NRC Waste Confidence Hearing - Tarrytown

More than 250 people filled a hotel ballroom tonight to discuss the federal government’s draft study on the long-term storage of used nuclear fuel.  The local meeting is one of 13 being held around the country.

The public comment period on the Waste Confidence Draft Generic Environmental Impact Statement and proposed rule has been extended to Friday, December 20, 2013. All public meetings that were postponed due to the shutdown have been rescheduled. 

Historically, Waste Confidence has been the U.S. Nuclear Regulatory Commission's (NRC's) generic determination regarding the environmental impacts of storing spent nuclear fuel beyond the licensed life for operation of a nuclear power plant. This generic analysis has been incorporated into the Commission's NEPA reviews for new reactor licenses, license renewals, and Independent Spent Fuel Storage Installation (ISFSI) licenses through the Waste Confidence Rule. The Waste Confidence GEIS and rule satisfy the NRC's obligations under NEPA with respect to post-licensed-life storage of spent nuclear fuel.

On June 8, 2012, the U.S. Court of Appeals for the DC Circuit found that some aspects of the 2010 rulemaking did not satisfy the NRC's NEPA obligations and vacated the rulemaking. [New York v. NRC, 681 F.3d 471 (D.C. Cir. 2012)]. The court indicated that in making either a Finding Of No Significant Impact based on an Environmental Assessment or in an Environmental Impact Statement supporting the rulemaking, the Commission needed to add additional discussions concerning the impacts of failing to secure permanent disposal for spent nuclear fuel, and concerning the impacts of certain aspects of potential spent fuel pool leaks and spent fuel pool fires.

In response to the Court's decision, the Commission decided to stop all licensing activities that rely on the Waste Confidence rule (see CLI-12-016). The NRC created a Waste Confidence Directorate within the Office of Nuclear Material Safety and Safeguards to oversee the development of a Waste Confidence Generic Environmental Impact Statement and revised Rule. The Commission has instructed the Directorate to issue the final Generic Environmental Impact Statement and Rule by no later than September 2014.  (NRC, Lohud)

'City & State' Energy Forum

On September 17, City & State hosted its annual “On Energy” forum discussing the aftermath of Super storm Sandy, the development of the energy superhighway, and the future of renewable energy. Here are some excerpts from the event.

 

 

(City & State, 9/18/2013)

NY Court of Appeals Hears Cases on Town Fracking Bans

The New York Court of Appeals on Thursday said it would hear challenges by energy companies and landowners to two upstate towns' bans on fracking, the controversial hydraulic fracturing process of extracting natural gas from underground shale.

The Court of Appeals will hear appeals by Norse Energy Corp. USA against the Town of Dryden and Cooperstown Holstein Corp. against the Town of Middlefield.

Dryden, a town of 14,435 in Tompkins County, according to a 2010 U.S. Census Bureau report, amended its zoning laws in 2011 to ban fracking. And Middlefield, a town of 2,114 in Otsego County, passed a similar zoning law in 2011.

Both towns' laws were upheld unanimously in May by panels of appellate court judges. The courts rejected the argument by energy companies and landowners that the towns' zoning laws were trumped by the state's Oil, Gas and Solution Mining Law, which empowers the state Department of Environmental Conservation to regulate oil and gas drilling.

New York Court of Appeals in Albany, NY

Fracking compnies believe local municipalities lack the expertise to properly regulate oil and gas drilling.  They believe that the New York state regulatory scheme has always anticipated that the DEC have preemptive rights to regulate fracking decisions.

Fracking involves the use of high-pressure water, chemicals and sand to crack open deep underground rock that houses rich supplies of natural gas.

The legal challenges haven't dissuaded New York communities from passing fracking bans.  More than 170 New York communities have passed bans or moratoria, according to FracTracker Alliance, a nonprofit that monitors gas drilling.

The Joint Landowners Coalition of New York, a group of 77,000 landowners, that support gas drilling believes that New York cannot have a 'not in my backyard approach' to energy development. (WSJ, 8/30/2013)

Indian Point’s Timely Renewal

On Sept. 29, 2013, Indian Point 2 will enter what’s called the period of “timely renewal,” while the NRC continues its consideration of Entergy’s application to renew the unit’s operating license.

Indian Point

The NRC’s timely renewal regulation implements a provision of the Administrative Procedure Act passed by Congress. Under that regulation, if a licensee requests a renewed license at least five years before expiration of its current license, the request is considered “timely” and the facility is allowed to continue to operate under its existing license until the NRC completes its review and reaches a decision on the license renewal request.

