Hallquist and the grid
Christine Hallquist, CEO of Vermont Electric Cooperative, presented the third class in my course: The Grid: What Your Electricity Bill Won't Tell You.
On May 3, 2016 at my class on grid issues, Hallquist described the grid from the perspective of a rural electric cooperative in Vermont. She heads Vermont Electric Cooperative (VEC). This utility was one of the rural Cooperatives of the Rural Electrification movement: it was founded in 1938 to bring electricity to rural Vermont. It is now the largest locally-owned electric distribution utility in Vermont. VEC is dwarfed by Green Mountain Power, a utility with a very Vermont-y name. However, Green Mountain Power is actually a wholly-owned subsidiary of Gaz Metro of Quebec.
In my opinion, Vermont Electric Cooperative is the quintessential Vermont utility. It started in the Rural Electrification movement of the 30s, and and it is a cooperative in which the owners and the consumers are the same people.
Update 2018: The videos still exist, but their URLs have changed. Here's the link to this video.
https://www.youtube.com/watch?v=4zN0D_CAkKE
As CEO of VEC, Hallquist is concerned with the cost shifts involved in net metering, since VEC's service area includes low income areas of Vermont. When your owners are your customers, you pay sincere attention to the economic issues.
Late in the talk, Hallquist also discusses grid stability. Intermittent power tends to be destabilizing: the grid was set up for rotating electric machinery. Rotating machinery has a healthy inertia which helps keep the grid stable. Starting at about 1:20 (1 hour 20 minutes into the talk), Hallquist shows the jagged effects of wind and solar, and the almost un-analyzable harmonics of the intermittents on the grid. Few utilities collect this type of data.
I am very grateful to Christine Hallquist for sharing her information and her wisdom with our class.
It happens first in a village
Agatha Christie's Miss Marple is able to solve crimes because she has carefully analyzed many (supposedly) smaller issues in a small village.
To a large extent, Vermont Electric Cooperative is a "village" for the growth of renewables. The owner/customers are not rich, and they need to keep electricity costs low. While places like Germany can boast of their renewables while simultaneously building lignite-fired plants, VEC is actually adding renewables and dealing directly with the costs and stability issues that renewables present.
For example, the owner/customers have made decisions, very recently, on how to keep wind energy from being curtailed on their grid. They are making decisions, right now, on how much net metering the customers can afford.
VEC is hopeful about advances in energy storage and weather forecasting and so forth. (See Hallquist's last slide on "What are we doing about it.") But right now, there are very real limits for renewables on a small grid, and VEC is reaching those limits.
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Previous sessions
The first session was The Grid: Power and Policy Introduction, and Howard Shaffer on the Physical Grid. The second session was Payments on the Grid: What Every Citizen Should Know. This post is the third session. The fourth session was a field trip to ISO-NE, the grid operator headquarters.
Showing posts with label Hallquist. Show all posts
Showing posts with label Hallquist. Show all posts
Wednesday, May 25, 2016
Sunday, April 17, 2016
The Grid: My Course at Dartmouth OSHER
The Course
I have been quite busy in the past week, getting ready for the launch of my four-week course about the grid, The Grid: What Your Electricity Bill Won't Tell You. The course begins at OSHER at Dartmouth, Tuesday, April 19. Here is the course catalog description.
And here is a slide from my Tuesday April 19 presentation.
The Guest Speakers
I don't know why everything is taking me so much time! I have two great guest speakers, and we are taking a field trip to ISO-NE headquarters the last day of the course. With all this help, it should be easy-peasy for me to get ready for the course. Right? Okay. It's hard.
The guest speakers:
Howard Shaffer was a startup engineer on a major pumped storage project. He will speak on the first day, about the physical grid. Here is Shaffer's post about the difference between supplying power and paying for power. Where's the Magic Switch?
Christine Hallquist, CEO of Vermont Electric Cooperative, will speak on controversies on the grid. Here is Hallquist's recent op-ed at VTDigger: Pricing Renewable Energy Right.
Videotape
The course will be videotaped for CATV8 community TV, and it will also be on-line. I will put links to the videos in some later blog posts. (In other words, I will be videotaped three times, and I haven't got a thing to wear.)
I have been quite busy in the past week, getting ready for the launch of my four-week course about the grid, The Grid: What Your Electricity Bill Won't Tell You. The course begins at OSHER at Dartmouth, Tuesday, April 19. Here is the course catalog description.
And here is a slide from my Tuesday April 19 presentation.
