Synapse teamed with Larkin & Associates and Resource Insight to evaluate MidAmerican Energy Holdings Company's (MidAmerican) proposed acquisition of PacifiCorp from owner Scottish Power. The overall objective of this assignment was to develop an assessment of the proposed acquisition from a consumer standpoint. Issues that we analyzed included: What would the new PacifiCorp corporate structure look like in terms of local presence and control? What are the financial and economic risks involved? And what would MidAmerican do for customers in terms of generation, transmission and distribution investment strategy? Further, if there were significant risks, were there certain conditions or alternatives that would mitigate those risks and make the acquisition more favorable for consumers? To answer these questions, Synapse reviewed the company filing, participated in the review of discovery, and participated in settlement negotiations. Project completed in January 2006.
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Synapse reviewed PG&E’s application to establish a voluntary customer climate protection program. Synapse made the following determinations: 1) PG&E shareholders would likely benefit from such a program, and 2) there would be greater customer participation in the program if PG&E shareholders participated in the funding for the program. Given these findings, Synapse recommended that PG&E pay for most of the marketing and administration costs associated with the proposed program. In addition, Synapse recommended that PG&E pursue the option of making the monthly voluntary customer contributions tax deductible. As a result of Synapse’s testimony, the Commission ruled to share marketing and administration costs 50/50 between non-participant and participant ratepayers, to require PG&E shareholders to guarantee 1.5 million tons of CO2 reductions regardless of subscriptions to the program, and to adopt certain ratemaking treatment preferred by TURN. In addition, the Commission directed PG&E to further explore the tax deductibility issue. Project completed in August 2006.
Synapse evaluated whether there are supply and demand-side alternatives to the proposed Big Stone II coal-fired generating facility that are technically feasible and economically cost-effective. Synapse also investigated whether the applicants included appropriate emissions control technologies in the design of the proposed facility and whether the applicants appropriately reflected the potential for the regulation of greenhouse gases in the design of the proposed facility and in their analyses of the alternatives. Project completed in September 2006. Follow-up work completed in 2009.
Testimony of Ezra Hausman Regarding the Proposed Big Stone II Coal-Fired Generating Facility
Additional Testimony of David Schlissel and Anna Sommer Regarding the Proposed Big Stone II Coal-Fired Generating Facility
Synapse reviewed several proposals to build new transmission lines to link Maine with the New Brunswick Canada electric system. One of these proposed lines would be a new link with the Maine Public Service Company (MPS) system in northern Maine. Another new line would be a second 345 kV transmission link between New England and New Brunswick. In addition, Synapse evaluated requests by MPS and Eastern Maine Electric Cooperative to reserve capacity on the proposed second 345 kV link between New England and New Brunswick. Project completed in January 2006.
Synapse was asked by SACE to review Georgia Power Company’s request for an accounting order to record early site permitting and construction operating license costs for new nuclear power plants. Synapse recommended that the Commission reject Georgia Power’s request for the accounting order. Synapse concluded that instead of making any decision regarding the relative economics of new nuclear power plants based on the incomplete record that will be developed in this rushed docket, the Commission should require that the economics of all technically feasible supply-side and demand-side options be investigated in detail in the 2007 IRP proceeding. We also recommended that the Commission also not take any action that would give nuclear power any specific subsidies that are not being provided to other supply-side and demand-side options. Project completed in July 2006.
Synapse testified on behalf of Intervenors Barbara Born, et al. (concerned citizens) with regard to the proposed Longview Power LLC coal plant. Synapse presented evidence that the Company neglected to provide adequate information regarding the short- and long-term financial viability of the Project. The Company also neglected to provide a comprehensive analysis detailing the amount of property taxes that Longview would be required to pay to Monongalia County in the absence of the Payment in Lieu of Taxes (PILOT) agreement. Synapse argued that it was therefore impossible to make a determination regarding the economic impact of the Project on Monongalia County and residents in the State of West Virginia. For these reasons, Synapse recommended that the Commission deny Longview of a Siting Certificate for the proposed plant. Project completed in April 2006.
Surrebuttal Testimony Reviewing the Siting Certificate Application for West Virginia Coal Plant
Synapse investigated the market power effects of the proposed merger between Exelon Corporation and Public Service Enterprise Group. Synapse’s analysis included running CRAI’s CASM model, re-running delivered price test analysis by petitioners’ witness Frame, and modeling of market power impacts using ELMO. The results of Synapse's analyses were presented in affidavits to FERC and testimony before the New Jersey Board of Public Utilities. The companies terminated the proposed merger on September 16, 2006. Project completed in October 2006.
Examination of Proposed Merger of Public Service Enterprise Group (PSEG) and Exelon Corporation - Supplemental Testimony
Analysis of Market Power in the Exelon Corporation & Public Service Enterprise Group Merger
Direct Testimony In the Matter of the Joint Petition of PSEG and Exelon
Rick Hornby presented “Risk Metrics for Electric Supply Portfolios and their Application in Policy Making” at a New York Department of Public Service Workshop in Case 06-M-1017 on October 20, 2006. The presentation draws from Synapse’s 2006 report Portfolio Management: Tools and Practices for Regulators, prepared for the National Association of Regulatory Utility Commissioners.
