Holyoke utility imposes moratorium on new gas service, citing pipeline constraints

Friday, February 15, 2019

The municipal utility serving the town that hosts the headquarters for the operator of the regional electric grid has informed its customers that the utility “is unable to accommodate new natural gas service requests due to the lack of natural gas availability in the region.” Holyoke Gas & Electric adds, “Recent proposals that would increase natural gas capacity in the region have been met with opposition, and the current pipeline constraints are causing significant adverse environmental and economic impacts on the region's ratepayers."

Holyoke Gas & Electric is a consumer-owned municipal utility established in 1902 through the purchase of a gas and electric plant from the Holyoke Water Power Company. According to the utility, the town saw ownership of a municipal utility "as a way to stabilize rates and keep local control over their energy services." As a municipal utility, Holyoke Gas & Electric is operated as a not-for-profit concern, and is owned by the community it serves. The utility cites public power advantages from this structure including operating in the local public interest, with local control over rates and services, local ownership, and reliance on local employees. In 1999, the utility acquired the Holyoke Dam, the city's canal system, and the remainder of the Holyoke Water Power Company's assets. The utility touts its ability to produce over 65% of its electricity needs from these renewable hydropower resources and cites "some of the lowest utility rates in New England."

Holyoke's Gas Division provides natural gas service through about 9,900 meters in Holyoke and Southampton. But on January 28, 2019, the utility gave its customers notice that it had placed a moratorium on most new natural gas service installations. According to that notice, the utility's natural gas customers are served by an interstate pipeline "which has become severely constrained due to a dramatic increase in demand over the last two decades," with "no corresponding increase in pipeline capacity to deliver additional supply to the region." As a result of significant growth in demand for natural gas by Holyoke's customers, HG&E said it is "forced to impose a moratorium on new natural gas connections until the capacity issue is addressed."

The utility further explained, "While inexpensive natural gas has never been more plentiful in the United States, there is insufficient pipeline capacity in our region to deliver additional load. Recent proposals that would increase natural gas capacity in the region have been met with opposition, and the current pipeline constraints are causing significant adverse environmental and economic impacts on the region's ratepayers." In its notice, the utility noted that due to the lack of natural gas during peak demand periods, "more electric generators are forced to switch to oil, while coal generators are called upon to operate, causing significant spikes in greenhouse gas emissions." Regional electric grid operator ISO New England, which is headquartered in Holyoke, reported that during a 15-day cold spell in January 2018, over two million barrels of oil were burned to generate electricity due to the lack of natural gas, more than the total amount of oil burned in 2017.

Beyond increased emissions, the utility also used ISO-NE data to show how "the lack of natural gas has a significant impact on energy costs throughout New England." Citing data from ISO-NE, the utility observed that during the the two-week period from December 26, 2017 to January 8, 2018, electricity prices experienced an "approximately $700 million increase in energy costs for New England ratepayers compared to the prior year."

Holyoke Gas & Electric says it is working with gas utility Columbia Gas of Massachusetts to explore a solution involving system upgrades in other communities to "address local capacity issues, which will help reduce regional carbon emissions, improve reliability, and support local economic development." In the meantime, HG&E says its moratorium on new natural gas connections will remain in place "until the capacity issue is addressed."

Federal Green New Deal resolution proposed

Thursday, February 7, 2019

Two members of Congress have introduced a resolution framing the "Green New Deal," a suite of programs aimed at addressing both global climate change and domestic economic challenges.

The Green New Deal resolution is offered by New York Representative Alexandria Ocasio-Cortez and Massachusetts Senator Ed Markey. A copy of the 14-page document posted by NPR bears the formal title, "Resolution Recognizing the duty of the Federal Government to create a Green New Deal." In a blog post on her House website, Rep. Ocasio-Cortez describes the Green New Deal as "a 10-year plan to create a greenhouse gas neutral society that creates unprecedented levels of prosperity and wealth for all while ensuring economic and environmental justice and security," to be achieved "through a World War 2 scale mobilization."

