BEFORE THE PUBLIC SERVICE COMMISSION OF WYOMING
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IN THE MATTER OF THE CONSIDERATION OF STATE-RELATED PROVISIONS OF THE FEDERAL ENERGY INDEPENDENCE AND SECURITY ACT OF 2007 |
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Docket No. 90000-106-XO-08 (Record No. 11992) |
NOTICE AND Order
(Issued July 10, 2009)
This matter is before the Wyoming Public Service Commission (Commission) on its consideration of the state-related provisions of the Federal Energy Independence and Security Act of 2007 (EISA), as more fully described below.
The Commission, having reviewed EISA, the Public Utility Regulatory Policies Act of 1978 (PURPA), all written comments filed in this matter, all oral comments presented during the public technical conference and open meeting held regarding this matter, applicable Wyoming utility law, and being otherwise fully advised in the premises, FINDS AND CONCLUDES:
Procedural History
1. When originally enacted, PURPA established federal standards relating to energy conservation, resource efficiency and rate equity. The Energy Policy Act of 1992 amended PURPA, including four additional federal standards. The Energy Policy Act of 2005 further amended PURPA and set forth additional standards relating to net metering, fuel diversity, fossil fuel generation, time-of-use metering and interconnection-related issues.
2. In 2007, EISA again amended PURPA, setting forth four additional “states must consider” PURPA standards, and added a non-PURPA standard requiring state consideration of incentives relating to the recovery and use of industrial waste energy.
a. The new standards for electric utilities to 16 U.S.C. § 2621(d) [PURPA § 111(d)], as follows:
· EISA Section 532(a):
o § 111(d)(16) Integrated Resource Planning[1]
o § 111(d)(17) Rate Design Modifications to Promote Energy Efficiency[2]
· EISA Section 1307(a):
o § 111(d)(16) (sic) Consideration of Smart Grid Investments[3]
o § 111(d)(17) (sic) Smart Grid Information[4]
Section 408 of P.L. 111-5, the American Recovery and Reinvestment Act of 2009, made technical corrections to EISA renumbering the misnumbered subsections (16) and (17) regarding smart grid investments and smart grid information as subsections (18) and (19), respectively.
b. Section 451 of EISA adds a “states must consider” section 374 non-PURPA standard at 42 U.S.C. § 6344 regarding “Additional Incentives for Recovery, Use and the Prevention of Industrial Waste Energy”.[5]
c. EISA Section 532(b) adds two new “states must consider” PURPA standards for natural gas utilities at 15 U.S.C. § 3203(b) [PURPA § 303(b)], including 303(b)(5), Energy Efficiency[6], and 303(b)(6), Rate Design Modifications to Promote Energy Efficiency.[7]
d. EISA Section 1307(b) amends Section 112(b) of PURPA (16 U.S.C. § 2622(b)) and requires state regulatory commissions to “commence the consideration,” but not necessarily the adoption, of the PURPA standards entitled Rate Design Modifications to Promote Energy Efficiency Investments and Smart Grid Information, by December 19, 2008, and to complete this consideration by December 19, 2009.
3. On October 16, 2008, the Commission issued a Notice of Commission Activity (Notice) calling a public technical conference to explore potential revisions to its existing rules or adoption of new rules to include the new PURPA standards, as found in EISA. The Notice was sent to electric and natural gas utilities and other parties who may have an interest in the subject. The Notice was published on the Commission’s website and on open meeting agendas. It set a comment filing deadline of November 3, 2008, and stated a second technical conference would be held on December 3, 2008.
4. On November 3, 2008, Comments of Rocky Mountain Power (RMP) Concerning the Energy Independence and Security Act of 2007, Wyoming Industrial Energy Consumers’ (WIEC) Comments on PURPA Amendments in EISA and Comments of the Wyoming Office of Consumer Advocate (OCA) were filed.
5. On November 12, 2008, Mr. Christopher Petrie, Commission Secretary and Chief Counsel, sent a letter to the Department of Energy (DOE), as required by 16 U.S.C. § 2612, stating that Powder River Energy Corp., Yampa Valley Electric Association, Inc., Black Hills Power, Inc. (BHP), Cheyenne Light, Fuel and Power Company (CLFP), MDU Resources Group, Inc. (MDU), and RMP are subject to the Commission’s ratemaking authority. The list was revised by adding High Plains Power, Inc., and Lower Valley Energy, Inc., and sent to DOE on December 11, 2008.
