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Posts Tagged ‘Transmission Costs’

MendoCoastCurrent, June 25, 2010

The Federal Energy Regulatory Commission (FERC) today proposed to build on its Order No. 890 open access transmission reforms by establishing a closer link between regional electric transmission planning and cost allocation to help ensure that needed transmission facilities actually are built.

The Notice of Proposed Rulemaking (NOPR) is based on an extensive record: three years of monitoring implementation of Order No. 890, three regional technical conferences and examination of more than 150 sets of comments filed in response to an October 2009 request for comment on transmission planning and cost allocation. It proposes and seeks comment on requiring:

  • Transmission providers to establish a closer link between cost allocation and regional transmission planning by identifying and establishing cost allocation methods for beneficiaries of new transmission facilities;
  • Transmission planning to take into account needs driven by public policy requirements established by state or federal laws or regulations;
  • Neighboring transmission planning regions to improve their coordination with respect to facilities that are proposed to be constructed in two adjacent regions and could address transmission needs more efficiently than separate intraregional facilities; and
  • The removal from Commission-approved tariffs or agreements provisions that provide an undue advantage to an incumbent developer so that sponsors of transmission projects have the right, consistent with state or local laws or regulations, to build and own facilities selected for inclusion in regional transmission plans.

“Our nation needs a transmission grid that can accommodate rising consumer demand for a more diverse mix of power generators and the sophisticated technology of the smart grid,” FERC Chairman Jon Wellinghoff said. “To do that, we must make sure FERC transmission policies are open and fair to all.”

A significant aspect of the proposal is the requirement that transmission planning take into account public policy requirements, such as state-mandated renewable portfolio standards. Doing so during the transmission planning process will help ensure these legal requirements are met in a way that is fair and efficient to transmission customers.

The proposal also ties cost allocation to the regional transmission planning processes to facilitate the transition from planning to implementation. This ensures that only those consumers benefiting from transmission facilities are charged for associated costs, and gives each region the first opportunity to develop cost allocation mechanisms and identify how the benefits of transmission facilities will be determined. Comments are due 60 days after publication in the Federal Register.

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Electric Light & Power, June 11, 2009

menu01onAs the Obama administration shapes its policy on transmission planning, siting and cost allocation, the Large Public Power Council (LPPC) has sent a joint letter voicing its transmission policy views and concerns to Energy Secretary Chu, Interior Secretary Salazar, Agriculture Secretary Vilsack, FERC Chairman Wellinghoff, White House Council on Environmental Quality Chair Sutley and Presidential Energy Advisor Carol Browner.

The letter was sent to the Obama policy makers by Bob Johnston, Chair of the 23 member not-for-profit utility organization. Members of the LPPC own and operate nearly 90% of the transmission investment owned by non-federal public power entities in the United States.

The LPPC told the Obama Administration that it is “most supportive of a framework for interconnection-wide planning that addresses the growing need to interconnect renewable resources to the grid.”

“Many of our members are leaders in renewable deployment and energy efficiency. We are committed to these policy goals and closely tied to the values of our local communities,” the LPPC emphasized. “But we also believe that creating a new planning bureaucracy could be costly and counterproductive in achieving needed infrastructure development.”

The LPPC voiced strong support for the region-wide planning process recently mandated by FERC Order 890 that directed implementation of new region-wide planning processes that the LPPC claims “require an unprecedented level of regional coordination, transparency and federal oversight.”

“It seems quite clear that federal climate legislation and a national renewable portfolio standard will further focus these planning processes, the LPPC asserted. “LPPC fully expects that the regional processes to which parties have recently committed will take on new urgency and purpose. Adding a planning bureaucracy to that mix will be time consuming and will likely delay rather than expedite transmission development.”

The LPPC also told the Obama policy makers that, “it would be unnecessary, inequitable and counterproductive to allocate the cost of a new transmission superhighway to all load serving entities without regard to their ability to use the facilities or their ability to rely on more economical alternatives to meet environmental goals.”

The LPPC contended, “that certain proposals it has reviewed to allocate the cost of new transmission on an interconnection-wide basis would provide an enormous and unnecessary subsidy to large scale renewable generation located far from load centers, at the expense of other, potentially more economical alternatives. Utilities, state regulators, and regional transmission organizations should determine how to meet the environmental goals established by Congress most effectively by making economic choices among the array of available options, without subsidy of one technology or market segment over others.”

