Today’s lede: Arizona regulators formally take up electricity competition. The Arizona Corporation Commission has voted to move forward with an “informal rulemaking process on the review, modernization, and expansion of the Arizona Energy Standards,” which specifically is to include a review of retail electricity competition. The press release noted the inclusion of retail electricity competition in the review of grid modernization was expressly sought by three commissioners, Robert Burns, Justin Olson, and Boyd Dunn.
Commissioner Burns submitted a letter for the record calling for the commission’s grid modernization effort, spearheaded by Commissioner Andy Tobin, to specifically encompass the issue of retail electricity competition. “[I]n order to fully develop rules and processes that will lead to a fully modernized grid and electrical system of the future, in this rulemaking docket staff must also explore, develop and propose possible revisions to the commission’s Retail Electric Competition Rules. I believe that including these rules in any new rulemaking docket is especially critical at this time of the many discussions dealing with ‘electrification of the grid.’”
This led to concurrences from commissioners Dunn and Olson. “I have not studied this issue since joining the Commission and I would like to explore the issue further,” wrote Dunn. “[I]t is worth considering in this docket revisions to the commission’s Retail Electric Competition Rules as part of evaluating the modernization of the grid and the electrification system of the future,” wrote Olson.
Freeport Minerals Corp. and Arizonans for Electric Choice and Competition submitted comments for the record in support of opening Arizona’s electricity market to competition. “[I]n order to fully develop rules and processes that will lead to a fully modernized grid and electrical system of the future, the rulemaking process must also include a review of the role that market-based solutions can play given the advancements in technology that make choice a viable reality for many customers. AECC supports the revision and integration of the commission’s Retail Electric Competition Rules into a comprehensive Rulemaking effort designed to modernize the industry so that renewable and clean energy, resource planning and procurement, and energy efficiency and demand-side management can incorporate market-based solutions to promote cost efficiency for the benefit of customers,” Freeport and AECC said in comments submitted for the record.
Separately, Olson wrote in the record regarding his concerns about allowing utilities to own electric vehicle charging infrastructure in ratebase. “We should begin with discussing whether EV charging infrastructure is a natural monopoly that necessitates involvement by our regulated entities,” Olson wrote. “Private, non-monopoly businesses have certainly shown a willingness to build EV charging stations. If private industry is willing to finance EV charging networks, then I do not believe we should burden ratepayers with that cost. Utilities that own charging stations also may have a competitive advantage over private businesses such that their entry may deter private investment in this area.”
Click through here to access the rulemaking docket.
In other action, the commission agreed to encourage business development in Arizona by approving “a special rate application for large volume energy users’ electricity rates.” Arizona Public Service is now required to make a compliance filing outlining a revised Rate Schedule General Service Extra High Load Factor. “Commissioners agreed to encourage economic development in Arizona by meeting the needs of large companies that require significant energy load and have a strong corporate commitment to sustainability, carbon free activity, and renewable energy,” the press release said.
Click through here to access the docket.
Senate poised to consider curbing Clean Water Act authority delegated to states in pipeline certification process. “The roiling debate over states’ right to halt development projects over their water quality effects heads to the Senate Environment and Public Works Committee today,” Politico reports. “The panel will hold a legislative hearing on a bill from Chairman John Barrasso, S. 3303, the Water Quality Certification Improvement Act of 2018. The measure would limit states’ authority under Section 401 of the Clean Water Act, which requires states to certify that projects won’t harm their water quality standards before the federal government issues a permit. In recent years a handful of Democratic-led states have used that authority to block natural gas pipelines. Republican Maryland Gov. Larry Hogan is also using the authority to try to force Exelon Corp. to clean up nutrient pollution flowing through one of its dams that harms the Chesapeake Bay.”
Senate measure amending Clean Water Act could have big impact in New Jersey. There is a move underway in Congress to revamp a key section of the federal Clean Water Act, a step that could undermine the ability of states to block energy and big infrastructure projects. The legislation, before the Senate Environment and Public Works Committee, would weaken Section 401 of the CWA, a provision that allows states to determine if such projects comply with water-quality standards. The tool has been used by states, including New York, which denied a permit to the 120-mile interstate Constitution pipeline over water-quality concerns. Many opponents of the PennEast pipeline in New Jersey are hoping the state Department of Environmental Protection will take similar action here. But Senate Republicans and industry lobbyists have argued the states are using the 401 process to delay or stall projects, including natural-gas pipelines. “The water quality certification process is being abused by a few states in order to delay important projects,’’ said Sen. John Barrasso, a Republican who drafted the bill to revamp that section of the law. “This kind of obstruction is about politics, not water quality,’’ he said in a press release announcing the bill.
