Direct Testimony of Thomas M. Hildebrand - Consumer Advocate ...
Direct Testimony of Thomas M. Hildebrand - Consumer Advocate ...
Direct Testimony of Thomas M. Hildebrand - Consumer Advocate ...
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THOMAS M. HILDEBRAND<br />
7336 Sheraton Drive<br />
Manassas, VA 201 12<br />
December 1,2007<br />
Ms. Sandra Squire<br />
Executive Secretary<br />
Public Service Commission <strong>of</strong> West Virginia<br />
201 Brooks Street<br />
Charleston, West Virginia 25301<br />
RE: CASE NO. 07-0508-E-CN<br />
TRANS-ALLEGHENY INTERSTATE LINE COMPANY<br />
Dear Ms. Squire:<br />
Enclosed herein please find the original and twelve (12) copies <strong>of</strong> "<strong>Thomas</strong> M.<br />
<strong>Hildebrand</strong>'s <strong>Direct</strong> <strong>Testimony</strong>." An electronic copy has been emailed to:<br />
jwatkins@psc.state.wv. us<br />
adeaver@allea henvpower.com<br />
ccallas@iacksonkeIlv.com<br />
rpalmert3alleg henvpower.com<br />
hriddle@alleghenvpower.com<br />
bmilll 1 @aIleahenvpower.com<br />
pmelick@iacksonkelly.com<br />
Copies have been served upon all parties <strong>of</strong> record.<br />
Sincerely,<br />
<strong>Thomas</strong> M. <strong>Hildebrand</strong><br />
I n te rveno r<br />
.- "I<br />
cc:<br />
all parties <strong>of</strong> record<br />
*.<br />
c,<br />
4
<strong>Direct</strong> <strong>Testimony</strong> <strong>of</strong> <strong>Thomas</strong> M. <strong>Hildebrand</strong><br />
Case No. 07-0508-E-CN<br />
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Q. WHAT IS YOUR NAME?<br />
A. <strong>Thomas</strong> M. <strong>Hildebrand</strong><br />
DUTIES & RESPONSIBILITIES<br />
Q. WHAT IS YOUR OCCUPATION?<br />
A. I’m an active duty Lieutenant Colonel in the United States Air Force.<br />
Q. WHERE ARE YOU CURRENTLY ASSIGNED AND WHAT IS YOUR JOB<br />
TITLE?<br />
A. I’m assigned to the Pentagon. I work for the Assistant Secretary <strong>of</strong> the Air Force for<br />
Acquisition. My job title is Chief <strong>of</strong> Process Improvement and Reengineering.<br />
EXPERIENCE & EDUCATION<br />
Q. WHAT IS YOUR PRIOR BACKGROUND?<br />
A. Please see attached resume at Attachment 1.<br />
Q. WHAT EDUCATION AND TRAINING HAVE YOU RECEIVED?<br />
A. Please see Attachment 1.<br />
Q. ARE YOU AN ELECTRICAL ENGINEER OR DO YOU CONSIDER YOURSELF<br />
A TECHNICAL EXPERT IN ELECTRICAL TRANSMISSION?<br />
A. No,<br />
Q. DO YOU HAVE TECHNICAL EXPERIENCE?<br />
A. Yes. As an Air Force program manager over the last 19 years, I had engineers on my<br />
staffs that worked the highly technical electrical issues on my programs. I only needed a<br />
high-level understanding,
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Q. WHAT TYPES OF PROGRAMS DID YOU MANAGE?<br />
A. Please see Attachment 1.<br />
Q. WHAT QUALIFIES YOU AS AN EXPERT BEFORE THE WV PSC AS THEY<br />
CONSIDER THE REQUEST FOR PERMIT TO CONSTRUCT THE TRANS-<br />
ALLEGHENY INTERSTATE LINE (TRAIL)?<br />
A. An expert is a person with a high degree <strong>of</strong> skill or knowledge <strong>of</strong> a specific subject. If<br />
you asked me how to design and build an electrical transmission network, I certainly<br />
don’t have that skill or knowledge. That’s ok because we have plenty <strong>of</strong> experts who can<br />
speak to that. On the other hand, I do have considerable knowledge <strong>of</strong> alternate<br />
approaches to TrAIL. Compared to the general public, I consider myself an expert<br />
because I’ve spent more than 500 hours studying, researching, and working this issue<br />
over the last 12- 18 months and I know more about it than the vast majority <strong>of</strong> the general<br />
public.<br />
PURPOSE OF TESTIMONY<br />
Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY?<br />
A. Provide important relevant facts and information to the WV Public Service<br />
Commissioners.<br />
Q. FOR EVIDENCE INCLUDED IN YOUR TESTIMONY, WHAT CRITERIA DID<br />
YOU APPLY?<br />
A. I believe the Public Service Commission exercises some flexibility to accept evidence<br />
it considers helphl for deciding on issues such as TrAIL. My approach was to only<br />
include information in my testimony that met three important standards: 1) The<br />
information had to be highly relevant to this case; 2) The information had to be from<br />
reputable subject matter experts; 3) The information needed to have a clear message. In<br />
other words, the statements were unambiguous with respect to the subject matter expert’s<br />
intent. I only included supporting material that met all three criteria.<br />
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Q. WHAT DO YOU WANT THE PSC COMMISSIONERS TO DO WITH YOUR<br />
TESTIMONY?<br />
A. I respectfully request this filing be accepted and evaluated by the Commissioners for<br />
the following reasons. First, I’ve attempted to select only “high quality’’ supporting<br />
material. Second, the Commissioners are aware that it is not feasible in cases such as this<br />
to call witnesses who hold high-level federal and state government positions or senior<br />
executives in private industry or those who may have a financial stake in the outcome <strong>of</strong><br />
these proceedings. Lastly, I’ve attempted to get important and relevant information from<br />
TrAILCo through discovery. In many instances, TrAILCo stated it did not have the<br />
information I requested and was not required to conduct studies and analysis to obtain it.<br />
Given this void <strong>of</strong> information, I hope the Commission will consider information I have<br />
compiled since this may represent the best available.<br />
If the Commission rules I am not qualified to <strong>of</strong>fer testimony and supporting evidence, I<br />
request (file a motion) to append my public testimony given on 30 October 2007 in<br />
Moorefield, WV so that this submission including all supporting information is included<br />
with it and given the appropriate level <strong>of</strong> review and consideration in this case.<br />
Q. DO YOU HAVE AN OVERALL CONCLUSION REGARDING THE NEED FOR<br />
TRAIL BASED ON THE INFORMATION/EVIDENCE PRESENTED?<br />
A. Yes. The TrAIL project is not the preferred solution to meeting stated reliability<br />
concerns while also balancing other considerations directly affecting West Virginia<br />
citizens. Planning assumptions used by TrAILCo and PJM such as those pertaining to<br />
alternative generation sources located in Eastern PJM were unrealistic and do not reflect<br />
reality. Additionally, adequate planning consideration was not given to alternatives to<br />
TrAIL that could use new technology to make maximum use <strong>of</strong> existing facilities and<br />
equipment. Additionally, huge region-wide initiatives that stand to diminish or eliminate<br />
any stated reliability need for TrAIL such as those mandated by Presidential Executive<br />
Order, the Department <strong>of</strong> Defense, and detailed in state and local government energy<br />
plans have not been properly factored. The magnitude <strong>of</strong> these initiatives make them<br />
unacceptable to ignore. In summary, the risks and costs resulting from TrAIL to the<br />
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West Virginia public outweigh any possible anticipated benefits. For these reasons, and<br />
not withstanding my belief that TrAILCo is not a West Virginia public utility as was<br />
envisioned by West Virginia statute, TrAILCo’s request for permit should be denied<br />
under $24-2-1 1 <strong>of</strong> Public Service Law.<br />
Procedurally, TrAILCo has failed to meet several <strong>of</strong> the requirements detailed in the West<br />
Virginia Public Service Commission ’s Rules and Regulations for the Government <strong>of</strong><br />
Electric Utilities.<br />
Q. WHY DO YOU SAY TRAILCO FAILED TO MEET THE REQUIREMENTS IN<br />
WV PSC “RULES AND REGULATIONS FOR THE GOVERNMENT OF ELECTRIC<br />
UTILITIES?”<br />
A. I cite the following examples and references to the Rules and Regulations for the<br />
Government <strong>of</strong> Electric Utilities:<br />
1) Para 9.2.1 .d states the following shall be included in the application<br />
“evidence that the same (chemical spray used to keep rights <strong>of</strong> way clean and<br />
pee <strong>of</strong> brush and trees and chemical contents contained) will not be injurious to<br />
animals, humans, or vegetation beyond said right <strong>of</strong> way. ”<br />
For instance, in Attachment 2*, TrAILCo responded to <strong>Hildebrand</strong>’s First<br />
Discovery Request, Question R24 and disclosed that approximately 100,000<br />
gallonshnits <strong>of</strong> herbicides were applied along transmission lines in West Virginia<br />
from 1998-2006.2 I do not believe TrAILCo’s application contained sufficient<br />
studies to establish the effects these applications could have on personal water<br />
supplies, rivers, and streams. I do not believe TrAILCo has adequately shown<br />
that no possible correlation exists between chemical applications and adverse<br />
’ For brevity, I’ve only included the cover letter <strong>of</strong> <strong>Hildebrand</strong> Discovery Request. Full filing is available<br />
upon request.<br />
’ 1997 data was incomplete due to data loss resulting from company computer problems and 2007 data was<br />
not provided.<br />
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health affects to humans, animals, or vegetation. TrAILCo has not performed<br />
adequate environmental impact assessments for such things as possible<br />
correlations between these herbicides and unexplained fish kills and fish<br />
abnormalities on the Potomac River and other waterways in the Chesapeake Bay<br />
watershed. Additional contamination <strong>of</strong> these waterways threatens ecosystems,<br />
tourism, and even industries. For instance, consider the large poultry industry in<br />
Hardy and Hampshire Counties. If already fragile waterways crossed by TrAIL<br />
are stressed even further by additional sediment and nutrient run<strong>of</strong>f, farms and<br />
poultry operations in some areas could be placed under more stringent rules and<br />
restrictions. This could have a significant adverse impact on local and state<br />
economies but I see no discussion <strong>of</strong> such environmental risks in TrAILCo’s<br />
application. One could make similar observations regarding threats West<br />
Virginia’s wildlife and tourism industry. For instance, consider the historic<br />
Trough bald eagle nesting area on the South Branch <strong>of</strong> the Potomac that would be<br />
crossed by TrAIL. TrAIL would be the third such high voltage line crossing the<br />
Trough, all within a mile. If the fish supply is impacted by herbicide applications<br />
and run<strong>of</strong>f and if bald eagle populations suffer as a result <strong>of</strong> this or the planned<br />
construction activities, tourism in the area will be significantly impacted. Several<br />
weeks ago my family toured the Trough via the Potomac Eagle tourist train which<br />
runs between Romney and Petersburg. The main attraction on the train ride is the<br />
opportunity to site and photograph the eagles in the Trough. If eagle populations<br />
decrease in the area, it stands to reason that fewer tourists will come to Romney<br />
and ride the Potomac Eagle train. This is just one example <strong>of</strong> the risk this project<br />
poses to West Virginia’s wildlife and tourism industries.<br />
2) Para 9.2.1 .e states TrAILCo must “show the habitat and type <strong>of</strong> wildlife, both<br />
land and aquatic, which may be in the right-<strong>of</strong>-way or adjoining thereto, and any<br />
known effect said line may have upon the same, including feeding and breeding<br />
habits.” It’s my understanding that several studies <strong>of</strong> rare, threatened, or<br />
endangered species are not yet complete.<br />
3) Para 9.2.1 .f states TrAILCo must “show what, if any, known effect upon human<br />
and domestic animal life located along said right-<strong>of</strong>-way will result from the<br />
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construction there<strong>of</strong>.” No definitive studies exist that prove EMF emissions are<br />
not harmful to humans or livestock and this topic continues to be debated among<br />
experts. Possible effects range from annoyance electric shocks to serious health<br />
issues like cancer. Regardless <strong>of</strong> whether or not they cause serious health issues,<br />
the important point is that people living and working near these high voltage lines<br />
are threatened by them. This threat is just one consideration that must be weighed<br />
against any justifications favoring TrAIL.<br />
Para 9.2.1 .h states TrAILCo must provide “pertinent facts showing, what, if any<br />
environmental impact said proposed line will have upon the area on and adjacent<br />
to said proposed line.” I do not believe TrAILCo has met this requirement. I<br />
<strong>of</strong>fer the following personal experience. TrAILCo has requested a 2,200 foot<br />
corridor within which to place the proposed line. Our property in Ashton Woods<br />
is inside that boundary and we have a cabin that could be in the direct path <strong>of</strong><br />
TrAIL. To this day, no person from TrAILCo has so much as acknowledged the<br />
existence <strong>of</strong> our building. Furthermore, I have never seen a TrAILCo map that<br />
placed the location <strong>of</strong> the building despite the fact that we brought it to their<br />
attention at a meeting with TrAILCo reps in Moorefield one year ago. This is<br />
indicative <strong>of</strong> the poor quality <strong>of</strong> planning and communication by TrAILCo on this<br />
project.<br />
In order to assess the credibility <strong>of</strong> TrAILCo and its parent companies’ claims<br />
regarding impacts, I requested copies (<strong>Hildebrand</strong> Discovery Request Question<br />
#R16) <strong>of</strong> public complaints received by TrAILCo’s parent. Rather than providing<br />
this information, TrAILCo stated no complaints were received by its parent when<br />
it clearly knew the intent <strong>of</strong> the question was that “parent” was to include all such<br />
parents, including the parents <strong>of</strong> AET. I mention this mainly because it represents<br />
the kind <strong>of</strong> treatment and lack <strong>of</strong> transparency that have frustrated the public<br />
potentially affected by TrAIL.<br />
6 150-3- 10 Promotional Practices, para 10.1 Declaration <strong>of</strong> Policy states, “utility<br />
shall not implement any practice or practices which shall have an adverse affect<br />
upon conservation, or which cannot be justified from a ratepayer benefithtility<br />
cost standpoint.” The TrAIL line is intended to connect coal producers in the<br />
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Western PJM region with markets to the East. By providing this additional<br />
transmission capacity and requiring all commercial and public consumers to pay<br />
for it rather than the generators who will benefit, this creates an unfair and<br />
uncompetitive market advantage for western PJM generators. Distributed<br />
generators like those burning natural gas and located closer to actual need areas<br />
are thereby placed at an economic disadvantage.<br />
7) Not withstanding my belief that TrAILCo should not be given status as a WV<br />
public utility, para 10.2 states, “a public utility shall not, without first obtaining<br />
approval <strong>of</strong> the Commission, engage, directly or indirectly, in any <strong>of</strong> the<br />
following promotional practices: financing <strong>of</strong> land, furnishing <strong>of</strong> consideration to<br />
any person for work done or to be done, acquisition from any person <strong>of</strong> any<br />
tangible or intangible property or service. For many months, TrAILCo has been<br />
negotiating land contracts which pay landowners cash for options to purchase<br />
property. These practices have been found to be unlawful by the Pennsylvania<br />
<strong>Consumer</strong> <strong>Advocate</strong> (See Attachment 3.) and the PA CA has requested<br />
injunctive relief to stop it from occ~rring.~ It is reasonable to assume that the<br />
same practices are occurring in WV. As mentioned above, I requested copies <strong>of</strong><br />
complaints in my discovery requests but was not granted them by TrAILCo.<br />
Without first obtaining approval for TrAIL as required, TrAILCo has been<br />
“financing land and furnishing consideration for work to be done and the<br />
acquisition <strong>of</strong> property.”<br />
8) Not withstanding my belief that TrAILCo is not a WV public utility, Para 10.2.11<br />
states, “public utility shall not furnish underground electric distribution to any<br />
area or customer under terms and conditions different from those applicable to<br />
any other area or customer receiving the particular class <strong>of</strong> service involved.<br />
First, TrAILCo has not provided evidence that the terms and amounts paid to the<br />
various landowners under option agreements are not different. It would be<br />
reasonable to assume the amounts negotiated with landowners are likely to vary<br />
widely. In this case, TrAILCo would be providing distribution “under different<br />
For brevity, I’ve only included the cover and conclusion <strong>of</strong> the PA filing. The full report is available<br />
upon request.<br />
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terms.” The TrAIL line will directly impact three States, PA, WV, and VA.<br />
Several counties in Virginia have been aggressively arguing that any new high<br />
voltage lines approved must be placed underground and there is the real<br />
possibility that this may happen. To my knowledge, TrAILCo has not stated that<br />
it will follow the same requirements (if underground lines are required) for<br />
construction in West Virginia as is determined by the other impacted States. In<br />
other words, if the line is required to be placed underground in VA, will TrAILCo<br />
follow the same requirement in WV? If TrAILCo will not certify to the<br />
Commission that it will follow the same installation approach in all States, this<br />
represents an instance whereby a utility (not withstanding my belief that TrAILCo<br />
is not a WV public utility) would be “furnishing underground electric distribution<br />
under different terms for customers receiving the same class <strong>of</strong> service.”<br />
9) Not withstanding my belief that TrAILCo is not a WV public utility, Para 10.4<br />
states, “no direct or indirect expenditures may be included in a utility’s cost <strong>of</strong><br />
service for political advertising. Any expenditures for political advertising are<br />
expressly disallowed.” To my knowledge, TrAILCo has not certified that all<br />
costs associated with political advertising, public relations, etc. in newspapers<br />
across WV to influence public opinion will not be filed to be recouped under<br />
FERC rules and potentially charged to customers. This may be a violation <strong>of</strong> the<br />
intent <strong>of</strong> para 10.4.<br />
10)Not withstanding my belief that TrAILCo is not a WV public utility, para 10.5.4<br />
states, “utility or its affiliate may not continue to engage in promotional practices<br />
after January 1, 1997 unless a schedule regarding promotional practices has been<br />
filed with the Commission. TrAILCo has clearly been engaged in an aggressive<br />
attempt to sway public opinion using advertisements. I <strong>of</strong>fer this for the<br />
Commission to consider. In April <strong>of</strong> 2006, TrAILCo learned <strong>of</strong> FERC’s decision<br />
that the cost for TrAIL would be allocated to all West Virginia ratepayers (See<br />
Attachment 4, Supplemental <strong>Direct</strong> <strong>Testimony</strong> <strong>of</strong> Mark Mader before the PA<br />
Public Utility Commission). In June 2006, two months later, TrAILCo sent spam<br />
email to the public using carefully chosen words I believe were intended to<br />
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deceive the public and thereby reduce opposition to TrAIL. These Allegheny<br />
email messages (See Attachment 4A.) said,<br />
“Some have claimed that TrAILCo has requested rate increases to West<br />
Virginia ratepayers to pay for TrAIL and this is not true. ’’<br />
In truth, TrAILCo knew that WV ratepayers would be responsible for paying for<br />
construction <strong>of</strong> TrAIL but this was not the message. Instead, the message acted to<br />
deceive the public by leading them to believe rates in WV would not increase as a<br />
result <strong>of</strong> TrAIL. This act diminished the level <strong>of</strong> public opposition to TrAIL and<br />
to some degree, it has also diminished the ability <strong>of</strong> the Public Service<br />
Commission to hear fair and balanced arguments. It is unclear if TrAILCo filed<br />
the required schedule with the Commission that might have prevented this<br />
promotional pra~tice.~<br />
11) Not withstanding my belief that TrAILCo is not a WV public utility, para 10.6.5<br />
states, “utility or its subsidiary operating in West Virginia requesting<br />
authorization shall provide information or data showing promotional practice will<br />
result in the conservation <strong>of</strong> energy and promotional practice is needed in order to<br />
foster conservation.” I have seen nothing from TrAILCo or its parents that<br />
establish that the construction <strong>of</strong> TrAIL will result in the conservation <strong>of</strong> energy<br />
or that promotional practices to influence public opinion are needed to foster<br />
conservation. To the contrary, I believe TrAIL will act as a disincentive to the<br />
conservation <strong>of</strong> energy.<br />
12)Not withstanding my belief that TrAILCo is not a WV public utility, para 10.6.5~<br />
states, “the direct and indirect costs associated with the promotional practice are<br />
reasonable, are not unduly burdensome to the ratepayers, and are not likely to<br />
impact detrimentally on the overall energy costs to consumers in its service<br />
areas.” The aforementioned promotional practices which served to deceive the<br />
public and sway public opinion, are certainly not reasonable, are unduly<br />
burdensome, and may impact detrimentally on the overall energy costs to<br />
consumers in its service areas.<br />
‘ For brevity, I’ve only included the referenced sections <strong>of</strong> Mr. Mader’s testimony. The complete<br />
testimony is available on request.<br />
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13) Not withstanding my belief that TrAILCo is not a WV public utility, para 10.8.1<br />
states, “a public utility operating in West Virginia may not, directly or indirectly,<br />
in any manner or by any device whatsoever, <strong>of</strong>fer or grant to a person any form <strong>of</strong><br />
promotional practice except such as is uniformly and contemporaneously<br />
extended to all persons in the same reasonably defined class.” The techniques<br />
used by agents acting on behalf <strong>of</strong> TrAILCo, as was determined by the<br />
Pennsylvania <strong>Consumer</strong> <strong>Advocate</strong> (Attachment 3) make a clear and convincing<br />
case that these techniques and practices are unlawll. Statements and remarks<br />
were described by Robbie Matestic, Greene Co. Economic Development <strong>Direct</strong>or<br />
as “over and over we hear that the facts <strong>of</strong> the project process and the project are<br />
being misrepresented, and information is not consistent between neighbors. ”<br />
People are being told to take the money because “thisproject is 99% approved.”<br />
14) This shows a clear violation <strong>of</strong> rules, regulations, and the public trust. These<br />
particular examples are from PA but it is reasonable to assume the same types <strong>of</strong><br />
statements, misrepresentation <strong>of</strong> the facts, and high pressure tactics are being used<br />
in West Virginia. I attempted to confirm this by asking discovery question R23 in<br />
<strong>Hildebrand</strong>’s First Set <strong>of</strong> Discovery Requests. TrAILCo objected and said they<br />
were “entirely irrelevant to the Commission ’s consideration <strong>of</strong> request for<br />
TrAIL. ” If unlawful practices by agents employed by TrAIL are also occurring in<br />
West Virginia, these may be highly relevant to the Commission.<br />
Q. YOU STATED TRAIL IS NOT NEEDED. PLEASE EXPLAIN.<br />
A.<br />
1) Mr. George C. Loehr testified in Pennsylvania as a subject matter expert and he has<br />
over 40 years experience in electrical reliability. In his direct testimony before the PA<br />
Public Utility Commission. Mr. Loehr concludes,<br />
“I can unequivocally state that the proposed TrAILCo Project is not needed to<br />
address reliability issues. ’’<br />
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2) As further evidence, I <strong>of</strong>fer the Commission a study performed by the Energy<br />
Consulting Company, Summit Blue, LLC (Attachment 5). The Summit Blue study<br />
concludes Demand Side Management programs could cut 17% <strong>of</strong>f Virginia’s projected<br />
peak demand and nearly 10% <strong>of</strong>f projected 2007 energy use. FERC has recommended<br />
greater use <strong>of</strong> demand resources and predicts an immediate potential savings <strong>of</strong> between<br />
3-7% <strong>of</strong>f peak demand in most regions.<br />
Another study titled How Dominion and Allegheny Got It Wrong (Attachment 6)<br />
concludes,<br />
“Dominion and Allegheny have ignored less costly and less environmentally<br />
damaging solutions; misrepresented the need for the proposed transmission line as a<br />
local Northern Virginia issue rather than a regional issue; made wildly unrealistic (but<br />
undisclosed) assumptions in analyzing the needs <strong>of</strong> Northern Virginia and the greater<br />
Mid-Atlantic area; and claimed falsely that the proposed transmission line will benefit<br />
consumers, when (as they know) studies show that the line is more likely to enrich power<br />
generators to the west at the expense <strong>of</strong> consumers. ’’<br />
3) The finding that other solutions to address reliability issues do in fact exist was<br />
confirmed by discovery requests to PJM. In response to the Piedmont Environmental<br />
Council Interrogatory Question No. 62 (Virginia Electric and Power Company Case No.<br />
PUE-2007-003 l), Steven Herling, Vice President <strong>of</strong> Planning, PJM Interconnection<br />
certified the following response which was an email from a PJM planner. See<br />
Attachment 6A where PJM planner states,<br />
“PJM has continued to review the voltage issues identiJied for the 2011 Mid-<br />
Atlantic Region Load deliverability study. PJM has ident$ed the need for the following<br />
reactive devices in order to adequately support imports into the Mid-Atlantic region.<br />
600 WAR dynamic reactive device at Airdale 500 kV<br />
400 WAR dynamic reactive device at Doubs 500 kV<br />
525 WAR dynamic reactive device at Airdale 500 kV<br />
300 WAR capacitor at Conemaugh 500 kV<br />
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“ While this is still a signgcant amount <strong>of</strong> reactive devices, it is still less than originally<br />
expected. We continue to review alternate reactive plans for 201 I, however for now PJM<br />
recommends the reactive devices listed above to eliminate the voltage concerns identiJied<br />
for 2011.”<br />
4) The Federal Government and State Governments are the largest consumers <strong>of</strong> electric<br />
power in the PJM region and the U.S. military is the largest consumer <strong>of</strong> electricity<br />
within the Federal Government. Any demand forecasts used to justify a large regional<br />
transmission project such as TrAIL would logically need to include estimates for future<br />
demand by these largest <strong>of</strong> consumers who are most vital to national security. In my<br />
discovery request (Attachment 2, Questions R9,10,1 l), I asked TrAILCo to provide<br />
current supply and future forecast demand for Federal (non-military), Federal (military),<br />
and State Government customers. TrAILCo replied,<br />
“Neither PJM nor TrAILCo has this information. ”<br />
5) To establish the importance <strong>of</strong> this evidence, I <strong>of</strong>fer the Commissioners Attachment<br />
7, Presidential Executive Order EO1 3423 and Attachment 7A, EO1 3423<br />
Implementation Instruction. ’. Among other things, these orders and instructions require<br />
federal agencies to reduce energy demand intensity by 3% per year or 30% by end <strong>of</strong><br />
2015 and starting in 2008,50% <strong>of</strong> required renewable energy supplies must come from<br />
new renewable sources. The orders also establish new training, reviewdaudits, and<br />
reporting requirements and directs Heads <strong>of</strong> Agencies to reduce greenhouse gas<br />
emissions. With respect to distributed generation, the implementation instruction from<br />
the Executive Office <strong>of</strong> the President states,<br />
“ Where life-cycle effective, each agency shall implement distributed generation<br />
systems in new construction or retr<strong>of</strong>it projects. Agencies are encouraged to use<br />
For brevity, I am only including the first section <strong>of</strong> this report which discusses energy management.<br />
Subsequent sections deal with such topics as pollution, recycling, and fleet management. The entire report<br />
is available upon request.<br />
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distributed systems when substantial contribution is made toward enhancing energy<br />
reliability or security. ”<br />
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6) Next, I <strong>of</strong>fer to the Commission, Department <strong>of</strong> Energy National Transmission Grid<br />
Study, May 2002 (Attachment 8j6.<br />
The Executive Summary <strong>of</strong> this extensive study report states the DOE conducted a study<br />
and found that modernization was needed.<br />
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“There is growing evidence that the US. transmission system is in need <strong>of</strong><br />
modernization”<br />
“Introducing advanced transmission technologies and improved operating<br />
practices, siting generation closer to areas where electricity is needed, and reducing<br />
electricity use through energy efficiency and distributed generation could all help reduce<br />
congestion. ”<br />
Specific Recommendation number 3 <strong>of</strong> the summary states,<br />
“We can avoid or delay the need for new transmission facilities by improving<br />
transmission system operations and full utilizing our existing facilities. Regional<br />
planning must consider transmission alternatives and non-transmission alternatives when<br />
trying to eliminate bottlenecks. ”<br />
Specific Recommendation number 4 <strong>of</strong> the summary states,<br />
“Opportunities for customers to reduce electricity demands voluntarily should be<br />
coordinated within regional markets. ”<br />
For brevity, I am only including the Executive Summary <strong>of</strong> this report. The entire report is available upon<br />
request.<br />
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7) The TrAILCo application does not address alternatives to new transmission, does not<br />
make maximum use <strong>of</strong> available technology, does not factor in new distributed<br />
generation available, and does not maximize existing facilities to meeting any claimed<br />
reliability or economic issues within PJM. For these reasons, TrAILCo has not complied<br />
with the findings <strong>of</strong> the DOE'S Transmission Grid Study, and has not maximized<br />
National Security interests as discussed by the Honorable Spencer Abraham.<br />
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Next, I <strong>of</strong>fer to the Commission Attachment 9, Department <strong>of</strong>Defense 's 2007 Energy<br />
Management Implementation Plan.7<br />
Federal Facilities Energy Program Goals are summarized below:<br />
- Green House Gas 30 percent reduction by 2010 from 1990 (Executive Order (EO))<br />
- Energy Efficiency Standard Buildings - 35 percent Btu/fi2 reduction by 20 10 from 1985<br />
(Executive Order (EO))<br />
- Industrial Buildings - 25 percent Btdft2 reduction by 2010 from 1990 (EO)<br />
- All Buildings - 20 percent Btdftz reduction by 2015 fiom 2003 (EPAct)<br />
- Excluded Buildings - no goal, but energy use must be reported (EPAct)<br />
- Facility Audits - 10 percent/year (can count alt financing) (EO)<br />
- Apply Sustainable Principles - (EO and EPAct)<br />
- Model Lease Provisions Supporting Sustainable Design - (EO)<br />
- New Buildings LCCE - energy usage 30 percent below ASHRAE (EPAct)<br />
- Building Metering Meter all buildings by 2012 to the extent maximum practicable<br />
(EPAct)<br />
- Energy Efficient Products<br />
- Include the procurement <strong>of</strong> Energy Star and DOE designated equipment in<br />
all contracts wherever possible (EPAct)<br />
- Renewable Energy Install 200,000 solar energy systems by 2010 (EO)<br />
- Obtain 3 percent <strong>of</strong> electric energy from renewable 2007-2009 (EPAct)<br />
For brevity, I am only including the Introduction section <strong>of</strong> this Implementation Plan. The entire report is<br />
available upon request.<br />
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- Obtain 5 percent <strong>of</strong> electric energy from renewable 2010-2012 (EPAct)<br />
- Obtain 7.5 percent <strong>of</strong> electric energy from renewable after 2013 (EPAct)<br />
Next, I <strong>of</strong>fer to the Commission Attachment 10, Inside the Pentagon publication, May<br />
3 1,2007 by Jason Sherman.’ The article discusses a recent DoD Energy Study and<br />
reported significant initiatives designed to make U.S military installations energy<br />
independent by removing them from the fragile and vulnerable electric grid.<br />
“An influential advisory panel to Defense Secretary Robert Gates will soon<br />
recommend the Pentagon protect critical domestic military installations by<br />
making them energy independent, a move intended to wean the US. militaryfiom<br />
America’s electrical grid which the panel believes is vulnerable to terrorist attack<br />
and natural disaster. James Schlesinger, a former defense and energy secretary,<br />
is concluding a yearlong Defense Science Board task force he is leading that<br />
proposes the Pentagon prepare for failures <strong>of</strong> the electrical grid -- on which US.<br />
facilities heavily rely -- by “islanding,” a concept that envisions installations<br />
generating their own power. ”<br />
Military installations are the largest consumer <strong>of</strong> electric power in the United States and<br />
there are many very large military installations and vital national security facilities across<br />
the PJM region. As such, any reasonable demand growth forecasts by TrAILCo would<br />
certainly need to factor the implications <strong>of</strong> such major initiatives. Likewise, major<br />
energy conservation initiatives mandated by Presidential Executive Order that would<br />
reduce energy use by 30% <strong>of</strong> current demand by all federal government facilities would<br />
need to be factored in as would comprehensive State energy plans like the one recently<br />
introduced by Virginia’s Governor Kaine. It was not apparent to me that these programs<br />
were factored into growth forecasts so I requested this information through discovery<br />
(<strong>Hildebrand</strong> questions R9, 10, 11). TrAILCo replied neither they nor PJM had this<br />
information.<br />
The final report has not yet been released to the public. I will provide a copy to the Commission at the<br />
earliest opportunity when it does (assuming security classifications allow it).<br />
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Q. WITH RESPECT TO THE NEED FOR THIS NEW TRAIL LINE, MUCH HAS<br />
BEEN MADE OF THE GROWING ELECTRICAL DEMAND IN THE STATE OF<br />
VIRGINIA. WHAT IS YOUR ASSESSMENT IN THIS AREA?<br />
A.<br />
1) Northern Virginia has a very large population base. Many may not realize Fairfax<br />
County, VA is not much different in population that the entire State <strong>of</strong> West Virginia.<br />
There are many such large population centers in Virginia, Maryland, <strong>of</strong> Washington,<br />
D.C. As such, this large concentration represents a huge and untapped energy<br />
conservation and efficiency resource. As an example <strong>of</strong> this huge potential to conserve<br />
energy, I <strong>of</strong>fer Attachment 11,2006 State Energy Efficiency Scorecard, published June<br />
2007 by the American Council for Energy-Efficient Economy.’ This report shows<br />
Virginia ranked 3gfh among states for Energy Efficiency and Virginia’s Electric Utility<br />
companies tied for last among all 50 States and receiving a score <strong>of</strong> 0 out <strong>of</strong> a possible 15<br />
points for energy efficiency spending. It should also be noted that West Virginia<br />
performed slightly better (ranked 35fh) than Virginia and West Virginia’s utility<br />
companies received one-half <strong>of</strong> one point. The key is that even modest success<br />
improving such measures would eliminate the need for TrAIL. I’d like to remind the<br />
Commission that PJM boasts more than 51 million customers. If each <strong>of</strong> them conserved<br />
an amount equal to a single light bulb, 51 OOMW would be saved. It makes you wonder if<br />
a better alternative to TrAIL might be for the power companies to simply send each<br />
household a coupon in their electric bill for two free compact fluorescent light bulbs from<br />
Home Depot.<br />
2) Attachment 12 is a page out <strong>of</strong> the US. Department <strong>of</strong> Energy’s 2006 Transmission<br />
Congestion Study.” It states, there are three primary ways to deal with long-term<br />
congestion: 1) Build new generation; 2) Build new or upgrade transmission capacity; 3)<br />
Reduce electricity demand through energy efficiency, demand response, and distributed<br />
generation. In TrAILCo’ s application, TrAILCo has chosen to not provide alternatives<br />
using options 1 and 3 and focus entirely on the more controversial additional TrAILCo<br />
line, option 2. Options 1 and 3 would clearly contribute to meeting any reliability and<br />
For brevity, I‘ve only included the referenced pages. The remainder is available upon request.<br />
lo For brevity, I’ve only included the referenced pages. The remainder is available upon request.<br />
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congestion issues and would have little or no impact on West Virginians, yet these<br />
2 options were neglected entirely.<br />
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3) Virginia’s Governor Kaine published The 2007 Virginia Energy Plan (Attachment 13,<br />
Executive Summary, pages 6-14)11 states,<br />
“Energy efjciency and conservation provide the least costly and most readily<br />
deployable energy resource options available to Virginia. ”<br />
‘‘ Virginia has invested less in energy efficiency than some other states and<br />
therefore still has signficant short and long-term opportunities for efJiciency and<br />
conservation. ”<br />
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“Energy efficiency and conservation opportunities can be classijied as having<br />
technical potential, achievable potential, and achievable cost effective potential. Studies<br />
show that Virginia has an achievable electric energy reduction potential <strong>of</strong> 14% over the<br />
next IO years. ”<br />
“ Virginia will need to reduce the energy growth rate through conservation and<br />
efficiency and increase its indigenous production <strong>of</strong> energy, both renewable and<br />
conventional. ”<br />
Specific goals include:<br />
1) Reduce the rate <strong>of</strong> growth in energy use by 40%; 2) Increase consumer education; 3)<br />
Expand tax incentives to increase incentives; 4) Utilities should sponsor conservation<br />
programs; 5) Help low income Virginians reduce their use; 6) Expand energy education;<br />
Implement policies to improve State building efficiency; 7) Support industrial and<br />
commercial sectors to do the same; 8) Support deployment <strong>of</strong> new conservation<br />
technologies; 9) Federal government should expand programs also; 10) Local<br />
governments should establish policies to increase energy efficiency <strong>of</strong> citizens; 11)<br />
Citizens should change their daily habits; 12) Government should lead by example.<br />
For brevity, I’ve only included the Plan’s Executive Summary. The remainder is available upon request.<br />
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1 Q. WHAT ABOUT NEW GENERATION THAT’S PLANNED FOR THE AREA?<br />
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A. To answer this question, I first <strong>of</strong>fer the Commission Attachment 13A from<br />
Dominion Power’s website that describes the Lake Anna nuclear reactor project which<br />
has passed environmental approval and is on the fast track. Lake Anna is south <strong>of</strong><br />
Washington D.C. and will provide more new generation alone than what Dominion has<br />
publicly stated would make the need for TrAIL disappear (2850MW). There are also<br />
additional projects in various stages <strong>of</strong> approval/construction including a coal-fired plant<br />
in Wise County, VA (585MW) (Attachment 13B), and CPV Warren gas-fired plant<br />
(600MW). According to aforementioned recent study by Summit Blue Consulting, there<br />
