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FERC Conf. on ISOs

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On Friday, FERC announced it will hold a conference on policies regarding ISOs. Here is the notice in its entirety, as taken from the FERC CIPS online system, at
http://208.207.43.2/cips/Library.htm

For future reference, the FERC website is at:

http://www.ferc.fed.us/

_______________________________________

UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION

Inquiry Concerning the )
Commission’s Policy on ) Docket No. PL98-5-000
Independent System Operators )

NOTICE OF CONFERENCE
(March 13, 1998)

The Federal Energy Regulatory Commission (Commission) hereby announces that it will convene a public conference to discuss its policies concerning Independent System Operators (ISOs). The conference will be held on April 15-16, 1998. Primarily, the Commission intends to examine the future of ISOs in administering the electric transmission grid on a regional basis. It wishes to examine whether any changes to the Commission’s policies that affect the development of ISOs are appropriate in order to promote competition and reliability in bulk power markets. The Commission expects to address issues pertaining to the formation and responsibilities of ISOs, whether ISOs can serve as an effective vehicle for further industry reform, and the appropriate roles for federal and state regulators in ISO development.

I. Introduction

In Order Nos. 888 and 889 and their progeny (1) , the Commission established the fundamental principles of non- discriminatory open access transmission services. Nevertheless, many issues remain to be addressed if the Nation is to fully realize the benefits of open access and more competitive electric markets. The formation of regional ISOs may facilitate achievement of the Commission’s pro-competitive goals.

(1) See Promoting Wholesale Competition Through Open Access Nondiscriminatory Transmission Services by Public Utilities; and Recovery of Stranded Costs by Public Utilities and Transmitting Utilities, Order No. 888, 61 Fed. Reg. 21,540 (1996), FERC Stats. & Regs. 31,036 (1996), order on reh’g, Order No. 888-A, 62 Fed Reg. 12,274 (1997), FERC Stats. & Regs. 31,048 (1997), order on reh’g, Order No. 888-B, 81 FERC 61,248 (1997), order on reh’g, Order No. 888-C, 82 FERC 61,046 (1998). Open-Access Same-Time Information System and Standards of Conduct, Order No. 889, 61 Fed. Reg. 21,737 (1996), FERC Stats. & Regs. 31,035 (1996), order on reh’g, Order No. 889-A, 62 Fed. Reg. 12,484 (1997), FERC Stats. & Regs. 31,049 (1997), order on reh’g, Order No. 889-B, 81 FERC 61,253 (1997).

In the wake of the unprecedented restructuring taking place in the electric industry, the Commission has received several proposals for forming ISOs and a number of regions are also in the process of developing ISO proposals. The Commission has approved ISOs in California, the Pennsylvania-New Jersey-Maryland Interconnection (PJM), and for the New England Power Pool (New England). In addition, proposals have been filed for creating ISOs in the Midwest and New York. Utilities and other market participants in the Electric Reliability Council of Texas have also formed an independent system administrator. Members of the Mid Continent Area Power Pool and the Southwest Power Pool are discussing respective ISO proposals. In the Pacific Northwest, utilities have been involved in negotiations intended to lead to the formation of an ISO (Indego). Also, utilities in New Mexico, Arizona, and Nevada have agreed to pursue development of an ISO (Desert Star). In addition, 11 investor-owned utilities from Ohio to the District of Columbia have signed a memorandum of understanding to explore the creation of an independent regional transmission entity.

This activity, and the growing popularity of the ISO concept, presents important and even urgent questions involving the appropriate function and organization of an ISO, whether the Commission should be more active or prescriptive in this area, and whether the pro-competition goals of Commission Order Nos. 888 and 889 can be further advanced with ISOs. We note that 11 state commissions have recently filed a petition in Docket No. PL98-3-000 suggesting that the Commission generically address ISO issues.

Although the Commission has not prescribed a single approach to ISOs, it has provided significant guidance regarding the proper formation and functions of ISOs. Given the dramatic changes taking place in both wholesale and retail electric markets and the many proposals under consideration with respect to the creation of ISOs or other transmission entities, such as transmission-only utilities, it is time for the Commission to take stock of its policies in order to determine whether they appropriately support our dual goals of eliminating undue discrimination and promoting competition in electric power markets. Accordingly, the discussion below provides a description of topic areas that we would like to explore at the conference for purposes of refining our ISO policies.

II. Panels

The Commission will organize the conference according to the following panel discussions. Appended to this notice is an extensive list of questions and topics assembled by Commission staff for each panel discussion. Participants will find it a general indication of the scope of the Commission’s interest in relation to each panel. The Commission also invites interested parties to address their written comments to the questions listed as well as to any related ISO matters of generic interest.

DAY 1

Panel 1 Basic Structure and Role

What will be the significance of the ISO’s role in the evolution of wholesale and retail electric markets? Should the ISO control some or all aspects of grid operations in order to promote competition in wholesale and retail power markets? Must the ISO be a control area operator?

Panel 2 Regulation, Governance, and Independence

How should ISOs be formed, governed, and regulated, given the current and foreseeable restructuring of the electric industry?

DAY 2

Panel 3 Role of States

What is the appropriate role for states in the oversight of single-state and multi-state ISOs?

Panel 4 ISOs and Reliability

Can the formation of regional ISOs promote or enhance the reliability or security of the regional grid?

Panel 5 ISOs and Transmission Pricing

How might ISOs facilitate transmission pricing reform?

Panel 6 ISOs and Market Monitoring

Should ISOs have monitoring and sanctioning functions and, if so, can they be sufficiently independent to enable the Commission to rely upon their processes?

Panel 7 ISOs and FERC Regulation

Should the Commission require, to the extent it has the authority to require, transmission owners to form or join an ISO in the interest of preventing undue discrimination, mitigating market power, completing a nascent regional ISO, or achieving any other benefits?

III. Participation In Conference

The Commission believes that it would be beneficial at this juncture to further explore our transmission policies. To that end, we announce today a conference, as discussed above, to examine our current policies on ISOs and any appropriate changes to those policies to further our pro-competitive goals. The conference will take place on April 15-16, 1998, at the offices of the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426. The conference will commence at 1:30 p.m. on April 15 and at 9:30 a.m. on April 16, and will be open to all interested persons.

Persons wishing to speak at the conference must submit a request to make a statement in Docket No. PL98-5-000. The request should clearly specify the name of the person desiring to speak and the party or parties the speaker represents. The request must also include a brief synopsis (not to exceed three pages) of the issue or issues the speaker wishes to address. All requests must be filed with the Office of the Secretary, Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426, on or before March 31, 1998. The Commission may also contact industry experts to participate in the conference. The Commission will issue a further notice listing the speakers and panels for the conference.
In addition, all interested persons are invited to submit written comments (not to exceed 10 pages) addressing topics to be discussed at the conference. Comments must also be filed on or before March 31, 1998, in Docket No. PL98-5-000. After the conference, interested persons may also submit written comments, with all such comments due on or before May 1, 1998. All comments will be placed in the Commission’s public files and will be available for inspection or copying in the Commission’s Public Reference Room during normal business hours. Comments are also accessible via the Commission’s Records Information Management System (RIMS).

If there is sufficient interest, the Capitol Connection will broadcast the technical conference on April 15-16, 1998, to interested persons. Persons interested in receiving the broadcast for a fee should contact Shirley Al-Jarani at the Capitol Connection (703)993-3100 no later than April 3, 1998.

In addition, National Narrowcast Network’s Hearings-On-the Line service covers all FERC meetings live by telephone so that anyone can listen at their desk, from their homes, or from any phone without special equipment. Call (202) 966-2211 for details. Billing is based on time on-line.

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APPENDIX

Panel 1 Basic Structure and Role

What is the optimal size of an ISO? What factors (e.g., transmission technology, legal/jurisdictional distinctions, reliability councils) should affect the size of an ISO?

