California Gov. Gavin Newsom and legislative leaders reached an agreement Monday on most parts of Newsom’s package of infrastructure bills intended to hasten clean energy development and improve grid reliability.
“We are accelerating our global leadership on climate by fast-tracking the clean energy projects that will create cleaner air for generations to come,” Newsom said in a joint statement with Senate President pro tempore Toni Atkins and Assembly Speaker Anthony Rendon announcing the deal.
The bills they agreed on include Senate Bill 149, which would streamline judicial review of certain 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 lawsuits and appeals. (See Newsom Stresses Role of Permitting in Calif. Energy Transition.)
Some environmental groups strongly opposed weakening CEQA protections.
The compromise between Newsom and lawmakers exempted from the streamlining provisions a highly controversial proposal to convey water from Northern to Southern California via a tunnel under the Sacramento-San Joaquin Delta.
Another measure, Assembly Bill 122, would allow but mitigate the removal of western Joshua trees, iconic California desert plants the state Fish and Game Commission is considering listing under the California Endangered Species Act but that occupy large swath of land slated for utility-scale solar arrays and battery storage.
Other measures include:
AB 124, which 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.
AB 126, which 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.
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 and declassify the peregrine falcon, brown pelican and thicktail chub, a small fish, from the law’s list of fully protected species.
The agreement on the infrastructure bills was part of a larger negotiation between Newsom and lawmakers on the fiscal year 2023/24 budget.
In his budget plan released in January, Newsom proposed slashing $6 billion from the state’s $54.3 billion climate commitment because of this year’s tax revenue shortfall. (See Calif. Governor Proposes $6B in Climate Budget Cuts.)
Lawmakers wanted much of the climate funding restored. The two sides agreed to keep $51.4 billion of the commitment in the budget, reducing it by $2.9 billion.
Newsom had until 11:59 p.m. Tuesday to sign, veto or make line-item revisions to the bills containing the Legislature’s budget plan.
RENSSELAER, N.Y. — NYISO on Tuesday said it will file comments for New York state to consider as it plans its cap-and-invest program, addressing issues such as allowances and leakage.
Mike DeSocio, director of market design at NYISO, told stakeholders at a meeting of the Installed Capacity Working Group and Market Issues Working Group that the ISO “supports placing a price on carbon emissions and thinks that it is very compatible with the competitive wholesale markets New York has benefited from over the last two decades.”
But, he added, “we are very concerned about reliability and want to reinforce that any program should envision times where there may be a need to run generation to support keeping the lights on that have run out of allowances.”
The cap-and-invest program would auction emission allowances to obligated sources, such as large-scale greenhouse gas producers, and nonobligated entities, such as agricultural or forestry industries. Nonobligated sources would see their allowances retired by the state, while obligated sources would need to purchase allowances to continue emitting. Money obtained from these auctions would go into a climate action fund, with much of it set aside for disadvantaged communities (DACs). (See NY Climate Justice Panel Sets Disadvantaged Community Criteria.)
“The program should be designed in a way where a generator does not need to make a decision or choice between running to keep the lights on or complying with an allowance,” DeSocio said.
The ISO will also comment on how to best address leakage, as well as inform agencies that however they plan to tackle the issue, NYISO will need plenty of time to develop software compliant with the new regulations.
NYISO will also share its support for the creation of an independent monitor, who is able to oversee the state’s policy.
“We’re treating this as an opening for us to offer our experience and help New York shape the cap-and-invest program,” DeSocio said. The ISO will happily provide guidance on any topic, but it would be helpful for agencies to give more insight into the program’s time frame, he said.
Chris Wentlent, chair of the New York State Reliability Council’s Executive Committee, asked whether NYISO plans to comment on having separate trade requirements for different DACs, and on the intent to initially have no offsets for generators.
DeSocio responded that NYISO did not plan to comment on either topic, but “both are important pieces for the state to consider, especially considering other requirements established by the [Climate Leadership and Community Protection Act], but this is not something the ISO will weigh itself into.”
The state’s Department of Environmental Conservation and the New York State Energy Research and Development Authority recently ended a series of webinars dedicated to explaining the cap-and-invest policy and identifying where public input could be most helpful to regulatory decision-making. (See NY Starts Public Review of Cap-and-invest Plans.)
The DEC and NYSERDA plan to have two rounds of pre-proposal outreach and ask that initial comments be submitted no later than July 1. Comments can be sent either online or mailed to the DEC’s Division of Air Resources.
New Jersey’s three-year, $150 million program to promote energy efficiency and building decarbonization incentive programs should be bigger and bolder to achieve the state’s ambitious clean energy goals, several speakers said at two public hearings last week.
Yet the proposal also ran into criticism from fossil fuel supporters and others who said the plan focused too much on transforming the state to make electricity the dominant — perhaps only — fuel used for building heat and hot water systems, and they questioned whether the plans would secure enough public support to achieve the goal.
The two online hearings, in the afternoon and evening of June 20, drew more than a dozen speakers and provided the first display of public, environmentalist and industry response to the straw proposal, known as Triennium 2, which aims to provide a strategy for reducing emissions through energy efficiency and shifting the state to increased electricity use. The Board of Public Utilities plans to have the completed program in place in July.