are more than 9,359MW <strong>of</strong> new generation in local PJM queues and that does not even<br />
include CPV’s 600MW (source PJM RTEP). This is 3 times the stated need and more<br />
than 20 times more than Northern Virginia’s projected load growth <strong>of</strong> 465MW according<br />
to the study.<br />
Q. YOU STATED THE COSTS AND RISKS TO THE PUBLIC POTENTIALLY<br />
SERVED BY THIS PROPOSAL OUTWEIGH ANY BENEFITS. PLEASE EXPLAIN<br />
SOME OF THE RISKS AND COSTS.<br />
A.<br />
1) Let me briefly mention the risks first. Many who support TrAIL claim the region<br />
faces the prospects <strong>of</strong> rolling blackouts without it. In order to understand the threat <strong>of</strong><br />
rolling blackouts better, I asked TrAILCo to provide information through discovery as to<br />
the number <strong>of</strong> days that their modeling showed such blackouts would occur in each state<br />
in 2011 and for what duration. Given that the reliability/rolling blackout argument was<br />
given such emphasis and importance, I expected this information to be readily available.<br />
Strangely, it was not. The answer I received was<br />
“PJM does not perform studies that forecast blackout days for each state. PJM<br />
has not calculated Loss <strong>of</strong> Load Expectation for any <strong>of</strong> the constrained areas related to<br />
the need for TrAIL based on the possibility that TrAIL would not be granted. However,<br />
regional transmission expansion planning analyzes against NERC criteria to prevent<br />
blackouts ”<br />
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I interpret this statement to say, “PJM doesn’t do the analysis to tell you what bad things<br />
will happen if the line is not approved. Instead, they will plan a new line and then tell<br />
you how it helped to meet NERC criteria. Unfortunately, this approach does not give the<br />
Public Service Commissioners the ability to properly assess the costs vs. benefits <strong>of</strong> the<br />
proposed TrAIL. This was exactly the finding <strong>of</strong> the West Virginia Public Service<br />
Commission when they evaluated what became known as the Appalachian Power<br />
Company, “Culloden to Gavin 765 kv transmission line,” Case No. 9003, some thirty<br />
years ago. See Attachment 14. On page 319 <strong>of</strong> the Public Service Commission’s<br />
Annual Report, in their order entered May 18, 1979, the WV Public Service found,<br />
“The record (Appalachian Power’s) is seriously deficient in that it does not<br />
contain studies reflecting the probability <strong>of</strong> each required element <strong>of</strong> outage. The<br />
difficulty we have experienced in attempting to evaluate the probabilities <strong>of</strong> the<br />
occurrences which must take place in the computer simulation studies lead us to the<br />
conclusion, however, that future certiJication cases presented in this jurisdiction should<br />
be accompanied by evidence concerning such probabilities iffeasible. ”<br />
This is consistent with another discovery question I asked TrAILCo. In question R2, I<br />
asked TrAILCo if they knew <strong>of</strong> any examples whereby a new transmission line would not<br />
“economically, adequately, and reliably contribute to needs.” The answer received was<br />
they knew <strong>of</strong> no such examples. When I asked if there was any number <strong>of</strong> lines that<br />
would be enough, TrAILCo replied,<br />
“Neither TrAILCo or Allegheny Power have performed any studies to determine if there<br />
is a number <strong>of</strong> transmission lines that West Virginia needs. ”<br />
A.<br />
1) I already mentioned National Security. I asked for information from TrAILCo through<br />
discovery. See <strong>Hildebrand</strong>’s Questions R6, R7, R17 requesting information about the<br />
number, duration, and effects <strong>of</strong> potential blackouts. TrAILCo responded that they do<br />
not have access to that information. It is inconceivable that TrAILCo would use<br />
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reliability issues and the threat <strong>of</strong> blackouts to justiQ this line but would not have<br />
information regarding duration and impacts <strong>of</strong> blackouts to residential, commercial, and<br />
government customers. Several interested parties representing construction and electrical<br />
workers supported TrAIL publicly and stressed the need to improve and strengthen our<br />
energy grid. I could not agree more that we need to so. Unfortunately, many equate<br />
strengthening the grid with providing more above ground high voltage transmission lines<br />
stretching for thousands <strong>of</strong> miles across the landscape. I think, as do the nation’s top<br />
National Security energy experts, that distributed generation will make our nation<br />
stronger. Distributed generation will <strong>of</strong>fer protection from such things as the cascading<br />
failures which knocked more than 100 power facilities <strong>of</strong>f line when improper<br />
maintenance allowed trees to come in contact with high voltage lines in 2003.<br />
2) There are economic costs. These are difficult to quanti@ but they certainly exist. Let<br />
me <strong>of</strong>fer one such personal example. Hundreds <strong>of</strong> families and property owners will<br />
suffer the negative effects <strong>of</strong> degraded property values from TrAIL. These are many<br />
such risks and costs for things such as 1) public health, 2) environmental damage, and<br />
risk to property values, communities, and economies. Although the precise amounts can<br />
be debated, the existence <strong>of</strong> these costs is widely accepted. I <strong>of</strong>fer the following<br />
examples:<br />
1) With respect to public health, there is an on-going debate <strong>of</strong> EMF and the<br />
fact that even the EPA describes EMF classified EMF from transmission<br />
lines as a “possible cause <strong>of</strong> cancer.” See Attachment 20. It’s not as<br />
important to prove the fact that power lines cause health problems as it is<br />
to agree that a large segment <strong>of</strong> the public believes power lines do have<br />
the potential to cause health issues. This means members <strong>of</strong> the public<br />
living in close proximity to these high voltage lines live in daily threat <strong>of</strong><br />
potential harmful effects.<br />
2) The other comment I will make regarding public health is to again bring<br />
notice to the fact that more than 100,000 gallons/units <strong>of</strong> herbicides and<br />
chemicals was applied in West Virginia between 1998 (1997 data<br />
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provided by TrAILCo was incomplete) and 2006 (See <strong>Hildebrand</strong><br />
Question R24, and Attachment 15 which <strong>of</strong>fers the results <strong>of</strong> studies<br />
showing impact <strong>of</strong> agricultural run<strong>of</strong>f into the Chesapeake Bay Watershed.<br />
This shows the eastern panhandle <strong>of</strong> West Virginia in a moderate to severe<br />
range for nitrogen reaching tributaries. TrAIL could exacerbate this<br />
situation. The report also discusses litigation brought by environmental<br />
groups against polluters. This type <strong>of</strong> litigation could be considered a<br />
significant risk to farming in the region. With thousands <strong>of</strong> acres <strong>of</strong> forest<br />
and land cover along power line easements cleared, more chemicals and<br />
sediment will enter WV waterways and the Chesapeake Bay Watershed. I<br />
have seen no evidence to establish an acceptable risk. Attachment 16<br />
<strong>of</strong>fers similar findings from a study just released Nov 07. The Potomac<br />
Conservancy gave the Potomac River a grade <strong>of</strong> “D-plus” in its State <strong>of</strong><br />
the River Report and blames, in part, agriculture (including poultry<br />
production) in the Shenandoah Valley for undermining success. Poultry<br />
production is a huge business in many West Virginia counties and is<br />
vitally important to State and local economies. Attachment 16A from the<br />
Chesapeake Bay Foundation discusses the importance <strong>of</strong> the Potomac<br />
River to tourism and the connection between pollutants, tourism, and<br />
agriculture (including poultry).<br />
3) Attachment 17 discusses the impact <strong>of</strong> lost forest that will occur along the<br />
proposed route. According to the EPA, one acre <strong>of</strong> forest prevents<br />
260,000 pounds <strong>of</strong> carbon dioxide from entering the atmosphere. Given<br />
that TrAIL will require cutting thousands <strong>of</strong> acres <strong>of</strong> forest, the impact <strong>of</strong><br />
TrAIL on global warming could amount to billions <strong>of</strong> pounds <strong>of</strong> carbon<br />
dioxide entering the atmosphere.<br />
4) With respect to potential harm to West Virginia’s economy, I <strong>of</strong>fer<br />
Attachment 18 which highlights potential lost business opportunities that<br />
can result <strong>of</strong> TrAIL. West Virginia competes with surrounding States for<br />
attracting businesses. One large data center named Terremark Worldwide<br />
recently broke ground in Culpepper, Virginia. This facility will consist <strong>of</strong><br />
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five 50,000-square-foot independent data center structures and a 72,000-<br />
square-foot <strong>of</strong>fice building. One <strong>of</strong> the reasons Terremark chose to locate<br />
where it did was based on its ability to obtain inexpensive electricity. If<br />
TrAIL is approved, Terremark may be powered using electricity generated<br />
in Pennsylvania. West Virginia will aid by allowing what amounts to a<br />
240 mile extension chord to run from Virginia to Pennsylvania. An<br />
alternative approach, one which would be far more beneficial to West<br />
Virginians, would be to use our excess generation to <strong>of</strong>fer greater<br />
incentives for businesses and government agencies to relocate to West<br />
Virginia.<br />
5) With respect to harm to families and communities, I <strong>of</strong>fer the following<br />
example. My family along with dozens <strong>of</strong> others attended an information<br />
meeting sponsored by Allegheny in Moorefield in December 2007. At<br />
this meeting, the Allegheny representatives we spoke with would not even<br />
acknowledge that landowners would experience any decrease in property<br />
values as a result <strong>of</strong> a power line on or in close proximity to their property.<br />
This example causes a serious credibility issue with both TrAILCo and its<br />
parent companies. A reasonable person would certainly conclude property<br />
owners would experience some decline in value. <strong>Testimony</strong> to this was<br />
provided by Mr. Charlie Winfree on 30 October in Moorefield. Mr.<br />
Winfree has been selling real estate for 20 years and is the top-selling<br />
realtor in the five-county area. In his testimony, he stated,<br />
“Many properties will be unsellable at any tolerable price whatsoever. I can<br />
tell you that residential properties will plummet nearby or in sight <strong>of</strong> these lines.<br />
You won’t see the market value effect for a long time because many impacted<br />
property owners will suffer more by simply being unable to sell at all, ”<br />
Q. WHAT NEGATIVE HEALTH CONSEQUENCES MAY OCCUR IF TRAIL IS<br />
APPROVED?<br />
A. Attachment 19 is the U.S. Department <strong>of</strong> Justice press release announcing the recent<br />
legal settlement with AEP over AEP’s operations at several coal-fired generation<br />
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facilities which were found to be in violation. The EPA source estimated 32 billion<br />
dollars in savings to consumers in annual healthcare costs will be avoided as a result <strong>of</strong><br />
this settlement and the upgrades to equipment that must now be met. From this estimate<br />
<strong>of</strong> 32 billion dollars in health costs, it is reasonable to predict that additional coal<br />
emissions containing particulate and mercury resulting from TrAIL transmission will<br />
produce similar heath costs. It does not matter if the amount is 32 billion or some amount<br />
less than that.<br />
Attachment 20 is from the Environmental Protection Agency and describes the<br />
controversy surrounding Electric and Magnetic Fields (EMF) from power lines. It finds,<br />
“Based on studies about the incidence <strong>of</strong> childhood leukemia involving a large<br />
number <strong>of</strong> households, National Institute <strong>of</strong> Environmental Health Sciences found that<br />
power line magnetic fields are a possible cause <strong>of</strong> cancer. ”<br />
Q. ARE THERE ALTERNATIVES?<br />
A. Yes. I <strong>of</strong>fer the following examples from well-respected experts:<br />
1) Attachment 21 if from California’s Independent System Operator and shows one way<br />
California has handled high demand periods that could stress the grid. They have<br />
achieved rather remarkable results, showing the ability to conserve as much as 1500<br />
megawatts during a day just be issuing “Flex Alerts’’ to the public.<br />
2) At the 2006 National Energy Forum, Mr. Tom Eckman, Manager, Conservation<br />
Resources, Northwest Power and Conservation Council gave Attachment 22 briefing<br />
regarding “non-wire solutions’2.” According to his report, conservation is a bargain<br />
compared to other alternatives and is significant enough to factor into transmission<br />
decisions. He says it costs 2.4 cents per kWH and met 40% <strong>of</strong> regional growth needs.<br />
’’ For brevity, I’ve only included the referenced pages. The entire brief is available upon request.<br />
23
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3) Attachment 23 was another briefing given at the National Energy Forum by Mr. Terry<br />
Boston, Executive Vice President, Power System Operations. l3 Mr. Boston discusses<br />
advances in technology that can now allow existing equipment to carry 10 times more<br />
current and conduct heat 4 times better than copper wire.<br />
4) Attachment 23A is also from the National Energy Forum and was a presentation<br />
given by Mr. Phillip Pellegrino, President, Superpower, Inc. Mr. Pellegrino describes<br />
new High Temperature Superconductivity (HTS) transmission wires that have 100 times<br />
the power density <strong>of</strong> copper, are more efficient, safer, suffer reduced transmission losses,<br />
are lighter, improve aesthetics, improved reliability, and will replace copper by the end <strong>of</strong><br />
the decade.<br />
5) Attachment 24 was another presentation given at the 2006 National Energy Forum by<br />
Mr. Anthony Ahern, President and CEO <strong>of</strong> Buckeye Power, Inc. Mr. Ahern notes that<br />
Ohio’s Electric Cooperatives can now interrupt 30% <strong>of</strong> residential consumer water<br />
heaters through direct load contr01.l~<br />
6) Attachment 25 is a presentation given by Mr. Andrew Ott, PJM Vice President,<br />
Markets on May 31,2007. After running simulations, Mr. Ott presented a slide titled<br />
“Relative Benefit Depends on Location.” The graphic presented shows those on the<br />
supply side <strong>of</strong> a constrained corridor receive a “generation benefit” but no “load benefit.”<br />
In contrast, those on the receiving side <strong>of</strong> the congested area receive “no generation<br />
benefit” but they receive the “load benefit.”<br />
7) Attachment 26 is a presentation given by Mr. Richard E. Morgan, Commissioner,<br />
Public Service Commission <strong>of</strong> the District <strong>of</strong> Columbia. In his presentation, Mr. Morgan<br />
shows demand response is an “essential component.” He also says “a little goes a long<br />
way and it is an idea whose time has come.” Further, he states it represents operational<br />
l3 For brevity, I’ve only included the referenced pages. The entire brief is available upon request.<br />
14<br />
For brevity, I’ve only included the referenced pages. The entire brief is available upon request.<br />
24
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savings, lower market prices, reduced volatility improved grid reliability, customer<br />
options, and positive environmental benefits.<br />
8) Attachment 27, Wall Street Journal, article titled “Incentives Prove Powerful,” by<br />
Rebecca Smith. Ms Smith reports “New England businesses this year have agreed to cut<br />
electricity use by 1,222 megawatts, twice as much as last year.” The same success can be<br />
achieved across the PJM region. In other cases, companies have been incentivized to<br />
shift use to non peak hours. Businesses in Chicago have signed up to cut use by 647<br />
megawatts.<br />
9) Attachment 28 is a presentation given by Ms. Kathleen Hogan from the<br />
Environmental Protection Agency’s Climate Protection Division.” Ms. Hogan discusses<br />
in detail the benefits <strong>of</strong> energy efficiency compared to alternatives. She finds efficiency<br />
to be lower cost, less pressure on other suppliers, lower electricity prices, and improved<br />
local economy and service to low income and seniors. There are also many long-term<br />
benefits to the utility systems including improved security, improved resilience, lower<br />
base and peak demand, reduced need for new generation and transmission, and<br />
modular/manageable design. She presents significant results through 2004 including 24<br />
gigawatts avoided.<br />
Q. WHAT IS YOUR RECOMMENDATION FOR THE PUBLIC SERVICE<br />
COMMISSION?<br />
A. I recommend the request for TrAIL be denied based on my conclusion that the<br />
negative impacts far exceed any possible positive ones. For West Virginians, this TrAIL<br />
project is clearly a very bad deal.<br />
Q. DOES THIS CONCLUDE YOUR TESTIMONY?<br />
A. Yes.<br />
l5<br />
For brevity, I’ve only included the referenced pages. The entire brief is available upon request.<br />
25
THOMAS RI. HILDEBRAND<br />
Lieutenant Colonel. USAF<br />
Senice History<br />
Yo!. 06 - Pres<br />
Chief, Continuous Process Improvement and Reengineering, Assistant Secretat-?- <strong>of</strong> the Air Force<br />
Acquisition, Pentagon<br />
Lead transformation efforts for $30 billion a >ear Air Force research. del elopinent. & modernization programs<br />
Integrate process mproreinent strategies & plans in support <strong>of</strong> Air Force priorities Plan. eLecute. and<br />
champion reengineering iiiitiatir es Train lean manufacturing and process improvement tools and techniques<br />
No\ 05 - NOY 06 Spacecraft Program Manager, Program Office, National Reconnaissance Office (NRO)<br />
Responsible for $2 5 billion spacecraft acquisition Led the go\ eminent & contractor teclinical & management<br />
team responsible for cost. schedule. and performance ch ersan pat load bus. & ground equipment<br />
derelopinent. integration 81 test from component let el to go\ erninent acceptance <strong>of</strong> spacecraft<br />
Sep 04 - NO\ 05<br />
<strong>Direct</strong>or, Operations and Engineering, Program Office, NRO<br />
Led ops and engineering di\isions for $6B satellite program pro\ iding intelligence to militan.. intelligence<br />
agency. and civil customers. Managed contractor and government teams performing prograin management<br />
aiid engineering for spacecraft. supporting ground architecture, and advanced systems integration.<br />
Jul03 - Sep 04<br />
Chief, Space Pr<strong>of</strong>essional Management Office, NRO<br />
Led the hX0 efforts resulting from the 2001 Space Commission. Met congressional mandate to establish a<br />
inilitary jvorkforce <strong>of</strong> dedicated space pr<strong>of</strong>essionals. Authored iinpleinentation plan including nen. training.<br />
certification. and career tracking: coordinated with other senices/ageiicies: represented in DoD fonlms.<br />
Dec 02 - Jul03<br />
Chief, Sustainment Division, Systems Operations Office, NRO<br />
Led goiernment and contractor teains and executed a $71M satellite coininand and control maintenance<br />
program <strong>Direct</strong>ed the IF ork <strong>of</strong> 1 10 personnel deplo? ed norldtt ide. eLecuting operations maintenance. aiid<br />
training aclii ities De7 eloped RL implemented sustainment policies for intelligence collection and processing<br />
Apr 99 - Dec 02 Deput! Chief, Information Operations Dhision, <strong>Direct</strong>orate for Intelligence, Sun eillance, and<br />
Reconnaissance, Deput? Chief <strong>of</strong> Staff for Air and Space Operations, Pentagon<br />
Deiked and implemented information operational plans for SecDEF appro\-ed special program. Integrated<br />
plans into Air Force and joint operations supporting theater combatant commanders. De\~eloped numerous<br />
technical plans for DoD agencies to protect emergent technologies: briefed plans to Pentagon senior leaders.<br />
Aug 98 - Apr 99 Chief, Sensors Integrated Product Team<br />
Sacramento Air Logistics Center, McClellan AFB, CA<br />
<strong>Direct</strong>ed 23 go\ erntnent and contractor SJ stem managers and engineers Managed planning. budgeting. and<br />
e\ecution for inoderiii7ation upgrade program <strong>of</strong> the AN/TPS-75 radar s> stein Supen ised procureinent<br />
program for a nen radar shelter Prot ided ops support €or $730M in operational assets deplo) ed 11 or1dt.i ide<br />
Rlar 98 - hug 98 Transportation Flight Commander<br />
Logistics Squadron, 4406t” Operations Group (P), Ahmed-Al-Jaber AB, Kuwait<br />
Led ehicle ops maintenance. passenger sen ices. and freight inanageinent during Operation SOUTHERN<br />
WATCH deplo! itient Orchestrated inassn e force deplo! mentiredeplo! iiieitt including nine fighter
Squadrons and 2000 personnel, Planned $8.5 million in impro\.eiiients to broken base infrastructure.<br />
Mar 96 - Mar 98<br />
Chief, Posture Planning Analysis Team, Plans and Programs Office<br />
Sacramento Air Logistics Center, McClellan AFB, CA<br />
Led the Base Realignment and Closure (BRAC) planning team <strong>of</strong> inanpon er. workload. and infrastructure<br />
experts Dei eloped a comprehensive roadmap for 350 <strong>of</strong>fices. 12.000 personnel. and numerous facilities<br />
Del eloped proposals and decision tools for senior leaders and coordinated plans nith other logistics centers<br />
Apr 95 - Mar 96<br />
Logistics Plans and Programs Analyst, Plans and Programs Office<br />
Sacramento Air Logistics Center, McClellan AFB, CA<br />
Managed efforts and developed inipleineiitation plan for the USAF's Agile Logistics Program. Evaluated<br />
logistics process improvement proposals and made recommendation to senior leaders. Performed economic<br />
analysis to determine optimal repair/overhaul source for such programs as the C-17 and Joiiit Strike Fighter.<br />
Oct 92 - Apr 95<br />
F-22 Aircraft hrmament Integration Manager, F-22 System Program Office<br />
Aeronautical Systems Center, Wright-Patterson AFB, OH<br />
Managed a $70M weapon integration effort on the Air Force's highest priorih FiA-22 fighter aircraft<br />
program. Led 30 Air Force and contractor engineers and managers n ho incorporated advanced technologies<br />
and programs. Oversan efforts through Preliininaq and Critical Design Reyiew engineering milestones.<br />
Aug 89 - Oct 92<br />
F-15E Aircraft Weapon Integration Manager, F-15 System Program Office<br />
Aeronautical Systems Center, Wright-Patterson AFB, OH<br />
Led two teams responsible for cost. schedule. and performance <strong>of</strong> ueapon and life support program<br />
integration. Responsible for new munitions. a leading-edge oxTgen generation sjstem; and anti-gravity force<br />
suit. Led two time-critical iiitegratioii efforts adding critical F- 15E mr-fighting capabilities for Operation<br />
DESERT SHIELD.<br />
Education - Master <strong>of</strong> Business Administration, UniT.ersitJ <strong>of</strong> Dayton. May 1995<br />
- Bachelor <strong>of</strong> Science. Business Management. West Virginia Uili\ ersity. magna cum laude. May 1988<br />
- ,4ir War College. 2005<br />
- Defense Systems Management College, Apr 2001<br />
- Air Command and Staff College. Jul2000<br />
- Program Element Monitor Course. Apr 2000<br />
- Education with Industq (Henlett Packard). Nov 1997<br />
- Squadron Officer School. Feb 1996<br />
Achiei ements - Meritorious Service Medals, 1999. 2003. 2006<br />
- Company Grade Officer Award. 4406" Ops Group. A1 Jaber AB. Kunait. Jun 1998<br />
- Commendation Medals. 1992. 1995<br />
- Achievement Medal. 1991<br />
- Certified Le1 el I11 in Program Management. 1994<br />
- Certified. Process Improvement "Black Belt." Uni\.ersit\. <strong>of</strong> Tennessee, 2007<br />
Interests<br />
Sports. fitness. nature. hiking. gardening. Ci.i il War histoq-
?<br />
c<br />
1600 LAIDLEYTOWER * EO. BOX 553 * CHARLESTON.WESTVIRGINIA 25322 -TELEPHONE: 304-340- IO00 TELECOPIEk 304-340-1 I30<br />
www.j~ksonkelly.com<br />
<strong>Direct</strong> Dial No. (304) 340-1251<br />
Fax NO. (304) 340-1080<br />
November<br />
19, 2007<br />
Via Hand Delivery<br />
Ms. Sandra Squire<br />
Executive Secretary<br />
Public Service Commission <strong>of</strong> West Virginia<br />
201 Brooks Street<br />
Charleston, West Virginia 25323<br />
Re:<br />
Case No. 07-0508-E-CN<br />
Application <strong>of</strong> Trans-Allegheny Interstate Line Company for a certificate <strong>of</strong><br />
public convenience and necessity under W. Va. Code 6 24-2- 1 1 a authorizing the<br />
construction and operation <strong>of</strong> the West Virginia segments <strong>of</strong> a 500 kV electric<br />
transmission line and related facilities in Monongalia, Preston, Tucker, Grant,<br />
Hardy, and Hampshire Counties, and for related relief<br />
Dear Ms. Squire:<br />
Pursuant to Procedural Rule 13.6.c, enclosed please find one copy <strong>of</strong> TrAILCo’s<br />
response to <strong>Thomas</strong> <strong>Hildebrand</strong> s First Set <strong>of</strong> Discovery Requests. We are providing copies to<br />
counsel for the CAD, the Staff (two copies), Laurel Run Community Watershed Association, the<br />
WVEUG, CPV Warren, and Mr. <strong>Thomas</strong> <strong>Hildebrand</strong>.<br />
Please file this letter and the response and circulate the twelve additional copies <strong>of</strong> the<br />
letter to the appropriate parties at the Commission. We also ask that you date stamp the extra<br />
copy provided and return it with our messenger. As always, we appreciate your assistance in this<br />
matter.<br />
Very truly yours,<br />
Enclosure<br />
cc: Randall B. Palmer, Esq, (wienc.)<br />
Gerald Deaver, Esq. (w/enc.)<br />
Mr. Stephen Lord (wlenc.)<br />
5-<br />
Mr. Michael Lewis (wienc,)<br />
Mr. Keith A. Latham (wienc.)<br />
Parties on the Service List (copied as described above}<br />
Christopher h - LL. w Callas<br />
Clarksburg,WV Martinsburg,WV = Morgantown, WV * New Martinsville, WV * Wheeling,W<br />
(C1284230 1) Denver, CO 9 Lexington, KY Pittsburgh, PA Washington, D.C.
TRANS-ALLEGHENY INTERSTATE LINE COMPANY<br />
CASE NO. 07-0508-E-CN<br />
HILDEBRAND FIRST DATA REQUEST<br />
Responsible Case Witness for this material: Alan Fleissner<br />
Response Date: November 19,2007<br />
HILDEBRAND-I-R1<br />
TrAILCo states TrAIL “will economically, adequately, and reliably contribute to the<br />
present and anticipated requirements for electric power <strong>of</strong> WV customers.” As such, please<br />
provide ail previously filed economic estimates by TrAILCo and its parent for past lines or<br />
transmission projects in WV along with supporting evidence for each that would show the extent<br />
to which such economic predictions have been accurate and materialized.<br />
RESPONSE:<br />
Allegheny Energy Transmission, LLC (AET) is the parent <strong>of</strong> TrAILCo. Neither AET nor<br />
TrAILCo has proposed to construct any transmission projects in West Virginia prior to the<br />
proposal pending in this proceeding and, therefore, neither has filed economic estimates with the<br />
Public Service Commission or any other agency for past lines or transmission projects in West<br />
Virginia.<br />
(7,<br />
..__
BEFORE THE<br />
PEWSYLVANIA PUBLIC UTILITY COMMISSION<br />
IN RE: APPLICATION OF<br />
TRANS-ALLEGHENY MTERSTATE<br />
LIKE COMPANY (TRAILCo)<br />
Docket Nos. -4-110172:<br />
A-1 107172F002-FO04<br />
and G-0007 1229<br />
(Consolidated)<br />
MOTION OF THE<br />
OFFICE OF CONSUMER ADVOCATE<br />
FOR INJUNCTIVE RELIEF<br />
Pursuant to 52 Pa. Code Section 5.103, the Office <strong>of</strong> <strong>Consumer</strong> <strong>Advocate</strong> (OCA)<br />
files this Motion For Injunctive Relief. The OCA requests that TrAILCo and its land agents.<br />
acting on behalf <strong>of</strong> Allegheny Power, be enjoined from engaging in activities including<br />
misrepresentation <strong>of</strong> facts, coercive acts, or harassment <strong>of</strong> consumers, all <strong>of</strong> which violate<br />
Section 1501 <strong>of</strong>the Public Utility Code and pertinent regulations. 66 Pa. C.S. $1501: see<br />
_generally. 52 Pa. Code $56.1 (good faith, honesty and fair dealing required in utility billing.<br />
termination and collection practices). In support <strong>of</strong> this Motion, the OCA provides the<br />
following:<br />
I. Background<br />
&4mple on-the-record evidence in the form <strong>of</strong> testimony and exhibits <strong>of</strong>fered bi-<br />
Allegheny Power customers throughout Washington and Greene Counties supports<br />
injunctive relief against the agents <strong>of</strong> TrAILCo, acting on behalf <strong>of</strong> Allegheny Power.<br />
Many Allegheny Power customers testified under oath at the public input hearings that they<br />
1
have been subjected to harassment, factual misrepresentations and misinformation, and<br />
coercive acts used by TrAILCo agents. According to the public input testimony, many<br />
customers were pressured by TrAILCo agents to sign "Damage Release-Right <strong>of</strong> Way"<br />
(Damage Release contracts). These Damage Release contracts refer to claimed existing<br />
rights <strong>of</strong> way on the consumers' properties'; require consumers to give up all rights with<br />
regard to any damages caused by the transmission line; require that the consurners withdraw<br />
all complaints against the transmission line, and refrain from opposing TrAILCo in any<br />
courts or regulatory proceedings. A sample <strong>of</strong> such a contract appears in the record as<br />
Cheryl Piroch's Exhibit 3 and a copy is attached to this Motion.<br />
According to the public input testimony, the tactics used to obtain these Damage<br />
Release contracts include false statements by TrAILCo agents to the effect that neighbors<br />
have already signed Damage Release contracts when, in fact, they have not. Other<br />
significant misrepresentations by the agents include such assertions as the transmission line<br />
is a "done deal" or "99 percent sure." Tr. 392, 446, 1164, 1524, 1526, 1920. The OCA<br />
submits that Section 1501 <strong>of</strong> the Public Utility Code has been violated by the many factual<br />
and legal misrepresentations to induce consumers to sign Damage Release contracts, by the<br />
TrAILCo agents acting on behalf <strong>of</strong> Allegheny Power. 66 Pa. C.S. 5 1501. The Public<br />
Utility Code and applicable case law support the determination that such statements and<br />
conduct constitute unreasonable service and the Commission has jurisdiction to act to<br />
prohibit such unreasonable service.<br />
' The OCA would note the recent filing <strong>of</strong> a Complaint in Civil Action and For Declaratory Judgment in<br />
Washington County Common Pleas Court that challenges the validity <strong>of</strong> the existing rights <strong>of</strong> way referenced<br />
in the TrAILCo filing. Sawezysmn. et al v. TrAILCo, Alleghenv Enerm Transmission, LLC. Alleghenv<br />
Energy. Inc., West Penn Power Co.; Docket No. 20078072.<br />
2
111. Conclusion<br />
WHEREFORE, the Offce <strong>of</strong> <strong>Consumer</strong> <strong>Advocate</strong> respectfully requests that Your<br />
Honors enjoin TrAILCo and its agents, acting on behalf <strong>of</strong> Allegheny Power, from engaging<br />
in hrther acts <strong>of</strong> bad faith or coercion; making further misrepresentations as described<br />
above: declare any claimed Damage Release contracts with affected consumers to be<br />
voidable, upon the request <strong>of</strong> customers induced to sign through misleading statements and<br />
coercive tactics; and provide notice and opportunity to be heard anew, if requested, for those<br />
who relinquished those rights as a result <strong>of</strong> the misrepresentation and coercion.<br />
Respectfully submitted,<br />
Dianne E. Dusman<br />
Senior Assistant <strong>Consumer</strong> <strong>Advocate</strong><br />
Pa. Attorney Id. No. 38308<br />
E-mail: ddusman@paoca.org<br />
Darryl A. Lawrence<br />
Pa. Attorney Id. No. 93682<br />
E-mail: dlawrence@paoca.org<br />
Jennedy Santolla<br />
Pa. Attorney Id. No. 203098<br />
E-mail: j santollal@paoca.org<br />
Christy M. Appleby<br />
Pa. Attorney Id. No. 85824<br />
E-mail: cappleby@paoca.org<br />
Assistant <strong>Consumer</strong> <strong>Advocate</strong>s<br />
Office <strong>of</strong> <strong>Consumer</strong> <strong>Advocate</strong><br />
jth Floor, Forum Place<br />
555 Walnut Street<br />
Harrisburg, Pa. 17101-1923<br />
Telephone: (717) 783-5048<br />
Fax: (717) 783-7152<br />
Date: October 18,2007<br />
Counsel for:<br />
Irwin A. Popowsky<br />
<strong>Consumer</strong> <strong>Advocate</strong><br />
95 802 .doc<br />
23
TrAILCo Statement No, 1OA<br />
Witness: Mark ,4. Maden.<br />
BEFORE THE<br />
PESNSYLVANIA PUBLIC CTILITU COMMISSION<br />
Ih RE: APPLlCATION OF TRANS-ALLEGHENY<br />
INTERSTATE LI3 E COMPANY FOR<br />
(I) A CERTIFICATE OF PUBLIC COKVENTENCE<br />
TO OFFER. RENDER, FURNISH AKD/OR<br />
SCPPLY TRANSMISSXON SERVICE ??i THE<br />
CQ.MMOIVFWALTB OF PENFSYLVANIA;<br />
(IX) AUTHORIZATION AND CERTIFICATION<br />
TO LOCATE, CONSTRUCT, OPERZTE AND<br />
MAIKTAIN CERTAM HTGH VOLTAGE ELECTRIC<br />
TRASSMllSSION LIhTS AND RELATED ELECTRIC<br />
SUBSTATION FACILITIES; (IXr) AUTHORITY<br />
TQ EXERCISE THE POWER OF EMINENT<br />
DOMAPI FOR THE CONSTRUCTION AND<br />
ISSTALLATION OF AERIAL ELECTRIC<br />
TRANSMlSSfON FACILITIES ALONG THE<br />
PROPOSED TUYSMISSION LISE ROUTES<br />
Ihr PEENSYLVANIA: (IV) APPROVAL OF AN<br />
EXEMPTTON FROM MUNICIPAL ZONING<br />
REGULATIOY WITH RESPECT TO THE<br />
CONSTRUCTION OF BUILDINGS; AND<br />
(17) APPROVAL OF CERTAIN RELATED<br />
AFFILIATED INTEREST AIGL~NGEMENTS<br />
: Docket Nos. A-lf0142,<br />
A-l10172FOQ02,<br />
A-1 10172F0003,<br />
A-ll0172FOOO4, anti<br />
G-00071229<br />
SUPPLEMENTAL DIRECT TESTIMOSY OF<br />
MARK A. MADER<br />
Re: Updated Allocation <strong>of</strong> Revenue Requirement for TrAIL<br />
July 26,2007
Trans-Allegheny Interstate Line Company<br />
Supplemeiital <strong>Direct</strong> <strong>Testimony</strong> <strong>of</strong> Mark A. Mader<br />
Page I <strong>of</strong> 12.<br />
TrAILCo Statement Yo. 1 OA<br />
I Q.<br />
7, ‘4.<br />
PLEASE STATE YOUR NAbIE AND BUSINESS ADDRESS.<br />
My name is Mark A, Mader, and my business address is 800 Cabin Hi11 Drive.<br />
?<br />
4 Q.<br />
5 A,<br />
5<br />
7<br />
S<br />
9<br />
10<br />
ii Q.<br />
i2<br />
1.,, A.<br />
iJ<br />
15<br />
16<br />
17<br />
18<br />
Greensburg, Pennsylvania 1 560 1.<br />
BY Vv’HOhf ARE YOU EMPLOYED -AN9 E UWT CAPACITY?<br />
I am employed by Allegheny Energy Service Corporation, and my title is <strong>Direct</strong>or, Rates.<br />
My time is devoted to tasks performed for the regulated companies <strong>of</strong> Allegheny Energy,<br />
Inc.. (.”Allegheny”) including The Potomac Edisoii Company (“Potomac Edison”).<br />
h4onongahela Power Company rMon Power”), and West Perm Power Coinpany (“West<br />
Perm”). all doing business as “Allegheny Power”. and Trans-Allegheny Interstate Line<br />
Company (-‘TrAILCo”).<br />
DID YOU PREPARE DIRECT TESTIMONY THAT WAS FILED PREVIOUSLY IN<br />
THIS CASE?<br />
Yes. My <strong>Direct</strong> <strong>Testimony</strong> was filed on April 13. 2007 C‘April 13 <strong>Testimony</strong>‘*). That<br />
testimoiiy generally described how PJM had allocated the revenue requirenisiits for the<br />
Trans-Allegheny Interstate Line (“TrAIL‘‘) among load serving entities in the PJM<br />
transmission zones, what West Penn‘s allocation was projected to be, and how West Penn<br />
would recover its portion <strong>of</strong> the TrAIL revenue requirement. 1 also described certain<br />
affiiiate agreements governing interaction <strong>of</strong> TrAILCo with other Allegheny companies,
Trans-Allegheny Interstate Line Company<br />
Supplemental <strong>Direct</strong> <strong>Testimony</strong> <strong>of</strong> Mark A. Mader<br />
Pagc 2 <strong>of</strong> 12<br />
TrAILCo Statement No. 10'4<br />
PL'RPOSE OF TESTIMOW<br />
PLEASE DESCRTBE THE PURPOSE OF YOUR SUPPLE%IENTPJ, DIRECT<br />
TESTIMONY.<br />
Recent orders by the Federal Energy Regulatory Commission ("FERC") h 7 e changed &e<br />
cost allocations by PJM, and the associated revenue requirement allocated to Allegheny<br />
Power, that are described at page 4: line 10, through page 10, line 17 <strong>of</strong> ni? April 13<br />
<strong>Testimony</strong>. The purpose <strong>of</strong> my suppfeEenta1 testimoiiy is to describe how. based on these<br />
FERC orders, TrXILCo expects the revenue requirements €or Tr.4IL. and the coritmmon<br />
<strong>of</strong> the line and associated substation expansions (..DVP Facilities'') to be onned b)<br />
Virginia Electric and Power Company ("Dominion Virginia Power") will be detemiined<br />
and allocard based on those orders to distribution utilities, also referred to as load serlxg<br />
entities ("LSEs"), in the PJM transmission zones. I will also describe the updated<br />
estimated budgeted costs for TrAL This suppiementai direct testimony updates and<br />
supersedes the seven pages <strong>of</strong> my April I3 Tesimonl that 1 note abo~s. but diem<br />
ise rhar<br />
previous testimony remains unchanged.<br />
EXHIBITS<br />
PLE.4SE IDENTIFY A'ND DESCRIBE THE EXHIBITS TO YOUR SUPPLEMENTAL<br />
DIRECT TESTIMOXY XWD SIJWIZE THE COhTEX'TS OF THOSk<br />
EXHIBITS.<br />
I am sponsoring two additional exhibits with my supplemental direct testimon!.:<br />
o<br />
TrAILCo Exhibit No. MAM-5 presenrs the updated allocation <strong>of</strong> revenus<br />
requirements to Allegheny Power: and
_,--I_-<br />
-I<br />
Trans-Allegheny Interstate Line Company<br />
Supplemental Direc.t <strong>Testimony</strong> <strong>of</strong> Mark A. Mader<br />
Page 3 <strong>of</strong> 12<br />
TrAILCo Statement No. 10A<br />
1<br />
e<br />
TrAILCo Exhibit No. MpLz/I-6 presents updated TrhIL cost estimates.<br />
2<br />
UPDATED FERC COST ALLOCATION PROCESS<br />
3 Q.<br />
-1<br />
5 A.<br />
6<br />
-<br />
I<br />
8<br />
9<br />
10<br />
11<br />
12<br />
13<br />
14<br />
15<br />
16<br />
17 Q.<br />
:8<br />
19<br />
10 A.<br />
31<br />
22<br />
PLEASE DESCRIBE THE RECENT FERC ORDERS YOU REFERRED TO<br />
EARLIER.<br />
On April 19: 2007, FERC issued orders in Docket Nos. EL05 121 -000, et d, and ER06-<br />
/---<br />
-<br />
1271-003, e! ai. (“April 19 Orders”) directing that new, centrally-planned facilities<br />
within PJM that operate at or above SO0 kV (such as much <strong>of</strong> the TrAIL facilities) be<br />
M1y allocated on a region-wide “postage stamp’’ basis and that costs for facilities below<br />
500 kV (such as the Prexy 138 kV facilities <strong>of</strong> TrAIL) be allocated baed on a<br />
“beneficiary pays” methodology. Under a region-wide “postage-stamp” raie design. the<br />
costs <strong>of</strong> new, centrally-planned transmission facilities in the PJM region will be allocated<br />
to all LSEs in PJM according to each LSE’s share <strong>of</strong> the regional load. Currently the<br />
XIv--.-- i ~ ~ ”-<br />
_._<br />
” .~ i___<br />
total Allegheny Power zonal load is approximately 6% <strong>of</strong> the total PJM regional load,<br />
This load ratio share is updated atmually. Under a "beneficiary pays” methodology. the<br />
beneficiaries <strong>of</strong> a particular transmission upgrade will be identified and dLrectly slliocated<br />
the costs <strong>of</strong> that upgrade.<br />
HOW DO THE REVENUE REQUIREMEKTS FOR TRAIL DIFFER FROM WHAT<br />
YOU DESCRIBED IN YOUR APRIL 13 TESTLMONY AS X RESC‘LT OF FERC‘S<br />
.@RE 19 ORDERS?<br />
Under the prior methodology, as I pointed out at pages 5 through 10 <strong>of</strong> my April 13<br />
<strong>Testimony</strong>, dl the revenue requirements associated with the non-Presy portrons <strong>of</strong> TrrUL<br />
and the DVP Facilities were allocated to loads outside the Allegheny Power Zone. dde<br />
7.N
I KHIL iuewsierrer Page 1 <strong>of</strong> 1<br />
We at Allegheny- Energy are committed to open and ongoing dialogue to inform the public and our<br />
customers about The Trans-Allegheny Interstate Line (TrAIL), the proposed 500-kilovolt transmission<br />
line. That's why we want you to be aware that inaccurate information appeared in articles published<br />
yesterday by several West Virginia newspapers and a national wire service.<br />
Let's set the record straight: we have not requested a rate increase in West Virginia in connection<br />
with the Trans-Allegheny Interstate Line.<br />
The TrAIL has a simple, yet vital mission: to ensure the reliability <strong>of</strong> our region's electric transmission<br />
system for years to come. We urge you to stay informed, keep an open mind and support a thorough,<br />
fair review <strong>of</strong> our plans by your state regulators. Visit our Web site at rJ;.:y~:!:< ?p?.r..;r~~ilf~~~:!~~~~.<br />
for more<br />
information.<br />
To contact us, send e-mail to ~ ~ ~ ~ or write ~ to TrAIL, ~ 800 ~ Cabin Hill ~ Drive, ~ ~ ~ ~<br />
Greensburg, PA 15601.