What are appropriate ISO operational responsibilities? Should the ISO operate SCADA (supervisory control and data acquisition) systems, switches, reactive power devices, transformer switching, phase shifters, and other transmission control equipment? Should the ISO control transmission facility maintenance schedules? Should the ISO control generation facilities that provide ancillary services, such as reactive power from generation, regulation and operating reserves? Should the ISO be able to direct the generation dispatch decisions of control area operators if the ISO itself is not a control area operator? Should the Commission further define the operational features of an ISO (i.e., should the Commission specify additional standards that define what is meant by an effective system operation and control), or should we allow substantial regional variation? What is the appropriate role for an ISO with regard to grid planning and expansion?
To ensure non-discriminatory transmission access, must an ISO be a control area operator? If there is a requirement that an ISO be a single control area operator and that is not feasible or cost-effective over a large area, would the result be an ISO that is too small to achieve other efficiencies like the elimination of pancaked transmission rates? Would a requirement that an ISO be a control area operator enhance competition and lower barriers to entry in the generation market? Does an ISO member that is also a control area operator have access to information that gives it an unfair advantage if it is also a market participant?

Some industry participants question whether ISOs will be permanent institutions or whether they are only transitional. Are ISOs merely part of a transitional phase for the electric industry or will ISOs be a permanent fixture in the industry structure for the foreseeable future? Is an ISO a stepping-stone to the independent regional transmission grid company? Should ISOs be designed consistent with the possible evolution to a regional gridco (i.e., a company that both owns and operates the high voltage grid)? Are there features of ISOs (e.g., stakeholder boards, not-for-profit status, ISOs serving as the operator of the PX) that will either enhance or inhibit their possible evolution into gridcos? What changes in ISO structure would be necessary to enable an ISO to more easily evolve into a gridco? Is a gridco (either for-profit or non-profit) preferable to a non-profit ISO that does not own transmission facilities?

Should the Commission encourage the formation of other transmission entities, i.e., private for-profit or government owned transmission entities? Would other types of transmission entities be better suited to sustain competition?

Panel 2 Regulation, Governance, and Independence

The Commission has not mandated a specific form of ISO governance, although it has emphasized that independence of the ISO “is the bedrock upon which the ISO must be built if stakeholders are to have confidence that it will function in a manner consistent with this Commission’s pro-competitive goals.” (2) In addition, the Commission has stressed that expertise is also critical, since transmission owners would be understandably reluctant to turn over control of their transmission assets to an operator that lacks the necessary operational expertise.

(2) Atlantic City Electric Company, et al., 77 FERC 61,148 at 61,574 (1996).

The recent trend has been toward a two-tiered form of governance: an independent non-stakeholder board, whose members are not affiliated with market participants, advised by committees of stakeholders. Within the ISO, the independent non- stakeholder board has the ultimate decision-making authority. Some have suggested that the two-tiered approach seems to have the advantage of combining independence with expertise. The two- tiered approach has been adopted in New England and PJM.

Should the Commission encourage or define a particular form of ISO governance beyond the independence principle? Should the Commission establish additional standards in the area of governance, but allow reasonable variations on a regional basis? Because transmission system owners do not have a controlling vote in an ISO, should the owners be allowed to establish any ISO rules that cannot be changed by vote of the ISO Board, as a condition for the owners to join the ISO? Should the ISO have the authority to modify transmission tariffs and operating rules without seeking the approval of the transmission owners? Should the Commission require more specificity on the division of liability between the transmission owners and the ISO? If the Commission is satisfied that an ISO’s governance arrangements ensure independence (i.e., are neutral relative to the economic interests of different classes of market participants and to different states), should the Commission give more deference to the decisions made by the ISO governing board? The experience in other countries suggests that ISOs need to make many adjustments in their early stages of development. The ability of ISOs to make necessary changes in their rules may be slowed down if the Commission employs the same review processes that have historically been applied to the rate filings of traditional vertically integrated public utilities and to power pools with governance structures dominated by transmission owners. Are there streamlined or light-handed regulatory processes that would allow independently governed ISOs to make needed rule changes while still ensuring that the Commission can function as a “backstop” to protect the public interest?

The relationship between an ISO and any power exchange (PX) is also an important issue to consider pertaining to ISO formation. The relationship between an ISO and PX can take on different forms: in California, the ISO will be the control area operator and the PX mandated by State restructuring legislation will be operated independently of the ISO as one of several possible exchanges; in PJM, the ISO operates the PX; and the Midwest ISO does not propose to be either a control area operator or to administer any centralized power exchange. Do the operational features of power systems require that the ISO and PX be one and the same in order for the marketplace to operate efficiently, or can efficiencies be maximized if such institutions operate independently? Should we require that an ISO be associated with a PX? If so, under what conditions?

DAY 2

Panel 3 Role of States

Panel 4 ISOs and Reliability

One purpose of an ISO that is a control area operator is to make an independent party, the ISO, responsible for at least short-term reliability. Increased competition in wholesale electricity markets has resulted in many new market participants, and has fostered a great increase in the number and variety of wholesale transmission and power sale arrangements, including ancillary services needed to accomplish transmission service. As the number of power sales continues to increase, the Nation’s high voltage transmission system is being used more extensively and in ways that differ from its original design. Recent experience indicates that line loading is increasingly problematic. As usage grows, it is increasingly important for regional stability that transmission providers have access to greater information in order to maintain the reliability of the grid.

The Commission is committed to ensuring that the rules and practices for reliable operation of the grid are compatible with open, non-discriminatory use of transmission systems. Regional ISOs would be aware of power flows over a broader geographic region and would be independent of the competitive pressures affecting market participants engaged in power sales and purchases. Are there opportunities for regional ISOs to address reliability concerns and thereby maintain, and even enhance, the reliability of the transmission grid in an open access environment? Should an ISO have a special relationship with regional reliability authorities or should it establish its own mandatory reliability rules? If so, should the rules be determined on a regional or national basis? What is necessary to ensure that regional ISOs will have access to all information required for them to determine power flows in their region? Should the ISO be responsible for both calculating and posting regional ATC values, along with the method and data used to determine these values? Should the ISO be allowed to implement voluntary redispatching of resources for transmission loading relief, before pro-rata curtailment? Would a regional ISO, as compared to an individual transmission owner, be able to manage congested interfaces and loop flow issues in a more efficient and non-discriminatory manner?

The North American Electric Reliability Council has encouraged the development of security coordinators. What rules should apply so that the ISOs’ responsibilities for maintaining reliability appropriately complement utilities’ obligations to maintain reliability at the retail level? Would it be preferable for the ISO to be the security coordinator in its region?

Would other entities through entrepreneurial efforts provide better reliability?

Panel 5 ISOs and Transmission Pricing
Regional ISOs can serve as a vehicle for making transmission pricing more efficient and thereby promote competition in electric markets. Pancaked transmission rates are a barrier to efficient trading because they add an embedded cost charge every time a transaction crosses a corporate boundary. A non-pancaked rate gives buyers and sellers of electricity greater access over a broader geographic market and thereby can remove one of the greatest barriers to trade. Further, regional ISOs may be able to take account of loop flows and price transmission congestion efficiently. Should the Commission establish a uniform method for transmission pricing in regional ISOs, or should transmission pricing be considered on a region-by-region basis? Is it more appropriate for a customer to pay an access charge based on the costs of the transmission owner where the load is located? Or, should the Commission require that access charges be set using a single, uniform rate? Should the Commission consider providing for incentive rates of return to the ISO or transmission owners? If so, how should such incentives be structured? Should they be designed to maximize throughput on the grid or more general measures of efficiency? Should the Commission encourage a uniform model for pricing transmission congestion? Could other transmission entities provide adequate pricing alternatives?

