Transcript Slide 1

RGGI WORKSHOP
June 15, 2006
Gary Ferenz
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Topics Presented
Overview of Conectiv Energy Supply, Inc. (CESI) business
CESI Renewable Energy Portfolio
Reporting Renewable Energy - Use of PJM-EIS GATS
Reporting Fuel Mix - Disclosure Label
Reporting Emissions
PJM Basics – Objective, Gen Dispatch, Power Flow
Commercial Perspective on RGGI “Leakage”
Bethlehem – 1,092 MW’s
Contact Information
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Conectiv Energy (CESI) - Overview
Unregulated subsidiary of PEPCO Holdings, Inc.
located in Newark, DE
Serve wholesale load and control 3,600 MW of
generation primarily in eastern PJM
Generation fleet fueled by natural gas, oil, coal, and
landfill gas
Involved in a variety of transactions – Load
Auctions, Municipal Supply, Generation Tolls, Fuel
Procurement, Hedging, Swaps, etc.
Flow power into and out of PJM
Bethlehem – 1,092 MW’s
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CESI Renewable Portfolio
 Renewable Energy obligations from serving load in
NJ, MD, and DE under State Renewable Portfolio
Standards (RPS)
 Trade Renewable Energy Credits (RECs) short and
long-term
 Produce RECs qualified in several states
 Active in Renewable regulatory process and PJM
Generation Attribute Tracking System (GATS)
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DE RPS Highlights
•
Comparable to surrounding states RPS except one class/tier
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Effective June 1, 2007 (banking starts 6/1/06)
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Planning Year requirements of 1% - 10% (2020) of retail load supplied
•
Maximum of 1% from pre-1998 generation facilities
•
Solar, wind, ocean tidal/thermal, fuel cells, small hydro, sustainable
biomass, anaerobic digestion and landfill gas
•
3-Year shelf life for RECs
•
Alternate Compliance Payments (ACP) of $25 - $45
•
Co-firing allowed – proportional basis
•
Behind-the-meter must be located in DE
•
Requires PJM GATS for compliance reporting
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CURRENT USE OF PJM GATS
 Records creation, sale and retirement of RECs
(except NJ Solar) and load served by state
 For Renewable generation, there is a monthly
allocation of Fuel Mix based on proportional
MMBtu utilization or different fuels
 Periodic assignment of load responsibility to
state accounts fro RPS Obligation calculation
 Currently do not use GATS for Emissions
Reporting or Disclosure Label
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Disclosure Label
 Provides Fuel Mix of a company’s total MWhs
of load served
 Provided to LSE Customers on a state-by state
basis
 Reporting Requirements usually handled by
Electric Delivery Company (EDC/LSE)
 Utilizes aggregated data from Suppliers usually
based on PJM averages with Renewable
additions
 Currently GATS not required for reporting
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Disclosure Label Example
BGS Supplier
Contact
Email
Conectiv Energy Services, Inc.
