and Commerce Association
NECA Welcomes its Newest Members:
In this installment:
NECA News Editor:
Letter from the President
As summer approaches and NECA activities wind down for a few months, it is a great time to reflect upon our year to date. I am pleased to report that it has been a fantastic year so far for NECA. The industry we represent continues to evolve and challenge us with new policies and issues, and NECA continues to be a leading regional voice for education, discussion and debate. Our recent annual conference with the Connecticut Power and Energy Society in Newport, Rhode Island confronted these issues head on. An impressive collection of speakers weighed in on the debate of how to meet regional environmental and economic goals, while being cognizant of the cost of meeting these goals. These speakers included Rhode Island Governor Donald Carcieri; ISO-NE President and CEO Gordon van Welie; Chairman, President and CEO Thomas Farrell II from Dominion; Arnold MacBurnie, Senior Vice President for Shell Energy North America (Canada); esteemed representatives of state energy and utility commissions, and a host of industry leaders from the private sector and academia.
NECA's role in framing and forwarding these critical industry debates occurred this year in a variety of other forums as well. Our six NECA committees continue to astound me with the depth of information and analysis in each report they provide to our Board and members. Our dinner meetings this year have attracted leading industry speakers including John Shelk, President of the Electric Power Supply Association; the Honorable Laurie Burt, Commissioner at the Massachusetts Department of Environmental Protection, and Patricia Stanton, Vice President of Clean Energy Markets from Conservation Services Group speaking on the impact of demand resources on regional reliability and capacity markets. Our renewable energy conference in March attracted a record number of attendees and provided an invaluable venue for framing the renewable issues and opportunities in New England.
Looking ahead, I see an equally impressive and exciting agenda for the remainder of the year. Our Environmental Committee has worked tirelessly to develop a workshop on RGGI for June 19th. Over the summer we will be focusing on dinner speakers for our September and October dinner meetings, and our Fuels and Power Markets Committees are already hard at work planning for their conferences in the fall with the Fuels Conference scheduled for September 24th and the Power Markets Conference scheduled for October 30th. After a successful Holiday party last year, we plan to again end our year with a holiday networking reception on December 3rd at the Renaissance Waterfront Hotel in Boston. And of course planning is already underway for our 16th annual conference with CPES scheduled for May 18th and 19th at the Mystic Marriott in Connecticut.
Thank you for all your support of NECA, and its many activities. Enjoy your summer and see you soon at one of our many fall events.
Sandi M. Hennequin
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NECA Power Markets Conference
Highlights from the 15th Annual New England Energy Conference
Dominion Resources' Chairman, President and CEO, Thomas F. Farrell II kicked off the 15th Annual New England Energy Conference and Exposition in Newport, RI on May 13th with the keynote address. Dominion is one of the nation's largest producers of energy and is the largest wholesale generator in New England. Mr. Farrell called for a rational and comprehensive approach for a national energy policy to address the increase in demand for energy across the country. Challenges faced by energy suppliers include difficulties encountered in the approval process to build new generation facilities along with political and environmental opposition. Dominion is attuned to climate and environmental issues and prides itself on providing a diverse energy portfolio, including renewable alternatives. As various states work toward the creation of regional regulatory programs, there must be coordination with national policy to develop consistency. A proponent of a federal cap-and-trade program, Farrell encourages a policy that promotes new development and realistic expectations. Our country is facing major energy challenges that need to be openly debated with the industry itself in the forefront. Farrell emphasizes the need for leadership who will elevate energy security to a top national priority. According to Farrell, the "goal of achieving environmental integrity without compromising economic growth will take a national commitment on an historic scale but it can be done."
- the Honorable Andy Dzykewicz, Commissioner, Rhode Island Office of Energy Resources
Mr. van Welie and the panelists were challenged to answer the question, "How will the region address environmental and economic goals?"
Mr. van Welie's regional focus on the challenges for achieving environmental and economic goals was a perfect segue for the panelists to discuss individual state challenges. Panelists cited legislation being proposed in their states to stimulate the renewable energy sector and promote long-term contracts with renewable energy developers. This panel was well received by conference attendees and nicely framed many of the issues that were discussed throughout the day.
