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November 5, 2024

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NJ Offshore Wind Projects Face Whale Protection Measures

Two initiatives designed to protect marine life, specifically whales in one case, will shape the development of two New Jersey offshore wind projects as developers face rising public concern over the impact of coastal wind projects on tourism, commercial fishing and marine life.

The National Oceanic and Atmospheric Administration (NOAA) on Sept. 13 issued a series of rules under which the 1,100-MW Ocean Wind 1, the state’s first OSW project, could move ahead while also ensuring the “least practicable adverse impact on marine mammal species or stocks and their habitat.”

The rules limit when and how Ocean Wind 1 developer Ørsted can conduct certain activities, such as piledriving, exploding ordnance and other construction activities, and set out how the developer should look out for whales and monitor and report any activity that affects them. The rules are part of the agency’s Letter of Authorization that allows the project to go ahead with certain construction activities.

The rules package demonstrates how the impact of OSW projects on marine life has become a significant issue.

NOAA on Monday also announced the Biden Administration has set aside $82 million in funds from the Inflation Reduction Act to harness technology to “conserve and recover” the population of North Atlantic right whales, which face extinction in part because of collisions with ships and entanglement with ropes and nets.

In an unrelated move, Community Offshore Wind, which in August submitted a proposal for a 1.3-GW project in New Jersey’s third OSW solicitation, last week announced it has struck a “groundbreaking” five-year partnership with NOAA “to promote the exchange of data and expertise that will transform environmental monitoring for offshore wind projects.” (See NJ’s 3rd OSW Solicitation Attracts 4 Bidders.)

The developer, a joint venture between RWE and National Grid Ventures, said in a release that it will collaborate with NOAA on how to study the environmental impacts on the marine ecosystem, in part by increasing transparency and sharing expertise between researchers and developers.

“Our goal is to bring offshore wind energy monitoring activities into this partnership,” Jon Hare, director of the Northeast Fisheries Science Center, which is part of NOAA, said in the release. “This agreement is our first chance to make these partnerships a reality and show by example that effective scientific monitoring benefits everyone.”

Doug Perkins, project director for Community Offshore Wind, said he believes the scientific data would be “invaluable as we continue to study, and seek to mitigate, the impacts of offshore wind development on marine ecosystems.”

Shifting Public Perception

Concern over the impact of offshore wind projects on marine life, especially whales, has escalated since the start of the year as a number of dead whales — one press report said as many as 12 — have washed up on the New Jersey shore. Marine life supporters and opponents of the projects have seized on the deaths, suggesting that OSW development should be halted while investigators study whether there is a link between the deaths and preliminary ocean-floor studies conducted in preparation for the turbines’ construction.

State and federal investigators, including those for NOAA, say there is no evidence of such a link, and have outlined reasons why there wouldn’t be. (See NJ Legislators Probing Whale Deaths Hear No Clear-cut Conclusions.) One factor in the deaths isvessel strikes as whales increasingly move into areas that put them in the path of ships or take them into shallow waters near the shore looking for food, researchers say.

Maddy Urbish, head of government affairs and market strategy for Ørsted in New Jersey, said in response to NOAA’s issuance of the rules that “Ørsted prioritizes coexistence with our local communities, marine wildlife and ocean neighbors.”

“This permit strictly prohibits Ocean Wind 1 from seriously injuring or causing the death of any marine mammal and outlines mitigation measures the project will put in place including noise abatement, vessel speed and time of year restrictions, and dedicated observers aboard every vessel,” she said.

The rules set down by NOAA for Ocean Wind 1 were part of the agency’s issuance of an “incidental take” Letter of Authorization, which is required under the Endangered Species Act when a development activity potentially endangers the health of a protected species.

The rules establish “permissible methods” to provide for the “mitigation, monitoring and reporting” of conditions during the construction of Ocean Wind 1. Among the requirements are:

    • A seasonal moratorium on impact pile driving from Dec. 1 to April 30, the months of the greatest presence of North Atlantic right whales.
    • A requirement that ordnance detonation take place only during daylight.
    • A requirement that visual and passive acoustic monitoring be carried out before certain activities are conducted. The monitoring must be done by trained observers.
    • Training required for all Ocean Wind personnel to “ensure marine mammal protocols and procedures are understood.”
    • A delay to construction or ordnance detonations if whales or other mammals are spotted in the area. Pile driving must be shut down — “if feasible” — if a North Atlantic right whale is seen in the area.wha
    • A requirement that impact pile driving must be done with the “least amount of hammer energy necessary” and observers must continue to look for mammals for 30 minutes after any impact pile driving or ordnance detonation.

Whale Extinction

The rules give NOAA the right to withdraw or suspend a Letter of Authorization if a project does not “substantially” comply with the directives set out by the agency.

