Today’s lede: Consumer interests accuse Wisconsin regulators of glossing over state’s rising electricity costs. Consumer interests and competitive retail suppliers are criticizing the Wisconsin Public Service Commission’s latest draft Strategic Energy Assessment, a regular report required by state law, for attempting to obscure escalating electricity costs in the state, a mounting concern in particular for industrial users.
The Citizens Utility Board, industrial consumers and competitive suppliers are faulting the draft SEA for examining utility costs in the monopoly-regulated state on an aggregated bill basis, which reflects declining usage, rather than the unit cost of electricity, which is rising, in order to have Wisconsin electricity costs compare favorably with other more energy-intensive states, Chris Hubbuch writes in the La Crosse Tribune. “Overall Wisconsin customers pay about 10 percent more for electricity than the Midwest average, and residential customers are hit the hardest,” he reports.
“While reductions in average usage per customer have contributed to average residential electric bills remaining relatively flat, CUB remains concerned that continued increases in electricity prices will cause utility bills to exceed those of nearby states and the Midwest average,” the Citizens Utility Board said in comments to the PSC.
“Energy is a major cost of doing business, and its affordability can help or hinder job creation, particularly when those costs are greater than energy costs in neighboring states and other areas of the country,” the Wisconsin Industrial Energy Group and the Wisconsin Paper Council said in joint comments.
The Professional Energy Association and the Retail Energy Supply Association said in joint comments the draft SEA “does not confront the unpleasant reality that Wisconsin experienced the second highest percentage increase in overall . . . average electricity prices in the contiguous United States over the past two decades.”
GOP failure to price carbon has contributed to nuclear power being uneconomic, climate activist says. Long-time climate activist Joe Romm notes that Nobuo Tanaka, former head of the Internation Energy Agency, has described new nuclear power facilities as “ridiculously expensive” and “uncompetitive” when compared to solar power. “At the same time, existing U.S. nuclear power plants are ‘bleeding cash,’ as Bloomberg has repeatedly documented. Saving them would require a subsidy of at least $5 billion a year, according to a July 19 analysis by the Brattle Group,” Romm writes in ThinkProgress.com.
“But every time conservatives in Congress have had the chance to vote for the only sustainable way of saving nuclear power — by putting a price on carbon pollution that could make it more competitive — they overwhelmingly oppose it,” he laments. “Conservatives in the Senate killed the cap-and-trade climate bill that passed the U.S. House back in 2009 — a bill that would have dramatically improved the economics of nuclear relative to fossil fuel plants. A rising price on carbon dioxide emissions would instantly help the economics of emissions-free nuclear power compared to one of its biggest competitors: natural gas. Studies have shown that the nuclear fleet could be preserved with a CO2 price averaging just $20/ton.”
Still, just last week the House passed a resolution rejecting a carbon tax, Romm notes. “The anti-carbon tax proposal was supported by an astounding 39 GOP members of the ironically-named ‘Climate Solutions Caucus.’”
Newspaper editorial boards in Ohio, Texas, denounce Trump administration’s call to subsidize baseload nuclear, coal. The editorial board at the Youngstown Vindicator in Ohio urged readers to rise up in opposition to the Trump administration’s “midguided” efforts to require consumer subsidies for uneconomic baseload coal and nuclear power plants. The editorial came in response to a recent report in the paper in which a developer says the administration’s proposed bailout threatens his company’s planned $900 million natural gas-fired power plant in the area (click through here). “Everyone that has an IQ of more than 25 is upset about this,” Clean Energy Future LLC President Bill Siderewicz complained to the newspaper. “This is so un-American.”
“In the free enterprise system, government places few restrictions on the types of business activities or ownership in which citizens participate. And, government does not pick winners and losers,” the newspaper’s editorial says. “Unlike the federal bailout of General Motors and Chrysler, which saved the American auto industry from disintegration and the nation’s economy from collapse, the shrinking of the coal and nuclear industries will not trigger a national crisis.”
