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November 14, 2024

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The Future of Natural Gas with Growing Demand and Climate Targets

The return to demand growth around the country has the industry considering how to meet it, with many utilities and states considering new natural gas-fired units, while others are trying to avoid growing carbon emissions while maintaining reliability. 

The Department of Energy on April 17 released a report on “The Future of Resource Adequacy,” which says firms investing in natural gas resources should make them able to be retrofitted with carbon capture and storage, or with the ability to burn clean hydrogen. (See related story, DOE Urges Utilities to Embrace ‘Holistic’ Reliability Solutions.) 

“Building new natural gas plants without a strategy to address emissions risks infrastructure lock-in and stranded assets,” the report said. “To help address these concerns, new gas capacity should be capable of achieving and supporting clean electricity systems. For example, gas generators should be designed to operate flexibly and at lower capacity factors to effectively support systems with increasing amounts of variable wind and solar generation.” 

Still, many utilities are trying to build new natural gas plants, with the Georgia Public Service Commission on April 16 approving Georgia Power’s request to add three new dual-fueled combustion turbine units at an existing generation site between integrated resource plans because of unexpected load growth in its territory. The commission also authorized the utility to invest in new grid-scale batteries. 

The new capacity was needed because Georgia Power found its 2030/31 winter demand projections had gone up by 5,900 MW since it issued its 2022 IRP, according to a brief the utility filed early this month with the PUC. The firm found it would need new capacity by winter 2025/26. 

“Given the continued increase, progress and pace of committed customer load, the commission should have an extremely high degree of confidence in the forecast and should approve the company’s load forecast as filed and agreed to in the stipulation,” the utility said. 

Overhanging the regulatory cases around new natural gas plants are EPA’s looming rules under Section 111(d) of the Clean Air Act, which are expected to restrict fossil fuel emissions in the future. Ultimately, the rule’s fate depends on the presidential election, as similar rules were overturned the last time Donald Trump was in the White House. 

The Southeast in particular has been a hot spot for new demand from Georgia up to Data Center Alley in Northern Virginia, Luis Martinez, the Natural Resources Defense Council’s lead for climate and energy in the region, said in an interview. 

Dominion Energy has proposed building a major new natural gas plant in Chesterfield, Va., just south of Richmond. 

“The troubling trend is the rush to build gas to meet it, which is what we’re hoping won’t come to fruition … because it will derail our short-term and long-term, I’d say, climate emission-reduction goals,” Martinez said. 

Moving to more and more natural gas in the region also makes it more prone to sudden price spikes because of the commodity’s volatile market, he added. North Carolina’s Duke Energy has expanded its gas fleet in recent years, and customers have been pinched by spiking prices from recent winter storms and generally higher costs in 2022, which now are being felt on their power bills, Martinez said. 

One reason the Southeast is seeing a flood of new natural gas plant proposals is that it relies on traditional regulation, meaning that as long as regulators approve the plant, it will get built. 

“This risk of potentially having this new gas generation become a stranded asset, or not cost competitive, which you could see in other regions, is not present,” Martinez said. “Once they’re approved in the Southeast, then it’ll be on ratepayers to pay for that whole thing, even if in 10 years these things are no longer useful because they have to add carbon capture and storage or they have to transition them to hydrogen, as the EPA 111 rule would require.” 

NRDC wants regulators around the region to evaluate all of the options they have to address the demand and pick the least-regrets ones, such as energy efficiency, before natural gas, he added. 

California has long used the “loading order,” where its Public Utilities Commission prioritizes efficiency and clean energy and places expanding natural gas capacity as a last resort to maintain reliability. While the different politics of the region mean that will never be a formal policy, it could serve as rule of thumb, Jackson Morris, NRDC’s director of state power sector policy, said in an interview. 

“There [is] tons of untapped energy efficiency on the system that needs to get tripled or quadrupled in scale. That’s No. 1,” Morris said. “Then you go to both utility-scale and distributed renewables projects. You also invest heavily in transmission and distribution investments, including both on existing reconducting efforts and things like that, as well as new lines and distribution infrastructure to maximize the capacity to move power around.” 

Natural gas should be the last resort to solve resource adequacy issues, he said. And NRDC would prefer utilities build CTs at this time because even though on a unit basis they are less efficient than combined cycle, they run much less often. 

Other states around the country are dealing with similar issues. Harvard Law School’s Electricity Law Initiative hosted a webinar this month with state regulators to discuss how to meet higher demand while staying on course for cutting emissions. 

“I think the most important thing that we can do as states is to help to get the incentives right to balance the reliability and sustainability and clean energy goals that we’ve got,” Illinois Commerce Commission Chair Doug Scott said. 

A big part of Illinois’ strategy is keeping its nuclear plants open. It pays them when natural gas is cheap, but customers actually received rebates in 2022 when the commodity’s price spiked, Scott noted. As far as new capacity, Illinois is working to expand renewables. 

Minnesota Public Utilities Commission Vice Chair Joseph Sullivan noted the industry has dealt with even higher rates of demand growth in the past, such as when consumers adopted air conditioning en masse and demand grew from 7 to 9% every year. 

“If you put on a data center, that’s 10% of the entire system; it’s a lot, and we’ve got to deal with that,” Sullivan said. “But if we plan for it, and we use the processes that we have, I think we’re going to get through it.” 

