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.
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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.
Synapse evaluated the economics of the proposed coal plant in Wise County, Virginia. Synapse found that Dominion Virginia Power 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. The Corporation Commission of Virginia approved the plant, but limited recovery to the currently proposed construction costs unless the company proves that future cost increases are prudent.
In response to the requirements of EPAct 2005 Title XII, the DC Public Service Commission issued Order No.14239, requesting comments regarding whether and to what extent the Commission should implement additional fuel diversity standards specifically for Pepco. Synapse provided advice and written support to the Office of People’s Counsel for its comments in response to the DC Public Service Commission’s request.
Bruce Biewald presented “Air Emissions Issues Associated DER in the Mid-Atlantic Region” before the Mid-Atlantic State Energy and Environment Workshop: State, Local, and Federal Approach for Distributed Energy Resources on September 27, 2007.
Synapse assisted UCS with an assessment of the prospects for additional coal-fired electric power generation in the Midwest to serve demand in the Northeast. This analysis considered transmission constraints, headroom for existing coal units to increase capacity factors, and carbon dioxide emissions cap and trade regulation.
As part of this project, Synapse Senior Associate Bob Fagan testified at FERC on PJM cost allocation mechanism for merchant transmission projects between NJ and NY.
Synapse assisted the Department of Justice in litigation brought by Boston Edison regarding the sale price of the Pilgrim Nuclear Station. Synapse’s testimony addressed the risks faced by the purchaser of a nuclear power plant in 1998.
Project work included reviewing Avista Utilities proposals for funding of low-income programs.
For this project, Synapse reviewed Avista Utilities proposals for funding of low income programs, a power cost only rate case (PCORC) mechanism, changes in its accounting treatment of DSM Program costs, recovery of fixed costs lost to DSM and investments in advanced meters.
At the request of the Union of Concerned Scientists, Synapse collaborated with Bill Moomaw, Director of the Center for International Environment and Resource Policy at Tufts University, to write a report on carbon emissions mitigation options in the Northeast. Synapse reviewed various resource options such as energy efficiency, renewable energy, and load response. The report recommends that carbon emissions could potentially be stabilized with annual emission reductions of 3%.
Synapse advised Tokyo Gas Company, a large natural gas utility in Japan, with regard to the implications of climate change policy on its business opportunities and risks.
Synapse was hired to prepare an expert reports on electric power system issues related to the EPA New Source Review. Bruce Biewald testified in a deposition prior to the settlement of the case. Project completed in July 2007.
This report is designed to assist utilities, regulators, consumer advocates and others in projecting the future cost of complying with carbon dioxide regulations in the United States. These cost forecasts are necessary for use in long-term electricity resource planning, in electricity resource economics, and in utility risk management.
For this project, Synapse reviewed a ISO-NE Scenario Analysis report and developed a Companion Report that evaluated two additional scenarios for greater EE, DR, renewables, and reduced carbon resources.
Doug Hurley presented “Composite Offers in the FCM” at the Demand Resource Summit on May 2, 2007.
For this project, Synapse analyzed issues associated with proposals to decouple annual revenues of electric distribution utilities from their annual kWh deliveries.
Reply Comments Regarding Rate Structures that will Promote Efficient Deployment of Demand Resources in Massachusetts (D.P.U. 07-50)
Synapse provided consulting and advice to the Conservation Law Foundation in support of development of a regional approach to decoupling.
Paul Peterson and Doug Hurley presented “Demand Resources in the New England Forward Capacity Market” at the ACEEE/CEE Market Transformation Symposium on March 21, 2007. Topics covered include background to the New England Forward Capacity Market (FCM), treatment of demand resources in the FCM and the Installed Capacity Requirement (ICR), and potential impacts of demand resources in the FCM.
Synapse represented the staff of the Pennsylvania Office of Consumer Advocate in the demand-side management (DSM) and advanced metering infrastructure (AMI) workgroup. We reviewed various aspects of DSM and AMI initiatives, prepared documents on good practices in these areas, recommended specific programs from other states, and participated in the workgroup.
Synapse was asked to assist with the coordination and documentation of a conference of experts on the calculation of carbon emissions displacement held in April 2007. Specific tasks included development of the meeting agenda, documenting the workshop proceedings and preparation of a draft workshop report, solicitation and coordination of participant input on the report, and preparation of a final workshop report. Synapse’s experts on displaced emissions calculation were also participants in the conference. The final report was completed in June 2007.
Synapse was hired by a coalition of public interest organizations to review the proposal by Duke Energy Indiana and Vectren to invest approximately $2 billion in a new integrated gasification combined cycle (IGCC) coal power plant at Edwardsport. The project included analysis and testimony by Bruce Biewald on computer modeling and resource planning, levelized cost comparisons, and ratemaking issues; by Phil Mosenthal of Optimal Energy on demand-side management potential and costs; Robert Fagan on renewable resource potential and costs; and David Schlissel on carbon dioxide regulations and power plant construction costs. The project team found that the Companies' planning for Edwardsport was inadequate, that the IGCC plant would increase dependence upon coal for electricity generation and would subject the Companies’ shareholders and customers to unnecessary costs and increased risks. Synapse witnesses recommended that the Commission reject the Companies’ request for approval of the proposal to construct and own the Edwardsport IGCC project, and instead require the Companies to do complete and proper planning which should include: (1) up-to-date construction cost estimates for IGCC and other resources; (2) analysis of the cost impacts on customers that reflect the ratemaking treatment that the Companies’ request be used for the resources; (3) use of a realistic range of low, mid, and high case projections for future carbon dioxide prices; (4) full consideration of cost-effective demand-side management, combined heat and power, and renewable resources, and (5) a proper risk analysis that recognizes a range of risks including but not limited to construction cost overruns and project delays as well as fuel prices and environmental compliance requirements.
Direct Testimony of Robert Fagan Reviewing the IGCC Plant Proposal by Duke Energy Indiana and Vectren
Exhibits of Robert Fagan for the Review of the IGCC Plant Proposal by Duke Energy Indiana and Vectren
Direct Testimony of David Schlissel Reviewing the IGCC Plant Proposal by Duke Energy Indiana and Vectren
Cross Answering Testimony of Bruce Biewald Reviewing the IGCC Plant Proposal by Duke Energy Indiana and Vectren
Bruce Biewald presented “Efficiency and Renewable Energy for Carbon Constrained Electric Systems” at the 2007 NASUCA Annual Meeting in Anaheim, California on November 12, 2007. The presentation covered efficiency and renewable energy issues for consumer advocates, including climate change and carbon policy, utility system planning implications, energy efficiency programs and policies, and wind power.
Assist Staff of the Arkansas Public Service Commission as a subcontractor to Larkin Associates on a range of electric resource planning and power procurement issues over the year July 2006 through June 2007. Specific tasks included assistance with development of resource planning guidelines for electric utilities, testimony regarding the reasonableness of the proposal by Oklahoma Gas and Electric Company to acquire additional wind and gas-fired generating capacity, preparation of a background report on fuel diversity policies and practices to assist the Commission in its determination of whether to recommend the adoption of a fuel diversity standard under the Energy Policy Act of 2005 (EPAct 2005). Advice to Staff in their assessment of SWEPCo’s proposal to construct a new coal-fired generating unit.
Synapse provided updated computations based on a previous study done for this client to reflect new values in a proposed rate increase.
For this project, Synapse contributed to the estimation of energy price and environmental benefits of distributed generation (DG) and analysis of business and regulatory options to encourage DG.
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