U.S. energy regulators have asked for public comment on a rule proposed by the Secretary of Energy that would require organized grid operators to pay certain electric generators for their grid reliability and resilience benefits.
On September 28, 2017, Secretary of Energy Rick Perry directed the Federal Energy Regulatory Commission to consider a proposed rule on an expedited basis. The proposed rule defines an "eligible grid reliability and
resiliency resource" based on criteria including the ability to provide essential energy and ancillary reliability services and to have a 90-day fuel supply on site enabling it to operate during an emergency, extreme weather
conditions, or a natural or man-made disaster. It would requires independent system operators and regional transmission organizations to establish a tariff that provides a
" just and reasonable rate"
for the purchase of electric energy from such resources including recovery of costs and a return on equity
On October 2, the Commission issued a Notice Inviting Comments, asking interested persons to submit comments regarding the proposal on or before October 23, 2017. Two days later, Commission staff followed up with a series of questions for public comment. Questions in that document cover topics including the need for reform, eligibility, implementation, and rates, as well as impacts on consumers.
Some questions posed by the Commission staff in its October 4, 2017 document are general, such as, "What is resilience, how is it measured, and how is it different from reliability? What levels of resilience and reliability are appropriate?" Others ask for whether commenters agree with references in the proposed rule to the 2014 "Polar Vortex" and "other extreme weather events, specifically hurricanes Irma, Harvey, Maria, and superstorm Sandy," as well as "the retirement of coal and nuclear resources and a concern from Congress about the potential further loss of valuable generation resources" as justifying the need for action.
As previously noticed by the Commission, initial comments on the proposed Grid Reliability and Resilience Pricing Rule in Docket No. RM18-1-000 are due on or before October 23, 2017 and reply comments due on or before November 7, 2017.
Energy powers society; society's choices shape energy policy. A blog about our energy resources and the choices they present for society.
Showing posts with label Hurricane Sandy. Show all posts
Showing posts with label Hurricane Sandy. Show all posts
Long Island utility exec resigns, hurricane response blamed
Thursday, November 15, 2012
The Long Island Power Authority
announced this week that its Chief Operating Officer, Mike Hervey, has resigned from LIPA effective at the end of 2012.
LIPA is a political subdivision of the State of New York. LIPA was formed in 1985 as a non-profit municipal electric utility to take over the assets of former investor-owned utility Long Island Lighting Company. Today, LIPA owns the electric grid in most of Long Island. LIPA does not own electric generation assets on the island but serves 1.1 million customers with electricity generated off-island. Its electric distribution network was hard hit by Hurricane Sandy, with over 1.1 million customers losing power. As of earlier this week, 10,000 customers just east of New York City were still without power, while 35,000 more farther onto Long Island suffered significant flood damage and will need repairs before electric service can be restored. County executives and other leaders are calling for federal involvement, and have criticized LIPA for its management of the restoration process.
In a statement released November 13, LIPA Chairman Howard E. Steinberg stated that he had accepted Hervey's resignation, with regret, on behalf of the Board of Trustees. The announcement noted that Hervey had worked for LIPA for 12 years, including serving as CEP for two years.
Also on Tuesday, New York Governor Andrew Cuomo formed a commission to investigate utility companies' storm preparedness and management. Governor Cuomo used his powers under the Moreland Act to form the commission, whose mandate also includes an examination of the regulatory and legal structures for oversight of utility operations. Citing storms including Hurricane Irene, Tropical Storm Lee, and Hurricane Sandy in the past two years, Governor Cuomo also addressed the adaptation process of adjusting "to the reality of more frequent major weather incidents".
One utility executive has already resigned, and the commission's investigation will soon be under way. What other changes lie ahead for utility companies in New York and elsewhere as a result of utility responses to hostile weather?
LIPA is a political subdivision of the State of New York. LIPA was formed in 1985 as a non-profit municipal electric utility to take over the assets of former investor-owned utility Long Island Lighting Company. Today, LIPA owns the electric grid in most of Long Island. LIPA does not own electric generation assets on the island but serves 1.1 million customers with electricity generated off-island. Its electric distribution network was hard hit by Hurricane Sandy, with over 1.1 million customers losing power. As of earlier this week, 10,000 customers just east of New York City were still without power, while 35,000 more farther onto Long Island suffered significant flood damage and will need repairs before electric service can be restored. County executives and other leaders are calling for federal involvement, and have criticized LIPA for its management of the restoration process.
In a statement released November 13, LIPA Chairman Howard E. Steinberg stated that he had accepted Hervey's resignation, with regret, on behalf of the Board of Trustees. The announcement noted that Hervey had worked for LIPA for 12 years, including serving as CEP for two years.