During the period of timely renewal, Entergy will have to continue to meet all of the regulations and license conditions that currently apply. In addition, in a May 1 letter to the NRC, Entergy voluntarily committed to update its Final Safety Analysis Report to include the aging management programs, and to implement the commitments it has made, for a renewed license. Indian Point 2 will continue to operate under its current license with these modifications, to assure continued safe operation during the timely renewal period, until the NRC reaches a decision on whether to approve the license renewal application.

Entergy submitted a license renewal application for Indian Point 2 and 3 in April 2007. The current operating license for Indian Point 2 expires at midnight September 28th; Unit 3’s license expires two years later, in December 2015.
Typically, the NRC staff takes about 18 to 24 months to review a reactor license renewal application. If there’s a hearing on the application, the process may take about 30 months to complete. In the Indian Point case, the hearing has taken longer than projected, in part due to the large number of contentions the parties have raised in the proceeding.

In addition, a decision on the Indian Point license renewal application has been deferred pending further Commission action involving the Waste Confidence Decision. In its Waste Confidence Decision and Temporary Storage Rule, updated in 2010, the Commission made a generic determination that spent nuclear fuel can be stored safely and without significant environmental impacts for a certain period of time after a nuclear plant permanently shuts down. In June of last year, the D.C. Circuit Court of Appeals found that some aspects of the 2010 Waste Confidence rule update did not satisfy the NRC’s obligations under the National Environmental Policy Act and vacated that rule. In response, the Commission decided to defer all final licensing decisions that rely on the Waste Confidence Decision while it takes steps to address the court’s decision. This applies to various license applications, including the Indian Point 2 license renewal application.

The NRC will continue to provide oversight of activities at both Indian Point 2 and 3 during the period of timely renewal. Last year, NRC conducted 11,000 hours of inspection at the two units. NRC will devote a similar number of inspection hours this year. Some of that includes inspection of the licensee’s commitments and aging management programs related to license renewal.

In short, even though a final decision hasn’t been reached on the renewal of the Indian Point 2 license, NRC will continue to assure that it operates safely during the period of timely renewal.  (NRC)

38.7 Million CO2 Allowances Sold at 20th RGGI Auction

CO₂ Allowances Sold at $3.21

The nine Northeastern and Mid-Atlantic states participating in the Regional Greenhouse Gas Initiative (RGGI), the nation’s first market-based regulatory program to reduce greenhouse gas pollution, today announced the results of their 20^th auction of carbon dioxide (CO₂) allowances.
 38,782,076 CO₂ allowances were sold at the auction, held Wednesday, June 5, 2013, at a clearing price of $3.21. The auction generated $124.4 million for reinvestment by the RGGI states in a variety of consumer benefit initiatives, including energy efficiency, renewable energy, direct bill assistance, greenhouse gas abatement, and climate change adaptation programs.

Allowances sold represent 100 percent of the allowances offered for sale by the nine states. Bids for the CO₂ allowances ranged from $1.98 to $5.55 per allowance.

According to the independent market monitor’s report, electricity generators and their corporate affiliates have won 86 percent of CO₂ allowances sold in RGGI auctions since 2008. Additional details are available in the Market Monitor Report for Auction 20.

With twenty auctions completed, RGGI continues to generate hard data showing that market-based emission reduction programs are an effective way to realize environmental goals, save consumers money, and create jobs. 
The next RGGI auction is scheduled for September 4, 2013. (RGGI)

Bioswale Installation Will Slow Down Stormwater Runoff In City

The Department of Environmental Protection plans to install 5,500 curbside gardens, called bioswales, to intercept, absorb and filter storm runoff before it flows into waterways. The bioswales will help clean up its rivers, streams and bays.  The bioswales—20 feet long and five feet wide—can hold 2,244 gallons of storm water at a time, the city says. They stretch five feet deep and are filled with broken stone and soil that contain air pockets to hold storm water. Planted with vegetation, the bioswales could pass topside as simple street gardens.

The bioswales, which cost about $25,000 each, will be tended by the city's parks department. Some 119 already have been installed in Queens and the Bronx around Jamaica Bay, the Hutchinson River and the East River. By 2014, city officials say they plan to have 2,200 bioswales installed, and 5,500 by 2015. Most will be situated in Queens, Brooklyn and the Bronx.

The bioswales are part of a larger city push on so-called green infrastructure, required under a 2012 settlement with New York state. In addition to paying a $200,000 fine to Albany for discharging pollutants into state waters, the city will spend some $5.3 billion to improve its sewer-overflow systems over the next 20 years.

