Oral arguments on the appeal of FERC’s approval by operation of law of the Southeast Energy Exchange Market (SEEM) held Wednesday at the D.C. Circuit Court of Appeals focused on the issue of deadlines.
FERC deadlocked 2-2 in October 2021 over the lawfulness of the market, which makes available unused transmission capacity from its member utilities in the Southeast for additional trades among its members. Under the Federal Power Act, the tie meant that the commission approved the market, even though it did not issue an order on it.
The automatic approval drew rehearing requests, but FERC unanimously ruled that they were filed too late, coming 30 days after commissioners filed statements on their positions — instead of a few days earlier, when the SEEM agreement actually went into effect. (See FERC Rejects SEEM Opponents’ Rehearing Requests.)
The case was appealed by environmental groups and renewable energy advocates, with Earthjustice attorney Danielle Fidler arguing that FERC was wrong to deny the rehearing requests because of lateness and had to come up with a justification for its action under the Federal Power Act.
Judge David Tatel asked whether the court would have to rule on the SEEM tariff itself if it rejected the agreement in the first place.
“If the SEEM agreement were invalidated, then that would make it more difficult to have the tariff go into effect,” Fidler said. “But as they are separate orders, those orders have to be addressed.”
Judge Neomi Rao asked whether it would make sense to remand the case to FERC if the court agrees that it miscalculated its rehearing deadlines and have the commission address the merits of the case. FERC issued its first order on the case before Commissioner Willie Phillips, now acting chair, joined. It is now back down to four members after Richard Glick left at the beginning of the year.
Fidler said that because FERC based its approval of the SEEM rules on questionable claims, both orders needed to be remanded to the commission. Among those is that the SEEM market is “bilateral” when it crosses 10 states and matches up available transmission capacity with power sales based on an algorithm, she argued.
“The petitioners argue that that that decision is also arbitrary and capricious, and that information needs to be provided to the commission as it considers both the agreement and the tariff,” Fidler said.
The Federal Power Act was amended in 2018 to add Section 205g after FERC split on approving the results of ISO-NE’s Forward Capacity Auction 8. The new section stipulates that, in the case of a deadlock, the commissioners must explain their positions and that the courts are allowed to review such cases.
Rao admitted that the legislative history indicated Congress wanted the court to review cases such as SEEM, but she said the text of section meant it did not apply.
“The only thing that’s judicially reviewable under ‘g’ is if there is a deadlocked rehearing order; that becomes judicially reviewable,” Rao said. “But we don’t have a deadlocked rehearing order here. Here we have a rehearing order focused on timeliness.”
Petitioners have asked the court to review whether FERC was right on the timing of their rehearing requests, Fidler said. If they win that argument, she argued, then it would fall back to the automatic approval. The court would also be within its rights to provide guidance to FERC on remand, she added.
FERC Senior Attorney Robert M. Kennedy defended the commission’s rehearing order, saying that it correctly interpreted the notice period under 205g as the D.C. Circuit directed it to do in another case.
Rao asked how that decision fits in with in FERC’s own rules on deadlines, which go back decades.
“The commission has consistently taken the position that while that rule can be applied to deadlines for filers, it cannot be applied to the commission’s implicit statutory period to act on rate filings because that would impermissibly extend the burden, the waiting period, imposed on utilities by Congress,” Kennedy said.
In some emergency situations, FERC can take more time to rule on rates, but generally it tries to get orders out before the 60-day deadline and will issue orders earlier if the deadline falls on a holiday or weekend.
Section 205g holds that the failure to act constitutes an order. When FERC issued a notice on Oct. 13, 2021, about the case, it indicated that its failure to act happened on Oct. 11; that date set the rehearing deadline, Kennedy said. The petitioners misread the statute, and FERC was clear that its failure to act occurred on Oct. 11, he argued.
Rao asked Kennedy whether it would make sense for the court to just remand the case, requiring the commission to deal with its arguments.
That would be the standard procedure, Kennedy replied.