The Guest Speakers
I don't know why everything is taking me so much time! I have two great guest speakers, and we are taking a field trip to ISO-NE headquarters the last day of the course. With all this help, it should be easy-peasy for me to get ready for the course. Right? Okay. It's hard.
The guest speakers:
Howard Shaffer was a startup engineer on a major pumped storage project. He will speak on the first day, about the physical grid. Here is Shaffer's post about the difference between supplying power and paying for power. Where's the Magic Switch?
Christine Hallquist, CEO of Vermont Electric Cooperative, will speak on controversies on the grid. Here is Hallquist's recent op-ed at VTDigger: Pricing Renewable Energy Right.
Videotape
The course will be videotaped for CATV8 community TV, and it will also be on-line. I will put links to the videos in some later blog posts. (In other words, I will be videotaped three times, and I haven't got a thing to wear.)
Thursday, July 9, 2015
Vermont Utilities Buy Nuclear Capacity from New Hampshire: Guest post by Bruce Parker
Utilities buy nuclear capacity from New Hampshire as Vermont dismantles nuke plant
By Bruce Parker / July 8, 2015 / Vermont Watchdog
Utility companies in Vermont are buying nuclear capacity from New Hampshire while Vermont dismantles its former electricity-generating nuclear powerhouse.
“We got a 20-year contract with NextEra, which is not very typical,” David Hallquist, CEO of Vermont Electric Cooperative, said of his company’s move to stock up on low-cost nuclear generation.
“The generators who are going to be around a long time, such as a nuclear plant, are going to sell long-term contracts. And with the volatility of the forward capacity market … we expect upward pressure (on prices) to continue,” he said.
Hallquist said his company filed a petition with the Public Service Board the last week of June to get approval of the long-range contract with NextEra, a Florida-based energy company that operates a nuclear power plant in Seabrook, New Hampshire. The nuclear plant is attracting business as officials in the Green Mountain State work to decommission Vermont Yankee, a nuclear plant that formerly supplied 70 percent of all electricity generated in Vermont.
Vermont Electric Cooperative, the state’s largest locally-owned electric utility, seeks up to 10 megawatts of capacity from the Seabrook nuclear plant. Hallquist says locking in a long-term rate on nuclear capacity makes sense due to nuclear power’s affordability relative to other power sources.
“Capacity in New England used to be fairly inexpensive relative to today — and that was just two years ago that it was relatively inexpensive. The capacity charge was just $3 a megawatt-month back two years ago. Today it’s $10 a megawatt-month,” he said.
To keep the lights on and prevent blackouts, electric utilities purchase both energy and capacity. Energy, measured in megawatt hours, is the electricity currently being consumed. Capacity, in contrast, is stable backup power that utilities use to manage peak loads that draw upon the grid. The amount of capacity utilities need is determined by ISO standards set by 13 independent system operators across the country. Those operators monitor grid use and provide oversight to keep the grid stable.
Since Vermont Yankee closed in 2013 — in part due to hot pressure from Gov. Peter Shumlin and the state’s renewables-minded Legislature — utility companies in the Green Mountain State have scrambled to find reliable sources for their forward-capacity needs. According to Hallquist, wind and solar power are useless as sources of capacity.
“The problem is when you’re doing capacity you’ve got to make sure it’s there when you need it. So solar and wind, because it’s an intermittent resource, you can’t purchase it as a capacity tool. You can only purchase (it for) energy,” he said. “ISO New England has to make sure the generation is available when the load is there, and you can’t necessarily count on solar and wind for capacity, because it’s weather dependent.”
Halquist’s company isn’t the only utility stocking up on next-door nuclear. In January, Green Mountain Power petitioned the Public Service Board for a 16-year, 150-megawatt contract purchase of nuclear from Seabrook.
“What we have filed for is a purchase that is mostly capacity and a little bit energy. We need that to help with our capacity obligations,” Dorothy Schnure, spokesperson for Green Mountain Power, told Vermont Watchdog.
Schnure said the company’s nuclear request underwent Public Service Board hearings in early June and now awaits approval.
“We went out to bid because we needed more capacity to help stabilize prices, and this was the lowest of the bids,” she said.
“Vermont at its peak uses about 1,100 megawatts of electricity. So you have to have enough generation, or capacity, available to satisfy that peak.”
Green Mountain Power uses nuclear generation for energy use as well as capacity, which is why its petition includes both. According to Schnure, the company hoped to reduce the nuclear energy in its portfolio but now intends to increase it.
