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Old 01-29-2014, 03:20 PM   #1
TheProfessor
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Default Electric Rates to Increase

I read that New Hampshire exports electricity. That NH has more then enough electricity. All electric customers will be charged on their monthly electric bill the cost to expand this natural gas pipeline. Each and all electric bills will increase for the construction of this natural gas pipeline partly used for the generation of electricity.

New England's six governors stepped into uncharted territory Thursday, asking the region's electric grid to help pay for new natural gas pipelines to ease supply constraints.

The governors announced a pact in December to push for regional investment in natural gas pipelines, and the request, in a letter to grid operator ISO New England, marked the first coordinated effort.

Currently, New England electricity customers pay a winter premium for power because the region lacks adequate pipeline capacity for power plants. That situation contributed to the Jan. 1 hike in electric bills, and on Thursday pushed wholesale electricity markets above $400 a megawatt hour, while normal days average closer to $60.

Under the plan, ISO New England would raise money for the pipelines by levying an additional fee on power plants, which would then pass the cost along to customers in their prices. The idea is to jumpstart construction of pipelines because, the governors say, the gas industry isn't moving quickly enough.

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Old 01-29-2014, 05:33 PM   #2
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I wouldn't be against it if it would result in more households having access to natural gas. My friends in towns that have natural gas available tell me their heating costs are much less than mine.
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Old 01-31-2014, 03:45 PM   #3
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Originally Posted by TheProfessor View Post
I read that New Hampshire exports electricity. That NH has more then enough electricity. All electric customers will be charged on their monthly electric bill the cost to expand this natural gas pipeline. Each and all electric bills will increase for the construction of this natural gas pipeline partly used for the generation of electricity.

New England's six governors stepped into uncharted territory Thursday, asking the region's electric grid to help pay for new natural gas pipelines to ease supply constraints.

The governors announced a pact in December to push for regional investment in natural gas pipelines, and the request, in a letter to grid operator ISO New England, marked the first coordinated effort.

Currently, New England electricity customers pay a winter premium for power because the region lacks adequate pipeline capacity for power plants. That situation contributed to the Jan. 1 hike in electric bills, and on Thursday pushed wholesale electricity markets above $400 a megawatt hour, while normal days average closer to $60.

Under the plan, ISO New England would raise money for the pipelines by levying an additional fee on power plants, which would then pass the cost along to customers in their prices. The idea is to jumpstart construction of pipelines because, the governors say, the gas industry isn't moving quickly enough.

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So when this is all constructed on our dime I should expect a kick back with interest right?
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Old 01-31-2014, 10:48 PM   #4
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Default Electric rates 101.

Hi Folks! I hope that you check out the pond hockey this weekend. But now to the subject.

I have been in the electrical power industry since 1978. When not working on the Lake I am a private power producer and have worked as a NERC certified system operator at the New England ISO. I know the biz.

First off "Where does your power go?". Short answer, almost every where. My dinky little plant in Tamworth is interconnected (in Sync) whth every piece of AC distribution wire from here to Canada to the Rockies to the Gulf, except Texas. We are all hooked together.

We produce more power in New Hampshire that we use so we export it. True, but it doesn't matter. Our rates are managed by the Indipendent System Operator (ISO) located in Holyoke, MA. Picture all of New England's electricity, Maine, New Hampshire, Vermont, Massachusetts, Connecticut and Rhode Island are all in the same boat and get paid the same. The ISO does inport and export power from inside NE to other ISOs.

As I sit here at my desk at 2130 on Friday night the price of juice is about$120 per megawatt. That would be 12 cents per Killiwatt at your door. Typically it should be around 30 to 50 buck a Meg this time opf year. That price is outragous. But why?

The price of electricty is set for every producer by the iSO. There are deals that brokers make to hedge their profits but all producers in the six states get paid the same. So if we are sending power to Mass. they don't have to produce as much and everybodys prices go down.

The choke point is the gas supply. Usually it is OK. When it is cold the gas people like to sell it to homeowners for morwe $$$. The gas plants run short and reduce output and the oil, coal and other expensive plants have to make up the difference at more money.

