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The credit outlook for public power utilities remains stable in the next 12 to 18 months but the impact of the U.S. Environmental Protection Agency’s proposed carbon dioxide emissions rule for existing plants remains unknown, representatives from Moody’s Investors Service, Fitch Ratings and Standard and Poor’s told attendees of the APPA Business and Financial Conference in Portland, Oregon on Sept. 16.

"We have a stable outlook for an overwhelming number of the public power utilities that we look at at S and P," said David Bodek, a credit analyst with Standard and Poor’s. "However if the [CO2] rules prove to be so onerous that rates are set just to recover those additional costs, but don’t provide the kind of debt service margins or liquidity, then there might be additional rating implications. But the jury is still out."

The EPA proposed the rule, under Section 111d of the Clean Air Act, in June 2014 and is accepting comments on it until Dec. 1. A final rule is expected in June 2015.

The power industry has been dealing with environmental regulations for years, analysts said. And public power has generally complied without suffering from credit implications. But those prior rules have not been so drastic, said Dan Aschenbach, a senior vice president with Moody’s.

"This has been something that public power, and the electric industry as a whole, has had to deal with for many decades," he said. "But for what we’re up against now as an industry, if it is an accelerated place of compliance that causes substantial cost increases, that’s something that could affect the outlook in the negative."

While the rule has raised specific concerns among state regulators and the power industry, including credit for prior action and adequate transmission for the transition away from coal, analysts have concerns of their own.

"Fuel diversity is a very important component of stability and credit," Aschenbach said. "We’re concerned that is one of the risks of too much movement in the [CO2] area. The other is the impact on reliability."

According to some preliminary analyses, the Midcontinent ISO is expected to have a major generation deficit in 2023 due to the shuttering of smaller coal plants, Aschenbach said. Such a capacity deficit is bound to cause reliability issues, he said.

"Reliability is a hallmark of public power utilities," he said. "Threats to that reliability [are] something that could affect the value."

Costs are also a concern, both higher costs of power and stranded costs. Dennis Pidherny, managing director at Fitch Ratings, said stranded investments for plants that were built some time ago, as well as those paying for emissions abatement equipment today only to close the plant due to new regulations, are both risks for utilities. Pidherny said public power utilities own few coal plants compared to investor-owned utilities, but are likely to be hit by a higher cost of power.

"I think this issue about carbon is just about cost," he said. "There are going to be higher costs incurred by utility systems to address these issues. From a public power standpoint, it’s how and if public power systems choose to recover those higher costs."—LAURA D'ALESSANDRO

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Federal energy regulators on Sept. 18 heard from the CEO of the Midcontinent Independent System Operator and other regional officials related to a regional resource adequacy forecast for 2016.

MISO and the Organization of MISO States (OMS), which represents state utility regulators in the MISO region, jointly developed a 10-year survey to assess the potential impacts of environmental regulations and other factors. The survey is intended to bring clarity and transparency to the question of how MISO’s resource adequacy picture is expected to evolve going forward.
"As we began to peel back the onion on the resource adequacy question, our first attempt was to look at the various state procedures around how they ensure that their utilities are in fact bringing the right amount of assets to the table," said Clair Moeller, CEO of MISO, at the Federal Energy Regulatory Commission’s monthly open meeting in Washington, D.C. The survey results that were the focus of the discussion at the FERC meeting were as of June 2, 2014.

Moeller said that "for the first time," through the MISO-OMS collaboration, "we were able to get a time synchronized picture of what the capacity positions were of all the participants" in the market.

He pointed out that "not everyone is state jurisdictional, obviously, in our market." He said, "we had quite good cooperation from the municipal utilities and the cooperatives. We had a 99% response rate."

Putting things in historical context, Moeller said that over the past decade, reserve margins have been healthy, noting that "we had such a surplus of capacity that the loss of load risk was trivial."

But more recently, there has been a swing towards much tighter reserve margins. Moeller noted the "retirement of nearly 18 percent of the coal [generation] in the MISO fleet." He said "it’s time to sharpen the pencil and make sure we’re not making assumptions within our math that are too risky."

