- Email: [email protected]
NEES transmission corridor proposal?
T
H
E
Utilities based their early estimates to decommission plants on the costs of dismantling the pioneer Shippingport plant near Pittsburgh in the mid-1980s. That work cost $91 million and led the Nuclear Regulatory Commission in 1988 to set minimum amounts that utilities must accumulate to finance decommissioning. The NRC requires owners of pressurized water reactors rated at over 1,200 MW to set aside $105 million (in 1986 dollars) for decommissioning. For smaller PWRs, the amount is $75 million. For boiling water reactors, the figures are $135 million for the 1,200 MW units and $104 million for the smaller BWRs. Those amounts now appear seriously inadequate and the NRC is reviewing them. n its FERC filing, Connecticut I Yankee said it wanted the immediate 10.7% hike, plus the ability to automatically modify its rate at five-year intervals, without advanced approval from FERC. Because Connecticut Yankee sells its power at wholesale to its ten owners at wholesale, FERC has jurisdiction over the rates. The commission rejected the automatic, five-year rate adjustment. “The commission has held that whenever an electric utility seeks to change its decommissioning charges,” said FERC’s order, “it must file a change in rates pursuant to section 205 of the [Federal Power Act] and part 35 of the commission’s regulations.” The commission set the 10.7% proposed rate hike for hearing, and also said it would institute an Janus y/Februa y 1993
NEWS
IN
F
investigation of Connecticut Yankee’s 12% rate of return on equity, as proposed by the Rhode Island attorney general, ‘because our independent preliminary analysis suggests that this fixed component of connecticut Yankee’sformula rate may indeed be excessive. . . .” Rate hikes for other decommissioning funds will require either FERC review or state review, or, in the case of municipally-owned units, perhaps no review. Already in line for early decommissioning are six units that have
been shut down prematurely: Yankee Rowe, Sacramento Municipal Utility District’s Ranch0 Seco plant, Public Service of Colorado’s Fort St. Vrain, the Long Island Power Authority’s Shoreham plant, Southern California Edison’s San Onofre Unit 1 and, most recently Portland General Electric’s Trojan plant, closed in November with a steam generator tube leak and put on the scrap heap when the utility decided it was too expensive to fix the steam generators. -Kennedy l? Maize
0
c u s Moving Power from Canada Is the Price Right for NU/NEES Transmission corridor Pmposal? s more open transmission access
I coming to New England, as a result of the Northeast Utilities acquisition of Public Service Co. of New Hampshire merger? Or will access be frustrated because its cost is too high and its terms too restrictive? These will be the central questions facing the Federal Energy Regulatory Commission as it reviews NUs compliance filings in the merger case, as well as a related proposal, made jointly with New England Electric System, for service through the New Hampshire corridor. The corridor proposal is vital to many New England utilities as the route for importing additional power from Canada. NU’s PSNH unit has offered other utilities, independent power developers and Canadian interests up to 28 years of access across its transmission lines. From 340 to 440 MW of transmission capacity in the “New Hampshire corridor” was offered in 1990 during hearings on the PSNH acquisition by NU; there were no takers on the first offer. This “second tier” offering was expanded to other potential users. The offer, made in conjunction with NEES, includes the offer of 200 MW of transfer capacity across NEES’ transmission system.
23
T
H
E
NEWS
IN
F
NU vice president for market-
have through 1994,” says Tuohey
ing Frank Sabatino said the offer
He adds, “We also have questions
was made as part of NU’s com-
about the firmness of the service.
mitment “to help ensure a com-
There appear to be provisions tat
petitive wholesale power market
could bump our service to protect
in New England.”
NU’s native load customers.”
But on January 12, FERC admin-
There are also, he says, ques-
0
c
u
s
Markets vs. Planning
Can DSM Really Hamper Competition ? re utility demand-side man-
tions about a capacity reservation
A
delayed a hearing on the New
charge for the NU/NEES pro-
development of competition in
Hampshire corridor proposal un-
posal. “We’d be paying for capac-
the electric industry? University
til the commission issues an initial
ity twice -
of Kansas economist Douglas
order on the NU/PSNH transmis-
and again to reserve for the fu-
sion compliance filing that was re-
ture. We think our current use
quired under the NU takeover of
should be enough to get us status
Management: Ratepayers Be-
the troubled New Hampshire utility
as a placeholder.”
ware!” - published by the Houston-
istrative law judge Jerome Nelson
once for current use,
agement programs hampering
Houston argues the affirmative in a new paper -
“Demand-Side
based Institute for Energy Resear&
“The tariff question is central
“DSM program growth,” Hous-
and it’s up for grabs,” said Alan Roth, FERC counsel for Massachu-
ton argues in the paper, “could
setts municipal utilities.
curtail healthy competitive devel-
“The
commission set up a procedure in
opments in the industry”
the corridor case without saying
competition should lead to the re-
‘boo’ about the compliance case.
laxation of regulation, DSM pro-
But the rates seem very high to us
grams, he says, require “disabling” regulation “in order to
-
high enough so they may im-
While
enforce the cross-subsidization”
pede traffic.”
