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August 3, 2024

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California Invests in Zero-emission Port Equipment

California Gov. Gavin Newsom announced $1.5 billion in port infrastructure upgrades Thursday, including $450 million to fund zero-emission locomotives, vessels and vehicles at some of the West Coast’s largest shipping container ports.

“No other state has a supply chain as critical to the national and global economy as California,” Newsom said in a statement. “These investments — unprecedented in scope and scale — will modernize our ports, reduce pollution, eliminate bottlenecks and create a more dynamic distribution network.”

The money will finance 28 projects that together will create an estimated 20,000 jobs, the statement said.

“The historic level of state funding also puts these projects in a stronger position to compete for significant federal infrastructure dollars from the Biden-Harris administration,” California Transportation Secretary Toks Omishakin said during an event announcing the awards Thursday at the Port of Long Beach.

The ports of Long Beach and Los Angeles — among the three busiest container shipping ports in the U.S., according to maritime information website Marine Insight — are trying to convert to zero-emission operations in coming years.

As part of the grants, the Port of Long Beach was awarded more than $383 million to help modernize its freight transport system at the port and in surrounding communities, the California State Transportation Agency said in its summary of the projects.

The funding will pay for the development of a battery plug-in tugboat and up to 12 long-haul and switching zero-emission locomotives. It also will finance nine hydrogen fuel cell “top handlers” to stack and move freight containers and 44 pieces of zero-emission equipment to replace diesel tractors, forklifts and other heavy equipment, the agency said.

A $46 million grant to the Port of Stockton will fund a zero-emission electric railcar mover. And more than $15 million will help expand Sierra Northern Railway’s efforts to develop and demonstrate hydrogen-powered switching locomotives to serve the Port of West Sacramento.

The Port of Oakland, the largest container port in Northern California, will receive more than $103 million for its modernization efforts. The money will help pay for battery-electric tractor rigs and charging stations, hydrogen fuel cell top handlers and a battery storage system.

“We look forward to our continued partnership with Secretary Omishakin in building an Oakland seaport for the next generation that uses clean, zero-emissions energy like electricity and hydrogen,” Port of Oakland Executive Director Danny Wan said in a statement.

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GOP Senators Call for FERC Conferences on EPA Power Plant Rule

Two key Republican senators want FERC to play a more active, public role in evaluating the potential impacts of the power plant emissions rules EPA proposed in May. (See EPA Proposes New Emissions Standards for Power Plants.)

Energy and Natural Resources (ENR) Committee Ranking Member Sen. John Barrasso (R-Wyo.) and Environment and Public Works Committee Ranking Member Sen. Shelley Moore Capito (R-W.Va.) sent a letter to the commission Wednesday urging it to hold a series of technical conferences on the rule.

“The proposal presents unjustifiable claims about the future availability of technologies — including carbon capture, clean hydrogen and the related infrastructure — used to power our electric grids,” Barrasso and Capito wrote in the letter. “In light of recent testimony before Congress and the projected impact of the Proposed Clean Power Plan 2.0, we ask you to convene as soon as possible a series of technical conferences to assess the potential impact of the proposed rule on electric reliability.”

The Federal Power Act requires FERC to protect electric reliability through mandatory standards and Congress more generally looks to the commission to safeguard the quality of interstate electric and natural gas service, the two wrote.

The ENR Committee recently held a pair of hearings on FERC oversight and reliability. During one of them, the commission’s two Republicans warned of a pending reliability crisis. (See Senators Praise Phillips, FERC’s Output at Oversight Hearing.) Commissioner James Danly warned of “an impending, but avoidable, reliability crisis,” and Commissioner Mark Christie said the crisis would occur if the rapid subtraction of dispatchable resources continued unabated.

Chairman Willie Phillips told the committee he was concerned about the pace of power plant retirements and said the commission needed to keep an eye on it. Similar concerns were echoed by the heads of NERC and PJM at a later hearing. (See Robb Warns of ‘Serious Disruptions’ from Grid Transition.)

“These witnesses expressed the critical, consistent concern that the premature retirement of dispatchable generation is frequently driven by government actions, including rulemakings from the EPA,” the letter said. “The Proposed Clean Power Plan 2.0 appears to pose a significant threat to the remaining dispatchable fleet when the nation can afford it least.”

