On August 3, 2015, the U.S. Environmental Protection Agency released the final version of its Clean Power Plan, the agency’s effort to regulate greenhouse gas emissions from power plants built before 2012. Synapse hosted a webinar two days after the final plan was released to provide a first-cut look at how the final rule differs from the rule proposed in draft form a year earlier. Panelists discussed new timelines, targets, and compliance pathways available to states; and presented a primer on the legal framework for compliance plans.
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FirstEnergy’s Ohio utilities (Ohio Edison, Cleveland Electric, and Toledo Edison) filed an application before the Public Utility Commission of Ohio seeking approval of an Electric Security Plan (“ESP”) and related Retail Rate Stability Rider (“Rider RRS”). FirstEnergy claims that customers will receive benefits of over $2 billion over the length of the plan due to the Companies’ projections of revenues from capacity and energy market sales. On behalf of Sierra Club, Synapse expert witness Tyler Comings submitted testimony focusing on the assumptions and analysis used by the Companies to support the Rider RRS, and the policy implications and risks associated with the proposed transaction.
Supplemental Testimony of Tyler Comings Evaluating the Assumptions and Analysis Used by FirstEnergy Ohio in Support of its Application for Approval of an Electric Security Plan and Related Retail Rate Stability Rider
Second Supplemental Testimony of Tyler Comings Evaluating the Assumptions and Analysis Used by FirstEnergy Ohio in Support of its Application for Approval of an Electric Security Plan and Related Retail Rate Stability Rider
Third Supplemental Testimony of Tyler Comings Evaluating the Assumptions and Analysis Used by FirstEnergy Ohio in Support of its Application for Approval of an Electric Security Plan and Related Retail Rate Stability Rider
Rehearing Testimony of Tyler Comings Evaluating the Assumptions and Analysis Used by FirstEnergy Ohio in Support of its Application for Approval of an Electric Security Plan and Related Retail Rate Stability Rider
Recently, there has been a substantial increase in the number of utilities that propose to recover more of their costs through monthly fixed charges rather than through variable rates. Synapse prepared a report for Consumers Union that documents the current trend toward utilities proposing substantial increases in fixed electricity charges, describes the theoretical flaws behind fixed charges, analyzes their impact on consumers, and proposes alternatives.
Synapse and Consumers Union held a webinar on February 10, 2016 based on the report: Caught in a Fix: The Problem with Fixed Charges for Electricity.
Caught in a Fix: The Problem with Fixed Charges for Electricity
Caught in a Fix - Webinar Slides
Synapse provided consulting and strategic services to support Efficiency Maine's participation in the Forward Capacity Market.
The widely cited FUND model of climate economics estimates that climate change will have less serious impacts, and that the optimal policy is to do less, than implied by many other analyses. Synapse's Frank Ackerman together with subcontractor Charles Munitz explored the FUND model, testing combinations of inputs that may illuminate the sources of FUND's distinct forecasts.
Southern Environmental Law Center retained Synapse to review Dominion Virginia Power’s application for a Certificate of Public Convenience and Necessity for its proposed Greensville County Power Station, a new natural gas combined-cycle plant. Synapse’s analysis found that the Company’s need analysis overstated its electric load and did not give appropriate consideration to alternative resource choices. On behalf of environmental respondents, Rachel Wilson submitted testimony to the Virginia State Corporation Commission demonstrating that Dominion overstated the need for the Greensville NGCC and recommending that the Commission deny the Company’s petition for a CPCN and an associated rate increase.
Synapse assisted the State of Maine Office of the Public Advocate in reviewing a petition filed by GridSolar. The petition has three key proposals: 1) the Smart Grid Coordinator should provide nine services that fall into two broad groups (NTA-related services and Customer-facing services), 2) the Smart Grid Coordinator should be established as a single, state-wide regulated utility, and 3) GridSolar should be selected as that Smart Grid Coordinator. Synapse developed testimony that addressed whether it is in the public interest to have a single, state-wide, third-party Smart Grid Coordinator established as a regulated utility and whether it is in the best interest of the public to select GridSolar to be that Smart Grid Coordinator.
