ISO NE – RI Future

October 25, 2016October 25, 2016

‘We have no fossil fuel industry here in Rhode Island,’ said Governor Raimondo this morning, but actually…

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Governor Gina Raimondo was the introductory speaker Tuesday morning at the AWEA Offshore WindPower 2016 conference in Warwick. Raimondo spoke to the conference attendees, mostly representatives of various wind power companies and allied industries, with some federal and state government employees on hand as well. Raimondo was keen on selling Rhode Island as a place for the growth and development of renewable energy such as solar and wind.”

“I am an advocate for the environment,” said Raimondo, “and I usually begin my comments in audiences such as these talking about the reality of climate change… Climate change is real, caused by human activity and not going to go away on it’s own. It’s up to us, policy makers, business leaders, entrepreneurs to meet the challenge of climate change.”

Comparing the problem of climate change to her work on pension reform, Raimondo said, “Climate change isn’t that different from big, thorny fiscal issues, which is to say it’s not going to go away unless we take action and it’s only going to get harder the longer we wait. So we have to meet the challenges of climate change with urgency and a seriousness of purpose, in the same way we would with other fiscal challenges.”

The governor then made her pitch for creating jobs in the state. “As Governor of Rhode Island I want my state to be a leader. Number one, it’s the right thing to do, number two, I want our state to be known as the state that solves problems and meets challenges. But number three, the silver lining in meeting the challenge of climate change is that we can create jobs.

“The good news here is that we can create jobs in solar, in wind, in energy efficiency, and those are the kind of jobs that I want to have here in Rhode Island.

“My message is that all the things about Rhode Island that enabled us to be first, with Deepwater Wind, are the reason you ought to think about doing business in Rhode Island,” said Raimondo, before making a very questionable claim that, “we have no fossil fuel industry here in Rhode Island. We’re not ‘as attached’ to [the] ‘good old’ fossil fuel industry. That’s a big deal. That means we have a culture embracing of this industry [wind energy].”

The governor’s press secretary, David Ortiz, later clarified what Governor Raimondo meant by this statement, saying that, “her point was that the state has no fossil fuel deposits and does not extract natural gas, crude oil or coal.”

2016-10-25-wind-conference-02 — Jeff Grybowski

Though this is true, it does not follow that Rhode Island has a “culture” embracing alternative energy. The fossil fuel industry has a giant economic, political and environmental presence in the state.

Putting aside the proposed Burrillville power plant, or any other of the proposed LNG infrastructure expansions in various stages of being approved, “Rhode Island’s Port of Providence,” according to the US Energy Information Administration (USEIA), “is a key regional transportation and heating fuel products hub” and “natural gas fueled 95 percent of Rhode Island’s net electricity generation in 2015.”

The USEIA goes on to say that Rhode Island “does not produce or refine petroleum,” as Raimondo’s office clarified, but, “Almost all of the transportation and heating fuel products consumed in Rhode Island, eastern Connecticut, and parts of Massachusetts are supplied via marine shipments through the Port of Providence. The port area has petroleum storage tanks, and a small-capacity petroleum product pipeline runs from the port to central Massachusetts.”

Rhode Island is heavily dependent on LNG imports. “Electric power generators and the residential sector are Rhode Island’s largest natural gas consumers. More than half of the natural gas consumed in the state goes to the electric power sector and almost all in-state electricity generation is fueled with natural gas,” says the USEIA, “Historically, natural gas has arrived in Rhode Island from producing areas in Canada and from the U.S. Gulf Coast and Mid-Continent regions, but increasing amounts of natural gas are coming from Appalachian Shales, particularly the Marcellus Shale of Pennsylvania.” This makes Rhode Island heavily dependent on fracked gas for its power generation.

And finally, as far as the dirtiest fossil fuel, coal, goes, “Providence is one of the leading coal import centers in the northeast, receiving one-tenth of the imported coal delivered to eastern customs districts in 2015. The state is part of the six-state Independent System Operator-New England (ISO-NE) regional grid. And, although Rhode Island and Vermont are the only two states in the nation with no coal-fired electricity generation, the ISO-NE grid remains dependent on coal-fired facilities during periods of peak electricity demand.”

So, although Rhode Island has no industry producing or refining fossil fuels, Rhode Island is heavily burdened and intertwined with the fossil fuel industry. We are soaking in fossil fuels as an importer and exporter. We fund the fracking of America with our energy choices, and even as we are economically and politically dictated to by companies like National Grid, Spectra, Invenergy and Motiva (a subsidiary of Saudi Aramco and Shell Oil Company, we bear the environmental scars of their abuse of our habitats and our health.

This is the fossil fuel industry in Rhode Island.

It is massive and it is killing us.

Also speaking at the AWEA Offshore WindPower 2016 conference was Deepwater Wind’s Jeff Grybowski, Senator Sheldon Whitehouse and Representative David Cicilline.

October 5, 2016

In message to Rhode Island, Bill McKibben praises and undercuts Sheldon Whitehouse on climate change

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“Five to ten years ago we thought the transition was going to be from coal, to natural gas as some sort of bridge fuel, onto renewables,” said 350.org’s Bill McKibben in a message to Rhode Island, “and now, sadly, we realize we can’t do that in good faith, because natural gas turns out not to work that way, as a bridge fuel.”

McKibben, a leading voice on the dangers of climate change, was speaking in a video message to Senator Sheldon Whitehouse’s annual Rhode Island Energy & Environmental Leaders Day” conference at the Rhode Island Convention Center last Friday.

