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August 2, 2024

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Wash. Raises $62.5M from Cap-and-trade Reserve Auction

Washington’s first cap-and-trade Allowance Price Containment Reserve (APCR) auction raised almost $62.5 million, the state’s Ecology Department said Wednesday.

The auction held last week put up 1,054,809 carbon emissions allowances for bid. Half were offered at a Tier 1 price of $51.90 and the other half at a Tier 2 price of $66.68, which reflects a benchmark set by the open market. The auction was open only to entities that need to cover direct emissions and was closed to financial traders of allowances.

The state was required to hold the cap-and-trade program’s first APCR auction, a mechanism designed to keep carbon prices in check, after prices in the May quarterly auction broke through a soft cap that triggers a requirement to tap the reserve. (See Wash. Auctions Reserve Carbon Allowances to Relieve Price Pressure.)

The list of eligible bidders included eight oil and gasoline companies. The cap-and-trade program has been blamed all summer for the state’s high gasoline prices, hovering around $5 per gallon. Throughout the summer, Washington and California have been swapping first and second place for the nation’s highest gas prices. (See Cap-and-trade Driving up Washington Gasoline Prices, Critics Say.)

Washington does not reveal the bidders’ or winners’ identities or the number of allowances awarded to individual entities to prevent market manipulation.

Washington has raised almost $920 million in the first seven months of the cap-and trade program, with two quarterly auctions left this fiscal year.

During the May 31 auction, the state sold 8.585 million allowances, for a clearing price of $56.01, exceeding the $51.90 soft cap price triggering the APCR auction. Half of those allowances were to be sold for $51.90 per share and half for $66.68 per share.

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Berkeley Lab Reports 25% Increase in Hybrid Solar-Storage Plants

More hybrid power plants are being built in the U.S., the Lawrence Berkeley National Laboratory said Wednesday, and almost all of them combine photovoltaic generation with storage.

In the annual update of its data compilation, Berkeley said the number of hybrid facilities increased 25% in 2022. At the end of the year, it counted 374 hybrid plants with a nameplate capacity greater than 1 MW operating nationwide. Combined capacity was nearly 41 GW of generation and 5.4 GW/15.2 GWh of storage — increases of 15%, 69% and 88%, respectively, from a year earlier.

“Hybrid Power Plants — Status of Operating and Proposed Plants, 2023 Edition” is available on Berkeley’s website; the full presentation includes two case studies.

Also available is “Batteries Included,” a shorter summary of key takeaways from the 2023 report.

Among the findings:

    • Solar-battery hybrids are the most common configuration, accounting for 213 of the total 374 plants and 59 of the 62 added in 2022.
    • The other common configurations are fossil-solar (35), fossil-storage (26) and fossil-hydro (26).
    • Hybrid configurations reflect their primary use cases — the relatively high average storage ratio and duration of solar-storage plants suggests the storage is providing resource capacity and energy arbitrage, while the low average storage ratio and duration of wind-storage plants suggest they are targeting ancillary services markets.
    • Interconnection queue data show continued strong developer interest in hybridization: There were 51% more hybrid plants with 59% more generating capacity in queues nationwide at the end of 2022 than at the end of 2021. In one example, 97% of solar and 45% of wind in the CAISO queue were proposed as hybrids.
    • The Inflation Reduction Act provided standalone storage with access to the investment tax credit for the first time, reducing some of the impetus for hybrid configuration, but that did not take effect until 2023, and Berkeley did not see any impact in the 2022 data.
    • The capacity contribution of hybrids varies but is not equal to the sum of their parts; hybrids often share components such as inverters or interconnections, which can limit their output, as can operational constraints such as charging the storage only from the generator.

Berkeley concluded by saying “more research is needed to understand the full capability of hybrid projects. [Our] ongoing work focuses on themes of hybrid valuation, market rule development and customer resilience opportunities. The end goal of this research is to support private- and public-sector decision-making related to hybrid power deployment.”

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NREL Creates Renewable Energy Materials Database

The National Renewable Energy Laboratory has created a database that quantifies material needs for building each megawatt of new wind and solar power and examines the supplies of those materials.

The Renewable Energy Materials Properties Database is a first-of-its-kind resource, according to Annika Eberle, NREL’s lead researcher on the project.

“The database also allows users to explore the national and global availability of each material and evaluate their potential supply risks,” she said in a news release.

The REMPD compiles extensive information on the vast array of materials needed for latest-generation wind and solar power technology, including country of origin, significant uses, projected availability and physical properties. It does not make predictions, but its data can provide insight into constraints that may develop in the supply chain.

