October 2014

Monthly Archive

Enron Redux in New England

Posted by on 14 Oct 2014 | Tagged as: Brayton Point coal plant, Cheryl Lafleur, Energy Capital Partners, Enron, Federal Energy Regulatory Commission, GDF-Suez FirstLight, Greenfield Recorder, Mt. Tom Coal Plant, Northfield Mountain Pumped Storage Project, Public Citizen, Rutland Herald, Times Argus

Note: the following piece appeared in September 2014 in the Sunday edition of the Rutland Herald(www.rutlandherald.com); the Times-Argus in Montpelier, VT(www.times-argus.com),  and The Recorder in Greenfield, MA(www.recorder.com).

Copyright © 2014 by Karl Meyer

ENRON REDUX

Kids: go to your parent’s bedroom and find mommy’s purse and take $110 out of it. Then go out and have some fun. Why? Because the Federal Energy Regulatory Commission and its own creation–the Holyoke, MA-based Independent System Operator of New England (ISO-NE), just confirmed that it’s ok to steal. The theft took place in June at a rigged ISO-NE “forward market” energy auction. There, Hartford-based Energy Capital Partners made off with the public’s loot to the tune of $110 from every New England ratepayer, according to consumer watchdog Public Citizen.

In a pre-dawn, September 17th press release, FERC Chair Cheryl LaFleur argued that it was legitimate for corporate-citizen ECP to manipulate the market and pick the pockets of ratepayers from Hartford to Springfield, and Boston and Montpelier—three years in advance. That panicked missive arrived directly on the heels of two FERC Commissioners, Norman Bay and Tony Clark, issuing their own September 16th press release terming the summer ISO-NE ratepayer swindle a “non-competitive auction.” It was a tiny crack in the curtain surrounding FERC decisions. In a split vote, LaFleur and one other Commissioner voted against intervening in the bogus outcome—thus tabling it, and letting the theft stand as legitimate commerce.

Given that, I’m figuring parents would prefer their kids got the cash, rather than a clique of market manipulators. Give your child a head start.

According to Public Citizen, FERC’s failure to intervene will have New Englanders forking out and additional $1.4 billion for the inflated BTU prices ECP manipulated into place for energy to be delivered three winters hence. That, Public Citizen says, will cost each of us over a hundred bucks.

With LaFleur providing the leadership, FERC, our public watchdog on energy projects, rates, regulation and reliability, gave the nod to its puppet-cousin ISO-NE–signaling that its “independent” actions letting ECP game the auction system were acceptable business as usual.

Just like stealing from your parents, Energy Capital Partners was pretty brazen in their market rigging. What they did was purchase an old New England dinosaur, the Brayton Point coal plant in Somerset, MA in 2013. Then, just weeks later, they announced they would be closing Brayton Point–citing environmental and economic constraints. That closure was timed perfectly to influence “forward” market prices. It would take place in May 2017—creating an energy “deficit” timed to show up on the books precisely as the 2017 energy auction was to take place. That staged BTU shortfall caused the spike in prices and accepted forward market bids at ISO-NE’s auction—all to be born at the public’s expense.

ECP will profit handily from their own paper tiger—silent proceeds flowing like electric current to investors, steered directly through ECP’s five other New England venture capital energy plants. That’s how you spike an energy market. It’s the stuff investors gush over.

FERC is charged with ensuring fair pricing for the public, as well as energy reliability in a deregulated market. In its own words its core responsibility is to “guard the consumer from exploitation by non-competitive electric power companies.” It was FERC that created ISO-NE, the regional grid’s independent system operator charged with keeping the lights on in the public’s interest. It’s now clear ISO also referees sham auctions.

Maybe New Englanders won’t mind getting their pockets picked; utility bills are clever at never revealing what you’re actually paying for. But I mind–$110 isn’t chump change to me. I’m worried too that today it’s FERC that’s also overseeing virtually all the controversial energy proposals now swamping the New England region: from mega Northern Pass power lines entering from Canada, to the Tennessee Gas Pipeline, to the relicensing of five large-scale hydro projects on the Connecticut River including the Northfield Mountain Pumped Storage Project.

Curiously, Energy Capital Partners sold the Northfield Mountain Pumped Storage Plant to GDF-Suez FirstLight Energy over half a decade back. Now it looks like FirstLight may be taking a page out of ECP’s market playbook. They just requested an open-ended and unprecedented “emergency” power uprate and a 20% increase in storage capacity for NMPS, due to a perceived–but as yet undocumented, energy shortfall for the coming winter. What FirstLight withheld in its lengthy application arguments to FERC, was that it is closing down its own 135 megawatt Mt. Tom coal plant in Holyoke this October. Create your own energy deficit. It is also an end-run around environmental relicensing studies set to take place next year. We’ll all pay.

So if you thought “no-bid” government contracts were a thing of the past and that energy market manipulation and wash-through trades were a distant echo of the Enron and Arthur Anderson scandals, think again. Given the pressing concerns of climate change and the dismal record of market manipulation, the time has arrived to re-regulate energy.

Karl Meyer of Greenfield, MA is a member of the Society of Environmental Journalists.

Stakeholder COMMENTS to FERC on Northfield Up-rate Request

Posted by on 10 Oct 2014 | Tagged as: Connecticut River ecosystem, Federal Energy Regulatory Commission, FERC, GDF-Suez FirstLight, ISO New England, Northfield Mountain Pumped Storage Project

*The following Stakeholder Comments were submitted to the Federal Energy Regulatory Commission on October 2, 2014.

