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The Bonneville Power Administration issued a final decision March 27 on allocating costs during periods of oversupply (e.g., high hydroelectric production and low demand). BPA will allocate oversupply costs to generators within its balancing authority area based on their scheduled use of transmission during oversupply events. The costs occur when BPA uses its "Oversupply Management Protocol" to displace generation in its balancing authority area with federal hydro power and compensates generators for certain costs related to the displacement.

BPA will submit the rate to the Federal Energy Regulatory Commission for approval. If approved, the rate would be effective through the fiscal year 2014-2015 rate period and also would recover the costs incurred since 2012, when BPA established the protocol. In 2012, the agency said it incurred $2.7 million in displacement costs. BPA did not have to implement the oversupply protocol in 2013.

Under the protocol, the agency reimburses renewable generators within its balancing authority area only for payments they would otherwise receive for producing power, including (1) production tax credits, (2) renewable energy credits unbundled from the sale of energy, and (3) losses with respect to contracts executed before March 6, 2012, for the bundled sales of renewable energy credits and energy. In addition, renewable generators must provide auditable cost information, and are displaced in order of least cost.

"I understand and respect the perspectives of the many parties to this case," said BPA Administrator Elliot Mainzer in his preface to the record of decision. "I have selected an alternative that I believe is consistent with our multiple statutory responsibilities, is rooted in the basic principles of cost causation and fairness that underlie BPA’s rate directives, and reflects the guidance we have received from FERC."

All generators on line in BPA’s balancing authority area during oversupply contribute to the costs of displacement, the agency said. "Therefore, BPA believes it is reasonable to allocate costs to those generators on line during oversupply events proportional to their scheduled generation, which represents their contribution to the magnitude of the event." This allocation methodology also could encourage generators to minimize generation during oversupply events, BPA said.

"To me, the oversupply issue has been somewhat disheartening," Mainzer said, "because it pits two clean energy resources — hydro and wind — and their respective interests against each other at a time when we should be working collaboratively to find ways to better leverage and harmonize our zero-carbon resources."

Mainzer said he looks forward to working with regional interests to identify a long-term solution to the oversupply issue that enables the region’s hydro and wind energy resources to operate together more harmoniously.

The Oversupply Management Protocol was established to reconcile several important objectives: to preserve reliability; protect aquatic species; and "continue our commitment to supporting renewable resource development," BPA said. "Compensating renewable generators for energy that is displaced with federal hydropower under the protocol allows us to meet those objectives."

The record of decision is posted at www.bpa.gov/goto/OS14.

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House Energy and Commerce Committee Republican leaders have written several regional transmission organizations (RTOs) seeking information related to electricity affordability and reliability, citing recent winter problems and increasing coal plant retirements. "This year’s brutally cold winter stressed the electric grid causing electricity prices to spike across the Midwest, Mid-Atlantic, and Northeast and highlighted our nation’s reliability vulnerabilities," said the March 26 letters signed by Chairman Fred Upton, R-Mich., and four others. "Members are concerned these problems will only worsen as more coal plants are scheduled to shut down due to environmental regulations."

The letters cited Energy Information Administration reports that approximately 54 GW of coal-fired generation will retire in the next two years, representing nearly 17.5 percent of all coal-fired generation in the United States. "We are specifically concerned that the loss of these critical generation facilities in such a short timeframe will make it increasingly difficult to meet electricity demands in the future, thereby putting reliability at risk and driving up electricity prices for consumers," the GOP members said in letters to PJM, the Midcontinent Independent System Operator, New York Independent System Operator, and Independent System Operator-New England,

The committee requested information from each of the RTOs relating to the performance of the grid during this past winter season, as well as affordability and reliability concerns due to plant retirements as a result of EPA regulations. The committee is seeking responses by April 18, 2014.

