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Federal budget explores sale of Tennessee Valley Authority

President Barack Obama's administration is willing to explore the possibility of privatizing the government-owned Tennessee Valley Authority, according to the 2014 federal budget proposal released by the White House in early April.

According to the proposed budget, the Tennessee-based utility would be subject to "strategic review" as the administration looks for ways to help reduce the country's deficit. "Reducing or eliminating the Federal Government's role in programs such as TVA, which have achieved their original objectives and no longer require federal participation, can help put the Nation on a sustainable fiscal path," the budget proposal said.

Divestiture of TVA "in part or as a whole" is an option suggested, although the budget does not present a specific plan detailing the utility's future. "At this point, we don't know what the strategic review might include or what options might be explored," TVA Board Chairman Bill Sansom said. "In the meantime, we will continue operating TVA in a sound financial manner in support of the people of the Tennessee Valley and the interests of the federal government."

Although TVA and its resources are owned by taxpayers, the corporation has not received government subsidies since 1998. Regulatory filings show TVA recorded more than US$11 billion in sales in 2012, and even though it has about $25 billion in debt that counts toward the federal deficit, taxpayers are not legally liable for it.

TVA provides power to 9 million people in seven southeastern states via a portfolio that includes 29 hydroelectric, 11 coal and three nuclear plants.

Bill would modify Connecticut RPS to include Canadian hydro

A bill is being considered in Connecticut that would modify the state's renewable portfolio standard by including hydro projects with capacities up to 30 MW. The legislation, called An Act Concerning Connecticut's Clean Energy Goals (or State Bill 1138) would expand the definition of "Class I" hydropower resources to projects with capacities up to 30 MW, assuming they began operation on or after Jan. 1, 2003. Connecticut's current RPS limits hydropower to plants with capacities of up to 5 MW.

Opponents in some states considering similar RPS revisions argue that adding existing hydroelectric resources might stymie renewable development in other sectors. Connecticut's bill adds a caveat that energy purchased from Canadian hydropower projects can also qualify for inclusion by the state.

Called a "Class I contracted tier renewable energy source," the legislation sets a cap on the percentage of energy that could be included. That number would start at 2% in 2014, then grow incrementally before maxing out at 7.5% in 2025 and all years thereafter.

The bill passed the state's Energy and Technology Committee with a 16-8 vote. It will go before Connecticut's General Assembly before the session ends in June.

Wood Group wins rehab contract for Castaic pumped storage

Wood Group GTS has won a US$11.2 million contract to re-rate a turbine-generator unit at the Los Angeles Department of Water and Power's (LADWP) Castaic pumped-storage plant.

The Houston-based Wood Group will replace discharge and wear rings, modify stay vanes, refurbish shutoff valves and replace the generator stator on a Hitachi turbine, increasing the unit's capacity to 21 MW and Castaic's total capacity to about 1,260 MW.

Wood Group has made similar modifications to three other turbines over the past four years as part of LADWP's Castaic Power Plant Modernization Program. The Castaic plant includes six pumped-storage units and one 55-MW conventional unit.

The project will increase unit efficiencies by about 2.7% in pumping mode and 1.2% in generating mode, the company said, with work to be completed by the end of August.

NYPA hydroelectric power allocation leads to jobs creation

Hydropower allotments announced by New York Governor Andrew Cuomo and the New York Power Authority (NYPA) will lead to more than 200 new jobs and US$190 million in capital investments.

Under a plan approved by NYPA in March, five companies will share nearly 13 MW of power from the 2,525-MW Niagara project, allowing for expansion and job creation. "Low-cost hydropower is one of the most effective development tools that we have to create jobs in New York," Cuomo said. "These are smart investments in the region's economy."

Included in NYPA's allotment are the following allocations:

- Yahoo! will receive 7.2 MW for a customer call center that will create a minimum of 100 jobs. The company's data center will also add 15 positions to its current workforce.

- SiGNa Chemistry will receive 2.5 MW to establish a manufacturing facility that will initially create up 50 jobs.

- Aurubis Buffalo will receive 2.8 MW to increase production at its Buffalo-based copper and brass rolling mill, creating 35 jobs.

- IIMAK will receive 200 kW for an equipment expansion at its Amherst manufacturing plant.

- RubberForm Recycled Products will receive 200 kW for its Lockport facility, allowing for the expansion of its recycled materials production line.

