California Energy Markets is the benchmark independent newsletter covering the energy and utility marketplace in California and the US Southwest.
http://www.newsdata.com/cem/thisweek.html - Dec 6, 2013 1:34:53 AM - Aug 14, 2012 11:53:01 AM
[CEM 1260 / November 27, 2013]
Appeal of Community Power Keeps Growing
The Marin Energy Authority is set to consider adding the City of Albany and Napa County to the pool of jurisdictions served by its community-choice aggregation program, Marin Clean Energy. Formal requests by Albany and Napa County to join MEA are indicative of growing interest in CCA in the Bay Area and throughout the state as elected officials seek greener power options for residents and businesses, reduced carbon footprints, and local energy-project development. Meanwhile, CCA advocates in California are mulling the formation of a statewide joint-powers authority to make aggregation more plug-and-play.
IOUs Propose Steep Rate Hikes for Lower Tiers
California's investor-owned utilities are seeking interim rate reforms they say will help resolve a decade-long rate inequity through which residential users in upper rate tiers have borne the brunt of rate increases. The proposals, submitted to the CPUC Nov. 22, would increase lower-tier rates as much as 32 percent, while rates for upper tiers would mostly decrease. The changes come as the commission is looking at ways to restructure residential electric-rate design in line with a new state law.
CPUC Looks for Ways to Limit Green Power Costs
An effort at the CPUC looks to limit utilities' spending on procuring renewables, following state legislation that calls for avoiding a disproportionate rate impact. What that means remains up for debate and possible definition. The commission's staff, a utility, large energy consumers, and renewables-industry groups have proposed various ways to calculate the cost cap.
Duke Projects in Wyoming Are First Wind Farms Guilty of Bird Deaths
Duke Energy has cut a deal with the U.S. Department of Justice and agreed to pay a $1 million fine for killing birds at two wind projects in Wyoming, the company said Nov. 22. The charges include killing 14 golden eagles and 149 other birds at the 200 MW Top of the World and 99 MW Campbell Hill wind projects near Casper between 2009 and 2013. The case is the first-ever criminal enforcement under the 85-year-old federal Migratory Bird Treaty Act for unauthorized kills at wind projects.
- FERC Eases Small-Generator Interconnections
- CARB Proposes $5.3 Million Research Plan
- Study: Methane Estimates May Be Too Low
- Quick Bites: CPUC Looks at Water-Energy Nexus
[CEM 1259 / November 22, 2013]
Sonoma Clean Power Inks Contracts With Constellation, Calpine
Community-choice aggregation upstart Sonoma Clean Power has entered into two electricity-supply contracts-one with Constellation Energy and the other with Calpine Energy Services-that pave the way for the CCA to launch as planned in May 2014. Sonoma Clean Power officials believe the contract prices will allow the CCA to offer rates that are below the proposed 2014 rates for incumbent utility Pacific Gas & Electric, a development that makes them "incredibly happy."
CARB Defends Emissions Data
A new analysis by Bloomberg New Energy Finance asserts that data issued recently by the California Air Resources Board is misleading because it shows emissions from facilities regulated under cap and trade increased between 2011 and 2012, when in fact they remained flat. CARB vigorously defended the data, saying it's BNEF that has it wrong. Nonetheless, carbon-market analysts continue to raise alarms that falling or flat emissions in the state are resulting in a substantial oversupply of carbon allowances, which they say could spell trouble for the market's liquidity.
PG&E Ethics Fine Debated; CPUC Proposes First Ratepayer Refund for San Onofre Shutdown
Consumer groups and cities pushed for the higher of two proposed fines for Pacific Gas & Electric related to the utility's handling of pipeline-safety information. The CPUC is debating whether to impose fines of $6.75 million or $17.25 million. Meanwhile, a draft decision at the CPUC would refund ratepayers about $94 million in costs collected for San Onofre Nuclear Generating Station.
CPUC to Lawmakers: We're Working on Safety
CPUC officials assured lawmakers at a Nov. 18 hearing they were doing all they could to make sure safety is a focus at the commission, and welcomed what they called constructive criticism in a recent Senate report that found not enough commitment to safety at the commission. Sen. Jerry Hill convened the hearing to present a report that was critical of the efforts the CPUC has made to date on safety.
