Smarter, faster. That's the goal of the EnerKnol Pulse, through dozens of headlines powered by the Platform. This week's edition features a blow to the 'America First' energy strategy, updates to billion-dollar energy projects and moves to curb climate change.

March 5, 2018


Featured Topics

Expanding Renewables

Fighting Climate Change

Markets and Ratemaking

Modernizing the Grid

Fossil Fuel Actions


Featured Entities

AEM Alliance

Ameren

American Municipal Power

Andeavor

Appalachian Power

Commonwealth Edison

Convergent E&P

Direct Energy

Dominion

Enbridge

Energy Transfer Partners

FirstEnergy

Great Plains Energy

HSE Hydro NH AC

Mid-America Pipeline

National Grid

Old Dominion Electric C.

PSNH

Savage

Southwestern Electric Power

Stephentown Spindle

Vancouver Energy

Westar Energy

Yankee Gas Services

Top News

U.S. Court Lifts Trump Administration's Freeze on Drilling Rules in Blow to Rollback Effort

The U.S. District Court for the Northern District of California ordered the U.S. Interior Department to place into effect an Obama-era pollution rule aimed at reducing methane emissions released during oil and natural gas drilling. The judge found that the Trump administration’s reasoning for suspending the regulations was “untethered to evidence,” noting the harm the emissions of methane, a potent greenhouse gas, cause to public health and the environment. The ruling is a win for plaintiffs, including the states of California and New Mexico, while deal a setback for the Trump administration’s regulatory rollback efforts. The case is California v. U.S. Bureau of Land Management. (17-cv-07186-WHO)

Great Plains, Westar Win U.S. Approval for $15-Billion Merger

The Federal Energy Regulatory Commission on Feb. 28 approved a transaction authorizing Great Plains Energy Inc. and Westar Energy Inc. to merge into a new holding company. After Kansas regulators denied the original proposal last year, the companies revised the transaction as a “merger of equals,” involving no transaction debt and no cash exchange. The stock-for-stock merger would result in Westar shareholders owning about 53 percent of the company and Great Plains shareholders holding the rest. The merger, subject to approval by Kansas and Missouri regulators, is expected to close in the second quarter of this year. The companies said the merger would result in one of the largest renewable energy portfolios, with emissions-free electricity accounting for about half of sales.

Virginia Legislature Sends Bills to Governor That Would Cut Rates, Reform Utility Oversight, Boost Renewables

The Virginia legislature on March 1 approved legislation, known as the Grid Transformation and Security Act, which would lift a freeze on rate reviews intended to help utilities cope with expensive power plant emission rules that have since been repealed under the Trump administration. The legislation would require Dominion Energy to provide credits for customers said to be overcharged during the suspension as well as require rate cuts to reflect recently enacted federal tax reforms. It would boost renewables, energy efficiency, and grid upgrades, including allowing increases in utility solar and wind installations to 5,000 megawatts from 50 megawatts. It would also reform the oversight process for electric utility rates, putting in place three-year reviews of electric utility companies starting in 2021. Governor Ralph Northam, a Democrat, is expected to sign the bill. (SB 966)

Expanding Renewables

New Jersey Board Unveils First Steps for State Goal to Buy 1,100 Megawatts of Offshore Wind

The New Jersey Board of Public Utilities announced it approved an order to implement the state’s delayed offshore wind program, which has gained momentum under newly installed Democratic Governor Phil Murphy. The board said it’s drawing up a plan to ensure the solicitation for the capacity is competitive and provides the best value for New Jersey ratepayers. The agency will also set minimum requirements for the solicitation and start a rulemaking process for the funding of offshore wind renewable certificates, according to a Feb. 28 press release. The governor seeks to put the state on a path to securing 3.5 gigawatts of offshore wind capacity by 2030.

U.S. Energy Department Wants More Hydropower to Keep the Lights On

The U.S. Energy Department announced that it’s seeking information on how to use the full potential of the nation’s hydropower fleet to improve the resiliency and reliability of the electric grid. The department said it intends to use comments and feedback it gathers to find ways to lower system costs, bring insights to research and development investments, and optimize the use of hydroelectric generation. Hydropower provided 7.4 percent of utility-scale generation last year, according to the U.S. Energy Information Administration, making it the largest source of renewable electricity in the nation. Responses to the information request are due by April 6.