In the announcement Monday, NOAA said the $82 million in funds from the Inflation reduction Act would support the use of technologies such as “passive acoustic monitoring” and the development and implementation of other technologies to enable vessels to detect and avoid North Atlantic right whales and other large whales.

North Atlantic right whales are “approaching extinction” the agency said in a release, with only 350 such whales alive and fewer than 70 “reproductively active females.” The funds also will go to developing new technologies such as high-resolution satellite information to help monitor whale movement and understand whale distribution and habitat.

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Feds Release Road Map for Offshore Transmission Grid

Federal regulators on Tuesday issued a suggested road map for building out the transmission network needed for the thousands of wind turbines envisioned off the Northeast coast.

The departments of Energy and Interior presented “An Action Plan for Offshore Wind Transmission Development in the U.S. Atlantic Region” as a tool to boost the offshore wind sector, strengthen the domestic supply chain and create jobs while protecting the climate.

It suggests immediate actions to connect the first generation of wind projects to the onshore grid and longer-term efforts to continue growing the new energy sector for decades to come.

The Biden administration has set a goal of 30 GW of installed offshore wind generation by 2030. Subsequent federal goals and the individual goals of numerous states could push the total above 100 GW by 2050.

The Action Plan was shaped by a series of workshops with experts and stakeholders from early 2022 to early 2023 and by the forthcoming Atlantic Offshore Wind Transmission Study by DOE’s Wind Energy Technologies Office.

The Action Plan identifies increased intra-regional coordination, shared transmission lines and a network of offshore HVDC interlinks as priorities. To accomplish this, it makes a series of recommendations for industry; local, state and federal governments; and other stakeholders.

These include:

    • Before 2025: Establish collaborative bodies; identify steps to be taken, such as updating reliability standards and offshore-onshore interconnection points; create voluntary cost assignments and tax credits.
    • From 2025 to 2030: Convene and coordinate with states to plan an offshore transmission network; with industry to standardize HVDC technology requirements; and with tribes, state agencies, stakeholders and federal agencies on priority transmission paths.
    • From 2030 to 2040: Establish a national HVDC testing and certification center to ensure compatibility in the offshore grid network that is envisioned.

Offshore wind is one of President Biden’s signature initiatives, but it faced significant challenges even before the financial and supply-chain hurdles that began to threaten progress in 2022.

Central among these challenges, the Action Plan states, is that there is no offshore grid.

A disparate collection of stakeholders with competing interests must create an expensive new piece of infrastructure that can carry large amounts of electricity long distances in a harsh environment using facilities that do not yet exist with equipment and components that are in short supply.

They must navigate multiple regulatory processes in each of as many as four levels of review — local, state, federal and tribal — while protecting the marine environment, respecting coastal communities and minimizing conflict with other ocean users.

They must connect to an onshore distribution grid that already is vastly oversubscribed and is not standardized between regions.

Networked transmission might help with this, but such interregional efforts carry their own set of planning, ownership and cost allocation challenges.

Coordinated transmission is “notoriously difficult” to develop.

All of this demonstrates the urgent need for proactive and coordinated transmission planning along the Northeast U.S. coast, the Action Plan asserts. It identifies several specific shorter- and longer-term obstacles:

    • Near-term: Without a long-term planning vision, early projects using radial transmission lines could preclude future holistic transmission solutions; significant onshore upgrades will be needed to deliver the electricity coming off the ocean; siting is complex.
    • Mid- and long-term: Offshore transmission costs are high, and cost allocation mechanisms are inadequate; developing new policies, standards and practices may delay projects; strategic planning must replace unsustainable current interconnection practices; separation of generation and transmission creates a risk that one becomes a stranded asset while the other is being completed.

Spiraling costs have become an issue with offshore wind, as inflation and interest rates drive up development expenses that ultimately will be borne by the American public, whether through utility rates or taxes or consumer costs.

The price tag of the envisioned interstate offshore grid is unknown, but the Action Plan cites a telling estimate in a report completed by the Brattle Group on behalf of several environmental advocacy and clean energy industry groups: Proactive transmission planning for a future 100 GW offshore wind industry would save at least $20 billion.

A leading offshore wind industry group applauded release of the action plan Tuesday and highlighted the difficulty of the present-day development process.

“Rebuilding our transmission system is extremely complex, and the federal government can play a unique role bringing major parties together to break through barriers,” said Liz Burdock, CEO of the Business Network for Offshore Wind.

“Along with ensuring that we can develop our industry, building out the grid in a coordinated fashion will yield enormous benefits for ratepayers and the environment, build confidence in the market’s trajectory and accelerate development. We welcome the release of this action plan and encourage the federal government to begin working to bring states and stakeholders together.”