Back when the original Clean Power Plan was finalized in 2015, President Obama’s EPA worked with FERC and the commission held a series of technical conferences on the plan’s potential impact on reliability, which all included testimony from EPA leadership, the letter said.

The letter said that without a similar effort from FERC to a build a record, the commission’s consultations with EPA on the rule “are likely to be ineffective.”

“EPA clearly lacks the expertise to project accurately the impact of its rulemaking on electric reliability without deeply informed and engaged participation from FERC and those subject to its jurisdiction that are charged with the obligation to generate and deliver electricity in order to meet continuous demand for electric service,” Barrasso and Capito wrote.

Behind the Scenes

While the letter argues for more public coordination between the two agencies, former FERC Chair Richard Glick said in an interview that the two closely coordinated on areas that implicated each other’s jurisdictions.

“Behind the scenes, FERC and EPA have conversations often,” Glick said. “FERC often provides technical assistance to agencies like the EPA, for instance, if there’s a concern about a particular upcoming rulemaking that EPA is looking at and what that impact might be on the reliability of the grid.”

Those kinds of conversations happened when Glick was at the agency, and he expects they have continued, though he acknowledged not having inside information about what has occurred since he left. It is ultimately up to Phillips whether he wants to go the more formal route of technical conferences as requested by the two senators, Glick said.

Any information shared between the agencies behind the scenes is going to be part of the public record anyway, Glick said.

The senators’ letter also complained about EPA’s decision to grant a brief extension for its comment deadline to Aug. 8, when many parties, including key trade associations and the ISO/RTO Council, had asked for an extension into the fall.

An EPA spokesman said the agency would respond to all comments in its final rule when it is issued. In the proposed rule itself, the EPA said it would coordinate with FERC and mentioned it signed a memorandum with the Department of Energy this spring that included consultation with the commission, NERC and state regulators. (See: DOE, EPA Team Up on Reliability Efforts.)

Electric Power Supply Association CEO Todd Snitchler said in a statement that trade group would support public coordination between FERC and EPA on the rule’s potential impacts, of which the group has been critical since it was released.

“While we support and our members actively contribute to the expansion of cost-effective clean energy, EPSA remains deeply concerned about the potential impact of the EPA’s proposed rules on critical natural gas power plants needed to provide reliable electric supply,” Snitchler said.

No existing commercial power plants in the country are using carbon capture and sequestration and no current technologies can meet 24/7 demand that can be “deployed quickly, cost effectively and at scale to fill the gap left by existing resources likely to be put out of business by the EPA’s aggressive new restrictions,” he added.

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FERC Accepts NERC Budget Update

FERC on Monday completed a back-and-forth on NERC’s 2023 Business Plan and Budget that it began last November with an order accepting the ERO’s clarification of the commission’s questions (RR22-4-002).

The commission said it was satisfied with NERC’s compliance filing, which the ERO submitted in January in response to FERC’s order accepting the budget in November. (See FERC Orders Clarification in ERO Budget Filing.) FERC also accepted the 2023 business plans and budgets of the regional entities and the Western Interconnection Regional Advisory Board in the same filing.

FERC had ordered the compliance filing to clear up a number of questions, some initially raised by the Edison Electric Institute, about how the funds in the budget were to be used. The commission said its oversight duties would be best served by “additional transparency” into costs relating to the Electricity Information Sharing and Analysis Center’s (E-ISAC) operations — particularly how NERC’s new Business Technology Department relates to the E-ISAC — in addition to the program’s relationship with outside partners and vendors.

The commission also demanded information on NERC’s fixed asset costs and allocation of its loan proceeds, and the inclusion of natural gas companies in the E-ISAC and the Cybersecurity Risk Information Sharing Program (CRISP).

In its filing, NERC explained that the Business Technology Department supports all of the ERO, including the E-ISAC. The organization told the commission that in its budget, costs directly assigned to a particular department may be reflected as indirect costs in each department that it supports; for example, the 2023 E-ISAC budget includes fixed asset additions of $1.1 million, $258,000 of which are directly assigned to the E-ISAC and $928,000 of which are allocated as indirect expenses from the administrative departments.

