Federal Report Recommends FERC Scrutinize RTO Costs and Benefits More Closely

Federal energy regulators should develop a standardized way to measure how well regional transmission organizations are performing, says a September report by the Govt. Accountability Office (GAO). The Federal Energy Regulatory Commission lacks performance standards to measure how well RTOs are doing their job, GAO said. “Without such measures, FERC will remain unable to demonstrate the extent to which RTOs provide consumers and others with benefits,” the watchdog agency said.

GAO noted that about a decade ago, as part of its effort to bring competition to the wholesale power market, FERC started to encourage the formation of RTOs. To date, seven RTOs have developed across the United States, covering all or part of 35 states and the District of Columbia, and serving more than half of U.S. demand.

“FERC officials, industry participants and experts lack consensus on whether RTOs have brought benefits to their regions that outweigh their costs,” GAO said. “Many agree that by integrating multiple transmission systems into larger service areas, RTOs provide opportunities for certain benefits, such as more efficient management of the transmission grid and improved generator access to electricity markets, but some believe that these benefits could have been achieved without RTOs.”

GAO recommended that FERC develop a consistent approach for regularly reviewing expense information in RTO budgets and also “assess the accuracy, completeness, and reasonableness” of the information RTOs report to FERC on Form No. 1. In addition, GAO also recommended that FERC work with the RTOs, stakeholders and other experts to develop standardized measures to track the performance of RTO operations and markets, and report the performance results to Congress and the public annually. In its reports to Congress, FERC should explain what the performance data mean about the benefits of RTOs and should explain any changes that might need to be made to address performance concerns, GAO said.

The report can be found at: http://www.gao.gov/products/GAO-08-987.

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APPA Washington Report
Next Year, The Mother of All Issues
By Robert Varela, Editor, APPA’s Public Power Weekly

With a president who supports a cap-and-trade program to reduce carbon and other greenhouse gas emissions, Congress will take a serious run next year at passing a comprehensive climate change bill.

The Senate most likely will pick up largely where it left off, with a variation of the Lieberman-Warner bill that made it to the Senate floor but fell short of the 60 votes needed to overcome a filibuster. That bill would have set up a cap-and-trade system to reduce U.S. emissions of carbon dioxide and other greenhouse gases to 19% below current levels by 2020 and 71% below current levels by 2050.

The Senate bill targeted refineries, power plants, factories and transportation for 70% of the reductions and made emissions allowances available to be traded in an open market. Proceeds from selling allowances would go to investments in clean energy technology and the creation of energy efficiency programs. After gasoline prices topped $4.00/gallon last year, some “emergency off-ramp” provisions were added to ease the pain if emission allowances became too expensive.

However, supporters did not add a “safety valve” that would actually limit the price of allowances. Senate Energy and Natural Resources Committee Chairman Jeff Bingaman, D-N.M., has backed the use of a safety valve. In comments on the Senate floor about the energy agenda in the next Congress, Bingaman emphasized the need to work on deployment of new technologies such as carbon capture and sequestration. “Particularly with the growing concern about global warming, we need to make sure that we are developing and putting in place a new generation of clean, low-carbon energy technologies,” he said.

On the House side, Energy and Commerce Committee Chairman John Dingell, D-Mich., and Energy and Air Quality Subcommittee Chairman Rick Boucher, D-Va., are working on a bill. They are expected to take a relatively moderate approach. One of the committee’s four white papers discussed ways to keep costs as low as feasible while still achieving environmental goals.

Any legislative efforts in the House will have to take note of a set of principles in an Oct. 2 letter signed by 152 Democrats (but not Dingell and Boucher). The principles call for capping total U.S. emissions by a date certain and then reducing emissions to 15% to 20% below current levels in 2020, and to 80% below 1990 levels by 2030. Federal emission reduction requirements “must be a floor, not a ceiling” for states, the letter said.

Emission allowances should be auctioned “with the revenues going to benefit the public, and any free allocations should produce public benefits,” the principles said. “If any allocations are given to polluters, they must be provided only to existing facilities for a brief transition period and the quantity must be limited to avoid windfall profits.”

However, they added that revenues from auctioned allowances should be returned to low- and moderate-income households “at a level sufficient to offset higher energy costs.” Also, workers and communities that are most affected should receive a portion of the auction revenues to ease the transition and build a trained work force for the new energy economy, the letter said.

One looming issue for the climate change debate next year will be the state of the economy. The combination of a recession and high energy prices could make members of Congress pause on legislation that could increase those energy prices (at least in the short-term).

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More Study Recommended
PSC Issues Draft Report on Great Lakes Wind Potential

Until 2008, Wisconsin’s wind power generation projects could be counted on one hand and with some help from your toes, you could tally up the number of turbines generating clean electric power from one of nature’s sources. By the end of this year, Wisconsin will be home to wind projects with a total rated capacity of 449 MW. Not a bad start according to experts.

Wisconsin has few native energy resources, with the exception of renewable energy sources such as wind, hydroelectric, and biofuels. Instead, Wisconsin currently generates a large majority of its in-state energy from non-renewable sources, and it imports all of the natural gas, coal, and uranium used to generate electricity in the state. The public and political pressure to locate and harness in state renewable energy sources continues to increase. The recently released Final Report from the Governor’s Task Force on Global Warming recommends an RPS (renewable portfolio standard) of 25 percent by the year 2025, with ten percent coming from renewable resources within the state. With heightened concern about global warming, fuel supplies, and price volatility, exploring in-state renewable energy sources is a necessity.

One of the major initiatives supported by the Governor’s Task Force and already underway by the Public Service Commission is a study of the potential for developing off-shore wind resources on Lake Michigan and Lake Superior.

