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FERC wins a big one
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ment would be too inflexible to permit Consumers to adapt to the changing power supply market. In the course of the proceeding, Consumers invoked the federal preemption doctrine, citing Mississippi Power & Light and the Nantahala case as a likely bar to the Michigan Commission's denying the wholesale contract approval sought, but Judge Mehl was unpersuaded. Mehl found that the Pike County doctrine - - which while recognizing the binding nature of a Federal Energy Regulatory Commission rate order, retains state regulatory jurisdiction to determine when power purchases by a utility are prudent and disallow those determined to be imprudent - - applied here. The Consumers/PGC request was opposed by residential ratepayers, an industrial consumers group, PSC staff and the Attorney General. onsumers has filed exceptions to ALJ Mehl's decision. Consumers spokesman Kelly Farr observes that the ALJ's action is a "proposal for decision" and not a final order. Also, he says, the PGC is novel in character and contains important policy matters that the commissioners alone must address. Perhaps significantly, Consumers has also asked that replies to its exceptions be delayed until April 15, to permit Consumers and PGC to explore the possibility of modifying the arrangement to meet concerns that arose in the state and FERC proceedings.
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FERC Wins a Big One In a January ruling that brought an unaccustomed court victory to the Federal Energy Regulatory Commission, the U.S. Court of Appeals (D.C. Circuit) upheld FERC's licensing of 16 hydroelectric projects in the Upper Ohio River Basin, against the challenges of a welter of state and federal environmental agencies and environmental groups. Until the January 10 ruling in U.S. Department of the Interior v.
i ,y/;
FERC, the federal hydro licensing agency had grown accustomed to being overturned, rebuked, lectured - - all but spanked - - by the courts for its carelessness in making a record and explaining the basis for its decisions. N o w FERC thinks it has found a way to avoid being embarrassed before the courts and to rationalize its own decision processes. The Upper Ohio River Basin case involved a threshold test of the interaction of the relicensing law, the Electric Consumers Protection Act (ECPA), with the Federal Power Act and other applica-
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ble laws, such as the Fish and Wildlife Coordination Act. Interior and the state agencies said FERC had acted without substantial evidence and violated licensing provisions of the Power Act by failing to perform studies they had requested under the Act's section 10(j) dispute resolution process. ut the appeals court panel was unanimous in finding that FERC had acted on the basis of substantial evidence in resolving a variety of environmental issues. "[W]e hold that FERC's actions in the face of uncertainty, including license conditions requiring continued study and evaluation, were lawful and reasonable," said the court. The court refused to interpret ECPA as the environmental appellants asked. "Even where the fish and wildlife agencies make formal ... recommendations, those agencies have no veto power," it said. Don Clarke, a Washington, D.C. attorney representing hydro developer intervenors, said the case was widely watched nationally. "I think environmental groups assumed they'd have more control over the FERC process under ECPA," Clarke said. "But FERC made a careful, voluminous record and the court found that was sufficient." Clarke said the essence of FERC's victory was "control in determining the adequacy of a record in its licensing process." "We didn't skirt the issues," says FERC attorney Tom Russo.
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The Electricity Journal
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"We drew on all the available evidence. [Procedurallyl, we're going to keep on doing what we did here."
IRP Notebook
Washington CARES A group of Washington public utility districts have joined together to form the Conservation and Renewable Energy System (CARES), a joint action agency of the state of Washington. CARES was formed to cure one of the market problems often attributed to demand-side and renewable resources: their small scale and high administrative, financing and related overhead costs. teve Johnson, director of the Washington Public Utility Districts' Association, says the new joint action agency will be able to issue municipal bonds. The bonds could enjoy a high credit rating, as their repayment stream will likely be backed by the Bonneville Power Administration through its purchases of resources which CARES and its members develop. "CARES would 'package' the resources, wherever developed, for sale to Bonneville," Johnson said. "The lawyers' work is done," added Johnson. "Now we're complying with the statutory requirements for agency set-up and discussing possible supply contracts." Johnson said CARES might very well do much of its
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work through energy service companies. "Bonneville has been very supportive," says Johnson. "[BPA Administrator] Randy Hardy has talked up the approach in his recent speeches." BPA is helping its customers and other Northwest utilities acquire some 1200 megawatts in conservation resources over the next eight years, under the regional integrated resource plan developed by the Northwest Power Planning Council, an interstate planning agency.
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March 1992
Compact Fluorescents Light Maine Central Maine Power has pronounced its three-month compact fluorescent coupon program "an outstanding success." Named "Operation Lightswitch," the program promoted the sale of over 165,000 compact fluorescent lightbulbs in Central Maine's territory, through mailing of two $9 discount coupons to each of the utility's 450,000 residential customers.
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Central Maine says the historic high costs of the high-efficiency bulbs, which last up to 13 times longer and use 75% less energy than comparably bright incandescent bulbs, were already reduced to the $13-$14 range in local stores by its programs. By using the CMP $9 coupon, the customers' price was brought down to the $4$5 range - - low enough to produce a payback from savings in less than six months. MP estimates the program will save eight megawatts of generating capacity. Over the life of the bulbs, it estimates total energy savings of 88 million kWh. CMP senior vice president Richard A. Crabtree said that with its 1989 and 1991 programs, CMP had now placed over 250,000 compact fluorescent lightbulbs in customer homes, "far more than any utility of our size in the U.S."
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IRP for Holding Companies: Alive, Alive, 0! When it was clear the slimmed down Senate energy bill, S. 2166, had picked up a sufficiently strong wind to sail quickly to the Senate floor and beyond, supporters of a proposal to permit regional integrated resource planning for multistate holding companies reluctantly agreed to get out of the way in return for Sen. Bennett Johnston's (D-La.) support for their proposal at another time.