6. Pursuant to due notice, the Commission held a technical conference on November 12, 2008, in the Commission’s hearing room in Cheyenne, Wyoming. It was attended in person and via telephone by representatives of various electric and gas utilities, Commission staff and Commissioners. The participants discussed EISA, PURPA and their respective requirements. Some participants only summarized their written comments while others explained their written comments in further detail. After the technical conference, the Commission determined the second technical conference scheduled on December 3rd was unnecessary and decided additional discussion could be held at a later date. The written and oral comments from various parties are summarized below.
Written Comments filed on November 3, 2008
7. RMP’s written comments addressed all standards. As to the IRP issue, RMP stated it already files an IRP plan with the Commission. Regarding smart grid investments, RMP does not consider smart grid technology to be mature enough to warrant investment and rate payer support of a smart grid program in Wyoming. It believed national standards and protocols need to be further developed prior to rate payers funding a project. With regard to rate design modification, RMP stated it participates in a collaborative on load growth and pricing and proposed a redesign of its Wyoming residential and general service schedules. RMP believed the EISA provisions relating to the sale of industrial waste energy are redundant and duplicative of RMP’s qualifying facility (QF) tariff, and would increase its administrative costs.
8. WIEC’s comments urged the Commission to initiate a formal rulemaking to adopt IRP rules in Wyoming for electric utilities, adding that “[t]hrough a robust IRP process, the Commission can ensure that the interests of Wyoming ratepayers are represented when utilities make decisions about supply-side resources and energy efficiency investments.” (WIEC November 3, 2008, Comments, p. 1.) In particular, WIEC urged the Commission to establish an IRP process that allows early Commission consideration of the broader regional context in which resources to serve Wyoming customers are chosen. With regard to smart grids, WIEC recommended the Commission consider monitoring and studying the deployment of smart grid technologies; but, given that these technologies are somewhat untested, WIEC did not recommend initiating a rulemaking to consider the implementation of smart grid systems in Wyoming. WIEC also recommended that the Commission not initiate a rulemaking to consider rate design modifications to promote energy efficiency investments. WIEC believed that rate design decisions should be made in the context of rate cases where the Commission can carefully consider the cost of service and full range of policy options that go into ratemaking. WIEC did, however, recommend the Commission initiate a rulemaking with regard to the sale of industrial waste energy. To ensure consistency with other QF sales, WIEC recommended that the Commission’s rulemaking cover the treatment of sales of industrial waste energy as well as sales from other industrial co-generators and renewable QFs.
9. Regarding the IRP standard, OCA stated that, although it is generally supportive of the development and deployment of energy efficiency resources, if they are cost effective, it is concerned that the adoption of the priority resource language could cause an energy efficiency resource that has not passed traditional cost effectiveness tests to trump a resource which may be demonstrated to be more cost effective. With regard to the issue of rate design to promote energy efficiency, OCA stated it believes the case-by-case basis is the most appropriate approach given the complexities of the issues and the unique circumstances of each individual utility. As to the use of smart grid technologies, OCA argued that Wyoming is currently in a phase of extensive infrastructure investment, and thus a full evaluation of such investments is appropriate and best accomplished on a case-by-case basis. With regard to waste energy recovery, OCA stated the standard is not avoided cost, which is the methodology used to determine rates applicable to QFs under PURPA, and that a discussion of the potential impact of the utilization of these two different rate setting concepts should be explored.
Comments at the November 12, 2008, Technical Conference
10. Mr. Bryce Freeman, OCA Administrator, discussed the procedural requirements in this matter including what “notice”, “hearing”, and “determination in writing” mean. He commented that EISA does not require the Commission to do anything other than consider the adoption of standards. He suggested the Commission could address this without a contested case hearing. He also commented that the “determination in writing” could be accomplished simply through the issuance of a letter or an order. He also stated his belief that Congress did not intend the states to look at these issues as only a one time effort and believed whatever action the Commission takes should be sustainable over time. He also believed that Wyoming is at a disadvantage with regard to IRPs, given its size; and it does not have the same voice as other states on a federal level. The OCA supports any process that gives Wyoming a greater voice, and thought it difficult without a formal IRP process to give foundation to resource related arguments and to challenge other states’ decisions.