McKibben started his eight minute message with praise for Whitehouse, calling him an “indefatigable leader,” along with Senator Bernie Sanders, around climate change issues. McKibben called Whitehouse’s Friday dialogues on the Senate floor against climate change and ExxonMobile “relentless” and “remarkable.”

“There are moments when I hope that his last name turns out to be a key to his and our future, but that’s for another day,” said McKibben.

But McKibben was also relentless in his condemnation of natural gas.

Natural gas, said McKibben, “turns out to be a dead end, not a bridge to the future but a kind of rickety pier built out into the lake of hydrocarbons. So we’ve got to make the transition to renewables now, and fast.

“We have to forget about bridges and make that leap.”

Earlier that day, during a question and answer session, Senator Whitehouse once again declined to speak out against the natural gas infrastructure projects currently threatening Rhode Island’s ability to meet carbon and greenhouse gas reduction goals. Greg Gerritt, of ProsperityforRI.com, confronted Whitehouse, saying that the “resistance,” those engaged in front line battles against fossil fuel infrastructure, was ultimately going to have a greater effect than the carbon tax that Whitehouse champions.

“People are saying no more fossil fuel pipelines, no more power plants, no more compressor stations, and they’re putting their bodies out there,” said Gerritt, “I want us to think about how the dark money plays out in a place like Rhode Island where you can talk about climate change, but you can’t actually stop anything.

“The politicians are all saying, ‘even though we know that if we build this we can’t ever meet our carbon goal, we still want to build a power plant.’ And I want to know what are we going to do so that on the ground, here in our own communities, that this power of the fossil fuel industry gets stopped.”

Whitehouse countered that his job in the Senate “is to try to solve this in a place where it will have the most powerful effect that it can, across the board. I will never win this fight, from where I sit, plant by plant. I just won’t, can’t. Too many of them, too much going on, and frankly there are hundreds of others that are being built while some are being protested, there are hundreds of other pipelines being used while one is being protested.

“It’s not effective, to, in my view, uh, it makes a difference, it sends a message, I don’t undercut what people are doing. I think what we did with Keystone helped send a big message, but my job, I think, is two things:

“One, fix that problem of the huge subsidy [for fossil fuel companies] because $700 billion a year or $200 billion a year sends such a powerful message through the entire economy,

“The second is, I see Meg Curran here, the chairman (sic) of the Public Utilities Commission, and we’re working with them, we’re working with FERC, we’re working with the ISO, we’re working with NEPOOL group, to try to make sure that the rules for these siting things, get adjusted. because the rules for these siting plans leave out the enormous cost of carbon.

“So for me, it’s these federal ground rules, to make them responsive to clean energy, to get them to reward the cleanness of clean energy, and to make fossil fuel pay its cost… that’s where I’m focused.”

However, if we are to heed McKibben’s video message, then Whitehouse’s focus seems like a small step, not the leap that McKibben says we need.

“The good news,” said McKibben, “is the distance we have to leap is shorter than we thought because the engineers have done such a good job with renewable technology. During the last ten years the price of solar panels dropped eighty percent. There’s not an economic statistic on our planet more important than that.

“What it means is that we now have a chance, an outside chance, of getting ahead of the physics of climate change. It would require a serious mobilization and a huge effort.”

McKibben has written about what such a mobilization would look like in the New Republic that is worth a read.

“I think we’re going to need real, powerful leadership in order to help us, as FDR helped us once upon a time to take those steps in the right direction.

“The question is not, ‘Are we going to do this?’ Everyone knows that 75 years from now we’ll power our planet with sun and wind,” said McKibben, “The question is ‘Are we going to do it in time to be able to slow down climate change?’ … It may be the most important question that humans have ever faced.

“I wrote the first book about it all back in 1989. The cheerful title of that book was The End of Nature. I fear that not much has happened since to make me want to change the title.

“We’re in a very deep hole,” said McKibben, “and the first rule of holes is to stop digging for coal, for oil or gas and start instead to take advantage of all that green power coming from above from the sun and the wind that we’ve been wasting for so long.”

September 17, 2016

Disruption and evolution at energy meeting

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The Consumer Liaison Group (CLG) Meeting happens four times a year and its a chance for ISO-NE to exchange information with electricity consumers in New England. ISO-NE is the group that regulates our electricity markets and keeps the lights on by coordinating electricity generation and transmission. They run billion dollar markets and interact with companies like Spectra Energy, Invenergy, National Grid and Deepwater Wind. Pretty much every aspect of the process of getting electricity to your television is touched upon by ISO-NE in some way.

The latest meeting of the CLG, in Providence on Thursday, featured a panel discussion with representatives from the four companies mentioned above. The panel was pulled together with the help of Douglas Gablinske, executive director of The Energy Council of Rhode Island (TEC-RI) an advocacy group for energy company concerns. Readers of RI Future may remember that Gablinske was a vocal opponent of Cale Keable’s bill to reform the Energy Facilities Siting Board (EFSB). He was also the only speaker at the RI Public Utilities Commission (RIPUC) to speak in favor of the pipeline tariff.

Gablinske surprised me by asking if I knew about any planned protests or disruptions. I said I didn’t. He asked me specifically about the FANG Collective. I had no idea of what plans they have, if any, I said. Then Gablinske said that he noticed Mary Pendergast on the list of people who had signed up to attend. Pendergast was sitting in the room, and he soon went over to introduce himself to her.

