The Federal Energy Regulatory Commission on Dec. 29 approved the Mountaineer XPress and Gulf Xpress natural gas pipeline projects proposed by subsidiaries of TransCanada Corporation. Mountaineer Xpress would make upgrades to enable deliveries of up to 2.66 million dekatherms a day from West Virginia, Ohio, and Pennsylvania, to delivery points at Columbia Gas’ TCO Pool. Gulf Xpress would add new compressor stations in Kentucky, Tennessee and Mississippi, allowing deliveries of up to 860,000 dekatherms a day to points along Columbia Gulf’s system. Both projects are scheduled to start in November, according to company websites.
Welcome to the first EnerKnol Pulse of 2018! Here is the latest from the North American energy sector, powered by the EnerKnol Platform.
January 8, 2018
Featured Topics
Fossil Fuels and Pipelines
Renewable Policies and Projects
Rates and Power Markets
Transmission and Reliability
Featured Entities
Alliant
Atmos Energy
Avista Utilities
Columbia Natural Gas of Kentucky
Delta Natural Gas
Dominion Energy
Duke Energy
Duke Energy Kentucky
EDF Renewables
Enbridge
Kentucky Power
Kentucky Utilities
Louisville Gas and Electric
Next Era
Optimum Renewables
Santee Cooper
SCANA
Spectra
Sunoco Pipeline
TransCanada
Top News
TransCanada Wins U.S. Approval for $3.2 Billion Gas Line Projects Linking Appalachian Shale Supplies to U.S. Markets
EDF Lodges Complaint Against Midwest Grid Over Delays Said to Put Billions of U.S. Tax Credits for Wind Farms in Jeopardy
The subsidiary of Électricité de France SA said that the Midcontinent Independent System Operator Inc. is “severely delayed” in completing interconnection studies for proposed wind farms. The setbacks put the projects at risk of failing to begin commercial operation by the end of 2020 and qualify for the federal production tax credit, according to the Jan. 4 complaint.
Dominion, SCANA Announce $14.6 Billion Merger Following South Carolina Nuclear Plant Debacle
Dominion Energy Inc. announced a $7.9 billion all-stock merger with SCANA Corporation and the assumption of its debt, totalling $14.6 billion. The agreement calls for customers of SCANA subsidiary South Carolina Electric & Gas Co. to receive a $1.3 billion cash payment, or about $1,000 for the average residential electric customer, to offset expenses tied to the withdrawal from the $9-billion V.C. Summer nuclear project as well as a 5 percent cut in rates.
Fossil Fuels and Pipelines
Sunoco Ordered to Halt Work on $3-Billion Midwest Natural Gas Liquids Project Amid Charges of ‘Egregious and Willful Violations’
The Pennsylvania Department of Environmental Protection issued an order on Jan. 3 suspending construction activity on the Mariner East 2 pipeline, a project by Energy Transfer Partners LP subsidiary Sunoco Pipeline LP, until the company demonstrates its ability to meet permit conditions. The 350-mile underground pipeline, which is the second phase of the $3 billion Mariner East project, would deliver natural gas liquids from Ohio and West Virginia into Pennsylvania.
U.S. Interior Department Repeals 2015 Hydraulic Fracturing Rule Entangled in Litigation, Citing Burdensome Requirements
The U.S. Interior Department issued a final rule on Dec. 29 repealing its 2015 regulation governing hydraulic fracturing on federal lands citing unjustified administrative burdens and compliance costs. A Wyoming court stayed the rule in 2015 before it took effect for lack of statutory authority and on appeal, the Tenth Circuit U.S. Court of Appeals dismissed the case and set a January 12, 2018, deadline for the rescission.
Trump Administration Moves to Open U.S. Offshore Tracts to Oil, Gas Drilling in Latest Move for 'Energy Dominance'
The U.S. Interior Department is proposing to open more than 90 percent of the outer continental shelf acreage for oil and gas development under its 2019-2024 draft program, in a sharp reversal from current rules that put 94 percent of acreage off limits, according to the department’s Jan. 4 press release. The proposal would open the majority of the Eastern Gulf of Mexico region to leasing for the first time since 1988, and also include leases in the Pacific and Atlantic regions where there have been no sales since 1984 and 1983, respectively. President Trump has rolled back a suite of rules on the sector in his bid for the U.S. to become a major player in the global energy marketplace.
Enbridge's Federal Permit to Operate Controversial Sabal Trail Pipeline Contested by Environmental Coalition
The WWALS Watershed Coalition Inc. contested the Federal Energy Regulatory Commission’s environmental assessment of the Southeast Markets project, specifically the 515-mile Sabal Trail natural gas pipeline, a joint venture of Enbridge Inc., NextEra Energy Inc. and Duke Energy Corp. which provides natural gas for plants operated by Florida Power and Light and Duke Energy of Florida. The coalition claims a lack of adequate accounting of greenhouse gases, according to a Dec. 29 motion.
Crude Oil Prices Hit Five-Year High in 2017 as Strong Global Demand, Supply Cuts Outpace U.S. Production Boom: U.S. EIA
Crude oil prices last year climbed to $60 a barrel, the highest since 2013, as a U.S.-led jump in global output was overtaken by strong demand as well as production curtailments by members of the Organization of the Petroleum Exporting Countries, according to a Jan. 3 report from the U.S. Energy Information Administration.
