USEP Exam 1

Calvert Cliffs Coordinating Committee vs. AEC (1971)

- Under NEPA, AEC must consider environmental impacts at every stage of licensing process as well as alternatives that might lessen environmental impacts. - Led to long construction delays. Redesigns of water-intake systems, reactor-cooling systems, radioactive waste-recovery systems, and rerouting of transmission lines.

Federal Oil and Gas Leasing - Offshore

Beyond 3 miles from coastline. Federal "Outer Continental Shelf" (OCS) - 3.9 billion acres. Federal OCS Program - multiple agencies within the Department of the Interior). Portion of revenues to Land & Water Conservation Fund.

Retail choice

Consumers get to choose their electricity provider. Restructured retail markets

Utilities

Entities involved in generating and/or delivering electricity. Generation, transmission, distribution, retail (GDTR).

state utility commissions

First ones in Wisconsin and New York. Provided lower cost of electricity to customers through monopolization of states - in exchange they can regulate the rates that are charged. Doesn't make sense to run multiple lines of electricity into neighborhoods to compete. Natural monopoly to electricity. Regulated by state public utility commissions: regulated allowed utilities to raise money because it was a safe investment even if it was not hugely profitable.

wheeling authority

allows EWGS to schedule energy transfers from one region/regulator to another

Intangible Drilling Costs Deduction

allows companies to deduct the majority of costs incurred while drilling new wells domestically.

Polarity

direction of current flow

FERC Order No. 636 (1992)

"Final Restructuring Rule." Ordered pipelines to separate their transportation and sales services, so that all pipeline customers have a choice in selecting gas sales, transportation, and storage services from any provider, in any quantity. Gas transmission through "contract carriage" with "firm capacity."

Investor-Owned Utilities (IOUs)

- 70-75% of U.S. population served by IOUs - Publicly listed corporations/private companies), subject to state regulation and financed by shareholder equity and bondholder debt - Many (post-restructuring) have multi-fuel, multi-state operations and are organized as holding companies with multiple subsidiaries - Vertically integrated (own generation, transmission, and distribution) - Own 2/3 bulk-power transmission lines but do not operate - Own 33.5 percent of generation - Often provide natural gas service as well ("Gas & Electric Cos.") Part of the private sector's ownership of the grid

Clean Air Act Amendments of 1990

- Acid Rain Training Program (Cap and Trade) - Hazardous Air Pollutant lists (6 to 189. Maximum Achievable control Technology) - Nonattainment requirements (classifications mmse with requirements for each) - Permit Programs - enforcement (citizen's civil action against violation of standards) - stratospheric ozone protections (CFCs and halons) - Transported Air Pollution (EPA authorized to establish administratively created transport regions/address problem with ground level ozone) - emission standards for mobile sources)

Inflation Reduction Act of 2022

- Advanced nuclear reactors can receive $25/mwh for ten years if going online after 2025. - 2024-2032, utilities will be able to get a $15/mwh tax credit for electricity produced by existing plants (subject to "prevailing wage" requirement), decreasing if price of electricity rises above $25/mwh. - Investment tax credit of 30% for new plants.

Subsidization of consumption:

- Gasoline Taxes, 1910s and 1920s - National Housing Act (1934) - GI Bill (1944) - Interstate Highway Act (1956) - Local Zoning Policies

Clean Air Act Amendments of 1977

- New Source Review (Section 111) - enforcement (noncompliance penalty equal to economic value of noncompliance for any source - 25,000/standards to reduce impairment to visibility in urban areas) - Interstate emissions (Good Neighbor - prohibit stationary sources that contribute significantly to NAAQS or interferes with maintenance of NAAQS). Substantial and political situation) - Sulfur Dioxide (scrubbers except for old stacks, reduced so3 criteria near high sulfur coal mines, tall stacks standard).

Independent Power Producers (IPPs)

- Post 1992 deregulation of wholesale power markets - Own generation only (47 percent of generation) - merchant power (around 1,000) Part of the private sector's ownership of the grid

Tax Breaks for Oil

1) Expensing of Intangible Drilling Costs (1913) 2) Percentage Oil Depletion Allowance (1924) 3) Foreign Tax Credit (1950)

Wholesale "Bulk Power" Energy

1) Load-Serving Entities (LSEs) sell their own generation 2) Bilateral Markets. Price and length of contract negotiated between generator and LSE. 3) Auction markets run by RTO/ISO: Range of bids determine Locational Marginal Pricing (LMP). - Energy Day-ahead market - 95% of market transactions. - Energy Real-time "spot" market Usually for 5, 15, and 60-minute increments, 75 minutes ahead. - Ancillary services (resources that have ability to adjust output or consumption in response to an automated signal - voltage control/reactive power, frequency regulation support, "spinning" operating reserves, and demand response in some places). - Forward markets for Financial Transmission Rights (protects customers against the risk of congestion-driven price increases in the day-ahead market). - Forward markets for Energy Capacity - usually three years into future

Sam Miller McDonald acknowledges that "there is a serious argument to be made that nuclear should -- and even must -- be an important component of our efforts at decarbonization." However, he identifies many major risks, challenges, and environmental problems with nuclear power as a strategy to combat climate change. List as many as you can.