To increase the gas flow to NE would decrease the need for the expensive plants and reduce the ISO costs.

The ISO has been warning that we are becoming too dependant on one source of fuel, natrual gas for years. Well It has happened. Currently 42% of the electric supply in NE is is being supplied by gas turbines. And the price of gas is through the roof!

Sorry Don. i tried to be short but it is a big subject. I hope that this helps.

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Old 02-01-2014, 10:53 AM   #5
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Misty Blue,

During the 1990s, the regionís electricity was produced primarily by oil, coal and nuclear generating plants, with very little gas-fired generation. In 1990, oil and nuclear generating plants each produced approximately 35% of the electricity consumed in New England, whereas gas-fired plants accounted for approximately 5%. Coal plants produced about 18% of New Englandís electricity. In contrast, by 2011, oil-fired plants produced 0.6% of electricity consumed in New England, and approximately 51% was produced by gas-fired generation. Coal production also fell by about two-thirds. Currently, during median load periods, nearly the entire fleet of dispatchable resources is made up of gas-fired generators, and a portion of the quick-start generators that would be called to respond to a loss of generation is also dependent on the same supply of natural gas.

That being said, why did the ISO let New England get so dependent on Gas fired plants when they must have known that gas is a Just In Time (JIT) type of fuel and the pipe lines were becoming inadequate to supply the amount needed.
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Old 02-01-2014, 10:38 PM   #6
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Default ISO is not to blame.

Rusty:

You either know the buisness or did your homework!

ISO has been fighting this for years. They saw it coming and warned that this could happen. The problem is that the ISOs hands are tied. They do not control who sells the power to the grid.

Gas plants are cheap to build, and require minimal manning, and usually the gas supply is cheap. If the grid can take the power without damaging the lines in an area I can build a gas plant (or any other) and if I am the cheapest producer (of the 400 in NE) ISO must buy from me.

The ISO can not pick who they get the power from. They can not tell me what fuel to use. If they can take my output, I am obeying the NERC rules, the ISO rules and I am the next cheapest plant to put on line then I will be the next plant on the line. Unless it is a relyability issue they have no choice.

Since de-regulation there is no incentive to maintain a "mix" in the system. It is profit driven and that is what has put us in this pickle.

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Old 02-02-2014, 07:57 AM   #7
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Misty Blue,

During the 1990s, the regionís electricity was produced primarily by oil, coal and nuclear generating plants, with very little gas-fired generation. In 1990, oil and nuclear generating plants each produced approximately 35% of the electricity consumed in New England, whereas gas-fired plants accounted for approximately 5%. Coal plants produced about 18% of New Englandís electricity. In contrast, by 2011, oil-fired plants produced 0.6% of electricity consumed in New England, and approximately 51% was produced by gas-fired generation. Coal production also fell by about two-thirds. Currently, during median load periods, nearly the entire fleet of dispatchable resources is made up of gas-fired generators, and a portion of the quick-start generators that would be called to respond to a loss of generation is also dependent on the same supply of natural gas.

That being said, why did the ISO let New England get so dependent on Gas fired plants when they must have known that gas is a Just In Time (JIT) type of fuel and the pipe lines were becoming inadequate to supply the amount needed.
Not to get political here.
It seems that the more diversity of types of energy production - the better.

Where/what, if any, would the Northern Pass play in all of this?
Sticking to the cost of electricity production and cost of electricity to the end consumer.
Positive impact or negative impact on the local coal fired power plants and the local wood powered power plants also.
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Old 02-02-2014, 08:05 AM   #8
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Thank you Misty Blue.

From what I understand, and what you just wrote, the existing forwarded Reserve Market (FCM ) rules include little incentive for capacity market resources to invest in the capability to operate at capacity under all fuel supply conditions (e.g., through firm gas contracts, dual fuel capability, or fuel storage arrangements). There are no enhanced payments related to product differentiation based on firmness of energy production, and there are effectively no penalties for failure to operate according to capacity supply obligations.

