Wisconsin utility willing to invest in new U.P. power plant

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

Wisconsin Energy Corp.’s chief executive said the company is “willing to be an investor” in a new power plant to help alleviate a generation capacity shortfall in Michigan’s Upper Peninsula.

CEO Gale Klappa made the comment Wednesday during an earnings conference call in answer to questions about whether the unfolding crisis in upper Michigan could affect Wisconsin Energy’s ability to win approval from Michigan regulators for the buyout of Integrys Energy Group.

Klappa said that the company remains engaged in talks with Michigan Gov. Rick Snyder’s administration and state Attorney General Bill Schuette on a “global solution” to the Upper Peninsula’s energy woes, and that a solution could be agreed on within 60 to 90 days.

That solution, Wisconsin Energy officials said, would likely involve a new 250- to 350-megawatt combined-cycle natural gas plant and perhaps the addition of renewable generation.

“There are a lot of moving pieces,” Klappa said. “Clearly, I think the preference of the administration is building additional generation in the UP, and we have indicated that we would be willing to be an investor as part of that solution.”

The comments come days after Snyder and the attorney general submitted formal comments with the Michigan Public Service Commission calling Wisconsin Energy’s proposed billion-dollar buyout of Chicago-based Integrys Energy Group “fatally flawed.”

“The level of concentration in both generation and transmission in the Upper Peninsula by one company as a result of this merger is a major concern,” the filing said.

Wisconsin Energy announced the $5.8 billion purchase of Chicago-based Integrys in June (EnergyWire, June 24). The acquisition requires approval from the Federal Energy Regulatory Commission as well as four state utility commissions, including Michigan’s.

Klappa said Wisconsin Energy has agreed to push back the Integrys review schedule by two months at the request of Michigan’s attorney general. But approval is still expected by June, in time for closing next summer.

Concern about the future of the Presque Isle plant and lack of additional generating capacity in upper Michigan has been brewing for more than a year. Those concerns began after two Upper Peninsula iron ore mines chose to buy power from an alternative supplier, prompting We Energies to seek approval to suspend operations at the plant.

But the issue went from a slow simmer to a full boil over the summer following a sequence of events that now threaten to saddle Upper Peninsula residents with staggering rate increases Dec. 1 (EnergyWire, Oct. 28).

The region’s grid operator, the Midcontinent Independent System Operator, has required We Energies to continue to run the Presque Isle plant at a cost of $97 million a year to help ensure electric reliability in the region.

And changes in how those costs are allocated at the request of We Energies mean the costs will be paid almost solely by upper Michigan consumers beginning Dec. 1, adding hundreds to thousands of dollars a year to utility bills.

While much of the anger of upper Michigan residents and politicians has been directed at We Energies and FERC, there have also been fingers pointed at Michigan’s electric choice law.

Under a 2008 Michigan law, customers representing up to 10 percent of a utility’s retail sales can choose an alternative power provider. But the law specifically exempted the mines in the Upper Peninsula, meaning that effectively 90 percent of electric load in the region can switch energy providers.

That, Klappa said, is a recipe for the kind of crisis now looming in the Upper Peninsula.

“Its becoming very, very clear — it has been clear for a while to us, and I think it’s becoming clear to all the parties in Michigan — that the customer choice law there is deeply flawed,” he said.

“Ninety percent customer choice in the UP makes long-term capacity planning very, very difficult.”

CMS Energy Corp.’s chief executive made similar remarks last week.

Asked about the situation facing the Upper Peninsula, John Russell of CMS said: “I think what it does is demonstrate to a lot of people in Michigan the unintended consequences of what I would call full deregulation.”

Utility challenges net metering plan in Ohio Supreme Court

©2014 E&E Publishing, LLC
Republished with permission

By Ellen M. Gilmer

One of the nation’s largest electric utilities is facing off against Ohio regulators over the state’s net metering policy.

The Public Utilities Commission of Ohio (PUCO) last week asked the state Supreme Court to dismiss a lawsuit from American Electric Power Company Inc.’s Ohio division alleging that recent changes to agency code would force the utility to subsidize its competition.

The lawsuit attempts to lessen the costs shouldered by public utilities in a deregulated electricity market. In Ohio, electricity generation became competitive under state law in 2001, allowing customers to choose to receive power generated by their traditional utility or by a competitive supplier. Distribution services and billing, however, remain the utility’s responsibility.

Exelon says nuclear ‘at risk’ designation is little help

Exelon's nuclear power plant at Byron, Illinois. (Photo by Bill and Vicki T via Creative Commons)

Exelon’s nuclear power plant at Byron, Illinois. (Photo by Bill and Vicki T via Creative Commons)

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

An executive for the nation’s largest nuclear generator said U.S. EPA’s proposed carbon plan, which designates 6 percent of the nation’s nuclear capacity “at risk” for retirement, provides little help to prop up financially struggling reactors.

“There’s not really much of an incentive,” Kathleen Barrón, senior vice president of federal regulatory affairs and wholesale market policy for Exelon Corp., told Illinois regulators.

Barrón’s comments came during an Illinois Commerce Commission policy session Tuesday on the state’s efforts to comply with the Obama administration’s plan for a 30 percent cut in carbon dioxide emissions from the power sector by 2030.

