NEPPA eNewsletter

I would like to divert from my traditional article this month to provide an open letter of response to Kathryn J. Jackson, Chair of the Board of Directors, and Gordon van Welie, Chief Executive Officer of ISO New England. On January 16, 2014, they issued a letter of response to concerns that the public power members and participants in New England have raised regarding forward capacity markets. To read the letter, click here.

Dear Ms. Jackson and Mr. Welie,

I appreciate your written response. It is well crafted and definitely reiterates your position; but your position is dismissive and does not adequately address the concerns raised by the public power community in New England. It is time for a real conversation about the market’s issues and shortcomings and the need for a holistic approach to reform.

As you seem unwilling to engage in an open discussion other than to defend your carved course, let me at least pose some questions in relation to your letter of January 16th. 

You stated in paragraph two of page two (of your letter) that "both the ISO and stakeholders have rejected the energy-only market approach because the market would be highly volatile and that high prices would be needed to induce investment in reliability." Please demonstrate the independent review of the data to show its vetting. Public power systems participated in the process and never argued that capacity markets should be replaced with an energy-only market.  Instead, we argued for enhancing signals in the energy and reserve markets and keeping the aspects of the capacity markets that work.  There is a need to look at the cost of maintaining reliability by looking at market costs on a holistic basis.  As you know, public power places a high value on reliability and our members as integral parts of their communities would not support a reduction in reliability. But we would very much like to see that this reliability is being obtained at the lowest reasonable cost to consumers on both a long term basis and a near term basis.   

You go on to suggest that our disagreements result from "differing visions." The reliable provision of power to the New England market should not be reduced to "differing visions." ISO was tasked with the creation and operation of a sustainable market for reliable power. It is not intended to be a monument to a person or group’s beliefs. 

Your dismissal of our suggestions for addressing the risks facing the region are not based on analysis, but "belief."  You dismiss the desire to provide the reliability that consumers' desire. No studies or quantifiable models were provided to support your lack of faith in the industry’s desire to value reliability or state governments’ ability to protect their citizen’s. Since public power is owned by the citizens, or using your term "consumers", that protection is built into our model.

Our concern is with the work done by the Analysis Group which indicates Pay For Performance will cause the capacity market to select more reliable resources. I would like to see the independent vetting of this analysis. The Analysis Group’s report is understating the risks implicit in the PI proposal, which will translate into higher risk premiums (and capacity charges to consumers). Your letter focuses on reliability of the market and how PFP will improve it. Has the ISO considered what would happen if (because of PI) existing units start retiring and no new units are willing to enter the market at the prices predicted by the Analysis Group? Has the AG analysis considered the implications of energy and reserve market reforms that are already in the pipeline and how they would affect their results, as well as the overall cost to consumers? As public power providers, NEPPA members interact with their customers/owners on a daily basis and they understand the economic constraints that drive their lives. Why should the citizens of New England trust your "beliefs" to strike the balance between their economic condition and the margins they are willing to accept for margins of reliability? I am proud of our members’ ability to balance their citizen’s economic situations and provide the most reliable power in the United States. Shouldn’t we be given more input based on our track record?

I eagerly await your response.

Thank you members, for your indulgence of my soap box moment. If you are as passionate about protecting the public power model, I strongly urge you to attend our annual DC rally, March 10th  –  12th. If you would like more information or are planning to attend, please let me know via email at lbrownell@neppa.org, so I can include you in our briefing and preparation process.

 

In the 2013 April edition of our e-newsline, we began a feature on the Utilities and Affiliate members that have generously donated to the NEPPA Training Center or had a part in NEPPA’s move. This month we will recognize Consulting Engineers Group, Inc.

Edmund Feloni, who is a Principal Engineer at Consulting Engineers Group, Inc., located in Hopedale, MA, goes on to say:

"Consulting Engineers Group, Inc was honored to be part of the creation and assembly of the new NEPPA Training Center. CEG has been supporting NEPPA and the municipal community for 20 years, and incorporates the safety and education philosophies learned from NEPPA. CEG believes that great positive education, training and safety awareness will be ushered to the NEPPA core municipal utility members, affiliates and contractors."

NEPPA, the quality leader for public power education in the Northeast, is seeking a new full-time instructor for its Littleton, MA, Training Center and other remote training sessions.

