Good afternoon and welcome to another EnerKnol Pulse! This week we feature a series of rate case updates, asset sales and fossil fuel policies, all accessed and tracked using the EnerKnol platform.

March 12, 2018


Featured Topics

Greening Energy Mix

Protecting Ratepayers

Evolving Power Markets

Expanding the Grid

Fossil Fuel Actions


Featured Entities

AEP

AltaGas

Avangrid Networks

Central Maine Power

Energy Future Holdings

Eversource

Global Infrastructure Partners

Hydro-Québec

ISO New England

Mitsubishi Corporation

NRG Energy

Oncor Electric

Public Service Co. of New Mexico

Rocky Mountain Power

SCE

Sempra Energy

South Central MCN

Tampa Electric

UGI Utilities

WGL Holdings

Xcel Energy

Top News

Texas Commission Approves Sempra’s $9.45-Billion Purchase of Oncor, Ending Energy Future’s Bankruptcy

The Public Utility Commission of Texas on March 8 authorized Sempra Energy to acquire Energy Future Holdings Corp.’s 80-percent stake in Oncor Electric Delivery Company LLC. The deal ends the bankruptcy faced by Oncor’s majority parent company Energy Future, which will survive as a wholly-owned subsidiary of Sempra. In 2014, Energy Future Holdings and its subsidiaries filed a chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Delaware District, which in 2017, authorized the company to enter into the merger agreement. Texas Transmission Investment LLC will maintain its nearly 20-percent ownership stake in Oncor.

Trump Administration Suspends New Mexico Oil, Gas Lease Sale to Gauge Impact on Thousands of Historic Sites

U.S. Interior Secretary Ryan Zinke directed the Bureau of Land Management to defer its March 8 oil and gas lease sale near the Chaco Culture National Historical Park in New Mexico until the completion of an analysis of more than 5,000 cultural sites in the leasing area, according to the bureau’s March 2 press release. The proposed sale includes 25 parcels spanning 4,434 acres, which has drawn protests from conservationists and tribal groups.

Eversource’s $1.6 Billion Northern Pass Power Line Clears Canadian Board in Wake of Permit Rejection

The National Energy Board of Canada on March 5 granted Hydro-Québec a permit to build and operate its Québec–New Hampshire international power transmission line. Massachusetts selected the 1,090-megawatt project as the winner of a solicitation to provide supplies of hydropower to meet the state’s renewable goals, but that decision was thrown into limbo after New Hampshire regulators denied a permit needed to advance its siting and construction. Eversource asked New Hampshire regulators to vacate the denial and resume deliberations.

Greening Energy Mix

NRG Seeks Approval from Texas Commission for $1.38-Billion Sale of Power Plants to Global Infrastructure Partners

NRG Energy Inc. filed a request for authorization with the Public Utility Commission of Texas for the sale of its Zephyr Renewables LLC, NRG Yield Inc., and NRG Renew LLC as well as generation facilities in the Southwest Power Pool to a fund managed by Global Infrastructure Partners. Under the deal, Global Infrastructure Partners’ fund will buy power plants from NRG in the Southwest Power Pool Inc., PJM Interconnection LLC, the Midcontinent Independent System Operator Inc., New York ISO, and ISO New England Inc. The companies asked the commission to take up review of a final order by May 25.

Southern California Edison Rolls Out Plan for Boosting Energy Storage as Utility Looks to Address Renewable Influx

The Southern California Edison Company asked the California Public Utilities Commission to approve its energy storage investment plan for the 2018 biennial procurement cycle, including a solicitation for about 40 megawatts of utility-owned storage at substations to aid renewable integration, according to the company’s March 6 application. The company’s target for the 2018 procurement cycle is 160 megawatts and its cumulative target for the 2014, 2016, and 2018 procurement cycles is 370 megawatts. The proposal stems from a 2010 law that mandated storage targets for the state’s investor owned utilities.

Xcel Energy Wins Minnesota Commission Approval for Low-Income Community Solar Cum Energy Efficiency Program

The Minnesota Public Utilities Commission on March 6 approved a pilot program proposed by Northern States Power Company, a subsidiary of Xcel Energy Inc., to combine energy efficiency measures with community solar garden subscriptions for low income consumers. The “Rehabilitation and Efficiency: Neighborhood Energy Works,” or “RENEWs,” program intends to serve more than 400 customers, including 160 community solar subscriptions. In its June filing for approval, Xcel said that the structure of its existing Solar*Rewards Community is not suitable for reducing customer bills because all customers, including low-income classes, fund the bill credits of a few subscribers and the cost burden increases as the program grows.

