On April 24, 2018, the New York Public Service Commission (PSC) initiated a new proceeding as part of New York’s Reforming the Energy Vision (REV) to explore the role of electric utilities in providing infrastructure and rate design to accommodate the needs and electricity demand of electric vehicles (EVs) and charging infrastructure.
On April 11 and 12, the Federal Energy Regulatory Commission (FERC) held a technical conference to address the participation of distributed energy resource (DER) aggregations in markets managed by independent system operators (ISOs) and regional transmission organizations (RTOs) and, more broadly, the potential effects of DERs on the bulk power system (Dockets RM 18-9 and
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In February 2018, the Missouri Senate passed a bill aimed at simplifying the rate case process and providing incentives to encourage Missouri utilities to invest in infrastructure improvements. Senate Bill 564 (SB 564) will affect Missouri utilities Ameren Missouri, Empire District Electric Company, Kansas City Power & Light (KCP&L), and KCP&L Greater Missouri Operations (GMO). This bill now lies with the Missouri House of Representatives, where the House Utility Committee has proposed HB 2256, an amended version of SB 564. If passed by the House in an upcoming vote, the bill will head back to the Senate for further legislation and negotiation. Previous attempts to modernize the current rate case framework have not been fruitful; however, a successful outcome for this bill could offer Missouri utilities an improved rate structure by January 2019.
Natural gas is now the leading fuel for electric generation in the United States as it surpassed coal in 2015, and in 2017, it was used to generate 32% of electricity, while coal was used to generate about 30%. While natural gas is forecasted to remain the primary source of electric generation for at least the next two years, its role is being challenged in some parts of the country. The resistance is being led by state policy makers, renewable energy advocates, and environmental groups who argue that some existing and proposed natural gas plants are not needed or should be replaced by renewable energy.
Entergy Corporation and the State of Vermont reached an agreement on the sale of Vermont Yankee in Vernon, VT to a subsidiary of NorthStar Group Services, Inc. (NorthStar). When the plant came offline for economic reasons in December 2014, Entergy estimated decommissioning and site restoration would cost $1.2 billion and take 60 years. However, NorthStar estimates decommissioning could begin as early as 2019 and take seven to nine years. NorthStar expects to finance the project via a trust that currently holds $570 million, along with cash guarantees from NorthStar ($140 million) and Entergy (up to $40 million). Supporters of NorthStar’s plan include Vermont’s attorney general, the town of Vernon, and other state and local stakeholders. Critics argue that NorthStar’s plan leaves citizens financially and environmentally vulnerable should problems arise and that NorthStar itself lacks requisite experience.
In the last 10 years, coal power generation has fallen from providing more than half of the electricity in the United States to less than 30% today. While that number held steady for 2016 and 2017, coal plant owners have announced 13 GW of planned retirements for 2018, the largest since a record 15 GW retired in 2015. Another 10 GW of capacity is already planned for retirement over the
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Rate freezes, arrangements where utilities are prohibited from filing rate cases, have been commonly used nationwide since the 1990s. As of January 2018, rate freezes or rate case moratoriums are in place across 27 jurisdictions, impacting 37 electric and 31 gas utilities. While these arrangements have overwhelmingly originated from past rate cases and are intended to benefit consumers, some adverse consequences can also result from such arrangements.
The Federal Energy Regulatory Commission (FERC) is moving quickly to ensure utilities are passing along the cost savings from the reduction of the federal corporate income tax rate from 35% to 21%, effective January 1 of this year. From the moment the tax bill was passed on December 20, 2017, officials and public service commissions from 35 states and the District of Columbia have been calling on FERC to act to direct regulated utilities to reduce their rates.
The concept of the digital power plant has been receiving a lot of attention and calls for an assessment of what it really means and what the maturing technologies have to offer power generation companies. At the December 2017 POWERGEN Conference, Mitsubishi Hitachi Power Systems President and CEO Paul F. Browning announced they had broken ground on a combined-cycle power plant capable of fully autonomous operation slated for completion in 2020. Emerging digital analytics platforms are transforming how power generation companies collect, use, and learn from their data to realize new opportunities for reducing costs, improving efficiency, and managing risk. In a market environment with exceptionally lean margins, the oldest legacy generating units can benefit from this digital transformation just as much as the newest cutting-edge construction.
Energy Future Holdings Corp. (EFH). Sempra Energy, an electric and natural gas utility holding company, serves roughly 32 million consumers worldwide. As part of the deal, Sempra received EFH’s 80% ownership of Oncor, the largest regulated electric transmission and distribution provider in Texas.
On February 15, 2018, the Federal Energy Regulatory Commission (FERC) unanimously approved Order 841, which is designed to remove barriers for the participation of energy storage resources in wholesale markets.
NRG Energy and JX Nippon’s joint venture Petra Nova project, the world’s largest operating post-combustion carbon dioxide (CO2) capture system, is set to receive another big boost from ongoing bipartisan enthusiasm for “clean coal.” The U.S. budget bill passed by Congress in early February included the FUTURE Act (S.1535) that extends tax credits for carbon capture, utilization, and storage (CCUS) projects and raises the credit from $10 to $35 per ton used for enhanced oil recovery. This certainly raises the prospects for further investment in an expensive and nascent technology.
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