Panel 6 ISOs and Market Monitoring

An ISO is a regulated public utility. However, it is not a traditional public utility because it is typically a non-profit organization that provides services to all market participants and is not directly controlled by any single participant or class of participants. Because the ISO will be involved in the day-to- day operation of the grid, it will know more about the grid and perhaps market operations than any other regional organization. While the Commission cannot abdicate its responsibilities to ensure just and reasonable rates and non-discriminatory terms and conditions of jurisdictional services, ISOs have the potential to monitor the competitiveness of regional bulk power markets and assess the availability of non-discriminatory access to transmission and ancillary services. In orders issued in the California and PJM restructuring proceedings, the Commission (3) required the ISOs to develop market monitoring plans.
(3) See Pacific Gas and Electric Company, et al., 77 FERC 61,265 at 62,087 (1996); Pacific Gas and Electric Company, et al., 81 FERC 61,122 at 61,548-54 (1997); Pennsylvania-New Jersey-Maryland Interconnection, et al., 81 FERC 61,257 at 62,282 (1997).

As explained in PJM, a market monitoring function must be conducted in an independent and objective manner. Should the Commission require every ISO to have a market monitoring plan? Should a market monitoring plan allow the ISO to detect and report market power abuses (vertical and horizontal), assess undue discrimination in the provision of transmission and ancillary services, and assure compliance with the ISO’s rules? Would it be appropriate to include enforcement mechanisms (e.g., sanctions and mitigation actions) with a monitoring function? Must the Commission review any ISO-imposed sanction or would it be appropriate to act only upon complaint? Are there any limitations on the Commission’s authority to permit initial market monitoring to be conducted by ISOs? Should the Commission rely in the first instance on the ISO to monitor discriminatory behavior?

Is it necessary and feasible for ISOs to monitor bilateral markets? Are the potential remedies available to ISOs (e.g., price caps, bidding caps, loss of bidding privileges) likely to be effective if the underlying problem is structural? Should there be different market monitoring requirements for ISOs that do not operate centralized energy markets?

Panel 7 ISOs and FERC Regulation

In Order Nos. 888 and 888-A, the Commission elected not to mandate the formation of ISOs. We stated, however, that if it becomes apparent that functional unbundling is inadequate or unworkable in assuring non-discriminatory open access transmission, we would reevaluate our position and decide whether other mechanisms, such as ISOs, should be required. In Order No. 888-A, we recognized that it would be appropriate to allow some time to confirm whether the functional unbundling mandated by Order Nos. 888 and 889 will remedy undue discrimination before reconsidering our decision that ISO formation should be (4) voluntary. Given that the industry has now operated under the Order No. 888 open access regime for almost two years, the question now before us is whether we should go beyond our current policy of merely encouraging regional ISOs.

(4) Order No. 888-A at 30,249.

The Commission would also like to consider the related issue of whether all public utilities in a region should be required to participate in an ISO when an ISO proposal is geographically fractured. Should the Commission be concerned if some public utility transmission owners in a region refuse to join the ISO? Will a patchwork ISO within a region raise issues of undue discrimination? What should the Commission’s response be to a proposal that has so many geographic holes that it does not permit effective regional competition and may hinder assurance of reliability? Should the Commission define appropriate geographic boundaries for ISOs?

Should the Commission require membership in an ISO in order to remedy undue discrimination under Sections 205 and 206 of the Federal Power Act (FPA)? Would our authority to remedy undue discrimination be broader if an ISO proposal is geographically incomplete (e.g., if similarly situated customers were paying different transmission service rates — one pancaked and one not)? What is the Commission’s authority in these matters over transmitting utilities that are not public utilities?

The Commission has strongly encouraged merger applicants to join an appropriate ISO. Would it be appropriate for the Commission to generically find that a merger applicant’s participation in an appropriately structured ISO is necessary to find that a merger of jurisdictional facilities is consistent 5 with the public interest under FPA Section 203? Should the Commission continue considering whether ISO membership is necessary in individual merger proceedings?

FPA Section 202(a) provides that “the Commission is empowered and directed to divide the country into regional districts for the voluntary interconnection and coordination of facilities for the generation, transmission, and sale of electric energy.” This authority currently resides with the Department of Energy (DOE). If DOE were to use its authority, or delegate that authority to the Commission, should Section 202(a) be used to enhance the development of ISOs in a rational, comprehensive manner? Would Section 202(a) empower DOE or the Commission to define appropriate geographic boundaries for ISOs?

Utility Restructuring Weekly Update

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A reminder that this weekly service is available from DOE. Anyone can request to be added to the email distribution list. (Only a small portion of the current list is shown in the note below.) Notice the coming availability on DOE’s website.

I have an electronic file of back issues from 5/97 on, if you need them.

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Subject: Utility Restructuring Weekly Update
Date: Fri, 13 Mar 1998 17:05:00 -0500
From: Jennifer.Bergman@ee.doe.gov

**********************************************************************
Please note: Effective March 23rd the Weekly will be available on the Internet at http://www.eren.doe.gov/utilities/weekly.html. The March 20th and March 27th editions of the Weekly will not be e-mailed. We expect to resume e-mail delivery for the April 3rd edition.

March 13, 1998

Utility Restructuring Weekly Update

This weekly information has been compiled by Energetics, Inc. for the weekly should be directed to either Jennifer Bergman, Energetics, Jen_Bergman@Energetics.com, or Diane Pirkey, U.S. Department of Energy, DIANE.PIRKEY@HQ.DOE.GOV. All other inquiries should be directed to the specific organization in question.

National/Federal:
An advisory committee, comprised of leaders from the electric and natural gas industries, Congress, Federal agencies, utilities, and consumer groups, recently released a report on federal and state restructuring policy and guidelines. “Restructuring the Electric Utility Industry: A Consumer Perspective,” prepared by the Consumer Energy Council of America Research Foundation  consumers, particularly small commercial and residential users. The following are some of the recommendations made in the final report: (1) Congress should pass restructuring legislation soon; (2) consumers should be allowed to stay with their current provider and pay cost-based rates during the transition period of stranded costs recovery; (3) consumers should have access to and receive the programs should be continued; and (5) market power issues and solutions should be studied further and recommendations presented. The report is available from CECA/FA at (202) 659-0404. CECA/RF Press Release, March 4th

Rep. Stearns is developing a restructuring bill that would give states According to Stearns, “Congress should be careful not to mandate re-regulation… We should empower the states to enact measures providing their customers with retail competition and choice.” The legislation is said to include a reciprocity provision that would prohibit utilities from competing for customers if their own state was not open for customer choice. This bill is seen by some as an alternative to Rep. Schaefer’s bill and could possibly gain more bipartisan support because it does not mandate a date certain for retail choice. Congress Daily, March 9th

33,000 out of the 10 million electricity customers have signed up with new energy suppliers. Of these 33,000 customers, only 14,000 are residential and small commercial customers. It seems as if many of the California consumers are listening to the Southern California Edison ads that say “Do Nothing” about competition. EnergyOnline, March 9th

Merger:

The Justice Department approved the proposed merger between Enova Corp. and Pacific Enterprises. As a part of the merger, which would form Sempra Energy, San Diego Gas & Electric will sell two of its fossil-fuel plants.

Stranded Benefits:

The U.S. Department of Energy and the California Energy Commission signed an agreement to promote the development energy-efficiency technologies. This plan is the first of its kind and it is being energy sources continues in a restructured electricity industry. The agreement, which is in a Memorandum of Understanding, focuses on energy-efficiency and renewable-energy technologies and encourages the development of advanced electricity generation systems. PowerPlus, March 9th

Principles that would guide buyers and sellers in a competitive marketplace. Under AWEA’s green marketing principles, green power products must include power from wind, solar, biomass, and geothermal resources. There should be no repackaging of electricity from renewables that are “already being paid for by utility ratepayers” and existing and new entrants must compete, with no preference given for Electricity Daily, March 5th

A new fast food restaurant in Phoenix offers its patrons an item not found on a typical menu: use of an electric vehicle charging station. Although this is not the first area restaurant to offer such station, it is the first one to offer both conductive (plug-outlet technology) and inductive (not requiring a metal-to-metal connection) charging. This $1 million, 115-seat McDonalds is the product of a collaborative effort between the fast food chain and the Arizona Public Service Co. to design a restaurant that is energy-efficient and environmentally friendly. Among its features are an energy management system to control cooling/heating, lighting, and ventilation; solar light tubes; occupancy sensors; photosensors to adjust to lighting needs; skylights; and state-of-the-art glazing. These features are projected to reduce energy costs by 25 percent. This store is one of a few McDonalds prototypes in the nation that is optimized for the climate of region in which it is located. Knight Ridder/Tribune Business News, March 9th