A December 2013 North American Electric Reliability Corporation long-term reliability assessment said that the impacts of environmental regulations and economic factors contributed to a potential shortfall of 6,750 MW, or a 7.0 percent, anticipated reserve margin in MISO by summer 2016.
But the report also said that "the potential exists to mitigate some—or all of—the projected 2016 shortfall by assessing key components of the projected anticipated reserve margin" including, but not limited to, the potential for more future-planned additions, the potential for growth in demand side management, the additional support anticipated from the MISO Southern Region, "the potential for transmission upgrades to mitigate current generation deliverability constraints, and the potential for transmission upgrades to convert current energy-only resources to network resources."

At the FERC meeting, Moeller said that the region has arrived at "about a 14 and a half percent [reserve] requirement," but "as we look at the firm plans for 2016, we don’t see firm plans for meeting" that requirement. "We see a slight shortfall, 2.3 gigawatts."

He also presented material at the meeting "showing a 2.5 gigawatt overage" in the MISO South region, but said there is "not sufficient transmission to move that 2.5 gigawatts" from South to North.

"We’re also experiencing significant industrial growth on the Gulf Coast, and so it’s our expectation that that 2.5 gigawatts will be consumed by local customers," Moeller said.

Later, he said that "as we look forward, things that we’re trying to do that you’ll see coming from us include tightening the definitions of resources" and what time of year they might apply. "The polar vortex taught us that capacity risk can happen all year long," he added.

"We’re also looking to make sure that any capacity that is in the market can participate in the market," Moeller said. —PAUL CIAMPOLI

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New York state ranks high in the potential for adding more rooftop photovoltaic and small-scale combined heat and power systems, the New York Independent System Operator said in a Sept. 18 report. The analysis, A Review of Distributed Energy Resources, says more residential and commercial customers are interested in adopting distributed resources, but says there is "an acute need" for the government and utility sectors to address several obstacles to expanding the use of distributed resources.

"New York state, already ranked fifth in the country for total distributed energy resource (DER) capacity, is pursuing an array of initiatives to further increase the use of on-site power generation and storage systems," the ISO said. Prepared by DNV GL, an international energy advisory and testing organization, the report evaluates the current and future growth outlook for several DER technologies.

In other states that have a high amount of distributed resources, the dominant technology used is solar photovoltaics, the study noted, but in New York, 57 percent of the state's DER capacity is generated by small-scale combined heat and power. Solar PV ranks second in New York at 41 percent, with another 2 percent derived from various energy storage facilities. New York ranks in the top five states for total distributed energy resources of 2 megawatts or less.

The report warned that challenges and obstacles to the greater use of DER technologies include:
1)  Technical requirements, such as transmission interconnection and grid-reliability concerns;
2)  An escalating variety of regulatory policies, requirements and tariffs across utility jurisdictions;
3)  Fair compensation and cost allocation for integrating DER into the grid; and
4)  The lack of turn-key solutions "and the need for complex, costly and project-specific engineering analysis to support project financing and implementation."

"This study underscores NYISO's commitment to work with state government leaders and the electric utility industry to improve the resiliency of the electric system and help customers to be more engaged in energy markets by efficiently integrating DER with the centralized power grid," said ISO President and CEO Stephen Whitley.

NY ISO releases long-term Reliability Needs Assessment
The New York ISO also released another report, its 2014 Reliability Needs Assessment, which says the state's bulk power system is currently reliable, but continues to be pressed by various factors, including generator retirements and growth in demand. "Changes in supply and demand will require investments in resources and infrastructure to maintain reliability over the next decade," the ISO said on Sept. 17. The report projects a need for additional resources in 2019, one  year sooner than had been projected in the ISO's 2012 reliability report.

By identifying future reliability needs every two years via its planning process, the ISO said it is setting the stage for market participants to respond. The ISO noted that it expects recent market rule changes — including the creation of a new capacity zone in the Lower Hudson Valley — to encourage the development of new resources. Capacity owners and developers are "taking steps to return generating units to service, restore units to their full capability or build new facilities," the ISO said.

The report points to a number of "transmission security violations" beginning in 2015 that "will require either remedial actions by New York transmission owners or other solutions offered in response to the Reliability Needs Assessment." (Transmission security is the ability of the power system to withstand disturbances such as the unanticipated loss of power system components without the need for interruption of power delivery to utility service areas, the ISO said.) Potential transmission security violations that could affect reliability were found in Rochester; western and central New York; the Albany region; and the New York City and Lower Hudson Valley areas.