11. RMP commented that it currently meets the IRP standards; and it finds the “priority resources” language in EISA § 532 puzzling. WIEC argued Wyoming’s current statutory scheme allows the Commission power to evaluate the reasonableness of IRPs with respect to energy efficiency and public policy. SourceGas mentioned that IRP means different things to electric and gas utilities. It commented that demand side management (DSM) would have a “horrific” impact on gas customers; but it could be part of an IRP in the future. SourceGas also commented that gas utilities will have difficulty embracing energy efficiency if the energy playing field is not level; and it is not in favor of a formal IRP or rate design rulemaking. SourceGas stated it has not yet submitted written comments, but it concurs with OCA in that rate design issues for gas utilities are best dealt with on a case-by-case issue, probably in a rate case setting.
12. OCA stated rate design is unique to individual utilities and best dealt with on a case-by-case basis, and not in a formal rulemaking. It encouraged the Commission to continue publicizing the financial and environmental benefits of making energy efficiency improvements, as it did during its heating cost town meetings during the summer of 2008.
13. The Wyoming Rural Electric Association (WREA) stated its member utilities get their power from many different sources, and believes no formal rulemaking would be required on any of the issues, advocating that they be addressed on a case-by-case basis. WREA offered to make a presentation to the Commission regarding each member’s energy efficiency.
14. Regarding the relative value of policy statements and formal rulemakings, SourceGas stated that the main advantage of policy statements was their flexibility to deal with issues on a case-by-case basis, allowing stakeholders to consider all possible options. Therefore, formal rules might not be cost effective. There was also discussion of various DSM methods and their effectiveness in other states.
15. On December 9, 2008, the Wyoming Association of Natural Gas Utilities (WANGU) submitted its late filed comments, asking the Commission to bifurcate its review of EISA’s “states must consider” provisions so that natural gas and electric utility provisions are considered separately to promote administrative convenience, expedition and economy. WANGU stated it takes no position on the procedural or substantive disposition of EISA provisions applicable to electric utilities. It stated the only EISA provision applicable to natural gas utilities is § 532(b); and it agrees with OCA that case-by-case consideration is the most appropriate approach given the complexities of the issues and unique circumstances of each individual company. WANGU proposed that the Commission hold an evidentiary or paper hearing exclusively for natural gas utilities to consider the adoption of § 532(b) on or before December 18, 2009. If, based upon that process, the Commission were to determine that it should adopt aspects of those general standards, then WANGU requested that the Commission authorize each natural gas utility to implement the adopted aspects through utility-specific proposals submitted by the utility in its next general rate case or in another proceeding.
16. On December 10, 2008, MDU submitted late filed comments regarding the EISA sections related to electric utilities. It suggested that IRP planning be considered via a paper hearing conducted by the Commission prior to December 19, 2009. As to rate design to promote energy efficiency, MDU supported consideration of available rate design policy options on a case-by-case basis. It suggested that a policy statement issued by the Commission would provide direction and meet the requirements of EISA. MDU supported the smart grid technologies standard in general terms but urged the Commission to consider the deployment of smart grid technologies on a case-by-case basis. As to waste energy recovery, MDU stated its tariffs already address the purchase of excess energy from QFs.
The December 10, 2008, Open Meeting
17. Pursuant to due notice, the Commission held an open meeting on December 10, 2008, to consider various procedural options for compliance with EISA. Additional oral comments were made by or on behalf of RMP, WANGU,; the OCA, WREA, MDU, CLFP and BHP, and WIEC. Also participating but not providing additional comments were Mr. Matt Grant for RMP, Mr. John Kennedy and Mr. Glenn Watkins for Questar Gas, and Ms. Tamie Aberle for MDU. The participants discussed the effects of legislative changes, potential implementation of IRP rules, changes in rate design, resale or recovery of waste energy, and activities in other states. The Commissioners chose not to take any action at this meeting but stated they would reflect on the comments and take action at an open meeting to be scheduled at a later date.
18. For RMP, Mr. David Mosier commented that its biggest concern is the IRP issue. He reiterated that RMP already files an IRP with the Commission, and is in compliance with the EISA standards, concluding that no further action would be necessary. He also commented that turning the relatively simple IRP process into a complex rulemaking is not necessary and to do so would be a mistake. He stated it would be unwise for the Commission to implement rules that would extend an already faulty process just to meet the goals of PURPA. RMP believed this would go beyond the intended scope of EISA. He suggested the Commission consider an IRP process outside of the EISA standard. He stated, if the Commission believes IRP is important to just and reasonable rates, then the process should be company-specific and considered on a case-by-case basis. As to smart grid investment, RMP does not consider the smart grid technology mature enough for implementation in Wyoming and recommended this issue also be addressed on a case-by-case basis. He discussed RMP’s investigation into using Laramie, Wyoming, as a pilot project for smart grid technology in Wyoming. RMP will continue to monitor this technology and will inform the Commission when, in its opinion. it becomes viable for use in Wyoming. As to rate design modification, RMP is meeting the proposed standards and believes continuing to work with interested parties on a collaborative basis is the best approach. Finally, as to the sale of industrial energy, EISA established a methodology for determining rates for excess energy which produces prices that more accurately reflect the embedded costs of generation, which vary by company. Thus, a seller of waste heat would be much better off financially to sell under the QF provisions of existing tariffs and receive avoided cost rates. In this respect, EISA is inconsistent with PURPA. Thus, RMP believes the sale of industrial waste heat is already currently being adequately addressed and no further action is needed.