“Originally, it was set to decrease to 50 (megawatts) and then decrease again to 40 megawatts. (As) part of this recent filing we slow the energy ramp down. Instead of going from 60 to 50 to 40, it goes from 60 to 50 to 55. So, going out into the future, we get a little bit more energy from Seabrook than we originally were getting in the original contract,“ she said.
In 2013, Entergy announced it was closing Vermont Yankee due to financial considerations. The Nuclear Regulatory Commission extended the plant’s operating license 20 years starting in 2011, and in 2012 Entergy won a court battle preventing the Vermont Legislature from shutting down its operations, which lawmakers attempted in 2010.
At the plant’s scheduled closing last December, Shumlin said he “long advocated for the closing of this plant.”
“I believe the ceasing of operations … after nearly 43 years represents a positive step for our state and our energy future. (T)hanks to investments in renewable energy such as solar, Vermont’s energy future is on a different, more sustainable path that is creating jobs, reducing energy costs for Vermonters and slowing climate change,” Shumlin said in a statement.
But Guy Page, communications director for the Vermont Energy Partnership, a coalition that advocates for clean, low-cost electricity solutions, said recent nuclear purchases tell a different story.
“There is a very sad irony to this situation. The source of power that had been demonized by Vermont’s energy leaders is now being embraced because it’s a decent, clean, low-cost solution to their energy problem,” he said.
“While it’s true it’s a good deal and it’s low carbon, Vermont is not getting the jobs. Vermont is not getting the tax revenue. Vermont is not getting the incredible donor benefit of having a large generous employer in their backyard.”
Page said Vermont Yankee, in addition to offering clean low-cost power, provided Winham County with good-paying jobs, money and volunteers for homeless shelters, and public safety emergency responders.
“That free infrastructure that was there because of the generosity of these people, they won’t be getting that from Seabrook.”
Page claims the situation in Vermont compares with Germany, which closed nuclear plants after the Fukushima disaster in Japan, but had to install coal plants to make up for the lost electricity generation.
“We’ve lost Vermont Yankee, and who knows what else we’re going to lose. What they’re saying is let’s double down on natural gas, let’s build more pipelines, let’s build more renewables,” Page said. “No one in power is talking about, gosh, maybe we ought to keep our existing nuke plants around. … It’s so easy to say no and wave a flag and feel good. But what are you going to do in its place?”
Contact Bruce Parker at bparker@watchdog.org
Bruce Parker is a reporter for Watchdog.org. Contact him at bparker@watchdog.org and follow him on Twitter @WatchdogVT
Sign-up for our Vermont Watchdog email list to receive the latest news and in-depth coverage.
COPYRIGHT
© 2015 Franklin Center for Government & Public Integrity
-------
This article originally appeared at Vermont Watchdog Org on July 8, 2015, and is used with permission.
Guy Page of Vermont Energy Partnership is quoted near the end of this post. Page is a frequent guest blogger at this blog. David Hallquist, CEO of Vermont Electric Co-Op, is quoted near the beginning of this post. Mr. Hallquist has published a guest post on this blog.
Meredith Angwin sends her appreciation to Bruce Parker, Guy Page and David Hallquist for their appearance on this blog.
By Bruce Parker / July 8, 2015 / Vermont Watchdog
 |
| DECOMMISSIONED: Vermont Yankee, an electric generating nuclear power plant located in Vernon, Vt., generated 620 megawatts of electricity and provided 71 percent of the state’s electric generation before lawmakers and environmentalists pressured it to cease operations.caption |
“We got a 20-year contract with NextEra, which is not very typical,” David Hallquist, CEO of Vermont Electric Cooperative, said of his company’s move to stock up on low-cost nuclear generation.
“The generators who are going to be around a long time, such as a nuclear plant, are going to sell long-term contracts. And with the volatility of the forward capacity market … we expect upward pressure (on prices) to continue,” he said.
Hallquist said his company filed a petition with the Public Service Board the last week of June to get approval of the long-range contract with NextEra, a Florida-based energy company that operates a nuclear power plant in Seabrook, New Hampshire. The nuclear plant is attracting business as officials in the Green Mountain State work to decommission Vermont Yankee, a nuclear plant that formerly supplied 70 percent of all electricity generated in Vermont.
Vermont Electric Cooperative, the state’s largest locally-owned electric utility, seeks up to 10 megawatts of capacity from the Seabrook nuclear plant. Hallquist says locking in a long-term rate on nuclear capacity makes sense due to nuclear power’s affordability relative to other power sources.