Session 1A - Greenhouse Gas Policy Initiatives
The first breakout session of the conference looked at issues related to the Regional Greenhouse Gas Initiative (RGGI) and carbon regulation generally from the perspective of four distinct industry participants. Jon Creyts, Principal of McKinsey & Company, discussed a paper he and others had authored on the costs of reducing greenhouse gas emissions. Sandy Taft, Director of US Climate Change Policy for National Grid, presented his company's efforts to reduce greenhouse gas emissions, including adopting carbon budgets and influencing carbon legislation and regulation. Seth Kaplan, Vice President for Climate Advocacy for Conservation Law Foundation, described the future with and without changes to our approaches to greenhouse gases. Finally, Christopher Sherman, General Counsel for the New England Power Generators Association explained the concerns that generators have with RGGI.
Session 1B - Fuel Diversity and Reliability in Light of FCM & RGGI
This Panel was created to address electric reliability in light of the impacts of RGGI and forward capacity markets. The panel made three excellent presentations. Bob Grace, President of Sustainable Energy Advantage, discussed the burgeoning $8 Billion renewable energy industry, its benefits in bringing additional diversity to the generation mix, and the barriers being faced, in spite of the great strides being made. Steve Cowell, Chairman and CEO of Conservation Services Group, addressed demand side resources incorporation into the forward capacity market, the huge success in expanding the market for demand side resources, and the challenges still being faced. Jeffrey Perry, Vice President, Mirant discussed the role of fossil fuels and the continuing need for new fossil generation, in spite of the successes of both renewable and demand resources, declining electrical reserve margins, lead times to construct new generation, regulatory uncertainties and their respective impacts upon maintaining reliable power in the region.
Our keynote speaker for the conference luncheon was Arnold MacBurnie, Senior Vice President of Shell Energy North America (Canada), Inc. Shell Energy is the energy marketing arm of Royal Dutch Shell located in Canada. Mr. MacBurnie addressed how a large multinational energy company like Shell is responding to the push to reduce carbon emissions and develop renewable resources. In particular, he highlighted Shell's efforts to develop alternative fuels such as biofuels, hydrogen and gas to liquids technologies. He also mentioned Shell's investments in wind resources and carbon emission sequestration projects. Shell views the path to energy independence coming from a variety of sources and Mr. MacBurnie demonstrated Shell's extensive commitment to delivering new energy resources that will help meet consumers' energy needs all over the world.
Session 2A - The Private Sector Response to the Dual Challenges
One of the afternoon panels addressed the challenges and opportunities that the private sector sees in response to policy calls for fuel diversity and reductions in carbon emissions. Experts from companies attempting to develop nuclear, renewables, demand response and clean coal projects discussed the progress that they were making and challenges they were facing. It is clear that renewable technologies have great acceptance but the ability to site projects and move through the interconnection queues continues to be a challenge. The demand response markets have tremendous potential but work still needs to be done on market rules to develop more, including allowing demand response resources to be capacity resources. The economics of nuclear plants are becoming more compelling in light of fossil fuel prices and efforts to bring updated technology to the United States; efforts like the UniStar joint venture will help advance development. However, much work needs to be done in developing new regulations and permitting new nuclear facilities. Finally, we heard that clean coal projects in the northeast have been proposed and received varying degrees of acceptance from government officials.
Session 2B - Regulatory Solutions: Beyond Market Mechanisms
Are market interventions by state regulators inappropriate or vital? Do the consumer benefits achieved by interventions such as power authorities, long-term contracts, RPS programs and socializing the cost of transmission lines to support remote renewable projects outweigh their adverse impacts on competitive markets? This panel featured a spirited discussion of these questions among Ann Berwick, Massachusetts Undersecretary for Energy, Janet Besser, VP of Regulatory Strategy for National Grid and Tom Bessette, VP for Energy Policy, New England for Constellation Energy. Mr. Bessette favored minimal interventions, urging continued reliance on market mechanisms. Ms. Besser and Ms. Berwick debated the circumstances under which electric customers throughout New England should be charged for construction of transmission capacity for remote renewables. Ms. Berwick emphasized that the benefits to MA customers would have to be clear before MA would support having such costs imposed on their consumers. The panel was organized by its moderator, Mary Beth Gentleman, Partner, Foley Hoag LLP, and Tim Roughan, Director of Distributed Resources, National Grid.
