An Ignoble Experiment

2. Exelon acquires Pepco for $6.8B

MidAmerican Solar and NRG Energy have completed their Agua Caliente Solar Photovoltaic Facility between Yuma and Phoenix, Arizona -- the largest solar PV project in the world with more than 4.9 million solar panels. The electricity generated by the 290 MW facility, which sits on 2,400 acres of land, can support 230,000 homes at peak capacity.

Credit: NRG

"In 2012, our company made a commitment to invest in its first utility-scale solar project to foster economic development while demonstrating our commitment to the environment," said Richard Weech, chief financial officer of MidAmerican Renewables, who also oversees the activities of MidAmerican Solar. "It is exciting to see this project become fully operational and begin to realize the full benefit of emissions savings with the clean energy generated at Agua Caliente."

The project, made possible by a $967 million loan guarantee from the U.S. Department of Energy's Loan Programs Office, is the first commercial-scale PV plant to use new inverter technologies that allow operation during larger voltage variations -- which can be caused by cloud cover or dust that causes voltage spikes or drops -- and make the plant more reliable than with traditional inverters. The technology will also improve the delivery of clean electricity generated by photovoltaic systems to the utility grid. Increasing grid reliability will enable greater deployment of large-scale photovoltaic renewable power generation projects

The use of solar power to avoid the annual emission of approximately 324,000 tons of carbon dioxide or the equivalent of taking nearly 70,000 cars off the road. The 559,000 MWh of renewable energy generated annually is being sold to Pacific Gas & Electric Company (PG&E) under a 25-year power purchase agreement.

Agua Caliente is the largest of 10 operational utility-scale solar PV facilities in three states in which NRG has ownership interest and has been named Solar Project of the Year by Renewable Energy World, and PV Project of the Year by Solar Power Generation USA, an industry conference.

For more:
- see this fact sheet

Read more about: MidAmerican Solar
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By Barbara Vergetis Lundin

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3. Energy efficiency helps ISO NE meet 2014 summer demand

Exelon Corporation and Pepco Holdings Inc. are combining companies (Exelon's BGE, ComEd and PECO, and Pepco Holdings' Atlantic City Electric, Delmarva Power and Pepco) to create the leading Mid-Atlantic electric and gas utility. The combined utility businesses will serve 10 million customers and have a rate base of approximately $26 billion.

"As part of this transaction, Exelon has committed to provide what our customers most want: investments in infrastructure improvements, continuation of our long tradition of philanthropy in our communities and direct customer benefits of $100 million," said Joseph M. Rigby, Pepco Holdings chairman, president and CEO. "Our shareholders will benefit from an immediate cash premium, and employees should enjoy even more opportunities as part of a larger company."

Further, being part of a family of large urban utilities with distinguished emergency response capabilities will be of great value to the Pepco Holdings utilities and their customers during major storms.

In addition to reliability, upon completion of the transaction, Exelon will provide an aggregate $100 million (approximately $50 per customer) for a Customer Investment Fund to be utilized across the Pepco Holdings utilities' service territories as each state public service commission deems appropriate for customer benefits -- such as rate credits, assistance for low income customers, and energy efficiency measures.

Exelon will also maintain charitable contributions in the Pepco Holdings service territories at Pepco Holdings' highest-ever level -- a total commitment of $50 million -- for at least a decade.

The $6.8 billion all-cash transaction, which has been approved by both companies' boards of directors, is expected to close in the second or third quarter of 2015 but still requires the approval of the stockholders of Pepco Holdings. Completion also depends on the approval of the Federal Energy Regulatory Commission, the District of Columbia Public Service Commission and several state commissions, including the Delaware Public Service Commission, the Maryland Public Service Commission and the New Jersey Board of Public Utilities. The transaction is also subject to the notification and reporting requirements under the Hart-Scott-Rodino Act and other customary closing conditions.

