Dozens of states want utilities to lower rates for electricity and natural gas services after the Trump administration signed into law legislation slashing the corporate income tax rate to 21 percent from 35 percent at the start of the year. Sixteen states and consumer advocates wrote to the Federal Energy Regulatory Commission on Jan. 9 requesting prompt action for the cuts to be extended to customers, while 20 states are mulling rate changes tied to the new tax law.
Welcome to EnerKnol Pulse, a roundup of the latest and most important energy sector news for the past week, powered by the EnerKnol platform.
January 16, 2018
Featured Topics
Fossil Fuels
Renewable Policies and Projects
Rates and Power Markets
Transmission and Reliability
Emissions and Climate Change
Featured Entities
AEP
Amazon
Avista
Dayton Power and Light
EDF Renewables
Eversource
MISO
Otter Tail Power
Peoples Gas Light and Coke
PG&E
PJM
Terra Rocky Mountain
Top News
More Than Half of U.S. States Seek to Use Federal Tax Cuts to Lower Energy Bills for Consumers
Federal Energy Regulator Rejects Subsidy Plan for Coal, Nuclear Plants in Rebuke of Trump Administration Proposal
Members of the Federal Energy Regulatory Commission were unanimous in finding no basis to adopt an Energy Department proposal to award payouts for coal power plants and nuclear reactors to compensate the generators for the resiliency they add to the nation’s electric system. FERC, however, directed the regional grid operators to submit information to evaluate the resilience of the bulk power system in a new proceeding. Energy Secretary Rick Perry had urged speedy approval of the subsidies, citing the strain on reliability brought by the retirement of the power plants.
Pacific Gas and Electric Cleared to Shutter California's Last Nuclear Plant in 2025 as Losses from Reactor Mount
The California Public Utilities Commission on Jan. 11 approved Pacific Gas and Electric Company’s request to close the Diablo Canyon nuclear plant in 2025 after its operating licenses expire, as the plant has become uneconomical to operate. The company is authorized to recover $241.2 million for closing the plant and other expenses through higher customer rates. A request for $85 million to mitigate the impact to communities was denied.
Fossil Fuels
Ohio Consumer Watchdog Says Its Unfairly Barred From Having Its Day in Court Against DP&L's Coal Plant Subsidies
The Office of the Ohio Consumers’ Counsel lodged its second appeal against the Public Utilities Commission of Ohio’s approval of subsidies intended to prop up struggling coal plants owned by Dayton Power and Light Company, a subsidiary of AES Corporation. The ratepayer advocate said that the commission has failed to issue an order that can be appealed to the Ohio Supreme Court, allowing it to ward off legal action possibly for years while consumer bills are unfairly inflated.
Terra Rocky Mountain Seeks to Double Oil, Gas Wells in Colorado Drilling Proposal
Terra Rocky Mountain LLC, a part of Terra Energy Partners, seeks to add up to 63 new wells in the state, which are estimated to produce nearly 120 billion cubic feet of natural gas over 40 years, according to a Jan. 9 announcement by the Bureau of Land Management. The project, to be developed over two to three years, is part of the Balzac Gulch Master Development Plan, which was approved in Sep. 2017.
Illinois State Lawmaker Floats Bill Ordering Utilities to Buy 'Clean Coal' Power in What Would Be a Boost to the Beleaguered Technology
Illinois House Republican lawmaker Reginald Phillips on Jan. 10 introduced a bill to promote “clean coal” power generation to help the state reach a goal of procuring 25 percent of electricity from those facilities by January 1, 2025. The bill would require utilities to include clean coal facilities in annual procurement plans and would establish a competitive process for buying “clean coal” power. Expensive “clean coal” technology, including carbon capture and sequestration, have lost favor amid the rise of cheap natural gas-power plants and renewables. (HB 4236)
Peoples Energy’s Illinois Gas System Upgrades Face Stronger Oversight Following 'Mismanagement’
The Illinois Commerce Commission approved a stronger oversight plan for a system modernization program by Peoples Gas Light and Coke Company, a subsidiary of Peoples Energy LLC, that seeks to upgrade aging natural gas infrastructure in Chicago, according to the commission’s Jan. 10 press release. The commission also announced a forthcoming agreement in the company’s 2014 program cost recovery case that would reduce recovery by about $5.4 million and result in refunds to customers to account for cost overruns, delays, and improper management.