2016-09-15 ISON-NE PVD 001 — As the meeting ended, protesters unfurled a banner

During the course of the presentation there was a disruption. As Invenergy’s John Niland gave his presentation to the room, Mary Pendergast stood and display a small sign that said, “No fracked gas Power plant.” Her protest was silent but it did seem to throw Niland off a bit, as his delivery seemed somewhat distracted.

It was during the third presentation that the disruptions became more pronounced. As Richard Kruse, vice president at Spectra Energy spoke glowingly about the need for bigger and better pipelines in our fracked gas infrastructure future, Kathy Martley of BASE (Burrillville Against Spectra Expansion), Keith Clougherty of the FANG Collective and Sally Mendzela stood up.

“Spectra Energy, Energy for Death,” said Martley as I headed for my camera. “Say no to Invenergy and tell Invenergy to go home,” Martley continued.

As the protest continued, Gablinske took the podium and said, “You have a right to be here but not be disruptive” as Clougherty continued to speak.

Lennette Boiselle, an ally of Geblinske and a lobbyist for the Northern Rhode Island Chamber of Commerce got up and left the room, presumably in search of security. Readers might remember Boiselle as the person arguing against democracy at the public comment hearing concerning Cale Keable’s EFSB bill.

“The political correctness, of not allowing other people to talk is sweeping through this country,” said Geblinske, “It’s an incorrect assumption, this gentlemen has the right to speak…”

“We’ve been listening to you our whole lives, Pal,” interrupted Sally Mendzela.

Gablinske ultimately offered to set up a forum where “both sides” could be heard but it is unknown if this will actually happen. The protesters took their seats, no one was ejected from the forum, and Kruse finished his talk.

Amazingly, though, that wasn’t the end. During a brief question and answer period at the end of the presentations, Gablinske called on Clougherty to ask a question!

“I would ask for a question, not a speech or a statement,” said Gablinske, when he realized who he had called upon.

Clougherty then asked Niland, Kruse and Bill Malee, a National Grid VP, “Do your companies have any money set aside for restitution for the millions of people who are going to be displaced and killed by the infrastructure projects you all are proposing?”

There is no good answer representatives from these companies can give, yet Niland attempted one. As expected, it was not good.

I found the most interesting talk of the day came from Mary Louise “Weezie” Nuara, External Affairs Representative for ISO-NE.

“The region’s competitive wholesale electricity markets are really designed to maintain reliability through the selection of the most economically efficient set of resources,” said Nuara, but the states “have environmental and renewable energy goals that are beyond the objectives of the wholesale electricity markets.”

What’s happening is that states are setting goals to increase renewables and reduce greenhouse gas emissions (like the goals set out in ResilientRI, but all the New England states have some version of this idea.) ISO-NE is designed to deliver energy as reliably and cheaply as possible. As a market, it cannot deliver renewables or reduce emissions unless those options are cheaper and cleaner. In August, NEPOOL (which represents the interest of the New England states when dealing with ISO-NE) began looking into how to adjust wholesale electricity markets to accommodate the goals of the states. It is NEPOOL’s goal to develop a “framework document” by December 2 to provide guidance to ISO-NE regarding potential changes. (A kind of advisory opinion, if you will.)

What makes this interesting, to my mind, is that if ISO-NE starts taking the climate change concerns of the states into account, plants like the one Invenergy is planning for Burrillville will have a harder time selling their energy into the markets.

ISO-NE is a little over a decade old, but already it’s finding that its systems are in need of being updated over concerns of climate change. By contrast, the EFSB here in Rhode Island was established thirty years ago, in 1986. The RI General Assembly has shown little inclination towards revising the EFSB’s mandate in lieu of climate change.

Below please find all the video from the CLg meeting except for the closing comments.

Rebecca Tepper, chair of the CLG Coordinating Committee and chief of the Energy & Telecommunications Division of the Massachusetts Attorney General’s office introduced keynote speaker Rhode Island General Treasurer Seth Magaziner.

Douglas Gablinske, executive director, The Energy Council of Rhode Island

Jeffrey Grybowski, chief executive officer, Deepwater Wind

John Niland, director of business development, Invenergy

Richard Kruse, vice president and regulatory & FERC compliance officer for Spectra Energy

Bill Malee, vice president of regulatory affairs, for National Grid

ISO-NE Q&A

September 9, 2016

Invenergy requests extension on power plant hearings

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Invenergy‘s attorneys Alan Shoer, Richard Beretta Jr and Nicole Verdi today filed a motion with the Energy Facilities Siting Board (EFSB) for a thirty day extension because they need the time to nail down an alternative water source for their proposed $700 million fracked gas and diesel oil burning power plant.

“The grounds for this request is that Invenergy expects to have an alternative water supply plan for the Project filed with the Board and available for review within the coming weeks,” reads the motion, “Therefore, in order to provide all parties with enough time to review and comment on Invenergy’s alternative water supply plans, Invenergy requests that the EFSB extend the remaining Procedural Schedule deadline thirty (30) days.”

In their original application Invenergy requested “an expedited review of this application and a Final Decision on its approval by no later than September 15, 2016,” adding, “This Facility will be bid into the ISO-NE’s Forward Capacity Auction number 10 (“FCA 10”) in February 2016, and if selected, commercial operation of the Facility will be required by June 1, 2019, with significant financial penalties due if this capacity obligation is not met.”