Explaining the $4 million loan proceeds, which the budget said would be used for software investments, NERC said the funds were specifically for the Align and Secure Evidence Locker projects. The ERO said budgeting this financing activity in its General and Administrative line item was “consistent with NERC’s historical practice” regarding software financing but acknowledged the commission’s “concern” about the lack of clarity this creates regarding where funds finally are to be spent.

NERC said future budgets would “allocate the budgeted capital financing activity … using weighted percentages of departments’ capital software spending.”

Regarding the E-ISAC vendor affiliate program, NERC said the program’s tiered structure — under which vendors may pay more for additional benefits such as access to networking sessions at the GridSecCon security conference — allows vendors of smaller sizes and resources to access the program that otherwise might not be able to join. The ERO also outlined its screening process for the program and asserted that the E-ISAC reviews the materials of vendors who will participate in its events to ensure they do not contain sales or promotional content, another concern raised by FERC.

Finally, NERC explained that the E-ISAC’s collaboration with the Downstream Natural Gas Information Sharing and Analysis Center provides the E-ISAC’s members with “increased insights into threats affecting a sector that has many overlaps” with their business through the sharing of informational bulletins. The ERO also said natural gas utilities that participate in CRISP pay for their access the same as any other participants.

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Calif. Legislature Approves Key Infrastructure Bills

California lawmakers on Wednesday approved the central components of Gov. Gavin Newsom’s package of infrastructure bills to speed clean energy development, sending the measures to Newsom for his signature.

The state Senate gave final approval to Senate Bill 149, which would streamline judicial review of clean energy and transportation projects by requiring that challenges to the projects under the California Environmental Quality Act (CEQA) be resolved by the courts within 270 days, including appeals. (See Newsom Stresses Role of Permitting in Calif. Energy Transition.)

The Senate also approved SB 147, which would allow the incidental taking of species that are fully protected under the state Endangered Species Act during the construction of infrastructure projects. It would also declassify the peregrine falcon, brown pelican and thicktail chub, a small fish, from the law’s list of fully protected species.

Another bill passed by the Senate on Wednesday, Assembly Bill 124, would authorize the California Infrastructure and Economic Development Bank and the state Department of Water Resources to use funding from the federal Inflation Reduction Act to finance projects that reduce greenhouse gas emissions.

“California is one step closer to building the projects that will power our homes with clean energy, ensure safe drinking water, and modernize our transportation system,” Newsom said in a statement after the bills passed .

Despite objections from environmental groups and some fellow Democrats, Newsom made it a priority to remove obstacles that could stop or delay construction of needed infrastructure. The state must add thousands of megawatts of new generation and storage resources in the next 10 years to meet its 100% clean energy goal by 2045 while maintaining reliability.

“I look forward to signing these bills to build California’s clean future, faster,” Newsom said in his statement. “Thanks to our partners in the Legislature, we’re about to embark on a clean construction boom that maximizes the unprecedented funding available from the Biden-Harris administration.”

Another measure in the package, AB 122, cleared the Senate and state Assembly on June 27. It would allow but mitigate the removal of western Joshua trees, which the state Fish and Game Commission is considering listing under the California Endangered Species Act. The iconic California desert plants occupy large swaths of land slated for utility-scale solar arrays and battery storage. Newsom has yet to sign the measure.

At least one other bill still requires Senate approval. AB 126 would extend funding for the state’s Clean Transportation Program and the Air Quality Management Program through Department of Motor Vehicle fees and require an annual funding allocation of 10% for hydrogen refueling stations from the Clean Transportation Program through 2030 or until a sufficient network of refueling stations exist.

Newsom and legislative leaders announced their agreement on the infrastructure bills June 26 as part of a larger deal on the fiscal year 2023/24 state budget. (See Calif. Governor, Lawmakers Agree on Infrastructure Bills.)

The bills will take effect immediately upon Newsom’s signature.

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FERC Explains Denial of Rehearing on Cold Weather Standard

FERC provided its promised justification for denying a request to rehear its recently approved cold weather standard, saying the petitioners’ cost recovery concerns were outside the scope of the proceeding (RD23-1).

