NTE Energy petition asks for FERC help with DukeTransmission deal devolves into pending court caseNTE Energy filed a petition for declaratory order at FERC yesterday seeking the commission’s intervention in a dispute it is having with Duke Energy Carolinas. The firm was trying to develop a 475-MW natural gas combined-cycle plant in North Carolina and entered into an interconnection agreement with the utility.

After working on the project for over a year, Duke had an “invoicing glitch” that led to several months passing without proper bills being sent to NTE for the interconnection project’s costs. Duke only realized its error when NTE decided to suspend work on the project in May 2019.

“Instead of working together with NTE to reconcile actual costs and liabilities as called for in the LGIA, Duke engaged in a series of increasingly hostile demands for increasingly larger amounts of money, amounting to millions of dollars in demand,” the filing said.

NTE invoked the dispute resolution and audit provisions of the FERC-approved interconnection deal, but Duke declared NTE in default and simultaneously went to state court seeking damages.

The petition said Duke failed to follow the FERC-required procedure for terminating an unexpired interconnection agreement over the objections of an interconnection customer, which is to file a notice of termination at the commission at least 60 days before the termination date. Duke listed the project as canceled on its OASIS and it reported the termination of the of the agreement in its electric quarterly report to FERC.

Those acts, taken without FERC approval of the contested termination of the deal, threw the future of NTE’s project into serious doubt and are caused NTE ongoing, competitive injury, the petition said. The filing asked for seeks clarification from FERC on how to interpret the interconnection arrangement.

“Left unclarified, transmission providers are at liberty to impose competitive harm on interconnection applicants by deciding for themselves when to announce that an interconnection

NTE Energy petition asks for FERC help with Duke

ERC: Retail power prices fall, gas production to wane

Emera Maine SOS rates to be lower next year, says PUC

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agreement has been unilaterally terminated,” the petition said. The commission has not interpreted its pro forma interconnection agreement, but that is the position Duke took in court, it added.

The petition asked FERC to clarify the legal obligations imposed on parties to conforming interconnection agreements, including the deal with NTE.

“By issuing the requested declarations, the commission can make clear to transmission providers how they are to seek the termination of an LGIA over an interconnection customer’s objections,” the petition said. “In doing so, the commission would promote uniformity of interpretation of its pro forma LGIA, and avoid the possibility of conflicting, confusing interpretations (like the one Duke has advanced) that could spawn future similar disputes at the commission and in the courts.”

PJM IMM argues to scrap IARR transmission programA filing at FERC Friday from PJM’s IMM argued for scrapping a program where competitive transmission projects are paid for through incremental auction revenue rights (IARRs). A recent filing from the RTO codified the process as required under a settlement FERC approved to resolve a complaint filed by TranSource.

The monitor does not oppose the filing asked for by FERC, but based on the experience of the proceeding, eliminating compensation of competitive transmission projects through IARRs would be better. “The process serves no useful purpose because it is unlikely to identify viable projects,” the IMM said.

“Including the process in the tariff creates confusion and may impede the development of better alternatives.” And using IARRs interferes with efficient and equitable compensation to auction revenue rights (ARR) holders, it added.

“The market monitor does not oppose acceptance of PJM’s compliance filing insofar as it clarifies the process going forward,” the IMM said. “But including a more transparent process in the OA (operating agreement) does not address the flaws identified with PJM’s market design in the course of this proceeding.

“It is effectively impossible to qualify for a legitimate IARR-funded upgrade based on the required process for allocating ARRs.”

IARRs are meant to be ARRs made available by physical transmission system upgrades due to customer-funded transmission projects, or due to customer-funded generation interconnection upgrades. But given the process and procedures for determining the upgrades needed to support an IARR request, it is effectively impossible that a

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viable project could be identified, it added.

The existing system has little residual capacity available for more ARRs so, given the current allocation of existing ARRs relative to system capability, the upgrades needed to produce IARRs under this approach are prohibitively expensive and impractical.

“Maintaining a nonviable IARR process will continue to create unnecessary confusion and adds nothing to the development of competitive transmission,” the IMM said. The monitor suggested FERC investigate the IARR and its issues under Section 206 of the Federal Power Act to take appropriate actions to protect the public interest and ensure an efficient market design.

ERC: Retail power prices fall, gas production to waneThe Energy Research Council’s (ERC’s) weekly average power price benchmarks for small to medium business customers in restructured states fell last week, the firm said. The national average of restructured states was down 0.69% to 7.28¢/KWH. “The thing that’s notable is the rollercoaster we’ve been on with natural

gas prices, but that’s all weather driven and it appears as though this spurt of above-normal cold weather that’s come in and jacked prices up so high is going to be followed by a warming trend,” ERC President James Moore told us.

Gas prices surged in recent weeks due to an early cold snap, but with forecasts showing above-normal temperatures, they already started to recede. The much more volatile gas market moved too fast to have

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any real impact on power prices, Moore said.

The longer-term strips remained stable and Moore said forward prices

in PJM are still within 10% of their all-time lows.

With the early cold out of the way, the market can turn its attention back to the record supplies that helped build up storage to its current surplus that should be able to handle anything this winter throws at it, he added.

Most of the individual states saw prices fall last week, with two neighboring jurisdictions leading the way. Maryland saw its average price drop 2.36% to 7.15¢/KWH and in Washington, DC, it fell 2.28%

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ERCOT's summer performance and futureA multi-media recording of Power

Markets Today's 90-minute webinar originally aired on October 23, 2019

Distinguished panel

The Electric Reliability Council of Texas (ERCOT) has made it through its second summer with a tight reserve margin and this year was more challenging than last. We assembled an expert panel to explain what worked and why, and what was learned that can shed light on how to plan for the future.