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DOE Reports Examine Difficult Job of Industrial Decarbonization

The U.S. Department of Energy on Monday released three “Pathways to Commercial Liftoff” reports focused on industrial decarbonization.

One report is focused broadly on industrial decarbonization, addressing chemicals, refining, iron and steel, food and beverage, cement, pulp and paper, aluminum and glass.

The other two focus on specifically cutting emissions in cement production and the chemicals and refining industries.

“This administration is committed to engaging with our private sector partners to accelerate the commercialization and deployment of key technologies needed to achieve the President’s ambitious climate and decarbonization goals,” Energy Secretary Jennifer Granholm said in a statement. “The reports released today provide in-depth analysis of emerging technologies and clear benchmarks to help guide targeted investments and propel the U.S. toward our clean energy future.”

Decarbonization presents an opportunity to transform industrial systems to improve energy and environmental justice, DOE said. Carbon-intensive industrial sectors are facing a critical inflection point, which offers a unique moment that neither the agency nor the private sector can allow to pass, it said.

The industrial sector represents 23% of the nation’s total greenhouse gas emissions, but the specific industries make up 14% of those emissions. Chemicals and refining is by far the largest emitting sector, making up 7% of the total U.S. emissions.

“Reasons often cited for slow progress on the decarbonization of industrial emissions include: the immaturity and high cost of many decarbonization levers; unidentified or uncertain customer demand for low-carbon products; and, in some but not all sectors, reluctance among companies to be a first mover,” the report said.

Even if the electricity and transport sectors decarbonize in line with the administration’s targets, and only limited abatement occurs in the industrial sector, the share of industrial emissions could rise to 27% of the country’s total by 2030 — even with associated impacts from the use of electricity and transportation.

The Infrastructure Investment and Jobs Act and the Inflation Reduction Act both offered support for decarbonizing industry. Customers and other stakeholders increasingly expect companies to address climate change, and some industrial firms are starting to work on it.

“Willing U.S. industry participants could utilize the momentum of the present moment to accelerate the commercialization of decarbonization technologies, respond to rising global demand for clean industrial commodities  and establish the U.S. as a global leader in industrial decarbonization,” the report said.

The report found that up to 30-40% of the emissions across the eight sectors could be addressed by 2030 using techniques that have net positive economics (when federal incentives are factored in), alongside emissions reductions from external factors such as cleaner grid power and transportation.

Ready-to-go decarbonization techniques include energy management systems/efficiency, carbon capture and storage (CCS) for natural gas processing, and other industry-specific changes.

“Expanding beyond near-term thinking and fully decarbonizing industry will be extremely challenging without cost reductions, education, breakthroughs, a complementary skilled workforce and widespread public acceptance,” the report said.

Another tranche of decarbonization would require some funding to bring demonstration-level technologies to the mainstream, such as industrial CCS retrofits, clean onsite electricity and storage and using heat pumps to electrify pulp and paper manufacturing.

However, to fully decarbonize all the industrial sectors in the report, some technologies that are  in the research and development or pilot phases will need to mature. Those include alternative chemistries to make cement and using captured carbon for industrial purposes.

The report estimates that fully decarbonizing the sectors it studied would cost between $700 billion and $1.1 trillion by 2050.

“To achieve adoption at scale of deployable technology levers will require bold leadership, even for solutions with net-positive economics,” the report said. “One factor is that, across the sectors of focus, many companies face pressure to plan towards and achieve near-term earnings targets.”

The report noted that environmental, social and governance (ESG) investing has been on the rise, which, along with “patient” capital, has somewhat alleviated that pressure, but the short-term focus on quarterly profits can still affect decision-making when it comes to making decisions on how to use long-term infrastructure investments.

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Idaho PUC Declines to Join Western RTO Governance Effort

The Idaho Public Utilities Commission last week said it will not join with other state regulators in an initiative to lay the groundwork for an independent RTO designed to serve the entire Western Interconnection.

Regulators from Arizona, California, New Mexico, Oregon and Washington proposed the West-Wide Governance Pathway Initiative in July in the face of increased competition for members between CAISO’s Extended Day-Ahead Market (EDAM) and SPP Markets+.

The proposal is intended to increase the potential for establishing a single wholesale electricity market that would include the participation of CAISO and build on the ISO’s existing Western Energy Imbalance Market and EDAM, for which the ISO recently filed a tariff with FERC. (See Regulators Propose New Independent Western RTO.)

Backers of the initiative issued an open letter Aug. 29 inviting stakeholders in the Western U.S. and Canada to build “Phase 1” of the effort, which will include “deciding on the form, mission and scope of an entity with independent, West-wide governance.” (See Backers of Independent Western RTO Seek to Move Quickly.)