The three-part plan, which follows a similar three-year strategy enacted in 2020, sets out general goals and incentive mechanisms and details demand response proposals. A third part of the proposal outlines a series of possible building decarbonization (BD) startup programs that target single and multifamily residential buildings, as well as commercial buildings, an already contentious issue in the state and one that provoked some of the most vigorous discussion at the hearings. (See NJ BPU Outlines $150M Building Decarbonization Plan.)
Eric Miller, New Jersey energy policy director at the Natural Resources Defense Council (NRDC), said at the hearing that the demand response and building decarbonization plans “are critical in meeting our climate targets while lowering customer bills, and providing more options for how customers interact with the grid to cool and heat their homes.”
Still, he added, “we are concerned with the straw proposal placing a $50 million-a-year program budget.” The NRDC “has concerns that it’s insufficient to meet the scale required to hit the targets” set out by Gov. Phil Murphy in a recent executive order, he said. The order set a goal of electrifying 400,000 additional dwelling units and 20,000 commercial or public buildings by December 2030.
Susanna Chiu, senior director of operational services for PSE&G, said that although the utility “generally agrees” with the building decarbonization guidelines, which place much of the responsibility for implementing the strategy on utility run programs, the company has reservations about the size.
“We feel that the $50 million-per-year proposal for the second Triennium is not enough to make an impact,” especially if the BPU expects to meet Murphy’s building decarbonization goals, she said.
“Huge Burden”
The Triennium 2 proposal is the state’s latest initiative seeking to cut building emissions, which account for 17% of the state’s greenhouse gases, following the governor’s executive order and the creation of a Clean Buildings Working Group to study the issue. Business and fossil fuel interests have pushed back on the effort, and in January, the New Jersey Department of Environmental Protection held off enacting a rule that would have banned the installation of new commercial-size fossil fuel boilers after Jan. 1, 2025, after protests from business and fuel groups. (See NJ Backs off Ban on Commercial-size Fossil Fuel Boilers.)
Opponents say switching to electricity will be extremely expensive, and they decry the use of a “mandate” to require the switch. But state officials say they instead will implement the switch from fossil fuel to electricity by offering consumers and property owners incentives and public education on the benefits of electric appliances.
Steven S. Goldenberg, representing the New Jersey Large Energy Users Coalition, said at the first hearing that the proposed budget, when coupled with the state’s other clean energy initiatives in the state Energy Masterplan, is a “huge burden on ratepayers.”
He questioned the effectiveness of offering subsidies to encourage property owners to switch from fossil fuels, and cited insights gathered when he worked on a clean energy study for then-Gov. Chris Christie.
“I still recall very clearly their consistent testimony that it’s very difficult to incent people to upgrade their equipment if their current equipment was operable,” he said. “So that if someone had an operating furnace, even though it may be low efficiency and a nice offer is made to upgrade it to a more efficient unit, those offers were being rejected.”
Anne-Marie Peracchio, managing director marketing and energy efficiency at New Jersey Natural Gas, said the utility was the only one in the state “that had an electrification pilot approved.” She noted that “at the halfway point of this triennial, there was only one reported participant.”
Peracchio urged the BPU to consider including “low- and zero-carbon fuels like clean hydrogen and renewable natural gas” in the straw proposal.
“It is critical that the state policy does not limit broader opportunities for cost-effective decarbonization by placing an over-reliance on electrification when that is just one of the available strategies to building decarbonization,” she said.
Heat Pump Incentives
Andrew McNally, a lobbyist for South Jersey Industries, which represents two gas companies among other businesses, said electrification is no easy task. He said he expected electricity rates to increase as demand grew, and urged the BPU to “maintain its focus on affordability,” because the cost increases will affect low- and moderate-income households the most.
In addition, he said, “electrification stands to increase overall emissions” because the increase in demand will force the state to use power that is not generated by clean energy sources.
“Our current electric generation mix continues to rely on fossil in substantial part,” he said. “Until the state realizes its emissions-free generation goals, or at least makes substantial progress towards it, increased reliance on electricity will produce more carbon emissions.”
But Allison McLeod, policy director for the New Jersey League of Conservation Voters, urged the BPU focus on encouraging people to switch from delivered fuels, such as oil, and natural gas, to electrification, and not to provide support for people interested in switching from delivered fuels to natural gas even if it reduces emissions.
“We would not support incentivizing or installing fossil fuel equipment as part of the straw proposal,” she said. “The building decarbonization efforts should focus exactly on that — decarbonization — not committing our state to additional fossil fuel infrastructure.”
Representatives of two geothermal heat pump companies, Dandelion Energy of Mount Kisco, N.Y., and Princeton Air Conditioning of central New Jersey, urged the BPU to emphasize the use of the appliances more, saying they are efficient and can be cost effective.
Heather Deese, director of policy and regulatory affairs at Dandelion Energy, said the widespread installation of pumps in other states has shown how to shape an effective building decarbonization program.
“The overall framing around a three-year program of ‘try and then scale’ is too cautious,” she said. “The focus of the building decarbonization plan in New Jersey should be on quickly establishing and scaling programs. We really don’t have time for a wait-and-see approach.”
The program should prioritize switching customers from natural gas to electric heat pumps, she said, noting that the 15- to 20-year life of a gas furnace means 5 to 7% of natural gas-heated homes would replace their existing furnaces every year.
