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In This Issue

Congressional Action Could Affect Massachusetts' Solar Net Metering Debate

CO2 Emissions Increase in ISO-NE

Natural Gas and Oil Market Update

EIA - Weekly Natural Gas Storage Report

NYMEX Natural Gas Week-to-Week Price Change

Natural Gas Futures - Five Year Price


NOAA 6 to 10 Day Outlook
Color indicates the probability of forecasted temperatures being above or below a historical average for the period.


Market Overviews

Congressional Action Could Affect Massachusetts' Solar Net Metering Debate

Mass Live | February 25, 2015

Massachusetts' debate over solar net metering is no longer just a state issue.

Massachusetts advocates are keeping an eye on an amendment introduced in the U.S. Senate that would limit states' ability to change the way they reimburse solar customers for energy they generate and send back to the electric grid – a practice called net metering.

"It's noteworthy that this net metering debate that we're having here in Massachusetts as well as in other states such as Nevada is drawing the attention of federal regulators," said Adam Wade, an attorney with the Boston law firm Foley Hoag's energy and clean tech group, who represents solar developers and investors and other renewable energy clients.

The amendment was proposed by U.S. Senate Democratic Leader Harry Reid, D-Nevada, and U.S. Sen. Angus King, I-Maine. As is common in the net metering debate, it is pitting utility companies against the solar industry.

The amendment was introduced after Nevada's Public Utilities Commission approved higher monthly service charges and a reduction in net metering credits for solar customers.

The change sparked an outcry among solar advocates, who said the financial incentives should not be changed for existing customers, who might not have bought solar panels had they known they would be less profitable. Solar developers began to withdraw from Nevada. A lawsuit is pending.

Today, most states reimburse solar customers for net metering at the retail rate – which includes the cost of electricity and costs for distribution lines, software and overhead. Some states, including Massachusetts, are deciding whether to reduce the reimbursement so solar customers pay their share for overhead costs.

The King-Reid amendment, part of a larger energy bill, would forbid states from retroactively changing net metering rates unless a utility or state regulatory authority proves at a hearing that the benefits of solar energy are lower than the retail rate. Regulators would have to consider all the economic and environmental benefits of solar energy. The amendment would prevent states from charging new fees to existing solar customers, unless it charges similar fees to all customers.

"What you've seen nationwide is the ability at the state level to try to either restrict or rein in existing support for solar and most distributed energies," said State Sen. Ben Downing, D-Pittsfield, chairman of the Legislature's Joint Committee on Telecommunications, Utilities and Energy. "The King-Reid amendment is a response to that."

Reid said in a U.S. Senate speech that the amendment "will safeguard people who want to generate their own clean energy from retroactive rule changes that could devastate their finances."

Nationally, the solar energy industry supports the amendment, arguing that it would prevent families and businesses who use solar panels from retroactive rate hikes.

Utilities and traditional energy companies oppose the amendment, as does an organization representing state utility regulators. They argue that states, not the federal government, are best suited to regulate rates. They say the retail rate is the wrong rate to use as a standard, since it requires non-solar customers to subsidize solar customers by paying for overhead costs.

In Massachusetts, commercial solar energy projects have stalled due to a cap on the net metering credits each utility can distribute. House-Senate negotiators are currently working on reconciling House and Senate versions of bills to lift the cap.

But the cap is one part of a larger issue. As Massachusetts' solar industry expands, questions are being raised about how big a subsidy is necessary to incentivize solar energy.

State energy officials have not yet determined how the King-Reid amendment would impact the state. It is unlikely to become law, since it was introduced by a Democrat and independent in a Republican-controlled Senate and does not seem to have significant support.

But if a federal law were to pass, it could limit Massachusetts' ability to cut rates retroactively and change the standards that are used to determine future rate changes.

For example, the state House bill would allow existing projects to maintain current rates for 20 years – despite efforts by solar companies to allow existing projects to keep their current rates forever. The King-Reid amendment would forbid retroactive changes.

"It would settle one of the issues that's before the conference committee right now, and it would provide a level of clarity that would be very helpful," Downing said.

Wade said the amendment also marks the first time federal regulators would recognize not only the cost but the value of solar energy when they determine the size of financial incentives. "It would really prescribe how value is meant to be determined," Wade said. "Focusing only on the costs and not at all on the benefits of solar ... really gives us a very incomplete picture."

Massachusetts utility companies oppose the federal amendment, arguing that net metering policy should be set by the states. They say Massachusetts should be allowed to cut its solar subsidies, which are raising the price of electricity for other customers.

"National Grid believes that each state should retain the ability to regulate rates through a transparent and open process," said National Grid spokeswoman Mary-Leah Assad. She said each state handles net metering differently, and Massachusetts needs the flexibility to develop "fair and equitable rates" and stop non-solar customers from paying electricity rates that can be double the costs in neighboring states.