R
0th said the rate would be
implicit when the program is
$27.33/kW-year through
based on the total resource cost or
the New Hampshire portion of
At the end of the day this focus
the corridor, with NEES getting
on the corridor proposal could be
an added $16.43 for “aftermath
moot if the regional transmission
traffic.” But, he says, “You have
authority (RTA) proposal FERC -
to pay to bring power to the corri-
required to be submitted to the
dor,” as well.
NEPOOL management commit-
David Tuohey a spokesman for
tee as part of its order on the
the Massachusetts Municipal
NU/PSNH merger -
Wholesale Electric Co., which is
terest. The RTA proposal, which
among the municipal intervenors, points out that the NU and NEES
is due in February, could change the rules for corridor service. But
charges do not include the cost of
since NU and NEES are collec-
moving power through Maine,
tively the metaphorical 800-lb. go-
which he says brings the pro-
rilla in New England, no one is
posed NU/NEES cost to about
betting that the RTA proposal will
$601 kW- year.
change much -
“Right now we’re paying about $30 for this service, which we
attracts in-
or, if it does, that
it will be accepted by NEPOOL. -
Robert 0. Mawitz
“social cost” test. Houston is an advocate of applying the nonparticipant or “no losers” test to DSM activities, but notes that “no state today is applying it; if they did, DSM programs would be far more expensive for the users and many would undoubtedly be eliminated.” Many advocates of DSM, Houston charges, believe that “the saving of energy, of itself, is good. From an economic perspective, this is incorrect.” These DSMocrats, Houston says, “are sophisticated enough not to appeal to conservation at any cost. They commonly defer to the language
L
24
The Electricity Joumal
H
E
Utilities based their early estimates to decommission plants on the costs of dismantling the pioneer Shippingport plant near Pittsburgh in the mid-1980s. That work cost $91 million and led the Nuclear Regulatory Commission in 1988 to set minimum amounts that utilities must accumulate to finance decommissioning. The NRC requires owners of pressurized water reactors rated at over 1,200 MW to set aside $105 million (in 1986 dollars) for decommissioning. For smaller PWRs, the amount is $75 million. For boiling water reactors, the figures are $135 million for the 1,200 MW units and $104 million for the smaller BWRs. Those amounts now appear seriously inadequate and the NRC is reviewing them. n its FERC filing, Connecticut I Yankee said it wanted the immediate 10.7% hike, plus the ability to automatically modify its rate at five-year intervals, without advanced approval from FERC. Because Connecticut Yankee sells its power at wholesale to its ten owners at wholesale, FERC has jurisdiction over the rates. The commission rejected the automatic, five-year rate adjustment. “The commission has held that whenever an electric utility seeks to change its decommissioning charges,” said FERC’s order, “it must file a change in rates pursuant to section 205 of the [Federal Power Act] and part 35 of the commission’s regulations.” The commission set the 10.7% proposed rate hike for hearing, and also said it would institute an Janus y/Februa y 1993
NEWS
IN
F
investigation of Connecticut Yankee’s 12% rate of return on equity, as proposed by the Rhode Island attorney general, ‘because our independent preliminary analysis suggests that this fixed component of connecticut Yankee’sformula rate may indeed be excessive. . . .” Rate hikes for other decommissioning funds will require either FERC review or state review, or, in the case of municipally-owned units, perhaps no review. Already in line for early decommissioning are six units that have
been shut down prematurely: Yankee Rowe, Sacramento Municipal Utility District’s Ranch0 Seco plant, Public Service of Colorado’s Fort St. Vrain, the Long Island Power Authority’s Shoreham plant, Southern California Edison’s San Onofre Unit 1 and, most recently Portland General Electric’s Trojan plant, closed in November with a steam generator tube leak and put on the scrap heap when the utility decided it was too expensive to fix the steam generators. -Kennedy l? Maize
0
c u s Moving Power from Canada Is the Price Right for NU/NEES Transmission corridor Pmposal? s more open transmission access
I coming to New England, as a result of the Northeast Utilities acquisition of Public Service Co. of New Hampshire merger? Or will access be frustrated because its cost is too high and its terms too restrictive? These will be the central questions facing the Federal Energy Regulatory Commission as it reviews NUs compliance filings in the merger case, as well as a related proposal, made jointly with New England Electric System, for service through the New Hampshire corridor. The corridor proposal is vital to many New England utilities as the route for importing additional power from Canada. NU’s PSNH unit has offered other utilities, independent power developers and Canadian interests up to 28 years of access across its transmission lines. From 340 to 440 MW of transmission capacity in the “New Hampshire corridor” was offered in 1990 during hearings on the PSNH acquisition by NU; there were no takers on the first offer. This “second tier” offering was expanded to other potential users. The offer, made in conjunction with NEES, includes the offer of 200 MW of transfer capacity across NEES’ transmission system.
