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August 21, 2024

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NYISO Finalizes CRIS Tariff Revisions

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RENSSELAER, N.Y. — NYISO on Wednesday presented the Installed Capacity Working Group/Market Issues Working Group with a proposed timeline for finalizing tariff revisions related to capacity resource interconnection service (CRIS) expiration and transfer rules for deactivated facilities looking to adjust their unexpired CRIS rights.

The ISO’s Nikolai Tubbs told stakeholders that NYISO would be finalizing the discussion on tariff provisions related to the CRIS project, which has been an extended ongoing process. (See “Tariff Revisions on CRIS,” Study: NYISO Dynamic Reserves Could Lower Congestion, Costs.)

Currently, NYISO anticipates these new provisions to go into effect in the second quarter, or 60 days after they have been filed with FERC toward the end of the first quarter.

Scott Leuthauser of Hydro Quebec Energy Services asked about the status of external CRIS and whether it would be affected by any of the proposed revisions. NYISO attorney Sara Keegan answered that those rights would be unaffected.

Howard Fromer, who represents the Bayonne Energy Center, asked when NYISO expected the proposed requirements for CRIS transfers would go into effect and what the ISO meant by “functional requirements,” which NYISO expects to be their 2023 deliverable.

Zach Smith, vice president at NYISO, responded that “all of the rules will become effective upon FERC acceptance,” including the requirements related to CRIS transfers.

Smith then clarified that the functional requirements that NYISO is seeking to deliver by the fourth quarter relate to partial CRIS expiration, and the ISO “needs software tools to facilitate the partial CRIS tracking.” Smith also told stakeholders that the first time NYISO will “expire someone under the new partial CRIS rules would be three years from the effective date.”

Mark Younger, president of Hudson Energy Economics, thought it was confusing that NYISO “have the deliverable for this year called ‘functional requirements,’ when, in fact, the real deliverable is implementation.”

Doreen Saia, an attorney with Greenberg Traurig, asked whether the tariff revisions specifically related to the same-location CRIS transfers rules, would be impacted by the Class Year 2023 base case lockdown.

Keegan responded that it would not, and that, “regardless of this filing, CRIS transfers would be requested by the class year start date.”

NYISO will seek approval for the proposed CRIS tariff revisions at both the Jan. 18 Business Issues Committee and Jan. 25 Management Committee meetings.

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DOI’s Klein Picked to Run Bureau of Ocean Energy Management

The U.S. Department of the Interior announced on Monday that Elizabeth Klein has been named director of the Bureau of Ocean Energy Management, which oversees offshore energy and mineral resources.

She will replace Amanda Lefton, who has run BOEM since the start of the Biden administration and is resigning effective Jan. 19.

Under Lefton, BOEM approved the country’s first two commercial-scale offshore wind projects and has held three offshore wind lease auctions. The three lease auctions included a record-breaking sale off New York and the first-ever sale off the West Coast.

“Liz has been an invaluable asset at the department since Day 1, and we are thrilled she is taking on this new role,” Interior Chief of Staff Rachael Taylor said. “The Interior Department is leading the effort to foster a clean energy future, and Liz will be critical to our efforts to meet the president’s ambitious goals to deploy affordable clean energy to power homes across America and create good-paying jobs in the growing offshore wind industry.”

Klein, who currently serves as senior adviser to Interior Secretary Deb Haaland, was previously nominated for deputy secretary of the department, but that was withdrawn early in President Biden’s term after opposition from Sen. Lisa Murkowski (R-Alaska).

This is Klein’s third stint at DOI, having worked at the department during the Clinton and Obama administrations. Before joining the Biden administration, she was deputy director of the New York University School of Law’s State Energy & Environmental Impact Center, which supports state attorneys general when they defend, enforce and promote laws and policies on clean energy and the environment.

Klein was a key architect of the Obama administration’s work to create a new offshore wind industry and leasing program.

The American Clean Power Association thanked Lefton for helping lay the foundation to get to 30 GW of offshore wind by 2030 and welcomed BOEM’s new boss.

