The EnerKnol Pulse is back with dozens of headlines sourced from the EnerKnol Platform. In today's edition, the Mid-Atlantic grid operator releases its much-anticipated reliability and fuels security report; ISO New England proposes market rules for integrating energy storage; Massachusetts utilities lay out a $2.77-Billion joint energy efficiency plan.

November 5, 2018


Featured Topics

Climate and Green Energy

Evolving Power Markets

Modernizing the Grid


Featured Entities

Berkshire Gas Company

CAISO

Dominion

EDF Renewable Energy

Emera

Eversource

FirstEnergy

Liberty Utilities

National Grid

NiSource

PJM

Tampa Electric

Unitil

Top News

PJM Finds ‘No Imminent Threat’ to Fuel Security, Seeks Market-Based Solutions to Address Long-Term Concerns

PJM Interconnection LLC released its fuel security analysis on Nov. 1 finding that its system is reliable and can endure prolonged periods of highly stressed conditions. The study analyzed over 300 scenarios that could occur from 2023 considering generation retirements, customer demand, fuel delivery, and fuel disruptions. The results underscored that in a sustained cold weather period with typical demand, the system can function reliably over an extended duration of stress. The grid operator said that load loss could occur “under extreme, but plausible conditions,” such as escalated retirement and extreme-load scenarios. Factors contributing to load shedding include the level of retirements and replacements, availability of non-firm gas service, ability to replenish oil supplies, and pipeline disruption and configuration. Although the system experiences highest demand in summer, PJM said the study focused on winter when fuel supply is under the greatest strain as heating customers compete with fuel delivery to generators. The analysis follows a 2017 report which found that the shift in fuel mix and technology types raises questions about system resilience. PJM seeks to find market-based solutions to address long-term fuel security concerns. The grid operator intends to present a problem statement to stakeholders in early 2019 and submit market rule changes to the Federal Energy Regulatory Commission in early 2020.

New England Grid Operator Proposes Market Design to Integrate Battery Storage

ISO New England Inc. filed revisions with the Federal Energy Regulatory Commission for a new market design that would help emerging storage technologies to “more fully participate” in the wholesale power markets, according to an Oct. 29 news release. The rule would recognize the ability of batteries to transition continuously and rapidly from a charging to a discharge state, and also allow them to simultaneously take part in the energy, reserves and regulation markets. Currently, 19 megawatts of battery storage facilities are participating in the New England market and over 800 megawatts of stand-alone proposals were on the grid operator’s interconnection queue as of Sept. 1. ISO-NE said the storage design, which began in early 2016, will work towards compliance with the commission’s Feb. 15 order that requires grid operators to establish a participation model for electric storage resources and set a Dec. 3 implementation deadline. Additional changes required for full compliance will be filed separately. ISO-NE requests approval for the revisions to take effect April 1, 2019.

Massachusetts’ Three-Year Energy Efficiency Plan Envisions $8.5 Billion in Customer Benefits

Massachusetts electric and gas utilities on Oct. 31 filed a joint energy efficiency plan with the Massachusetts Department of Public Utilities proposing an investment of $2.77 billion over three years from 2019 to 2021. The proposal seeks to invest over $200 million more in the new plan compared to the prior three-year period and achieve over 400,000 short tons of additional emissions reductions. The plan takes a new approach to customer-focused energy efficiency called “Energy Optimization,” a holistic and integrated approach to helping customers address their energy use and associated costs based on individual needs and goals. The programs and core initiatives are designed to deliver benefits of at least $8.5 billion, more than double the program costs of $3.8 billion. Massachusetts has topped the American Council for an Energy Efficient Economy’s energy efficiency scorecard for the past eight years. The companies are NiSource Inc. subsidiary Columbia Gas of Massachusetts; Berkshire Energy Resources subsidiary The Berkshire Gas Company; National Grid plc subsidiaries, Boston Gas Company, Colonial Gas Company, Massachusetts Electric Company and Nantucket Electric Company; Unitil Corp. subsidiary Fitchburg Gas and Electric Light Company, among others.