August 18, 2016August 26, 2016

CLF to PUC: Burrillville plant not needed

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The Conservation Law Foundation (CLF) today presented its arguments against Invenergy’s proposed $700 million fracked gas and diesel oil burning power plant in a brief filed with the Rhode Island Public Utilities Commission (PUC). The PUC is charged with rendering an advisory opinion to the Energy Facilities Siting Board (EFSB) the board that will have the final say in whether the proposed plant gets built. In putting together their advisory opinion, the PUC will be considering briefs from the CLF, Invenergy, the Town of Burrillville and the Division of Public Utilities and Carriers (Division).

The PUC’s mandate is to “conduct an investigation … and render an advisory opinion” as to the “need for the proposed facility,” says CLF attorneys Max Greene and Jerry Elmer in their brief, quoting Rhode Island General Laws § 42-98-9(d). The CLF “therefore presented unrefuted evidence that shows the plant is not needed, in the form of testimony from expert witness Robert Fagan.”

Though Invenergy’s expert witnesses “profess to disagree” with Fagan, they argue that the plant will provide a “social surplus” of energy and not that the plant is actually needed, says the CLF in their brief. In the recent ISO-NE forward capacity auction, Invenergy only sold half its capacity. If you subtract out Invenergy’s contribution to the energy markets the region still has nearly 1,000 megawatts of excess capacity, says the CLF.

Further, Invenergy and the Division presented no evidence at the hearings that the plant is needed. Instead, Invenergy made the claim that if the power plant sold energy in an ISO-NE forward capacity auction, this proves the plant must be needed. The CLF argues that this is incorrect, maintaining that “… a CSO is not a showing of need but the result of a complex market mechanism that takes into account other factors such as cost.”

But even if we accept the “CSO equals need” argument, says the CLF, neither Invenergy nor the Division “has presented evidence to show that the proposed Invenergy plant is needed. This is because Invenergy has proposed a two-turbine, 1,000 MW plant but has not obtained a CSO for a two-turbine, 1,000 MW plant.” What Invenergy is defending is a one turbine plant, since that’s what sold at auction.

The PUC must consider the need of the power plant as proposed. What Invenergy has proposed is a two-turbine, 1,000 MW plant. As the CLF brief makes clear, “Invenergy has not obtained a CSO for a two-turbine, 1,000 MW plant,” it has, at best, demonstrated the need for a “485 MW project.”

“Not once does the EFSB Order describe the proposed Invenergy plant under consideration as a single-turbine, 485 MW generator. Instead, the Order says the proposed plant ‘will have a nominal power output at base load of approximately 850-1,000 megawatts” and that the plant will consist of two units. So defined, ‘the proposed facility’ and ‘the Project’ do not have a CSO.”

The PUC’s advisory opinion is due at the EFSB before final hearings start in September. The briefs from all intervenors are due at 4pm today (Thursday).

July 27, 2016

CLF makes its case against need for Burrillville power plant at RIPUC hearing

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2016-07-26 PUC Burrillville 3026 — Robert Fagan

On the second day of the RI Public Utilities Commission (RIPUC)’s evidentiary hearing concerning Invenergy‘s proposed $700 million fracked gas and diesel oil burning power plant, to be located in Burrillville, Jerry Elmer of the Conservation Law Foundation (CLF) presented his witnesses who argued that the power plant is not needed and that it’s effect on ratepayers would be negligible.

The CLF’s case is one of nuance, and much depends on the views of Commissioner Herbert DeSimone Jr. DeSimone is the one commissioner on the PUC board that did not recuse themself, and the one commissioner who will write the RIPUC’s advisory opinion to the Energy Facilities Siting Board (EFSB), the body ultimately responsible for deciding on the plant. Invenergy is making the case that since the proposed plant has already sold half its capacity in an energy futures market run by ISO-NE, the plant is by definition needed. This is the default position not only of Invenergy, but also of the RI Office of Energy Resources (OER) and the RIPUC, if the questioning from their attorneys at the hearing are any indication.

The CLF is maintaining that what ISO-NE did was purchase extra power, and if Invenergy’s plant is taken out, there will still be more than enough electricity on the grid to power all of New England. Also, going forward, as more and more renewables come on line, the need for the plant will go down, not increase. Unfortunately, ISO-NE is somewhat of a black box. Though they publish thousands of pages on how their energy auctions are run, figuring out why one plant’s energy was purchased and another was not is virtually impossible, and no one from ISO-NE was at the hearing to answer questions.

As for ratepayer savings, on the first day of the hearing Invenergy’s attorney Alan Shoer called his witnesses and made his case that the savings to ratepayers would be significant. On the stand, John Niland, director of development for Invenergy admitted that the $280 million number he gave to Burrillville residents earlier in the year was false, and that he knew it was false when he presented it. The true number was closer to $36 million in rate payer savings.

2016-07-26 PUC Burrillville 3031 — All lawyers at the bench for a huddle

The CLF’s witness, Christopher Stix, also ruled out the $280 million number, saying it took him one week after the ISO-NE auction results were published to perform his calculations that the actual savings ranged from between zero and $36 million. John Niland testified that Invenergy did not know this number when he falsely gave the $280 million figure to the audience in Burrillville seven weeks after the auction published its results.

It is up to DeSimone to decide whether or not a savings of between zero and $36 million to rate payers is worth the additional pollution, the despoilment of Burrillville’s pristine habitats and the continued dependency on fracked gas for our energy needs in New England for decades to come. It is worth noting that $280 million was a number too big to ignore, from an economic standpoint, where as zero to $36 million (which is a bell curve, the actual number may be closer to $20 million) is not nearly as tantalizing.