NREL specifically analyzed the future material needs of wind energy development for an accompanying report, “Materials Used in U.S. Wind Energy Technologies: Quantities And Availability for Two Future Scenarios.”

It sounds a cautionary note that has been raised elsewhere: To meet the Biden administration’s lofty goals, the wind energy industry would have to increase installations by a factor of 500% to 1,000%, which could outstrip current global supplies of materials such as carbon fiber, which is used for everything from golf clubs to airplanes.

“We expect demand for carbon fiber to grow rapidly with increasing deployment of wind energy, especially as blades become longer and use more carbon fiber,” Eberle said. “By 2025, our High Deployment scenario projects that new U.S. wind energy installations could use more carbon fiber in a year than is currently produced in the United States.”

A single offshore wind turbine has a calculated need for 12,380 kilograms of carbon fiber.

The authors suggest increased recycling and use of alternative materials to reduce the supply chain pressures shown in the REMPD.

There is also the issue of domestic production: The authors note that 5,000 heavy cast-iron hubs and bedplates are installed each year on American wind farms, and the number is expected to increase to 12,000 to 20,000 annually.

Almost all are imported now, and this growth presents opportunities for U.S. manufacturers.

Details

The REMPD uses a six-tier taxonomy to organize data at the major steps in the wind and solar power supply chain, from raw material to finished material to subassembly to finished component, plus the larger picture of the wind and solar facilities nationwide.

It lists, for example, 159 materials from acetone to zinc needed for a 100-MW solar plant employing cadmium telluride modules versus 168 materials for a similar-sized plant employing crystalline silicon technology. A 7-KW residential or a 200-KW commercial rooftop installation uses vastly smaller quantities of just 124 materials.

The wind database is less complicated, estimating the needs of a single 3.4-MW onshore geared turbine and a single 15-MW offshore direct-drive turbine. The 40 component materials of the onshore turbine weigh in at a combined 488,867 kilograms. The offshore turbine has only 39 component materials, but they weigh a combined 1.34 million kilograms.

In both examples, low-carbon steel is the bulk of the structure: 797,000 kilos for the offshore turbine. The rare earth element terbium is on the opposite end of the scale: less than a gram is calculated for the onshore turbine.

NREL collaborated on the REMPD with the Department of Energy’s Wind Energy Technologies Office and Solar Energy Technologies Office, which funded the project, and with Oak Ridge National Laboratory, Sandia National Laboratories, Lawrence Berkeley National Laboratory and Arizona State University.

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NYC Wants Ride-share Fleet to Go Green by 2030

New York City Mayor Eric Adams on Wednesday announced proposed rules that would require ride-sharing companies’ fleets in the city to go green or be more accessible by 2030.

The Green Rides Initiative proposal would make the city the first metropolis with a set of rules requiring that all vehicles used by companies such as Uber and Lyft be either zero-emission or wheelchair-accessible by the end of the decade.

“When it comes to driving towards sustainable and inclusive transportation alternatives, New York City isn’t just along for the ride; in fact, we are leading the way,” Adams said. “By championing the integration of zero-emission vehicles and wheelchair-accessible transportation, we are cutting dirty emissions and guaranteeing equitable transportation opportunities for every New Yorker.”

The proposal would require 5% of all high-volume for-hire trips be zero-emission or wheelchair-accessible starting in 2024; that requirement would increase by 20% each year after 2026.

Benchmarks for electrifying NYC’s for-hire fleet by 2030 | New York City Taxi and Limousine Commission

Companies would be fined $50 for every 1,000 trips they are below a year’s percentage requirement and have to file a corrective action plan. They would then be fined $500 and be suspended from operating in the city for 30 days if they are found not to be following their prescribed plans.

The proposal is part of Adams’ larger PlaNYC program, a long-term climate plan that, among other things, seeks to ensure every New Yorker lives within 2.5 miles of an electric vehicle charging station by 2035, and electrify school buses and the city’s own fleet. According to the New York City Taxi and Limousine Commission, the 78,000 for-hire vehicles that it has licensed account for about 4% of the city’s vehicle emissions.

Comments on the Green Rides Initiative can be submitted online, and a hearing on the proposal is scheduled for Sept. 20.

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SERC Devotes Webinar to Physical Security Risks, Awareness

With an uptick in physical attacks on electric infrastructure, the Southeastern Electric Reliability Council this week hosted a session on making physical security more bulletproof — literally.