States:

Arizona

Negotiations continue in the effort to generate an intergovernmental agreement between the Salt River Project (SRP) and the Arizona Corporation Commission (ACC) to ensure that the rules of the retail market apply to all electricity providers. Currently, long-held agreements between investor- owned utilities (IOUs) and SRP define the various suppliers’ service territories. In competitive markets, however, those boundaries will fade, and the IOUs fear that SRP will invade their service territories without providing reciprocal access to its market. According to sources, both the ACC and SRP are committed to creating an agreement, but disagreement continues over enforcement issues. These discussions are taking place in the context of legislative action on an electric restructuring bill. The bill, which passed the Arizona House last week, calls for full competition in SRP’s service territory by 2000, although the ACC’s blueprint for reform does not envision direct access for the IOUs until 2003. The measure was sent to the Senate, which is expected to begin committee review within the next week. Electric Power Alert, March 11th & March 9th

Colorado

The latest Colorado bill to deregulate the electric industry fared no better than those that have preceded it. Rep. Gary McPherson (R) shelved his bill to allow commercial and residential consumers to choose their electricity provider by 2002 because he did not have enough votes to move it out of the House committee. The next step is to prepare a compromise bill by combining it with one previously introduced by Rep. Paul Schauer (R) that stalled in committee last month. If the compromise bill fares no better in the General Assembly, a measure to prepare a report on the effects of deregulation by December 1999 will be the next step. Progress toward deregulation continues to move slowly in the state; comparatively low electric rates and many opponents, including rural electric associations and cooperatives, are cited as reasons. Knight Ridder/Tribune Business News, March 9th

Florida

State Senator Charlie Crist (R) recently announced his bill to bring choice to the state’s electricity consumers in three years. The bill would require utilities, including municipal power agencies and rural electric cooperatives, to submit restructuring plans detailing what they would charge for generation, transmission, distribution, metering, and billing to the Pubic Service Commission by year’s end. Without a co-sponsor or a companion bill in the House, it is not likely the bill will go beyond the committee hearings. Knight Ridder/Tribune Business News, March 9th

Illinois

The relationship between investor-owned utilities (IOUs) and their affiliate companies will be the subject of an extensive series of hearings by the Illinois Commerce Commission (ICC) at the end of the month. The ICC is instructed by Illinois’ newly enacted open competition law to determine proper boundaries for these relationships. The Illinois Citizen Utility Board (CUB) and Enron
Corp have already gone on record indicating that they are concerned about the impact IOU relationships with sister companies may have on a competitive market. Citing a recent court decision, the CUB argues that the relationships between affiliates creates a barrier to entering the market. Enron Corp is concerned with making sure that they pay no more than an affiliate for services like transmission and distribution. According to sources, Commonwealth Edison (ComEd) and other Illinois-based IOUs will argue that denying them a strong relationship with their affiliates will put them at a disadvantage in competing with IOUs from other states that may not be regulated as strongly. ComEd also plans to testify that electric competition will increase customer welfare and that regulation by the ICC should be light-handed. Electric Power Alert, March 11th

Indiana

An electric industry deregulation bill died in the Indiana state legislature, a victim of divergent interests within the state’s investor-owned utility community. The bill, which would have allowed full competition by 2004, was supported by companies such as American Electric Power and Cinergy Corp. These companies currently have relatively little market share in Indiana and believe that competition would create new opportunities to expand their business. Other more established utilities, including Northern Indiana Public Service Co and Indianapolis Power & Light Co, opposed the bill, sources say, because they already control large portions of the state’s market and see little advantage to competition. Electric Power Alert, March 11th

Massachusetts

In a single order, the Department of Communications and Energy granted approval of restructuring plans for three of the state’s utilities: Cambridge Electric Light, Commonwealth Edison, and Canal Electric. With this order, all but two of the Massachusetts utilities have received final approval on their restructuring plans. The remaining two, Massachusetts Electric and Fitchburg Gas & Electric Light, have both received interim approval on their plans. PowerPlus, March 12th

New Hampshire

New Hampshire Governor Jeanne Shaheen (D), Public Service Co of New Hampshire (PSNH), and consumers have begun private talks to work out a resolution to the electric industry reform deadlock that has gripped the state for much of the year. Issues being debated include the timing and extent of rate cuts and stranded cost recovery. Participants remain hopeful that there will be some sort of resolution, but do not anticipate meeting the July 1, 1998 deadline for open access envisioned by the Public Service Commission (PSC). If the talks do not produce a timely resolution, PSNH has promised to continue with its legal action claiming that the PSC’s February 1997 order implementing choice at the behest of the state legislature constitutes an unconstitutional taking of property because it opens the utility’s transmission and distribution and does not compensate its loss through full stranded cost recovery. Tired of the reform deadlock, House members passed a bill February 12 authorizing the PSC to issue securitization for independent power producer buy downs. Other investor-owned utilities in the state have bypassed the reform talks and begun to file settlements calling for full stranded cost recovery and divestiture of fossil fuel assets in return for rate reductions and open access by July 1. Electric Power Alert, March 11th

New York

The New York Public Service Commission (PSC) has approved the 1998 Demand Side Management (DSM) Plan submitted by the Long Island Lighting Company (LILCO) with certain caveats. Funding for the plan was approved at $10.6 million. The utility plans to operate well as low-income programs. In its ruling, the PSC indicated concern that LILCO’s DSM plan provides only limited market transformation opportunities and does not address how the plan will be coordinated with the statewide DSM programs to be funded with the new system benefit charge (SBC) or how its low-income program night be jointly developed and operated as a gas and electric program. As a result, administrator being designated by the Commission, and other interested parties in order to develop and coordinate further market transformation initiative and joint low-income programs. New York Public Service Commission, March 4th

Pennsylvania
Under a bill recently introduced by Rep. Lloyd (D), all Pennsylvanians would be able to choose their power supplier by January 1999, up to two years earlier than mandated by the state’s restructuring law. This bill has the backing of consumer and environmental groups, however the state’s utilities oppose it. Lloyd’s bill is currently being cosponsored by 15 others. Knight Ridder/Tribune Business News, March 10th

Texas

Texas-New Mexico Power Company is beginning a pilot program for a small town in south-central New Mexico. Starting May 1, the utility’s  supplier for a two-year period.
EnergyOnline, March 4th

Vermont

Momentum towards electricity restructuring in Vermont has been slowed as a result of a March 1 decision by the state’s Public Service Board (PSB) to grant Green Mountain Power Corp (GMP) a mere fraction of the rate increase it was seeking. The PSB decision, experts believe, demonstrated that the current system of regulatory oversight can protect consumers, validating the concerns of many House members that deregulation may diminish those protections. “The rate case effectively kills restructuring for the session,” said a source with the Associated Industries of Vermont. “The politics look absolutely abysmal.” While ratepayers have hailed the decision to award only $5.6 million of the $22 million requested by GMP, the utility is vehemently opposed and has promised to file an appeal to the PSB or go directly to the state Supreme Court. According to the utility, the PSB erred in its finding that GMP was imprudent in signing a contract with Hydro Quebec in 1991. As a result of the decision, GMP’s bond rating has been downgraded, leaving the utility in a precarious financial position. Electric Power Alert, March 11th

Virginia

The state Senate approved an amendment to the restructuring legislation that would expand the requirements of competition to include both generation and transmission facilities. This amendment also calls for both generators and power marketers to participate in the development of an independent system operator. The House is now considering this amendment. PowerPlus, March 12th

WEBSITES:
Yahoo Utilities Company News: http://biz.yahoo.com
PMA Daily Power Report: http://www.powermarketers.com
EnergyOnline: http://www.energyonline.com

DOE Reliability TF draft papers

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(Forwarding information from the DOE SEAB TF. I’ve reformatted the attachments for convenience. The minutes will be posted on their website — http://www.hr.doe.gov/seab — but probably not the draft papers.)

