Author Archives: Frank Andorka

Wisconsin Utilities Agree To Add 300 MW Of Solar To Portfolios

WisconsinMilwaukee, Wisconsin

By Frank Andorka, Senior Correspondent

Get ready for 300 MW of solar projects coming your way, Badger State.

Two of the state’s utilities – Madison Gas and Electric (MGE) and WEC Energy Group (WEC), through its Wisconsin Public Service (WPS) – will be partners in two projects in the state. The projects will be developed Invenergy and NextEra Energy Resources, according to applications filed with the Public Service Commission of Wisconsin (PSCW) at a cost of approximately $390 million.

If approved by the end of 2018, construction of both projects is expected to begin by spring 2019, with both plants being operational by the end of 2020.

[wds id=”3″]

WPS would own 200 MW and MGE 100 MW of the combined output at two locations. Each plant is 150 MW, In both cases, WPS will 100 MW and MGE will own 50 MW of the output.

The Badger Hollow Solar Farm would be located in southwestern Wisconsin in Iowa County, and the Two Creeks solar project would be located in northeastern Wisconsin, near the Point Beach Nuclear Power Plant.

“This is another step forward as we move toward a more sustainable energy future and deep decarbonization,” said Jeff Keebler, MGE president and CEO. “These projects align with MGE’s short- and long-term carbon reduction goals. If approved, we look forward to the opportunity to grow cost-effective, clean energy to reliably serve our customers into the future.”

“Both of these projects represent opportunities for MGE to partner with proven solar developers with projects ready to begin the regulatory process,” Keebler added. “Renewable energy has decreased in cost and increased in efficiency in recent years. As with our Saratoga wind farm project currently under construction, Badger Hollow and Two Creeks are economic projects that lower long-term costs for our customers while meeting their energy needs for decades to come.”

“Investing in these solar projects is the first step in our overall plan to add solar capacity to our generation portfolio and save WPS customers more than $100 million over the economic lives of the projects, as compared to projected prices in the power market,” said Gale Klappa, CEO of WPS.

UPDATE: Trump Throws Free Market Principles Out Window On Behalf Of Coal, Nuke Plants

This article has been updated to reflect that President Trump has in fact given the order rather than just considering it.

Trump

By Frank Andorka, Senior Correspondent

Well, that’s not very free market of him.

In a move that made George Gilder do a spit take, President Donald J. Trump has ordered the Energy Department to instruct grid operators to purchase electricity from failing coal and nuclear plants in an effort to keep such faltering plants alive and well, according to the Associated Press.

[wds id=”3″]

Earlier today, Bloomberg indicated such a move might be imminent, citing a memo it reviewed that previewed the action the Energy Department has now been ordered to take, using its power under the Federal Power Act – Section 202 powers, to be exact.

At the time, Bloomberg called the move “an unprecedented intervention into U.S. Energy markets,” in the master-of-understatement style for which they are known. The news organization quoted from the memo that argues:

“Federal action is necessary to stop the further premature retirements of fuel-secure generation capacity.”

The phrases “premature retirements” is the key one in the memo, as it has long been policy of this president to try to prop up failing nuclear and coal plants by any means necessary. It was what was behind the study Secretary of Energy Rick Perry ordered shortly after his appointment into the importance of “baseload power” and the completely arbitrary idea that electrical generation facilities must have 90 days of reserve power on site.

The study was expected to find that an increase in coal and nuclear plants were necessary. When it didn’t, Perry ordered the Federal Energy Regulatory Commission to issue a rule that would have provided for bailouts of failing nuclear and coal plants. FERC respectfully declined.

Which is why the ball has landed back in the Department of Energy’s court, and they appear to be on the verge of simply ordering grid operators to buy power from these plants to provide the plant operators with a financial bailout orchestrated by the federal government.

It’s no shock that this action could be coming. After all, it was President Trump who stood in front of West Virginia coal miners and offered them the impossible dream of bringing coal jobs back to the United States, despite the electricity market – including a majority of utilities – voting against such a move with their market-based plans to close the plants instead. To fulfill his campaign promise, the only way to save those jobs is to rig the system in favor of coal plants.