The three panelists, Marian Chertow of Yale, Mary Sharpe Hayes, former Board member of ISO-New England and Ken Payne of the University of Rhode Island, led a robust discussion of conclusions drawn from the keynote speakers and the preceding panels at the conference. Some common themes and questions that were the subject of the debate among the panelists and the audience were: Are we too late to address global warming; if natural gas is going to be on the margin in New England for the foreseeable future how do we deal with the effects of such a scenario; is the growth in demand side and conservation resources sustainable or has New England only scratched the surface; how do we get the real time price signals for electricity out to the end use consumers; how much will RGGI cost -in the short term /in the long term; and are the coal and nuclear options for generating electricity "off the Table" for New England- irretrievably, or only until coal gasification and carbon sequestration become commercially viable and when the estimated costs of new Nuclear plants are reduced. Peter Brown was the moderator of this panel.
Some of you at our Annual New England Energy Conference may have noticed the construction at the Hyatt. We received a fair amount of feedback on the high quality of the conference but the poor quality of the hotel. We have negotiated with the hotel and have agreed upon a letter of apology to the board of directors and a 20% discount off our bill to compensate us for our inconvenience.
While we will never be able to target the exact individuals, we would like to something that will benefit our membership. If you have any suggestions, please send them to Lois at firstname.lastname@example.org.
Save the Date
Annual NECA Fuels Conference
The tradition continues! Please join NECA in September for another spirited discussion
and networking with experts and market participants.
With coal, oil and natural gas prices soaring, interest runs high for the outlook on energy supply,
demand, infrastructure projects, the impact of potential legislative and regulatory actions,
and the impact on 2008-9 Winter and the foreseeable future.
For more information on NECA's upcoming Fuels Conference, its program, or any
conference updates, click on our website: www.necanews.org
The tradition continues! Please join NECA in September for another spirited discussion and networking with experts and market participants.
With coal, oil and natural gas prices soaring, interest runs high for the outlook on energy supply, demand, infrastructure projects, the impact of potential legislative and regulatory actions, and the impact on 2008-9 Winter and the foreseeable future.
For more information on NECA's upcoming Fuels Conference, its program, or any conference updates, click on our website: www.necanews.org
|Mark your Calendars for Upcoming NECA Events|
Thursday, September 11, 2008
Board of Directors
Doubletree Guest Suites Hotel
Soldiers Field Rd, Boston
Wednesday, September 24, 2008
Tuesday, October 7, 2008
Thursday, October 30, 2008
Tuesday, November 18, 2008
Board of Directors
Doubletree Guest Suites Hotel
Soldiers Field Rd., Boston, MA
Wednesday, December 3, 2008
Monday & Tuesday
Save These Dates
What Does "RGGI" Mean to Me?
On June 19th, NECA brought together a group of energy and environmental experts to dispel the myth that "Reggie" was just something Red Sox fans used to yell at a former competitor, and carbon allowances are just something dinosaurs gave their offspring. Over 130 people attended this first of its kind workshop to help sort through the myriad requirements associated with regulations being implemented throughout the Northeast under the Regional Greenhouse Gas Initiative (RGGI). This was a hands-on, nuts and bolts discussion of the specific actions that regulated facilities will be required to take to comply with the new rules.
The sell-out workshop offered participants a first hand opportunity to talk about interpretations, expectations and special circumstances in face-to-face discussions with many of the regulators responsible for implementing the new rules. Experts on environmental regulations, trading and auctioning of carbon allowances, and development of offset projects provided unique insight on strategies for effectively dealing with the new requirements. Regulated companies, service providers and other interested professionals came away with an improved understanding of "What does RGGI mean to me?" Presentations from the workshop are available at NECA's web site www.necanews.org.
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