(March 2010) New Day for Prudence: I am sending this letter at the request of Robert Gruber, who is the executive director of the Public Staff-North Carolina Utilities Commission (NCUC), which is the state agency charged with representing the public in matters before the NCUC. In the article, “New Day for Prudence,” the group that filed the quoted testimony is not “the Office of Public Counsel.” It consists of a number of non-profits and associations that banded together and called themselves the Public Advocacy Groups for the purpose of intervening before the NCUC. We’re also concerned because the article’s description of the NCUC’s ruling is erroneous.
How merchant funding is remaking the rules for renewables.
Six weeks ago, FERC opened a notice of inquiry to invite industry comments on whether wind, solar, and other intermittent energy sources face unfair obstacles in wholesale power markets. Now assigned their own acronym—VERs, for “variable energy resources”—renewables make up a growing percentage of the nation’s energy supply portfolio. But as FERC notes, they present “unique challenges,” especially in terms of constraints on location and limits on the degree to which system operators can control or dispatch individual VER units. Thus, FERC suggests that certain common rules and practices, such as those for unit commitment, dispatch, and scheduling, might make it overly difficult to integrate VERs into the grid.
An emerging model for green power.
Certain New Jersey counties have undertaken a regional, public-private partnership approach to developing renewable energy projects for local government buildings. Local governments generally include municipalities, school districts, counties, and municipal or county or other regional sewerage or water utilities, depending on applicable state law.
Tools to facilitate changing utility economics.
These are challenging times for the electric and gas utilities. Reliability projects, renewable portfolio standards, greenhouse-gas emissions control, AMI, smart-grid investments, and conservation programs—all these things add to costs, but might bring in no additional revenue. Moreover, there will be unprecedented capital investment in transmission, renewable generation projects, and replacement of old facilities from the 1950s and 1960s. Thus, earnings likely will be more closely watched and traditional general rate cases might not be able to keep up.
Automation technologies promise a reliability revolution.
Utilities are using automation and back-office systems to improve their performance on outage management and service restoration. The next generation of smart-grid technologies promises a revolution in self-healing systems. But first the industry must gain confidence in the technology—and the business case for investment.
Mitigating enforcement penalties in NERC hearings and appeals.
The North American Electric Reliability Corp. (NERC) holds substantial enforcement powers as the nation’s electric reliability organization for bulk power transactions. Taking affirmative steps will help utilities and system operators to avoid or minimize NERC penalties.
Living in the new world of mandatory reliability standards.
Mandatory reliability standards put in place by NERC three years ago give reason for optimism concerning their success. But the organization struggles with standards development, compliance, enforcement and transparency.
Opportunity for advancement or exercise in futility?
The power grid has been slow to embrace renewable energy sources. In order to allow renewable energy sources to evolve into a solution rather than a headache, new tools and processes will need to be developed to forecast and control renewable production capabilities.
Siemens Energy has been awarded an 18-month, $300,000 R&D program by the Illinois Clean Coal Institute to study the effects of coal and coal-derived syngas combustion on the behavior of material and coating degradation in utility boiler and gas turbine environments. Focus areas of the research program will explore materials degradation modes in integrated gasification combined-cycle (IGCC) systems and utility boilers.