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September 10, 2024

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Poll Shows Drop in Support for Offshore Wind in NJ

Support for New Jersey’s development of offshore wind projects has plummeted after 15 years of solid support, with just 54% of state residents now in favor of the strategy, according to a new poll by Monmouth University.

That’s down from 76% support in 2019, the year in which the state awarded its first offshore wind project, when just 15% opposed the move, according to the institute. Forty percent of those questioned now oppose the development of offshore wind, according to the poll.

Offshore wind projects drew 82% support in 2008 and peaked at 84% support in 2011, according to the institute. The poll, of 814 New Jersey adults, was “sponsored and conducted” by the Monmouth University Polling Institute, the institute said.

The poll presents another dose of bad news for the two offshore wind developers looking to complete projects in New Jersey’s waters. Danish developer Ørsted said Wednesday it will delay the expected commercial operations date for its Ocean Wind 1 project — the state’s first offshore project — from 2025 to 2026 because of rising costs. The developer said it will make a final investment decision on the project in late 2023 or early 2024. (See More Bad OSW News: SouthCoast Bails, Ørsted Tanks.)

A spokesperson for Ørsted, responding to a question from NetZero Insider about the poll, said the project will begin onshore construction in a few weeks and “has not slowed down or paused any planned activity.”

“A majority of New Jerseyans support offshore wind because they recognize the incredible need to reduce our reliance on fossil fuels, while more than two-thirds agree that significantly increasing the amount of offshore wind energy produced should be a priority over the next 10 years,” the spokesperson said. The poll shows that 37% think increasing the amount of wind energy produced should be a “major priority” and 30% think it should be a “minor priority.”

The state’s second OSW developer, Atlantic Shores Offshore Wind, released a statement blaming the adverse poll numbers on the “harmful effect of misinformation on sustainable energy development.”

Hurt Summer Tourism

Part of the decline in public opinion stems from concern about the effect on tourism, which is based on the New Jersey Shore. Forty percent of residents say “placing wind farms off the coast will hurt summer tourism,” according to the institute. In contrast, just 9% say it will help tourism, the institute said.

The recent spate of dead whales washing up on New Jersey beaches also influences the debate over offshore wind, the poll said. Twenty percent of those polled said they believe the development of offshore wind “definitely” contributed to whale deaths, and 25% thought it “probably” was connected. Ten percent said wind energy sector “definitely” had no connection to the deaths, and 35% said it probably didn’t.

| Monmouth University

State and federal investigators say they have found no connection between the whale deaths and any preparation work for the turbine projects, for which construction has yet to start.

“Opinion on the beached whale phenomenon has a high correlation with support for wind energy,” the institute said in an article outlining the poll results. “Among New Jerseyans who see a connection between the two, just 29% favor offshore wind energy development. Among those who feel these things are not related, 76% support wind energy.

Tony MacDonald, director of the Urban Coast Institute at Monmouth University, said in the article that it’s not surprising the offshore wind sector is facing headwinds, given that New Jersey is pursuing “very ambitious goals” to develop renewable energy, and “changing the status quo is very hard.”

“Clearly the state and wind industry have to do a much better job in reaching out to communities to demonstrate the economic and environmental benefits of these projects, as well as to counter misinformation about threats to tourism and threats to whales,” he said.

The statement from Atlantic Shores Offshore Wind, a joint venture between Shell New Energies US and EDF-RE Offshore Development, said, “the need to educate and engage in information sharing” is one of the challenges of developing a new energy source.

“We have a role to play in helping people understand offshore wind and ensuring that they have accurate information,” the developer said. “The spreading of misinformation and lies is dangerous and doesn’t serve the people of this state, who so urgently need the benefits that offshore wind will bring. It must stop.”

The project will bring power to more than 700,000 homes, generate $1.9 billion in economic activity and create 18,000 jobs, the statement said.

37% See OSW As Major Priority

The poll shows clearly that residents don’t necessarily see those benefits. Only 22% said they think the offshore wind sector will create a lot of jobs, compared to 55% who said they think it won’t create any jobs, the institute said.

Thirty-seven percent of residents said offshore wind should be a “major priority” for the state over the next decade, down from 48% in 2019, the institute said. The latest poll showed that 30% think offshore wind should be a minor priority, and 30% say it shouldn’t be a priority at all, the institute said.

The extent of the disaffection can be seen in the support for other forms of energy. Forty-one percent of residents favor building a new nuclear reactor, up from 26% in 2019, and 40% of residents favor drilling for oil or gas off the coast, according to the institute. Among those who think the wind turbines would hurt tourism, 23% support wind development, but twice as many favor drilling for fossil fuels off the coast.