While the commission’s vote was unanimous, Commissioner James Danly in a concurrence urged a separate investigation into the cost recovery mechanisms established by RTOs and ISOs.

The Electric Power Supply Association (EPSA), the New England Power Generators Association (NEPGA), and the PJM Power Providers Group filed a request for rehearing of EOP-012-1 (Extreme cold weather preparedness and operations), which FERC approved in February along with EOP-011-3 (Emergency operations). That request was denied “by operation of law” in April, when the commission allowed 30 days to pass without action on the request. (See FERC Denies Rehearing of Cold Weather Standard.)

In its follow-up filing last week, the commissioners affirmed that they “continue to reach the same result ” even after considering the petitioners’ arguments.

Petitioners Objected to Cost Burden

EPSA, NEPGA and the PJM group objected to the standard’s requirements for freeze protection measures on new and existing generating units, claiming the measures would require generator owners “to incur potentially significant costs that they lack a reasonable opportunity to recover through rates.” However, FERC declined to address this argument in its implementation order, calling it “outside the scope of the instant proceeding.”

The petitioners responded that by failing to address cost recovery in its order, FERC violated Sections 215 and 219 of the Federal Power Act. They argued the commission should have initiated a proceeding under FPA Section 206 to explore means of cost recovery for compliance with the new standards.

Responding to the cost recovery question, FERC observed that Section 215 says it may approve a proposed standard if the standard is “just, reasonable, not unduly discriminatory or preferential and in the public interest.” It drew a sharp contrast between this part of the act and Section 206, which governs rate proceedings; while both sections use the term “just and reasonable,” FERC said the language in Section 215 clearly does not refer to utilities’ rates.

“While petitioners may have preferred that the commission adopt a specific cost recovery mechanism … the commission’s approval of a reliability standard without such a mechanism does not run afoul of FPA Section 215,” the commission said in its June 29 order. “Nothing in petitioners’ rehearing request suggests that [the standard] is insufficient to protect the reliability of the [grid], which … is the commission’s primary concern in this proceeding.”

Regarding the request for a Section 206 proceeding, FERC said it did not err because Section 215 does not require such actions in connection with reliability standards. Moreover, it pointed out that entities have other means of seeking cost recovery and that nothing in its order affirming the standards prevents them from doing so.

The petitioners also suggested NERC change the standards to require “balancing authorities to ensure sufficient quantities of weather-resilient generation are available, which would then have allowed for the development of rules that would also address cost recovery.” This too was rejected by FERC, which said “nothing in [the] rehearing request suggests that generator owners and … operators are incapable of the duties required under the reliability standard.”

Finally, the commission said Section 219, which “allow[s] the recovery of all costs prudently incurred to comply with the reliability standards,” does not require it to address cost recovery when approving reliability standards, as the petitioners claimed. FERC said utilities that feel they are eligible for cost recovery under this section may do so with “the appropriate filing” and that its order does not preclude such a filing.

Danly Warns of Generation Retirements

In his concurrence, Danly affirmed he supported his fellow commissioners’ decision. However, he warned a Section 206 investigation may be warranted, concerning whether the cost recovery mechanisms used by RTOs and ISOs “can be relied upon to ensure just and reasonable rates.”

Danly said “increasing reliability risk throughout the country” indicates that RTOs and ISOs have not provided the proper incentives for utilities to retain and add the dispatchable generation needed to ride out adverse grid events. He cited a warning from PJM that generation retirement rates are “exceeding the rate of new additions of resources that … we need to manage the grid of the future,” adding that PJM attributed these retirements in part to “diminished energy revenues.”

“Prudence demands that the commission make sure its markets adequately compensate compliance with [reliability] standards in advance of those standards becoming mandatory and enforceable,” Danly said. “Otherwise, sufficient generation may not be available during the next cold weather event. They may have already retired.”

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FERC Denies Rehearing over GridLiance Transmission Recovery

FERC on Wednesday denied a rehearing request over its February decision approving SPP’s tariff revisions that add an annual transmission revenue requirement (ATRR), a formula rate template and implementation protocols for GridLiance High Plains-owned facilities in Nixa, Mo. (ER18-99).

