Mt. Tom Coal Plant

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FERC Comments as FirstLight seeks unprecedented mid-license power increase

Posted by on 10 Nov 2015 | Tagged as: Federal Energy Regulatory Commission, FERC licensing process, FirstLight, forward market power auction, ISO New England, Mt. Tom Coal Plant, Northfield Mountain, Northfield Mountain Pumped Storage Project, Northfield Mountain Pumped Storage Reservoir

The following are comments submitted to FERC concerning what would be an unvetted and potentially precedent-setting mid-license power uprate for FirstLight’s Northfield Mountain Pumped Storage Station.

Karl Meyer, M.S.
Greenfield, MA, 01301
October 29, 2015

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

PROTEST against the granting of application for Amendment for Minimum and Maximum Reservoir Elevation for P- 2485-070, FirstLight Hydro Generating Company’s Northfield Mountain Pumped Storage Station.: Application for Temporary Amendment of Minimum and Maximum Reservoir Elevation Requirement, filed September 1, 2015.

Dear Secretary Bose,

In the 43-year operating history of the Northfield Mountain Pumped Storage Project a full assessment of the project’s impacts on the public’s river and terrestrial resources has never occurred. It has long been understood that NMPS significantly impacts some 50 miles of the Connecticut River’s riparian, stream bank, farmland and flood plain habitat from Vernon, VT to Holyoke, MA. The application before FERC requests a major, mid-license expansion of this facility’s storage and generating capacity without a full vetting of its impact on public resources.
If granted, the proposal before FERC represents a license to benefit—unrestricted and at profit, from a full 25% increase in generation capacity from NMPS’s Upper Reservoir for a 120 day period each fall, winter, and early spring, until 2018.

Given that NMPS is in the midst of its first-ever relicensing studies to gauge the impacts of its operations, it is not in the public interest to see this ongoing, 3 year, “temporary” storage amendment granted. Doing so without a full vetting of the emerging science and without the full participation of all stakeholders would amount to an Ex parte ruling—basically a precedent-setting gift to the power company during its run-up to a relicensing decision on April 30 2018.

NMPS has been granted extra cold season storage capacity only four times over its 43 year history. Each of those–save 2014, was restricted to extenuating circumstances where ISO would request NMPS to pump and generate beyond its mandated parameters after a trigger was reached. In requesting and being granted extra-limital storage last year, ISO and FirstLight appear to have entered into a new partnership of open-ended, unrestricted use of the public’s Connecticut River resources. This request is being made without investigation or any recompense to the public’s benefit beyond what both the utility and ISO refer to as “flexibility” in times of limited on-line capacity or restricted generation.

However, neither ISO or FirstLight has supplied any information as to how NMPS was used in any “emergency” capacity last winter—a winter that was prematurely touted as one with a tight energy market. Though a price squeeze was visited upon the public last winter in the form of vastly inflated energy bills, the predicted energy shortage never materialized. Both Northfield and ISO like to tout NMPS’s “black start” capability. However, to my knowledge the plant has only been used in that manner once, during the August 2003 Blackout, and increased storage capacity was not a factor in its use at that time.

ISO has in the past been tagged by FERC Board Members as supporting stilted judgements and sanctioning Foreward Market Capacity auction results that were clearly only in the interest of the power company—costing the public millions. That included 2013, when they sanctioned results from market bids by Energy Capital Partners(former owners of NMPS), who had unloaded their massive Somerset Coal Plant causing a dip in the future winter capacity outlook, sending energy bid prices soaring for ECP.

FirstLight has put itself in line to benefit from the same situation. They did not mention in any application that their Mt. Tom Plant was shuttered recently, and they stand to benefit if NMPS is granted open-ended generating privileges on the heels of a planned shutdown of one of their assets.

Further, it should be noted that FirstLight submitted only limited information on water levels in the CT River at their Turners Falls Dam and further downstream at the Montague USGS Gauge. No information was provided on how often, and by how much, the river fluctuated daily in the Turners Falls Pool due to their pumping and generating. They contend they generally strayed little from the average elevations in the TF Pool. Daily up-and-down figures during winter freezing, wetting, thawing, and rewetting, are wholly lacking.

