For the GRACE Foundation, Synapse examined the economics and capital costs of next generation nuclear power plants. The study considered the costs of existing domestic and international nuclear plants, as well as potential impacts of worldwide competition for power plant commodities, nuclear and financial industry views, and comparative costs of energy efficiency and renewables programs.
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In 2008, Synapse prepared a paper discussing the dramatic increase in cost estimates for new nuclear power plants, the reasons for the increase, and why it is reasonable to expect that the actual costs will exceed expected costs.
For Niagara Mohawk service territory in New York State, Synapse developed projections of electric energy and capacity costs which will be avoided due to reductions in electricity use and natural gas costs that will be avoided due to reductions in natural gas use. Deliverables included detailed projections for an initial fifteen year period beginning in 2007 and escalation rates for another fifteen years from 2022 through 2037.
For this project, Synapse performed a detailed analysis of the impacts of distributed generation resources on wholesale electric energy prices and air emissions in Massachusetts. Impacts analyzed include potential reductions on the level of wholesale electricity market prices and associated air emissions.
In “Prime Time for Efficiency,” published in Public Utilities Fortnightly, Synapse’s Doug Hurley and authors from the Conservation Law Foundation discuss how including demand resources in ISO-New England’s forward capacity market created business and regulatory structures to allow reduced and managed energy use to be as financially rewarding as building another power plant.
Synapse was asked to evaluate the need for and the economics of Duke Energy Carolinas’ (“Duke” or “the Company”) Cliffside Project consisting of two 800 MW coal-fired generating units. Synapse’s testimony demonstrated that Duke had not adequately considered the potential for federal greenhouse gas regulations, had not adequately considered energy efficiency and renewable technologies as alternatives to the proposed 800 MW coal-fired plants, and had not shown a need for the generating facilities. Synapse also testified that the Company’s planning methodology was flawed and, therefore, that the modeling analyses presented by Duke did not show that the proposed plants were the lowest cost option. On the basis of this testimony Synapse recommended that the North Carolina Utilities Commission not grant a Certificate of Public Convenience and Necessity for the proposed Cliffside Project. The Commission agreed, in part, and only granted a Certificate for one of the two proposed coal-fired units.
Supplemental Testimony Evaluation Duke Energy Proposal for Two Cliffside Project Coal Units
Reply Comments Regarding Implementation of Energy Efficiency and DSM Programs in North Carolina, Docket No. E-100, Sub 110
Synapse was asked to prepare testimony and to speak in Kansas about the economic risks associated with the proposed 2100 MW Holcolm Expansion power plant.
Synapse evaluated the economics of the proposed coal plant in Iowa. Synapse found that Alliant Energy had not prudently considered the potential for further increases in the cost of building the plant or the costs of likely federal regulation of greenhouse gas emissions. Synapse also found that a portfolio of energy efficiency, wind resources, and natural gas capacity was a lower cost option.
Bruce Biewald presented “Prudent Planning and New Coal Fired Power Generation” at the CERES Conference on April 29, 2008. The presentation included a discussion of prudent electric system planning practices, including actively seeking out relevant information, relying on up-to-date and realistic construction cost estimates, including reasonable CO2 price forecasts in the reference case and analyzing high and low sensitivities, and fully considering alternatives.
Synapse facilitated a workgroup to develop, prioritize, and recommend action items that will reduce greenhouse gas emissions from the Residential, Commercial, and Industrial (RCI) sector.
Synapse evaluated the economics of a proposed coal plant in southern Wisconsin.
Direct Testimony of Bob Fagan on the Application of Alliant Energy for the Construction of a New Coal-Fired Generating Unit
Surrebuttal Testimony of David Schlissel on the Application of Alliant Energy for the Construction of a New Coal-Fired Generating Unit
Surrebuttal Testimony of Bob Fagan on the Application of Alliant Energy for the Construction of a New Coal-Fired Generating Unit
Synapse evaluated American Municipal Power’s proposed 960 MW coal-fired power plant in Meigs County, Ohio and whether AMP-Ohio had adequately considered the risks associated with that proposed plant in its resource planning for its member communities. Synapse also examined the costs (including construction costs and the cost of CO2 regulations) of the proposed plant and of alternatives to the proposed plant. Synapse found that AMP-Ohio had not prudently evaluated the potential for further increases in the project’s cost or the likely costs of federal regulations of greenhouse gas emissions. The Ohio Power Plant Siting Board approved the plant.
As part of APPA’s Electric Markets Reform Initiative, Synapse was asked to investigate whether or not today’s RTOs have produced a healthy environment for managing electricity procurement costs through bilateral contracting. Synapse found that while bilateral contracts are widely recognized as crucial to the functioning of truly competitive electricity markets, RTOs have failed to create an environment conducive to the vigorous, competitive, long-term bilateral contracting that would provide the most benefits to consumers.
Synapse prepared a detailed assessment of the Bush Administration’s Global Nuclear Energy Partnership (GNEP) plan to institute the reprocessing of light water reactor spent fuel and to build a large number of fast breeder reactors. As part of GNEP, the United States also would provide nuclear fuel to and would take back the spent fuel from any countries that committed to not seek their own fuel enrichment and spent fuel reprocessing facilities.
Synapse assisted the Office of the People's Counsel of the District of Columbia (OPC) in reviewing and analyzing Potomac Electric Power Company’s (PEPCO’s) application for its “Blueprint for the Future”. PEPCO filed this application on April 4, 2007 with the D.C. Commission for authorization to establish a demand side management (DSM) cost recovery mechanism, an advanced metering infrastructure (AMI) rate adjustment mechanism, a DSM collaborative, and an AMI advisory group that it plans to implement in all of its service territories.