The letters were signed by Upton, Energy and Power Subcommittee Chairman Ed Whitfield, R-Ky., Chairman Emeritus Joe Barton, R-Texas, full committee Vice Chairman Marsha Blackburn, R-Tenn., and Energy and Power Subcommittee Vice Chairman Steve Scalise, R-La.

The letters are posted on the committee’s website. —ROBERT VARELA

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Sen. Heidi Heitkamp, D-N.D., introduced a bill to create a viable path forward for coal by increasing support for advanced clean coal technologies such as carbon capture and sequestration (CCS). The Advanced Clean Coal Technology Investment in Our Nation Act would provide a variety of incentives to companies to invest in technologies that reduce the carbon footprint of coal-fired power.  

A summary of the bill from Heitkamp’s office said it would:
  • Develop large-scale carbon storage programs to support the commercial-scale application of enhanced oil recovery and geologic storage of carbon dioxide;
  • Direct the Department of Energy to allocate 25 percent ($2 billion) of its Loan Guarantee Program funding for fossil energy to coal projects;
  • Enable eligible projects to receive loan guarantee even if they have received other federal assistance;
  • Create clean energy coal bonds to provide tax credits for coal-powered plants that sequester carbon dioxide or meet efficiency targets;
  • Increase the current tax credit for carbon sequestration to 30 percent; and
  • Require DOE to file reports on the economic and technical status of CCS research and demonstration projects.
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SEDC, Inc.

Six New England senators have asked the Federal Energy Regulatory Commission to review recent increases in natural gas prices in New England to ensure that they reflect supply and demand and are not being increased by speculation or manipulation. The senators also asked the commission for recommendations for ways to reduce natural gas price volatility in the region.

"Unfortunately, wild fluctuations and record prices for ... natural gas over the last two winters have eroded end-users’ confidence" in natural gas markets, said the March 25 letter from Sens. Jeanne Shaheen, D-N.H.; Edward Markey, D-Mass.; Richard Blumenthal, D-Conn.; Jack Reed, D-R.I.; Sheldon Whitehouse, D-R.I; and Angus King, I-Maine. New England’s average spot price for early 2014 was a record $22.53 per million British thermal units – "over fifty percent higher than this timeframe a year ago and far above the national average," they said.

Natural gas's share of the electricity generation portfolio in the New England region increased from less than 20 percent in 2001 to more than 50 percent in 2012, the senators noted. "This shift, coupled with limited pipeline capacity, has contributed in part to the recent increases in spot prices for businesses." New England’s governors recently committed to cooperate on the need to increase natural gas pipeline capacity in the region, the senators said. "While such efforts are critical for New England’s long-term energy future, we must ensure that the current natural gas markets are functioning properly." —ROBERT VARELA

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The Environmental Protection Agency has informed a federal district court that it will not meet its court-approved deadline of May 22 to finalize wastewater effluent limits for discharges of toxic pollutants from roughly 1,200 steam electric power plants, Bloomberg BNA reported March 19.

Last June, the EPA issued a proposed rule that would strengthen the control of certain steam electric power plant discharges. The rule was published in the June 7, 2013 Federal Register. The agency is under a consent decree to take final action by May 22.

In a March 18 status report filed with the U.S. District Court for the District of Columbia, Steven Silverman, deputy assistant attorney general at the U.S. Justice Department's Environment and Natural Resources Division, said the EPA was in discussions with the Defenders of Wildlife, the Environmental Integrity Project, Earthjustice and the Sierra Club to see if the deadline for the final rule could be pushed beyond May 22, Bloomberg BNA said.

The EPA has not updated the effluent limits for power plants since 1982. The agency agreed to update the rules following a 2012 approved settlement agreement with the environmental groups in the case, Defenders of Wildlife v. Jackson.