1 INTRODUCTION<br />
The Commonwealth <strong>of</strong> Virginia currently ranks near the bottoiii <strong>of</strong> all states in expenditures on demandside<br />
nianagement (DSM)'- comprising more efficient uses <strong>of</strong> energ (energy efficiency) and the abiliq.<br />
<strong>of</strong> a consumer to respond to scarcity and high costs (demand response) - according to the American<br />
Council for an Energ)--Efficient Economy (ACEEE) and the Alliance to Saye Energ- (ASE).' This<br />
creates a unique opportunity for the Conimonn.ealth to leverage key lessons learned and best practices<br />
identified in other jurisdictions to develop efficiently and implement a cost-effecti7.e portfolio <strong>of</strong> DSM<br />
program <strong>of</strong>ferings.: Such a portfolio could rely on proven DSM tecluiologies and strategies to achieve<br />
significant energy savings and peak demand reduction over a relatively short timefranie (i.e.. ivitliin moto-three<br />
j-ears). as well as over the longer term. In addition. such a portfolio would generate additional<br />
benefits by protecting ratepayers against future increases in energ! costs. proyiding system reliability<br />
benefits. <strong>of</strong>fering customers the abilic to better manage their energ costs. and maintaining a competitii e<br />
regional economy as businesses increasingly look for locations with robust. diJ.erse energ supplies from<br />
demand-side and supply-side resources.<br />
' For the purposes <strong>of</strong> this report, DSM refers to energy efficiency. demand respnse. and iiino~ativ electric rates designed TCJ<br />
shift energy use from peak demand periods. DSM coT:ers the panoply <strong>of</strong> activiries custoiners can take to nianaee their energ! iise<br />
on their side <strong>of</strong> the meter. The 2Vnfiontrl .Irfion Plan for Energ?, Eflcienq defines energy efficienc!. a5 "Using less energ! to<br />
provide the same or improved le.;el <strong>of</strong> service to the energy consumer in an economically efiicient way The teriii energ!'<br />
efficiency as used here includes using less energy at any time." The US DOE defines demand response as "Chaiiges in eiectnc<br />
usage by end-use customers from their normal consumption patterns in response to changes in the price <strong>of</strong> electriciv over tline.<br />
or to incenti1.e payments designed to induce lower eIectrici6 use at times <strong>of</strong> high \\holesale market prices or nhen s!'stem<br />
relinbilip is jeopardized." '4s specified in the report Een&ts <strong>of</strong> Demnd Respume hi Elecrncir?, .Lfarkers mid Recommei?n'nho?ls<br />
for Achieving Them. the US DOE identifies two primq tspes <strong>of</strong> demand response: (1) Price-based demand response slrcll as<br />
real-time pricing (RTP). critical-peak pricing (CPP) and time-<strong>of</strong>-use (TOU) tariffs. give customers time-vFing rates that reflect<br />
the \due and cost <strong>of</strong> electricit\i in different time periods. h e d with this infonnation customers tend to use less electricit\ at<br />
times \\hen electricitl; prices are high mid (2) 1ncenti.c-e-based demand response program pa! participating custoniers to reduce<br />
their loads at times requested b!' the program sponsor. triggered either by a grid reliabilih. problem or high electricin prices.<br />
Dan York Rr Martin Kushler. American Council for an Enerav-Efficient Econornv. .iCEEE's 3rd .\irtiontr/ Scoreborrrd oil<br />
' Numerous sources exist compiling DSM best practices including the US DOE and US EPA. 3'afioml rlcrion Plan for Etrerg,<br />
Eficiency. (July 2006); US EPA. Clean Energy-Emironmefit Guide to .-1ctio~7. Policies. Be57 Practices. mid .4ciiotz Steps for<br />
Smtes. (April 2006): and California Best Practices Project Advisory Committee. .Yafional Energy&ficzenq~ Besr Pracrices Siz~d,<br />
(Dec. 20043. http: I wwn..eebestpractices.coin<br />
-1-
Resenations about DSM that the Virglnia State Corporation Commission (SCC) may have had under the<br />
price-capped transition to retail competition no longer apply since that transition has been abandoned in<br />
the new "reregulation" bill.4 In particular. the bill:<br />
- Provides incentiJ,es for utilities to find renewable forms <strong>of</strong> energy and establish demand-side<br />
in ana gemeiit and conservation pro grams:<br />
-<br />
..\llo\vs each utility to seek rate adjustment clauses to recover costs <strong>of</strong> FERC-approved demand<br />
response programs and costs <strong>of</strong> providing incentives for the utility to design and implement<br />
demand-side management programs; and<br />
-<br />
<strong>Direct</strong>s the SCC to "conduct a proceeding to establish goals for the amount <strong>of</strong> enera and demand<br />
to be reduced by the operation <strong>of</strong> demand side management. consen-ation. energy efficiency. and<br />
load management programs. and deyelop a plan for the development and implementation <strong>of</strong><br />
recommended programs."'<br />
More recently Govenior Kaine issued Executive Order 48 that directs the Commonwealth's executive<br />
Branch to reduce the aimual cost <strong>of</strong> enerE purchases from nomenewable sources by at least 20% by<br />
fiscal year 2010. These initiati\-es provide the Commonwealth with an opportunity to integrate costeffective<br />
demand- and supply-side options into system planning processes. Ois-cn that L'irginia irtilities<br />
ha~t: among the nation's least chdoped DSM programs and fi3di12g rhis direciive cc:il:! engezrder<br />
cunsiderabie bush~:ys opprl-imiiies i'm kkpend~ni vendors ulr DSM prrsgranrs md tschnciogies.<br />
ili sarieh <strong>of</strong> DSM programs that incorporate both energy efficiency (Le., permanent energy savings) and<br />
demand response (i.e., targeted peak demand reduction) goals could be effectively applied in the<br />
Commonwealth given Virginia's current economics and demography, These are characterized by<br />
population and economic groivth6. a large concentration <strong>of</strong> commercial data centers, and significant<br />
public sector facilities. The list <strong>of</strong> available program options can be narrowed by focusing on only those<br />
DSM strategies and technologies that are most applicable to the Commonwealth's situation and have been<br />
proven successful in other jurisdictions. Doing so shows that five DSM programs have the greatest<br />
potential to generate energj savings and peak demand reduction. together with corresponding cost<br />
savings. over a relatively short timeframe. The programs are described below. Estimated energy savings<br />
and peak demand reduction associated with these programs are presented in Section 3.<br />
1. Residential and Commercial High-Efficiency Lighting Programs provide financial incentives<br />
to end-use customers to <strong>of</strong>fset the incremental costs associated with pie-qualfied. hgh-efficiency<br />
lighting sj stems as well as financial and educational incentives to lighting retailers and specialty<br />
contractors to increase promotions and installations <strong>of</strong> high-efficiency lighting systems.<br />
2. Residential HVAC Retr<strong>of</strong>it and Quality Installation Programs provide financial incentives to<br />
end-use customers to <strong>of</strong>fset the incremental capital costs associated with hgh-efficiency HVAC<br />
equipment as well as utility financial and technical assistance to HVAC retailers and specialty<br />
' Summa ssed House <strong>of</strong> HB 3068. wai I .st3te.\:a.us:ce;- .<br />
Il!l?!.BBE.$<br />
sc:s7:.1 ........o!.I.&%2<br />
i-...biiff~di-.-.htiiO ..... . :I =. (accessed Mar. 19,2007)<br />
'Id<br />
' Peak demand for Dominion Virginia Power, the Commonwealth's largest electric utili?. is expected to increase b.i 1.8O.v per<br />
?ear through 2016, from 18.138 MW in 2006 to 21,680 in 2016; Memll. Hyde. "Proposed Mt Storm-Meadow Brook-Loudoun<br />
500-kV Line: Critical Analysis and Alternatives." confidential internal ivork product prepared for Bracewell t Giuliani. LLP<br />
(March 2007)<br />
2
Exhibit 5. Estimated Peak Demand (Mw) Reduction 29<br />
Demand Response<br />
44%<br />
1 % Appliances & Office<br />
Results from the current assessment suggest that a well-designed portfolio <strong>of</strong> DSM program <strong>of</strong>ferings<br />
including both energy efficieiicj- and demand response strategies could cost effectiyely reduce the<br />
Commonwealths peak demand by approximately 5 .OOO MW and its enera. consumption forecasts bq-<br />
7.800 GWh over a ten-year planning horizon. These estimates represent near15 17% <strong>of</strong> the<br />
Commonwealth’s projected 2007 peak demand and nearly 10% <strong>of</strong> the Conimonn-ealtli’s projected 20117<br />
enerz use. The estimates are well within the ranges presented in e\-aluations <strong>of</strong> DSM potential in other<br />
jurisdictions. and are 1ikel:- conservative in that only basic DSM strategies viere considered. Additional<br />
energy savings and peak demand reductions could lilielq- be achieved through DSM program <strong>of</strong>ferings<br />
that overcome barriers to DSM program participation, including customers’ lack <strong>of</strong> experience ivith high<br />
efficiency products. lack <strong>of</strong> infomiation about available technologies and erpected sayings. and<br />
uncertainh about equipment reliability and performance characteristics.<br />
3.2 Demand Response in Wholesale and Retail Markets<br />
Based on a surveq- <strong>of</strong> electric utilities nation~ide.~~ FERC recommended implementing actiTities to<br />
enable greater use <strong>of</strong> demand resources in regional transmission planning and operations procedures. The<br />
agency concluded that dentand response has an important role to plal; in both wholesale and retail<br />
electricity markets. FERC estimated that the potential immediate reduction in peak electric demand that<br />
can be achieved from existing demand response resources is betlveen thee and seyeu percent <strong>of</strong> peak<br />
electric demand in most regions.” FERC Staff recommended that FERC: 1) esplore how to better<br />
accommodate demand response in n-liolesale markets: 2) explore how to coordmate nith utilities. state<br />
comniissions and other interested parties on demand response in wholesale and retail markets: and 3)<br />
consider specific proposals for conipatible regulatorq- approaches; including h o to ~ eliniiiiate regulaton<br />
” Id<br />
30<br />
Federal Energ> Regulaton, Cornrnlssion ,4ssessmen/ <strong>of</strong> DeiimndRespurm mzd.-Id cinced,\fzerenng. Staft Report. Docket No<br />
AD-06-2-000. August 2006<br />
I’ Man land Public Senice Commission. Ten-Yea1 Plan <strong>of</strong>Electnc Companies in Mqland (2006-2015) (P 70)<br />
13
arriers to improved participation in demand response, peak reduction, and critical peak pricing<br />
pro grams. ''<br />
A recent study done for the Mid-Atlantic Distributed Resources Iaitiati\-e (MADRI) quantfied the dollar<br />
benefits <strong>of</strong> demand response in PJM." MADRI was established in 2004 by the public utility conmissions<br />
<strong>of</strong> Delaware. the District <strong>of</strong> Columbia. Maryland, New Jersey and Pennsylvania. aloiig with the U.S.<br />
Department <strong>of</strong> Energy (DOE), U. S. Environmental Protection Agency (EPA). Federal Energy Regulatop<br />
Coniniissioii (FERC), and the PJM Interconnection. The MADRI study esainined the effects <strong>of</strong> reducing<br />
electricity use by tliree percent during the Iughest use hours for five utility areas-Baltimore Gas &<br />
Electric. Delmarva Power. PECO, PEPCO and Public Service Electric & Gas. The study quantified the<br />
economic benefits <strong>of</strong> demand response by comparing prices R-ithout aid nith demand response reduction<br />
during the 20 five-hour periods in 2005 with the highest electricity demand for each utilitl;.<br />
As shom in Exhibit 6. findings from the study were that a three percent reduction in peak demand would<br />
have generated a 5% - 8% reduction in wholesale electricity prices during the time periods in question.<br />
"In addition to reductions in electricity prices. demand response participants were estimated to save $9<br />
million - $26 million for eneru annually and another $73 million for capaciG- charges." Since Virginia is<br />
part <strong>of</strong> the PJM Interconnection. it is reasonable to assume that similar benefits mould be realized in the<br />
Commonlx-ealth if comparable demand response programs were put in place. Eshibit 6 summarizes the<br />
prima? stud! conclusions.<br />
.?<br />
'- Mal? land Public Service Commission. Ten-Year Plan <strong>of</strong> Electric Companies in Maqhnd (2006-2015) (P. 76)<br />
.'' Quantihing Deinand Response Benefits in PJM, Prepared by the Brattle Group (Jan. 29. 2007)<br />
\\ n .en2?cetics,corn,.m3dri. pdfi Rrattle~roripl2eport.pdi'
O h Load Red1<br />
tion in the Top 100 Hours ii<br />
i 324DRI Zones"<br />
Benefits<br />
Caveats<br />
S7-20 Million<br />
(enerp only)<br />
(1-2% price<br />
reduction in<br />
curtailed hoursj<br />
n a<br />
- Capacity price decrease<br />
due to reduced demand<br />
- Enhanced competitiveness<br />
in energy and capacity<br />
markets<br />
- Real-time vs. day-ahead<br />
- Value <strong>of</strong> reduced volatility<br />
- Insurance against extreme<br />
events<br />
- Avoided T&D costs<br />
ia<br />
- Probably significantly<br />
<strong>of</strong>fset in long-run<br />
equilibrium as capacity<br />
and capacity prices<br />
adjust, "long-run''<br />
might not be so long<br />
- Load shifting and<br />
demand elasticity<br />
<strong>of</strong>fset some benefit in<br />
short-term<br />
- Based on simplifying<br />
assumpbons regarding<br />
the value <strong>of</strong> load that<br />
is curtailed<br />
n. a<br />
nia<br />
- Based on generic<br />
long-run cost <strong>of</strong><br />
avoided capacity<br />
- Ignores cost <strong>of</strong><br />
equipment and<br />
demand response<br />
program<br />
administratron<br />
S7-20 MiUion<br />
- Additional benefits to noncurtailed<br />
load could be<br />
large<br />
- Includes both the solid<br />
economic efficiency<br />
gains to curtailed load<br />
and the less robust<br />
benefits to noncurtailed<br />
loads<br />
34<br />
Quantifiing Demand Response Benefits in PJM. Prepared bs- the Brattle Group (Jan. 29. 2007)<br />
:$ ~~'i\.e!ier;etiCS.crJin, rsndri. pdts- RrattleGr~!inRecori.Ddl'<br />
15
4. CONCLUSION AND ACTION AGENDA<br />
Demand for electricity is increasing throughout the Commonwealth due to population growth. increasing<br />
per capita energy consumption, and other factors. In order to meet current and anticipated energy needs.<br />
the Coinmonwealth should consider both supply- and demand-side solutions. The potential for costeffective<br />
energ savings and peak demand reduction delkered through well-designed DSM programs<br />
using pro\-en enerG efficiency and deniand response technologies and strategies is substantial within the<br />
Commonwealth and worthy <strong>of</strong> consideration by system planners, regulators. and lawmakers as they<br />
deliberate the optimal resource portfolio to satisfv future demand.<br />
4.1 Action Agenda<br />
State legislatures. both within the PJM Interconnection and across North America (e.g.. Pennsylvania.<br />
New Jersey. Minnesota. Illinois), have taken action rn 2007 by setting DSM targets and promoting -4MI<br />
and inno\.ative time-differentiated rates that are much more ambitious than current proposals in the<br />
Coimonviealth. In order to avoid falling further behind its peers. the Commonwealth should act novi to<br />
apply key lessons learned and adopt DSM best practices pioneered in other jurisdictions." Such a<br />
portfolio could rely on DSM technologies and strategies to achieve significant energy savings and peak<br />
deiiiand reduction oyer a relatively short timeframe (i.e.? within three years). In addition, such a portfolio<br />
n.ould pro\-ide additional benefits by protecting ratepayers against future increases in energ costs.<br />
enhancing overall s>-steni reliability. proyiding customers the ability to inanage their energy costs, and<br />
maintaining a competitive regional economy as businesses increasingly look for locations with robust,<br />
diverse energTi supplies from demand-side and supply-side resources.<br />
This is a critical time for the Commonwealth as large-scale electric infrastructure investments are being<br />
considered throughout the region. Inyestments not made on the demand-side now. may be lost forever as<br />
growing enerR needs are met through higher cost supply and transmission investments. The<br />
Common\A ealth needs to use the powers <strong>of</strong> the State Corporation Commission or <strong>of</strong> the State Legislature<br />
to.<br />
- Set DSM targets and proyide incentives for deniand response programs. innovative rates, and<br />
advanced metering technology.<br />
- Set targets for 1% reductions per year in forecast energy consumption and peak demand growth,<br />
goals that are well within reach <strong>of</strong> Dominion Virginia Pover. the largest utihg in the<br />
Commonwealth.<br />
- Address financial disincentives for utility investment in DSM. This generallj includes cost<br />
recovery <strong>of</strong> iinestnients 111 DSM and related infrastructure. treatment <strong>of</strong> lost margins on fixed<br />
costs (not total lost revenues) stemming from reduced sales due to DSM.j6j7 and alloning the<br />
.-<br />
'' Nunieroiis sources exist compiling DSM best practices including the US DOE and US EPA. See EPA. et al.. .Yanomddcrioi7<br />
Phi for EHPI"&I' Eficienc): (July 2006): EPA. Clean Etlergy-E~ro~wneizr Guide to .1 ction: Policies, Best Pmctices. mid .4ction<br />
Steps ,for States. (April 2006): and California Best Practices Project Advisory Committee, .Vationnl Ene~g), Eficzenc~~ Best<br />
Pm7ncticr.s Stir&. (Dec. 2001), -v. nn .rrbestnracrices.com. ndf;BP Sunlrnan:.pjf.<br />
'@<br />
A comnion mistake is to assume that DSM increases energy costs. DSM does not increase energy costs. Even if DSM were to<br />
reduce sales so dramaticall!. that fixed costs were not recovered by the utility and the price per kWh \\-ere to increase. then the<br />
16
6<br />
How Dominion and Allegheny Power<br />
Got It Wrong<br />
The 502 Junction-Mt. Storm-Meadow Brook-Loudoun (TrAI L)<br />
500-kV Transmission Line<br />
September 2007<br />
Piedmont Environmental Council<br />
45 Horner Street<br />
Warrenton, VA 201 86
1<br />
Contents<br />
SECTION 1: INTRODUCTION AND CONCLUSIONS ............................................ 2<br />
REFERENCES<br />
................................................................................ 3<br />
......................................................................................................... 3<br />
...................................................................................................... 3<br />
.................................................................... ............. 5<br />
SECTION 2: WHY DO DOMINION, ALLEGHENY, AND PJM WANT TO DO<br />
THIS? ................................................................................................................................. 6<br />
HAMMERS AND NAILS ..... ............................................................ 6<br />
MARKETS FOR COAL-FIRED GENERATORS ................... .............................................. 6<br />
POR LIOS ....................................... 6<br />
LOW-RISK ADDITION TO DOMTN-ION/ALLEGKENY<br />
SECTION 3: WHAT IS THE REAL PROBLEM?. ..................................................... 7<br />
LINE OVERLOADS AND LOW VOLTAGE ............................................................................ 7<br />
THE OVERLOADS REFLECT A BAD ASSUMPTION ....................................<br />
A REGIONAL ISSUE - NOT A NORTHERN VIRGINIA ISSUE .......................<br />
SECTION 4: DID THEY LOOK AT THE RIGHT SOLUTIONS? . 11<br />
SOLUTIONS THEY CLAIM TO HAVE CONSIDERED ........................................................... 11<br />
SOLUTIONS NOT CONSIDERED ........................................................................................ 11<br />
SECTION 5: DID THEY FIND THE BEST SOLUTION? . 14<br />
WHAT IS "BEST"? ................................................................................................... 14<br />
SELECTION AMON TERNATIVES .......................................................<br />
SECTION 6: WHAT IF THE LINE IS BUILT? ........................................................ 17<br />
CONSUMER COSTS ......................................................................................................... 17<br />
GENERATION MARKET EFFECTS .................................................................................... 18<br />
JOB AND INVESTMENT TRANSFERS ....................... 19<br />
LINE AFTER LINE ........ ....................... 19<br />
ENVIRONMENTAL QUA ....................... 19<br />
A LESS-RELIABLE SYSTEM ................................... .................................................... 19<br />
APPENDIX A: ALTERNATIVES TO THE LOUDOUN LINE . 20<br />
APPENDIX B: DOMINION'S ANALYSIS OF GENERATION AND DEiMAND<br />
MANAGEMENT ALTERNATIVES ............................................................................ 22
2<br />
Section 1: Int7.oduction and Conclusions<br />
i<br />
Dominion Virginia Power (Dominion) and Allegheny<br />
Power (Allegheny, through its TrAlLCO subsidiary)<br />
have applied to the Virginia State Corporation<br />
Commission (SCC) to build a 500-kV line through the<br />
Shenandoah Valley and Northern Virginia Piedmont.<br />
To sell the project, they have said that burdening this<br />
area with 165-foot-tall towers and 150-foot-wide rights<strong>of</strong>-way<br />
is the only way to prevent power blackouts in<br />
Northern Virginia. This alarm is false - a scare tactic<br />
- coming from;<br />
0 Failure to understand that reliable and<br />
economic power comes from a combination <strong>of</strong><br />
power generation, transmission, and<br />
management <strong>of</strong> the quantity and timing <strong>of</strong><br />
demand; and<br />
A myopic search for solutions that looks only to<br />
transmission from remote plants and ignores<br />
new local power sources and demand<br />
management.<br />
The SCC should deny the Dominion and TrAlLCo<br />
request to build this line. It is an unnecessary, risky,<br />
high-impact, sub-optimal solution.<br />
In this report, the Piedmont Environmental Council (Piedmont) shows that the<br />
sacrifice that Dominion and Allegheny demand <strong>of</strong> Northern Virginia cannot be<br />
justified. Specifically, they have:<br />
s<br />
e<br />
e<br />
Ignored less costly and less environmentally damaging solutions;<br />
Misrepresented the need for the proposed transmission line as a local<br />
Northern Virginia issue rather than as a regional issue;<br />
Made wildly unrealistic (but undisclosed) assumptions in analyzing the<br />
needs <strong>of</strong> Northern Virginia and the greater Mid-Atlantic area; and<br />
0 Claimed falsely that the proposed transmission line will benefit consumers,<br />
when (as they know) studies show that the line is more likely to enrich<br />
power generators to the west at the expense <strong>of</strong> consumers.<br />
For these reasons, authority to build the proposed transmission line should be<br />
denied,
3<br />
Background<br />
This paper analyzes the proposed 502 Junction-Mt. Storm-Meadow Brook-<br />
Loudoun 500-kV power transmission line (Loudoun line) that Dominion and<br />
Allegheny seek authority to build across Northern Virginia. We analyze their<br />
filings with the SCC and related documents from the US. Department <strong>of</strong> Energy<br />
(DOE), Dominion, and PJM. PJM operates the electric power system in several<br />
eastern states. It also plans the extra-high voltage (EHV) electrical grid in that<br />
area.<br />
Some History<br />
May 12, 2005: PJM proposed to the Federal Energy Regulatory Commission<br />
(FERC) the Mountaineer concept to provide 5,000 MW <strong>of</strong> new capacity to<br />
transmit predominantly coal-fired electric generation from power plants on the<br />
Ohio-West Virginia border through new corridors ending at New York City. This<br />
would be PJM's largest initiative ever. PJM did not show the need for 5,000 MW.<br />
PJM's objective seems to have been to provide markets for western generation.<br />
Strategic alternatives (local generation, demand management, and transmission)<br />
and the various trade-<strong>of</strong>fs were not addressed.<br />
Auaust 8, 2005: The President signed the Energy Policy Act <strong>of</strong> 2005. This gave<br />
the DOE authority to define "national interest" transmission corridors and to<br />
facilitate new transmission.<br />
March 6, 2006: Allegheny asked the DOE to confer early "national interest"<br />
designation on its proposed "TrAIL" 500-kV line, funning from western<br />
Pennsylvania to northern Maryland. This was the first concrete plan to<br />
implement the Mountaineer concept.<br />
June 2006: PJM endorsed the Loudoun line instead <strong>of</strong> the TrAlL line. The<br />
Loudoun line is a revision <strong>of</strong> the TrAlL line, with a route shift into Virginia. We will<br />
show that PJM's analysis <strong>of</strong> the Loudoun line was superficial. Allegheny now<br />
calls its portion <strong>of</strong> the Loudoun line "the TrAlL line."<br />
Auqust 2006: The DOE released its "National Electric Transmission Congestion<br />
Study," which explicitly endorsed the assumptions underlying PJM's Mountaineer<br />
concept. The study did not question or analyze PJM's assumptions or<br />
conclusions.<br />
Conclusions<br />
Arguments for the Loudoun line are wrong. Dominion, Allegheny, and PJM<br />
argue that it is needed to solve a possible voltage problem' at Meadow Brook in<br />
2011, possible overloads <strong>of</strong> the Mt. Storm-Doubs 500-kV line in 2011, and<br />
Voltage in an EHV system may drop below its normal level when a local area draws power from<br />
the grid. An excessive drop results in voltage collapse and a local blackout that may cascade.
possible overloads <strong>of</strong> the Pruntytown-Mt. Storm 500-kV line in 2014. These<br />
problems would only occur under certain unlikely contingencies.<br />
PJM's planning process is biased to find solutions only using transmission<br />
lines. The process is incapable <strong>of</strong> asking for, or finding, optimal solutions<br />
that include generation, demand management, and transmission options<br />
on a level playing field.<br />
The threatened overloads are not real. They flow from PJM, Allegheny.<br />
and Dominion unrealistically and unreasonably assuming that essentially<br />
all new generation will be built in western PJM and essentially none in<br />
eastern PJM. To the contrary, there are more than enough proposed<br />
generation projects in eastern PJM to avoid the overloads without a new<br />
line.<br />
0 Voltage may become a real concern at Meadow Brook. But this can be<br />
solved at low cost with no environmental impact using conventional<br />
technology, wifhout the Loudoun line.<br />
Building the Loudoun line would adversely affect the environment along its route<br />
and the economy and reliability <strong>of</strong> power in eastern PJM. Specifically, the<br />
Loudoun line would:<br />
<strong>Direct</strong>ly damage the environment. A line with towers as high as a 16-story<br />
building could be seen from at least two miles on either side <strong>of</strong> the line. A<br />
270-mile line would negatively affect over 1,000 square miles. In addition<br />
to damage to birds, other wildlife, habitat and vegetation, land-use<br />
damage would be significant, resulting in change to current and planned<br />
land uses. These issues are explored in more detail in other Piedmont<br />
documents .<br />
Make eastern PJM even less attractive for new generation than it is now,<br />
with more coal-fired generation built in western PJM instead. This would<br />
lead to spiraling west-to-east transmission needs.<br />
Transfer jobs and tax revenues from eastern PJM to western PJM.<br />
Compound the direct and indirect environmental impacts <strong>of</strong> transmission.<br />
Western coal-fired generation would be much more harmful<br />
environmentally than the eastern natural gas-fired generation it displaced.<br />
Condemn populous eastern PJM to increasing dependence on remote<br />
western generation, making PJM more vulnerable to cascading blackouts.<br />
Increase cost to ratepayers.
5<br />
References<br />
We quote most <strong>of</strong>ten from five sources.<br />
1. RTEP - "Regional Transmission Expansion Plan," a 330-page PJM report,<br />
dated February 27, 2007, and available at<br />
h ttp://ww. an n i ncl/req-tran s-em- RI an. htm i .<br />
rs j rn . co m/~l<br />
2. Dominion Filing - an April 19, 2007 six-volume filing Dominion made with<br />
the SCC in support <strong>of</strong> the Loudoun line, and available at<br />
http://w . dom .ccm/aboest/elec-transm issionlsiowerlinelmeadowbr~c~<br />
sccam. iss<br />
The <strong>of</strong>t-cited KEMA Report is contained within the Dominion filing at<br />
~ttp://~~.d0m .com/aboutlelec-transmissian/Bower[ineim~~<br />
ap~Iicatjon/vsI2lkema reoort.odf<br />
3. TrAlLCo Filing - an April 19, 2007 filing TrAlLCo made with the SCC in<br />
support <strong>of</strong> the Loudoun Line, and available at<br />
http:l~w.aplraijinf0.c0m/index.DhD?page=vir~inia<br />
4. Discovew - Dominion answers to discovery by Piedmont and others in the<br />
SCC proceeding and available in relevant part on Piedmont's website at<br />
http ://www. pecva . ora/ d ow n loads/ts owe rhn es/dccum ents/industn//Dm i nio<br />
nDiscoverv.Ddf .<br />
5. DOE - "National Electric Transmission Congestion Study," a 122-page<br />
DOE report, available at<br />
httsi:l/nietc.anl.aov/documentsibocs/Con~~~ Studv 2006-9MB.~df
6<br />
Section 2: 7Vhj do Don ii io<br />
Allegheny a i PJMtwnt LO do this?<br />
PJM - a transmission system operator and planner - is<br />
predisposed to solve all power challenges with<br />
transmission.<br />
Coal-fired utilities in western PJM, including Allegheny,<br />
will get lucrative access to eastern markets and<br />
ratepayers will pay the freight.<br />
Dominion/Allegheny can invest surplus cash in a lowrisk<br />
project with guaranteed return - an addition to<br />
balance their portfolios.<br />
Uammers and Nails<br />
If you are a hammer, then every problem looks like a nail. PJM is responsible for<br />
planning the transmission system. PJM has transmission engineers and the<br />
tools and data for transmission planning. This predisposes PJM to meet every<br />
problem with a transmission hammer.<br />
Markefs for Coal-fired Generators<br />
Western-PJM utilities Allegheny and American Electric Power (AEP) are primarily<br />
coal-fired. With only modest internal demand growth, they are actively seeking<br />
new markets. The obvious targets are in the East. With the Loudoun line and<br />
other proposed west-to-east transmission, western utilities will secure access to<br />
these markets, financed by ratepayers throughout PJM.<br />
By burning cheap fuel to sell into high-priced markets, Allegheny, AEP and<br />
others may make more money per kWh than by selling to their regulated<br />
customers. Sales to the east will let them pr<strong>of</strong>it from any spare generating<br />
capacity that they may have from time to time. It is no accident that Allegheny<br />
and AEP are partners on the proposed Amos-Bedington-Kemptown 765-kV line,<br />
and that Allegheny is partner with Dominion to build the Loudoun line.<br />
Low-Risk Addition to DominioMAllegheny Portfolios<br />
In the past, Dominion invested some <strong>of</strong> its excess cash in oil and gas exploration<br />
and production and in interstate gas pipelines. Some <strong>of</strong> this investment was<br />
speculative and most <strong>of</strong> it was more risky than electric power transmission.<br />
In fact, the return on all <strong>of</strong> the investment by Dominion and Allegheny in the<br />
Loudoun line is guaranteed.