The LPPC letter further claimed that the cost of a massive transmission build-out will be substantial and that cost estimates they had reviewed “appear to be meaningfully understated.” The LPPC estimates that nationwide costs for such a build-out “may range between $135 billion and $325 billion, equating to a monthly per customer cost between $14 and $35.  This is a critical matter for LPPC members, as advocates for the consumers we serve.”

The Large Public Power Council letter concluded by offering its support for additional federal siting authority for multi-state transmission facilities “in order to overcome the limited ability of individual states to address multi-state transmission projects to meet regional needs. LPPC is confident that such new authority can be undertaken in consultation with existing state siting authorities in a manner that capitalizes on existing expertise and ensures that state and local concerns are addressed in the siting process.”

The LPPC’s membership includes 23 of the nation’s largest publicly owned, not-for-profit energy systems. Members are located in 10 states and provide reliable, electricity to some of the largest cities in the U.S. including Los Angeles, Seattle, Omaha, Phoenix, Sacramento, San Antonio, Jacksonville, Orlando and Austin.

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Note: This is an older article from 2007 yet still very current in its coverage of environmental and permitting concerns related to Wave Energy and Tidal Energy projects.

MICHAEL LUFKIN & LAURA FANDINO, Marten Law Group, July 11, 2007

The adoption of renewable energy portfolio standards promises to push forward investment in the development of wave and tidal power. Projects are being developed in New York, Washington, Oregon, California and other states, spurred in part by state laws requiring public and private utilities to obtain a portion of their electricity from renewable resources. As an example, Oregon recently adopted a renewable electricity portfolio standard which requires the state’s largest utilities to meet 25% of their electric load with new renewable energy resources by 2025. Challenges to these projects include the environmental and land use impacts associated with them. Just as wind power has drawn its share of opponents, so too are critics of tidal and wave energy raising concerns about the impacts of large-scale development of these resources.

What is Tidal and Wave Energy?

Two types of marine renewable energy resources have garnered substantial interest: wave energy and tidal energy. There are several methods to capture energy from ocean surface waves. For example, one wave power device slated for use by Finavera Renewables, Ltd. (“Finavera”) in Makah Bay, Washington, involves the use of moored wave energy conversion buoys (the “Aquabuoy”) similar in size to the large navigational aids that demarcate shipping lanes. Aquabuoy converts the kinetic energy of the vertical motion of waves into pressurized water, which is directed into a conversion system consisting of a turbine that drives an electrical generator. The power from the buoys is then transported to shore through the use of an anchored submarine transmission cable installed on or just beneath the sea floor. While the Finavera plans to operate the Makah Bay project 3.7 miles offshore, wave energy devices may be used at the shoreline, nearshore, and offshore.

Another ocean energy resource, tidal energy, captures energy from the rise and fall of tides. Most tidal energy projects rely on offshore turbines, which operate much like an underwater wind farm. The ebb and flow of the tides is used to turn the blades which are connected directly to an electrical generator. Energy produced by the system is transferred to shore through the use of a submarine transmission cable installed on the sea floor. In France, and several other countries, tidal energy production has involved the construction of a dam (or barrage) to block incoming and outgoing tides across a delta, estuaries, or other coastal basin area, where the amplitude of tides are increased. In that case, the ebb and flow of the tides is used to turn turbines, or push air through a pipe which then turns a turbine, that drives an electric generator.

Preliminary Projects

Eight tidal energy projects are currently under development in Washington State that use offshore turbine technology. On March 9, 2007, the Snohomish County Public Utility District (“PUD”) received preliminary permits from the Federal Energy Regulatory Commission (“FERC”) to conduct technical and economic feasibility studies and evaluate tidal energy potential at seven locations in Puget Sound: Spieden Channel, San Juan Channel, Guemes Channel, Agate Pass, Rich Passage, Admiralty Inlet and Deception Pass. FERC has also granted a preliminary permit to Tacoma Power to evaluate the development of tidal power in the Tacoma Narrows. Each of the preliminary permits will enable these entities to study tidal energy at the permitted sites for a period of three years.

In addition to Washington State, FERC has issued preliminary permits for tidal energy projects in Alaska, California, Maine, Oregon, and New York. In New York, the Verdant Power Roosevelt Island Tidal (“RITE”) Project, is on its way to becoming the first tidal energy project to be licensed by FERC. FERC granted a preliminary permit for the RITE project, located in New York’s East River, in September 2002. FERC is licensing the RITE project under the authority granted through the preliminary permit. The project will consist of 200 turbines and will generate up to 10 MW of distributed power.