1) takes an average of tern years to build, and the energy it produces cost more than renewables 2) cost more to run than they earn in profit 3) Slowness, costliness, and inflexibility of nuclear power is a major hindrance to the rapid transition required to address climate change 4) Technology to deal with radioactive waste and non renewability of uranium are out of reach with no real guantentees of ever being viable. 5) very bad for the environment. Uranium mining is highly environmentally destructive with radioactive waste rock. Waste threatens wildlife and plants are built on waterways that create hotspots that threaten aquatic species 6) uranium is nonrenewable 7) fissile material is famously explosive 8) creates an reliance on our current carbon infrastructure for mining, processing, and transportation (more as well - the grid for example) 9) socially unfair as marginal groups suffer the most harm and not provide jobs to them 10) Needs high levels of geopolitical stability, climate and geological stability (Fukushima), civilization all stability, and so on. 11) aging containers leak their toxic content 12) waste products are toxic for hundreds of thousands of years after

List the three reasons outlined by Jason Bordoff for why nuclear power has returned to the energy debate, despite setbacks, in recent years. Briefly describe each.

1) the urgency of meeting increasingly ambitious climate goals. It would be easier, faster, and cheaper to get to net zero emissions if nuclear energy is part of the solution. Global electricity use will need to more than double to achieve net zero emissions by 2050, and other renewable resources can;t provide for all of it due to being intermittent. Only carbon free energy source operating at scale that can reliably deliver power at any time. Requires less land and no new transmission infrastructure. 2) significant advances in nuclear technology reduce costs, waste, and safety concerns like better containment technology 3) national security concerns about China's and Russia's growing leadership in nuclear power. This has motivated recent efforts to invest in advanced reactors and retain the domestic nuclear industry. Participation in the supplier regime for reactor fuels and equipment used to afford Washington points of influence to shape nonproliferation aspects of other countries' civilian programs. Now the US is no longer the predominant supplier of reactors (russia). China and Russia will be setting future norms of nuclear commerce and safety with potentially negative consequences for nuclear nonproliferation efforts

Interstate Interconnection

1920s: • Holding Companies • Regulatory Bargain • Grow-and-Build • Interstate sales of electricity - mostly to urban areas • Public Utilities Commission v. Attelboro Steam & Electric, 1927 - U.S. Supreme Court barred states from regulating interstate wholesale sales of electric power

"Great Bandwagon Market"

1965-1974. This was the time when the demand for nuclear generators started to grow, which happened after the first commercial generator in Pennsylvania. They kept wanting to build bigger and better plants to meet what they assumed was going to be the increasing demand for electricity. However, the cost, rising inflation, and delays caused by regulations led to the demand shrinking and plans being canceled.

Three Mile Island

1979 - A mechanical failure and a human error at this power plant in Pennsylvania combined to permit an escape of radiation (steam) over a 16 mile radius. Partial shutdown. One unit was shut down because the valve forgot to close and started to overheat. It swung public opinion even more against nuclear energy. Before Chernobyl and Fukushima

Public Utility Regulatory Policies Act 1978

2) Section 210: Required regulated electric utilities to buy power from small (less than 80 mw) non-utility independent power producers (IPPs) ("qualifying facilities" QFs) at utility's "avoided cost"of generation, which was left to state regulators to determine. Avoided cost = the cost the utility would have incurred had it supplied the power itself. Typically based on forecasts by state PUCs. Opened wholesale markets to limited competition. Part of wholesale power restructuring

Arctic National Wildlife Refuge

A 19 million acre tract of land in northeastern Alaska. Under consideration for petroleum exploration and extraction because it could yield great amounts of oil and natural gas. Opponents are worried about this harming the pristine habitat for many species and people in the area.

National Environmental Policy Act (NEPA)

A 1970 U.S. federal act that mandates an environmental assessment of all projects involving federal money or federal permits. Authorized the Council on Environmental Quality as the oversight board for general conditions; directs federal agencies to take environmental consequences into account in decision making; requires EIP statement be prepared for every major federal project having environmental impact.

Community Choice Aggregation (CCA)

A group of neighbors can decide to buy electricity as a group in order to more buying power with a lower price and can be pretty good for renewable energy.

Mineral Leasing Act of 1920

Authorized DOI to lease federal land for oil and gas (exempted national parks, monuments, wilderness, and incorporated cities, towns, and villages). Minimum 12.5% royalty. Revenues split between federal government and states. Power of federal government to compel "unitization" - 1935 amendments Onshore Oil and Gas leasing

What are the three main types of electricity generating capacity? What are the additional categories of generating capacity? Explain what each does.

Baseload generating units: supply all or part of the minimum (base), demand on the electric power grid, producing electricity at a nearly constant rate throughout most of the day. Usually nuclear power plants/ Peak Load generating units meet electricity demand when demand is at its highest, or peak. Natural gas and petroleum. Relatively inefficient and costly yet provide high value service Intermediate load generating units: largest generating sector and provide load responsive operation between base load and peaking service. Additional categories: - Intermittent renewable resource generators: wind and solar energy generators. Tend to reduce the amount of electricity required from other generators to supply the electric power grid - Energy storage systems/facilities: use energy to charge an energy storage system or device that is discharged to supply electricity when needed at desired levels and quality. can provide ancillary services - Distributed: primarily supply some or all of the electricity demand of individuals buildings or facilities. If generate more than facility consumes, surplus goes to grid.