“Capacity in New England used to be fairly inexpensive relative to today — and that was just two years ago that it was relatively inexpensive. The capacity charge was just $3 a megawatt-month back two years ago. Today it’s $10 a megawatt-month,” he said.
To keep the lights on and prevent blackouts, electric utilities purchase both energy and capacity. Energy, measured in megawatt hours, is the electricity currently being consumed. Capacity, in contrast, is stable backup power that utilities use to manage peak loads that draw upon the grid. The amount of capacity utilities need is determined by ISO standards set by 13 independent system operators across the country. Those operators monitor grid use and provide oversight to keep the grid stable.
Since Vermont Yankee closed in 2013 — in part due to hot pressure from Gov. Peter Shumlin and the state’s renewables-minded Legislature — utility companies in the Green Mountain State have scrambled to find reliable sources for their forward-capacity needs. According to Hallquist, wind and solar power are useless as sources of capacity.
“The problem is when you’re doing capacity you’ve got to make sure it’s there when you need it. So solar and wind, because it’s an intermittent resource, you can’t purchase it as a capacity tool. You can only purchase (it for) energy,” he said. “ISO New England has to make sure the generation is available when the load is there, and you can’t necessarily count on solar and wind for capacity, because it’s weather dependent.”
 |
| NEW HAMPSHIRE STRONG: Vermont utility companies are planning to purchase nuclear power capacity from New Hampshire’s Seabrook Station Nuclear Plant due to the plant’s stable generation and highly affordable rates. |
Halquist’s company isn’t the only utility stocking up on next-door nuclear. In January, Green Mountain Power petitioned the Public Service Board for a 16-year, 150-megawatt contract purchase of nuclear from Seabrook.
“What we have filed for is a purchase that is mostly capacity and a little bit energy. We need that to help with our capacity obligations,” Dorothy Schnure, spokesperson for Green Mountain Power, told Vermont Watchdog.
Schnure said the company’s nuclear request underwent Public Service Board hearings in early June and now awaits approval.
“We went out to bid because we needed more capacity to help stabilize prices, and this was the lowest of the bids,” she said.
“Vermont at its peak uses about 1,100 megawatts of electricity. So you have to have enough generation, or capacity, available to satisfy that peak.”
Green Mountain Power uses nuclear generation for energy use as well as capacity, which is why its petition includes both. According to Schnure, the company hoped to reduce the nuclear energy in its portfolio but now intends to increase it.
“Originally, it was set to decrease to 50 (megawatts) and then decrease again to 40 megawatts. (As) part of this recent filing we slow the energy ramp down. Instead of going from 60 to 50 to 40, it goes from 60 to 50 to 55. So, going out into the future, we get a little bit more energy from Seabrook than we originally were getting in the original contract,“ she said.
In 2013, Entergy announced it was closing Vermont Yankee due to financial considerations. The Nuclear Regulatory Commission extended the plant’s operating license 20 years starting in 2011, and in 2012 Entergy won a court battle preventing the Vermont Legislature from shutting down its operations, which lawmakers attempted in 2010.
At the plant’s scheduled closing last December, Shumlin said he “long advocated for the closing of this plant.”
“I believe the ceasing of operations … after nearly 43 years represents a positive step for our state and our energy future. (T)hanks to investments in renewable energy such as solar, Vermont’s energy future is on a different, more sustainable path that is creating jobs, reducing energy costs for Vermonters and slowing climate change,” Shumlin said in a statement.
But Guy Page, communications director for the Vermont Energy Partnership, a coalition that advocates for clean, low-cost electricity solutions, said recent nuclear purchases tell a different story.
“There is a very sad irony to this situation. The source of power that had been demonized by Vermont’s energy leaders is now being embraced because it’s a decent, clean, low-cost solution to their energy problem,” he said.
“While it’s true it’s a good deal and it’s low carbon, Vermont is not getting the jobs. Vermont is not getting the tax revenue. Vermont is not getting the incredible donor benefit of having a large generous employer in their backyard.”
Page said Vermont Yankee, in addition to offering clean low-cost power, provided Winham County with good-paying jobs, money and volunteers for homeless shelters, and public safety emergency responders.
“That free infrastructure that was there because of the generosity of these people, they won’t be getting that from Seabrook.”
Page claims the situation in Vermont compares with Germany, which closed nuclear plants after the Fukushima disaster in Japan, but had to install coal plants to make up for the lost electricity generation.