19. For WIEC, Mr. Thorvald Nelson listed the 20 industrial customers which comprise WIEC and discussed its keen interest in this process. WIEC believed there should be balance in the costs of DSM, and savings on supply side, and thinks it would be a disservice to the public interest if it were not cost effective. He also explained the pros and cons of the different types of planning that could be used in the IRP process. He stressed that what is being built in Wyoming for RMP customers is being driven by policies in Oregon and Utah; and there is very little the Commission can do about that unless it takes a more active role in the IRP process. As to smart grid, WIEC would not support a rulemaking, but believes an informational gathering technical conference with participation by utilities who are utilizing smart grid in other jurisdictions could be helpful. WIEC agreed with RMP that a rulemaking is not necessary on the rate design issue and thinks it is best accomplished on a case-by-case basis. Regarding the sale of industrial waste energy, WIEC recommended the Commission embark on a rulemaking based on the difficult issues with regard to the differing pricing regimes for industrial waste energy under EISA and PURPA. It would be helpful to have known and certain pricing, but currently there is a vast amount of uncertainty and conflicting ideologies in the legislation itself.
20. Mr. Bryce Freeman commented that the OCA has been an ardent and engaged participant in energy efficiency and IRP issues for many years. He cautioned that energy efficiency and DSM programs need to be balanced against supply side resources, and he is concerned that the IRP language in EISA gives priority to energy efficiency and DSM.
21. Speaking on behalf of WREA, Mr. Jim Spires of Tri-State Generation and Transmission Association, Inc. (Tri-State) argued that EISA does nothing to enlarge regulation over rural electric utilities that have opted out of retail rate regulation.
22. Commenting for MDU, Mr. Bruce Asay agreed with WANGU that the Commission should bifurcate its consideration of the electric and natural gas provisions of EISA. MDU recommended the Commission hold a paper hearing on IRP and saw benefit in a state-specific analysis. For rate design to promote energy efficiency, MDU advocated case-by-case consideration based on the demographics and operating characteristics of each utility. As to smart grid, MDU supported the standard in general terms, but recommended consideration of smart grid on a case-by-case basis.
23. Speaking on behalf of WANGU, Mr. Eric Nelsen, General Counsel for SourceGas, requested the Commission bifurcate its proceedings as to those standards applicable to natural gas and electric utilities. WANGU took no position on those standards applicable to electrical utilities. WANGU proposed the Commission hold a paper hearing to determine whether to adopt EISA § 532(b). If standards were adopted based on that process, it proposed that each be addressed in the utility’s next rate case proceeding.
24. Mr. Brian Iverson, for CLFP and BHP, joined in the comments of WANGU. CLFP and BHP agreed with previous comments that IRP should be done on a case-by-case basis to make the process less time consuming. CLFP and BHP also agreed that energy efficiency needs to be considered in the IRP process, and it intends to do more in this area. CLFP and BHP agreed with OCA in that it must be cost effective and demand side solutions must be compared to supply side resources. CLFP and BHP argued that rate design is a rate case issue, and should be considered at that time. As to smart grid, CLFP and BHP stated it is already utilizing smart metering in its Pueblo, Colorado, operations and believes the decision to use smart grid technology should be left to each utility on a case-by-case basis. CLFP and BHP also agreed with previous comments that smart grids are not enough, and smart rates are also needed to accomplish the goals of EISA. With regard to waste energy, CLFP and BHP agreed with RMP in that the proposals in EISA conflict with existing QF standards under PURPA.
25. On January 21, 2009, the Commission held public deliberations on this matter.
Conclusions of Law
26. The Commission began its consideration in this proceeding with the issuance of its October 2008, Notice of Commission Activity. This Notice and Order serves as the formal commencement of the consideration of adopting the new PURPA Standards to comply with 16 U.S.C. § 2622(b).