By diverting storm water, the bioswales are designed to ease pressure on the city's 14 water-treatment plants, the final destination for both sewage water and storm-water runoff. On days with heavy rainfall, those plants become overwhelmed, letting wastewater and sewage slip into the city's waterways.

The city collects and treats 1.3 billion gallons of sewage and storm water on a dry day, city figures show, though the system can handle 2.5 billion gallons. Rainy days send far more than 2.5 billion gallons toward the treatment plants, the city says. (WSJ, 6/3/2013)

RGGI Qualification Applications Due April 24

Qualification Application and Intent to Bid for RGGI Auction 20 Due Wednesday, April 24, 2013

Documents Available

The deadline for submitting the Qualification Application and Intent to Bid for RGGI CO2 Allowance Auction 20 is Wednesday, April 24, 2013.     The Qualification Application and Intent to Bid must be received no later than 5:00 PM ET Wednesday, either by e-mail OR in hard copy at:
	RGGI CO2 Budget Trading Programs Auction Manager c/o World Energy Solutions, Inc. 100 Front Street, 20th Floor Worcester, MA 01608
For questions please call: (800) 578-0718.     For more information

Dynegy Lays Off 57 Danskammer Workers

Danskammer plant Dynegy, the company that owns the Roseton and Danskammer electric generating plants in the Town of Newburgh, which is in the process of selling both, has laid off all but two IBEW employees at Danskammer.

A total of 57 workers got their pink slips a couple of days ago.

The company that is buying Danskammer is going to dismantle it. Another company is buying the Roseton plant and will continue to operate it for electrical generation.

IBEW Local 320 President and Business Manager John Kaiser said he is trying to have the Danskammer workers placed.  (Mid Hudson News, 4/3/2013)

NYISO Approves Comprehensive Reliability Plan

Identifies System Reliability Risks and Solutions through 2022

 

The Board of Directors of the New York Independent System Operator (NYISO) approved the 2012 (CRP) for New York’s power system, which concludes that additional transmission and generation resources will be needed during the study period (2013-2022) to meet system reliability criteria and that sufficient solutions have been proposed to meet those reliability needs.

The 2012 CRP is the product of the Comprehensive Reliability Planning Process conducted by the NYISO to provide a blueprint for meeting the reliability needs of the state’s bulk electricity grid over a 10-year planning horizon. The multi-phased process includes an assessment of reliability needs prior to the development of the reliability plan.

In September, the NYISO issued the 2012 Reliability Needs Assessment (RNA) identifying transmission security violations, which could manifest as soon as 2013, and resource adequacy violations, which could occur by 2020. To address these needs, the NYISO requested market-based, regulated backstop and alternative regulated solutions. Market-based solutions are the preferred means to meet future reliability needs with the other regulated solutions available for implementation if necessary.

The CRP reports that market-based, regulated backstop and alternative regulated solutions have been proposed to meet the reliability needs identified in the 2012 RNA. Based upon its updated study model the evaluation of the market-based solutions and the most recent Local Transmission Plans (LTPs) from the state’s transmission owners, the CRP made the following findings:

Transmission Security and Adequacy

The needs identified in the 2012 RNA for the Rochester and Syracuse areas will be resolved by 2017 with permanent solutions identified in Rochester Gas & Electric’s and National Grid’s LTPs.

Resource Adequacy

The market-based solutions, if constructed, are fully sufficient to meet the resource adequacy needs for 2021 and 2022 identified in the RNA. Market-based solutions to the resource adequacy needs include: NRG’s proposal to repower the Astoria plant and provide a net capacity increase of 405 megawatts (MW) of generating capacity in the New York City region (Zone J); Constellation NewEnergy, Inc.’s proposal to increase demand response by 30 MW in the New York City region (Zone J); and NRG’s proposal to repower the Dunkirk plant with 440 MW of capacity in the Western New York region (Zone A), which would replace existing generation at the site and could address reliability issues in the area.
 
Risk Factors

While solutions studied in the CRP will result in the system meeting reliability criteria, there are uncertainties and risk factors that could adversely affect the implementation of the plan and system reliability over the 10-year planning horizon. These include: the need for transmission owners’ LTPs to proceed on schedule; factors such as financing, future market conditions and interconnection requirements influencing the timely completion of market-based generation solutions; the retirement of additional generating units beyond those already considered in the 2012 RNA for either economic or environmental reasons could raise additional, adverse impacts on reliability beyond those identified in the CRP; and if the Indian Point Power Plant licenses are not renewed and the plant were to retire by the end of 2015 or thereafter, this would result in immediate transmission security and resource adequacy criteria violations unless sufficient replacement resources are in place prior to retirement.

