Ezra Hausman presented “Protecting Consumers in a Warming World” to the NASUCA Roundtable on Global Warming in Denver, Colorado on June 11, 2007. The brief presentation covered topics including CO2 emissions price forecasts and how to protect consumers through prudent planning.
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In the late 1990s, a number of states restructured their electricity markets to allow retail customers to "shop" for their supply. Many states are now considering changes to restructuring law and policies that will result in a return to some form of retail state regulation of electric generation prices and services. Synapse assisted consumer affairs consultant Barbara Alexander in preparing a report for AARP that analyzed the current state of retail regulation and outlined provisions that should be included in any re-regulation legislation in order to protect the interests of residential consumers. Synapse consultants provided research support and served as technical editors.
As an add-on project to the development of avoided natural gas and electricity costs in New England over a long-term planning horizon (2007-2022) for a consortium of state utility regulators and utilities, Synapse prepared a forecast of regional natural gas prices for gas distribution systems serving the Brooklyn/Long Island region and the Syracuse region. The forecast includes projections of natural gas commodity prices, capacity costs and marginal supply costs for electric generation, commercial, and industrial, and residential end uses.
In order to address the effectiveness of LMP markets, Synapse was asked by the American Public Power Association (APPA) to review the theory and goals of the Locational Marginal Pricing (LMP) construct and to hold them up to the several years’ worth of experience in LMP markets. We asked the following questions: (1) Does security-constrained dispatch and LMP pricing work as well in the real world as it should in theory? (2) Have the price-signaling aspects of LMP produced the desired outcomes in terms of investments in electricity infrastructure? (3) Have the LMP markets been workably competitive, or is market power and price manipulation a concern? (4) Have power production costs come down as a result? Our results were presented at the Electricity Markets Reform Initiative (EMRI) symposium, hosted by APPA in Washington, DC on February 5, 2007.
LMP Electricity Markets: Market Operations, Market Power, and Value for Consumers Presentation
LMP Electricity Markets: Market Operations, Market Power, and Value for Consumers Article
Synapse was asked to review the reasonableness of NSPI's load forecasting methodology for resource planning purposes. Synapse assessed whether NSPI should develop a methodology to produce an end-use forecast.
Synapse evaluated the proposed sale of the Point Beach nuclear power plants. The Commission ultimately approved the sale, but applied a number of the conditions Synapse recommended.
Surrebuttal Testimony Addressing the Proposed Sale of the Point Beach Nuclear Plant
Synapse provided a review and assessment of energy options for VNRC’s use in considering positions on potential energy policy legislation.
Synapse analyzed the rate components of Duke Energy Ohio's standard offer service to determine whether they provide reasonably priced service in terms of accounting costs or market pricing principles. Taken together, we found the rates poorly defined and to not have a reasonable basis. Neil Talbot presented testimony in this case before the Public Utilities Commission of Ohio on March 9, 2007.
Synapse conducted and engineered an economic review of Nova Scotia Power's proposed addition of a heat recovery steam generator and duct fitting to an existing combined-cycle power plant. Synapse recommended Board approval of the Heat Recovery Steam Generator (HRSG) portion of the project, but not the duct firing portion. The Board agreed with Synapse's recommendation. Project completed in 2007.
Synapse examined the impact that retiring Mirant Corporation's Potomac River Generating Station would have on electric system reliability in and around Washington, DC and Northern Virginia. Synapse also assisted the City of Alexandria to identify potential generating and transmission system alternatives to continued operation of the facility.
Synapse provided an economic valuation of the Bellows Falls hydroelectric facility as of April 2006 for the Town of Rockingham, VT.
The Union of Concerned Scientists (UCS) retained Synapse to review, from a public policy perspective, the merits of long-term power purchase agreements (PPAs) between developers of wind power projects and providers of retail electric supply service (“load serving entities” or LSEs) in restructured electric markets. This review found that long-term PPAs encourage the development and/or expansion of wind power projects. Using Massachusetts as a case study, Synapse found that long-term PPAs provide several important benefits to customers of the contracting LSEs in particular, and to the Commonwealth of Massachusetts (Commonwealth) in general. The benefits of the PPAs to the customers of the contracting LSEs include mitigation of price volatility, mitigation of future increases in prices and reduction in the cost of RPS compliance reflected in those prices. In addition, because long-term PPAs encourage the development and/or expansion of wind power projects, they provide additional benefits to the customers of the contracting LSEs, and to the Commonwealth in general, in the form of reductions in dependence on natural gas, increased generation diversity, and reductions in emissions of carbon dioxide.
Synapse was hired to analyze the costs and effectiveness of supply-side and load-side up approaches for state carbon reduction policy for the electric power sector. Bruce Biewald prepared a simple Excel model and presented the results to CPUC/CEC.
Exploration of Costs for Load Side and Supply Side Carbon Caps for California Excel Workbook
Synapse reviewed the electric DSM programs of Tampa Electric Company (TECO or the Company), and identification of increases the Company could achieve to its planned DSM impacts on energy requirements and peak demands. Testimony of David Nichols identified additional potential based on two cost-effectiveness perspectives. Testimony was filed in FL Public Service Commission Docket No. 07-0467-EI concerning the determination of need for a new TECo power plant. TECo withdrew its application before the testimony was scheduled to be heard by the Commission.
Synapse’s Dr. Ezra Hausman submitted testimony before the Massachusetts State Joint Committee on Economic Development and Emerging Technologies regarding global climate change science and the benefits of a revenue neutral carbon tax.
Live Testimony on The Revenue Neutral Carbon Tax Study Bill
On the basis of Synapse’s analysis of likely future CO2 prices and a presentation by Synapse staff at a March 2007 workshop, the New Mexico Commission adopted a range of projected levelized CO2 emission allowance costs of between $8 and $40 that electric utilities will have to use in their future resource planning.
