Archive for the ‘Transmission’ Category

No Good Deed Goes Unpunished

Via WikiMedia Commons

Via WikiMedia Commons

Rumor has it that North America may be energy independent within a few years.

Alternative energy sources like wind, solar, and biomass are contributing ever greater amounts to the nation’s energy bank. And the country’s traditional oil and gas industry is booming as it hasn’t in decades. Where the U.S. had become an energy mendicant, relying on unstable (and occasionally unsavory) sources overseas, the country is set to be a net energy exporter and will soon overtake Saudi Arabia as the globe’s top oil producer. Energy independence is a good thing. Weaning ourselves from middle Eastern oil reserves will bring market stability and reduce the temptation to secure our oil and gas supplies by force of arms.

But supplying the bulk of our own energy needs domestically presents challenges of its own.  Wind and solar electricity has to make its way from place where it is generated to consumers who might be thousands of miles away. The national grid is being upgraded but is not yet up to that task. Moving all the new oil and gas that’s flowing out of the various bonanzas around the country presents a whole separate category of problems. Quite aside from the environmental toll presented by hell-for-leather production in, say North Dakota or Alberta, just moving the stuff around the country safely and efficiently is a herculean task.

We generally think of oil and gas as flowing through pipelines. The Keystone Pipeline, which would bring tar sand oil from Alberta is a political flash point. Lots of people are questioning its safety, and for good reason. Exxon’s burst pipeline in Arkansas  and PG&E’s fiery pipeline failure in San Bruno are still fresh in the public mind.

But pipelines are not the only way oil gets around the country. Increasingly, it’s making its way to market by rail. And that’s proving to be a bit of a train wreck in its own right. Last month, the town of Casselton, ND had to be evacuated after a mile-long train carrying crude oil slammed into another train, resulting in thunderous explosions and a searing plume of toxic smoke. ABC tells us that this was the third accident in six months involving trains carrying North Dakota crude oil. In July, a train of 72 carloads of crude oil in Quebec derailed and burst into flames, killing  almost 50 people.

Coal, too, is being increasingly transported by train in the face of growing opposition.

It’s naive to think we don’t need the energy we’re pulling out of the ground with such new-found vigor. It’s also naive to think we could stop it being distributed around the country. But we shouldn’t think that energy independence is an unalloyed good. It presents a whole slew of problems of its own.

Storing Renewable Energy: Is It All In the Spin?

via Wikimedia Commons

via Wikimedia Commons

We’ve been discussing the double edged sword that is nuclear power and what role it should play in reducing global greenhouse gas emissions. The reason nuclear power keeps climbing out of its crypt, no matter how many stakes seem to be driven though its heart, is that other alternatives to dirty fuels like coal have been hobbled by a major flaw: even the most vocal proponents of wind and solar energy agree that energy storage is renewables’ Achilles heel. No doubt, windmills churning away in the breeze produce electricity, as do banks of solar panels in the Tucson sun. The problem is what happens on those hot still nights when turbines are stilled, the panels are dark, and you really, really want to turn on the air conditioning. The beauty of carbon energy and nuclear energy is that they can be relied on to provide electricity all the time, not just when the weather is cooperative.

All sorts of solutions have been proposed to the problem of storing the electricity from wind and solar generators so it can be used when it isn’t being generated. Good old reliable lead acid batteries like the one under the hood of your car predate the Civil War and are hardly models of efficiency (and are made up of lead and, uh, acid). Water pressure storage, thermal storage, and a host of other means of keeping electricity handy have been put forth to solve the conundrum posed by solar cells’ uselessness at night and wind turbines’ fickleness in the doldrums.

One solution that has been proposed but proven more technically tricky than expected, is a variant of a toy you may have had in your toy box – the top. Flywheels, in the form of gyroscopes, have been used for years as stabilizers. More recently they have been put to use to store energy. A flywheel spinning at high speed (and I do mean high speed) can store energy for use on demand. The trouble has been that the technology involved in using flywheels as a form of mechanical battery is complex, expensive, and heavy, principally because of the ridiculously high RPMs required to produce a usable amount of electricity. As a result, flywheel batteries have been largely confined to service as backup power supplies for hospitals and emergency services that require steady, reliable power delivery. But those flywheels are intended to supplement existing electricity as uninterruptible power supplies rather than long-term storage. In an effort to advance the state of the art in flywheel batteries, the federal government gave a $43 million loan guarantee to Beacon Power, but that company went on to join Solyndra in the bankrupt alternative energy graveyard.