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OMS Taps Minnesota PUC Veteran as Next Executive Director

The Organization of MISO States has named Tricia DeBleeckere, current MISO director of state policy and strategy, as its next executive director. 

Before her two years at MISO, DeBleeckere spent nearly 14 years at the Minnesota Public Utilities Commission, serving as a commission adviser and analyst and planning director focused on transmission and distributed energy resources integration. While with the commission, she was active in OMS. 

“We are very excited to have Tricia return to the OMS team; she brings a wealth of industry expertise to OMS’ work and is already a known asset for many MISO states. Her previous experience working for a state commission, existing relationships with OMS, and her most recent experience at MISO will be an incredible resource for our members,” OMS President and Iowa Utilities Board Member Joshua Byrnes said in an April 19 news release. “Tricia brings a deep understanding of how to navigate complex regulatory and stakeholder processes, and her experience, knowledge and thoughtfulness will serve OMS and state commissions well.” 

DeBleeckere holds a Bachelor of Science from the University of Minnesota and is finishing a Master of Business Administration from the University of Texas Permian Basin. Her new role becomes effective May 8. 

“I am truly excited to be working with the OMS team again to ensure we are proceeding through the energy transition in the most cost-effective, reliable and efficient way possible. There are many challenges currently before OMS, state commissions and MISO — with many more to come in the years ahead,” DeBleeckere said in a statement.  

DeBleeckere, who is based in Minneapolis, will lead the Madison, Wis.-based OMS remotely.  

At an April 11 OMS board meeting, Byrnes reported that OMS leadership interviewed four candidates in early April. Michigan Public Service Commission Chair Dan Scripps said OMS was faced with a difficult choice among excellent candidates.  

Previous OMS Executive Director Marcus Hawkins left OMS this month to become a commissioner with the Wisconsin PSC. (See MISO Members Send off OMS Leader Hawkins to Wisconsin PSC.)  

In March, MISO CEO John Bear said Hawkins was leaving a “hole” in OMS leadership but said he was cheered that MISO still can work with him as a Wisconsin Public Service commissioner.  

Bear also thanked Minnesota Public Service Commissioner Joseph Sullivan and Byrnes for stepping up to share former OMS President and Wisconsin Public Service Commissioner Tyler Huebner’s duties after he was abruptly fired by the state’s GOP-controlled Senate. (See Wisconsin Senate Votes to Fire Commissioner Huebner 4 Years into Job.)  

“It’s a critical, critical partnership with OMS,” Bear said.  

Byrnes said Huebner’s exit was “unfortunate” and that he was grateful to learn from him while he had the chance.  

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Past Opponents Now See Legislative Pathway to CAISO Regionalization

Representatives from two groups that blocked past efforts to “regionalize” CAISO predict success for an upcoming campaign to change California law to allow the ISO to participate in the kind of independent RTO envisioned by the West-Wide Governance Pathways Initiative. 

The reps from labor and California’s publicly owned utilities shared their views April 19 at a virtual meeting of the initiative’s Launch Committee. The committee discussed its recent straw proposal for a “stepwise” approach to transitioning CAISO’s state-run governance to an independent body. (See Western RTO Group Floats Independence Plan for EDAM, WEIM.) 

“Frankly, I wouldn’t be spending this much time if I thought this was going to crash and burn,” committee member Marc Joseph, an attorney who represents the International Brotherhood of Electrical Workers (IBEW), said during the meeting. 

Step 1 of the straw proposal entails making the Governing Body of CAISO’s Western Energy Imbalance Market and Extended Day-Ahead Market as independent as possible “within the current CAISO structure in a way that presents little or no” risk to prompting challenges under California law.  

Step 2 looks to fulfill the Pathways Initiative’s “primary goal” by “creating a durable governance structure with a fully independent board that has sole authority to determine the market rules for EDAM and WEIM.” A key action is creating a new “regional organization” (RO) separate from CAISO that would become successor to the WEIM/EDAM Governing Body.  

That step would require changes to California law, which Joseph is confident will happen next time around.  

That confidence stems in part from the fact that the powerful constituency he represents won’t oppose the bill, something Joseph shared in an interview with RTO Insider in January. (See Former Opponents Shift Position on CAISO ‘Regionalization’.) 

In the interview, he explained the IBEW opposed the three previous legislative efforts to convert CAISO into a multistate entity because the plans, as proposed, would have expanded the boundaries of the ISO’s balancing authority area. Under California law, that could’ve meant the portion of projects that California’s renewable portfolio standard required to be interconnected directly to the ISO’s BAA could be built outside the state, reducing job opportunities for members. 

But the Pathways Initiative plan would allow the ISO to preserve its BAA while still integrating more closely with the rest of the West.  

Still, skeptics have continued to express doubts the initiative will produce the kind of California legislation needed to transform the ISO’s governance.  

“So many people outside of California asked me, ‘So what’s different this time?’ Or more pointedly they ask, ‘Why should we expect any different result this time?’” Joseph said during the call. 

He pointed to the makeup of the effort’s Launch Committee. In addition to Joseph, it includes public power representatives Jim Shetler, general manager of the Balancing Authority of Northern California (BANC), and Randy Howard, GM of the Northern California Power Agency (NCPA) — all of whom are “spending lots and lots of time and effort to craft a proposal that will succeed.” 