Synapse was retained by Sierra Club to review Indianapolis Power & Light Company’s (IPL) 2014 IRP, provide comments and feedback to IPL throughout the stakeholder process, attend stakeholder meetings, and review the final IRP.
Synapse’s comments address the scenario structure and resource choice methodology used in the IRP. Synapse found that IPL developed arbitrary futures for its fleet that provide little insight into the true economics of each of its generating units, as the company failed to analyze the units on an individual basis. The comments also identify issues with IPL’s scenario input assumptions and its treatment of demand-side management resources.
Synapse worked with the Regulatory Assistance Project to draft integrated resource planning rules on behalf of the Puerto Rico Public Service Commission.
Synapse worked with REMI to conduct a national analysis of a fee-and-dividend carbon policy. Synapse used the ReEDS model at the state level in order to assist REMI in a macroeconomic analysis of the impacts of such a policy. Synapse defined modeling scenarios and assumptions with input from REMI; performed five model runs; and provided generation, capacity, and emissions outputs that were used as inputs to the REMI model.
On behalf of the Mountain Association for Community Economic Development (MACED), Synapse performed an analysis of the long-standing problem of disappearing coal jobs in eastern Kentucky. We then examined options for alternative employment based on six possible growth industries identified by MACED: energy efficiency, local food production, health care, sustainable forestry and wood products, tourism, and environmental remediation. Synapse developed scenarios for growth, based on the regional potential for expansion and the estimated costs and potential of each industry. We completed the technical analysis using IMPLAN, a well-known economic impact model. Specifically, we modeled a scenario that creates enough new jobs in these growth areas by 2030 to replace half of the remaining coal jobs and also bring the region’s unemployment levels down to the national average. The project received generous support from the Environment, Economics, and Society Institute (EESI).
Sierra Club retained Synapse to evaluate Kansas City Power & Light's application before the Missouri Public Service Commission to nearly triple customers’ fixed charge from $9 to $25 per month. Synapse conducted analysis and provided expert testimony regarding the impacts of the Company's proposed rate design on efficient price signals, customer equity, and investments in distributed energy resources. Ultimately the Commission rejected the Company’s proposal, approving a new fixed charge of only $11.88.
Surrebuttal Testimony of Tim Woolf on the Topic of Kansas City Power & Light Company Rate Design Proposal
Synapse worked with Meister Consulting Group to analyze the Clean Energy Plan of Lincoln Electric System (LES), the customer-owner municipal utility for the city of Lincoln, Nebraska, on behalf of Sierra Club. Historically, LES has generated about 85 percent of its electricity from coal-fired power plants. Synapse and Meister used LES’s Clean Energy Plan to develop a set of scenarios examining the bulk power costs (including costs of complying with upcoming environmental regulations) and monthly bill impacts of LES maintaining its coal-focused status quo. The project team also examined alternatives in which LES pursues expanded renewable energy PPAs.
The Massachusetts Department of Energy Resources (DOER) retained Synapse to conduct a low demand modeling analysis. The purpose of the modeling analysis was to consider various gas demand scenarios and to evaluate a range of solutions to meet Massachusetts’ short- and long-term resource needs, considering greenhouse gas reductions, economic costs and benefits, and system reliability.
New England’s energy infrastructure has become increasingly stressed due to various market conditions, leading to near-term supply inadequacy and cost impacts, especially during winter months. DOER sought to compare a range of energy solutions considering greenhouse gas reductions, economic cost and benefits, and system reliability to meet Massachusetts’ short- and long-term energy needs. As such, DOER retained Synapse to evaluate varying solutions for meeting Massachusetts’ energy needs while striking a balance between reliability, cost, and the environment.
As part of the modeling analysis process, Synapse and DOER solicited stakeholder input and feedback at several key junctures. Raab Associates, Ltd. worked with Synapse and took the lead on the stakeholder engagement process. All materials from stakeholder meetings—including notes, slides, and agendas—are made available on this page.