Eversource Unit Lays Out Plan for Customer Engagement, Cutting Power Usage, Climate Change Mitigation

NSTAR Electric Company unveiled benchmarks for gauging its success in reaching three goals set by the Massachusetts Department of Public Utilities in a rate case last November. To gauge customer engagement and satisfaction, it will track usage across digital platforms and use an annual satisfaction survey. The utility also looks to meet a goal to cut system peak demand by 7 percent, or about 384 megawatts, in 2022 by boosting energy efficiency, demand response, and deploying renewables. To cut greenhouse gas emissions associated with its operations by 10 percent and mitigate climate impacts, it will transition its vehicle fleet to biofuels, from diesel, install 62 megawatts of solar generation, deploy storage and harden its transmission system. Performance-based ratemaking is gaining prevalence as a means to reward utilities that evolve in response to market and technology advancements. NSTAR is a unit of Eversource Energy.

Protecting Ratepayers

Maryland Advocate Protests $6.4-Billion Washington Gas-AltaGas Merger, Arguing Settlement Doesn't Protect Ratepayers

The Maryland Office of the People’s Counsel said that a settlement agreement reached last December over terms of the purchase of D.C.-based WGL Holdings Inc. by AltaGas Ltd., of Alberta, Canada, doesn’t go far enough in safeguarding ratepayers, according to a March 1 filing with the state utility commission. The settlement calls for the investment of $103 million to expand natural gas infrastructure in Maryland. The consumer advocate said that AltaGas’s shaky finances, including weak earnings and an inferior credit rating, present “significant monetary risks” for consumers, none of which are addressed in the agreement. The companies anticipate closing the transaction in the first half of the year.

Pennsylvania Commission Launches Probe into UGI Utilities’ 12 Percent Rate Hike Request

The Pennsylvania Public Utility Commission on March 1 voted unanimously to investigate a request by UGI Utilities Inc., a subsidiary of UGI Corporation, to increase the utility’s annual revenues by 10.4 percent and raise electricity bills by 11.8 percent starting later this month. The utility’s proposal, made in January, drew opposition from the state’s Office of Consumer Advocate. The commission is suspending the request for up to seven months to determine whether the proposal is reasonable.

New Mexico Public Service Company Seeks Rate Hike to Recover Losses Tied to Energy Efficiency Program

Public Service Company of New Mexico asked the New Mexico Public Regulation Commission to allow it to boost electric rates to recover the lost fixed costs associated with the lower energy sales from its energy efficiency program using a so-called “Lost Contribution Mechanism.” The utility said that losses tied to the energy efficiency programs totaled about $87 million over the last seven years, with another $11 million in losses through 2020, posing a barrier to the program’s expansion. The state’s Efficient Use of Energy Act requires utilities to cut energy use by eight percent below 2005 levels by 2020. Public Service Company of New Mexico is a subsidiary of PNM Resources.

Tampa Electric to Use Federal Tax Cut Savings to Offset About $100 Million in Storm Restoration Costs

The Florida Public Service Commission authorized Tampa Electric Company, a subsidiary of Emera Inc., to use savings from recently enacted federal tax cuts to pay down $102.5 million in restoration costs incurred from tropical storms and hurricanes in the past three years, so as to avoid a hike in consumer rates, according to the commission’s March 7 order. Last month, the commission accepted a similar plan from Duke Energy to apply the utility’s savings under the tax cuts to pay for $500 million in restoration costs from Hurricanes Irma and Nate.

Avangrid Subsidiary in Maine Faces Probe Following Hundreds of Complaints of Billing Errors

The Maine Public Utilities Commission announced March 1 that it has launched an investigation into Central Maine Power Company’s meters, billing statements and customer communication after the agency received about 380 complaints from ratepayers over possible inflated charges. The commission noted that the utility launched a new billing system in October. The utility joins the ranks of DTE Energy, which faces a probe from Michigan Public Service Commission over errors tied to a malfunction of its new billing system. Central Maine is a unit of Avangrid Networks Inc., which is owned by Iberdrola SA.

Evolving Power Markets

NRG Seeks U.S. Approval to Sell Boston Energy Trading to Mitsubishi Unit as Part of $3 Billion Asset Sale

Boston Energy Trading and Marketing LLC on March 6 asked the Federal Energy Regulatory Commission to approve the sale of its membership interests in NRG Energy Gas & Wind Holdings Inc., a subsidiary of NRG Energy Inc., to Diamond Energy Trading and Marketing LLC, a subsidiary of Mitsubishi Corporation. The applicant seeks commission order by April 20. The proposal is part of NRG’s $3 billion asset sales announced in recent months.