7<br />
Section 3: What is the Real Problem?<br />
Dominion, Allegheny, and PJM planners say that two<br />
key lines may overload in 2011 and 2014, and that<br />
northwestern Virginia may experience voltage<br />
problems in 2011. According to the planners, the<br />
overloads and voltage problems will occur only in the<br />
event <strong>of</strong> certain known low-probability contingencies.<br />
If these occur, voltage could be low. But the<br />
threatened line overloads are not a real risk. PJM's<br />
unrealistic and unreasonable assumption that<br />
essentially no new generation will be built in eastern<br />
PJM fuels the DominionlAllegheny cries <strong>of</strong> "Wolf!"<br />
Dominion claims that Northern Virginia load growth<br />
requires the line. To the contrary, the Loudoun line is<br />
to serve loads in a broader region, <strong>of</strong> which Northern<br />
Virginia is a small part.<br />
Line Overloads and Low Voltage<br />
Power system equipment occasionally fails. The power system is therefore<br />
planned redundantly and operated conservatively, The goal is to withstand<br />
"contingencies"- failures <strong>of</strong> one or more bulk transmission or generation<br />
facilities. Dominion and PJM planners say that under certain contingencies:<br />
1. The Mt. Storm-Doubs and Pruntytown-Mt. Storm 500-kV lines may<br />
overload in 201 1 and 201 4, respectively, and<br />
2. Low voltage may occur near the Meadow Brook substation in 201 1.<br />
See Fig. 3.1 for these locations on the Northern Virginia grid.<br />
In addition, utility planners claim that some lower voltage lines and transformers<br />
in western Virginia will overload under certain contingencies. Building the<br />
Loudoun line would fix some <strong>of</strong> the problems on the lower-voltage system. But<br />
new extra-high-voltage transmission lines are not built to address local problems<br />
on the lower-voltage system. Local, cheaper, and less obtrusive fixes are readily<br />
available.<br />
Finally, PJM says that under some contingencies many lines in eastern PJM<br />
could overload and that voltage problems could occur throughout eastern PJM in<br />
2016. This reflects the gradual growth <strong>of</strong> electrical demand and PJM's unrealistic<br />
assumption that little or no new generation will be built in the area, and that
demand growth will not be moderated by new demand management programs.<br />
In recent years, demand has grown at around 2% per year in most <strong>of</strong> PJM,<br />
including Dominion's territory. This modest growth rate is predicted to continue.<br />
Planners constantly study future conditions to find where the system needs<br />
1<br />
Fig. 3.1. Key transmission facilities in and near Northern Virginia.<br />
The Overloads Reflect a Bad Assumption<br />
The Dominion/Allegheny/PJM projection <strong>of</strong> overloads on the Pruntytown-Mt.<br />
Storm-Doubs 500-kV lines is not supportable. This also is true for many <strong>of</strong> the<br />
problems in 2016. These overloads show up in computer models as a direct<br />
result <strong>of</strong> an unrealistic and unreasonable assumption.<br />
This assumption is that almost no new generation will be built in eastern PJM.<br />
PJM databases used for all reliability studies assume, for instance, only 19.8 MW<br />
<strong>of</strong> new generation added in Virginia, Maryland, and the District <strong>of</strong> Columbia by<br />
2012 and only 640 MW more by 2016.2 In contrast, the same databases assume<br />
that thousands <strong>of</strong> MW <strong>of</strong> new coal-fired generation will be built in western PJM.<br />
None <strong>of</strong> the utilities publicly acknowledges this assumption or its implications.<br />
The thousands <strong>of</strong> MW <strong>of</strong> generation projects proposed for eastern PJM belie the<br />
assumption. See Table 3.A. Most <strong>of</strong> this is gas-fired generation with in-service<br />
dates <strong>of</strong> 201 1 or earlier.<br />
2<br />
Dominion's Response to Discovery (Bates No. DOM000558)
9<br />
Table 3.A does not include the proposed 600-MW CPV gas-fired Warren plant to<br />
be built near Meadow Brook by 2010. The plant reportedly has obtained all<br />
needed permits and has had an interconnection agreement with Dominion for<br />
several years. It was put on hold temporarily but the developers told Dominion<br />
and PJM in 2006 that they now would go forward. Remarkably, it is not in any <strong>of</strong><br />
the databases.<br />
With modest demand growth, but essentially no new<br />
generation in eastern PJM through ten years, <strong>of</strong> course<br />
imports from western PJM would Qrow. Of necessity the<br />
computer models using this assumption will show westto-east<br />
lines overloading, and the 2016 voltage<br />
I<br />
Table 3.A<br />
New gene,ation in<br />
local PJM queues<br />
Source PJM RTEP<br />
Location<br />
problems, too. MD + DC 5,170<br />
Dominion 3,209<br />
If even some - not necessarily all - <strong>of</strong> the generation<br />
in Table 3.A materializes, major new transmission will not be needed in 201 1.<br />
Mirant Mid-Atlantic is one <strong>of</strong> the largest independent power producers in PJM,<br />
with 5,000 MW <strong>of</strong> capacity in the Washington DC area. "Mirant has been<br />
analyzing the [Loudoun line] . . . . Our analysis shows that facility overloads are<br />
highly sensitive to . . . [generation] assumptions used in the model." Mirant says<br />
that this may amount to "perhaps 2 MW <strong>of</strong> transmission flow for every [I] MW <strong>of</strong><br />
generati~n."~ Mirant complains that PJM made independent and far-reaching<br />
assumptions about Mirant plants.<br />
The real problem, then, is the need for new generation in eastern PJM. In<br />
the past, generation development in the area lagged. In 2006 Joseph T. Kelliher,<br />
Chairman <strong>of</strong> the Federal Energy Regulatory Commission, placed the blame<br />
squarely on a broken PJM market.4 Since then some fixes have been made, and<br />
more than the needed amounts <strong>of</strong> new generation are in the pipeline for eastern<br />
PJM. But PJM, Dominion, and Allegheny still assume that almost none will be<br />
built.<br />
A Regional Issue - Not a Northern Virginia Issue<br />
Dominion claims that the Loudoun line is for Northern Virginia. This is a political<br />
claim advanced to overcome local opposition to the line. It is not a fair<br />
description <strong>of</strong> the primary purpose <strong>of</strong> the line.<br />
The supposedly overloaded Pruntytown-Mt. Storm-Doubs 500-kV path begins<br />
near huge coal plants on the Ohio River. It connects them and West Virginia's<br />
Mt. Storm coal-burning plant to an important transmission substation in Maryland,<br />
' Robert E. Driscoll, CEO, Mirant Mid-Atlantic LLC, letter to Steve Herling, Vice President<br />
Planning, PJM (June 7, 2007). http:/lwwv piin.comicommilteeslteacidov:nlcadsi20070509-<br />
mirant-comments. pdf<br />
4<br />
Joseph T. Kelliher, statement on PJM Reliability Pricing Model (Apr. 20, 2006).<br />
I<br />
I
north <strong>of</strong> Washington DC. Most <strong>of</strong> the power on this and a parallel line serves<br />
Washington DC, Baltimore, and their Maryland suburbs. Some <strong>of</strong> it finds its way<br />
north and east to Philadelphia and Delaware. Only a small fraction flows south to<br />
Northern Virginia.5<br />
In the RTEP report, PJM concedes that the Loudoun line will serve needs in<br />
Pennsylvania, Delaware, Maryland, the District <strong>of</strong> Columbia. and possibly other<br />
load centers, in addition to Northern Virginia.'<br />
Table 3.8<br />
Northern Virginia accounts for a small fraction <strong>of</strong> the demand<br />
(in megawatts, MW) that the Loudoun line is supposed to serve.<br />
Table 3.B shows<br />
that<br />
Virginia demand is<br />
2006 2011 Forecast Increase<br />
Northern Virginia<br />
6,368 6,833 465<br />
PEG0 Energy Co. - PA 8,337 8,904 567<br />
Delmarva Power & Light - DE, MD 3,994 4,403 409<br />
Baltimore Gas 8 Electric - MD 7,212 7,703 491<br />
PEPCO Holdings - DC 6,953 7,474 521<br />
Totals 32,864 35,317 2.453<br />
Sources:<br />
Northern Virginia: Dominion filing, Attachment I 8.3<br />
AII others. RTEP report<br />
Northern Virginia's projected load growth <strong>of</strong> a mere 465 IWW obviously does<br />
not require a new 3,000 IMW line. The real problem is regional.<br />
7<br />
KEMA Report, pp. 23-33.<br />
PJM RTEP, pp. 171, 215, 270,297.<br />
Table 3 B actually overstates Northern Virginia's fraction <strong>of</strong> the load to be served by the<br />
Loudoun line The table does not include Allegheny Power's customers in Northern Maryland,<br />
who are served from the Doubs and Bedington substations and would be served by the Loudoun<br />
line. We do not know their demand since PJM lumps it with that <strong>of</strong> other AP customers further<br />
west, but the KEMA Report indicates that it might be 2,200 MW in 2011.
11<br />
Section 4: Did they Look at the Right Solutions?<br />
Dominion and PJM purport to have studied four<br />
alternatives to the Loudoun line. But three <strong>of</strong> the four<br />
were straw men, set up to be knocked down.<br />
Inadequate voltage can be solved inexpensively and<br />
with no environmental impact, using conventional<br />
technology.<br />
Line overloads have many real solutions. The most<br />
important is to build local power plants in proximity to<br />
demand instead <strong>of</strong> siting them remotely in western<br />
PJM and then needing transmission, too. Demand<br />
management could contribute. And there are real<br />
transmission alternatives to the Loudoun line.<br />
Solutions they Claim to Have Considered<br />
Dominion and PJM considered four putative alternatives to the Loudoun line.<br />
1. A second Mt. Storm-Doubs 500-kV line;<br />
2. A Mt. Storm-Loudoun 500-kV line;<br />
3. Reconductoring the existing Mt. Storm-Doubs 500-kV line; and<br />
4. The originally proposed 502 Junction-Mt. Storm-Kemptown 500-kV line -<br />
Allegheny's original TrAlL.<br />
Of these, only the last is a real alternative. The first two obviously would make<br />
the Pruntytown-Mt. Storm overloads worse. The third, reconductoring, would<br />
require taking the Mt. Storm-Doubs 500-kV line out <strong>of</strong> service for a long period.<br />
That would be risky and reconductoring might not appreciably increase transfer<br />
capability.<br />
Solutions not Considered<br />
If load grows, then power plants must be built somewhere. Transmission lines<br />
don't generate power. Transmission options are really "new western coal-fired<br />
power plants, plus transmission." The real choice is between these options and<br />
"new eastern power plants, without major new transmission." See Appendix A<br />
for more details on the options below.<br />
1. Build power plants in eastern PJM. PJM power markets need to be<br />
repaired so that they support continued operation <strong>of</strong> existing generation<br />
and induce investment in new generation in eastern PJM, near urban load
~~ ~~~<br />
h<br />
12<br />
centers nd 0th r demand. PJM has recently undertaken some<br />
encouraging efforts to fix its market. New generation, including gas-fired<br />
power plants near Washington, DC, has been announced recently beyond<br />
what is included in Table 3.A and retirements have been postponed. Even<br />
the continued operation <strong>of</strong> Mirant's plant in Alexandria, near demand<br />
centers in the District <strong>of</strong> Columbia and Northern Virginia, would represent<br />
a major change in the assumptions used by the utilities. Similar efforts<br />
have recently met with success in New England.<br />
2. Develop demand-side resources. Dominion's demand-side management<br />
(DSM) efforts to date have been minimal. Even moderate development <strong>of</strong><br />
DSM resources could make a significant contribution to power supply in<br />
Virginia and eastern PJM, as documented in a recent study by Summit<br />
Blue Consulting. A 10% reduction (more than 3,500 MW) in eastern PJM<br />
is feasible, though perhaps not quite by 201 1,<br />
3. A 525-MVAR static VAR compensator (SVC') at the Meadow Brook<br />
substation. This would fix the only real problem that Dominion advances<br />
as justification for the Loudoun line, low voltage near Meadow Brook. It<br />
would cost about $35 million, with no environmental impact. In contrast,<br />
the Loudoun line would cost more than $850 million and have a<br />
devastatingly destructive impact on a historically important and largely<br />
pristine environment."<br />
4. A phase-angle regulator (PAR) on the Pruntytown-Mt. Storm line. It would<br />
direct some flows away from the Pruntytown-Mt. Storm-Doubs lines onto<br />
lines that are less heavily loaded.<br />
5. The proposed Amos-Bedington-Kemptwn 765-kV line. Allegheny and<br />
American Electric Power propose to build a huge line from the Ohio River<br />
to a point just north <strong>of</strong> Washington, DC. According to PJM, even with the<br />
Loudoun line, this 765-kV line is needed to solve serious problems in the<br />
region beginning in 2012. But our studies show that if it is built, the<br />
Loudoun line will not be needed.<br />
There are other options, conventional as well as innovative, for meeting needs in<br />
201 1, 2016, and beyond. But Dominion, Allegheny, and PJM investigations into<br />
alternatives thus far have been very shallow,<br />
a<br />
The Federal Energy Regulatory Commission chairman blames apparent generation shortages<br />
on a broken PJM market. See Joseph T. Kelliher, Chairman, Fed. Energy Regulatory Comm'n,<br />
Statement on PJM Interconnection, LLC Reliability Pricing Model (Apr. 20, 2006).<br />
9<br />
SVCs are widely used devices that control voltage by supplying or absorbing reactive power, or<br />
VARs. They are controlled by solid-state valves, which have no moving parts. They are used in<br />
place <strong>of</strong> older, larger rotating devices whose footprint was as large as a house<br />
lo if there were a drop in water pressure at your house the water company could consider two<br />
alternatives. It could install a giant new pipe all the way back to the reservoir - tearing up<br />
hundreds <strong>of</strong> miles <strong>of</strong> ground. Or it could put a small pump near your house. If it chose the<br />
former, you would guess that they had some other use for all that water.
13<br />
KEMA, Inc., a consulting firm, evaluated demand-side and generation options for<br />
Dominion.” KEMA was not part <strong>of</strong> the planning process. Its evaluation was<br />
done months after Dominion had already committed to the Loudoun line. KEMA<br />
was hired to bolster Dominion’s filing with the SCC.<br />
KEMA did not consider viable demand and generation options. Furthermore,<br />
KEMA ignored transmission, generation, and demand management options that<br />
could in combination displace the Loudoun line.<br />
KEMA‘s analysis was overly simplistic. Its conclusion that a massive new<br />
transmission line is the best solution is not justified. See Appendix B for details.<br />
” KEMA Report, pp 69-70
14<br />
Section 5: Did they find the Best Solzition?<br />
The objective <strong>of</strong> Dominion, Allegheny, and PJM is to<br />
maximize reliability at the lowest cost. But the<br />
planning process ignores important generation,<br />
demand-side, and transmission alternatives as well as<br />
environmental protection and regional development<br />
issues.<br />
I<br />
PJM claims that its transmission decisions are optimal<br />
because it only acts when generators have failed to<br />
solve problems. This remarkable fallacy has it just<br />
backwards. PJM has evaluated very few <strong>of</strong> the<br />
generation proposals for service before 2011 and<br />
hence ignores them for planning purposes - "the<br />
generators have failed to act!" PJM is only now<br />
beginning to accept generation study requests for<br />
2014. PJM's decision to build the Loudoun line, if<br />
approved, will foreclose future generation decisions in<br />
a self-fulf i I I in g prophecy .<br />
I<br />
What is "best" is measured in relation to some<br />
criterion. The utilities' criterion is reliability (in<br />
this case, maximum improvement in<br />
transmission capability) at minimum cost.'*<br />
This limited perspective virtually ensures that<br />
Dominion's choices will not be "best" in relation<br />
to many important criteria.<br />
Environmental protection plays no role in PJM's<br />
transmission planning. It seems to be an addon<br />
after the major decisions are made. Table<br />
5 . Summar,zeS ~ word searches <strong>of</strong> PJMI~ 330-<br />
page RTEP. On average, forms Of the words<br />
"reliable," "economic," and "cost" appear f'nOre<br />
Word Occurrences<br />
Table 5.A<br />
in the RTEQ<br />
report reflect PJM's priorities<br />
Various forms <strong>of</strong> Occurrences<br />
reliable 444<br />
economic 141<br />
cost 131<br />
environment 12<br />
cu Itu ral 1<br />
historic' 0<br />
scenic 0<br />
+"Historic" Was never used In the Context<br />
"historic site" It was used ten times in<br />
the context "past and continuing<br />
operatlon <strong>of</strong> the power system<br />
l2 For instance, see Dominion Application, testimony by Scott Gass, pp. 17-18.
15<br />
Ten <strong>of</strong> the twelve uses <strong>of</strong> the word "environment" referred to power plants. Only<br />
one referred specifically to transmission. It did so only to bemoan the difficulty <strong>of</strong><br />
siting transmission lines due to environmental concerns.<br />
By contrast, Virginia places a great deal <strong>of</strong> importance on the environment. The<br />
State Code reflects that in § 56-46.1 which states that, 'IAs a condition to<br />
approval the Commission shall determine that the line is needed and that the<br />
corridor or route the line is to follow will reasonably minimize adverse impact on<br />
the scenic assets, historic districts and environment <strong>of</strong> the area concerned." This<br />
evaluation should be done when the planners are evaluating the various<br />
alternatives. It should not be an afterthought, done after the key decisions have<br />
been cast in concrete. 13<br />
The focus <strong>of</strong> Dominion and Allegheny is the same as PJM's. They failed to<br />
consider the relative environmental impacts <strong>of</strong> alternatives. A line with towers as<br />
high as a 16-story building could be seen for miles on either side. The 270-mile<br />
line Loudoun line would visually mar over 1,000 square miles. Wildlife,<br />
vegetation, and other land-use damage would be ~ubstantial.'~<br />
PJM ~ Dominion, and Allegheny have ignored other important considerations as<br />
well. They failed to consider the effect a transmission line has on a number <strong>of</strong><br />
environmental attributes, including air quality. The Loudoun line would bias<br />
generation plans, encouraging new coal-fired generation in western PJM and<br />
discouraging new natural gas-fired generation in the east. Coal-fired plants are<br />
much more environmentally damaging than natural gas plants.<br />
Se/ec tion among A ltern a fives<br />
"We can order transmission owners to build lines, but we cannot order generation<br />
to be built," admits a PJM spokesman. "So if we are seeing overloads<br />
developing, the only thing we can order is power lines."15 From this crabbed<br />
perspective, PJM concludes: "When PJM proposes a transmission upgrade . . .<br />
to resolve a reliability issue or transmission constraint, by virtue <strong>of</strong> the market's<br />
inaction regarding other potential solutions, the . . . transmission solution<br />
becomes the most economical option."16<br />
73<br />
The Electric Power Research Institute developed a multi-objective method to find out how<br />
much transmission a system needs. One <strong>of</strong> the objectives <strong>of</strong> this analytical framework was to<br />
minimize "corridor impact." EPRI, An Approach for Determining Transfer Capability Objectives,<br />
EPRI EL-3425, Mar. 1984. PJM utilities and engineers were heavily involved in this work,<br />
14<br />
"Comments <strong>of</strong> the Piedmont Environmental Council" Statement <strong>of</strong> Catherine Gilliam,<br />
Attachment A, filed with DOE July 6, 2007. (Comments regarding the DOE'S National Interstate<br />
Electric Transmission Corridors.)<br />
15<br />
Mark Clayton, Cheap Power to Northeast US: a mixed blessing, The Christian Science<br />
Monitor, May 9, 2007, at p. 4.<br />
l6 PJM RTEP, p. 121. See also p 40.
16<br />
This flagrant non sequitur shines the light on PJM's (and Dominion's) myopia.<br />
Compared to nothing - inaction - any course <strong>of</strong> action can be pawned <strong>of</strong>f as<br />
optimal.<br />
PJM does not recognize a proposed plant in its transmission studies until (1) a<br />
Generation Interconnection Feasibility Study, (2) a System Impact Study, and (3)<br />
a Facilities Study have been completed and (4) an Interconnection Service<br />
Agreement has been executed.<br />
Except for large new projects, like nuclear units and (western} coal-fired plants,<br />
PJM will not allow a proposed generator to begin this process more than seven<br />
years before its in-service date. The study queues for 201 I were therefore not<br />
open until 2004. The transmission planning data bases used to analyze the<br />
Loudoun decision were developed in 2005 or early 2006. Few generators had<br />
had time to complete the interconnections studies by then. Proposed generators<br />
are still entering the study queues for in-service in or before 2011. In fact!<br />
interconnection studies have not yet been completed for most <strong>of</strong> the power plants<br />
proposed for service in eastern PJM between 2007 and 2011.<br />
PJM is only in 2007 beginning to allow proposed generators to enter the study<br />
queues for 201 4 in-service. The queues for 201 6 will not open for two years.<br />
Thousands <strong>of</strong> MW <strong>of</strong> generation projects were and are pursuing this process in<br />
good faith. But in PJM's "Chicken Little" approach, "The sky is falling; the<br />
generators have failed to act; therefore we will build the Loudoun line, and our<br />
decision is optimal!" Joseph Heller calls this "Catch-22."<br />
If the line is built, it will cause prices on the eastern PJM bulk electricity market to<br />
drop. This will discourage new generation in that region. PJM can then say,<br />
"See, we were right!" in a self-fulfilling prophecy.<br />
The true optimal course is to fix the PJM market so that it induces desired<br />
actions, such as maintaining and refurbishing existing generation and attracting<br />
investment in new, clean generation and demand management where it is<br />
needed in eastern PJM. By taking these options <strong>of</strong>f the table, and committing<br />
only to transmission solutions, PJM, Allegheny, and Dominion foreclose or bias<br />
decisions on demand management, new generation, and refurbishing older<br />
power plants.
17<br />
Section 6: Khat ifthe Line is Bziilt?<br />
1 If the Loudoun line is built:<br />
The PJM system will be inherently less reliable<br />
and more vulnerable to cascading blackouts.<br />
PJM studies show that consumers will pay<br />
more and generators (primarily in western PJM)<br />
will pr<strong>of</strong>it more.<br />
Changes in marginal cost will discourage new<br />
generation in eastern PJM and encourage it in<br />
western PJM.<br />
This will cause a spiral <strong>of</strong> more and more major<br />
west-to-east transmission.<br />
Related jobs, investments, and tax revenues<br />
will migrate from the east to the west.<br />
Environmental damage will be greater.<br />
<strong>Consumer</strong> Costs<br />
If the Loudoun line is built, regional transmission congestion may be reduced.<br />
But a PJM study shows that ratepayers will pay more for power and generators<br />
will make more pr<strong>of</strong>its.I7 To demonstrate this we must analyze the PJM study<br />
and the Byzantine PJM market process. We regret that these are complex. The<br />
complexities have kept people from understanding what will really happen.<br />
When congestion occurs in PJM, the price <strong>of</strong> electricity in the bulk markets goes<br />
up dramatically. To keep generators from reaping windfall pr<strong>of</strong>its, and to protect<br />
ratepayers, part <strong>of</strong> the price increase is captured by PJM and reimbursed to the<br />
ratepayers through "financial transmission rights" or FTRs. The FTR payments<br />
reduce the net costs <strong>of</strong> congestion to ratepayers.<br />
In a 2010 test year, the PJM study shows that ratepayer payments to generators<br />
(summed throughout PJM) will increase by $169 million if the line is built, even<br />
though congestion is reduced. (One would think that reduced congestion would<br />
mean lower payments. The increase is due to defects in market processes.)<br />
In addition, generator production costs (fuel costs) will go down by $140 million.<br />
This saving, though, is not passed through to ratepayers. Rather, the generators<br />
" "Market Efficiency Analysis Preliminary Results," PJM TEAC committee report, Feb. 21, 2007.<br />
Later versions <strong>of</strong> this report analyze a more distant future in three scenarios. Depending on<br />
assumptions about new generation, the benefits <strong>of</strong> the Loudoun line may accrue to generators or<br />
consumers. In the most likely scenario, the benefits accrue to the generators, at the cost <strong>of</strong> the<br />
ratepayers, as in 2010.
18<br />
as a whole (but mainly those in western PJM) will be $309 million richer ($169<br />
million more in revenue plus $140 million less in fuel cost). See Table 6.A.<br />
r<br />
Dominion publicly argues that<br />
gross payments by the<br />
ratepayers will go down by<br />
"f'?lore than $600 million'' (the<br />
number is actually $621 million,<br />
according to the PJM study),<br />
Table 6,A<br />
The Loudoun line will make generator income<br />
increase (2010 PJM test year)<br />
$ 169,000,000 Increase in revenue<br />
140,000,000 Decrease in production (fuel) cost<br />
$ 309,000,000 Net increase in generator income<br />
The ratepayers also will<br />
pay for the line itself - an<br />
average "mortgage<br />
Table 6.B<br />
The Loudoun line will make customer costs increase<br />
(2010 PJM test year)<br />
$ 621,000,000 Decrease in gross customer payments<br />
790,000,000 Decrease in FTR reimbursements to customers<br />
$ 169,000,000 Net increase in customer costs<br />
200,000,000 Annualized cost <strong>of</strong> the line itself<br />
$ 369 000 000 Total increase in customer costs<br />
In summary, building the Loudoun line may make congestion go down. But<br />
because <strong>of</strong> imperfections in the PJM market processes, PJM's study shows that<br />
the line will make generator pr<strong>of</strong>its and customer costs go up.<br />
Generation Market Effects<br />
If the Loudoun line and other new east-to-west lines are built, then market prices<br />
and revenues to generators in eastern PJM will drop, as will output from those<br />
generators. Conversely, prices and revenues to western generators as well as<br />
output from western generators will rise. As discussed earlier, PJM studies show<br />
that revenues to generators as a whole will increase. Constellation Energy, a<br />
major eastern PJM generating company, pointed out that "it would simply be<br />
imprudent to make an investment [in eastern PJM] that had no opportunity to<br />
recover its fixed costs" after new lines are built." For the same reason, older<br />
generators in the east will tend to be retired instead <strong>of</strong> cleaned up and<br />
'' Dominion Application, testimony by Steven R. Herling, p. 19.<br />
19<br />
Letter from Divesh Gupta, Counsel for Constellation Energy to PJM Board (June 15, 2007),<br />
(available h~p:iiLt?r,/wlp!~.ccrmi~omm~~~~~/~eac/~~w~loads~~O@7~~#9-~~~-i~~~~,
19<br />
refurbished. New cleaner generation will not be built in eastern PJM. Dirtier<br />
coal-fired generation will be built in western PJM instead.<br />
Job and Investment Transfers<br />
If the Loudoun line is built, jobs building and running power plants will be in the<br />
west, not the east. Western communities and school districts, not eastern ones,<br />
will get the high property taxes on power generation that will be paid (as part <strong>of</strong><br />
their rates) by eastern consumers.<br />
Line after Line<br />
If the Loudoun line is built, then major urban centers in eastern PJM, including<br />
Washington DC, will become increasingly dependent on imported power. More<br />
and more transmission will be needed resulting in an "aluminum sky."<br />
Environmental Quality<br />
If the Loudoun line is built, it will scar some <strong>of</strong> the most scenic and historically<br />
important parts <strong>of</strong> the country. Many <strong>of</strong> these lands are held in permanent<br />
conservation easements. Wildlife (including endangered species) and its habitat<br />
will be injured. The resulting transmission spiral will make environmental<br />
damage spiral too.<br />
New power plants will burn coal in western PJM instead <strong>of</strong> natural gas in eastern<br />
PJM. The local (western PJM) environmental impact <strong>of</strong> new coal plants will be<br />
much greater than the local (eastern PJM) environmental impact <strong>of</strong> new natural<br />
gas plants. In addition, coal plants emit more greenhouse gases and other<br />
airborne pollutants than do natural gas plants.<br />
A Less-Reliable System<br />
If the Loudoun line is built - leading to spiraling dependence on long-distance<br />
power plants - then PJM will become more vulnerable to cascading blackouts.<br />
Depending on long-distance energy transfers is less reliable (all else being<br />
equal) than relying on local generation or local conservation.<br />
The province <strong>of</strong> Quebec epitomizes this. Hydro-Quebec, the provincial power<br />
company, gets much <strong>of</strong> its power from huge, remote hydroelectric plants. As a<br />
result, the system has been so highly prone to blackouts that all <strong>of</strong> Hydro-<br />
Quebec's interconnections are expensive direct-current links that effectively<br />
quarantine the province from its neighbors to prevent cascading failures.<br />
Quebec didn't have much choice - you have to put the dams where the water is.<br />
PJM has a choice. Choosing to depend on transmission from remote generation<br />
is imprudent and will create unnecessary risks.
Appendix A: Alternatives to the Lozrdoun Line<br />
This appendix contains some details on alternatives to the Loudoun line that<br />
should have been but were not considered by Dominion/Allegheny and PJM. We<br />
emphasize that this is a partial list. There are many other options, conventional<br />
as well as innovative.<br />
Some <strong>of</strong> the options listed cannot meet all <strong>of</strong> the need by themselves. But they<br />
can do so in combination with other options.<br />
*'<br />
'I. More power plants in eastern PJM. PJM and Dominion/Allegheny<br />
carefully ignored this obvious and central option. Thousands <strong>of</strong> MW <strong>of</strong><br />
new power plants are proposed for eastern PJM. If they are not built. it<br />
will be because <strong>of</strong> failure <strong>of</strong> the PJM market. In 2006, FERC Chairman<br />
Kelliher said in very strong terms that the PJM market is broken. New<br />
generators, especially in the East, cannot make a sufficient pr<strong>of</strong>it to attract<br />
investment. He told PJM to fix the market or else he would.20 PJM is<br />
making efforts to do so and early results are encouraging.2'<br />
We noted above the proposed CPV Warren plant to be built near Meadow<br />
Brook by 2010. The plant reportedly has obtained all needed permits and<br />
has had in place an interconnection agreement with Dominion for several<br />
years. It was put on hold, but in 2006 the developer told Dominion and<br />
PJM that they were going forward with it. Remarkably, however, it is not<br />
in the PJM databases from which PJM and Dominion forecast overloads<br />
and voltage problems.<br />
Also, in July 2007 CPV announced a proposal for another 600 MW gas<br />
fired plant in Charles County, MD, near Washington, DC. According to<br />
CPV, "the new facility will generate enough electricity to power 600,000<br />
homes and use state-<strong>of</strong>-the-art technology to produce electricity efficientiy<br />
and cleanly to help meet the region's demand for energy.""<br />
2. Dernand-side resources. Energy Information Administration data for 2005<br />
shows that Dominion is ranked 3gth overall in spending on demand-side<br />
management. It spends the least <strong>of</strong> any company with a similar level <strong>of</strong><br />
sales. A serious effort in this area needs to be part <strong>of</strong> the eastern PJM<br />
energy portfolio. PJM's recent auctions evidence the significant<br />
contribution that demand management can make. A 10% reduction is<br />
Joseph T. Kelliher, Chairman, Fed. Energy Regulatory Comm'n, Statement on PJM<br />
Interconnection, LLC Reliability Pricing Model (Apr. 20, 2006).<br />
21 Press Release, IS0 New England Inc., Competitive wholesale Markets Prove an Effective Tool<br />
for fulfilling Regional Electricity Needs (Mar. 16, 2007) (htt~:/fi,Y\aL"vZ.is~-<br />
ne.comin~\isiss/~ri2.3C;7ifcm soi results 03-16-2907. Wf) (In comparison, New England's recent<br />
initiative called forth more than 17,000 MW <strong>of</strong> new power plants and demand-side resources.)<br />
22<br />
See http://w. cpv. com/pdf/presreIease7.25.07.
21<br />
3.<br />
4<br />
-<br />
feasible. This would amount to more than 3,500 MW and by Dominion's<br />
numbers would eliminate the need for the Loudoun line. Perhaps 3,500<br />
MW are not feasible by 2011, but in combination with generation options<br />
or less-obtrusive transmission options demand management could still<br />
eliminate completely any need for the Loudoun line.<br />
A 525-MVAR static VAR compensator (SVC) at Meadow Brook. Four<br />
such devices would solve voltage problems in Pennsylvania (two places),<br />
Maryland, and Meadow Brook.23 The first three are in PJM's plan. The<br />
one at Meadow Brook was never mentioned publicly. Installing it would<br />
solve the only real problem used by Dominion to justify the Loudoun line.<br />
It would cost about $35 million, while the Loudoun line would cost more<br />
than $850 million. The device would have a footprint measured in square<br />
feet - its only environmental impact. The impact <strong>of</strong> the Loudoun line, in<br />
contrast, would be enormous.<br />
The proposed CPV Warren plant to be built near Meadow Brook by 2010<br />
will provide nearly half <strong>of</strong> the MVARs needed at zero cost if it is connected<br />
to the grid properly, reducing the size and cost <strong>of</strong> the Meadow Brook SVC.<br />
A phase-angle regulator (PAR) on the fruntytown-Mi. Storm line, A PAR<br />
is a special transformer. PARS increase the impedance <strong>of</strong> a line, thereby<br />
reducing its flows and increasing flows along other paths. It would direct<br />
some flows away from the Pruntytown-Mt. Storm-Doubs lines onto lines<br />
that are less heavily loaded. It would increase the west-to-east transfer<br />
capability by more than half what the Loudoun line would give. It would<br />
cost about $150 million. Its environmental impact would be limited to its<br />
footprint. PJM has had several in service for many years. They are more<br />
reliable than any thermal power plant.<br />
A PAR could be a useful hedging option. It could provide some increase<br />
in transfer capability while other options (new plants, demand<br />
management, etc.) were being built,<br />
Alternatively, it could be a permanent element <strong>of</strong> the system, in<br />
combination with other options,<br />
3. The proposed Amos-Bedington-Kemptown 765-kV line. This line would<br />
be much larger than the Loudoun line, which it in essence would parallel.<br />
In July 2006, PJM said that building the Loudoun line in 2011 would solve<br />
all problems in the local region through 2021. By early 2007, PJM said<br />
that, even with the Loudoun line, the 765-kV line is needed to solve<br />
serious problems in the region beginning in 2012. Neither<br />
Dominion/Allegheny nor PJM admits addressing whether the Loudoun line<br />
would still be needed if the 765-kV line were built. We have studied this,<br />
using PJM's data and the same s<strong>of</strong>tware PJM and Dominion use. The<br />
answer is, "no."<br />
23 PJM and Dominion e-rnails show that they knew this at least as early as May 1, 2006.<br />
Dominion Discovery Response, (Bates No DOM000218.)
22<br />
Appendix B: Dominion 5 Analysis <strong>of</strong> Generation and Demand<br />
Management Alternatives<br />
KEMA Incorporated evaluated demand-side management (DSM) and generation<br />
options in connection with Dominion's SCC filing.24 This evaluation was not part<br />
<strong>of</strong> the planning process, but rather was performed after the fact to justify<br />
Dominion's decision to build the Loudoun line.<br />
KEMA's "analysis" <strong>of</strong> DSM or new generation as alternatives to the Loudoun line<br />
is biased and shallow. KEMA considered only "new northern Virginia<br />
generati~n''~~ and DSM. The power system is regional as are the markets to be<br />
serviced by the proposed Loudoun line, There is no justification for restricting the<br />
alternatives to northern Virginia. The supposed reliability need for the line is<br />
regional.<br />
KEMA admits that DSM could displace the Loudoun line, but goes on to argue<br />
that to do so DSM would require "about a 3,000 MW load reduction" in Northern<br />
Virginia by 2011 .26 The Northern Virginia load growth that supposedly requires<br />
the line is only 465 NIW. KEMA <strong>of</strong>fers no reconciliation <strong>of</strong> these wildly<br />
inconsistent numbers.<br />
KEMA "analyzed" only two generation alternatives - both destined to fail.<br />
0 Distributed generation. "Our analyses show that nearly 30,000 small new<br />
distributed generators would be needed by 2011 and nearly 80,000 by<br />
2016. . . . The number <strong>of</strong> new distributed generating units that would be<br />
required . . . is beyond reasonable expe~tation."~~ KEMA is right - a new<br />
technology will not achieve such market penetration so fast. The 80,000<br />
number is especially disingenuous; it refers to what would be needed to<br />
displace other major transmission additions - such as the Amos-<br />
Bedington-Kemptown 765 kV transmission line - needed even if the<br />
Loudoun line is built.<br />
0 New Loudoun substation power plant. According to KEMA: "[Tlh~s would<br />
require a 3,000 MW plant by 2011 - by far the largest plant in Virginia,<br />
and one <strong>of</strong> the largest in North America . . . . Such a large new plant<br />
would be nearly impossible to license and build by 2011."28 KE MA<br />
ignores that it is distinctly possible to site reasonably sized plants<br />
24KEMA Report pp. 69-70<br />
25 Id. at p. 4<br />
Id. at p. 69 (emphasis added)<br />
27 Id. at pp. 69-70<br />
28 Id. At p. 70
23<br />
summing much more than 3,000 MW in the region to be supplied by the<br />
Loudoun line; such plants have been proposed and are awaiting approvals<br />
by PJM and the local utilities.<br />
Both KEMA generation "options" are obvious non-starters. KEMA says as much;<br />
consequently, they didn't do any analysis. In particular, KEMA did not consider<br />
the thousands <strong>of</strong> MW <strong>of</strong> generating plants that are now in the eastern-PJM<br />
interconnection study queues, all <strong>of</strong> which are real options. KEMA did not look at<br />
other projects that are or were temporarily on hold, such as CPV Warren. They<br />
did not consider other potential generation, conservation, and efficiency options<br />
that will be called forth by PJM's recently reformed capacity market. Neither did<br />
Dominion. Neither did Allegheny. Neither did PJM.
