From: James Kotcon <jkotcon@wvu.edu>
To: EC@osenergy.org; James Kotcon <jkotcon@wvu.edu>; wvec-board@yahoogroups.com
Sent: Fri, July 16, 2010 6:03:38 PM
Subject: Re: [EC] Alternative and Renewable Energy Portfolio
I reeeally need to keep up.
It was brought to my attention that the Special Session in November again amended the bill to limit the use of Supercritical Technology to no more than 10 % of the credits needed for compliance (24-2F-5-b). This would significantly limit what utilities can claim from plants like John Amos or Fort Martin.
This means utilities will NOT be bale to meet the standard with Fort Martin and john Amos alone, and that "advanced supercritical" and "ultra-supercritical" plants, along with "pressurized fluidized bed", "carbon capture and sequestration", "coalbed methane", "waste coal", "IGCC", "synthetic fuels", "coal liquefaction or gasification", "pumped storage", "recycled energy" and/or "tire-derived fuel" facilities will be needed to meet the portfolio standard. "Various "energy efficiency technologies" may also be used with fossil fuel facilities to meet the portfolio requirement. And those facilities don't have to be in West Virginia, but could be anywhere in the PJM territory, provided the energy is not used to meet any other state's portfolio standard. Since several of these technologies will only count under West Virginia's law, it is not clear whether the utilities will actually have to do anything.
Of course, the PSC could identify other categories of "advanced coal technologies" that qualify (including presumably redefining Fort Martin or John Amos as "Advanced Supercritical Technology"), and the PSC may simply waive the portfolio requirement if a utility demonstrates that, in spite of their efforts, the renewable fuels were "not available".
My apologies for my error and any confusion it caused, and the incendiary remarks in my messages from last week.
It looks like we really should be paying attention to the PSC rule-making on this issue, and not just on the net-metering rules. The PSC is required (24-2F-12) to promulgate rules to implement the article, but no dates or deadlines for this rule-making is specified.
Each utility will have to file a portfolio standard compliance plan with the PSC by Jan. 1, 2011 indicating how they will meet the standard (24-2F-6). (This could present an opportunity to clearly demonstrate to the Legislature how meaningless the bill has become.) The PSC is required to give public notice and hold hearings on the compliance plan, so we could intervene at that time, however, the utility has the burden of demonstrating that its compliance plan represents the least cost of compliance. That means they could claim that burning coal in their existing plants is cheaper than buying renewables.
Again, please accept my apologies for the error in not catching the amendment in the November Special Session. Unless the Legislature adopts a major revision of this bill, it seems likely that the PSC rule-making is our next best chance to prevent further back-sliding. Looks like we all have to pay more attention.
Jim Kotcon
>>> "James Kotcon" <jkotcon@wvu.edu> 7/9/2010 7:03 PM >>>
It was recently brought to my attention that the PSC finalized some rule changes to the Net Metering rules as mandated by last year's Alternative and Renewable Energy Portfolio bill. While the changes create some concerns for our net-metering program (adding the various fossil fuels sources as eligible for net metering), the program is still limited to small residential generators, and is not that different from certain distributed generation programs in a few other states.
Of greater concern is that the bill mandated PSC rule-making to implement the Alternative and Renewable Energy standards. We had long been concerned that the bill, by including natural gas plants and certain coal plants in the definition of "Alternative", did not provide a real incentive for renewables. Earlier this year, I re-read the bill and saw that it included "SuperCritical" boiler technology as one of the sources eligible for "Alternative" energy credits. Not being an engineer, it has only slowly dawned on me that some of West Virginia's larger power plants have "supercriticial" boilers, but it was not until Byron Harris's e-mail below that I realized how many.
When legislators were voting for this bill, how many of them realized that, under the language of the bill, the John Amos and Fort Martin plants qualify as "Alternative" energy sources? Under this bill, the utilities in 2009 were already meeting the standard required by 2025.