More electric industry news of interest:
NRC filing moves FirstEnergy’s Davis-Besse nuclear plant one step closer to closure. FES submits training program for fuel removal, storage. FirstEnergy still mulling decision on Davis-Besse. FirstEnergy Solutions has taken the next step toward deactivating Davis-Besse Nuclear Power Station and two other nuclear plants in the region, as legislative efforts to help the facilities have stalled. The company announced Wednesday that it had submitted to the Nuclear Regulatory Commission its Certified Fuel Handler Training and Retraining Program, as required under the NRC’s decommissioning process. FES also reported that it must either purchase the fuel required for Davis-Besse’s next refueling or proceed with the scheduled plant shutdown by mid-2019. May 2020 is the scheduled date for deactivation of the Ottawa County nuclear plant. Thomas Mulligan, a spokesman for FirstEnergy Solutions Inc,. said there were a number of scheduled steps the company had to follow in the time leading up to Davis-Besse’s deactivation. He said efforts for any state legislation that could help FES’ two Ohio plants — Davis-Besse and the Perry nuclear plant near Cleveland — appeared to be on hold. “There is no legislation at this moment that I’m aware of,” Mulligan said.
Will Washington State voters make history on climate change? The state could be the first in the union to adopt a carbon price by ballot. This November, voters in Washington State may do what no group of people—in or outside the United States—has done before. They will vote on whether to adopt a carbon fee, an aggressive policy to combat climate change that charges polluters for the right to emit carbon dioxide and other potent greenhouse gases. Their decision will reverberate far beyond the Olympic Peninsula. If the measure passes, Washington will make history, becoming not only the first state in the union to adopt a type of policy called a carbon tax—but also the first government anywhere to do so by ballot referendum.
Emails show history of private meetings between regulators, energy insiders and advisers to Gov. Jerry Brown. Emails that California utility regulators withheld for years — and recently released under a court order — show that political appointees of Gov. Jerry Brown met privately to discuss state energy policy. State officials say the meetings are routine and help them develop policies that benefit consumers. When leaders from multiple boards and commissions coordinate priorities and objectives, the public is better served, they said. “It’s a basic function of government for agencies to work cooperatively with others,” Brown spokesman Gareth Lacy wrote in an email. According to the newly released emails, officials from the California Public Utilities Commission joined colleagues from the Energy Commission, Air Resources Board, State Water Resources Control Board and Independent System Operator to debate issues of mutual concern, including cases before their respective panels. Meetings of the so-called Energy Principals also included members of the Brown administration, energy producers and other industry stakeholders, the emails show. Utilities commission spokeswoman Terrie Prosper said the Energy Principals meetings were held periodically so public officials could discuss cross-cutting issues that are important to the state. “Discussions among the leaders of various agencies must occur in order to ensure that the state properly manages resources and considers the needs of Californians,” she said in a statement. “There was never a quorum of CPUC commissioners present.” Critics were quick to condemn the meetings, which according to the emails were held through most of 2014. “They are not appropriate because the public doesn’t get a chance to participate,” said Michael Aguirre, the San Diego attorney who sued the utilities commission for access to the emails that revealed the meetings. “If they’re going to collapse four or five agencies into a group of energy principals, then they need to notice their meetings,” he said. “The public’s constitutional right to watch needs to be respected.”
California debate on utilities’ wildfire liability sparks a lobbying frenzy. With the clock ticking down on the legislative session, some of the state’s biggest special interests are spending millions of dollars to influence the debate over how much wildfire liability PG&E and other investor-owned utilities should face, given the “new normal” of hotter, dryer summers.
