Legalectric

But we knew that…

PJM State of the Market Report 3Q 2012

Here’s the part I’m most interested, demand is DOWN, from the intro, summarizing p. 23 of the report linked above:

The PJM system peak load for the first nine months of 2012 was 154,344
MW, which was 3,672 MW, or 2.3 percent, lower than the PJM peak
load for the first nine months of 2011.  The DEOK Transmission Zone
accounted for 5,360 MW in the peak hour of the first nine months of
2012. The peak load in 2012 excluding the DEOK Transmission Zone was
148,984 MW, a decrease of 9,032 MW, or 5.7 percent, from the peak load
for the first nine months 2011. (See page 23)

2.3%, 5.7%, DUH!  Demand is DOWN!  Here’s the specifics:

I love it when that happens…

Got that?  NO hockey sticks in the hotel!

Yesterday, both meetings, in Hermantown and in Grand Rapids, were well attended.  The Hermantown municipal building is new, nothing like that was there last time I was in town, it’s been a while.  Very nice building, wonder if Minnesota Power’s Arrowhead transmission line had anything to do with that?

Here are copies of what I’ve been handing out:

Handout – November GNTL Meetings

Notice Plan Comment Form – click to download editable form

Notice Plan Comments are due November 19, 2012, and Reply Comments due December 10, 2012.  Send to burl.haar@state.mn.us, with “Great Northern Notice Plan Comments – Docket 12-1163” in subject line.

Minnesota Power’s Notice Plan for Great Northern Transmission Line

I’ve been looking for the studies that support this line, made some progress, but not enough, MISO has a page on the Northern Area Study.  Here’s the kind of map I find interesting, one that shows the flows and areas where they want more, from 20120921 Northern Area Study Transmission Design:

Here are the docs listed (hey MISO, don’t bother deleting them, I’ve got them saved…):

Northern Area Study TRG
	NAS_LDE_Congestion_09212012
	NAS_IntcInterfaceFlows_NASUn_CA_09282012
	NAS_IncInterfaceFlows_NASUn_SS_09282012
	NAS_IncInterfaceFlows_EastUn_SS_09282012
	NAS_IncInterfaceFlows_EastUN_CA_09282012
	NAS_HDE_Congestion_09212012
	NAS_BAU_Congestion_09212012
	20121102 Northern Area Study TRG Agenda
	20121102 Northern Area Study Presentation
	20120921 Northern Area Study Transmission Design
	20120921 Northern Area Study Presentation
	20120921 Northern Area Study FULL RESULTS
	20120921 Northern Area Study Economic Factors
	20120921 Northern Area Study Agenda
	20120801 Northern Area Study Scope
	20120711 Northern Area Study Presentation Scope Follow-up
	20120607 Northern Area Study TRG Presentation
	20120607 Northern Area Study TRG Agenda

The Delaware Water Gap is one of the few National Park Service Wild and Scenic Rivers, and it’s in a struggle to stay that way.  I represented Stop the Lines before the New Jersey Board of Public Utilities administrative proceeding, which ended with a permit issued to PSEG.  Boooo-hisssss.

TODAY, a lawsuit was filed by National Parks Conservation Assoc.,  Appalachian Mountain Club, Appalachian Trail Conservancy, Association of New Jersey Environmental Commissions, Delaware Riverkeeper Network, New Jersey Highlands Coalition, New York-New Jersey Trail Conference, Rock the Earth, Sierra Club, Stop the Lines versus Ken Salazar as Secretary of the Interior and head of National Park Service, and Dennis Reidenbach as Northeast Regional Director of National Park Service:

Complaint – National Parks Conservation Assoc., et al. v. Salazar & Reidenbach

GOOD!  Serves them right, after caving to Obama’s transmission fast-tracking!

So what’s the scoop?  PSEG and PPL have targeted the Delaware Water Gap for a crossing of its Susquehanna-Roseland transmission line.  Here’s the NATIONAL PARK SERVICE PAGE for the project.