October 15 Stakeholder Meeting Slides
October 15 Stakeholder Summary Notes
October 15 Stakeholder Comments
October 30 Stakeholder Meeting Agenda
October 30 Stakeholder Meeting Slides
Feasibility Study for Low Gas Demand Analysis
October 30 Stakeholder Summary Notes
October 30 Stakeholder Comments
December 18 Stakeholder Meeting Agenda
December 18 Stakeholder Meeting Slides - Updated December 19
December 18 Stakeholder Meeting Slides - Updated January 7
Analysis Workbook: Gas Model (Excel) (updated January 7)
Analysis Workbook: Supply Curve - High Gas (Excel) (updated January 7)
Analysis Workbook: Supply Curve - Low Gas (Excel) (updated January 7)
Analysis Workbook: Supply Curve - Ref Gas (Excel) (updated January 7)
December 18 Stakeholder Comments
December 18 Stakeholder Summary Notes
Massachusetts Low Demand Final Report
Synapse provided technical support to the Minnesota Pollution Control Agency in its estimation of a consumption-based inventory of greenhouse gas emissions for the state.
There are myriad issues to consider when modeling efficiency into IRP. What are the best ways to optimize energy efficiency relative to generating resources? How should efficiency measures be bundled? Can a supply-side approach be an efficient and transparent process for stakeholders? What are the pros and cons for the supply-side optimization approach for energy efficiency versus an approach to place efficiency on the load-side as an exogenous input instead? How does IRP typically incorporate the results of efficiency potential studies? What are the key pitfalls of potential studies as used in IRP?
In “Searching for Best Practices for Modeling Energy Efficiency in Integrated Resource Planning,” presented at the 2015 ACEEE National Conference on Energy Efficiency as a resource, Kenji Takahashi examined the range of options used for incorporating energy efficiency into IRP. Drawing on case examples from various jurisdictions including PacifiCorp, Northwest Power Conservation Council, Tennessee Valley Authority, and Vermont, he recommended best practices for modeling cost-effective energy efficiency in long-term resource plans.
Synapse assisted the Regulatory Assistance Project in developing chapters for the National Association of Clean Air Agencies’ technical document identifying a wide range of technologies, programs, and policies that agencies might employ to comply with EPA’s Clean Power Plan. The document, Implementing EPA’s Clean Power Plan: A Menu of Options, contains 26 chapters, each exploring a different approach to reducing emissions. Synapse prepared Chapter 13: Pursue Behavioral Efficiency Programs and Chapter 14: Boost Appliance Efficiency Standards. The full NACAA Menu of Options can be found here: http://www.4cleanair.org/NACAA_Menu_of_Options.
Nebraska Public Power District (NPPD) invited independent reviews of its recent planning exercises, including its 2012 Generation Options Analysis (GOA) and its February 2013 NPPD Draft Integrated Resource Plan (Draft IRP). Sierra Club retained Synapse to review NPPD’s Draft IRP and to provide expert comments on this iteration of the planning process.
On behalf of The Alliance for Solar Choice (TASC), Synapse provided expert witness services in a docket opened in Nevada to review NV Energy’s proposal for an alternative net energy metering tariff. NV Energy proposed to establish a new rate class and a new, three-part rate structure for net metering customers. In his direct testimony to the Nevada Public Utilities Commission, expert witness Tim Woolf explained why NV Energy’s proposal is not compliant with SB 374—a state senate bill designed to encourage private investment in renewable energy resources—and why it is inconsistent with ratemaking principles. Mr. Woolf proposed an alternative rate structure that is compliant with SB 374, will prevent cost-shifting between net metering and non-net metering customers, will provide customers with simple, appropriate price signals regarding the value of net metered resources, creates downward pressure on electricity rates, and promotes the development of customer-sited renewable resources in Nevada.
Raab Associates, Ltd. and Synapse prepared a primer on large-scale energy infrastructure issues in 2015 in New England. The primer gives an overview of the current electricity and gas infrastructures in the region, discusses some of the key issues and challenges, and provides an overview of some of the current transmission and gas pipeline proposals. The report was one of four released by the Boston Green Ribbon Commission to provide fundamental information about how the energy supply system works in New England, while highlighting strategies for institutional renewable energy procurement and public sector innovation to reduce greenhouse gases.