Boiling Water Reactor and Pressurized Water Reactor (two main types in U.S.)

Boiling: fuel rods in the core boil cool water to steam, which spins a turbine that generates electricity. A condenser turns the steam back into water. Can cause explosion due to hydrogen from steam reactions occur if water fails to flow from cooling pumps or the suppression pool for days. Pressurized: core heats pressurized water that never boils which in turn converts water in a second loop into steam. Radioactivity is limited to the pressurized loop, but if electricity is lost, pumps cannot circulate water to cool down the core, raising the risk o a core meltdown. Spent fuel housed separately

Price-Anderson Nuclear Industries Indemnity Act (1957)

Capped industry liability and created industry-funded insurance scheme.

"Regulatory Bargain"

Coined by Samuel Insull. Utilities (usually IOUs) are given a monopoly over a customer base in a given area, but the prices you charge have to be approved by the state regulatory board/power comission.

Natural Gas Policy Act of 1978

Combined interstate and intrastate gas markets; created Federal Energy Regulatory Commission (FERC) to replace FPC (Federal Power Commission). Initiated phased price deregulation for competition. Complex system of wellhead gas price ceilings by category. This act occurred due to the natural gas shortages in winter 1976-1977 happening.

Natural Gas Wellhead Decontrol Act of 1989

Complete deregulation of wellhead prices. Gas prices became more volatile. Opened market for energy trading. But FERC still regulated gas transmission rates, terms, and conditions of service to ensure that they are just and reasonable and not unduly discriminatory or preferential.

Market-Demand "Pro-Rationing" (1935-1972)

Controls to limit production below capacity - Coordinated by Interstate Oil and Gas Compact Commission (est. 1935)

Mandatory Oil Import Quotas, 1959-1972

Created by Eisenhower, these limit imports on oil to a certain percentage of domestic production in order to prevent a dependence on imported petroleum supplies

Atomic Energy Commission

Created in 1946 by the Atomic Energy Act to oversee the research and production of atomic power. It is a government monopoly over nuclear technology due to how dangerous it is. Joint Committee on Atomic Energy (JCAE).

Considering all the arguments for and against nuclear power, where do you stand on this subject and why? Should U.S. energy policy encourage the recommissioning of existing nuclear plants and/or the construction of new ones? If so, how?

Definitely do not build more and start phasing out our current plants (though use them as long as we can since the radioactive waste can't be undone). It seems like a good backup to renewable energy sources, but there are far too many concerns for it. I don't think they should recommission or construct new ones because it is just making us even more reliant on our current infrastructure when we need to be moving away from it.

Percentage Depletion Allowance

Depletion: allows businesses to deduct a certain amount from their taxable income as a reflection of declining production from a reserve over time. This specific version allows firms to deduct a set percentage from their taxable income. Because percentage depletion is not based on capital costs total deductions can exceed capital costs. Limited to independent producers and royalty owners.

What are the differences between regulated and deregulated retail power markets?

Difference: some states still enforce a regulatory bargain model where utilities have a monopoly on a geographic location (regulated). Deregulated, certain states allow customers to choose who gives them electricity.

What are the three main grids

Eastern Interconnection (east of the rockies) Western Interconnection (west of the rockies) The Electric Reliability Council of Texas

FERC Order No. 2000 (1999)

Encouraged FERC-jurisdictional utilities that own and operate transmission lines to turn over operational control of those lines to an independent Regional Transmission Organizations (RTOs) as ISOs that have met requirements (12 characteristics and functions) to assume greater responsibility for system security and reliability. Southeast and much of the West declined affiliation. California and Texas established single state ISO/RTOs. Purpose to create more openness and reliability. Part of wholesale power restructuring

Atomic Energy Act (1954)

Ended government monopoly on technical data; permitted use of atomic energy for peaceful applications. AEC licensed and regulated nuclear power plants. Done so once it was seen as safe for generating electricity. Not a lot of regulations besides from being safe

What are the other ways in which society bears the cost of fossil fuel development? How can accounting for those costs be incorporated into policy?

Externalities is the main way society bears the costs of oil and gas. Social cost of carbon: reflects the negative societal impacts of climate change (like spread of disease, decreased food security, etc). Used as a metric to inform federal decision making on environmental policies and their cost benefit analyses. Can be used to show how much it costs a person. Health externalities: pollutants lead to health impacts like asthma and development of cancer. Account for these costs by ensuring death rates are incorporating into policy. Environmental externalities: land degradation, spills, and other damage. Phase out subsidizes by using these as examples of how it costs more than it portrays and save tax payer dollars. To account for these costs, you could implement tradable permitts for pollution, pollution tax, lowering the benefits gained by polluting. Can save billions in taxpayer dollars

Describe the basics of how FERC currently regulates natural gas markets in the United States and the FERC "orders" that shape the regulation of interstate pipelines.