The administration’s subsidy proposal also came under fire from the editorial board at the San Antonio Express-News. The editorial drew a contrast between Rick Perry’s record as governor of Texas, where he proudly took credit for the state’s competitive electricity market and booming wind energy development, and his role today as Trump’s Energy Secretary, where “Perry has chosen to promote the beleaguered coal and nuclear industries at the expense of ratepayers and also wind and natural gas power sources.”
“Perry works for an administration that is unabashedly pro-coal, and its ties to the industry have been well-documented. But Perry’s persistence in bailing out the coal industry debases his own legacy on energy in Texas. Let’s be clear. Perry’s plan would cost the public billions simply to sustain uneconomic plants. It’s bad economics and bad environmental policy. Perry should remember what he championed as governor. That would mean endorsing energy policies in the interest of American consumers and enterprise, not select industries,” the editorial concludes.
FERC convenes technical conference on power grid ‘resiliency’. When the Federal Energy Regulatory Commission earlier this year rejected Energy Secretary Rick Perry’s proposed rule requiring consumer subsidies for coal and nuclear power facilities with 90 days’ fuel supply on site, the agency opened a docket to examine power grid “resiliency,” which was the basis for the rejected rule proposal. Today FERC convenes a technical conference to build the record for its proceeding, which could help determine whether certain resources contributing to grid resiliency get favored financial treatment in FERC-regulated wholesale power markets (click through here).
Politico notes that today’s technical conference comes after the deadline for public comments in FERC’s resiliency docket recently closed. Alison Silverstein, an industry consultant and a speaker at today’s technical conference today, told Politico: “The fun is in how differently everyone explains how a resilient system is actually manifested. This is where everyone’s talking up their book – transmission folks think resiliency means more wires, coal people say it’s fuel security, NERC says it’s standards and drills, services and studies,” she said. “I don’t envy FERC, which will have to find some public interest, statute-based rationality from a conversation where everyone’s talking across each other.”
Connecticut opens bidding from zero-carbon energy producers. The Connecticut Department of Energy and Environmental Protection will begin accepting bids from zero-carbon energy producers today, under a quasi-market-based approach the state adopted to promote clean energy.
The program was initially intended to promote renewable resources such as wind and solar, but after much jostling about the issue of Dominion’s threats to shut down the Millstone nuclear power station, the state opened the program up to nuclear energy from Millstone. But now it remains to be seen if Dominion even offers to bid power from Millstone, Benjamin Kail writes in The Day. “After years of lobbying and debate among lawmakers, environmentalists, power companies and utilities, Dominion claims DEEP’s draft RFP released in June is unworkable at a time when Millstone’s future is in jeopardy,” Kail reports.
DEEP in February agreed to include nuclear in the RFP, saying it would grade bids received from so-called “at risk” energy producers on factors such as price, environmental benefits, grid reliability and fuel diversity, Kail reports. Bids from new zero-carbon projects will also be scored on price and non-price criteria, but proposals from existing facilities not at risk of closure will be evaluated on price alone. Given data indicating Millstone should remain profitable for at least the next decade, this has raised questions as to how the state would evaluate a bid from Millstone.
DEEP will pick winners submitting bids in response to the RFP by late 2018 or early 2019. The Public Utilities Regulatory Authority will approve final contracts between energy producers and utilities by spring of 2019.
D.C. Circuit issues two opinions upholding FERC. The D.C. Circuit U.S. Court of appeals issued two decisions today upholding FERC on appeal. In one case, Verso Corp. v. FERC, the court upheld FERC’s decision ordering refunds in a cost-allocation proceeding. “We conclude that the reallocation at issue here does not constitute an impermissible retroactive rate increase,” the court said.” Having established that the existing rate was unjust and unreasonable, and having determined that a different methodology would comply with cost-causation principles, FERC had authority to order refunds and corresponding surcharges under Section 206 and its broad remedial authority under Section 309.”