NYPA said the allocations will be provided under seven-year contracts, with the allocations drawn from two blocks of Niagara electricity known as "Expansion Power and Replacement Power."

FERC relicenses Boundary, OKs surrender of Sullivan Creek

The Federal Energy Regulatory Commission issued an order March 20 relicensing Seattle City Light's 1,003-MW Boundary project on Washington's Pend Oreille River.

In operation since 1967, Boundary Dam provides 25% of the power used by the city of Seattle. FERC staff issued an environmental impact statement in 2011 endorsing the utility's relicense proposal with added staff recommendations.

In a related order carrying out part of a Boundary project relicensing agreement, FERC also accepted the surrender of the license for an upstream water storage project, Sullivan Creek. Seattle and Sullivan Creek's licensee, Pend Oreille County Public Utility District, are to remove that project's Mill Pond Dam and perform other work to improve aquatic habitat in Sullivan Creek and Sullivan Lake.

Seattle City Light filed in 2009 to relicense Boundary. In March 2010, Seattle and Pend Oreille PUD filed a settlement agreement asking to consolidate the relicense proceeding with the surrender of Sullivan Creek, which is operated as a storage project for downstream generation under the Pacific Northwest Coordination Agreement. The agreement includes obligations for evaluating and providing fish passage for resident salmon, including fish entrainment, improving aquatic habitat, stocking fish for recreational purposes, conserving native fish, groundwater well decommissioning, acquiring and managing land for wildlife, and other measures for recreation and cultural resource enhancement and protection. The utility also plans to upgrade turbine runners, rewind generators and replace step-up transformers of two units, increasing generation and possibly installed capacity.

Under the Sullivan Creek agreement, Pend Oreille PUD would retain and operate the remainder of the project under a U.S. Forest Service special use authorization. That would include Sullivan Lake Dam and Sullivan Lake. Mill Pond Dam would be removed and a cold water release intake would be added to Sullivan Lake Dam.

Although Seattle City Light requested a 50-year license, FERC only granted a 42-year license so it will expire at the same time as that of Pend Oreille PUD's 72-MW Box Canyon project. The commission said that would allow coordination of mitigation and enhancement efforts at the neighboring projects.

FERC's revised economic analysis found that continuing to operate Boundary as originally licensed would produce power at $27.77/MWh less than the cost of alternative power; Seattle's proposal would produce power at $19.42/MWh less than alternative power; and as licensed, including the staff modifications and resource agency mandatory conditions, would produce power at $19.40/MWh less than the cost of alternative power.

FERC's EIS said the plan to surrender Sullivan Creek, plus FERC staff modifications, would cost $18.2 million.

Committee approves 50-kW plant in Alaska's Denali National Park

A bill allowing for the construction of a 50-kW hydro project in Alaska's Denali National Park was unanimously approved in mid-March by the Senate Energy and Natural Resources Committee.

The bill - one of several passed as part of a package of public lands bills - directs the National Park Service to issue a special-use permit to speed the plant's development and allows the authority to exchange 10 acres of land from owner Doyon Ltd. for its construction.

The project will be built on Eureka Creek to power Katishna Roadhouse, a Doyon-owned lodge about 100 miles into the park. Currently, power for the roadhouse is provided by diesel generators.

FERC issues three exemptions, receives application in March

The Federal Energy Regulatory Commission issued three license exemptions totaling 578 kW and received an application for a 292 kW exemption in March.

The Energy Infrastructure Update for March included approval of an application by the city of Westfield's Water Resources Department for a conduit exemption for the 80-kW Sackett Filtration Plant project to be installed in Hampden County, Mass.

FERC also approved an application from L.S. Starrett Co. for a (maximum) 5-MW small hydro exemption for the existing unlicensed 25-kW Crescent Street Dam project on Millers River near Athol, Mass. FERC approved increasing the project's installed capacity to 448 kW.

The commission also approved an application from Freedom Falls LLC for a (maximum) 5-MW small hydro exemption for the 50-kW Freedom Falls project to be built on Sandy Stream in Waldo County, Maine.

In other action, Three Valleys Municipal Water District filed an application for a conduit exemption for the 292-kW Miramar Bypass Station project at Claremont in Los Angeles County, Calif.

The March update may be obtained at www.ferc.gov/legal/staff-reports/2013/mar-energy-infrastructure.pdf.


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