“We also recommend that the BD program should direct the utilities and state-run programs to include ground-source heat-pump rebates alongside air-source heat-pump rebates as a core part” of the state’s building decarbonization and energy efficiency programs, she said.
Deese and Scott Needham, president of Princeton Air Conditioning, each noted that New York has a program that provides incentives for the installation of heat pumps, and a tax credit benefit as well.
“It’s amazing how little mention in the state of New Jersey geothermal heat-pump systems get,” Needham said.
Maine Gov. Janet Mills on Monday vetoed legislation to streamline the permitting of ports to serve the offshore wind industry she and many others hope to develop in the Gulf of Maine.
Mills herself had originally proposed the bill to standardize evaluation of offshore wind port proposals and dubbed it “An Act to Modify the Visual Impact Standards for Offshore Wind Port Development.” (LD 1847.)
The Legislature amended it to include several progressive priorities, including requirements for project labor agreements for building the port and then for work done there; labor peace agreements; workforce diversity and equity plans; just transition and workforce development plans; and the use wherever possible of zero-emissions port equipment and technology.
They aptly renamed the amended measure “An Act to Modify the Visual Impact Standards for Offshore Wind Port Development and Establish Labor Standards for Wind Power Projects.”
Mills objected to the labor provisions of the Legislature’s amended bill. Last week she asked legislators to remove the language or to add additional language that would ensure employee-owned business and small businesses would benefit as well as union workers. They did not.
“Harnessing the benefits of offshore wind will require an ‘all-hands-on-deck’ approach that includes unions, small businesses and existing employee-owned and other Maine companies. Without that approach, Maine will be at a disadvantage compared to other New England states. It is imperative that investment in offshore wind facilities and projects foster opportunities for Maine’s workforce and construction companies to compete on a level playing field for this work.”
Mills said in the veto message that she wanted to work with the Legislature on LD 1847 and on LD 1895, another offshore wind measure that contains provisions unacceptable to her. She said she sees some willingness to do this among the measures’ sponsors.
In the June 21 letter to the sponsors, Mills said she recognizes “the value of PLAs, or collective bargaining agreements, as a tool to lift up working men and women by ensuring that they are paid strong wages with good benefits.”
But she had three specific objections to requiring them in this instance:
More than 90% of Maine’s construction workers are non-union.
Construction costs are soaring, and a PLA would further increase prices that ultimately would be borne by Maine ratepayers.
No other New England state imposes a statutory requirement for PLAs on offshore wind projects. Rather, state and federal regulations and solicitations typically “encourage” PLAs, which she would not object to.
Organized labor was not happy with Mills’ position.
“You can’t create the jobs of tomorrow with yesterday’s wages & labor standards,” tweeted the Maine AFL-CIO, which endorsed Mills for re-election in 2022.
Executive Director Matt Schlobohm said in a Facebook post: “Maine’s climate motto has been ‘Maine Won’t Wait.’ With this veto, Gov. Mills is saying, ‘Maine Will Wait’ — for thousands of good jobs, for clean energy & for the build out of a new industry. We will wait because the Governor is opposed to fair labor standards which are the industry norm.”
Mills is a Democrat, as are the majorities of both houses of the Legislature, and organized labor is a core constituency of the Democratic Party.
As President Biden signed the landmark Inflation Reduction Act of 2022 — enacting a welter of transformational clean-energy tax credits and subsidies — the White House emphasized that it would create good-paying union jobs nationwide by incentivizing prevailing wage agreements and apprenticeship programs.
Maine’s Situation
The U.S. Bureau of Labor Statistics reports that 9.2% of workers in Maine were union members in 2022, compared with 10.1% nationwide.
The percentage is much higher in other Northeast states that are trying to build an offshore wind industry: 12.7% in Massachusetts, 14.2% in Connecticut, 14.9% in New Jersey, 16.1% in Rhode Island and 20.7% in New York, the second highest in the nation.
Maine has some obstacles to its offshore wind ambitions that the other states do not.
For starters, the other states are developing wind power with turbines whose foundations are fixed to the ocean floor, a model used for decades worldwide. The Gulf of Maine is too deep for this — any turbine array there will need to float, and floating technology is still in its early stages, with limited commercial build-out as research and development continue.
But Maine is seeking a lease from the U.S. Bureau of Ocean Energy Management to site a floating research array generating up to 144 MW, and the University of Maine has a long-running effort to position itself as a center of U.S. floating wind research.
There also is the question of where to put the ports that would (or would not) need to employ union labor. As in other states, there is strong local opposition to industrializing the coast and ocean, which along with forests are central to Maine’s identity.
But most of Maine’s long, rocky coast is unsuitable to be a homeport for hulking installation vessels.
Sears Island on the central coast has emerged as a candidate. It is one of the largest accessible undeveloped islands on the Eastern Seaboard, and over the past few decades, one proposal after another — nuclear reactor, LNG terminal, coal power plant, oil refinery, container port — has died in the face of local opposition.
There is an Irving oil terminal a few hundred yards away on the mainland, but aside from that it remains a wooded nature preserve in a region dotted with quaint villages and small harbors. Advocates want to keep it that way.
At a meeting of the Maine Offshore Wind Port Advisory Group on Monday, multiple speakers voiced opposition to the concept of building a port there, some vowing a fight if one was proposed.
