Regulatory Matters - Second Quarter 2023

Natural Gas

Electricity

Company News

Regulatory News

July 24, 2023

Sprague Regulatory Matters is provided as a courtesy to our customers. Please note that the information contained in Sprague Regulatory Matters is for informational purposes only and should not be construed as legal or business advice on any subject matter. You should not act or refrain from acting on the basis of any information included in this without seeking legal or professional advice

Default Electricity Prices
Ohio – Electric

The Ohio Public Utilities Commission is encouraging customers of Ohio’s regulated electric utilities to compare competitive offers from retail suppliers as prices increase for utility electric service (PUCO encourages consumers to explore energy choice options | Public Utilities Commission of Ohio). Default electricity prices, referred to as the “price-to-compare” on customers’ bills, increased June 1st due to upward pressure on wholesale electricity markets. Customers enrolled directly with a retail electric supplier or in a local government aggregation will not be impacted by these changes.

Federal Energy Regulatory Commission Approval
Virginia & West Virginia – Natural Gas

The Federal Energy Regulatory Commission issued an order authorizing the Mountain Valley Pipeline Company LLC (Mountain Valley Pipeline Project |) to proceed to full construction on its 304-mile, 2 billion cubic feet per day natural gas transportation project. The project stalled for a number of years due to adverse appeals court rulings regarding multiple authorizations and permits; however, Congress instructed the Army Corps to issue its permit as part of the recent Federal Debt Ceiling Bill. The new law also ratified other Mountain Valley Pipeline permits and sought to insulate them from further litigation from environmental groups. Mountain Valley expects construction crews to begin work on the right of way, and Mountain Valley Pipeline continues to target project completion by the end of 2023; however, challenges continue.

Northeast Supply Enhancement Project
New York – Natural Gas

Transcontinental Gas Pipe Line Company is exploring modification to its Northeast Supply Enhancement (NESE) natural gas transmission project in an effort to avoid New York state water permits. In late June, Transcontinental defended its request for a two-year extension at the Federal Energy Regulatory Commission after the New York State Department of Environmental Conservation (NYSDEC) recommended that the Federal Energy Regulatory Commission deny the extension stating that the Company failed to show it was diligent in its work to complete the NESE project. NYSDEC said Transcontinental did not seek a new water quality certificate or reach out to specifically address the state’s concerns after the NYSDEC issued its recent denial of a water quality certificate. The Company stated that instead of reconvening with state agencies, it has presented National Grid, a revised scope of the project that would completely avoid offshore water impacts while still meeting the need for additional firm natural gas transportation service downstate.

Supplier Consolidated Billing
Maryland – Electric

The Maryland Public Service Commission approved a request filed by its Commission Staff to delay the implementation of supplier consolidated billing from December 2023 until December 2024. The reasons cited for the delay include slow progress made in the electronic data interchange (EDI) workgroup and a lack of commitment from suppliers to implement supplier consolidated billing for testing.

Request to Reopen Retail Choice Proceeding
Arizona – Electric

The Retail Energy Supply Association (RESA) filed a motion requesting the Arizona Corporation Commission (ACC) reopen a customer choice docket to examine issues necessary for the ACC to create a customer choice program in Arizona. Specifically, RESA requested that the docket be reopened and a committee consisting of representatives from any prior dockets meet within a month. This group would solicit further participation, identify key issues, and establish the steps and processes necessary for the ACC to consider the key issues in order to develop a customer choice program in Arizona. If granted, the group would present a summary of the study results to the Commission by March 1, 2024. "In light of the current realities in the energy market, it is essential to embrace new entrants and capital in Arizona's energy markets to foster competition across the state," said Tony Cusati III, Arizona State Chair, on behalf of RESA. “Historically, states that have relied on regulated monopoly service have experienced significantly higher electricity prices than states that have implemented restructuring and embraced competitive retail choice."

Electricity Market Reform
South Carolina – Electric

A report prepared by the Brattle Group (Assessment of Potential Market Reforms for South Carolina’s Electricity Sector (scstatehouse.gov)) funded by the South Carolina State General Assembly under the Electricity Market Reform Measures Study Committee recommended the introduction of retail electric choice for large commercial and industrial customers; however, it recommended that policymakers defer consideration of retail choice for residential and small business customers. The consultant's report recommended: (1) introducing partial retail choice for large commercial and industrial customers, enabling businesses that are large, sophisticated energy consumers to negotiate rates, self-supply with clean energy, participate in regional transmission organization (RTO) markets as demand-side resources, and optimize their own consumption; (2) introducing a path for community choice aggregation that would enable communities to pursue environmental goals and negotiate rates; and (3) defer consideration of retail choice for residential and small business customers until after other reforms are implemented.

Twin States Clean Energy Link
New England – Electric

The latest proposal for a major electric transmission line that would be able to carry power to New England from Canada, would also be able to send to Quebec renewable energy produced by future power generators off the New England coast or other sources. Twin States Clean Energy Link (Twin States Clean Energy Link | For a Greener New England Grid) is a proposed 211-mile, $2 billion transmission project that would provide 1,200 megawatts of bi-directional transmission capacity with Quebec. The link would enter the U.S. in Canaan, Vermont and would be buried along state highways in Vermont and New Hampshire until it linked to an existing transmission corridor in Monroe, New Hampshire that would carry the power to a new substation in Londonderry. There it could be distributed throughout New England. If ultimately approved, the earliest construction could begin is 2026.

Circuit Court of Appeals Ruling on Natural Gas Ban
California – Natural Gas

The 9th U.S. Circuit Court of Appeals in San Francisco issued its ruling that Berkeley, California cannot ban natural gas hookups in new buildings because U.S. Federal Law preempts its rule. The Court’s ruling states that Berkeley’s 2019 ban barred appliances that use natural gas, and the U.S. Energy Policy Conservation Act preempts this. The 9th Circuit Court of Appeals is the first to weigh in on this issue and major U.S. cities such as New York, San Francisco, and Seattle, along with other municipalities have enacted similar limits.

New York City Faces Greater Reliability Risk in Energy Transition
New York – Electric

The New York Independent System Operator (NYISO Home - NYISO) issued its annual Power Trends report that provides an in-depth look at the forces shaping the future of the New York State electric grid. The 2023 report focuses on clean technologies and maintaining reliability as New York transitions away from fossil fuels - New York City faces the greatest risk due to limited generation and transmission. New York policymakers envision an electric grid that will include large amounts of renewable, intermittent resources such as solar and wind, along with energy storage and behind-the-meter resources.

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