“We also are excited to work with Elizabeth Klein, who brings a wealth of experience to BOEM, having worked in the highest levels of the Department of the Interior under Presidents Obama and Biden,” ACP Vice President for Offshore Wind Josh Kaplowitz said. “The offshore wind industry looks forward to ongoing collaboration with incoming Director Klein and her team to accelerate offshore wind energy development and deployment, while creating jobs for American workers and investing in American communities.”

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Illinois, Public Citizen Ask for Confidential Docs in Dynegy Probe

The Illinois attorney general’s office and Public Citizen are calling on FERC to release private files pertaining to the commission’s investigation of Dynegy’s conduct during MISO’s 2015 capacity auction.

The organizations lodged a motion Jan. 6 asking FERC to direct its Office of Enforcement to allow access to “all documents and materials in its possession collected by enforcement staff during the non-public investigation of Dynegy.” (EL15-71)

The Office of Enforcement concluded in a heavily redacted report last September that Dynegy engaged in market manipulation to ensure it could set prices in MISO’s 2015-16 planning resource auction. The finding reversed a three-year, non-public FERC investigation that cleared Dynegy of wrongdoing before ending abruptly in 2019. (See FERC Staff Finds Dynegy Manipulated 2015 MISO Capacity Auction.)

Illinois and Public Citizen said they’re seeking documents that Dynegy or others provided to FERC enforcement staff during the investigation that they weren’t privy to. They said they anticipate documents and depositions “that will likely be relevant to the issues” raised in their complaints.

The organizations have requested $428.6 million and interest from June 2015 to refund Illinois load serving entities’ customers in MISO’s Zone 4.

They said they have executed nondisclosure agreements to receive non-public filings from Dynegy about the refunds’ status. They also said they’ve already committed to safeguarding information when they were granted access to the case’s confidential remand report and appendix documents.

“The People and Public Citizen have already agreed to protect investigation materials in accordance with the commission’s model protective order and should be granted the ability to review any and all materials in the possession of, or acquired by, enforcement staff,” they wrote.

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Biden Admin Releases Blueprint for Transportation Decarbonization

The Biden administration on Tuesday released what it described as a national plan to eliminate carbon dioxide and other greenhouse gas emissions from the nation’s transportation sector by 2050, including from private automobiles, the trucking industry, freight and passenger rail, and aviation.

The 88-page National Blueprint for Transportation Decarbonization argues that successfully addressing the climate crisis will require nothing less than a total commitment of the federal government working with state, local and tribal governments, and with industry.

Underlying these objectives will be the research, development and refinement of new technologies: battery electric systems in light-duty vehicles, fuel cell electric systems running on hydrogen in heavy trucking, synthetic low-carbon liquid fuels for aviation and maritime use.

Transportation accounts for up to 29% of all U.S. emissions, and the administration announced as early as April 2021 its goal to reduce emissions from the sector by 50 to 52% by 2030 compared to 2005.

The blueprint is the work of the departments of Energy, Transportation and Housing and Urban Development, and EPA. It describes itself as “the first comprehensive, whole-of-government approach to decarbonizing the transportation sector that aligns decision-making among agencies and identifies new and innovative opportunities for collaboration that are critical to achieving our shared vision of a future decarbonized transportation system.”

“It’s not an accident that these four agencies are represented here. It is because the president has made it clear that he expects to see action,” Jeff Marootian, senior adviser at DOE, said at a launch event for the report at the Transportation Research Board’s Annual Meeting in D.C.

“So much of the work that’s reflected in the blueprint isn’t really a starting point,” he said. “This is very much an orchestration of what has already been done, both in DOE and at other agencies as well, to help move this forward.”

The blueprint also provides the first details of the administration’s plans to use funds provided by the passage of the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.

The resources from the two laws are allowing DOE and its national laboratories to deliver “end-to-end research and development so we can take these technologies that many have worked hard on developing and commercialize them, de-risk them, and help really support our partners in industry to help actually commercialize them and provide these for consumers,” Marootian added.

“The blueprint is predicated on three ideas,” said Andrew Wishnia, deputy assistant secretary for climate policy at DOT. “One is how do we improve convenience? The second is how do we improve efficiency? And the third is how do we improve clean options?”

On convenience, for example, Wishnia pointed to funding from the IIJA that will support “more bike infrastructure, more walking infrastructure, better land use coordination [and] more money going to metropolitan planning organizations.”