Ronnie<br />
BaileylCOMMOPSNANCPOW<br />
ER<br />
05111112006 01:19 PM<br />
TO<br />
CC<br />
bcc<br />
Subjec!<br />
William BigdelylCOMMOPSNANCPO\PIER@VANCPOWEFI,<br />
Riahard ...-..-.-<br />
LaVignelCOMMOPSNANCP~WE~~VANCPOWER,<br />
Craig CridedCOMMOPSNANCPOWER@VANCPOWER,<br />
Kirit Doshi/COMMOPSNANCPOWER@VANCPO\NER.<br />
-<br />
Nelson BurksiCOMMOPSn/ANCPOWER@VANCPOln(ER<br />
Fw: MidAtlantic 201 I Laad Deliverability Voltage issues<br />
)<br />
1<br />
'<br />
i 1<br />
\<br />
FYI<br />
- Fowarded by Ronnie Bailey/COMMOPSNANCPOWER on 05/0li2006 01:: 9 PM -<br />
To<br />
cc<br />
Subject<br />
------- - - ---..-____<br />
E3ill..Mitcheil@conectiv.com, bawillis@pepco corn,<br />
cbeard@gpu,com, escook@pplweb.com,<br />
monisond@firstenergycorp .corn,<br />
hohlbaughdg@firstenergycorp corn, ESorber@ugi .corn.<br />
esam.khadr@pseg .corn, frank.caroselli@~onec!iv corn,<br />
Glenn.Catenacci@pseg.com, harvey.zwyer@bge .corn,<br />
jayers@pplweh. corn, jim.summers@conectiv.com:<br />
jaradrnari@pepco corn, mdonnefly@peco-energy corn,<br />
Michaei C.Ziegler@bge.com, rhrabah@gpu corn,<br />
mangononr@oru .corn. david.weaver@peco-energy .corn,<br />
segiatz@pplweb. corn, Charles P.Matassa@bge cam,<br />
JSYNER@alleghenypower corn,<br />
CVOGEL2@alleghenyenergy.corn,<br />
Ronnie-Bailey@dom .corn, RMATTlU@alleghenypower corn<br />
mirdih@pjm.com, tesfan@pjmexchOl .pjm. corn,<br />
coodrj@pjmexchOl .pjrn.com, simsm@pjmexch01 pjm.com,<br />
hadgel@pjmexchOl. pjrn.com, kernjon@pjmexcbO; .pjm.com<br />
Mid-Atlantic 201 1 Load Deliverability Vatlage issues<br />
--. --_ - -.- ___-_<br />
"-42<br />
'\<br />
PJM has continued to review the voltage issues identified for the 20 1 1 Mid-Adantic Region Load<br />
deiiverability study PJM has identified the need for the following reactive devices in order to adequately<br />
support imports into the Mid-Atlantjc Region<br />
600 MVAR dynamic reactive device at Airydale 500 kV<br />
400 MVAR dynamic reactive device at Doubs 500 kV<br />
525 MVAR dynamic reactive device at Meadow Brook 500 kV<br />
300 MVAR capacitor at Conemaugh 500 kV<br />
While this is still a significant amount <strong>of</strong> reactive devices, it is much less than originally expected Nebiat<br />
was able to obtain more imports from New York which backed <strong>of</strong>f the west to east flows Wlth the devices<br />
above, no reactive sceling <strong>of</strong> TO zonal load is required I realize that we will continue to review alternative<br />
reactive pians for 20 17, powever for now PJM recommends the :@active devices listed above to eliminate<br />
Ip__9__n___l_--__i.)<br />
u<br />
\ the voltage concerns identified for 20 1 1<br />
*II -=h'-%w-r<br />
i.:T-+.*.- -- --- IC_,..-.--<br />
___I___~,__<br />
If anyone has alternative solutions that can be completed by June 202 1, please provide so that PJM can<br />
evaluate<br />
Thanks,<br />
- .--- -<br />
DOM 0002 i 8
Vireinia Electric and Power Company<br />
Case No. PUE-2007-00031<br />
Piedmont Environmental Council<br />
Second Set<br />
The foliowing response to fnterrogukxy Question No. 62 <strong>of</strong> the First Set <strong>of</strong><br />
Interrog;ltories and Requests for Production <strong>of</strong> Documents <strong>of</strong> Piedmont Environmental<br />
Council received on May 21,2007 has been prepared under my supervision as it concerns<br />
the PJM R.TEP.<br />
Vice President <strong>of</strong>Plaming<br />
PJM htercowection, L,.L.C.<br />
Qucsfion No. 62<br />
a Were my new generating units, and <strong>of</strong> what capacity, assumed to be built in<br />
Virginia, Mayland, and the Delmarva Peninsula in conducting the 2011,2012, and 20 16<br />
studies?<br />
o, If the answer to subpart (a) is ‘eyes,” then identify those new generating units,<br />
including their assumed Iocation, in-service date, and capacity..<br />
Response:<br />
a<br />
Yes.<br />
b These are the generators not yet in service located in Maryland, Virginia and the<br />
Delrnma Peninsula<br />
Queue<br />
GSl W62<br />
Location<br />
Proiected In- MW Capacitv (C) i<br />
Service Date MW Enerw (?3)<br />
Maryland I 200992 1 640 C<br />
--+<br />
Alt the generators listed above were included in the 2016 basecase. The IUg genemtor<br />
wa5 included in the 201 I, 201.2, and 2016 basecases<br />
DOM 000558
i<br />
Friday,<br />
January 26, 2007<br />
Part II<br />
The President<br />
Executive Order 1342?--Strengthening<br />
Federal Environmental, Energy, and<br />
TranSpQrtatiQn Management
Fpderal Register<br />
T’ol 72 No 17<br />
Presidential Documents<br />
7 I<br />
3919<br />
Friday. January 26. 2007<br />
____<br />
Title 3- Executive Order 13423 <strong>of</strong> January 24. 2007<br />
The President<br />
Strengthening Federal Environmental, Energy, and Transportation<br />
Management<br />
Bv the authoritv vested in me as President by the Constitution and the<br />
laws <strong>of</strong> the United States <strong>of</strong> America, and to strengthen the environmental.<br />
energy, and transportation management <strong>of</strong> Federal agencies. it is hereby<br />
ordered as follows:<br />
Section 1. Policy. It is the policy <strong>of</strong> the LJnited States that Federal agencies<br />
conduct their environmental, transportation, and energy-related activities<br />
under the law in support <strong>of</strong> their respective missions in an environmentally.<br />
economicallv and fiscally sound. integrated, continuously improving, efficient,<br />
and sustainable manner.<br />
Sec. 2. Goals for Agencies. In implementing the policy set forth in section<br />
1 <strong>of</strong> this order, the head <strong>of</strong> each agency shall:<br />
(a) improve energy efficiency and reduce greenhouse gas emissions <strong>of</strong> the<br />
agency, through reduction <strong>of</strong> energy intensity by (i) 3 percent annuall?<br />
through the end <strong>of</strong> fiscal year 2015, or (ii) 30 percent by the end <strong>of</strong> fiscal<br />
year 2015, relative to the baseline <strong>of</strong> the agency’s energv use in fiscal<br />
year 2003;<br />
(b) ensure that (i) at least half <strong>of</strong> the statutorily required renewable energy<br />
consumed by the agency in a fiscal year comes from new renewable sources.<br />
and (ii) to the extent feasible, the agency implements renewable energy<br />
generation projects on agency propertv for agency use;<br />
(cl beginning in FY 2008, reduce water consumption intensitv, relative to<br />
the baseline <strong>of</strong> the agency’s water consumption in fiscal year 2007, through<br />
life-cycle cost-effective measures by 2 percent annuall? through the end<br />
<strong>of</strong> fiscal year 2015 or 16 percent by the end <strong>of</strong> fiscal year 2015;<br />
(d) require in agency acquisitions <strong>of</strong> goods and services (i) use <strong>of</strong> sustainable<br />
environmental practices, including acquisition <strong>of</strong> biobased. environmentally<br />
preferable, energy-efficient, water-efficient, and recvcled-content products,<br />
and (ii) use <strong>of</strong> paper <strong>of</strong> at least 30 percent post-consumer fiber content;<br />
(el ensure that the agency (i) reduces the quantity <strong>of</strong> toxic and hazardous<br />
chemicals and materials acquired, used, or disposed <strong>of</strong> by the agency, (ii)<br />
increases diversion <strong>of</strong> solid waste as appropriate, and (iii) maintains costeffective<br />
waste prevention and recycling programs in its facilities;<br />
(f) ensure that (i) new construction and major renovation <strong>of</strong> agency ‘buildings<br />
comply with the Guiding Principles for Federal Leadership in High Performance<br />
and Sustainable Buildings set forth in the Federal Leadership in High<br />
Performance and Sustainable Buildings Memorandum <strong>of</strong> Understanding<br />
/2006), and (ii) 15 percent <strong>of</strong> the existing Federal capital asset building<br />
inventorv <strong>of</strong> the agency as <strong>of</strong> the end <strong>of</strong> fiscal year 2015 incorporates<br />
the sustainable practices in the Guiding Principles;<br />
(gj ensure that, if the agency operates a fleet <strong>of</strong> at least 20 motor vehicles,<br />
the agency, relative to agency baselines for fiscal year 2005, (i) reduces<br />
the fleet’s total consumption <strong>of</strong> petroleum products by 2 percent annually<br />
through the end <strong>of</strong> fiscal year 2015, (ii) increases the total fuel consumption<br />
that is non-petroleum-based by 10 percent annually. and (iii) uses plugin<br />
hybrid (PTH) vehicles when PIH vehicles are commercially available at
3920 Federal Register/ Vol. 72, No. 17 /Friday, January 26, 2007/Presidential Documents<br />
a cost reasonably comparable, on the basis <strong>of</strong> life-cycle cost, to non-PM<br />
vehicles; and<br />
(h) ensure that the agency (i) when acquiring an electronic product to<br />
meet its requirements, meets at least 95 percent <strong>of</strong> those requirements with<br />
an Electronic Product Environmental Assessment Tool (EPEATj-registered<br />
electronic product, unless there is no EPEAT standard for such product,<br />
(ii) enables the Energy Star feature on agency computers and monitors,<br />
(iii) establishes and implements policies to extend the useful life <strong>of</strong> agency<br />
electronic equipment, and (iv) uses environmentally sound practices with<br />
respect to disposition <strong>of</strong> agency electronic equipment that has reached the<br />
end <strong>of</strong> its useful life.<br />
Sec. 3. Duties <strong>of</strong> Heads <strong>of</strong> Agencies. In implementing the policy set forth<br />
in section 1 <strong>of</strong> this order, the head <strong>of</strong> each agency shall:<br />
(a) implement within the agency sustainable practices for (i) energy efficiency,<br />
greenhouse gas emissions avoidance or reduction, and petroleum products<br />
use reduction, (ii) renewable energy, including bioenergy, (iii) water conservation,<br />
(iv) acquisition, (v) pollution and waste prevention and recycling,<br />
(vi) reduction or elimination <strong>of</strong> acquisition and use <strong>of</strong> toxic or hazardous<br />
chemicals, (vii) high performance construction, lease, operation, and niaintenance<br />
<strong>of</strong> buildings, (viii) vehicle fleet management, and (ix) electronic equipment<br />
management;<br />
(b) implement within the agency environmental management systems (EMS)<br />
at all appropriate organizational levels to ensure (i) use <strong>of</strong> EMS as the<br />
primary management approach for addressing environmental aspects <strong>of</strong> internal<br />
agency operations and activities, including environmental aspects <strong>of</strong><br />
energy and transportation functions, (ii) establishment <strong>of</strong> agency objectives<br />
and targets to ensure implementation <strong>of</strong> this order, and (iii) collection,<br />
analysis, and reporting <strong>of</strong> information to measure performance in the implementation<br />
<strong>of</strong> this order;<br />
(c) establish within the agency programs for (il environmental management<br />
training, lii) environmental compliance review and audit, and (iii) leadership<br />
awards to recognize outstanding environmental, energy, or transportation<br />
management performance in the agency:<br />
(d) within 30 days after the date <strong>of</strong> this order (i) designate a senior civilian<br />
<strong>of</strong>ficer <strong>of</strong> the United States, compensated annually in an amount at or<br />
above the amount payable at level IV <strong>of</strong> the Executive Schedule, to be<br />
responsible for implementation <strong>of</strong> this order within the agency, (ii) report<br />
such designation to the <strong>Direct</strong>or <strong>of</strong> the Office <strong>of</strong> Management and Budget<br />
and the Chairman <strong>of</strong> the Council on Environmental Quality, and (iii) assign<br />
the designated <strong>of</strong>ficial the authority and duty to (A) monitor and report<br />
to the head <strong>of</strong> the agency on agency activities to carry out subsections<br />
(a) and (b) <strong>of</strong> this section, and (B) perform such other duties relating to<br />
the implementation <strong>of</strong> this order within the agency as the head <strong>of</strong> the<br />
agency deems appropriate;<br />
(e) ensure that contracts entered into after the date <strong>of</strong> this order for contractor<br />
operation <strong>of</strong> government-owned facilities or vehicles require the contractor<br />
to comply with the provisions <strong>of</strong> this order with respect to such facilities<br />
or vehicles to the same extent as the agency would be required to comply<br />
if the agency operated the facilities or vehicles;<br />
(f) ensure that agreements, permits, leases, licenses, or other legally-binding<br />
obligations between the agency and a tenant or concessionaire entered into<br />
after the date <strong>of</strong> this order require, to the extent the head <strong>of</strong> the agency<br />
determines appropriate, that the tenant or concessionaire take actions relating<br />
to matters within the scope <strong>of</strong> the contract that facilitate the agency's compliance<br />
with this order;<br />
(g) provide reports on agency implementation <strong>of</strong> this order to the Chairman<br />
<strong>of</strong> the Council on such schedule and in such format as the Chairman<br />
<strong>of</strong> the Council may require; and
Federal Register/ Vol. 72, No. 17 / Fridav, Tanuarv 26. 2007 ,’ Presidential Documents 3921<br />
(h) provide information and assistance to the <strong>Direct</strong>or <strong>of</strong> the Office <strong>of</strong> Management<br />
and Budget, the Chairman <strong>of</strong> the Council, and the Federal Environmental<br />
Executive.<br />
Sec. 4. Additional Duties <strong>of</strong> the Chairmnn <strong>of</strong> the Council on Environmpntd<br />
Quality. In implementing the policy set forth in section 1 <strong>of</strong> this order.<br />
the Chairman <strong>of</strong> the Council on Environmental Quality<br />
(a) (i) shall establish a Steering Committee on Strengthening Federal Environmental,<br />
Energy, and Transportation Management to advise the <strong>Direct</strong>or <strong>of</strong><br />
the Office <strong>of</strong> Management and Budget and the Chairman <strong>of</strong> the Council<br />
on the performance <strong>of</strong> their functions under this order that shall consist<br />
exclusively <strong>of</strong> (A) the Federal Environmental Executive, who shall chair.<br />
convene and preside at meetings <strong>of</strong>, determine the agenda <strong>of</strong>. and direct<br />
the work <strong>of</strong>, the Steering Committee, and (B) the senior <strong>of</strong>ficials designated<br />
under section 3(d)(i) <strong>of</strong> this order, and (ii) may establish subcommittees<br />
<strong>of</strong> the Steering Committee, to assist the Steering Committee in developing<br />
the advice <strong>of</strong> the Steering Committee on particular subjects;<br />
(b) may, after consultation with the <strong>Direct</strong>or <strong>of</strong> the Office <strong>of</strong> Management<br />
and Budget and the Steering Committee, issue instructions to implement<br />
this order, other than instructions within the authority <strong>of</strong> the <strong>Direct</strong>or to<br />
issue under section 5 <strong>of</strong> this order: and<br />
(c) shall administer a presidential leadership award program to recognize<br />
exceptional and outstanding environmental, energy. or transportation management<br />
performance and excellence in agency efforts to implement this<br />
order.<br />
Sec. 5. Duties <strong>of</strong> the <strong>Direct</strong>or <strong>of</strong> the Office <strong>of</strong> iMonogemenf nnd Budget.<br />
In implementing the policy set forth in section 1 <strong>of</strong> this order, the <strong>Direct</strong>or<br />
<strong>of</strong> the Office <strong>of</strong> Management and Budget shall. after consultation with the<br />
Chairman <strong>of</strong> the Council and the Steering Committee, issue instructions<br />
to the heads <strong>of</strong> agencies concerning:<br />
(a) periodic evaluation <strong>of</strong> agency implementation <strong>of</strong> this order;<br />
(b) budget and appropriations matters relating to implementation <strong>of</strong> this<br />
order:<br />
(cl implementation <strong>of</strong> section 2(d) <strong>of</strong> this order; and<br />
(d) amendments <strong>of</strong> the Federal Acquisition Regulation as necessary to implement<br />
this order.<br />
Sec. 6. Duties <strong>of</strong> the Federal Environmental Executive. A Federal Environmental<br />
Executive designated by the President shall head the Office <strong>of</strong> the<br />
Federal Environmental Executive, which shall be maintained in the Environmental<br />
Protection Agency for funding and administrative purposes. In implementing<br />
the policy set forth in section 1 <strong>of</strong> this order, the Federal Env’ (ironmental<br />
Executive shall:<br />
(a) monitor, and advise the Chairman <strong>of</strong> the Council on, perforniance by<br />
agencies <strong>of</strong> functions assigned by sections 2 and 3 <strong>of</strong> this order;<br />
(b) submit a report to the President. through the Chairman <strong>of</strong> the Council.<br />
not less <strong>of</strong>ten than once every 2 years, on the activities <strong>of</strong> agencies to<br />
implement this order; and<br />
(c) advise the Chairman <strong>of</strong> the Council on the Chairman’s exercise <strong>of</strong> authority<br />
granted by subsection 4(c) <strong>of</strong> this order.<br />
Sec. 7. Limitations. (a) This order shall apply to an agencv with respect<br />
to the activities, personnel, resources, and facilities <strong>of</strong> the agency that are<br />
located within the United States. The head <strong>of</strong> an agencv may provide that<br />
this order shall apply in whole or in part with respect to the activities,<br />
personnel, resources, and facilities <strong>of</strong> the agency that are not located within<br />
the United States, if the head <strong>of</strong> the agencv determines that such application<br />
is in the interest <strong>of</strong> the United States.
3922 Federal Register / Vol. 72, No. 17 / Friday, January 26, 2007 / Presidential Documents<br />
(b) The head <strong>of</strong> an agency shall manage activities, personnel, resources.<br />
and facilities <strong>of</strong> the agency that are not located within the United States:<br />
and with respect to which the head <strong>of</strong> the agency has not made a determination<br />
under subsection (a) <strong>of</strong> this section, in a manner consistent with the<br />
policy set forth in section 1 <strong>of</strong> this order to the extent the head <strong>of</strong> the<br />
agency determines practicable.<br />
Sec. 8, Exemption Anthorify. (a) The <strong>Direct</strong>or <strong>of</strong> National Intelligence may<br />
exempt an intelligence activity <strong>of</strong> the United States, and related personnel,<br />
resources, and facilities, from the provisions <strong>of</strong> this order, other than this<br />
subsection and section 10, to the extent the <strong>Direct</strong>or determines necessary<br />
to protect intelligence sources and methods from unauthorized disclosure.<br />
(b) The head <strong>of</strong> an agency may exempt law enforcement activities <strong>of</strong> that<br />
agency, and related personnel, resources, and facilities, from the provisions<br />
<strong>of</strong> this order, other than this subsection and section 10, to the extent the<br />
head <strong>of</strong> an agency determines necessary to protect undercover operations<br />
from unauthorized disclosure.<br />
(c) (i) The head <strong>of</strong> an agency may exempt law enforcement, protective,<br />
emergency response, or military tactical vehicle fleets <strong>of</strong> that agency from<br />
the provisions <strong>of</strong> this order, other than this subsection and section 10.<br />
(ii) Heads <strong>of</strong> agencies shall manage fleets to which paragraph (i) <strong>of</strong> this<br />
subsection refers in a manner consistent with the policy set forth in section<br />
1 <strong>of</strong> this order to the extent they determine practicable.<br />
(d) The head <strong>of</strong> an agency may submit to the President, through the Chairman<br />
<strong>of</strong> the Council, a request for an exemption <strong>of</strong> an agency activity, and related<br />
personnel, resources, and facilities, from this order.<br />
Sec. 9. Definitions. As used in this order:<br />
(a) “agency” means an executive agency as defined in section 105 <strong>of</strong> title<br />
5, United States Code, excluding the Government Accountability Office;<br />
(b) “Chairman <strong>of</strong> the Council” means the Chairman <strong>of</strong> the Council on<br />
Environmental Quality, including in the Chairman’s capacity as <strong>Direct</strong>or<br />
<strong>of</strong> the Office <strong>of</strong> Environmental Quality;<br />
(c) “Council” means the Council on Environmental Quality;<br />
(d) “environmental” means environmental aspects <strong>of</strong> internal agency operations<br />
and activities, including those environmental aspects related to energy<br />
and transportation functions;<br />
(e) “greenhouse gases” means carbon dioxide, methane, nitrous oxide,<br />
hydr<strong>of</strong>luorocarbons, perfluorocarbons, and sulfur hexafluoride;<br />
(f) “life-cycle cost-effective” means the life-cycle costs <strong>of</strong> a product, project,<br />
or measure are estimated to be equal to or less than the base case (i.e.,<br />
current or standard practice or product):<br />
(8) “new renewable sources” means sources <strong>of</strong> renewable energy placed<br />
into service after January 1,1999;<br />
(h) “renewable energy” means energy produced by solar, wind, biomass,<br />
landfill gas, ocean (including tidal, wave, current and thermal), geothermal,<br />
municipal solid waste, or new hydroelectric generation capacity achieved<br />
from increased efficiency or additions <strong>of</strong> new capacity at an existing hydroelectric<br />
project;<br />
(i) “energy intensity” means energy consumption per square foot <strong>of</strong> building<br />
space, including industrial or laboratory facilities;<br />
(j) “Steering Committee” means the Steering Committee on Strengthening<br />
Federal Environmental, Energy, and Transportation Management established<br />
under subsection 4(b) <strong>of</strong> this order;<br />
(k) “sustainable” means to create and maintain conditions. under which<br />
humans and nature can exist in productive harmony, that permit fulfilling
Federal Register IVoL 72, No. 17 /Friday, January 26, 2007 /Presidential Documents 3923<br />
the social, economic? and other requirements <strong>of</strong> present and future generations<br />
<strong>of</strong> Americans: and<br />
(1) “United States” when used in a geographical sense, means the fifty<br />
states, the District <strong>of</strong> Columbia, the Commonwealth <strong>of</strong> Puerto Rico, Guam.<br />
American Samoa, the United States Virgin Islands, and the Northern Mariana<br />
Islands, and associated territorial waters and airspace.<br />
Sec. 10. General Provisions. (a) This order shall be imDlemented in a manner<br />
consistent with applicable law and subject to the availability <strong>of</strong> appropriations.<br />
(b) Nothing in this order shall be construed to impair or otherwise affect<br />
the functions <strong>of</strong> the <strong>Direct</strong>or <strong>of</strong> the Office <strong>of</strong> Management and Budget relating<br />
to budget. administrative, or legislative proposals.<br />
(e) This order is intended onlv to improve the internal management <strong>of</strong><br />
the Federal Government and is not intended to, and does not, create any<br />
right or benefit, substantive or procedural. enforceable at law or in equity<br />
by a party against the United States, its departments, agencies. instrunientalities,<br />
entities, <strong>of</strong>ficers, employees or agents, or any other person.<br />
Sec. 11. Revocations; Confarming Provisions. (a) The following are revoked:<br />
(i) Executive Order 13101 <strong>of</strong> September 14, 1998;<br />
(ii) Executive Order 13123 <strong>of</strong> June 3,1999;<br />
(iii) Executive Order 13134 <strong>of</strong> August 12,1999, as amended:<br />
(iv) Executive Order 13148 <strong>of</strong> April 21, 2000; and<br />
(v) Executive Order 13149 <strong>of</strong> April 21, 2000.<br />
(b) In light <strong>of</strong> subsection 317(e) <strong>of</strong> the National Defense Authorization Act<br />
for Fiscal Year 2002 (Public Law 107-107): not later than January 1 <strong>of</strong><br />
each year through and including 2010, the Secretary <strong>of</strong> Defense shall submit<br />
to the Senate and the House <strong>of</strong> Representatives a report regarding progress<br />
made toward achieving the energy efficiency goals <strong>of</strong> the Department <strong>of</strong><br />
Defense.<br />
(cl Section 3(b)(vi) <strong>of</strong> Executive Order 13327 <strong>of</strong> February 4. 2004, is amended<br />
by striking “Executive Order 13148 <strong>of</strong> April 21, 2000’’ and inserting in<br />
lieu there<strong>of</strong> “other executive orders”.<br />
THE lVHITE HOUSE,<br />
Junuary 24, 2007.
il ...:"#(;R,3,yn!.,!:\
1. Introduction<br />
The Federal government has made si,Onificant progress in improi,ing em-ironmental and<br />
energy performance through a series <strong>of</strong> executive orders, Memoranda <strong>of</strong> Understanding.<br />
and other guidance. Executive Order 13423 (E.O.), Smngilieizing Federal<br />
Environmental. Energ).: and Tr’msportntion Marnagemem. intends to build on that bod!.<br />
<strong>of</strong> work and success by integrating and updating prior practices and requirements into a<br />
cohesiye, strategic approach to further ensure enhanced performance and compliance<br />
with statutory and other legal requirements.<br />
Section 2 <strong>of</strong> the E.O. directs Federal agencies to implement sustainable practices for:<br />
e<br />
0<br />
0<br />
e<br />
e<br />
e<br />
0<br />
0<br />
e<br />
0<br />
Energy efficiency and reductions in greenhouse gas emissions.<br />
Use <strong>of</strong> renewable ener5.<br />
Reduction in n-ater consumption intensit\..<br />
Acquisition <strong>of</strong> green products and services.<br />
Pollution prei-ention, including reduction or elimination <strong>of</strong> the use <strong>of</strong> tosic and<br />
hazardous chemicals and materials.<br />
Cost-effective waste prevention and recycling programs.<br />
Increased diversion <strong>of</strong> solid waste.<br />
Sustainable desi,onkigh performance bwldings.<br />
Vehicle fleet management, including the use <strong>of</strong> alternative fuel vehicles and<br />
alternative fuels and the further reduction <strong>of</strong> petroleum consumption.<br />
Electronics stewardship.<br />
A. Purpose<br />
The purpose <strong>of</strong> this document is to define agency requirements for implementing E.0<br />
13423 and to define broad strategies for achieving them. This document is the first <strong>of</strong><br />
such E.O. implementing instructions. In order to ensure effectiye and efficient<br />
implementation, and to meet the goals and objectives <strong>of</strong> the E.O.. it is mandato? that<br />
executive departments and agencies implement the activities described in these<br />
instructions in accordance with Sections 1: 2, 3, and 4(b) <strong>of</strong> the E.O.<br />
B. Authority<br />
These instmctions are issued under the authority <strong>of</strong> Section 4(b) <strong>of</strong> the E.O. This section<br />
authorizes the Chairman <strong>of</strong> the Council on Environmental Qualit\. (CEQ) to issue<br />
instructions on implementing the E.O. after consultation nith the <strong>Direct</strong>or <strong>of</strong> the Office<br />
<strong>of</strong> Management and Budget (OMB) and the interagency Steering Committee.<br />
@. Organization and Oversipht<br />
The organizational structure <strong>of</strong> the entities established to coordinate and o\-ersee<br />
implementation <strong>of</strong> E.O. 13423 is shown in Figure 1. The organizational structure as well<br />
as the roles and responsibilities <strong>of</strong> each entih are described below.<br />
1
Figure 1. Organization <strong>of</strong> entities established to implement E.O. 13423. The agency<br />
chair <strong>of</strong> each Worhng Group is shonn in parentheses.<br />
(1) SteerinP Committee. In accordance with the E.O., agencies ivill designate<br />
Senior Officials, xho will comprise the Steering Committee. The Steering Committee<br />
\vi11 be responsible and accountable for implementation <strong>of</strong> the E.O. and these<br />
instructions. Semiannual meetings will be held, usually in Februan and August.<br />
Additional meetings <strong>of</strong> the Steering Committee may be called by the Federal<br />
Ensironmental Executive (FEE), as appropriate.<br />
(2') E.O. Ad\-isory Group. This group shall consist <strong>of</strong> Office <strong>of</strong> the Federal<br />
Enyironmental Esecutive (OFEE), OMB, Department <strong>of</strong> Energy (DOE), and<br />
Enyironmental Protection Agency (EPA) staff and others as appropriate as determined by<br />
the Chairman <strong>of</strong> CEQ. The Advisory Group will support the Steering Committee by<br />
scheduling meetings, providing logstical support, coordinating approyal <strong>of</strong> guidance<br />
documents, conducting assessments <strong>of</strong> agency implementation, and ensuring cooperation<br />
and coordination between workgroups. The Advisory Group shall coordinate reporting<br />
2
V. Training<br />
E 0 13423. sec 3(c), excespted In implemennng rhe pol’~cj~ ser forth In secrm I<br />
<strong>of</strong>this order the liead qf each agency shall.<br />
Establish w rrhn rhe agency program for (I) environmental mnmgernent<br />
training<br />
A. Reauired Training<br />
Each agent!' shall ensure that all personnel n.hose actions are affected b) the E.O. recei1 e<br />
initial awareness trainin,o as well as necessary refresher training on the goals <strong>of</strong> the E 0<br />
and any related instructions. including the environmental impacts <strong>of</strong> the employees‘<br />
actions.<br />
The interagency a.orkgroups shall discuss training needs and del-elop guidance on<br />
training. as appropriate.<br />
B. Scone and Sources<br />
Each agency shall provide environmental management training to its employees. Each<br />
agency shall identifc. the specific training needs <strong>of</strong> individual emplo),ees, u-hich shall be a<br />
function <strong>of</strong> operations and responsibilities related to the EO. goals and other legal<br />
requirements. The training shall address the role <strong>of</strong> indiyidual employees in ensuring the<br />
asency pursues the policy, goals, and objectives set forth in the E.O. and emphasize the<br />
benefit <strong>of</strong> improved environmental: enera: and transportation management to the<br />
mission <strong>of</strong> the organization. Training shall be provided to employees and others, such as<br />
contractors. as appropriate, at all le\-els: and repeated as necessan to ensure improl-ed<br />
awareness.<br />
Training can be, but is not limited to, agency-developed training, training proi;ided by a<br />
third pam such as a contractor or non-pr<strong>of</strong>it organization. trainins provided by another<br />
agency. Defense Acquisition University or Federal Acquisition Institute courses. or<br />
educational sessions provided during relevant conferences such as the annual Federal<br />
environmental symposium, annual GSA Expo, DoD‘s annual Joint Services<br />
Eni;ironmental Management conference, FedFleet, or the annual EnerE conference.<br />
11
VI. Energy and Water Management<br />
__..._ ~. .-".*TI.- --,.,.. '<br />
"--'I -,--..-. __,,<br />
,. ~<br />
. .,<br />
,&Oxsec. 2(cQ. 0). and (c): In implementing rhe policy set forth in section .<br />
-I-. __. .-.-.<br />
I I <strong>of</strong> this order, the head qf'ench agency shall:<br />
i<br />
I (0) improve energy efficiency and reduce greenhouse gas emissions <strong>of</strong>the agency,<br />
j through reduction <strong>of</strong> energy inrensitl, by (i) 3 percent annually rhrotigh the end <strong>of</strong> :,<br />
1 FY 2015. or (ii) 30percent by the end <strong>of</strong> FY 2015, relative to the baseline <strong>of</strong>the<br />
i 1 ngencjs 's energy use in FY 2003; 1<br />
i 1 ensure that (zj at least ha(f <strong>of</strong> the statutorily required renewable energtl<br />
1 i slimed by the ngency in a$scal year comes@om nau renewable sources,<br />
i<br />
L<br />
baseline qf the agency 3 water consumption in FY 2007, through l@-cycle costeflecrive<br />
measures by 2percent annualiy through the end<strong>of</strong>FY 2015 or 16<br />
percent by the end <strong>of</strong> FY 201 5.<br />
Sec. 3(a). excerpt: In implementing the policy set.forth in section I <strong>of</strong> this order,<br />
the head qfeach agency shall:<br />
(n) implement within the agency sustainable pracricesLfor (i) energy eflcienqy<br />
geenhowe emissions avoidance or reduction, and petroleum products use<br />
reduction. (ii) renewable energy, including bioenera:, (iii) water conservation ... .<br />
Technicnl Lead: DOE<br />
Workgroup: Interagency Energy Management Task Force<br />
A. Strategies and Tools<br />
Each agency shall use a va.rieQ- <strong>of</strong> energy and tvater management strategies and tools to<br />
meet the goals <strong>of</strong> the order. Strategies and tools include, but are not limited to, the<br />
folloning .<br />
(1 ) Funding. The following instruments should be utilized to the maximum extent<br />
practical to implement energy efficiency management projects, water management<br />
projects, and renewable energy projects with energy conservation measures (ECMs)<br />
ha\:ing long- and short-term payback periods that can be incorporated into life-cycle cost<br />
effective contracts. Appropriated funds may be combined with Energy Savings<br />
Performance Contracts (ESPCs) and Utility Energy Service Contracts (UESCs) to<br />
leverage government funding and optimize project scope and reductions in energ?. use<br />
and cost <strong>of</strong> facility operations. Renewable energy measures shall be considered in each<br />
ESPC or UESC proposal and be implemented where practical.<br />
ESPCs. ESPCs can facilitate and accelerate completion <strong>of</strong> large projects that can<br />
incorporate ECMs Fvith long- and short-term payback periods. through life-cycle<br />
cost-effective performance contracts.<br />
12
74<br />
I;ESCs. UESCs enable projects in States where the utility companies are<br />
permitted and encouraged to perform energy savings sen ices, especially in peak<br />
load constrained regions <strong>of</strong> the country.<br />
<strong>Direct</strong> Appropriated Funding. Appropriations should be requested in annual<br />
budget requests and priontized for application in projects or measures that do not<br />
generate savings sufficient to support private sector financing or for application as<br />
cost share to ESPCdUESCs so that larger, more comprehensive projects can be<br />
undertaken..<br />
Enhanced Use Leasing. This tool can be utilized for large or long-term<br />
renem-able and cogeneration projects and where appropriate and authorized.<br />
Ratepayer Incentives. Incentives such as ratepa>.er supported rebates from<br />
public benefit funds or utilities should be utilized at every opportuniv to enhance<br />
energy reduction.<br />
Retention <strong>of</strong> Funds. Retention <strong>of</strong> unused appropriated funds directly related to<br />
energy and water cost savings by all agencies can be used for reinyestment in<br />
energ) or nater consen-ation and sustainable building requirements.<br />
.- 3UI.I.I\-~,.._L_W.IW1_I --.,<br />
,_..._yi<br />
'"*<br />
(2) Distributed Generation. Where life-cTcle cost effective: each agenq shall<br />
'%*.<br />
implement distributed generation systems in new construction or retr<strong>of</strong>it projects.<br />
/' including reneu-able systems such as solar electric, solar lighting: geo (or ground<br />
i coupled) thermal, small wind turbines, as well as other seneration systems such as fuel :<br />
!%, cell, cogeneration. or highly efficient alternatives. In addition, agencies are encouraged /i<br />
':~ to use distributed generation systems when a substantial contnbution is made toumd ,I'<br />
',.; enhancing energy reliability or secunty.<br />
1 ,- ...,<br />
Fe,.*;'+@"-3s%&<br />
(3) Metering. To the maximum extent practicable, agencies should install<br />
metering devices that measure consumption <strong>of</strong> potable water: electricity, and thermal<br />
enerp in Federal buildings and other facilities and grounds. Data collected shall be<br />
incorporated into Federal tracking systems and be made available to Federal faciliomanagers.<br />
Agencies should consider inclusion <strong>of</strong> metering requirements in all ESPCs and<br />
UESCs, as appropriate.<br />
(4) Auditing Agencies should conduct energy and nater audits <strong>of</strong> at least 10<br />
percent <strong>of</strong> facility square footage annuall? and conduct ne& audits at least e\ ec 10 \ ears.<br />
thereafter This audit requirement can be met by audits done in conjunction nith ESPC<br />
or UESC projects<br />
(5) Ener.q. Star:Q Tools. For applicable facilities, agencies should meet Energ.<br />
StarE: Building critena, and score the energ performance <strong>of</strong> buildings using the Enerq. u-<br />
Starg Portfolio Manager rating tool as part <strong>of</strong> comprehensive facility audits. Agencies<br />
ma!. use the Energ Star Portfolio Manager rating tool to track energy and water use in<br />
all facilities.<br />
(6) Labs21, Agencies should explore efficiency opportunities in applicable<br />
facilities and programs such as the Labs21 partnership to encourage the development <strong>of</strong><br />
sustainable, high performance, and loi+--enera laboratories nationmide.<br />
.__<br />
--,<br />
'....<br />
'. +<br />
13
(7) Energy Purchasing. Agencies should purchase electncity and thermal energy<br />
from sources that use high efficienq- and low-carbon generating technologies in order to<br />
reduce greenhouse gas intensity to the extent possible.<br />
(8) Water Efficient Products. Where applicable, agencies should purchase<br />
Watersense (SM) labeled products and choose irrigation contractors u.ho are certified<br />
through a Watersense labeled program.2<br />
B. Exclusions<br />
The goals set forth in section 2(a) and 2(b) <strong>of</strong> E.O. 13423 are subject to the exclusions set<br />
forth in Section 102(c), (d), and (e) <strong>of</strong> EPAct 2005 and the DOE Guidelines Establishing<br />
Criteria for Excluding Buildings from the Energy Performance Requirements <strong>of</strong> Section<br />
533 <strong>of</strong> the National Energ. Conservation Poli? Act, as amended by EPAct 2005, issued<br />
on January 27.2006.<br />
C. Additional Guidance<br />
(1) Enera- efficiencv. Within 90 days <strong>of</strong> issuance <strong>of</strong> these instructions, DOE, in<br />
consultation with the Interagency Energy Management Task Force, shall issue or update<br />
guidance on:<br />
0 Long term planning and strategies for achieving energy goals.<br />
e The rene1vable energ goal and use <strong>of</strong> renewable energy credlts.<br />
0 Use <strong>of</strong> alternatively financed projects such as ESPCs and UESCs<br />
0 Use <strong>of</strong> and investment in renewable energy generation.<br />
0 Calculating and validating fkds available for retention in accordance \.\ ith<br />
Section 102(f) <strong>of</strong> EPAct 2005.<br />
DOE guidance should clarie that each agency shall begin reporting performance toward<br />
the reduction goal for FY 2007. which for that year requires a 6 percent reduction,<br />
relative to the FY 2003 baseline, in order to be considered on track to meet 30 percent<br />
reduction goal in 2015.<br />
(2) Life-c\xle costs. Guidance on measuring life-cycle costs IS prowded in 10<br />
CFR 336. Subpart A. Additional gidance on measuring cost-effectik eness is provided in<br />
10 CFR 436.1S(a), (b), and (c), 434.20, and 434.21.<br />
(3) Water consenation. By September 30,2007. DOE. in coordination with EPA,<br />
shall issue guidance with respect to a 2007 baseline for potable, landscape. and other<br />
jvater consumption intensih and meeting the water conservation goal <strong>of</strong> Section 2(c) <strong>of</strong><br />
the EO.<br />
EPA‘s WaterSense program is a voluntary public-private partnership that identifies and promotes hghperformance<br />
products and programs that help preserve the nation-s water supply. More information can be<br />
found at “~~~:,e~.~.e.<br />
14
The Transmission system was buil? over the past 1 QG years bv verticaliv integra:&<br />
uriiriies<br />
that produced and transmitted elect,rici?y localiy. Srnaii i!mco:lnections betweefi neighboring<br />
utilities existed, but they were crea?ed to increase reiiabiiity and share excess generarion. Over<br />
the past 10 years! ive have introdi;ced corngetition into iljhoi@s& electricity inarketj tc ioi;fe:<br />
cosis to consumers by spiirrina needed investments in generation and increasing the ef.:iciei?cY<br />
<strong>of</strong> operatms. Today, our transmission s!:stem acts as an imrmte highlay system for whcksale<br />
e! W.:i<br />
c<br />
< lt\i C~IV in e rce .<br />
- y___.-a-.mi^. -,,~,.<br />
..... ,. . ,<br />
There is growing evidence that the U.5. transmission system is in I;rgeiit need <strong>of</strong> noderniza-<br />
----.---CI~r.".~--.~,"-.-----<br />
tioii. The system has become csng~sted tecause growth ic electricity demand a<br />
--u 7.<br />
io new generation faciiities have nor been matched by irivemien: in new transrrticsion faciiiriei.<br />
Transmission ~foblems have been compounded by the incomplete transition io fair arrd effl:;ent<br />
competitive whdesaie electricity markets, Because the existing crammission system was not<br />
designed :o meet present demand, daily traixmission consmints or "battlenecks'. increase eiec-<br />
uicq costs to co~sumcrs and increase th? risk <strong>of</strong> blacknu?s.<br />
Eliminating transmission csnstraints or boxienecks is ejjenrial ti; ensuring reliable and<br />
affordable eiectricity now and ig the Future. 'The Depamrnt <strong>of</strong> Energy (DOE) c~?nduct:i! an inde<br />
pendent assessment <strong>of</strong> the U.S. electricity transmiSsion system and found that:<br />
* Qur $.S. transmission system facilirates h iejde eiectxity markets that lower ionsurners'<br />
electricity bills ky. nezrly $1 3 billion annuail)).