The commission said that according to precedent set by the D.C. Circuit Court of Appeals’ Allegheny Defense Project v. FERC decision, the rehearing request is denied by operation of law. The 2020 order found FERC no longer could grant rehearing requests “for the limited purpose of further consideration.”

FERC did modify the discussion in the February order but continued to reach the same result.

The commission’s order affirmed an administrative law judge’s 2021 decision finding SPP’s proposal to incorporate the Nixa assets into one of its transmission pricing zones was consistent with cost-causation principles and was just and reasonable. (See “Order on GridLiance ATRR,” FERC Grants Rehearing of SPP Capacity Accreditation Proposal.)

Several cities in Arkansas and Missouri and a group of SPP transmission owners (Evergy, American Electric Power and Xcel Energy subsidiaries and Western Farmers Electric Cooperative) filed a joint rehearing request in March. They argued that a cost shift associated with a zonal placement decision under SPP’s tariff cannot be just and reasonable unless each customer or group of customers that will bear some portion of the assets’ costs is deriving a benefit from those specific assets that is “roughly proportionate” to those costs.

The commission said it disagreed that rough proportionality is the only appropriate way to approach cost causation under SPP’s zonal placement process. It sustained its decision not to adopt the requirement, saying the intervenors’ approach “does not square with the existing zonal rate construct under the SPP tariff.”

“SPP’s zonal rate construct does not attempt to measure each transmission customer’s benefit from each transmission asset included in the zonal ATRR. Nor does it charge each customer transmission costs on an asset-by-asset basis,” FERC wrote. “Instead, under that zonal construct, the costs and benefits associated with network service in a zone are assessed on an aggregate level, with each customer paying for transmission service based on its load ratio share, which reflects its total use of the aggregate assets in the zone.”

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FERC Clears MISO, SPP’s Affected System Study Improvements

FERC has approved changes to MISO and SPP’s affected system study process to allow either RTO to order upgrades of limiting elements on tie lines.

In a June 30 order, FERC said the revisions to MISO and SPP’s joint operating agreement regarding upgrades to tie line limits and more consistent modeling on SPP’s part should bolster reliability (ER23-1803).

Now MISO or SPP can require all necessary tie line upgrades during the study process, regardless of on what side of the seam the limiting element is located. The upgrade then would be handled under the business practices and tariff of the RTO that has functional control over the limiting element.

Additionally, SPP pledged to conduct its affected system studies using the actual amount of either Network Resource Interconnection Service or the non-firm Energy Resource Interconnection Service requested in MISO by interconnection customers.

The order stems from a complaint EDF Renewables made in 2017 over ambiguous affected system study processes in MISO, PJM and SPP. (See Affected-system Rules Unclear, FERC Says.)

However, MISO and SPP’s JOA revisions could be short-lived, as the RTOs are hoping to ditch their affected system study process in favor of installing regular Joint Targeted Interconnection Queue studies. Both RTOs are readying tariff and JOA language for their first, $1.9 billion portfolio of 345-kV lines meant to bring more generation online at the seams. (See MISO Stakeholders Request JTIQ Cost Containment Measures.)

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NJ’s 1st OSW Project Gets BOEM Seal of Approval

The U.S. Bureau of Ocean Energy Management (BOEM) said Monday it had approved the construction and operations plan for Ørsted’s 1.1-GW Ocean Wind 1 project, New Jersey’s first offshore wind project and the third backed by the Biden administration.

After BOEM released its Record of Decision, the Danish developer said it expects to begin onshore construction in the fall with “offshore construction ramping up in 2024.”

In a release put out by Ørsted, Gov. Phil Murphy called BOEM’s approval “a pivotal inflection point, not just for Ørsted, but for New Jersey’s nation-leading offshore wind industry as a whole.”

The company said the project, located 13 miles from the Jersey coast and with 98 turbines, would power 500,000 homes when it begins commercial operations in 2025.

“Ocean Wind 1 is on the cusp of making history,” said Ørsted Americas CEO David Hardy, adding that the project is set to begin “delivering on the promise of good-paying jobs, local investment and clean energy.”

