Category Archives: FERC

CPES Policy Committee Update: October 3, 2017

This update features policy, regulatory, legislative, and regional developments in Connecticut and New England. The policy updates are compiled by the CPES New Energy Professionals Team. If you are interested in learning more about the New Energy Professionals, the Policy Committee, or if you have ideas for future policy updates, we would welcome your input and feedback. Please send comments to Kathryn Dube, CPES Executive Director, via email: kdube@ctpower.org.

In this Update:

  • U.S. Department of Energy Proposes Grid Resiliency Rule for FERC Action
  • First Round Comments on DEEP’s draft 2017 Comprehensive Energy Strategy Available

REGIONAL AND INDUSTRY DEVELOPMENTS

U.S. Department of Energy Proposes Grid Resiliency Rule for FERC Action

On September 29, 2017, the U.S. Department of Energy (DOE) filed a Notice of Proposed Rulemaking (NOPR) directing the Federal Energy Regulatory Commission (FERC or Commission) to issue a final rule to “ensure that the reliability and resiliency attributes of generation with on-site fuel supplies are fully valued.” The NOPR pointed to the significant number of retirements of fuel-secure generation and stated that the rule must provide for “recovery of costs of fuel-secure generation units frequently relied upon to make our grid reliable and resilient.”

DOE is requiring the Commission to consider and take final action on the proposed rule within 60 days from the date of publication of the NOPR in the Federal Register. In the alternative, DOE urges the Commission to issue the rule as an interim final rule, effective immediately, with provision for later modifications after consideration of public comments.  

First Round Comments Available

The first round of comments on the Department of Energy and Environmental Protection’s (DEEP) draft 2017 Comprehensive Energy Strategy were due September 25, 2017. The comments are available on the DEEP webpage at the following link: http://www.dpuc.state.ct.us/DEEPEnergy.nsf/$EnergyView?OpenForm&Start=1&Count=30&Expand=6.2&Seq=2

CPES Policy Committee Update: September 26, 2017

This update features policy, regulatory, legislative, and regional developments in Connecticut and New England. The policy updates are compiled by the CPES New Energy Professionals Team. If you are interested in learning more about the New Energy Professionals, the Policy Committee, or if you have ideas for future policy updates, we would welcome your input and feedback. Please send comments to Kathryn Dube, CPES Executive Director, via email: kdube@ctpower.org.

In this Update:

  • Federal Energy Regulatory Commission Activity: U.S. Senate Energy Committee Sends FERC Nominees to Full Senate
  • Update on Millstone Power Station
  • CT Budget: Energy Industry Impact

REGIONAL AND INDUSTRY DEVELOPMENTS

FEDERAL ENERGY REGULATORY COMMISSION ACTICITY: U.S. SENATE ENERGY COMMITTEE SEND FERC NOMINEES TO FULL SENATE
On September 19, 2017, the U.S. Senate Energy & Natural Resources Committee approved two nominees to serve as commissioners on the Federal Energy Regulatory Commission (FERC)—Kevin McIntyre and Richard Glick. McIntyre, a republican who will be designated as chairman, has been nominated to two terms ending in 2023. The Committee held a nomination hearing for McIntyre and Glick on September 7. The nominations now head to the Senate floor.

If confirmed, McIntyre and Glick will join Commissioners Cheryl LaFleur and Robert Powelson, and Acting Chairman Neil Chatterjee, returning a full complement of five commissioners to FERC.

CONNECTICUT

MILLSTONE POWER STATION UPDATE
The fireworks continue in the joint DEEP-PURA proceeding to study the economic viability of Millstone Station. Last week, in a response to a series of data requests from the Department of Energy and Environmental Protection (DEEP) and the Public Utilities Regulatory Authority (PURA), Dominion declined to answer a majority of inquiries about its revenue, expenses, cash flow and earnings. “Dominion Energy will not provide competitively sensitive or proprietary information related to this request … at this time,” the company wrote. DEEP and PURA staff will likely be forced to move forward using estimates based on public information. See articles from Hartford Business Journal and the Courant.

