Up county comissioners presentation
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The document summarizes energy issues and opportunities in Michigan's Upper Peninsula. It discusses the region's reliance on distant power sources, high electricity rates, and the upcoming closure of its largest power plant. To improve reliability, affordability and local economic development, the document advocates developing local renewable energy and efficiency. It analyzes the region's energy landscape and regulations, and identifies 52 advanced energy technologies that could help achieve greater energy independence and sustainability.
![OCREA
ALGERDELTA
UPPCO
PRESQUEISLE
WEPCO
GREATLAKES
DTEELECTRIC
ALPENA…
CONSUMERS
TRI-COUNTY
CHERRYLAND
MIDWEST…
THUMB
CLOVERLAND
XCEL
WPS
AEP
MI AVERAGE RESIDENTIAL ELECTRIC RATES
2013
[$/KWH]
MI Average: $0.14/kWh
Source: MPSC Utility Company Annual
Reports 2013
Residential Electric Rates
13Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula
Energy Future” White Paper by Meldrum, Green and
Kantamneni](https://image.slidesharecdn.com/va3gtqwgtjcqyzbcdewp-signature-088dda7e45b534d7304d27cc90f17890315ee50c4c3009791106c0c4dff5e0a1-poli-160516092137/85/Up-county-comissioners-presentation-13-320.jpg)
![YEAR UPPCO PRESS STATEMENTS*
(emphasis mine)
UPPCO
REQUEST
(Annual)
MPSC
DECISION
ROE
[%]
2013
“covering expenses for several
improvement projects and
inflation”
$7,883,410
$5,819,583
(25% less)
5.80%
2011
“Fund safety improvements to
McClure, Bond Falls, Victoria, and
Prickett dams to comply with federal
standards”
$7,701,288
$4,200,000
(46% less)
6.27%
2010
“Hydroelectric projects, Reduced electric
sales, increased cost for reading meters
monthly, General inflation”
$15,559,133*
$8,868,706
(43% less)
7.12%
2009
“Hydroelectric facility upgrades, Cost of
capital, Low sales growth, It's been three
years since our last base rate increase” $12,182,239
$6,499,934
(47% less)
7.83%
2006
“inflation, new customer service system,
improve system reliability, and increased
generator maintenance”
$6,230,897
$3,813,000
(42% less)
N/A
2005
“recover costs associated with improving
service quality and reliability and
managing rising employee and retiree
benefit costs”
$4,547,800
UPPCO
withdraws
request.
N/A
2002
“Our last rate increase was granted in
1993 and was phased in over two years,
1993 and 1994” $9,938,841
$4,868,158
(51% less)
N/A](https://image.slidesharecdn.com/va3gtqwgtjcqyzbcdewp-signature-088dda7e45b534d7304d27cc90f17890315ee50c4c3009791106c0c4dff5e0a1-poli-160516092137/85/Up-county-comissioners-presentation-34-320.jpg)
Up county comissioners presentation
- 1. Energy in the UP Jay Meldrum Chris Green Abhilash Kantamneni Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper. 1Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper by Meldrum, Green and Kantamneni
- 3. Sustainability • ‘investing in local resources and measures to safeguard long term economic and social progress in communities’ • ‘building infrastructure that does not rely on distant sources for fulfilling basic needs’ • ‘stimulates local economic activity, leverages local assets resources and capital’ • ‘local participation, decision making and self-reliance’
- 5. • Single line High-voltage transmission and low- voltage distribution are economical. • High-capacity line minimizes capital costs and losses • Transmission and distribution are natural monopolies. Generation: Presque Isle Power Plant (PiPP) owned by WEPCO Transmission: American Transmission Company (ATC) Distribution: Upper Peninsula Power Company (UPPCO), Alger Delta Source: www.econlib.org