But the blueprint acknowledges that the third “idea” will drive the majority of emission reductions. Given the broad array of vehicle types, technologies and usage patterns, a successful transition will require various vehicle and fuel solutions and must consider full life-cycle emissions.

It also acknowledges the impact transportation technologies have had on U.S. society over time, pledging that remaking transportation will be done with a clear focus on the impact it will have on communities. It includes more federal attention to urban planning.

Marion McFadden, principal deputy assistant secretary for community planning and development at HUD, stressed “the interconnectedness of transportation and where people live.”

“Decarbonizing transportation will affect everyone, and solutions must address the needs of all urban, suburban and rural communities; businesses of all sizes; and individuals and families at every socioeconomic level,” the blueprint predicts in an introductory explanation.

Recognizing the enormity of the undertaking, the blueprint further notes that “the scope, scale and speed of the shift will continue to require solutions that leverage market forces and private sector investments, which government policies and investments should jumpstart and guide.”

John Bozzella, president and CEO of the Alliance for Automotive Innovation, said the auto industry is approaching decarbonization as both an environmental and economic imperative.

Electrification is a “big opportunity for our economic competitiveness [and] our ability to compete with economies around the world,” Bozzella said. He predicted that by the end of the decade, the auto industry will pour more than a trillion dollars in electrification.

But, he said, even though “[electric] vehicle sales have doubled year over year, it’s 7% of new vehicle sales. To get to 50% by the end of the decade, it’s going to require not only an all-of-government approach at the agencies here today. … We also need to pair that with an all-of-the economy collaborative approach.”

Multiagency Approach

In remarks accompanying the release of the plan, Energy Secretary Jennifer Granholm also noted the ambitious nature of the plan’s objectives. “The domestic transportation sector presents an enormous opportunity to drastically reduce emissions that accelerate climate change and reduce harmful pollution.”

Transportation Secretary Pete Buttigieg underscored the importance of a multiagency approach.

“Transportation policy is inseparable from housing and energy policy, and transportation accounts for a major share of U.S. greenhouse gas emissions, so we must work together in an integrated way.

“Every decision about transportation is also an opportunity to build a cleaner, healthier, more prosperous future. When our air is cleaner; when more people can get good-paying jobs; when everyone stays connected to the resources they need and the people they love, we are all better off.”

EPA Administrator Michael Regan said the blueprint supports the agency’s “priority is to protect public health, especially in overburdened communities.”

Housing and Urban Development Secretary Marcia Fudge said one of her department’s objectives is to “ensure that clean transportation investments are made equitably and include communities and households that have been most harmed by environmental injustice.”

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Calif. Governor Proposes $6B in Climate Budget Cuts

California Gov. Gavin Newsom on Tuesday presented his fiscal year 2023/24 budget plan, which proposes eliminating $6 billion in funding for clean transportation and other climate initiatives because of a projected plunge in tax revenue caused mostly by the declining value of technology stocks.

The cuts would reduce last year’s $54 billion five-year commitment for climate initiatives to $48 billion, maintaining 89% of last year’s historic funding levels. Even reduced, the amount represents the world’s largest climate pledge at a “sub-national level,” Newsom said.

California could still see billions of dollars from the federal Inflation Reduction Act (IRA), “not only filling that bucket back up but substantially increasing the total investment,” and that’s the reason why climate and transportation were targeted for some of the largest cuts in this year’s budget, the governor said.

If financial conditions improve, the budget proposes a $3.9 billion “trigger” mechanism to restore much of the reduced spending in FY 2024/25, Newsom noted. A recession, however, could require even deeper budget cuts in the May revision of the budget plan, he said.

The governor’s budget summary details the financial conditions that made it necessary to reduce overall state spending next fiscal year.

“As 2023 begins, risks to the state’s economic and revenue outlook highlighted in the 2022 budget have been realized — continued high inflation, multiple federal reserve bank interest rate increases, and further stock market declines,” it says. “This last risk is particularly important to California, as market-based compensation — including stock options and bonus payments — greatly influences the incomes of high-income Californians. Combined with a progressive income tax structure, this can have an outsized effect, both good and bad, on state revenues.”