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ment would be too inflexible to permit Consumers to adapt to the changing power supply market. In the course of the proceeding, Consumers invoked the federal preemption doctrine, citing Mississippi Power & Light and the Nantahala case as a likely bar to the Michigan Commission's denying the wholesale contract approval sought, but Judge Mehl was unpersuaded. Mehl found that the Pike County doctrine - - which while recognizing the binding nature of a Federal Energy Regulatory Commission rate order, retains state regulatory jurisdiction to determine when power purchases by a utility are prudent and disallow those determined to be imprudent - - applied here. The Consumers/PGC request was opposed by residential ratepayers, an industrial consumers group, PSC staff and the Attorney General. onsumers has filed exceptions to ALJ Mehl's decision. Consumers spokesman Kelly Farr observes that the ALJ's action is a "proposal for decision" and not a final order. Also, he says, the PGC is novel in character and contains important policy matters that the commissioners alone must address. Perhaps significantly, Consumers has also asked that replies to its exceptions be delayed until April 15, to permit Consumers and PGC to explore the possibility of modifying the arrangement to meet concerns that arose in the state and FERC proceedings.
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FERC Wins a Big One In a January ruling that brought an unaccustomed court victory to the Federal Energy Regulatory Commission, the U.S. Court of Appeals (D.C. Circuit) upheld FERC's licensing of 16 hydroelectric projects in the Upper Ohio River Basin, against the challenges of a welter of state and federal environmental agencies and environmental groups. Until the January 10 ruling in U.S. Department of the Interior v.
i ,y/;
FERC, the federal hydro licensing agency had grown accustomed to being overturned, rebuked, lectured - - all but spanked - - by the courts for its carelessness in making a record and explaining the basis for its decisions. N o w FERC thinks it has found a way to avoid being embarrassed before the courts and to rationalize its own decision processes. The Upper Ohio River Basin case involved a threshold test of the interaction of the relicensing law, the Electric Consumers Protection Act (ECPA), with the Federal Power Act and other applica-
O
C
U
S
ble laws, such as the Fish and Wildlife Coordination Act. Interior and the state agencies said FERC had acted without substantial evidence and violated licensing provisions of the Power Act by failing to perform studies they had requested under the Act's section 10(j) dispute resolution process. ut the appeals court panel was unanimous in finding that FERC had acted on the basis of substantial evidence in resolving a variety of environmental issues. "[W]e hold that FERC's actions in the face of uncertainty, including license conditions requiring continued study and evaluation, were lawful and reasonable," said the court. The court refused to interpret ECPA as the environmental appellants asked. "Even where the fish and wildlife agencies make formal ... recommendations, those agencies have no veto power," it said. Don Clarke, a Washington, D.C. attorney representing hydro developer intervenors, said the case was widely watched nationally. "I think environmental groups assumed they'd have more control over the FERC process under ECPA," Clarke said. "But FERC made a careful, voluminous record and the court found that was sufficient." Clarke said the essence of FERC's victory was "control in determining the adequacy of a record in its licensing process." "We didn't skirt the issues," says FERC attorney Tom Russo.
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The Electricity Journal
T
H
E
"We drew on all the available evidence. [Procedurallyl, we're going to keep on doing what we did here."
IRP Notebook
Washington CARES A group of Washington public utility districts have joined together to form the Conservation and Renewable Energy System (CARES), a joint action agency of the state of Washington. CARES was formed to cure one of the market problems often attributed to demand-side and renewable resources: their small scale and high administrative, financing and related overhead costs. teve Johnson, director of the Washington Public Utility Districts' Association, says the new joint action agency will be able to issue municipal bonds. The bonds could enjoy a high credit rating, as their repayment stream will likely be backed by the Bonneville Power Administration through its purchases of resources which CARES and its members develop. "CARES would 'package' the resources, wherever developed, for sale to Bonneville," Johnson said. "The lawyers' work is done," added Johnson. "Now we're complying with the statutory requirements for agency set-up and discussing possible supply contracts." Johnson said CARES might very well do much of its
N
E
W
S
I
N
F
work through energy service companies. "Bonneville has been very supportive," says Johnson. "[BPA Administrator] Randy Hardy has talked up the approach in his recent speeches." BPA is helping its customers and other Northwest utilities acquire some 1200 megawatts in conservation resources over the next eight years, under the regional integrated resource plan developed by the Northwest Power Planning Council, an interstate planning agency.
S
March 1992
Compact Fluorescents Light Maine Central Maine Power has pronounced its three-month compact fluorescent coupon program "an outstanding success." Named "Operation Lightswitch," the program promoted the sale of over 165,000 compact fluorescent lightbulbs in Central Maine's territory, through mailing of two $9 discount coupons to each of the utility's 450,000 residential customers.
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Central Maine says the historic high costs of the high-efficiency bulbs, which last up to 13 times longer and use 75% less energy than comparably bright incandescent bulbs, were already reduced to the $13-$14 range in local stores by its programs. By using the CMP $9 coupon, the customers' price was brought down to the $4$5 range - - low enough to produce a payback from savings in less than six months. MP estimates the program will save eight megawatts of generating capacity. Over the life of the bulbs, it estimates total energy savings of 88 million kWh. CMP senior vice president Richard A. Crabtree said that with its 1989 and 1991 programs, CMP had now placed over 250,000 compact fluorescent lightbulbs in customer homes, "far more than any utility of our size in the U.S."
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IRP for Holding Companies: Alive, Alive, 0! When it was clear the slimmed down Senate energy bill, S. 2166, had picked up a sufficiently strong wind to sail quickly to the Senate floor and beyond, supporters of a proposal to permit regional integrated resource planning for multistate holding companies reluctantly agreed to get out of the way in return for Sen. Bennett Johnston's (D-La.) support for their proposal at another time.
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