Karl Meyer, M.S. Environmental Science
85 School Street # 3
Greenfield, MA, 01301
413-773-0006 October 2, 2014

The Honorable Kimberly D. Bose, Secretary
Federal Energy Regulatory Commission
88 First Street, NE
Washington, DC 20426

COMMENTS: on P- 2485-065, GDF-Suez FirstLight Hydro Generating Company’s:
Application for Temporary Amendment of Minimum and Maximum Reservoir
Elevation Requirement.

Dear Secretary Bose,

The Northfield Mountain Pumped Storage Project is currently undergoing
studies under the 5-year FERC relicensing process in order to continue
plant operations beyond 2018. NMPS was built as a peaking power plant—
making use of the surplus power generated from a cluster of Western New
England nuclear power facilities: Yankee Atomic, Vermont Yankee, and
Haddam Neck. Yankee Atomic and Haddam have long-since ceased operation,
and VY will close on December 29, 2014.

After that date, NMPS is requesting to remain in service as an entirely
different entity: a peaking plant, with no surplus regional nuclear power
to draw on. It will then be relying on coal, oil, gas, and imported
hydro to pump water uphill—a very expensive and inefficient process,
consuming what amounts to baseload energy to create peaking generation.
This will be bought on the open market; then resold to ratepayers at
peaking-market prices. The first question that must be asked is: is it
fair to consumers?

Why should such an open-ended power up-rate be allowed when stakeholders
are deep in the discovery phase of the relicensing process? Studies just
months down the road will help determine the current operational,
commercial and environmental impacts of NMPS.

This open-ended request uses NMPS’s “emergency” capabilities as a veil.
In truth, as ISO-NE well knows, it can—and does, take over NMPS on rare
emergency occasions, paying market rates to GDF-Suez for the plant’s
output. Thus, hiding behind an “emergency” goodwill intention is not a
forthright argument from FirstLight, and should not be accepted rationale
for granting NMPS an open-ended and, unstudied, 20-plus percent power
generation capability increase.

Looked at head-on, this is an attempt to turn a plant into a facility
that would now generate using legacy fuels to supply ratepayers with
peaking-priced, spot-marketed power in a quasi-baseload producer fashion.
If FERC were to allow such an increase for a full one-third of a year, it
would be creating a whole new animal in the energy market—without a
requisite public process.

FirstLight’s argument in its generation and storage capacity increase is
that it will be available for “emergency” situations which might arise in
winter markets. The reality is—request aside, NMPS is and has always
been a station prescribed for emergency use. That has been a chief
selling point since it opened 1972. And, it is still available as such—
without any amendments to its current license. Thus, no changes should
be made to current operational limits, as the plant can be called upon
under unusual-event circumstances by ISO within all currently sanctioned
parameters.

Allowing NMPS to begin generating as a baseload plant
without study or understanding of the full impacts of longer pumping and
generation would be an abrogation of FERC’s public responsibilities.
Under current operating conditions, NMPS creates what amount to erosive
tidal conditions in the Turners Falls Impoundment that exceed the daily
tides experienced at Hyannisport, MA. The requested new pumping and
expanded limits at NMPS during winter months will undoubtedly result in
an increase in erosion and sediment load in the river and at the NMPS
reservoir. Daily increases in freezing and thawing along sensitive
riverbanks dictate that.

In 2010 FirstLight attempted to clear its reservoir of sediment and failed
to accomplish the task. The result was a complete outage lasting seven months,
with NMPS unavailable for any emergency output. Most troubling was that
FL attempted to clear its reservoir and intakes by shoveling the silt and muck
directly into the Connecticut River. The EPA issued a cease and desist order in early
August, and FL was found to be in gross violation of the federal Clean
Water Act for polluting the navigable waters of the United States.

It should also be helpful to know that NMPS has never successfully
discharged the silt from its reservoir in its entire history without
experiencing a partial or full outage in its turbine battery. Given that
history, allowing NMPS to potentially create more siltation in the CT
River at their plant should not be allowed until they have proven it will
not impact emergency operations.

Further, attempts by a previous owner to utilize more of the NMPS
reservoir in the 1980s were turned back by a public process that
shed light on the fact that increased pumping of the Connecticut River
would result in significant impacts to the ecosystem. That request—to use
the Connecticut River as a drinking water source to be shifted up to the
NMPS reservoir and then transferred out of basin tothe Quabbin Reservoir,
was ultimately not implemented. In fact, it resulted in the implementation of
a new law, the Inter-Basin Transfer Act, which would only allow water to be
taken from the river in an emergency situation, after all logical engineering
steps were taken to plug holes and eliminate waste in the Boston water delivery
system.

That should be the situation going forward. NMPS remains in service as
currently licensed—available for use in specifically defined emergency
situations by ISO-NE, until studies are complete.

Lastly, is important to note that GDF-Suez FirstLight made no mention of
the closure of their own 135 megawatt Mt. Tom coal plant in Holyoke this
20141002-5022 FERC PDF (Unofficial) 10/2/2014 8:40:09 AM
fall, when they listed several outlier plant closures as reason for their
request to help as fill -in for a tight winter market. At the very least
that is disingenuous. Some might see it as market manipulation.

Thank you,
Karl Meyer, MS