The project is the third OSW project in the U.S. approved by BOEM, as the nation seeks to reach a goal of 30 GW of wind energy in place by 2030. The other two approved projects are Vineyard Wind off the Massachusetts coast and South Fork Wind off Rhode Island and New York. Both projects recently installed their first monopile foundations, according to the Business Network for Offshore Wind.

“Ocean Wind 1 represents another significant step forward for the offshore wind industry in the United States,” BOEM Director Elizabeth Klein said in a release put out by the Department of the Interior announcing the decision. “The project’s approval demonstrates the federal government’s commitment to developing clean energy and fighting climate change and is a testament to the state of New Jersey’s leadership in supporting sustainable sources of energy and economic development for coastal communities.”

Approvals Still Needed

The announcement comes as Ocean Wind 1 faces continued opposition from OSW opponents who question the cost to the state, say it will hurt the state’s commercial fishing and tourism industries, and have expressed concern about the impact on marine life, especially whales.

Nine dead whales have washed up on the state’s beaches in recent months, but state and federal investigators say there is no evidence that the deaths are related to the developers’ preliminary sonar mapping of the ocean floor. Some of the state’s Republican congressmen have called for a moratorium on the OSW projects until any potential connection between them and the whale deaths is investigated.

Yet the projects have strong support from the state. On Friday, both houses of the Legislature approved a bill that would allow Ocean Wind 1 to reap the benefits of federal tax credits instead of those benefits flowing to the state and helping reduce costs to ratepayers, as is required by New Jersey law. The bill has yet to be signed by Murphy. (See NJ Lawmakers Back Ørsted’s Tax Credit Plea.)

Stephanie Francoeur, a spokeswoman for Ørsted, said Ocean Wind 1 still needs approval from the Army Corps of Engineers, National Marine Fisheries and EPA.

“All of this is expected by the end of Q2 2024, which allows us to move forward with offshore construction,” she said.

The project already has received “major state permits” from the Department of Environmental Protection (DEP), including a Coastal Area Facility Review Act Permit (CAFRA) and state and federal consistency under the Coastal Zone Management Act. The project already has site plan approval for onshore substations, she said.

Expanding Litigation

Ocean Wind 1 faces two appeals filed against the decision by the state Board of Public Utilities to grant the project an easement over property owned by Cape May County and Ocean City on which to lay underground cables tying the turbines to a nearby substation.

The BPU granted the approval under a new state law that allowed the agency to override local government agencies on an OSW infrastructure issue if it was “reasonably necessary” for the project to advance.

Michael J. Donohue, the attorney for Cape May in the case, said the county is “reviewing the 177 pages and dozens of collateral documents related to the Record of Decision of the Bureau of Ocean Energy Management and other federal agencies released today.”

“Upon completion of that review, the county will determine what avenues for legal challenges, if any, exist to pursue,” he said.

Bruce Afran, a Princeton attorney who filed suit to stop Ocean Wind 1 on behalf of three groups opposing the project, said BOEM’s approval is “by no means a done deal, and the developer of the project is going to face expanding and growing litigation.”

The June 8 suit filed by Afran on behalf of Protect Our Coast NJ, Defend Brigantine Beach and Save Long Beach Island appeals DEP’s finding that the adverse marine impact expected from Ocean Wind 1 did not rise above the level allowed by state law. Afran said he expects to file a suit in federal court against the BOEM decision, saying that the agency’s own environmental impact statement concluded that the project would damage marine life and hurt the tourist industry.

“The approval disregards BOEM’s own findings of significant environmental harm to be caused by this project,” he said.

BOEM’s final, 2,300-page EIS concluded that the project combined with others will have a “major” impact on scenic and visual factors and on scientific research, but only a “moderate” impact on a host of other issues. The study found the impact on scientific research and surveys would be major, as would the cumulative impact of the project and others nearby, including on National Oceanic and Atmospheric Administration surveys that support commercial fisheries and protected species research programs.

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NM Sets Course to Adopt New Clean Vehicle Rules

New Mexico is about to launch a rulemaking on regulations that would largely mirror California’s ZEV sales requirements, but with one key difference.