The NYISO will continue to monitor, evaluate and report, on a quarterly basis, the viability and timeliness of all submitted market-based solutions and will be prepared to trigger a gap or regulated backstop solution, if necessary.

The 2012 Comprehensive Reliability Plan  

The New York Independent System Operator (NYISO) is a not-for-profit corporation responsible for operating the state’s bulk electricity grid, administering New York’s competitive wholesale electricity markets, conducting comprehensive long-term planning for the state’s electric power system, and advancing the technological infrastructure of the electric system serving the Empire State.

###

For more information, please contact:

David Flanagan (518) 356-7325 [office]/(518) 727-1569 [mobile] / dflanagan@nyiso.com

Ken Klapp (518) 356-6253 [office]/(518) 461-3564 [mobile] / kklapp@nyiso.com    

NRC Assigns New Inspectors to Indian Point

The Nuclear Regulatory Commission has assigned three new resident inspectors to the Indian Point nuclear power plant in Buchanan.

James Scott Stewart was named as the senior resident inspector and Katrina Dunham and Ami Patel were named as the resident inspectors at the facilities.

Previously, Stewart, who joined the NRC in 1987, was the senior resident inspector at the Turkey Point nuclear plant in Homestead, FL, Crystal River 3 in Crystal River FL, and at Calvert Cliffs in Lusby, MD.

Dunham joined the agency in 2010 after graduating from the Maine maritime Academy and most recently was a reactor engineer in the Division of Reactor Projects.

Patel began her career with the NRC in 2008 as a project engineer in Atlanta. She transferred to Rhode Island in 2009 and worked in various positions in the Division of Reactor Projects.

Each commercial nuclear power plant in the U.S. has at least two NRC resident inspectors. They serve as the agency’s eyes and ears at the facility, conducting regular inspections, monitoring significant work projects and interacting with plant workers and the public. (MidHudsonNews, 3/13/2013)

Will Sandy Storm Money Bail Out LIPA Re Shoreham?

The financial engineering required to privatize the LIPA could cost taxpayersif the state decides to bailout Long Island. Customers of the Long Island Power Authority in Nassau, Suffolk and parts of Queens counties suffered through prolonged blackouts during Superstorm Sandy thanks to the utility's widely lambasted mismanagement. Governor Cuomo earlier this month in his State of the State address tated that he wanted to "abolish" LIPA. But analysts believe that persuading a private company to buy the much-maligned utility would require the state to assume at least $4 billion of LIPA's $7 billion in debt from the Shoreham nuclear power plant closure.



A sale would also trigger nearly $1 billion in additional costs: early-termination fees paid to bondholders, as well as penalties for the derivatives contracts that would suddenly become void, according to people who have studied a privatization.

LIPA could a very hot property for publicly traded Consolidated Edison Inc., New Jersey's Public Service Enterprise Group or another utility seeking to expand. Its chief asset: a monopoly serving a region whose population is larger than 20 states. LIPA has 1.1 million customers and ranks as the second-largest government-owned utility after the Los Angeles Department of Water & Power.

The trouble is LIPA's balance sheet. Debt obligations are nearly twice the value of its $4 billion in assets, and its 19-to-1 debt-to-cash ratio is more than double the industry average.



Any private buyer would seek to raise rates so it could pay down debt, cover the costs of stormproofing LIPA's infrastructure—and generate a decent shareholder return. But higher rates are a nonstarter. Mr. Cuomo earlier this month demanded they be frozen as part of any privatization. The only way out of this box, analysts say, is for the state to assume a portion of LIPA's debt so a buyer gains some financial flexibility.  Could part of the $60 billion in Superstorm Sandy bailout money be used to bailout LIPA?  Sounds plausible, unless restrictions are tied to the federal money.

Mr. Mitnick suggests the state take on some or all of LIPA's obligations, at least assuming the $4 billion liability originally associated with the long-closed Shoreham nuclear-power plant. With a lower debt load, LIPA would surely attract plenty of suitors eager to own its transmission and distribution assets.

The state's debt load is $63 billion, according to a report earlier this month by state Comptroller Thomas DiNapoli, who said the state has the capacity to add only another $2 billion through next year.