The institute released the poll as the state Board of Public Utilities (BPU) evaluates applications submitted by four bidders in the state’s third offshore wind solicitation. The BPU expects to announce the winning bids by the end of the year. (See NJ’s 3rd OSW Solicitation Attracts 4 Bidders.)

The solicitation guidelines say the agency may award capacity of up to 4 GW, and perhaps more, as the state seeks to develop 11 GW of offshore wind capacity by 2040.

The state awarded its first OSW contracts to the 1,100-MW Ocean Wind 1, followed by the selection of the 1,148-MW Ocean Wind 2 and the 1,510-MW Atlantic Shores projects in 2021. All three projects are located about 10 to 15 miles from the shore, prompting opposition from residents and businesses who fear the visible turbines will ruin the ocean view and deter tourists.

The opposition, including citizens groups and municipal and county government, has instigated several lawsuits against the projects, especially against Ocean Wind 1. A new opposition group, Move ‘Em Out, announced itself this week with a website carrying the slogan “SOS: Your beach is next.”

In turn, Ørsted has filed suit to ensure it gains approvals needed to move the project ahead. (See Lawsuits Mount over NJ OSW Projects as Opposition Digs in.)

The company gained a small victory Aug. 15 when the two sides signed a consent order in New Jersey Superior Court in which the County of Cape May agreed to grant a road-opening permit that will allow the developer to start preliminary work and testing for the eventual installation of underground cables for Ocean Wind 1.

The developer is looking to build a 275-kV underground line through the Jersey Shore community of Ocean City, which is in Cape May County, to connect with the PJM grid at a substation sited on a closed coal-fired power plant in neighboring Upper Township.

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FERC: MISO Can Ban Intermittent Resources from Providing Ramp

MISO has FERC’s go-ahead to bar its renewable energy resources from supplying ramping reserves.

FERC’s Thursday order leaves MISO’s dispatchable intermittent resources (DIRs) ineligible to provide ramping service beginning Sept. 1 (ER23-1195).  (See MISO Plans to Bar Intermittent Resources from Ramp Capability; MISO Defends Renewable Ramping Stance to FERC.)

FERC said MISO’s plan doesn’t amount to undue discrimination because it “currently faces operational and price formation challenges associated with DIRs being unable to deliver ramp capability products services in the vast majority of intervals that DIRs are cleared.”

A group of MISO transmission customers argued FERC should have rejected the filing because the ban will treat similarly situated resources differently.

A coalition of MISO’s clean energy advocates also protested MISO’s plan on the same grounds and said the commission had a duty to reject it because it would create a rate that “unduly discriminate[s] among resources’ eligibility to provide grid services.” The group also said that MISO is “rapidly approaching an inflection point where it may be economic for renewable generation to maintain headroom in order to provide ramp capability products.” They said that prohibiting DIRs from providing ramp service conflicts with “MISO’s admitted need for greater flexibility” over the next two decades.

MISO has said its proposal is necessary — at least for now — because of the “significant differences” between renewable and non-renewable resources’ ability to deliver ramp product. It said most of DIRs’ cleared ramping capability is uneconomic and cannot be delivered because it’s trapped behind transmission constraints. The MISO ramp capability product’s current design doesn’t account for a resource’s deliverability.

“Given these conditions, we find that the proposed tariff revisions are just and reasonable and not unduly discriminatory or preferential as they will allow MISO to procure ramp capability products from only those resources that can reliably deliver them,” FERC decided.

FERC said that accepting MISO’s proposal will put a stop to DIRs being paid for ramp service “even though DIRs cannot reliably deliver the product 99.7% of the time.” It also said it will end some market distortion because MISO’s market clearing software will be able to clear resources other than DIRs that can provide deliverable ramping.

MISO’s Independent Market Monitor agreed that DIRs are “virtually always undeliverable” when scheduled to furnish ramping up capability.

The Monitor said, “ideally, MISO would automatically disqualify any resource from being scheduled to provide ramp capability products when it is not deliverable, but that is not technically feasible for MISO today or in the near future.”

In a joint concurrence, Chair Willie Phillips and Commissioner Allison Clements wrote to “emphasize the narrow, fact-bound nature of these decisions.”

Phillips and Clements said FERC’s decisions hinges on a “near perfect overlap between DIRs’ undeliverability and the circumstances when DIRs would clear ancillary services.”

“Today’s orders depend upon the particular factual circumstances before us, that unlike non-DIRs, DIRs are highly unlikely to be able to provide ancillary services when they are cleared,” the two wrote. They said ramping trends and circumstances could change in the future as MISO adds more renewable energy and advised MISO to improve its markets software so it can account for transmission constraints.

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Rhode Island Increases Heat Pump Incentives

Rhode Island is dedicating $25 million of American Rescue Plan Act funding to create a new heat pump incentive program, Gov. Dan McKee (D) announced last week.

