforming the Energy Vision plan, seeks to remove barriers limiting energy storage adoption by residential customers, transmission systems and transportation.

Southern Renewables Seeks Texas Regulator's Approval to Sell 33 Percent Interest in Solar Generation Plants

Southern Renewable Energy Inc. asked the Public Utility Commission of Texas to approve the transfer of 33 percent of its limited partnership interests in SP Solar Holdings I LP to a third-party buyer to be identified by June 8, according to an April 9 filing. SP Solar Holdings owns all the equity interests of two solar generation units, the 102-megawatt BNB Lamesa Solar LLC and the 120-megawatt East Pecos Solar LLC. Southern Power Company directly owns Southern Renewable Energy and indirectly owns SP Solar Holdings.

U.S. Lawmaker Unveils Bill That Would Grow Renewable Energy to Offset Impacts of Nuclear Plant Closures

U.S. House lawmaker Salud Carbajal, a Democrat representing California, introduced legislation on April 9 that would create new tax credits for renewable energy development to reduce the economic impact from the closure of nuclear power plants. The bill would establish energy opportunity zones in municipalities or counties where nuclear power plant closures occur for a 10-year period beginning on January 1. (H.R. 5441)

Evolving Power Markets

U.S. Energy Regulator Accuses PSEG of Violating PJM Market Bidding Rules Over Nine Years, Launches Probe

The Federal Energy Regulatory Commission announced that in a nonpublic investigation it found that PSEG Energy Resources & Trade LLC, the trading arm of Public Service Enterprise Group Inc., made false statements and submitted incorrect cost-based bids into PJM Interconnection LLC’s energy market between 2005 and 2014. The notice, issued April 5, comes as the New Jersey legislature passed legislation giving state nuclear generators $300 million a year to keep struggling reactors operating.

NextEra, NRG Urge U.S. Energy Regulator to End Renewables Exemption in New England Capacity Auction

NextEra Energy Resources LLC and NRG Power Marketing LLC asked the Federal Energy Regulatory Commission to reverse its March 9 order permitting a three-year extension of an exemption that allows new resources qualifying under state renewable energy standards to enter the ISO New England Inc.’s capacity market at a zero price, according to an April 9 filing. The three-year phase-out comes as the grid operator’s new two-state auction process replaces the exemption for accommodating the entry of state-sponsored resources. The companies said that the move contradicts the commission’s prior premise that renewable investments will occur with or without the exemption and that the resulting entry of 514 megawatts over three years will suppress prices.

New England Consumer-Owned Systems Oppose Discrimination Against Conventional Resources in Capacity Auction Reforms for Sponsored Resources

The Eastern New England consumer-owned systems, which are publicly owned utilities, asked the Federal Energy Regulatory Commission to reconsider the definition of sponsored policy resources in the commission’s order approving ISO New England Inc.’s capacity market reforms for the entry of subsidized resources, according to an April 9 filing. The group asserts that the definition discriminates against conventional resources developed by public power utilities in favor of state-mandated renewables procurements by investor-owned distribution companies. The reforms institute a substitution auction under which existing capacity resources that commit to permanently exit the market can transfer their supply obligations to new state-supported resources. The group asserts that the auction process requires them to bear an unreasonable portion of the side payments resulting from the non-rationability of the demand bids of the existing resources because consumer-owned systems are not subject to the same renewable mandates, and the discriminatory definition makes them ineligible to participate in the substitution auction.

Mid Atlantic Grid Operator Launches Five-Minute Market Settlement to Align Price Signals, Avoid Undercompensation

PJM Interconnection LLC implemented an enhanced market settlement solution, called five-minute settlement, which reflects the actual value of resources that respond to operating needs of the market in five-minute intervals, according to the grid operator’s April 10 press release. The new program, which replaces the previous hourly settlement, aligns dispatch and settlement intervals so as to eliminate imbalance of market price signals that could undercompensate sellers. The program follows the Federal Energy Regulatory Commission’s June 2016 order that seeks to standardize market processes related to settlements and shortage pricing.

Consumer Group Protests New England Grid Operator’s Reforms for State-Backed Resources

Public Citizen Inc., a consumer rights advocacy group, on April 6 requested rehearing of the Federal Energy Regulatory Commission’s approval of ISO New England Inc.’s two-stage capacity auction designed to accommodate the entry of subsidized generators. The group disputed the claim that competition from state-backed renewables will cause prices to be too low for owners of non-renewable resources to win contracts in the auction.