A “more substantive” reason for Joseph’s confidence is that he sees the Pathways proposal as being “completely and fundamentally different” from past proposals in both “structure and detail.” 

Prior proposals would have replaced CAISO’s Board of Governors with an independent body “not connected in any way to the state of California,” he said, providing “absolutely no guarantees” California consumers or policies would be protected. 

In contrast, “we will know the details” about the outcome of the Pathways plan, Joseph continued.  

“CAISO would remain intact, the CAISO balancing authority area would remain intact, the incentives to create jobs in California would remain intact,” he said. “And the thing that changes is the governance just of the market functions now currently housed within … CAISO, with the door left open for more incremental changes in the future.” 

For those reasons, Joseph expects any future bill to alter the ISO’s governance will look much different from the past failed bills. 

“Obviously, I can’t speak for the California legislature, but given the fundamental differences in both structure and detail [of Pathways], and the demonstrated benefits for California consumers and for workers … I think there’s every reason to think that the outcome can be different,” he said. 

Legislative Approach

NCPA’s Howard said California’s publicly owned utilities opposed previous regionalization efforts for many of the same reasons laid out by Joseph. They’ve altered their stance in part due to their success in participating in CAISO’s Western Energy Imbalance Market, and they want to build on that. 

“We like what we see in the [EDAM], but we know overall market conditions have changed dramatically throughout the West in the last couple of years, and we see that change continuing,” Howard said. “And so the do-nothing strategy, or staying as we are today, doesn’t make a lot of sense.” 

Howard said the framework in the Pathways proposal resolves many of the issues the public had with earlier attempts to change CAISO governance.  

He noted that while the Launch Committee won’t directly lobby California lawmakers, some of its members already are starting to engage with the legislature in their organizational capacities with the aim of moving a bill through the 2025 session. 

“There’s already been an effort to get out and have some informational sessions with some key legislative staff [and] walk through what we’ve been working on [and explain] why it is different” from past efforts, Howard said, adding that he saw some of those staff listening in on the call. 

Pathways backers will begin meeting with legislators in the fall to discuss the type of legislation needed and “hopefully work on draft language,” Howard said, with the expectation of having a bill submitted into either the California Assembly or Senate at the start of the next session in January.  

“I agree with Mark. With the framework that’s here and that we’re proposing, I don’t see … difficulty … in moving this forward. But again, I can’t speak for [legislators]; they will have that opportunity to vote,” he said. 

Funding Update

Launch Committee co-Chair Kathleen Staks, executive director of Western Freedom, updated meeting participants on the status of the Pathways Initiative’s financial status after the U.S. Department of Education rejected its January application for $800,000 in grants. (See Pathways Initiative Rejected for $800K in DOE Funding.) 

Staks said DOE declined to select the project because the agency lacked details about the scope of the activities to be funded by the grants, which would have consisted of $400,000 annually for two years. 

“Back in January, we were still very early in our work, and it was difficult to provide details at that point about the direction and the ultimate structure that we’re still frankly working to develop with input from stakeholders,” she said. 

The funding assumptions for Phase 1 of Pathways, expected to conclude this month, did not include the DOE money. 

Staks said DOE is putting out another round of funding for wholesale electricity market studies and engagements this spring and the Launch Committee “is evaluating potential proposals for that funding opportunity and how beneficial those funds would actually be.” 

“We’re also pursuing other funding opportunities, and we’ll continue to provide information about the budget and the various tasks that we need to be able to fund and how much money and where that money is coming from,” she said. 

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Louisiana PSC Adopts Nearly $2B Entergy Resilience Plan

State regulators voted 3-2 on April 19 to approve Entergy Louisiana’s hotly debated $1.9 billion grid-hardening proposal to be funded by ratepayers, four days after the utility submitted it.

The utility filed the first phase of its Entergy Future Ready Resilience Plan with the Louisiana Public Service Commission on April 15 and requested fast-tracked approval on April 19 during the commission’s Business and Executive Session (U-36625). The commission issued a supplemental agenda to its meeting to consider Entergy’s ask.

The quick turnaround elicited criticism from Commissioner Davante Lewis, who expressed concerns that the final draft of the plan wasn’t shared earlier with the public and commission staff.

“Like all Louisianans, I would love to see the kind of grid improvements that get us back on track faster after storms, but I need to be certain I am equipped to represent the public, who have no other choice but to buy their power from these companies from month to month,” Lewis wrote in a press release prior to the meeting. “Transparent, deliberative decision-making is already difficult to achieve when specifics of this proposal are deemed proprietary and confidential to Entergy’s outside contractors.”

Lewis also said “substantial details” of the plan “are obscured by contractor confidentiality agreements.”

“The public deserves to know more and have the chance to be heard in decisions of this magnitude,” he wrote.

An illegible list of projects contained in Entergy Louisiana’s grid-hardening plan | Entergy Louisiana

The 17 pages of potential transmission and distribution system projects listed in Entergy’s filing are nearly illegible (see picture) and provide few specifics on the projects.

Commissioner Foster Campbell joined Lewis in opposition. He said he could not vote in favor of the plan because it assigns the same costs to ratepayers over five years regardless of where they live, and the bulk of storm damages occur in the southern part of the state. He noted his district includes the “poorest place in America.”