Named Clean Heat Rhode Island, the program will expand heat pump incentives available from the state’s Office of Energy Resources (OER), which previously were focused only on households with oil or propane heating systems.

The new incentives “will make heat pump incentives available to a wider range of Rhode Islanders,” the OER wrote in a press release.

Rhode Island law mandates a 45% decrease in carbon emissions by 2030 compared to 1990 levels, and net-zero emissions by 2050.

“Residential and commercial heating is a major contributor to our state’s carbon emissions,” McKee said in his announcement. “My administration has been hard at work to develop a solution that makes energy-efficient electric heating accessible and affordable for everyone.”

Rhode Island’s residential and commercial heating sectors combined to make up about 28% of the state’s total emissions in 2019, with an additional 1.3% of emissions coming from the gas distribution network, according to the state’s emissions inventory. From 1990 to 2019, combined emissions from the residential and commercial heating sectors declined by about 14%, lagging the 19.6% decrease in total statewide emissions, according to the inventory.

The new incentive program will be broken up into three categories: a residential incentive for homes heated with fossil fuels, an additional residential incentive for low-income customers and a commercial incentive meant for small businesses, nonprofits and public buildings.

The standard residential incentive includes $1,000 per ton (12,000 BTU) of capacity to switch to efficient air source heat pumps and $1,250 per ton for ground source heat pumps. The state also is offering a $750-per-ton new building incentive for air and ground source heat pumps. Both incentives are capped at $10,000 per household.

For income-eligible customers, the incentive will cover the entire cost of the upgrade, but it extends only to customers with oil and propane heating systems.

According to the state, heat pumps for Rhode Island homes typically require two to three tons of capacity. A 2020 study commissioned by National Grid found that converting a single-family Rhode Island home to a ductless mini-split heat pump would have an average installed cost of $15,600.

The commercial incentive, which includes $2,500 per ton for air source heat pumps and $4,500 per ton for ground source heat pumps, is extended to nonprofits as well as small-to-medium businesses with less than $30 million in gross annual revenue.

Rhode Island Energy, the state’s investor-owned utility company, also offers up to $350 per ton to residential customers switching to electric heat pumps from propane, oil or natural gas heating systems.

The new incentive program comes as the state continues to grapple with how to cost-effectively decarbonize its heating sector and natural gas network.

Rhode Island’s Public Utilities Commission is in the middle of a multiyear investigation into the future of the state’s gas network and how to align the network with the state’s statutory climate goals (Docket No. 22-01-NG). (See Rhode Island PUC Grapples with Future of Gas.)

The PUC assembled a stakeholder committee in March of this year — with representation from a diverse range of companies and organizations, from Enbridge to the Sierra Club — to determine the scope of the investigation’s technical analysis.

The stakeholder committee is expected to finalize a list of decarbonization scenarios for the state’s gas network in September. In the coming weeks, the state likely will announce the members of a technical working group, who will work with consulting firm Energy + Environmental Economics (E3) to develop the granular assumptions for the technical analysis.

In August, E3 circulated a list of draft decarbonization scenarios that varied in levels of reliance on heating electrification, the existing gas system and alternative fuels like hydrogen and biomethane. The draft options ranged from a “High Electrification” scenario, which assumes the eventual decommissioning of the gas system, to a “Continued Use of Gas” scenario, which assumes a significant role for alternative fuels.

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ERCOT Continues to Rely on Voluntary Conservation

AUSTIN, Texas — ERCOT CEO Pablo Vegas thanked Texas consumers Thursday for helping the grid operator survive tight operating conditions this summer, saying their response to conservation appeals has been “nothing short of tremendous.”

ERCOT CEO Pablo Vegas | © RTO Insider LLC

“Over the last 10, 11 days, we’ve asked Texans quite a bit to conserve energy during broad periods of the afternoon and early evenings,” Vegas told ERCOT’s Board of Directors Thursday. “We’ve seen each of the days that we have made those calls a material and meaningful impact on energy demand that has contributed … to get through a tight period of operations without having to go into emergency operations.”

The grid operator has made nine appeals for voluntary conservation this summer, including six times in seven days since Aug. 24. Residential customers are not compensated for their reduction, unlike businesses that participate in demand response programs.

The oppressive heat that has baked Texas since June has lessened this week, and demand with it. After recording more than 200 hourly average demand marks of 80 GW this summer, the average peaks have reached only 78.12 GW since Sunday.

However, ERCOT still has encountered tight conditions during the early evening, when solar power ramps down and wind resources, which generally contribute less than solar during the summer, try to fill the gap.

The problem this week is with thermal generation units, which have been running full bore this summer. On Wednesday during ERCOT’s latest conservation appeal, thermal outages neared 12 GW, almost a third above what the ISO terms an “extreme” level.