27. EISA requires state regulatory commissions must “commence the consideration”, but not necessarily the adoption, of PURPA Standards (16) Integrated Resource Planning, (17) Rate Design Modifications to Promote Energy Efficiency Investments, (16) (sic) Consideration of Smart Grid Investments, (17) Smart Grid Information, and the non-PURPA standard of Sale of Industrial Waste Energy, and must complete consideration by December 19, 2009. See EISA Section 1307(b) (which amends Section 112(b) of PURPA (16 U.S.C. § 2622(b)).
28. The Commission, during its deliberations in this matter, determined that, because of the current state of the economy and massive changes taking place in federal policy and governmental leadership, it would be unwise, too costly, and premature to create a rulemaking with set processes for the below sections of EISA. The Commission found and concluded as follows:
a. EISA § 532(a)(16) [PURPA §111(d)(16)] Utility Energy Efficiency Programs in Integrated Resource Planning for electric utilities. The Commission will expect discussion of energy efficiency to be included in any IRP filed by any electric or natural gas utility under the Commission’s jurisdiction and will be reviewed under the Commissions Rules and Regulations. The Commission declines to open a rulemaking on PURPA §111(d)(16), amending 16 U.S.C. § 2621(d), or to adopt formal policies establishing cost-effective energy efficiency given its pending rulemaking on the IRP process in Docket No. 90000-107-XO-09.
b. EISA § 532(a) [PURPA §111(d)(17)]. Rate Design Modifications to Promote Energy Efficiency Investments for electric utilities. The Commission declines to adopt a formal rulemaking or policy statement on PURPA §111(d)(17). The Commission noted the comments made by many of the utilities that the Commission has already been examining these and related issues and policy options (including DSM, cost recovery mechanisms, inverted block rate design, straight fixed/variable rate design, decoupling, and its winter heating costs town meetings encouraging energy efficiency improvements), in the context of rate cases and in other matters coming before the Commission. The Commission believed that rate design decisions should be made in the context of rate cases where the Commission can carefully consider all facts concerning the cost of service and the full range of policy issues that contribute to fair and reasonable ratemaking. The Commission concluded it is in the public interest to continue to address these issues on a case-by-case basis. It directed that each electric utility file a policy statement on rate design modifications within its utility to promote energy efficiency within one year from the date of this order. The Commission found this issue to be important given the current economic climate, but declined to open a formal rulemaking on this issue given the possibility of a cap and trade system, unclear national policies and the current state of the economy.
c. EISA § 532(b) [PURPA § 303(b)(5)]. Rate Design Modifications to Promote Energy Efficiency Investments for natural gas utilities. The Commission noted, and acknowledged the comments by many of the natural gas utilities on this issue, that it has already been examining such issues and policy options (including DSM, cost recovery mechanisms, inverted block rate design, straight fixed/variable rate design, decoupling, and its winter heating cost town meetings encouraging energy efficiency improvements), in the context of rate cases and in other matters coming before the Commission. The Commission believed that rate design decisions should be made in the context of rate cases where the Commission can carefully consider all facts concerning the cost of service and the full range of policy issues that contribute to fair and reasonable ratemaking. The Commission concluded it is in the public interest to continue to address these issues on a case-by-case basis. It directed that each natural gas utility file a policy statement on rate design modifications within its utility to promote energy efficiency within one year from the date of this Notice and Order.
d. EISA § 1307(a) [PURPA §111(d)(17)]. State Consideration of Smart Grid Technologies. The Commission noted the previous discussions on smart grid technologies it has had with utilities and RMP’s study of the potential deployment of smart grid technology in Laramie, Wyoming. The Commission analyzed the total costs, cost-effectiveness, improved reliability, security concerns, system performance and social benefit of using smart grid technologies in Wyoming. The Commission also considered whether the utilities would be able to recover from ratepayers the cost of bringing smart grid technology to Wyoming. Using a balancing test, the Commission concluded that current smart grid technologies are not ripe for application in Wyoming given its sparse populations and the costs of implementing such technologies, and declined to open a rulemaking on EISA §1307(a)(17. The Commission would like to be informed on a going forward basis of advances in this technology to understand when and if it could be beneficial in Wyoming. The Commission encouraged utilities to be proactive in monitoring and evaluating the deployment of these technologies in Wyoming and to notify the Commission when these technologies may be ripe for use in Wyoming. The Commission directed each electric utility to file an annual report regarding developments in smart grid technologies, stating [i] which technologies are being promoted by regional planning organizations, [ii] whether smart grid technologies would be beneficial to Wyoming customers, and [iii] whether it has considered or adopted any smart grid technologies. The first of these annual reports shall be due one year from the date of this Notice and Order.