FirstLight offers that it generated less in winter 2014/2015 than in many other years, but that tells only their story. When, and under what circumstances they generated, and at what profit, are really what’s required for a full assessment of the plant’s public good. Offering that “we only used a little” see?—is not any reasonable way to assess what might happen with an open-ended license to benefit from “peaking” spot market fluctuations this winter–or in 2016, 2017, and 2018.

Further, NMPS’s ownership changed hands three times over the last decade. Granting a mid-license capacity uprate to this plant could lead to speculation and instability in the deregulated market, causing a bubble in its asset value. If GDF-Suez decides to sell their NMPS plant in the interim, only merchants will benefit—with the public left in the dark on impacts, price, and profits.

I protest the granting of FirstLight an amendment to increase its minimum and maximum storage capacity for the remainder of its license. Further, FERC should not grant a one-year amendment without requiring a public accounting of how the plant was used in any “emergency” fashion—if any, last winter, and how its increased generation was harvested for profit on a daily basis last winter. If these are not provided, the amendment should be denied. Any amendment granted NMPS should include a capacity trigger from ISO, so as to ensure the public is not being gouged by winter fear-mongering.

Sincerely,
Karl Meyer, M.S.
Greenfield, MA, 01301

A look inside the FERC licensing process

Posted by on 06 Jan 2015 | Tagged as: 5-year FERC licensing process, Drew Huthchison, Federal Energy Regulatory Commission, FERC, FERC license, FERC licensing process, fracked gas licensing, GDF-Suez FirstLight, ISO New England, Kinder Morgan, Kinder Morgan pipeline, Mt. Tom Coal Plant, National Marine Fisheries Service, NOAA, Northfield Mountain Pumped Storage Project, shad, shad larvae, Turners Falls power canal, US Fish & Wildlife Service, US Geological Service’s Silvio O. Conte Anadromous Fish Lab, USFWS, Vermont Yankee, Yankee Rowe Nuclear Plant

In mid-December I was interviewed on Greenfield Community Television’s Local Bias feature by Mark Wisniewski, former Greenfield City Council President. In a wide-ranging talk we discussed my experiences with the ongoing Federal Energy Regulatory Commission licensing process as both a journalist and stakeholder in the hydro projects at Northfield Mountain and the Turners Falls Power Canal on the Connecticut River. The FERC licensing process is a cumbersome and lengthy ordeal–transpiring over a 5- year swatch of time.

Anyone interested in–or involved as a citizen in, the deluge of FERC projects currently affecting our region, might gain some insight by tuning in: from fracked-gas pipelines, to hydro, nuclear, climate and ecosystem impacts.

Local Bias airs beginning Wednesday, at 5:30 pm, and repeats on Thursday and Saturday nights at 9 pm throughout the month of January 2015.

Local Bias is produced and directed by Drew Hutchison.

Try the link below,.. or go to look up GCTV, Local Bias to connect to a copy of the show.

http://gctv.org/videos/local-bias-karl-meyer-121514

FERC grants Northfield “temporary” Power Up-rate: the downside impacts of a studied pumped storage operation, re-posted.

Posted by on 04 Dec 2014 | Tagged as: American shad, Connecticut River, Connecticut River ecosystem, Federal Energy Regulatory Commission, federal trust fish, FERC, FERC license, FirstLight, GDF-Suez FirstLight, ISO New England, Mt. Tom Coal Plant, Northfield Mountain Pumped Storage Project, Northfield Mountain Pumped Storage Station, USFWS

On November 26, 2014, FERC issued an “Order Granting a Temporary Amendment” for P-2485, the Northfield Mountain Pumped Storage Station to increase its storage capacity by 25%, and generate electricity during times of peak demand–or peak prices on the electricity “spot” market, without restriction.

In its power uprate application GDF-Suez FirstLight stated that this extra capacity was necessary due to power plant closures in Vermont and coastal Massachusetts and a predicted cold winter–a forecast for the Northeast that has now been re-evaluated, with a warmer winter now predicted.  GDF-Suez FirstLight did not mention in its application that it was shuttering its own 130 megawatt Mt. Tom plant in Holyoke in October. Another factor that may have played a part in the power uprate bid: GDF-Suez North America Hydro had had its bond rating downgraded in the prior fiscal year.