The reliability report "provides an objective and thorough assessment of the reliability needs of the state's electric grid over the next 10 years so that the market can respond with potential solutions," the ISO said, adding that the next step in the state's planning process will be to develop and issue a comprehensive reliability plan.

Both the 2014 Reliability Needs Assessment and the report on distributed resources, A Review of Distributed Energy Resources, are available on the New York ISO's website. —JEANNINE ANDERSON

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The California Independent System Operator’s Board of Governors on Sept. 18 approved an implementation plan for a soon-to-be launched energy imbalance market (EIM).
Portland-based PacifiCorp will operate its EIM system in parallel with the ISO system for 31 days beginning on October 1.
PacifiCorp will submit its daily real-time data to the ISO, which will then optimize the market and issue "advisory" resource dispatches that PacifiCorp can choose to use. On Nov. 1, the market will become fully binding as well as the related financial settlements.
Cal-ISO said that the board agreed that running in parallel allows both entities to gain experience operating "the highly sophisticated real-time systems using real market data and avoid tinkering with the systems, if necessary, while the market is live."

The board also approved changes to the ISO planning standards that the ISO said will mitigate issues that can arise during days experiencing weather-driven natural gas price spikes as seen during the winter of 2013-2014.

Drawing upon the lessons learned from this past December and February, the ISO is eliminating the fixed cost option generators can choose to receive commitments cost payments and instead will use a variable cost method that will track daily changes in natural gas prices," Cal-ISO went on to say.

The change means generators will have greater flexibility in managing risks associated with natural price volatility, and it will improve market efficiency by ensuring more accurate gas prices are used for ISO dispatching decisions, according to the ISO.—PAUL CIAMPOLI

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Our publishing partner, Naylor Association Solutions, sends Public Power Daily to you every morning from their office in Winnipeg, Canada. As part of improvements to its system, Naylor this week began sending all APPA newsletters from a new email address.

To ensure you continue receiving the newsletter, please add newsletter@naylorcampaign11.com to your contact list, or ask your IT department to whitelist this Naylor address for all employees in your company. Thank you very much.

If you have questions about this, please call Fallon Forbush, APPA, at 202/467-2958, or email him at FForbush@PublicPower.org.

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Webinar – Smart Grids Enable Smart Cities: Insights into the Benefits New Technologies Offer Public Power Communities
September 23

Webinar – Estimating the Impacts of Premature Coal Plant Retirements on Retail Electric Rates
September 24

NERC Critical Infrastructure Protection (CIP) Version 5 Compliance Program Development Workshop
Scottsdale, Arizona
September 29-30

Fall Education Institute
Scottsdale, Arizona
September 29-October 3

Webinar – Achieving Excellence in Public Power Governance
September 30

Public Power Leadership Workshop
Scottsdale, Arizona
October 1-3

Webinar – Performing a Utility Financial Check-Up
October 16

Legal Seminar
San Antonio, Texas
October 19-22

DEED webinar – Measuring Energy Savings Using Non-Intrusive Devices Inside Residential Customer Homes
October 23

Customer Connections Conference
Jacksonville, Florida
October 26-29

Webinar – OSHA Subpart V: Fall Protection
October 30

Webinar – OSHA Subpart V: Arc Protection and Flame-Resistant Clothing
November 10

Grid Security Summit
Arlington, Virginia
November 12-13

Webinar – Energy Efficiency: Overview of Energy Efficiency Programs
November 18

Webinar – It's a Wrap: A Look Back at Legislative, Regulatory, and Political Developments in 2014
December 9

Webinar – Energy Efficiency: Identifying Your Utility's Energy Efficiency Goals and Developing a Portfolio Strategy
December 11

Webinar – OSHA Subpart V: Minimum Approach Distance
December 16

For a full APPA Events Calendar, visit Publicpower.org.