e. EISA § 374(b) [42 U.S.C. § 6344]. Standards for Sales of Industrial Waste Energy. The Commission acknowledged the complexity of this issue as it is presented to it in EISA and PURPA. The Commission acknowledged WIEC’s comments on the pricing and avoided cost dilemma discussed hereinabove. The Commission noted RMP’s comments that its current tariff practice of using avoided cost pricing for QFs would leave sellers better off under existing tariffs than they would under the embedded cost regime of EISA. Additionally, the EPA has not promulgated the rules needed to guide the industry in the process. This is a situation in which a one-size-fits-all proposal appears problematic and the new EISA standard could cause undue confusion. The Commission declined to pursue a rulemaking on this standard given the nature of the Western Interconnection, the statutory pricing regimes involved, the unsettled state of national energy policy and the resulting uncertainty and expense involved in changing the current regime using a process that must be overly dependent on speculation.
29. The Commission also directed that notice of this proceeding, by a copy of this Notice and Order, shall be provided to the Secretary of the United States Department Energy and the Administrator of the United States Environmental Protection Agency, as required by PURPA § 121 and EISA § 374(e)(2), 42 U.S.C. § 6344, respectively.
30. The Commission directed that the public notice in this matter be in the following form:
PUBLIC NOTICE
Pursuant to the Wyoming Administrative Procedure Act, W.S. § 37-1-101, et seq., and its Procedural Rules and Special Regulations, the Wyoming Public Service Commission (Commission) hereby gives notice that it has considered the state-related provisions of the Federal Energy Independence and Security Act of 2007 (EISA). The Commission, having reviewed EISA, the Public Utility Regulatory Policies Act of 1978 (PURPA), all written comments filed in this matter, all oral comments presented during the technical conference and open meeting held regarding this matter, applicable Wyoming utility law, and being otherwise fully advised in the premises, declined to open a formal rulemaking on the “states must consider” provisions of EISA.
Anyone desiring to file a statement, intervention petition, protest, or request for a hearing in this matter must so file, in writing, with the Commission on or before August 10, 2009. The petition shall set forth the grounds of the proposed intervention or request for hearing, and the position and interest of the petitioner in this proceeding. Please include reference to Docket No. 90000-106-XO-08.
If you wish to intervene in this matter or request a public hearing which you will attend, and you require reasonable accommodation for a disability, please contact the Commission at (307) 777-7427, or write to the Commission at 2515 Warren Avenue, Suite 300, Cheyenne, Wyoming 82002, to make arrangements. Communications impaired persons may also contact the Commission through Wyoming Relay by dialing 711.
Dated: July 10, 2009
IT IS THEREFORE ORDERED:
1. Pursuant to the public deliberations held on January 21, 2009, and as discussed hereinabove, the Commission declines to open a rulemaking on the “states must consider” provisions of the federal Energy Independence and Security Act of 2007.
2. Each natural gas and electrical utility is directed to file a policy statement on rate design modifications within its utility to promote energy efficiency within one year from the date of this Notice and Order.
3. Each electric utility is directed to file an annual report regarding developments in smart grid technologies, including which technologies are being promoted by regional planning organizations, whether any smart grid technologies would be beneficial to any particular Wyoming customers, and whether it has considered or adopted any available smart grid technologies in Wyoming or elsewhere if it serves in more than one jurisdiction. The first of these annual reports shall be due one year from the date of this Notice and Order.
4. The Commission shall provide a copy of this Notice and Order to the Secretary of the United States Department of Energy and the Administrator of the United States Environmental Protection Agency.
5. This Order is effective immediately.
MADE and ENTERED at Cheyenne, Wyoming, this 10th day of July 2009.
Public Service Commission of Wyoming
ALAN B. MINIER, Chairman*
STEVE OXLEY, Deputy Chairman
(SEAL) KATHLEEN A. LEWIS, Commissioner*
Attest:
VICTORIA HANSEN, Assistant Secretary
*At the time the open meeting was held Ms. Lewis was Chairman and Mr. Minier was a Commissioner.
[1] (16) INTEGRATED RESOURCE PLANNING.--Each electric utility shall--
(A) integrate energy efficiency resources into utility, State, and regional plans; and
(B) adopt policies establishing cost-effective energy efficiency as a priority resource.