Attached for your information are four draft papers that will be discussed by the DOE Task Force on Electric System Reliability at their meeting on March 10 at the ANA Hotel in Washington, D.C.

Also attached are the minutes of the January Task Force meeting.
—————————–

esr#7min.rtf
Minutes of Seventh Task Force Meeting January 13, 1998
tech-13.rtf
Technical Issues in Transmission System Reliability
trans02.rtf
INCENTIVES FOR TRANSMISSION ENHANCEMENT
tfanc02.rtf
ANCILLARY SERVICES AND BULK-POWER RELIABILITY
iso-14.rtf
The Characteristics of the Independent System Operator
———————————

(for those new to the distribution list, here is the earlier note about the
March meeting. Note website reference at end.)
———————————
Subject: UFTO Note- Next Meeting DOE Reliability TF
Date: Thu, 19 Feb 1998
————————————————————–
Next (8th) Meeting DOE/SEAB- Electric System Reliability Task Force
Tuesday, March 10, 1998, 8:30 AM – 4:00 PM.
ANA Hotel, Ballroom I, 2401 M Street, NW, Washington, D.C. 20037

Background The electric power industry is in the midst of a complex transition to competition, which will induce many far-reaching changes in the structure of the industry and the institutions which regulate it. This transition raises many reliability issues, as new entities emerge in the power markets and as generation becomes less integrated with transmission.

Purpose of the Task Force The purpose of the Electric System Reliability Task Force is to provide advice and recommendations to the Secretary of Energy Advisory Board regarding the critical institutional, technical, and policy issues that need to be addressed in order to maintain the reliability of the nation’s bulk electric system in the context of a more competitive industry.

Tentative Agenda
Tuesday, March 10, 1998
8:30 – 8:45 AM Opening Remarks & Objectives
— Philip Sharp, ESR Task Force Chairman
8:45 – 10:15 AM Working Session: Discussion of Draft Position Paper
on Technical Issues in Transmission System Reliability
10:15 – 10:30 AM Break
10:30 – 11:45 AM Working Session: Discussion of a Draft Position Paper
on the Role and Shape of the Independent System Operator
11:45 – 12:45 PM Lunch
12:45 – 1:45 PM Working Session: Discussion of a Draft Position Paper
on Ancillary Services and Bulk-Power Reliability
1:45 – 2:45 PM Working Session: Discussion of a Draft Position Paper
on Incentives for Transmission Enhancement
2:45 – 3:30 PM Working Session: Guest Presentation & Discussion of
State and Regional Reliability Issues
— Philip Carver, Oregon Office of Energy
3:30 – 4:00 PM Public Comment Period
4:00 PM Adjourn

Information on the Electric System Reliability Task Force and the Task Force’s interim report may be found at the Secretary of Energy Advisory Board’s web site, located at http://www.hr.doe.gov/seab.

Chemical Treatments Neutralize Asbestos

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Brookhaven National Lab and WR Grace issued a major joint press release last December (attached below) announcing the development of a new commercially available treatment process that changes the chemical makeup of chrysotile asbestos. This is the type of asbestos used in fireproof coatings on structural steel.

The process destroys the asbestos in place, while maintaining its fireproofing properties. An acidic foam is applied, which soaks in and digests the asbestos molecules. The resulting material simply is not asbestos any more.

Contact Len Ciesluk, 410-531-4645, leonard.ciesluk@grace.com

The form of asbestos used for thermal insulation (e.g. pipe wrapping and boilers, etc.) contains a different form of asbestos called amosite. The WR Grace process does not apply to amosite, but work is proceeding rapidly at Brookhaven on other formulations that will deal with both types of asbestos (sometimes a mix is used). Brookhaven is applying for patents, and is looking to DOE for additional funding. They’ve already begun discussions with a few utilities, and would be delighted to talk to UFTO companies about working with them to turn this new chemistry into a commercial process, estimated to require only a few months.

Contact is Leon Petrakis, 516-344-3037, petrakis@bnl.gov
—————————–

W.R. Grace – BNL Press Release
ISSUED DECEMBER 10, 1997

–Product Destroys Asbestos While Maintaining Original Materials’ Fire-resistive Capabilities on Columns and Beams–

–Product Should Provide Significant Cost Savings to Building Owners–

The new technique uses a foamy solution sprayed directly onto asbestos-containing fireproofing. The foam chemically digests asbestos fibers, dissolving them into harmless minerals.

When the treatment is done, the fireproofing is no longer a regulated material. The process is the first to chemically destroy asbestos without first removing the fireproofing.

Grace anticipates that building owners will realize significant cost savings from the new product. Current techniques for removing asbestos-containing fireproofing require the construction of air-tight barriers, labor-intensive scraping of the fireproofing, and the installation of new asbestos-free fireproofing. The new product eliminates the need to remove and replace older material and substantially reduces the time needed for the entire process. Moreover, the new process produces essentially no waste and is expected to save building owners the expense of disposing of regulated waste materials.

The new product is expected to be commercially available in early 1998.

Larry Ellberger, chief financial officer and acting chief executive officer of Grace, stated, “This product is an important advance in the science of asbestos abatement. Our scientists embarked on this research several years ago because it was a natural extension of our expertise and because we were committed to helping our customers find a more time-efficient and cost-effective alternative to asbestos removal. We are gratified by the excellent collaboration we have had with the scientists at Brookhaven, whose expertise in chemistry and materials science was a perfect complement to our scientists’ knowledge of the product and its properties. Brookhaven’s involvement was critical to the timely completion of this project. This is a win-win for Grace shareholders, building owners and industry-government cooperation.”

Dr. Leon Petrakis, the senior scientist in charge of the project at Brookhaven, said, “We are delighted to have worked with Grace on this project. We believe our collaboration has led to a turning point in the important but until now rather overlooked science of asbestos abatement. This method could be used in thousands of schools, office buildings, hospitals, and other institutions around the country. We also believe it could lead to the development of a family of innovative materials that chemically digest asbestos-containing materials, with potential applications for addressing asbestos in thermal insulation at the Department of Energy, in other governmental facilities and in the utility industry.”

Extensive Tests Performed

Full-scale tests performed with the new product by Grace and Brookhaven have confirmed that its use would reduce asbestos to less than 1 percent, which is the Environmental Protection Agency’s definition of non-asbestos materials. The asbestos-neutralizing process was first evaluated in Brookhaven’s unique testing laboratory, specially equipped to handle asbestos. It was then tested at a vacant four-story building with existing asbestos-containing fireproofing.

All tests performed to date used Grace’s asbestos fireproofing. Project scientists, who are knowledgeable about the composition of asbestos-containing fireproofing made by others, believe the process should be effective on most of those products as well.

Although most of the efforts thus far have been centered around spray-applied fireproofing, laboratory tests conducted by Grace and Brookhaven have confirmed that the digestion process should also be effective with acoustical plasters.

Grace expects to receive six patents for the new asbestos-neutralizing process. Brookhaven has received one patent relating to the process and is applying for two others.
Brookhaven and Grace also developed a new quantitative analytical method that detects chrysotile asbestos fibers in material containing as little as 0.1 percent of the fibers. Development of the technique utilized the powerful X-rays of Brookhaven’s National Synchrotron Light Source, as well as conventional laboratory instruments.

Scientific Cooperation at Work

The development of the asbestos-neutralizing process began at Grace several years ago. Through mutual participation in the Council for Chemical Research, scientists from Grace and Brookhaven met to discuss ways that Brookhaven could participate in the research.

The partners signed a Cooperative Research and Development Agreement, or CRADA, which provided for joint funding of the multi-million dollar project. The project also received funding from the Department of Energy, which represents cooperation within that agency, including the DOE’s Office of Environmental Management and the Office of Energy Research. Initial funding also came from Brookhaven’s pool of Laboratory Directed Research and Development funds and its Department of Applied Science.

