Good afternoon and welcome to another EnerKnol Pulse, the weekly newsletter that brings you important energy news of the past week, all accessed and tracked using the EnerKnol Platform. President Trump elevates Commissioner Neil Chatterjee to chair the Federal Energy Regulatory Commission; Oregon's Democratic governor bans offshore oil development in response to the Trump administration's drilling push; New York's attorney general targets ExxonMobil, accusing it of misleading investors over the impact of climate change.

October 29, 2018


Featured Topics

Climate and Green Energy

Grid and Power Markets

Fuels and Pipelines


Featured Entities

Ameren

Commonwealth Edison

Dominion

DTE Gas

EDF Renewables

Enbridge

EQT Midstream

Exelon

Exxon Mobil

NV Energy

Top News

Trump Taps Chatterjee to Take the Helm at FERC, Replacing McIntyre

President Donald Trump selected Commissioner Neil Chatterjee, a Republican appointee, to be the chairman of the Federal Energy Regulatory Commission, replacing fellow Republican Kevin McIntyre, according to an Oct. 24 announcement. Chatterjee, a former energy adviser for Republican Senate Majority Leader Mitch McConnell, was acting chairman of FERC last year before McIntyre’s confirmation, and during that critical time he oversaw FERC’s initial response to the U.S. Department of Energy’s controversial proposal to prop up coal and nuclear plants, filed in Sept. 2017. Despite supporting a short term subsidy plan throughout the heated debate, he eventually voted against the DOE’s proposal, with the rest of the commission. The move comes after the ailing health of former FERC Chairman McIntyre caused him to miss the commission’s regular monthly meetings and eventually step down, although he plans to remain as a commissioner at FERC, allowing Republicans to preserve partisan parity until nominee Bernard McNamee is confirmed by the Senate. The federal regulator is currently juggling a major investigation into grid resilience, a capacity market overhaul in PJM Interconnection LLC and ISO-New England Inc. and the implementation of the Public Utility Regulatory Policies Act.

Oregon Governor Issues Executive Order to Ban Offshore Oil Development Citing Threat to Coastal Economy

Governor Kate Brown, a Democrat, issued an executive order on Oct. 24 directing state agencies to safeguard Oregon’s coastal economy by preventing the construction of infrastructure associated with oil and gas drilling. The measure comes in response to the Trump administration’s proposal to encourage offshore drilling in federal waters off the Oregon coast. Brown sought an exemption for Oregon from the administration’s proposal, similar to Florida, but to no avail. Under state law, oil and gas leasing is prohibited in Oregon’s Territorial Sea up to three miles from the coastline until 2020, but does not block drilling farther in the federal waters. The order seeks to protect the state’s coast which supports $2 billion coastal tourism and recreational industry and $320 million fishery. California and New Jersey have also enacted similar measures in response to the administration’s efforts.

New York Attorney General Sues ExxonMobil Over Climate Change Misinformation

Exxon Mobil Corp. was the target of a lawsuit by New York’s top legal representative which alleges that oil and gas giant deceived investors over its management of the risks posed to the business by climate change regulation, according to an Oct. 24 filing. The suit further alleges that Exxon assured investors it had adequately evaluated the impact of climate regulations but failed to use these figures in its internal planning or cost assumptions. The attorney general also accuses the company of misinforming investors about the likelihood of its oil and gas reserves and other long-term assets becoming too costly to develop or operate in a low carbon future ushered by regulation. Exxon has stated that it “looks forward to refuting these claims as soon as possible”. Oil companies have faced increased pressure from cities and states to step up their efforts on climate change mitigation and adaptation.

Climate and Green Energy

Dominion Solicits Wind, Solar Contracts to Meet 3-Gigawatt Renewable Goal in Virginia

Dominion Energy Inc. on Oct. 24 announced a request for proposals for up to 500 megawatts of wind and solar in Virginia under a plan to add 3 gigawatts of renewables in the state by 2022. The company said it will issue annual RFPs to meet the goal. The solicitation is open to onshore projects in Virginia, with capacities of at least 5 megawatts and must be online in 2020. The company seeks bids for energy, capacity, and environmental attributes such as renewable energy certificates, or power purchase contracts. Project developers must submit a notice of intent to bid and confidentiality agreements by Nov. 2. Final asset and power purchase proposals are due by Dec. 13, and March 14, 2019, respectively. The plan stems from legislation enacted in July that paved the way for widespread adoption of renewables.