- Report on OTC Options at Diablo Stirs Debate
- New Renewables Rules Cause Stir in New Mexico
- DOE Told to Propose Ending Nuke-Waste Disposal Fee
- Google and KKR Invest in Recurrent Solar Projects
[CEM 1258 / November 15, 2013]
Renewable-Energy Plans Approved; CPUC Opens Proceedings on Alternative Vehicles, Efficiency
The CPUC opened new proceedings to delve into the best ways to better incorporate safety into general rate cases; bolster alternative-fuel vehicles; and extend energy-efficiency programs. The commission also approved investor-owned utilities' 2013 renewables portfolio standard plans. Outside of small programs such as feed-in tariffs, investor-owned utilities don't plan to procure any more renewables that would come on line before 2016. Ratepayer-advocacy groups and solar developers say that could lead to higher costs, as some federal tax credits are scheduled to expire by then.
Dynegy Will Shutter Morro Bay Power Plant
Dynegy has announced it will close the 650 MW natural gas-fired Morro Bay power plant next year after failing to secure a long-term power-purchase agreement for the facility. The company is exploring alternative uses for the site, including renewable-energy development. Morro Bay couldn't generate enough business to support operation as a merchant facility. Meanwhile, Dynegy has found a buyer for power from another aging once-through-cooling facility, Moss Landing, at least for the next three years.
Arizona Adopts 70 Cents/kW Net-Metering Surcharge
Arizona regulators ordered Arizona Public Service to charge future residential net-metering customers a monthly fee of 70 cents for each kilowatt of installed solar capacity. Solar-industry representatives said it would wipe out some or all of the residential customer savings that result from leasing solar panels; APS said the fee wasn't enough to cover grid costs.
CEC Staff and HECA Seek to Resolve Issues
CEC staff and the developer of the Hydrogen Energy California Project are at odds over how to calculate greenhouse-gas emissions for the integrated gasification combined-cycle plant, and how to evaluate the project's carbon-sequestration component and its compliance with California's emissions performance standard. A workshop this week helped to close the gap a bit, but there is no guarantee the CEC will take the developer's recommendations.
- Debate Continues Over Need for Peaking Plant
- Riverside to Buy Wind Power as RPS Contingency
- CEC Adopts RPS Procurement Report
- Gateway West Transmission Line Gets Partial OK
[CEM 1257 / November 8, 2013]
Without SONGS, California Emissions Spike
Data released this week by the California Air Resources Board shows greenhouse-gas emissions from in-state sources grew significantly in 2012, in spite of California's aggressive efforts to reduce industrial pollution. The spike was caused by an increased reliance on natural gas-fueled generation due to the closure of the San Onofre Nuclear Generating Station as well as diminished hydropower production, CARB reported. Smokestack watchers remain optimistic, however, that California is on track to achieve its long-term emissions-reduction goals.
Cal-ISO Approves Design of Energy Imbalance Market
Cal-ISO's energy imbalance market with PacifiCorp is set to launch in October 2014 despite concerns from some stakeholders over transmission, greenhouse-gas costs, bidding practices, and "leaning" on the new market for capacity. Cal-ISO said an ongoing stakeholder process will deal with some of these issues.
CPUC Commissioner Proposes $17 Million Fine on PG&E for Ethics Violation
A proposed decision from CPUC Commissioner Mark Ferron would fine Pacific Gas & Electric $17.2 million-more than twice as much as a CPUC judge has proposed-for failing to report pipeline-safety information in a timely manner. The CPUC also issued an $8 million citation to PG&E for failure to perform pipeline-safety tests in accordance with federal rules.
Senate Report Slams CPUC's Safety Oversight
Three years after the deadly San Bruno natural gas transmission-line explosion, the CPUC has not yet figured out how to make safety a priority, according to a new report by a Senate subcommittee. Commissioners have had little involvement in the development of safety policy at the commission, the report argues, and the CPUC does not follow up on audits of pipeline safety.