The CLF’s first witness, Robert Fagan, testified for a marathon five hours.

“We know now is that the Invenergy plant is not needed for electrical needs in New England,” said Fagan, and under cross examination he did not falter.

Getting through Fagan’s testimony required defining a host of terms and acronyms. ICR, LOLE, NERC, sloping versus vertical demand curves etc. were defined and discussed. It was very technical, but it served two functions. One, it established Fagan’s expertise, something Invenergy tried to call into question in pre-filed testimony, and two, it helped prove Fagan’s case that the proposed power plant was not necessary.

Though high-powered attorneys Alan Shoer and Jerry Elmer set the tone for the meeting, it’s most likely that RIPUC attorney Cynthia Wilson-Frias will have the most impact on Commissioner DeSimone’s advisory opinion, given that she will likely help author it and DeSimone can be expected to lean heavily on RIPUC’s in house legal expertise. Wilson-Frias asked pointed questions about the fact that Invenergy already sold some of its expected output to ISO-NE. She indicated that since the energy sold, it is by definition needed. Fagan countered this logic well, his entire testimony was in fact a rebuttal of sorts to this idea, so it comes down to how much weight Wilson-Frias gives Fagan’s views versus the more mainstream “free” market ideas favored by Invenergy.

The last day of the hearing is today, and unfortunately I will not be in attendance. I hope to get an update from Jerry Elmer after the hearing.

You can view the entire days proceedings below:

June 27, 2016June 27, 2016

Why should Burrillville care about Invenergy’s bad financial decisions?

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At the most recent Burrillville Town Council meeting, Town Councillor Kimberly Briquette Brown made some curious remarks about Invenergy’s obligations to ISO-NE, the organization responsible for managing the supply of electricity to Rhode Island and neighboring states. Invenergy is planning to build a $700 million fracked gas and diesel oil burning power plant in the town and residents of Burrillville strongly oppose the plant.

“It’s my understanding,” said Brissette Brown, “from speaking to Mike McElroy and learning about this just as much as everybody else has been over the last few months, that once the ISO had granted the power capacity in February to Invenergy, that regardless of whether not they enter into a tax agreement with the town, if they do not go forward with building the power plant they’re going to be fined, substantially, it’s my understanding, and I could be wrong, millions of dollars. At the time… there was a concern about the financial ramifications of leaving the bill to people that thought that by voting no to a tax agreement that they’d be basically sending the power company packing.”

The gist of her remarks seems to be that Burrillville town attorney Michael McElroy convinced her that the town might be on the hook financially for the fines that Invenergy might suffer for not delivering on its obligations to ISO-NE. I couldn’t see how this was possible, so I asked Jerry Elmer, senior attorney at the Conservation Law Foundation (CLF), for his insight. The added emphasis is all mine:

By way of background, I explain in general that the results of FCA-10 show that the Invenergy plant is not needed, here.

And I am well aware of the fact that the mechanics of these FCAs can be complicated and difficult to understand; I provide some general background, here.

“In FCA-10, Invenergy bid both of its turbines, or 997 MW, into the ISO’s auction. However, in the actual auction, Invenergy cleared only one turbine, or 485 MW. Thus, Invenergy acquired a CSO of 485 MW. Invenergy agreed to provide electricity to the regional grid operator, ISO-NE, for a one-year period of time running from June 1, 2019 through May 31, 2020. This period of time is called Capacity Commitment Period 10 (CCP-10), and it corresponds to FCA-10. In return for agreeing to be available to the regional grid operator during that specified, future period, Invenergy will receive a stream of payments called capacity payments.

“In effect, Invenergy is selling a commodity, capacity, in return for a stream of money, called capacity payments. (And those links above provide some needed background that may help readers understand this.)

“In order to be allowed to participate in the ISO’s Forward Capacity Auction (FCA), Invenergy (or any other entity) had to first “qualify.” In order to qualify to participate in an auction, Invenergy (or any other entity) had to show that it had a realistic chance to actually build its proposed plant. (The ISO requires this, because the ISO is responsible for keeping our electricity grid reliable. ISO cannot keep the grid reliable if entities that acquire CSOs cannot actually build and operate power plants.) Invenergy (or any other entity) also has to put up a huge amount of “Financial Assurance” to even be allowed to participate in an FCA. FA is a kind of bond, a way of securing (guaranteeing) that Invenergy will be able to perform its obligation. FA would be forfeited if Invenergy (or any other entity) acquired a CSO (in an auction) but then did not actually have a plant built by the beginning of the CCP.

“So, now that Invenergy did acquire a CSO in FCA-10, is Invenergy irrevocably committed to building the proposed plant in Burrilville? The answer is unequivocally not.

“Could Invenergy abandon its proposed plant in Burrillville completely, and not lose the FA (bond) posted with ISO? The answer is unequivocally yes.

“To be sure, Invenergy could not just walk away from the plant. However, between today and June 1, 2019 (the beginning of CCP-10, when Invenergy’s CSO kicks in) the ISO will hold three separate Reconfiguration Auctions. One will occur about 2 years before June 1, 2019; one will occur about a year before June 1, 2019; and the last one will occur just before the start of CCP-10. At each of these Reconfiguration Auctions, buyers and sellers buy and sell CSOs to each other.

“Invenergy could – if it wanted to – sell out of its CSO in any one of those Reconfiguration Auctions. Of course, because the ISO is still responsible for keeping the New England electricity grid reliable, any entity that wanted to buy Invenergy’s 485-MW CSO would have to be qualified by the ISO to participate in the Reconfiguration Auction. The qualification process would be very similar to the qualification process for participating in an FCA – show that you either have a power plant already or could realistically build one in the remaining time allowed, and post FA.