Synapse examined the impact of a proposed state-specific Mercury emissions rule upon wholesale electricity market prices, competition, and retail electricity consumers in Illinois. In our testimony, we demonstrated how IPM model results obtained by ICF Corporation did a poor job of resolving state-specific economic and dispatch impacts of the proposed rule. To rectify this, we developed our own estimates of the likely direct and indirect economic implications of the rule for the state and the surrounding region. Synapse's research and analyses showed that the benefits of implementing this rule significantly outweighed the costs. As a result, a slightly modified version of the rule was accepted upon settlement by all affected utilities and the state. Project completed in September 2006.
Synapse assisted the Town of Leesburg on issues related to the preferred siting of a proposed transmission line. Synapse’s testimony addressed the benefits of siting the proposed line away from a multiple use bicycle, walking and jogging trail and away from the Town of Leesburg, historic district. Project completed in July 2006.
Pursuant to a Vermont Public Service Board Order in Docket No. 7801, a mediated negotiation process was established to review the process by which VT electric utilities conduct transmission system planning with a particular focus on the evaluation of non-transmission alternatives (NTAs) that could include energy efficiency, demand response, or distributed generation resources. Synapse assisted CLF, a party to Docket 7801, in the mediated negotiation process. Synapse also provided direct and rebuttal testimony that urged the VT PSB to reject the proposed Memorandum of Understanding (MOU) submitted by the majority of the utility parties and the Department of Public Service. The VT PSB issued a decision on June 20, 2007. In the Order, the VT PSB largely accepted the provisions of the MOU and, after a lengthy discussion, rejected CLF’s positions. Project completed in December 2006.
Rebuttal Testimony Regarding the Review of Vermont Transmission Planning Process
Synapse assisted the Staff of the Delaware Public Service Commission conduct a multi-party exploration of potential updates to Delaware's procedures for competitive procurement of power to serve default service customers. In the wake of major retail rate increases from the state's first procurement, the Delaware Legislature enacted major changes to the state's electric restructuring statute. Synapse helped the Staff plan and run workshops to gather the views of retail marketers, wholesale generators and marketers, consumers, and the serving utility. We then fashioned written proposals for process changes, moderated discussions among the parties, and helped negotiate consensus on most of the issues. Synapse then helped the Staff draft and present its report to the Commission. Among the changes adopted by the Commission were provisions to increase and speed up public disclosure of information about bids, to coordinate procurement timing with surrounding jurisdictions, and provide the Commission with better market information and added flexibility to manage the RFP. Project completed in October 2006.
Doug Hurley presented “Update on New England’s Demand Response Programs” at the Energy, Utility, and Environment Conference in Tucson, Arizona in January 2006.
Synapse Assisted the Town of Charlotte, Vermont in its participation before the Vermont Public Service Board in Docket No. 6860. The particular issue in dispute was the extent to which cost recovery would be available on a regional (New England) basis for various components of the new 115kV line being proposed by VELCO. Synapse provided analysis and testimony for the town and participated in hearings before the Public Service Board. Project completed in September 2006.
Synapse reviewed issues associated with the proposed acquisition of Vermont Gas by Green Mountain Power. Project completed September 2006.
Synapse provided a valuation of a hydroelectric facility in Weybridge VT for property tax purposes. Project completed in January 2006.
Peter Bradford and David Schlissel presented “Why a Future for the Nuclear Industry is Risky” to the New York Society of Security Analysts. Risks discussed include concerns about credit worthiness of companies that pursue new nuclear plants and national security.
Synapse reviewed PSI Energy Inc.’s environmental compliance plan for NOx, SO2, and mercury air regulations, and prepared testimony addressing system planning, cost estimates for emission control technologies, climate policy and carbon prices, energy efficiency as a compliance option, renewable generation as a compliance option, and analysis of the retirement of older generating units. Synapse’s analysis and recommendations are presented in the Testimony of Bruce Biewald in Indiana Utility Regulatory Commission Cause Nos. 42622 and 42718, filed March 18, 2005. Project completed in May 2005.
Testimony Reviewing PSI Energy Environmental Compliance Plan Filing
Testimony Exhibits Reviewing PSI Energy Environmental Compliance Plan Filing
Synapse provided expert witness testimony in Docket Nos. 30485 (January 2005) and 30706 (March 2005) before the Texas Public Utility Commission. Neil Talbot and Robert Fagan testified in January on aspects of securitization of stranded costs by CenterPoint Energy Houston Electric, the T&D arm of the former Houston Light and Power. In a separate but related docket, Amy Roschelle testified in March on the appropriate interest rate to use in association with a competitive transition charge (CTC) for stranded assets. The thrust of the testimony of all three witnesses focused on ensuring a fair and reasonable stranded cost recovery process, a risk-adjusted rate of return, and minimizing the impact of charges to consumers. Project completed in May 2005.