“I can’t in good conscience vote to give them a higher utility bill when I don’t think they get a fair share,” Campbell said.

Entergy Louisiana insists the resilience plan has not been rushed through the regulatory process and was in the works at the PSC for about a year and a half. Spokesperson Brandon Scardigli said the utility first filed its resilience application in December 2022.

“The record in that proceeding is complete, as the company and intervenors have filed several rounds of testimony and discovery throughout those 16 months, engaging stakeholders and responding to questions and concerns,” Scardigli said in an email to RTO Insider.

He pointed out that the commission’s approval could have Entergy getting a jump on improvements before the Atlantic hurricane season kicks off.

“June 1 marks the beginning of hurricane season — in just 45 days. Now is the time to take the necessary steps to harden Louisiana’s electric grid, which will benefit residents and businesses by reducing the cost of future restoration and shortening the duration of outages following storms, allowing Louisiana to get back to normal faster,” he wrote.

Entergy did not address RTO Insider’s request to elaborate on which projects are in the proposal or how they might be prioritized. Scardigli said the plan includes “thousands of projects aimed at reinforcing critical structures on both the transmission and distribution systems.”

Prior to the vote, Lewis said taking up Entergy’s proposal could create a bad precedent in which utilities don’t have to “make good faith efforts” to negotiate with staff or address the public’s concerns. He said he received more than 90 emails in a single day from intervenors and constituents asking for more time to understand the proposal.

He said he saw no reason to address Entergy’s plan “this month [or] this week.” In fact, Lewis said the only reason he could fathom Entergy needing its plan addressed so soon is so it could deliver its shareholders some “good news” during an April 23 earnings call.

Campbell made a failed motion to defer Entergy’s application for a month; only Lewis joined him in the vote. Commissioner Eric Skrmetta advanced Entergy’s plan for consideration. Commissioners Craig Greene and Mike Francis voted with Skrmetta.

Skrmetta said he spent “an enormous amount of time” talking with Entergy in recent weeks about the plan, which he said embodies the phrase “an ounce of prevention is worth a pound of cure.”

He emphasized that Entergy’s plan includes a pole performance metric that stipulates if 150 or more poles fail in a storm they were designed to withstand, a portion of the funds spent on them is returned to ratepayers. He called it “a de facto insurance policy” and said the plan is in the best interest of the company and ratepayers.

Public Criticism

Multiple advocacy groups spoke at the meeting to express disappointment at the hasty nature of the request and asked the commission to delay acting on the application.

Lake Charles resident James Hyatt said commissioners are “supposed to be looking out for ratepayers and not for shareholder value.” He pointed out that ratepayers still are paying for past storm damage while Entergy’s profits increase.

Erin Hansen, representing citizen nonprofit Together Louisiana, said decisions that are made “rushed, under the cover of darkness, tend to represent special interests.”

“We’re here, and we feel a little taken — put upon, if you will — because it looks like there’s a giant check that’s been written and the PSC is about to sign it, but that check is linked to our bank account,” Hansen said.

She said Louisianans want reliability improvements, but Entergy needs to allow time for public understanding. She added that a clear schedule, public input, transparency and examination are not “irritating delays to be pushed through.”

“They are an essential part of your responsibility to your ratepayers,” she said.

Logan Burke, executive director of the Alliance for Affordable Energy, said that while her organization supports more investments in reliability, “we expected more process.”

“Louisianans expect this body, which makes decisions worth billions of dollars, to make them clear-eyed based on facts and in a way that is accessible to the ratepayers who will be impacted. The public’s trust depends on that,” Burke said.

Burke expressed concern that the plan’s intent is not resilience but a “single-minded investment in Entergy’s preferred solutions.”

Entergy Defends

Larry Hand, Entergy Louisiana’s acting vice president of regulatory and public affairs, said the utility already engaged extensively with parties to the docket to craft the grid-hardening plan. He said Louisiana PSC staff “reigned in” Entergy’s original plan.

“I wouldn’t characterize this as, ‘no one has supported this; no one agrees to it,’” Hand said. He added that the plan “is not something that fell out of the sky and should surprise intervenors.”

Hand also stressed that the plan needed expedited treatment before hurricane season but said “he couldn’t say” whether construction on any projects would begin prior to the impending storm season. He said the first projects likely would be of assistance during the 2025 hurricane season.

Hand said the average resident will see a peak $7.19/month increase by 2029, which gradually would decrease with depreciation.

Energy Louisiana CEO Phillip May said the plan would facilitate new growth and economic progress in the state.

“While we can’t say with certainty that any project will be started before June 1, what we can say is: The state has an enormous opportunity of economic development, and those folks who are deciding whether or not to invest in the state of Louisiana … want to see a sign that their concerns are taken seriously [that] we’re going to build a grid that gives them confidence to make those investments,” May said.

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BNEF Summit Focuses on Financing Energy Transition, Fast and Slow

NEW YORK — Global investment in the energy transition grew 17% to more than $1.7 trillion in 2023 — a new high, BloombergNEF CEO Jon Moore told a standing-room-only audience at the opening session of the BNEF Summit on April 16.  

Unfortunately, those topline figures aren’t “where we need to be,” Moore said. 

“We need to be two-and-a-half times that number, so we need to be investing more on an annual basis than we are today, and that goes up to $6.5 [trillion] and $7.5 trillion in the subsequent decades,” the 2030s and 2040s, respectively, he said. “So, we really do need big numbers here.” 