Manitowoc Mayor Kevin Crawford, an active proponent of renewable energy sources, participated in the PSC’s Wind on the Water (WOW) working group that recently released its draft report on the feasibility of placing wind turbines in Great Lakes waters. You can find the entire draft report and enter your public comments by clicking on this link http://psc.wi.gov/apps/dockets/comment.aspx. The full report is quite large, so if you download a copy, be patient!

The draft report found that while off-shore wind projects are technically feasible and represent one potential approach to meeting a portion of the state’s long-term energy needs, the development of such projects on the Great Lakes will require a coordinated effort by state and federal agencies, local government, affected Indian Tribes, and possibly the Wisconsin Legislature.

“I want to thank Commissioner Lauren Azar and everyone who worked so hard on this investigation,” said PSC Chairperson Eric Callisto. “In keeping with Governor Doyle’s vision of Wisconsin being a leader in renewable energy, this report will help us identify the most effective ways to tap Wisconsin’s abundant renewable energy potential. Off-shore wind is not without its challenges, but this study is an important step forward in evaluating, in a comprehensive manner, the potential costs and benefits of its generation.”

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Wisconsin Department of Commerce to Host Informational Meetings Addressing New Electrician Licensing Law

The State Legislature passed a law last session (2007 Wis Act 63) that requires a new statewide licensing system for people who work with electrical equipment. Previously, State law did not require that a person be licensed or certified to work as an electrician or electrical contractor. The new system is scheduled for April 1, 2013.

It is important to know that utility workers and utilities were exempt from applying the new licensing standards.

To better understand the new requirements and how they apply, the Dept. of Commerce Safety & Buildings Div. is sponsoring a series of informational meetings around the state:
     ● Wed., Dec. 3, 3-6 p.m., Alliant Energy, 880 N Wisconsin St,
        Berlin;
     ● Thur., Dec. 4, 3-6 p.m., Richland Coop Center, 30 East Robb
        Rd, Richland Center;
     ● Mon., Dec. 8, 3-6 p.m., Ashland City Council Chamber, 601
        Main St W, Ashland;
     ● Tue., Dec. 9, 3-6 p.m., Rhinelander City Council Chamber, 135
        S. Stevens St, Rhinelander;
     ● Wed., Dec. 10, 3-6 p.m., Rice Lake City Hall Meeting Room,
        30 E. Eau Claire St, Rice Lake.

There will be a presentation by DCOMM staff and an opportunity to ask questions.

There are several main points about this new law (2007 Wis Act 63):
     ● There will be a new statewide licensing system for electrical work
        beginning, journeymen and master electricians, and electrical
        contractors;
     ● Electrical wiring is to be inspected in all building construction,
        including public buildings, commercial properties, and farms.
        Municipalities may continue to opt to be responsible for
        inspections in their jurisdictions; and
     ● The state will provide for inspections in municipalities that do not
        conduct such inspections. (Currently, Uniform Dwelling Code
        electrical inspections are required with building permits for new
        construction or remodeling of one and two-family dwellings.)

For more information contact one of the Safety and Buildings Division electrical consultants, Monte Ewing, 608-225-3416; Terry Fameree, 920-360-2529; Tom Garvey, 414-852-3696; or Ray Weber, 715-421-2610, email electrictech@commerce.state.wi.us.

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MEUW Management Certification Program Schedule Revised

For a variety of reasons (competing MEUW tasks and responsibilities), we haven’t been able to dedicate enough time over the last three months to properly launch the 2008-2010 MEUW Management Certification Program. We have therefore revised the schedule for Sessions A and B to give us the time to secure the best presenters for these quality programs.

The revised schedule for Sessions A, B and C of the 2008-2010 MEUW Mgmt.Certification Program follows (all Sessions taking place at the Marshfield Holiday Inn):
     – Session A (Communication Skills, Time and Program
        Management), originally scheduled for December 8, 2008, will
        now be held on Wednesday, February 11, 2009 (the date
        originally scheduled for Session B);
     – Session B (Leadership: Managing People and Team-
        building) will be on Thursday, March 12, 2009, the day after
        the 2009 MEUW Collections Seminar; and
     – Session C (Utility Planning and Risk Management) will
        remain on Wednesday, April 22, 2009.
Please mark these changes on your calendars and make sure that interested employees know of the schedule changes. Registration materials are typically sent out six weeks prior to the Session.

Admittedly, that compresses the first three sessions into three months. We realize this is not optimal in terms of time away from the office for attendees, but it puts us back on track without going into the summer months. Now, this revised schedule assumes speaker availability, which we are still firming up. We’ll keep you posted.

Thank you for your continued support for this important management training program, and for your patience as we continue planning the launch of the 2008-2010 series of sessions.

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Application Deadline is November 19
MEUW to Hire Safety & Health Manager

The MEUW Board of Directors has approved the creation of a new safety position that will oversee the entire MEUW safety program and all MEUW safety employees (two electric line instructors and five regional safety coordinators).

The Board discussed this over the course of the last two Board meetings, created a special Ad Hoc Committee to explore the matter in greater detail over the summer, and voted to proceed with the position at the September 19, 2008, meeting.

The new position is the result of success and growth in the MEUW Safety Program, and will enable MEUW to continue to provide high quality and valuable safety and training resources and services to MEUW Members. The position will be funded by a 60% contribution from the regional safety groups, a 25% contribution from the MEUW safety & job training program, and a 15% contribution from the MEUW general fund.

The deadline for applications is November 19, interviews will take place the week of December 1 and our objective is to have the position filled by the first week in January. The job posting and a complete position description is available at www.meuw.org.

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