FERC has jurisdiction over rates over the price of interstate oil and gas shipments. authority of siting and approval of interstate gas pipelines. Easier and quicker to build gas pipelines since you have to go to every state for oil. Pipeline owners have to be unbundled from gas production or gas sales. To build a new pipeline, pipeline companies must prove how it will serve public interests, is economically feasible, and has no significant environmental impacts. Orders: 636, 637, 639

Federal Power Act of 1935

FPC to regulate wholesale transmission and sale of electric power ("bulk power") so that it was "reasonable, nondiscriminatory, and just to the consumer;" reserved to states authority over power plants and sales to consumers; FPC retained power to license all non-federal hydropower projects on navigable waters or public lands. FPA became FERC in 1978. regulated distribution across state lines. Part of the New Deal Reforms State: regulate retail sales and distribution services; facility sitting; environmental impacts

Clean Air Act of 1970

First comprehensive environmental pollution-control statute. Ambitious goal of removing all air pollution that posed a threat to public health or welfare. Passed by Senate 73-0. One of the most technically and legally complex environmental laws. Almost every major EPA rule enforcing the CAA has been challenged in court. More than a dozen circuit and district court decisions have yielded Supreme Court decisions on appeal Title 1: Air Pollution Prevention and Control (stationary sources) - NAAQS, SIP, NSPS, National Emission Standards for Hazardous Air Pollutants Title II: Emissions Standards for Moving Sources

What is electricity

Form of energy resulting from the flow of charged particles (electrons, protons). Voltage - Difference in "electrical potential" in an electric field (electrostatic charge between two points (volts - V) Current - Electric flow within a conductor; electron flow past a stationary point (amperes - I) Power - V x I (amps) = Watts (W)

Public Utility Holding Company Act (PUCHA) of 1935

Gave Securities and Exchange Commission (created in 1935) regulatory authority over utility holding companies and led to the dismantling one of the largest ones created during the 1920s and associated with stock market abuses. Dissolved giant public utility holding companies ("Power Trust"). Act applied to both gas and electricity utilities. Each became a single integrated system serving a limited geographical area. Part of the New Deal Reforms

Describe the different components that make up "The Grid."

Generation (starts at a generator), transmission (transforms energy to extremely high voltages to transport long distances) (kinda step two and three as energy conversion than transmission), distribution (step down transformers for distribution/electricity in low voltages over short lengths to homes and buildings), end use. Electricity substation, transformers, and power lines that connect electricity producers and consumers Interconnections are western, eastern, and Texas

GTDR

Generation and Transmission: Bulk Power/wholesale market Distribution and consumption retail: utility service/retail market

Balancing Authorities

Generation and load are balanced at the regional level and sub regional level for reserves. Frequency maintained

Environmental Legislation 1960s-1970s

Growth of federal power to regulate the impacts of fossil fuel-driven development: - Clean Air Act Amendments (1970): Obama attempted to use it to regulate GHG, and EPA got authority for it in 2007; however, it is being called into question - National Environmental Policy Act (1970) - Resource Conservation and Recovery Act (1976): deals with hazardous waste by setting criteria for landfills and no dumping of solids - Federal Land Policy and Management Act (1976): have to consider the multiple use of federal land and not privilege extraction (protection of other values)

AC vs. DC

In direct current (DC), the electric charge (current) only flows in one direction. Electric charge in alternating current (AC), on the other hand, changes in flow, so the direction can change. AC has an advantage of being converted via transformers to higher voltages which, at the time, allowed electricity to be transmitted over long distance at lower losses. AC: powerplants, high-voltage, spinning turbines, more common, long-distance, cheaper. DC: renewables, shorter distances, used by computer/phone chargers

History of gas industry

In the 19th century, it was coal gas. The first interstate gas pipelines was 24 inch diameter pipes. It has long term contracts, gas sales and transportations were bundled (monopoly power), and states attempted to regulate (lost in court). Then, as a response to German "Operation Drumbeat" submarine attacks in WWII, they build the big inch for crude oil and little inch for refined product is pipelines (1942-2943), which held a capacity for 300,000 barrels of oil per day. Late 1940s: Texas Railroad commission banned flaring, which created a need to find new markets for gas. 1954-1978: - Phillips Petroleum vs. Wisconsin (1954) - FPC must regulate the price of natural gas at the wellhead. Effects of this decision were complicated and far-reaching. - "Cost-of-service" rate-making. Cost of providing the service, rather than market value of natural gas, plus a "fair" profit. - Discouraged exploration for natural gas shipped interstate. Producers preferred to sell in unregulated intrastate markets (namely, Texas), which causes gas shortages

Surface vs. Mineral Estate

In the US, surface owners (right to farm or build on the property) usually owns the minerals (rights to use a property for the minerals it harbors), which is known as fee simple, but there are split estates where the surface owner does not own the mineral rights. Very common in the west due to the homestead settlements laws which gave land to settlers but reserved minerals for the governor. Usually the rights of the mineral estate triumph the surface estate, so mineral owners could drill a well in your front yard and you can't stop it.

Foreign Tax Credit

Instead of claiming royalty payments as deductions, oil and gas companies can treat them as fully deductible foreign income tax.