In a lengthy preamble, the resolution cites findings in the October 2018 "Special Report on Global Warming of 1.5 °C" released by the Intergovernmental Panel on Climate Change and the November 2018 Fourth National Climate Assessment report that human activity is the dominant cause of observed climate change over the past century, with harmful effects. The preamble also asserts that because the United States has historically been responsible for 20 percent of global greenhouse gas emissions through 2014 and has a high technological capacity, the nation must take a leading role in reducing emissions through economic transformation. It cites economic stagnation, income inequality, and systemic racial, regional, social, environmental, and economic injustices as having been exacerbated by climate change, pollution, and environmental destruction.

Based on these findings, the resolution expresses the sense of the House of Representatives that "it is the duty of the Federal Government to create a Green New Deal" to achieve five key goals: achieving net-zero greenhouse gas emissions through a fair and just transition for all communities and workers; creating millions of good, high-wage jobs and ensuring prosperity and economic security for all people of the U.S.; investing in the nation's infrastructure and industry to sustainably meet the challenges of the 21st century; securing clean air and water, climate and community resiliency, healthy food, access to nature, and a sustainable environment, for all people of the U.S. for generations to come; and promoting justice and equity by reversing historic oppression of "frontline and vulnerable communities."

The resolution calls for accomplishing these goals through a 10-year national mobilization that would require a list of 14 specific industrial and infrastructure projects, including upgrading infrastructure to eliminate greenhouse gas emissions as much as technologically feasible; meeting 100 percent of domestic power demand through clean, renewable, and zero-emission energy sources; developing energy-efficient, distributed, and "smart" power grids; improving building energy efficiency; expanding renewable energy manufacturing; and overhauling the transportation system. The resolution also expresses 15 supporting principles for social and economic justice and security.

The concept of a "Green New Deal" is not new, with similar concepts proposed as early as 1998, and the phrase "Green New Deal" first surfacing in public discourse in 2007. In addition to the proposed federal resolution, states may also consider "Green New Deal" legislation. For example, a list of Maine legislative requests includes the title of a bill proposed by state Representative Chloe Maxmin has proposed a bill listed as LR 1034, "An Act To Establish a Green New Deal for Maine."

FERC inaction on Vineyard Wind capacity auction waiver request

Tuesday, February 5, 2019

Federal energy regulators have declined to act on an emergency petition by an offshore wind energy developer in time to allow the company to participate in a regional capacity auction, prompting two commissioners to issue a statement that "by failing to act, the Commission has introduced significant uncertainty into this auction."

The petition was filed by Vineyard Wind LLC, a joint venture of Avangrid Renewables, LLC and Copenhagen Infrastructure Partners that is developing an offshore wind energy project in federal waters offshore the coast of Massachusetts. The project is expected to be operational by 2021, and its developer has entered into a power purchase agreement to sell electricity to the Massachusetts electric distribution companies.

Vineyard Wind also intended to participate in grid operator ISO New England, Inc.'s February 4, 2019 Forward Capacity Auction 13 -- specifically, as a "Renewable Technology Resource" eligible under the ISO-NE tariff for an exemption from certain rules governing bid pricing. In 2018, Vineyard Wind made timely submissions to the grid operator to support its participation in the auction under these provisions. But the grid operator denied the company's request for Renewable Technology Resource designation, on the grounds that the project will be located in federal waters whereas the tariff limited the exemption's availability to projects located in any ISO-NE state.

While ISO-NE subsequently sought to amend its tariff to remove this "federal waters exclusion," on December 14, 2018, Vineyard Wind also asked the Commission for a waiver to allow it to participate in Forward Capacity Auction 13.In its petition, the company asked for waiver by January 29, 2019, to allow the company and any other similarly situated entities to participate in Forward Capacity Auction 13, which commenced on February 4, 2019.

Vineyard Wind's request was not without support. In early January, the grid operator filed comments saying it did not oppose Vineyard Wind's waiver request, and asking the Commission to act by the January 29, 2019 date requested by Vineyard Wind so the waiver could be effective for the thirteenth Forward Capacity Auction. Also in January, the Massachusetts Department of Energy Resources filed comments supporting the company's waiver request.