Climate and Green Energy

EDF Renewable Energy Wins U.S. Approval for 500-Megawatt Solar Project in California

The Bureau of Land Management authorized EDF Renewable Energy Inc.’s Palen Solar Project, a 500-megawatt solar photovoltaic facility that would span 3,478 acres of federal lands in Riverside County, California. The project, expected to come online in 2020, would be located in the bureau’s Solar Energy Zone and Development Focus Area that has been designated for utility-scale renewable energy development. The bureau said the project is expected to result in $1 billion private infrastructure spending with $67.3 million in indirect economic benefits annually during the construction period. EDF Renewable Energy Inc. is a subsidiary of EDF Energies Nouvelles S.A.

New Jersey Regulator Establishes 10-Year Term for New Solar Credits

The New Jersey Board of Public Utilities announced that all Solar Renewable Energy Certificate or SREC applications submitted after Oct. 29 will have a lifespan of 10 years, clarifying legislation enacted in May. The language of the legislation says that the 10-year term applies only for certain proposals seeking to connect to the distribution system. The state’s solar program is financed through SRECs which are tradable commodities generated by solar projects for the energy they generate and then sold to electricity suppliers. The law phases out the SREC program by 2021 and calls for a new or modified framework to support solar development. New Jersey’s solar industry has completed 90,000 solar projects over the past 18 years, reaching over 2.4 gigawatts of installed solar generating capacity.

Florida Regulator Approves Cost Recovery for Second Phase of Tampa Electric's 600-Megawatt Solar Plan

The Florida Public Service Commission on Oct. 29 authorized Tampa Electric Company to recover costs for five solar projects totaling 260 megawatts under the second phase of the company’s solar plan. The projects raise the revenue requirement by $46 million resulting in a $2.46 increase in monthly residential bills, effective January 2019. The agency said that the increase will be partially offset by $17 million fuel savings from the projects, as well as federal tax cut savings. In June, the commission approved funding for 140-megawatts of solar generating capacity under the first phase of the 600-megawatt solar plan comprising four tranches. The company’s 2017 rate agreement froze base rates until Jan. 1, 2022, but allowed cost recovery for solar generation. Tampa Electric Company is a subsidiary of Emera Incorporated.

NIPSCO to Retire 2.2 Gigawatts of Coal Generation in Indiana Over Next Decade in Transition to Clean Energy

Northern Indiana Public Service Company LLC, a subsidiary of NiSource Inc., on Oct. 31 filed its 2018 integrated resource plan with the Indiana Utility Regulatory Authority, detailing a strategy to retire its coal-fired generation portfolio over the next decade and transition to more cost-efficiency renewable energy. The resource plan charts a path to meet customer electric needs over the next 20 years. The utility plans to close the 1,780-megawatt R.M. Schahfer Generating Station in Wheatfield by 2023 and 469-megawatt Michigan City Generating station in Michigan City by 2028. The changes are expected to result in over $4 billion in cost savings for customers over the long term and lower carbon emissions by more than 90 percent by 2028. To replace the coal plants, the company plans to pursue renewable energy resources such as wind, and solar, as well as battery storage technology. NIPSCO’s current resource portfolio consists of hydroelectric, wind, demand-side resources, and natural gas-fired sources in addition to the coal-fired plants.

Virginia Pollution Control Board Endorses Stricter Power Plant Emissions Rule as State Moves to Join Regional Carbon Market

The Virginia State Air Pollution Control Board on Oct. 30 approved recommendations to revise to regulations governing carbon dioxide emissions from fossil fuel-fired electric power plants in the state. The Department of Environmental Quality proposed a more stringent base budget of 28 million tons in 2020 resulting in additional emissions reductions of 5 million tons by 2030. Budgets for subsequent years would decline by three percent a year. The agency proposed a tougher base – instead of 33 million or 34 million tons proposed initially – due to favorable forecast for current emissions based on new air modeling from Virginia-specific data provided by the Regional Greenhouse Gas Initiative, a nine-state compact that established the nation’s first mandatory emissions trading program. The board is expected to vote on the proposal in the Spring of 2019.

Virginia Regulator Clears Dominion’s Offshore Wind, Solar Projects

The Virginia State Corporation Commission on Nov. 2 issued an order finding that Dominion Energy Inc.’s proposal to build a 12-megawatt offshore wind project off the coast of Virginia Beach is prudent. The project, expected to come online in December 2020, has an estimated cost of about $300 million, excluding financing costs. The commission noted that the project “would not be deemed prudent” given that economic benefits are speculative and risks will be borne by customers, but the finding is based on recent amendments to state laws which require that such projects be found to be in the public interest. The project is not a result of competitive solicitation to buy power from third party developers, which would have resulted in developers bearing some or all of the project risks, the commission said. The agency also approved the company’s prudency petition for a solar project that involves a 20-year agreement to buy power from an 80-megawatt solar facility finding that the proposal would protect customers from financial and other risks, unlike the offshore wind project.