But in a press release Thursday, Idaho regulators said they had voted unanimously not to participate.

Among their concerns was the conclusion that the initiative “has been less than transparent concerning its creating and funding.” The Aug. 29 letter stated that work on the initiative would be backed by “funding derived exclusively from 501(c)(3) sources,” an arrangement that would “be evaluated over time and will likely require supplementation as the workload intensifies.”

The Idaho commissioners said also that “there is no evidence that the initiative’s goal of independent governance is feasible without changes in California’s legislation,” an issue which has long impeded CAISO’s efforts to expand into the wider West.

The regulators additionally called the initiative’s goal of seating a board of directors by January 2024 “premature and unrealistic” and said that “at its core, the initiative presumes economic benefits for Western states without justification or specifics.”

Idaho PUC President Eric Anderson | Idaho PUC

“As always, the IPUC respects other commission, state and stakeholder decisions concerning participation with the initiative,” Idaho PUC President Eric Anderson said in the release. “However, given the IPUC’s concerns, the inherent flaws in the creation of the initiative and the initiative’s current actions and goals, the IPUC does not see a viable path forward for the initiative or that participation would result in any specific net economic benefits for Idaho customers.”

The governance initiative was the key topic during a panel discussion among utility commissioners at CAISO’s EDAM Forum in Las Vegas on Aug. 30. The commissioners acknowledged that Phase 1 would operate outside of any existing organization or decision-making process, and they asked regional stakeholders to provide feedback on how to structure the process.

Speaking on the panel, California Public Utilities Commission President Alice Reynolds said the effort is intended to set aside the problem of CAISO’s governance and determine what an independent entity “needs to look like.”

During a separate panel at the forum, Idaho Power CEO Lisa Grow lauded CAISO’s efforts in developing the EDAM but questioned the need for the West to create a full RTO in the near term.

Grow said that, unlike utilities in Colorado and Nevada, Idaho Power doesn’t “have legislative or PUC-mandated things that we have to do towards an RTO, so we can kind of watch how this goes.”

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Maryland Moves Ahead with Advanced Clean Car and Truck Rules

Maryland upped the ante on its clean transportation programs Monday as the state finalized its adoption of California’s Advanced Clean Cars II (ACC II) rule and began the process for adopting California’s Advanced Clean Trucks (ACT) rule.

Maryland is the eighth state to adopt ACC II, which will require all new light-duty vehicles sold in the state to be zero emission by 2035.

Gov. Wes Moore (D) announced the state’s intent to adopt ACC II in May. The rule could go into effect as early as January 2026, depending on when automakers begin rolling out their 2027 models, according to a spokesperson for the Maryland Department of the Environment (MDE). For the 2027 model year, 43% of new light-duty vehicles will have to be zero emission, with the share increasing between 6 and 9% per year, reaching 100% by the 2035 model year, according to MDE. (See Maryland to Adopt California’s Advanced Clean Cars II Rule.)

Both electric and hydrogen fuel-cell vehicles are classified as zero-emission vehicles. In addition to California, other states that have adopted the rule include Massachusetts, New York, Oregon, Vermont, Virginia and Washington.

Environment Secretary Serena Coleman McIlwain called Maryland’s adoption of ACC II “a big step toward cleaner air and a more aggressive response to the threats posed by climate change.”

MDE began the process for ACT adoption with a notice of proposed action, requiring truck manufacturers to increase the percentage of new zero-emission trucks sold in the state from 2027 to 2035.

MDE will hold a virtual public hearing on the proposed rule at 10 a.m. Oct. 11. Written comments may be submitted through Oct. 11.

The rule’s targets for clean truck sales vary depending on the type or class of truck. The percentage for Class 2b and 3 trucks, which include vans and heavier pickup trucks (8,501-14,000 pounds), would start at 15% in model year 2027 and rise to 55% by 2035. For heavier-duty Class 4-8 trucks (14,001-80,000 pounds), the zero-emission requirement would be 20% in model year 2027 and 75% in 2035.

MDE’s proposed rule on ACT was mandated under the Clean Trucks Act (H.B. 230) passed by the General Assembly and signed into law by Moore in April. If the proposed rule is finalized, Maryland would be the ninth state to adopt ACT, joining California, Colorado, Massachusetts, New Jersey, New York, Oregon, Vermont and Washington.

Both rules are expected to significantly affect transportation sector greenhouse gas emissions, which account for about 40% of the state’s GHG emissions, according to MDE. By 2035, ACC II is expected to cut carbon dioxide emissions from light-duty vehicles by 63% under 2021 levels, while nitrogen oxide emissions could drop 75% and sulfur oxides 64%, according to an analysis from the Sierra Club.

