- Oil & Gas Journal: House subpanel hears testimonies on gas pipeline permitting bill
POLITICO Morning Energy for 5/15/2015
By DARIUS DIXON, with help from Alex Guillén
JUDGMENT DAY, MARYLAND STYLE: After much anticipation — and many postponements — the Maryland Public Service Commission seems ready to announce its decision today on whether it’ll green-light a potential $6.8 billion merger of Exelon Corp. and Pepco Holdings Inc. FERC and the states of Virginia, Delaware, and New Jersey have either signed off on the proposal or signaled their intention to do so. But D.C. and Maryland were always going to be the toughest climbs since their commissions are required to ensure that such deals be in the “public interest” rather than just merely inoffensive to all parties. Maryland regulators have already pushed back the decision date five times (before the most recent delay, the PSC was expected to issue a decision last Friday), and without Maryland, the whole deal could come crashing down.
What you need to know about the debate in Maryland:
— The state’s attorney general, Brian Frosh, could hardly be more against the merger proposal and seems to take every opportunity available to cut it down like he’s in a samurai flick. In March, uninvited to a discussion about the merger on WAMU’s The Kojo Nnamdi Show, he called in to make his case just a few hours after he’d testified a hearing on Capitol Hill on an unrelated issue. In a brief to the commission, Frosh wrote (http://bit.ly/1bTlZ5l): “This merger will harm Maryland customers, offers no tangible, incremental benefits of sufficiently meaningful value, and is not in the public interest.” The staff of the Maryland Public Service Commission has floated 19 revisions to the deal (http://bit.ly/1BLx8Qe). The state’s Office of People’s Counsel also ripped the deal as not meeting Maryland’s public interest requirements, calling the benefits “either illusory (particularly in the case of reliability benefits) or woefully deficient, and in any case, cannot mitigate or offset the harms that have been identified.” http://politico.pro/1Bbkybb). There’s a mixture of concern that Exelon would undermine competition, and resist distributed power generation, like rooftop solar, since, unlike Pepco, it has large baseload power plants to operate — including economically struggling nuclear plants in the Midwest.
— Since then, Exelon has offered more money, reliability assurances, microgrid projects and others incentives to get the state’s blessing. This has worked … somewhat. Exelon and Pepco reached a settlement with several groups, including two Maryland counties — Montgomery and Prince George’s — that represent the vast majority of the customers that would be directly affected by the merger. But when it came to the AG, the People’s Counsel, and commission staff: No dice. Commission staff again withheld their recommendation last month “even though the merger is now acceptable to particular parties.” As of two weeks ago, Frosh and the Maryland Energy Administration called on the PSC to reject the merger. Their three-sentence conclusion argued that the Exelon and Pepco “submitted a fatally defective merger application.”
How things could shake out: A flat-out no is possible, which could make the entire merger plan collapse. But the Maryland PSC could also give a conditional approval that would require some or all of the staff recommendations to be OK’d by the utilities in order to get the final go-ahead. Obviously, an unqualified yes from the PSC would be a big win for Exelon but…
…THEN D.C. BECOMES THE MERGER THUNDERDOME: Like the Maryland PSC, the D.C. Public Service Commission has a public interest statute, and the merger is no less dramatic than it is in Maryland. Three members of the D.C. City Council announced their opposition to “any deal.” Councilwoman Mary Cheh, who chairs the body’s transportation and environment committee, and two colleagues, wrote that regulators need to consider “non-monetary benefits,” such as Pepco’s divestment of power plants in 1999. More than half of the city’s advisory neighborhood commissioners are also opposed to the merger. A decision is expected from D.C. regulators later this month. And anti-merger folks seem ready for a fight. “We expect that if the Maryland PSC does approve the merger it will carry additional requirements that may well scuttle any consummation of the deal,” Larry Martin of the GRID 2.0 Working Group, “Even if Maryland approves the deal, the DC PSC will be hard-pressed to follow suit.”
In case you’re wondering about bias (especially if Pepco or Exelon folks are reading): Your host doesn’t have the privilege of calling Pepco his personal power provider. I live in Alexandria.