Given the unprecedented power hike granted Northfield, with ISO-New England formally jumping in the middle and cheering on the process with a formal letter to FERC, I thought I might republish testimony I sent to FERC last spring, when FirstLight submitted–then subsequently retracted as a “mistake,” testimony it posted on behalf of their plant’s storage flexibility cited the wind and solar benefits of a pumped storage plant in Ludington, Michigan.

If you read through the testimony you’ll see how devastating to the ecosystem and fisheries that Ludington Pumped Storage Plant has been.  That plant, though significantly larger, has a similar timeline–first started in the early 1970s, and currently undergoing relicensing. The big difference has been that local non-profits and agencies didn’t let them off the hook for the massive habitat destruction during their first licensing period–actually winning a $172 million dollar settlement from the owners some 20 years back.  Sadly, it was too late to shield their ecosystem or save their fisheries.

So, Northfield will pump more this winter.  It seemed a good time to re-post what the STUDIED damages were at another pumped storage plant over a similar time frame.  Sadly, we can’t know what we’ve lost across the decades here on the Connecticut River.

Read below:

New Stakeholder Comments filed with FERC re: Northfield Mountain

Posted by karlmeyer on 21 May 2014 | Tagged as: American shad, Bellows Falls, Connecticut River, Connecticut River ecosystem, ecosystem, Endangered Species Act, EPA, ESA, Federal Energy Regulatory Commission, federal trust fish, GDF-Suez FirstLight, Ludington Pumped Storage Plant, New Hampshire, Northfield Mountain Pumped Storage Station, shad larvae, Turners Falls power canal, US Fish & Wildlife Service, USFWS, Vermont Edit This

The following Stakeholder Comments were filed today, 5/21/2014, with the Federal Energy Regulatory Commission respecting Connecticut River fish mortality investigations at Northfield Mountain Pumped Storage station (NMPS)

Karl Meyer, M.S., Environmental Science

85 School Street, # 3

Greenfield, MA 01301

 

Kimberly D. Bose, Secretary

Federal Energy Regulatory Commission

88 First Street, N.E.

Washington, DC 20426

Stakeholder Comments, RE: FERC P-2485-063, and P-2680-108: relevance of FirstLight Hydro Generating Company’s document submission issued by FERC as “Conference/Meeting Transcript issued in FERC P-2485-063, et al” on May 9, 2014 for Northfield Mountain Pumped Storage project (NMPS). The inclusion of “Transcript of the April 17, 2014 FERC Scoping Meeting held in Pentwater, Michigan re Consumers Energy Company’s et al Ludington Pumped Storage Project under P-2680-108” offers an incomplete, unsubstantiated and confusing picture of its applicable connection to the relicensing of NMPS on the main stem of a four-state river system in Massachusetts.

Dear Secretary Bose,

Please consider the following comments respecting the relevance of FirstLight Hydro Generating Company’s recent document filing as it seeks a new license for the Northfield Mountain Pumped Storage station. I testified as a Stakeholder in the NMPS Study Dispute Panel Technical Conference along with officials from the USFWS and Trout UnLimited on Tuesday, April 8, 2014. The Dispute Panel was convened out of concerns that no study of the entrainment of eggs and larvae of migratory American shad was being required as part of a relicensing bid from GDF-Suez FirstLight Power for NMPS. I find no clear context provided by FirstLight for the inclusion of a transcript for the April 17, 2014 FERC Scoping Meeting for the Ludington Pumped Storage Plant–a lakeside Michigan-based facility, as part of the NMPS relicensing proceedings.

NMPS’s pumping/generating impacts are known to reach downstream to Holyoke Dam at river-mile 86 and affect spawning-run migratory fish that utilize Massachusetts, New Hampshire and Vermont habitats upstream to Bellows Falls Dam at river-mile 172. It is critical to the relicensing of any pumped storage generation on this four-state river to have robust studies with measurable outcomes to protect the public’s interest in a balanced and functioning Connecticut River ecosystem.

