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Economic Escape Valve to Moderate Maryland's Tough Emissions Law

The Healthy Air Act that Maryland Governor Ehrlich signed into law in early April requires seven Maryland power plants to reduce their emissions of sulfur dioxide by 90% by 2015; nitrogen oxides by 80% by 2015; and mercury by 80 % by 2010 and by 90% by 2012. The law also requires Maryland to join the Regional Greenhouse Gas Initiative , a compact of seven northeastern and middle Atlantic states that have pledged to cut 10 % of their carbon dioxide emissions by 2018. While these requirements represent one of the toughest emissions laws to be enacted to date in the United States, the law also...

FERC Rebuffs Demands that It Reinstate "Legitimate Business Purpose" Rule

In an April 17 order , FERC characterizes its new anti-manipulation rule for wholesale sales and transmission of power as "a "˜catch-all' provision reaching all manner of fraud perpetrated by any entity in connection with a transaction subject to the jurisdiction of the Commission." [ See FERC Jettisons "Legitimate Business Purpose," Retains Other Rules for Natural Gas and Power Wholesalers ] The April 17 order rejected California and New England regulators' and certain public power organizations' challenges to FERC's decision to rescind a provision in market-based tariffs and rate schedules...

Contract Rights Let Independent Generators Continue Fight for Reactive Power Payments

Last fall, FERC agreed with Entergy Services, Inc. that the utility need not pay non-affiliated generators for supplies of reactive power within their specified power factor range (the "deadband" range) so long as Entergy does not compensate its own or its affiliated generators for the same supplies. FERC's orders appeared to cut off future payments for reactive power to all generators interconnected to the utility. Following FERC's orders, however, generators argued that they should have the right to litigate whether their interconnection agreements with Entergy "” which are separate from...

ColumbiaGrid Supplants GridWest in Pacific Northwest

Following an April 11 meeting among its remaining stakeholders, GridWest, the much-maligned proposed transmission organization for the Pacific Northwest, voted to dissolve for lack of financial support. Once the giant of the Pacific Northwest, Bonneville Power Administration (BPA) , decided to pull out of GridWest last November, it was just a matter of time before the proposed organization faltered. See Pacific Northwest Grid Restructuring Proposal Fails, Utilities Vow to Continue On Without Bonneville In lieu of GridWest, six power operators have proposed to create a new organization,...

Ohio Regulators Provide Ratepayer Funding for AEP Clean Coal Plant

The Public Utilities Commission of Ohio (PUCO) has granted AEP the authority to recover in rates construction costs up to $23.7 million related to its proposed integrated gasification clean coal (IGCC) plant. Critics argued that the PUCO should not allow AEP to recover its costs through rates in a deregulated electric power market such as Ohio's. In response, AEP countered that it needed the generation to serve as provider of last resort to consumers in its Ohio service territory; thus granting it the ability to recover the IGCC costs in rates was justified. The PUCO agreed. AEP next will...

FERC Reorganizes OMOI as Office of Enforcement

In an action described as an extension of implementing its new enforcement authority granted under the Energy Policy Act of 2005 , FERC is reorganizing its Office of Market Oversight and Investigations ("OMOI") . The new office, to be headed by current OMOI head Susan Court, will be named the Office of Enforcement and will include four divisions - Investigations, Audits, Financial Regulation, and Energy Market Oversight. FERC has promised that the new Office's oversight would place more emphasis on "identifying market manipulation and the exercise of market power," as well as run more...

"Let It Be Me," NERC Tells FERC

Within days of FERC clarifying final elements of its Electric Reliability Organization (ERO) rule, the North American Electric Reliability Organization (NERC) filed with the agency its long-awaited ERO application. On February 3, FERC issued its final rule establishing the criteria it will use to select an ERO, as mandated in the Energy Policy Act of 2005 . FERC Rule Allows Regional Entities to Propose and Enforce Reliability Standards ] But the rule didn't go into effect pending a FERC decision on how to handle conflicts between the ERO's reliability standards and FERC-approved tariffs. The...