“We had more thermal outages coming off of a long stretch of very high demand and high utilization,” Vegas said. “It’s not surprising to see some mechanical breakages happening on some of the dispatchable generation.”

He told the board that ERCOT’s new normal is managing three primary variables that drive the grid’s reliability on any given day: demand on the system, the “traditional” thermal dispatchable fleet’s availability, and intermittent renewable generation’s performance.

“The combination of those three contributes meaningfully to whether or not we’re going to have enough supply to meet demand,” Vegas said. “When you have a challenge with one or even two of those, sometimes things can be tight and we get through it. And if you have issues with all three of them, you can have very tough conditions.”

Vegas said that on Aug. 17, operating reserves dwindled to about 600 MW during the evening ramp down. ERCOT resorted to deploying its ancillary services to find extra supplies to meet demand. That included its emergency reserve service, under which participants are paid to take their loads offline.

“What we’ve been experiencing throughout the summer has been some combinations of those three at different points in time,” he said. “That’s why it’s so critical that we have these tools available to us to manage these very quickly evolving situations and circumstances.”

ERCOT has set 10 new all-time peaks as of Aug. 23. The current mark of 85.44 GW, set Aug. 10, still stands. That is a 6.7% increase over last year’s peak, a stunning load growth when compared to the industry’s normal 1% gain year over year, Vegas said.

“The Texas economy continues to be booming and this is a great outcome for the state of Texas. It’s bringing opportunity, it’s bringing jobs … but it’s also bringing demand,” he said. “I don’t think anybody expects the growth to slow down meaningfully, so we need to be positioned to lean into that and to support that growth as we move forward.”

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Backers of Independent Western RTO Seek to Move Quickly

LAS VEGAS — The coalition of utility commissioners that this summer proposed the creation of an independent Western RTO is wasting no time getting the project up and running.

That spells good news for CAISO, one of the key beneficiaries of the effort as it seeks to stand up its Extended Day-Ahead Market (EDAM) in the face of increasing competition for participants from SPP’s Markets+ offering.

The group, which includes regulators from Arizona, California, New Mexico, Oregon and Washington, on Tuesday issued a notice inviting a broad range of stakeholders from across the Western U.S. and Canada to “help build” Phase 1 of the effort, which will include “deciding on the form, mission, and scope of an entity with independent, West-wide governance.”

“This effort, the ‘West-Wide Governance Pathway Initiative,’ seeks to build on the benefits of [CAISO’s] Western Energy Imbalance Market (EIM), realize the potential benefits of an extensive footprint for the Extended Day-Ahead Market (EDAM), and enable a path forward for a potential West-wide fully organized market (a Regional Transmission Organization or RTO), should participants in this effort so choose,” the notice said.

The regulators first floated the RTO plan in a July letter just as the growing competition between CAISO and SPP raised the prospect that the West could become divided into two day-ahead markets that eventually would evolve into separate RTOs.

The commissioners’ proposal cited studies showing the West would reap the greatest economic and environmental benefits from a single market — and one that pointedly includes CAISO. The plan seeks to create a workaround for an issue that for years has bogged down CAISO’s attempts to expand into an RTO: its state-run governance.  (See Regulators Propose New Independent Western RTO.)

‘With All Urgency’

In the notice issued Tuesday, the regulators made clear they plan to pursue an aggressive timeline for laying the groundwork for the effort. They seek to “finalize key elements of the independent entity’s governance” by December and to select and seat a founding board by January. The Regulatory Assistance Project will provide “staffing and facilitation” for the initial phase, which will be led by Carl Linvill and Jennifer Gardner, both former members of the WEIM Governing Body.

“Funding derived exclusively from 501(c)(3) sources will support the initial work of this initiative,” the notice said. “This arrangement will be evaluated over time and will likely require supplementation as the workload intensifies. We commit to ensuring that the initiative has access to consultants and advisors on the broad array of topics that may become relevant as the work proceeds.”

The commissioners acknowledged that Phase 1 of the effort “is being facilitated outside of any existing organization or decision-making process and asked stakeholders to provide feedback on a series of questions — outlined in the notice — about how to structure the stakeholder process. Comments are due by Sept. 11.

“I think there’s a lot of work in front of us to make sure that stakeholders are widely engaged, that public power has a seat at the table, [and] that the [investor-owned utilities], the public interest organizations, the consumer advocates are  all invited into that conversation and that it moves with all urgency,” Oregon Public Utility Commissioner Letha Tawney, a signatory of the July letter, said Wednesday in Las Vegas at a forum focused on CAISO’s EDAM.

“We propose a bit of a scope, decisions about a legal entity, a charter, a mission, a founding board. That’s ambitious,” Tawney said. “I’d love to hear, is that sufficient? Is it insufficient? Given how ambitious it is, is something else feasible?”