NMPS impacts migrating and spawning anadromous fish in a four-state ecosystem that has been the focus of a federal fisheries restoration program begun in 1967, “to provide the public with high quality sport fishing opportunities in a highly urbanized area, as well as provide for the long term needs of the population for seafood.” NMPS, completed in 1972, has been shown to have direct impacts on migratory fish entrainment and fish passage from northern Massachusetts to central Vermont and New Hampshire.

The US Fish & Wildlife Service, National Marine Fisheries Service, and fisheries directors in MA, NH, VT, and CT are all charged with protecting these resources for the public. Federal and state laws, licenses and statutes governing these mandated protections include the federal Clean Water Act, Endangered Species Act, and federal-trust fish protections beginning with the Anadromous Fish Conservation Act of 1965. FERC authority also mandates licensee compliance and protections for the public’s fisheries resources and restoration projects. FERC itself is mandated to comply with federal environmental law.

The Ludington Pumped Storage Plant is a FERC licensed facility sited and operating within a single state on a lakeshore well over 100 miles from it closest bordering state—and situated with 118 miles of open water at its back. Northfield Mountain Pumped Storage, situated adjacent to the Connecticut River, operates on the Navigable Waters of the United States in Massachusetts just 10 miles from where the Connecticut River passes out of Vermont and New Hampshire. NMPS pumps and generates from a narrow ribbon of river that is less than 1,000 feet wide—during warm seasons it sometimes draws more water than the river’s natural output.

In short, these are two very different animals, operating in very different habitats.

However, there are similarities in the long-term environmental impacts of these far-flung pumped storage facilities. They both kill large quantities of the public’s fish. Unfortunately, those impacts were not cited or included in FirstLight’s submission to FERC in either Dispute Resolution Panel documents or its license application documents. In 1995 the owners of the Ludinton Plant agreed to a $172 million dollar settlement for its killing o fish during the previous two decades. The public there at least had the minor benefit of one-time study that showed LPSP “in a single year, killed 440,000 salmon and trout, 85,000 perch and millions of forage fish that served as food for valuable game.”

Unfortunately, to date, we have no such data from a study of NMPS, nor any compensation for the long-term damage to a public resource and a long-term fisheries restoration project. In Michigan, a US-based entity was required to pay restitution and undertake remedial action. Here at NMPS the plant operator is a transnational corporation, based outside the United States, that is “taking” an unknown quantity of a public resource without compensation or required analysis. If a US Citizen were to do this they would be subject to legal action.

 

Please see below: Ludington Daily News, August 13, 1987: “Federal agency rules on fish kill, Ludington hydro plant must comply within 60-90 days.”

The Ludington plant had begun operations in 1973, and had been the subject of legal proceedings from that time forward. The State of Michigan had filed a suit in Ingham County Circuit Court seeking more than $147 million in damages, and the National Wildlife Federation had won a federal court order that Consumers needed a pollution discharge permit for the plant.

In summary here are several excerpts from that article defining the impacts at that time including references to a single study that found the plant killed millions of native fish in a single year, species that are today disappearing, or have essentially disappeared, in Lake Michigan waters:

“Environmentalists and state officials Wednesday hailed a federal ruling designed to end the fish kills at the Ludington Pumped Storage Facility operated by Consumers Power Co.” (Co-owned with Detroit Edison Co.)

“Finally, after 14 years of negotiations and litigation, and the destruction of millions of Lake Michigan sports fish, we’re going to see an end to this needless waste of an important resource,” said Thomas Washington, executive director of the Michigan United Conservation Clubs.

“The MUCC, National Wildlife Federation and Department of Natural Resources have negotiated fruitlessly for years with Consumers Power to stop the fish kills.”
“The plant, in operation since 1973, pumps Lake Michigan water uphill into a reservoir, and generates electricity during times of high demand by letting it flow back to Lake Michigan through generators. In the pumping process, it kills millions of fish.”

“The MUCC said that a study commissioned by Consumers Power showed the plant, in a single year, killed 440,000 salmon and trout, 85,000 perch and millions of forage fish that served as food for valuable game.”

However, it took another eight years of environmental damage and drawn-out court proceedings before a settlement—totaling $172 million, was finally reached in 1995. See: Ludington Daily News, March 7, 1995: “Local groups urged to begin working on projects for fish kill settlement plan.”