NEPPA offers competitive compensation and presents a positive environment. Candidates must have crew experience and be proficient in operational/technical and safety areas of public utility operations and must be comfortable with public speaking and group management. NEPPA will train the right candidate in our programs. For information or to apply, please contact either Steve Socoby, ssocoby@neppa.org, or Larry Brownell, lbrownell@neppa.org, or call 978-540-2200.

This year’s E & O conference is scheduled to take place at the Holiday Inn in Boxboro, Ma., on May 14th and 15th.  We encourage General Foremen, lineworkers, and General Managers to attend this annual event that brings together the latest in products and technology for our municipal membership.  On the 14th, in addition to the exhibits, there will be an opportunity for our members to be kept up to date on the issues of Cyber Security, NEPPA’s mutual aid services, Metering and Revenue Protection, and LED Lighting.

During the afternoon and in addition to the vendor booths, there will be a demonstration on ropes followed by a presentation of Storm Soldiers, a short film about the "men who all make it happen" in what is a job constantly listed in the top ten for most dangerous. Please use this link for more information:

We’ll wrap up the day with raffles and a reception featuring a figure from the sports world that will sign autographs and stay for pictures.

On Thursday the 15th, there will be a safety summit and roundtable discussion just after the breakfast, which will run concurrently with the Engineering Roundtable.  Steve Collier, VP of Business Development at Milsoft Utility Solutions, will keep our Engineers current on "the Rewards of Integrating Metering, Outage Management, SCADA and Other Technologies in Today’s Public Power Market".  Mr. Collier has more than 30 years in the energy, telecommunications and IT businesses in the U.S. and abroad.  He has his BS and MS degrees in electrical engineering from the University of Houston and Purdue University, respectively.

Please join us for this interesting cross section of learning, networking and connecting with your peers! 

16 Days

This program will combine classroom instruction with hands-on, practical applications in the field.  The class will be held at the NEPPA Training Center in Littleton, MA and in our new substation training area. Click here to learn more!

4 Days

This program will cover the basics of electric metering concepts and hardware, and combines classroom instruction with hands-on practical application. Click here for more information.

NEPPA will offer the Public Utility Management Program April 23rd-25th, at the Water’s Edge Resort in Westbrook, Connecticut. The spring curriculum will include sessions on operations basics, an industry overview, evaluating your public communications, and understanding & interacting with your Board. Other sessions will be announced in February. 

The program is designed for lighting board members, general managers and staff moving into management functions of public utilities. It touches on all of the elements related to operating a public utility. The program is designed so that attending two consecutive programs will produce a solid 360 degree look at the industry.

Since the program is focused on interaction with the expert speakers, the attendance is limited to a maximum of 20 attendees each session. 

The program is a great continuing education resource for managers and board members to keep abreast of the current trends in the industry. 

What is the best way to prepare a new lighting commissioner for their role? Attend PUMP with them! This gives you the opportunity to give your commissioner the knowledge they need about the industry and for you to discuss your individual utility’s unique circumstance.

In This Issue:

• Congressional Focus: FY 14 Spending Omnibus Passes, Debt Limit Up Next...
• Energy Policy: APPA Comments on Capacity Markets, QER Gears Up...
• Dodd-Frank: Groups Ask CFTC to Address Sub-Threshold Petition...
• Cyber Security: McCaul Cyber Bill Advances...

Congress passed omnibus legislation Jan. 16 to fund the federal government through the end of FY14 with large bipartisan majorities, removing the threat of a government shut-down for the rest of the fiscal year.  The $1.1 trillion spending bill includes $10.2 billion for energy programs within the Department of Energy (DOE) – a $620 million increase over FY13, and $8.2 billion for EPA, which is $143 million less than it received last year.

On Jan. 22, Treasury Secretary Jacob Lew sent a letter to Congressional leaders indicating that the government will likely exhaust its ability to borrow in late February, setting up another fiscal showdown, earlier than congressional leaders had anticipated.  Lew said February spending will be high with 2013 tax refunds, and leaves the Treasury with little room to maneuver after the official debt limit is reached on Feb. 7.

To read the complete legislative update including the following topics, click the links below:

House Homeland Security Subcommittee Reports McCaul Cyber Bill