“We’ve lost Vermont Yankee, and who knows what else we’re going to lose. What they’re saying is let’s double down on natural gas, let’s build more pipelines, let’s build more renewables,” Page said. “No one in power is talking about, gosh, maybe we ought to keep our existing nuke plants around. … It’s so easy to say no and wave a flag and feel good. But what are you going to do in its place?”
Contact Bruce Parker at bparker@watchdog.org
Bruce Parker is a reporter for Watchdog.org. Contact him at bparker@watchdog.org and follow him on Twitter @WatchdogVT
Sign-up for our Vermont Watchdog email list to receive the latest news and in-depth coverage.
COPYRIGHT
© 2015 Franklin Center for Government & Public Integrity
-------
This article originally appeared at Vermont Watchdog Org on July 8, 2015, and is used with permission.
Guy Page of Vermont Energy Partnership is quoted near the end of this post. Page is a frequent guest blogger at this blog. David Hallquist, CEO of Vermont Electric Co-Op, is quoted near the beginning of this post. Mr. Hallquist has published a guest post on this blog.
Meredith Angwin sends her appreciation to Bruce Parker, Guy Page and David Hallquist for their appearance on this blog.
Tuesday, March 26, 2013
Vermont Yankee Financial Analysis: The Write-Down and More
In April of 2012, Entergy wrote down the value of the Vermont Yankee power plant from $517 million to $162 million. Andrew Stein's article at Vermont Digger provides a summary of events and speculation, and many useful links: Entergy document cites drastic fall in value of Vermont Yankee nuclear power plant, raising questions about its viability.
The Stein article is well-written and well-referenced, but I found aspects of it confusing. I decided to put together my own timeline and some comments.
April 2012: Entergy writes down plant value.
Entergy announced a "write-down" of the value of the Vermont Yankee plant in an earnings call on April 26. 2012. For some reason, this was not widely reported. I have files of "important articles" and I can't find an article about this one. I didn't blog about it--I wonder if I noticed it.
However, the Entergy announcement was picked up by some of the business news services. Here's Yahoo Finance, April 26, 2012 Entergy swings to loss on write-down, warm winter.
Personal Comment: When I worked for a major software company at one point, I came in to work one morning and discovered that our earnings call the day before had shown a loss of (I think) $200 million dollars on revenues of (?) $100 million for the quarter. I was terrified. Did I still have a job? Were we on the brink of folding? Massive lay-offs ahead?
The old-timers reassured me that if the company had a moderately bad quarter, it would take every write-off it could take, that same quarter, and things would look terrible. But they weren't terrible. They weren't good, but the company was just setting up so that nothing would get in the way of the next quarter, which would look like a spectacular rebound.
By the way, I am NOT an investment advisor of any kind. I know some things about energy, but only a little about corporate decision making such as write-downs.
November 2012: Entergy Files with the Security Exchange Commission
In November 2012, Entergy filed a letter with the Securities and Exchange Commission, which referenced the VY write-down. Stein at VTDigger links to this letter, and here's the link (caution--it's a long document, and may be slow to load). Most of the summary material that concerns Vermont Yankee is on page 12 and following: Entergy Wholesale Commodities (mostly the nuclear plants). Page 14 shows the Asset Impairment figure (write-down of Vermont Yankee value). Page 16 shows that the net revenue for the nuclear fleet decreased from $1,541 million to $1,391 million (2011 to 2012) or about 10%. Page 17 shows revenue per MW decrease from $55.20 to $49.84 in the same time period. (Remember, however, that 2012 was the nadir for natural gas prices, which have since doubled, bringing electricity prices up with them.)
Personal Comment: In looking through the rest of this report, I cannot see any reason to believe that the nuclear plants were operating at a loss in 2012, though they certainly were not making big a profit as they made in 2011 (or that they will make with rising gas prices in 2013). Entergy's forward-looking guidance for the nuclear plants is on page 28 and looks profitable, to me at least. However, I am not a financial analyst, and I welcome reader input on this issue.
January 2013: UBS Analyzes Entergy and Says that Vermont Yankee is vulnerable to closure
Personal Comment: This UBS report does not mention the asset write-down of VY. It also seems to claim that the rise in natural gas prices are a glitch, easily remedied by ISO-NE action. In my opinion, it is not easy to get a pipeline built in the Northeast. I think the analyst doesn't live around here!
I expect natural gas prices to rise overall, and especially here. Supporting this, I recommend the Seeking Alpha analysis linked above. I also recommend Vermont Electric Cooperative CEO's Hallquist's guest post on my blog about natural gas, wind and the grid. I recommend Matt Wald of the New York Times article about gas prices: In New England, A Natural Gas Trap. I am not a financial analyst, but even to me, this UBS analysis seems very incomplete. The overall rise of natural gas prices is not just a "perceived supply constraint."
