On January 30, 2014, the California Independent System Operator Corporation (“CAISO”) submitted proposed tariff changes to the Federal Energy Regulatory Commission (“FERC”) in Docket No. ER14-1206-000 to implement policy and process enhancements to the project sponsor competitive selection process that takes place during the third stage of CAISO’s transmission planning process. The proposed tariff changes were developed by CAISO over the past several months as part of its Competitive Transmission Improvements stakeholder initiative, which began in September 2013. The proposed tariff changes address five issues:
Last week, the U.S. Senate approved the nomination of Senator Max Baucus (D-MT) as the next U.S. Ambassador to China by a 96-0 vote. Although Senator Baucus’ departure will certainly have an effect on foreign policy, it has also set off a chain reaction as Senators move into key leadership positions on tax and energy issues.
Senator Baucus’ departure vacates the Chairmanship of the Senate Finance Committee, which has wide jurisdiction over all issues relating to tax, trade, and entitlement programs. In his place, Senator Ron Wyden (D-OR) will take the helm at the Finance Committee, leaving his current post as Chairman of the Committee on Energy and Natural Resources. Senator Mary Landrieu (D-LA) will replace Wyden as Chairman.
After years of negotiations, the United States House and Senate have passed a comprehensive Farm Bill which will be signed into law by President Obama on February 7 at Michigan State University, the alma mater of Senate Agriculture Committee Chair Debbie Stabenow (D-MI). On February 4, the Senate voted 68-32 to approve the five-year authorization bill, formally titled the Agriculture Act of 2014. The House passed the legislation last week.
While the bill predictably includes provisions which impact farm programs and also authorizes nutrition programs, in addition, it includes an Energy Title which provides support to many feedstock growers as well as traditional farmers who improve the energy efficiency of their operations.
The Imperial Irrigation District (IID), the third-largest public power utility in California, recently issued QR 123, the first step in a solicitation for 20 megawatts to 40 megawatts of “battery” storage. The solicitation seeks storage that can accommodate a very broad range of specified operational characteristics, and it may prove challenging for any given storage technology to meet all of those characteristics. The solicitation’s reference to “battery” storage implies that IID is not seeking flywheels or other energy storage technologies.
At this stage, QR 123 is in the nature of a request for vendors to supply their qualifications to “design, engineer, procure and construct a utility-scale energy storage project” that will have the desired operational characteristics. Responses are due February 11, 2014.
Information about QR 123 can be found here.
Last December, Pacific Gas & Electric Company (PG&E) filed its cost of service and rate application for gas transportation and storage. This application was filed in the context of the California Public Utilities Commission (CPUC) being under enormous pressure to increase its safety oversight of utilities, a $14.4 million fine imposed on PG&E for failing to notify regulators about incorrect records on a natural gas pipeline and a looming $2.2 billion fine for the 2010 San Bruno explosion. In this context, it is understandable that PG&E would be very sensitive to safety concerns and would seek to make capital expenditures to improve the safety of its gas transportation system. The catch, of course, is that when a utility spends money, rates go up. For PG&E, this is complicated even further by the risk that a $2.2 billion fine could increase PG&E’s cost of raising money to pay for the capital upgrades it wants to make. When rates go up, large consumers pay attention; and when rates go up a lot, everyone pays attention.
K&L Gates will be a Gold Sponsor at Infocast’s 7th Annual Energy Storage Week in Santa Clara from February 11-13. This event will address the projected rapid rise in energy storage project development over the next 3-5 years. Early movers in this market are poised to capture larger than average advantages. Policy makers and senior executives at the forefront of energy storage deployment will be attending the summit to share up to date information on the policies, procedures and industry best practices into business plans and to gain access to key players and decision makers across the entire supply and utilization chains of storage services to further storage projects. K&L Gates attorneys Bill Holmes, Paul Lacourciere, Dirk Michels, Charlie Schwenck and Andrew Young will be attending Infocast’s Energy Storage Week. We look forward to seeing you there!