Synapse, with Resource Insight, assisted the Utah Committee of Consumer Services with issues relating to potential renewable energy legislation. Synapse reviewed the treatment of renewable resources in PacifiCorp's integrated resource plan and assessed the economic impact of a renewable portfolio standard proposed by the legislature or reviewed by the Public Service Commission. Project completed in February 2005.
Synapse assisted RAP in evaluating the effects of recent state policies relating to renewable energy and energy efficiency on air emissions and the regional economy. The work, conducted for the U.S. EPA, included estimating the effect of programs such as utility efficiency funding and renewable portfolio standards since 2000, including avoided air emissions and impacts on regional jobs, income, and output. Project completed in June 2005.
Electric Energy Efficiency and Renewable Energy in New England: An Assessment of Existing Policies and Prospects for the Future
Synapse assisted New Brunswick Power in developing avoided costs for proposed energy efficiency programs. The programs were intended to be supported with a system benefits charge and to be implemented by an independent energy efficiency utility in New Brunswick. The analysis included a review of production cost model results, avoided energy costs, avoided capacity costs, avoided transmission and distribution costs, and consideration of greenhouse gas emission reduction credits. The analysis also included an assessment of the potential rate impacts of the efficiency programs. Project completed in March 2005.
Synapse prepared expert testimony regarding the avoided costs of wind generation in South Dakota. The project included the review and critique of avoided costs proposed by Montana-Dakota Utilities Company, as well as the review and critique of alternative avoided cost assumptions proposed by the wind developer. The testimony covered many aspects of avoided costs, including production cost modeling of energy costs, determination of the appropriate capacity value for wind generation, costs associated with integrating wind into an electricity system, and accounting for the costs of future climate change regulations. Direct testimony was submitted to the South Dakota Public Utilities Commission on February 18, 2005.
Synapse prepared testimony that addressed the proposed allowed return on equity (ROE) and rate of amortization for Central Vermont Public Service Corporation (CVPS). Synapse determined the appropriate ROE for CVPS by using the discounted cash flow (DCF) and CAPM models. The Company originally requested a 5.0 percent rate increase, although it later reduced its requested increase to 2.9 percent. In the end, the Board accepted Synapse’s ROE recommendation in full. As a result Vermont customers’ rates were reduced by approximately 1.88 percent commencing April 1, 2005. Project completed in April 2005.
Synapse was retained by the Sierra Club to assist in its litigation concerning the Stuart Station coal-fired generating facility in Ohio. Project completed in 2005.
Synapse contributed four chapters to EPA's guidebook of policies that states can implement to advance clean energy activities. These chapters address:
- integrating energy efficiency and renewables into air quality planning,
- integrating energy efficiency and renewables into state and regional energy planning,
- identifying and describing the financial incentive (and disincentive) mechanisms for clean energy and energy efficiency associated with state-level ratemaking structures for electric and gas utilities, and
- the role of clean energy in integrated resource planning and portfolio management.
The guidebook can be found on the EPA's website here: http://epa.gov/cleanenergy/stateandlocal/guidetoaction.htm.
Project completed in December 2005.
Synapse prepared comments for use by TURN; a pre-workshop memorandum on the California PUC's proposal titled "An Incentive Framework for Utility Procurement of Energy Resources Modeled After Cap-and-Trade Principles of the Sky Trust," issued as Appendix B to the PUC's 4/6/04 Order Initiating Rulemaking (OIR). Synapse also considered the OIR itself, the ALJ's scheduling ruling of 11/23/2005, and the "Addendum to the Sky Trust Proposal: Alternative Approaches to Elements of the Policy Framework" of 2/3/2005. Synapse considered the strengths and weaknesses of the Proposal at a conceptual level and a nuts-and-bolts level. The proposal set out one model for a cap-and-trade system for greenhouse gas (GHG) emissions and certain alternatives to that model. The proposed system was described as applying to the resource selection and management the state's electric IOUs, to the natural gas distribution companies, or both. The documents briefly alluded to additional financial incentives for IOUs that related various ways to the proposed cap-and-trade system. Synapse's comments primarily related to the proposed cap-and-trade system as applied to an electric IOU and the financial incentive issue. Project completed in February 2005.
Synapse advised Public Service Commission Staff in Delaware on alternatives for procuring power to serve default customers as provided for in the State's restructuring law and assisted the PSC Staff in the conduct of a multi-party workshop process considering those alternatives. Synapse examined issues of acquisition of generation supply and the management of a resource portfolio to provide bundled generation service to residential, commercial, and industrial customers and assisted staff in successful multi-party settlement negotiations. Project completed in September 2005.
Synapse provided an economic valuation of the Bellows Falls hydroelectric facility as of April 2004 for the Town of Rockingham, VT. Project completed in March 2005.
Synapse analyzed proposed changes to Green Mountain Power's electric rate designs. William Steinhurst prepared testimony recommending the modification of tariffs for residential customers to improve fairness and encourage energy efficiency. Project completed in June 2005.
Prefiled Surrebuttal Testimony Analyzing Proposed Changes to Green Mountain Power Electric Rate Designs
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