The state’s revenue outlook is “substantially different than … in the last two years” of record surpluses, it notes. The governor’s budget forecasts that state general-fund revenues will be $29.5 billion lower than in 2022/23.

“California now faces an estimated budget gap of $22.5 billion in the 2023-24 fiscal year,” it says.

Bond sales or withdrawals from the state’s budget reserves could offset further reductions, it says. In 2014 voters approved Proposition 2, requiring funding upgrades to the state’s Budget Stabilization Account, known as the rainy day fund. To make withdrawals, the governor must declare a state of emergency.

The account now holds $22.4 billion and constitutes the largest portion of the state’s $35.6 billion in total budget reserves, the budget proposal says.

Major cuts proposed in the governor’s budget include a $1.1 billion reduction in the state’s $10 billion, five-year commitment to funding for light-, medium- and heavy-duty zero-emission vehicles that was adopted in the past two fiscal years.

“The budget maintains $8.9 billion (89%) of ZEV investments with a focus on communities that are the most affected,” the budget summary says. “This includes targeted investments in disadvantaged and low-income communities by increasing access to the benefits of clean transportation and by continuing to decarbonize California’s transportation sector and improve public health.”

In addition, it proposes $2.5 billion in “reductions across various ZEV programs, which are partially offset by approximately $1.4 billion in fund shifts to cap-and-trade funds.

“Further, the administration will pursue additional federal funding to help offset the decrease in state funds,” it says. “For example, the federal IRA includes $100 billion to states for clean energy and climate investments. The administration will continue to aggressively pursue this federal funding.”

Some proposed program cuts include:

  • A reduction of $745 million in state general fund dollars for programs that “expand affordable and convenient ZEV infrastructure access in low-income neighborhoods.” The cuts would be “partially offset by a shift of $535 million to the Greenhouse Gas Reduction Fund. This maintains approximately $2.1 billion (91%) for programs,” according to the budget summary.
  • A $1.5 billion general fund reduction for programs that support drayage trucks, transit buses and school buses, “which is partially offset by a shift of $839 million to the Greenhouse Gas Reduction Fund. This maintains approximately $5.3 billion (89%)” of the original funding,” it says.
  • A $270 million cut to the California Public Utilities Commission’s residential solar and storage program. “This maintains approximately $630 million (70%) for solar and storage incentives for low-income utility customers,” the budget summary says.
  • A reduction of $50 million from the long-duration energy storage program at the California Energy Commission. “This maintains approximately $330 million (87%) for support of long duration energy storage projects that will help with the state’s energy transition,” it says.
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ERO Submits E-ISAC Outreach Clarifications to FERC

NERC last week submitted a compliance filing that sought to reassure FERC about the fairness of the Electricity Information Sharing and Analysis Center’s (E-ISAC) industry outreach efforts.

FERC ordered the filing in November, as part of its order accepting NERC’s 2023 Business Plan and Budget and those of the regional entities and the Western Interconnection Regional Advisory Board (RR22-4). (See FERC Orders Clarification in ERO Budget Filing.) The commission’s request was based on comments submitted by the Edison Electric Institute in response to the budget documents.

In its order, FERC said it needed “additional transparency into certain E-ISAC costs” because the $38 million budgeted for the E-ISAC represents more than 25% of NERC’s overall budget for 2023 and an increase of more than 15% from the previous year’s budget. Specifically, the commission raised questions about the E-ISAC’s Vendor Affiliate Program (VAP), a membership plan for suppliers of hardware and software products to the electricity sector.

Membership in VAP consists of three tiers; higher levels cost more but confer additional benefits, such as access to networking sessions at the GridSecCon security conference or participation in GridSecCon panels. The commission asked NERC to explain why it chose this structure for the program, how it prevents participating vendors from engaging in sales and other “business development opportunities,” and how it promotes collaboration and information sharing.

In its response, the ERO said that along with sharing threat indicators and other intelligence with the electricity sector, the E-ISAC aims to “take a holistic approach to cyber and physical security” by inviting vendors to participate in information sharing and providing information on the vendors to grid operators. Through the VAP, NERC can connect “security-focused professionals, service providers, and original equipment manufacturers [OEM] … together with E-ISAC members to share information and enhance security practices.”