Study says California utilities should only pay for wildfires if they are negligent. In a 12-page report analyzing the costs of deadly wildfires in California, the Wharton Risk Management and Decision Process Center at the University of Pennsylvania included among its recommendations that utilities should pay for property damages from wildfires only if it has been determined they acted negligently (click through here). “Utilities must provide power, even in high-risk areas,” the report said. “If they operate their system according to the highest safety standards, but a prolonged drought, a heat wave, and high wind conditions combine to blow debris into a line and it sparks a conflagration, should they be required to pay all property damage associated with that fire?” The authors of the brief said they looked into the California wildfire debate because the Wharton Risk Management and Decision Process Center has researched risk management for floods and hurricanes — and to a lesser extent — wildfires for more than 30 years. “Just from an exposure perspective, while all the West has burned and is burning, California does seem to be at the heart of things,” said Carolyn Kousky, the center’s Director of the Policy Incubator. “You have a situation where the utility, who is providing what some could say is an essential service in electricity, getting squeezed whether they are negligent or not,” Katherine Greig, a senior fellow and strategic adviser at the Wharton Center said. “We are not advocating for a situation where the utility doesn’t feel pain if it doesn’t take really prudent steps to mitigate starting these fires. We’re just saying be careful what you do in terms of laying all the costs on them.”
California Senate appropriations committee takes up ISO regionalization bill. A bill that would move California toward forming a regional ISO is under consideration in the state Senate Appropriations Committee. The bill, A.B. 813, calls for the appropriation of about $737,000. Any bill with a fiscal impact of $50,000 or more is put in a “suspense file” until appropriations can review it. The appropriations committee is the last Senate committee looking at the bill. If passed, it will be sent back to the Assembly for a final vote. California policymakers have been pushing hard for a regional market that would encompass all the western states for years, but opponents have been pushing just as hard to kill the bill. A.B. 813, which would make regionalization legally possible, has moved through the energy and utilities and the judiciary committees. “We are pleased that lawmakers have thus far moved this bill along,” California ISO spokesman Steven Greenlee told Utility Dive.
California’s zero-carbon bill aims to set climate example. California lawmakers want to prove that one of the world’s largest economies can wean its electric power sector off of fossil fuels, using a bill expected to receive a final vote before the end of August. If enacted, Senate Bill 100 would make California the second state to adopt a 100 percent renewables mandate. Hawaii became the first state to set that target, in 2015. The bill is vigorously opposed by the state’s electric utilities, who predict cost increases.
California seeks way to get energy choice right this time. Given its influence, it’s never a pretty sight when California goes astray on energy policy. The energy crisis of 2000-01 still looms large. Its rolling blackouts and skyrocketing costs impaired America’s then nascent customer choice movement. But fast forward nearly two decades and customer choice is reborn — although not in the way the state first envisioned, and now with California positioned as a strong success story.
Democratic candidates for Arizona Corporation Commission debate (video). Democratic candidates for the Arizona Corporation Commission participated in a debate hosted by The Arizona Republic and azcentral.com. The hour long debate’s live stream is archived at the link below. The broadcast begins at the 11.30 mark.
Potential Navajo Generating Station operator offers few new details. A Chicago-based company in negotiations to take over a coal-fired power plant in northern Arizona said it would run the generating station at less than half its existing capacity to ensure it’s economical, a company official said. Fewer employees, and a new lease and coal supply agreement also are in the mix as Middle River Power pursues a takeover of the Navajo Generating Station. The current owners of the 2,250-megwatt plant near the Arizona-Utah border are planning to shut it down next year unless someone else buys it, saying power produced by natural gas is cheaper. Joseph Greco, a senior vice president for Middle River Power, told Arizona utility regulators the company would operate the plant at 44 percent of its capacity, and differently during peak and off-peak demand, making it more economical while ensuring a steady power base. The company offered few other details, citing non-disclosure agreements.
Missouri court overrules regulators, finds PSC has jurisdiction over EV charging stations. A Missouri appeals court gave utilities in the state a path to include electric vehicle (EV) charging infrastructure in their rate base, finding that state regulators do have jurisdiction over the stations (click through here). The Missouri Court of Appeals for the Western District concluded last week that charging stations are similar to gas stations, siding with Kansas City Power & Light (KCP&L). The state Public Service Commission (PSC) had argued last year that the stations provided a charging service rather than the sale of electricity, preventing another Missouri utility, Ameren, from developing its ports. While the decision likely means KCP&L will again request to recover investments it has made in EV infrastructure, the court’s order made clear that regulators have a range of mechanisms to ensure their authority results in fair rates for all customers.
Reporter breaks down ad opposing Nevada’s Question 3: The Energy Choice Initiative (video). Before it’s all over in November, the advertising fight over the Energy Choice initiative will make it the most expensive ballot initiative in the history of Nevada. The measure, known as Question 3, would amend the constitution to give Nevadans the right to choose which company they buy electricity from. But the battle of ads is leaving many Nevadans confused about what the measure would actually do. Politics Now Co-host Steve Sebelius breaks down an add opposing the initiative.