Note: Yes, I know am not up to March 2013 yet in this analysis. But this post is long enough. I will do another one soon--January to March.
Postscript: I have a post up today at ANS Nuclear Cafe about Framing the Discourse. It describes nuclear opponents "framing" and word-choice, and calls for short frames written by nuclear advocates. I will write a post about this on my own blog in a few days, but right now, I hope people will submit a lively comment stream of frames at the ANS blog. Stop by the ANS Nuclear Cafe post and add your two cents (actually, add your five words).
Thursday, March 7, 2013
Guest Post: Hallquist on Wind and the Grid
David Hallquist is the Chief Executive Officer of the Vermont Electric Cooperative (VEC). Like most co-operatives, VEC is owned by its rate-payers.
Once upon a time, VEC was the third-largest utility in Vermont.
But then the two largest utilities, Green Mountain Power and Central Vermont Public Service, merged. The new utility (Green Mountain Power) is a wholly-owned subsidiary of Gaz Metro of Quebec. So now VEC is the second-largest utility in Vermont.
This afternoon, David Hallquist sent me an email including some VEC talking points. I asked if I could use them as a guest post on my blog. He graciously agreed.
But first, a few words about VEC. VEC takes its responsibilities quite seriously, including:
This afternoon, Hallquist sent me two documents that were very interesting. One I already had: Matt Wald of the New York Times on the soaring prices of natural gas In New England: A Natural Gas Trap. Hallquist also sent me the talking points below, which expand on the Wald article and look further toward the future.
These talking points are the way VEC sees the grid situation, right now.
--------------------------
Concerns about the Effect of Natural Gas prices on Electric Rates
Vermont Electric Cooperative’s power supply portfolio is designed to provide stability and predictability of short and long-term power supply costs. VEC keeps a small portion of the portfolio open so that some power can be purchased on the open market. Recent unexpected and prolonged high price levels in the wholesale energy markets has caused concern that underlying issues may cause future market volatility that could ultimately have a negative impact on consumer electric rates.
Wholesale electricity prices skyrocketed in mid-January through the end of February:
This made sense in late-January as the Northeast was experiencing its worst cold snap since 2009. What did not make sense is that the prices did not come back down when the weather moderated. The prices finally came back down on February 24.
Natural gas prices drive wholesale electricity prices:
Natural gas prices have been high due to an increase in demand, at a time when New England’s supply is constrained:
Natural gas and wholesale electricity prices have returned to normal levels, but future volatility is expected:
Further exacerbating the problem are the ISO operating procedures that are curtailing the production of lower cost, intermittent renewable energy generators:
For more information, please contact:
Dave Hallquist, CEO
dhallquist@vermontelectric.coop
1.802.730.1138
or
Randy Pratt, Manager of Programs and Policy
rpratt@vermontelectric.coop
1.802.730.1108
Once upon a time, VEC was the third-largest utility in Vermont.
But then the two largest utilities, Green Mountain Power and Central Vermont Public Service, merged. The new utility (Green Mountain Power) is a wholly-owned subsidiary of Gaz Metro of Quebec. So now VEC is the second-largest utility in Vermont.This afternoon, David Hallquist sent me an email including some VEC talking points. I asked if I could use them as a guest post on my blog. He graciously agreed.
But first, a few words about VEC. VEC takes its responsibilities quite seriously, including:
- The requirement to use intermittent renewable power
- The requirement to provide reliable, reasonably-priced power to its owner/ratepayers.
This afternoon, Hallquist sent me two documents that were very interesting. One I already had: Matt Wald of the New York Times on the soaring prices of natural gas In New England: A Natural Gas Trap. Hallquist also sent me the talking points below, which expand on the Wald article and look further toward the future.
These talking points are the way VEC sees the grid situation, right now.
Concerns about the Effect of Natural Gas prices on Electric Rates
Vermont Electric Cooperative’s power supply portfolio is designed to provide stability and predictability of short and long-term power supply costs. VEC keeps a small portion of the portfolio open so that some power can be purchased on the open market. Recent unexpected and prolonged high price levels in the wholesale energy markets has caused concern that underlying issues may cause future market volatility that could ultimately have a negative impact on consumer electric rates.
Wholesale electricity prices skyrocketed in mid-January through the end of February: - Prices are normally around $36/megawatt-hour ,
- Prices spiked at about $1000/megawatt-hour, and
- Prices hovered much of the time around $200/megawatt-hour.