23
T
H
E
NEWS
IN
F
NU vice president for market-
have through 1994,” says Tuohey
ing Frank Sabatino said the offer
He adds, “We also have questions
was made as part of NU’s com-
about the firmness of the service.
mitment “to help ensure a com-
There appear to be provisions tat
petitive wholesale power market
could bump our service to protect
in New England.”
NU’s native load customers.”
But on January 12, FERC admin-
There are also, he says, ques-
0
c
u
s
Markets vs. Planning
Can DSM Really Hamper Competition ? re utility demand-side man-
tions about a capacity reservation
A
delayed a hearing on the New
charge for the NU/NEES pro-
development of competition in
Hampshire corridor proposal un-
posal. “We’d be paying for capac-
the electric industry? University
til the commission issues an initial
ity twice -
of Kansas economist Douglas
order on the NU/PSNH transmis-
and again to reserve for the fu-
sion compliance filing that was re-
ture. We think our current use
quired under the NU takeover of
should be enough to get us status
Management: Ratepayers Be-
the troubled New Hampshire utility
as a placeholder.”
ware!” - published by the Houston-
istrative law judge Jerome Nelson
once for current use,
agement programs hampering
Houston argues the affirmative in a new paper -
“Demand-Side
based Institute for Energy Resear&
“The tariff question is central
“DSM program growth,” Hous-
and it’s up for grabs,” said Alan Roth, FERC counsel for Massachu-
ton argues in the paper, “could
setts municipal utilities.
curtail healthy competitive devel-
“The
commission set up a procedure in
opments in the industry”
the corridor case without saying
competition should lead to the re-
‘boo’ about the compliance case.
laxation of regulation, DSM pro-
But the rates seem very high to us
grams, he says, require “disabling” regulation “in order to
-
high enough so they may im-
While
enforce the cross-subsidization”
pede traffic.”
R
0th said the rate would be
implicit when the program is
$27.33/kW-year through
based on the total resource cost or
the New Hampshire portion of
At the end of the day this focus
the corridor, with NEES getting
on the corridor proposal could be
an added $16.43 for “aftermath
moot if the regional transmission
traffic.” But, he says, “You have
authority (RTA) proposal FERC -
to pay to bring power to the corri-
required to be submitted to the
dor,” as well.
NEPOOL management commit-
David Tuohey a spokesman for
tee as part of its order on the
the Massachusetts Municipal
NU/PSNH merger -
Wholesale Electric Co., which is
terest. The RTA proposal, which
among the municipal intervenors, points out that the NU and NEES
is due in February, could change the rules for corridor service. But
charges do not include the cost of
since NU and NEES are collec-
moving power through Maine,
tively the metaphorical 800-lb. go-
which he says brings the pro-
rilla in New England, no one is
posed NU/NEES cost to about
betting that the RTA proposal will
$601 kW- year.
change much -
“Right now we’re paying about $30 for this service, which we
attracts in-
or, if it does, that
it will be accepted by NEPOOL. -
Robert 0. Mawitz
“social cost” test. Houston is an advocate of applying the nonparticipant or “no losers” test to DSM activities, but notes that “no state today is applying it; if they did, DSM programs would be far more expensive for the users and many would undoubtedly be eliminated.” Many advocates of DSM, Houston charges, believe that “the saving of energy, of itself, is good. From an economic perspective, this is incorrect.” These DSMocrats, Houston says, “are sophisticated enough not to appeal to conservation at any cost. They commonly defer to the language
L
24
The Electricity Joumal