FERC Accepts CAISO Tariff Changes for Western Day-Ahead Electricity Market

The Federal Energy Regulatory Commission in December accepted changes to the California Independent System Operator’s tariff that will enable it to launch a Western day-ahead electricity market.

The acceptance of Western day-ahead market rules by FERC was paired with approval of another significant set of ISO tariff changes that will provide important day-ahead market enhancements.

Collectively, these new rules are known as the Day-Ahead Market Enhancements (DAME) and the Extended Day-Ahead Market (EDAM).

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Grid Monitor Warns of Blackout Risks as Coal Plants Retire

Rolling blackouts are a rising threat across the U.S. as aging power grids collide with extreme weather, rising electricity demand and a shift to cleaner fuels, the nation’s top grid monitor warned Wednesday.

In a report, the North American Electric Reliability Corp. said most regions of the country face growing risks of inadequate electricity supplies during periods of extreme cold and heat over the coming decade. Major wind and solar power projects that could serve metropolitan areas aren’t being built fast enough as power companies shut down old coal plants.

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SPP marks milestones and progress across western efforts in early November

LITTLE ROCK, ARK. — Since 2019 when Southwest Power Pool (SPP) officially became a reliability coordinator for several utilities in the Western Interconnection, the grid operator has steadily grown its western customer base and portfolio of western services. The first two weeks of November 2023 have seen SPP make significant progress in continuing to advance three of those services: its operation of the Western Resource Adequacy Program (WRAP) on behalf of Western Power Pool; Markets+, SPP’s proposed bundle of day-ahead and real-time market services; and expansion of SPP’s regional transmission organization (RTO) services into the Western Interconnection.

On November 1, an important element of the Western Power Pool’s WRAP, for which SPP is the program operator and responsible for technical implementation of the program’s design, became operational. The WRAP’s operations program produces updated forecasts each season to help determine if participants will have sufficient resources, and it enables anyone with a deficit to secure additional resources. The operations program will remain non-binding for a period, meaning that no financial charges or deficiency payments will be assessed, but it is now fully functional and available to enhance system reliability.

“SPP is grateful for our partnership with Western Power Pool and the opportunity to help assure resource adequacy for their member utilities,” said Casey Cathey, SPP’s Senior Director of Grid Asset Utilization who has led SPP’s efforts as WRAP program operator. “We understand the importance of both resource adequacy and regionalization, and are proud of the work we’ve done to advance both causes for WRAP participants.”

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Florida Municipal Power Agency Voices Concerns About EPA Proposed Greenhouse Gas Rule

The Florida Municipal Power Agency recently filed comments with the Environmental Protection Agency voicing concerns about EPA’s proposed greenhouse gas rule for electric utilities.

The rule, which targets CO2 emissions from fossil fuel-fired power plants, presents unique challenges in Florida, FMPA noted.

FMPA is a wholesale power agency owned by municipal electric utilities in Florida.

Florida relies on natural gas generation for 75% of its power supply, “by far the highest percentage in the United States. It would be one of the most impacted states by EPA’s proposed rule, which would introduce experimental ‘green’ hydrogen to partially fuel natural gas power plants by 2032,” FMPA said in a news release related to the comments.

The Florida Reliability Coordinating Council also filed comments on the proposed rule. The FRCC reported the rule would likely reduce natural gas generation levels between 20% to 40% for natural gas units, creating significant reliability risks in Florida, FMPA pointed out.

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December Natural Gas Report

Storage Levels Continue to Grow

The Energy Information Administration (EIA) reported a rare late-season injection of 10 Billion Cubic Feet (Bcf) into storage for the week ended November 24th.  Expectations were for a 10 Bcf withdrawal due to the colder temperatures over the Thanksgiving holiday.  Current storage inventory is at 3,836 Bcf which is nearly 9% above the five-year average.

Record Production and Modest Demand Keeping Gas Prices Lower

Strong gas production levels, less widespread demand and high storage levels are keeping natural gas prices lower.  The winter NYMEX Henry Hub Futures Contract prices are averaging around $2.80 per MMBtu.  With the basis added to convert to Mid-continent pricing, projected monthly prices are currently averaging below $3.50/MMBtu.

Daily Index Prices React to Cold Snaps

However, anomalies in the daily index market have occurred coast to coast over the past 45 days.  With the below-normal temperatures at the end of October, mid-continent daily prices jumped $1.30 over the last 7 days of October, reaching the $3.135/MMBtu mark.  Colder weather over the Thanksgiving holiday also saw daily prices increase by 30¢ per MMBtu.

Most forecasts are calling for warmer than average temperatures for the 2023-2024 winter.  There will be cold snaps along the way.  The daily index market is still showing some built-in fear built and could result in sporadic volatility.  Under the Wood River gas supply contract, the exposure to the volatility of the daily index market has been greatly reduced.


First Steps Taken Towards New Generation in Russell

At the November 21st Russell council meeting the city council approved a resolution authorizing and providing for the acquisition and installation of 15 Megawatts of generation.

Representatives from KMEA, Gilmore Bell, Stifel, and Russell staff presented the generation project details and its stages to the City Council.  The project consists of five 3 Megawatts CAT generating units to be added in both power plant locations.

