Addresses frequency, timing, and eligibility requirements

Update courtesy of Utility Regulatory News #4035: Reviewing advice letters submitted by the state’s three largest electric utilities following a California Public Utilities Commission decision in December that had outlined an auction process for the procurement of energy supplies from small renewable facilities, the commission found that certain modifications were needed in order for the associated solicitations to meet the commission’s vision for its renewable auction mechanism (RAM).

The commission noted that the three utilities - Pacific Gas & Electric Co. (PG&E), San Diego Gas & Electric Co. (SDG&E), and Southern California Edison Co. (SCE) - had proffered advice letters that varied from each other as well as from some of the terms set forth in the commission’s December order. For instance, the commission pointed out, PG&E and SCE had proposed holding only one renewable auction per year, whereas the commission had specifically mandated a total of four auctions over the next two years. The commission also noted that although the December decision had explicitly provided for simultaneous auctions, the utilities had not coordinated their RAM schedules, and SCE had actually recommended that their auctions be staggered purposely. The utilities also disagreed as to what facilities could participate in the auctions and what minimum and maximum capacity limits should apply.

The commission nixed PG&E’s approach to eligibility, which would have restricted participation to new facilities only. Instead, the commission determined that SCE’s terms were preferable in that they would allow both new and existing renewable facilities to participate. As to capacity thresholds, the commission found that certain aspects of both PG&E’s and SDG&E’s proposals were apt. It thus ruled that eligibility would be based on a contract minimum of 1 MW and a project size minimum of 500 kW. However, the commission agreed that projects should be allowed to aggregate, so as to meet the 1-MW contract minimum if their capacity was less than that. Aggregation would be capped at 5 MW, however.

The utilities were instructed to file new advice letters showing compliance with the commission’s directives. For the full story, subscribe to URN.

Posted: September 13th, 2011 under energy policy, green energy, renewables.
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Approves pricing mechanism for net surplus generatorsUpdate courtesy of Utility Regulatory News #4029: In accord with its duties enunciated in Assembly Bill 920, the California Public Utilities Commission (PUC) has published a rate schedule applicable to those qualifying self-generation customers whose total electric generation during a consecutive 12-month period exceeds their on-site consumption during that same time frame. Such customers are known as net energy metering (NEM) customers. After considering NEM proposals from the state’s five largest electric utilities, the commission found that a NEM price based on a utility’s default load aggregation point (DLAP) would be the best way of assuring that net surplus compensation payments made to a customer would abide by avoided cost rate-making principles set forth in the Public Utility Regulatory Policies Act of 1978.

The commission held that the NEM price should be predicated on a simple rolling average of each utility’s DLAP price from 7:00 a.m. to 5:00 p.m., a period the PUC deemed to coincide with the times during which a net surplus generator would be most likely to be actively producing electricity. In essence, the commission said, the rate would be representative of the 12-month average spot market price for those particular hours for the year in which the customer has net-generated. The commission averred that at a later date, an adder will be applicable for the renewable energy attributes of the generator. The commission explained that it is unable to set that adder at the present time because the California Energy Commission has not yet issued a ruling on how a self-generator’s compliance with the state’s renewable portfolio standards program will be certified. For the full story, subscribe to URN.

Posted: August 25th, 2011 under energy policy, renewables.
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Court denies effort to compel project to go forward

Update courtesy of Utility Regulatory News #4029: In a case decided on procedural grounds, the U.S. Court of Appeals for the First Circuit has rejected a move to reinstate apparently now-abandoned plans by the U.S. Department of Energy (DOE) to designate the Yucca Mountain site in Nevada as the nation’s repository for spent nuclear fuel.