Bloom Energy Withdraws Request for Cogeneration Status Amid Protests of Eligibility

Bloom Energy withdrew a petition with the Federal Energy Regulatory Commission to have its facilities that are 5 megawatts or smaller classified as cogenerators under the Public Utility Regulatory Policies Act of 1978, to “aid administrative efficiency and efficient use of the commission’s resources,” according to an April 4 filing with the agency. The bid for Bloom Energy to qualify its technology under the statute, which allows producers to sell power to utilities at favorable rates, has been met with opposition. Bloom Energy generators use proprietary solid oxide fuel cell technology to convert fuel into electricity through an electrochemical process without combustion, according to the company website.

ETRACOM LLC Fined $1.9 Million in Settlement of California Power Market Gaming Case

The Federal Energy Regulatory Commission on April 10 approved an agreement resolving claims that ETRACOM LLC violated the commission’s anti-manipulation rule during its virtual trading in May 2011 in the California Independent System Operator Corporation’s wholesale electric market. ETRACOM, a privately-held financial trading company, agreed to pay $1,900,000 in disgorgement and interest to the grid operator for distribution to market participants impacted by the trading at issue, and penalty to the U.S. Treasury.

Cloverland Electric Seeks Relief from Obligation to Buy Power from Independent Producers

Cloverland Electric Cooperative asked the Federal Energy Regulatory Commission to cancel its requirement to enter into new contracts to purchase energy and capacity from independent power producers that have a net capacity greater than 20 megawatts and are located in the footprint of Midcontinent Independent System Operator Inc., according to an April 10 filing. The commission allows relief from the obligations if it finds that sellers have nondiscriminatory access to wholesale markets. The utility said that facilities from which it would buy power would have non-discriminatory access to the Midwest power market because it relies on American Transmission Company LLC for transmission service and that it is not possible to safely interconnect over 20 megawatts to its distribution system even with significant upgrades. Cloverland Electric is a Michigan nonprofit cooperative corporation that provides retail service.

Maintaining the Grid

Midcontinent Grid Operator Revises Interconnection Process to Avoid Queue Delays

The Federal Energy Regulatory Commission on April 10 approved the Midcontinent Independent System Operator Inc.’s revisions requiring interconnection customers to finalize the level of the network resource interconnection service at an earlier stage of the interconnection process to prevent unscheduled restudies in the later stage. The grid operator’s three-phase interconnection study requires interconnection customers to review the study results and then move to the subsequent phase by making a milestone payment or withdraw and receive a refund. The revisions require the selection to be finalized at the end of the second stage to further streamline the interconnection process and reduce the chances of queue delays.

Cypress Creek Renewables Lodges Complaint Against DTE Electric Claiming Undue Interconnection Delays

Cypress Creek Renewables LLC on April 6 filed a complaint with the Michigan Public Service Commission alleging that DTE Electric Company has been delaying its generator interconnection applications. Cypress Creek argues that the hold up in the process amounts to a violation of the agency’s interconnection and net metering standards and the federal Public Utility Regulatory Policies Act of 1978, which requires utilities to buy power from certain non-utility generators based on the utility’s avoided costs. The solar company complained that DTE violated timelines for checking the completeness of at least 111 applications and reversed the status of 70 applications previously deemed as complete. It said that DTE has been unreasonably demanding for engineering studies charging exorbitant fees for those studies, and refusing to provide proper distribution system information, so as to avoid its obligation to buy the output of those projects. DTE Electric, a subsidiary of DTE Energy Company, is a public corporation that provides electric service in Southeast Michigan.

New England Grid Operator to Avert Retirement of Exelon’s 2,000-Megawatt Electric Generation Units Over Concerns of Fuel Security

The ISO New England Inc. is planning to request that the Federal Energy Regulatory Commission issue a waiver to keep the Mystic Generating Station operational, following Exelon’s recent decision to retire the plant in 2022. Despite optimistic assumptions, the loss of the plant poses fuel security risk to the region during winter, according to the grid operator’s analysis released on April 10. Exelon said that flaws in the market design renders the plant uneconomic to operate beyond May 2022, but it would submit cost-of-service compensation for the units needed for fuel security.