This made sense in late-January as the Northeast was experiencing its worst cold snap since 2009. What did not make sense is that the prices did not come back down when the weather moderated. The prices finally came back down on February 24.
Natural gas prices drive wholesale electricity prices:
- Natural gas prices in New England in mid-February were five times the prices in early January.
Natural gas prices have been high due to an increase in demand, at a time when New England’s supply is constrained:
- New England has become more dependent on natural gas for its energy supply in the transportation, heating and electricity generation sectors.
- Winter Storm Nemo caused a key nuclear generator, along with other smaller electricity generators, to go off- line, causing an even greater demand for natural gas.
- Transmission infrastructure to New England spans a very long supply line starting in the Gulf of Mexico and is not adequate for current regional demand.
- By contrast, in neighboring New York where transmission is less constrained, natural gas prices remained low in early 2013.
Natural gas and wholesale electricity prices have returned to normal levels, but future volatility is expected:
- While the problem has gone away for the short term, this issue needs to be addressed as we continue to move to more and more natural gas as an energy source.
- New England has traditionally seen some volatile price spikes, but this last event shows we are in a critical situation.
- According to ISO-NE, “the fuel supply uncertainty is escalating rapidly and is unsustainable.”
Further exacerbating the problem are the ISO operating procedures that are curtailing the production of lower cost, intermittent renewable energy generators:
- Several times during these past few weeks, the Kingdom Community Wind project was capable of full production, yet the ISO-NE was only allowing 1/6 of the output.
- At one point, ISO-NE shut down Kingdom Community Wind to allow the oil peaking unit in Swanton to be run.
- Wind curtailment is an issue across the country, and needs a national focus on ISO rules about how intermittent resources (wind and solar) are handled.
For more information, please contact:
Dave Hallquist, CEO
dhallquist@vermontelectric.coop
1.802.730.1138
or
Randy Pratt, Manager of Programs and Policy
rpratt@vermontelectric.coop
1.802.730.1108
Wednesday, January 2, 2013
A Wind Moratorium Press Conference Tomorrow in Montpelier
Never a dull moment here in Vermont. Tomorrow in Montpelier: a press conference on a proposed moratorium for industrial wind.
Wind, the Press Conference
Two Vermont Senators are co-sponsoring a bill calling for a moratorium on Industrial Wind in Vermont. There may be other co-sponsors also. Senator Joe Benning (R-Caledonia) and Robert Hartwell (D-Bennington) will introduce the bill at a press conference tomorrow, Thursday, at 2 p.m. in the Cedar Creek Room at the State House in Montpelier.
If you look at the Senate District map of Vermont, you will see that the Caledonia district is in the northern part of Vermont, on the eastern side of the state, while the Bennington district is in the southern part of the Vermont, on the western side of the state.
In other words, this is more than a bi-partisan press conference. It's practically an all-Vermont press conference. According to a Times Argus article. Vermont Senate President Campbell says there may be 18 votes for the moratorium, which would be a majority in the 30-person Vermont Senate. However, the Vermont House is less likely to pass a moratorium. Governor Shumlin's administration is solidly against it.
If you want to learn more about wind in Vermont, it would be fun to attend the press conference. Here's the official press release about the conference.
Wind, the Reactions
David Hallquist, CEO of Vermont Electric Cooperative (VEC), is not happy with ever-expanding renewable mandates. He was quoted by WCAX: VEC CEO Dave Hallquist says the utility is concerned about finding balance between rising electric rates and the adoption of a greener power portfolio.
"I don't think we've really thought this out entirely. We're kind of looking at this through different perspectives. Our perspective as the boots on the ground utility that has to carry it out says we don't know how it can work even from a physics standpoint," Hallquist said.
The VEC Board of Directors has sent a request to the Vermont legislature, requesting that the legislature not continually increase the requirements for renewables. Vermont Digger's Anne Galloway wrote Vermont Electric Co-op directors ask law-makers to put a hold on new renewable energy mandates. Her article includes the text of the Board of Directors request to the Legislature. The director's request for no-new-mandates is not the same as the new-wind-moratorium that the senators propose. But the director's request is surely in the same direction. The last paragraph of their request states:
The VEC Board of Directors recommends that the Vermont Legislature impose a moratorium for a period of two years effective on January 1, 2013, on further renewable power supply mandates or sooner if the grid instability, human health impacts, and cost issues have been addressed and a transition plan is in place that considers the cost and reliability impacts of moving to higher levels of renewable resources.