Because the Commission did not act on the waiver request by January 29, so two days later, the company asked the Commission for immediate action on its petition. The next day, Massachusetts Governor Charlie Baker filed a letter requesting that the Commission immediately grant the waiver request. On February 4, as the Forward Capacity Auction was set to begin, but without any Commission action on the waiver request, Vineyard Wind submitted an emergency motion asking for the auction to be stayed pending a decision on the waiver request, or in the alternative asking for the Commission to order a redo of the auction if waiver were subsequently granted.

But the Commission still did not act, and ISO-NE's thirteenth forward capacity auction proceeded without Vineyard Wind's participation as a Renewable Technology Resource. That same day, Commissioners LaFleur and Glick issued a joint statement expressing disappointment that the Commission had not acted. In that statement, the two commissioners noted that while "the Commission can move forward only when it has a majority of votes for a particular action", the Commission's failure to act had introduced "significant uncertainty" into the auction, saying, "All parties, including New England’s states, consumers, and auction participants, deserve better."

While ISO-NE has now conducted Forward Capacity Auction 13, Vineyard Wind's petition still remains pending.

Maine legislature considers EV incentives

The Maine State Legislature is considering several measures that could create new incentives for purchasing or leasing electric vehicles.

At least two bills proposing new incentives for electric vehicles have been printed so far:
  • LD 604, An Act To Create an Electric Vehicle Tax Credit: Sponsored by Senator Chenette, this bill would provide an income tax credit for the purchase of a new plug-in electric-drive motor vehicle that is eligible for a federal income tax credit. The credit would be $300 plus $50 for each kilowatt-hour of battery capacity in excess of 5 kilowatt-hours, up to a maximum credit of $1,500. (As a point of reference, the base model 2019 Nissan Leaf comes with a 40-kilowatt battery.) LD 604 has been referred to the Legislature's Joint Standing Committee on Taxation.
  • LD 614, An Act To Provide Purchase Rebates for Battery Electric Vehicles: Sponsored by Representative Henry Ingwersen, this bill would establish an "Electric Vehicle Rebate Fund" to be administered by the Efficiency Maine Trust. The bill would direct the Trust to create a program, beginning July 1, 2020, that would pay a direct rebate of $2,500 to Maine residents who purchase or lease an eligible electric vehicle and meet certain criteria, including a certification of intent to retain ownership of the electric vehicle (through purchase or lease) for at least 36 months. The program would be limited to fully electric, zero-emission vehicles that have an on-board electrical energy storage device that is designed to be recharged using an external energy source. LD 614 has been referred to the Legislature's Joint Standing Committee on Energy, Utilities and Technology. 
More bills proposing incentives for electric vehicle adoption could still surface later in the Maine legislative session. For example, a list of legislative requests submitted by legislators includes LR 1380, An Act To Encourage Municipalities, State Agencies, Colleges and Universities To Adopt Electric Vehicles.

Outside Maine, a number of other states offer incentives for electric vehicle adoption. Additionally, the federal Internal Revenue Service offers a tax credit for qualifying electric vehicles, ranging from $2,500 to $7,500 per new EV purchased for use in the U.S., depending on the size of the vehicle and its battery capacity.

New England generator retirements mostly in Massachusetts

Wednesday, January 30, 2019

New England power plants with over 5,200 megawatts of electric generation capacity have retired or announced plans to retire since 2013, according to the region's electric grid operator. Most of this capacity comes from facilities powered by coal, oil, and nuclear fuels -- and most of these retiring facilities are located in Massachusetts.

Regional transmission organization ISO New England Inc. operates the wholesale electricity markets covering all six New England states (except northernmost Maine.) But changes in technology and the prices of both fuels and renewable generators are significantly reshaping the mix of generating resources used to power the region, with older and more carbon-emitting power plants retiring and new, cleaner generating capacity being proposed and developed.

According to ISO New England, more than 5,200 MW of generating capacity have retired or announced plans to retire since 2013. But the geographic effects of these retirements are not spread evenly across the region. The grid operator notes that 3,778 megawatts (or 72%) of this retiring capacity comes from generators located in Massachusetts, such as the Pilgrim Station nuclear power plant (slated to close in 2019) and the 1,537-megawatt Brayton Point coal-fired plant which closed in 2017. 737 megawatts of retiring capacity are located in Connecticut. Another 640 are located in Vermont -- primarily Entergy's now-closed Vermont Yankee nuclear power plant.

