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Troubled FirstEnergy Companies Seek Bankruptcy Protection

April 3, 2018

FirstEnergy Corp.’s competitive arm FirstEnergy Solutions (FES) and several key subsidiaries, including FirstEnergy Nuclear Operating Co. (FENOC), on March 31 sought Chapter 11 bankruptcy protection. FirstEnergy said the move would facilitate an “orderly financial restructuring” and accelerate its strategy to become a fully regulated utility.

FES—the parent company of FE Aircraft Leasing Corp., FirstEnergy Generation, FirstEnergy Nuclear Generation—along with FirstEnergy Generation Mansfield Unit 1 Corp., Norton Energy Storage, and FENOC filed the voluntary petition seeking relief under Chapter 11 with the U.S. Bankruptcy Court for the Northern District of Ohio.

In aggregate, the companies have about $ 3.8 billion of funding indebtedness. FES, which sells power and related services to retail and wholesale customers in Illinois, Maryland, Michigan, New Jersey, Ohio, and Pennsylvania, in December 2017 reported total assets, liabilities, and capitalization of about $ 5.5 billion, but brought in revenues of about $ 3.1 billion.

FES holds about $ 1.5 billion of funded indebtedness, including a $ 700 million secured revolving credit facility; about $ 332 million of 6.05% of unsecured notes, which are due in 2021; about $ 363 million of 8.80% unsecured notes due in 2039; and a $ 150 million revolving credit note with Allegheny Energy Supply Co.,…

Minnesota May Be Next to Support Nuclear Plants

April 1, 2018

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Following the lead of Illinois and New York, which have enacted policies supporting nuclear power plants, the Minnesota Legislature is weighing a bill that could help the owner of two nuclear facilities within its borders.

Minnesota is home to the single-unit 671-MW Monticello nuclear plant and the dual-unit 1,100-MW Prairie Island plant (Figure 1). Xcel Energy owns a 100% stake in both of them.

1. Home on the prairie. The Prairie Island Nuclear Generating Station generates about 20% of the electricity used by Xcel Energy’s customers in the Upper Midwest. Unit 1 began operation in December 1973 and Unit 2 followed in December 1974. The reactors are licensed until 2033 and 2034, respectively. Courtesy: Nuclear Management Co.

Current Minnesota regulations require investor-owned utilities, such as Xcel, to file multi-year integrated resource plans (IRPs) with the Minnesota Public Utilities Commission (MPUC). Companies give details about their future generation mix in the IRPs. Once the MPUC approves the plan, the utility decides how much money to allocate toward capital, and operations and maintenance expenses at each of its generation facilities.…

Moody’s: Battery Storage Viability is Increasing

March 24, 2018

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Battery storage’s emergence as a tool to boost grid reliability and a viable project finance opportunity is good news for utilities and grid operators, said Moody’s Investor Service in an infrastructure and project report on March 19.

The ratings agency noted that currently, lithium ion battery costs hover at about $ 400/kWh installed—the battery itself which is about $ 200/kWh, and the balance of the plant (with traditional electric components) at another $ 200/kWh. While that figure is the result of an already significant cost decline over the last several years, if current trends continue, costs will continue to decline to $ 100/kWh between 2020 and 2022.

The cost decline could translate to a “significant reduction in project costs, which will make storage applications more economically viable,” it said.

Cost declines for battery storage can be pegged to growing economies of scale in manufacturing and improvements in battery technology, Moody’s noted. The energy storage sector also has regulatory backing. Along with energy storage mandates in several states, including California, Massachusetts, New York, and Hawaii, a 30% investment tax credit is available for energy storage coupled with renewable generation at a federal level.…

Utility Managers Build Business Case for Digital Technologies

March 22, 2018

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The rise of digital technologies for power plants has moved in fits and starts over the past several years, with some generators quickly embracing digitization of their assets while others are looking to justify potential investments.

Suppliers of digital technologies have widely marketed the benefits, but many generators are looking to current end users for information about what the implementation of digitization means for their plants. Presenters at POWER magazine’s ELECTRIC POWER Conference + Exhibition on March 22 talked about the benefits—and some of the challenges—they’ve experienced with digitization at their facilities, in a session titled “Building a Business Case for Digital Technologies.”

Phillip Yakimow, manager and principal engineer for performance monitoring for Xcel Energy; Michael Reid, general manager for technical programs for Duke Energy; Crystal Bettinger, supervisor of predictive maintenance at Westar Energy’s Jeffrey Energy Center in Kansas; and Brian Wolf, lead performance and optimization consultant for Black & Veatch, presented case studies outlining how digitization has worked at their plants.…

U.S Solar Installations Dip Amid Uncertainty

March 16, 2018

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Burdened by a trade case, unpredictable policy-making, interconnection delays, and other market factors, the U.S. installed 30% less solar photovoltaic (PV) capacity in 2017 compared to a record-breaking 2016.

However, the 10.6 GW of new PV capacity added last year represents 30% of all new generating capacity added to the U.S. grid, more than any other power source but natural gas, and according to the Solar Energy Industries Association (SEIA), it is characteristic of solar PV’s booming growth. Last year’s capacity addition still represents 40% growth over 2015’s installation total, the trade group noted as it released its U.S. Solar Market Insight Report 2017 Year-in-Review, which it prepared with GTM Research, on March 15.

“The solar industry delivered impressively last year despite a trade case and market adjustments,” said SEIA President and CEO Abigail Ross Hopper. “Especially encouraging is the increasing geographic diversity in states deploying solar, from the Southeast to the Midwest, that led to a double-digit increase in total capacity.”…

Texas Utility Ready to Ramp Up Renewables

March 14, 2018

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The CEO of Texas-based CPS Energy said March 6 that the utility wants to generate at least 50% of its power from renewable sources by 2040, part of a plan that includes the addition of 550 MW of battery storage, as it looks to reduce its dependence on fossil fuels. But the city-owned San Antonio utility will continue to operate coal and natural gas-fired power plants, though the city’s mayor has said he would oppose building more fossil fuel-powered units.

CPS CEO Paula Gold-Williams outlined the company’s “flexible path” strategy in a meeting with the utility’s board of directors on Tuesday. The utility last year announced it would close its two coal-fired units at the 840-MW Deely station (Figure 1) in San Antonio, one of several Texas coal plants being retired this year, though it will continue to operate two natural gas-fired units—the Sommers Gas Plant—at the site, with generation capacity of 892 MW.

1. Closing in 2018. The Deely power plant near San Antonio will be closed in 2018.

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