Also on Tuesday, New York Governor Andrew Cuomo formed a commission to investigate utility companies' storm preparedness and management. Governor Cuomo used his powers under the Moreland Act to form the commission, whose mandate also includes an examination of the regulatory and legal structures for oversight of utility operations. Citing storms including Hurricane Irene, Tropical Storm Lee, and Hurricane Sandy in the past two years, Governor Cuomo also addressed the adaptation process of adjusting "to the reality of more frequent major weather incidents".
One utility executive has already resigned, and the commission's investigation will soon be under way. What other changes lie ahead for utility companies in New York and elsewhere as a result of utility responses to hostile weather?
Hurricane Sandy prompts Jones Act waiver
Friday, November 2, 2012
Hurricane Sandy's disruption of petroleum shipments and refining has led Secretary of Homeland Security Janet Napolitano to issue a temporary waiver allowing foreign oil tankers to enter ports in the northeastern United States.
The Jones Act, a federal law enacted as part of the Merchant Marine Act of 1920, limits who may carry on coastal shipping between domestic ports. This so-called cabotage law generally requires that all goods transported by water between U.S. ports be carried in U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens and U.S. permanent residents.
Hurricane Sandy's impacts to northeastern energy infrastructure included disruption of oil and gasoline supplies in the area near New York City and New Jersey. Between reduced supply and concentrated demand, gasoline is reported to be in shortage conditions. Long lines are reported at gas stations, and demand at some stations has led them to run out of gasoline.
In an attempt to alleviate the shortage, today Secretary of Homeland Security Janet Napolitano issued a temporary, blanket waiver of the Jones Act. The waiver is designed to allow foreign-flagged oil tankers, that would otherwise be barred from the U.S. coastwise trade, to ship petroleum products from the Gulf of Mexico to Northeastern ports. The waiver will remain operative through November 13th.
The Jones Act, a federal law enacted as part of the Merchant Marine Act of 1920, limits who may carry on coastal shipping between domestic ports. This so-called cabotage law generally requires that all goods transported by water between U.S. ports be carried in U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens and U.S. permanent residents.
Hurricane Sandy's impacts to northeastern energy infrastructure included disruption of oil and gasoline supplies in the area near New York City and New Jersey. Between reduced supply and concentrated demand, gasoline is reported to be in shortage conditions. Long lines are reported at gas stations, and demand at some stations has led them to run out of gasoline.
In an attempt to alleviate the shortage, today Secretary of Homeland Security Janet Napolitano issued a temporary, blanket waiver of the Jones Act. The waiver is designed to allow foreign-flagged oil tankers, that would otherwise be barred from the U.S. coastwise trade, to ship petroleum products from the Gulf of Mexico to Northeastern ports. The waiver will remain operative through November 13th.
Assessing Hurricane Sandy's energy impacts
Tuesday, October 30, 2012
Yesterday Hurricane Sandy made landfall in New Jersey, but the magnitude of the storm meant that heavy winds, strong rains, and a powerful coastal storm surge affected a broad swath of the mid-Atlantic and northeastern parts of the United States.
One consequence of the storm is widespread power outages. As of 8:00 AM yesterday, about 36,000 electricity customers had lost power in Connecticut, Delaware, New Jersey, New York, North Carolina, Rhode Island, and Virginia. By 2:00 PM yesterday, outages were up to over 316,000, in the states listed above as well as in Maryland, Massachusetts, New Hampshire, and Pennsylvania. At that time, New York had the most outages (105,089 customers, or about 1%), but New Hampshire was the hardest hit in terms of percentage affected (18,190 customers, or about 3%). These reported outages came six hours before the storm officially made landfall, making outage numbers much higher today -- some reports indicating 8 million customers without power.
[Update: as of 9:00 AM this morning, the Department of Energy reports 8.1 million customers without electricity, including 62% of New Jersey, 31% of Connecticut, and 23% of Rhode Island.]
In addition to these power outages, some electricity generating facilities have shut down. The U.S. Nuclear Regulatory Commission (NRC) reports three nuclear power units in the Northeastern United States had to shut down and two units reduced as a result of impacts from Hurricane Sandy. Reasons range from water pump failure to encroaching high water to problems on the external power grid.
Another consequence of the storm is disruption to oil refineries. By 1:00 PM yesterday, two mid-Atlantic refineries had closed, with four more shutting down part of their production. In total, 1.1 million barrels per day of refining capacity had been disrupted due to the storm.
Today, as the storm has moved inland, crews are working hard to recover from the storm. It is still early to assess the total damage from the storm, as well as whether its disruption to energy infrastructure will be temporary or longer-lasting.