HAPPY FRIDAY: I’m Darius Dixon, and I remain surprised each time I see a story about video games in The New Yorker. So, I’m excited to read Raffi Khatchadourian’s story about No Man’s Sky, a game with “18,446,744,073,709,551,616 unique planets”: http://nyr.kr/1H6bfcD Khatchadourian also wrote the best story I’ve ever read about ITER: http://nyr.kr/1Hk886l. Send your energy news, tips and commentary to ddixon@politico.com, and follow us on Twitter @dariusss, @Morning_Energy and @POLITICOPro.
** A message from the Nuclear Energy Institute: It’s time to create a sustainable, integrated program for the storage and disposal of used nuclear fuel. The nuclear energy industry is committed to working with Congress, the administration, and state leaders on an integrated management solution for used nuclear fuel. Learn more: nei.org **
OBAMA DEFENDS SHELL’S ARCTIC DRILLING BID: President Barack Obama yesterday defended the decision to let Shell drill offshore in the Arctic, and addressed criticism from environmentalists that the move undercuts his fight against climate change. “Shell had to go back to the drawing board,” he said at a press conference, after its last foray off the Alaskan coast suffered a series of crippling failures in 2012. The president praised his Interior Department’s response to that stumble, saying the company had to wait a lengthy period “until they could provide us with the kind of assurances that we have not seen before.” He noted that his administration learned important lessons from the BP oil spill: “I think it’s fair to say that I know a little something about the risks of offshore drilling, given what happened in the Gulf very early in my presidency. So no one’s more mindful about the risks involved and the dangers.” Obama also rebuffed charges that giving Shell a conditional go-ahead conflicted with global warming agenda. “I believe that we are going to have to transition off fossil fuels as a planet in order to prevent climate change,” he said. But, he added, “in the meantime, we are going to be using fossil fuels, and when it can be done safely and appropriately, U.S. production of oil and natural gas is important.”
SPEAKING OF SHELL AND THE ARCTIC: From The Associated Press: “An oil rig outfitted for Royal Dutch Shell’s exploration in the remote Arctic Ocean parked in Seattle’s harbor Thursday, marking a pivotal moment for an environmental movement increasingly mobilized around climate change. Activists paddling out in kayaks to meet the rig off Seattle’s picturesque waterfront said it’s their moment to stand against opening a new frontier of fossil fuel exploration… Shell still needs other permits from state and federal agencies, including one to actually drill offshore in the Arctic and another to dispose of wastewater. But it’s moving ahead meanwhile, using the Port of Seattle to load drilling rigs and a fleet of support vessels with supplies and personnel before spending the brief Arctic summer in the Chukchi Sea.” http://yhoo.it/1IBFzSi
On a related note: Several enviros have been trying to block the Port of Seattle from leasing space to Shell for the company’s Arctic drilling fleet. That complaint (http://bit.ly/17Mwh5q), which was filed in early March, is still migrating through court.
DID I HEAR YUCCA MOUNTAIN? Rep. John Shimkus’ House Energy and Commerce subcommittee is convening today at 9 a.m. to discuss the “current status of nuclear waste management policy.” Well, what nuclear waste management policy is that? The Illinois Republican has lined up a witness table populated by Andrew Fitz from the attorney general’s office of Washington state, NRC Yucca Mountain Directorate chief Josephine Piccone, as well as representatives from the Michigan Public Service Commission, the Natural Resources Defense Council, Southern Co. and the Decommissioning Plant Coalition.
CAN’T WE ALL JUST QER? Energy Secretary Ernest Moniz will testify next week before a House Energy and Commerce subcommittee next week, the panel announced late yesterday. Moniz was asked to discuss the Obama administration’s Quadrennial Energy Review, a sizable document that laid out several recommendations aimed at addressing aging natural gas pipeline networks, electric grid modernization, rail traffic and other elements of the nation’s infrastructure. Moniz, who is on good terms with E&C Chairman Fred Upton and subcommittee chairman Ed Whitfield, will also be peppered with questions about the panel’s pieces of draft legislation. In a joint statement, Upton and Whitfield said many of the QER recommendations are “in step with the committee’s efforts” and that they are “seeking meaningful feedback on our proposals.” That hearing is scheduled for Thursday at 10 a.m. in Rayburn 2123.