Gary Ferenz
[email protected]
Emission Table
Kilowatt hours transmitted to Atlantic City
Electric: January 1, 2005 – December 31,
2005
Annual NOx Emissions Rate (lbs/MWh)
Annual SO2 Emissions Rate (lbs/MWh)
Annual CO2 Emissions Rate (lbs/MWh)
Phone
Fax
(302) 451-5225
(302) 451-5266
Jan - Dec 2005
9,999,999,999
(Jan05 – Dec 05)
July 04 – June 05
999,999,999
June 04 – Dec 04
9,999,999
June 04
99,999
2003 PJM
999,999,999
2.60
8.49
1,293
2.9
8.5
1195
2.9
8.5
1,195
3.0
11.1
1,268
3.0
11.1
1,268
July 04 – June 05
96.7%
50.2%
6.9%
1.4%
33.2%
37.2%
1.5%
1.1%
(minimum of 0.75%)
0.11%
0.7%
June – Dec 04
96.7%
50.2%
6.9%
1.4%
37.2%
1.1%
June 04
96.7%
53.5%
8.4%
32.9%
2.0%
32.9%
2.0%
0.7%
0.8%
0.2%
Fuel Source
Non-Renewable Sources
Coal
Gas
Hydroelectric (large)
Nuclear
Oil
CLASS I RENEWABLE ENERGY:
Captured Methane Gas
Fuel Cells
Geothermal
Hydroelectric (small)
Solar
Solid Waste
Wind
Wood or other Biomass
CLASS II RENEWABLE ENERGY:
Captured Methane Gas
Fuel Cells
Geothermal
Hydroelectric (small)
Solar
Solid Waste
Wind
Wood or other Biomass
TOTAL
Jan - Dec 2005
95.8%
55.8%
5.3%
0.91%
0.07%
0.11%
(minimum of 2.5%)
3.1%
2003 PJM
53.5%
8.4%
2.1%
0.1%
0.1%
0.1%
0.1%
2.5%
2.5%
2.5%
0.8%
100%
100%
100%
100.0%
Signature ____________________________
Title
____________________________
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CESI Emissions Reporting
 Data collected by Continuous Emission Monitors
(CEMS) and internal systems
 Currently report NOx, SO2 and state emissions
factors
 Electronic Data Reports (EDR) to EPA and states
on a quarterly, seasonal, and annual basis
 Delay between reporting and release of data to
public and for use by GATS
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Emissions Reporting
 GATS currently not used for ER
 GATS would be a Duplication of current
reporting efforts
 GATS has Outdated default emissions rates
 GATS Requires monthly manual input to match
EDR
 Potential timing and adjustment issues
 GATS could be used in the future IF REQUIRED
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PJM Power Pool Operations
 Objective is Reliability at the Lowest Cost
 Economic Dispatch Model – Lowest cost available
generation is called on first to serve load
 Transmission system supports transport of power from
where it is generated to where it is needed to serve load
 Locational Marginal Pricing (LMP) – provides intended
incentive to flow cheapest power to load
 Significant investments in additional transmission
pathways and coal generation are planned which will flow
more cheap coal power from low-cost west to east
 Low-cost coal generation located in non-RGGI states, load
located in RGGI states
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Mid-Atlantic Power Pathway
Congestion Map Illustrating Areas of Highest Congestion and Price
Low Cost
Non-RGGI
Western
Generation
Note: Map information is based on PJM data for a single day at peak demand
Eastern
RGGI Load
in NJ, DE &
MD
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Future Transmission Investments
PHI has proposed a major transmission project to PJM:
• 230 mile, 500 kV line originating in northern Virginia, crossing Maryland,
traveling up the Delmarva Peninsula and into southern New Jersey
• Significant 230 kV lines that support Maryland, Delaware and New Jersey
American Electric Power (AEP) and Allegheny Power (AP) are individually
proposing major high-voltage transmission projects by 2014; PHI has
proposed a separate and complementary power pathway
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Resulting Issues With RGGI
PJM design and significant pending investments are powerful
forces which encourage transport of power (mostly coal) from
the non-RGGI West to Eastern RGGI states
May result in less RGGI-state generation but more non-RGGI
generation as PJM dispatches lowest-cost source – “leakage”
Critical Issue: Cost and availability of CO2 allowances/credits - If
significant, raises costs of generators located in RGGI states
Diminished financial returns of RGGI-state generation may
discourage investment and/or bring faster retirement of RGGI
generation – Reliability Issue for PJM
Additional Multi-pollutant state initiatives will add incremental
costs to RGGI state generators
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Suggested Considerations
Delay until all states in PJM join so there is no issue
with “leakage” or economic harm to RGGI-state
generators
CO2 Offsets should be geographically unrestricted to
bring about the most economical solution to lower
CO2 and minimize any conflict with the PJM power
pool system
Further consideration and investigation of using a
load serving requirement similar to RPS
methodology whereby a load-serving entity would
be required to have a limit on the CO2/MWh of
power used to serve load in a RGGI state
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Contact Information
Gary Ferenz
Conectiv Energy Supply, Inc.
[email protected]
302-451-5225
Additional Contact:
Gary Helm
302-451-5077
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