‘Commonsense Rules’

Special provisions of the Clean Air Act have made it possible for California to enact clean car and truck rules that exceed the vehicle emission standards set by the U.S. EPA. During the administration of former President Donald Trump, EPA revoked the Clean Air Act waiver allowing California’s stricter rules. Under President Joe Biden, EPA reinstated the waiver in March 2022, opening the door for California and other states to adopt ACC II and ACT.

The states that have adopted ACC II will be ahead of Biden’s goal for 50% of new light-duty vehicle sales to be zero emission by 2030.

Environmental and electric vehicle advocates were quick to provide statements of support for Maryland’s adoption of ACC II in a joint press release.

“Every day, fossil fuel cars emit pollutants that intensify climate change and contribute to toxic air pollution,” said Kevin Shen, policy analyst for the nonprofit Union of Concerned Scientists. “By adopting the Advanced Clean Cars II standards, Maryland has chosen to lean into its ambitious climate goals and jumpstart the transition to electric cars, which … will only continue to become even more efficient as Maryland cleans up its grid.”

Tom Van Heeke, senior policy advisor for EV manufacturer Rivian Automotive, called the ACC II standards “commonsense rules to expedite EV adoption in the state of Maryland …  especially if combined with the Clean Trucks Act of 2023.”

Ramon Palencia-Calvo, director of the Maryland League of Conservation Voters’ Chispa Maryland program, which is focused on Latino communities, stressed the public health impacts of the new standard.

“Communities of color, low-income communities and neighborhoods near major transportation hubs bear an especially unfair burden of harmful pollution due to decades of systematic marginalization,” Palencia-Calvo said. “Increasing the number of clean vehicles on our roads will reduce respiratory illness and hospitalizations, leading to healthier outcomes.”

Maryland at NYC Climate Week

The actions on clean cars and trucks came as Maryland officials sought to raise the state’s profile as a leader at Climate Week in New York City.

On Monday, MDE announced the state had joined the international Under2 Coalition, with Environment Secretary McIlwain signing the membership agreement. The coalition includes 167 state and regional governments committed to reaching net-zero emissions by 2050. Montgomery County joined the group in 2017, according to the Under2 website.

Joining the coalition “accelerates climate action in Maryland by giving us greater access to technical support and the shared knowledge of more than 160 governments across the world,” McIlwain said. “This action underscores our commitment to building the green economy that will dominate the next century, as well as creating the resiliency to make our state stronger.”

Maryland also is part of the Regional Greenhouse Gas Initiative, a regional cap-and-trade program, and the U.S. Climate Alliance, a bipartisan group of 25 governors committed to meeting the goals of the 2015 Paris climate accords.

Passed in 2022, Maryland’s Climate Solutions Now Act (S.B. 528) sets a 2031 target for the state to cut its greenhouse gas emissions by 60%.

Speaking at the Climate Week opening ceremonies Sunday, Moore made the case for centering climate action on community economic development, especially for low-income and disadvantaged communities.

“Our communities of color — our working parents — our middle-class families: They are the ones who stand to benefit most from our aggressive climate goals. Those are the hands that will install new solar panels at the local rec center. Those are the minds that will invent next-generation wind turbines that power millions of homes,” Moore said.

“This is about whether or not we can dominate industries of the future, instead of relying on industries of the past,” he said. “This is about whether or not we can bring manufacturing jobs home, instead of relying on foreign labor. This is about whether or not the clean energy revolution will close the wealth gap, instead of being just another way to make it bigger.”

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Calif. Sues Oil Majors over Climate Impacts

California is suing five of the world’s largest oil and gas companies, saying their executives have known for decades about the dangers of fossil fuels but hid the information to protect their profits.

The lawsuit was filed in San Francisco County Superior Court and announced over the weekend by Gov. Gavin Newsom (D) and Attorney General Rob Bonta.

The defendants are Exxon, Shell, Chevron, ConocoPhillips and BP and their subsidiaries, along with the American Petroleum Institute (API), a group representing the natural gas and oil industry in the U.S.

The lawsuit accuses the companies of “creating, contributing to and/or assisting in the creation of state-wide climate change-related harms in California,” including extreme heat, drought, wildfires, storms and flooding.

It asks the court to order the oil companies to pay for the impacts their actions have had on the environment, fine them for their alleged lies and award punitive damages.

“For more than 50 years, Big Oil has been lying to us — covering up the fact that they’ve long known how dangerous the fossil fuels they produce are for our planet,” Newsom said in a statement. “California taxpayers shouldn’t have to foot the bill for billions of dollars in damages.”