Meanwhile, ISO New England says just 4 megawatts of New Hampshire capacity has retired or announced plans to retire since 2013, plus 13 megawatts in Rhode Island and another 37 in Maine.

The grid operator reports that another 5,000 megawatts of coal- and oil-fired generators are at risk for retirement in coming years.

U.S. to export more energy by 2020 than it imports, projects EIA

Tuesday, January 29, 2019

Federal energy analysts project that the United States will export more energy than it imports by 2020, making the nation a net energy exporter for the first time since the 1950s. Fossil fuels represent the largest volumes of this international trade.

Source: U.S. Energy Information Administration
The United States both exports and imports energy in a variety of forms, including natural gas, coal and coke, petroleum and other liquids, and electricity. According to the U.S. Energy Information Administration, the United States has long been a net exporter of coal and coke. In 2017, the nation began exporting more natural gas than it imports, primarily in the form of liquified natural gas or LNG. EIA notes that electricity trades with neighboring Canada and Mexico represent "a relatively small part of U.S. net energy trade flows."

The EIA projects that domestic production of crude oil, natural gas, and natural gas plant liquids will continue to grow at a faster rate than U.S. energy consumption over the next decade, meaning the balance of these fuels will be exported. EIA projects that due to "evolving trade flows of liquid fuels and natural gas," increasing exports of these fuels will tip the trade balance to where the U.S. is a net exporter of energy by 2020. When this shift occurs, it will represent the first time that the United States exports more energy than it imports on an annual basis since 1953.

Exactly how large the nation's net exports might be -- and how long the net-exporter status might last -- depend on a variety of assumptions about matters including oil and gas prices, resource extraction technologies, and possible changes to law. Under EIA's reference case which reflects current laws and regulations, the U.S. begins exporting more energy than it imports on an annual basis in 2020 and maintains that status through 2050. In other cases featuring lower prices or extraction rates for oil and gas, EIA projects that U.S. will return to net-importer status by the mid- to late-2030s.

Source: U.S. Energy Information Administration
Changes to laws and regulations could also affect the trade balance for energy products.

EIA says 2016 U.S. energy expenditures declined to lowest share of GDP since 1970

Thursday, January 24, 2019

According to the most recent data released by the U.S. Energy Information Administration, in 2016, U.S. energy expenditures declined for the fifth consecutive year, reaching $1.0 trillion in 2016. This represents a 9% decrease in real terms from 2015.

Adjusted for inflation, total energy expenditures in 2016 were the lowest since 2003. Expressed as a percent of gross domestic product (GDP), total energy expenditures were 5.6% in 2016, the lowest share of GDP since at least 1970. According to EIA, contributing factors include steady annual increases in GDP since 2010, coupled with steady annual decreases in total energy expenditures since 2011.

Source: EIA, "In 2016, U.S. energy expenditures per unit GDP were the lowest since at least 1970"

Meanwhile, annual total U.S. energy consumption has remained virtually flat since 2013. So the recent decreases in total energy expenditures are generally the result of lower energy prices. But EIA says it doesn’t expect this trend to continue, as average energy prices of products such as motor gasoline, natural gas, and retail electricity have all increased since 2016.

Source: EIA, "In 2016, U.S. energy expenditures per unit GDP were the lowest since at least 1970"
EIA also notes significant geographic variation in state total energy expenditures as a percent of state GDP. In 2016, Louisiana led the pack as it has every year since EIA started tracking this metric in 1997, with 2016 energy expenditures per GDP of 11.1% in 2016. EIA points to Louisiana’s large industrial sector consumption, including its energy-intensive petrochemical industry, as the biggest piece of the explanation.

Source: EIA, "In 2016, U.S. energy expenditures per unit GDP were the lowest since at least 1970"

But even while leading the nation, Louisiana set its own record-low ratio of energy expenditures per GDP, at a level that was less than half of the state’s previous high (26.5%) which was reached in 2008. Meanwhile, District of Columbia (1.6%), New York (3.3%), Massachusetts (4.3%), California (4.3%), and Delaware (4.4%) had the lowest energy expenditures per GDP in 2016. EIA says this reflects relatively high consumption in less energy-intensive residential and commercial sectors as well as relatively high state GDP.