Steam electric power plants currently account for more than half of all toxic pollutants discharged into streams, rivers and lakes from industrial facilities in the United States, the agency said. "High exposure to these types of pollutants has been linked to neurological damage and cancer as well as damage to the circulatory system, kidneys and liver," the EPA said. More than 23,000 miles of rivers and streams are damaged by steam electric plant discharges, which also include boron, cadmium, chromium, nickel, thallium, vanadium, zinc, nitrogen, chlorides, bromides, iron, copper and aluminum, according to the agency. —JEANNINE ANDERSON

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A decision made in 1994 by Glenn Cannon, general manager of Waverly Light and Power in Iowa, set in motion a research and demonstration project — later funded in part by a grant from APPA’s Demonstration of Energy & Efficiency Developments (DEED) program — that improved a key piece of electrical equipment: the transformer. That year, a truck accident had knocked down a bank of transformers in Waverly, causing a 20-gallon spill of PCB-contaminated mineral oil that cost WL&P $30,000 to clean up.

At the time the transformers were manufactured, mineral oil with polychlorinated biphenol additives was the preferred coolant used to insulate transformers. However, after PCBs were found to be toxic in the late 1970s, PCB-laden mineral oil started being removed from service. Many utilities, including WL&P, still had this type of oil in some of their transformers well into the 1990s.

Recognizing that Iowa produces a huge amount of soybeans each year and that the University of Northern Iowa’s Ag-Based Industrial Lubricants Research Program is located in Waverly, Cannon reached out to ABIL Director Lou Honary for help. Cannon wanted to explore the insulating properties needed for the fluid and research soybean oil variations that would meet the insulation needs of transformers. After several years of laboratory and field testing, the first transformers insulated with soybean-based oil were placed into service in WL&P’s distribution system in 1997.

A transformer containing the Envirotemp FR3 transformer fluid is pictured in the foreground. Photo courtesy of Waverly Light & Power

In December 1999, with the help of a DEED grant, more extensive research was done and a patent was awarded for the oil, which was now called BioTrans. The DEED study showed impressive results: the fluid was non-toxic, non-flammable, readily biodegradable, and had passed a test as an environmentally preferred oil by the National Institute of Standards and Technology. By 2002, BioTrans was being used by utilities from Alaska to South Carolina.

In 2002, Cargill Inc., one of the world’s leading producers of food-grade vegetable oils, purchased the patents and trademark rights and began manufacturing BioTrans.

In 2004, Cargill teamed up with Cooper Power Systems in Houston to produce, market, and distribute a separate vegetable-based transformer oil developed by Cooper in the 1990s. Envirotemp FR3 fluid uses as its base vegetable oil that is non-toxic and non-hazardous in soil and water, an excellent insulator, non-flammable and biodegradable. It has the added benefit of enhancing the performance and life of a utility’s transformers.

Today, Cargill has taken Envirotemp FR3 worldwide. It is now used in over 500,000 transformers operating in 27 countries. Recently, the U.S. Environmental Protection Agency presented Cargill with a 2013 Presidential Green Chemistry Challenge Award for its innovation in developing the fluid.

Siemens announced recently that it will unveil a prototype 420-kV substation class transformer built specifically for use with the Envirotemp FR3 fluid. Designed for use by TransnetBW, a utility located in Germany, the unit is the largest power transformer using the renewable fluid.

In the end, though, Cargill credits Glenn Cannon and WL&P. "Part of our success today and the volume of FR3 fluid being sold today is directly related to what Waverly Light & Power started," said David S. Roesser, global general manager of dielectric fluids at Cargill. "So their involvement was critical."

As for DEED’s contributions to the project, Cannon, now retired, said: "In the early stages of development, the transformer oil project would not have been able to get off of the ground had it not been for DEED. This project and its implications were pretty far outside of our normal scope of business and we needed outside support to keep us going. In return for DEED’s support, WL&P also returned money to DEED when the project became a success. So, everybody wins. The DEED program really works."