PjM, New York, and New England) aione couid save consumers about $500 miliio~ annu-<br />
ally. Savings could be even greater because DOE’S analysis does nor capture ail <strong>of</strong> the<br />
----<br />
factors, such as impacts on teiiability, that result from bottlenecks.<br />
_-- -\<br />
mission technologies and improved operating practices, 12,.,<br />
siting generation closer to areas where electricity is needed, and reducing electricity use<br />
through targeted energy efficiency and distributed generation could all help reduce<br />
transmission congestion.<br />
@ Better utilizing existing facilities can help delay the need for new transmission facilities,<br />
cannot avoid construction <strong>of</strong> new transmission facilities entirely.<br />
---7--<br />
’<br />
Much work is needed to address transmission bottlenecks and modernize our nation’s<br />
transmission systems. As a percentage <strong>of</strong> total energy use, electricity use is growing.2 This<br />
reflects the transformation <strong>of</strong> our economy to an increasingly sophisticated, information-based<br />
economy, one that relies on electricity. Electricity, though, is not a commodity that can be<br />
stored easily. Our transmission infrastructure is at the heart <strong>of</strong> our economic well-being.<br />
Imagine an interstate highway system without storage depots or warehouses, where traffic<br />
congestion would mean not just a loss <strong>of</strong> time in delivering a commodity, but a loss <strong>of</strong> the<br />
commodity itself. This is the nature <strong>of</strong> the transmission infrastructure. That is why bottlenecks<br />
are so important to remove and why an efficient transmission infrastructure is so important to<br />
maintain and develop.<br />
This report outlines 51 recommendations that will help ensure a robust and reliable trans-<br />
mission grid for the 21 st century. The following are six general recommendations:<br />
0 First, we must increase regulatory certainty by completing the transition to competitive<br />
regional wholesale markets.<br />
% Second, we need to develop a process for identifying and addressing national-interest<br />
transmission bottlenecks.<br />
*,><br />
‘xi,+,<br />
i<br />
. . . . . . . . . . . . . . . . . , , . , . . . . . . . . . . , , , , . . . . . . . . . . . . . .<br />
‘In 1970, eiectricity accounted for 8 percent <strong>of</strong> totai US. energy use. In 2000, electricity accounted for<br />
16 percent <strong>of</strong> total US. energy use. Source: Energy Information Administration. Annual Energy Outlook 2002.<br />
Download from http://w.eia.doe.gov
mission system operations and fully utilizing our existing facilities. Regional planning<br />
processes must consider transmission and non.transmlsslon alternatives when trying to<br />
e Fourth, opportunities for customers to reduce their electricity demands voluntarily, and<br />
targeted energy-efficiency and distributed generation, should be coordinated within<br />
regional markets.<br />
Fifth, ensuring mandatory compliance with reliability rules must include enforceable penal<br />
ties for non-comrsliance that are commensurate with the risks that the violations create.<br />
88 Sixth, DOE will take an increased leadership role in transmission R&D and policy by creat<br />
ing a new Office <strong>of</strong> Electricity Transmission and Distribution.<br />
Action is needed now to put this study’s recommendations in place. Private industry and federal,<br />
state, and local governments must work together to ensure that our electricity transmission<br />
system will meet the nation’s needs for reliable and affordable electricity in the 2lst century,
Department <strong>of</strong> Defense<br />
Fiscal Year 2007<br />
Energy Management<br />
Implementation Plan<br />
USD (AT&L)<br />
January 2007<br />
Deparmwnt <strong>of</strong> Defense<br />
1
Deportment <strong>of</strong>Defense<br />
FI* 2007 Energy A4anagernent Implementation Plan<br />
Table <strong>of</strong> Contents<br />
I. INTRODUCTION ......... ........................................ ............................................... 3<br />
11. MANAGEMENT AND IN1 STFMTION ...............<br />
A. Energy Management Infrastructure ................... .......................................................... 5<br />
1. Senior Agency Official ....................................<br />
2. Ageno- Enere Team ......................................<br />
B. Management Tools ...........................<br />
1, Atyards (Employee Incentive<br />
1. Performance Evaluations .......<br />
2. Training and Education ...............<br />
3. Shon'case Facilities.. ..............<br />
111. Implement at i on Strategies ........ ................................. ........................... 16<br />
A. Life-Cycle Cost Analysis (LCC<br />
................................................ 17<br />
B. Facilie Energy Audits ....................................................<br />
........................... 19<br />
C. Financing Mechanisms .............<br />
D. Energ.-StarE' and Energy -Effi<br />
E. ENERGY STAR' Buildings ..... ................................................<br />
F. Sustainable Building Design ...<br />
G. Energy Efficiency in Lease Provisions ..........................<br />
.............................. 30<br />
H. Industrial Facility Efficiency Improvements ................<br />
........................ 31<br />
I. Highly Efficient S!-stems .........................................<br />
...........................<br />
11<br />
33<br />
J.<br />
K.<br />
M<br />
Distributed Generation.. ..<br />
Electrical Load Reduction Measures ...................<br />
Water Conservation .....<br />
...................................... 35<br />
2
I. INTRODUCTION<br />
The Department <strong>of</strong> Defense (DoD) is comrmtted to achiei ing the energ reduction goals set forth<br />
in the Energy Polic? Act <strong>of</strong> 2005 (EPAct 2005) and Executir e Order (EO) 13123. "Greening the<br />
Go! emment through Efficient Energ Management" In accordance nith the EO 13 123. all<br />
Federal agencies prepare an Annual Implementation Plan that outlines specific plans to make<br />
progress ton ard those goals This document represents the DoD Implementatlon Plan for Fiscal<br />
Year (FY) 2007<br />
This implementation plan proyides a detailed account <strong>of</strong> the strategic approaches that will be<br />
employed department-\side. It ivas developed using plans submttted by each <strong>of</strong> the Defense<br />
Components. The organization <strong>of</strong> thls document follo\vs that <strong>of</strong> the Annual Energ, Management<br />
Repon.<br />
This introduction sen es to demonstrate DoD's understanding <strong>of</strong> EPAct 2005 and EO 13123<br />
requirements and to smrnanze the department's integrated approach to ach1e.c e the goals The<br />
remainder <strong>of</strong> the document consists <strong>of</strong> tu0 chapters Section 11 pro7 ides details concerning the<br />
department's energq management and admnistratij e structure Section I11 presents the<br />
department's specific FY 2007 implementation strategies. planned projects. and goals<br />
Federal Facilities Energ? Program Goals are summarized below:<br />
Green House Gas<br />
Enere Efficient!.<br />
Bui1din.g Metering<br />
30 percent reduction by 2010 from 1990 (EO)<br />
Standard Buildings - 35 percent Btuift'reduction by 2010 from 1985 (EO)<br />
Industrial Buildings - 25 percent BhY'ft' reduction by 2010 from 1990 (EO)<br />
All Buildings - 20 percent Btdft' reduction by 2015 from 2003 (EPAct)<br />
Excluded Buildings - no goal, but ener.g use must be reported (EPAct)<br />
Faciliq Audits - 10 percentiyear (can count alt financing) (EO)<br />
Appl!. Sustainable Principles - (EO and EPAct)<br />
Model Lease Provisions Supporting Sustainable Design - (EO)<br />
Nerv Buildings LCCE - energ. usage 30 percent below ASHRAE (EPAct)<br />
Meter all buildings by 2012 to the extent maximum practicable (EPAct)<br />
EnerD Efficient Products<br />
Include the procurement <strong>of</strong> Energy Star and DOE designated equipment in<br />
all contracts n-herever possible (EPAct)<br />
Renew able Enerv<br />
Install 200.000 solar energ systems by 201 0 (EO)<br />
Obtm 3 percent <strong>of</strong> electric enere from renen able 2007-2009 (EPAct)<br />
Obtain 5 percent <strong>of</strong> electnc energ from renenable 201 0-201 2 (EPAct)<br />
Obtain 7 5 percent <strong>of</strong> electric energ. from renenable after 201 3 (EPAct )<br />
~- ~-<br />
Deparhiietit <strong>of</strong> Defense 3
Deparfment <strong>of</strong> Defensr<br />
FI' 2007 Enera, Aianagement bnplementation Plan<br />
Petroleum<br />
Source Ener.0<br />
Financing<br />
Training and<br />
Education<br />
Reduce usage (EO)<br />
Reduce Usage (EO)<br />
Accomplish ail projects that are life cycle cost effective (EO)<br />
Assure that all appropriate personnel receive training (EO)<br />
Designate exemplary new and existing facilities as energ?: and renem able<br />
showcases (EO)<br />
Water Conservation Implement Best Management Practices<br />
- 30 percent <strong>of</strong> facilities by 2006 (EO)<br />
- 50 percent <strong>of</strong> facilities by 2008 (EO)<br />
- 80 percent <strong>of</strong> facilities by 2010 (EO)<br />
Vehicles<br />
Federal alternative fueled vehicles must Use alternative fuels (EPAct)<br />
EO - Executive Order 1323<br />
EPAct - Energy Policy Act <strong>of</strong>August 8, 2005, Public Lnw 109-18<br />
Energ. conservation is a high priority for the Department. Reduction in energy consumption can<br />
create substantial dollar savings and reduce greenhouse gas emissions. DoD intends to meet the<br />
gods <strong>of</strong> this order b!- implementing the folloning broad strategies:<br />
0 Implement cost-effecti1.e energy conservation projects ivith direct appropriations and<br />
alternative financing through Utili$)- Energ Service Contracts (UESG) and Enera Savings<br />
Performance Contracts (ESPC), and by procuring energ-efficient products and senices.<br />
0 Implement water consenation best management practices to achieve water efficiency.<br />
4 Promote renenable eners technology by purchasing renewable power and implementing<br />
renenable energy projects when cost-effective based on life-cycle analysis.<br />
D~pari~eiit <strong>of</strong> Defense 4
_ .I._.<br />
Back to the previous pa<br />
....................<br />
News from Inside the Pentagon<br />
provided by the InsideDefense NewsStand<br />
DSB task force report wrapping up<br />
VULNERABLE ELECTRIC GRID PROMPTS CALL FOR ENERGY-<br />
INDEPENDENT BASES<br />
Dat?: Siaq’ 31.2007<br />
An influential advisory panel to Defense Secretary Robert Gates will soon recommend the Pentagon<br />
protect critical domestic military installations by making them energy independent, a move intended to<br />
wean the U.S. military from America’s electrical grid which the panel believes is vulnerable to tenorist<br />
attack and natural disaster.<br />
James Schlesinger, a former defense and energy secretary, is concluding a yearlong Defense Science<br />
Board task force he is leading that proposes the Pentagon prepare for failures <strong>of</strong> the electrical grid -- on<br />
which U. S. facilities heavily rely -- by “islanding,” a concept that envisions installations generatins their<br />
own power, according to sources familiar with the report.<br />
“The grid is fragile,” said one source familiar with the panel’s deliberations. “So there was some<br />
concern in the task force about DOD’s ability to operate in the event <strong>of</strong> a grid failure for an extended<br />
period <strong>of</strong> time.”<br />
In iZugust 2003, a massive blackout hit huge swaths <strong>of</strong> the Northeast, Midwest and Ontario, Canada.<br />
affecting tens <strong>of</strong> millions <strong>of</strong> people. This power outage was traced, in part, to overgown trees in Ohio<br />
that touched high-voltage electrical lines, setting in motion sequential blackouts that eventually knocked<br />
more than 100 power plants <strong>of</strong>fline<br />
Susceptibility to deliberate attack is also a concern.<br />
”They had a variety <strong>of</strong> scenarios that they were very concerned about,” said the source, who declined to<br />
discuss any <strong>of</strong> the particular scenarios.<br />
The panel -- which Pentagon acquisition executive Kenneth Krieg commissioned to examine a wide<br />
range <strong>of</strong> issues, including “opportunities for DOD to produce energy for its own use” -- will recommend<br />
that domestic bases shift from the electric grid to renewable energy sources such as wind and solar<br />
energy and possibly by small-scale nuclear power plants, the sources said.<br />
The “Task Force on DOD Energy Strategy” is also set to recommend the Defense Department establish<br />
a senior executive responsible for energy leadership, although it is expected to stop short <strong>of</strong> calling for<br />
an “energy czar.” as some members <strong>of</strong> the task force had proposed.<br />
On the issue <strong>of</strong> carbon-based fuels, the DSB is not expected to advance any far-reaching<br />
recommendations. The panel is expected to endorse many steps the Defense Department has taken over<br />
the last year to bring greater attention to energy efficiency both at facilities and across its fleet <strong>of</strong><br />
weapon systems.<br />
Last month, Krieg established a pilot program that requires three next-generation weapon system<br />
programs to consider energy efficiency as a key part <strong>of</strong> their designs, a significant step that could pave<br />
the way for economic fuel consumption to play a prominent role in planning for future U.S. combat<br />
capabilities.
The InsideDefense Newsstand Page 2 <strong>of</strong> 2<br />
-‘Effective immediately, it is DOD policy to include the fully burdened cost <strong>of</strong> delivered energy in trade<strong>of</strong>f<br />
analyses conducted for all tactical systems with end items that create a demand for energy and to<br />
improve the energy efficiency <strong>of</strong> those systems, consistent with missions and requirements and cost<br />
effectiveness,” Kneg wrote in an April 10 memo.<br />
The three programs tapped for this project are the Air Force’s future long-range strike aircraft, the Army<br />
and Marine Corps Joint Light Tactical Vehicle and the Navy’s next-generation cruiser, CG(X).<br />
The DSB is also expected to endorse a number <strong>of</strong> other recommendations <strong>of</strong> an internal Defense<br />
Department Energy Security Task Force which last September produced what <strong>of</strong>icials involved in the<br />
effort say is a comprehensive roadmap to platform efficiency, establishing alternative fuels programs<br />
and accelerating initiatives to make defense installations more energy emcient.<br />
As a result <strong>of</strong> these efforts, the Pentagon last fall added $13 1 million to its fiscal year 2008 to 2013<br />
spending plan for research and development <strong>of</strong> energy-efficiency technologies, according to Pentagon<br />
<strong>of</strong>ficials.<br />
Among the research projects slated for additional investments, according to Pentagon <strong>of</strong>ficials, are: a<br />
lightweight ground vehicle fuel efficiency demonstrator designed to facilitate a 30 percent decrease in<br />
fuel consumption and work on lightweight transmissions and enhanced efficiency engines; the<br />
Transportable Hybrid Electric Power system, an effort to utilize renewable energy sources to power<br />
forward-deployed units in order to reduce the number <strong>of</strong> resupply convoys that have been vulnerable to<br />
attack in places such as Iraq; and the Highly Efficient Embedded Turbine Engine, which developers<br />
hope will provide a 25 percent decrease in fuel consumption for aircraft by revisiting the core<br />
geometries and temperatures <strong>of</strong> turbine engines. - Jason Sherman<br />
PENTAGON-23-22- 14<br />
0 2005 Inside Washington Publishers<br />
Reproduction or redistribution forbidden without express permission <strong>of</strong> the publishers<br />
http://defense.iwpnewsstand.com
THE STATE ENERGY EFFICIENCY SCORECARD FOR 2006<br />
Maggie Eldridge, Bill Prindle, Dan York, and<br />
Steve Nadel<br />
June 2007<br />
Report Number E075<br />
OAmerican Council for an Energy-Efficient Economy<br />
1001 Connecticut Avenue, N.W., Suite 801, Washington, D.C. 20036<br />
(202) 429-8873 phone, (202) 429-2248 fax, htt~e:/iaceee.org
The State Energy Efficiency Scorecard for 2006. ACEEE<br />
EXECUTIVE SUMMARY<br />
More and more states are turning to enera effciencJ- as the "first fuel'' in the race for clean<br />
and secure energy resources. In their commitments to advance energy efficiency policies and<br />
programs, they are outpacing the federal go\;emment by a ividening margin. States now<br />
spend about three times as much on energy efficiency programs as the federal goi.emment.<br />
and are leading the way on appliance standards, building codes. energy efficiency resource<br />
standards. and other lie!. policies that drive energy efficiency investment. In this era <strong>of</strong> state<br />
pre-eminence? it is important to document best practices and recopize leadership among the<br />
states, so that other states follow, and to encourage federal action to catch up. Toward that<br />
end. ACEEE developed this report as a comprehensive ranking <strong>of</strong> state energ. efficient!.<br />
policies and identified exemplary programs and policies n-ithin each polic?. categon.. The<br />
report ranks states based on their progress in eight energ efficiency policy categones:<br />
1. Spending on Utilih and Public Benefits Enera Efficiency Programs<br />
2. Energ Efficiency Resource Standards (EERS)<br />
3. Combined Heat and Pokver (CHP)<br />
4. Building Energ? Codes<br />
5. Transportation Policies<br />
6. Appliance and Equipment Efficiency Standards<br />
7. Tas 1ncentii.es<br />
8. State Lead b! Example and Research & Deyelopment<br />
Summaiy <strong>of</strong> Rmkings<br />
Table ES-1 contains a summan. ranking <strong>of</strong> the states on the eight policy categories included<br />
in this study. The "top ten'' states. based on their combined scores. are:<br />
1. Vermont, Connecticut, and California (tie)<br />
4. Massachusetts<br />
5. Oregon<br />
6. Washington<br />
7. New York<br />
8. Nen- Jerse!.<br />
9. Rhode Island. Minnesota (tie)<br />
The top ten states earn scores between 20 and 33 out <strong>of</strong> a possible 44 points, and the next<br />
fifteen states' scores trail fsurly moderately behind all score more than 10 points, up to 17 5<br />
points The bottom 26 states. howe5er. senousl) lag behind the other states. scoring betlieen<br />
0 5 and 10 points<br />
..,<br />
111
The State Energ) Efficiency Scorecard for 2006, ACEEE
The State Energ! Efficient! Scorecard for 2006. ACEEE<br />
I<br />
Iowa* 0<br />
s 0 3<br />
Wisconsin e 0 0<br />
I 2.5<br />
I<br />
Connecticut 1 I a I 0<br />
Illinois e 0<br />
1<br />
1<br />
49
The State Energy Efficiencx Scorecard for 2006. ACEEE<br />
* States nith etemplarq iimo\atn e finance mechamsms \?ere giyen an evtra pomt<br />
Research and Development<br />
In 1990, several state energy R&D institutions established the Association <strong>of</strong> State Energ<br />
Research and Technology Transfer Institutions (ASERTTI)” in response to the increasing<br />
need for state initiatives in R&D. In addition to providing a variety <strong>of</strong> services to promote<br />
the creation, development, and commercialization <strong>of</strong> new technologies for enera efficiency,<br />
state R&D efforts can address a number <strong>of</strong> market failures that persist in the enere services<br />
marketplace (Pye and Nadel 1997). State-level institutions have the advantage <strong>of</strong> focusing<br />
on regional needs and opportunities that are not addressed by national programs. State<br />
institutions can also coordinate a range <strong>of</strong> resources from across the state.<br />
Other Policies<br />
Iiznovcrrive.finnizcing. States are developing a wide range <strong>of</strong> innovative financing mechanisms<br />
to finance programs to implement energy efficiency improvements in existing buildings and<br />
ne\\- state facilities, including revolving loan funds, tax-esempt master lease-purchase<br />
agreements, lease revenue bonds, pension funds, and performance contracting. These<br />
mechanisms are usually administered by the state energy <strong>of</strong>fice or other lead agency, which<br />
coordinates the program across multiple state agencies.<br />
1oil.a has been a leader in state financing for public facilities. Legislation passed in the 1980s<br />
established the Iotl-a Energy Bank, which allows state agencies to use lease-purchase<br />
financing and loans for energy-management improvements, and the State Facilities Program<br />
(EPA 2006d). The Tesas LomSTAR program ivhich was initiated by the Texas Energ,<br />
Office in 1988? uses a revoll-ing loan fund mechanism that is funded at about $100 million.<br />
As <strong>of</strong> April 2006, LoanSTAR funded a total <strong>of</strong> 187 loans <strong>of</strong> which 17 were to state agencies,<br />
46 to institutions <strong>of</strong> higher education, 36 to local governments, 78 to independent school<br />
districts, and 10 to counp hospitals (SECO 2007).<br />
50
constraints.‘ Similarly. ISOs and RTOs estimate the<br />
degree to which congestion in specific areas would<br />
bs alleviated by transmission upgrades, because<br />
major reductions in congestion mean bill savings<br />
for electricity customers.’ Congestion also occurs in<br />
areas where thc grid is managed by individual integated<br />
utilities rather than by regional grid operators:<br />
however, since transmission, generation and<br />
redispatch costs are less visible in these areas, the<br />
costs <strong>of</strong> congestion are not as readily identifiable.<br />
As the tenn is used here, reliability refers to the delivery<br />
<strong>of</strong> electricity to customers in the amounts desired<br />
and within accepted standards for the frequency,<br />
duration, and magnitude <strong>of</strong> outages and<br />
other adverse conditions or e\*ents. Loadpockets are<br />
created when a major load center (such as a large<br />
city llke San Francisco or New York) has too little<br />
local generation relative to load and must import<br />
much <strong>of</strong> its electricity via transmission from neighbo+iing<br />
regions. For example, most <strong>of</strong> California is<br />
currently a generation-short load pocket; by contrast,<br />
transmission constraints cause Maine, which<br />
has far more generation than load, to be generation-rich.<br />
Because it is frequently difficult to site<br />
and build efficient new generation within a city, or<br />
to build additional transmission into a city, the resulting<br />
load pocket will <strong>of</strong>ten experience congestion-meaning<br />
it cannot import as much low-cost<br />
energy as it would like, and the city’s electricity<br />
provider(s) must operate one or iiiore existing<br />
power plants inside the city more intensively to ensure<br />
that all customer needs are met, although at<br />
higher cost. If electricity demand inside the load<br />
pocket grows quickly without being checked by energy<br />
efficiency and demand response, the load<br />
I<br />
pocket may face a looming reliability problem, vi ith<br />
too little supply (local generation plus transmission-eilabled<br />
imports) relative to demand-whether<br />
in actual ternis or according to accepted rules for<br />
safe grid operation. In such cases. it is necessary for<br />
the transmission owner(s) serving the load pocket to<br />
resolve the reliability problem as quickly as possible.<br />
7,<br />
e case <strong>of</strong> a load pocket, thcre arc three primary 1<br />
ways to deal with a long-teim congestion problem:<br />
1.<br />
Build new central-station generation within the<br />
load pocket;<br />
2. Build ncw or upgrade transmission capacity<br />
(some combination <strong>of</strong> lines and other equipment<br />
such as transfomiers and capacitors) to cnable<br />
distant generators to senre a portion <strong>of</strong> the<br />
area’s load; or<br />
3. Reduce electricity demand (and net import<br />
needs) within the load pocket, through some<br />
combination <strong>of</strong> energy efficiency. demand response.<br />
and distributed generation.<br />
The three options can be used singly or in combination<br />
to solve a transmission constraint problcni<br />
flexibly and cost-effectively. Generation and transmission,<br />
however, are costly, time-consuming solutions<br />
that <strong>of</strong>ten face opposition. Demand-side options<br />
tend to be under-utilized because they have<br />
high transaction costs with results that may be less<br />
certain and less controllable. It should also be noted<br />
that there are a variety <strong>of</strong> transmission-only solutions<br />
to any specific transmission problem; not cyery<br />
transmission project (or cornbination <strong>of</strong> projects)<br />
will provide equal congestion relief, nor will<br />
it provide equal reliability or economic benefits to<br />
one in the affected region.<br />
\-p.o.-^------ -<br />
‘See, for example. PJM’s statement that congestion costs resulting from constraints in the Allegheny Mountain area azotaled S747 million in 1005.<br />
with another $464 million on the Delaware River path that year. Se<br />
.Int~rest-L.ansinissioc-iomci~r-s pdi^ for additional detail. Organized<br />
to protect themselves irnd prevent the full cost <strong>of</strong> congestion from driving up their total deljvered electticity costs.<br />
‘It is important to note that the purpose <strong>of</strong> this study was to identifj areas experiencins significant congestion, as opposed 10 estimating the net<br />
value <strong>of</strong> actions to address thc congcstion. See, for example., the CAISO’s estimate that transmission upgrades and operatianal impravcnienrs<br />
czonioleted in 2005 reduced summer congestion costs by more than $54 million in just two months (IIIPJ: ,ww,..2aiso cc.m.docs:<br />
, and that three newly approsed transmission project<br />
bonknecks and maintaining ackquate generalion for local rzliability by $30 million per year”<br />
4 US. Department <strong>of</strong> Energy I National Electric Transmission Congestion Study ‘ 2006
and achievable cosi effective potential.<br />
Cahlations based on sthldies in other<br />
states sh
. , . .<br />
.. .
I<br />
. ---<br />
...............................................................<br />
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age 1 <strong>of</strong> 2<br />
North Anna Power Station<br />
Pdoith Anna is located in Louisa<br />
county if? central Virginia,<br />
northwest Of Richmond.<br />
The facility was rramed alter the North Aniia River, which was dammed tc Form the 9,61313-acre Lake Amh?<br />
I-eser-voii- and the 3,400-acre ;ni'aste Heat Trcatrnent Facility, used to prwide ci;o!ing water fcr the station.<br />
Domi?iiiion annotimed :3t: Noit. 28, 2Oci7, that I: has filed an application with the U.5. ~uciear Feguiatory<br />
Cornmissior? Cor .f;. iicetse tu build and cperate 3 ~ i nuclear e ~ reactor at its North Anria Power Station in central<br />
Virgirria. If hililt, the new reactor would add to Dominron's position as one <strong>of</strong> the nation's top nuclear<br />
operators. The appiication filed with the NRC is for a Combined Operating License [COij for North ~ nna unit<br />
3. The CCn7pagji has not committed to build the aeiv uniti but xants to maintair, the ~ption ttt dc sc to n?eet<br />
]nro:ected skyrncketing dcmnd For electricity i!: Virginia in the next decade,
North Anna Power Station Page 2 <strong>of</strong> 2<br />
t Waste Heat Treatment Facility (WHTF)<br />
Emergency Preparedness<br />
Read our information on emergency planning efforts.<br />
If you wouid like to learn more about nuclear energy, we invite you to visit the N:xtt? Am6 Niiclcar<br />
7 -<br />
ir:ror:natiar: Cer!ler. The center welcomes visitors including individuals having specid needs. To assist us in<br />
accon?modating any special requirements or needs, we ask that you c~ntact us in advance <strong>of</strong> yorir visit. To<br />
arr~inge a visit or for other jnforrnatjon, call (540) 894-2029 or 21328.
age 1 <strong>of</strong> 2<br />
THE FREE LANCE-STAR ENTERTAlNMENT CON<br />
4I?vB$TLhE - Alcr:a - linm~ - b ~~tle - .u,oe* YZ - Thu. Oct 11, 2007<br />
TAT€ CLASSIFIEDS IOBS WHEELS STAR DIRECTORY SHOPPING<br />
63arrw'*w.cuw.,<br />
*C*<br />
School High School Schaol Here<br />
Dominion to move toward third reactor<br />
NRC tc review process for expected Dominion<br />
a pitcatton to 5UilP new reactor at North Anna plants<br />
By RUSR DENNEN<br />
Sometime this fall, Dominion power is expected to tak the<br />
neZ step in plans for a thlrd nuclear reactor at North Anna<br />
sower Station<br />
P?e utility will apply for a combined operating license that, if<br />
approved, would allow it to build Unit 3 at the Louisa County<br />
3lant on Lake Anna.<br />
The Nuclear Regciatory Commission will hold a public meeting<br />
act. 2A at 7 p.m. at Louisa County Middle School to review the<br />
-c-c application orocess , . ~ __u____^_~_ .,-. I.<br />
The YRC IS ready to review this applicatioc and t'?e others we're expecting over the next couple <strong>of</strong> years<br />
i Cormunities pear these sites ?eed to know whats ahead, said David Matthews, director <strong>of</strong> the Division <strong>of</strong> New<br />
Reactor Licensing<br />
t<br />
\ Pie review includes safety and environmental assessments, as well as how the public can take part in the<br />
t process A combined operating license wmld a l b Dominion to build and, with conditions, operate Unit 3<br />
Baltimo-e Gas & Electric's Calvert Cliffs plant on the Chesapeake Bay in Calvert County, Md , ~ a the 5 first to apply<br />
for a combined operating license, though nearly a dozen utilities are prepanng them<br />
!<br />
1<br />
Meanwhile, Domimops early site permit application-the first step in the review process-is wendlng its way<br />
tirough the regulatory process The NRC is expected to make a decision on that by early next year<br />
1<br />
i<br />
lhe early site Oermit allows Dominion to envi-onmental and safety issues, and :o complete orelimiqary<br />
n <strong>of</strong>ficials say they have not yet decided whether to build a new reactor at North Anna, out that they want<br />
if the aarly-site permit and the combined operating-license applications are approved, construction<br />
as early as 2015<br />
-8-<br />
me applications are opposed by several envimnmentai groups. They say another reactor is unnecessary at E! time<br />
ihen utilities should be exploring alternative energy sources, and would present a new target for terronsts<br />
4 citizens group on the lake has expressed conceris about increased water temperatures ard how that would<br />
affect aquatic life and recreational use<br />
Dornlnion plans to use a 1,600-megawatt General Electnc Economic Simplified Boiling Water Reactor for Unit 3<br />
me NRC IS reviewing thar: design<br />
The 'Lake Anna area, where the North Anna Power Station is situated, is in Fredencksburg's backyard, and is<br />
bordered by Spotsylvanra, Louisa and Orange counties. Surrounded by thousands <strong>of</strong> homes, it is a recreational<br />
draw in central Virginia.<br />
For more information, nrc gov/reactors/new-wactor-iicenslng.html Qusty Dennen: 5401374-5431<br />
Email, ;~:zrrocn$t: ~(.i.)i):.Cs:d:.i:bn:<br />
'6<br />
i<br />
i<br />
i<br />
i<br />
:<br />
September 2003- Dominion power applies for early Site $emit<br />
=all 2007--Dominion to apply for combined operating license<br />
Early 2008--Nuclear Regulatory Commission to decide on early site permit<br />
,. .- .
Fredericksburg.com - Dominion to move toward third reactor<br />
Page 2 <strong>of</strong> 2<br />
Early 2011--NRC to aecide on combined operating-license application.<br />
Source: Nuclear Regulatory Commission<br />
What do you think?<br />
Enter your FreaTalk usemame and pasSWOid to pmt e c~mmen! on !his stor/. lfyGu are registered on FrwTalk or anather part <strong>of</strong> this Slte. use that Iogln<br />
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loca!.N@.w.s.o~da.fes~ ...........................................................................<br />
Today's Popdar Stories:<br />
. ~ bnui LOOO .IL:hlq<br />
(Thuwday, 00.37, The Free Lance-Star)<br />
e After a y&ar. !rrgarW'j?.icome Ceci~i<br />
age I<br />
OT z<br />
g J<br />
12<br />
News Features:<br />
South west Vi rg i n i a<br />
e a desiyi? is make it carbo:?-capture csmpatible, mezniny t h~i tec$noiogy to<br />
captwe carbon dioxide COuld Se added LO the stme!-i when iC becomes<br />
commerciaiiy avaiiatie. Dominion is sponsoring research at Virgin:a Tsch ta see<br />
if it is jjo5sible tc seqwster carbon dioxide !r: csai seams iE Sciirhwest j:iigrnia.<br />
ff posibif, greenhouse gaSse-5 froni the pcwei stetivn could eventzaiiy be<br />
sequestered. Carion capttire teciPm!ogy is entrtied to em-a i.?cei-ttvs przn?iun?s<br />
u ri der Vi ry i c? i a 's reg ti i acwj f r a mew u rk ,
Dominion Seeks Approval for Power Station in Southwest Virginia Page 2 <strong>of</strong> 2<br />
B The possiDle beneficial I-ecycling <strong>of</strong> combustion isy,-products for t:ne<br />
rnazufacturi3g <strong>of</strong> cament,<br />
7-&- , , ,'; ~brnpany<br />
-_I 3ke IS ccrrnrnitted to ;-esci?ing a goal <strong>of</strong> havin~ 12 Zercsnt <strong>of</strong> its electricity<br />
CG;?X from miewable rescurces by 2022 and to helping ths conimonwea!ti ce;.eicp a<br />
comprehensive iong-term energy ccnservation pian as d~recred by tlie Gened<br />
Assernbi y.<br />
The station wiil be mated cn 2 1,XC-acre site near 5t. Paul in Wise County. 3 would<br />
prob*;ide eriougn power to serve 145,000 residentiai custonws. Ui;c;e:' a state iaw<br />
encwraging the construction <strong>of</strong> the station, it vicsi3 be powered by Virgnia CG~:. The<br />
srarion would en?pioy up to 8CO workers during constrdction. Once con-@&e, :ne<br />
station wouici i?2ve 75 full-Wne employees, and it ako would create about 350 rr!ii:iny<br />
jobs ir: the area.
A proposed Wise County, Va., 'clean coal' power plant could be among<br />
Virginia's Top I O polluters<br />
httn:~~~~f~~.tricities. corn/tristafe/tri!news. Pri ntView .-content-a rticles-TR f -2007- 10-21 -0025, htm I<br />
Sunday, Oct 21,2007 - 02:OO AM<br />
By Rex Bowman, Media General News Setvice<br />
A $1.6 billion coal-fired power plant proposed for Wise County is touted by the<br />
utility company that wants to build it as an eco-friendly "clean coal" model <strong>of</strong><br />
environmental design.<br />
But if built to the company's specifications, it would be one <strong>of</strong> the biggest air<br />
polluters in Virginia, according to documents filed with the state.<br />
The plant would give Dominion Virginia Power an extra 585 megawatts <strong>of</strong> power.<br />
enough to support 146,000 new homes.<br />
The proposed Virginia City Hybrid Energy Center would be allowed to pump<br />
more than 12,500 tons - or 25 million pounds - <strong>of</strong> pollution into the air each year<br />
if Dominion Virginia Power goes through with its plans. The pollutants include<br />
nitrogen oxides, an ingredient <strong>of</strong> smog; sulfur dioxide, a major cause <strong>of</strong> acid rain:<br />
and carbon monoxide, which can pose serious breathing problems for those with<br />
respiratory ailments.<br />
The emissions are in addition to the 5.3 million tons <strong>of</strong> carbon dioxide the plant<br />
could discharge annually, according to company <strong>of</strong>ficials. Carbon dioxide, though<br />
recognized by the U.S. Environmental Protection Agency as a greenhouse gas,<br />
is not regulated as a pollutant.<br />
Dominion Virginia Power points out, however, that the Wise facility would pollute<br />
less than do older plants. The utility is allowed to call the power plant a "clean<br />
coal" operation under rules laid down by the U.S. Department <strong>of</strong> Energy, which is<br />
encouraging utilities to use certain coal technologies by giving the technologies<br />
the envi ronmen ta 1 I y-friendly sticker.<br />
But environmentalists fighting to stop state approval <strong>of</strong> the power plant say the<br />
"clean coal" label, though sanctioned by the federal government, is a deceptive<br />
marketing practice that could dampen opposition to the plant even though its<br />
construction could spell disaster for the ecosystem <strong>of</strong> Appalachian Virginia,<br />
If approved by the State Corporation Commission, the plant would join other<br />
coal-fired power plants at the top <strong>of</strong> the list <strong>of</strong> roughly 2,000 polluters monitored<br />
by the Virginia Department <strong>of</strong> Environmental Quality.<br />
"Any time the utility industry adopts a really effective messaging strategy, it<br />
makes our lives more difficult," said Matt Wasson <strong>of</strong> Appalachian Voices, one <strong>of</strong><br />
several groups opposing the power plant. "The label <strong>of</strong> clean coal is, in my
opinion, a focus group's phrase, and a very effective one, to justify all these<br />
planned coal-fired plants."<br />
James K. Martin, a senior vice president at Dominion Virginia Power, defends the<br />
use <strong>of</strong> the term as accurate, illustrating that the proposed plant can be seen two<br />
ways. While environmentalists view the plant as a setback in the context <strong>of</strong><br />
nationwide efforts to curb pollution, power industry <strong>of</strong>ficials such as Martin see<br />
the plant as a step forward in the context <strong>of</strong> evolving energy technology because<br />
it pollutes less than older plants.<br />
For instance, while Dominion Virginia Power is asking for permission to annually<br />
emit more than 12,500 tons <strong>of</strong> pollutants in Virginia City, the company's<br />
Chesterfield County power station - the state's biggest air polluter - released<br />
more than 76,800 tons <strong>of</strong> pollutants into the atmosphere last year.<br />
Furthermore, said Dominion Virginia Power spokesman Dan Genest, a plant the<br />
size <strong>of</strong> the one planned for Virginia City potentially could emit more than 167,000<br />
tons <strong>of</strong> nitrogen oxides and sulfur dioxide into the air each year if none <strong>of</strong> the<br />
state-<strong>of</strong>-the-art technological controls were in place. With controls, the amount is<br />
projected at about 5,340 tons per year.<br />
"We think it's an exciting technology," Martin said <strong>of</strong> the proposed plant's<br />
cleaning system. He also noted that the plant likely would operate at 90 percent<br />
<strong>of</strong> capacity, meaning emissions would never hit the 12,500-ton mark.<br />
Dominion Virginia Power wants to build the power plant on 1,700 acres <strong>of</strong><br />
abandoned strip mine just west <strong>of</strong> the town <strong>of</strong> St. Paul and fuel it with Virginia<br />
coal and waste wood products.<br />
The company, which hopes to win approval from the State Corporation<br />
Commission by April and have the plant up and running by 2012, says the<br />
electricity is necessary to help it meet an anticipated 4,000-megawatt jump in<br />
demand from Dominion Virginia Power customers by 201 7.<br />
The General Assembly gave its blessing to the plant in 2004, when it decreed as<br />
a public good any power station in Southwest Virginia that used only Virginia<br />
coal. Sen. William C. Wampler Jr., R-Bristol, pushed for the measure, and he<br />
recently said he still supports the plant.<br />
"We have to have it as part <strong>of</strong> the mix to power Virginia,'' he said, adding that the<br />
state should also look at using more nuclear power.<br />
The federal Energy Department regards the proposed Virginia City plant as a<br />
potential "clean coal" operation because it would use a process known as<br />
"circulating fluidized bed combustion technology," or CFB. The process involves
310 ANNUAL REPORT<br />
CASE NO. 9003<br />
APPALACHIAN POWER COMPANY.<br />
a corporation.<br />
Application for a Certificate <strong>of</strong><br />
Convenience and Necessit), to Construct<br />
a 765 kV Transmission Line<br />
in Mason, Putnam and Cabell Counties.<br />
PROCEDURE<br />
ORDER: Entered Mag 18. 2979<br />
On May 9. 1977, Appalachian Power Company ("Appalachian". "APCQ"<br />
or "company") filed an appiication for a certific2te <strong>of</strong> convenience and<br />
necessity to consrrucl a 765 kV transmission line south from an inter-connection<br />
in Mason County with the existing 765 kV Amos-Gavin line to Appalachian's<br />
Culloden Station in Cabell County, covering 2 distance <strong>of</strong> approximately<br />
33 miles. This line will hereinafter be referred to as the proposed<br />
Culioden-Gavin 765 kV transmission line.<br />
Appalachian filed with its appijcarion a 74 page bookiet entitled "Environmental<br />
Analysis for the Culloden-Gavin 765 kV Transmzssion Line.<br />
Foilowing the filing <strong>of</strong> its application. Appalachiar? published the norice<br />
required by W.Va. Code 24-2-1 la. which stated that the Commission could<br />
approve the application unless within fifteen (15) days after completion <strong>of</strong><br />
pubIiCatlOn a written request for a hraring thereon had been received by<br />
the Commission from a person or persons alleging the proposed transmission<br />
iine or its location to be against the public interest. No written requests<br />
were made to the Commission for a hearing on rhe application during the<br />
period.<br />
By order entered on July 18. fY77 this matter was set for hearing to<br />
be held in the Commission's Hearing Room at the Capitol in the City <strong>of</strong><br />
Charleston on the 3ist day <strong>of</strong> August. 1977 at which time and place<br />
Appalachian was ordered to appear and prosecute its application and anyone<br />
interested was inviled to appear and make objection thereto. Leave was<br />
granted to anyone interested to file objection to the application with the<br />
Commission at any time on or before the 31s day <strong>of</strong> August. 1977.<br />
Appaiachian was also ordered to give notice <strong>of</strong> the fiiing <strong>of</strong> Its application<br />
and <strong>of</strong> the time and place <strong>of</strong> hearing by publishing a copy <strong>of</strong> the<br />
Commission's order once a week for two successive weeks. the first publication<br />
to be made nol more than thirty days nor less than fifteen days prior<br />
to the 31st day <strong>of</strong> August. 1977 in a newspaper published and <strong>of</strong> genera!<br />
circulation in each <strong>of</strong> the Counties <strong>of</strong> Mason. Putnam and Cabell and to<br />
make due return to the Commission on or before the day <strong>of</strong> hearing.<br />
Appalachian published the Commission's order <strong>of</strong> Jul) IS, 1977 in<br />
accordance with the requirements <strong>of</strong> that order. The hearing was held ,4ugust
wy_Jc-<br />
f<br />
W. Va.<br />
19791 PUBLlC SERViCE COMMISSION ?!P<br />
nos 3445-138 kV transformer<br />
daliszewski Reb. Ex. G, 11,<br />
<strong>of</strong> the Amos-Hanging Rock<br />
andy No. 2 and Amos No. 2<br />
,timated 1980-8 1 winter peak<br />
nos operating at about 118%<br />
<strong>of</strong> its normal raring (Id,, 2).<br />
is-Gavin 765 kV circuit with<br />
service and Big Sandy No. t<br />
5 k\’ circuit is loaded above<br />
jbove cases the overload con-<br />
[re in the system resulting in<br />
3.<br />
: that the operation <strong>of</strong> transould<br />
result in the immediate<br />
.ge which could cause failure<br />
ing within normal capabilities<br />
jence that the proposed line<br />
:@ >. (Maliszewski Reb.<br />
.<br />
\<br />
centration <strong>of</strong> generating capacity in one area, the fact remains that the<br />
New Haven plant was certificated in 1974, is now nearing completion and<br />
clearly the .4PCO Reliability Studies S1 - SI2 are <strong>of</strong> some significance as<br />
justification for the proposed line. In addition. the load flow studies A1 - A30<br />
demonstrate that serious power flow and overloading problems will exist,<br />
not necessarily leading to transient stability problems. but which could. nonetheless.<br />
result in system outages due to transformers and other facilities operat-<br />
ing at or above their winter emergency ratings in the near future.<br />
.-Pi IS--*-<br />
_’**.-**.- 4.:.*-> ,,..,-‘r*i*i__:<br />
~ . . ~ ~<br />
rd is seriously deficient in that it does not contain studies ’\<br />
reflecting the probability <strong>of</strong> each required element <strong>of</strong> outage and units ’1,<br />
operating at full load simultaneously, there is, we believe, a sufficient basis<br />
\i<br />
in the record for a finding that the proposed line is essential for the New \<br />
Haven plant to be properly and reliably integrated into the AEP System :.<br />
without violating the basic ECAR criteria. Particularly, there is evidence<br />
that single and double contingency outages have occurred a number <strong>of</strong> times<br />
on the AEP transmission system (Reb. Maliszewski Ex. G. 31. The difficulty<br />
i ’<br />
we have experienced in attempting to evaluate the probabilities <strong>of</strong> the oc- ;<br />
currences which must take place in the computer sirnilation studies lead us to ;<br />
the conclusion, however, that future certification cases presented in this<br />
jurisdiction should be accompanied by evidence concerning such probabilities i’<br />
c-<br />
w-EIPq;*ryr. -<br />
<br />
hich could occur undei tran-<br />
hed this conclusion concern-<br />
?stem under stress. The fact<br />
tvels were within acceptablc<br />
#ties operatbg normalby. The<br />
nber 7. I977 memo assume<br />
-he staff does recognize that<br />
:m in the stead), mode <strong>of</strong><br />
ce (Tr. 1576).<br />
is opinion that the proposed<br />
no; take into account an)’<br />
and that his opinion was<br />
tTr. 1416). Alrhou,oh Dr.<br />
are an essential aspect <strong>of</strong><br />
did noi have the capability<br />
ve itself violated the first<br />
voidance <strong>of</strong> excessive con-<br />
!<br />
B. EVIDENCE ADDRESSXNG APPLICANT’S CONSIDERATION OF<br />
ALTERNAIIES TO THE PROPOSED LINE<br />
APCO has asserted that the proposed line will remedy the problems<br />
discussed above and that there is no viable alternative to the construction <strong>of</strong><br />
the line. Intervenors assert. however. that there are numerous alternatives<br />
both in terms <strong>of</strong> additional equipment and in terms <strong>of</strong> system management<br />
which could achieve with less environmenta! impact the stability and reinforcement<br />
AEP pr<strong>of</strong>esses to desire.<br />
The chief alternative to the proposed line is to tie both the New Haven<br />
and Gavin Plant into the existing 345 LV system. APCO admitted that this<br />
alternative would provide transient stability for the New Haven and Gavin<br />
Plants. but objected to it because it would no1 reinforce the svstem as adequately,<br />
would require a new 345 kV transmission Iine from Sporn to<br />
Culloden following essentially the same route as the proposed line. and<br />
would he more expensive (Maiiszewski Ex. A. 21. 22: Maliszewski Reb. Ex.<br />
I to IS). The majority <strong>of</strong> the cost estimated for this alternative consisted <strong>of</strong><br />
the construction <strong>of</strong> 345 kV lines to carry the same amount <strong>of</strong> ioad as the<br />
765 kL’ line. (lnt. Maiiszewski Exh. 7).<br />
A second alternative mentioned by the applicant would be the constriiction<br />
<strong>of</strong> a 765 kV line from Gavin to North Proctorville. This configuration<br />
solves the stability problem but AEP tesrified ir does nothing IO soive the<br />
overload problems (Tr. 673-674; 1637).