Wrangling over consumer costs of failed S.C. nuclear reactors ain’t over yet. Still, unless the Fourth Circuit Court of Appeals reverses her — which certainly isn’t impossible and could happen as soon as today — Judge Childs’ ruling all but guarantees that this month’s temporary rate cut will stay in effect until December. That’s when the PSC must rule on the request by SCANA Corp. and Dominion to merge and charge us an additional $5 billion over the next 20 years for the nuclear reactors that SCE&G abandoned mid-construction. Even if the court were so inclined, it would be almost impossible to rule on the merits of the lawsuit before then. Federal courts simply don’t move that fast. That means we can now turn our attention away from the sideshow of our August through December power bills and focus instead on the real fight: how much we will have to pay for the unfinished reactors during that 20-year “abandonment” phase of construction. The Public Service Commission will decide whether and how much SCE&G can charge based on that new law that SCE&G is challenging in court. Expect SCE&G to amend its lawsuit after the PSC rules, to incorporate specific objections to that order.
Utility exec addresses Pueblo city council prior to vote on municipalization consultant. Before City Council voted to hire a consulting firm on Monday night that will study the viability of the city ending its pact with Black Hills Energy early, Vance Crocker, the vice president of Colorado electric operations for the utility, gave a presentation to council about changes Black Hills has made to help customers and its commitment to working with the city.
Henderson County, Texas, saves on electricity. Henderson County has benefitted for several years of decreased electricity rates, and the trend is expected to continue. Commissioners authorized Jack Bailey of Texas Power Consultants on Tuesday to lock in a rate at the current price, about 3.9 cents per kilowatt hour. “To get power in the 3 cent range is highly unusual,” Bailey said. “That’s truly amazing.”
Precinct 4 Commissioner Ken Geeslin said the low rates may not be available indefinitely because power plants are being shut down. “We may not see rates this low again,” Geeslin said. “There are a lot of indicators out there that are concerning over the next five years.” Proposed plants that were to have been constructed in Henderson County have not reached the construction phase. “The Southern Company spoke to this court about a tax abatement for a new power plant in the Trinidad area, which I think you all know, didn’t happen,” Geeslin said. “In Precinct 4, there’s a peaking plant that was planned outside of Larue. They can’t find a customer. They had the equipment, the land and all of the options but no customer.”
Entergy scraps plans to hike Algiers customers’ rates after pushback from City Council. Entergy New Orleans is scrapping plans to sharply hike rates for Algiers customers and to improve the company’s overall profitability after City Council members panned both ideas. The plan Entergy sent to the council last month would have seen the utility charge the average Algiers customer an extra $22 a month for 1,000 kilowatt-hours of electricity, a typical amount for residential customers. At the same time, Entergy would have raised its authorized “return on equity” rate to 10.75 percent, which is higher than the council has approved in the past. The utility said the higher rates in Algiers would bring that area in line with the rest of Orleans Parish. Residents on the west bank have paid cheaper rates for years because they formerly fell under Entergy Louisiana, a separate unit of Entergy Corp. Utility officials said the higher overall profit margin would have helped pay for plans to install “smart” electricity meters in customers’ homes over the next two years, build a new gas-fired power plant in New Orleans East and modernize the city’s electricity grid. But Councilwoman Helena Moreno, chairwoman of the council committee that oversees Entergy, said the plan would have meant “an unacceptable rate shock for Algiers customers.” It also would have brought “an excessive return on equity benefiting Entergy shareholders, at the expense of New Orleans’ ratepayers,” she said in a statement Wednesday. Faced with those and other objections, Entergy said it would withdraw its plan and send a new proposal to the council next month.
The Great American Con: Why giving false hope to coal country is the cruelest hoax of all. Next week, Donald Trump will rally his supporters in Charleston, W.V, trying to lift the sagging poll numbers for the Republican nominee to the U.S. Senate while also feeding raw meat to the populace there about how coal will once again be King of the Hill. But the reality couldn’t be any different — that coal is no longer the linchpin of the American economy and that there are now cleaner and cheaper ways to create electricity. The message, instead, should convey this and urge the state’s leadership and its citizenry to champion low-carbon fuels and to take part in the new energy revolution sweeping not just the country, but also the rest of the developed world. To do otherwise is to mislead the people. “From Texas to Pennsylvania to West Virginia, recent coal plant retirement announcements are part of a trend that adds up to one coal plant retirement every 16 days – the same pace as during the Obama years,” Mary Anne Hitt writes for the Sierra Club.