Ontario to Guarantee Minimum Price for Small Renewable Energy Sales

To boost renewable energy production by small developers, the Ontario Minister of Energy plans to set standard prices for the Ontario Power Authority's purchases of renewable energy from smaller generators. According to the plan, the provincially-owned Power Authority would purchase the electric generation of eligible wind, biomass or small hydropower generators at a base price of Canadian $0.11/kWh. A higher price, Canadian $ 0.42/kWh, would apply to electricity from solar power. The program is expected to be implemented in the fall of 2006. Promoting power generation from renewable and...

Constellation-FPL Merger Snags in Maryland

With the repeal of PUHCA, ( see Congress Enacts Energy Bill and FERC Pares Back Accounting & Record Keeping, but Retains Strict Transfer Pricing for Public Utility Holding Companies under PUHCA 2005 ) many in the industry expected to see an explosion of merger activity. The bloom may be wearing off that rose a bit, at least in the state of Maryland. With the prospect of significant retail rate increases looming, Maryland's legislature has sought to strike back by holding up the proposed merger between Constellation Energy Group and FPL Group, Inc. Last week, Maryland lawmakers passed two...

High Prices Cause Reconsideration of Model Retail Power Supply Auction

For several years, the annual basic generation service (BGS) auction New Jersey uses to procure power for retail customers who do not choose their own supplier has been touted as a model for other jurisdictions wrestling with retail competition issues. In a somewhat surprising move, the New Jersey Board of Public Utilities (BPU) recently announced that, in light of rising power costs, it will explore alternatives to the BGS auction as part of the 2007 procurement process. The BPU first used the BGS auction in 2002. The process consists of a descending-clock auction that is conducted over the...

Mass Legislators Revive Fight over Participation in Northeast Emissions Reduction Plan

Balking at Governor Mitt Romney's opposition, members of the Massachusetts legislature recently introduced a petition for legislation to reduce carbon dioxide emissions in Massachusetts through participation in the Regional Greenhouse Gas Initiative (RGGI) , a regional cap-and-trade program intended to reduce greenhouse gases in the Northeast. However, because of concerns over the program's effect on electricity prices, it is questionable whether the bill can be passed before the state legislative session ends in July 2. A two-thirds majority vote of the legislators would be needed to...

Public Supports Investing in Wind Turbine Technology, but Not in My Backyard

Over the last couple of weeks the forecast for wind has been decidedly mixed. On the one hand, a Vermont Public Service Board (VPSB) hearing officer recommended on March 10 that state regulators reject a proposed 6-MW wind energy project in East Haven, Vermont. The project, which has been under development since 2001, would install wind turbines along a ridgeline that sits on an abandoned radar base surrounded by environmentally protected lands on East Mountain in the state's rural Northeast Kingdom area. Opponents of the East Haven project object to how it will affect the scenic views in the...

MISO Defections "• Do They Signal a Sea Change at FERC on RTO Membership?

FERC has approved the withdrawal from Midwest ISO of two Kentucky utilities that helped establish the FERC-recognized regional transmission organization (RTO). Both had become disenchanted with what they perceived as the inordinately high cost of membership. FERC's approval of the withdrawals "• with virtually no strings attached "• suggests a sea change from a FERC insistent on transmitting utilities joining RTOs to a reconstituted FERC that is agnostic on whether utilities participate in RTOs and ISOs, provided they meet other relevant standards imposed by FERC, particularly regarding...

EPA, Midwestern Blue Skyways Collaborative to Promote Renewable Power

The US EPA and several Midwestern states have formed a collaborative to begin curbing polluting emissions through voluntary measures. The "Blue Skyways Collaborative" held its inaugural meeting last month, welcoming a diverse group of participants including representatives from EPA, the Departments of Defense and Energy , state and local officials, and corporate representatives. It is spearheaded by the Central States Air Resource Agencies (CenSARA) , the regional air planning organization for the Midwest, comprising Minnesota, Iowa, Nebraska, Kansas, Missouri, Oklahoma, Arkansas, Louisiana,...

Forward Capacity Market Proposed in Lieu of LICAP for New England

New England generators, the ISO-New England (ISO-NE) , and four out of six New England states submitted an agreement to FERC on March 6 to resolve the running debate on New England capacity markets. The agreement would establish a forward capacity market in ISO-NE, replacing the controversial LICAP proposal that has been stuck at FERC for months. Under the agreement, the ISO-NE would be responsible for performing forecasts of needed capacity three years in advance and for conducting an annual auction to purchase sufficient power to meet those needs. The plan provides that generators would be...