Finding new ways to get more investors to put more of their money into clean energy technologies — especially the startups providing new solutions to critical challenges — was a major focus of the two-day BNEF Summit. Moore’s opening remarks provided a high-level perspective on the transition, which, at present, is moving both fast and slow, he said. 

Following Moore, David Crane, under secretary for infrastructure at the Department of Energy, drilled down into how looming predictions for demand growth could affect the existing momentum and financing of the transition. 

DOE Under Secretary for Infrastructure David Crane (left) speaks with Thomas Rowlands-Rees, BNEF head of North America research, at the BNEF Summit in New York. | © RTO Insider LLC

Among sectors moving fast, Moore noted the lion’s share of new investment is streaming toward renewable energy, electric transportation and power grids, a category that has taken off in the past four years. Global investment in passenger electric vehicles (EVs) was up 36% in 2023, investment in energy storage jumped 77%, and investment in carbon capture and storage (CCS) nearly doubled, Moore said.  

Europe — specifically the Netherlands — is the main driver in CCS, with its Porthos project to store carbon dioxide emissions from oil and gas plants in depleted gas wells more than 1.8 miles down in the North Sea. Moore also zeroed in on global investments in solar, where he said “there is now enough [projected] solar capacity to support us where we need to be at net zero at 2030. … So we actually don’t need any more,” though installations will continue at a slower pace. 

Investments in battery factories are also running ahead of projected demand, though not to the same extent as solar, he said. 

But Moore also cautioned that exponential increases in global investment will be needed for some technologies. While investment in renewables, storage, the grid and EVs will need to increase two to three times by 2030, investment in hydrogen must jump sixfold, nuclear almost ninefold and CCS a whopping 45-fold.  

Overall, he said, investment in clean energy supply is close to but has yet to surpass fossil fuel investments. In 2023, clean power supplies drew in $1,023 billion versus $1,098 billion for fossil fuels.  

Looking at the global stock taking at the United Nations Climate Change Conference of the Parties in the United Arab Emirates last year, BNEF is ranking climate progress overall at 3.8 out of 10, Moore said.  

BNEF CEO Jon Moore | © RTO Insider LLC

“If you added up all the [nationally determined contributions] and everyone achieved what they said they wanted to achieve by 2030, we would reduce CO2 emissions by 5.3%,” he said, well below what will be needed to limit climate change to the 1.5 to 2 degrees Celsius set in the 2015 Paris Agreement.  

The uncertainty surrounding the U.S. presidential election in November — and its impact on U.S. energy and climate policies — could be multiplied by upcoming elections in other countries, Moore said. India’s seven-phase parliamentary elections kick off on April 19 and continue through June 1.  

Countries representing “two-thirds of global GDP” will have elections this year, he said. 

‘Bursting at the Seams’

In the U.S., unprecedented federal investments in clean energy provided by the Infrastructure Investment and Jobs Act and the Inflation Reduction Act have slammed into concerns about unprecedented demand growth, Crane said in an on-stage conversation with Thomas Rowlands-Rees, BNEF head of North America research. 

“Our world is now bursting at the seams,” Crane said. From 2012 to 2022, demand growth was mostly flat and steady at about 0.5% per year, he said, but now “people are talking about 5 or 6% per year. … In the energy world, those are big numbers.” 

The result is that “we’re solving for two different demand problems simultaneously,” Crane said: incremental demand growth from electrification of buildings and transportation, and the “big chunks” of new demand from data centers. 

“With this data center thing, and the high-tech companies that are driving that, we need them to become energy companies because they have so many ways they could work with us,” he said. 

Many of the projects Crane oversees at DOE, such as the hydrogen and carbon capture hubs, were intended to get first-of-a-kind projects online in the 2020s, to be followed by commercialization and scaling to help reach President Joe Biden’s goal of a decarbonized grid by 2035, he said. 

BNEF projects clean energy investments will have to increase close to threefold by 2030 to get to net zero by 2050. | BloombergNEF

“But this demand [growth] thing seems to be a 2025-to-2030 thing, so we have to look at what we can do in a short period,” Crane said. He pointed to the new Pathways to Commercial Liftoff report on the deployment of innovative grid technologies like advanced conductors and dynamic line ratings, released April 16. (See DOE Report Highlights Benefits of Advanced Grid Technologies.) 

Such technologies are “cheaper [and] faster, and we can get somewhere between 20 and 100 GW more capacity on [an existing] system,” he said. 

Crane sees a twofold challenge for wide deployment of grid-enhancing technologies: a lack of easily identifiable incumbents in the sector and the need for creative financing. 

A decade ago, he said, “I’m looking at something like electric vehicle charging, and there are at least three big incumbent stakeholder groups” — oil companies, utilities and automakers,  

“But suddenly, [with] these things like reconductoring, virtual power plants in particular, it’s harder to see who are the natural incumbents that should want to lean into that space, and so it leaves an opening for the more entrepreneurial companies, and we need to support those companies,” he said. 

For creative financing, Crane called on the clean energy professionals at the conference to help develop the new approaches to investment that will be needed to get these technologies widely deployed. Upgrading transmission systems usually occurs within “an integrated utility system, so standalone financing of these things is an area for people in this room to pioneer. This is a business opportunity … and we need it.” 