Synapse provided expert advice on and analysis of energy efficiency and CHP programs offered by New Jersey's Clean Energy Program for the New Jersey Division of Rate Counsel. We reviewed, analyzed, and commented on various energy efficiency-related matters, including the state-administered programs’ monthly performance, designs and budgets, avoided energy supply cost estimates, cost-benefit analyses, energy savings protocols, EM&V studies, and overall administrative structure. We also periodically reviewed and commented on New Jersey Energy Master Plans, and on a three-year energy efficiency program plan called the Comprehensive Resource Analyses.
The Northern Maine Independent System Administration predicted near-term reliability issues in their territory, which is not directly electrically connected to the rest of Maine and the ISO New England. Synapse was hired to assist the Maine OPA in their investigation of the various options being proposed to solve the reliability need, including simple transformer upgrades, additional transmission links to New Brunswick, and large transmission projects that would connect Northern Maine to the ISO New England. Ultimately, a simple and low-cost transformer upgrade project was approved by the ME PUC.
Sierra Club retained Synapse to review Oklahoma Gas & Electric’s application before the Oklahoma Corporation Commission seeking authorization of a plan to comply with the Clean Air Act and to modernize its Mustang plant, and to recover costs for both projects. The filing requested approval of retrofits on Sooner units 1 & 2, conversion of Muskogee units 4 & 5 to natural gas, and construction of new natural gas combustion turbines to replace steam units at Mustang.
Synapse expert witnesses Tyler Comings, Jeremy Fisher, Rachel Wilson submitted direct testimony in this proceeding. Mr. Comings’ testimony focused on the reasonableness of the assumptions used in the Company’s supporting analysis, and how those assumptions impact the net present value of the proposed action. Dr. Fisher discussed the Company’s planning methodology and compared it with best practices in resource planning. Ms. Wilson evaluated the PROMOD and PCI Gentrader modeling performed by the Company and presented the results of her own Gentrader modeling analysis.
The witnesses’ analyses showed that OG&E’s preferred option only advantaged ratepayers in fringe cases, and not at all under reasonable expectations about the future. In December 2015, the Commission denied the Company's application.
Direct Testimony of Jeremy Fisher Comparing the Modeling Performed by Oklahoma Gas & Electric against Best Practices in Resource Planning
Direct Testimony of Rachel Wilson Evaluating the Modeling Performed by Oklahoma Gas & Electric and Presenting Results of Independent Modeling Analysis
Rebuttal Testimony of Tyler Comings Regarding Assumptions in Analysis Supporting OGE Request for Authorization and Cost Recovery of Clean Air Compliance Plan and Mustang Modernization
Rebuttal Testimony of Jeremy Fisher Regarding Oklahoma Gas and Electric Plan to Comply with the Federal Clean Air Act
Synapse assisted the Office of the Auditor General of Ontario during its audit of the region’s electricity power system planning. Synapse provided advice on the key areas the audit team should focus on and best practices in other jurisdictions.
In Utah Docket 14-035-147 and Oregon Docket UM 1712, PacifiCorp proposed to close its Deer Creek coal mine, sell Utah mining assets, and engage in a long-term coal supply contract with the proposed buyer of those assets, Bowie Resource Partners. The resulting coal supply agreement (CSA) would require PacifiCorp’s Huntington Power Station to take, or pay for, a substantial amount of coal through 2029. On behalf of Sierra Club, Synapse reviewed PacifiCorp’s analyses to determine whether the transaction is in the best interest of the Company’s customers. Synapse expert witness Jeremy Fisher assessed that the Company had not determined if the power plant was at risk of being non-economic and had overvalued the benefits of the sale and coal supply agreement. Dr. Fisher recommended that the Commissions of these states hold the Company responsible for signing contracts that allow sufficient optionality, and do not require a long-term commitment to a non-economic resource.