Speaking at the EDAM forum, California Public Utilities Commission President Alice Reynolds said the July letter was intended to take the problem of CAISO’s governance off the table. The process ahead, she said, will need to examine what an independent entity “needs to look like.”

“How we can build this so that there is an entity to provide the full range of options for regional cooperation, recognizing that we may not ultimately use all of them. Some of us might, some of us might not, but at least we’d have a path to the full range of benefits,” said Reynolds, who also signed the July letter.

“How can we get there as a region and really confront this 500-pound gorilla in the room of governance?” Arizona Corporation Commission member Kevin Thompson said at the forum. “If we could solve that issue, then let’s solve it and move on for the benefit of not only our utilities, but the benefit of our consumers as well.”

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NYISO Proposes $41.62M Project Budget for 2024

NYISO faced stakeholder scrutiny Wednesday after presenting its final project budget recommendations for next year to the Budget and Priorities Working Group, amounting to an estimated $41.62 million total.

The ISO is proposing 29 market and 37 enterprise project candidates. Although the total is fewer than was suggested when NYISO last shared the proposed budget, it is still about 30% higher than this year’s.

Labor costs are the primary driver behind the budget’s increase, rising from $13.74 million this year to an estimated $18.03 million.

Breakdown of NYISO’s proposed budget for next year compared to previous years | NYISO

Kevin Lang, partner at Couch White, expressed concerns about the hike, asking how the ISO planned to mitigate rising costs and whether it had the bandwidth to manage the projects or would require help from outside consultants.

“I recognize that some of these [projects] are relatively small and some will be a larger effort, but there are many more projects here than you had in the last few years,” Lang said.

Kevin Pytel, senior manager of product and project management at NYISO, conveyed confidence, saying, “We are comfortable with the workload; it is a lot, and we’re awfully stretching ourselves, but we do feel like it is achievable.”

Lang next asked how NYISO planned to reduce the cost of future budgets.

NYISO CFO Cheryl Hussey told Lang that “to address the increase in the cost of the product portfolio for next year, we’ll be proposing to increase our level of financing by $10 million in 2024,” a request that is under review by the New York Public Service Commission.

Pytel committed to a project prioritization process re-evaluation this fall, aiming for collaborative discussion on potential enhancements. Feedback on the proposed budget or the prioritization process can be sent to kpytel@nyiso.com.

The proposed budget will be revisited at the BPWG meeting Sept. 11, and NYISO aims to obtain budget approval at the Management Committee meeting Sept. 27.

July Operations Report

NYISO CEO Rich Dewey reported to the MC meeting, which also was held Wednesday, that it had been a “cool, long and wet summer” that saw much lower monthly energy prices compared to last year.

NYISO COO Rick Gonzales said the summer’s peak load of 28,735 MW came July 28, noting how August has been particularly mild so far. Additionally, 20 MW of nameplate front-of-meter solar resources were added since June. (See NYISO Operating Committee Briefs: July 22, 2023.)

Working Capital Fund Rebalance

The MC also voted to recommend that NYISO’s proposed revisions to how it rebalances customer contributions to its working capital fund be approved by the Board of Directors.

Every January, NYISO calculates each customer’s contribution to the fund based on the previous year and issues refunds that include interest in February. The ISO wants to rebalance the fund twice a year, in January and July, based on the prior six months. The rebalancing would better reflect recent conditions, and customers would receive refunds more quickly, it said.

The Business Issues Committee has already endorsed the proposal, and the ISO plans to present it to the board for Oct. 16. (See “Working Capital Fund Rebalance,” NYISO Business Issues Committee Briefs: Aug. 16, 2023.) If greenlit, the revisions will be implemented starting in July 2024.

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FERC Approves SERC Settlement with Mississippi Co-op

SERC Reliability’s settlement with Mississippi’s Cooperative Energy for violations of NERC’s reliability standards will not carry a monetary penalty, according to the agreement approved by FERC on Wednesday (NP23-19).

The commission said in a filing that it will not further review the settlement, leaving the agreement intact.

NERC submitted the settlement between SERC and Cooperative on July 31 in its monthly Notice of Penalty spreadsheet; it was the only settlement made public this month, although NERC filed a separate NOP concerning violations of the Critical Infrastructure Protection (CIP) standards. That filing was not publicly accessible, in keeping with NERC’s policy that publishing information on CIP violations could be helpful to malicious actors.

Headquartered in Hattiesburg, Miss., Cooperative served nearly 450,000 homes and businesses as of the end of 2022 across 55 of the state’s 82 counties. The utility’s 11 member cooperatives operate 1,838 miles of transmission lines and 58,348 miles of distribution lines, and own generating assets with a total combined capacity of nearly 2.5 GW.