The meeting was the second of three scheduled by the commission to discuss implementation of the EPA rule, which is expected to be finalized next summer and implemented a year or two after that. A third policy session is set for Nov. 6.

Study: Midwest states should collaborate on EPA carbon rules

(Photo by Michael Leland via Creative Commons)

(Photo by Michael Leland via Creative Commons)

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

States within the Midcontinent Independent System Operator’s footprint could save billions of dollars complying with U.S. EPA’s proposed carbon rules for existing power plants by banding together and applying strategies beyond the four “building blocks” put forward by the federal agency, according to an analysis by the grid operator.

The analysis was conducted by the Carmel, Indiana-based regional transmission operator to help members prepare comments to submit to EPA. Results were presented to the grid operator’s Planning Advisory Committee on Wednesday. MISO hasn’t decided yet if it will submit formal comments by the deadline, which was extended until Dec. 1, said Brian Rybarik, MISO’s interregional director of external affairs.

FutureGen officials say Sierra Club complaint jeopardizes project

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

Efforts to develop the FutureGen “clean coal” demonstration project in western Illinois cleared a major hurdle last month with a legal victory that will force consumers to purchase the $1.65 billion project’s output.

But a different legal challenge — a Sierra Club complaint filed with the Illinois Pollution Control Board — is keeping jittery investors on the sideline and threatens to derail development of the plant, a FutureGen executive said in testimony filed with the board.

FutureGen 2.0 is the second iteration of a federal clean coal demonstration project originally proposed by the George W. Bush administration more than a decade ago. The original, more ambitious plan was scrapped after years of planning and political rancor because of massive cost increases.

Clean Line transmission project gets chilly reception in Missouri

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

MONROE CITY, Missouri — A plan to string high-voltage transmission lines 200 miles across the state of Missouri got a chilly reception from area landowners during the first public airing of the project Tuesday.

Over the course of several hours, farmers, business owners, politicians and organized labor representatives aired opinions about the $2.2 billion project, which aims to deliver 3,500 megawatts of cheap wind energy from the southwest Kansas plains to more populated areas hundreds of miles to the east.

The hearing was the first of a series of public meetings on the project being held across the state. While some in attendance support the jobs, taxes and clean energy that developers promised, coalitions of landowners opposed to the project, most of them wearing neon green T-shirts or stickers that said “Block GBE,” dominated the hearing.

Minnesota case puts value of solar in spotlight

(Photo by Oregon DOT via Creative Commons)

(Photo by Oregon DOT via Creative Commons)

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

There’s a new cash crop coming soon to the Twin Cities — electric power from community-owned solar gardens.

But just how much interest there is in harvesting the sun’s rays from jointly owned solar-electric systems could be dictated by state regulators in a key decision today. [UPDATE: Regulators sided with Xcel Energy in the case, updated story coming later today]

A 2013 law requires Minneapolis-based Xcel Energy Inc. to administer a program for community solar gardens — centralized solar electric systems whose production is shared by people to buy stakes and get a credit on their power bills.

Xcel CEO charts steady course to lower-carbon future

Xcel CEO Ben Fowke. (Image via YouTube)

Xcel CEO Ben Fowke. (Image via YouTube)

©2014 E&E Publishing, LLC
Republished with permission

By Rod Kuckro

Xcel Energy Inc. Chief Executive Officer Ben Fowke may have found the sweet spot as the leader of one of the nation’s largest utility holding companies.

It’s not that his four regulated utilities with operations in eight states aren’t challenged by the multiple trends shaking up the electricity industry across the U.S. They certainly are.

It’s that Fowke, 56, views the challenges more as opportunities as he navigates a careful course toward a less carbon-intensive future.

Minnesota agencies advise using federal carbon cost estimate

(Photo by Joseph Mietus via Creative Commons)

(Photo by Joseph Mietus via Creative Commons)

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

Don’t reinvent the wheel.

That was the underlying message from two Minnesota agencies in recommending the Public Utilities Commission adopt federal “social cost of carbon” values to help guide utility decisions about electric generation.

A law enacted by the state more than two decades ago requires the PUC to establish “externality” values for carbon dioxide and other power plant pollutants to help shape planning decisions. The commission this year ordered an update to some of the values, including CO2, at the request of clean energy advocates.

Kansas program brings ‘pay as you go’ option to electricity

(Photo by Mike DelGaudio via Creative Commons)

(Photo by Mike DelGaudio via Creative Commons)

© 2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

The term “feeding the meter” just took on a new definition in Kansas, where Westar Energy Inc. has won regulatory approval to offer prepaid electric service on a limited basis.

The Kansas Corporation Commission approved a pilot program for up to 1,000 of the utility’s customers after the state’s consumer advocate negotiated additional consumer protections.

Prepaid electric service isn’t new, but it’s still rare among investor-owned utilities. So far it’s been mostly limited to electric cooperatives and municipal utilities that fall outside the scope of state regulators. Such programs have generally been criticized by consumer advocates for providing little if any benefit while often costing customers more money in the long run and targeting low-income groups.