Another knotty problem centers on paying off trading partners and investors if the utility is privatized. Like most utilities, LIPA has entered into lots of derivatives transactions to help hedge its exposure to fluctuating interest rates and energy prices. In the event of a privatization, those contracts would be voided, forcing the utility to pay $295 million in early-termination fees, according to a 2011 report for LIPA by the Brattle Group, a consulting firm.

It would be more expensive still to deal with LIPA's investors. In order to retire LIPA's approximately $7 billion in debt, the Brattle Group estimated that holders would have to be paid a $666 million premium in exchange for selling their bonds before maturity. (Crain's New York Business, 1/18/2012)

PJM Interconnection & NY ISO Coordinate

PJM INTERCONNECTION AND NEW YORK ISO LAUNCH MARKET-TO-MARKET COORDINATION BETWEEN TRANSMISSION SYSTEMS

Increases Efficiencies of Regional Wholesale Electricity Markets

PJM Interconnection and the New York Independent System Operator (NYISO) yesterday successfully began jointly managing transmission limits that occur near the "seams" between their regions. The coordination between the two markets will increase the efficiency and lower the costs of electric transmission congestion management.

Congestion occurs when limits on transmission lines restrict the amount of power that can flow. In response, grid operators typically increase or decrease output from generators. The joint coordination allows the most cost effective generator— whether in New York or PJM— to be adjusted to address the constraint.



The benefits of market-to-market coordination between NYISO and PJM include:

• Lower overall congestion costs for consumers
• More consistent prices across the two wholesale electricity markets because prices at the borders between them are expected to come together more closely
• Greater reliability because a broader pool of resources is available

In October 2012 NYISO and PJM announced a long-term approach to optimize the flow of electricity across their common border and reduce threats to reliability that also includes:

• Coordinating planning processes to facilitate efficient transmission investments
• Deploying smart grid technologies that maintain system balance through the use of robust data, communications and automated systems
• Developing a shared understanding of regional natural gas delivery constraints for power generation



The New York Independent System Operator (NYISO) is a not-for-profit corporation responsible for operating the state’s bulk electricity grid, administering New York’s competitive wholesale electricity markets, conducting comprehensive long-term planning for the state’s electric power system and advancing the technological infrastructure of the electric system serving the Empire State.

PJM Interconnection, founded in 1927, ensures the reliability of the high-voltage electric power system serving 60 million people in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. PJM coordinates and directs the operation of the region’s transmission grid, which includes 59,750 miles of transmission lines; administers a competitive wholesale electricity market; and plans regional transmission expansion improvements to maintain grid reliability and relieve congestion. Visit PJM. (PJM, NYISO)

RGGI States Initiate Bidding Process for Auction 19

Auction to be held: March 13, 2013 | 9:00 AM - 12:00 PM ET

Auction Notice now available at:

http://www.rggi.org/market/co2_auctions/information

Webinar Information now available at:
http://www.rggi.org/docs/Auctions/19/Auction19-Webinar-Instructions.pdf

January 15, 2013 - The states participating in the Regional Greenhouse Gas Initiative (RGGI) 2013 auctions today released the Auction Notice and application materials for their nineteenth quarterly carbon dioxide (CO2) allowance auction, to be held on March 13, 2013. The Auction Notice for CO2 Allowance Auction 19 provides potential auction participants with the information needed to submit a Qualification Application and indicate their intent to bid in Auction 19. As indicated in the Auction Notice for CO2 Allowance Auction 19, the states will offer for sale 37,835,405 CO2 allowances. The states will use a reserve price of $1.98 for the March auction.
Details
Key Dates:	January 17: Prospective Bidder Webinar [Registration & Details] January 30: Intent to Bid and/or Qualification Application Due by 5:00 PM ET March 6: Financial security due by 5:00 PM ET March 13: Auction 19 (9:00 AM - 12:00 PM ET) March 15: Auction results posted to www.rggi.org
Bidder Webinar Information:	Prospective bidders are encouraged to participate in a free webinar, which is open to the public, that will review the RGGI auction format and qualification process. The webinar will present the auction format, forms that need to be submitted, and an overview of the qualification process. No questions will be taken during the webinar. The webinar will be held from 2:00 PM ET to 3:00 PM ET on Thursday, January 17, 2013. Date and Time: Thursday, January 17, 2013, 2:00 PM - 3:00 PM ET Registration: While the webinar is open to the public, registration is required. To register for the webinar, please go to: https://www3.gotomeeting.com/register/319512430 . After registering you will receive a confirmation email containing information about joining the webinar. Audio Access Toll-Free Phone Dial In: (888) 609-1608 Alternative Phone Dial In: +1 (909) 259-0034 Access Code: 862-164-649 Presentation Slides and Recording: The presentation slides for the webinar will be posted on the Auction Materials webpage no later than 10:00 AM ET on Wednesday, January 16, 2013. A recorded version of the webinar will be made available no later than 5:00 PM ET on Tuesday, January 22, 2013 on the Auction Materials webpage. The Auction Materials webpage can be visited at http://www.rggi.org/market/co2_auctions/information.