Court Endorses Connecticut’s Diversion of Clean Energy Program Funds to Fill Budget Gap

The U.S. District Court for the District of Connecticut ruled on Oct. 25 that Connecticut’s transfer of ratepayer funds collected for energy conservation programs to the general fund is not illegal. The court said that state law has not promised ratepayers that their money would not be transferred to the general fund for other purposes, saying the law makes it clear that state government entities have discretion over the use and disbursement of the funds and not ratepayers or electric distribution utilities. In May, a coalition of energy efficiency contractors, and consumer and environmental advocates challenged that state for using $145 million from ratepayer-funded programs intended to reduce peak demand, lower energy costs, reduce emissions, and support low-cost efficiency improvements. The petitioners said that the budget bill passed last October diverted money from the Green Bank, Energy Efficiency Fund, and Regional Greenhouse Gas Initiative.

U.S. Power Sector Emissions Drop to Three-Decade Low as Electricity Demand Slows, Energy Mix Evolves: EIA

U.S. electric power sector emissions totaled 1,744 million metric tons in 2017, the lowest since 1987, according to an Oct. 29 report from the U.S. Energy Information Administration. Energy-related emissions in the power sector fell by 28 percent since 2005 compared to 5 percent in all other energy sectors. The agency attributed the drop in power sector emissions to slower electricity demand growth and changes in the generation mix. Electricity demand fell in six of the past 10 years as industrial demand dropped and residential demand has been flat. Less-carbon intensive natural gas has been displacing coal and gaining share in the power mix. Increases in generation from non-carbon resources such as wind and solar have also contributed to the emissions reductions.

Evolving Power Markets

Ohio Regulator Approves FirstEnergy's Auction Results to Determine Default Power Rates

FirstEnergy Corp’s wholesale auction held on Oct. 22 resulted in an average clearing price of $47.12 per megawatt hour to secure a one-year product to supply electricity to the company’s Ohio customers for the delivery period of June 2019 through May 2020. The results will be combined with previous and future auctions to determine the price-to-compare for the period. The previous auction held in January secured a two- and three-year product at a clearing price of $49.31 and $49.35, respectively, for delivery periods starting June. Customers have the option to shop for an alternate supplier or join a local government aggregation group to meet their power needs.

Western Power Market Benefits Exceed $500 Million

The Western Energy Imbalance market generated about $100 million in savings in the third quarter of this year, with total benefits reaching $502 million since its launch in November 2014, according to an Oct. 29 press release from the California Independent System Operator Corporation. The third quarter benefits were the highest for any quarter due largely to periods of high demand and fuel prices. Since its launch, the market has delivered 734,437 megawatt-hours of renewable energy that otherwise would have been curtailed. The energy imbalance market is an automated system that secures the lowest-cost energy to serve real-time customer demand over a broad region spanning across multiple western states.

Texas Grid Operator Reports Adequate Supplies to Serve Winter, Spring Peak Demand

The Electric Reliability Council of Texas forecasts a peak demand of 61,780 megawatts for the upcoming winter from December through February 2019, according to a Nov. 1 press release. The grid operator expects nearly 80,000 megawatts of resource capacity to be available for peak demand this winter. Since the preliminary winter assessment released in September, two wind farms have come online with winter capacity ratings totaling 72 megawatts. Planned resources are expected to add 253 megawatts this winter. The grid operator’s preliminary report for the upcoming spring – March through May 2019 – forecasts a peak demand of 61,566 megawatts and expects an additional 1,139 megawatts of resource capacity to be available for the spring season.

Indiana Regulator Slashes Indianapolis Power & Light’s Revenue Hike by Half

The Indiana Utility Regulatory Commission approved a settlement increasing Indianapolis Power & Light’s annual revenues by about $43.9 million, resulting in a $5.18 hike in monthly residential bills, according the agency’s Oct. 31 press release. In February, the utility lowered its revenue request to $96.7 million from its initial request of $124.5 to account for savings from the federal tax cut law that slashed the corporate income tax to 21 percent from 35 percent, effective Jan. 1. Under the settlement, the utility will provide $14.3 million in credits over two years to reflect the tax cut impacts, in addition to the $9.5 million previously approved by the commission in a tax investigation case. Indianapolis Power & Light is a unit of AES Corporation.