Circuit (transmission and distribution)

Interconnection of electrical components; connected by conducting wires that transmit power produced by generation

Why has it been difficult to build new nuclear power plants in the United States in recent years?

It has been difficult to build new nuclear power plants in the US because natural gas (unlocked by the shale revolution) and dramatic cost declines in wind and solar power have made it harder for nuclear power to compete. Not to mention, the cost to build plants have grown, their timelines are lengthened, or the project just scrapped. Regulations require better design and it costs way too much.

How is electricity generated? What proportion of electricity generation comes from various sources in the United States?

It is generated from the conversion of primary sources, usually by an electric generator. Natural Gas 38%; coal 22%; nuclear 19%; renewables 20%

Load-Serving Entities (LSEs)

It is typically a business, like a generator, broker, marketer, aggregator, or utility that sells electricity to consumers using the transmission or distribution facilities of an electric company, and pays a tariff to the distribution company. It's can enter a bilateral contract without going through the wholesale market. Only supply specific loads to customer. created after breaking up vertical integrations - Example: Investor owned Utility, Mid American

Nuclear Regulatory Commission (NRC)

It licensed and regulated nuclear power. The Energy Reorganization Act of 1974 split AEC into NRC and the Energy and Development Administration, which managed nuclear weapons.

AP100

Most common type of Gen III reactor. Designed to cool a hot core without electricity or human operation for several days. Three tanks inside containment vessel with a fourth in the roof above it rely only on natural forces to supply cooling water.

How is the regulation of oil and gas operations divided up between state and federal governments? Between onshore and offshore? Between different segments of the value chain?

Most regulation goes to the states- drilling and production is mainly states. State land = states control. It also deals with exploration and production on state and private land. State regulated activities- seismic and geographic surveys, leasing drilling, hydraulic fracking, oil and gas production, well closure and site restoration. States enforce regulations by permitting and regulatory expectations. Interstate oil and gas compact commission. Federal regulates primarily water and air quality, worker safety, and exploration and production on native, public, and intercontinental shelf land. Require the capture of all gases and fluids that come out of a well as it is being prepared for production. Regulate wells that dispose of oilfield waste. On federal land (onshore)- Bureau of land management has jurisdiction on all oil leasing, oil exploration, development, and production on native and federal land. Natural parks service regulates oil and gas activities in there parks. Fed decisions on constraints on drilling oil and natural gas are based on the NEPA environmental impact statements. Standards for drilling and production, requires all operations federal land to comply with state and local regulations, and protect life, property, and environmental quality. Offshore- 3-9 miles off shore on the Outer continental shelf (0CS) is regulated by fed. Usually managed by Bureau of Ocean Energy Management as they deal with leasing, resource assessments, and licensees seismic surveys. Bureau of safety and environmental enforcement regulates oil and gas drilling and production Pipelines States run the operations of oil pipelines and construction FERC controls the interstate travel of oil. The Pipeline and hazardous materials safety administration regulates operation of pipelines that provide long distance transmission and local customer distribution. EPA for emissions. Federal government with OSHA. Federal railroad administration for rail transport of Druid oil and refined products.

National Energy Act of 1978

National Energy Conservation Policy Act: DOE to set Minimum Energy Performance Standards (MEPS) (DOE created in 1977); Required federal agencies to perform energy surveys to reduce consumption of nonrenewable energy sources; Enabled government to give loans for purchase and installation of solar heating or cooling equipment; Created a grant program for energy conservation Power Plant and Industrial Fuel Use Act: Restricted construction of power plants using oil or natural gas as a primary fuel (restriction on use of natural gas repealed in 1987). Encouraged use of coal, nuclear, etc. Reflects concerns over energy security (OPEC) Public Utilities Regulatory Policy Act (PURPA): Forced electric utilities to buy power from Independent Power Producers (IPPs) if cost less than "avoided cost" rate to consumer; forced utilities to interconnect with renewable power production facilities; beginning of wholsale electricity deregulation; Promoted R&D for renewable energy technologies; Ended promotional rate structures Energy Tax Act: Temporary investment tax credit of 10% for installation of solar, wind, or geothermal sources of energy. Gas Guzzler tax - tax on vehicles with official EPA-estimated gas mileage below certain levels Natural Gas Policy Act: Granted Federal Energy Regulatory Commission (FERC) authority over intrastate as well as interstate natural gas production; Initiated the phased price deregulation of natural gas. regulatory control over intrastate gas by setting ceilings on wellhead sales of gas History: energy shortages, so emphasis of energy security by also trying to control how much oil we are using due to OPEC

Difference between Natural Gas and Oil (market)

Natural Gas - Often produced in association with crude oil. - Bought and sold only in national market (until very recently). - Can only be shipped by pipeline (or LNG tanker). Crude Oil and Oil Products - Bought and sold in a global market. - Can be shipped by pipeline, rail, barge, ship, or truck. Drilling and production for both mostly regulated at state level (unless on federal land or covered by federal law). Pipelines and pricing for oil vs. gas regulated differently.