Richard Kauffman - - Cuomo Energy Czar

Richard Kauffman, a senior advisor to U.S. Energy Secretary Steven Chu, will be New York’s new “energy czar,” Gov. Andrew Cuomo announced in his State of the State.

Richard Kauffman

Kauffman will join Cuomo’s cabinet as chairman for energy policy and finance. One of his top priorities will be to “plan and execute” a strategy to bolster the state’s energy infrastructure and curb its contribution to climate change while keeping rates down.

Cuomo unveiled his “Charge NY Plan” during the address, increasing the number of plug-in, electric vehicles on the road in New York. The plan calls for installing 3,000 charging stations across the state in hopes of supporting 40,000 electric vehicles.

Cuomo also emphasized investment in “clean tech”—including solar energy and lowering emissions. He proposed creating a $1 billion “green bank” to offer state incentives for investing in green energy. (Albany Watch, 1/9/2013)

Moreland Commission Recommends Dissolving LIPA

The Moreland Commission (Moreland Commission on Utility Storm Preparation and Response) has recommended that the Long Island Power Authority (LIPA) should be dissolved.  LIPA is a state agency that was created in 1985 to manage Long Island’s power grid. The commission recommended that the network that supplies electricity to 1.1 million customers should be turned over to a utility company overseen by the same state commission that regulates Consolidated Edison and other power distributors in New York.



But that regulator, the Public Service Commission, needs more resources and the power to punish utility companies with heavy fines and even the loss of their franchises, the commission said. Those recommendations were part of a preliminary report presented to the governor in advance of his annual State of the State speech. The major changes proposed by the commission would require legislation.
      

After storms in 2011 and again after Hurricane Sandy cut power to 90 percent of Long Island Power Authority customers, that longstanding arrangement drew criticism from officials, including Mr. Cuomo. They blamed it for the authority’s disorganized response, which left most customers without power for more than a week in November, and some for over two weeks.

 

 



      

To improve the way utilities prepare for and respond to storms like Hurricane Sandy, the governor said, state regulators need a better set of potential incentives and sanctions. Most of all, he said, they need the ability to brandish the threat of withdrawing a utility’s certificate to operate.

      

Placing the power grid in private hands would be the most cost-effective option and would put its operation under the scrutiny of state regulators, the Moreland Commission concluded. It would then operate as other big utilities like Con Edison do, rather than in the bifurcated way it has for more than three decades.

      

The power authority, which has just 112 employees, does not actually operate the system for distributing electricity on Long Island. It merely owns the grid, and oversees the work of a utility company — National Grid, which is in the final year of its contract — that it pays to keep the power flowing.

      

The unusual arrangement goes largely unnoticed until a storm blows in and knocks out power to large swaths of the island. Then, attention turns to the authority’s executives and the board of political appointees they answer to.

 

The commission said the regulatory agency needed a larger staff and should have more engineers and auditors to monitor utilities effectively, but it provided no estimate of how much that expansion would cost.

      

A more complicated financial issue is the question of how to make the Long Island grid attractive to a private buyer. The authority is saddled with about $7 billion in debt it took on to build the Shoreham nuclear plant, which was shuttered before it ever operated commercially. The authority has assets worth about $4 billion, which would leave it with about $3 billion of “stranded debt.” Another obstacle to privatization cited by some industry experts would be the loss of the ability to issue tax-exempt debt, which would increase the costs of paying to run the utility. (NYTimes, 1/7/2012) 

 

2013 State of the State

Governor Andrew Cuomo’s third and rather lengthy “State of the State” address in Albany, NY. The speech was limited on the topic of energy.