One consequence of the storm is widespread power outages. As of 8:00 AM yesterday, about 36,000 electricity customers had lost power in Connecticut, Delaware, New Jersey, New York, North Carolina, Rhode Island, and Virginia. By 2:00 PM yesterday, outages were up to over 316,000, in the states listed above as well as in Maryland, Massachusetts, New Hampshire, and Pennsylvania. At that time, New York had the most outages (105,089 customers, or about 1%), but New Hampshire was the hardest hit in terms of percentage affected (18,190 customers, or about 3%). These reported outages came six hours before the storm officially made landfall, making outage numbers much higher today -- some reports indicating 8 million customers without power.
[Update: as of 9:00 AM this morning, the Department of Energy reports 8.1 million customers without electricity, including 62% of New Jersey, 31% of Connecticut, and 23% of Rhode Island.]
In addition to these power outages, some electricity generating facilities have shut down. The U.S. Nuclear Regulatory Commission (NRC) reports three nuclear power units in the Northeastern United States had to shut down and two units reduced as a result of impacts from Hurricane Sandy. Reasons range from water pump failure to encroaching high water to problems on the external power grid.
Another consequence of the storm is disruption to oil refineries. By 1:00 PM yesterday, two mid-Atlantic refineries had closed, with four more shutting down part of their production. In total, 1.1 million barrels per day of refining capacity had been disrupted due to the storm.
Today, as the storm has moved inland, crews are working hard to recover from the storm. It is still early to assess the total damage from the storm, as well as whether its disruption to energy infrastructure will be temporary or longer-lasting.
Hurricane Sandy's effects on energy
Monday, October 29, 2012
Hurricane Sandy is expected to make landfall near the southern coast of New Jersey this evening. The storm has already dealt damage to Cuba, Jamaica, and Haiti, and is expected to carry significant storm energy northward into the mid-Atlantic and northeastern United States. Power outages are already being reported, but many more are expected: according to a Johns Hopkins engineering model, up to 10 million people may lose electricity in the mid-Atlantic over the next week. Utilities are already staffing up and hiring external contractors to assist in the storm recovery efforts. State governors are declaring a state of emergency to waive limits on how many hours utility workers can drive and work, to allow workers from other states and Canadian provinces to assist.
Hurricane Sandy's effects on energy are not limited to electric infrastructure. Petroleum refineries - and by extension oil and gas markets - will also be impacted by the storm. According to a situation report released this morning by the U.S. Department of Energy's Office of Electricity Delivery & Energy Reliability, at least one petroleum refinery has already shut down. Phillips 66's Linden, NJ refinery has shut down its production; the Linden refinery is capable of producing 238,000 barrels per day.
The report also cites trade press reports indicating reduced production at two other mid-Atlantic oil refineries, Philadelphia Energy Solutions’ Philadelphia, PA refinery (335,000 b/d capacity) and PBF Energy’s Delaware City refinery (182,200 b/d capacity). Hurricane Sandy's impacts to refineries are not limited to those processing crude oil; the report also cites reduced production rates at Hess Corporation’s Port Reading, NJ facility (70,000 b/d capacity), which processes gas oils to produce petroleum products.
Collectively, these refineries do not account for a significant portion of the nation's refining capacity. However, the impacted facilities' concentration in the mid-Atlantic may temporarily raise gasoline prices in the mid-Atlantic and northeastern U.S. A key factor affecting the extent of this price bump will be how quickly the refineries can return to full production.
When tomorrow morning comes, the storm's direct impacts will be well underway, as will restoration efforts. Last year's October storm, Hurricane Irene, left many electric utility customers without power for over a week. How will Sandy compare to Irene?
Hurricane Sandy's effects on energy are not limited to electric infrastructure. Petroleum refineries - and by extension oil and gas markets - will also be impacted by the storm. According to a situation report released this morning by the U.S. Department of Energy's Office of Electricity Delivery & Energy Reliability, at least one petroleum refinery has already shut down. Phillips 66's Linden, NJ refinery has shut down its production; the Linden refinery is capable of producing 238,000 barrels per day.
The report also cites trade press reports indicating reduced production at two other mid-Atlantic oil refineries, Philadelphia Energy Solutions’ Philadelphia, PA refinery (335,000 b/d capacity) and PBF Energy’s Delaware City refinery (182,200 b/d capacity). Hurricane Sandy's impacts to refineries are not limited to those processing crude oil; the report also cites reduced production rates at Hess Corporation’s Port Reading, NJ facility (70,000 b/d capacity), which processes gas oils to produce petroleum products.
Collectively, these refineries do not account for a significant portion of the nation's refining capacity. However, the impacted facilities' concentration in the mid-Atlantic may temporarily raise gasoline prices in the mid-Atlantic and northeastern U.S. A key factor affecting the extent of this price bump will be how quickly the refineries can return to full production.
When tomorrow morning comes, the storm's direct impacts will be well underway, as will restoration efforts. Last year's October storm, Hurricane Irene, left many electric utility customers without power for over a week. How will Sandy compare to Irene?
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