Eversource spokeswoman Priscilla Ress agreed. "We believe policies about retail electric rates, including net metering, should continue to be set at the state level. We support renewable and clean energy as part of a diverse energy portfolio, but it's also important to be mindful of their cost to our customers," Ress said.

Business groups also oppose the federal proposal. Chris Geehern, a spokesman for Associated Industries of Massachusetts, called the King-Reid amendment "an unwarranted and arrogant interference in the ability of states to set accurate pricing signals for solar energy."

"States should have the right to determine their own pricing policies for solar, as well as for other renewable and non-renewable power consistent with a well thought-out market," Geehern said.

But Sean Garren, northeast regional manager for the solar advocacy group Vote Solar, which supports the amendment, said the involvement of national regulators in what had been primarily a state issue shows that it is not just a local fight, but "a national attack from coordinated partners on the solar industry to try to slow the growth of a booming industry that's threatening the status quo of our how energy is created and distributed."

Read More:

CO2 Emissions Increase in ISO-NE

RTO Insider | February 25, 2015

Carbon dioxide emissions rose about 7% in New England last year as the loss of the Vermont Yankee nuclear plant increased fossil fuel generation, ISO-NE said last week.

new englandCO2 emissions rose to just more than 30 million tons in 2015, up from 28 million tons in 2014, Patricio Silva, ISO-NE senior analyst for system planning, told the Planning Advisory Committee during its annual environmental update Wednesday. That reversed a trend that has seen carbon emissions fall from 32 million tons in 2012 to 31 million tons in 2013.

“Emissions rose slightly, probably because of the closing of Vermont Yankee” at the end of 2014, Silva said.

A separate data set from ISO-NE, which runs through only 2014 and includes emissions from smaller power plants not counted by EPA, shows CO2 emissions had declined 26% from 2001 through 2014.

Entergy, which owns Vermont Yankee, also plans to shut the Pilgrim nuclear plant in Massachusetts no later than mid-2019. Its closure would leave New England with only three nuclear generators: the Seabrook plant in New Hampshire and the two-unit Millstone plant in Connecticut. (See Entergy Closing Pilgrim Nuclear Power Station.)
Ozone Standard

In addition to a discussion of the region’s carbon emissions, the meeting also touched on EPA’s stricter ozone standards. In a rule adopted in October, the standard was reduced to 70 parts per billion from the 75 ppb adopted in 2008.

“Rhode Island and most of Connecticut would be non-attainment for the 2015 ozone standard,” Silva said.

Preliminary 2013-2015 data, based on eight-hour concentrations, show southwestern Connecticut exceeds even the less strenuous standard, at 81 ppb or more. Rhode Island and the much of the rest of Connecticut fall into the 71 to 80 ppb range. The rest of New England meets the new standard at less than 70 ppb.

The regulation has a seven-year phase-in period.

Read More:

Natural Gas and Oil Market Update


Oil Prices Give Back Gains as Bullish Bounce Fades

The Wall Street Journal | February 25, 2015

Oil prices slipped Thursday, giving back prior-day gains as the market came to grips with new data underscoring the global oversupply of crude.

The benchmark U.S. contract was down 2.4% at $31.37 a barrel on the New York Mercantile Exchange, while the global Brent contract was down 0.8% at $34.13 a barrel on the ICE Futures Europe exchange. Both contracts have been in a prolonged swoon, with the U.S. contract falling 15% this year and 38% in the last 12 months amid mounting global oversupply as U.S. and international producers continue to pump out crude.



Natural Gas Prices Fell to a 17-year Low

Business Insider | February 25, 2015

The drop to that level came after the Energy Information Administration's weekly report on inventories, which showed that inventories fell by 117 billion cubic feet (Bcf) last week from the prior period.

But compared to this time last year, gas stockpiles are 615 Bcf higher, and 577 Bcf more than the five-year average. So clearly, there's been a swell in inventories, similar to what we've seen with crude oil, that has helped to push prices to this new low.

There's also been pressure from higher-than-normal temperatures, which has reduced demand for heating gas.

Natural gas futures for April delivery fell 4% to as low as $1.748.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Working gas in storage was 2,584 Bcf as of Friday, February 19, 2016, according to EIA estimates. This represents a net decline of 117 Bcf from the previous week. Stocks were 615 Bcf higher than last year at this time and 577 Bcf above the five-year average of 2,007 Bcf. At 2,584 Bcf, total working gas is above the five-year historical range.

NYMEX Natural Gas Week-to-Week Price Change NYMEX Natural Gas Week-to-Week Price Change

Natural Gas Futures - Five Year Price ($ per mmBtu)

NYMEX Natural Gas Week-to-Week Price Change - Five Yearly Snapshot

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