Now a new venture is raising money for a new flywheel technology. Appropriately for such an undertaking, it’s turned to Kickstarter for funding. Inventor Bill Gray has come up with something he calls the Velkess. It is not a Nordic god from a Wagner opera, but an acronym for VEry Large Kinetic Energy Storage System.

Gray has high hopes for his new machine, which he claims avoids many of the problems that have stood in the way of previous flywheel batteries: exacting tolerances, the wobbling and stresses produced by rapid rotation, and the possible catastrophic failure of the ceramic or high tensile steel of traditional wheels. Gray’s new flywheel is made of common fiberglass, and designed to be more flexible and forgiving than prior iterations. Gray claims his machine could store electricity for one tenth the cost of the units Beacon was proposing.  His company is aiming first at the residential and small commercial market and then expanding out into the utility-scale market. This is the reverse of previous attempts to build out flywheel technology which usually started large and hoped to go small.

There is probably no silver bullet to reining in greenhouse gases. Combating global climate change will take a much broader armory than the traditional fuels we have relied on in the past. Maybe, just maybe, these grown up spinning toys will prove an important component.

FERC Flexes Its Muscle

Today the Federal Energy Regulatory Commission announced that it will investigate prices charged by two natural gas pipeline companies. The probe will determine whether both companies overcharged customers. The targets are Wyoming Interstate Company and Viking Gas Transmission Company. Viking connects Canadian natural gas to major pipelines in Wisconsin, North Dakota, and Minnesota; WIC transports through Colorado, Wyoming, and Utah. Both companies have 75 days to submit full cost of service and revenue information to FERC for analysis.

Meanwhile, on the other side of the market, FERC has sidelined JP Morgan Ventures Energy Corp. and laid down a six-month suspension of the company’s electric market-based sales rate authority beginning April 1, 2013. JP Morgan Ventures made factual misrepresentations and omitted information from filings to FERC and in communications with the California Independent System Operator, according to FERC. JP Morgan Ventures will still participate somewhat in wholesale energy markets during the suspension, but its rate will be capped at the higher of the applicable locational marginal price or its default energy bid.

FERC Helps Renewables’ Transmission to Electrical Grid

Photo by Peter Craine. Some rights reserved.

The Federal Energy Regulatory Commission (FERC) recently finalized a rule helping integrate Variable Energy Resources (VERs) into the US electric system. VERs are electricity generators that produce output that is not constant and controllable over time, sources like wind and solar. The existing electrical grid was designed with steady electricity generation sources in mind, and FERC’s Order No. 764 is an attempt to efficiently incorporate renewable resources into grid operations in the US by making power transmission from generator to grid more flexible.

Though renewables with variable generation are claiming a greater portion of electricity generation, the new rules could improve transmission scheduling flexibility for both VERs and traditional sources. The grid’s current setup challenges both renewable generators who struggle to work within grid rules designed for constant sources and for grid operators trying to incorporate hard-to-predict electricity sources.

The problems for VERs in the electrical grid are many. We have written about the Bonneville Power Administration struggling to cope with simultaneous surges in wind and hydroelectric power during storms, forcing it to give away or dump excess electricity. FERC’s new rule aims to help transmission from renewables to the grid in recognition of one of these problems. Under current rules, VERs incur high charges for supplying electricity in an amount above or below that committed to for each hour-long interval. With FERC’s change to scheduling transmissions in 15-minute intervals, VERs will be better able to match their committed transmission to actual output and avoid the imbalance penalties.

You can read Davis Wright Tremaine’s full advisory to learn about FERC’s Meteorological and Outage data changes, and a post of ours with background information about the new rules from November.

FERC Says No to Preferential Treatment

Photo by Iwan Gabovitch. Some rights reserved.