In addition, Finavera is currently developing a 1 MW demonstration wave power plant at Makah Bay, Washington. The company completed a Preliminary Draft Environmental Assessment in October of 2006 which concluded with a finding of no significant environmental effects from the technology. In Oregon, FERC issued preliminary permits to Ocean Power Technologies (“OPT”) to develop a project off the coast of Reesport, southwest of Eugene, and AquaEnergy Group, Ltd. to develop an offshore wave energy project in Coos Bay.

Environmental Concerns

The primary concerns raised by critics of tidal and wave energy projects are their potential adverse impacts on marine ecosystems, fishery resources, and mammals. Environmental concerns raised by these groups include noise, species’ effects, and the physical disturbance of marine habitat. Environmental noise is said by some to affect the behavioral patterns of marine species i.e., feeding, mating and migration in areas where the habitat of protected marine species overlaps with the project. Habitat disturbance is also raised as a concern, as is displacement of benthic organisms in the footprint of the construction, including endangered or threatened species. Other concerns raised are the potential loss of fishing areas and impacts on shellfish resources.

Operating concerns include: (a) potential injuries to marine wildlife and diving birds arising from direct contact with tidal energy turbines; (b) behavioral impacts to marine species; (c) habitat disturbance, including disturbance of contaminated sediments, and impacts to sensitive spawning and nursery areas; (d) water quality impacts; and (e) hydrodynamic impacts. Hydrodynamic impacts resulting from the extraction of energy and physical presence of tidal project structures can include direct alteration of area siltation patterns, and changes to area ecology by alteration of substrate type.

Additional Barriers to Commercial Development

Permitting Process

Because of the relative infancy of wave and tidal energy development, there remains some uncertainty and confusion over which federal and state agencies have regulatory jurisdiction over marine energy projects. Generally speaking, a project’s location determines which federal agency takes the lead in overseeing the permitting process. Under the Federal Power Act (“FPA”), FERC has the authority to regulate and license all hydroelectric facilities on navigable waters of the United States. FERC has interpreted its authority under the FPA broadly to include essentially all wave and tidal energy projects, including ocean projects. In 2005, Congress muddied the jurisdictional waters by granting lead federal agency status to the Minerals Management Service (“MMS”) for renewable energy projects on the Outer Continental Shelf (“OCS”). Congress stated, however, that in granting MMS lead agency status over projects on the OCS, it was not eliminating the jurisdiction of other federal agencies. Thus for now, it appears that FERC and MMS will share lead agency status for OCS projects, while FERC will have exclusive authority to license projects in rivers and ocean waters out to the OCS.

The FERC Process

Most of the tidal and wave energy projects under consideration in the Pacific Northwest have not formally entered the FERC licensing process. Rather, these projects have received a preliminary permit from FERC which reserves a project location for the permit holder while environmental and feasibility studies are conducted. The preliminary permit is valid for three years. At the end of the three years, the permit holder must file a license application or lose priority for the location. Construction activities are not allowed during the period in which a project is being studied under a permit.

To construct and operate a tidal or wave energy project a developer must either obtain a hydropower operating license from FERC, or be granted an exemption from licensing. The process for obtaining a FERC operating license can often take five to seven years and requires significant analysis and consultation with state, federal, and tribal resource agencies. Operating licenses are normally granted for 30 to 50 year periods.

Because of the burdensome nature of the licensing process, some developers have sought an exemption from FERC licensing requirements. FERC may exempt hydropower projects “which are 5 megawatts or less, that will be built at an existing dam, or projects that utilize a natural water feature for head or an existing project that has a capacity of 5 megawatts or less and proposes to increase capacity.” FERC has shown a willingness to grant short term exemptions that allow for the deployment and testing of new generation technology. Projects determined to be exempt from FERC licensing requirements must still comply with applicable state and federal environmental and resource protection laws.

Transmission

Another issue affecting the commercial viability of wave and tidal power is the ability and cost of bringing the power to the market. Like other types of renewable based generation, wave and tidal power resources are often located a significant distance from load centers and/or existing transmission systems. The construction costs and additional environmental impacts associated with constructing transmission lines to bring wave and tidal power to the grid can be a challenge to the viability of a project.

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