NYC COUNCILMEMBERS TARGET INDIAN POINT: Fuming after Saturday’s transformer fire at Entergy’s Indian Point nuclear plant, three members of the New York City Council introduced a resolution yesterday calling on the NRC not to relicense the plant. Councilman Donovan Richards, who chairs the body’s Environmental Protection committee, is leading the measure, which has two other co-sponsors. It also calls on the state to develop a “socially, economically, and environmentally just transition plan” for those affected by such a closure. The resolution: http://on.nyc.gov/1K9oU92
A ROLLING PEBBLE GATHERS NO TOSS: Both EPA and the developers of the proposed Pebble Mine say there’s no need to delay oral arguments in a lawsuit just because EPA’s inspector general is looking into the matter. Judge H. Russel Holland in Alaska earlier this month said he was considering postponing May 28 oral arguments over an EPA motion to dismiss after reading about the IG inquiry in his Sunday paper. Pebble Limited Partnership on Thursday urged the judge to move forward with the arguments in the suit, which alleges the agency violated an open government law when working on proposed mining restrictions in the area. PLP also said it does not believe denying EPA’s request to toss the case — and thus allowing Pebble access to EPA communications and documents — would “interfere” with the IG’s probe. PLP’s filing: http://politico.pro/1A3diRV
EPA, meanwhile, stated that the IG says its report won’t come out until February 2016, not this summer, as had been reported. The agency argued that if the court waits until the IG report comes out in February, “EPA will have been subject to the Court’s preliminary injunction for more than a year without the Court even deciding whether plaintiff has stated a valid [claim].” EPA also argued that the judge’s ruling here would not affect the IG investigation in turn, and that the injunction the judge placed on EPA that keeps it from moving forward with any work on its Bristol Bay watershed analysis has created “enormous uncertainty” for the agency and for many Alaskans. EPA’s filing: http://politico.pro/1HgwBGK
NEVADA BUSINESS BIGWIGS FORM GROUP TO CHALLENGE UTILITY: Las Vegas Sands Corp., Wynn Resorts, Sunrun, SolarCity and Switch announced the formation of a new group last night called the Nevada Coalition to Protect Ratepayers, which “will work to promote increased market choices.” Some of these companies, like Wynn and Sands Corp., have been trying to defect from the state power utility, NV Energy, so that they can get and/or generate their own wholesale electricity. One of the group’s main goals is to push state regulators and the Nevada Bureau of Consumer Protection to “be more innovative when helping NV Energy introduce new programs that enable the utility to offer a more competitive portfolio of energy options,” such as more renewable power.
THE INJECTION INJUNCTION: Earthjustice filed a preliminary injunction yesterday against California’s Division of Oil, Gas and Geothermal Resources on behalf of the Center for Biological Diversity and Sierra Club to “stop the daily and unlawful injection of millions of gallons of oil wastewater into California’s protected underground water supplies.” The filing asks Alameda County Superior Court Judge Robert B. Freedman to vacate DOGGR’s rules that give the agency and oil companies until February 2017 to operate in protected aquifers, and to mandate that DOGGR take action to stop the injections while an underlying lawsuit from the group filed last week proceeds in court. A hearing is set for June 11. The injunction: http://politico.pro/1e4Ql6B
SCIENCE POLICY WONK ALERT: Wednesday’s House Rules Committee meeting on the Science Committee’s COMPETES Act reauthorization bill has been rescheduled to Monday at 5 p.m. Among the more than three dozen amendments filed are those seeking to boost ARPA-E funding, and geoscience spending, as well as several efforts to add stronger wording about climate change: http://1.usa.gov/1KHqn34.
QUICK HITS
— The new Warsaw Pact (on emissions). POLITICO Europe: http://politi.co/1KQ6wid
— Kansas lawmakers repeal clean energy standards. The Lawrence Journal-World: http://bit.ly/1A5cBXM
— Most U.S. energy executives are changing their business models to cut costs. Fuel Fix: http://bit.ly/1bTypKG
— End of the Road for Tesla, Ride-for-Hire Bills in Texas. The Texas Tribune: http://bit.ly/1JMhXHu
Tags: energy, fuel, gas, oil