Interstate Commerce Act of 1887

Originally governed "common carrier" railroads and telegraph companies; later extended to pipelines. Applied to oil pipelines when amended in 1912. Protect producers from monopolistic practices of pipelines. "Just and reasonable rates" and non-discriminatory. Capacity allocated on a pro-rata basis (all interested and qualified shippers entitled to reasonable percentage of use). Siting and environmental review of interstate pipelines by states (unless crossing federal land or waterway). Power of eminent domain granted by states.

List the various kinds of entities that own parts of the electric power system. List the various entities that regulate parts of the electric power system.

Owner: - Generation: Investor owned utilities; Publicly owned utility; Independent power producers; Federal marketing authorities - Transmission: Investor owned utilities; Publicly owned utility; Federal power marketing authorities; Independent transmission companies - Distribution: Investor-owned utilities; Publicly owned utility; Federal power marketing authorities Regulator - generation: State public utility commissions - Transmission: FERC (oversees connection to the grid); State PUCs; North American Electric Reliability Corporation that sets reliability standards - Distribution: State PUCs

Federal Energy Regulatory Commission (FERC)

Part of the Department of Energy, this agency regulates electricity and natural gas. Controls the price of natural gas and electricity for business transactions that occur between states (interstate). It also ensures that regulated energy companies are following guidelines set by the law. (rebranded from FPC due to wellhead prices)

Rural Electrification Administration (REA) Act of 1936

Part of the New Deal Reforms. REA provided loans and assistance to rural electric cooperatives to develop electricity distribution.

Publicly Owned Utilities (POUs)

Part of the ownership of the grid but public sector. Retail rates are cost plus pricing that are significantly lower than IOUs - City-owned or municipal utilities (Munis) - State-owned utilities and authorities (e.g., New York Power Authority, Minnesota Municipal Power Authority) - Rural Electric Cooperatives (Coops) - Member-owned utilities. Most formed during Great Depression to extend electric service to remote areas IOUs were unwilling to serve. - Federally owned utilities and power marketing administrations - Other Public Utility Districts (Native American tribes, irrigation districts, mutual power associations, and other public and quasi- public entities such as those on university campuses) - Most are distribution only.

Load

Power consumed by electrical component in a circuit; the draw of electricity on the system. Generations must always equal ____

eminent domain

Power of a government to take private property for public use.

What agencies and requirements are involved in approving a liquified natural gas (LNG) export facility?

Pre file at FERC before formally filling; Applicants file all material with FERC and Pipeline and Hazardous materials safety administration; PHMSA: letter of determination; Final NEPA Document from NEPA; FERC final order (deny or approve) where comissions owners deny or approve the permit; Joint record of decision from cooperating agencies with environmental review authorization deny or approve the project; Non FTA export approval if they want to export to non Free Trade Agreement countries, the department of energy must separately implement a review to see if exports are in public interest; Final investment decision.

Generation

Production of electric power • Turbines ("spinning," "electromagnetic induction") - Steam turbines - Combustion Gas turbines - Combined-heat-and power (CHP) ("co-generation") - Hydroelectric turbines - Wind turbines • Internal Combustion Engines • Solar Photovoltaic Cells • Others: fuel cells, Stirling engines, thermoelectric generators

Natural Gas Act of 1938

Protect consumers against potential exercise of monopoly power in interstate market (monopoly prices, discrimination in favor of affiliated or preferred customers). After deregulation, pipelines subject to FPC/FERC oversight: Rates; terms and conditions of service; siting, construction, operation, and removal of pipelines. Protecting both producers and consumers from monopoly power. "Contract Carriage" post deregulation: nominations as "firm" or "interruptible." Siting and environmental review of interstate pipelines by FERC. Power of eminent domain granted by FERC, so communities have less power to stop them. Companies wishing to make an interstate sale of natural gas had to get a "certificate of public convenience and necessity" from the newly created Federal Power Commission (eventually FERC). Certificates set a maximum price that was "just, reasonable, and nondiscriminatory." Certificates came with power of eminent domain.Price controls were therefore imposed on natural gas shipped across state lines --"interstate."

Regional Transmission Organizations (RTOs)/Independent System Operators (ISOs)

Regional Transmission Organization or Independent System operation are nonprofit organizations owned jointly by utilities in the region, and they are established in particular geographic regions to manage the operations of the electrocity's grid. They are responsible for ensuring the reliability of the transmission grid by facilitating wholesale power markets, monitoring transmission grid performance, and coordinating the operations of power generators in the region. Plan for capacity and expansion. who and when gets to interconnect to the grid. The services are the auctions they run. RTO's have more requirements under NEPA. ISOs run wholesale market (responsible for maintaining system balance, reliability, and electricity market operation) and RTOs is system reliability, service, and interconnection. Subsection of NERC. Services and products: RTOs run auction markets that determine which power plants generate energy (day ahead and real time), markets for ancillary services, capacity. operate high-voltage grid, and engage in long-term transmission planning

FERC Order No. 888 (1996)

Required FERC-jurisdictional transmission owners to provide open, non-discriminatory access to their system. Uniform open-access transmission tariff that all utilities required to follow. Recommended creation of Independent System Operators (ISOs) to satisfy requirement for providing non-discriminatory access to transmission. Part of wholesale power restructuring

Nuclear Energy Innovation and Modernization Act (NEIMA) (2019)

Requires NRC to create a licensing framework for next-generation reactors by 2027. New draft proposed licensing rule (1,200 pages) floated at end of 2022. More complex and burdensome than existing regs.