Renewable Policies and Projects
New Jersey Bill Accelerates Solar Goal to Capitalize on Federal Tax Incentive, Boost Job Growth
The New Jersey legislature passed a bill on Jan. 8 that would increase the state’s solar renewable energy standard to 5.2 percent of electricity sales in 2022 from the current target of 4.1 percent by 2028 to match the federal investment tax. The measure also initiates a study to examine improvements and potential expansion of the standard through 2031. (S 2276)
Eversource Cleared to Impose Controversial New Charges on Customers Generating Solar Power
The Massachusetts Department of Public Utilities on Jan. 5 approved a plan by Eversource Energy to impose a demand charge based on maximum monthly usage for residential net-metered customers who install solar panels on or after Dec. 31. The demand charges, part of Eversource’s so-called “monthly minimum reliability contribution,” are intended to help defray the costs of maintaining the distribution system and are being imposed with the proliferation of solar generation in the state. The utility’s plan drew opposition from a number of groups including the state attorney general who said the new rate risks unfairly burdening customers.
Otter Tail Power Cleared to Recover Costs for 150-Megawatt North Dakota Wind Farm
The Minnesota Public Utilities Commission on Jan. 10 approved a request by Otter Tail Power Company, a subsidiary of Otter Tail Corporation, to recoup investments in the Merricourt wind farm through its Renewable Resource Cost Recovery Rider and to count the project toward its state renewable energy goals. Otter Power will take over the facility, located in McIntosh and Dickey Counties, upon completion by developer EDF Renewable Energy Inc., a subsidiary of EDF Energies Nouvelles.
New York Commission Proposes Grid Connection Standards for Small Renewables, Electric Storage as State Undergoes Energy Transition
The New York Public Service Commission is seeking comments on a proposed framework to interconnect new distributed generators and energy storage systems up to 5 megawatts, in a new proceeding initiated on Jan 10. The proposal is part of the commission’s value of distributed energy resources proceeding that established the first compensation values for storage plus distributed generation in March 2017.
Rates and Power Markets
Amazon Wins Preferential Rates for Ohio Data Centers in AEP Agreement as State Looks to Aid Economy
The Public Utilities Commission of Ohio approved an agreement between Amazon subsidiary Vadata Inc. and American Electric Power Company Inc.’s Ohio subsidiary to provide a discount for the e-commerce giant’s data centers operating in the AEP Ohio service territory over the next 10 years, according to a Jan. 10 press release. In granting the arrangement, the agency cited the benefits the facilities will bring to the state’s economy.
New England Grid Operator Proposes Capacity Market Revamp to Address Threat from Subsidized Generation
ISO New England Inc. proposed a two-stage process for its capacity market to accommodate the entry of subsidized resources over time and maintain competitive pricing, according to a Jan. 8 filing with the Federal Energy Regulatory Commission. The proposal includes financial incentives for existing, high-cost capacity resources to transfer their capacity obligations to subsidized new resources, and then permanently exit the capacity market. The grid operator seeks approval by March 9 to begin its year-long preparation for the thirteenth auction. Among the states buying up supplies include Massachusetts, which is procuring up to 1,200 megawatts of “clean energy.”
Avista Trims Natural Gas Rates 6.4 Percent in Second Cut Since November to Reflect Falling Fuel Costs
Avista Corporation subsidiary Avista Utilities Inc. requested approval to cut rates from the Idaho Public Utilities Commission, the second since November when it lowered prices 2.4 percent. The costs are adjusted annually to reflect the cost of buying gas on the wholesale market, which account for about 40 percent of a customers’ natural gas bill. If approved a residential customer using 49 therms would see their bill fall to $39.91 from $42.64.