age 1 ot 5<br />
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such as waste water effluent discharges from large manufacturing plants. These<br />
sources are generally pipelines or ditches that are carrying wastewater discharge<br />
to streams and waterways, and their quality can be easily monitored. One<br />
portion <strong>of</strong> the CWA mandated that best available technology be used to control<br />
point source pollution. The Sierra Club has called this regulation "one <strong>of</strong> the most<br />
successful environmental laws in our nation's history."<br />
Unfortunately, the story <strong>of</strong> non-point source pollution regulation is much more<br />
dismal. Currently, the bay receives a whopping 41% <strong>of</strong> its nitrogen from<br />
agriculture alone, as compared to 21% from all point sources, both industrial and<br />
municipal. This nitrogen pollution's origination sources can be seen in figure 1,<br />
below.<br />
While some<br />
atteinpts at<br />
stemming this non- "Total Nitrogen from<br />
point source<br />
pollution have<br />
been made,<br />
success has been<br />
severely limited by<br />
a lack <strong>of</strong> funding<br />
and political<br />
unwillingness to<br />
regulate<br />
agricultural run<strong>of</strong>f.<br />
Instead, many<br />
lawmakers have<br />
opted to<br />
implement<br />
incentive programs<br />
to reduce water<br />
pollution, but these<br />
are habitually<br />
under-funded and<br />
under-staffed. One<br />
Virginia program<br />
aimed at reducing<br />
animal waste<br />
pollution<br />
attempted to<br />
provide up to 75%<br />
<strong>of</strong> the cost <strong>of</strong><br />
waste<br />
management, but<br />
requests for<br />
participation Figure 1: Total nitrogen from agriculture reaching<br />
exceeded available Chesapeake Bay Tributaries. Source: "Saving a National<br />
funds by $2 2 Treasure" Blue Ribbon Financing Panel 2004.<br />
billion in 2004<br />
alone. In Maryland a program to subsidize cover crop application could have<br />
spent between $12 and $17 million, but its budget was only $8 3 million.<br />
,f Additionally, sprawl around the urban centers in the Chesapeake Bay has further<br />
fueled nutrient run<strong>of</strong>f, Often, sprawl takes place on virgin land, clearing acres <strong>of</strong> %<br />
trees and farmland in favor <strong>of</strong> housing developments. Even though farms are<br />
sources <strong>of</strong> nutrient pollution, increasingly housing developments are becoming<br />
even greater sources <strong>of</strong> run<strong>of</strong>f and nutrient pollution. While farms can be<br />
managed to reduce their pollution, many housing developments give little<br />
thought to the nutrient run<strong>of</strong>f in their storm water Many scientists believe rapid<br />
rates <strong>of</strong> sprawl in the watershed are the reason the bay's situation isn't<br />
improving While concerted efforts have been made to manage nutrient<br />
pollution, rapid sprawl is <strong>of</strong>fsetting these gains.<br />
'%I<br />
- " .d<br />
-*.. .. --*C1--*--"z-r<br />
1<br />
And so the cause <strong>of</strong> the problem IS evident. As the beloved Pogo once remarked<br />
"we have met the enemy and he is us".<br />
I<br />
If there is any hope <strong>of</strong> achieving the 2010 goal significant investment<br />
consideration must be made, not only on how to reduce pollution, but also where
,<br />
I ayc 3 UI i,<br />
we can get the greatest reduction for our limited financial resources. As with any<br />
pollution management program, the greatest clean-up gains per dollar spent are<br />
made from initial regulation. lust by implementing accountability standards and<br />
establishing management programs, great pollution reductions are achieved in<br />
the initial stages <strong>of</strong> poilution management, It is the later stages, generally those<br />
that are working to virtually eliminate pollution from a particular source, that are<br />
overwhelmingly costly. In the case <strong>of</strong> clean water, point source regulation has<br />
been ongoing since the 1972 CWA, but non-point regulation has been severely<br />
lacking and thus presents the greatest opportunity for pollution reduction,<br />
Investing in Clean Water<br />
A 2004 report by the Chesapeake Bay Commission identified six least-cost<br />
options to clean up the bay. Five <strong>of</strong> them focused on agriculture and non-point<br />
sources, indicating just how underdeveloped such programs are. The remaining<br />
suggestion is just what the Harrisonburg-Rockingham Sewer Authority is doing,<br />
upgrading its plant to the limit <strong>of</strong> present technology. They estimated that these<br />
six options, if implemented, could achieve 75% <strong>of</strong> the reduction goal for Nitrogen<br />
at the relatively low cost <strong>of</strong> $623 million total for all the bay states, but each<br />
come with their own individual cost. As seen in figure 2 below, while water<br />
treatment facility upgrades have great potential for reducing nitrogen loads, they<br />
are the most expensive reductions to achieve per pound,<br />
NITROGEN<br />
PHOSPHORUS<br />
SEDIMENT<br />
Measures M. Ibs. $/lb.<br />
Waste Treatment 35.0 8,56<br />
Upgrades<br />
Diet and Feed<br />
Changes<br />
Nutrient<br />
Management<br />
Enhanced Nutrient<br />
Mgmt.<br />
13.6 1.66<br />
23.7 4.41<br />
Conservation Tilage 12.0 1.57<br />
CoverCrops 23.3 3.13<br />
M. Ibs. $/lb. M. Ibs. $/lb.<br />
3.0 74.00 na<br />
0.22 0.00 na<br />
0.80 28.26 na<br />
0.80 95.79 na<br />
2.59 1.68<br />
0.44 0.22<br />
na=Not applicable - = No additional cos<br />
t<br />
Implications<br />
Total potential reductions for nonpoint<br />
sources (2-6) at the edge <strong>of</strong> the field*<br />
Totai potential reductions for nonpoint<br />
sources (2-6) delivered to the Bay**<br />
Total potential reductions for ail six<br />
practices (1-6) delivered to the Bay**<br />
Bay Agreement reduction goal (2002-<br />
2010)<br />
NITROGEN PHOSPHORUS SEDIMENT<br />
53.6m lbs. 2.93m Ibs. 1.35m tons<br />
45.4m Ibs. 1.99m Ibs. 0.90m tons<br />
80.4m lbs. 4.99m ibs. 0.90m tons<br />
103m ibs. 6.7m Ibs. 0.90m tons<br />
* The reductions attributed to each agricultural practice ae less when<br />
combinedwith outer practices on the same land. Therefore, the expected ttoal<br />
reduction from combing agricultural practices is less than their sum.<br />
** Agricultural reductions are measured at edge <strong>of</strong> field, and are reduced by<br />
the time they reach the bay; this results in totla reductions in loadings from<br />
those six practices as indicated. Waste treatment plant reductions estimates<br />
are as delivered to the bay.<br />
Figure 2: Nutrient reduction by cost. Source: Chesapeake Bay commission<br />
"Cost-Effective strategies for nutrient and sediment reduction" 2004<br />
Why then, did the state choose to promote this reduction above the others<br />
suggested in the report? Primarily, point source reductions are the most<br />
convenient to enforce, A monitoring structure is already in place for point source<br />
reduction, and there is great potential for reduction in this category. Additionally,
Virginia Business Magazine: Virginia iaeas, I ne LnesapeaKe tray<br />
raye 4 UI a<br />
the reduction amounts are virtually guaranteed if the technology is properly<br />
implemented. Even so, I would argue that greater per-dollar reduction could<br />
have been achieved by shifting this investment by the state and locality to nonpoint<br />
source controls,<br />
The Commission's five other strategies are ail plans that are viable and currently<br />
in practice on small scales, or are simply under-funded. I am not arguing that<br />
the capacity increase for the regional sewer authority is unwarranted, but if this<br />
spending is aimed primarily at cleaning up the bay, there are other options that<br />
could be more cost effective and achieve greater reductions. In total all six<br />
investments are only projected to meet three quarters <strong>of</strong> the reductions needed.<br />
Litigation<br />
While the state has largely ignored the significant water pollution associated with<br />
agricultural systems, environmental groups have started questioning the legality<br />
<strong>of</strong> their continued high rates <strong>of</strong> pollution. Three environmental groups have<br />
joined forces and threatened a federal suit against two corporations for<br />
overwhelming the SIL wastewater facility in Timberville, Virginia. The waste in<br />
question is primarily poultry and meat processing waste, and its overproduction<br />
is allegedly causing the facility to pollute substantially beyond their permitted<br />
discharge. This case is claiming violations under the CWA, challenging the<br />
corporations' argument that once their waste reaches the SIL treatment facility<br />
they are no longer liable for its release as pollution. While the wastewater facility<br />
is considered a traditional point source and has discharge permits under the<br />
CWA, this allegation is unique in that it is attempting to shift liability from the<br />
permitted facility onto the producers <strong>of</strong> the waste.<br />
This pending case is similar to the federal Concerned Area Residents for the<br />
Environment v. Southview Farm case. In this case the courts held that some<br />
forms <strong>of</strong> large industrial agriculture, which are <strong>of</strong>ten considered the biggest nonpoint<br />
source polluters, can be classified as point sources due to their<br />
concentration <strong>of</strong> nutrient pollution into collection ponds and ditches. This<br />
designation called for Southview Farms, a dairy and crop farm, to be subject to<br />
the same best management practice standards and permitting process as<br />
contained animal feed operations (feedlots), which are regulated as point<br />
sources under the Clean Water Act. Initially the Southview case followed the<br />
same 60 day notice <strong>of</strong> CWA violations as have been given in the pending Virginia<br />
case. If this new case follows the course <strong>of</strong> Southview and the violations are not<br />
addressed, the next step will be for a Judge to find that the processing<br />
companies are alleging continuing violations <strong>of</strong> the CWA. This finding will be<br />
sufficient grounds for the environmental groups to bring a citizens suit, as<br />
decided in Gwaltney <strong>of</strong> Smithfield v. Chesapeake Bay Foundation.<br />
This litigation can be seen as a barometer for public opinion. Citizens are calling<br />
for non-point source polluters to take responsibility for the damage they are<br />
causing to the Bay. Such regulation fits into the action plan the Chesapeake Bay<br />
Foundation has been calling for, and there is some promise for help on the<br />
federal level. The farm bill, due for renewal in September, could contain<br />
provisions quadrupling federal aid to the Chesapeake Bay watershed, totaling<br />
$262.5 million, which would then be matched by the states. One proposal calls<br />
for this funding to be managed by a regional authority, and under this direction<br />
real progress could be made in regulating non-point source pollution in the Bay's<br />
watershed. Unfortunately our legislatures national, state and local have done<br />
very little to help the matter in the past. The Bays' problems have been clearly<br />
evident for decades, but the legislators do not seem at all interested funding a<br />
real solution, rather they have been putting it <strong>of</strong>f by long speeches, studies and<br />
generally finessing it until after the next election.<br />
Saving the Bay<br />
In the long term, several changes must be made if we are to elevate the<br />
Chesapeake from its current classification <strong>of</strong> "dangerously out <strong>of</strong> balance" with<br />
its score <strong>of</strong> 29 by the Chesapeake Bay Foundation to "saved," a score <strong>of</strong> at least<br />
70. Both point and non-point sources must be rigorously managed, and this<br />
management must extend even beyond the agricultural controls that many are<br />
considering. Land use shifts from agriculture to development have incurred high<br />
water pollution in sprawling regions <strong>of</strong> the Bay's watershed. Removing forests<br />
that naturally clean run<strong>of</strong>f and remove nutrients and replacing them with<br />
landscapes that are at susceptible to high amounts <strong>of</strong> erosion is a trend that<br />
must stop. Future developments must be mandated to manage run<strong>of</strong>f and
I<br />
uyL. 4 VI J<br />
contain any nutrient pollution.<br />
Additionally, homeowners that aren't connected to water treatment networks are<br />
sources <strong>of</strong> nutrient pollution. Generally they rely on individual septic systems,<br />
many <strong>of</strong> which will fail and leak over their lifetime. These systems typically have<br />
had no, or very limited maintenance and some are several decades old.<br />
Currently private septic tanks are estimated at contributing 4% <strong>of</strong> the nutrient<br />
pollution found in the bay. An inspection program should be implemented, with<br />
graduated upgrades required, to ensure these systems aren't leaking and are<br />
adequately neutralizing their nutrient pollution.<br />
Finally, private lawn fertilization also contributes to water pollution. One way to<br />
raise clean-up funds while reducing water pollution could be a fertilizer tax. This<br />
tax could be levied against all fertilizers based on concentrations <strong>of</strong> nitrogen and<br />
phosphorus per pound equal to an estimated clean up cost, both for commercial<br />
farms and private homeowners. The proceeds <strong>of</strong> this tax could be used to further<br />
fund non-point source reductions and improve public awareness <strong>of</strong> the myriad <strong>of</strong><br />
factors that have changed the bay from one <strong>of</strong> the most productive ecosystems<br />
in America to an estuary that is struggling to survive.<br />
Saving the Bay will require a concerted effort on behalf <strong>of</strong> policymakers,<br />
industries, farmers, and citizens across the watershed, but the return on this<br />
investment will be substantial. The Clean Air Act has reportedly returned 4 times<br />
its implementation cost, and the bay could see such high returns as well. These<br />
returns will come from increased, sustainable harvests <strong>of</strong> fish and shellfish as the<br />
bay's populations recover, increased tourism to rehabilitated areas, and the<br />
inherent value <strong>of</strong> an ecosystem in balance. While these returns show great<br />
potential, we must be willing to make a real investment now for the future health<br />
<strong>of</strong> the Bay.<br />
Mr. Logan is a first year law student at the University <strong>of</strong> Virginia. Mr. Litten is a<br />
Harrisonburg attorney.<br />
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supplies nearly 90 percent <strong>of</strong> the Washington region's drinking water.<br />
,, , ,<br />
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-.,<br />
point the cause <strong>of</strong> one <strong>of</strong> the clearest signs that something is '.,<br />
sex" fish, which have both male and female attributes. Possible<br />
mica1 pesticides, animal hormones in manure or human hormones in //<br />
_i_.~~,._., ..,. -_-i-.----~------'-<br />
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~ .<br />
Previously, studies had found that male bass in Dist~~ct.<strong>of</strong>.Co!umbia waters were growing<br />
eggs. Recently, females Caught near the Blue Plains sewage treatment plant in southwest<br />
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( - z n z x intersex fish, as well as high lev <strong>of</strong> sediment, nitroiii'<br />
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.~.>,: ?_,,<br />
L_ ...,C,I._..l-.l. -1 I+'--<br />
"We've plateaued," said Hedrick Belin, president <strong>of</strong> the conservancy. "The improvements that<br />
we've made, the progress, has stalled out."<br />
In 1965, President Lyndon B. Johnson called the Potomac a "national disgrace." At the time, it<br />
had been fouled by centuries <strong>of</strong> contamination by raw sewage and industrial pollutants.<br />
Major improvements at wastewater treatment plants since then helped the Potomac become<br />
clean enough to support numerous bald eagles and a stock <strong>of</strong> smallmouth and largemouth<br />
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otornac, where it feeds algae<br />
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Closer to Washington, forests have bee<br />
rainwater carries pollutants into streams without being filtered by soil and plant roots.<br />
"More people means more ro<strong>of</strong>tops and more roads," Belin said. And that, he said, "leads to<br />
greater contaminated run<strong>of</strong>f, coming <strong>of</strong>f those hard surfaces."
U<br />
Group gives Potomac River a D-plus - Yahoo! News rage 2 ot 2<br />
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WEST UIROINIA<br />
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The streams and creeks that form the South Branch <strong>of</strong> the<br />
Columbia - in the<br />
watershed Sixteen million<br />
people live, work, and play<br />
Allegheny Plateau around Franklin and Petersburg, West<br />
Vtrginia, while the Potomac forms the dividing line between<br />
the Mountain State and Maryland from the North Branch east<br />
into the rolling land <strong>of</strong> the Panhandle around Martinsburg,<br />
Shepherdstown, Charles Town, and Harpers Ferry, where the<br />
Shenandoah meets the Potomac. This beautiful area IS well-<br />
approximately 11,684 miles<br />
<strong>of</strong> shoreline. Fifty major<br />
tributaries pour water into<br />
the Chesapeake every day.<br />
for tributaries like The Trough (a spectacular gorge on the<br />
South Branch), the Lost River, and the Cacapon River.<br />
While tourism is a major contributor to this part <strong>of</strong> West<br />
Virginia, agriculture has grown tremendously in recent years,<br />
Chesapeake Bay provides<br />
food, water, cover, and<br />
nesting or nursery areas to<br />
more than 3,000 migratory<br />
and resident wlidlife species.<br />
the already-pressured Potomac downstream. For more information, call CBF's Virginia<br />
http://www.cbf.org/site/PageServer?pagenarne=state main wv &orinter frienriIv=I 13/117nn7
u- ' -.-<br />
FRIENDS 3,<br />
&FOREST<br />
abut us i contact<br />
Neb% Horne<br />
News Archive<br />
June 10: 2006<br />
Global Warming Attributable to Human Activities<br />
Giobai V'riarmins refers to the !ncreaSes i<br />
temperature <strong>of</strong> the Earth's atmosphere a<br />
which iiave been observed iii recent decades<br />
According to the National Academy <strong>of</strong> Scleixes be<br />
Eaflh's surface temperatilre has risen by aboiii ,I<br />
degree Fahrenheit in the oast cenkq wirb<br />
9 during the pas: !WO decades<br />
There is new and stronger evidence that most <strong>of</strong> the wamiing ever rhe last 50 yeais 1s attriouta5le<br />
to numan activities. Air travel. household vehicles, appliances and hea!ing:cooiing units create<br />
buridup <strong>of</strong> greenhouse gases - primarily carbon dioxide. methane. and nitrous oxide The Energy<br />
Informatiorl Administration (Department <strong>of</strong> Energy) estiinates thar iii the U S the average annual<br />
cx$oiT dioxide emissions per person is 20 metric ions<br />
Ways to Reduce Carbon Dioxide Emissions<br />
There are two oradical ways to reduce carbon dioxide emissions.<br />
e Mod:Q iiiirnan activities that add more carbon dioxide to the atnmphere. and/or<br />
?!an! ww trees and preserve existing trees and piant cornniunilies that sequeste: :s;b3?<br />
Saturai!y<br />
---.--.---"*,.---<br />
---.,-.___<br />
-----T<br />
Carbon sequeslraiion is<br />
(c<br />
the process through which agricultural and focestw practices reiwvi.<br />
carbon<br />
d<br />
dioxide (C02) fror the atmosphere. Preseiviqg an average acre <strong>of</strong> Fcresi :he Uni:ed<br />
Slates keeps mere than 26O;OOO pounds OT carbon dioxide obi <strong>of</strong> the atniosnher'e (Source<br />
EPAIGiobal Environment and Technology Foundation.)<br />
----<br />
-LI<br />
..-..- _.. -P-<br />
Forest PracWOffsSft Global Warming<br />
Foiestrg practices periormed evey day by our consewatioi? parrners-repianting trees :em:vinij<br />
invasive wecies that affect forest habitat. and reducing the tma: <strong>of</strong> fifes and fuel loads--prov;de<br />
a positive influence on the global warming trend.<br />
fake Actlot: to Reduce Your Carbon "Fetotprini"<br />
Contributing to healthy forests <strong>of</strong>fers Friends <strong>of</strong>the Fores! the unique CppQKUnity to <strong>of</strong>fset tAee!r<br />
carbon "footprint" by neutralizing their effect on global c!imate change Ycur finaiwal conPibutioand<br />
volunteer efforts wiii help us complete more forest projects. and in turn will help yoc iediicr<br />
vosr net contribution to Gtobal Warming. Hsb today'<br />
'he stor$ begs the question if preserving an acre <strong>of</strong> forest keeps 260 000 ibs <strong>of</strong> C02 out ~f the<br />
abrosphere that apparently is a 'steady state ' rfow much C02 does a healthy forest<br />
seqiiester (many forests are adding fiber volume) Goes a forest at climax sequester as much<br />
C92 as a growing forest? Climax forests likely are adding carbon io tne sot' but not necessariiy<br />
.: Back fr h.Jei$s -owe ' ~ c ~ y < $?:I- ~ $<br />
mhtml:file://C:\Documents and Settings\Kathy\My Documents\powerline\Evidenc. .<br />
1 113317nn7
i<br />
Keduce CjioDai vvarming<br />
raye L VI L<br />
;o the volume <strong>of</strong> carbon above ground.<br />
27 Szpiemer 7 20 Edward Webb said ...<br />
l belive as a 8 yr old boy that global warming will not effect our generation but will1 effect<br />
generations to come and that IS the issue I belive we should press to the governient <strong>of</strong> today<br />
after all the children ) are our future<br />
4 ;),..:orer ':3 '4 ,Me Lee said ...<br />
i love that most environmentalisis try to help the atmosphere<br />
ithink that envirorneniaiists are awsorne people who do all that they can and are widley thank<br />
enogh<br />
So Thank You So Very Much<br />
I like to help the enviroment but it's icinda hard 2 do all the time<br />
Your Name i<br />
I' ' " ' '<br />
@<br />
0 2007 Friends <strong>of</strong> the Forest - becorneafriend org - 1 L' o'liabl
Entertainment: Calendar I Travel<br />
-+ confact us qco SubaicrZbe Discover Culpeper I VA Vineyards<br />
Terremark Worldwide Inc. has<br />
begun to move the mud for Its<br />
new data center campus in<br />
Culpeper, located on Technology<br />
Drive <strong>of</strong>f McDevitt Drive and<br />
The Miami-based company<br />
creates Internet networks and IS<br />
a global provider <strong>of</strong> managed<br />
Information Technology (IT)<br />
infrastructure solutions for<br />
LIFESTYLE<br />
'5. Tu 2 -=<br />
e campus will consist <strong>of</strong> five<br />
,000-square-foot independent<br />
data center structures and one<br />
72,000-square-foot <strong>of</strong>fice<br />
building, according to its Web<br />
site.<br />
,\ :qT2- > VZ" -<br />
Spmesman Xavier Gonzalez said the first ohase <strong>of</strong> the facility consists <strong>of</strong> 50,000<br />
?.&,< I, r, * --, ,.<br />
square feet.<br />
L* 5-y<br />
"We're moving along as scheduled and everything is going well," Gonzalez said.<br />
"We're still on schedule for a June 2008 opening for the first phase <strong>of</strong> the facility and<br />
customers will be deployed as that opens "<br />
'I<br />
,s-.L-<br />
Reader's Reactim<br />
Subscribe-to the Newsp-aper<br />
0 2007 Media General Part <strong>of</strong> the GatewayVA Network.<br />
Terms and Conditions<br />
Subscribe to the Star-Exponent today and Save 50%<br />
mhtml:file://C:\Docurnents and Settings\Kathy\My Documents\DowerlinF1\Fvi~Pnr. 1 1 ~ 7"V-v
FOR IMMEDIATE RELEASE<br />
TUESDAY, OCTOBER 9,2007<br />
WWV\I.USDOJ.GOV<br />
Fact Sheet: United States Et 1. VS. ~~~~~~~~<br />
Overview<br />
ENRD<br />
(202) 514-2007<br />
TDD (202) 514-1888<br />
Electric Power<br />
On October 9, 2007, the United States, eight states, and thirteen citizen groups announced a settlement<br />
agreement with American Electric Power (AEP) under the Clean Air Act's (Act) New Source Review (NSR)<br />
provisions that obtains relief at sixteen (16) <strong>of</strong> AEP's coal-fired power plants (46 units) located in Indiana.<br />
Kentucky, Ohio, Virginia, and West Virginia.<br />
By several measures this is the single largest environmental enforcement settlement. It is the largest<br />
environmental settlement as measured in terms <strong>of</strong> injunctive relief. As described in more detail below, it is<br />
estimated that AEP will spend more than $4.6 billion to comply with the consent decree. The settlement also<br />
is the largest as measured in terms <strong>of</strong> pollution reductions obtained from the owner or operator <strong>of</strong> a Clean<br />
Air Act stationary source(s). Upon full implementation, the settlement will secure at least 813,000 tons per<br />
year <strong>of</strong> air pollution reductions from AEP's 16 power plants.<br />
In 2006, nitrogen oxide (NOx) emissions at these 16 plants totaled 231,000 tons per year. By 2016,<br />
these AEP emissions will be reduced to 72,000 tons per year, continuing in perpetuity. In 2006, sulfur<br />
dioxide (S02) emissions at these 16 plants totaled 828,000 tons per year. By 201 8, these AEP emissions<br />
will be reduced to 174,000 tons per year, continuing in perpetuity. This SO2 reduction -- from a single<br />
settlement -- is more than the SO2 emitted from most states (45 out <strong>of</strong> 50). This reduction in emissions is<br />
one <strong>of</strong> the largest percentage decreases achieved in any <strong>of</strong> the United States' prior settlements with coalfired<br />
electric utilities, and it reflects a multibillion dollar investment by AEP.<br />
The settlement requires the installation and continuous operation <strong>of</strong> pollution control technology such as<br />
selective catalytic reduction devices (SCRs) for the control <strong>of</strong> NOx and flue gas desulfurization equipment<br />
(FGD), also known as scrubbers, for the control <strong>of</strong> SO2 emissions,<br />
In addition to the significant reductions <strong>of</strong> SO2 and NOx, AEP will pay a $15 million penalty, the highest<br />
penalty paid by any electric utility in settlement <strong>of</strong> a New Source Review case. Under the settlement, AEP<br />
also committed $60 million to perform or finance environmental mitigation projects.<br />
The Defendant<br />
AEP ranks among the nation's largest generators <strong>of</strong> electricity. This settlement includes 16 plants<br />
located in Indiana, Kentucky, Ohio, Virginia, and West Virginia, which, combined, generate over 20,000<br />
megawatts.<br />
Power Plants Enforcement Effort<br />
The Department <strong>of</strong> Justice, at EPA's request, has filed lawsuits against several coal-fired electric<br />
http://www. usdoj.gov/apa/pr/2007/0ctober/O7~enrd~798. htm I 11/29/2007
#07-798: 10-09-07 Fact Sheet: United States Et AI. vs. American Electric Power Page 2 <strong>of</strong> 3<br />
utilities for alleged violations <strong>of</strong> the Clean Air Act. This series <strong>of</strong> cases seeks to bring the power plant<br />
industry into full compliance with the NSR and Prevention <strong>of</strong> Significant Deterioration (PSD) requirements <strong>of</strong><br />
the Clean Air Act. This settlement with AEP represents the fourteenth judicial settlement under the power<br />
plants enforcement effort. EPA has reached similar settlements with Alabama Power, Illinois Power<br />
Company and Dynegy Midwest Generation, Alcoa Rockdale, TX, facility, PSEG Fossil, Southern Carolina<br />
Public Service Authority, Southern Indiana Gas and Electric Company Culley Station, Tampa Electric<br />
Company, Virginia Electric Power Company, Wisconsin Electric Power Company, First Energy, Minnkota<br />
Power Cooperative and Square Butte Power Cooperative: East Kentucky Power Cooperative: and Nevada<br />
Power Company.<br />
Clean Air Act Violations<br />
The United States, states, and citizens groups alleged that AEP made physical and operational<br />
changes at nine <strong>of</strong> its plants that constituted “major modifications” without first undergoing PSD review or<br />
Non-attainment New Source Review (NNSR), obtaining required permits, and installing and operating Best<br />
Available Control Technology and/or technology reflecting the Lowest Achievable Emission Rate (MER) to<br />
reduce air pollution.<br />
Environmental Benefits<br />
Harmful Pollutants Addressed by This Settlement<br />
Nitrogen oxides: NOx cause a variety <strong>of</strong> health problems and adverse environmental impacts, such as<br />
ground-level ozone, acid rain, PM, global warming, water quality deterioration, and visual impairment. NOx<br />
play a major role, along with volatile organic chemicals, in the atmospheric reactions that produce ozone.<br />
Sulfur dioxide: High concentrations <strong>of</strong> sulfur dioxide affect breathing and may aggravate existing<br />
respiratory and cardiovascular disease. Sensitive populations include asthmatics, individuals with bronchitis<br />
or emphysema, children, and the elderly. Sulfur dioxide is also a primary contributor to acid deposition, or<br />
acid rain.<br />
”“ ._-..- -”<br />
P’<br />
i Health Benefits<br />
I<br />
’<br />
1<br />
Once AEP has fully installed the pollution control equipment required by the settlement, the United<br />
States estimates that the annual benefits to public health will include approximately $32 billion per year<br />
. saved in avoided health-related costs associated with respiratory and cardiopulmonary<br />
-. ,asthma and heart attacks.<br />
,.<br />
.I _I<br />
Civil Penalties<br />
..<br />
AEP will pay a civil penalty in the amount <strong>of</strong> $1 5 million.<br />
Mitigation Projects<br />
-------------<br />
AEP is required to spend $60 million to perform and finance environmental mitigation projects to<br />
address the impacts <strong>of</strong> past emissions; the total amount will be split 60%/40% between the United States<br />
and the various settling states. The $36 million federal share <strong>of</strong> mitigation projects will be spent on projects<br />
to acquire and restore ecologically sensitive land in eastern states downwind <strong>of</strong> AEP’s plants; restore or<br />
improve watersheds and forests in national parks adversely affected by past emissions; reduce nitrogen<br />
loading to Chesapeake Bay through actions such as the acquisition <strong>of</strong> buffer zones; and additional projects<br />
to reduce emissions from mobile sources, such as diesel barge tugs and conventionally powered trucks in<br />
AEP’s fleet. The remaining $24 million for environmental projects will be allocated among the states that<br />
joined the settlement.<br />
.<br />
Other Plaintiffs
The following eight states joined as plaintiffs in the case: New York, New Jersey, Massachusetts,<br />
Vermont, Connecticut, New Hampshire, Maryland, and Rhode Island.<br />
The following citizen groups also joined as plaintiffs: Natural Resources Defense Council, National<br />
Wildlife Federation, Sierra Club, United States Public Interest Research Group, lzaak Walton League <strong>of</strong><br />
America, Ohio Citizen Action, Citizens Action Coalition <strong>of</strong> Indiana, Hoosier Environmental Council, Ohio<br />
Valley Environmental Coalition, West Virginia Environmental Council, Clean Air Council, Indiana Wildlife<br />
Federation, and the League <strong>of</strong> Ohio Sportsmen.<br />
07-798<br />
http:Ilwww. usdoj~gov~opa/pr/2007/0ctoberl07 enrd 798 html<br />
I I 17n13nn7
I -<br />
I -<br />
t:)-Tn<br />
Electric and Magnetic Fields (EMF) Radiation<br />
from Power Lines<br />
Electric and magnetic fields (EMF) are invisible lines <strong>of</strong> force<br />
that surround any electrical device that is plugged in and<br />
turned on. EMF are made up <strong>of</strong> waves <strong>of</strong> electric and magnetic<br />
energy moving together (radiating) through space. Electric<br />
fields are produced by electric charges and magnetic fields are<br />
produced by the flow <strong>of</strong> current through wires or electrical<br />
devices.<br />
EMF is commonly associated with power lines. A person<br />
standing directly under a high-voltage transmission line may<br />
feel a mild shock when touching something that conducts<br />
electricity. These sensations are caused by the strong electric<br />
fields from the high-voltage electricity in the lines. They occur<br />
only at close range because the electric fields rapidly become<br />
weaker as the distance from the line increases.<br />
Many people are concerned about potential adverse health<br />
effects. Much <strong>of</strong> the research about power lines and potential<br />
health effects is inconclusive. Despite more than two decades<br />
<strong>of</strong> research to determine whether elevated EMF exposure,<br />
principally to magnetic fields, is related to an increased risk <strong>of</strong><br />
childhood leukemia, there is still no definitive answer. The<br />
general scientific consensus is that, thus far, the evidence<br />
available is weak and is not sufficient to establish a definitive<br />
cause-effect relationship.<br />
-I-Ic -x-__I- *--I-. .<br />
-. ._^I<br />
~a~~~~~ USA Topics<br />
Personal Exposure:<br />
* Airport Security Scanning<br />
* Cosmic Radiation During<br />
Fl ig h ts<br />
* CTScans<br />
* Dental X-ray<br />
@<br />
Diagnostic Nuclear<br />
Medicine<br />
* Electric and Magnetic<br />
Fields (EMF) Radiation<br />
from Power Lines<br />
* Lasers<br />
* Mammography<br />
* Medical X-Rays<br />
* Microwave Ovens<br />
* Radioactive Materials in<br />
Antiques<br />
Radiation in Tobacco<br />
* Radiation Therapy -<br />
External Beam<br />
* Radon in Homes and<br />
Buildings<br />
* Sun Exposure<br />
* UV Tanning Equipment<br />
Wireless Technology<br />
* more topics., .<br />
Pr i Bf tcr Friend I ”rr v* TS i 0 H1<br />
EMF (PDF)<br />
(IPP, 128Kb)<br />
[about pdf format]<br />
- -r -_I-.-<br />
---\<br />
1998, an expert working group, organized by the National Institute <strong>of</strong> Health’s Nationar‘--.,<br />
/ Institute <strong>of</strong> Environmental Health Sciences (NIEHS), assessed the health effects <strong>of</strong> exposure *..,<br />
,‘ to extremely low frequency EMF, the type found in homes near power lines. Based on studies ‘\,<br />
; about the incidence <strong>of</strong> childhood<br />
--<br />
leukemia involving a large number <strong>of</strong> households, NIEHS<br />
-*-..*.._*C”P.---------s. .” ~ -E --.- *.- .r-_ ”_.-___<br />
f found that power line magnetic<br />
--<br />
fields -,-. -..<br />
are a ible cause <strong>of</strong> cancer, 7T-Z Wo-rXTnrg group also<br />
i ~<br />
4<br />
- +<br />
i c ~ ~ ~ ~ FeSuTrS ~ <strong>of</strong> ~ EM F ~ a n ima f I, c i % F, and - mechanistic (process) studies do not<br />
confirm or refute the finding <strong>of</strong> the human studies. The International Agency for Research on<br />
I<br />
__ - *----<br />
Cancer (WHO) reached a similar conclusion.<br />
rr-3-Y-- I _I”_ - - _-- -*.c.w*c<br />
-.a_.. ___-~__ __ I<br />
Who is protecting you<br />
---- ”^. 111 *_.-...-- nX^Z--^ .-a-<br />
--.----)-c-.-L------=<br />
__<br />
# -- ^._..I<br />
-*c<br />
In the U.S., there are no federal standards limiting occupational or residential exposure to<br />
power line EMF.<br />
[I\\<br />
http://www.epa .gov/radtown/power-lines. html
Electric And Magnetic Field (tMk) Kaaiation Trom rower Lines I<br />
K ~ I U uwri uw<br />
... raye L UI L<br />
About seven states set standards for the width <strong>of</strong> right-<strong>of</strong>-ways under high-voltage<br />
transmission lines because <strong>of</strong> potential for electric shock.<br />
What you can do to protect yourself<br />
People concerned about possible health risks from power lines can reduce their exposure by:<br />
* Increasing the distance between you and the source - The greater the distance<br />
between you and the power lines the more you reduce your exposure.<br />
Limiting the time spent around the source - Limit the time you spend near power<br />
lines to reduce your exposure.<br />
Resources<br />
Ca I ifor n i_a_ Electric grid Ma netkc. Fields Pros ra m EF!T@is;c@iw<br />
2006 - California Department <strong>of</strong> Health Services.<br />
This page is about find a rational and fair approach to dealing with the potential risks, if<br />
any, <strong>of</strong> exposure to EMF.<br />
(-<br />
-<br />
E I e ct ro m agn e t ic Fi ell&<br />
2006 - World Health Organization (WHO)<br />
This page provides information about electromagnetic fields, answers to frequent<br />
questions, international research projects, and links to additional resources.<br />
EMF QuestBns a.nd Answers<br />
2002 - U.S. National Institutes <strong>of</strong> Health, National Institute <strong>of</strong> Environmental Health<br />
Sciences<br />
This document provides basic information about electromagnetic fields, health effects<br />
research, existing national and international standards and recommendations, and<br />
answers to frequent questions, and related links.