Maryland Energy Administration Seeks Exclusion of Energy Storage from Rate Recovery in Pepco’s Microgrid Proposal

The Maryland Energy Administration said that the Maryland Public Service Commission should consider impacts to ratepayers in evaluating the microgrid projects proposed by Pepco Holdings Inc. and underscored that rate recovery must be limited to quantified benefits that go to ratepayers, according to the agency’s April 6 filing. The agency recommended that legal questions over the ownership of energy storage by distribution companies should be addressed, and unregulated assets and energy storage systems that function as generation assets should be excluded from rate recovery. The microgrid proposal is part of a series of conditions the commission imposed in approving the merger of Exelon Corporation and Pepco in 2015.

Washington Regulators Safeguard Customer Choice as Advanced Meter Technology Spreads

The Washington Utilities and Transportation Commission has determined that companies must allow customers to opt out of advanced meter installation, following concerns raised by ratepayers over the implementation of the new technology and opt-out charges, according to an April 10 press release. The commission will develop explicit requirements and create new rules to protect consumer information and allow customers who opt out to retain their existing meters.

Illinois Regulator Explores Policy Tools to Tackle Grid Dynamics Amid Growing Electric Vehicle Adoption

The Illinois Commerce Commission held a policy session examining the benefits of electric vehicles to the grid, policy options to tackle the new electric demand dynamics, and rate structuring to improve accessibility, according to the commission’s April 6 press release. Panelists discussed the benefits such as better system utilization, renewable accommodation, and rate reductions, as well as the need to address the lack charging stations, battery storage capacity, and grid load issues. Advanced metering technology for rate design and time of use rates are expected to benefit ratepayers. Widespread electric vehicle adoption is expected to bring up to $43 billion in benefits to the state by 2050. Illinois ranks sixth in the nation for the number of electric vehicles registered in the state.

Fossil Fuels and Pipelines

Mountain Valley Pipeline Seeks 70-Mile Expansion Following Capacity Commitment from SCANA Subsidiary

Mountain Valley Pipeline LLC announced an extension to its $3-billion project called Southgate, which would receive gas from the mainline in Virginia and extend approximately 70 miles south to new delivery points in North Carolina. The proposed expansion follows a commitment for pipeline capacity from PSNC Energy, a unit of SCANA Corporation, and amid growing demand from the Southeast Market, according the April 11 news release. The original pipeline has already received approval from federal regulators. The extension is expected to be in operation by the fourth quarter of 2020. Mountain Valley is a joint venture of EQT Midstream Partners LP, NextEra US Gas Assets LLC, Con Edison Transmission Inc., WGL Midstream and RGC Midstream LLC.

Spectra Energy Wins U.S. Approval for Texas Gas Infrastructure Projects Connecting Gulf Coast Markets

The Federal Energy Regulatory Commission on April 6 authorized Texas Eastern Transmission LP to build its proposed Stratton Ridge Expansion Project that would enable bidirectional flow on its system to connect natural gas supply basins with Gulf Coast markets. The commission also authorized Brazoria Interconnector Gas Pipeline LLC to lease capacity on its Texas intrastate pipeline system to provide 322,000 dekatherms per day of firm transportation service from Texas Eastern’s existing interconnections with Texas Gas to a delivery point on Brazoria’s pipeline near Stratton Ridge, Texas. Texas Eastern and Brazoria are subsidiaries of Spectra Energy Partners LP.

Longview Power Wins U.S. Approval to Sell Shares in West Virginia Coal Plant

The Federal Energy Regulatory Commission on April 11 approved Longview Power LLC’s request for a transaction under which its parent Longview Intermediate Holdings C LLC would sell common shares currently held by Third Avenue Management LLC to Tennenbaum Capital Partners LLC and its managed funds and investment accounts. Currently, three entities own 10 percent or more of the shares of Longview Intermediate Holdings, which holds all the membership interests of Longview Power LLC, the owner of a 700 megawatt coal-fired generation facility in West Virginia. Longview Power will continue to make wholesale sales of electric energy, capacity, and ancillary services after consummation of the transaction.

U.S. Lawmaker Proposes Bill to Promote Natural Gas Demand Response Programs

U.S. Senator Sheldon Whitehouse, a Democrat representing Rhode Island, introduced legislation on April 11 that would require the U.S. Department of Energy to establish a pilot program for natural gas demand response. The legislation would allow gas utilities and local distribution companies to develop programs that reward customers for reducing energy use during periods of high prices or infrastructure constraints. Demand response has long been used in the electricity sector to shift consumption during peak periods in response to time-based rates or financial incentives. (S.2649)

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