As a result of the settlement agreement approved by the Federal Energy Regulatory Commission that allowed ISO-New England to develop and administer a Forward Capacity Market for New England, a potential new revenue stream for utility DSM programs was created. This created many new decisions for regulators regarding how programs should participate in the market and how the resulting revenues should be used. Synapse prepared a paper providing background and setting forth some of the options for regulators and program administrators.
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Synapse was asked to examine whether the co-owners of the proposed Big Stone II had demonstrated that the demand for electricity cannot be met more cost effectively through energy conservation and load-management measures or through renewable resources. The testimony filed by Synapse found that the Big Stone II co-owners had not adequately considered the risks associated with building a new coal-fired generating unit in their modeling analyses, including the risk of future greenhouse gas regulations, the potential for further increases in the Project’s capital cost, and the potential for fuel supply disruptions that could affect plant operating performance and fuel costs. Synapse’s testimony also found that the Big Stone II co-owners had not shown that their demand for electricity cannot be met more cost effectively through energy conservation and load-management measures or through renewable resources. This portion of the project was completed in 2006.
Direct Testimony of Ezra Hausman Regarding the Evaluation of Proposed Big Stone II Generating Facility
Direct Testimony of David Schlissel and Anna Sommer Regarding the Evaluation of Proposed Big Stone II Generating Facility
Direct Testimony of Tim Woolf Regarding the Evaluation of Proposed Big Stone II Generating Facility
Direct Testimony of Michael Drunsic Regarding the Evaluation of Proposed Big Stone II Generating Facility
Rebuttal Testimony of Robert Fagan Regarding the Evaluation of Proposed Big Stone II Generating Facility
Testimony Errata of David Schlissel and Anna Sommer Regarding the Evaluation of Proposed Big Stone II Generating Facility
Synapse reviewed service quality issues associated with proposed merger of utilities. Project completed in December 2006.
Assessment of Proposed Merger of Peoples Energy Corporation and WPS Resources Rebuttal Testimony
Synapse was hired by the National Association of Regulatory Utility Commissioners (NARUC) to conduct an analysis and write a report on electricity portfolio management. Specifically, the paper critiques available models used for portfolio management and resource acquisition and provides advice for regulators on how to choose and utilize such models in making regulatory decisions. Measures for evaluating risks and hedging strategies are discussed, with an emphasis on the perspective of customers and regulators. Project completed in September 2006.
Portfolio Management: Tools and Practices for Regulators
Energy Portfolio Management: Tools and Resources for Regulators
Synapse assisted Element Markets with an assessment of state policies to promote renewable resources and associated market issues. Project completed March 2006.
Synapse collaborated with the Pace Energy Project to evaluate New York State's Distributed Generation (DG) Pilot Program. The pilot project was conducted from 2002 to 2004. Through this procedure, New York utilities put selected distribution system projects out to bid among DG developers to determine whether DG could provide the service at a lower cost than the project proposed by the utility. Of the DG bids offered, none were selected as the least-cost alternative to distribution projects.
In the fall of 2004, NYSERDA hired Pace and Synapse to evaluate the results of the three-year pilot program, assess the program's effectiveness in meeting pilot program objectives, and to identify and evaluate alternative approaches for procuring DG as a distribution system resource. Pace and Synapse made recommendations to improve the DG procurement process based on our independent assessment of the DG Pilot experience, as well as based on a review of similar efforts to integrate DG in transmission and distribution system planning across the United States. The report was completed in August 2006.
On behalf of the Citizens Action Coalition of Indiana, Synapse reviewed a number of aspects of the proposed Duke-Cinergy merger to gauge its impact on PSI's retail ratepayers. The analysis included a comparison of existing ratepayer protections in place since the 1994 merger that created Cinergy, a critique of the proposed merger savings allocation between ratepayers and shareholders, and recommendations for PSI to strengthen energy efficiency commitments and maintain customer service and reliability post-merger. Testimony was filed before the Indiana Utility and Regulatory Commission on November 8, 2005. Project completed in January 2006.
Synapse represented the Rhode Island Division of Public Utilities and Carriers Staff in a collaborative process to oversee and provide input concerning energy efficiency programs offered by National Grid, the state’s primary electric utility. This work encompasses all aspects of energy efficiency program design and implementation, including efficiency measure assessment, program delivery options, program budgeting, cost-benefit analyses, utility performance incentives, and other relevant regulatory policies. Project completed in December 2006.
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.
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.
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