Here’s the full map:

Which is a small part of the bigger picture, part of line #1 on this Project Mountaineer, the transmission for coal scenario hatched at a top secret FERC meeting in 2005:

The alternatives evaluated by the National Park Service’s Delaware Water Gap in their EIS looks like this (click on map for larger version):

Here’s the link to the National Park Service’s Final EIS.  Inexplicably, National Park Service went from identifying the “no action alternative” as the Environmentally Preferred Alternative,  to a (rolling over) “STICK IT HERE!”  Oh, and a payoff of $30-40 million.  And then there’s “pre-approval” of the project by NPS…

Stay tuned!

Xcel Energy’s 2Q report came out almost two weeks ago (where DOES the time go?!?!), and one part stuck out:

I think the strongest sales that we are seeing are at SPS, based upon the energy related businesses they had down there. We are also seeing on the C&I sides, some pretty good pick up in Wisconsin.  Again, that’s energy-related, but in this case, it’s more sand mining, which has really become quite the business in that part of Wisconsin.

This came from their transcript, on Seeking Alpha, linked above.  So who is looking at the impacts of frac sand mining on energy use, sales and peak demand?

The earnings call and other info is available on Xcel’s Investor site at www.xcelenergy.com.  CLICK HERE FOR THEIR INVESTOR RELATIONS PAGE (may need to agree to their “Safe Harbor Statement” to get here) Xcel’s demand isn’t anything to write home about, this from their 8/2/2012 Xcel Energy Second Quarter 2012 Earnings Report:

And from the SEC:

Xcel’s 10-Q filed with SEC

And in this filing, an amazing tidbit that I’d not noticed before — Firm Transmission Rights are regarded as COMMODITY DERIVATIVES:

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Commodity derivatives — The methods used to measure the fair value of commodity derivative forwards and options utilize forward prices and volatilities, as well as pricing adjustments for specific delivery locations, and are generally assigned a Level 2.  When contractual settlements extend to periods beyond those readily observable on active exchanges or quoted by brokers, the significance of the use of less observable forecasts of long-term forward prices and volatilities on a valuation is evaluated, and may result in Level 3 classification.

Electric commodity derivatives held by NSP-Minnesota include financial transmission rights (FTRs) purchased from Midwest Independent Transmission System Operator, Inc. (MISO).  FTRs purchased from MISO are financial instruments that entitle the holder to one year of monthly revenues or charges based on transmission congestion across a given transmission path.  The value of an FTR is derived from, and designed to offset, the cost of that energy congestion, which is caused by overall transmission load and other transmission constraints.  Congestion is also influenced by the operating schedules of power plants and the consumption of electricity pertinent to a given transmission path.  Unplanned plant outages, scheduled plant maintenance, changes in the relative costs of fuels used in generation, weather and overall changes in demand for electricity can each impact the operating schedules of the power plants on the transmission grid and the value of an FTR.  NSP-Minnesota’s valuation process for FTRs utilizes complex iterative modeling to predict the impacts of forecasted changes in these drivers of transmission system congestion on the historical pricing of FTR purchases.

If forecasted costs of electric transmission congestion increase or decrease for a given FTR path, the value of that particular FTR instrument will likewise increase or decrease.  Given the limited observability of management’s forecasts for several of the inputs to this complex valuation model – including expected plant operating schedules and retail and wholesale demand, fair value measurements for FTRs have been assigned a Level 3.  Monthly FTR settlements are included in the fuel clause adjustment, and therefore changes in the fair value of the yet to be settled portions of FTRs are deferred as a regulatory asset or liability.  Given this regulatory treatment and the limited magnitude of NSP-Minnesota’s FTRs relative to its electric utility operations, the numerous unobservable quantitative inputs to the complex model used for valuation of FTRs are insignificant to the consolidated financial statements of Xcel Energy.

“Financial Transmission Rights” which “entitle the holder to one year of monthly revenues or charges based on transmission congestion across a given transmission path.” SAY WHAT?!?!?!

Now please, correct me if I’m wrong, but wasn’t “derivatives” in a tanking market what got Xcel’s NRG into bankruptcy?