Eversource Wins U.S. Approval to Sell Nine Hydropower Facilities as Utility Continues to Advance Restructuring Process

The Federal Energy Regulatory Commission on Feb. 28 authorized a transaction allowing Public Service Company of New Hampshire, a subsidiary of Eversource Energy, to sell nine hydroelectric generating facilities with a combined capacity of 63.1 megawatts to HSE Hydro NH AC LLC, a subsidiary of Hull Street Energy LLC. The output from the facilities will be sold into the New England wholesale market at market-based rates. Eversources completed the sale of its New Hampshire fossil fuel powered generation facilities last month. The sale of Eversource’s power generation facilities is part of a comprehensive restructuring and rate stabilization agreement entered into in 2015.

Washington State Energy Bill Would Eliminate Coal, Natural Gas Plants by 2045, Shifting to Hydropower and Renewables

Washington State House Democrats introduced legislation on Feb. 22 that would put utilities on a path to cutting their use of fossil-fuel electric generation, with a goal to eliminate all such power by 2045. Utilities that exceed the targets would incur charges ranging from $50 per megawatt-hour to $100 per megawatt-hour from 2030 through 2045. The bill aims to build on the state’s foundation of hydroelectric generation, while also relying on energy conservation and renewables. (HB 2997)

Fighting Climate Change

New Jersey Adopts Measure to Force Membership in Coalition Backing Paris Climate Accord

New Jersey Governor Phil Murphy, a Democrat, signed legislation that requires the state to join the U.S. Climate Alliance, a coalition of states formed to uphold the nation’s commitments to the Paris Climate Accord through adopting measures to tackle the threats posed by climate change. President Donald Trump announced his intention to withdraw from the accord last year. Under the Paris agreement, the U.S. committed to cut emissions 26 percent below 2005 levels by 2025. (S 598)

California-Canada Carbon Emission Auction Sells Out of Permits as Market Expansion Fuels Demand

The first joint auction held by California, Quebec, and Ontario sold out of all greenhouse gas allowances, selling a record 98.2 million permits for current emissions at $14.61, according to results released Feb. 28 by the California Air Resources Board. Almost 70 percent of permits for 2021 emissions were sold, signaling additional confidence in the market. Proceeds from the quarterly carbon auctions go towards programs to cut greenhouse gases. The market forms a central part of California’s plan to reduce emissions 40 percent below 1990 levels by 2030.

New Jersey Governor Advances Bid to Join Regional Carbon Emissions Market as State Sharpens Focus on Climate Change

Democratic Governor Phil Murphy announced his commitment for the state to rejoin the Regional Greenhouse Gas Initiative, saying membership in the group is needed to restore New Jersey’s “rightful place” as a leader in combating climate change. The initiative, the nation’s first mandatory cap-and-trade program to reduce greenhouse gas emissions, requires member states to agree to admit a new member. Murphy’s predecessor, Chris Christie, a Republican, withdrew New Jersey from the program in 2012, citing a lack of effectiveness and uncertainty over its future. The Murphy Administration has set a goal of 100 percent clean energy for New Jersey by 2050.

Markets and Ratemaking

FERC to Explore Expanding Market Access for Demand Response, Efficiency in PJM Capacity Auction

The Federal Energy Regulatory Commission will hold a technical conference to determine if PJM Interconnection LLC‘s stringent performance rules restricting storage, renewables, demand response and energy efficiency from selling into its annual capacity auction unnecessarily raises customer bills, and whether the addition of seasonal capacity markets could assure reliability at lower costs. The commission is responding to complaints from Advanced Energy Management Alliance, Old Dominion Electric Cooperative, Direct Energy, and American Municipal Power, alleging that the grid operator has unfairly discriminated against intermittent generating capacity. In 2015, PJM modified its capacity market rules to transition to a single annual product called capacity performance that imposes penalties for non-performers during emergency conditions on the grid. No date for the conference has been set.

Mid-Atlantic Grid Operator Urges Need for Price Reforms, Citing 11-Fold Spike in Out-of-Market Payments

PJM Interconnection LLC signaled the need for reforms to its energy market after a recent arctic blast sent so-called uplift charges to about $4.3 million per day from the average of $389,000 per day. Uplift charges are the payments the grid makes to generators when market revenues don’t cover a plant’s operational cost of helping to serve demand on the system. Electric consumption on the mid-Atlantic system soared to over 137,000 megawatts in early January, reaching the sixth highest overall winter peak demand.

