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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LOCKHEED MARTIN SPONSORS FREE ACCESS TO EXCLUSIVE CONTENT.

Vienna, Va.: Public Utilities Fortnightly magazine launched a new twice-monthly online resource today. Fortnightly’s Green Utility (http://greenutility.fortnightly.com) features content developed by Fortnightly’s editorial staff, focusing on renewable power generation technology, finance and regulatory policies in the United States and Canada. The new editorial resource is made possible with sponsorship support from Lockheed Martin.

Fortnightly’s Green Utility will feature exclusive articles, webcasts, intelligence and commentary, as well as special access to related articles from the archives of other publications at Public Utilities Reports Inc. — including Public Utilities Fortnightly, Fortnightly’s Spark and Utility Regulatory News.

“Green Utility will focus Fortnightly’s editorial analysis on the challenges and opportunities of building out North America’s renewable energy infrastructure,” said Michael T. Burr, Fortnightly’s Editor-in-Chief. “Fortnightly brings the world-class editorial expertise to look beyond the news and hype, and analyze renewable energy issues in a way no other publication does. Lockheed Martin’s support allows us to make this unique and objective analysis freely accessible online.”

Fortnightly’s Green Utility is part of Fortnightly.com’s growing inventory of online resources. In the past two years, Fortnightly.com launched two financial databases — the Utility ROE Database and the Transactions Database — providing data about utility ratemaking decisions and financial transactions, such as mergers, acquisitions and debt issues.

The March 1, 2011, installment of Fortnightly’s Green Utility, with a webcast and article developed by Fortnightly Contributing Editor Steven Andersen, features a conversation with tax-credit guru Keith Martin of Chadbourne & Parke. The second installment is scheduled for release on March 15.

PUBLIC UTILITIES FORTNIGHTLY (www.fortnightly.com), published by Public Utilities Reports Inc., in Vienna, Va., is the journal of record for the U.S. utility industry, providing authoritative, in-depth analysis of trends in generation, transmission and distribution of electricity and natural gas. For more than 80 years, Public Utilities Fortnightly has delivered exclusive interviews and expert analysis to help utility-industry executives and regulators decide where to invest, how the industry will be regulated and what the future holds. Subscription rate: $287/year.

Posted: March 1st, 2011 under IGCC, R&D, biomass, carbon regulation, climate change, efficiency, electric vehicles, geoengineering, green energy, offshore wind, regulation, renewable energy credits, renewables.
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National Grid to pay 18.7 cents/kWh with 3.5% annual escalation.

Courtesy of Utility Regulatory News #3997: The long-planned and highly controversial Cape Wind project took a major step forward when the Massachusetts Department of Public Utilities signed off on a 15-year power purchase agreement (PPA) between the developer, Cape Wind Associates, and an electric utility, National Grid.

The contract covers 50% of the output of the facility, which is located offshore from Massachusetts in federal waters in Nantucket Sound. The initial price in the PPA, effective in 2013, is 18.7 cents per kilowatt-hour, inclusive of electricity, capacity, and renewable energy attributes. The price is subject to an annual 3.5% escalation clause.

In approving the contract, the department noted that National Grid had demonstrated a need for additional sources of supply and that the Cape Wind project was the best choice to satisfy that need given the project’s size, proximity, capacity factor, renewable energy benefits, and advanced stage of permitting. The department estimated that the PPA would have no more than a 1% to 2% billing impact on National Grid ratepayers. Moreover, the department found that the Cape Wind facility would moderate peak load requirements in the region. The department said it was impressed by wind data that showed that Cape Wind’s capacity factor would have averaged 76% during the area’s top ten historic peak hours. Nevertheless, the department declined to approve a second PPA for the remainder of the wind farm’s output, observing that the second contract was subject to assignment, which could include assignment to a non-jurisdictional party. For the full story, subscribe to URN.

Posted: December 23rd, 2010 under green energy, offshore wind, regulation, renewable energy credits, renewables.
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Excessive costs, marginal benefits force rethink

Weekly Update Courtesy of Utility Regulatory News #3987: Questioning their cost-effectiveness, the New Mexico Public Regulation Commission has directed Public Service Co. of New Mexico (PNM) to eliminate or moderate certain of the projects included in the solar component of the utility’s ambitious renewable energy portfolio procurement plan (REPPP).

As proposed by the utility, the solar sector of its REPPP would consist of five primary elements: (1) a small solar thermal facility in Belen; (2) a solar storage demonstration project; (3) company-owned but customer-sited photovoltaic (PV) units; (4) utility-owned and utility-sited PV facilities; and (5) a three-year solar performance plan (SPP). The commission endorsed the first two elements, in that they involve minimal funding and potentially important benefits, but the commission came to the opposite conclusion as to the proposed company-owned, customer-sited projects.

Looking at the proposal’s costs on a dollars-per-kilowatt-hour (kWh) basis, the commission observed that the customer-sited option would be extremely expensive and thus clearly uneconomic. It therefore disallowed the customer-sited element in its entirety. Applying the same dollars-per-kWh analysis to the utility-owned, utility-sited program, the commission determined that associated costs were somewhat more reasonable, but still excessive.

Consequently, the commission held that PNM could go forward with certain of its recommended utility-owned and sited facilities, but it limited such installations to 22 megawatts (MW), as compared to the company’s originally requested 45-MW project. The commission expressed deep concern about the SPP, especially that part of the plan that would eliminate existing net metering billing methods for participating customers and would implement a more complicated billing scheme instead. The commission thus called for significant modifications to the SPP as well, including expansion of traditional PV technologies to incorporate more solar thermal applications. For the full story, subscribe to URN.

Posted: September 29th, 2010 under green energy, regulation, renewables.
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State Court Upholds Transmission Line Certificate

Weekly Update Courtesy of Utility Regulatory News #3987: Although its chief justice dissented, finding that the majority’s decision “undermines the public trust doctrine,” the Massachusetts Supreme Judicial Court has affirmed the grant of an all-inclusive certificate for the construction of an underwater/underground transmission line associated with a large offshore wind farm planned for Nantucket Sound.

The project, sponsored by Cape Wind Associates, LLC, envisions the installation of 130 wind turbines, each more than 400 feet tall. The turbines themselves will be in federal waters some three miles off the coast of Massachusetts. Just as the wind farm was hotly contested before federal regulators, so too was the transmission line the subject of much debate in myriad proceedings before state and local authorities. After a three-year review of its requisite environmental impact report, Cape Wind in 2005 received approval for its proposed line from the Energy Facilities Siting Board, a decision which was upheld by the state high court in 2006 and which was followed by a determination in 2007 that the line complied with the Massachusetts Environmental Protection Act. Yet Cape Wind was unable to proceed because it still lacked a development of regional impact (DRI) ruling from the Cape Cod Commission. Upon the commission’s last DRI denial in October 2007, Cape Wind returned to the siting board, invoking state law that provides for a special Section 69K certificate, which is a blanket or all-inclusive permit that incorporates into a single approval the various state and local authorizations that ordinarily must be obtained individually. The Cape Cod Commission, along with several other local agencies and environmental advocates, appealed the grant of the composite certificate, arguing that it violated community rights and improperly bypassed the commission’s jurisdiction. The court, however, dismissed their arguments that the siting board had acted beyond its authority and that its ruling had been flawed. The court found that the board had correctly interpreted the Section 69k statute and also had correctly assessed the need for the transmission line.

Looking at the tortuous history of the Cape Wind project, the court concluded that the siting board had made a reasonable and fully informed decision based on a complete and comprehensive record. For the full story, subscribe to URN.

Posted: September 29th, 2010 under green energy, regulation.
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