May in MISO proved no trouble for control room operators.
MISO averaged 70 GW of average systemwide load, lower than 2022’s 73 GW average. The footprint registered a 102-GW monthly peak on May 31. Operators also noted a 2.8 GW all-time solar peak on May 25, when panels supplied 4.3% of system load at midday.
Real-time locational marginal prices dropped by nearly two-thirds from last May, at $26/MWh, with natural gas prices sliding from about $8/MMBtu to around $2/MMBtu year-over-year. Natural gas generation supplied 42% of the energy mix; coal accounted for 24%, while wind generation and nuclear took a 16% and 14% share, respectively.
MISO recorded an average 55 GW of daily generation outages in May, on par with the same time last year and in 2021.
Meanwhile, MISO has declared its first capacity advisories and conservative operations instructions of the summer. It preemptively issued a capacity advisory for June 29 until further notice due to extreme heat indexes in the region. Parts of Louisiana are expected to reach triple-digit heat indexes through the weekend.
The grid operator called conservative operations, a capacity advisory and a hot weather alert for MISO South June 26 as the region weathered the continued heatwave. The short-lived warnings were issued and terminated a few hours later in the afternoon.
Earlier, MISO declared conservative operations for northern portions of its footprint on June 22 and 23 due to higher-than-anticipated load and heavy transfers.
Low-carbon hydrogen production and cleaner electric generation are the goals of a global effort led by governments and corporations trying to slow climate change by drastically reducing carbon dioxide emissions within the decade.
But the two goals appear to be at odds, in a collision involving environmentalists and technology trade groups battling over how much clean electricity can be diverted from the grid to produce hundreds of millions of tons of hydrogen annually.
At least half a dozen groups filed comments months ago with the U.S. departments of Energy and the Treasury to influence the creation of the rules that the IRS will use to determine the size of the production tax credits authorized by the Inflation Reduction Act for hydrogen production as well new renewable energy projects. Renewable energy producers are expecting at least a preliminary announcement on the rules later this summer.
The IRA authorizes a tax credit of 2.75 cents/kWh generated and up to $3/kg of hydrogen produced for the first 10 years of operation. The legislation also extends the 30% investment tax credit for at least two years.
The collision of interests between the renewable energy industry and fledgling hydrogen producers is in the details, including:
Whether existing wind and solar installations can divert their output from the grid to new power-hungry electrolyzers — possibly forcing more dirty power on the grid to make up for the diversion — or whether only newly built wind and solar generation can be used if the hydrogen producers want a tax credit;
Whether electrolyzer companies relying on grid power must purchase additional renewable power by buying renewable energy credits (RECs) and in the same region, or will be allowed to perform the “true-up” annually by purchasing additional power for anywhere on the grid; and
Whether electrolyzer companies should operate off the grid, producing hydrogen only when dedicated wind and solar power is available, or extend operations by also building on-site energy storage — options that potential hydrogen producers say will stunt the growth of the new industry.
The American Clean Power Association (ACP) issued a “Green Hydrogen Framework” last week distilling the conflicting issues and proposing a consensus resolution it said its 750 members would be able to endorse if DOE and the IRS adopt them.
The proposed compromise focuses on future hydrogen producers relying on grid power and would enable electrolyzer companies to buy power from existing wind and solar installations if they “are operational no earlier than 36 months” prior to the electrolyzer beginning production.
In other words, an electrolyzer company buying clean power from an older renewable energy facility would not qualify for IRA tax credits under this plan.
One exception under the ACP proposal: An electrolyzer company could buy from any existing wind and solar plant facing “persistent congestion.”
The ACP plan would also limit renewable energy purchases and credits to the same region in which an electrolyzer is operating.
Arguing that new production of green hydrogen should be continuous, the ACP plan would also phase in the requirement that hydrogen producers should replace renewable energy used by electrolyzer plants being built in 2029 and later years.
Those electrolyzer plants that begin construction before the end of 2028 could true-up the energy accounting requirement annually, according to the plan, an annual accounting rule that would be grandfathered in future years.
“This compromise framework offers a roadmap for effectively balancing the dual priorities of supporting early-market development of green hydrogen with maintaining a rigorous and robust standard for ensuring clean production,” the report argues.
“At present, green hydrogen is objectively not cost competitive with other forms of existing hydrogen production,” the reports notes in a reference to hydrogen split from methane. “Accelerating green hydrogen production through the Inflation Reduction Act’s clean hydrogen tax credits can help propel decarbonization across the economy — an estimated 90-million-ton reduction in carbon emissions each year by 2030.”
“These large emissions reductions are due to the fact that green hydrogen is essential for decarbonizing key sectors of the U.S. economy that are difficult to abate through direct electricity usage — including heavy-duty manufacturing, chemical production and heavy-duty transportation.”
The Fuel Cell & Hydrogen Energy Association criticized the ACP plan as a compromise that will “chill development.”
“The IRA offers a significant opportunity to reduce GHG emissions, decarbonize heavy-energy users and help achieve the Biden administration’s climate, energy security and clean manufacturing goals,” CEO Frank Wolak said. “We are concerned that the positions described by the American Clean Power Association, particularly on additionality, will chill development of the essential first generation of clean-hydrogen facilities. Restricting generators capable of selling environmental credits and leaving nuclear and hydropower out altogether are inconsistent with the broad intent of the IRA.”