A quote from CEO Hallquist in the same article: “We observed the wind issue splitting our community....We asked ourselves, why are we doing this when it represents only 4 percent of our carbon footprint?”
Specific Wind: Facts and Quotes
The Georgia Mountain Wind Turbines were connected to the grid by December 31, enabling them to receive a 30% federal tax rebate on the project.
In Windham County, home of Vermont Yankee, the Town of Windham has been fighting against wind development. Residents were hopeful when the Vermont Department of Public Service backed the Town of Windham's fight. However, the Public Service Board (PSB) has overruled the local citizens, at least for now. In an article in the Bennington Banner: (Windham) Selectboard Chairwoman Mary Boyer also said the permitting process has been a valuable experience.
"Although we were hoping that the PSB would support our right to determine our own land use as the governor has suggested, that is not to be at this time," Boyer said in a statement sent to the Reformer.
In contrast, Tony Klein of the Vermont legislature is all in favor of wind energy. In WCAX's article on the wind moratorium, Klein, chair of the House Natural Resources and Energy committee, was quoted as follows: "I think it's (a wind moratorium) about the most anti-business statement the Legislature could make," said Rep. Tony Klein, D-East Montpelier.
The Press Conference
Stop in at the Cedar Creek Room tomorrow afternoon, if you can make it, and attend the press conference. It should be an interesting afternoon.
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| Cedar Creek Room at State House Oil Painting of Battle of Cedar Creek |
Two Vermont Senators are co-sponsoring a bill calling for a moratorium on Industrial Wind in Vermont. There may be other co-sponsors also. Senator Joe Benning (R-Caledonia) and Robert Hartwell (D-Bennington) will introduce the bill at a press conference tomorrow, Thursday, at 2 p.m. in the Cedar Creek Room at the State House in Montpelier.
If you look at the Senate District map of Vermont, you will see that the Caledonia district is in the northern part of Vermont, on the eastern side of the state, while the Bennington district is in the southern part of the Vermont, on the western side of the state.
In other words, this is more than a bi-partisan press conference. It's practically an all-Vermont press conference. According to a Times Argus article. Vermont Senate President Campbell says there may be 18 votes for the moratorium, which would be a majority in the 30-person Vermont Senate. However, the Vermont House is less likely to pass a moratorium. Governor Shumlin's administration is solidly against it.
If you want to learn more about wind in Vermont, it would be fun to attend the press conference. Here's the official press release about the conference.
Wind, the Reactions
"I don't think we've really thought this out entirely. We're kind of looking at this through different perspectives. Our perspective as the boots on the ground utility that has to carry it out says we don't know how it can work even from a physics standpoint," Hallquist said.
The VEC Board of Directors has sent a request to the Vermont legislature, requesting that the legislature not continually increase the requirements for renewables. Vermont Digger's Anne Galloway wrote Vermont Electric Co-op directors ask law-makers to put a hold on new renewable energy mandates. Her article includes the text of the Board of Directors request to the Legislature. The director's request for no-new-mandates is not the same as the new-wind-moratorium that the senators propose. But the director's request is surely in the same direction. The last paragraph of their request states:
The VEC Board of Directors recommends that the Vermont Legislature impose a moratorium for a period of two years effective on January 1, 2013, on further renewable power supply mandates or sooner if the grid instability, human health impacts, and cost issues have been addressed and a transition plan is in place that considers the cost and reliability impacts of moving to higher levels of renewable resources.
A quote from CEO Hallquist in the same article: “We observed the wind issue splitting our community....We asked ourselves, why are we doing this when it represents only 4 percent of our carbon footprint?”
Specific Wind: Facts and Quotes
The Georgia Mountain Wind Turbines were connected to the grid by December 31, enabling them to receive a 30% federal tax rebate on the project.
In Windham County, home of Vermont Yankee, the Town of Windham has been fighting against wind development. Residents were hopeful when the Vermont Department of Public Service backed the Town of Windham's fight. However, the Public Service Board (PSB) has overruled the local citizens, at least for now. In an article in the Bennington Banner: (Windham) Selectboard Chairwoman Mary Boyer also said the permitting process has been a valuable experience.
"Although we were hoping that the PSB would support our right to determine our own land use as the governor has suggested, that is not to be at this time," Boyer said in a statement sent to the Reformer.
 |
| Rep Tony Klein |
The Press Conference
Stop in at the Cedar Creek Room tomorrow afternoon, if you can make it, and attend the press conference. It should be an interesting afternoon.
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