In the other decision issued today, NextEra Energy Resources et al. v. FERC, the court upheld FERC’s decision to allow an exemption to the minimum offer price rule in the ISO New England forward capacity market for a limited amount of qualifying renewable energy resources. Generators had challenged FERC’s decision, but the court found “FERC engaged in reasoned decision-making to find that the renewable exemption to the minimum offer price rule results in a just and reasonable rate.”
More electric industry news of interest:
Offshore wind is likely the next big U.S. renewable sector. At this moment, 30 megawatts of offshore wind turbines are sending power to Narraganset Electric, the National Grid affiliate serving Rhode Island. They are the only offshore turbines in operation in the U.S., a pittance considering Europe is closing in on 20,000 MW in operation. But in the U.S. renewable sector, offshore wind is generating increasing excitement. Between dropping costs, ambitious state renewable targets, and a host of European developers looking to bring their knowledge stateside, the long-awaited U.S. offshore wind surge is now widely seen as imminent. “The U.S. will certainly take advantage of the path already traveled by the EU offshore market and will be in a position to catch up in just a few years,” said Alejandro de Hoz, the vice president of U.S. offshore for Avangrid Renewables.
FirstEnergy won’t say what it’s done with Ohio grid modernization money. Ohio regulators let FirstEnergy collect $168 million a year from ratepayers with virtually no strings attached for how it is spent. Ohio ratepayers have paid FirstEnergy’s utilities roughly a quarter of a billion dollars since January 2017 under a distribution modernization rider (click through here). Now, critics say FirstEnergy is stalling on saying just what it’s doing with that money, which regulators approved without any requirements that it pay for specific projects. The mandate for consumers to pay the rider is currently on appeal before the Supreme Court of Ohio. Meanwhile, FirstEnergy’s utilities have been collecting the $168 million per year, and regulators could renew the charge for another two years after 2019. “To date, FirstEnergy has stymied the efforts of the state-designated advocate of its consumers to discover information about its subsidy charges,” Ohio Consumers’ Counsel Bruce Weston and assistant counsel Zachary Woltz said in a July 13 brief (click through here). They and other challengers see the charge as an unlawful “backdoor bailout” for FirstEnergy’s generation subsidiaries. And critics say any hypothetical rationale for the rider as a tool to boost the company’s credit position in advance of future projects became even weaker after FirstEnergy’s generation subsidiaries filed for bankruptcy five months ago.
Californians should not pay for utility negligence when it comes to wildfires. Looking at billions of dollars in damages caused by last year’s wildfires in California, powerful special interests are already lobbying the state capitol to shift the liability. Major investor-owned utilities, insurance companies, trial lawyers and others are all playing “hot potato” with liability for damages. Those at risk of getting stuck with the tab are the groups getting cut out the process: Ratepayers. California’s ratepayers already pay some of the highest utility rates in the country. Electricity rates for California families are already 41 percent higher than the U.S. average. But the pain goes beyond the energy bills you see at home. It’s also reflected in the availability of jobs with good wages, and overall costs of living in California because electricity rates for factories, farms, and food processors are a staggering 86 percent higher than the U.S. average. These rates are not only high. They are also climbing. In 2010, commercial ratepayers paid 21 percent above the national average. Today, it’s 49 percent. We’re leaving the rest of the country behind in our skyrocketing energy costs. hat does this have to do with wildfires? Well, the major utilities are now pushing legislation to make you pay for the damages on your utility bill.
If utilities don’t get help on wildfires, California could be in another energy crisis. Nearly 20 years ago, deeply flawed public policy sent electricity costs soaring, caused widespread rolling blackouts, bankrupted one utility and nearly another and led to statewide public outrage. It also stalled California’s march toward a cleaner, more renewable energy future. The new electricity market designed in 1996 was manipulated by out-of-state energy wholesalers, including Enron, which pocketed billions of dollars from consumers. Representing the central coast in the Assembly as speaker pro tem, I helped enact a legislative fix, but the energy crisis left Californians shaken and uncertain. Today, a perfect storm has emerged that could prove just as damaging. Due to court rulings and incoherent regulations, California’s utilities face outsized financial risks from wildfires that cannot be effectively managed until conditions change.