- 6. State Regulation: Michigan Public Service Commission (MPSC) Regional Regulation: Midwest Independent System Operator(MISO) Federal Regulation: Federal Energy Regulatory Commission (FERC) Source: www.econlib.org • Utility serves ALL customers in the area • Utility maintains reliability and dispatches generation • Utility designs rate structures to distribute costs (Cost of Service Study) * Some coops, like REA have voluntarily chosen to regulate their own rates. • Govt. grants utility monopoly over a service area • State commission approves utility rates* • State guarantees “fair” return on equity and “prudently” incurred expenses • ‘Return on Equity’ high enough to attract capital, but low enough to be economical Government Responsibilities Utility Responsibilities
- 7. Image source - MISO Image source - EIA
- 8. 8 MISO LMP REAL-TIME MAP
- 10. 4 Investor-Owned Utility Companies 3 Rural Electric Cooperatives 12 Municipal Electric Utilities 10Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper by Meldrum, Green and Kantamneni
- 11. 11 1% 3% 32% 31% 16% 11% 6% 38% 38% 24% WE WPS Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper by Meldrum, Green and Kantamneni
- 12. UP pays over $ 300 million every year in electricity bills. Residents pay a significant portion of yearly bills 12Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper by Meldrum, Green and Kantamneni 2% 5% 27% 39% 17% 7% 5% 50% 24% 26% WE WPS
- 13. OCREA ALGERDELTA UPPCO PRESQUEISLE WEPCO GREATLAKES DTEELECTRIC ALPENA… CONSUMERS TRI-COUNTY CHERRYLAND MIDWEST… THUMB CLOVERLAND XCEL WPS AEP MI AVERAGE RESIDENTIAL ELECTRIC RATES 2013 [$/KWH] MI Average: $0.14/kWh Source: MPSC Utility Company Annual Reports 2013 Residential Electric Rates 13Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper by Meldrum, Green and Kantamneni
- 14. Residential Electric Rate Increases OCREA ALGERDELTA UPPCO PRESQUEISLE WEPCO GREATLAKES DTEELECTRIC ALPENAPOWER CONSUMERS TRI-COUNTY CHERRYLAND MIDWEST… THUMB CLOVERLAND XCEL WPS AEP MI AVERAGE RESIDENTIAL ELECTRIC RATE INCREASE 2001-2013 MI Average: 74% Source: MPSC Utility Rates Summary 14Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper by Meldrum, Green and Kantamneni
- 15. Abhi (@akantamn)
- 16. Regions with the highest rates also have economically vulnerable populations Interactive Map- http://bit.ly/UPEnergy Poverty 16Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper by Meldrum, Green and Kantamneni
- 17. Regions with the highest rates also have economically vulnerable populations Interactive Map- http://bit.ly/UPEn ergyPoverty 17Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper by Meldrum, Green and Kantamneni
- 18. MI Public Act 295 (2008) Overview Renewable Energy Standard (RES) 10% of all retail electric sales for all utilities in MI to come from renewable sources Energy Optimization Program (EO) Authorizes EO surcharge on monthly bills to finance customer Energy Efficiency upgrades Net Metering Program On site renewable electric generation with credits for monthly excess generation
- 19. MI SB437/SB438 (2016) Overview “Clean Energy Goal” 30% clean energy goal met through energy efficiency, natural gas and renewables. Energy Efficiency Removes mandates, replaced with performance incentives Customer generation Buy all, sell all
- 20. MI Public Act 296 (2008): Overview Limits Electric Choice Only 10% of utilities retail sales may seek alternative supplier Creates Exception for Mining Iron ore mining or processing not subject to choice limits
- 21. CONSUMERS 39% DTE 50% Other 7% Alger- Delta 0% CLOVERLAND 1%ONTONAGON 0% UPPCO 1% WE 1% WPS 1% Xcel 0% UP 4% Michigan Annual Electricity Consumption by Utility
- 22. Abhi (@akantamn)
- 23. 23 Questions?