NV Energy Seeks to Add 350 Megawatts of Renewables, Storage in Nevada

NV Energy Inc. issued a request for proposals for projects of at least 20 megawatts to add 350 megawatts or more renewable energy capacity in Nevada, according to the company’s Oct. 16 press release. The solicitation is open to solar, geothermal, wind, biomass and biogas technologies that comply with the state’s renewable portfolio standards. The company will consider supplemental battery systems that qualify for the federal investment tax credit and are associated with proposed renewable energy resource. Projects must come online by the end of 2023. Bids are due by Dec. 10 and successful projects would be subject to approval by the public utilities commission.The solicitation follows an announcement in May that NV Energy has contracted for 1,001 megawatts of new solar capacity. NV Energy is a subsidiary of Berkshire Hathaway Energy Company.

Missouri Regulators Clears Ameren to Build 400-Megawatt Wind Farm, Largest in State

The Missouri Public Service Commission on Oct. 24 approved a settlement authorizing Ameren Missouri, a subsidiary of Ameren Corporation, to construct and operate its proposed High Prairie Wind Farm in Schuyler and Adair counties. Under the settlement, TG High Prairie LLC, a special purpose entity tasked with building the facility, would merge into Ameren Missouri after completion of the wind farm. The commission granted Ameren’s request to establish a Renewable Energy Standard Cost Recovery Mechanism. Ameren said the project will generate over half of the non-solar renewable energy credits required for compliance. The state’s energy targets call for 15 percent of retail sales to come from renewable sources by 2021. The project is expected to be completed by 2020.

Montana Regulator Commends EPA Proposal to Replace Obama-Era Generator Emission Rules

The Montana Public Service Commission voiced support for the U.S. Environmental Protection Agency’s “Affordable Clean Energy Rule,” a proposal to replace an Obama-era measure to regulate carbon emissions from power plants, according to an Oct. 26 press release. The commission said it “takes a keen interest” in the proposed rule in view of the state’s coal-fired power generation, and noted that the plan addresses the concerns it had about the EPA’s lack of jurisdiction. The agency commended the recognition of state authority in the new proposal in determining performance standards and implementing the rule. The new plan, unveiled in August, is expected to achieve higher emissions reductions of up to 34 percent by 2030 relative to 2005 levels and lower annual compliance costs by $400 million compared to the prior standards, according to the EPA. Obama’s signature Clean Power Plan established the first federal emission guidelines for power plants, setting a target for each state, with a goal of reducing emissions by 32 percent below 2005 levels by 2030. The U.S. Supreme Court halted the rule in 2016 pending review in the U.S. Court of Appeals for the District of Columbia.

Ameren to Buy 157 Megawatt Wind Facility in Missouri as Part of $1 Billion Commitment to Expand Renewables

Ameren Missouri, a subsidiary of Ameren Corp., announced an agreement to buy a 157-MW wind generation facility to be built in northern Missouri, according to the company’s Oct. 22 press release. The proposed Brickyard Hill wind project, to be developed by EDF Renewable Energy Inc., is expected to come online in 2020. The acquisition is subject to approval from the state public service commission and transmission interconnection agreement from the Midwest grid operator. The company said the measure marks a major step in implanting its integrated resource plan. Ameren plans to invest about $1 billion in wind projects to achieve a target of 700 megawatts by 2020. The company also plans to add 100 megawatts of capacity over the next decade towards a 50-megawatt goal by 2025. EDF Renewable Energy Inc. is a subsidiary of EDF Energies Nouvelles S.A.

Grid and Power Markets

Connecticut Regulator to Strengthen Retail Electric Billing Rules to Ensure Transparency

The Connecticut Public Utilities Regulatory Authority proposed to update rules that require licensed electric suppliers to provide timely and accurate information to distribution companies for inclusion on residential customer bills, according to an Oct. 15 draft decision. The proposed update would require distribution companies to reject enrollments that lack supply summary information and place them on standard service if rejections are not addressed in a timely fashion. Suppliers would have to submit the next cycle rate 62 days before the period for which the rates apply and specify whether a contract is fixed or variable rate. They would have to update existing information with the utility and also bear the costs incurred to implement the changes. The agency proposes a detailed monthly reporting to streamline enforcement. The agency said that suppliers failed to comply with regulations enacted in 2015 that aimed to ensure transparency for retail market customers by requiring the reporting of specific details including service rate, term, cancellation fee, and any rate change in the next billing cycle.

ComEd Seeks Approval of 'Price to Compare' Bill Message to Increase Visibility for Illinois Customers

Commonwealth Edison Company proposed that residential and commercial monthly bills display the “price to compare” for accounts of 15,000 kilowatt-hour or less of annual usage, according to an Oct. 15 filing. In July, the commission asked regulated utilities to clearly display the message so that customers can easily find and understand their current electric cost as they consider switching to an alternative retail supplier. The directive came in response to the annual report on the current state of the retail electric choice market issued by the commission’s office of retail market development. The commission said that the number of customers served by alternative suppliers dropped by about six percent since last year, as their average price of supply has increased. This year customers enrolled with alternative suppliers paid $195.3 million, or 24 percent, more than the utility’s price-to-compare charge in 2017. To start including the message on bills starting in December, the company seeks a declaratory ruling, with a final order by Dec. 4, finding that the proposed message is “legitimate consumer education effort” authorized by the commission. Commonwealth Edison is a subsidiary of Exelon Corporation.