Cities and counties in California have filed similar lawsuits against fossil fuel companies for their alleged contributions to climate change. But with the state’s action, California has become the largest geographic area and the largest economy to sue big oil companies, the attorney general’s office said.

API responded to the lawsuit Monday by calling it “an enormous waste of California taxpayer resources.”

In a statement, API Senior Vice President and General Counsel Ryan Meyers said the industry provides “affordable, reliable American energy to U.S. consumers while substantially reducing emissions and our environmental footprint.”

“This ongoing, coordinated campaign to wage meritless, politicized lawsuits against a foundational American industry and its workers is nothing more than a distraction from important national conversations,” Meyers said.

Internal Memo Cited

Bonta said in a statement that oil and gas companies “have privately known the truth for decades — that the burning of fossil fuels leads to climate change.”

For example, the lawsuit cites a 1978 internal Exxon memo saying that “current scientific opinion overwhelmingly favors attributing atmospheric carbon dioxide increase to fossil fuel consumption.”

“Present thinking holds that man has a time window of five to 10 years before the need for hard decisions regarding changes in energy strategies might become critical,” the memo said.

But publicly, the companies were telling a different story, the lawsuit alleged. It pointed to a 1996 publication from Exxon called “Global Warming: Who’s Right? Facts about a debate that’s turned up more questions than answers.”

Then-Exxon CEO Lee Raymond said in the document that “taking drastic action immediately is unnecessary since many scientists agree there’s ample time to better understand the climate system.”

“Directly contradicting Exxon’s own internal knowledge and peer-reviewed science, the publication ascribed the rise in temperature since the late 19th century to ‘natural fluctuations that occur over long periods of time’ rather than to the anthropogenic emissions that Exxon itself and other scientists had confirmed were responsible,” the lawsuit said.

The lawsuit accuses the companies of still deceiving the public, through ads that portray them as climate-friendly businesses.

In addition, the lawsuit alleges, the companies’ actions have slowed the development of alternative energy sources, while increasing the costs of responding to the climate crisis.

Taking Aim at Big Oil

With the new lawsuit, California continues to take aim at the oil industry from multiple directions.

Last year, the state banned the sale of gas-powered cars starting in 2035. (See Calif. Adopts Rule Banning Gas-powered Car Sales in 2035.)

And in June, a new state law intended to combat price gouging at the pump took effect. After calling a special session of the legislature this year, Newsom signed the first-in-the-nation law, which gives state regulators the power to penalize oil companies for price gouging.

The law created the Division of Petroleum Market Oversight within the California Energy Commission. Last week, the commission introduced Tai Milder, the prosecutor who will lead the division.

The division will look for irregular or illegal behavior within the industry and refer any potential violations to the attorney general’s office. The CEC has also launched a dashboard with an estimated breakdown of gas prices and margins.

“Transparency and accountability are essential to protecting California consumers, and those principles will guide the work of this division every day,” Milder said in a statement following his appointment.

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NYISO Operating Committee Briefs: Sept. 15, 2023

Stability And Voltage Studies

The NYISO Operating Committee on Friday approved three studies aimed at helping the ISO alleviate congestion on its grid.

The ISO’s Central East and Total East interfaces study reports, and its Central East voltage limit study, each sought to identify areas of the grid in need of upgrades to ensure it operates reliably under several different demand and environmental conditions.

The first two reports updated the definitions of the transmission components that make up the Central East and Total East interfaces and examined the impact of adding new 345-kV lines to the interface.

The Central East voltage limit study evaluated the grid’s performance after the addition of several new lines and found that performance improved, allowing for an increase in the minimum level of energy loss that triggers contingency operations.

NYISO expects the new interface criteria to be integrated into grid operations following the deployment of updated models and software in October.

Shortage Pricing

The OC also approved manual revisions NYISO says would improve the accuracy of transmission shortage pricing by better reflecting the actual costs of relieving constraints.

The changes involve eliminating transmission constraint “relaxation” logic for facilities and interfaces that use a demand curve mechanism and introducing a six-step mechanism for those assigned a non-zero constraint reliability margin.

NYISO argued the revisions would reduce market inefficiencies by more accurately pricing the relief services that certain transmission projects provide to the grid.

The Business Issues Committee had approved the revisions the previous day. They are expected to become effective in October after the deployment of software updates.

August Operations Report

Aaron Markham, NYISO vice president of operations, informed the OC that August saw a peak load of 24,917 MW but that the summer’s peak load of 30,200 MW occurred due to a heat wave Sept. 17.

Markham noted that the heat wave resulted in appropriately 1,500 MW of unforced outages.

He said NYISO is investigating the cause of the outages but that it had sufficient resources.

Markham also said the ISO has added 3 MW of energy storage and 66 MW of behind-the-meter solar resources since last month.