 



The governor announced the appointment of a “Clean Energy Czar” to figure out financing of certain renewable technologies. Richard L. Kauffman, former senior advisor to U.S. Energy Secretary Steven Chu, will serve as chair of the newly formed Energy Policy and Finance Sub-Cabinet. He will lead the effort to develop policy and financing strategies to advance the following goals:

• NY Green Bank: The $1 billion Green Bank will leverage public dollars with a private sector match to spur the clean economy.
• Extend NY-Sun Solar Jobs: The program will be expanded at $150 million annually for 10 years to increase solar panel installations for homes and businesses.
• Charge NY Program: The Charge NY Program will invest in an electric car network to reduce reliance on fossil fuels by installing a statewide network of charging stations and providing charging infrastructure tax credits.

The governor also called for a “fundamental redesign” of New York’s power system including expanding the regulatory authority of the Public Service Commission and abolishing the Long Island Power Authority. He also continued his charge for clean energy development in New York, proposing a mandate to lower the regional greenhouse gas cap and announcing his commitment to “ensure a skilled energy workforce.” (2013 State of the State)

How Will Article 10 Work?

On Aug. 4, 2011, New York restored and updated its long-expired Article 10, which governs in-state siting of new, repowered or modified electric generating facilities over 25 MW.

The new Article 10, like its predecessor, centralizes siting authority in the New York State Board on Electric Generation Siting and the Environment and is intended to guarantee developers a streamlined, time-certain permitting process.

By lowering the size threshold from 80 to 25 MW, Article 10 permits more wind, solar and other renewable projects to use its streamlined process while continuing to recognize the authority of local interests over smaller projects that have more local impacts.

Implementing regulations were proposed this spring, with comments due by the end of May.

Noteworthy provisions of the proposed regulations are:

■ Disclosure of sensitive, detailed capital cost estimates. Not appearing to be required by Article 10, Section 1001.14 of the regulations requires applicants to provide detailed capital cost estimates, along with supporting work papers. The proposed disclosures would require developers to air competitively sensitive commercial information; fear of which could discourage developers from siting new projects or risk distorting a fully competitive market by permitting market participants to influence competitive bid processes like the New York State Energy Research and Development Authority solicitations.

■ Minor design revisions trigger substantial scrutiny. Certain minor project design changes such as shifting collection lines, interconnection lines or access roads could trigger more scrutiny and fees if such change is deemed a “revision” under Section 1000.2(ak) rather than a “modification” under section 1000.2(x). This

■ High bar for ignoring local laws. Section 1001.31(e) requires that before asking the siting board to find that a compliance with a local law would be unreasonably burdensome, applicants must show it is technically impractical to comply with the local requirement or the costs to consumers of the applicant’s doing so would outweigh its benefits. In comparison, Article 10 gives the siting board discretion to overrule local laws that pose an unduly burdensome barrier. Arguably, then the implementing regulations adopt a more onerous standard than that contemplated in the actual legislation.

■ Low bar for forcing administrative hearings. Section 1000.12 allows parties, including those seeking to challenge or delay a project, to force an administrative hearing upon a showing of material and relevant concerns. This could expose developers to costly litigation of potentially frivolous issues. Article 10 does not codify a higher standard but would permit the siting board to impose a substantive and significant standard, which would prevent litigation concerns.

■ Long lead time for public involvement program (PIP) plan. Section 1000.4(d) requires applicants to submit a PIP plan at least 150 days before the preliminary scoping statement. Added to the three-month pre-application (1000.5(c)) and yearlong application, this five-month wait appears to extend the certification time line to 20 months—nearly twice the duration proposed in the notice of proposed rulemaking.

■ Costly detail for preliminary design drawings, noise and vibration studies, and site studies. The requirement discourages applicants from improving the design once it has been submitted for fear such changes might be deemed “revisions” under the law.

These studies depend on variables that cannot be known at the application stage, and the specificity sought adds costly layers of complexity without achieving any corresponding benefit.
Section 1001.21 requires construction-level detail of site geology, seismology and soils, which would impose a potentially large cost at the application stage.

■ Early-stage site safety response plans and New York State Division of Homeland Security and Emergency Services review. Section 1001.18(d) requires applicants to ask the New York State Division of Homeland Security and Emergency Services to review plans, seeming unnecessary for relatively small projects, especially small renewable resources.

■ Study radius of groundwater analysis and storm water plans. Section 1001.23 requires detailed groundwater analysis and storm water plans.

The proposed regulations highlight some potential early-stage obstacles the siting board could impose on in-state developers.