“The key partner at the table in this is the financial community that can find ways to get these things done,” he said. 

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New Jersey BPU Picks 8 Grid-scale Solar Projects Totaling 310 MW

The New Jersey Board of Public Utilities on April 17 approved eight projects with solar capacity totaling 310 MW in its second solicitation for grid-scale projects, nine months after declining to support any bids in the first solicitation due to cost. 

The board received 14 proposals in response to its solicitation for 300 MW through the state’s Competitive Solar Incentive (CSI) program. The capacity selected includes 92 MW of storage that was paired with two of the projects. Five of the eight projects are for “basic grid supply” while the other three will be on contaminated sites and landfills. The BPU did not approve any projects in the “grid supply on the built environment” category, which includes rooftops, or the category for net metered residential projects larger than 5 MW.  

Four of the approved projects have a capacity of more than 50 MW, and the remainder are between 2.7 and 13 MW. The largest, the 95-MW Harmony Plains Solar, will be in Harmony Township in Western New Jersey and cover 383 acres. 

BPU President Christine Guhl-Sadovy called the board’s decision “very exciting” in its ability to “bring solar through a competitive process, as well as this first energy storage project.” 

“It was terrific result,” said Fred DeSanti, executive director of the New Jersey Solar Energy Coalition. After the first solicitation failed in July, DeSanti expressed skepticism that developers would be able to submit low enough bids for the agency. “The number of projects, the size of the projects; [we’re] very happy.” 

He said he was especially surprised with the board’s decision to award more than the target combined capacity. 

“This is a very positive signal for the solar community in New Jersey,” he said. “It shows the state is still very dedicated to moving forward and in a big way.” 

Ed Potosnak, executive director of the New Jersey League of Conservation Voters, said the solicitation showed the state’s “ongoing commitment for a 100% clean energy future.” 

The CSI program is seen by officials as a key element in reaching the state’s solar capacity goals of 12.2 GW of solar energy by 2030 and 17.2 GW by 2035. Those are well above the nearly 4.8 GW installed in the state as of Feb. 29, of which 815 MW — or less than 2% — is grid-scale, according to BPU figures. 

The BPU designed the CSI program to set incentive levels for grid-supply projects — those selling into the wholesale markets — through market forces. Developers bid the lowest level of Solar Renewable Energy Certificates they would need to complete the project, and the BPU backs projects based on the highest bids. 

In declining to award bids in the first solicitation, BPU officials said they exceeded their agency’s confidential price caps. They suggested at the time that the pricey submissions were because of the high level of economic and regulatory uncertainty nationwide, as well as higher-than-historic costs, which all impacted the development of larger-scale solar. (See NJ Rejects Solar Bids as Too Expensive.) 

Lyle Rawlings, president of Mid-Atlantic Solar & Storage Industries Association, said the solicitation’s outcome is “good for the sector.” He said it is difficult to know whether developers submitted less expensive bids in the second solicitation or the BPU loosened its standards because the agency does not reveal what it considers acceptable. 

“There’s no data to tell us and no way to find out definitively whether they raised the cap, or whether the developers sharpened their pencils and lowered the prices,” he said. “If I were to guess I would say a little of both. I suspect that the BPU adopted a more reasonable price cap, and the development community noted that they all lost last time.” 

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Wash. Cap-and-invest Supporters Launch Anti-repeal Effort

Bolstered by a nearly $5 million war chest, supporters of Washington’s cap-and-invest system have begun efforts to defeat a campaign that seeks to scrap the carbon allowance program through a referendum this fall. 

Conservative group Let’s Go Washington placed Initiative 2117 on the November ballot to call on voters to repeal the program, which the state’s Department of Ecology implemented last year as part of the Climate Commitment Act. The effort comes as Washington moves to link the program with the larger and well-established cap-and-trade program shared by California and Quebec. (See Calif., Quebec, Wash. to Explore Linking Carbon Markets.) 

Cap-and-invest supporters in February formed the No 2117 coalition, which has collected about $4.7 million and spent around $365,000, according to the Washington Public Disclosure Commission (PDC).  

Big donors include Microsoft founder Bill Gates and software developer Chris Stolte, who each contributed $1 million, as well as husband-and-wife software developers Craig McKibben and Sarah Merner, who together gave $1 million.  

In a press release April 17, the coalition said pending donations would increase the total to about $11 million, with pledges from Amazon, Microsoft and former Microsoft CEO Steve Ballmer and his wife, Connie Ballmer. 

“We’re going to make sure we have the resources needed to defeat 2117,” No 2117 spokesman Mark Prentice told NetZero Insider.  

The membership of No 2117 is dominated by environmental and liberal political organizations, but also includes the Seattle Metropolitan Chamber of Commerce, BP America and the Certified Electrical Workers of Washington union.  

During its signature-gathering phase last year, Let’s Go Washington raised $7.37 million and spent $7.66 million, according to the PDC. The group has raised $765,488 and has spent $464,970 so far this year, and has $256,873 in debts. 

Redmond hedge fund manager Brian Heywood provided roughly $5 million of the group’s 2023 donations to get I-2117 on November’s ballot.  

“I’m not putting any more money into it,” Heywood told NetZero Insider. That $5 million also contributed to placing two other Let’s Go Washington initiatives on the November ballots: one that would repeal the state’s fledging capital gains tax and another that would allow residents to opt out of a tax that funds a state program to provide for long-term health care. 