For more:
- see this report

By Barbara Vergetis Lundin

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4. Sierra Club does not appeal EPE air permit

The New England Independent System Operator (ISO NE) is reporting that it expects the region to have the needed resources to meet consumer demand for electricity this summer, with electricity demand forecast to peak at around 26,660 MW at conditions of about 90 °F.

Salem Harbor Power Station slated for closure in 2015. Credit: Fletcher 6/Wikimedia Commons

The forecast takes into account the demand-reducing effect of region-wide energy efficiency (EE) measures acquired through the Forward Capacity Market (FCM). If EE measures were not accounted for, the peak forecasts would be 28,165 MW.

"Widespread energy efficiency efforts across New England have reduced the region's forecasted peak demand for electricity," said Vamsi Chadalavada, executive vice president and chief operating officer of ISO New England. "Beginning June 1, the remaining units of the Salem Harbor power station in the Greater Boston area will retire, representing a reduction of 585 MW of generating capacity in the region."

While ISO NE expects to have sufficient resources to meet consumer demand this summer, this is the first in a series of expected large resource retirements in the coming years that will reduce the available generating capacity in New England, resulting in the need for new resources. New England has a variety of capacity resource types it can use to meet peak summer demand and maintain reliability, including generators, demand-response resources, and electricity imports from neighboring power systems.

Through the FCM, 29,135 MW of generation has capacity supply obligations this summer; however, the maximum electricity output of a generator may be greater than its supply obligation. The ISO has observed that generators typically have offered the additional megawatts, above their obligation, into the energy market when prices are higher and demand is peaking. If all the region's generators were operating at maximum capability, the total amount of electricity produced would be approximately 30,900 MW.

A total of 1,280 MW of net electricity imports and 700 MW of demand-response resources that can reduce power usage during tight system conditions were also procured through the FCM auction process.

In the summer of 2013, electricity usage peaked on July 19, 2013, at 27,379 MW. The all-time record for peak demand was set on August 2, 2006, when demand reached 28,130 MW. In New England, 1 MW of electricity can power approximately 1,000 homes.

For more:
- see this report

Related Article:
ISO-NE FCM auction falls short

By Barbara Vergetis Lundin

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5. 2013 CA wholesale power prices competitive despite higher natural gas prices

El Paso Electric (EPE) has been given the green light to proceed with its Montana Power Station with the issuance of the Environmental Protection Agency's (EPA) greenhouse gas (GHG) permit. The project stalled during the permit appeals period for the four-unit natural gas burning Montana Power Station. No appeals were filed during that time, (although it looked likely that one would come from the Sierra Club) so EPE will commence construction of the first two units, which it expects to bring online by summer of 2015.

In response to comments on the GHG permit, EPA says it "take[s] notice that El Paso Electric Company at its own initiative also undertook special efforts to reach resolution with community members, including reaching an agreement for ongoing community engagement through a citizen advisory panel."

The issuance of the EPA permit allows EPE to stay on track to effectively meet the growing needs of its service territories. EPA's permit action follows the Texas Commission on Environmental Quality's decision in January 2014 to issue a separate permit for emissions other than GHG.

The Montana Power Station is to be a new 400 MW electric power plant in El Paso County, Texas, including four natural gas-fired turbines and associated equipment -- including cooling towers, a firewater pump engine, ammonia storage tanks and unloading system, circuit breakers and a diesel storage tank.

"We are looking forward to the construction of the first two units of the Montana Power Station, which are due to be online to meet our summer 2015 peak," said Tom Shockley, EPE's chief executive officer. "These units are designed to work in concert with our 107 MW of solar energy including 60 additional megawatts of utility-scale solar to be added in 2014. This combination of clean burning natural gas and solar generation will efficiently provide the power necessary to meet the anticipated growing needs of our region."

For more:
- see the permit

Related Article:
EPE gets GHG permit, but appeal looks likely

By Barbara Vergetis Lundin

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