In California Docket A. 15-09-007, PacifiCorp filed a request to authorize the sale of the Utah mining assets on a post-hoc basis. Testifying on behalf of Sierra Club, Jeremy Fisher reviewed the relationship between the mining assets, the long-term CSA, and the mine closure, and determined that the sale of the mining assets could not be separated from the other elements of the transaction, as written, and had not been assessed as a separate entity. In addition, Dr. Fisher discussed the contractual risks encumbent on the Company for executing the contract prior to full regulatory approval, and noted that the Company continued to overvalue the benefits of the overall agreement.
Direct Testimony of Jeremy Fisher Regarding PacifiCorp Request to Authorize Sale of Utah Mining Assets
Synapse prepared a report for the Western Interstate Energy Board that describes how regulators can guide and improve utility performance through the use of performance metrics or through performance incentive mechanisms. From reliability and safety standards to customer engagement, these tools have been widely used and are evolving to provide regulators with new means of ensuring that utilities’ incentives are aligned with the public interest. The report identifies many of the metrics and performance incentives that regulators have used to monitor and evaluate utility performance, as well as emerging metrics and incentives that are being discussed in jurisdictions facing new issues and challenges, such as the integration of distributed energy resources. The report also provides a set of principles and recommendations for regulators based on Synapse’s review of the large amount of literature on these topics and lessons learned from case studies.
Webinar: Guiding Utility Performance
Performance Incentive Mechanisms: Presentation to the Western Interstate Energy Board
Presentation to e21 Initiative: Performance Incentive Mechanisms
Lawrence Berkeley National Laboratory (LBNL) has prepared a series of technical reports on Future Electric Utility Regulation, which examine issues related to incremental and fundamental changes to electric industry regulation in a future with high distributed energy resource (DER) levels. Synapse provided research and analysis to support LBNL in producing a technical report on performance-based regulation in a high DER future. The report: summarizes the full suite of mechanisms used in various types of PBR; compares ratemaking and regulation of utilities under cost of service versus PBR paradigms; explains how to incorporate performance-based metrics focused on DER; presents key subtopics from the perspective of both the electric utility and the customer/broader public interest; describes a taxonomy of issues to consider in determining whether to implement some elements of PBR or comprehensive PBR; and describes criteria state utility commissions can consider to evaluate whether to adopt some form of PBR in the context of a high DER future.
Performance-Based Regulation in a High Distributed Energy Resources Future (webinar slides)
Synapse analyzed the potential for clean alternatives to replace Progress Energy’s Asheville, North Carolina, coal-fired power plant. Specifically, this analysis considered local reliability issues that may be triggered by the retirement of the Asheville plant, the ability of clean alternatives (such as energy efficiency and renewable resources) to resolve those reliability issues, and the comparative costs and bill impacts of clean alternatives versus pollution control retrofits at the Asheville plant. Synapse’s work product discussed the untapped potential for energy efficiency, renewable energy, and demand response in the service territory of the Asheville plant.
Synapse assisted Sierra Club with an analysis of the revenue requirements necessary to install a cooling tower at Wisconsin Public Service Corporation?s (WSPC) Pulliam Units 7 and 8. Rachel Wilson submitted direct testimony to the Wisconsin Division of Hearings and Appeals on total cost estimates for construction and operation of the cooling towers as well as the economic achievability of the cooling towers and the expected impact on electric rates in WSPC?s service territory.
On behalf of Sierra Club, Synapse evaluated the reasonableness of the Midcontinent Independent System Operator’s (MISO) 2015/2016 capacity auction, which resulted in a dramatic price spike for Zone 4 (southern Illinois). Synapse’s analysis found that the auction results were an artifact of the auction construct, and did not accurately reflect actual supply and demand conditions. In particular, Synapse highlighted the fact that counter flows from power exports were not accurately accounted for, and that the threshold for investigating possible market power was inappropriately tied to PJM’s clearing prices. As a result, Synapse recommended that FERC reject the results of the auction and that the flaws in the auction construct be corrected. Following a technical conference on this matter, FERC agreed with Sierra Club and other intervenors that MISO’s method for calculating counter flows and for determining the threshold for investigation of market power were not just and reasonable, and ordered MISO to change its methodologies.
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