The proposed resolution follows the publication of a least seven previous analyses and proposals from other groups, including one from the American Council on Renewable Energy and energy consulting firm Energy and Environmental Economics. (See How Green is that Green Hydrogen.)
Vistra’s more than $3 billion purchase of Energy Harbor and its nuclear plants ran into opposition at FERC on Friday as consumer advocates in Ohio argued the deal would harm the state’s retail power market (EC23-74).
PJM’s Independent Market Monitor, Monitoring Analytics, did not oppose the merger, but it argued that FERC should condition its approval on behavioral commitments from Vistra so it cannot abuse market power in the RTO’s capacity market and local energy markets.
Vistra proposed buying Energy Harbor, which owns the generation and competitive retail business spun off from FirstEnergy, in March. Vistra plans to combine the three nuclear plants from the deal with its existing clean energy assets and retail businesses in a new subsidiary called “Vistra Vision.” (See Vistra Pays More than $3 Billion for Energy Harbor.)
Ohio restructured its industry in 2001, allowing customers to buy power from competitive retailers, but even those who do not shop benefit from the default standard service offer (SSO) auctions into which Vistra and Energy Harbor have bid their generation in recent years, said the Northeast Ohio Public Energy Council (NOPEC).
“The Ohio SSO market is served by a small — and shrinking — set of suppliers. Over the past five years, the average number of suppliers has dropped from 11 to six,” NOPEC said. “In addition, in recent SSO auctions all (or almost all) registered bidders were selected to provide one or more tranches. This is a sign that these auctions currently have limited alternative suppliers.”
Both have participated in 39 auctions since 2019, with Energy Harbor winning 22% of total supply and Vistra 33%.
“When both Energy Harbor and Dynegy have submitted winning bids in the same auction, their combined shares of the procured tranches range from 35% to as high as 82%,” said NOPEC.
NOPEC is a regional council of local governments that provides electricity aggregation services to their citizens, which represents 68% of the total retail power market of 2.5 million customers — with the rest making individual decisions to shop with specific retailers. Energy Harbor and Vistra each serve about 20% of the state’s government aggregation market, said NOPEC, which is the largest provider of such services with slightly more than their combined share.
“The proposed transaction, and Vistra’s resulting increased share of the governmental aggregation market, follows directly on the heels of efforts by its subsidiary, Dynegy, to attempt to eliminate NOPEC as a competitor,” the group said.
Vistra’s subsidiary Dynegy asked the Public Utilities Commission of Ohio (PUCO) to terminate NOPEC’s certificate to serve as a government aggregator after it returned some customers to utility SSO rather than force them to pay spiking prices. NOPEC noted that Dynegy did the same thing because both were responding rationally to market conditions, while the nonprofit was working to ensure its member communities and their retail customers got the lowest prices possible.
The PUCO threw out Dynegy’s request, saying that NOPEC did nothing wrong in returning some customers to SSO.
The Ohio Consumers’ Counsel also urged FERC to review the measure and its impact on the retail market in Ohio, noting that the commission has agreed to do so when state agencies have limited authority over mergers.
“The potential adverse effects of this merger on retail consumers in Ohio will be significant,” the OCC said. “FERC’s review of both the retail and wholesale impacts of the merger on Ohio consumers is needed so that Ohio consumers can be protected from the adverse effects of this merger.”
Fewer bidders in the SSO auctions will likely raise prices in them, which will have an impact on the offers made by retailers.
“The standard service offer is used by Ohio consumers as the price to compare against the prices offered by marketers, including prices offered by governmental aggregators,” the OCC said. “Thus, higher standard service offer prices would act as a price ‘umbrella,’ allowing for increases in both marketer headroom and likely the prices offered by them. This also could result in higher profits for marketers, to the detriment of consumers.”
Both NOPEC and the OCC argued that the deal would have detrimental effects on PJM’s wholesale markets, as did the Monitor, though the latter argued behavioral constraints were the best way to deal with any such issues.
“The IMM recommends behavioral remedies to address flaws in PJM’s energy market power mitigation rules to ensure that Vistra cannot exercise market power as a result of the Energy Harbor acquisition,” the Monitor said. “Absent a reorganization of the entire market, structural remedies for individual transactions are not likely to be as effective as behavioral remedies because the structural remedies are generally based on an unrealistic, static view of market structure.”
Nuclear units have traditionally participated as zero- or low-cost baseload resources in the PJM markets, meaning they bid low and clear often — while benefiting when power prices spike. But now, owners of nuclear plants are increasingly looking to serve some kind of load directly located nearby that is outside of the wholesale markets, which creates the ability and incentive for nuclear plants to exercise market power.
“Under this offer strategy for the nuclear units, the combination of Vistra with Energy Harbor would result in more structural market power for Vistra as measured by the [three-pivotal-supplier] test both in local markets and in the aggregate energy market,” the Monitor said. “The impact on energy prices and congestion could be very large if the FERC permits this behavior and enough plants engage in the behavior.”
Energy Harbor has a deal with Standard Power to use its Beaver Valley nuclear plant to provide between 200 and 300 MW of power to a data center.
