Robert Fagan – RI Future

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 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.”