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week of Feb. 4, 2019

Another week filled with major energy policy events is coming up and the EnerKnol Week Ahead is here to keep you in the know. In this edition, the New England grid operator braces for another forward capacity auction amid dwindling supply and controversial subsidies to ailing plants; federal regulators receive input on a major overhaul aimed at better integrating energy storage into wholesale power markets; California regulators receive wildfire mitigation plans from the state's utilities, including troubled PG&E.

Featured Entities

California PUC

D.C. Circuit


Florida PSC

ISO New England

U.S. Congress

Federal Agencies

February 5
U.S. Congress Energy and Minerals Market Outlook Hearing

The U.S. Senate Committee on Energy and Natural Resources will examine the outlook for energy and mineral markets. This is the second hearing in just over a year focusing on the supply chain for the production of batteries aimed at electric vehicles and energy storage, two fast growing sectors. Minerals such as lithium, cobalt, nickel and graphite are in high demand and U.S. senators are concerned that China is currently leading the way in mining and processing these key commodities.

February 6
U.S. Congress Climate Change Impacts Hearing

The House Committee on Energy and Commerce will discuss the environmental and economic effects of climate change. This is the first committee hearing on the heavily politicized topic since 2013 when Republicans held a hearing critical of the Climate Action Plan. Now under Democratic control, the committee leadership has vowed to begin seriously examining how climate change is affecting communities, environment and economy, and take action to reduce its harmful effects.

February 6
D.C. Circuit Southwest Power Pool Charges Oral Arguments

A federal appeals court is scheduled to hold oral arguments in a challenge against FERC by Missouri River Energy Services for refusing its request to be exempt from congestion and marginal loss charges required by the Southwest Power Pool. These charges, implemented in 2014, account for electric losses that occur in the normal course of electric transmission. Missouri River and two other entities protested these charges as applied to them arguing that they are parties to a 1977 contract addressing payments for infrastructure upgrades, which exempts them. The case is Missouri River Energy Services v. FERC (18-1166)

February 7
FERC Energy Storage Market Participation Deadline

The Federal Energy Regulatory Commission is scheduled to receive comments on proposals filed by regional grid operators in 2018 to comply with the commission’s landmark energy storage order (Order 841), which paved the way for broader participation of storage resources in wholesale power markets. FERC issued the order because it found that current tariffs do not recognize the operational characteristics of electric storage resources and limit their participation. The order, issued on Feb. 15 2018, directed grid operators to establish a market model that remedied this. Compliance filings were due Dec. 3, 2018 with implementation to conclude by Dec. 3, 2019.

Eastern Region

February 4
ISO NE Forward Capacity Auction

ISO New England Inc. will hold its 13th forward capacity auction, covering the 2022-2023 delivery period. The price of capacity in the previous annual auction held last February cleared at a five-year low after the grid operator secured a surplus, with more than 34,800 megawatts of supplies. Under a controversial order approved by FERC in early December, two natural gas-fired units at Exelon Corp.’s money-losing Mystic power plant in Boston will be treated as price-takers in this auction. The New England grid operator found that the loss of the 1,700 megawatts of capacity and closure of the accompanying Distrigas liquefied natural gas terminal would lead to “unacceptable fuel security risks” as soon as 2022. The New England Power Generators Association estimated that out-of-market support for the generator could displace up to about 1,300 megawatts of otherwise economic resources and suppress prices by up to $642 million in the upcoming auction.

February 5
FL PSC FPL Federal Tax Impact Decision

The Florida Public Service Commission will discuss and take final action on the tax impacts associated with the federal Tax Cuts and Jobs Act of 2017 for Florida Power & Light Company. In December 2017, the company wrote off Hurricane Irma costs that had been charged to the storm reserve then amortized the reserve amount available at the time. The company also said that the tax law decreases its forecasted revenue requirement for 2018 by $772.3 million. FPL is a subsidiary of NextEra Energy Inc. 20180046-EI

Western Region

February 6
CA PUC Wildfire Mitigation Plans Deadline

The California Public Utilities Commission is scheduled to receive wildfire mitigation plans mandated by the state legislature that describe utilities’ measures to prevent, combat, and respond to wildfires affecting their service territories. The bill also authorizes the state commission to approve utilities’ recovery of costs and expenses from the blazes that occurred in 2017 after applying a “stress test” to determine the maximum amount the utility can pay without harming ratepayers and maintaining safe service. For wildfire incidents from 2019 onwards, the commission would allow cost recovery if the expenses are found to be reasonable, based on a set of standards including the utility’s conduct. A federal judge of the U.S. District Court for the Northern District of California is waiting to see the fire mitigation plan that PG&E files to make a decision on the criminal case for the 2010 San Bruno gas line explosion, which may require that the troubled utility inspect its entire grid for safety problems before the start of this year’s fire season. SB 901