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December 17, 2010

FERC Approves FirstEnergy-Allegheny Merger
In an unsurprising decision given its merger review history, FERC approved the merger of FirstEnergy Corp. and Allegheny Energy without any conditions relating to mitigation of market power. In doing so, FERC rejected protests from the Pennsylvania Office of Consumer Advocate and several other consumer advocates, which cited the applicants' three screen failures in the horizontal market power test (EC10-68). FERC brushed aside these failures as occurring in off-peak periods where the applicants have relatively low market shares involving comparatively small Herfindahl-Hirschman Index increases. "[T]he screen failures that Applicants present do not raise competitive concerns because they do not involve systematic failures in a highly concentrated market," FERC decreed. FERC also dismissed withholding concerns raised by the consumer advocates, and the advocates' arguments that PJM West should be modeled as a distinct market.

PPL Provides Rounded Price to Compare Info
PPL issued a news release stating that the final price to compare for January through May 2011 is "about" 9.3 cents per kilowatt-hour for residential customers and 9.8 cents per kilowatt-hour for small business customers. PPL has not yet posted a revised class-specific Price to Compare chart which lists the prices to three decimal places, Matters is working to get the exact figures.

DPUC Denies Dominion Retail Intervention Regarding Nonbypassable Admin. Adder
The Connecticut DPUC denied Dominion Retail's intervention in United Illuminating's reconciliation proceeding in which UI has asked the DPUC to make the Generation Service Charge administrative adder nonbypassable (12/14). "The Department hereby denies Dominion's request as untimely. Hearings in this proceeding ended on November 30, 2010, and briefs were received on December 3, 2010. Introducing new evidence or argument at this late stage in the proceeding does not promote its orderly conduct." Dominion Retail had said that parties were not provided notice that the scope of the proceeding included re-allocation of the admin. adder costs; the DPUC's ruling is silent on this issue (10-08-01).

Pa. PUC Maintains POR Uncollectibles in PECO Electric, Gas Base Rates
The Pennsylvania PUC adopted settlements in PECO's electric and natural gas rate cases which maintain the status quo regarding Purchase of Receivables uncollectibles, and leaves them in base rates. In the electric case (R-2010-2161575), the PUC denied the exceptions from Trial Staff, which was seeking to unbundle uncollectibles and institute a merchant function charge and uncollectible POR discount component.

Pa. PUC Approves Backcast Energy Scheduling for PECO Supplier Requirements
The Pennsylvania PUC adopted PECO's revised supplier coordination tariff which calls for PECO to use backcast energy scheduling for estimating supplier load requirements, notwithstanding concern from Chairman James Cawlyey that suppliers did not receive proper notice of the tariff change (see 10/21, R-2010-2205078).

West Penn Power Green Tariff to Continue on Interim Basis
The Pennsylvania PUC granted West Penn Power Company d/b/a Allegheny Energy a temporary extension of its Wind Energy Service Rider (a REC block option) pending further review of the continued offering of the tariff (P-00072349).

City of Dallas Appeals PUCT Denial of REP Application
The City of Dallas has filed an appeal of the PUCT's decision denying its Option 2 REP application. Believed to be filed in Travis County district court, the appeal is Cause No. D-1-GV-10-001924 - City of Dallas, Texas vs. Public Utility Commission of Texas.

PUCT Publishes Non-Wind RPS Carve-Out Proposal for Comment
The PUCT voted to publish for comment Staff's revised proposal for publication regarding a non-wind RPS carve-out (see 12/10 for coverage of the proposal).

PUCT Defers Action on DCRF Rule Until After Session
The PUCT deferred acting on a proposal for adoption which would allow utilities to charge REPs a Distribution Cost Recovery Factor, as the Commission will withhold action until after the legislative session since the issue may be addressed by lawmakers (see background on DCRF in our 12/10 story).

TXU Supporting Installation of EV Charges in McKinney
The City of McKinney, Texas, will receive rebates from TXU Energy to install four electric vehicle (EV) charging stations and to convert several city vehicles to electric hybrid vehicles under the TXU Energy EV Accelerator Program.

USPowerGen to Restart Astoria Strategic Review
US Power Generating Company announced that on January 24, 2011 it will resume the next phase of its strategic review process to solicit a sale or merger transaction in connection with its subsidiary, Astoria Generating Company Holdings, L.L.C. USPowerGen expects that final round bids in the Astoria Generating process will be due mid-March 2011.

ERCOT Reports Reserve Margin Forecasts
ERCOT released the latest reserve margin calculations as follows:

16.43 percent in 2011
15.78 percent in 2012
13.14 percent in 2013
14.48 percent in 2014
13.94 percent in 2015
13.57 percent in 2016

ERCOT's target reserve margin is 13.75 percent.

Calif. PUC Mandates Utility Procurements Through Renewable Auction Mechanism
The California Public Utilities Commission adopted a Renewable Auction Mechanism, first reported by Matters, which requires the three large utilities to procure an aggregate of at least 1,000 megawatts (MW) of capacity from eligible renewable projects up to 20 MW in size (R.08-08-009). The mandated procurement is limited to only the utilities at this time.

Calif. PUC Approves PG&E Oakley Agreement
The California Public Utilities Commission approved Pacific Gas and Electric Company's (PG&E) purchase and sale agreement with Contra Costa Generating Station LLC for the Oakley Project, a natural gas-fired combined cycle facility that is expected to produce 586 megawatts of generation. PG&E may not take ownership of the plant under the purchase and sale agreement prior to January 1, 2016; or, alternatively, PG&E may take ownership only on the condition that its shareholders absorb the associated revenue requirements from the date of purchase until January 1, 2016.

Illinois Procures Long-Term Renewables for Default Service
As first reported by Matters in yesterday's live blog, the Illinois Commerce Commission approved 20-year renewable contracts bundling energy and RECs for default service in the following amounts:

Total Annual Quantity (MWH) Average Price ($/MWH)

Ameren 600,000 $50.44

ComEd 1,261,725 $55.18

Winning bidders were:

Bishop Hill Energy II, LLC

Blackstone Wind Farm, LLC (see Note 1)

FPL Energy Illinois Wind, LLC

Grand Ridge Energy IV, LLC (see Note 2)

Invenergy Illinois Solar I, LLC (see Note 2)

Meadow Lake Wind Farm, LLC (see Note 1)

Meadow Lake Wind Farm II, LLC (see Note 1)

Meadow Lake Wind Farm III, LLC (see Note 1)