[2] (17) RATE DESIGN MODIFICATIONS TO PROMOTE ENERGY EFFICIENCY INVESTMENTS.--
(A) In general.--The rates allowed to be charged by any electric utility shall--
(i) align utility incentives with the delivery of cost-effective energy efficiency; and
(ii) promote energy efficiency investments.
[3] (18) CONSIDERATION OF SMART GRID INVESTMENTS.-
(A) IN GENERAL.-Each State shall consider requiring that, prior to undertaking investments in nonadvanced grid technologies, an electric utility of the State demonstrate Procedures. Federal Register, publication. Deadline. Records. to the State that the electric utility considered an investment in a qualified smart grid system based on appropriate factors, including-
(i) total costs;
(ii) cost-effectiveness;
(iii) improved reliability;
(iv) security;
(v) system performance; and
(vi) societal benefit.
(B) RATE RECOVERY.-Each State shall consider authorizing each electric utility of the State to recover from ratepayers any capital, operating expenditure, or other costs of the electric utility relating to the deployment of a qualified smart grid system, including a reasonable rate of return on the capital expenditures of the electric utility for the deployment of the qualified smart grid system.
(C) OBSOLETE EQUIPMENT.-Each State shall consider authorizing any electric utility or other party of the State to deploy a qualified smart grid system to recover in a timely manner the remaining book-value costs of any equipment rendered obsolete by the deployment of the qualified smart grid system, based on the remaining depreciable life of the obsolete equipment.
[4](19) SMART GRID INFORMATION.-
(A) STANDARD.-All electricity purchasers shall be provided direct access, in written or electronic machine-readable form as appropriate, to information from their electricity provider as provided in subparagraph (B).
(B) INFORMATION.-Information provided under this section, to the extent practicable, shall include:
(i) PRICES.-Purchasers and other interested persons shall be provided with information on-
(I) time-based electricity prices in the wholesale electricity market; and
(II) time-based electricity retail prices or rates that are available to the purchasers.
(ii) USAGE.-Purchasers shall be provided with the number of electricity units, expressed in kwh, purchased by them.
(iii) INTERVALS AND PROJECTIONS.-Updates of information on prices and usage shall be offered on not less than a daily basis, shall include hourly price and use information, where available, and shall include a day-ahead projection of such price information to the extent available.
(iv) SOURCES.-Purchasers and other interested persons shall be provided annually with written information on the sources of the power provided by the utility, to the extent it can be determined, by type of generation, including greenhouse gas emissions associated with each type of generation, for intervals during which such information is available on a cost-effective basis.
(C) ACCESS.-Purchasers shall be able to access their own information at any time through the Internet and on other means of communication elected by that utility for Smart Grid applications. Other interested persons shall be able to access information not specific to any purchaser through the Internet. Information specific to any purchaser shall be provided solely to that purchaser..
[5] Section 374:
(b) STANDARD FOR SALES OF EXCESS POWER.--For purposes of this section, the standard referred to in subsection (a) shall provide that an owner or operator of a waste energy recovery project identified on the Registry that generates net excess power shall be eligible to benefit from at least 1 of the options described in subsection (c) for disposal of the net excess power in accordance with the rate conditions and limitations described in subsection (d).
(c) Options.--The options referred to in subsection (b) are as follows:
(1) Sale of net excess power to utility.--The electric utility shall purchase the net excess power from the owner or operator of the eligible waste energy recovery project during the operation of the project under a contract entered into for that purpose.
(2) Transport by utility for direct sale to third party.--The electric utility shall transmit the net excess power on behalf of the project owner or operator to up to 3 separate locations on the system of the utility for direct sale by the owner or operator to third parties at those locations.
(3) Transport over private transmission lines.--The State and the electric utility shall permit, and shall waive or modify such laws as would otherwise prohibit, the construction and operation of private electric wires constructed, owned, and operated by the project owner or operator, to transport the power to up to 3 purchasers within a 3-mile radius of the project, allowing the wires to use or cross public rights-of-way, without subjecting the project to regulation as a public utility, and according the wires the same treatment for safety, zoning, land use, and other legal privileges as apply or would apply to the wires of the utility, except that--
(A) there shall be no grant of any power of eminent domain to take or cross private property for the wires; and
(B) the wires shall be physically segregated and not interconnected with any portion of the system of the utility, except on the customer side of the revenue meter of the utility and in a manner that precludes any possible export of the electricity onto the utility system, or disruption of the system.
(4) Agreed on alternatives.--The utility and the owner or operator of the project may reach agreement on any alternate arrangement and payments or rates associated with the arrangement that is mutually satisfactory and in accord with State law.