CONNECTICUT BUDGET: IMPACT ON THE ENERGY INDUSTRY
The Republican budget, that passed in dramatic fashion, includes a provision to remove PURA from the Department of Energy and Environmental Protection, which has existed as a single agency since 2011. As passed, the bill also eliminates statutory authorization of the Bureau of Energy and Technology Policy. The Republican budget: (1) Reduces rates and decreases costs for Connecticut’s ratepayers, (2) ensures the reliability and safety of our state’s energy supply, (3) increases the use of clean energy and technologies that support clean energy, and (4) develops the state’s energy-related economy. The head of such authority shall be the chairperson elected in accordance with section 16-2 of the state statutes. Despite passing both the House and the Senate, Governor Malloy has threatened to veto the budget. See article from WNPR

CPES Policy Committee Update: September 11, 2017

This update features policy, regulatory, legislative, and regional developments in Connecticut and New England. The policy updates are compiled by the CPES New Energy Professionals Team. If you are interested in learning more about the New Energy Professionals, the Policy Committee, or if you have ideas for future policy updates, we would welcome your input and feedback. Please send comments to Kathryn Dube, CPES Executive Director, via email: kdube@ctpower.org.

In this Update:

  • Senate Energy and Natural Resources Committee Holds Nomination Hearing to Consider FERC Nominees
  • EIA: Electricity Prices Reflect Rising Delivery Costs, Declining Power Production Costs
  • 2017 CES Technical Meeting on September 13: Agenda

REGIONAL AND INDUSTRY DEVELOPMENTS

U.S. SENATE ENERGY AND NATURAL RESOURCES COMMITTEE HOLDS NOMINATION HEARING TO CONSIDER FERC NOMINEES

On September 7, 2017, the U.S. Senate Energy and Natural Resources Committee held a nomination hearing to consider the nominations of Richard Glick and Kevin McIntyre to fill the two remaining seats on the Federal Energy Regulatory Commission (FERC).

The nominations of Neil Chatterjee and Robert Powelson were confirmed by the U.S. Senate in August, restoring a quorum to FERC for the first time since early February.  For more information, visit the FERC website.

EIA: ELECTRICITY PRICES REFLECT RISING DELIVERY COSTS, DECLINING POWER PRODUCTION COSTS

Over the past decade, retail electricity prices have not closely followed the costs of fuels used to generate electricity, such as coal or natural gas, mainly because of changes in the other costs involved with producing and delivering electricity in the United States.

The average retail price of electricity in the United States has risen about 1.5% per year between 2006 and 2016, about the same as the 1.6% per year general rate of inflation over those years. In contrast, natural gas prices for U.S. electric generators, a key component in the cost of generating electricity, have fallen at an average rate of 8.4% per year since 2006.

The cost of electricity reflects money spent on generation, transmission, distribution, and other plant-in-service additions, as well as plant operation and maintenance. Over the past decade, the portion of total electricity costs attributed to power production for most utilities has decreased from 69% to 54%, while the portion associated with delivering that electricity to customers has risen. These costs are based on financial reports filed with the Federal Energy Regulatory Commission by major utilities and represent about 70% of all electric utility spending.

Power production costs incurred by utilities include fuel costs; nonfuel costs, including the costs of building, upgrading, operating, and maintaining generators; and the costs of purchasing power from independently-owned generators or from power markets. While the fuel and purchased power costs have decreased over the decade with the decrease in natural gas prices, nonfuel costs have increased slightly.

Electricity delivery costs have increased in real 2016 dollar terms from 2.2 cents per kilowatthour (kWh) in 2006 to 3.2 cents/kWh in 2016, roughly offsetting the decrease in the generation cost. Delivery costs include:

  • Transmission expenses such as towers, poles, wires, substations, and communications equipment necessary to ensure reliable transmission of electricity from generators to neighborhoods
  • Expenses for distribution equipment to deliver electricity at lower voltages to households and businesses
  • Distribution expenses to install, operate, and maintain meters and sensors
  • Customer billing, education, relations, and other services that allow customers to participate in utility programs such as energy efficiency, rebate, and time-of-use pricing programs

Transmission and distribution costs have risen for several reasons. In many areas, aging electric infrastructure has been replaced with new equipment that allows utilities to repair faults on transmission lines remotely, to read meters remotely, and to more quickly find, repair, and communicate with customers about neighborhood reliability problems and outages. Other infrastructure has been built to improve reliability and resiliency, to connect to new sources of electricity generation (including wind and solar), and to reduce transmission-line congestion in quickly growing areas.

