The Direct Energy Buzz for June 2015

With summer vacation on our minds, we’re going to get wired on how electricity travels in this June 2015 installment of the Direct Energy Buzz.

Transmitting electricity isn’t just about stringing wires to handle the demand load – it’s really about balancing two different kinds of power. We’ll also discuss the balancing act between power regulation and pride in Texas. But first, let’s examine a new factor beginning to affect home electricity rates — electric vehicles.

Jolts for EV Sales?

Last year when gas prices were high, roughly 118,500 plug-in electric cars were sold in the U.S. When crude oil prices tanked this past winter and dropped by nearly 50%, most auto industry analysts predicted that electric vehicles (EV) sales would see lower sales.

True enough – year to date through May 2015, sales for the three most popular EV models (Nissan Leaf, Tesla Model S, and Chevy Volt) were lower — but not by more than a few hundred units. EV sales for the most part were still strong due in part to ending tax credits and recovering oil prices. Oil prices have been rising this past month due to diminishing US crude stocks and shrinking US shale oil production. The newest EIA forecast expects total U.S. crude oil production to generally decline from June 2015 through early 2016.

All of which is bad news for for folks who don’t own an EV — unless they suddenly just realized now might be a really good time to buy one.

Increasing prices and volatility in the oil market will put more EVs on the highway. Increased demand for charging these vehicles will bring more charging stations and could increase the amount of your electric bills if you charge your EV heavily during peak demand hours.

As a way to mitigate that cost with the benefits of lower carbon output, the Minnesota Public Utilities Commission ordered special off-peak EV rates for customers of Xcel, Minnesota Power of Duluth, and Otter Tail Power Co. of Fergus Falls. Most off-peak rates are at night and are typically fed by wind turbine generation. Minnesota is the first to make special EV rates a state-wide policy. As a result, some EV owners are learning to shift their heavier power usage, such as laundry and similar chores, to off-peak hours and saving money.

Legislative Wiring for Texas Pride?

Senate Bill 933 has arrived on the desk of Texas Governor Greg Abbott. The bill allows the Public Utility Commission of Texas (PUCT) to review transmission interconnections enabling imports or exports from the Electric Reliability Council of Texas (ERCOT) power grid.

At present, state regulators are not involved evaluating and approving cross-border transmission lines. Only the Federal Energy Regulatory Commission (FERC) has this power, thanks to interstate commerce laws. Under current law, ERCOT oversees the intrastate transmission of electricity solely within Texas and is not subject to FERC jurisdiction, since ERCOT does not provide for interstate transmission of electricity. ERCOT has a few interconnections with other grids, but these are within the state.

However, the Southern Cross Transmission Project from Dallas to northern Mississippi and the Tres Amigas Project linking ERCOT with the Eastern and Western Interconnections near Clovis, New Mexico will add capacity to ERCOT’s import and export bulk power. Since this could affect reliability, resource adequacy, and wholesale prices, the trick was how to accomplish the feat without paving the way for FERC to meddle in the Lone Star State’s grid.

SSB 933 amends Utilities Code, sec. 37.051, prohibiting anyone or any utility from interconnecting to ERCOT to transmit in or out unless the person obtained a Certificate of Convenience and Necessity (CCN) from the PUCT. The application for the CCN would have to be made within 180 days of seeking an order from FERC related to the interconnection. The bill allows the PUCT to place reasonable conditions on the CCN necessary to protect the public interest.

While some are painting this as a victory for Texas’s continued control over its own grid , the law nods to the FERC’s authority over interstate bulk power transmission. The pending SSB 933 law states that FERC approval must be sought for a project before the PUCT will begin processing a CCN for it.

In the case of Southern Cross, FERC ordered both Oncor and CenterPoint to provide transmission services because they are not public utilities within the appropriate section of the Federal Power Act (FPA).

Power Lines Wired for Efficient Transmission

Ideally, alternating current (AC) power is transmitted to your home at the standard sine-wave system frequency of 60 Hertz or 60 cycles per second with voltage and current remaining in phase. Utilities generate electricity that does work (called “real power”) turning motors, illuminating lights, etc.

These kinds of workloads are resistive, but there are also inductance and capacitance loads, too. Unlike resistive loads which drain and dissipate power, inductors and capacitors absorb and return power to the source — making what’s called “reactive power.” But with reactive power, voltage and current have drifted out of phase with each other.

Thus, maintaining the optimum mix of real power (volts) with reactive power (volt-ampere reactive or “VAR”) is a key element in bulk electrical transmission and distribution. Reactive power is used to control voltages in transmission systems so electricity is transmitted at a high enough voltage to overcome the resistance of power cables. Too much reactive power increases voltage in a transmission line and creates line loss due to heat. Too little, and voltages drop below levels for transformers step down electricity for homes.

Plus, if the reactive power phasing for its voltage and current are 90 degrees out of phase, there is as much energy flowing to the AC load as is flowing back. This leaves only the out-of-phase reactive power being transmitted — and it doesn’t  power resistive work-loads. For the grid to work properly, then the Volt/VAR combination must be carefully managed.

What does all this mean to you, dear consumer? Well, The EIA recently announced that as of 2013, 630 of the almost 2,000 U.S. utilities have installed Volt/VAR Optimization (VVO) technology. This includes equipment such as sensors and software capable of reducing line losses by 2%–5%, maintaining appropriate voltage (which keeps sensitive hi-tech electronics running properly for businesses and institutions), and reducing system problems during peak demand. By reducing line loss with this technology, utilities need only generate as much energy as necessary — which saves fuel, reduces carbon emissions, and can even help lower your bill.

Utilities that have completed VVO installations in major cities include ConEd in New York City, Oncor in Dallas-Ft. Worth, and Georgia Power in Atlanta.

Do you have any buzzing news about the energy industry you feel would interest our readers? Let us know in the comments!

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