SERC Senior Reliability and Security Adviser Travis Moran said there’s been an uptick over the past few years in ballistic damage to and tampering with substations and transformers.

Moran pointed to a coordinated attack on a substation in Moore County, S.C., in December 2022 that left more than 40,000 customers without power and an attempt on substations in Baltimore, Md., in February by a recently released neo-Nazi felon who previously plotted to bomb a nuclear plant.

“We’ve gone from just cutting wires, copper theft, to now truly targeting our infrastructure to have significant impacts,” Moran said during SERC’s Aug. 15 webinar, titled “Policy Considerations for Enhancing Physical Security of the Grid.”

Moran said 2013’s Metcalf, Calif., incident, where unknown suspects cut phone cables and opened gunfire on a substation, represented a tipping point showing that the “threat posture had changed from what we historically faced.”

“It’s important to understand where we are now, and how we got here, where we came from,” he said.

Before then, Moran said criminal activity at substations was limited to “garden variety” vandalism, break-ins and theft.

Moran said in recent years, the loss of megawatts in the U.S. due to physical attacks far outnumbers the outages that cyberattacks cause, though cyber has a “larger attack surface.” He said in 2021, 92 physical attacks resulted in utilities losing 145 MW, affecting more than 56,000 customers. In contrast, 2022 contained 163 physical attacks that took out almost 7.5 GW, affecting almost 94,000 customers.

Moran said NERC’s CIP-014-3 standard for physical security is only a “baseline,” and he encouraged companies to go above and beyond.

He urged attendees to test vulnerabilities and identify their threats, unacceptable consequences and their “diamonds,” or key design elements their systems cannot afford to lose. He said the “diamonds” require more layers of physical protection.

“I don’t care if you’re an investor, a muni, a co-op, you all have something to lose,” he told attendees.

Moran also said it’s worth studying the motivations behind physical attacks, including neo-Nazi agendas, anti-authority and anti-capitalism philosophies, monetary focuses and environmental ideologies.

“Our adversaries are learning. And that’s a key variable that we always have to keep in mind: They’re gathering intelligence,” he said.

Moran said attackers are becoming increasingly aware of weak points on equipment to target with bullets, including the cooling fans of transformers. He said a shooter can be a fair distance away and still attack effectively.

Moran also said individuals are becoming more sophisticated with drone attacks.

“Previously they were kind of an anecdotal threat,” he said.

Moran said when designing substations and transformers, utilities should bring in physical security experts as early as possible. He said utilities should consider the proximity of critical equipment to fence lines and which directions equipment faces. Once operational, utilities should engage with trusted partners regularly to continue testing their protection systems and improving their physical security postures, he said.

Moran said utilities should be aware that perpetrators often prefer to execute attacks to coincide with mass gatherings, including sporting events and political rallies. He also said attackers will make attempts during extreme weather events, knowing that outages in heat waves and winter storms will be an “opportunity multiplier” to cause maximum harm.

“It’s unfortunate to talk about these kinds of things, but that’s unfortunately where we are in this day and age,” he said.

Moran said companies should remember that electricity is a “life-sustaining force” that is integral to banking, water, food, hospital and transportation systems.

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NYISO Business Issues Committee Briefs: Aug. 16, 2023

July Market Performance

NYISO Senior Vice President Rana Mukerji on Wednesday presented the July operations report to the Business Issues Committee, saying it was a “quiet month” and that July’s average energy costs were down 54% compared to last year.

July’s higher average temperatures increased locational-based marginal prices compared to June, but the 76.7% year-over-year decline in average fuel prices means prices are much more stable.

Working Capital Fund Rebalance

The BIC also voted to recommend that tariff revisions presented by NYISO related to rebalancing the ISO’s working capital fund be approved by the Management Committee on Aug. 30.

NYISO is required to maintain a working capital fund that rebalances its coffers, either by refunding or charging customers based on their market contribution, and the ISO proposed to increase the frequency of this rebalancing to semiannual, as well as use a six-month lookback period in its calculations, rather than a whole year.

The ISO argues that its proposals will make customers’ bills or refunds more accurate, shorten the time it will take for customers to receive either their bills or refunds and enable customers to obtain interest distributions twice a year.

NYISO expects the MC will vote to recommend that the board approve the proposed revisions, and it anticipates filing the revisions with FERC in October.

Staff Shakeup

NYISO told the BIC that Mike DeSocio, director of market design at NYISO, is leaving his position at the end of the month to become an energy consultant.