California Independent<br />
System Operator Corporatior<br />
FOR IMMEDIATE RELEASE<br />
August 1,2006<br />
Contact: Stephanie McCorkle<br />
<strong>Direct</strong>or <strong>of</strong> Communications<br />
1 (888) 51 6-NEWS<br />
i<br />
Conservation, Teamwork and Planning Helped California Grid<br />
Weather the Historic Heat Wave <strong>of</strong> July 2006<br />
Heartfiilt "Thank You" Extended<br />
(Folsom. CA) The California high-voltage power grid is cooling <strong>of</strong>f this week after handling<br />
record peak demand last week when the mercun climbed above 110 degrees for three da!.s in a rom<br />
throughout much <strong>of</strong> interior part <strong>of</strong> the state. The all time record peak demand on Monday. Jd:, 24 11 as<br />
50.270 megawatts-an abnormally high demand at levels not expected until fi1.e years from noq. The<br />
California Independent System Operator (California ISO) reports that electricity demand dropped this<br />
u,eek to n.pical summer conditions. now that temperatures have moderated<br />
The California IS0 extends a formal "thank you" to California for the impressive<br />
conservation levels that helped keep the lights on and wholesale prices low during the historic heat<br />
crisis <strong>of</strong> last week,<br />
"We plan operations for extreme scenarios for a I-in-10 year heat tvave, but this \vas a 1 -in-SO<br />
!.ear heat storm" said California IS0 President and CEO Yakout Mansour. "The public, joining tvith<br />
business, was phenomenal in helping to reduce the strain on the power grid. Consenation pla>.ed a<br />
critical role in maintaining stability <strong>of</strong> the grid and we want consumers, large and small. to understand<br />
the importance <strong>of</strong> their contributions."<br />
-.-". -\<br />
------ ivlansour says the muscle that Governor Arnold Schwarzenegger put into championing 1.<br />
/ \<<br />
conservation helped the state achieve a conservation rate <strong>of</strong> at least 1.500 megawatts, lvhich included<br />
general conservation, state water pump load reduction as well as a 25 percent reduction in potver usage<br />
i<br />
.')<br />
-MORE-<br />
SM/GF/08-01-06<br />
Media Hotline: 888 516-NEWS
“43<br />
HEAT STORM THANKS-2-2-2<br />
The Fles Your Power organization was instrumental in moving the conservation message swiftly<br />
and effectively via television and radio airwaves. Commercial customers that voluntarily reduce<br />
demand on hgh demand days also did their part. Compensated for their curtailments, these customers<br />
shed an estimated 855 megawatts just as California was setting the new sky-high record demand for<br />
electricity on July 24. Additional business customers in the California ISO‘s Snve-A- Watt: Voluntary<br />
Load Reduction Program also made a difference, producing about 50 megabFatts in power savings<br />
lj\-ithout any form <strong>of</strong> compensation.<br />
Despite the 100 degrees temperatures for more than 10 days in a row in the inland regions and<br />
records broken along the coast, the California IS0 transmission system experienced not a single power<br />
outage or blackout during the extraordinary heat.<br />
Mansour noted that cooperation, communication and coordination among all sectors <strong>of</strong> the<br />
energ industry helped the IS0 handle demand. “We planned this year for the worst scenario by holding<br />
estensive summer training that brought the industry together to drill, drill and drill some more. Little<br />
did ive kno\\-, the weather would be worse than the worst case scenario,” said Mansour. ”Fortunately:<br />
Lvorst case weather did not translate into worst case results. Power plant owners responded to the<br />
challenge tvell ahead <strong>of</strong> the season and prepared their fleet to withstand difficult conditions. In fact, u.e<br />
saw the lowest summer outage rate ever last week. Utilities worked closely with us on load forecasting<br />
and resource adequacy requirements and every energy agency in the state stood ready to assist us. We<br />
n-ant to thank them all for the team spirit that was sho~i.”<br />
The California IS0 is a not-for-pr<strong>of</strong>it public benefit corporation charged with managing the flow<br />
<strong>of</strong> electricih along California‘s open-market wholesale power grid. The mission <strong>of</strong> the California IS0 is<br />
to safeguard the reliable delivery <strong>of</strong> electricity, and ensure equal access to 25,000 circuit miles <strong>of</strong><br />
“electron highway.“ As the impartial operator <strong>of</strong> the wholesale power grid in the state, the California<br />
IS0 conducts a small portion <strong>of</strong> the bulk power markets. These markets are used to allocate space on the<br />
transmission lines, maintain operating reserves and match supply with demand in real time.<br />
######<br />
SMICM0801-06<br />
Media Hotline: 888 516-HoFIs
Save Energy Now!<br />
FOR IMMEDIATE RELEASE<br />
Contact Stephanie McCorkle<br />
(SSS) 5lWEWS<br />
Rem a rka b le Conservation Effort<br />
Callforria IS0 asks consumers Lo conserve one more cia? dunng the late<br />
aftcmoon peak demand penod tomonon as thc heat wave concludes on Fnda?<br />
"Regional hot temperatures drol c lug11 energ! deimnd in man! parts <strong>of</strong><br />
the West." according to IS0 Vice President Operations Jim Detmers Toda! 's<br />
strong conservation efforts not oillj helped California avoid an electiical<br />
eniergencj , we were also able to pro\ ide liniited emergenc) assistance to<br />
ncighbonng control areas coping with high demand .'<br />
The Callforria IS0 is esteiiding its declaration <strong>of</strong> a Flev Alert into<br />
Fndq . August 31,2007 and is requesting that Callforrims continue to<br />
conserve energj Energy conservation tips can bc found ar<br />
Set thermostat at<br />
78 degrees or<br />
higher<br />
Cool with fans<br />
Draw the drapes<br />
Turn <strong>of</strong>f<br />
unnecessary lights<br />
and appliances<br />
Use big appliances<br />
in early morning or<br />
late at night<br />
24-Hour Ahead Outlook for Friday, August 31<br />
California 1SO Declares a Fles Meiz Day<br />
High temperatures are forecast to continue throughout the state and region. The<br />
California IS0 is not anticipating an)- shortages: but demand is expected to be<br />
high and Californians are urged to reduce energy usage. particularly during the<br />
afternoon hours.<br />
e Stage 1: possible Stage 2: uillikely Stage 3 unlikelj<br />
Forecast peak demand: 47,950 megawatts around 1:OO pm.<br />
Please monitor the California IS0 tvehsitc at ~ W Y ~ ~ . C ~ ~ for W . updated C ~ I<br />
infomiation about the electricity supply. The Systems Co/7t/irin?7 page pro\*ides<br />
the cunent demand onk Gnd and an bwby-lxmrfow <strong>of</strong> the day's elecirid<br />
qludsb&fd is avadabt in Todq :s olltLw,-.
FLEX<br />
ALERT<br />
Save Energy Now!<br />
‘M<br />
bKis hr mclaim
A Decade <strong>of</strong> Underinvestment<br />
15,000<br />
13,000<br />
rn<br />
T3<br />
a<br />
11,000<br />
.-<br />
E 7,000<br />
5,000<br />
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05<br />
-Source: NERC Reliability Assessment RePorts *230-kV & Above<br />
2
R&D Critical Needs<br />
Dynamic modeling, simulation &<br />
analytical tools<br />
Devices to maximize the capacity <strong>of</strong><br />
the existing grid<br />
The ability to control & direct the flow<br />
<strong>of</strong> electricity<br />
Hybrid DC & materials science<br />
advances to expand the grid<br />
7
PMUs Offer Wide-Area Visibility
R&D Top I00 in the World<br />
SuperVAR
Proposed ORNL Superconductor<br />
vs<br />
Power Flow -+<br />
vf?<br />
e New cable designs, in conjunction with a 5%<br />
Phase Angle Regulator (PAR), allows operators<br />
to change power flows across a network<br />
Power is controllable in both directions<br />
e Lower-cost alternative to DC systems ,,<br />
.. ....<br />
10
From Silicon to Diamonds<br />
Chemical Vapor Deposition <strong>of</strong><br />
Diamond (CVD) devices can<br />
Carry 10 times more current<br />
Conduct heat 4 times better than copper<br />
Carry IO to 30 times the DC voltage<br />
Operate at much higher frequencies<br />
m<br />
. I . than<br />
conventional devices<br />
11
New Designs for Existing ROW<br />
u*.”omn* L.,<br />
51 40 I<br />
- :ii-- 6!<br />
problems<br />
DC allows much higher power<br />
transfers over longer distances<br />
with fewer losses<br />
Hybrid designs have complex<br />
problems - studies are<br />
con t i n u i ng<br />
Built over existing AC lines --very<br />
little new right-<strong>of</strong>-way needed<br />
-- -- -<br />
- .<br />
12
U.S. appetite for electricity is = Currently, the grid<br />
steadily growing<br />
Overburdened<br />
P Driven by the internet and the<br />
Too congested<br />
proliferation <strong>of</strong> electronic devices<br />
Antiquated<br />
P Global demand for electricity is<br />
The result is incre<br />
growing at a multiple <strong>of</strong> the US. rate blackouts<br />
As a result, new generation<br />
investments have been on<br />
the rise since the early 1990s<br />
Meanwhile, our power grid<br />
has been severely neglected<br />
New aeneratina cawcitv<br />
1930 1940 1950 1960 1970 1980 1990 2000<br />
NARUC Conf. 2007
Half as thick as 1G & 2G wire made by other companies<br />
- Total wire thickness is only 0.095 mm; twice the enginee *<br />
Uses patented surround copper stabilizer<br />
- No sharp corners - valuable for high voltage applications<br />
Uses high-strength, non-magnetic, highly-resistive Hastell<br />
- Better mechanical properties & lower h ac losses<br />
0.1 mm 0<br />
NARUC Conf. 2007
' AOOx power density <strong>of</strong> copper 1<br />
lox transfer capacity <strong>of</strong> copper<br />
cables<br />
m<br />
Green Technology<br />
- More efficient<br />
- Significantly reduced<br />
transmission losses<br />
Safer - no fires, explosions<br />
Smaller footprint<br />
Lighter<br />
Security benefits<br />
- Below grade<br />
- Inside buildings<br />
Aesthetics<br />
Enhanced relia<br />
Life cycle econo<br />
B end<strong>of</strong>deca<br />
e x ective replacement for<br />
copper!<br />
NARUC Conf. 2007
v 2006 National Electricity Delivery Forum<br />
Regional Transmission Organizations Part I
Buckeye Power, Inc.<br />
Non-pr<strong>of</strong>it generation cooperative owned by<br />
Ohio’s distribution cooperatives
m<br />
BUCKEY<br />
I - - 4<br />
Demand Response<br />
Ohio's cooperatives have 30+ years <strong>of</strong> experience with direct<br />
load control. We can interrupt 30% <strong>of</strong> our residential<br />
consumers' water heaters.
Demand Response
Transmission Expansion Analysis<br />
Andrew Ott<br />
PJM Vice President, Markets<br />
May 31, 2007
Transmission Expansion Drivers<br />
Expansion ordered by PJM because <strong>of</strong><br />
Reliability Violation<br />
Expansion recommended by PJM based<br />
on economics<br />
Voluntary Investment<br />
- Merchant generation interconnection<br />
- Financial transmission rights<br />
- Other property rights
Annual market simulations<br />
Economic Expansion Analysis<br />
Study Assumptions and Parameters<br />
Base input assumptions regarding generating<br />
unit characteristics, fuel costs, emissions costs,<br />
load forecasts, etc.<br />
Sensitivity analysis:<br />
Metrics:<br />
- High/Low fuel prices - Total Production “cost”<br />
- High/Low - Transmission<br />
demand<br />
Congestion Cost<br />
- High/Low future<br />
- Load Payments<br />
generation<br />
(energy)<br />
- High/Low - Generation Revenue<br />
- Transmission Los
Economic Expansion Metric<br />
1. Economic metrics are not as definitive as<br />
reliability metrics<br />
2. Provide Information to Market<br />
Stake holders<br />
3. Transparent Review <strong>of</strong> Results and<br />
Assumptions<br />
4. Stakeholder Discussion<br />
5. Recommendation to Board<br />
6. Recommendation to FERC
.<br />
System Production Cost Savings<br />
sociated with 502 Junction-Meadowbrook-Loudoun 500 kV Line<br />
600.0<br />
-Base<br />
- -.~.<br />
Assumptions<br />
500.0<br />
. ~<br />
.<br />
. . .. . -~ -. .....-. .- .<br />
-. . . . . -. - . . ... . -<br />
-High<br />
Fuel Cost<br />
- & = Low Fuel Cost<br />
400.0<br />
*High<br />
Load<br />
n<br />
v)<br />
c<br />
0<br />
I 300.0<br />
.-<br />
z<br />
3<br />
200.0<br />
100.0<br />
-.tHigh<br />
Emissions<br />
- r) - LowEmissions<br />
-Base Assumptions -<br />
GI<br />
- + - Base Assumptions -<br />
G2<br />
- Base Assumptions -<br />
G3<br />
0.0<br />
2012 2014 201 6 2018 2020 2022
System Congestion Cost Savings<br />
sociated with 502 Junction-Meadowbrook-Loudoun 500 kV Line<br />
1600.4<br />
1400.C<br />
+Base<br />
-High<br />
-_ - -<br />
Assumptions I<br />
Fuel Cost<br />
I<br />
1200.0<br />
1000.0<br />
/<br />
... -. ..... .<br />
.<br />
. .- ..... - .<br />
- . ... .......<br />
I<br />
L t- - - - - I<br />
~- .~._ --<br />
-+<br />
600.0<br />
c<br />
0LL";L --. c<br />
'Y c<br />
' - - - m I m<br />
c<br />
..... ._-<br />
-w<br />
c<br />
c<br />
............. ..... . ..... -<br />
-<br />
-High<br />
Emissions<br />
= - LowEmissions<br />
400.0<br />
-+-Base<br />
GI<br />
Assumptions<br />
200.0<br />
+ Base Assumptions<br />
G3<br />
0.0 - I<br />
I<br />
I<br />
I<br />
i<br />
Q1 Carbon Wder
PRODUCTION COST METRIC<br />
8% Discount Rate 10% Discount Rate 12O/0 Qscount Rate<br />
myear NPV Benefit 2,866.9 2,269.5 1,842.3<br />
30-year NPV Cost (2,251.6) /I,885.4) /I,611.O)<br />
myear Net Benefit 615.4 384 1 231.3<br />
2C-year NPV Benefit 2,210.7 1,855.0 1,577.6<br />
20-year NPV Cost (1,963.6) 11,702.7) (1,493.9<br />
Byear Net Benefit 247.1 152.3 83.7<br />
IC-year NPV Benefit 1,215.6 1,101.2 1,002.2<br />
IO-year NW Cost 11,342.01 JI ,228.9) (1,130.0)<br />
IC-year Net Eknefit (126 4) (127 7> (127.8)<br />
Benefit NPV vs Cost NPV<br />
(Energy<br />
_ _<br />
Market Benefits Only)<br />
CONGESTION COST METRlC<br />
8% ascount Rate IOYO Discount Rate 12% Discount Rate<br />
13,386.2 10,732.9 8,818.9<br />
12,251.6) /I,sSs.4) (1,611.0)<br />
11,1M6 8,847.5 7,2078<br />
10,622.3 8,986.0 7,702.7<br />
JlS3.6) 11,702.7) 11 ,493.9)<br />
8,658.7 7,283.3 6,208.8<br />
6,188.8 5,623.8 5,133.3<br />
11,342.0) il,Z8.9) /1,130.0)<br />
4,8468 4,394.9 4,003 3<br />
LOAD PAYMENT METRIC<br />
8% Discount Rate 10% Discount Rate 12% Discount Rate<br />
30-year NPV Benefit 19,306.0 14,858.8 11,731.3<br />
30-year NPV Cost (2,251.6) /I,885.4) (1,611.0)<br />
30-year Net Benefit 17.054.5 12.9i3.4 10,1203<br />
20-year NPV Benefit 13,938.8 11,471.6 9,570.3<br />
20-year NPV Cost (1,963.6) /'I, 702.7) (1,493.9)<br />
Byear Net Benefit 11,975 1 9 768 9 8,0764<br />
1 C-year NPV Benefit 6,562.5 5,896.2 5,323.5<br />
10-year NPV Cost /1,342.0) (1,228.9) {I, 130.0)<br />
1 &year Ne1 Benefit 5,220.5 4.c37.3 4,193.4<br />
GUUERAllON REVENUE METRIC<br />
8% Discount Rate 10% Discount Rate 12% Discount Rate<br />
5,919.8 4,125.8 2,912.4<br />
12,251.6) 11,885.4) /1,611,0)<br />
3,6682 2,2404 1,3014<br />
3,316.4 2,485.6 1,867.7<br />
/I,963.6) 11,702.7) 11,493.9)<br />
1,352.8 782.9 313. a<br />
373.6 272.4 190.1<br />
11,342.0) 11,228.9) I1,130.0)<br />
(968.4) (9% 5) (9399)
Potential Beneficiaries<br />
Relative benefit depends on location<br />
Load - No Benefit<br />
Constrained Transmission<br />
I<br />
Corridor<br />
Generation -<br />
No Benefit<br />
Generation - Benefit<br />
Transmission<br />
Upgrade<br />
Load - Benefit
" 2 6 "<br />
& % 2<br />
Large Scale Example<br />
Market simulation made using GE MAPS model<br />
Simulation <strong>of</strong> hourly security-constrained generation<br />
dispatch over an annual period<br />
Simulations made with and without an actual<br />
Transmission upgrade<br />
Cost <strong>of</strong> Transmission upgrade allocated based on<br />
zonal power distribution factor for load beneficiaries<br />
Change in Load Payments compared to cost<br />
allocation<br />
- ... .
-<br />
Change in Zonal Load Payment due to R EP Upgrade<br />
Simulation Results<br />
+$<br />
increase<br />
in i- I<br />
I<br />
0<br />
1<br />
- .<br />
-. .<br />
.... - . ~ ~. - - .~<br />
.... - .... - ... _.- -<br />
- - -- ...........<br />
. . . .. ........ ... .. ......... ..-- -- ~<br />
~- ~<br />
.- - . _- -..<br />
- --- - -<br />
--1-<br />
ne9 Zone Zone Zone Zone Zone Zone Zone I<br />
- _ _ 10<br />
11 12 13 14 15 16<br />
..... -- - - - ~ . .<br />
- ...... ................<br />
..............................<br />
I<br />
.- . - - - . - .. - - - - .- - - ..<br />
. .-<br />
-$<br />
decrease<br />
in<br />
payment<br />
t<br />
J<br />
..... . - .<br />
. . . . . . . . . . . . . . . . . . . . . .<br />
..........<br />
-.<br />
.-<br />
....... -I
......................<br />
~ -~<br />
in %<br />
50.0<br />
Simulation Results (cont.)<br />
Zonal Share <strong>of</strong> Total Savings (%)<br />
vs -<br />
Zonal Share -_ ~-- <strong>of</strong> I<br />
x. ."<br />
-<br />
45.0<br />
. - ...........<br />
~<br />
... __<br />
40.0<br />
. . . . .... .........<br />
35.0<br />
30.0<br />
25.0<br />
- - . . _ - - - -<br />
__<br />
_<br />
_.<br />
Note:<br />
-(I) Zone 12 showed an increase in energy payment but<br />
was assigned a small share <strong>of</strong> upgrade cost<br />
(2) five other zones showed an increase in energy<br />
payment but were not assigned share <strong>of</strong> upgrade cost<br />
20.0<br />
- .. - __ -<br />
-- ___<br />
15.0<br />
-_ .-<br />
10.0<br />
- -_ -<br />
5.0<br />
. ...... ....... - ................ -<br />
0.0<br />
Zone 1 Zone2 Zone3 Zone4 Zone5 Zone6 Zone7 Zone8 Zone9 Zone 10 Zone 12<br />
8% <strong>of</strong> Total Energy Payment Decrease .%<strong>of</strong><br />
Upgrade Cost]
0 bse rvations<br />
Difficult to justify large scale upgrades based<br />
solely on economic benefits<br />
Economic metric will evolve as validation<br />
andlor reason to advance reliability upgrades<br />
PJM economic expansion metric likely<br />
reduces merchant incentives<br />
Incremental Rights created by upgrades<br />
should be allocated to customers or zones in<br />
proportion to cost allocation<br />
1<br />
I
Demand Response:<br />
The Other Side <strong>of</strong> the Market<br />
2006 N ional Ele ricity Delivery Forum<br />
gton, DC<br />
February 16, 2006<br />
Richard E. Morgan<br />
Commissioner<br />
Public Service Commission<br />
<strong>of</strong> the District <strong>of</strong> Columbia
A few thoughts on<br />
demand response<br />
r<br />
i<br />
55<br />
50<br />
45<br />
0 DR is an essential<br />
Qnandry<br />
component <strong>of</strong> a<br />
competitive electricity market<br />
0 A challenge to traditional utilitv<br />
regulation - both retail and wholesale<br />
0 A little DR goes a long way<br />
0 An idea whose time has come!<br />
Q 10 20 30 40 50 60 70 80 90
Potential benefits <strong>of</strong> demand<br />
response<br />
Operational savings<br />
U Reduced generat<br />
market<br />
U Lower arket prices<br />
Reduc price volatility<br />
Improved grid reliability<br />
Improved customer options<br />
0 Provision <strong>of</strong> ancillary services<br />
Positive environmental benefits
Barriers to<br />
0 Traditional retail rate<br />
designs that blend<br />
costs & dampen price signa<br />
0 “Fractured value chain” in unbundled<br />
competitive markets
September 10,2007<br />
Incentives Prove Powerful<br />
As summer enters its final phase, programs that push for, and<br />
increasingly reward, reduced electricity use by companies and other<br />
users are showing results.<br />
Utilities and grid operators are reporting a surge in participation in<br />
programs that encourage customers to turn <strong>of</strong>f inessential<br />
equipment, shift schedules or take other steps toward greater energy<br />
efficiency. That is especially the case in states that have made<br />
conservation a central pillar <strong>of</strong> energy policies aimed at controlling<br />
greenhouse-gas emissions and restraining energy costs. The success<br />
could result in an expansion <strong>of</strong> such programs in a time <strong>of</strong><br />
tightening electricity suppl~es.inSQme.-pl.a~~~, though an especially<br />
. _-CY.<br />
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...--... I. VY, ,““Y I uvvcIllul - V V ~ d . L U I I I Page 2 <strong>of</strong> 3<br />
or utilities and help them automatically go into energy-saver mode. EnerNOC Inc. <strong>of</strong> Boston,<br />
which went public in May, had 1,852 locations signed as <strong>of</strong> June 30, more than triple the number<br />
the prior year, giving EnerNOC 756 megawatts <strong>of</strong> customer load under management, up from 234<br />
megawatts.<br />
One participant is Stop & Shop Supermarket Co., a unit <strong>of</strong> Netherlands supermarket giant Ahold<br />
NV. The chain is able to cut energy use by 40 megawatts when asked, an amount <strong>of</strong> power equal<br />
to the output <strong>of</strong> what is known as a peaker plant ”. that otherwise might be fired up to meet high<br />
demand, through various measures.<br />
. --<br />
/-<br />
*I At Exelon Corp.5 Commonwealth Edison Co., Chicago, 2,173 business locations have signed up<br />
f<br />
for utility programs this year in which they, collectively, are paid to cut use by 647 megawatts.<br />
That compares with 22 sites totaling 25 megawatts last year. Customers decide when to cut energy<br />
’<br />
use. not utility or grid <strong>of</strong>ficials, and it is <strong>of</strong>ten based on the market price <strong>of</strong> power they will<br />
L e c e . */+c<br />
~-~---.--“~,..~*.-,~.-~-nl_-g-<br />
_-<br />
___c__~L_ II_ nrnl<br />
.)_ *,.“.-.-,e-<br />
I- ---e@--<br />
Some firms shift production to times when power costs are lower or ratchet back lighting and air<br />
conditioning.<br />
“Customers are becoming much more energy conscious,’’ says Sharon Hillman, vice president <strong>of</strong><br />
marketing and environmental programs at ComEd that soon will have one <strong>of</strong> the largest “demand<br />
response” programs outside <strong>of</strong> California.<br />
In the Midwest and mid-Atlantic states, a slew <strong>of</strong> programs has attracted the participation <strong>of</strong><br />
scores <strong>of</strong> firms with the promise <strong>of</strong> rewards. Big energy users cut electricity usage by nearly 2,000<br />
megawatts on Aug. 8, a day when supplies were stretched thin in the multistate area where power<br />
flows are managed by PJM Interconnection LLC.<br />
The conservation effect in California looks like the strongest since 200 1, when the state had<br />
rolling blackouts because <strong>of</strong> power shortages and illegal market activity. In the aftermath <strong>of</strong> that<br />
crisis, the state encouraged construction <strong>of</strong> more gas-fired power plants and renewable energy<br />
resources. That effort has been superceded by a policy that seeks to <strong>of</strong>fset market growth by<br />
giving consumers tools to cut use, in some cases by replacing inefficient older equipment,<br />
installing smart controllers or changing patterns <strong>of</strong> use.<br />
The ability to change usage, typically away from high-priced or grid-stressed periods, is called<br />
“demand response,” and it is especially important because California is introducing a new method<br />
for pricing wholesale electricity in April 2008, capping an eight-year market-overhaul effort. The<br />
Federal Energy Regulatory Commission, which oversees wholesale electricity markets, has urged<br />
state <strong>of</strong>ficials to help users gain influence in the market, not just as consumers but as those who<br />
can put <strong>of</strong>f or eliminate consumption.<br />
Grid <strong>of</strong>ficials are finding that it pays to have a variety <strong>of</strong> programs in the field. The California<br />
Independent System Operator, which runs most transmission lines in the state and reports to<br />
FERC, has arrangements in place that give it 2,300 megawatts worth <strong>of</strong> customer demand it can<br />
call upon in an emergency. But it wants to develop a capability to tap an even larger universe <strong>of</strong><br />
companies and not just when there are emergencies but as a counterweight to high prices.<br />
The Cal-IS0 has set up a Demand Response Lab to study the best technologies available. It would<br />
like to have a vast cadre <strong>of</strong> energy users able to cut consumption as easily and quickly as
006?<br />
Energy demand continues to grow<br />
0 Higher energy prices than seen for<br />
decades<br />
0 High energy expenditures<br />
0 Reliability issues<br />
0 Capital expenses for generation,<br />
transmission and congestion relief<br />
Investment risk associated with<br />
climate change<br />
0 Security concerns<br />
I) Energy Efficiency is a costcompetitive<br />
solution<br />
More than 10 years <strong>of</strong> experience<br />
Stable price<br />
Have not reached diminishing returns<br />
Total Energy Consumption by<br />
End-Use Sector 1949-2004<br />
m 40<br />
25<br />
/ Commercial<br />
1949 1959 1969 1979 1989 1999<br />
Year<br />
Growth in U.S. Electricity and Natural<br />
Gas Consumption, 1949-2004<br />
-<br />
9 20 Natural Gas<br />
t<br />
-<br />
U) 15-<br />
e 10-<br />
B<br />
E lectr ioity<br />
1949 1959 1969 1979 1989 1999<br />
Year<br />
Sources: EIA Annual Energy Review 2004<br />
I I<br />
4<br />
E<br />
(P<br />
2
Economic Benefits for Energy Efficiency<br />
0 Lower cost compared to new generation and transmission<br />
e Downward pressure on natural gas prices and volatility<br />
Lower wholesale electricity prices<br />
Improved local economy and service to low income and seniors<br />
Utility System Benefits<br />
Near-term fix with persistent, long-term benefits<br />
Improved security <strong>of</strong> electricity and gas systems<br />
Improved resilience due to lower reliance on fossil fuels<br />
Lower baseload and peak demand<br />
Reduce need for “hard to site” G&T assets<br />
a Targeted, modular, manageable<br />
0 Environmental Benefits<br />
Lower greenhouse gas emissions and criteria pollutants<br />
Lower water use<br />
0 Risk Management Benefits<br />
Diversifies utility resource portfolios<br />
3
ector Contributes a Third <strong>of</strong><br />
missions<br />
0 Energy efficiency provides substantial environmental<br />
benefits while creating economic benefits for customers.<br />
US. Greenhouse Gas Emissions by Sector in 2002<br />
(Total = 6,888 MMTCOZE)<br />
Residential<br />
5.6% 1 Pgriculture<br />
8%<br />
U.S. Greenhouse Gas Emissions by Sector<br />
with Electricity-Related Emissions Distributed<br />
in 2002 (Total = 6,888 MMTC02E)<br />
Trans portation<br />
27.0%<br />
Sout-r- U.S. Greenhouse Gas Emissions and Sinks: I v ~ - 2002, Tables 2-6 and 2-8<br />
27%<br />
4
Established energy efficiency as reliable, low-cost resource<br />
* Real programs with real results<br />
0 Programs delivering efficiency at 2 to 4 cents / kWh<br />
Established large potential to meet new demand<br />
Regionally, nationally<br />
* Real programs<br />
Can help control load growth by 50% or more<br />
Established measurement and verification procedures<br />
Savings are real, persistent<br />
0 Integrated into resource planning<br />
0 Established model energy efficiency delivery programs for key<br />
customer classes<br />
0 Residential -- commercial - industrial<br />
0 Low income<br />
Gas / electric<br />
New I mature<br />
5
~~<br />
iency is Cost Competitive<br />
loo PI--<br />
80 - ~<br />
i Y 5<br />
60<br />
Capital Costs<br />
Variable Costs (incl Fuel)<br />
----<br />
I Fixed Costs<br />
1ncr.Transmission Costs<br />
40<br />
20<br />
0<br />
1<br />
Natural Gas<br />
Sources: EIA 2004 “CEEE 2004<br />
6
-<br />
i'ciency Can Help Control<br />
rowth<br />
U.S. Electricity Consumption Projections<br />
c 5,m<br />
X<br />
c 5,000<br />
0<br />
E<br />
- AEO 2005 Reference Case<br />
-<br />
ill Half Growth Scenario<br />
5 Labs Study<br />
111 ACEEE median achievable<br />
--3 szI?W-7IPu<br />
NV Study<br />
NEEP Study<br />
[avg. annual growth l.8Yo]<br />
(1 7% reduction by 2025) [avg. annual growth 0.9O/0]<br />
(18% reduction by 2020) [avg. annual growth 0.6O/0]<br />
(24% reduction in 20 years) [avg. annual growth 0.5?40]<br />
(22% reduction by 2020) [avg. annual growth 0.3Y0]<br />
(17% reduction by 2013) [avg. annual growth ~ 0.1 YO]<br />
Sources: EIA AEO 2005, ACEEE, SWEEP, NEEP<br />
7
-<br />
ciency Funding Has<br />
er Last Decade<br />
A nnual Spendin Utility Sector Energy<br />
Efficiency rams 1992-2002<br />
005 dollars)<br />
- ~<br />
__-----__ _-_ __lll__II-___<br />
v)<br />
5<br />
= $2.0<br />
0<br />
U<br />
v)<br />
R<br />
-<br />
g $1.5<br />
L<br />
v)<br />
.- 0"<br />
-<br />
.-<br />
E $1.0<br />
.c)<br />
S<br />
4d E"<br />
- 2<br />
$0.5<br />
$0.0<br />
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003<br />
Year<br />
Sourco: Data from ACEEE 2005 Scorecard adjusted for inflation using<br />
US. Department <strong>of</strong> Labor Bureau <strong>of</strong> Labor Statistics lnflatior e Tlculator<br />
8
Energy Efficiency<br />
Z2r<br />
* Utility financial incentives<br />
Throughput charges create direct disincentives for utilities to sell less<br />
e Utilities do not earn the same rate <strong>of</strong> return on energy efficiency like<br />
generation, transmission, and distribution<br />
0 Utilities may not be ensured cost recovery or shareholder incentives<br />
Customer rate structures provide delayed reaction by customers<br />
Company policies<br />
Employees rewarded based on capital investment<br />
Resource planning<br />
Planning does not incorporate demand-side resources<br />
0 Misperception that energy is not a reliable resource<br />
Full value <strong>of</strong> efficiency not considered, including reliability, environmental,<br />
risk management and economic benefits<br />
0 Lack <strong>of</strong> awareness on program best practices<br />
9
Issues<br />
0 Traditional end-user barriers<br />
Lack <strong>of</strong> information<br />
Competing vendor claims<br />
Split incentives<br />
State decision-makers<br />
Lack <strong>of</strong> good documentation on<br />
clean energy policies<br />
Little integration <strong>of</strong> air / energy<br />
issues<br />
Utility barriers<br />
Existing electricity regulations /<br />
market rules incentivize supply-side<br />
resources<br />
0 View that ener y efficiency is not a<br />
reliable, cost e 9 fective resource<br />
Concern that energy efficiency will<br />
raise rates<br />
Lack <strong>of</strong> good documentation and<br />
education on demand-side programs<br />
0<br />
0<br />
0<br />
0<br />
EPA Efforts<br />
Engage interested PUCs in<br />
innovative policies<br />
EPA - NARUC Projects<br />
AR, CT, DC, HI, MN,<br />
NJ, NM<br />
Engage utility, PUC, and<br />
related stakeholder leaders<br />
under the Energy Efficiency<br />
Action Plan
Y STAR<br />
0 ENERGY STAR is a cost-effective platform<br />
Helps lower program administration costs<br />
Reduces start-up time<br />
Provide valuable lessons learned 1<br />
Provide access to a network <strong>of</strong> partners<br />
I<br />
0 Partnering with Key Market Players I<br />
Major Manufacturers and retailers<br />
Utilities / system benefits charge administrators<br />
States -- 30 partners<br />
0 Broad national platform for EE<br />
Residential - Commercial<br />
- products - 40+ products<br />
- existing home retr<strong>of</strong>it existing buildings<br />
- new homes new buildings<br />
National recognition -- 60% <strong>of</strong> public<br />
h ~ tp://w~~. en erg ys fa r. go v<br />
11
0 Goal<br />
cy Action Plan<br />
0<br />
To create a sustainable, aggressive national commitment to energy<br />
efficiency through gas and electric utilities, utility regulators, and partner<br />
organizations.<br />
Leadership Group<br />
Utilities, regulators, energy directors, consumer advocates, NGO’s,<br />
industrials, and others<br />
OOEIEPA facilitated<br />
0 Expected Outcomes<br />
Documenting business practices / solutions for overcoming barriers limiting<br />
utility investment in energy efficiency<br />
- Removing disincentives / providing incentives<br />
- lntegrating EE into utility planning<br />
- Examples <strong>of</strong> EE programs that work<br />
- Tactics that help EE succeed<br />
Communication strategy for spreading practices / solutions<br />
A network <strong>of</strong> experts and resource materials on energy efficiency practices<br />
http://www. epa. gov/cleanp wrgy/eeactionplan. htm<br />
12