Public Utilities Reports

PUR Guide 2012 Fully Updated Version

Available NOW!
PUR Guide

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

Baghouse Bottleneck

EPA, mercury and electric reliability.

Fortnightly Magazine - February 2012

of 1.23 percent per year.

 

Wellinghoff: So, Mr. Lauby … I understand you used a growth rate of 1.23 percent; is that correct?

Lauby: Yes.

Wellinghoff: And that was nationwide?

Lauby: That’s based on the data we have before us from industry.

Wellinghoff: Okay, then I also noticed that your on-peak generating capacity was projected to increase by 90 GW, which was a significant decline from what you estimated in your last year projections?

….

Lauby: You’re right … we did see a reduction in the plans for capacity, and our belief is that that’s resulting from the lower growth rate. This is one of the lowest growth rates we’ve seen since we’ve started LTRAs.

Wellinghoff: Okay. I think the growth rate was interesting, because I just had TVA in my office, and they told me they’re … forecasting their growth rate out at below 1 percent.

 

Wellinghoff’s hint was clear: if NERC’s presumed growth rate was too high, and its projected capacity additions too low, then it would over-estimate the threat to reliability, lending fodder to Republican opponents on Capitol Hill. So when Lauby identified Texas as a potential problem area, the chairman was quick to pounce:

“Of course, one of the issues with Texas is they’re isolated. They don’t have anybody else that they could lean on.”

For panelist Michael Kormos, PJM’s senior v.p. of operations, who saw the MATS rule as difficult but manageable for his RTO region, Wellinghoff was more forgiving, agreeing that PJM’s wider interconnections would help see it through. In testimony submitted to FERC in advance of the conference, Kormos had stated that “PJM has not identified any overarching reliability impacts associated with potentially retiring units that cannot be resolved with transmission upgrades within the four-year period allowd by the proposed MATS rule.”

But Wellinghoff soon returned with questions for Anthony Topazi, chief operating officer for Southern Company, a vertically integrated utility that has shunned FERC’s market models. Wellinghoff even hinted that FERC might question the veracity of data from stand-alone, fully state-regulated utilities, while offering a higher level of trust to findings from RTOs:

 

Wellinghoff: What level of demand growth do you forecast in Southern, as opposed to TVA?

Topazi: We have … we’re one of the industry leaders in demand response, about 2,000 MW.

Wellinghoff: No, I’m sorry. Maybe you didn’t understand my question. Your load growth. What level of load growth projections?

Topazi: I don’t know the specific number but it has come down considerably over the last year …

Wellinghoff: Higher than TVA’s less than one percent?

Topazi: It’s in the one, one-and-a-half percent range.

Wellinghoff: Okay, all right, and you know, I can appreciate that maybe you and some other isolated utilities may need some specific exemptions … Are you willing to have third-party verification and analysis, by FERC going in, analyzing what you’re doing with respect to resource planning and your assumptions?

Topazi: Yes. I mean utilizing the NERC process and standards is what you have to do to …

Wellinghoff: If we’ve got planning authorities like