Bloomberg notes the order is only a draft and has not been finally decided yet, but it’s hard to imagine a circumstance under which the president wouldn’t manipulate the market this way to allow him to claim victory in the mythical “war on coal.”

More:

Trump orders ‘immediate steps’ to boost coal, nuclear plants (Associated Press)

Trump Prepares Lifeline for Money-Losing Coal Power Plants (Bloomberg)

PPL Corporation Acquires Safari Energy

PPL Corporation announced that it acquired Safari Energy. a leading provider of solar energy solutions for commercial customers in the United States.

“The Safari Energy acquisition offers PPL an attractive, low-risk opportunity to help advance a cleaner energy future; to support the growth of distributed energy resources, including energy storage; and to gain additional experience with technologies that will play a bigger role in shaping the future energy grid,” said William H. Spence, chairman, president and chief executive officer of PPL Corporation.

“However, even as it provides these benefits, the acquisition will not alter PPL’s core business strategy,” Spence said. “PPL’s primary investment focus and engine for growth remains our high-performing, award-winning regulated utilities.”

[wds id=”3″]

Safari Energy develops highly structured turnkey solutions to its clients, managing projects through all phases of development, from inception to financing, design, engineering, permitting, construction, interconnection and asset management. Headquartered in New York City, Safari Energy has completed more than 200 solar projects in 19 states, with over 80 projects underway.

“I’m very proud of Safari Energy’s track record of using solar power to unlock incremental revenue for our customers,” said Matt Rudey, chief executive officer, Safari Energy. “PPL’s acquisition of Safari will support our continued growth and allow us to expand our offerings to better serve our customers.”

PPL also announced today that it has hired industry veteran Vijay P. Singh to lead PPL’s involvement in the evolving distributed energy resource space and to complement the Safari Energy team. Singh previously served as executive director of Renewable Energy Development and Energy Storage for NextEra Energy Resources.

Terms of the Safari Energy transaction were not disclosed. The company said the purchase price is not material to PPL. While PPL expects the transaction to be earnings and credit accretive immediately, the company does not expect Safari Energy to contribute meaningfully to PPL’s earnings per share through the company’s current forecast period, which extends through 2020.

The Energy Show: John Farrell on Why It Costs More For Utilities to Sell Power

For over a hundred years our civilization has been getting electricity from centralized generation. This utility business model relies on remote power plants fueled originally by coal, oil and gas — and now increasingly by wind and solar.

But the development of inexpensive rooftop solar power over the past 20 years is changing this central generation paradigm. It is now cheaper for homes and businesses to generate their own electricity on their rooftop, and only stay connected to the utility for night time power. These Distributed Generation (DG) solar power systems are connected on the customer’s side of the meter, or referred to as Behind the Meter (BTM) from a utility’s perspective.

Utilities generate their profits by selling power, as well as owning the power plants and utility power lines. When customers generate their own power, utilities lose revenues. Moreover, when customers pay for their own solar generating systems, utilities do not get to own additional generating assets – further reducing their profits. This loss of revenues and profits is disrupting the conventional Investor Owned Utility (IOU) business.

Utilities claim that there are costs being shifted from solar customer to non-solar customers. This cost shift argument is nonsense, since in reality the utilities are trying to regain their lost profits from solar customers by increasing rates for everyone else. Think about it: since utility customers are going elsewhere for the utility’s product (electricity), utilities are raising prices for everyone else. Nice work if you can get it.

The trend towards BTM solar (and now battery storage) is inexorable as these technologies continue to get cheaper. The aptly named Institute for Local Self Reliance (ILSR) focuses on these technology and sociological transitions. Our guest on this week’s Energy Show is John Farrell. John directs the energy program at ILSR and is best known for his research and papers on economics and benefits of local ownership of decentralized renewable energy. John is one of our best thinkers and communicators on this subject, so Listen Up to this week’s Energy Show for his commentary on the superior economics of Behind the Meter solar and storage.