As we left off in Part I, the fight over the Hudson Valley’s energy future has gone to federal court. NYISO’s new capacity zone is going to raise prices for ratepayers by $70 million this summer just as the sting from this past winter’s polar vortex price spikes are beginning to wear off. When this sort of danger strikes who are you going to call? The NYPSC and the CHG&E (expecting someone else?) each filed separate, now consolidated, petitions at the Federal Court of Appeals for the Second Circuit seeking immediate reprieve for New Yorkers who face immediate and sudden “rate shock”. CHG&E petitioned for judicial review of the FERC August and January Orders that seem to have triggered this impending doom, arguing that FERC’s orders are arbitrary, capricious, and contrary to law and FERC’s prior orders, regulations, and policies. CHGE v. FERC, (2d Cir.), Petition for Review (May 30, 2014). Continue reading
As we enjoy these first few days of July, and say hello to summer, we are reminded that the compliance filing marathon is NOT OVER YET. Oh yes folks, as we are wrapping up our EQR filings, annual Form 561 interlock reports, and gearing up for Q2 2014 EQRs that are due by the end of July - we are reminded that there is another compliance monster looming – Form 861, which is an annual filing required by the Energy Information Administration (“EIA”). Form 861 is required for all companies with forward power contracts with physical delivery. This includes companies that sell energy and promise to deliver it to someone who promises to buy it. Generally speaking, Retail Energy Marketers – this means you.
So what’s the EIA? When is the form due? What is Form 861? The short answer is that the EIA records energy statistics. Form 861 is typically due April 30 every year – but is delayed for various reasons this year. Form 861 is what the EIA uses to collect data on retail energy sales and other energy statistics. Submission of this form is required, and Parties can be fined for failing to send it in. Continue reading
New York’s new capacity zone (“NCZ”) conundrum discussed in an April 11, 2014 post, entitled: Hudson Valley & NYC Brace As Imminent Changes to New York’s Energy Markets Approach, is now being fought at Federal Circuit Court. The New York Public Service Commission (NY PSC) and Central Hudson Gas and Electric (CHG&E) have challenged the Federal Energy Regulatory Commission’s (FERC’s) approval of the new capacity zone, which is expected to significantly impact ratepayers in the Lower Hudson Valley. Rising temperatures can bring shockingly high electric prices, however, with an increase of $280 million per year in electric rates and $70 million of that coming just this summer in the Lower Hudson Valley, utility bills may burn much worse than any prolonged summer sun exposure. So sit back in your beach chair and unwind with us as we unravel the story of the Hudson Valley’s energy future. Continue reading
Under President Obama and the EPA’s new carbon reduction plan, which is the first ever national standard on carbon reductions, New York is now required to cut its carbon emissions by 44% by 2030. The EPA’s new rule comes just over a month after Governor Cuomo and the New York State Public Service Commission (PSC)’s April 24, 2014, announcement of their Reforming the Energy Vision (REV) initiative, which aims to develop a new energy paradigm in New York. Under the EPA’s new rule, every state has a great deal of flexibility in developing their implementation plans. REV aims to fundamentally restructure the way New Yorkers buy and use energy, and perhaps will become a main driver of how New York meets its newly federally required carbon emission standards.
Under REV, the PSC will begin a comprehensive overhaul of its regulatory scheme primarily with the creation of Distributed System Platform Providers (“DSPP”). A DSPP will essentially play the role of a local franchise utility (ConEd, O&R, CHP&G, Nat Grid, etc.) – but with more responsibilities. DSPPs would be tasked with planning and redesigning the local grid in order to integrate more distributed energy and demand response.
Though not yet a final plan, REV offers ESCOs, utilities and consumers an exciting opportunity as the traditional role of utilities expands beyond distributing electricity, maintaining local power lines, and billing customers. Additionally, aligning utility interests with increased distributed renewable energy and energy efficiency is an innovative revelation. Some are calling this expansion of the utility model a revolution. So, who implements REV, what are the opportunities and how will the role of ESCOs, energy consumers and other participants in the energy industry be impacted? Continue reading
Once again, the Court of Appeals for the DC Circuit has ruled that the Federal Energy Regulatory Commission (“FERC”) has overstepped its jurisdictional bounds. Last year, the DC Circuit rejected FERC’s presumption of authority to fine energy trader Brian Hunter for manipulating the natural gas futures market. This time, the DC Circuit struck down Order 745 - which sets forth FERC’s mandate to compensate end-use customers for not using electricity under a demand response market schematic. In a ruling issued today (May 23), the DC Circuit found that FERC went too far, “encroaching on the state’s exclusive jurisdiction to regulate the retail market.”
FERC required that RTOs/ISOs establish markets to compensate demand response resources under Order 745 back in 2011. Participants in demand response markets are retail electricity consumers that offer to reduce their energy consumption, and are compensated in the wholesale market as though they had generated the amount of energy they saved. Thus, participants receive compensation for the “NegaWatt” (as opposed to the MegaWatt). Continue reading
For our friends with interlocking positions at multiple FERC-jurisdictional entities, your annual reports are due Wednesday April 30. For background, individuals cannot hold multiple management positions, including officer and director positions, across multiple entities with FERC Authority without prior authorization. After getting authorization, these officers and directors must file Form 561 annual reports thereafter. Form 561 details electric public utility officer and board of director positions that officers and directors held within and outside their affiliated public utility at any point during the preceding year. The reports are based on last year’s information.
Here are Our Top 6 FAQs from FERC on Form 561: Continue reading
The race to solve New York’s energy future is on and competing solutions have hit a new threshold of controversy. In one corner, Governor Cuomo wants to build new transmission lines to bring power from update resources to serve downstate demand. In the other corner, FERC has approved the New York Independent System Operator’s (a regional transmission organization operating under FERC’s umbrella) solution to create of a new downstate capacity zone made up of the Lower Hudson Valley and New York City. Enter Hudson Valley Congressman Maloney (D), representing Orange, Putnam, and parts of Westchester and Dutchess Counties, who has sponsored H.R. 4327, a law introduced on March 27, 2014 that would prohibit FERC from authorizing the creation of a new capacity zone if it raises costs for ratepayers.
There is significant transmission congestion between upstate and downstate (i.e. upstate and Central New York vs. Lower Hudson Valley and NYC). New York City, Long Island, and Westchester County account for over half of the electricity demand in New York. The problem – at peak demand, there is insufficient transmission line capacity to deliver enough energy to the downstate region. Thus the question – how to resolve this reliability problem?
The new zone basically creates a boundary, and within those limits, sufficient electric capacity must be available to meet customer demand. This capacity can come from transmission lines that enter into the region or from new or existing generation within the region.
From the New York Public Service Commission’s (NY PSC’s) perspective, this plan will cost rate payers in the new zone $230 million in just the first year and $500 million over three years to fund the start up costs of newly required generation facilities. It also fails to take into account a massive transmission line build out initiative currently underway known as the Energy Highway Blueprint, which was initiated by Governor Cuomo. From NYISO’s perspective, its mandated studies found undisputed significant transmission constraints in the new capacity zone. NYISO must base its decision to ensure reliability in the region on current conditions, which may not include the Governor’s proposed transmission lines, no matter how promising.