Chris James presented “The Business Case for Energy Efficiency: How to Bend the Curve” before the International Joint Commission in Bismarck, North Dakota on October 4, 2007.
David Schlissel presented “The Risks of Building New Nuclear Power Plants” before the Utah State Legislature Public Utilities and Technology Committee on September 19, 2007. The presentation covers the historical costs of nuclear construction; factors behind rising power plant construction costs; the economics of new nuclear units; and additional risks for plant owners and investors.
Assisted the valuation consultant retained by the Town of Jay by analyzing the expectations regarding the gas-fired cogeneration facility project's long-term annual revenues and operating costs for two set points in time.
In collaboration with Raab Associates, Synapse provided a summary overview of the background and context for implementation of the Least Cost Electricity Procurement in Rhode Island and an outline of the major issues associated with its implementation.
Synapse provided the Ohio Office of the Consumer Counsel and other consumer advocates with assistance in evaluating PJM's proposed Reliability Pricing Model (RPM) for capacity markets. Synapse reviewed, proposed modifications, and intervened in a contested process at FERC to determine the final design of the RPM capacity market. Our efforts helped secure modifications to the model that will save state ratepayers in PJM hundreds of millions of dollars annually. In addition, Synapse assisted the Office with transmission planning for economic and reliability upgrades (including cost allocation).
Synapse provided the Office of the People's Counsel with assistance in evaluating PJM's proposed Reliability Pricing Model (RPM) for capacity markets. On behalf of DC OPC and other consumer advocates in the PJM wholesale power system, Synapse reviewed, proposed modifications, and intervened in a contested process at FERC to determine the final design of the RPM capacity market. Synapse provided assistance to DC OPC in all phases of the review, comments, technical conferences, and settlement processes, and our efforts helped secure modifications to the model that will save state ratepayers in PJM hundreds of millions of dollars annually. In addition, Synapse assisted the Office with transmission planning for economic and reliability upgrades (including cost allocation).
Synapse was retained to analyze and critique NSPI's application for an air emissions strategy to meet Provincial emission compliance regulations. Our focus was upon the alternatives and methodology used by NSPI to determine its preferred option for SO2 and NOX reduction. We reviewed the Company's STRATEGIST model runs.
Supplemental Evidence Regarding the Review of NSPI Emissions Compliance Plan
Synapse reviewed SIGECO's (Vectren's) environmental compliance plan and prepared testimony addressing system planning, the proper role of demand-side management and renewables in compliance planning, and the need to anticipate climate policy and carbon prices. Synapse's analysis and recommendations are presented in the testimony of Bruce Biewald in Indiana Utility Regulatory Commission Cause No. 42861.
Synapse evaluated the potential for developing better alternatives for moving electricity produced by renewable technologies from the San Diego County/Imperial County/Baja region into San Diego than the new 500 kV transmission line proposed by San Diego Gas & Electric.
Synapse evaluated the fairness of Empire Electric’s proposed rate treatment of off-system sales and consideration of a fuel clause adjustment. Synapse critiqued Empire’s modeling of fuel costs and projections of natural gas prices as part of a proceeding before the Missouri Public Service Commission and supported expert testimony before that commission. Project completed in November 2006.
Synapse evaluated the fairness of Kansas City Power and Light’s proposed rate treatment of off-system sales. KCPL proposed an unorthodox accounting treatment allocating “margins” or profit with an “Unused Energy” allocator. Synapse provided support for expert testimony before the Missouri Public Service Commission. Project completed in November 2006.
Synapse investigated a number of issues in a rate case: 1) whether Arizona Public Service’s (APS) acquisition of the Sundance Generating Station was prudent; 2) whether the amounts that APS requested for Operating & Maintenance expenditures (“O&M”) for the PWEC Units and the Sundance Plant were reasonable; and 3) the generation and associated costs included in APS’ base rate application. Synapse found that APS’ acquisition of the Sundance Plant was reasonable and prudent. However, we found that the Company’s requested power plant O&M was unreasonably high and should be reduced for both plants. Project completed in February 2006.
Direct Testimony of Rick Hornby Regarding the Audit of the Fuel and Purchase Power Practices of the Arizona Public Service Company
Surrebuttal Testimony of David Schlissel Regarding the Audit of the Fuel and Purchase Power Practices of the Arizona Public Service Company
Surrebuttal Testimony of Rick Hornby Regarding the Audit of the Fuel and Purchase Power Practices of the Arizona Public Service Company
Synapse evaluated the potential benefits and costs associated with the deployment of Broadband Over Power lines (BPL) in a utility’s service territory. The potential benefits of BPL include the ability to use the existing power lines and the wiring inside homes and other buildings to offer enhanced energy services and load control, to facilitate the use of distributed generation, for automatic meter reading, to provide internet and other informational services to customers, and for increased system monitoring and outage detection. Project completed in March 2006.
Synapse was asked to evaluate alternatives to the Broadwater LNG import facility, proposed as a floating storage and regasification facility to be located in Long Island Sound. Synapse concluded that the region does not have a pressing need for a new baseload resource to provide natural gas, and the region's energy needs for the next decade can readily be met through energy efficiency, implementation of existing renewable energy goals, expanded use of combined heat and power, and repowering of existing power plants. Finally, we found that there are other options for increasing gas supply to the region which would be far preferable to the Broadwater proposal. The most promising of these includes two LNG import facilities already under construction in Eastern Canada, together with the planned expansion of the Maritimes and Northeast pipeline from Eastern Canada into the northeastern United States. Project completed in February 2006.
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