“While 12 to 18 months more may pass before the settlement, valued at $172 million, becomes final state officials urged local groups not to wait to prepare proposals for enhancing local fishing.”

“Many audience questions fielded by the five-person panel concerned the perception the settlement doesn’t do much for Ludington area fishing specifically—the fishing most affected by the fish kill at the plant.”

It was only after 1995 that some of the large-scale impacts of Ludington Pumped Storage Plant began to be addressed. Ultimately, a FERC-sanctioned 2-1/2 mile long (12,850 ft) barrier net was deployed across hundreds and hundreds of acres of riverbed and bank.

Sadly, it seems that net did not mitigate or resolve the loss of local fisheries in the Ludington region. Its deployment was either ineffective or far too late for a regionally- and culturally-important sustained harvest of local- sourced and eaten native yellow perch and lake trout. Those perch have now essentially disappeared in the Ludington-Manistee region—which is noted in Stakeholder Testimony supplied for the Ludington Scoping Meeting on April 17, 2014 where Mr. Richard Underwood testified that past Michigan DNR creel surveys had found: “close to a quarter million perch” in Ludington habitats. “In the last few years, four years, we have had a total of zero count of perch in Ludington, and that’s how it has affected.”

The giant Ludington barrier net appears to be one key player in the puzzle of the missing perch. It appears to act as a fish trap. According to Mr. Underwood that net, along with an artificial reef constructed nearby, attracts a giant collection of cormorants that feed on the fish trapped within the confines of the net, “There were so many birds on the reef and inside the barrier net you couldn’t count them. I estimated there were 3,500.”

Ironically too, in recent years, federal hatcheries in the Connecticut River basin have been producing lake trout to supplement the now-crippled and dwindling native population of lake trout on Lake Michigan.

Another similarity in these two relicensing proceedings is that FERC’s Scoping Site Visits at both the NMPS plant and LPSP were scheduled either before the PAD had been given to Stakeholders, as it was NMPS, or—as noted in state fisheries testimony at Ludington, the Site Visits are not scheduled to take place until well after Study Requests and Stakeholder Comments are due.

Both of these processes deprived the public and officials the ability to visit, witness, and develop an understanding of the complex impacts of these pumped storage plants before submitting testimony, comments, and informed study requests.

Similarly, both plants have deployed barrier nets as a means of diminishing their fish kills and entrainment/mortality impacts. And, at both sites the fishing is poor and with stocks deteriorating.

The difference on the Connecticut River is that migratory fish here are forced to encounter two entrainment opportunities through FirstLight facilities. The first occurs seven miles downstream, when they are deflected by attraction flows into the Turners Falls Power Canal, with Cabot Station turbines operating on the downstream end.   The small percentage of fish that manage to survive the 2-1/2-mile, 8-day (average) transit to the head of that canal—and the even smaller number that actually exit upstream(1-10%), then get the chance to be culled by NMPS turbines, just five miles further upstream.

In its filing of the Ludington Scoping Meeting documents, GDF-Suez FirstLight seems to be suggesting some link between the large-scale wind power facilities built by LPSP owners Consumers and DTE, and a key, future role for renewables here in sucking the Connecticut River backward and pulling it uphill into the Northfield Mountain Pumped Storage reservoir.

That connection is tenuous, at best. Consumers and its partner DTE now own and operate a large-scale wind farm consisting of some 56 turbines. Its deployment required the purchase or easement rights to 16,000 acres of Michigan property, most of it to trench-out underground power lines to reach back to their grid and pumped-storage plant. Their large-scale wind operations are due to the presence of 118 miles of open Lake Michigan at their back, as well as a flat, open, prairie landscape to site giant turbines on.

FirstLight seems to be implying that NMPS will be similarly employed at some future date—its ecosystem impacts ignored because of the huge amount of surplus, cheap, local, renewable energy available to pump a river uphill at night. But solar doesn’t generate at night; and available local hydro here is modest and run-of-river—it would not constitute a “renewable” source to be tapped to pump water uphill. And, wind power opportunities here are spotty, small scale, and generally available on isolated ridge tops.