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NYISO Business Issues Committee Briefs: Sept. 14, 2023

Seasonal Demand Curves

RENSSELAER, N.Y. — NYISO on Thursday secured Business Issues Committee approval of the ISO’s proposal to create separate capacity demand curves for summer and winter beginning with the 2025/2026 capability year.

The ISO proposed the tariff revisions to better reflect winter and summer reliability risks and send clearer signals to the market about the value certain resources have in each season. It also said the changes are necessary to accommodate moving from annual capacity accreditation factors to seasonal ones in the future.

The changes are part of the latest demand curve reset, conducted every four years to update the parameters for NYISO’s capacity market. The revisions now go to the Management Committee for approval Sept. 27.

NYISO/PJM Joint Operating Agreement

The BIC also recommended approval of proposed revisions to the Joint Operating Agreement between NYISO and PJM.

The revisions are intended to improve the coordination and data accuracy between the grid operators, particularly in the areas of resource adequacy and transmission planning.

A provision NYISO considers key would remove a list of interconnection tie facilities between the ISO and PJM out of the JOA and publish it on each of their websites, which the ISO argues would make it easier to adjust and increase transparency.

Stu Kaplan, partner at Troutman Pepper, asked if the changes made to the list could in any way change who has operational control over a New York facility.

NYISO did not have an immediate answer but responded that its proposals apply mostly to low-level equipment like substations, though it added that it will consider the issue moving forward.

The MC will consider revisions at its meeting this month. NYISO anticipates implementation by the first quarter of 2024 if the Board of Directors and FERC approve them.

August Market Operations

NYISO Senior Vice President Rana Mukerji presented the August market operations report, noting that average energy prices were lower than both the previous month and August of last year. (See “July Market Performance,” NYISO Business Issues Committee Briefs: Aug. 16, 2023.)

The month’s average energy cost was 56% lower than last year, declining from $93.42/MWh to $40.13/MWh. Mukerji said lower temperatures led to lower loads.

Eclipse Preparation

At a separate meeting of the Installed Capacity and Market Issues working groups the same day, NYISO updated stakeholders about its preparations for two upcoming solar eclipses, including how it is coordinating with solar forecasters and its neighbors to mitigate the impact on New York’s energy production.

The ISO said October’s annular solar eclipse — which will most impact Texas and the Western U.S. — could reduce solar output in parts of the state by 15 to 30%, with statewide behind-the-meter solar generation declining by as much as 700 MW and front-of-the-meter down 30 MW.

Path for total solar eclipse April 8, 2024 | NYISO

Next April’s total solar eclipse will cause even greater disruption, as it will pass directly through New York. During the roughly 2.5-hour eclipse, NYISO forecasts that solar production could decline by more than 3,000 MW at the peak, as some areas of the state will be completely obscured for nearly four minutes.

The ISO also said that wind generation could be impacted by the eclipses, both because of cloud cover and the expected localized cooling that will lower wind speeds when the sun is obscured.

NYISO has said it expects to have enough resources available to cover potential shortfalls. (See “NYISO Updates & Eclipse Prep,” NY State Reliability Council Executive Committee Briefs: Sept. 8, 2023.)

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Northeast Governors Ask Feds to Assist OSW Industry

Governors of the states that have procured all the offshore wind power contracted to date in U.S. waters are asking the federal government to help the struggling industry regain its momentum.

The governors sent a letter to several ranking officials in the Biden Administration saying that offshore wind development is in danger of failing or becoming unreasonably expensive for ratepayers amid a confluence of challenging factors.

They asked for three forms of relief:

    • Updated clean energy tax credit guidance from the Internal Revenue Service — including on the Domestic Content and Energy Community bonus credits to the Investment Tax Credit and Production Tax Credit — that will ensure offshore wind developers are fully eligible for them.
    • A new revenue-sharing program so that money generated by offshore wind leases does not go only to the federal government. Developers will pass those lease payments on to ratepayers, the governors reason, so some of the resulting revenue should come back to the states where those ratepayers live.
    • Expedited clean energy permitting. Slow timelines are hampering efforts to build a clean energy economy and meet decarbonization goals to protect the climate.

The governors of Connecticut, Maryland, Massachusetts, New Jersey, New York and Rhode Island sent their letter to the secretaries of Treasury and Energy, the IRS commissioner, a deputy Energy secretary and two top energy and climate advisers to President Biden.

Offshore wind power development is a signature initiative of Biden, who has set a national target of 30 GW installed by 2030. There are just two projects totaling 42 MW in operation and two projects totaling 932 MW under construction off the New England coast.

Thousands more megawatts are in the pipeline; two major wind farms have gained final federal approval for construction and operation this year and a third may soon follow.