Texas Grid Operator Expects Record Summer Demand Driven by State's Rapid Economic Growth

The Electric Reliability Council of Texas Inc. projects peak demand this summer to reach a record 72,974 megawatt, fueled by the breakneck pace of the state’s economy. Over 77,000 megawatts of capacity will be on hand to meet the higher electricity consumption, Ercot said. In response to higher power prices during peak demand, the grid operator said it anticipates voluntary reductions in consumption and an increase in power sold in the market by industrial facilities. More than 14,000 megawatts of generation is planned to be in service by 2020.

Louisiana City Lodges Protest Against Southwestern Electric Power, Seeking Rate Cut

The City of Minden filed a complaint with the Federal Energy Regulatory Commission on Feb. 28, seeking to cut the return on equity that Southwestern Electric Power Company uses to calculate rates for power supply service to 8.2 percent, from 11.1 percent. The city also charged the subsidiary of American Electric Power Company Inc. with violating its power supply agreement by failing to hedge congestion charges for transmission service from its location in the Southwest Power Pool to Minden’s location in the Midcontinent Independent System Operator Inc. region. Minden seeks an order enforcing the hedging provision or else terminating the agreement.

Pennsylvania Commission to Set New Default Electric Service Prices for FirstEnergy Companies

The Pennsylvania Public Utility Commission is seeking comments on default service plans proposed by units of FirstEnergy Corp., according to a March 2 press release. The current service rates expire at the end of May next year, and the proposed plans would cover service provided from June 2019 through May 2023. A 1990s electric competition law requires utilities and suppliers to provide default service to customers reflecting the least cost, if an alternative supplier is not selected. The companies are Pennsylvania Power Company, Pennsylvania Electric Company, Metropolitan Edison Company, and West Penn Power Company. The commission will hold a hearing on March 13.

Modernizing the Grid

National Grid Seeks Presidential Permit for 1,200-Megawatt Power Line to Deliver Canadian Wind Power to U.S.

GridAmerica Holdings Inc., a subsidiary of National Grid, requested approval from the U.S. Energy Department for its Granite State Power Link Project, a 1,200 megawatt overhead, high-voltage direct-current transmission line designed to ship Canadian wind power to New England. The project is among 40-plus projects that have competed for contracts to supply Massachusetts with renewable electricity needed to meet the state’s ambitious clean energy goals. GridAmerica is just the latest developer seeking to import supplies of Canadian renewable energy into the Northeast as states in the region continue to boost renewable goals.

ComEd Cleared to Move Ahead with One of Nation's First Microgrid Cluster Projects

The Illinois Commerce Commission on Feb. 28 granted approval for Commonwealth Edison Co.‘s $25-million utility-scale microgrid project outside of Chicago. The pilot demonstration, which is intended to better understand the systems and to advance their design and operation, will interconnect with a microgrid at the Illinois Institute of Technology, creating one of the first clusters in the nation. The unit of Exelon Corp. will submit annual reports to the commission over the 10-year study period. Microgrids are electric system’s that can operate autonomously from the traditional power grid using local energy supplies, such as batteries, solar panels or smaller generators, enabling them to remain in operation during outages.

Ameren Looks to Expand Electric Vehicle Charging Stations, Improve Grid-Utilization

Union Electric Company, a subsidiary of Ameren Corporation, is requesting approval from the Missouri Public Service Commission to implement programs under its “Charge Ahead” initiative, which seeks to encourage the adoption of electric vehicles among residents and businesses, according to the commission’s Feb. 26 press release. The programs will provide incentives to electrify machinery, such as forklifts, and to help meet the cost of installing public and private charging stations.

Convergent to Buy Nation's First Flywheel Storage Facility as Regulators Knock Down Barriers for Technology

A subsidiary of Convergent Energy and Power LP seeks approval to acquire two 20-megawatt storage projects from Spindle Grid, a unit of RC Beacon Holdings LLC. The projects, used for frequency regulation, are in Stephentown, New York, and Hazle Township, Pennsylvania. Convergent and Spindle seek approval from the Federal Energy Regulatory Commission by April 9. FERC and state commissions are overhauling market rules in a bid to lower barriers that have prevented greater adoption of the technology.

Fossil Fuel Actions

U.S. Regulator Says No Evidence of Gas Market Gaming in New England, Call Claims of Manipulation 'Flawed'

The Federal Energy Regulatory Commission announced Feb. 27 that it found no instances of anticompetitive withholding of pipeline capacity in New England in the course of what it said was an extensive investigation. The probe by was prompted by a report by the Environmental Defense Fund last summer that claimed local gas distribution companies in the region limited space on the Algonquin pipeline system in order to drive up natural gas and power prices. Yankee Gas Services Company, a subsidiary of Eversource Energy, is asking the Connecticut Public Utilities Regulatory Authority to take into account the Federal Energy Regulatory Commission’s finding as the state commission conducts its own review.