NERC told the commission that participants in the VAP are screened before being admitted into the program. This screening is designed to keep out security risks. Criteria include being a known provider of cybersecurity products or services, an OEM, or a provider of other related services to the industry. Companies based outside the U.S. may be admitted, but only if they are not subject to U.S. sanctions, compliant with E-ISAC security procedures, or not presenting other, unspecified risk factors.

Approved vendors are given access to the E-ISAC Portal, but “are limited to certain discussion channels created specifically for the VAP.” The same confidentiality and use restrictions apply to vendors as to all other users.

Regarding the membership structure, NERC said the tiers are meant to “accommodate vendors of different sizes and resources.” However, the only benefit the ERO identified for higher-paying vendors is improved visibility; NERC emphasized that the program “does not promote any particular vendor, product, or service.” Participants in VAP must limit their discussions to “specifically agreed-upon topics … that are directly relevant to the security of the electricity industry.”

The E-ISAC said it reviews vendor presentations prior to their participation in any E-ISAC event and monitors posts on the portal to check for material that might serve a business purpose. While the E-ISAC acknowledged that some members and VAP participants have business relationships, it said these are exclusively outside the domain of the VAP and “incidental to the vendor’s participation.”

FERC also expressed worries about the relationship of the E-ISAC to its counterpart in the natural gas sector, asking NERC to show whether costs were shared fairly between the two organizations. NERC replied that its communications with the Downstream Natural Gas-ISAC had created “no new or incremental costs [and] no additional tools, FTEs, or other investment are required at this time.” NERC observed that organizations in the gas sector are already providing $60,000 per year to the E-ISAC to cover any costs associated with cross-sector engagement.

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NY Company Plans 60-stall EV Charging Station for Queens

A Brooklyn-based electric mobility and infrastructure company on Monday announced plans to build what it says would be the “largest public fast-charging station in the Western Hemisphere” in Queens.

The station would be among five that Revel plans to build across New York City (except Staten Island), consisting of 136 stalls in total. The “superhub” in the Maspeth neighborhood of Queens will be the largest, with 60 charging stalls. Like its flagship 25-stall station in Bed-Stuy, Brooklyn, each of the five new stations will be open 24/7 and accessible to any model of electric vehicle, according to the company.

Buildout is expected to be mostly complete late in 2023, with the site in Red Hook, Brooklyn, projected to come online in 2024.

The new facilities will use the widely compatible combined charging system standard and will take 10 to 20 minutes per charge. The company said the hubs will be subject to managed charging, with incentives for EV owners to use.

“The only way mass EV adoption will ever happen in New York City is if the charging infrastructure is there to support it,” Revel CEO and co-founder Frank Reig said in a news release. “We need high-volume, public sites in the neighborhoods where people actually live and work, and that’s exactly what Revel is delivering with our growing superhub network. This is the biggest fast-charging expansion our city has ever seen, and it’s a huge step toward making our EV transition a reality.”

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Hochul Highlights Cap and Invest in State of the State Address

New York Gov. Kathy Hochul (D) on Tuesday shared what her energy and environmental priorities will be in the coming year during the annual gubernatorial State of the State address, including implementing an economywide cap-and-invest program.

The goal of the program is to “cap greenhouse gas emissions, invest in clean energy, and prioritize the health and economic wellbeing of our families,” Hochul said. “Leading emitters will have to purchase permits to sell their fuels,” and “the dirtier the fuel, the bigger the price tag.”

“The invest part of the program will accelerate the clean energy transition and include universal climate action rebates” that will provide over $1 billion in revenue, which would be allocated “to lower utility bills, [and] cover transportation and other decarbonization efforts,” she said. It would give New York “great flexibility to focus our efforts on the biggest polluters” while providing relief to “our families, our famers and small businesses” from high energy costs.

Hochul’s speech covered many of the same, non-energy issues she pledged to tackle during her inauguration speech at the beginning of the year: crime, affordable housing and mental health care. But in both speeches, she emphasized the importance of reducing energy costs and electrifying New York’s building stock.

