Citizens' Task Force on Wind Power - Maine

Negative Pricing in The New England Electric Pool Will Cost Ratepayers a Fortune

Wind projects in New England receive such enormous payments for their generation, they will offer their output to the grid even when prices go negative. Clearly, when low or negative pricing occurs, the best course for the electric power providers is to reduce the production of energy. That's common sense, unless the power producer can be paid handsomely for products attached to their output, " the enhancers ."

Real time wholesale prices in New England averaged $40 per megawatt/hour for the last quarter of 2014. Wind power entering the grid normally is a "price taker"( they would take the price other generators offered the market ), therefore they would receive, on average, $40 per megawatt/hour delivered. They also would receive $62 per megawatt/hour for the renewable energy credit entitled to them by State Government Renewable Portfolio Standard Programs. They also receive $35 per megawatt/hour entitled them through a federal government program named the Production Tax Credit. Some wind plants also receive about $8 per megawatt/hour for "capacity payments " , meaning they cash in for the annual promise to " be there " three years in the future.

Normally, wind doesn't affect the wholesale real time price of electricity, but, because of the ancillary products( " the enhancers" ), which are outside the wholesale energy market ( REC, PTC, capacity guarantee ), the retail, customer price absorbs these payments in the monthly bills. That's a $145 per megawatt/hour gift from the taxpayers and ratepayers.

The New England wholesale electric market has made recent changes to their pricing scheme that allows power producers to make negative offers for their electric output.

A normal market, with no negative offers, as seen during the last quarter, pays plants $40 per megawatt/hour, allowing generators a fair return for their product, Wind power, being the new kid on the block, would have their output curtailed to prevent transmission strain from too much energy feed-in. Wind, as a "price taker ", was chosen for curtailment because other generators were entering realistic offers, while Wind wanted in at any price to get " the enhancers " at $145 per megawatt/hour.

With the new market rules, Wind can now make offers that guarantee their output will not be curtailed. They have a $145 per megawatt/hour enhancement boost that other generators have not and generators with fuel costs can't exist long paying the market to accept their output.

Expanding on this new, market pricing development, it can be shown that high wind penetration will result in higher natural gas prices, as it assumes a new role as a " balancer " for Wind..

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Comment by Dan McKay on January 1, 2015 at 12:19pm: Rhode Island ratepayers should thank the Maine DEP and Gary Campbell for denying this project .

"Negative Pricing"

"On July 1, 2013, ISO-NE filed changes to the Transmission, Markets and Services Tariff with

the Federal Energy Regulatory Commission. These changes include a revision to the ISO-NE

market rules that would reduce the minimum offer price in the spot wholesale energy market

from $0/MWH to negative $150/MWH. Allowing negative offer prices could increase the

likelihood of negative Locational Marginal Prices (“LMPs”).

This changes ratepayer exposure to above market costs in those hours per year when LMPs are

very low, as it increases the amount by which the Champlain Wind PPA could be above market

in a given hour. Consider an example in an hour when the LMP is zero as the result of a zero

offer price. The amount by which the purchase in that hour is above market is the contract price

minus the LMP. Prior to the change, the maximum above market exposure in such an hour

would be the $78 per MWH PPA price less the $0 per MWH LMP, or $78/MWH. Now assume

that a negative $150 per MWH offer price is allowed and it results in an LMP of negative $150

per MWH. In this example, the amount by which the purchase in this hour is above market

becomes the $78 per MWH PPA price minus a negative $150 per MWH or $228/MWH.

NGRID proposed a solution that would have put the risk of negative pricing on Champlain

Wind. However, because the RFP was issued prior to the proposed change in the market rules,

Champlain Wind’s bid price did not include accepting this risk. Champlain Wind countered with

a higher contract price to take on this risk. NGRID decided not to change the contract and to

have ratepayers accept the risk associated with negative pricing.

In response to Division’s Data Request 1-2, the Company states that there were 62 hours during

the period July 1, 2012 to June 30, 2013 in which real time pricing in ISO-NE Maine Zone

dropped to zero. If the price went to negative $150 in each of these hours the ratepayer impact of

the rule change would be approximately $170,000.

In its recent RFP for renewable resources in Massachusetts, NGRID and the other electric

utilities placed the risk of negative pricing on the power sellers. Ms. Abrams states that the

Company intends to revisit this issue in the next renewable RFP in Rhode Island with the benefit

of the Company’s experience in Massachusetts.

Given the timing of the rule change, the importance of maintaining the integrity of the RFP

process, and the relatively small degree of risk to ratepayers, we believe it is acceptable for the

Champlain Wind PPA to place this risk on ratepayers. In future RFPs, NGRID should, and has

agreed to, require power sellers to take on this risk."

Comment by Mike DiCenso on December 30, 2014 at 8:54pm: The problem...does the general public have trust that the gov. would never let this scam happen? It is just confusing enough to turn the average persons' attention to something else, which is what the intent is of the wind cabal.

Comment by Marshall Rosenthal on December 27, 2014 at 1:00pm: The wind power producers and the government have cooked up a perfect Ponzi scheme that the rest of us are forced to finance. At the outrageous price of $145 per megawatt/hour, it is only a matter of time when this becomes clear to the public. I look forward to the day that the fraud subpoenas are handed out to these criminal conspirators.

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U.S. Sen Angus King

THE UNTOLD STORY OF RECORD HILL WIND

The Untold Story of Record Hill Wind, continued

Maine as Third World Country:

CMP Transmission Rate Skyrockets 19.6% Due to Wind Power

Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.

Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT

******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********

(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/

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Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."

https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/

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