- SDG&E Earnings Take a Hit on Tax Expenses
- to CEC: Nuke Concerns Not Your Purview
- Arizona Mulls Charge on Solar PV Customers
- FERC Says It's Clearing the Market of Bad Actors
[CEM 1256 / November 1, 2013]
Pacific States and British Columbia Create Plan to Combat Climate Change
California, Oregon, Washington and the Canadian province of British Columbia signed an agreement this week that could lead to a more harmonized regional effort to combat climate change. The Pacific Coast Action Plan on Climate and Energy commits the jurisdictions to steps aimed at reducing greenhouse-gas emissions, including the creation of carbon-pricing programs, the low-carbon fuel standard and other initiatives California has pioneered. Gov. Jerry Brown called it a historic first step in addressing "the world's greatest existential challenge."
PG&E Earnings Plunge on San Bruno Charges
PG&E Corp. saw its third-quarter earnings plunge after a big charge for pipeline-related costs it can't recover from customers. PG&E expects a final decision on a penalty related to the deadly 2010 San Bruno natural gas pipeline explosion early next year, and if the fine is sizable, the utility said it could appeal the CPUC decision.
Edison Profits Healthy; Utility Looks Ahead at Capital Spending, SONGS Cost Recovery
Edison International's third-quarter earnings were rosy-$438 million, an increase of 130 percent from the year-ago quarter. But long-term earnings growth depends on recovering costs related to the shutdown of the San Onofre Nuclear Generating Station and taking advantage of new opportunities in a changing industry, such as energy storage.
EPA Urges Dry Cooling for HECA Plant
The U.S. Environmental Protection Agency has recommended that the Hydrogen Energy California Project switch from wet cooling to dry cooling, a move that could reduce water use and save tens of millions of dollars over the life of the plant. As projected, HECA would use more than 2 billion gallons of water a year. Developer SCS Energy said it has found dry cooling would be infeasible.
- Could Get $6.7M Fine for Ethics Violation
- Stakeholders: NV Energy Buyout Could Cost Ratepayers
- Bipartisan Bill on Rare Earths Introduced in U.S. Senate
- CPUC Forecasts Leave Out SONGS Costs
[CEM 1255 / October 25, 2013]
Cal-ISO, PacifiCorp See Energy Imbalance Market as Building Block in Larger Western Effort
Cal-ISO and PacifiCorp hope that their energy imbalance market, set to launch next year, will draw more participants in the West once the EIM starts to show benefits. But Northwest entities have some issues with market-design details, including the imposition of a carbon adder under California's cap-and-trade system as well as reciprocity between transmission networks. California utilities, meanwhile, fear the EIM could be manipulated and suggested Cal-ISO go slowly on implementation.
SCPPA to Purchase Nevada Power Plant for LADWP
The Southern California Public Power Authority is set to acquire a natural gas-fired power plant in Nevada on behalf of the Los Angeles Department of Water & Power. Energy generated by the combined-cycle plant, the 531 MW Apex Power Project owned by LS Power, would replace electricity LADWP currently receives from the coal-fired Navajo Generating Station in Arizona.
At Cal-ISO Symposium, a Focus on Reliability
A town-hall-style panel at Cal-ISO's Oct. 23 Stakeholder Symposium 23 elicited wide-ranging responses from experts on some of the thorniest questions facing California's electricity sector, including how to ensure grid reliability in the absence of the San Onofre Nuclear Generating Station. One point of contention is how much preferred resources, such as renewables and efficiency, can fill the void left by SONGS.
Apple Aims for Zero Net Energy With New Office
The City of Cupertino has approved Apple's plans to construct a 2.8-million-square-foot, four-story office building that will accommodate 12,000 employees and run entirely on renewable energy. The circular building will be the centerpiece of a sprawling 176-acre development site. Apple plans to generate about half the power needed at the site with on-site fuel cells, with the remainder coming from on-site solar and market purchases of renewables.