Cap-and-invest supporters “are going to have to raise $15 million to convince people of something that is not true. [The program] is not designed to remove climate change; it is designed to be a tax,” Heywood said. 

Both sides said they expect many small contributors to donate to their campaigns.  

“Other side is a bunch of big money. … They’re going to make me the villain. … This is the American Revolution army versus the well-financed British army,” Heywood said.  

‘Catastrophic Blow’

Meanwhile, the Western States Petroleum Association (WSPA) — which represents four of Washington’s oil refineries, as well as others along the West Coast — plans to sit out the balloting. 

“We do not oppose the [Climate Commitment Act] and believe the cap-and-trade program should be fixed rather than repealed. We are not involved in the campaign,” WSPA spokesman Kevin Slagle said in an email. 

Washington’s fifth oil refinery is owned by No 2117 coalition member BP America. 

Let’s Go Washington’s repeal campaign plans revolve around the rise in Washington’s gasoline prices, while No 2117’s efforts will stress the fallout for Washingtonians if the cap-and-invest program is revoked.  

“We’re going to talk about the costs of what [cap-and-invest opponents] are imposing,” Prentice said.  

“I-2117 would deal a catastrophic blow to efforts to reduce carbon and health-harming air pollution, and it would have a devastating impact on our state budget,” David Mendoza, director public advocacy and engagement at The Nature Conservancy in Washington, said in No 2117’s April 18 news release. “I-2117 would take away billions of dollars for needed investments in renewable energy, clean air and water, healthy communities, healthy forests and economic support for those most impacted by the climate crisis. That’s why a broad coalition of organizations and community leaders from across our state has come together to mobilize communities in Washington to defeat I-2117.”  

Since being implemented last year, Washington’s cap-and-invest program has raised almost $2.1 billion. The state’s Legislature recently appropriated $816 million in cap-and-invest money to support programs during the fiscal year running from July 1, 2024, to June 30, 2025. 

That spending is split between the Legislature’s transportation and capital budgets. 

The transportation portion includes building hybrid electric-diesel ferries, buying electric school and transit buses, installing charging stations, bolstering Washington’s fledgling hydrogen industry, purchasing electric vehicles for several state and local agencies, and designing a hydrofoil for the Kitsap Transit system, plus several road, bridge and small boat projects.  

The capital budget portion includes grants or direct appropriations for energy conservation at the state’s universities, forest land purchases, restoring landscapes destroyed by wildfires, restoring coastlines, salmon recovery, sewage treatment and EV chargers. It also covers energy conservation measures at juvenile detention facilities, decarbonization projects, energy conservation in other buildings, and modernizing conservation measures in small school districts and tribal schools. 

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NJ Creates Green Bank to Support Clean Energy Goals

The New Jersey Economic Development Authority on April 15 approved the establishment of a green bank to help the state reach its clean energy goals by investing private and public money in financial instruments supporting clean energy projects. 

The New Jersey Green Bank (NJGB) will make investments through “debt, credit enhancements and other financial vehicles,” the EDA said in a statement. It “will be dedicated to investing in projects, technologies and companies that align with the state’s climate goals, including in areas such as zero-emission transportation, building decarbonization and resiliency, and clean energy generation and storage.” 

“The NJGB will also look to facilitate the development of climate and clean energy capital markets in the state through forms of financial support, such as warehousing and securitization, that address underdeveloped or nonexistent capital markets for these investments,” the agency said. 

EDA CEO Tim Sullivan called the bank a “pivotal step in the state’s continued push to meet the ongoing challenges of climate change.” New Jersey Gov. Phil Murphy (D) has set a goal for the state to reach 100% clean energy by 2035. 

“The NJGB will inject capital into New Jersey’s clean energy economy and support green businesses and good-paying jobs in the field,” Sullivan said. “Additionally, the investments made by the NJGB will pave the way for a cleaner and healthier environment for our residents and future generations.” 

Projects the bank supports will have to be new, rather than existing projects seeking refinancing, and must lead to reduced greenhouse gas emissions or other co-pollutants, according to the EDA. They could include solar power, onshore and offshore wind, all-electric heat pumps, geothermal and battery storage, the agency said. 

New Jersey follows several states that have created similar banks, among them Massachusetts, which created its Community Climate Bank in 2023. That bank started with $50 million in state funds and an initial focus on affordable housing, according to its website. Connecticut, Colorado and California also have green banks, according to the Coalition for Green Capital, which assists green banks in securing investments. The EDA’s proposal, issued last year, listed 28 other entities, mainly states, that have created green banks. 

New York’s Green Bank, a division of the New York State Energy Research and Development Authority, says it has committed more than $2 billion to finance clean energy and sustainable infrastructure projects over its 10-year history. The typical investment is $10 million to $15 million, according to the agency, which says it has an annual investment target of $225 million. 

Murphy allocated $40 million to the Green Fund in his 2024 budget, released last year. The fund “could attract up to $280 million in private capital to advance projects to advance the state’s new and bold environmental goals,” the budget book said. The bank is a subawardee in an application by the Coalition of Green Capital for funding from EPA’s National Clean Investment Fund (NCIF). 