Growth of Investor-owned utilities

Samuel Insull - Commonwealth Edison • Thomas Edison's former secretary • Pioneered: Central station generation (steam turbine or hydro); "Father of Centralization"; Electric metering; Electric holding companies; "Grow-and-build" strategy; Interconnection; Promoted the regulatory bargain

Unbundling

Separating the transmission of gas from the buying and selling of gas Restructuring 1978 -1992

Fission vs. Fusion

Splitting of a heavy, unstable nucleus into 2 lighter nuclei vs 2 light nuclei combine together

Briefly explain how the government -- other than through tax and accounting regulations -- subsidizes the oil and gas industry.

The government can subsidize the oil and gas industry though funding for research and development in order to maintain the competitiveness of the industry. It can also try to make coal cleaner, or it can try to create Carbon Capture and storage technology. - American Recovery and Reinvestment act: funds for carbon capture and storage technology The Overseas Private Investment Corporation (OPIC) finances American business abroad with loans and committed investments for oil and natural gas products Military budget to protect oil and gas in the Persian gulf - other natural resources as well.

Locational Marginal Pricing (LMP)

The price of a unit of energy at a particular electrical location at a given time. LMPs are influenced by nearby generation, load level, and transmission constraints and losses.

American Recovery and Reinvestment Act (ARRA 2009)

The stimulus bill. It was focused on renewables and clean energy; energy efficiency and building retrofits; smart grid and instructive projects; and fuel efficiency and electric vehicles. • $90 billion to "lay the foundation for a clean energy economy of the future"; 10% of the stimulus bill ($443 million to State of Iowa) • Extension of renewable energy production tax credits (PTC) • Green Energy Subsidy (Section 1603) - Payments For Specified Energy Projects in Lieu of Tax Credits up to 30% of project costs (up front payments instead of cost recovery through tax credits) • Block grants for energy efficiency and conservation, weatherization assistance, advanced battery manufacturing, alternative fuels, and EV technologies • Research funding for grid modernization/smart grid/electricity storage • Loan guarantees for renewable energy and transmission (Solyndra) • Funding for carbon capture and storage demonstration projects • Funding to convert federal buildings to "high-performance green buildings" • Funding for procurement of energy-efficient vehicles for use in federal fleets • Clean Renewable Energy Bonds for non-profits and state/local/tribal governments • Energy Conservation Bonds for state and local governments

Zero Emissions Credits (ZECs)

Utilities have to buy ZECs which is transferred to places selling nuclear plants. If you don't buy electricity from nuclear, you have to buy a ZEC. Based on the social cost of carbon model that by keeping plants in operation we are contributing to GHG targets Payments that electricity generators receive to compensate them for the valuable attribute of not emitting greenhouse gases

France

_____ relies on nuclear energy the most and is the second largest generator. US is first and China is second (only one that has been adding a significant amount)

Last In, First Out Accounting

allows oil and gas companies to sell the fuel most recently added to their reserves first as opposed to selling older reserves, allowing the most expensive reserves to be sold first and reducing the value of their inventory for taxation purposes

Flaring

burning off of the natural gas under controlled conditions in order to prevent an explosion

Master Limited Partnerships

combines the investment advantages of publicly traded cooperations with the tax benefits of partnerships. Shareholds pay personal income tax but MLP is exempt from corporate income taxes.

North American Electric Reliability Corporation (NERC)

formed in 1968 in response to the 1965 blackout. Huge weakness of a large interconnected system: a small disturbance in one section of grid can spread and interrupt supply to large area. Utilities often had different operating standards and procedures. NERC is the electric reliability organization certified by the Federal Energy Regulatory Commission to establish and enforce reliability and security standards for the bulk-power system. All bulk power system owners, operators, and users are required to register with NERC. Originally National American Electric Reliability Council. They created guidelines for the region. They need systems to survive one major contingency through reserves, etc. these are not mandatory guidelines. They essentially do: reliability, training, security, technical standards, etc. Also, resource balancing, communication, infrastructure protection, design and maintenance, emergency preparedness, etc. NERC does developing and enforcing reliability standards; monitoring the bulk power system in real time; assessing the bulk power system reliability and adequacy; investigating disturbances and abnormal events on the bulk power system; coordinating physical and cyber security needs; auditing owners, operators, and users for preparedness; providing education, training, and certification for industry personnel. 2005 reliability standards are now mandatory.