- PG&E Gets OK to Open Gas Line as Winter Arrives
- PNM, New Mexico Regulators Agree to Review Rates
- EPA: Power-Plant Emissions Down 10 Percent
- Salton Sea Restoration Deal to Drive Renewables
[CEM 1254 / October 18, 2013]
CPUC Kicks Off Energy Storage Market
California this week set the first energy-storage mandate in the nation. The CPUC, concerned about having enough flexible capacity to integrate renewables, adopted a decision that requires utilities to procure more than 1.3 GW of energy storage by 2020. Investor-owned utilities must procure storage for three different grid domains-transmission, distribution, and customer sites-but will be allowed to defer procurement of 80 percent of their targets if no cost-effective or viable storage projects are found. Pumped-hydro storage is excluded from targets.
Google Invests $103 Million in Solar Project
Further cementing its position as a financing engine for renewable-energy projects in the state, Google has announced it is investing $103 million in the 265 MW Mt. Signal Solar Project, located in Imperial County. The solar farm is the latest addition to Google's $1 billion renewable-energy investment portfolio, which now totals 13 projects with a collective nameplate capacity exceeding 2 GW, according to the company.
Cal-ISO Looks at Options for Distributing Forfeited Interconnection Funds
Cal-ISO is considering new methods for distributing the millions of dollars in forfeited interconnection-study funds it is left holding each year as generation projects withdraw from the interconnection queue. Currently, Cal-ISO distributes forfeited funds to scheduling coordinators, but a number of stakeholders say the method is unfair and should be abandoned. The grid operator has collected about $40 million in forfeited funds since 2009, and this week petitioned FERC for permission to disburse the $20 million collected in 2012.
CEC Staff: Blythe Impacts Significant
CEC staff determined that impacts of the 485 MW Blythe Solar Power Project would be significant in several technical areas, including biological resources and cultural resources. Staff recommended mitigation measures such as land acquisition to protect habitats for certain species.
- Net Metering Cost Shift Debated at CPUC
- ACC Passes on Solar-Panel Rebate Decision
- Will Hear EPA GHG Permit Challenge
- Firm Produces Lithium From Geothermal Brine
[CEM 1253 / October 11, 2013]
Utility of the Future Seen on the Horizon
State energy agencies gathered with utility representatives and outside experts to talk about what the changing energy landscape and grid could mean for California utilities. As distributed generation gets cheaper and is deployed throughout the state, utilities face declining revenue and a need for capital to bolster a grid that will need to serve more functions. The meeting marked the start of discussions about possible changes to regulatory and ratemaking structures.
PG&E Bid to Reap Shareholder Benefits From Hercules Purchase Scrutinized
Ratepayer advocates and municipal utilities are trying to put the kibosh on a cost-recovery proposal put forth by Pacific Gas & Electric that would allow shareholders to reap $2.7 million in benefits from PG&E's planned purchase of utility assets belonging to the City of Hercules. Critics are calling the proposal-which would allow shareholders to share in projected benefits from the transaction-an "unwarranted money grab." PG&E, however, says the proposal is equitable and compensates PG&E for the risks it is taking in the deal with Hercules.
Federal Shutdown Impact Felt in California
The partial shutdown of the federal government slowed permitting of renewable-energy projects destined for public lands and other energy-related work in California-including development of the Desert Renewable Energy Conservation Plan. Meanwhile, agencies such as the Nuclear Regulatory Commission are operating with skeleton crews.
CEC Report: State Needs to Do More to Combat Climate Change
California needs to do further work in coming years to reduce greenhouse-gas emissions and to increase the resiliency of the state's energy system to the impacts of climate change, the CEC said in a new report. Climate-change impacts to the state's energy supply include increased electrical demand, decreased thermal power-plant efficiency, potentially greater fluctuations in hydropower levels, and wildfires.
- PG&E Gas-Safety Concerns Prompt Shutdown
- Geothermal Energy May Help With Intermittent Power
- Supreme Court Weighs GHG Regulation Cases
- Borenstein Urges Cap-and-Trade Price Ceiling
[CEM 1252 / October 4, 2013]
California: Unfriendly to Utility Investment?
CPUC Commissioner Mark Ferron noted this week that the investment community believes California could come to be seen as "investment-unfriendly" as it deals with two cases. The commission could penalize Pacific Gas & Electric up to $2.25 billion for the San Bruno explosion. It could also refuse to allow Southern California Edison to recover substantial costs related to the shutdown of the San Onofre Nuclear Generating Station. Investors have warned of credit-rating downgrades from the San Bruno case, but consumer advocates believe it's an attempt to persuade the CPUC to go easy on PG&E.
