Initial Brief of Nextera Energy Resources, Llc
Total Page:16
File Type:pdf, Size:1020Kb
COMMON\MEALTH OF' MASSACHUSETTS DEPARTMENT OF PUBLIC UTILITIES Joint Petition of Fitchburg Gas and ) Electric Lieht Company dlbl a U nitil, ) Massachusetts Electric Company and Nantucket Electric Company dlbla ) National Grid, and NSTAR Electric ) Company and Western Massachusetts ) D.P.U. 18-64 Electric Company, each dlbla ) D.P.U. l8-65 Eversource Energy, for approval oflong- ) D.P.U. 18-66 term contracts for renewable energy, ) pursuant to Section 83D of An Act ) Relative to Green Communities, St. 2008, c.169, as amended by St. 2016, c. ) 188, $ 12. ) INITIAL BRIEF OF NEXTERA ENERGY RESOURCES, LLC March 22,2018 70995546v.1 TABLE OF CONTENTS I. INTRODUCTION 1 II. STANDARD OF REVIEW..................... 1 III. ARGUMENT....... ..J A. The PPAs do not comply with the statutory definition of CEG ..J B. The Companies have failed to show the proposed tracking of CEG is appropriate 7 C. The Companies' failure to require fully incremental hydroelectric energy renders the evaluation and selection results invalid 9 D. The PPAs and TSAs fail to satisfr certain enumerated criteria...... .....13 E. The material changes from the form PPA to the proposed PPA are inconsistent with the 83D RFP process .22 IV. CONCLUSION.......... .25 I 70995546v.1 I. Introduction On July 23,2018, Fitchburg Gas and Electric Light Company d/olalJnitil, Massachusetts Electric Company and Nantucket Electric Company dlbla National Grid, and NSTAR Electric Company and Western Massachusetts Electric Company, each dlbla Eversource Energy ("the Companies") filed a joint petition with the Department seeking approval of long-term contracts for the New England Clean Energy Connect project ("NECEC"), pursuant to Section 83D of An Act Relative to Green Communities, St. 2008, c. 169, as amended by St. 2016, c. 188, $ 12, An Act to Promote Energy Diversity ("83D"). Specifically, the Companies seek approval of Transmission Service Agreements ("TSA") with Central Maine Power Company ("CMP") and Power Purchase Agreements ("PPA") with H.Q. Energy Services (U.S.), Inc. ("HQUS"). The Companies filed joint direct testimony on July 23,2018.. NextEra Energy Resources, LLC ("NextBra"), the Attorney General, and the Department of Energy Resources submitted direct testimony on December 21,2018. The Companies filed joint rebuttal testimony on February I, 2019. NextEra and the Attomey General filed surrebuttal testimony on February 15, 2019. Evidentiary hearings were held on Februar y 25,26, and.28,20lg. II. Standard of Review The Department is required to determine whether the TSAs and PPAs are in compliance with Section 83D and Department's regulations,220 C.M.R. $ 24.00 etSgq. The Departmentmust determine whether the HQUS hydroelectric energy associated with the NECEC project complies with the 83D definition of Clean Energy Generation ("CEG"). The CEG definition requires that oofirm such energy be service hydroelectric generation from hydroelectric generation alone," with the term firm service hydroelectric generation defined as ". hydroelectric generation provided without intemrption for I or more discrete periods designated in a long-term contract, including but not limited to multiple hydroelectric run-of-the-river generation units managed in a portfolio 1 70995546v.1 that creates firm service though the diversity of multiple units."l Therefore, as a threshold issue, the Department is required to find that the HQUS hydroelectric energy satisfies the CEG definition; if it does, then the Department determines whether the proposed PPAs and TSAs satisfy the following criteria: l. Provide enhanced electricity reliability within the Commonwealth; 2. Contribute to reducing winter electricity price spikes; J Are cost effective to Massachusetts electric customers over the term of the contract taking into consideration potential economic and environmental benefits to the ratepayers; 4. Avoid line loss and mitigate transmission costs to the extent possible and ensure that transmission cost ovemrns, if any, are not borne by ratepayers; 5. Allow for long-term contracts for CEG resources to be paired with energy storage systems; 6 Guarantee energy delivery in winter months; 7 Adequately demonstrates project viability in a commercially reasonable timeframe; 8 Where feasible, creates and fosters emplo¡rment and economic development in Massachusetts; and 9 Are a cost-effective mechanism for procuring low-cost renewable energy on a long-term basis. Finally, the Department is required to ensure that an appropriate tracking mechanism is used to accurately measure the progress of achieving the goals set forth in the Global Warming 'When Solution Act ("GV/SA").3 the standard of review is applied to the record in this proceeding, rChapter 188, Section l2 (definition of CEG); 220 C.M.R. {i$ 24.02 and,24.05 283D (d);220 C.M.R. 24.0s (l) 3a:l $ 6¡. 