In addition, the green bank could receive at least $100 million from the NCIF, $202 million from the Coalition for Green Capital and $350 million from Ecority, a clean energy financing nonprofit, according to a memorandum on the Green Bank proposal by Sullivan. 

New Jersey has for several years sought to launch such a bank. The state Energy Master Plan, released in 2019, outlined the concept and benefits of such a bank, saying it would help address an existing financing gap in customer segments: “those who lack access to the capital necessary to fund energy efficiency projects on their own but earn too much to qualify for low-income incentive programs.” 

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Industry Approves NERC’s Cyber Monitoring Standards

A proposed reliability standard to require utilities to implement internal network security monitoring (INSM) software on select grid cyber systems won industry approval this week, leaving a clear path for the ERO to submit the standard to FERC comfortably ahead of the commission’s deadline. 

The latest ballot period for CIP-015-1 (Cybersecurity — INSM) began April 11 and closed April 17, the same day as the formal comment period that began April 5. NERC’s Standards Committee authorized reducing comment and ballot periods for the project to as few as 10 days because FERC in 2023 ordered the ERO to submit standards requiring INSM by July 9 of this year. 

According to NERC’s ballot system, the standard received 175 votes for passage and 37 against. Applying the ERO’s weighting procedure (which proportionally reduces the impact of industry segments with fewer than 10 voters), the final result is a 76.78 weighted value in favor.  

The standard needed a two-thirds majority to pass. Now that the target has been reached, the normal move is to submit it for a five-day final ballot; a spokesperson for NERC told ERO Insider the team for Project 2023-03 (INSM) has not met to discuss the next step for the project.  

Under new rules approved by FERC in November, drafting teams may choose to conclude a standards action without a final ballot, but only if the previous ballot received approval from at least 85% of the registered ballot body, no further changes are proposed, and the team has made a good faith effort to resolve applicable objections and responded to industry comments in writing. (See FERC Approves NERC Standards Process Changes.) 

FERC ordered NERC to add INSM to its cybersecurity requirements in response to incidents like the SolarWinds hack of 2020, through which thousands of public- and private-sector organizations — including FERC itself — may have been infected with malicious code. (See FERC Orders Internal Cyber Monitoring in Response to SolarWinds Hack.) Commission staff said the SolarWinds attack demonstrated that an attacker “can bypass all perimeter-based security controls … and compromise” electronic networks believed to be secure. 

The standard this week would require registered entities to “implement one or more documented process(es) for [INSM] of networks … of high-impact [grid] cyber systems and medium-impact … systems with external routable connectivity [ERC].” 

Documented processes under the standard must include each of the following: 

    • network data feeds to monitor network activity, including connections, devices and network communications 
    • at least one method to detect anomalous network activity using the network data feeds 
    • at least one method to evaluate anomalous activity to determine what additional action is needed 

Entities would also have to implement documented processes to retain INSM data associated with anomalous network activity and to protect all data gathered or retained to prevent unauthorized deletion or modification. 

The limit of the standard’s applicability to medium-impact systems with ERC and all high-impact systems is in keeping with FERC’s original order. The commission also ordered NERC last year to examine the feasibility of implementing INSM in low-impact systems and medium-impact systems without ERC, but the ERO recommended against expanding the standard’s reach at this stage in a study submitted in January. (See NERC Recommends Phased Approach to INSM.) 

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Wash. Council OKs Reduced Version of Horse Heaven Hills Project

Washington’s Energy Facility Site Evaluation Council (EFSEC) on April 17 recommended approval for a slimmed-down version of a controversial wind project proposed for a site just south of the Tri-Cities in southeastern Washington.  

The EFSEC, a committee of representatives from several Washington state agencies, voted 5-2 to recommend that Gov. Jay Inslee approve the Horse Heaven Hills project. The governor now has 60 days to issue a final decision.  

Scout Clean Energy of Boulder, Colo., originally wanted to install up to 222 wind turbines that would be 500 feet tall, or up to 141 turbines that would go up to 657 feet along a 24-mile east-west stretch of the Horse Heaven Hills just south of Kennewick, Wash.  

However, EFSEC decided in February that two-mile buffer zones need to be implemented around 60 to 70 ferruginous hawk nests in that area. In 2021, the Washington Fish and Wildlife Commission downgraded ferruginous hawks’ status from threatened to endangered. 

The buffer zone roughly halves the number of turbines in the project. A precise new number won’t be available until Scout maps out a revised siting plan for the turbines. The company said the changes trim nameplate capacity of the project from 1,150 MW to 236 MW. 

Scout’s original proposal also included two 500-MW solar farms on the east and west sides of the 24-mile stretch. EFSEC ordered that the eastern solar farm be removed because it is near sensitive Tribal cultural sites. 

The wind farm has drawn strong opposition from numerous Tri-Cities residents because the turbines would show up in a currently pristine view of the hills from the urban area and because they’re near the ferruginous hawk nests. A February decision by EFSEC removed turbines along the north slopes of the hills, which would also eliminate much of the Tri-Citians’ concern about their view. (See Washington Renewable Developer Rankled by Siting Board Alterations.) 

“By partially approving the Horse Heaven wind and solar project, EFSEC is balancing the need for renewable, clean energy with potential impacts on tribal cultural resources, wildlife and surrounding communities,” EFSEC Chair Kathleen Drew said at the group’s April 17 meeting.