Fort Collins, Colo., crafting goal for 100% renewable electricity by 2030. Fort Collins is making strides toward a 100 percent renewable electricity goal for 2030, a long-discussed benchmark that could hold considerable weight because the city co-owns its power provider. Meeting the proposed goal would mean a major cut in greenhouse gas emissions and a paradigm shift for Platte River Power Authority, the electricity provider for Fort Collins, Loveland, Estes Park and Longmont. But the goal will need sign-off from Fort Collins City Council and the Platte River board of directors to become official.
Unitil plans $60 million grid modernization project in N.H. Growing customer base fuels expansion of service areas. Unitil is expanding national gas to three New Hampshire towns and plans to spend $60 million in electric grid modernization as a result of past earnings growth and the anticipation of strong demand driven by robust economic development in the region, according a Thursday afternoon earnings call. The $4.2 million gas expansion – planned for Epping, Atkinson and Kingston – has yet to be approved by the state Public Utilities Commission, said Alec O’Meara, in response to NH Business Review questions. The grid modernization is based on similar efforts in other states he added. Details have yet to be worked out.
Appalachian Power to lower rates in Va. based on federal tax cut bill. Next month’s electric bill will be a little lighter for customers of Appalachian Power Co., which is passing along its savings from tax cuts imposed by Congress. An estimated $50 million interim rate reduction, spread out over Appalachian’s 1 million customers, means that monthly bills will decrease about 6 percent for the average residential account. That amounts to $4.83 for someone who uses 1,000 kilowatt-hours a month, the utility said in an announcement Monday.
Where blockchain will really matter in energy. In 2017, startups raised over $300 million to apply blockchain technology to energy, and deal flow has only ballooned in 2018. Although evangelists herald blockchain as the new internet, capable of upending mainstays of the energy sector like the centralized power grid, many applications have created more hype than value. There has been a dearth of straightforward, publicly accessible data on blockchain experiments in the energy sector, but that’s starting to change. What we’ve seen so far makes clear that some of the humbler initiatives — those that work within the existing system and partner with incumbent utilities and regulators — are likely to have the greatest impact.
Big utilities scheme to make solar customers pay more. When homeowners install rooftop solar panels, their electricity bills go down. That’s a threat to the profit margins of big utility companies, and in response they are scheming to undermine the economic benefits of going solar. Nationwide, many utilities are lobbying state regulators to let them steal their customers’ savings from going solar and put it back in their own pockets. The utilities’ usual business model is to drive up the rate customers pay for each unit of electricity, but now they’re trying to make it more expensive simply to be connected to the electric system. Your electricity bill includes a flat monthly customer charge to cover the cost of reading your meter, the line running to your home, and administrative overhead. Historically, customer charges have usually ranged from $5 to $10 a month. But now utilities want to jack up the flat charge for residential solar customers, who not only use less electricity from the system, but in some cases generate enough of their own electricity to send some of it back into the system. The companies argue that these customers are not paying their fair share of electric system costs, unfairly shifting the burden of maintaining the system to non-solar customers. Of course, raising the flat charge is also a way of discouraging customers from investing in solar.
Heliene will become first foreign solar company to produce modules after Trump tariffs. Tariffs aren’t the only reason the Canadian company set up operations in America. Canadian-based solar company Heliene will soon be making modules at a retooled Minnesota production facility. It’s the first new plant since Donald Trump announced tariffs on imported crystalline-silicon solar cells and modules. JinkoSolar, Hanwha Q Cells, FirstSolar, LG and SunPower have announced moves to expand U.S. operations in recent months. But Heliene’s is the first foreign-owned facility to move into production after the Trump administration’s Section 201 decision. Though Heliene made the decision to move into the U.S. before the 30 percent tariffs were imposed, producing modules in Minnesota will help the company circumvent costly duties. “We didn’t do any announcement,” said company president Martin Pochtaruk. “We just got it done.”