Note: The bill requires that by 2025, utilities hold "credits" equal to 25 % of the electricity sold to retail customers in the state. As originally passed in 2009, the bill only included "ultra-supercritical technology", but due to technical errors, the bill was not signed. I believe that only the Longview plant would have qualified as "ultrasupercritical" as AEP's ultra plants are in other states, and Allegheny does not have any. When it was re-introduced in the Special session of May, 2009, the words "supercritical technology" were added to the definition of "Advanced coal technology", which is what let in Amos, Fort Martin, et al. I have not done the math, but a ball park estimate is that 2/3 of the electricity generated in WV is sold out of state. So 25 % of the 1/3 sold in-state would have to come from these "Alternative" generation facilities. Since no other state will award credits for
supercritical boilers, the only place that AEP or Allegheny would have to use credits from Fort Martin, John Amos, Mountaineer, or Harrison are in WV. Thus they can still sell all their renewable, hydro, or truly "alternative" energy to out-of state customers to meet the portfolio standards in those states, and not have to do a thing for West Virginia's law.
Would it be appropriate to start labeling this bill as "Manchin's fraudulent Renewable Energy bill".
How did the words "Supercritical technology" get added to the bill when it was introduced in the special session?
Did Governor Manchin know he was lying to us when he told us in January that it would be the most aggressive such standard in the nation, or was he also fooled, or was it a deliberate change that only came up between April and May?
JBK
>>> "Harris, Byron" <BHarris@cad.state.wv.us> 7/9/2010 3:33 PM >>>
Jim,
You are correct that West Virginia's largest plants use supercritical boilers. As for the Allegheny companies, Mon Power the 2 units at Ft. Martin (576 Mw each) are subercritical units. Aslo, Mon Power owns a 20% share of the 3 units at Harrison (684 Mw each - MP share = 420Mw). Potomac Edison does not own any generationf. As for AEP, Appalachian Power the 3 units at John Amos and the single unit at Mountaineer are supercritical. Apco owns 100% of Mountaineer and Amos units 1 & 2 (816 Mw each). Apco also owns 1/3 of unit 3 (1300Mw). Wheeling Power doesn't own any generation.
Several power plants in WV are owned by out of state utilities and aren't subject to the statute. For example, Mt. Storm is owned by Dominion Virginia Power and Kammer is owned by Ohio Power.
Click on Case Information, then Search By Activity, in the Case Number dialog box enter 184.25
Byron Harris, Director
Consumer Advocate Division
723 Kanawha Blvd., Room 700
Charleston, WV 253-1
Ph. 304.558.0526
Email bharris@cad.state.wv.us
I was just recently made aware of the PSC's G.O. 184.25 regrading the Alternative and Renewable Energy Portfolio Standards adopted as HB. 104 in 2009 and an contacting you after having reviewed your comment letter of Oct. 1, 2009, as posted on the PSC web page. I am very concerned that the definitions of "Alternative" energy are so broad as to make the Act meaningless. For example, the use of "supercritical technology" for coal-fired boilers is considered as an "alternative" energy source that could be used to meet a utility's required emissions credits.
It is my understanding that several of West Virginia's largest power plants use supercritical boilers, including the John Amos power plant. If that is the case, would not that one plant be sufficient to meet all of the requirements for credits in the state for the foreseeable future? As such, the bill would providfe no incentive for carbon capture and sequestration, recycled energy sources, renewable energy courses, or energy efficiency programs. I question whether the Legislature, in voting to adopt HB 104, really understood or intended that John Amos be considered an "Alternative" energy source, as I believe the intent was to promote adoption of "alternative and renewable" energy sources as those terms are more commonly understood.
Would you be able to confirm whether my understanding of the definition of "supercritical technology" is correct and that plants such as John Amos would be eligible to generate such alternative energy credits? Can you identify which of AEP's and Allegheny's current plants use "advanced coal technology" as defined in HB 104?
Please keep me informed as this proceeding continues.
Thank you.
James Kotcon, Chair
Energy Committee
West Virginia Sierra Club
304-293-8822 (office)
304-594-3322 (home)