Instead of following California’s Advanced Clean Cars II mandate that all new cars sold in the state be zero-emission in model year 2035 and beyond, New Mexico would cap the zero-emission requirement at 82%, starting with model year 2032.

New Mexico is also moving toward zero-emission requirements for trucks, similar to California’s Advanced Clean Trucks rule.

New Mexico Gov. Michelle Lujan Grisham announced Monday that the state plans to enact advanced clean car and clean truck rules. The announcement came during a visit to the Chalmers Ford dealership in Rio Rancho.

“These rules will speed up much-needed investment in New Mexico’s electric vehicle and clean hydrogen fueling infrastructure, create new job opportunities and, most importantly, result in cleaner and healthier air for all New Mexicans to breathe,” Lujan Grisham said.

Advanced Clean Cars and Advanced Clean Trucks would require vehicle manufacturers to deliver an increasing percentage of zero-emission vehicles for sale each year. As proposed, New Mexico’s clean cars rule would start with a 35% ZEV requirement for model year 2026, increasing each year up to an 82% requirement for model year 2032 and beyond.

In contrast, California’s ZEV requirements in Advanced Clean Cars II continue to increase until reaching 100% in model year 2035. California will also allow sales of some plug-in hybrids. (See Calif. Adopts Rule Banning Gas-powered Car Sales in 2035.)

Requirements under New Mexico’s proposed Advanced Clean Trucks would start with model year 2027 and vary depending on vehicle class. For model year 2035, the zero-emission requirement would be 55% for Class 2b-3 trucks, 75% for Class 4-8, and 40% for Class 7-8 tractors. Those percentages are the same as in California’s Advanced Clean Trucks program.

The proposed rules would apply to automakers, rather than auto dealers or consumers, and would not prohibit the sale or ownership of new or used gas-powered vehicles.

Colorado’s Plan Similar

Environmental advocates who have been urging New Mexico to update its car and truck standards were pleased with Lujan Grisham’s announcement.

“It’s a big step forward,” said Noah Long, a senior attorney with the Natural Resources Defense Council. “Those are really important rules.”

Long said New Mexico’s proposal is similar to an Advanced Clean Cars regulation being considered in Colorado, where increasing ZEV requirements for automakers would stop at 82% in 2032.

NRDC’s analysis has shown “significant benefits” of the rule through 2032, and even more benefits if required ZEV percentages continued to increase. Long noted that the states could amend their regulations to increase stringency in later years.

In addition to Colorado and New Mexico, Maryland, Delaware, New Jersey and Rhode Island are considering adoption of Advanced Clean Cars II this year, according to NRDC. Washington, Oregon, New York, Massachusetts, Virginia and Vermont have already adopted the California program.

Although draft rules have not yet been released, the New Mexico Environment Department posted a fact sheet on the proposed rules that lists the percentage requirements.

The clean cars and trucks rules will be part of the same rulemaking process, which could start as soon as this month, NMED spokesman Matthew Maez told NetZero Insider. The draft rules will generally follow California’s regulations, Maez said, with a few differences.

“The largest difference will be that the proposed rules in New Mexico will culminate in California’s 82% requirement for manufacturers by 2032,” he said.

Availability Issues

In May 2022, New Mexico adopted the Advanced Clean Cars (ACC) regulation, which is based on California’s earlier program. (See NM Adopts Calif. Advanced Clean Cars Rules.)

ACC supporters said at the time that the rule would boost EV availability in New Mexico, where people often struggle to find an electric car to buy. Automakers will prioritize delivery of EVs to the jurisdictions that require them, proponents said.

“These new rules will ensure that all New Mexicans have access to a greater number of new zero- and low-emission vehicle models, while hastening the transition away from polluting diesel and gasoline-powered cars and trucks,” NMED Cabinet Secretary James Kenney said in a statement.

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FERC Approves $1.8M Penalty Against Exelon Utilities

FERC on Friday approved a $1.8 million penalty against Exelon’s utilities, part of a settlement between the subsidiaries and ReliabilityFirst for violations of NERC reliability standards (NP23-17).