Davis Wright Tremaine, in their “Northwest Energy & Environmental Law Blog,” posted earlier this week about a recent FERC Order that denied Rock Island Clean Line LLC’s “request to apply a preference for energy from renewable resources in its open season.”

Rock Island Clean Line LLC (or “Rock Island”) submitted an application to FERC back in November 2011 requesting the authority for the Rock Island Clean Line transmission project, a 500-mile transmission line capable of delivering of up to 3,500 MW from renewable energy projects in Iowa, Nebraska South Dakota, and Minnesota to customers in Illinois and other states.

In order to establish a “preference for renewable energy” and thereby secure the support of stakeholders and potential customers, part of the application included a proposal to give preference to renewable energy resources in its open season. This part of the application was rejected:

We find that Rock Island’s general arguments do not sufficiently explain how distinctions between renewable energy resources and other types of generators justify its requested preferential treatment in an open season for initial transmission capacity.

Overall, however, the Order represented a win for Rock Island, who stated in a press release that they now have the “regulatory approval” they need from FERC to “begin negotiating transmission service agreements with potential customers of the Rock Island Clean Line transmission project, likely load serving entities or wind developers.”

FERC Seeks Input on Interconnection Facilities

Late last week, FERC put out a call for comments via an April 19th Notice of Inquiry relating to open access and priority rights on interconnection facilities. Just a few days later law firms Van Ness Feldman and Alston + Bird stepped up to the plate with their analysis (here and here, respectively) on FERC’s proposed changes.

Specifically, FERC asks “whether, and, if so, how the Commission should revise its current policy concerning priority rights and open access with regard to certain interconnection facilities.” According to their news release, at a 2011 FERC technical conference, commenters asserted “asserted that open-access policies may be ill-suited for generator lead lines, which the NOI refers to as interconnection facilities,” and that “the policies may have detrimental impacts on the development and financing of such lines.”

Therefore FERC asks:

  • Has industry largely adapted to current policy in the time since the technical conference?
  • Must interconnection facilities provide third-party access under an open-access transmission tariff (OATT) to ensure non-discriminatory access and just and reasonable rates?
  • Does current policy blur the line between interconnection and transmission service with respect to third-party access, creating unintended consequences?

So, what does it all mean?

Alston + Bird concludes that “the NOI could mark an early step in a major shift in the Commission’s policy towards generator interconnection,” and that “[t]he impact could be particularly pronounced in the renewable power industry, where generators are often located in remote locations at long distances from transmission systems, and are increasingly being planned and constructed on a modular, phased basis.” VNF, in turn, wraps it up like so:

“FERC will need to consider how best to balance the need to promote generation development from areas remote from the transmission grid, how to allocate costs in a way that does not promote free rider interconnections to generator lead lines, and how to reduce the regulatory burden on generation developers, among other issues.”

Comments are due June 11, 2012. View the Federal Register notice here.

FERC’s Transmission Planning and Cost Allocation: The Law Firm Analysis Rolls In

Approximately one week ago, FERC published a much-anticipated Final Rule (“Order No. 1000”), which aims to ensure that “Commission-jurisdictional services are provided at just and reasonable rates and on a basis that is just and reasonable and not unduly discriminatory or preferential.” Specifically, the rule amends the transmission planning and cost allocation requirements established by Order No. 890 back in 2007, by requiring public utility transmission providers to a) “improve transmission planning processes and allocate costs for new transmission facilities to beneficiaries of those facilities,” and b) “align transmission planning and cost allocation.”

The folks over at FERC feel confident that the changes laid out in Order No. 1000 could remove barriers to development of transmission facilities, and “provide consumers with greater access to efficient, low-cost electricity.”

That sounds good and all, but what does it mean for you? Legal experts at some of the top-rated law firms are crawling all over each other to break down the requirements and help you comply. Below, you can browse related memos added to Knowledge Mosaic’s Law Firm Memos library so far, or you can even set up a Daily Memo Alert (I recommend using the text string: FERC and 1000) to catch them going forward.

Alston + Bird

Dewey & LeBoeuf

King & Spalding

Mayer Brown

Morrison & Foerster

Van Ness Feldman

Winston & Strawn

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