Any competitive concerns from that deal can be dealt with by requiring Vistra to reduce the capacity interconnection rights equal any “behind the generator” load added to the acquired nuclear plants, the Monitor said.
It also suggested three other behavioral requirements: a prohibition on submitting price-based offers that intersect, or cross, the cost-based offer for the resource; that Vistra include operating parameters that are identical to their parameter-limited schedules in its energy-market offers; and that the company use a market seller offer cap in the capacity market that is equal to its units’ net avoidable-cost rate, which the IMM said is the competitive offer for capacity resources.
The Western Energy Imbalance Market Governing Body appointed a new member Thursday and selected a new chair and vice chair from among its members.
The Governing Body’s five members chose Rebecca Wagner, an independent energy consultant, to serve the remainder of the term of member Jennifer Gardner, who had announced she planned to resign at the end of this month. The term ends June 30, 2024.
Rebecca Wagner, WEIM | Rebecca Wagner via LinkedIn
Wagner recently served as vice chair of the WEIM’s Governance Review Committee. She was a member of the Public Utilities Commission of Nevada for more than nine years. She also served as director of the Nevada Office of Energy and energy adviser to Nevada Gov. Kenny Guinn.
She now heads Wagner Strategies, advising clients on regulatory and utility matters, clean energy and climate policy.
“Rebecca is an outstanding addition to the Governing Body,” CAISO COO Mark Rothleder said in a statement. “Her electric industry experience and her participation on WEIM committees [afford] her insight into issues facing our partners in the West. Her leadership experience was central in the development of the joint-authority governance model” for the WEIM and CAISO.
The Governing Body elected Andrew Campbell to serve as chair and Robert Kondziolka to serve as vice chair for the next year.
Andrew Campbell, Energy Institute at Haas | Energy Institute at Haas
Campbell, executive director of the University of California at Berkeley’s Energy Institute at Haas, was named to the Governing Body last June.
Kondziolka, a veteran of Arizona’s Salt River Project, has chaired the Governing Body for the past year and has been a member since January 2020.
The Governing Body also reappointed member Anita Decker to her third term. Decker was executive director of the Northwest Public Power Association prior to joining the Governing Body in 2019. Her three-year term ends in June 2026.
The Governing Body oversees the WEIM’s interstate real-time market, which now includes 22 participants. It has generated nearly $4 billion in benefits for participants since 2014.
New Jersey lawmakers are considering a pile of proposed laws related to clean energy as the legislature nears its summer recess, among them bills that would expand the state community solar program, create an electric vehicle battery recycling program, promote the use of heat pumps and develop storage system capacity.
The Assembly Environment and Solid Waste Committee on June 15 advanced A4782, which would give the New Jersey Board of Public Utilities the power to approve 225 MW of community solar projects in fiscal years 2024 and 2025, and 150 MW a year after that.
The Senate passed the bill in February. The legislature takes a summer recess at the end of the month, and any legislation not passed by then will have to wait until at least November to be considered.
Community solar is seen as a key part of the state’s clean energy future, and the capacity levels set in A4782 are slightly above the 150 MW/year proposed by the BPU in a straw proposal for a permanent community solar program released in April. However, the capacity is well below the 500 MW/year that the bill’s sponsors had sought when they first introduced the legislation. BPU officials, who held two successful pilot community solar solicitations, had opposed the expansion, arguing that the agency could not handle such a dramatic increase in capacity. (See NJ Proposes Modest Community Solar Capacity Hike.)
The bill would also direct the BPU to draft rules and regulations to allow low- and moderate-income residents to “self-attest” their income in applying for the program, rather than providing documentation. At least half the customers enrolled in community solar projects must be low- or moderate-income residents, but developers have found it difficult to meet that quota, in part because residents don’t want — or are unable — to provide the documentation.
Opponents to the law included the New Jersey Division of Rate Counsel, who submitted a letter June 14 to the committee that expressed concern that the 500-MW capacity would “likely crowd out lower-cost grid supply projects” that attract lower subsidies.
“Legislation should not limit competition in the solar market, as competition tends to drive prices downward,” the division wrote.
Assemblymember John F. McKeon (D), a bill sponsor and committee member, said he and Sen. Bob Smith (D), a sponsor in the Senate, had met with the BPU and other stakeholders over the past 18 months.
“This was the framework that they’ve chosen and asked us to proceed with to best implement our goals to accentuate solar throughout the state,” he said.
End-of-life EV Battery Management
The committee on Thursday also approved A5365, which would create a program to provide “proper end-of-life management” of EV batteries.
The bill would require battery manufacturers, resellers, importers and anyone who sells vehicle batteries in the state to submit a battery management plan to the New Jersey Department of Environmental Protection (DEP). The bill also would require any vehicle battery sold in the state to contain a permanent label providing information about the battery. It would also prohibit the disposal of such batteries as solid waste.
Scot Mackey, a lobbyist for Alliance for Automotive Innovation, which represents many automobile manufacturers, said the bill’s proposal that manufacturers submit a battery recycling plan to the DEP would be “onerous.” He urged legislators to instead back a plan under which battery owners would find their own recycling method, with the manufacturer as a “backstop,” if there is no other alternative.
That approach “lets the existing infrastructure that is already out there … to still play the role that they play and take those vehicles and recycle them,” Mackey said.