To Launch Aggregation Program, San Francisco Lawmakers Search for Way Around SFPUC
With CleanPowerSF mired in political gridlock, members of San Francisco's Board of Supervisors are considering alternative strategies for launching the community-choice aggregation program without the blessing of the city's utilities commission or mayor. At a hearing this week, supervisors discussed possible avenues for moving CleanPowerSF forward, including linking up with the Marin Energy Authority or hiring an outside contractor to run the program. But the path forward won't be simple, given potential legal conflicts.
Draft Update of AB 32 Scoping Plan Highlights Progress, Changes Ahead
A draft update of the state's AB 32 scoping plan evaluates the impacts of existing pollution-reduction policies and what steps will need to be taken to achieve longer-term goals. California is on track to meet the 2020 greenhouse-gas emissions target set forth in AB 32, but the plan notes that the target is due for a revision given more recent emissions figures. Longer term, to achieve more aggressive emissions reductions, the state will have to consider expanding renewables and carbon capture for natural gas-fired power.
Bird Fatalities at Ivanpah Spark Concern
Thirteen birds were scorched or singed at the Ivanpah Solar Electric Generating System in the first few weeks of September, according to data released this week by project developer BrightSource Energy. The injuries are consistent with exposure to solar flux, or concentrated solar energy. Ivanpah is in the final stages of construction, and is undergoing testing. Regulators may consider adding new conditions to try and mitigate the impacts.
- WECC Takes Big-Picture Look at Its Transmission Future
- Wyden Blames 'Organized PR' for Binz Withdrawal
- USFWS Considers Eagle Take Permit
- Quick Bites: Edison Goes Public With SONGS Grievance
[CEM 1251 / September 27, 2013]
Net-Metering Cost Shift Could Approach $1 Billion
A long-awaited draft of a report on ratepayer impacts from California's net-energy metering program found that, by 2020, net metering could shift more than $1 billion per year to customers who do not take part in it. For residential consumers, a typical NEM customer is paying much more than their cost of service before installing solar photovoltaics but less than the cost of service after installing NEM, the report stated. The CPUC's Energy Division believes the $1 billion figure is overstated, and solar advocates have blasted the report.
NREL: Costs to Integrate 33 Percent Wind, Solar on Western Grid Are Manageable
Integrating up to 33 percent wind and solar on the U.S. Western grid is cost-effective and would substantially reduce emissions, according to a study released Sept. 25 by the National Renewable Energy Laboratory. NREL estimates the grid would save $7 billion a year in fuel costs under such a scenario, and the increased cost to cycle fossil-fuel power plants to integrate renewables would be at most $1.28/MWh. The report, however, says more work needs to be done on how the economics of fossil-fuel plants are affected, which is already a hot issue in California.
Bird Deaths at Ivanpah Could Affect Review of Palen
The Ivanpah Solar Electric Generating System hit a big milestone by sending its first power to the grid, part of the commissioning process in advance of the start of the plant's commercial operations later this year. In August, a swallow was the first reported fatality at Ivanpah from solar flux, or concentrated solar energy, and the death of a peregrine falcon in early September also appears to be flux-related. Regulatory agencies are grappling with the implications as they review the similar Palen Solar Electric Generating System.
Changes Sought to Energy Storage Decision
Ratepayer, utility, renewables and other groups this week sought to change various parts of a CPUC draft plan to procure energy storage. The decision calls for utilities to get more than 1.3 GW of storage by 2020, but parties questioned the decision's provisions that allow for deferring or shifting procurement targets among different storage-type categories. They also asked to clarify that storage procured through other proceedings would count toward the targets and that storage would count toward such programs as resource adequacy.
- Court Sets Precedent for California GHG Laws
- Imperial County OKs Ethanol Production Facility
- PUCN Rejects Call for Lower Solar-Power Rebates
- NW Lawmakers Like SEIA Plan to Settle Solar Dispute