U.S. Energy Department Engages Private Sector in Cyber-Attack Exercises to Strengthen Energy Sector Preparedness

The U.S. Energy Department is conducting exercises with the private sector to enhance the energy industry’s ability to withstand cyber attacks in keeping with the National Cybersecurity Awareness Month dedicated to protecting critical infrastructure, according to an Oct. 26 press release. The agency’s Office of Cybersecurity, Energy Security, and Emergency Response, launched in February, engaged energy trade associations, investor-owned utilities, and municipalities in a tabletop exercise under the first phase of the “Liberty Eclipse 2018,” examining a national cyber incident affecting power entities and oil and gas resources. The second technical phase will be held on Plum Island, New York, from Nov. 1 through 7 in collaboration with the Defense Advanced Research Projects Agency to assess research technologies for black start recovery of the grid in the event of a cyber attack.

DTE Gas to Refund $24.9 Million to Michigan Customers in Second Round of Federal Tax Cut Adjustments

The Michigan Public Service Commission on Oct. 24 approved DTE Gas Co.’s second round of federal tax cut refunds that will be reflected on customer bills from January 2019 through June 2019, resulting in a $2.21 cut in monthly residential bills. The first round, called Credit A, was approved in May, lowering monthly bills by $2.12 starting July. The commission established a three-step process to address the short- and long-term impacts of the federal tax law, which slashed the corporate income tax rate to 21 percent from 35 percent effective Jan. 1. The second round or Credit B calculations determine refunds from Jan. 1 until the date when the Credit A was reflected in customer bills, while the third adjustment quantifies the impact on customer bills of long-term items that have not been considered in the prior steps. So far, the commission has ordered $32.6 million in Credit B refunds, in addition to $379.5 million in Credit A rate cuts for utility customers. DTE Gas is a subsidiary of DTE Energy Company.

Fossil Fuels and Pipelines

Minnesota Regulators Formally Approve Controversial Line 3 Oil Pipeline Project

The Minnesota Public Utilities Commission on October 26 issued an order approving Enbridge Inc.’s proposed $7-Billion Line 3 replacement project, following a favorable vote in June. The formal ruling, which comes after much deliberation over replacing a 1960s-era line versus limiting environmental risks, opens the door for appealing the decision. Environmental groups like Sierra Club and local Native American tribes have strongly opposed the project arguing it risks spills in the Mississippi River headwaters region and would increase the flow of tar sands crude oil from Canada to U.S. refineries. The Line 3 project is designed to fully replace 1,031 miles of pipeline between Hardisty, Alberta, and Superior, Wisconsin.

Construction of $4.6-Billion Mountain Valley Natural Gas Pipeline Halted as More Permits are Revoked

The U.S. Army Corps of Engineers on Oct. 19 suspended water crossing authorizations in two counties of West Virginia for the Mountain Valley natural gas pipeline. The Corps stated that because more than a thousand water crossing verifications are currently suspended along the majority of the 303-mile pipeline route in that area, it considers it appropriate to also suspend the Pittsburgh district crossings.The decision comes after earlier this month the U.S. Court of Appeals for the Fourth Circuit ordered another halt to construction activity on all portions of the Mountain Valley natural gas pipeline ruling that the Army Corps of Engineers had instituted inadequate requirements for how the pipeline should cross streams in West Virginia, just a few weeks after some sections had resumed construction. The troubled pipeline would supply up to two million dekatherms per day of natural gas to markets in the Mid- and South Atlantic regions. The $4.6-billion project is a joint venture of EQT Midstream Partners LP, NextEra US Gas Assets LLC, Con Edison Transmission Inc., WGL Midstream, and RGC Midstream LLC.

Trump Administration Approves First Oil Drilling Project in Alaska Federal Waters

The U.S. Interior Department announced a conditional permit for Hilcorp Alaska LLC’s Liberty Project, the first oil and gas production facility in federal waters off Alaska, according to an Oct. 24 press release. The company proposes to construct a nine-acre artificial gravel island in the Beaufort Sea about 20 miles east of Prudhoe Bay and five miles off the coast, similar to four producing islands that currently operate in the state waters. The agency said the project will be subject to stringent conditions including restrictions to drilling which may occur only during periods of solid ice conditions, as well as seasonal restrictions on drilling and vessel traffic to prevent disturbance to subsistence whaling activities. The approval is subject to receiving permits from other state and federal agencies. The move is part of the Trump administration’s aggressive push for oil and gas development under its energy dominance agenda. Hilcorp Alaska LLC is a subsidiary of Hilcorp Energy Company.