The committee also backed A5442, which would direct the BPU to study how best to market and promote large-scale geothermal heat pump systems, and look at the feasibility and benefits of mounting such a campaign.
The bill is part of an escalating focus among state agencies on how to reduce carbon emissions from buildings. Other elements include an executive order from Murphy to electrify 400,000 dwelling units; an energy benchmarking program; a “Clean Buildings Working Group”; and a recent building decarbonization straw proposal. (See NJ BPU Outlines $150M Building Decarbonization Plan.)
The bill would require the BPU to study whether the state should offer financial incentives such as public-private partnerships and financial investments. The study would also examine whether heat pumps would be “affordable” and to what extent those costs should be borne by ratepayers.
The bill also would require the BPU to assess the relative energy efficiency of geothermal heat pumps compared to other common energy sources, such as natural gas, propane and fuel oil, and how other states are implementing the pumps.
Barbara Blumenthal, research director with the New Jersey Conservation Foundation, said the organization considers the topic important and urged the BPU study to adopt a broad approach.
“We want to make sure we’re using this technology … in ways that it actually reduces bills for consumers,” she said. “We want to make sure that the study considers different business models … and not just assuming that it’s going to take a significant amount of ratepayer money or other general expenditures to do this.”
Stimulating Storage Development
Another bill under consideration in the Assembly, A4893, takes aim at the state’s shortfall in energy storage capacity, seeking to boost a supplemental energy source that is seen as key to the expansion of clean energy use and to address the inconsistent nature of wind and solar generation.
The state, although aggressive in several clean energy sectors, is far from reaching its goal of putting 2,000 MW of storage in place by 2030. (See NJ Offers Plan to Boost Lagging Storage Capacity.)
The legislation would require the BPU to develop a pilot program to provide incentives to developers and others that install energy storage systems, and then regulations for a permanent program. The program would seek to help develop a range of storage, from “customer-sited energy storage systems, which are smaller energy storage systems owned by a customer of electric utilities and sited in a customer’s residence or business … to front-of-the-meter energy storage systems, which are larger energy storage systems that are connected directly to the grid,” according to a legislative summary of the bill.
The incentives, a portion of which would go to low- to moderate-income customers, would consist of an upfront payment and a performance incentive paid by the electric utility to compensate the storage owner for services providing electricity to the grid. The Senate approved the bill a year ago.
Stimulating EV Charger Development
Still awaiting support in either house, however, is a controversial bill that seeks to promote the installation of commercial EV chargers by reducing the electricity rate charged to the operators. Sen. Smith, chairman of the Senate Environment and Energy Committee and a vigorous clean energy advocate, pulled it from the committee’s June 8 agenda, and it has yet to be formally considered.
The bill, S3914, would require each electric utility to submit a tariff for commercial customers to the BPU. The tariff would not use “demand charges” but would be designed to “utilize alternatives to both traditional demand-based rate structure and capacity demand charges” and “establish cost equity between commercial electric vehicle tariffs and residential tariffs,” according to the bill.
It also aims to “accelerate third-party investment in electric vehicle charging infrastructure for light-, medium- and heavy-duty vehicles.”
The bill sparked opposition from the Division of Rate Counsel, which argued in a June 7 letter to the committee that the costs associated with high demand will not go away simply because the state allows commercial EV charging companies to avoid them.
“The [demand] charge is used so that users with high electric load are contributing their fair share to maintain the electric grid and account for other charges associated with large loads,” the division said. “If demand charges are waived for certain customers who are putting the greatest demands on the grid, other customers, who use far less electricity, will ultimately pay for them through rate increases.”
The Rate Counsel urged the committee to reject the bill and allow the BPU to study how best to set electric rates for commercial EV charging vendors while also being fair to ratepayers.
NEW YORK — After a three-year hiatus prompted by the coronavirus pandemic, New York Energy Week returned to Manhattan last week, with participants celebrating the progress the state and city have made toward decarbonization while offering sobering acknowledgements of the challenges ahead.
Co-sponsored by Consolidated Edison, the New York State Energy Research and Development Authority and technology provider EnerKnol, the program offered panel discussions and presentations at several venues around New York City.
During a panel discussion on opening night June 20, Matthew Ketschke, vice president of distributed resource integration for Con Ed, observed that the utility, which serves 3.6 million customers in New York City and Westchester County, is at “the hub of the energy transition in New York City and New York state.”
“One of my roles is to help to figure out how to make that happen, [with] stakeholders and both government and industry innovation,” he said.
Ketschke noted that Con Ed, “the oldest continuously traded company on the New York Stock Exchange,” recently celebrated its 200th anniversary. “The original company was a manufactured gas company. It actually used whale oil to produce manufactured gas,” he said. “It wasn’t until the 1950s that we started to flow natural gas.”
Ketschke acknowledged the difficulty of meeting the state’s Climate Leadership and Community Protection Act, which requires 70% renewable energy by 2030 and 100% by 2040.
“Clearly, New York has set up very ambitious goals. But without ambitious objectives and goals, you really don’t make a whole lot of progress. We’re going to have some significant technical hurdles to overcome. But New York is already way ahead in a lot of areas,” he said, citing the city’s 100-year-old electrified subway system and its “very low” per capita energy consumption.