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Director of human resources and administration— The American Public Power Association seeks a director of human resources and administration to manage the development and implementation of the association’s policies and procedures that govern human resources and office administration. The director will manage the administration of employee benefit programs in conjunction with finance and legal staff members, including APPA’s defined benefit pension plan, 401(k) plan, health insurance plans, and voluntary benefit plans. The position is responsible for ensuring a positive employee-employer environment through oversight of employee recruitment, training and development, evaluation, and retention. The position also supervises support services staff and equipment (aside from I.T.), and will act as a liaison with the landlord and office service vendors and insurance brokers to ensure a quality work environment. Required education and experience:

• degree from a four-year college or university with major coursework in human resource management, business • • administration, or related field; master’s degree preferred;
• ten or more years work experience in human resources, with substantial prior experience in a management-level capacity;
• SPHR certification or demonstrated coursework toward achieving the SPHR certification preferred;
• strong interpersonal and communications skills, both oral and written;
• excellent conflict resolution and mediation skills;
• ability to work independently and exercise sound judgment;
• thorough knowledge of all aspects of HR administration;
• current knowledge of trends, practices, regulations, and developments in the HR area;
• ability to foster trust throughout the organization in the impartiality and integrity of the HR function, including the • ability to maintain the highest level of confidentiality and ensure fair treatment;
• knowledge of federal and local labor laws and their application;
• knowledge of budgeting, personnel, and administrative techniques;
• knowledge of lease administration and building services practices;
• ability to pay attention to detail and maintain accurate recordkeeping;
• history of excellent customer service delivery; and
• proficiency in Microsoft Office Suite.

Apply: For more information, visit PublicPower.org. Interested candidates should email a cover letter and resume to HumanResources@PublicPower.org with "HR Director" in the subject line. APPA is an equal opportunity employer.

Superintendent— The city of Croswell in Michigan is seeking applicants for the next superintendent of Croswell Light and Power. Qualifications: Qualified candidates should have management experiences. Positive attributes might include: lineman, water licenses, economic development experience, business management, utility management, community relations, GIS, and SCADA. Local government experience is a plus. Apply: The city will be accepting resumes until the position is filled. Interested candidates may contact the city administrator for more information, or visit www.cityofcroswell.com for a complete job description. Contact Sam Moore, city administrator for the city of Croswell by email at smoore@croswell-mich.com.

Manager of regulatory program— The Northern California Power Agency seeks a manager of regulatory program. The position serves as the agency’s subject matter expert related to the federal power program. The successful candidate will represent and advocate the agency’s policy positions before the Western Area Power Administration and the U.S. Bureau of Reclamation. The successful candidate will also advise NCPA on policy issues and educate policymakers and stakeholders with regard to operation and scheduling of Central Valley Project resources, as well as various policy directives by multiple agencies —including the Department of Energy, Department of Interior, Federal Energy Regulatory Commission, and the California Independent System Operator— that could impact the federal power program and its customers. The successful candidate also serves as NCPA lead in interactions with external interest groups and stakeholders working in the area. Qualifications: A bachelor’s degree (master’s strongly preferred) in economics, engineering, business administration, or related field, and a minimum of seven years of directly related federal agency or electric utility experience is desired. The position requires in-depth familiarity with the Central Valley Project, the federal power program, and related statutes and regulations. The successful candidate must have demonstrated strong leadership, writing, and communications skills, as well as the ability to work with limited supervision and achieve legislative and regulatory goals. Compensation: The starting salary is $115,815 to $144,768 per year, depending on experience. Employer-paid benefits include CalPERS retirement, medical, retiree medical, and more. Apply: All applicants are required to submit the agency’s online application to be considered. See www.ncpa.com to apply. Equal opportunity employer.

General manager— The Kennebunk Light and Power District in Maine is offering a unique career opportunity for a new general manager. The Kennebunk Light and Power District is an independent public municipal utility district located in Kennebunk, Maine. The district has earned a reputation among its 6,400 ratepayers and the community at large for excellent service, affordable rates, and innovation in efficiency and renewable power generation. Kennebunk (population of 11,000) is an historic New England town, known for its hardworking residents, family-friendly community, top-rated schools, and beautiful beaches in southern Maine. The district is at an historic crossroads as it determines with the local community the future of its hydro power dams, its role in local renewable power production, and the organization’s business strategy and structure. The general manager is supported, guided, and directed by a locally elected board of trustees, to whom s/he reports. The general manager oversees the staff, assets, infrastructure, and operations of the Kennebunk Light and Power District, and will help shape its vision and strategy. The general manager is the leader responsible to fulfill the mission, policies, business plan, and goals of the district. The district's mission states, "KLPD is to provide the most reliable service at the lowest possible cost, while recognizing the importance of the safety of its employees and its customers." The essential responsibilities of the general manager include:

• ensuring sound financial management of the district;
• overseeing all district operations;
• ensuring excellent customer service and public relations;
• fulfilling responsibilities to the district’s board of trustees; and
• completing other duties as required.