Grace, based in Boca Raton, Florida, is a leading global supplier of flexible packaging and specialty chemicals with annual sales of $3.5 billion. Grace is the world’s leading producer of spray-applied fireproofing–Monokote® MK-6– to protect structural steel against damage from fire. Grace operates in more than 100 countries.

Brookhaven National Laboratory carries out basic and applied research in the physical, biomedical and environmental sciences and in selected energy technologies. Brookhaven is operated by Associated Universities, Inc., a nonprofit research management organization, under contract with the U.S. Department of Energy.
# # #
STATEMENT BY U.S. SECRETARY OF ENERGY FEDERICO PEÑA

Brookhaven Laboratory scientists have helped create an innovative, safe solution to a tough problem that affects people around the country. This is just one example of many achievements at Brookhaven, known for its contributions in medicine, basic research, energy and environmental science. Partnerships between Department of Energy laboratories and private industry consistently reap tangible rewards. In this case, we will make a difference in safely removing asbestos from schools, houses, offices and other buildings.”

Next Meeting DOE Reliability TF

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Next (8th) Meeting DOE/SEAB- Electric System Reliability Task Force
Tuesday, March 10, 1998, 8:30 AM – 4:00 PM.
ANA Hotel, Ballroom I, 2401 M Street, NW, Washington, D.C. 20037

FOR FURTHER INFORMATION CONTACT: Richard C. Burrow, Secretary of Energy Advisory Board (AB-1), U.S. Department of Energy, (202) 586-1709 or (202) 586-6279 (fax).

Background

The electric power industry is in the midst of a complex transition to competition, which will induce many far-reaching changes in the structure of the industry and the institutions which regulate it. This transition raises many reliability issues, as new entities emerge in the power markets and as generation becomes less integrated with transmission.

Purpose of the Task Force The purpose of the Electric System Reliability Task Force is to provide advice and recommendations to the Secretary of Energy Advisory Board regarding the critical institutional, technical, and policy issues that need to be addressed in order to maintain the reliability of the nation’s bulk electric system in the context of a more competitive industry.

Tentative Agenda
Tuesday, March 10, 1998
8:30 – 8:45 AM Opening Remarks & Objectives
— Philip Sharp, ESR Task Force Chairman
8:45 – 10:15 AM Working Session: Discussion of Draft Position Paper
on Technical Issues in Transmission System Reliability
10:15 – 10:30 AM Break
10:30 – 11:45 AM Working Session: Discussion of a Draft Position Paper
on the Role and Shape of the Independent System Operator
11:45 – 12:45 PM Lunch
12:45 – 1:45 PM Working Session: Discussion of a Draft Position Paper
on Ancillary Services and Bulk-Power Reliability
1:45 – 2:45 PM Working Session: Discussion of a Draft Position Paper
on Incentives for Transmission Enhancement
2:45 – 3:30 PM Working Session: Guest Presentation & Discussion of
State and Regional Reliability Issues
— Philip Carver, Oregon Office of Energy
3:30 – 4:00 PM Public Comment Period
4:00 PM Adjourn

This tentative agenda is subject to change. The final agenda will be available at the meeting.

Public Participation: The Chairman of the Task Force is empowered to conduct the meeting in a fashion that will, in the Chairman’s judgment, facilitate the orderly conduct of business. During its meeting in Washington, D.C., the Task Force welcomes public comment. Members of the public will be heard in the order in which they sign up at the beginning of the meeting.

Information on the Electric System Reliability Task Force and the Task Force’s interim report may be found at the Secretary of Energy Advisory Board’s web site, located at http://www.hr.doe.gov/seab.

Resonant Shock

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See UFTO Note Jan 15, 1998 for background on this remarkable development–turns ash of any kind, tailings, and dirt, into excellent building materials–cheaply and easily–using shock compaction.

The company, Resonant Shock Compaction, is making excellent progress. Here are two items they’ve just sent me (I’ve made no changes):

1. Large Block Testing Program — invitation to participate.
2. Abstract of their paper at recent DOE FETC 3rd annual Conference on Unburned Carbon on Utility Fly Ash.
—

Proposed Large Block Testing
RSC Compaction Technology
University of Denver

Background:

Public Service Company of Colorado and others are interested in testing the RSC technology beyond tests conducted in 1997 using coal combustion by-product (CCB) mixes to make parts for potential construction applications. This testing will test the RSC technology and its ability to fabricate large block parts.

Test Program Participants:

The following are defined as “test program participants,” Boral Material Technologies, Cat Construction Inc., McDonald Farms Enterprises, Public Service Company of Colorado, RSC LLC, Tri-State Generation & Transmission, UtiliCorp United, University of Denver, VFL Technologies, Wallace Industries; and Nuclear Fuel Industries/Stoller Corp. These parties are willing to fund this test program in which large parts will be fabricated for laboratory and field testing. All program participants will share equally in test data without regard to their monetary contribution toward the test program.

Test Objective:

The test objective is to measure strength and durability of large blocks fabricated from CCB mixes compacted by the RSC technology. These large blocks will be approximately 36″ by 48″ by up to 10″ thick. The test program will compare properties of the large blocks with smaller test blocks fabricated and tested in 1997 and 1998.

It is proposed that the following number of quality blocks be fabricated from the following mixes:

(4 Blocks) Cherokee bottom ash and Cherokee No. 4 silo ash
(1 Block) Cameo combination silo/bottom ash
(1 Block ) FGD material from Craig and bottom ash from Hayden
(1 Block) Bottom ash from Nucla and other materials
(1 Block) Bottom ash from Clark Station and Class C ash from Comanche
(1 Block) Mojave bottom ash and fly ash
(1 Block) Japanese bottom ash and fly ash (NFI/Stoller)

Equipment:

The existing RSC machine at the University of Denver will be used. Four more air cushions and associated pneumatics will be installed to fabricate large blocks. A vacuum lifting device will be installed to safely move the large blocks. The vacuum lifting device will enable the same mold to be used repeatedly with minimum cycle time. A low cost curing chamber will be constructed to accelerate block curing to approximately 24 hours. Cement mixers and batch scales will be rented to prepare mixes and core drilling services will be hired to produce cores for laboratory testing.

A single mold that can fabricate the blocks will be provided and upon completion of the program, the mold will become property of RSC LLC.

Mold Design:

A single mold, designed to produce parts approximately 36″ by 48″ by up to 10″ thick will be designed by RSC LLC. Cost of the mold will be paid by test program participants. The mold will be designed for manual disassembly or ejection removal of parts. Testing will also address handling techniques (pins, bolts, lifting holes, etc.) for these test parts. The use of a vacuum lifting device will enable parts to be removed from the mold upon ejection for separate movement to the curing chamber.

Mix Design:

Each test participant will provide sufficient quantities of CCBs at no cost to the program. All costs of raw materials provided to RSC LLC will be borne by test program participants. Disposal of excess material will be arranged by PSCo. Each participant will work with RSC LLC to determine the appropriate mix design. New materials and/or mix designs will first be tested in the small mold to develop mix design for the large blocks.

Machine Operations:

Machine power settings, vibration, shock, acceleration, and period will be set to achieve large block strength and durability characteristics similar to previously fabricated small test blocks.

Testing:

Block strength and durability will be determined by measurement of compressive strength, porosity, freeze-thaw cycling, and resonant frequency. These tests will be performed on core samples cut from the blocks. Test criteria are based upon the 1997 and 1998 testing of small test block fabricated from similar mixes. Machine parameters and mix composition will be optimized to achieve strong and durable blocks.

Upon completion of curing the blocks will be transported to the PSCo Arapahoe Plant where the test cores will be cut from the blocks for testing at the University of Denver and at Commercial Testing Laboratories (CTL). Participants will determine block performance by placing the blocks in field test conditions at their respective locations. Upon completion of the test program, sample cores or whole parts may be retained by RSC LLC, the University of Denver and/or program participants.

Additional test capabilities available through the University of Denver Environmental Materials Laboratory include acoustic pulse velocity and absorption, acoustic emission, surface porosity, SEM analysis, thermal properties, and TCLP.