The utility recently published a long-range plan for decarbonizing its gas system, which considers “shrinking and sunsetting” the system or repurposing it for low-carbon fuels, such as hydrogen.
“I think there are a lot of challenges,” he acknowledged. “That said, we’re New Yorkers. We’re pretty good at overcoming challenges, and I think there’s a lot of very good work that’s been done so far.”
Hiring Needs
To meet those challenges, Con Ed is expanding its outreach efforts as it looks to add 1,000 new employees in the next year.
“That means going to high schools and having conversations with kids who might never have thought of the electric business or the gas business or the energy business as being a career for them,” Ketschke said. “Somebody I’m real interested in coming to work for us is somebody who is in high school … and is an athlete and … likes a physical job, but never thought of being a lineman, or maybe a gas mechanic, or working in a power plant.”
The company offers a tuition aid program that helps employees go to college. “We have a number of people today working [as] general managers and vice presidents who came in as meter readers and kind of worked their way up,” he added.
Con Ed and others seeking workers should expand their hiring criteria to emphasize “helpfulness and grit,” said Donnel Baird, CEO of New York-based BlocPower, which helps decarbonize homes and other buildings in low- and moderate-income neighborhoods. “When it really comes down to finding the best talent … if you’re serious about it, you’ll end up with a DEI [diversity, equity and inclusion] strategy.”
For its part, BlocPower is providing job training to gang members and the incarcerated.
“There is, as we all know, a massive undersupply of skilled labor and skilled technicians across the country that is so pervasive that it could cripple all of the incredible clean energy legislation the Biden administration has passed,” he said. “We may not be able to implement [the Inflation Reduction Act] if we don’t solve this green workforce problem.
“There is a lot of heavy lifting that must be done, and my premise is that … most of us, if not 98% of us — even folks who are climate advocates — we do not truly believe that we’re going to pull this off,” he continued. “So we are all struggling with depression. We’re struggling with anxiety, particularly if you have children or … grandchildren that you care about. People don’t really believe that we’re going to pull this off. And so our job at BlocPower is to identify the geographies and markets where there’s an appetite to go big or go home.”
BlocPower has contracts to help three cities — Ithaca, N.Y., and Menlo Park and San Jose, Calif. — that have committed to decarbonizing 100% of their buildings.
“And so over the next five or six years, we’re supposed to invest around $6 billion of private sector capital … to help building owners finance affordable electrification for all in these cities, and go building by building to install air source heat pumps, heat pump hot water systems, replace gas ovens, and develop the workforce to go building by building to do that.”
Victoria Cerullo, acting executive director for the New York City Mayor’s Office of Climate and Environmental Justice, spoke about the city’s efforts to aid its 500,000 “energy-cost burdened” families and identifying “underutilized rooftops” to bring solar to small apartment buildings in environmental justice communities.
“We have old buildings here in New York City — old buildings [and] new buildings. … We need to harness all of the existing rooftops and any accessible space to power the city.”
Transmission, Generation to Eliminate the ‘Tale of Two Grids’
The push for more solar in New York City is among the efforts policymakers are making to eliminate what has been termed the “tale of two grids” in New York state, with upstate residents getting 90% of their electricity from non-emitting generation, and city residents depending on fossil fuel generation for 90% of their power needs.
Another effort to eliminate that disparity is Clean Path NY, an $11 billion partnership between the New York Power Authority (NYPA), energyRe and Invenergy to deliver more than 7.5 million MWh of emissions-free energy into New York City annually.
“We are extraordinarily proud of the fact that our project, and all of the projects that are happening, are really now oriented toward delivering meaningful benefits to frontline communities, to avoid some of the negative social health consequences that are pursuant to the burning of fossil fuels,” Clean Path COO Luke Falk said. “The reduction of [nitrogen oxides, sulfur oxides and particulate matter] attributable to just our project will reduce the statewide emissions from electricity by more than 20% per year.”
Falk, who discussed the project in a panel discussion Wednesday, was joined by Patricia Lombardi, senior vice president for NYPA, who discussed plans to retire additional fossil fuel peaker plants in the city as the new renewables are connected.
RTO Insider Editor Rich Heidorn Jr. (right) moderates a panel with (from left) Luke Falk, Clean Path NY; Emilie Nelson, NYISO; and Patricia Lombardi, New York Power Authority. | Andrew Theodorakis/NYPA
Several plants were recently shuttered, and NYISO will be issuing a short-term reliability assessment in July on plans to retire additional peakers in 2025, said ISO Executive Vice President Emilie Nelson, the third member of the panel.
“The reliability margins are narrowing,” Nelson said. “And that really comes back to what we’ve already talked about: that new supply needs to come into service in order to allow for resources to exit.”
Improving air quality in the city means winning buy-in from upstate communities hosting the generation and transmission. Clean Path sought to minimize the impact by using existing rights of way and putting much of the remaining transmission underground, Falk said.
“Our experience is that it is extraordinarily important … to give primacy to community engagement and stakeholder relations,” Falk said. “And that’s not just a talking point for our project. We’ve had literally hundreds of meetings with different groups across the state, representing every type of interests that you can think of: from the most local community-centric concern to … broad, regional environmental concerns, to labor, to workforce development to … our elected officials, and everybody in between. It’s an ongoing process.”