“Invenergy could elect to sell out of its CSO in any of the next 3 ISO-run Reconfiguration Auctions for any one of a variety of reasons. For example, Invenergy could decide that the political climate in Rhode Island has turned against it, and that the plant might not be permitted by the Energy Facility Siting Board. (This could happen, say, if Governor Raimondo were persuaded to oppose the proposed plant as a result of overwhelming constituent pressure.) Or Invenergy could decide that the New England energy market is less lucrative than it thought it would be, and it is not worth building the plant. (In fact, the auction clearing price crashed from over $17 per kilowatt-month in FCA-9 to $7.03 per kilowatt month in FCA-10.) Or, Invenergy could sell out of its CSO for no other reason than that it thought it was profitable to do so. (Remember that whatever entity buys the CSO from Invenergy would be buying the right to a future stream of income. This is a valuable commodity, and it is entirely possible that Invenergy simply flips the CSO for a quick profit. Note that in that last sentence I mean “possible” as being completely within the ISO Market Rules; I am not suggesting that this is a likely course for Invenergy – only that it can be done.)

“In fact, Invenergy could sell out of its CSO in any one of the next three Reconfiguration Auctions for any reason it wanted to do so. The fact is that, having acquired a CSO on February 8 does not mean that the plant must inevitably be built, and does not mean that Invenergy is powerless to walk away without forfeiting the huge bond it posted with the ISO.

“In this scenario, the Town of Burrillville would not be on the hook for any of Invenergy’s CSO. In fact, the Town of Burrillville could almost certainly not be qualified by the ISO to buy Invenergy’s CSO. But, in any event, if Invenergy sold out of its CSO, the Town of Burrillville would have no liability for the CSO.”

So, in summary, the Town of Burrillville is in no way responsible for Invenergy’s bad decision to buy into a forward capacity energy market before being sure that they would be able to supply the energy required.

Invenergy made the promise, not Burrillville.

So I ask again, “Why should anyone in Burrillville care about bad decisions made by a Chicago based energy company? How is it possible that Burrillville should be liable for Invenergy’s bad business decisions?”

June 14, 2016

CLF: Invenergy lied to public at EFSB hearing in Burrillville

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John Niland, director of development for Invenergy, knowingly mislead both the public and the EFSB, the board tasked with deciding the fate of the Burrillville power plant proposal, at a public hearing on the matter, according to the Conservation Law Foundation (CLF).

The Conservation Law Foundation (CLF) today filed two expert witness testimonies with the Public Utilities Commission (PUC) that reveals Invenergy representatives knowingly presented false facts and figures at a public Energy Facilities Siting Board (EFSB) hearing in Burrillville attended by 700 people.

The CLF testimony also provides further evidence that the electricity produced by a proposed $700 million fracked gas and diesel burning power plant in Burrillville is not needed in New England.

Invenergy’s estimates of consumer savings from the proposed plant are grossly inflated and inaccurate, says the CLF. Invenergy claims the power plant will save between $118 to $120 million for ratepayers. The actual number, according to CLF’s witnesses, is between 0 and $36 million.

Christopher Stix, first witness

The first testimony is from Christopher Stix, a volunteer financial analyst for the CLF providing financial and market analysis for CLF’s energy initiatives, specifically in the area of power plant licensing and electric and gas transmission. The testimony is lengthy and technical (and can be downloaded at the link above) but the actual conclusions of the testimony are fairly easy to present.

False Facts

Stix claims in his testimony that Invenergy knowingly presented false information at the March 31, 2016 EFSB hearing at the Burrillville High School.

“…on March 31, in front of 700 people, Invenergy presented in two different ways… information that Invenergy knew, at the time, was false. First, the words “$280 million in Savings” appear in big, green letters on Slide 12 of Invenergy’s presentation… Second, the false information was emphasized by Invenergy’s John Niland, who said, “Talking about ratepayer savings, the analysis we’ve done looks at what happens to the cost of power to the region when you put in a plant like this. – – [T]hat’s really what the $280 million number represents.” [EFSB March 31, 2016 Hearing Transcript. page 16, lines 8-11; 15-17.)

“…eventually Invenergy backed off its wrong assertion of $180 – $120 million in capacity savings in just FCA-10. In Ryan Hardy’s April 22 testimony, page 13, lines 20-21, Invenergy touts ‘Capacity cost savings to Rhode Island ratepayers . . . to be $170 million from 2019 to 2022, or $42 million annually on average.’ It is important to note here that in his testimony, Mr. Hardy gives no specific figure at all for projected capacity savings from just FCA-10. Instead, he sticks with a vague average over a period of several years.

“Mr. Hardy does not acknowledge in his April 22 testimony that his figure had changed radically from his sworn testimony before the EFSB on January 12, 2016, when he stated under oath that ‘the savings from capacity costs alone is nearly 212 million…’” [January 12, 2016 Transcript. page 164, lines 6-14; and Slide 24.]

“Third, and importantly, nothing changed between March 31, when Invenergy publicly presented figures that were grossly wrong, and April 22, when Invenergy presented very different figures. The relevant FCA had occurred on February 8. Invenergy acquired no new information between March 31 and April 22. Thus, there was absolutely no reason for Invenergy to have presented inaccurate information to the EFSB and Burrillville residents on March 31.”