Test Results:

Test data obtained from this program will be available to program participants. It is anticipated that test data will be used by program participants and others to identify potential market applications of the RSC technology for large blocks. If a participant requires test data for a specific mix to be treated with confidentiality, that data will be provided only to that participant. However, it is anticipated that the physical characteristics of the large blocks will be reported generically without regard to specific mix designs.

Material Handling Issues:

Material handling techniques used at the University of Denver will not represent anticipated production techniques. Raw materials will be delivered in drums and mixing performed by manually placing mix components into a cement mixer and manually placing the mix into the mold. Equipment for weighing, measuring and blending raw materials may be rented. A forklift and vacuum hoist will be used to move the block. Because of space limitations at the University, different mix designs will be scheduled to reduce on property storage of raw materials and facilitate movement of completed blocks.

Schedule:

The test program schedule will be mutually determined by test program participants. A draft schedule is attached.

Test Program Costs:

The test program participants have agreed to fund this test program for an amount not to exceed $50,000. A test agreement will be prepared in which each participant will indicate their participation and/or level of funding. Participants will additionally bear all costs associated with providing their mix materials to the program, and transportation of mix material and test blocks. PSCo will assist in the coordination of transportation of finished blocks to Arapahoe Station and in the disposal of excess materials.

Other Parties and Potential Recovering of Test Program Costs:

To reduce the test program costs for all participants and to encourage development of the RSC technology with other entities, if test data from this program attract other partners, then the test program participants will be reimbursed a prorated portion of their costs from future agreements in which the large block testing served as the catalyst. For example, each participant’s share will be calculated as a percent of the total program. If a future agreement is signed between RSC LLC and other entities in which the large block test program results enable the agreement to be executed, then each test program participant will receive a fractional share of the agreement value to reimburse them for their participation, up to the full value only of their actual costs. This repayment will be made within three years of the completion of the test program. If no large block agreement with an entity is executed by that time, the test program costs will be forgiven.

Proposed Estimated Budget $45,000 – $50,000.

⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭
Presentation at the DOE FETC 3rd Annual Conference
on Unburned Carbon on Utility Fly ASh.

RESONANT SHOCK COMPACTION FOR COAL COMBUSTION PRODUCT UTILIZATION

⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭University of Denver

Robert E. Pressey, Keith Wier, and David Frey, RSC LLC.

INTRODUCTION

⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭⎭
The RSC technology is a high-g particle packing and forming process that has been licensed for ten years to commercially manufacture refractories weighing up to 5000 pounds. The Public Service Company of Colorado has funded a program at the University of Denver to develop applications of RSC to forming high-carbon Class F fly ash and bottom ash into value-added blocks and panels to construct sound barriers, retaining walls, pond liners, and tilt-up building panels. The Environmental Materials Laboratory is providing test facilities to study RSC process dynamics and product characteristics.

Typically, high-carbon test specimens formed by the RSC process have a compressive strength of 2000 to 5000 psi. Even specimens made from stoker fired ash containing 30% LOI measured 2500 psi. RSC is a robust technology that is tolerant of a wide range of carbon, calcium oxide, and calcium sulfate.

The RSC machine at the Environmental Materials Laboratory is a commercial sized unit capable of compacting 2000 pound parts. Laboratory test specimens are nominally 10 pounds but a mold to make 500 to 1000 pound panels has been designed. Large ash-based blocks and panels will be made for field testing.
⎭SUMMARY

Based upon Resonant Shock Compaction of Public Service Company of Colorado Cherokee Plant Class F fly ash and bottom ash this past year, it appears that the RSC technology can compact high-carbon ash into construction blocks, panels, or aggregate that pass many ASTM concrete and masonry strength and durability standards. These standards include compressive strength of 3000 to 5000 psi, sodium sulfate aggregate durability, face fired masonry water absorption, and freeze-thaw 300 cycle tests. These tests were performed by an ASTM certified commercial laboratory.

Papers at the last three DOE FETC Conferences on Unburned Carbonaceous Material on Utility Fly Ash reported that the highest valued ash utilization (cement admixture) is “at risk” because low NOx combustion technology often increases ash carbon content above the ASTM 618 limit of 6%, and the industry preference for 3% or lower. There is considerable effort underway to modify combustion processes to reduce ash carbon content and other efforts to increase alternative high-volume use options for high-carbon ash such as structural fill, agricultural soil amendments, and mine stabilization. Ash use is also limited by transportation cost to market and seasonal demand by the construction industry. Reduced ash use in concrete results in increased cement consumption and an associated one ton of CO2 for each ton of cement clinker produced.

Current research and development is focused on PSCo Cherokee Class F fly ash containing sodium carbonate flue gas conditioning agents and bottom ash, Valmont Class F fly ash and bottom ash, Comanche Class C fly ash, and Hayden bottom ash mixed with fly ash which has been conditioned with limestone ( flue gas desulfurization conditioned fly ash). Other tests include similar ashes, high carbon stoker ash (30% LOI), and circulating fluid bed ash containing highly reactive residual calcined calcium oxide with calcium sulfate.

The RSC market goal is to provide an alternative high-volume, high-valued product utilization of coal combustion products in partnership with electric utilities, ash brokers, construction companies, and manufacturers of concrete blocks, panels, and bricks. Acceptance of RSC ash-based construction materials is predicated upon successfully demonstrating the strength and durability of these products and obtaining the construction industry certifications from the International Conference of Building Officials, National Evaluation Service (ICBO NES).

Large blocks and panels will be made at the Environmental Materials Laboratory for testing in real applications. A transportable commercial plant will be built. Marketing studies have been performed by MBA students at the University of Denver Daniels School of Business. A preliminary conceptual design including capital and operating costs has been completed. Projected capital and operating costs are quite low.

Several electric utilities, environmental contractors, construction companies, and block manufacturers are participating in evaluation of the RSC technology to convert ash into construction blocks and panels. Waste clay and mine tailings are also being tested independently and in combination with ash. Specific products of interest to these parties are low cost highway sound barriers, retaining walls. pond liners, and tilt-up building walls. Test specimens containing greater than 50% bottom ash can be sawed, screwed, and nailed like wood.
⎭The University of Denver, Environmental Materials Laboratory, RSC LLC, and several electric utilities, are continuing studies to understand the unique properties of the RSC formed ash-based products. High-carbon ash formed into high strength products by the RSC process appear to be stronger than conventionally formed high-carbon ash products. RSC particle packing and high-g compaction of fly ash, bottom ash, and binder only requires about 10% water. This bonding process is being studied.

Acoustic velocity absorption and scanning electron microscopy have been used to measure ash and RSC product characteristics. A scanning optical microscopy densitometer system has been developed to measure product porosity. Acoustic velocity will be measured to correlate with product integrity. Differential scanning calorimetry and wide line proton nuclear magnetic resonance can provide information on ash-cement hydration.

The US Department of Energy has funded similar studies of the RSC technology at the University of Denver, Environmental Materials Laboratory to compact and stabilize radioactive and heavy metal contaminated soils. These studies have been conducted in cooperation with the DOE Rocky Flats Environmental Test Site, the DOE Argonne National Laboratories, and the DOE Mixed Waste Focus Area. Preliminary results have shown that RSC compacted soils have lower toxicity leach rates than other methods.

Energy Storage Assoc. Meeting

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Energy Storage Association (ESA) Fall Meeting
“The Value of Energy Storage in a Restructured Utility Market”
Sacramento, CA
November 18 -19, 1997

((An UFTO Note on Nov 10 gave the original agenda for this meeting.))

*** –> SPECIAL OFFER <– ***

This one time, the ESA is offering to send a free copy of the full proceedings to prospective members, together with their membership solicitation package. Membership in ESA is a good way to stay in touch with developments in utility storage, and a year’s company membership is only $1500.

