Mint Happenings – Q3 2014

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Mint Happenings – Q3 2014

Entering a New Market

Mint Energy has expanded its footprint into Pennsylvania. We are excited to launch our Commercial and Industrial electricity services beginning in the PECO service territory.

Our innovative approach and unique offerings combine aspects of both traditional fixed and index-based rate structures. This will provide businesses the opportunity to better manage their energy expenditures while receiving unparalleled service and a variety of (including “more environmentally sustainable”) products.

Quarter Three Recap

Due to mild summer weather across New England, there were no major challenges to the power system throughout the season. Average temperature and fewer heat waves drove down power usage and peak demand to their lowest levels since 2009. New England consumed 33,821 GWh of electricity during the months of June, July, and August. This figures represents the least power used in this time period since the 33,808 GWhs consumed in summer 2009, and was less than every other summer since 2000.
Winter Electricity Rates to Rise in New England

National Grid has reported it expects that “customers are going to see a significantly higher bill this winter than they did last winter,” said National Grid spokesman Jake Navarro. Its 6 month Basic Service electricity supply rate for this winter to rise higher than they’ve seen, and is a significant increase over last year’s rates (Bruce Mohl. (September 2014). Electricity Prices to Soar. CommonWealth Magazine. Prices will rise to almost $0.25 kWh (almost double from the current Basic Service variable supply price) for General Service (G2- and G-3) Commercial customers on the variable basic service option during the month of January.

This winter, other Local Distribution Company (i.e., utility) electricity customers in New England will also likely see an increase in their monthly bills. Similar price changes for other utilities (NSTAR, WMECO, National Grid Rhode Island, Emera Maine, Central Maine Power, and PECO) are illustrated on page two.
A significant reason for the increase this winter is predominantly due to heavy reliance on natural gas and the inadequate capacity of gas pipelines coming into New England to bring enough gas to market when needed. New England has seen a correlation between electricity rates and cold weather in the past three winters, for example, when winters wholesale natural gas prices in the New England region have spiked when pipelines could not sustain demand during extended cold snaps.

PECO Generation Supply Rates to Increase December 1

Retail Energy | October 17,2014

PECO RatesPECO has filed updated Generation Supply Adjustment (GSA) rates for the period beginning December 1, 2014, and the rates reflect an increase versus the current GSAs.

The GSA is the largest component of the bypassable Price to Compare, and reflects base generation and AEPS compliance. The GSA does not include the cost of bypassable transmission, which is added to reflect the official Price to Compare.

The new GSAs for commercial customers are to the right (cent/kWh).

Winter Reliability Program

On July 11, 2014, ISO New England and the New England Power Pool (NEPOOL) filed with the Federal Energy Regulatory Commission (FERC) a proposal (that has since been approved) to implement a revised Winter Reliability Program (WRP) for the upcoming winter (2014/2015). This past winter, the ISO implemented the first WRP, which helped to increase the amount of oil inventory held by oil and dual-fuel generators in the region. The program proved to be critical in keeping the lights on throughout colder-than-normal winter conditions. That first WRP was intended to be a one-time solution to bridge a reliability gap. However, ISO New England’s operational experience last winter and other developments have prompted the ISO and NEPOOL to seek approval of another program to mitigate significant reliability concerns for the upcoming winter.

Challenges that prompted request for another winter program
More severe pipeline constraints – Over the past several winters, the pipelines carrying natural gas into New England have become progressively more constrained as demand for the fuel has greatly increased for both heating and power generation. The ISO has commissioned various studies of the capacity of the pipeline infrastructure in the region; findings from one updated study and operating conditions last winter revealed that the pipelines are even more constrained than previously understood. These limitations have caused volatility and natural gas price spikes, which have translated into higher wholesale electricity prices.

Difficulty replenishing oil inventories – These pipeline constraints pushed up gas prices above oil prices for much of last winter, which resulted in more frequent dispatch of oil generators, with extended run times. Because of these conditions, oil inventory was used up rapidly. Even with the first WRP in place, many oil-fired generators depleted their inventory mid-winter, and had difficulty securing and transporting additional oil due to harsh weather conditions and competition for the barges and trucks required to move the fuel.
Generator retirements – Two large, non-gas-fired generators that provided valuable resource diversity during the 2013/2014 winter will be retired by the time winter arrives this year. Vermont Yankee nuclear power plant-with more than 600 megawatts (MW) of capacity-announced it will retire this fall, and two Salem Harbor generators with a combined capacity of 587 MW retired on June 1, 2014. To put this into perspective, the 2013/2014 WRP procured oil and demand resources capable of producing more than 1.9 million megawatt-hours of power while the combined capabilities of these retiring resources is 2.6 million megawatt-hours.
2014/2015 Winter Reliability Program
The proposal filed with FERC is not an extension of the first WRP; it has been modified as a result of several market changes that will be in effect prior to winter 2014/2015 as well as the Commission’s clarification of generator obligations to procure adequate fuel to meet their expected run times.
Several elements of the 2014/2015 proposed WRP are consistent with the first program, including the demand-response component, as well as permanent rules related to dual-fuel generator audits and the partial elimination of higher-cost fuel requirements that evolved from similar features in last winter’s WRP.
The proposal is also fundamentally different from the first program. Those significant differences include:

Improved fuel neutrality, achieved by adding a liquefied natural gas (LNG) component
Compensation for fuel that is based on unused inventory at the end of the winter rather than upfront inventory
Instead of an “as-bid” design, compensation for the fuel inventory and demand response programs that is based on a set rate
Core components of the proposal

Compensation for unused oil inventory
Compensation for unused LNG contract volume
Demand response
Incentives for commissioning dual-fuel capacity
In addition to these components that, if approved, would be in effect for the 2014/2015 winter period, the ISO is also seeking market rule changes to be in effect for the 2014/2015 winter and beyond.

Partial elimination of higher-priced fuel burn requirement for dual-fuel resources
Dual-fuel auditing
“ISO-NE and NEPOOL file proposal with FERC to implement a Winter Reliability Program for winter 2014/2015.” ISO Newswire. July 14, 2014

By | 2017-03-20T13:25:15+00:00 August 21st, 2016|Categories: Uncategorized|0 Comments

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