DeSocio has been with NYISO for 23 years and will be replaced by Shaun Johnson, director of market mitigation and analysis at the ISO.

Johnson previously led the market design team for roughly a decade, during which he helped shepherd broader regional market initiatives that enabled the design of current markets, according to NYISO staff.

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Mass. DPU Moves to Streamline Municipal Aggregation

The Massachusetts DPU is looking for ways to streamline its review of municipal electric supply aggregation plans.

Tuesday’s Department of Public Utilities order (Docket 23-67) includes proposed guidelines and a draft template to help municipalities develop new aggregation plans. The DPU is proposing to expedite its review process for certain municipalities that use the template.

Many of the rules governing what must be included in a municipal aggregation plan have already been established through other DPU orders, but the guidelines proposed Tuesday would gather them in one place and provide a simplified explanation for them.

Municipal aggregation holds the promise of lower electric costs for ratepayers, as their city or town buys power for them in bulk. And some community choice aggregation packages have the added benefit of boosting the clean energy transition, if they specify use of renewable energy certificates.

A University of Massachusetts-Amherst report issued in February found that these plans saved money for residents of 79% of the municipalities that developed them. (See Community Choice Aggregation Benefits in Mass. Quantified.)

But the DPU has taken some criticism for the speed with which it approves them. The Boston Globe this year reported that Massachusetts’ two U.S. senators were urging DPU to “stop holding up communities’ attempts to cut utility bills and emissions.”

In the UMass-Amherst study, 26% of responding municipalities decried detrimental DPU delays.

The DPU addressed that in the order it issued Tuesday.

It said it has reviewed each aggregation request on a case-by-case basis, creating a continually evolving body of precedent that future applicants must continually monitor and adjust to.

“As a result, there is an unacceptable backlog of applications pending at the department that suggests a different approach is warranted,” the order reads.

“By providing this clear direction and otherwise streamlining the process for reviewing and approving municipal aggregation plans, the department intends to move expeditiously to address the backlog of applications currently pending before the department, as well as simplify the process going forward in the interests of reducing the administrative resources — on the part of both the municipalities and the department — devoted to this issue.”

The DPU is seeking public comment on the proposals through Sept. 18.

Massachusetts established municipal aggregation in 1997. The DPU has approved more than 175 programs since August 2000, and more than 1.2 million customers statewide are enrolled in an aggregation plan.

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The IRA at 1: Implementing at Speed and Scale Remains Key Challenge

As the Inflation Reduction Act begins its second year of implementation, one of the key measures of the law’s success is the wave of new clean technology manufacturing plants and investment dollars going to districts with Republican members in Congress, according to Jason Grumet, CEO of the American Clean Power Association (ACP).

“The vast majority of the benefits are going to states that tend to be governed by conservatives,” Grumet said during a Monday webinar reviewing the IRA’s first year. With ACP tracking more than $270 billion in private sector investments announced in the past year, about 80% of that money is going to districts with Republican lawmakers in Congress, while 60% of the manufacturing plants also are going into Republican-held districts, he said.

“And so, I think what we’re going to see is that the polarization that has been driving so much of the energy and climate debate is going to really start to settle out as it becomes clear that this is American energy and American resources and American communities and American jobs,” Grumet said.

Grumet and other industry leaders on the panel agreed that the investments and jobs flowing into red states make it increasingly unlikely Republicans in Congress will try to claw back any of the $370 billion in clean energy funds in the law.

“The reality is, at the ground level, [the IRA] was not an issue in the 2022 election,” said Gregory Wetstone, CEO of the American Council on Renewable Energy (ACORE), which sponsored the event. “The best way to make sure [repeal] doesn’t happen … is to see the law carried out.”

Republican lawmakers would be at pains to “turn back the clock and close down this new manufacturing facility in [their] district,” Wetstone said. “I don’t think it’s going to happen. … It would be extremely difficult politically.”

But the IRA has been a political flashpoint almost from the start. The law was passed in the House of Representatives and Senate on straight party-line votes (with Vice President Kamala Harris breaking the tie in the Senate), following intense, behind-closed-doors negotiations between the White House and Sen. Joe Manchin (D-W.Va.). The law was passed as a budget reconciliation measure, meaning it needed only a simple majority in both houses.

The incentives in the law range from the $7,500 tax credit for electric vehicles, to a 10-year extension of the 30% investment tax credit (ITC) for solar and other clean technologies, to $8.5 billion for consumer rebates for energy-efficient appliances and home upgrades.