(d) Rate Conditions and Criteria.--
(1) Definitions.--In this subsection:
(A) Per unit distribution costs.--The term `per unit distribution costs' means (in kilowatt hours) the quotient obtained by dividing--
(i) the depreciated book-value distribution system costs of a utility; by
(ii) the volume of utility electricity sales or transmission during the previous year at the distribution level.
(B) Per unit distribution margin.--The term `per unit distribution margin' means--
(i) in the case of a State-regulated electric utility, a per-unit gross pretax profit equal to the product obtained by multiplying--
(I) the State-approved percentage rate of return for the utility for distribution system assets; by
(II) the per unit distribution costs; and
(ii) in the case of a nonregulated utility, a per unit contribution to net revenues determined multiplying--
(I) the percentage (but not less than 10 percent) obtained by dividing--
(aa) the amount of any net revenue payment or contribution to the owners or subscribers of the nonregulated utility during the prior year; by
(bb) the gross revenues of the utility during the prior year to obtain a percentage; by
(II) the per unit distribution costs.
(C) Per unit transmission costs.--The term `per unit transmission costs' means the total cost of those transmission services purchased or provided by a utility on a per-kilowatt-hour basis as included in the retail rate of the utility.
(2) Options.--The options described in paragraphs (1) and (2) in subsection (c) shall be offered under purchase and transport rate conditions that reflect the rate components defined under paragraph (1) as applicable under the circumstances described in paragraph (3).
(3) Applicable rates.--
(A) Rates applicable to sale of net excess power.--
(i) In general.--Sales made by a project owner or operator of a facility under the option described in subsection (c)(1) shall be paid for on a per kilowatt hour basis that shall equal the full undiscounted retail rate paid to the utility for power purchased by the facility minus per unit distribution costs, that applies to the type of utility purchasing the power.
(ii) Voltages exceeding 25 kilovolts.--If the net excess power is made available for purchase at voltages that must be transformed to or from voltages exceeding 25 kilovolts to be available for resale by the utility, the purchase price shall further be reduced by per unit transmission costs.
(B) Rates applicable to transport by utility for direct sale to third parties.--
(i) In general.--Transportation by utilities of power on behalf of the owner or operator of a project under the option described in subsection (c)(2) shall incur a transportation rate that shall equal the per unit distribution costs and per unit distribution margin, that applies to the type of utility transporting the power.
(ii) Voltages exceeding 25 kilovolts.--If the net excess power is made available for transportation at voltages that must be transformed to or from voltages exceeding 25 kilovolts to be transported to the designated third-party purchasers, the transport rate shall further be increased by per unit transmission costs.
(iii) States with competitive retail markets for electricity.--In a State with a competitive retail market for electricity, the applicable transportation rate for similar transportation shall be applied in lieu of any rate calculated under this paragraph.
(4) Limitations.--
(A) In general.--Any rate established for sale or transportation under this section shall--
(i) be modified over time with changes in the underlying costs or rates of the electric utility; and
(ii) reflect the same time-sensitivity and billing periods as are established in the retail sales or transportation rates offered by the utility.
(B) Limitation.--No utility shall be required to purchase or transport a quantity of net excess power under this section that exceeds the available capacity of the wires, meter, or other equipment of the electric utility serving the site unless the owner or operator of the project agrees to pay necessary and reasonable upgrade costs.
[6] 303(b)(5) ENERGY EFFICIENCY.--Each natural gas utility shall--
(A) integrate energy efficiency resources into the plans and planning processes of the natural gas utility; and
(B) adopt policies that establish energy efficiency as a priority resource in the plans and planning processes of the natural gas utility.
[7] 303(b)(6) RATE DESIGN MODIFICATIONS TO PROMOTE ENERGY EFFICIENCY INVESTMENTS.--
(A) In general.--The rates allowed to be charged by a natural gas utility shall align utility incentives with the deployment of cost-effective energy efficiency.
(B) Policy options.--In complying with subparagraph (A), each State regulatory authority and each nonregulated utility shall consider--
(i) separating fixed-cost revenue recovery from the volume of transportation or sales service provided to the customer;
(ii) providing to utilities incentives for the successful management of energy efficiency programs, such as allowing utilities to retain a portion of the cost-reducing benefits accruing from the programs;
(iii) promoting the impact on adoption of energy efficiency as 1 of the goals of retail rate design, recognizing that energy efficiency must be balanced with other objectives; and
(iv) adopting rate designs that encourage energy efficiency for each customer class.