“Homeowners and renters worry about paying their energy bills because rates are at record highs, and geopolitical forces outside our control are hitting our wallets right here at home,” she said. This winter has seen “energy costs of 20 to 30% higher than just last year,” forcing many families to “make the terrible choice” between “keeping the thermostat up or food on the table.”

These conditions are exacerbated by the fact that New York’s building stock is old. (See “Barriers and Challenges,” Empire Building Challenge Seeks to Decarbonize NY High-rises.)

“They are less insulated, harder to heat and have higher greenhouse gas emissions,” accounting for a third of the state’s total emissions, said Hochul.

To counter rising costs, Hochul announced the creation of the EmPower Plus pilot program, which will “help low-income families retrofit their homes” to become electrified, she said.

The program will help low-income families insulate their homes, upgrade the energy efficiency of their appliances, switch their heating to electric systems, and reduce their overall economic burden by providing $200 million in relief to more than 800,000 New Yorkers, according to Hochul.

Additionally, homes that fully electrify will “be eligible for the first-in-the-nation energy affordability guarantee” that they “will never have to spend more than 6% of their income on electricity,” Hochul promised.

Hochul said that since the passage of the Climate Leadership and Community Protection Act (CLCPA) in 2019, the “legislature has instituted aggressive mandates and deadlines for reducing emissions, and now we’re executing on that plan.”

Other Notable Proposals

“Climate change remains the greatest threat to our planet, but also to our children and our grandchildren,” Hochul said, and so, alongside the cap-and-invest and EmPower Plus proposal, she announced several other climate action policies.

Hochul proposed “to end the sale of new fossil fuel power heating equipment by 2030” and called for “all new construction to be zero emission starting in 2025 for small buildings and 2028 for large buildings.”

She promised to implement these policies in “a thoughtful way that prioritizes affordability, protects those already struggling to get by, and corrects environmental injustices of the past.”

One other proposal, outside the energy and environment spheres, that Hochul claimed would help New Yorkers deal with high energy prices was her proposal to peg the minimum wage to inflation.

Reactions

The New York State Energy Research and Development Authority (NYSERDA) supported Hochul’s announcement to pursue a cap-and-invest program, saying it “establishes a declining cap on greenhouse gas emissions, invests in programs that drive emissions reductions in an equitable manner prioritizing disadvantaged communities, limits costs to economically vulnerable households, and maintains the competitiveness of New York industries.”

NYSERDA plans to immediately design the program, as recommended by the recently passed Climate Action Council (CAC) Scoping Plan. (See “Economy-Wide,” CAC Inches Toward Final Scoping Plan, Shares IRA Impacts.)

It said the program would “incentivize consumers, businesses and other entities to transition to lower-carbon alternatives” by requiring large-scale emitters to purchase allowances for their pollutive activities.

Doreen Harris, president of NYSERDA and co-chair of the CAC, said the “proposal furthers New York’s leadership by bringing forward an innovative solution to meet the profound challenges presented by the destructive nature of climate change.”

In the same statement, Basil Seggos, commissioner of the Department of Environmental Conservation, said his team “looks forward to working with NYSERDA, the legislature and New Yorkers across the state to build this essential program, which will also prioritize addressing pollution hotspots impacting the health and wellbeing of the state’s disadvantaged communities.”

Anne Reynolds, executive director of the Alliance for Clean Energy New York, said in a statement that “cap-and-invest is a powerful tool to reduce carbon emissions and pay for the portions of the climate Scoping Plan that are currently unfunded.”

Rory Christian, chair of the Public Service Commission, commended Hochul, saying she is “providing unprecedented financial relief to utility ratepayers,” while her “new and innovative energy affordability initiatives are coming at exactly the right time.”

In an email to NetZero Insider, Julie Tighe, president of the New York League of Conservation Voters, said, “Gov. Hochul met the environmental moment.”

“With a focus on environmental justice, she’s setting the state on a course for a clean energy economy that works for everyone no matter their zip code,” Tighe said.

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ERCOT Claims Immunity Before Texas Supreme Court

The Texas Supreme Court heard oral arguments Monday morning in a pair of lawsuits that could determine whether ERCOT has a right to sovereign immunity.