GE falls to 9-year low below $12. General Electric shares fell below $12 per share for the first time since July 24, 2009, on Wednesday, plowing a new low for the stock this year as investors appear concerned about the embattled industrial company’s turnaround plan. Shares of GE fell 1.1 percent in trading to close at $12.22 per share. The stock slipped as low as $11.94 per share before rebounding back above $12. The stock has fallen nearly 11 percent this month, with its market value now at about $104 billion.
SEC has reportedly served Tesla with a subpoena after Elon Musk’s take-private tweet. The Securities and Exchange Commisison has served Tesla with a subpoena after CEO Elon Musk tweeted that he was considering taking the company private and that he had the necessary funding lined up, according to reports from The New York Times and other outlets. Earlier reports said the SEChad intensified scrutiny of the automaker after the controversial tweet. A subpoena would be one of the first steps in a formal inquiry. Shares of Tesla were down 3 percent in afternoon trading, though they moved only a fraction of 1 percent following the Times article. Representatives of Tesla and the SEC declined to comment.
Goldman Sachs is advising Elon Musk on his plans to take Tesla private. Goldman Sachs is working with Tesla on its bid to go private, the bank confirmed. Two days after Elon Musk said he was “excited to work with Silver Lake and Goldman Sachs” as financial advisers in his bid to take Tesla private, at least half of the tweet has been confirmed. In a note to clients, Goldman Sachs said it was suspending research coverage of Tesla because it was “acting as a financial advisor in connection with a matter that is fundamental to the reasonable analysis of the rating and price target for the stock.” Earnings estimates during this period will be made without regard to the proposed matter, Goldman said, adding that the “not rated” status “will continue until such time as sufficient information is available, and/or contingencies appear resolved, to allow such analysis.”
Tesla backs off solar panel deal with Panasonic. The U.S. company won’t buy the entire output of the solar plant it jointly runs in Buffalo. Tesla Inc. has backed away from an agreement to buy all the output from a solar-panel factory it operates with Panasonic Corp., Panasonic said Thursday, another sign of the uncertain outlook for Tesla’s solar business, SolarCity. The Japanese company said it began making solar cells and modules at the factory in Buffalo, N.Y., in August 2017, under a deal that called for Tesla to buy the entire output for its home solar-panel business. But Panasonic said the contract was revised early this year to remove the exclusivity.
Ontario Power Generation inks deal to acquire U.S. hydropower assets. No impact on electricity bills, greater financial return for Ontarians. Ontario Power Generation has entered into a purchase and sale agreement with affiliates of Hudson Clean Energy Partners and other shareholders to acquire 100 per cent of the equity of Eagle Creek Renewable Energy LLC (Eagle Creek), an owner and operator of small hydropower facilities in the United States. This investment on behalf of Ontarians will be financed through OPG’s corporate public debt program or other available credit facilities. No taxpayer dollars will be used to fund this acquisition. BMO Capital Markets acted as a financial advisor to OPG on the Acquisition. The transaction is subject to standard regulatory approvals.
Is wind power blowing holes in Hydro-Québec’s profits? On the eve of an election call, Quebec’s main party leaders have gone to battle over a wind-power project that Liberal Premier Philippe Couillard argues is crucial to good relations with First Nations but that François Legault’s Coalition Avenir Québec calls “useless” and “ruinous.” The head of Hydro-Québec, which would purchase all of the power from the 200-megawatt Apuiat wind-energy development on Quebec’s remote North Shore, has warned that the project would cause losses of between $1.5-billion and $2-billion for the provincial utility over 25 years. The warning from Hydro-Québec chief executive officer Éric Martel, contained in a letter obtained last week by Le Journal de Montréal, drew a stiff rebuke from Mr. Couillard and Quebec Energy Minister Pierre Moreau. They ordered Mr. Martel to put a sock in it and negotiate a long-term power purchase contract with the Innu First Nation and its partners in the $600-million Apuiat project, Quebec’s Boralex Inc. and Le Groupe RES of France. Mr. Martel’s position, Mr. Moreau said in a reply to the utility’s CEO, “is contrary to the direction and objectives that the government of Quebec has set for Hydro-Québec, of which, I will remind you, it is the sole shareholder.” The controversy over the Apuiat project has rekindled a debate about the role of wind energy in Quebec’s electricity mix, of which more than 90 per cent comes from decades-old hydroelectricity dams.