A recent report from ACP counted 83 announcements for new cleantech manufacturing facilities across the country, expected to create an estimated 30,000 jobs. New clean energy projects totaling close to 185,000 MW also have been announced, the report said. (See American Clean Power Tallies Potential Impact of IRA at $270B.)

The ITC was a key provision for the solar industry, said Abigail Ross Hopper, CEO of the Solar Energy Industries Association.

Noting that the industry has had to contend with the uncertainty of previous one- and two-year extensions of the credit, Hopper said, “to have a 10-year runway has really been quite a revelation. This first year, there’s been a level of relief and optimism and long-term planning that at times felt a bit elusive.”

The tax credits also are structured to advance certain policy initiatives, such as bonus credits for projects with prevailing wage agreements and registered apprenticeship programs, or for using materials that meet domestic content requirements.

Such provisions forge “a direct connection between policy outcomes and investment decisions,” Hopper said. “So, we’re seeing projects really driving toward particular geographies; particular materials; in particular communities. That sort of linking … means that there will be a much greater likelihood that the investments are going to be built and the money spent in areas that perhaps in the past have not seen the benefits of this kind of investment.”

Public Awareness vs. Results

But implementation of the IRA has not been smooth or easy. Manchin has broken with the White House over the Treasury Department’s guidance on domestic content requirements for certain tax credits that he says do not follow the letter of the law.

Treasury still is working its way through the guidelines it must issue for tax credits and other provisions in the law. A page on the Internal Revenue Service website, last updated on Monday, lists 27 notices the agency has issued to date on the various provisions of the law.

Public awareness of the law and its benefits for consumers is another ongoing challenge, with significant political implications for President Joe Biden heading into next year’s presidential election. A recent poll from George Mason University found that four out of 10 registered voters said they knew nothing about the IRA, while six in 10 said they knew “a little.”

But Heather O’Neill, CEO of Advanced Energy United, said knowing the name of the law may be less important than seeing and experiencing its results. “What we want are benefits,” she said. “We want steel in the ground. We want new projects, new products, new manufacturing, new economic development and new ability for consumers to purchase these products and goods and services.”

The bigger roadblocks for implementation are well known, Grumet said: transmission, permitting and workforce development and the politics surrounding those issues. But he views the challenge as a critical opportunity for the industry.

“The fact that we are now confronting these fundamental, big-term structural challenges to scaling clean energy is great news, right? Because we’re not going to have any version of a sustainable climate economy or national security picture if we don’t make a profound transition in our energy system, which I don’t think very many people have appreciated the scale of in terms of those challenges,” he said.

Wetstone agreed, saying the issues arising out of implementation of the IRA are “a result of trying to get something done really rapidly, which is the pace we need to go to address the climate crisis. So, I actually think it’s a very good thing that we’re being forced to come to grips with all this.”

He and the other panelists agreed that while a deal on permitting is possible this year, finding a spark to trigger bipartisan cooperation and action is less likely.

“There’s no committee that has the jurisdiction to put the pieces together that are necessary for a politically viable outcome,” Grumet said. “So, the only way we’re going to get a deal through this divided Congress is if there was … support for transmission, particularly interregional transmission.”

Making the profound changes ahead also will mean the clean energy industry has to rethink its role in the mainstream energy system, he said.

“If we’re going to be honest about what this transition looks like, we have to embrace where we are today, which means we have to be part of the energy sector; not the renewable power sector, not the clean power sector, [but] the energy sector. … We think we’ve got the best technologies. Give us fair competition based on economics and security and climate change, [and] clean power is going to win. We’re going to win on the merits, and we’re going to win in a collaborative environment.”

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SPP Awards NextEra 3rd Competitive Project

Three weeks after it was unable to agree on a recommended developer for a competitive upgrade in New Mexico, SPP’s Board of Directors regrouped Tuesday and endorsed an industry expert panel’s initial direction.

Following a brief virtual discussion, the board approved a notification to construct award to NextEra Energy Transmission (NEET) Southwest as the Crossroads-Hobbs-Roadrunner transmission project’s designated transmission owner.

Xcel Energy subsidiary Southwestern Public Service (SPS), the incumbent transmission provider, was selected as the upgrade’s alternative designated TO.

NEET Southwest’s bid came in at $291.6 million to build the proposed 90.5- and 44.5-mile, 345-kilovolt lines to connect the Crossroads, Hobbs and Roadrunner substations. SPS’ bid came in at $220 million.