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EVENTS CALENDAR


Webinar – Federal Legislative and Regulatory Issues for Boards
March 31

Public Power Lineworkers Rodeo
Oklahoma City, Okla.
April 4-5

2014 Engineering and Operations Technical Conference
Oklahoma City, Okla.
April 6-9

Webinar – The Management of Successful Customer Service Operations
April 8

Webinar – Investing in Intellectual Capital: How to Capture, Mentor and Retain Critical Knowledge and Skillsets
April 10

2014 Public Communications Committee Spring Issues Roundtable
Washington, D.C.
April 11

Webinar – Electric Utility 101: Distribution
April 16

Webinar – Cybersecurity Awareness Training Part III
April 17

DEED webinar – New Program Options to Engage High School Students on Energy Usage
April 23

Webinar – Determining Revenue Requirements for Your Utility
April 24

General Accounting, Finance & Audit Spring Meeting
Washington, D.C.
April 24-25

Webinar – Industry Issues and Challenges Facing Public Power Governing Bodies
April 30

Spring Education Institute
Myrtle Beach, S.C.
May 5-9

DEED webinar – Better Building Practices Toolkit for New Residential Construction
May 8

Webinar – Overview of Utility Financial Operations for Board and Council Members
May 13

Webinar – The Leadership Development Process
May 15

Webinar – Development of Cash Reserve Policies
May 20

Webinar – Technology: From Meter Reading to Customer Information Systems
June 3

DEED webinar – Energy and the Environment, a High School Curriculum for Public Power
June 11

Webinar – Accounting Standards and Reporting Framework Update
June 12

National Conference & Public Power Expo
Denver, Colo.
June 13-18


Webinar – Introduction to Legislative Issues and Grassroots Advocacy
June 25

Webinar – Rate Making for Utility Boards and City Councils
June 30

DEED webinar – Customizable Weather Database Helps Utilities Handle Customers' High-Bill Complaints
August 20


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


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Naylor, LLC

CLASSIFIEDS
Regulatory counsel—The American Public Power Association is recruiting for a regulatory counsel to assist in energy policy formulation and policy advocacy before the Federal Energy Regulatory Commission (FERC), North American Electric Reliability Corporation (NERC), federal courts, other federal/state agencies and industry policy forums. The incumbent participates in and monitors FERC dockets and NERC activities of interest to the association and its members, as well as advocates association positions in these forums and participates in coalitions on such matters with other industry associations and groups as appropriate. The incumbent also communicates with individual APPA utility members, groups of members and their counsel to develop and coordinate consistent policy positions. Required education and experience includes:

• a law degree and appropriate bar admissions to practice law before state and federal courts;
• prior relevant experience in FERC and NERC regulatory matters;
• broad experience in electricity policy issues;
• the ability to analyze legal issues, draft complex legal documents, understand multifaceted regulatory, technical and economic issues and develop solutions;
• the ability to help plan and organize educational offerings on areas of expertise for the association; and
• the ability to communicate effectively—verbal and written communications—and gain cooperation from staff, members, outside counsel, other industry association representatives, press and the public.

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

Vice president, corporate services—Lincoln Electric System (LES) in Nebraska is recruiting for Vice President, Corporate Services. This position reports to the chief operating officer and oversees the Employee Resources Department, Transportation Department, Safety Department and Facilities Department. Requirements: The position requires proficient knowledge of human resources- and safety-related information systems, such as SAP and IndustrySafe, along with the ability to build and maintain internal relationships. The VP regularly interacts with LES’s administrative board and business consultants. Qualifications: Candidates should have a bachelor’s degree and a successful track record of increasingly responsible utility management assignments directing an organization similar to LES. Ten years of experience with facilities, safety, human resources and related information systems is preferred. A graduate degree in business is desirable. Lincoln Electric System is a municipally owned electric utility providing service to approximately 130,000 customers in Lincoln, Neb. LES employs a staff of approximately 475 non-union and union personnel. LES is governed by a nine-member administrative board. Apply: To apply, go to www.LES.com. LES is an EEO employer.


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Naylor, LLC


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