The first was ERCOT’s appeal to the high court that it find the grid operator to be a governmental agency and entitled to immunity from lawsuits (22-0196). It asked the court to reverse a state appeals court ruling last February that it is a private, independent, membership-based nonprofit not created or chartered by the state. (See ERCOT’s Legal Issues Continue to Mount.)

The second involves CPS Energy’s claim against ERCOT over its wholesale market’s high prices during the February 2021 winter storm (22-0056). An appeals court in 2021 sided with ERCOT’s claims that the grid operator is a “governmental unit” and dismissed the San Antonio municipal utility’s lawsuit.

ERCOT said in both lawsuits that it can’t be sued because it’s a governmental entity under the authority of the Public Utility Commission of Texas. On Monday, the grid operator’s attorneys painted a dire picture should ERCOT be found a private entity and open to lawsuits.

Elliot Clark (Supreme Court of Texas) Content.jpgAttorney Elliot Clark defends ERCOT against CPS Energy as CEO Pablo Vegas (right) listens. | Supreme Court of Texas

“Quite literally, chaos will follow,” Winstead’s Elliot Clark said.

He noted to the court’s nine justices that state law has given the PUC authority over ERCOT, authority that has only been strengthened following the 2021 storm. The proper course, he said, is to take disputes to the commission, as have other market participants.

Clark said other market participants have begun disputes at ERCOT that will work their way to the PUC. He said the commission has the “expertise” to handle those claims, which total about $3.2 billion, and suggested CPS should have done the same with its dispute over the scarcity prices that prevailed for four days after the storm.

“CPS Energy did not follow the regulatory process,” Clark said. “If it is allowed by this court to pursue the same issues in its hometown district court, then all of those other market participants will abandon the regulatory process and go file suit in their hometown district courts.”

Alexander Dubose & Jefferson’s Wallace B. Jefferson echoed those comments in ERCOT’s appeal against Panda Power Funds in a case that dates back to 2017. Panda is accusing the grid operator of publishing “flawed or rigged” energy demand projections that led the company to spend $2.2 billion on three power plants that now operate at a loss.

ERCOT “has no private interest. Its interest is in furthering the public’s interest in a reliable grid,” Jefferson said. “The state controls its bylaws, and the state sets the fee that funds the organization.”

CPS attorney Harriet O’Neill argued that to be a governmental unit, ERCOT would have to be an organ or arm of the state.

“We can argue the niceties of the difference between an organ and an arm, but that really sort of buries the lede,” she said. “The lede is that the Legislature never saw fit to come in and even take the more incremental measure of designating ERCOT as a governmental unit.”

The Supreme Court in 2021 declined to make a ruling on ERCOT’s status. It said it did not have jurisdiction over the matter because an appeals court in 2018 found the grid operator was entitled to sovereign immunity before the higher court was asked to review the case. (See Texas Supremes Sidestep Ruling on ERCOT Lawsuit Shield.)

More than 100 market participants and individuals have filed lawsuits against ERCOT over its performance during the storm.

ERCOT does not comment on pending litigation and declined to provide comment on Monday’s arguments.

Texas Gov. Greg Abbott filed an amicus brief in both cases, saying the legislature has “conferred authority” on the PUC and placed ERCOT at its “complete disposal.”

“ERCOT cannot serve this important governmental function if it is subject to competing commands and retrospective money judgments from district judges scattered across our 254 counties,” he wrote. “This court should solve this too-many-cooks problem by recognizing ERCOT’s governmental immunity, acknowledging PUC’s exclusive jurisdiction, or both.”

Abbott added that the court should “respect the Legislature’s work by pulling grievances against ERCOT out of the lower courts, redirecting them to PUC in the first instance for expert adjudication, and then standing ready to provide orderly judicial review of any administrative action.”

A decision is expected back from the Supreme Court by July. The court has cleared its docket for each of the last eight years and is expected to do the same this year. Its current session ends June 30.

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New California Energy, Climate Laws Go Live

A half-dozen new climate and energy laws took effect in California on Jan. 1, including measures to promote carbon capture and sequestration, establish emissions reduction and clean energy targets, and instruct the state’s three major energy agencies to expand their long-term generation and transmission planning horizons.