Dashed by FERC, Energy Department's Controversial Grid Resiliency Plan Finds a Second Life in the Heart of Coal Country

Kentucky state House lawmaker Jim Gooch, a Republican, introduced legislation on Feb. 22 that would set targets for retail electric suppliers to purchase “reliable energy,” consisting of electricity generated from plants with on-site fuel, such as coal plants and nuclear reactors. Power generation that is intermittent, such as wind and solar, would be excluded. Retail electricity suppliers would be required to ramp up the amount of the supplies provided to consumers, from 70 percent in 2020, to 75 percent in 2026. The measure is similar to a plan proposed last year by the Energy Department that would have awarded payouts for coal and nuclear to reflect the value on-site fuel supplies add to grid reliability. That plan ultimately was rejected by the Federal Energy Regulatory Commission. (HB 448)

Energy Transfer's Rover Gas Line Under Fire Again by Ohio Regulator in Latest Setback for Troubled Shale Project

The Ohio Environmental Protection Agency blasted Energy Transfer Partners LP for failing to provide notification of over two dozen landslides along the Rover natural gas line that are said to pose a “serious threat” to the environment. The agency ordered Energy Transfer to report on the “land slips” and coordinate with the U.S. Army Corps of Engineers and U.S. Fish and Wildlife Service on additional measures to take, according to a Feb. 22 letter. The 713-mile, $4.2 billion link has drawn heightened scrutiny from regulators and has had construction suspended after incurring over a dozen environmental violations. Rover is expected to be in full service by the end of the first quarter of 2018, according to a project website.

Minnesota Tosses Bid by Environmental Group to Expand Review of $7-Billion Enbridge Oil Pipeline

The Minnesota Public Utilities Commission rejected a challenge brought by environmental groups and Enbridge Energy LP against the agency’s assessment of the Line 3 oil pipeline project, finding that no new errors or issues were raised. In December, the commission identified four deficiencies in the project assessment, which it said needed to be addressed before the final review can be approved. Sierra Club argued that the agency failed to identify other errors and additional reviews were warranted. The approximately $7-billion Line 3 Replacement, the largest project in Enbridge history, will fully replace 1,031 miles of pipeline between Hardisty, Alberta, and Superior, Wisconsin. The project is slated to go into service in 2019, according to the company website.

North Carolina Awards Permit for $6-Billion Atlantic Coast Shale Gas Line, Advancing Project

The North Carolina Department of Environmental Quality issued an air permit for the Northampton Compressor Station on the 600-mile Atlantic Coast natural gas pipeline. The project will extend from West Virginia to North Carolina, enabling the shipment of 1.5 billion cubic feet per day of shale supplies. The project is owned by Dominion Energy Inc. in partnership with Duke Energy Corp., Piedmont Natural Gas Company Inc. and Southern Company Gas. The link is scheduled to start in late 2019, according to a project website.

Vancouver Energy Abandons Bid for Nation's Largest Oil Train Terminal Project Following Rejection by Governor

Andeavor Corp. (formerly Tesoro Corp.) and Savage Companies have terminated the lease for the site where Tesoro Savage Vancouver Energy oil rail terminal would have been built, according to a Feb. 28 statement. Governor Jay Inslee, a Democrat, last month denied the company’s application for the 360,000 barrels of crude oil a day terminal, after an advisory council recommended that the governor nix the project, citing impacts from increased rail traffic and geological hazards.

Andeavor Lodges Challenge Against Enterprise, Claiming Unlawful Contract and Shipping Charges

Andeavor Field Services LLC, a subsidiary of Andeavor Logistics LP, filed a complaint Feb. 27 with the Federal Energy Regulatory Commission alleging that Mid-America Pipeline Company LLC, a subsidiary of Enterprise Products Operating Company LLC, improperly imposed ship-or-pay obligations on uncommitted shippers for existing capacity and then demanded deficiency payments. Mid-America demanded and received considerable amounts of money for alleged shipment deficiency and also unlawfully seized and diverted Andeavor’s shipments causing disruption in business relationships, according to the Feb. 27 complaint. Andeavor requested a fast track for the proceeding.

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