- 24. 24 Preprint: Abhilash Kantamneni, Richelle Winkler, Lucia Gauchia, Joshua M. Pearce, Emerging economic n in a northern climate using solar hybrid systems. Energy Policy 95, 378–389 (2016). doi: 10.1016/j.enpol.2016.05.013
- 25. Image source - ATC
- 26. Reliability • Limited generation in the UP • Electric grid isolated from the lower peninsula • Transmission expansion across straights prohibitively expensive • Transmission operator (ATS) majorly owned by WI utilities • Infrastructure reliant on WI utilities 26Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper by Meldrum, Green and Kantamneni
- 27. Reliability • Largest power plant closure (PiPP) puts reliability at risk • Lack of immediate replacement options • Costs allocation from subsidizing PiPP operation ($117 M a year) yet to be determined 27Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper by Meldrum, Green and Kantamneni
- 28. Affordability Several regions in the Upper Peninsula pay the highest rates in the state, and are among the highest in the country. 4 out of 5 utilities in Michigan with the highest residential electric rates, are in the UP. The top three highest (OCREA, Alger Delta and UPPCO) are exclusive to just the central and western UP with little to no local generation. Conversely, 3 out of 4 lowest Michigan electric rates are in the UP. There are typically utilities with contiguous territories and services areas. 28Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper by Meldrum, Green and Kantamneni
- 29. Abhi (@akantamn)
- 30. 30 Interactive Chart available at http://bit.ly/UP FuelMix Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper by Meldrum, Green and Kantamneni
- 34. YEAR UPPCO PRESS STATEMENTS* (emphasis mine) UPPCO REQUEST (Annual) MPSC DECISION ROE [%] 2013 “covering expenses for several improvement projects and inflation” $7,883,410 $5,819,583 (25% less) 5.80% 2011 “Fund safety improvements to McClure, Bond Falls, Victoria, and Prickett dams to comply with federal standards” $7,701,288 $4,200,000 (46% less) 6.27% 2010 “Hydroelectric projects, Reduced electric sales, increased cost for reading meters monthly, General inflation” $15,559,133* $8,868,706 (43% less) 7.12% 2009 “Hydroelectric facility upgrades, Cost of capital, Low sales growth, It's been three years since our last base rate increase” $12,182,239 $6,499,934 (47% less) 7.83% 2006 “inflation, new customer service system, improve system reliability, and increased generator maintenance” $6,230,897 $3,813,000 (42% less) N/A 2005 “recover costs associated with improving service quality and reliability and managing rising employee and retiree benefit costs” $4,547,800 UPPCO withdraws request. N/A 2002 “Our last rate increase was granted in 1993 and was phased in over two years, 1993 and 1994” $9,938,841 $4,868,158 (51% less) N/A
- 35. 35
- 36. 36
- 38. 38 Utilities Regulators • outside MPSC Local Community • Shareholders • Customers • Advocates Legislators • Local government
- 39. •Anaerobic Digestion •Biomass Power •Combined Heat & Power •Fuel Cells •Gas Turbines •Geothermal •Hydroelectric •Landfill Gas •Flexible AC •High Voltage DC •High Temp. Superconductors •Syncophasors •Energy Storage •EV Charging •Distribution Automation •Advanced Metering •Advanced Distribution •Microgrids •Demand Response •Voltage Optimisation •Behavioral Efficiency •Data Analytics •Efficient Building Systems •Efficient HVACs •Efficient Water Heating •Intelligent Lighting •Efficient Electronics •Building Management •ESCO Services •Utility Efficiency Programs •Waste Recovery •Conservation •Infrastructure Efficiency •Clean Diesel •Hybrid EV •Plug-in EV •Hydrogen Vehicles •Advanced Gasoline ICE •Natural Gas Vehicles •Ethanol •Biodiesel •Compressed Natural Gas •Hydrogen Generation Delivery & Management Building Efficiency Water Efficiency Transport •Marine & Hydrokinetic •Large-Scale Nuclear •Modular Nuclear •Distributed Solar •Large-Scale Solar PV •Solar Thermal •Onshore Wind •Off-Shore Wind •Waste to Energy Adapted from report by Abhi (@akantamn) 52 Advanced Energy Technologies Fuel Delivery