The grid operator had to deal with its tightest reserve margin ever and the hottest August in almost a decade, but the energy-only market managed to keep everyone's lights on.

Prices shot up, which is meant to help new capacity get built and thus put more reserves on the system.

But the energy-only market is not designed to meet the historic one in a one-in-10-year reliability standard that is the norm outside of Texas so the grid will be running tight for the foreseeable future.

Find out about ERCOT's past summer performance and future from our distinguished panel by downloading the multi-media recording of Power Markets Today's webinar originally aired on October 23, 2019. Call +1-301-769-6812 (1-888-637-7776 toll-free in the US and Canada) to order.

Webinar recording

ERCOT's summer performance and futureA multi-media recording of Power

Markets Today's 90-minute webinar originally aired on October 23, 2019

Distinguished panel

The Electric Reliability Council of Texas (ERCOT) has made it through its second summer with a tight reserve margin and this year was more challenging than last. We assembled an expert panel to explain what worked and why, and what was learned that can shed light on how to plan for the future.

The grid operator had to deal with its tightest reserve margin ever and the hottest August in almost a decade, but the energy-only market managed to keep everyone's lights on.

Prices shot up, which is meant to help new capacity get built and thus put more reserves on the system.

But the energy-only market is not designed to meet the historic one in a one-in-10-year reliability standard that is the norm outside of Texas so the grid will be running tight for the foreseeable future.

Find out about ERCOT's past summer performance and future from our distinguished panel by downloading the multi-media recording of Power Markets Today's webinar originally aired on October 23, 2019. Call +1-301-769-6812 (1-888-637-7776 toll-free in the US and Canada) to order.

Webinar recording

ERCOT's summer performance and futureA multi-media recording of Power

Markets Today's 90-minute webinar originally aired on October 23, 2019

Distinguished panel

The Electric Reliability Council of Texas (ERCOT) has made it through its second summer with a tight reserve margin and this year was more challenging than last. We assembled an expert panel to explain what worked and why, and what was learned that can shed light on how to plan for the future.

The grid operator had to deal with its tightest reserve margin ever and the hottest August in almost a decade, but the energy-only market managed to keep everyone's lights on.

Prices shot up, which is meant to help new capacity get built and thus put more reserves on the system.

But the energy-only market is not designed to meet the historic one in a one-in-10-year reliability standard that is the norm outside of Texas so the grid will be running tight for the foreseeable future.

Find out about ERCOT's past summer performance and future from our distinguished panel by downloading the multi-media recording of Power Markets Today's webinar originally aired on October 23, 2019. Call +1-301-769-6812 (1-888-637-7776 toll-free in the US and Canada) to order.

© 2019 Modern Markets Intelligence Inc. (MMI) All Rights Reserved. Reproduction without permission prohibited.

Wednesday, November 13, 2019Power Markets Today 5

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to 7.36¢/KWH.

Texas bucked the national trend as its prices rose 1.51% to 5.44¢/KWH, which Moore linked to ongoing tight reserve margins in ERCOT.

While production has been at record levels all this year, that could start to change in the first half of 2020 based on where the gas has been coming from lately. High production stuck around despite low prices as most of the new supplies are coming from the Permian basin and other oil-centric fields where gas is a byproduct of drilling for crude oil.

Oil is priced high enough for that drilling to continue, but the issue is that on average, 70% of a well’s production is used up in the first year. The wells that helped record production this year should start to see declining output next year, Moore noted.

Given the industry’s reluctance to invest capital generally, analysts and forecasters including at the EIA have said production could tail off some time in the first half of next year, he added. Demand has been going up due to exports and that is expected to continue, so if production falls off in Q2 of next year, supply and demand will become unbalanced and prices would go up for both gas and power, Moore said.

“Under any set of circumstances, prices will not be better in the first half of 2020 than they are now,” he added.

Emera Maine SOS rates to be lower next year, says PUC

The Maine PUC yesterday announced new, lower rates for residential and business customers of Emera Maine next year as the result of a competitive bid process for its standard offer

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supply (SOS). Typical residential customers – based on 500 KWH of use – will see an 8.4% drop on their monthly bills, the PUC said.

“Locking in a lower price of a basic necessity for 2020 helps both residents and business owners better manage tight budgets,” Chairman Philip Bartlett said in prepared remarks. About 60% of sales in Emera’s territory are covered by standard offer supply, with the rest being made of shoppers.

Medium business customers in Emera’s territory pay a different price every month, which ranges from 5.3¢/KWH in June to a high of 10.8¢/KWH in January. On average across the year, medium business customers will see a 21% decrease.

Large business customers pay prices that are indexed to ISO-NE’s wholesale prices that are set before each month (though most of that class shops for power). The PUC will release the names of the firms that won bidding for the SOS supply in two weeks, allowing time for power supply arrangements to be finalized.

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Gas futures fall ahead of expected storage draw: NYMEX December natural gas futures settled down slightly in trading yesterday amid expectations for warmer weather ahead, analyst Jackson Mueller reported. The contract fell 1.6¢ to close at $2.621/MMBTU. Traders expect the first withdrawal of the season to be reported by EIA tomorrow for the week ending Nov 8. Expectations called for a 1-BCF pull, he added.

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