Clearly the Connecticut River Valley has none of the necessary features that might facilitate the large-scale wind renewables/pumped storage relationship found at LPSP. Nor, has FirstLight proposed plans for any large-scale wind projects in the region. No other entity has either. Cape Wind, whose large scale deployment will be installed miles off the Atlantic shore, is not proposing a pumped storage plant be built above the Truro Cliffs in order for its renewable energy megawatts to be consumed. Here, there just aren’t flatland mega-farm acres available, and only a few ridge tops here have proven suitable for siting isolated turbines.

GDF-Suez Manager John Howard stated at the Dispute Resolution Panel: “We can manage fluctuations in energy schedules with wind, solar, and imports from Canada and New York, primarily. And then the ability to respond very quickly to energy and operating reserve needs of the power system, any time of the day or calendar year.” He states that “We can manage…” But there is nothing backing up the statement. Nothing that proves there is a surplus amount of renewable energy reaching NMPS to state clearly that “We do manage…” or “We will be managing…”   The implication is that NMPS is a necessity here in order to implement renewable energy in the region. Where is the science to back that up? Solar is not around at night. And the region is sub-marginal for large-scale wind, as well as lacking in opportunities for securing thousands of acres of right-of-way here. So, where is the implied connection between these two facilities—beyond fisheries destruction?

Michigan, with its open face to the winds—which do blow at night, apparently ignores the to damage to its Great Lake ecosystem and fish, and tallies the wind-energy driving Lake Michigan waters and uphill to its pumped-storage plant as “renewable.” We don’t have that wind here, and solar power generation is a whole different animal–not in any way the high-octane source needed to push a river uphill at NMPS. FirstLight has built a 2 MW solar installation atop the 11 acres of land it was mandated to construct for silt-settling ponds by the EPA in 2010 after being sanctioned for massive infractions of the federal Clean Water Act by dumping up to 45,000 tons of pumped storage reservoir silt and sludge into the Connecticut River , the company has not included any information on how that solar facility connects to, and interacts with, and powers its pumped storage operations. Unlike large-scale wind, solar does not deliver its energy at night–when NMPS asserts that it will do most of its pumping.

Pumped storage can only be deemed “renewable” energy in a generating environment where ecosystem impacts are not considered. Pumped-storage itself was a net-loss bargain that was ill-considered even back when there was actually surplus nuclear available in the region. Now this taking-of-a-river is mostly accomplished at NMPS by climate-warming, non-renewable fossil fuels. This is a lose-lose situation for renewable energy use–and for an ecosystem.

GDF-Suez FirstLight’s NMPS plant does feature “black-start” capabilities, and does offer FERC and ISO the ability to accomplish load-leveling at certain critical times. However, these attributes must be balanced against long-standing federal and state efforts to complete a forty-seven year old migratory fisheries restoration on the Connecticut, and the public’s long-term need to have a sustainable Connecticut River ecosystem. NMPS operations also need to adhere to federal and state environmental law.

In 1995, Consumers and DTE paid the public $172 million for their past fish kills of the previous decades. Thus far, the public has not been compensated for the on-going taking of fish at NMPS on the Navigable Waters of the United States, nor have citizens in MA, VT, NH and CT been able to reap the benefits of anything near the stated goals of a four-state fisheries restoration program targeting recreation fishing and harvestable seafood.

Studies with measurable results are required for a fair relicensing process. Stated steps in the FERC relicensing process should be followed to allow the public a contextual look at the operations before the need to suggest studies or prepare testimony. To facilitate a fair process, FERC should require context and full disclosure of all submitted documentation on the part of the applicant, as well as phone conference transcripts to allow an understanding of the ongoing dispute procedure.

Placing a net in front of LPSP and NMPS has not stopped the fish kills at either plant. A band-aid should not be applied to a gaping wound. Complete and proper studies of all life stages of fish mortality are needed for NMPS relicensing. Regulatory pumping and generating restrictions that protect the public resources of US citizens are overdue and necessary there. The studies needed to accomplish this should take place before any new license allows this ongoing “take” to continue through 2048.

End of Formal Comments

Thank you for this opportunity to participate in improving license requirements and protecting the Connecticut River ecosystem for future generations.

Sincerely,

Karl Meyer, M.S.

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.