PJM Reports a Record Amount of New Generation

On Friday, PJM, the regional transmission organization (RTO) that coordinates the wholesale power market for 13 states (all or parts of Delaware, District of Columbia, Maryland, New Jersey, Ohio, Pennsylvania, Virginia, West Virginia, Indiana, Illinois, Kentucky, Michigan, North Carolina, and Tennessee, all of which EarlyBird Power is licensed in), reported the results of its annual capacity auction. Their Reliability Pricing Model auction, PJM said, has attracted a record amount of new generation (due to an increase in new natural gas-fired electricity facilities) and record imports. The auction also confirms enough electricity from June 1, 2016 through May 31, 2017, and power suppliers will meet the needs of the region served by PJM three years from now.

In the RPM auction, suppliers make their plants available to provide electricity for the PJM system for a year. Demand response and energy efficiency firms also participate in the yearly auction. New generation from the auction totaled 5,462.9 MW, a record amount that is up 2.18 percent from last year’s 5,346.3 MW figure. Capacity imports rose greatly, nearly doubling to 7,482.7 MW. The capacity auction also procured high amounts of energy efficiency and demand response (1,117.3 and 12,408.1 MW respectively). In the wake of this record generation news, capacity prices throughout the PJM region dropped significantly, from a 2015/2016 price last year of $136 to a 2016/2017 price this year of $59.37. The huge decrease in capacity prices also means a substantial drop in PJM region forward electricity prices, which are down as much as 15 percent since the auction results were published.  

Cuomo Proposes PSEG Takeover for LIPA

Governor Andrew Cuomo of New York wants Public Service Electric & Gas Co. of New Jersey to take over for the Long Island Power Authority. “LIPA is broken. And LIPA has to go away,” Gov. Cuomo asserted in the wake of the well-known failures of the utility company in response to Hurricane Sandy. LIPA was sharply criticized for faults characterized by using an outdated system devoid of recent and necessary upgrades, under-budgeting for the response to the storm, and lacking alert and comprehensive maintenance. The utility failed to meet industry requirements, lagging behind technologically in its reliance on a twenty-five-year-old mainframe computer system or the storm’s recovery process. State, county, and local officials at every level as well as citizens in addition to Gov. Cuomo have castigated the utility for these errors. Cuomo labeled LIPA’s response that did not restore power in a timely manner for many Long Island residents as “incompetent” a Moreland Commission report lambasted the utility for not holding itself accountable.

Gov. Cuomo’s proposed legislation would decrease the size of LIPA dramatically in favor of PSEG: the board of directors would drop from 15 to 5 and the entire staff from 90 to 20. Cuomo’s plan favors a rate freeze for 2013-2015. It also lays out a pay-by-performance initiative for PSEG to emphasize the importance of competence and ensure that PSEG will serve customers well. Voting on the legislation could be finished by June 20.

New Energy Efficiency Savings Protocols Published

The Energy Department reported on Wednesday that it has published a new series of protocols for determining the savings that result from upgrades in energy efficiency in homes, commercial buildings, and industrial facilities in the hopes that the new methods will improve credibility and clearly outline the advantages of energy efficiency programs that give families and businesses significant savings. The current way public utility commissions, utilities, contracts, and program administrators calculate energy efficiency varies. The Department hopes that the new protocols, developed with the help of the Uniform Methods Project, provide consistency and help increase confidence in the economic benefit. The protocols have been vetted by numerous experts and follow accepted energy efficiency practices.

The Energy Department lists the following protocols:

- Commercial and Industrial Lighting Evaluation Protocols

- Commercial and Industrial Controls Evaluation Protocols

- Small Commercial/Residential Unitary/Split HVAC Cooling Efficiency Upgrade Evaluation Protocols

- Residential Furnaces and Boilers Evaluation Protocols

- Residential Lighting Evaluation, Refrigerator Lighting Evaluation Protocols

- Whole-Building Retrofit with Billing Analysis Evaluation Protocols

- Metering Cross-Cutting Protocols

- Peak Demand and Time-Differentiated Energy Savings Cross-Cutting Protocols

- Sample Design Cross-Cutting Protocols

- Survey Design and Implementation Cross-Cutting Protocols for Estimated Gross Savings

- Assessing Persistence and Other Evaluation Issues Cross-Cutting Protocols

Boston Passes Energy Monitoring Law

Large cities like New York have laws set in place that require property owners to monitor energy and water usage. Boston has now joined the ranks of those cities by passing an ordinance that will require large commercial and residential building owners in the city to report their annual energy and water usage in the hopes that the law would make buildings more energy efficient and reduce the city’s buildings’ large greenhouse gas emissions. In contrast, the real estate industry has argued that the costs outweigh the potential benefits of such a law because it would result in extra expenses for property owners. Some of the owners, they asserted, would have to hire an energy consultant to meet the requirements. The law in Boston will also use Energy Star ratings, which assess the energy efficiency of buildings from a 1 to 100, and stipulates that buildings with a rating below 75 will require energy audits every five years to improve energy efficiency. EarlyBird Power already conducts energy audits and tracks usage data to help improve our clients’ energy efficiency as part of our consulting and Energy Star analysis.

Obama: U.S. to Likely Become Net Natural Gas Exporter by 2020

Over the weekend, President Barack Obama said that the U.S. would likely be a net natural gas exporter by 2020. This major announcement follows the World Energy Outlook’s scenario forecast that also sees the U.S. becoming a net gas exporter by 2020 and even nearly self-sufficient by 2035. President Obama indicated in his trip to Costa Rica during the weekend that he still has to make an executive decision about the U.S. exporting liquefied natural gas, but with the Department of Energy studying applications for liquefied natural gas terminals (and approval of one in Texas expected soon in addition to the belief that subsequent terminals will be proposed), it seems more of a formality that the U.S. will solidify its devotion to a new energy policy and take the reigns as a natural gas exporter. It especially seems an apt time for the U.S. to commit rigorously to a becoming a net exporter of natural gas considering that prices of liquefied natural gas in the U.S. have become relatively cheap when compared to Europe and Asia. The statement by the Obama administration is also seen as an advocate for natural gas as opposed to oil and coal as a way to reduce greenhouse emissions (in addition to renewable energy sources).