The Ohio Consumer Counsel retained Synapse to critique proposed rules on energy efficiency portfolio standards and greenhouse gas reporting. Synapse also assisted in preparation of comments filed by OCC.
Synapse was retained by UCS to write a report that describes the potential for new and existing coal plants, located just outside the boundaries of RGGI, to dilute the initiative's environmental objectives. Construction of new coal plants and upgrades and construction of new transmission lines could increase the imported quantity of coal-fired electricity into the RGGI region.
Synapse authored Don’t Get Burned, a report on the risks of investing in new coal-fired power plants. Synapse also spoke on this subject to rating agencies, investment analysts, investors, and regulatory commissioners. The risks to investors identified in our report include federally mandated reductions in greenhouse gas emissions, state actions that would adversely affect the need and relative economics of coal-fired power plants, uncertainties related to carbon capture and sequestration, more stringent regulation of non-greenhouse gas emissions, increasing construction costs and schedule delays, and uncertainties regarding the recovery of plant construction and operating costs.
Don`t Get Burned: The Risks of Investing in New Coal-Fired Generating Facilities ‒ Presentation
Synapse spoke to rating agencies and investment analysts concerning the financial risks of investing in new nuclear power plants.
Synapse prepared testimony related to carbon price and escalation of construction costs for coal plants. Synapse testified before the Nevada Public Service Commission regarding our findings, and afterward developed a report based on our testimony.
Synapse provided assistance to DC OPC effort to modify procurement rules for Standard Offer Service. DC PSC deferred all activity in this proceeding pending the outcome of other regulatory proceedings.
Synapse provided analytical assistance to SEI/CCS and evaluated a number of policies and programs to tackle climate change, including utility energy efficiency programs and renewable energy portfolio standards. More specifically, we evaluated costs of and energy and emissions savings from those policies/programs.
Synapse assisted The Cape Light Compact with their comments to the MA DPU regarding a decoupling docket and the impacts it had on energy efficiency programs implemented by a municipal aggregator.
Synapse subcontracted to the Global Development and Environment Institute (GDAE) at Tufts University to write a chapter on the costs and risks of climate change to the electricity energy sector for a report presented by the NRDC. The chapter explored current energy infrastructure in the US and how it might be put at risk from climate change, as well as how energy use could be expected to change under a changing climate. Synapse created a regionally explicit model of hourly energy use in 2005, and applied expected seasonal temperature changes to each region to estimate expected per-capita energy consumption in 2025, 2050, 2075, and 2100. With energy consumption increasing during summer peak periods in warm climates, the costs of procuring power in the south (Florida in particular) and southwest (S. California) resulted in high costs to consumers in those regions. Lower consumption of electricity, gas, and oil in northern latitudes provided net savings for a limited number of consumers. Ultimately, the analysis concluded that climate change could result in net costs of $28 billion per annum by 2025 and $141 billion per annum by 2100. These costs did not include the risk of losing coastal power plants and other infrastructure to coastal flooding. To view the results of the project, please visit http://www.nrdc.org/globalwarming/cost/contents.asp.
The National Regulatory Research Institute (NRRI) retained Synapse to prepare a primer on the U.S. electric industry for public utility commissioners and public utility commission staff. The primer provides basic information on the U.S. electric industry. It assumes only a basic understanding of the nature and purpose of utility regulation. While it addresses issues related to ratemaking, it is not an introduction to rate setting. Section I reviews the overall nature of the industry and of power production and use. Section II breaks down the industry into segments and discusses their recent and current status and organization. Section III (written by Scott Hempling of NRRI) covers regulatory jurisdiction, while Section IV identifies some of the critical issues facing the industry and its regulators.
Kenji Takahashiand David Nichols presented “The Sustainability and Costs of Increasing Efficiency Impacts: Evidence from Experience to Date” at the ACEEE Summer Conference on August 20, 2008. Issues discussed include high annual electric energy savings through energy efficiency programs, sustainability of high energy savings, the conservation supply curve, and trends in cost of saved energy.
The Sustainability and Costs of Increasing Efficiency Impacts: Evidence from Experience to Date (paper)
In March 2008, Synapse participated in a California Public Utilities Commission workshop on greenhouse gas adders in Market Price Referent (MPR) methodology. Synapse’s presentation focused on the appropriate greenhouse gas adder to consider when entering into long-term electricity contracts with renewable resources, and is based upon Synapse’s carbon price forecasts.
For the Nova Scotia Utility and Review Board, Synapse performed an analysis of a Nova Scotia proposal to convert two existing simple-cycle combustion turbines into a single combined-cycle unit with duct firing. Synapse reached the conclusion that the Board should proceed with Nova Scotia Power’s proposed combined-cycle conversion without the addition of the extra 25 MW of capacity from duct firing. The efficiency penalty imposed on the plant through the addition of duct firing was found to reduce the economic benefit to the point where duct firing was not justifiable.
For this project, Synapse provided comments to TURN for submission to the California Public Utilities Commission (CA PUC) for Greenhouse Gas Docket R 06-04-009 CPUC . Project work included attending a CA PUC workshop held in San Francisco on May 6, 2008 on greenhouse gas and E3 carbon allocation modeling.
Synapse conducted a valuation of the Moore Hydroelectric Facility in Littleton, NH to ensure that their tax valuations are fair and up-to-date. As projected power prices have climbed over the past few years, the value of carbon-free hydroelectric generating resources has increased dramatically. This is because these plants get the benefit of higher electricity prices but pay none of the higher fuel and emissions costs. Facilities which had declined in value during the early years of deregulation can now have a market value of two or three times what it would have been just three or four years ago. Synapse has worked with a number of cities and towns in New England that depend on property taxes from these resources.
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