“Russell takes great pride in its status as a Public Power Community, underscored by our governing body’s recognition of our utilities’ significance. I am appreciative of our committed team and governing body, resolutely committed to progressive action and strategic investments that continually elevate our community’s quality of life and secure its long-term sustainability.  Additionally, my appreciation extends to KMEA and their continual support and invaluable assistance in our endeavors and those of other member cities.  Public Power in Kansas would not be at the high level it is today without great city staff, governing bodies, and Team KMEA.” says city manager Jon Quinday.

As part of the long-term project the city plans to retire older units while adding additional capacity to the city’s portfolio.

Russell continues its investment into the electric department with this announcement coming on the heels of a $2,039,650 million dollar BRIC grant received to rebuild the city North 1 and 2 circuits.   The city council had previously approved the rebuilding of the East residential circuits 1 and 2 last year with construction to begin in the spring of 2024. These distribution rebuilds total more $4.5 million in project cost that will be completed over the next couple of years. The long-term plan for the city is to rebuild one circuit a year until the entire system is replaced.


Grid Resilience Grant Due December 29th

As part of the Department of Energy’s goal to improve grid resilience the Kansas Corporation Commission has received a grant for small utilities to apply for.  The primary goal of the program is to demonstrate measurable improvements in energy resilience, with a focus to necessary and supporting grid modernization investments in rural, underserved, and disadvantaged communities, to invest in modernized grid infrastructure and to create good-paying jobs.

The current amount that is available to small utilities in this round of funding is $13,313,126 with future amounts of $6,647,000 available over the next 3 fiscal years.

This grant does have a cost match portion which typically will be up to 48% of the project cost.  The state of Kansas does have funds that can be utilized to help with these matching funds through the Build Kansas Fund.  These funds are specifically designed to help organizations leverage local dollars and to support infrastructure projects within Kansas.  Please follow the link for further details on that program. Build Kansas Fund Overview — Kansas Infrastructure Hub (kshub.org)

The Grid Resilience Grant, commonly known as the 40-101 (D) program does have a deadline of 5 pm ct. on December 29th.  Please follow the link for full details on the program and application directions. Kansas Corporation Commission – Formula Grant for Preventing Outages and Enhancing the Resilience of the Electric Grid (ks.gov)

If you should have any questions regarding these programs, please contact Tyson McGreer, Manager Member Services at mcgreer@kmea.com or 913-660-0235.

Oberlin Takes Delivery of Two CAT Engines

On October 23rd the city of Oberlin took delivery of two new CAT C175 3.0 MW engines.  This marks the first delivery of equipment under KMEA’s new financing program.  These engines will replace the city’s current, outdated generation.  In addition to providing Oberlin with easy-to-run, reliable generation that will serve the community in time of need for many years to come, they also help the city meet its Southwest Power Pool capacity requirement .

The KMEA financing program is aimed to give cities an option when a large, capital-intensive project, like the purchase of new generation, is needed for the utility.  KMEA assumes the project-related debt on behalf of the city.  The city reimburses KMEA through a capacity contract payment that is simply included on KMEA’s normal monthly power supply bill.

Osawatomie partners with Garden City to receive emergency transformer


On the evening of Thursday, October 24th, the city of Osawatomie began experiencing troubles at the power plant substation.  After a full diagnosis of the problem, it was determined that the substation transformer was damaged, and a replacement was needed.  With the cooperation of city staff and KMEA/Mid-States a replacement transformer was located in Garden City.  To meet the urgent need, the City of Garden City quickly approved the sale of the transformer and began efforts to load and transport it to Osawatomie Thursday evening.

“The leadership shown by the City of Osawatomie to reach out and the responsiveness of the City of Garden City’s Electric Department staff is a testament to the value of the public power community, in general, and, more specifically, it is a testament to the value of being a member of KMEA.” Says Matt Allen, City Manager, Garden City.

According to Osawatomie’s City Manager Bret Glendening, the oversized load permit for travel at night was obtained in approximately 4 hours, which has to be at, or near a record to allow for legal transport of the 70,000 lb. load.

The transformer arrived in Osawatomie around 8 am on Friday morning. Work began immediately, preparing a new gravel road to get the transformer up an 11% grade to its permanent location.  With the coordinated work of the city, KMEA Mid-States, and Bardroff Heavy Hauling, the transformer was positioned, hooked up, and delivering power to the affected 300 meters by 12:30 am on Saturday.  In the worst case some customers were without power for seventy-six hours.

“Without the fast work of city employees, KMEA, and Garden City, the situation likely would have lasted much longer.  The cooperation between municipal utilities and the strong connections and expertise from KMEA Mid-States was paramount in the completion of this emergency project” says Glendening.

KMGA 2023 Awards

This year’s recipient of Mike Gilliland award was Pat Adams, the City Administrator of the City of Halstead. Pat started working for the city on April 25, 1994 as a Utility Maintenance Worker. In October of 2000, he was promoted to the position of City Superintendent, overseeing all of the city’s Public Works and Utilities.