Midcontinent Grid Operator’s Energy Offer Cap Waived Temporarily to Address Winter Price Spikes
The Midcontinent Independent System Operator Inc., manager of the grid spanning from Minnesota to Louisiana, received FERC approval to waive the $1,000 per megawatt-hour offer price caps for the day-ahead and real-time energy markets from December 2017 through April 2018 to accommodate winter price spikes that could cause generators’ marginal costs to exceed the offer cap.
Transmission and Reliability
Mid-Atlantic Grid Manager Assigns Costs for $350 Million in Power Line Projects Aimed at Relieving Transmission Bottlenecks
PJM Interconnection LLC designated the source of funding for 45 new transmission upgrades, including projects aimed at reducing transmission line pinch points along the system operators’ border with the Midcontinent Independent System Operator Inc. PJM requests approval of its proposal on April 5. Since 2000, the PJM Board has authorized more than $35 billion in transmission investments.
Florida Bill Would Furnish Hospitals, Airports, Shelters with Solar-Powered Batteries for the Next Hurricane
Florida state House lawmaker Holly Raschein, a Republican, introduced legislation on Jan. 2 that would allocate $10 million to fund a pilot program to demonstrate the effectiveness of solar energy storage systems in providing backup energy for health facilities, assisted living communities, ports and police stations during outages caused by natural disasters. Lawmakers in hurricane-battered Puerto Rico proposed similar legislation to expand renewable generation to strengthen the resilience of the power grid. (HB 1133)
PJM Finds Major Cold Snap No Match for Grid After Adopting Lessons from 2014 Polar Vortex
PJM Interconnection LLC said that the electric grid it manages was ready to handle the extreme arctic cold blasts in December and January thanks to a series of measures taken after the 2013-2014 winter polar vortex that caused record outages. PJM and its generator fleet improved equipment performance, tested resources, held emergency drills and worked on cold weather preparedness, according to a Jan. 9 press release. The grid operator reported three of the top 10 highest peaks in winter electricity demand from Dec. 27 through Jan. 7.
U.S. Utility-Scale Battery Installations Surpass 700 Megawatts Amid Cost Declines, Growing Revenue: EIA
The economics of energy storage have brightened thanks to lower costs, and the availability of the batteries to generate revenue from various services, including balancing demand on the grid, smoothing renewable generation, and deferring infrastructure investments, according to a Jan. 8 report from the U.S. Energy Information Administration. Most of the 700 megawatts of capacity was installed in the last three years, the agency reports.
Emissions and Climate Change
Minnesota Hikes Price of Carbon Pollution 10-Fold Following Push by Environmental Groups
The Minnesota Public Utilities Commission set the carbon costs utilities must use in their resource planning to a range of $9.05 to $42.46 per ton in 2020, from $0.44 to $4.53 per ton previously. The decision follows a February 2014 investigation into the state’s pollution prices that was prompted by a coalition of environmental groups, and stands in contrast to steps by the Trump administration to abandon the metric as a foundation for new rules at the U.S. Environmental Protection Agency.
New York Senator Proposes 'Marshal Plan' to Completely Phase Out Fossil Fuel Use in State, Finding Current Efforts Lagging
New York State Senator Todd Kaminsky, a Democrat, proposed a bill to end the use of fossil fuels in electric generation, transportation, heating systems and manufacturing through wide scale deployment of renewables. According to the Intergovernmental Panel on Climate Change industrialized countries must slash greenhouse gas emissions by at least 80 percent below 1990 levels by mid-century to avert the worst effects of climate change. For its part, New York currently has a plan to turn to renewable or emission-free sources for half its energy needs by 2030. (S 7253)
Washington State Senators Propose Carbon Pollution Tax in Bid to Cut Power Sector Emissions
Washington State Senate Democrats Kevin Ranker, Jeannie Darneille, and Manka Dhingra proposed a bill on Jan. 5 that would establish a carbon pollution tax on fossil fuel-powered electricity generation. The draft legislation would set a tax rate of $15 per metric ton starting July 2019 and increasing $2.50 per year until reaching $30 per metric ton. (SB 6096)