On the clean energy front, Senate Bill 1020 establishes new state goals of using 90% carbon-free electricity by 2035 and 95% by 2040 as steps on the way to supplying retail customers with 100% clean energy by 2045, as required by 2018’s Senate Bill 100. The bill was developed last year by the Senate Climate Working Group.

“Senate Bill 1020 is our collective victory in equipping California to meet the urgent challenges of climate change, adaptation and resiliency through an equitable lens,” Sen. John Laird, who authored the measure, said in a news release when Gov. Gavin Newsom signed it in September. “We cannot afford to wait for a better time for progress, and the accelerated goals established in SB 1020 reflect this urgency.”

Another key measure, Assembly Bill 1279, codified a 2018 executive order by former governor Jerry Brown that originated the state’s goal of achieving carbon neutrality by 2045. The legislation also requires the state to reduce greenhouse gas emissions at least 85% below 1990 levels by 2045 and instructs the California Air Resources Board (CARB) to report to the legislature on the “feasibility and tradeoffs” of achieving the bill’s goals.

Carbon Capture

Several laws that took effect in the new year aim to advance carbon capture and sequestration (CCS) as viable means of reducing greenhouse gasses.

Senate Bill 905 directs CARB to establish a regulatory framework for carbon capture and storage technologies to prevent CO2 from entering the atmosphere and to trap it underground. In its 2022 scoping plan, CARB said the state should use the technologies as a way to meet emission reduction goals, though no such projects currently exist in California.

“Carbon capture and sequestration will be a necessary tool to reduce GHG emissions and mitigate climate change while minimizing leakage and minimizing emissions where no technological alternatives may exist,” the CARB plan said.

The measure also requires CARB to develop a streamlined permitting process by 2025 that evaluates seismic, environmental and air-quality risks, and to create a public database that tracks the development of CCS projects statewide.

Assembly Bill 1757 tasks the state Natural Resources Agency with establishing ambitious carbon sequestration targets for “natural and working lands” by Jan. 1, 2024.

“The state’s forests, agricultural lands, rangelands, wetlands, oceans, and other natural and working landscapes define the beauty and well-being of our state, but tragically are suffering increasing degradation caused by a changing climate,” the measure says.

The Natural Resources Agency has until Jan. 1, 2024, to create a plan with specific CO2 reduction goals for 2030, 2038 and 2045 and to establish an expert advisory committee to “inform and review modeling and analyses for natural and working lands [and] to advise state agencies on implementation strategies.”

In addition, the act requires CARB to determine “standard methods for state agencies to consistently track greenhouse gas emissions and reductions, carbon sequestration, and, where feasible and in consultation with the Natural Resources Agency and the Department of Food and Agriculture, additional benefits from natural and working lands over time.”

Senate Bill 1314 prohibits captured CO2 from being injected into oil wells for “enhanced oil recovery,” or EOR, as a way to extract remaining oil.

EOR isn’t widely used in California, but injection of CO2 and other gasses “accounts for nearly 60% of EOR production in the United States,” according to the U.S. Department of Energy. Increased carbon capture could expand the practice, it said.  

“The legislature finds and declares that the purpose of carbon capture [and sequestration] technologies … is to facilitate the transition to a carbon-neutral society and not to facilitate continued dependence upon fossil fuel production,” the bill says.  

Transmission Planning

Several transmission planning bills faltered or were heavily water down in 2022.

One that passed mostly intact was SB 887. It directs CAISO, the California Public Utilities Commission and the state Energy Commission to expand their generation and transmission planning horizons from the current 10 years to “at least 15 years … to ensure adequate lead time for [CAISO] to analyze and approve transmission development and for the permitting and construction of the approved facilities.”

CAISO already performs a 20-year transmission outlook, but it is a long-term conceptual plan of grid needs, including out-of-state projects, intended to complement but not replace the ISO’s 10-year transmission planning process, which concerns only in-state projects.

Becker’s bill instructed CAISO to identify “the highest priority transmission facilities that are needed to allow for reduced reliance on [fossil fuel] resources in transmission-constrained urban areas by delivering renewable energy resources or zero-carbon resources that are expected to be developed by 2035 into those areas.”