Natural gas is sold through brokered markets, and, in a separate transaction, is transported through an interstate pipeline system. The pipelines offer a number of transportation services that vary in priority (and expense). The charges for these services are based on tariffs that are approved by the Federal Energy Regulatory Commission (FERC) and provide regulated rates of return to pipeline owners.

Hence, nothing is getting done.
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Old 02-02-2014, 08:21 AM   #9
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Originally Posted by TheProfessor View Post
Not to get political here.
It seems that the more diversity of types of energy production - the better.

Where/what, if any, would the Northern Pass play in all of this?
Sticking to the cost of electricity production and cost of electricity to the end consumer.
Positive impact or negative impact on the local coal fired power plants and the local wood powered power plants also.
Access to 1,200 megawatts (the equivalent of the Seabrook Nuclear Power Station) of low-carbon, low-cost, renewable hydro power would definitely help with the power shortage that we sometimes have here in New England.

That's about all that I have on the "Northern Pass".
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Old 02-02-2014, 11:23 PM   #10
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Default Electric rates 102.

Ok folks, lets look at the money.

Remember the six states that make up ISO NE? Think of New England as a boat. There are around 400 producers supplying the boat. There are also around six wires connecting our boat to the dock (the other ISOs). There is a balance between what we produce locally, import and export to and from the dock.

Selling electricity is like selling at an auction. Except it is sort of a reverse auction.

Every morning all of the suppliers in NE bid in on how much they will charge, on an hourly basis, for their power for the next day. We are guessing on how much power will cost tomorrow. The cost depends on the system load and what the other plants have bid in at. It varies as the day goes on and with other factors. Want some fun? The Super Bowl is on right now and the load will vary by the minute according to time outs, half time, etc. During a time out a million people in NE get out of their chair and grab a beer, put popcorn in the microwave and flush the toilet. The ISO can actually see this and will prepare for the load swing.

So now it is time to bid. We have three plants bidding: Misty power, Professors scientific, and the Rusty turbine. (Sorry Rusty, had to say it)

Misty bids in at $0.00 per MW.
Prof. bids in at $25 per MW.
Rusty bids inat $50 per MW.

Remember, the ISO must run the cheapest plant first.

Misty bid $0 as did several other plants like Nucs that can't change load easily. But we are betting that the load required will be greater than total of all of the plants that bid zero.

So the load is a bit above this load supplied by the zeros. The ISO must add more generation to meet demand so Prof. gets a call to run at $25. Here is the "reverse auction" kick. We ALL get that $25! Even us zeros.

Now the load increases above what we and the Prof. and the rest of us zeros can supply. The ISO calls on Rusty to start up at $35. And, yup, we ALL get the $35!

If load goes above what we can supply the ISO will call on the next cheapest plants which are usually Gas. But it is -10 degrees outside and there is a shortage of gas. If the gas plants can't run then ISO will call on the next cheapest unit, maybe Harry's oil burner at $85 per MW and we ALL get $85! That is how the prices ended up at around $200 during the last cold spell.

Another funny thing....

It is 2000 on groundhog day and the ISO just called me and said that they have too much generation running and the price just went to $0.00 per MW and the expensive plants will be called off and the rest of us will ALL be getting zero. We will continue to run at this price (I expect it to go up around 0600) because we are power plant operators and have a duty to provide a vital service to our community.

Sorry, didn't mean to preach...

Misty Blue.
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Old 02-03-2014, 12:28 AM   #11
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My understanding is that gas has been cleaning nukes clock for the last few years pricewise, is this true??
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Old 02-03-2014, 08:46 AM   #12
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Thank you Misty Blue, that was very well written and easy to understand.

According to an article written by "Forbes"..... ISO-New England asked Public Service of New Hampshire (PSNH – a subsidiary of NorthEast Utilities) to operate its entire generation fleet at the end of last month to help keep the lights on. This included firing up several infrequently-deployed combustion turbines which ran on jet fuel.