The successful candidate must be able to lead the district to advocate for public policy aligned with the district's mission and maintain all legal, financial, and operations records in a professional manner. The successful candidate must also ensure that the district has effective liaison with board-designated organizations. The general manager also oversees human resources management and organization structure. The successful candidate will have strong financial management abilities to oversee all district operations. Minimum qualifications: A combination of more than 15 years of professional experience and education in management, public administration, business management, and/or professional engineering is required and must include:

• ten years of progressively responsible experience in utility leadership and management (preferred);
• working knowledge of finance and management accounting;
• experience and technical knowledge in cost of electrical service, distribution, transmission, generation, new energy markets, rate-making, and electrical engineering;
• a bachelor's degree in engineering and/or business or public administration (a master's degree is preferred), or a professional engineer with experience and advanced education in business/public administration; and
• possession of a valid Maine driver’s license (Class C).

The general manager will be required to relocate, as necessary, in order to reside in the local area. Apply: Applications should be sent via email to: generalmanagersearch@klpd.org. Applications must include a cover letter and resume. Applications must be received by Oct. 3. Go to www.klpd.org for additional information and a full job description. NO PHONE CALLS PLEASE.

Electric utility system operator-power (real-time/day-ahead energy trader)—
The city of Redding, California, is recruiting for an electric utility system operator-power (real-time/day-ahead energy trader). The candidate will schedule real-time and day-ahead delivery of power to assure a balanced load to the resource energy portfolio; develop, implement, evaluate, economically optimize, coordinate, and arrange day-ahead and real-time power trades and schedules with other municipal utilities, marketers, and power companies; and ensure the safe, reliable, and economical operation of the Redding Electric Utility’s generation assets. Compensation: Salary is $41.71 to $50.70 per hour ($43.38 to $55.27 per hour, effective Jan. 18, 2015). Apply: To review a complete job announcement and to apply online, visit www.ci.redding.ca.us. Apply by Oct. 2. EOE/FAAE.

Senior substation design engineer— MEAG Power in Alpharetta, Georgia, is accepting applications for a senior substation design engineer. Qualifications: The position requires a bachelor’s degree in engineering, eight to 10 years related experience in the electric utility industry, and a professional engineering license (Georgia preferred), or the ability to obtain one within a year. Apply: Apply at www.meagpower.org.

Manager of electric operations— The City of Geneva Public Works Department in Illinois is accepting applications for a full-time manager of electric operations. The position manages the operation and maintenance of the utility's generation, substations, SCADA, metering, fiber, outages, and related customer complaints in order to provide safe, reliable, and efficient electric and data service to the customers of the city of Geneva. This position reports to the superintendent of Electric Services, and is responsible for crew management, capacity and reliability planning, project management, and other duties as assigned. Qualifications: Minimum qualifications for the position include a bachelor’s degree in electrical engineering with a minimum of five years related experience, including management and direct supervision of non-exempt employees. A candidate with power generation experience or any combination of education, training, and experience which provides the required knowledge, skills, and abilities to perform the essential functions of the position is desirable. The successful applicant must reside within a 12-mile radius of the city of Geneva within one year of employment, and possess an Illinois driver’s license. Compensation: The city of Geneva offers an excellent fringe benefit package and starting annual hiring range of $78,283 to $94,872. Apply: Please send a completed job application to Lisa Jepson by mail: Human Resources Office, City of Geneva, 22 S. First St., Geneva, Illinois 60134; or by email: ljepson@geneva.il.us; by 5 p.m. on Sept. 24. Resumes will not be accepted without a completed job application. For more information, please visit our website. The city of Geneva is an equal opportunity employer.

Check out APPA's career services on the Web

Visit the Career Center at PublicPower.org. Our career center allows job seekers to upload resumes, and recruiters to obtain resumes from job seekers. Classified ads in Public Power Daily and Public Power Weekly cost 70 cents per word for APPA members, and 80 cents per word for nonmembers, for a one-week run. Job posting subscriptions are available in packages of five, 10, or unlimited for a full year. The weekly deadline for placing a classified ad is every Thursday at 12 p.m. (Eastern time). If you have questions about classified ads, please write to jobs@publicpower.org, or call 202/467-2958.

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