NEET Southwest and SPS were the only entities to submit proposals. A third proposal that came in at $282.7 million is thought to be NEET Southwest’s; according to the IEP’s report, the two proposals were similar, but the SPS bid offered a construction schedule of one year, half as much as the other two.

“No explanation, method or means was provided in the proposal to support the indicated timeframe to construct,” the IEP said of the SPS bid.

The board failed to reach a decision during last month’s board meeting in St. Paul, Minn., when some of the directors were unable to get satisfactory answers from the IEP on the cost and timelines of the winning bid. The board rejected the panel’s recommendation after the Members Committee’s straw ballot gained only three votes in favor. (See SPP Board Rejects Recommended Competitive Project.)

The Members Committee’s straw vote passed in a 10-7 vote. The committee also approved SPS as the alternate DTO 10-2, with five abstentions.

SPP director Larry Altenbaumer | © RTO Insider LLC

Larry Altenbaumer, one of the more vocal directors during the July discussion, supported the IEP’s recommendation during the Tuesday call.

“As a board member, I don’t have the credentials or the analytic ability to independently develop my own recommendation, and I don’t think it is either the job of me as a board member or the IEP to try to resolve deficiencies in terms of proposals that are submitted,” he said.

“I remain a very strong supporter of the competitive process. but in the end, my conclusion is that the shortfalls we have in this particular process were largely shortfalls in terms of what had been submitted by proposals,” Altenbaumer said.

He said he still was unsatisfied with the panel’s response to one of 10 questions the directors asked the industry experts. Asked to explain who the panel would have recommended had the scores been the same, the IEP acknowledged the scores were very close.

“Therefore, the essence of this question was discussed in the selection of the proposals,” the panel wrote. “The IEP concluded that based on the review of factual information in the proposals as described in the IEP report, the IEP made and stands by its recommendation as stated in the IEP report.”

Altenbaumer said he planned to suggest additional considerations “that I think can further strengthen what is already a very high-quality and comprehensive competitive bid process.”

SPP will review its competitive transmission owner selection process, required under FERC Order 1000, for potential improvements. The grid operator has done the same thing after the four previous IEP panels.

NEET Southwest has been awarded SPP’s last three competitive projects, including Wolf Creek-Blackberry in Kansas and Missouri and Minco-Draper in Oklahoma. (See “Expert Panel Awards Competitive Project to NextEra Energy Transmission,” SPP Board of Directors/Members Committee Briefs: Oct. 26, 2021. See SPP Board of Directors/Markets Committee Briefs: April 26, 2022.)

The IEP was seated last August to evaluate anonymous bids for the project. The upgrade, initially estimated to cost $376.3 million, was proposed by SPS as an alternative to a previously identified project in the 2021 Integrated Transmission Plan. (See SPP Board of Directors/Members Committee Briefs: July 26, 2022.)

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NYPSC Seeks FERC Rehearing on NYISO’s 17-Year Amortization

The New York Public Service Commission on Monday asked FERC to rehear its order approving NYISO’s proposal to use a 17-year amortization period in the ISO’s capacity auction demand curves (ER21-502).

The PSC said its rehearing request is supported by points it made last month in a petition urging the D.C. Circuit Court of Appeals to review FERC’s decision to allow the ISO to reduce the 20-year amortization period — the assumed time that a hypothetical gas-fired peaking plant will remain operational — to 17 years. (See DC Circuit Asked Again to Rule on NYISO’s 17-Year Amortization.)

NYISO proposed the changes in response to legislation that set strict net-zero standards for fossil fuel plants, reducing their operational lives, but the PSC said the move will hurt consumers and “cause an increase in over $100 million in unhedged capacity costs for the state.”

The PSC noted that FERC’s letter order accepting the amortization proposal departed from precedent because the commission accepted the NYISO plan without explanation after having rejected it twice previously.

The FERC-approved demand curves became effective in July, prompting the PSC to seek a quick ruling because the use of the new amortization period in auctions “will wrongfully increase by hundreds of millions of dollars per year the wholesale electricity rates paid by New York ratepayers between July 2023 and March 2025.”

The PSC also contended that NYISO’s proposal is speculative, basing current demand curves on technologies that are either not yet in development or may never exist, highlighting how previous rulings wrote that state legislation “does not require that all existing fossil fuel generators retire by no later than 2040 to satisfy the 2040 zero-emission requirement.”

NYISO implemented the 17-year amortization period as part of its demand curve reset to adjust market demand assumptions for upcoming capability years.