Taken together, these obstacles would seem to undercut the objective and limit the effectiveness of Article 10, as well as frustrate the desire of developers and consumers that the legislation streamline permitting. (Electric Light & Power, by Frederick R. Fucci and Daniel A. Broderick, Dickstein Shapiro LLP, 9/1/2012)

LIPA Turmoil

Michael Hervey, who has been the acting CEO the Long Island Power Authority since Gov. Andrew M. Cuomo took office. He is leaving at the end of the year. National Grid has operational control of the system. Until last week, LIPA's 15-member board of trustees had seven vacancies and enough internal turmoil to create uncertainty over whether it could find a quorum to perform routine business.

Cuomo still has to find a few more board members with the skills most needed now. In the past, we have said a 15-member board was too unwieldy.

The new CEO must oversee the intricacies of switching the management of the electrical system from National Grid to PSEG of  New Jersey, which won the contract to begin operating the system in 2014. As part of that process, the LIPA chief will have to determine who from Grid should stay on, what equipment and other property belongs to LIPA and who will keep track of that inventory.

Some challenges:

With no automated outage notification system likely to be in place anytime soon, how will LIPA know who has lost power in another major storm?

When LIPA establishes a timeline for restoration, who will communicate it? And how? There isn't anyone there capable of doing more than writing a simple press release.

Does LIPA know how many of the restorations made after Sandy are not permanent ones? In many cases, it will only be able to calculate what was done and who performed the work when it gets detailed bills from the out-of-state utilities. That's many months away.

LIPA is now a public authority that owns its transmission and distribution system but contracts its operation to a private utility, currently National Grid. The other options are finding an incredibly creative way to deal with LIPA's debt and sell the system to a private operator -- or devising yet another public-private hybrid that can be more effective than a public authority to provide reliable power and stable rates.  (Long Island Newsday, 12/14/2012)

In the aftermath of Hurricane Sandy, Consolidated Edison (ConEd) is evaluating whether to underground the entirety of its distribution network, an undertaking that would cost $40 billion.

ConEd is also speaking with the New York Public Service Commission (PSC) about increasing its $2bn annual investment in electric, gas and steam infrastructure.

Sandy took out one-third of ConEd's service territory, or about 1 million customers, quintupling the number of outages the company had seen in recent years from the worst storms, typically Nor'easters.

The majority of the utility's distribution cable is already underground – 94,000 miles of more than 130,000 miles total. To take the rest of the system underground – more than 37,000 miles of overhead lines and 49,000 transformers – would also require taking telecom and cable lines underground, for an additional $20bn, bringing the total cost of undergrounding the infrastructure to $60bn.

A ConEd study two or three years ago evaluated the cost of undergrounding the distribution network in Westchester County and Staten Island in New York. IT was estimated it could triple people's rates to put things underground. The Sandy recovery costs have provided a point of comparison between preventive and reactive measures. Sandy narrowed the gap between the cost of recovery and prevention.

New York Gov. Andrew Cuomo on Dec. 3 requested $42 bilion from the federal government for Hurricane Sandy recovery.  The estimated economic toll is $60 billion just for New York – that doesn't include New Jersey.

ConEd has so far committed to spend $250 million to reinforce its system for flood prevention, but has not yet identified exactly what measures it will take. The company has so far spent $330m on Sandy recovery costs, and expects that number to rise to between $350m and $450m. ConEd has estimated it would cost $800m for substation reinforcement – elevating equipment or building flood walls around substations that are near the waterfront. Ten substations are vulnerable to a major hurricane or storm.  (Energy Biz, 12/16/2012)

Millenium Pipeline Minisink New York Compressor Station

FERC Order Issuing Certificate

Issue July 17, 2012

Minisink Compressor Station

On July 14, 2011, Millennium Pipeline Company, L.L.C. (Millennium) filed an application pursuant to section 7(c) of the Natural Gas Act (NGA) and Part 157 of the Commission’s regulations for a certificate of public convenience and necessity authorizing it to construct and operate a new compressor station and related facilities in the Town of Minisink, Orange County, New York (Minisink Compressor Project). Millennium states that the proposed Minisink Compressor Project will enable it to transport an additional 225,000 dekatherms (Dth) per day to its interconnection with Algonquin Gas Transmission, LLC (Algonquin) at Ramapo, New York. For the reasons discussed below, the Commission granted Millennium’s requested authorization, with appropriate conditions.

The Federal Energy Regulatory Commission (FERC) approved the project by a 3 to 2 vote by Commissioners. A rehearing is currently being considered by FERC, and if it’s denied Minisink will  move on to Federal Court, however residents are prevented from doing so by a FERC-issued tolling order. In the meantime, Millennium is fully underway with the project, despite local opposition, and lack of a final legal determination. (FERC, Stop The Minisink Compressor Station)