Just in today from PEPCO:

All,

I am writing to provide an update on PHI’s proposed Mid Atlantic Power Pathway (MAPP) project.

Today PJM issued the final results of its 2012 transmission analysis and due to factors such as lower load growth from the sluggish economy, the installation of new gas fired power plants, and the increase in demand response programs, no reliability violations were identified within the transmission planning window. As a result, the PJM Transmission Expansion Advisory Committee (TEAC) issued a recommendation that the MAPP project be canceled.  On August 24, 2012, the PJM Board of Managers will meet to make a final decision on the TEAC’s recommendation.

I would like to express my sincere appreciation for your interest and participation in the MAPP project over the past few years.

Thank you,

Mark Okonowicz
MAPP – Environmental Coordinator
Pepco Holdings, Inc.
P – 302-283-6115
C – 302-463-5438
mark.okonowicz@pepcoholdings.com

This is after their bogus claims, in 2008, of skyrocketing peak demand (utterly unsupported by fact) from a June 25, 2008 MAPP Presentation found on the DNREC site — this “forecast” is so outrageous, and cancellation is SO HILARIOUS in light of Todd Goodman’s objections to my chalenging demand:

So let’s take a step back – what is MAPP?

No, this isn’t about the Mid-Continent Area Power Pool… it’s the Mid-Atlantic Power Pathway (MAPP), and it is DEAD!

The Mid-Atlantic Power Pathway, a transmission line that was part of “Project Mountaineer,” a coal transmission web that was hatched at a 2005 FERC meeting.  MAPP was the NE part of line 4, below (Susquehanna-Roseland is the eastern part of line 1):

Here’s the transcript of that meeting, too scary, but it’s important to read this:

FERC Transcript 5/13/05

They tried and tried and tried, against evidence, to ram all these projects through.  The did manage to get the first one through, the TrAIL (Trans-Allegheny Interstate Line) project, but PATH (Potomac-Appalachian Transmission Highline) is dead, Susquehanna-Roseland is permitted but not yet built…

Slowly but surely, PJM is admitting that transmission is not “needed” by any measure.  With MAPP, first they planned it as above, in the first map, and then they eliminated the part in Delaware from Indian River to Salem/Hope Creek nuclear plants:

Despite this, Delaware’s DNREC issued permits for part of this project in Sussex County, Delaware!  Whatever for?  Why would they do this?  Aren’t they paying attention to things electrical?  DNREC should know this is not needed

Delmarva Power Receives Delaware Subaqueous Lands Permit

Delmarva Power & Light Company (DPL) has received the Subaqueous Lands Permit from the State of Delaware Department of Natural Resources and Environmental Control (DNREC) for the transmission line associated with the MAPP project in Sussex County, Delaware.  This permit grants DPL the ability to place temporary mats in the existing right of way to establish access and work areas over subaqueous lands to support construction activities.

Here is today’s good news — PJM’s latest review, just released, showing NO THERMAL VIOLATIONS — DUH:

August 9, 2012 Reliability Analysis Update

Here are two slides that say it all, the first focused on PATH but including MAPP, and the second, the “MAPP Project Analysis” results:

And the bottom line?  Another DUH, GOODBYE PATH AND GOODBYE MAPP:

Once again, we’re proven right.  How long have we been fighting all these transmission projects, how much time, effort and money showing it’s not needed, even when using INDUSTRY studies, documentation, forecasts.  All their claims of need are fabricated, reverse-engineering to get the result they want, billions of dollars of PRIVATE INTEREST, not PUBLIC interest, projects, built on the backs of landowners, with a FERC guaranteed 12+% rate of return for the owners/builders/developers.

The down side is the ratepayers are probably going to be hit with all these development costs because so many jurisdictions allow recovery for “CWP,” construction work in progress.  So we get screwed, but not as badly as if they had built the projects.

Like CapX 2020, this project was another of those personal projects.  MAPP was originally heading up through Delaware to the Salem/Hope Creek nuclear plants, and the Delaware part would have gone near us in Port Penn, we’re right across the Delaware River from Salem/Hope Creek.  They should know better than to try something like that!