In 2008, in conformance with Bush administration policies, DOE had submitted an application with the Nuclear Regulatory Commission (NRC) for formal approval of the site. However, the NRC had not yet ruled on the application when President Obama took office. The change in administrations included a change in outlook on the Yucca Mountain project, with DOE seeking to withdraw its application in 2010. But the NRC Licensing Board refused to allow such withdrawal, explaining that Congress had explicitly listed Yucca Mountain as the nuclear waste repository of choice and that DOE did not have the power to substitute its policy decisions for those set forth by Congress. The full NRC then stepped in and said it would review the Licensing Board’s determination. To date, though, the NRC has not acted on either that Licensing Board review or the original underlying DOE application, leading several local governmental authorities from around the country to file suit seeking to force DOE to get the Yucca Mountain project back on track.

The court, however, deemed it premature to hear the suit. It explained that inasmuch as the NRC has not yet taken any “final action” in the matter, the issue is not ripe for appeal. While the court appeared sympathetic to the petitioners’ obvious frustration with the slow pace of development of the long-promised Yucca Mountain facility, the court said that as of now, neither DOE nor the NRC has failed to comply with federal legislative directives and timelines. Thus, the court held, until such time as they miss a deadline or the NRC renders a final agency action, the plaintiffs do not have grounds for appeal. For the full story, subscribe to URN.

Posted: August 25th, 2011 under energy policy, nuclear.
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Holds that it may be challenged in federal court

Update courtesy of Utility Regulatory News #4027: Despite the fact that a Montgomery County, Maryland ordinance imposing a new levy on carbon dioxide (CO₂) emissions specifically refers to that levy as an “excise tax,” the U.S. Court of Appeals for the Fourth Circuit has declared it a regulatory fee instead, in that the assessment in effect is applicable to but a single generator.

The ordinance requires electric generators producing more than one million tons of CO₂ emissions per year to pay a levy of $5 per ton of CO₂ emitted. However, because only one generator meets that output threshold, the court ruled that, regardless of the terminology used in the ordinance, the assessment is in fact a fee, not a tax, because a tax is a burden that must be generally borne, whereas a fee can be more of an individual burden. Consequently, the court held that the one generator is not foreclosed by the Tax Injunction Act from appealing the ordinance in federal court. That law prohibits federal courts from exercising jurisdiction over tax rulings involving local authorities. However, because the CO₂ levy has been distinguished from a tax, and because the ordinance explicitly refers to its regulatory purpose in reducing greenhouse gas emissions in the county, the court found that the CO₂ fee structure was beyond the ambit of the Tax Injunction Act, such that the generator could proceed with its challenge of the ordinance before a federal district court. For the full story, subscribe to URN.

Posted: July 13th, 2011 under carbon regulation, energy policy, regulation.
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First Energy commits to economic development initiatives.

Weekly Update Courtesy of Utility Regulatory News #3987: Citing FirstEnergy Corp.’s agreement to hold ratepayers harmless from costs incurred in switching from one regional transmission organization (RTO) to another, and pointing to the company’s pledges to devote more funding to local economic development programs, the Ohio Public Utilities Commission has signed off on a modified bidding structure by which FirstEnergy’s operating subsidiaries procure supply for their standard service offer (SSO) customers. FirstEnergy’s Ohio operating companies are Ohio Edison Co., Cleveland Electric Illuminating Co., and Detroit Edison Co.

The new SSO procurement process will be based on a twice-yearly competitive bid protocol that will utilize an independent bid manager and rely on a descending clock format. Pursuant to settlement, FirstEnergy agreed not to reflect in resulting rates $42 million in exit fees and integration costs it is incurring as it moves from the Midwest Independent System Operator RTO to the PJM Interconnection RTO. The utility also assented to forgoing recovery of certain “legacy” regional transmission expansion planning charges. In addition, FirstEnergy said that during the three-year period the new SSO bidding arrangement is in place, the utility will provide at least $25 million for economic development and job retention programs.

As part of that commitment, FirstEnergy said it would target automakers, offering those consuming more than 45 million kilowatt-hours at a single site in 2009 a monthly discount for increases in production. For the full story, subscribe to URN.

Posted: September 29th, 2010 under Uncategorized, energy policy, regulation, retail competition, transmission regulation.
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