Cooperative’s settlement with SERC stems from a violation of FAC-008-3 (Facility ratings) and its predecessor FAC-009-1 (Establish and communicate facility ratings). SERC discovered the infringement in 2021, when FAC-008-3 was in effect (the standard was replaced later that year by FAC-008-5 ), but it later determined that the noncompliance began in 2007 when the earlier standard became enforceable.

While reviewing evidence submitted during a data request for an off-site compliance audit, SERC’s audit team discovered that Cooperative had failed to consider current transformers when determining facility ratings for its solely and jointly owned facilities. This constituted a violation of requirement R6 in FAC-008-3, which requires transmission owners and generation owners to have facility ratings that are consistent with the associated facility ratings methodologies.

The regional entity specifically noted that the rating for a 230-kV line “was inaccurate once the [current transformer] was considered” and, to be consistent with the requirement, should have been lowered to account for the limiting component.

After the discovery, Cooperative performed an extent-of-condition assessment that included print reviews or walkdowns of similar facilities to see if their ratings considered current transformers. The assessment covered 53 facilities, of which the utility determined that 27 did not include current transformers in their ratings. Seventeen of the affected facilities had to be derated, and SERC determined that three had at some point in their history experienced a load in excess of the newly calculated facility ratings.

The RE attributed the noncompliance to a lack of internal controls, such as a checklist or other measure to ensure all equipment documented in the ratings methodology was included in the development of facility ratings. SERC said the violation posed a moderate risk, despite the documented exceedances; the RE noted that in all three incidents the exceedance was less than 20% of the revised facility ratings and no harm is known to have occurred.

Cooperative’s mitigation actions included updating its system information database to include data on current transformers for updating facility ratings, performing field work on high-priority facilities to eliminate limitations related to current transformers and implementing a checklist for the facility ratings process that will provide “better visibility for required facilities data … and [prevent] recurrence.” According to the settlement, the mitigation was verified to be complete on April 26, 2022.

SERC awarded the utility penalty credit for its high level of cooperation throughout the enforcement process; Cooperative provided “detailed and organized information” to the RE and “openly shared information” about its internal compliance program and organizational structure, even where that meant exposing potential weaknesses. Cooperative received additional credit for agreeing to settle the violation.

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NV Energy Proposes to Convert Valmy Coal Plant to Gas

NV Energy wants to convert its last coal-fired power plant to a gas-fueled facility, as the utility continues to be plagued with cancellations and delays of planned solar projects.

The proposed conversion of the North Valmy Generating Station is contained in an amendment to the utility’s 2021 integrated resource plan. The amendment was filed last week with the Public Utilities Commission of Nevada; PUCN is expected to act on the proposal by Feb. 2, 2024.

The coal-to-gas conversion is meant to satisfy PUCN’s request for a “complete solution” for the 522-MW North Valmy coal plant, slated to close at the end of 2025.

NV Energy previously planned to replace capacity lost through the coal-plant closure with two solar-plus-storage projects developed by Primergy Energy — Hot Pot and Iron Point — but those projects fell through.

PUCN then rejected NV Energy’s plan for a 200-MW battery energy storage system as a partial solution to the coal-plant closure, saying it wanted to see a comprehensive plan. (See NV Energy Rejected on Plan to Replace Coal Plant with Storage.)

NV Energy said the gas conversion will reduce carbon emissions by almost 50% at North Valmy, which is near Battle Mountain in northern Nevada.

“Serving Nevada’s rural customers is a critical priority, and the proposed option delivers a reliable and cost-effective option to serve a more remote location that also reduces carbon emissions to respond appropriately to the region’s energy demands,” NV Energy CEO Doug Cannon said in a statement.

NV Energy and Idaho Power each own half of the North Valmy Generating Station. NV Energy’s cost for the coal-to-gas conversion would be $83 million. The utility is asking to run the refueled generating station through 2049.

NV Energy’s IRP amendment also proposes building a 400 MW solar project in Northern Nevada with a 400-MW, four-hour battery storage system. The project, called Sierra Solar, would cost $1.5 billion for solar, storage and interconnections.

In addition, the amendment proposes the purchase of development assets for the Crescent Valley solar-plus-storage project for an undisclosed price.

Solar Uncertainty

In arguing previously for approval of its 200-MW battery storage system, NV Energy said supply chain issues had derailed the Hot Pot and Iron Point solar-plus-storage projects.

In last week’s filing, the utility said the developer “failed to meet key project milestones” and the build-transfer agreement for Hot Pot and Iron Point had been terminated. PUCN had approved NV Energy’s plan to buy Hot Pot and Iron Point from Primergy Solar last year.

In addition, NV Energy said two other solar-plus-storage projects have been canceled: Southern Bighorn and Chuckwalla. Combined with Iron Point and Hot Pot, the four projects would have provided 1,100 MW of solar and 795 MW of battery storage.