Other costs associated with electricity, such as administrative and general expenses, have also risen by 20% in real dollar terms since 2006, but these costs account for a smaller portion of the overall costs of providing electricity

https://www.eia.gov/todayinenergy/detail.php?id=32812
http://www.theenergycollective.com/todayinenergy/2412322/electricity-prices-reflect-rising-delivery-costs-declining-power-production-costs

CONNECTICUT

DATES SET FOR THE DRAFT 2017 COMPREHENSIVE ENERGY STRATEGY TECHNICAL HEARINGS
The Connecticut Department of Energy and Environmental Protection (DEEP) released a draft of the 2017 Comprehensive Energy Strategy (CES) on June 26th. They will hold a technical meeting on September 13, 2017 at 11:00 a.m. in Hearing Room 1, at DEEP’s New Britain Office, Ten Franklin Square, New Britain, Connecticut Directions to DEEP’s New Britain Office. The purpose of the technical meetings are to allow stakeholders an opportunity to present oral comments and to pose questions to DEEP staff and consultants involved in the preparation of the analytics and the findings in the draft Strategy. DEEP requests that you RSVP and send your questions to DEEP.EnergyBureau@ct.gov three business days prior to the scheduled date if you plan on attending and/or participating in any of the scheduled technical meetings. Visit the DEEP website for more information.

CPES Policy Committee Update: June 20, 2017

This update features policy, regulatory, legislative, and regional developments in Connecticut and New England. The policy updates are compiled by the CPES New Energy Professionals Team. If you are interested in learning more about the New Energy Professionals, the Policy Committee, or if you have ideas for future policy updates, we would welcome your input and feedback. Please send comments to Kathryn Dube, CPES Executive Director, via email: kdube@ctpower.org.

This week’s feature:

  • FERC Staff Issues 2017 Summer Seasonal Assessment Report
  • PURA Established a Docket Regarding Joint Application for Approval of a Change of Control
  • Connecticut Legislation Adjourned for the Regular Session on June 7, 2017

REGIONAL AND INDUSTRY DEVELOPMENTS

FERC Staff Issues 2017 Summer Seasonal Assessment Report

On June 15, 2017, Federal Energy Regulatory Commission (FERC) staff issued the Summer 2017 Energy Market and Reliability Assessment Report. The report is FERC staff’s annual opportunity to share its summer outlook on the electricity and natural gas markets, as well as reliability matters, to better inform the Commission’s understanding of current and future trends.

The report touches on the possibility of tight supply margins should forecasted summer peak conditions occur in New England. The report states that “ISO-NE may be required to rely on additional imports from neighboring regions as well as implementing operating procedures to maintain reliability during possible periods of supply deficiencies.”

To access the entire report, click here.

PUBLIC UTILITIES REGULATORY AUTHORITY NEW DOCKET:

On June 16, 2017, PURA established the following docket:

 

CONNECTICUT LEGISLATIVE UPDATE

The 2017 Regular Session adjourned on June 7, 2017.  A special session has been called to deal with the biennial budget and the current budget deficit. If a budget agreement can not be reached by July 1st, the beginning of the new fiscal year, the Governor will run the state without a budget through Executive Order or the Legislature may pass a continuing resolution until a budget is in place.

See the June 13 Policy Update for a list of bills that passed during the regular session that may be of interest to our members.

 CPES does not take a position on these legislative proposals; this is provided for informational purposes only to CPES members.

FERC Staff to Hold Technical Conference on Wholesale Markets and State Policies

On May 1-2, 2017, Federal Energy Regulatory Commission (FERC) staff will hold a technical conference to discuss the impact of state policies on wholesale energy and capacity markets operated by the Eastern Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs). According to the Notice of Technical Conference, “Over the years, the rules underpinning competitive wholesale markets have evolved to address a myriad of issues while ensuring the reliable delivery and sale of electricity at just and reasonable rates. In recent years, there has been increased interest by state policy makers to pursue policies that prioritize certain resources or resource attributes. Because the wholesale competitive markets, as currently designed, select resources based on principles of operational and economic efficiency without specific regard to resource type, there is an open question of how the competitive wholesale markets, particularly in states or regions that restructured their retail electricity service, can select resources of interest to state policy makers while preserving the benefits of regional markets and economic resource selection.”

The technical conference is intended to foster “further discussion regarding the development of regional solutions in the Eastern RTOs/ISOs that reconcile the competitive market framework with the increasing interest by states to support particular resources or resource attributes.” For more information, visit the FERC website. 

For information on the discussions taking place in New England on Integrating Markets and Public Policy (IMAPP), visit the New England Power Pool (NEPOOL) website. IMAPP discussions, launched by NEPOOL in August 2016, are intended to identify potential changes to the region’s wholesale electricity markets to accommodate the public policy goals of the New England states, namely their carbon reduction and renewable energy goals.

Last month, the Chair of NEPOOL’s IMAPP process announced that further meetings on IMAPP will be deferred until May 2017 to give ISO New England time to identify a conceptual market approach that could be implemented in the near term and to provide states additional time to further analyze the various long-term proposals discussed in the IMAPP process to date.