Federal Power Marketing Areas (PMAs)

four different regulation bodies + TVA that operate electricity systems and sell output of federally owned and operated hydroelectric dams Tennessee Valley Authority (TVA) Act of 1933 - Federally owned corporation to provide flood control and electricity generation to Tennessee Valley (Tennessee, Alabama, Mississippi, and Kentucky). Bonneville Power Administration (BPA) Act of 1937 - Creation of federal agency to market power from Bonneville dam on the Columbia River in the Pacific Northwest. Southwestern Power Administration (SWPA - 1944) Southeastern Power Administration (SEPA - 1950) - Only PMA that does not construct and own transmission lines. Western Area Power Administration (WAPA - 1977)

Net metering

solar generatord can sell extra energy back to the grid

Frequency

the number of complete wavelengths that pass a point in a given time

Rule of Capture

the owner of an oil or gas well could claim all that is pumped from it, regardless of whether the oil or gas migrated from adjacent property. Common law doctrine of "finders, keepers" If you drill a well into a common pool, you technically found it first so it is yours. Led to competitive drilling

Energy Policy and Conservation Act of 1975

• Creation of the Strategic Petroleum Reserve. • Federal authority to order major electricity generators to switch to coal from oil or natural gas. • Federal financial assistance to state energy conservation programs. • Mandatory fuel efficiency standards for new automobiles (CAFE standards) - 27.5 mpg by 1985. • Banned crude oil exports.

Other Natural Gas Controversies

• FERC's granting of eminent domain in pipeline citing. • Judicial review of FERC's issues of certificate. Agency can no longer allowed construction to proceed while it considers legal challenges. • FERC's permitting of LNG export facilities. • Methane emissions from natural gas wells and infrastructure. • Suspicions of natural gas market manipulation. • Questions around advantage of natural gas in wholesale electricity markets. • Gas stoves and gas heating.

Briefly explain the recent controversy over FERC's approval process for natural gas pipeline projects?

• February 2022 - FERC issued new guidance for pipeline projects, adding new considerations for landowners, environmental justice, and "interim plan" for quantifying climate impacts to determine if they are "significant," thus triggering NEPA before issuing "certificate of public convenience and necessity." Approved 3-2 on party lines. • FERC backed off under pressure from Joe Manchin, Chair of Senate Committee on Energy and Natural Resources (Biden need his vote for IRA). Guidance redefined as "draft." • West Virginia v. EPA (June 2022) - "major questions" doctrine. In "extraordinary cases" of "political and economic significance," an agency must point to a "clear statement" from Congress in authorizing action or rule. Question about whether Congress can use old statutes to regulate GHG emissions. FERC new guidance in limbo. • Manchin block confirmation of Richard Glick to new term at FERC. Open seat on five-member commission. Two Dems vs. two Reps. Further limbo. • Consideration of "permitting reform" as condition of Manchin's support for IRA. Washington's biggest energy debate at the moment.

Energy Policy Act of 1992

• Goals and mandates to increase clean energy use and improve energy efficiency (building codes, equipment standards, "alternative fuel vehicles") • Wholesale Electricity Transmission - Creation of Exempt Wholesale Generators (EWGs) (exempt from certain financial and legal restrictions applied to "utilities" under Public Utilities Holding Company Act of 1935); advanced the deregulation of wholesale electricity • FERC given "wheeling authority" to order and condition access to interconnected transmission lines • Renewable Energy Production Tax Credit (PTC) - 1.5 cents/kwh for ten years (renewed periodically; rate raised in 2009 to 2.3 cents/kwh) • Initiated Research on "Clean Coal" • Directed EPA to develop radiation protection standards for Yucca Mountain nuclear waste repository (designated in Nuclear Waste Policy Act of 1987) Lowered barriers to the market entry of IPPs and for utilities to generate electricity for customers outside their service territories. Created much more competition in generation for wholesale market. Further press wholesale deregulation by opening up transmission access to nonultities. In return, regulated utilities were permitted to build new merchant plans outside their service territories. Reflected the time as this decade was about splitting the traditionally integrated functions of electricity providers (generation, transmission, and distribution) into separate functions. It was also about competition, and restricting opened up market competition, which we can see with the policy.

Energy Security and Independence Act of 2007

• Increase in fuel efficiency standards for all new vehicles, 2010 to 2020, 25 to 35 mpg, or "ten in ten." • Tax credits for electric and hybrid vehicles. • Renewable Fuel Standard II (expanded biofuel mandate to non-corn-based sources). • Requirements for more efficient buildings, equipment, and lighting (phase out of incandescent light bulbs). • Acceleration of R&D into renewable energy and carbon capture and sequestration. • Training program for "Green Jobs." • Mandated reduced energy use in federal buildings.

Energy Policy Act of 2005

• Package of $14.5 billion in tax incentives and subsidies for energy of various types (new resource development, research, decommissioning) • Solar Investment Tax Credit of 30% • Authorized non-oil-and-gas leasing offshore • Amended PURPA to include "net metering" and required public utilities to offer net metering • "Clean Coal" Loan Guarantees • Nuclear Power Loan Guarantees and Credits • Exempted "Fracking" from Safe Drinking Water Act • Renewable Fuel Standard I (biofuel mandate) • Energy Efficiency Provisions • Reliability standards and congestion studies for wholesale electricity • Renewable Energy Provisions (Stalemate on Drilling in ANWAR and increased CAFE Standards) • hydrogen fuel and ethanol very focused on This reflected the time because this is a much more comprehensive energy policy that emerges due to the increase attention to the energy sector because of increasing princes for oil and NG, concern about greater speculation in oil markets, and the rise of energy demand in China and India. Expand energy and improve what we got.