The reason for this “According to ISO-New England, about 75 percent of the region’s natural gas electrical generation capability was not running Thursday, presumably due to limited gas supply and/or high prices. Smagula commented “There is no question that the New England system is severely stressed at the moment.”

PSNH is the only remaining utility in New England with its own power plants, (biomass, coal, oil and nine hydroelectric facilities), with 1,150 megawatts of capacity.

http://www.forbes.com/sites/peterdet...ary-cold-snap/
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Old 02-03-2014, 03:59 PM   #13
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So are you saying that some of these gas fired plants get their gas cut off based on the supply/demand?I would aasume that it so as not to interupt residential and in my case a fairly large commercial users?
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Old 02-03-2014, 04:44 PM   #14
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Default Interruptable Gas Contracts

Years ago, when I worked for Adelphi University in Garden City, NY, our central heating plant was a dual fuel system, natural gas, or fuel oil (at that time, number 6, later changed to number 2 - the same as your oil burner - primarily for environmental reasons) Because of the interruptable contract, we paid a very low price for the gas and burned it the majority of the time. But, whenever there was a cold snap or other problem with the gas supply we got a phone call from (then) LILCO, and had to stop using the gas within a few hours. That way they had enough gas when demand was high for their other customers, but were able to contract with their suppliers for greater constant amounts of gas, for a lower price for all their customers. We even used the gas fired boilers to generate steam for our absorption air conditioning chillers in the summer, less expensive than electricity.

I believe these interruptable contracts are quite common, and typically lower energy costs for everyone when averaged out over a year.

Basically, it is hard to store gas, you have to have someone to use it all the time. Yes, you can shut off wells, but not quickly. and starting them again is difficult.
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Old 02-03-2014, 05:20 PM   #15
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Default Canal Street in Nashua

I use to work for a large company in Nashua. Originally the company had #6 fuel burned in converted coal furnaces. In the 90's the furnace were replace with dual fuel, natural gas and #2 oil. The cooling system was unique in that water from the river were poured over condensers to cool the air. About that same time the EPA considered this method hazardous and the company converted to air pump cooling system. The end result in negligible savings as the money saved on heating fuel was pumped into the new cooling system as it required mega electricity to operate.

There was a processor that when feed with the cost of both fuels, the processor will switch to whatever is cheaper.

Today, PSNH determines when the company burns natural gas or oil depending on the demand and not the price. Actually costing the company more on the long run.
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Old 02-04-2014, 08:37 AM   #16
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I have non interuptable contracts for my gas supply but I believe they are up soon. My 20 million btu boiler is a dual fuel burner but I took the 10,000 gallon oil tanks out of the ground 10+ years ago and never replaced them as gas has been far cheaper. Have to look again at the numbers with this much higher demand of gas.
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Old 02-07-2014, 12:01 PM   #17
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Default Electric rates 103. The final chapter

So where do companies like NH electric. com and the like fit in here?

When you pay your electric bill only about 40% goes to pay for the actual power supplied to you. The rest are delivery charges, taxes and such things.

About 40% is what you are actually paying for the power delivered to your meter. I think that it is called Co-Op power in my NHEC bill. It may have a different name on your bill. That is the what these companies are trying to sell you on. And possibly save you money.

You see for with the exception of the past few weeks with the stupid cold, the average ISO price for a KW has been about 4.5 cents.But that is not what you pay your power company. The Co-Op has been around 6.5 cents a KWhour, and PSNH around 8.5to 9 cents. That is where they make their money.

The e-NH.com people are betting that the average price stays where it is at and that if they sell you power for, say 5.5 cents per KW they can make a profit instead of the other companies. They make around one cent and you save around one cent or more depending on your company.

It can be a good deal but I do not know the money changes hands.

Misty Blue.

Last edited by Misty Blue; 02-09-2014 at 12:22 PM.
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Old 02-09-2014, 12:26 PM   #18
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Default correction?

I do not want to mislead anyone.

The numbers that I used in my provious post are examples and do NOT reflect actual prices from any of the power companies or their compeditors.

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