NV Energy noted it is negotiating to potentially revive the Southern Bighorn and Chuckwalla projects.

Project delays are another issue. NV Energy said the operation date has been postponed for the Boulder Solar III project, which will provide 128 MW of solar and 58 MW of battery storage.

“Renewable project developers continue to struggle to meet their contractual obligations to the companies to deliver commission-approved renewable projects,” NV Energy said in its filing.

Energy Independence

An overarching goal for the IRP amendment is to advance Nevada’s energy independence and reduce the state’s “exposure to uncertain market resources,” the filing states.

“Cause continues to exist to doubt the availability and deliverability of regional market capacity and energy, and therefore, to limit the companies’ immediate reliance on it on a going-forward basis,” NV Energy said.

The filing takes a “balanced approach” toward energy independence by combining the addition of renewable energy and storage resources with continued operation of natural gas generation, the company said.

NV Energy has been participating in the development of the Western Resource Adequacy Program. And energy independence doesn’t rule out participation in an RTO.

“This effort toward energy independence moves in lockstep with expected resource sufficiency requirements of a future market or regional transmission organization,” the company said in its filing.

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DOE Puts Up $15.5 Billion to Retool Factories for EVs

The U.S. Department of Energy on Thursday announced $15.5 billion in funding and loans focused on retooling factories to build electric vehicles.

The total includes $2 billion in grants and up to $10 billion in loans to support automotive manufacturing conversion projects that keep high-quality jobs in their current communities.

“President Biden is investing in the workforce and factories that made our country a global manufacturing powerhouse,” said Secretary of Energy Jennifer M. Granholm. “Today’s announcements show that President Biden understands that building the cars of the future also necessitates helping the communities challenged by the transition away from the internal combustion engine.”

The funding includes the Domestic Conversion Grant Program, which will prioritize projects that are likely to retain collective bargaining agreements, or those with existing high-wage workers who get the top quartile wages in their industry.

The department also announced a notice of intent to make $3.5 billion in funding available to expand domestic manufacturing of batteries for electric vehicles and the grid, as well as for battery materials and components imported from other countries.

Manufacturers can apply to receive assistance via financial grants through DOE’s Office of Manufacturing Energy Supply Chains, or debt financing through its Loan Program Office.

The Inflation Reduction Act set up the $2 billion Domestic Manufacturing Conversion Grant, which will provide cost-shared grants for the domestic production of hybrid, plug-in hybrid, electric drive and hydrogen fuel cell electric vehicles. The program is aimed at expanding manufacturing for all classes of electrified vehicles, component assembly and related vehicle part manufacturing.

Projects picked for the funding also must contribute to the President’s Justice40 Initiative, which aims to increase diversity and equity in the workforce and ensure every community benefits from the transition to a clean energy future.

DOE wants concept papers for the grants by Oct. 2 and full applications by Dec. 7.

The department also is making another $10 billion in loans available under the Advanced Technology Vehicles Manufacturing Loan Program for manufacturing conversion projects that retain high-quality jobs.

Examples include retaining high wages and benefits, including workplace rights, or commitments such as keeping the existing facility open until a new facility is complete. For projects that would replace an existing factory, DOE will assess its projected economic impact and compare that to the existing facility’s.

The final $3.5 billion is meant to bolster domestic battery manufacturing and the production of battery materials. The funding comes from the Infrastructure Investment and Jobs Act.

A notice of intent outlines how the round of funding will support growing the domestic industry, supporting workers and promoting equity. The program will support communities that are home to experienced autoworkers, DOE said.

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Latest FERC Order on Grand Gulf Nuclear Plant Ambiguous on Refund Amount

FERC’s most recent order on an Entergy subsidiary’s tax violations and lease payment collections for the Grand Gulf Nuclear Station in Mississippi reignited a longstanding dispute over how much in refunds should be due to customers.

FERC this week didn’t appear to order more refunds stemming from litigation. However, regulators argue FERC’s most recent order means Entergy should reimburse ratepayers more than half a billion dollars.

FERC last year ruled that Entergy subsidiary System Energy Resources Inc. (SERI) charged an excessive revenue requirement to ratepayers because it had improperly excluded accumulated deferred income tax (ADIT) deductions since 2004. Those deductions are related to the future estimated decommissioning expenses for Grand Gulf that Entergy claimed on its consolidated federal income tax return. Entergy claims it’s already taken care of the matter by crediting about $100 million to customers.

The newest order on Grand Gulf matters, issued Aug. 28, doesn’t clear up exactly how much Entergy owes for the tax violations, though it rehashes longstanding disagreements over Grand Gulf accounting practices (EL18-152). FERC restated that SERI “must refund amounts resulting from the improper exclusion of ADIT liabilities from the [unit-power sales agreement] rate base.”