Illinois Regulator Approves $103 Million Rate Hike for Ameren’s Electric, Gas Services

The Illinois Commerce Commission authorized $71.6 million in additional revenue for Ameren Illinois Company’s electric service, resulting in a $4 increase in monthly residential bills, according to a Nov. 1 press release. The commission approved $31.7 million rate increase for the company’s gas delivery service, raising monthly bills by about $3.50. The gas rates take effect this month, and the electric rates in January 2019. Both the rates reflect changes from the federal tax law that slashed the corporate income tax rate to 21 percent from 35 percent. Ameren Illinois is a subsidiary of Ameren Corporation.

New England’s Competitive Retail Electricity Prices are Less Volatile Than Wholesale Prices: EIA

Retail electricity prices for customers enrolled with competitive suppliers in the New England region are less volatile compared to wholesale power prices, although temporary price hikes occur when wholesale prices experience the largest increases, according to an Oct. 31 report from the U.S. Energy Information Administration. All the New England states except Vermont have deregulated electricity market, where companies compete to generate and sell wholesale electricity to retail suppliers, and customers pay for electricity in the supply portion of their bills. The agency said that retail choice customers sign contracts for fixed or variable prices, which limit the monthly volatility in prices. Commercial and industrial customers in the retail market usually have variable pricing contracts, due to which competitive retail prices in these sectors respond quickly to volatility in wholesale prices. Residential prices remained stable until 2015, when the energy component of the price rose by nearly 20 percent to cover price spikes in the previous winters. Since 2012, there have been four instances when monthly average wholesale prices spiked by over 75 percent from the prior month, but the retail prices in the subsequent three months rose on average 4 percent relative to the three-month period before the spike.

Modernizing the Grid

Ohio Regulator Creates Grid Modernization Workgroups to Foster Innovation Towards Enhanced Customer Experience

The Public Utilities Commission of Ohio on Oct. 24 established the PowerForward Collaborative, a utility workgroup charged with monitoring marketplace developments to fulfil the objectives of its grid modernization roadmap. The PowerForward roadmap charts a path forward for the state’s grid modernization endeavor, creating a regulatory paradigm to foster innovation that allows for an enhanced experience for customers. The plan envisions the modern grid as an open access platform that facilitates the seamless interface of evolving applications, and contemplates a marketplace that allows customers to access innovative products and services from entities of their choice. The collaborative’s initial areas of focus include issues related to electric vehicles and a process for deploying nonwire alternatives – distributed energy resources to offset expensive wires upgrades. The commission also opened dockets for the collaborative’s sub workgroups – Distribution System Planning Working Group and Data and Modern Grid Workgroup. The collaborative will hold its first meeting on Dec. 6.

Department of Energy Launches First-Ever Grid Software Competition

The Department of Energy announced its inaugural Grid Optimization (GO) Competition consisting of a series of challenges to develop software that will improve the reliability, resilience and security of the nation’s power grid. In an Oct. 31 press release, U.S. Secretary of Energy Rick Perry recognized that the grid has become more diverse, with the rapid development of new energy sources like battery storage, wind and solar power, and distributed energy resources creating challenges for grid operators. The first stage of the competition is offering up to $4 million in prizes to develop new algorithms to make routing power across the grid faster and more efficient.

New Jersey Regulator Announces Energy Storage Analysis to Help Achieve 2 Gigawatt Goal

The New Jersey Board of Public Utilities approved a six-month contract beginning Nov. 1 with Rutgers University to conduct an analysis of energy storage, according to the agency’s Oct. 29 press release. The state enacted legislation in May that sets a target to reach 600 megawatts of storage by 2021 and 2,000 megawatts by 2030. The study will also consider the potential of renewable electric energy storage systems to foster electric vehicle adoption and the potential impact on renewable generation. The report is expected to quantify the benefits and costs of increasing storage and distributed energy resources, and provide recommendations to expand opportunities. The analysis has a proposed budget of $300,000 which will be met by the board’s industry funds.