Power plant not needed

Early on, Stix was asked if the New England electricity grid needs the proposed Invenergy plant.

Stix replied, “neither the New England electricity grid, nor the ISO, needs Invenergy in order to keep the grid reliable. Overall, in FCA-lO, the ISO procured fully 1,416 MW more than its ICR. Even if you subtract all 485 MW of the CSO acquired by Invenergy, the ISO would have still over-procured 931MW. And, here in the SENE zone, the ISO procured 1,321 MW more than its LSR Again, even if you subtract all 485 MW of the CSO acquired by Invenergy, the ISO would still have over-procured 836 MW in the zone The result of FCA-10 shows that the generation capacity that the Invenergy plant would bring to the electricity grid is not needed in Rhode Island, and is not needed in New England.”

Inaccurate consumer savings

Stix testified that “[t]he irrefutable, bottom-line fact is that Mr. Hardy and [PA Consulting Group] wrongly predicted savings to Rhode Island ratepayers,just from capacity, and just from FCA-l0, to be between $118 and $120 million dollars. The actual figure was somewhere between zero and $36 million. Mr. Hardy’s projected figure was 272% of the actual figure, and maybe much, much more than that. To put it another way, it is just not true to say that a predicted result of $118 million in ratepayer savings in one year “is very close to” ratepayer savings of between zero and $36 million. I doubt very much if Rhode Island ratepayers consider $118 million in one-year savings to be “very close” to zero to $36 million. And I doubt that the PUC will view it that way, either.”

Robert Fagan, second witness

The second witness testimony presented by the CLF today is from Robert Fagan, a Principal Associate at Synapse Energy Economics, a research and consulting firm specializing in electricity industry regulation, planning and analysis.

Fagan also says the proposed power plant is not needed in both the short, medium and long terms. He says there is no “near-to-medium term reliability need for the proposed Invenergy plant,” pointing out that “existing and projected energy efficiency and behind-the-meter solar PV resources in New England more than supplant the energy output of the proposed plant and support a reliable electric sector in Rhode Island and New England without the proposed plant” and “there is no longer-term reliability need for the proposed plant.”

Fagan says that “Rhode Island and New England net loads… exhibit declining trends, contrary to the applicant’s assertions.” Invenergy claims that the ISO-New England Forward Capacity Markets indicate need, but as we have seen, they do not.

Further, Invenergy offers, “no evidence of any longer-term reliability or other need for the proposed plant. They incorrectly inflate the energy forecast need for Rhode Island and New England. Their narrative on alternative energy resources, including energy efficiency and renewable energy resources, is completely absent of any quantitative analysis of the effect of a portfolio of energy efficiency and renewable resource supply as an alternative to the proposed plant.

Looking to the longer term future of energy in Rhode Island, Fagan says, “When considering energy efficiency and alternative new resources including behind-the-meter solar PV, other solar PV (utility scale), onshore wind, offshore wind, Canadian hydro, demand response, and storage alternatives – in addition to existing capacity resources and a recently strengthened New England transmission system – near-term and long-term reliability of Rhode Island and New England electric power sectors can be assured without reliance on the proposed power plant.”

Fagan also says that, “The applicant’s failure to present any evidence of a long-term reliability need for the plant is significant, because absent such a need, I don’t see how this proposed plant fits with Rhode Island state energy policy that, according to the applicant, emphasizes increasing energy efficiency, integration of renewable energy into the system, and achieving reductions in greenhouse gases.”

February 16, 2016May 3, 2016

Recent power auction proves Burrillville power plant unneeded

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The Clear River Energy Center, a gas and oil fired energy plant proposed by Invenergy for Burrillville, Rhode Island is not needed, according to the results of ISO New England Forward Capacity Auction, the results of which were released last Monday. The results of the auction means that cost of energy in Rhode Island in 2019-2020 will be reduced and these lower costs have nothing to do with the energy offered by Invenergy.

[Note: Jerry Elmer had this to say in an email received after the story ran: “Energy and capacity are two different commodities. (The third component of electricity price is ‘ancillary services.’) The price of both energy and capacity are elements of the ultimate price of electricity that is paid by ratepayers (electricity customers) but energy and capacity are not the same thing. (That is, energy and capacity are not the same thing as each other; and energy and capacity prices are not the same thing as the price of electricity.) As components of the overall electricity market in New England, energy represents about 80% of the value (price) of electricity and capacity represents about 20%. (Ancillary services are a very, very small part of the price.)]

Forward Capacity Auctions (FCA) are somewhat complicated, and making sense of the ISO NE press release was a big lift, so I talked to Jerry Elmer, senior staff attorney at the Conservation Law Foundation (CLF), to get my head around it.

“Invenergy is planning to build a 900 – 1000 MegaWatt (MW) plant,” said Elmer, “Only 485 MWs cleared in that auction and got a capacity supply obligation (CSO). So what that tells you immediately is that the plant is not needed in RI. If the plant were needed it would have gotten a CSO of 900 MW.”

Hold up. Let’s take this a little slower.

The way electrical prices are determined in Rhode Island is through a series of annual auctions. Most recently we completed FCA 10 (Forward Capacity Auction 10). Power companies bid to supply energy and ISO NE takes the best offers at the lowest price. The companies in the bidding are then obligated to supply that power during the time period specified and at the determined price. This is the capacity supply obligation (CSO).

In the most recent auction, FCA 10, Invenergy cleared only 485 MWs, about half of what their proposed 900-1000 MW plant could produce.