2 70995546v.1 it is clear the petition fails to satisfu the requirements of Section 83D and the Department's regulations. Accordingly, the Department should reject the TSAs and PPAs. III. Argument A. The PPAs do not comply with the statutory definition of CEG The definition of CEG is unambiguous and requires that the HQUS' energy come from hydroelectric energy alone and that the energy must be firm.a The record, however, reveals that HQUS' energy is neither from hydroelectric energy alone nor is the energy firm. Indeed, the proposed PPAs' definition of "Hydro-Quebec Power Resources" states that the hydroelectric generating stations are operated as a system that provides electric energy which consists "predomínantly" ofhydroelectric energy. The use ofthe term predominantly in the proposed PPAs is a result of the following facts: (1) while the Hydro Quebec system is predominantly hydroelectric, energy is also produced by various fuel sources (including wind, fossil, biomass, and biogas) that flow over the same Hydro Quebec TransEnergie ("HQT") transmission systems to which the PPAs' Quebec Line will interconnect;6 Q) Hydro Quebec imports energy to its transmission system from other regions that produce energy from nuclear, renewables, and fossil;7 aChapter 188, Section 12 (definition of CEG) (emphasis added). sAttåchment 3 to EDC-NEER 1-2, showing over 5%o of Hydro Quebec system mix is wind, biomass, biogas, waste, and solar, with some nuclear and fossil fuel generation as well. Attachment 5 to EDC-NEER 1-2 at 17, Hydro Quebec "purchase[s] all the output from 39 wind farms (3,508 MW) and 7 small hydropower plants (107 MV/) and almost all the ouþut from 8 biomass and 4 biogas cogeneration plants (272 MW) operated by independent power producers. Moreover, 988 MW are available under long-term contracts with other suppliers." (emphasis added). Attachment I to EDC-NEER l-2 at 1, reflects purchases of wind energy at ll.2 TWhs and biomass at 1.8 TWhs. Attachment I to EDC-NEER l-2 at 3: "We [Hydro Quebec] buy wind power from independent producers and feed it reliably into our grid." 6Exhibit oo'Interconnecting JII-3 at 14: Utility' shall mean, as the context requires, TransÉnergie or the utility providing interconnection service for the Hydro-Québec Power Resources to the transmission system of that utility." isee Attachment I to EDC-NEER l-2 at4, Hydro Quebec purchases from ISO-NE, Ontario, and New Yor( Exhibit RSW (Direct Testimony of Whitley et el.) at 21, Figure A (generation mix of ISO-NE, Ontario, and New York). J 70995546v.1 and (3) the vast majority of the HQT transmission and generation system is located behind the proposed alternating current ("4C") to direct current ("DC") Appalaches converter substation on the Quebec Line.8 This allows for various sources of generation and imports on the HQT system to flow over NECEC to the ISO-NE Larrabee Road delivery point.e In fact, the diversity of energy sources is required to meet Hydro Quebec Distribution ("HQD") load requirements, as Hydro Quebec cannot meet its system peak with Hydro Quebec Production ("HQP") hydroelectric generation alone,l0 and thus, must integrate other fuel sources reliably onto its transmission g.id.ll The PPAs' acknowledgement that the HQUS is predominately from hydroelectric energy is consistent with HQUS' recent bid into the Connecticut Procurement for Zero-Carbon,l2 as well as its sale of energy to a number of Vermont utilities. The HQUS-Vermont PPA recognizes that the HQUS system energy cannot come from 100 percent hydroelectric energy, and, therefore, the sThe Quebec Line is defined as ". a 1,200 MW +/-320 kV high-voltage direct current ('HVDC') transmission line from the converter station at the Appalaches substation in Thetford Mines, Québec to the U.S. Border" to be owned by HQT. Exhibit JU-4-A at 6. Also, see NEER Hearing Exhibit 7 (HQT documents on the location of the euebec Line and Appalaches AC to DC converter substation). During the hearing, the Hearing Examiner took under advisement the Companies' objection to the NextEra hearing exhibits. All the NextEra hearing exhibits are publically available documents obtained from the public websites of Hydro Quebec, State of Vermont and Connecticut agencies, or the U.S. Securities and Exchange Commission, and, as publically available records they are properly allowed as record evidence in Department proceedings. See, e.s., G.L. c. 233 þ76A. The documents are also identical or similar to evidence that was entered on the record without objection. See, e.e., Attachments l-6 to NEER l-2 and Attachments l-3 to NEER 1-3. eThe closest source of generation to the Appalaches AC-to-DC converter substation is fossil and wind generation, not hydroelectric. NextEra Hearing Exhibit 7 at 8 (wind facilities); Attachment 5 to NEER l-2 at 4 (Becancour fossil facility). r0Attachment 5 to EDC-NEER l-2 at7 and 11, note b (Hydro Quebec's system peak was 38,204 MWs, while its installed capacity of hydroelectric generation was only 36,767 MV/s). rrSee. e.g.