New England Grid Operator Creates New Bilateral Transaction for More Flexible Exchange of Capacity Obligations

The Federal Energy Regulatory Commission on Feb. 28 approved a new capacity bilateral transaction called “annual reconfiguration transaction” for the Independent System Operator of New England Inc., replacing an existing measure used to transfer capacity supply obligations between resources. The new transaction mechanism overcomes zonal requirements by accommodating even or uneven capacity exchanges within the same zone or across constrained zone boundaries while accounting for reliability impacts. The commission also accepted a change to the “materiality threshold,” used to determine whether an existing resource can satisfy its capacity obligation, revising to 10 percent of the obligation or 10 megawatts but at least 2 megawatts, from the previous 20 percent or 40 megawatt limit.

New York Regulator to Review Utilities’ Storm Response in View of Prolonged Outages

New York Governor Andrew Cuomo directed the Department of Public Service to investigate utility preparations and the response to winter storm Riley to study the operational failures during the restoration process, according to a March 6 press release. The review will focus on the Dutchess, Putnam, Sullivan and Westchester counties where over 90 percent of customers remain without power four days after the storm. The storm battered the east with strong winds, coastal flooding, and heavy snow.

Expanding the Grid

AEP’s $4.5-Billion Oklahoma Wind Farm Draws Opposition from GridLiance Over Ratepayer Costs, Lack of Coordination

Transmission owner South Central MCN LLC, a subsidiary of GridLiance Holdco LP, asked the Oklahoma Corporation Commission to reject American Electric Power’s Wind Catcher Energy Connection, citing the high project costs and AEP’s failure to coordinate with it and the regional transmission planner Southwest Power Pool Inc. The 2,000-megawatt wind farm, to be located in western Oklahoma, and associated 360-mile transmission line crossing the state, is scheduled for completion in 2020, pending approval from state and federal regulators.

Rocky Mountain Power Requests More Time for Net Metering Reviews Amid Influx of Applications

Rocky Mountain Power, a division of PacifiCorp and Berkshire Hathaway Inc., requested that the Utah Public Service Commission temporarily waive the processing deadline for more complex and lengthy net metering interconnection applications, according to the commission’s March 6 notice. Last year, the company was temporarily relieved from deadlines due to the large volume of applications received ahead of the Nov. 15 sunset of the net metering program.

Fossil Fuel Actions

Drillers in Oklahoma's Largest Oil, Gas Fields Subject to Tighter Rules to Avert Earthquakes From Fracking

The Oklahoma Corporation Commission issued new regulations designed to reduce the risk of earthquakes from hydraulic fracturing in the state’s most abundant shale formations known as the SCOOP and STACK plays, according to the agency’s Feb. 27 press release. The rules call on drillers to have access to a seismic array that detects earthquakes in real-time, and lower the minimum quake level for operators to pause operations. The commission said that over the past year the number of “felt” earthquakes that may be linked to well completion activity and hydraulic fracturing has increased. The SCOOP and STACK formations hold the largest energy reserves in the state.

West Virginia Legislature Advances Bill Easing Restriction on Securing Oil, Gas Drilling Rights

The West Virginia state legislature pushed forward a measure that would allow oil and gas developers to drill on property with the consent of persons owning 75 percent interest in the land and that imposes deadlines when disputes arise. The bill would also expand the Oil and Gas Conservation Commission’s authority to act in disputes. The bill returns to the House for concurrence on a minor amendment. West Virginia ranks ninth in the U.S. for natural gas production, while its crude oil production has nearly tripled over the past five years, according to the U.S. Energy Information Administration. (HB 4268)

U.S. Energy Department to Research Alternate Uses of Coal as Demand for Fuel Slips to Record Lows

U.S. House lawmaker Fred Upton, a Republican representing Michigan, introduced legislation on March 6 that would require the U.S. Energy Secretary to establish a program to oversee physical security and cybersecurity for pipelines and liquefied natural gas facilities. The rise in cyber attacks against the nation’s infrastructure has raised concern among regulators and industry, who say stronger protections are needed. (H.R. 5175)

U.S. Energy Department Launches New Research to Diversify Use of Coal as Demand for Fuel Slips to Record Lows

The U.S. Energy Department’s Oak Ridge National Laboratory and the National Energy Technology Laboratory entered into an agreement to pursue research on innovative ways to use coal to create high-value products, including as a precursor for products like fibers, nanocarbon catalysts and other materials. The move comes as coal consumption in the U.S. for power generation is on a downward spiral, projected to slip to a record low of 30 percent, according to the U.S. Energy Information Administration.

U.S. Lawmaker Proposes Bill to Revise Coal Tax Credits to Aid Struggling Industry

U.S. House lawmaker Kevin Cramer, a Republican representing North Dakota, introduced legislation on March 5 that would extend the refined coal production tax credit and modify the qualifying advanced coal project credit. Currently, facilities claiming the production tax credit must have been in service by December 2011 and qualify for a credit of $4.375 per ton, adjusted for inflation, for the first 10 years of operation. (H.R. 5159)