Under the rules of ISO NE, a certain amount of energy must be locally sourced in each zone. Here in Rhode Island, we are in the South Eastern New England (SENE) zone and the amount of locally sourced power required is 10,028 MW.

As Elmer explained the math, “The zone cleared the auction at 11,348 MW. So do a thought experiment: Invenergy got a CSO for 485 MW. Take 485 MW out of 11,348 MW and you’ve got 10,843 MW in the zone without Invenergy. You’ve got a surplus. You’ve 500 MW more than you need, without Invenergy.”

This is not what Invenergy expected when they presented their plans for the new plant. “If you look at Invenergy’s filing with the Energy Facility Siting Board (EFSB),” says Elmer, “they were talking about how desperately the plant is needed, it’s needed in RI to keep the lights on, and that the clearing price of capacity is going to be much higher in RI than in the rest of the ISO NE pool, what they call ‘rest of pool.’”

In the previous auction, Rhode Island did not fare so well. The reason for this is that between FCA 9 and FCA 10 the zones were restructured. “It used to be, up until this auction, there were two separate zones,” said Elmer, “There was SEMA RI (SouthEast Massachusetts and RI), NEMA Boston (SouthEast Massachusetts and Boston), and ‘Rest of Pool,’ but for FCA 10, the ISO collapsed what used to be the NEMA Boston zone with the SEMA RI zone and made one SouthEast New England (SENE) zone.

“The interesting thing here is that Invenergy has been planning this plant for a couple of years and it is true that in the two previous actions, FCA 8 and FCA 9 one year ago, the SEMA RI zone cleared much higher than rest of pool. Invenergy was right about that. So they start this plan for this plant, and they figure that they are going to absolutely clean up financially.

“This is an import constrained zone, clearing price is double what the rest of the pool is, we’re going to put 900 or 1000 MW into this very high priced zone, we are going to make a fortune. This was their thinking.

“Between FCA 9 and FCA 10, ISO NE collapsed the NEMA Boston and SEMA RI zone into a big zone, and now, instead of the zone that includes RI being very constrained with a shortage of power, we now have an excess of power in the zone.”

Drawing the lines of the various zones has nothing to do with politics, said Elmer, “It’s nothing you can vote on or put political pressure on. It’s physics! It’s where the transmission does or does not exist.”

Let’s look at this from Invenergy’s point of view for a minute: Invenergy “thought they were supposed to have 900 or 1000 MW cleared, at a very high price,” said Elmer, “instead only half the plant cleared, 485 MW. What cleared went at exactly the same price as rest of pool, no premium, zero. The rest of pool came out 25 percent lower than last year’s clearing price, and the zone here [in Rhode Island] cleared at about half the price of last years price for this zone.”

This is great news for Rhode Island, but for Invenergy, not so much. “Here’s the kicker,” said Elmer, “Invenergy got a CSO for 485 MW. That means they have got to build the plant. They are on the hook. They posted a huge bond with the ISO called Financial Assurance (FA) just to be allowed to play in the auction. So now Invenergy has the worst of all worlds.

“It only sold half its capacity to the ISO and at a much lower price than anticipated, but they still have to build the plant, or as an alternative, they could sell their CSO between now and June 1, 2019 in one of the annual or monthly reconfiguration auctions that the ISO runs, and get out of the business altogether and not even build the plant.

“They are now forced to build the plant that will be much less profitable and lucrative than they thought, or get out of it.”

Currently, the EFSB is holding hearings to determine whether or not the plant will be built. In their filing with the EFSB, Invenergy’s two major arguments in favor of the plant were, “The plant is needed for system reliability, to prevent blackouts, to keep the lights on” and “The plant will end up lowering the bill for ratepayers,” said Elmer.

“What the results of the auction shows is that both of Invenergy’s main arguments are just wrong. They are false,” said Elmer, “The plant is not needed for system reliability, it is not needed to keep the lights on and the net effect on the clearing price is either zero or very close to zero because the plant wasn’t needed.”

“CLF is presenting three witnesses to the EFSB,” said Elmer, “one witness for each of the three arguments that Invenergy is making in favor of the plant. We’ve got one witness on the system reliability issue: Is the plant needed to keep the lights on? The answer is no and this auction proves it.

“We have a separate witness on the money issue. Will building the plant save money for rate payers? This auction result says no, the answer is no.

“And then we’ve got another witness on the climate change/carbon emission issues whose testimony is going to be that if the plant is built, it will be impossible for the state to meet its carbon emission reduction goals.”

This information is “absolutely all relevant to the EFSB. In fact, Invenergy is the party before the EFSB that raised these issues! CLF is not raising these issues. We’re addressing these issues because Invenergy raised them. In legal terms, Invenergy opened the door on each of these issues, we’re just walking through it. We’re not raising these issues, Invenergy’s raising these issues. The reason we’ve got witnesses addressing these issues is because Invenergy raised them!”

The arguments in favor of the plant that we are hearing from our elected leaders, such as Senator Sheldon Whitehouse, that Rhode Island suffers from an energy “choke point” and needs this plant for grid reliability, is simply not true any more, if it ever was. Given this new information, Senator Whitehouse should now feel very free to change his position on the proposed plant.

The low energy prices available now allows Rhode Island the luxury of planning a just transition to renewable energy sources and the time we need to concentrate on efforts to lower the amount of energy we need. Political leadership is needed to take advantage of this opportunity, and should not be squandered on an unnecessary fossil fuel plant that will harm Rhode Island’s environment and keep us addicted to fossil fuels for at least another half century.