Sierra Club Seeks Additional Review of Enbridge Line 3 Oil Pipeline, Finds Minnesota Commission Missed 'Significant Defects'
Sierra Club requested that the Minnesota Public Utilities Commission undertake a supplemental review of Enbridge Inc.’s proposed Line 3 Replacement Project, arguing that additional information is needed to assess potential environmental effects from the pipeline, according to the group’s Jan. 2 petition. On Dec. 14 the agency found that the final environmental review was inadequate for the 337-mile project, which extends from the North Dakota–Minnesota border to the Minnesota–Wisconsin border.
Renewable Policies and Projects
Iowa Board Orders Alliant to Boost Wind Farm Payouts by 30 Percent, Extends Contracts to 20-Years
The Iowa Utilities Board ruled that Interstate Power and Light Co., a subsidiary of Alliant Energy, is required to enter into a power purchase agreement with three 8 megawatt wind farms owned by Optimum Renewables LLC for 20 years, finding that the original term of five years wasn’t sufficient to attract investments. The agency boosted payouts for the wind farms, to be located near Mason City, Manchester, and Centerville, to $31.32 per megawatt hour, up from $23.59 per megawatt.
New York Governor Unveils Ambitious Plan to Expand Renewables, Carbon Trading Market in Annual Address
New York Gov. Andrew Cuomo issued a proposal in his 2018 State of the State address to reach 1,500 megawatts of energy storage by 2025 with $200 million in investments, 800 megawatts of offshore wind by 2019 through procurement rounds, as well as an expansion of the carbon emissions trading market, the Regional Greenhouse Gas Initiative. The targets come as New York seeks to source half the state’s power needs from renewable generation by 2030.
Rates and Power Markets
Idaho Commission Cuts Avista's Rate Hike by 29 Percent, Prohibits Further Increases Until 2020
The Idaho Public Utilities Commission approved a plan by Avista Utilities Inc., a subsidiary of Avista Corporation, to hike electric and natural gas rates for 2018 by an average of 5.6 percent and 2.3 percent, respectively, to replace and upgrade infrastructure, versus the proposal for 7.9 percent and 5.7 percent, according to the agency’s Jan. 2 press release. The settlement calls for reductions or delays in several proposed projects and includes a “stay-out provision” that bans the utility from filing a rate increase request prior to 2020.
Connecticut Regulator Eyes Adjustments to Customer Rates Following Sweeping U.S. Tax Cuts
The Connecticut Public Utilities Regulatory Authority opened a case to consider adjustments to customer rates to account for reduced tax obligations for utilities under the recently enacted Federal Tax Cuts and Jobs Act, according to the agency’s Jan. 3 press release. Utilities customarily pass taxes onto customers’ power bills.
Kentucky Commission Orders Utilities to Pass on Savings from Historic Federal Tax Cuts to Consumers
The Kentucky Public Service Commission ordered the state’s investor-owned utilities to track savings from the recently enacted federal tax law and pass them on in the form of lower electric, water and natural gas rates. The Trump administration passed sweeping legislation that slashes the corporate income tax to 21 percent, from 35 percent, lowering the tax burden on investor-owned utilities.
California Commission Proposes Resource Planning Framework, Rules Out Early Procurement to Capture Federal Tax Credits Citing Renewable Cost Declines
The California Public Utility Commission proposes to adopt a two-year planning cycle to set emission targets and consider integrated resource plans, according to a Dec. 28 proposed decision by Commissioner Liane Randolph. The draft decision proposes a “steady approach” for renewable procurement over a 2030 planning horizon rather than requiring early activities to utilize federal tax credits, citing declining renewable costs regardless of the tax benefits.
Federal Energy Regulator Approves Revisions to Improve Grid Operators' Coordination of Pseudo-Tied Resources Amid Booming Growth
The Federal Energy Regulatory Commission on Dec. 29 accepted revisions to the operating agreement of the Midcontinent Independent System Operator and PJM Interconnection LLC to improve coordination of resources that are pseudo-tied, a transaction involving real-time transfer of control from the balancing authority in which the resource is located to another in a different location. The grid operators reported that pseudo-tied volumes from the Midcontinent operator’s region into PJM increased from about 155 megawatts to 2,160 megawatts from June 2015 to June 2017. The commission accepted PJM’s proposal in 2015 that an external generation resource must be pseudo-tied with PJM to qualify as a capacity performance resource.
Transmission and Reliability
California Grid 'Reluctantly' Assumes Oversight of System Reliability to Avert Price Hikes
The California Independent System Operator Corporation announced it will develop its own reliability services by the spring of 2019. The move comes after Peak Reliability, the current coordinator, is expected to raise prices following the departure of Mountain West Transmission Group and after Peak’s partnership with PJM Interconnection LLC. As reliability coordinator, the California grid operator is required to comply with federal and regional reliability standards, oversee security risks and restore service after major outages.
Texas Grid Operator Hits Record Winter Peak Electricity Demand, Reports Sufficient Supplies for System Performance
The Electric Reliability Commission of Texas Inc. set a winter peak demand record of 62,855 megawatts on Jan. 6, breaking the previous high of 59,650 megawatts set on January 6, 2017, according to the grid operator’s Jan. 4 press release. The grid operator reported that adequate generation and transmission resources were available to keep up with the demand.
Puerto Rico Commission Proposes Microgrid Rules for Quicker Power Restoration Following Prolonged Hurricane Outages
The Puerto Rico Energy Commission on Jan. 4 proposed rules aimed at encouraging the development of new microgrids. According to the agency, microgrids, or decentralized power systems, are needed to avert long power outages like the ones caused by Hurricanes Irma and Maria, as well as to integrate more renewable electricity supplies.