However, these projects all face strong headwinds from inflation, interest rates and supply chain constraints. Two developers have canceled their power purchase agreements and others are threatening to walk away from projects without more money.

Also, developers’ recent bids for state contracts apparently have come in at a very high cost. The world’s leading offshore wind developer, Ørsted, saw its stock price tank after it warned of major cost impairments on its U.S. projects.

“These pressures are affecting not only procurements of new offshore wind but, critically, previously procured projects already in the pipeline,” the governors wrote.

“Absent intervention, these near-term projects are increasingly at risk of failing. Without federal action, offshore wind deployment in the U.S. is at risk of stalling because states’ ratepayers may be unable to absorb these significant new costs alone.”

Clean energy industry advocacy group American Clean Power endorsed the governors’ request.

CEO Jason Grumet said in a prepared statement: “This letter comes at a pivotal time, with the industry seeking to scale up rapidly but meeting headwinds due to inflation, supply chain constraints and permitting delays. The success of offshore wind development in these states will go a long way towards determining whether we achieve the Biden Administration’s 30 GW of offshore wind by 2030 objective.”

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WAPA, Basin Electric Commit to SPP’s RTO West

SPP said last week that recent announcements by the Western Area Power Administration (WAPA) and Basin Electric Power Cooperative have rounded out the group of western utilities that plan to pursue membership in the grid operator’s Western Interconnection RTO market.

The announcements give SPP seven utilities interested in becoming the SPP RTO West’s inaugural full members when it begins operations in 2026. SPP will become the first U.S. grid operator to provide RTO services in both the Eastern and Western Interconnections.

CEO Barbara Sugg said on X, the social network formerly known as Twitter, “I am excited for these commitments to continue growing the RTO in the West and look forward to working together to keep the lights on!”

WAPA Administrator Tracey LeBeau issued a decision letter Sept. 8 authorizing three of its four regions — Colorado River Storage Project (CRSP), Upper Great Plains (UGP) and Rocky Mountain — to pursue final negotiations with SPP for RTO West membership. A federal agency, WAPA had to first file a recommendation report in the Federal Register and solicit public input.

LeBeau said participating in SPP RTO West is consistent with WAPA’s commitment to develop alternative ways to retain and increase the value of its resources and services.

“Taking under careful consideration our customers’ and our industry’s collective movement to adapt to a rapidly changing energy environment, I am pleased at the progress we have made as WAPA takes a further thoughtful step in pursuing final negotiations with SPP,” she said in a statement.

As part of the final negotiations, WAPA will develop implementation details to pseudo-tie CRSP customers from the Western Area Colorado Missouri balancing authority area to the Western Area Lower Colorado BAA. It said this will address CRSP customer concerns about the potential effects of RTO membership for entities outside the footprint.

If the final negotiations with SPP are successful, CRSP and Rocky Mountain will execute membership agreements and UGP will expand its participation in SPP’s eastern RTO.

Basin Electric alerted SPP of its intent to pursue RTO membership on Sept. 12. It must execute a signed commitment agreement by Oct. 10.

WAPA and Basin Electric already are members in SPP’s Eastern Interconnection footprint. Both were part of the Integrated System, which joined SPP in 2015. (See Integrated System to Join SPP Market Oct. 1.)

WAPA annually markets and transmits more than 28,000 GWh of renewable power from 57 hydroelectric power plants in 15 western and central states. Basin Electric is a generation and transmission association with 141 member cooperative systems across nine states serving 3 million consumers.

Other interested RTO West members include:

    • Colorado Springs Utilities;
    • Utah’s Deseret Generation and Transmission Cooperative;
    • Municipal Energy Agency of Nebraska;
    • Platte River Power Authority in Colorado; and
    • Tri-State Generation and Transmission Association.

SPP has been working with the utilities for almost three years to evaluate the benefits and requirements of RTO membership. A Brattle Group study has identified at least $49 million in annual savings for members of SPP RTO West.

The western RTO’s success hinges on SPP’s use of three DC ties between its two footprints to optimize energy markets and create new opportunities for energy transfers and improved system resilience for both current and future members.

“Creating multiple market options for new members will enable market designs that align with the unique needs of one or more geographic regions and provide opportunity for all to benefit,” Bruce Rew, SPP’s senior vice president of operations, said.

The potential members currently are participating in the grid operator’s Western Energy Imbalance Service (WEIS) market. SPP says the WEIS provided an estimated $31.7 million in net benefits for its participants last year and reduced wholesale energy costs by $1.35/MWh through real-time dispatch.

SPP expects RTO West to add additional members, beginning in 2027. They have a March 1 deadline to indicate their interest in membership.

The RTO has 110 member companies in the Eastern Interconnection.