NERC submitted the settlement to the commission in a Notice of Penalty on May 31, along with a separate spreadsheet NOP concerning violations of the Critical Infrastructure Protection (CIP) standards (NP23-16). The spreadsheet NOP was not made public because FERC considers CIP violations to be critical energy infrastructure information. FERC said in its Friday filing that it would not further review any of the settlements, leaving the penalty intact.

Exelon utilities Atlantic City Electric (ACE), Delmarva Power and Light (DPL), Pepco, Baltimore Gas and Electric (BGE), Commonwealth Edison and PECO Energy collectively provide electric service to nearly 9 million people in New Jersey, Maryland, Delaware, Virginia, Illinois, Pennsylvania and D.C.

RF’s settlement with the companies stems from violations of FAC-009-1 (establish and communicate facility ratings), which required that transmission owners and generator owners establish facility ratings that are consistent with an established facility ratings methodology. (The standard was replaced in 2013 by FAC-008-3.) The compliance issues were initially identified by ACE, DPL and Pepco; their discovery prompted BGE, ComEd and PECO to conduct investigations, which unearthed their own ratings issues.

ACE kicked off the investigation process in April 2019 after it discovered that it had placed a transmission line back into service without communicating the updated facility rating to PJM. The discovery led ACE to compare more facility ratings against PJM’s records to ensure that all of the RTO’s records were accurate. However, the utility found more inaccuracies in this review, prompting Exelon to expand the scope of the reviews to include DPL and Pepco. Exelon first informed RF of the issues — through the regional entity’s legal team — following this expansion in July 2019.

In December 2019, while the reviews were underway, RF issued an audit notification letter to the utilities. As part of the audit, the RE notified the utilities that they were in violation of FAC-008-3. The review continued through March 2021, when the three utilities identified 235 out of their 349 facilities that required facility rating changes.

BGE, ComEd and PECO reported to RF in July 2020 that they were also in violation of FAC-008-3, having begun their own reviews the year before as a result of the widespread issues discovered by ACE, DPL and Pepco. Their reviews, completed in December 2022, found 278 total misratings across their collective 1,504 facilities.

RF determined that the violations by all six utilities began in June 2007, when FAC-009-1 took effect. They ended in March 2021 in the case of ACE, DPL and Pepco, and in December 2022 for the remaining companies; these dates indicate when the extent of condition reviews were completed and all discrepancies officially corrected.

The RE found that the violations posed a serious risk to grid reliability in the cases of ACE, DPL, Pepco and PECO, and a moderate risk for the other two utilities. Explaining this assessment, RF said that the number of errors and their duration both indicate “a longstanding, systemic issue” with the utilities’ facility ratings practices. It further noted the large adjustments needed in some cases (one facility required a reduction of up to 66%) and that more than a dozen facilities were found to have operated near or above their corrected ratings.

RF attributed the violations to “insufficient internal controls throughout each company’s facility ratings program and processes.” It noted that “multiple teams at various steps” contributed to each utility’s overall facility ratings process, without enough care taken to ensure accurate recording of information at each stage, increasing the potential for human errors.

In the case of the initial three utilities, the RE suggested that a “lack of clear overall ownership and accountability for the … facility ratings program” also exacerbated the risk, along with a lack of formal training for relevant teams. For the remaining utilities, RF found that they had failed to maintain or confirm facility baselines, in some cases relying on baselines developed by third parties that were not adequately reviewed prior to adoption.

ACE, DPL and Pepco committed to more than 25 mitigating activities including implementing additional controls for data accuracy; establishing a new standard repository for relay load limits; committing to regular updates for stakeholders involved in the facility ratings process; and creating a new common facility ratings database. Actions by BGE and the other utilities include completing a full review of the extent of the conditions and implementing a common tool for documenting equipment and facility ratings across all Exelon companies.

RF noted the utilities’ cooperation throughout the process, including their self-disclosure of the suspected noncompliance and their willingness to conduct full physical walkdowns of their facilities “within a relatively short time frame” as reason for mitigating the penalty. On the other hand, the RE said that a previous compliance issue related to FAC-008 served as an aggravating factor in the penalty determination because the utility “failed to identify the full breadth of their systemic issue with facility ratings.”