To request the package and proceedings of the November meeting, contact (please tell them UFTO sent you):

ENERGY STORAGE ASSOCIATION
TEL: (301) 951-3223
FAX: (301) 951-3235

E-MAIL: John Hurwitch, Executive Director, jwitch@switch.smart.net
——————————-

–> MEETING HIGHLIGHTS

(more details on request–and in the Proceedings)

–> Overview of the Market:
The goal of ESA and the DOE Utility Storage program is to build market volume for storage systems. Utilities are proving to be a very tough market for battery storage, despite a strong benefit/cost story. One hypothesis is that the benefits are scattered among different stakeholders (even within a utility), with no single part being big enough by itself. Nobody is in a position to put it together, and restructuring is making the situation even worse, as the walls go up inside utilities. Also, utilities say they have no money, and want the first cost to be very low, regardless of life-cycle considerations. Meanwhile, big needs are looming, especially on transmission systems, but nobody seems to own the problem or is in a position to make the investment.

Vendors are offering turnkey systems for various applications and markets, but there are very few orders, and those are mostly for very special situations, e.g. in Alaska (remarkable success stories). Vendors are getting very discouraged, and may be close to throwing in the towel.

Is the problem with the Technology? Marketing? Or do utilities “just not get it?” Or, are the proponents wrong in their view that storage is an idea whose time is overdue, and that it’s largely a matter of “education”? In 1996, DOE and Sandia visited with over two dozen utilities to try to understand the industry’s views on storage. Results were recently published: “Report on the Energy Storage Systems Program Executive Meetings Project” SAND 97-2700, November 97. However, more dialogue with the utility industry is still needed, to get to the bottom of these questions.

The ESA has proposed a flagship project called “Storage 2000,” as a joint program with DOE to stimulate and accelerate development, with a goal of 200 MW of project commitments by the year 2000. Applications are to include renewable, distributed, generation/transmission (ancillary services), and customer systems.

–> Energy Storage in the UK
The closer storage is to the customer, the better. Anthony Price, of National Power, UK, compared batteries to warehouses for “just in time” distribution, where it’s well known that you put storage only in one place in the system, close to the customer. He showed an analysis of the bulk market hourly price over time. Even with big differences between on and off peak wholesale prices, you can’t win by buying off-peak and selling on-peak. Not only are there roundtrip (storage) losses, but you’re also fighting the spread (sell at the bid price, buy at ask). What you’d be selling is capacity, and there’s currently an excess.

The farther down the distribution chain you are, more distribution costs are built into the price of goods, so storage has more value. However, whoever owns the storage controls that value. “If the customer owns the storage, then the rates are wrong”.

–> Uninterruptible Power and Power Quality
While utility storage isn’t moving, UPS and P/Q applications are a very strong market (a lesson there somewhere?). There are still issues, however. Though vendors have products, there’s often insufficient understanding of what a “disturbance” really is. For example, they may design for a 3 phase symmetrical fault, which rarely occurs. Phase shifts and waveforms need particular attention. Too often, products need to be redesigned in the field.

There are several interesting systems using steel flywheels: – International Computer Power — steel flywheel in a 100 kVA motor genset to provide ridethrough, successfully demonstrated for two years at a Hewlett Packard site, dramatically reducing diesel backup starts. – Holic Power Protection — 100’s installed worldwide. Diesel generator and flywheel combination where the flywheel dynamically adjusts itself to maintain constant generator speed. 1250 kVA unit runs about $1.1 million. Without the diesel, it can provide short term ride through. – Active Power, Austin TX, has been issuing press releases lately. Modular pancake unit provides 400kW for 5 sec, for short discharge P/Q applications.

In “new” technology (composite) flywheels, Beacon Power presented their plug-replacement for batteries in UPS systems. The 1 kW, 2kWh unit goes directly on the DC bus. Beacon is a joint venture between SatCon and Duquesne. They expect to be in production by the end of ’98, with beta tests in mid year.
–> Renewables and Storage
Solar and Wind energy systems need storage, particularly in remote/village power applications. The opportunities are huge, particularly to supply the 2 billion people in the world with no electricity, and to displace diesel fuel consumption. A number of programs are trying to come up with reliable modular integrated systems (hybrids with diesel, solar or wind, and batteries). Batteries are often blamed as the weak link in renewable energy systems (right along with inverters), but the blame may be misplaced–often the wrong type of battery is installed by local people.

The President’s “Million Solar Roof” initiative is beginning to be felt, though this may not necessarily imply much use of storage. SMUD has a huge commitment to renewables, and are just now beginning to consider the potential benefits of storage in that context.

The first major project under Storage 2000 is to be the “Renewable Generation and Storage ” (RGS) project. Partners will be selected by formal solicitation process in 1998 for design, development and testing of a prototype integrated system with a PV array, inverter and storage, ready for customer use. International opportunities exist for “Remote Area Power Systems” or mini-grid systems. Funding is available, and local governments are motivated, e.g. in Latin America. The Solar Energy Industry Association has information. ( http://www.seia.org ).

–> Texas Energy Storage Technology Institute (ESTI)
This is a coordinated research program involving all the universities in Texas, funded in part by the Texas Energy Coordinating Council, a state agency. ESTI is doing work in capacitors, batteries, and particularly high performance flywheel systems for railroad applications. DOT and DARPA funding support the Advanced Locomotive Propulsion System, which includes a 3 MW Allied Signal gas turbo-alternator, and the University-developed 167 kwh flywheel for braking and acceleration. The idea is to provide an alternative to electrification of railroad right of way. ESTI wants to encourage synergies between stationary and mobile storage systems. Contact John Price, 512-471-4496, 512-232-1888 (direct), j.price@mail.utexas.edu, http:/www.utexas.edu/research/cem

–> Key Note Speaker

Separately, Pramod Kulkarni of the CEC outlined the priorities for storage in California, seen as a “strategic” area under the public benefit R&D program.

DOE Reliability TF- Meeting announcement and minutes

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Subject: UFTO Note – DOE Reliability TF- Meeting announcement and minutes
Date: Thu, 08 Jan 1998 13:29:04 -0800

Below is the announcement of the next (7th) meeting of the DOE/SEAB Task Force meeting, which also can be found on line at: http://www.hr.doe.gov/seab

The minutes of the 6th meeting (November 6th) will also be available on line in a day or two. I have a copy if you’d like it now.

DOE Secretary of Energy Advisory Board
Notice of Open Meeting —
Seventh Meeting of the Electric System Reliability Task Force

Tuesday, January 13, 1998, 8:30 AM – 4:00 PM.
Madison Hotel, Dolley Madison Ballroom,
15th & M Streets, NW, Washington, D.C.

FOR FURTHER INFORMATION CONTACT: Richard C. Burrow, DOE,
(202) 586-1709 or (202) 586-6279 (fax).

The meeting will build on the task force’s Interim Report and SRRO Letter Report, and will include discussions of the following items:

— Draft Position Paper on Technological Issues in Transmission System Reliability
— Draft Position Paper on the Role and Shape of the Independent System Operator
— Presentation on the Provision of Ancillary Services

Tentative Agenda
8:30 – 8:45 AM Opening Remarks & Objectives — Philip Sharp,
ESR Task Force Chairman
8:45 – 10:15 AM Working Session: Discussion of Draft Position
Paper on Technical Issues in Transmission System
Reliability — Facilitated by Philip Sharp
10:15 – 10:30 AM Break
10:30 – 11:30 AM Working Session: Discussion of a Draft Position
Paper on The Role and Shape of the Independent
System Operator — Facilitated by Jose Delgado
11:30 – 12:00 PM Public Comment Period
12:00 – 1:15 PM Lunch
1:15 – 2:30 PM Working Session: Presentation & Discussion on
The Provision of Ancillary Services — Eric Hirst
(ORNL) & Facilitated by Philip Sharp
2:30 – 3:45 PM Working Session: Presentation & Discussion on
Transmission Pricing Issues — Susan Tierney &
Facilitated by Philip Sharp
3:45 – 4:00 PM Public Comment Period
4:00 PM Adjourn

Information on the Electric System Reliability Task Force and the Task Force’s interim report may be found at the Secretary of Energy Advisory Board’s web site, located at http://www.hr.doe.gov/seab.