FERC also decided last year that SERI must refund ratepayers about $149 million plus interest for overbilling on the Grand Gulf annual lease payments it collected from Entergy companies from 2015 through 2022. This week’s order allows Entergy to offset the undepreciated remaining book value of the sale/leaseback property, letting it partly recover some of that amount.

The Louisiana Public Service Commission and New Orleans City Council maintain Entergy owes roughly $550 million in refunds split between ratepayers in Louisiana, Arkansas and New Orleans. (See Regulators File Emergency Motion in Ongoing Grand Gulf Battle.)

SERI operates and owns 90% of the 1,400-MW Grand Gulf plant in Port Gibson, Miss. It sells the plant’s output to Entergy’s Arkansas, Louisiana, Mississippi and New Orleans affiliates under a unit-power sales agreement (UPSA) that includes the costs of the Grand Gulf Nuclear Power Station’s sale-leaseback renewals.

In a press release, Entergy said its actions “have been and continue to be in the best interest of its customers.” It also encouraged the state regulators and city councilors to consider accepting a settlement related to the remaining litigation involving Grand Gulf performance issues and accounting practices. (See Entergy Offers Regulators $588M to End Grand Gulf Complaints.)

“We are pleased today’s order resolves a major source of litigation between our regulators and SERI,” said Rod West, Entergy group president of utility operations. “We hope the clarity provided by the FERC in this ruling helps to guide constructive discussions with our regulators to resolve the remaining SERI litigation matters. A comprehensive settlement could provide significant and imminent refunds to our customers at a time when energy bills are high due to record usage.”

New Orleans City Council Vice President Helena Moreno called Entergy’s reading of the order and the utility’s claim it doesn’t owe further refunds “bizarre.”

The Louisiana Public Service Commission also said it disagreed with Entergy’s interpretation.

“The FERC order confirms that SERI does owe refunds, contrary to Entergy’s assertions. FERC denied SERI’s request for rehearing of the refund issue. Entergy’s public statement provides no FERC language alleged to support its position,” the Louisiana PSC said in the release. The state commission also predicted more litigation.

Louisiana PSC Vice Chair Mike Francis vowed to fight for more refunds.

“It’s time for Entergy Corp. to stop these legal challenges and comply with the order to refund what is owed to our people. The time is now to bring the matter to rest,” Louisiana PSC Commissioner Davante Lewis said.

Despite the murky refund issue, FERC’s order contained myriad decisions on rehearing. It said though Entergy defended its accounting treatment of Grand Gulf’s lease renewal, it remains inappropriate for SERI to have handled the renewal as a financing extension of the original sale-leaseback agreement that lasted from 1989 to 2015. The lease renewal from 2015 onward should have been considered standalone, FERC said.

The commission reaffirmed that the lease renewal “was not simply an extension of the original sale-leaseback under the terms of that agreement, pursuant to, for example, an evergreen clause,” but a separate transaction using “new lease instruments that memorialized a new lease term, as well as the amounts and frequency of new rental payments.”

FERC also asserted that it was wrong of SERI to attempt to recover the costs of a return on net capital additions through both its rate base and the lease renewal payments because it constitutes a double recovery.

Additionally, FERC directed SERI to transfer and reclassify $147.3 million of excess ADIT associated with nuclear decommissioning tax deductions to a property-related ADIT account.

Tiff Arises over ALJ Authority

Lastly, FERC rejected SERI’s argument on rehearing that it shouldn’t have allowed an administrative law judge to conduct the hearing and issue an initial decision in the Grand Gulf sale-leaseback and tax disputes. SERI had surprisingly alleged that “proceedings before an administrative law judge are unconstitutionally insulated from the president’s control by multiple layers of removal protections.” It said such judge’s decisions are invalid because they are unconstitutionally appointed by the FERC chair alone.

FERC Commissioner Mark Christie said he was taken aback that SERI raised a constitutional issue so late and in a rehearing request. He wrote separately to second FERC’s rejection of Entergy’s argument and admonish SERI for throwing a curveball so late in the game “in only a few pages buried near the end of its rehearing request.”

“A constitutional issue of this magnitude is not one that is appropriate to raise for the first time on rehearing. It should have been raised and fully briefed well before this point in the process and — preferably in my view — set down for oral argument before the full commission, before any final determination by this commission would be rendered,” Christie wrote. “Ideally, a constitutional issue of this magnitude should be raised only in a general proceeding where all interested parties can weigh in extensively.”

It was FERC’s defense of the use of an administrative law judge in this case that had Commissioner James Danly tacking a dissent onto the order. He said FERC’s argument that it can use an after-the-fact ratification of an administrative law judge’s appointment in a docket or a full commission review and adoption of an administrative law judge’s findings to remedy a possible constitutional infirmity was legally flawed.