“What makes this case different, among many other things, is the fact that you have before you majority-voted orders from the commission that deal with many of the same issues that were raised with respect to the agreement,” Kennedy said.
Massachusetts Energy and Environmental Affairs Secretary Rebecca Tepper named two new commissioners to the Department of Public Utilities on Wednesday, the first step in what Gov. Maura Healey has promised will be a “transformation” of the department.
The new appointees are Jamie Van Nostrand and Staci Rubin. Cecile Fraser, appointed by previous Secretary Kathleen Theoharides under Gov. Charlie Baker, will stay on as a commissioner as well.
Unlike utility regulatory commissions in other states, appointments to the Massachusetts DPU are not subject to confirmation by the state’s legislature, and they are formally made by the EEA secretary, not the governor.
Fraser has served as the department’s acting chair since January, working alongside current Commissioner Robert Hayden, who will step down on April 8 after having served for eight years. Fraser will continue in that role until Van Nostrand, whom Tepper named chair, joins May 1.
Van Nostrand is a professor at the West Virginia University College of Law and has worked in the energy industry for more than 30 years. He was previously executive director of the Pace Energy and Climate Center in New York and an energy lawyer at two major law firms.
Rubin is vice president of environmental justice at the Conservation Law Foundation and a previous DPU official: She was a senior counsel and hearing officer from 2015 to 2018. She will join the department again as a commissioner April 10.
“We know how critical it is that the DPU leadership understands that the transition to a clean energy economy is a pocketbook issue and will be thoughtful in how we evolve our grid and economy for the future,” Healey said in a statement. “I have full faith in Jamie Van Nostrand, Staci Rubin and Cecile Fraser to uphold those values.”
During her campaign for governor, Healey promised to increase funding for the DPU, as well as to direct it to create new offices for public participation and grid modernization.
In a press release, she said that the new commissioners will work toward making the department a partner in achieving climate goals and better at engaging with communities, in addition to integrating equity into its decision-making and building agency expertise.
Rubin in particular has experience pushing the DPU to be a better ally to the state government in fighting the climate crisis.
“For many years, I’ve advocated for a more inclusive, transparent DPU that considers climate justice, and I’m grateful for the opportunity to bring that vision to life,” she said in a statement. “Together, we will work to ensure that environmental justice populations have seats at the table in shaping our clean energy future.”
The U.S. Department of Transportation on Tuesday announced a new round of funding aimed at putting electric vehicle chargers in “urban and rural communities, downtown areas and local neighborhoods, particularly in underserved and disadvantaged communities.”
The Infrastructure Investment and Jobs Act (IIJA) authorized the $2.5 billion for the Charging and Fueling Infrastructure (CFI) Discretionary Grant Program, to be used over five years for competitive grants that will help put chargers in communities, as opposed to the state and interstate highway chargers being funded by the law’s National Electric Vehicle Infrastructure (NEVI) program.
“By helping bring EV charging to communities across the country, [CFI] is modernizing our infrastructure and creating good jobs in the process,” Transportation Secretary Pete Buttigieg said in a DOTpress release. “With today’s announcement, we are taking another big step forward in creating an EV future that is convenient, affordable, reliable and accessible to all Americans.”
Transportation accounts for the largest share of U.S. greenhouse gas emissions — 38% — according to figures from the Congressional Budget Office. EV sales are growing, having hit close to 6% of all new car sales in 2022, but lack of publicly available chargers and range anxiety still remain significant barriers to adoption, according to a recent analysis from the World Economic Forum.
The U.S. currently has about 130,000 publicly available EV chargers, according to figures from the White House, but President Biden has committed to increasing that number to 500,000 by 2030.
With $5 billion from the IIJA, NEVI has provided formula-based funding to all 50 states, Puerto Rico and D.C. to help build out a national network of EV chargers.
The NEVI guidelines call for federally funded chargers to be installed every 50 miles along major highways, no more than one mile off an exit. The Federal Highway Administration approved the initial state plans for the funding, as required under the IIJA, in September. The agency also recently finalized the technical standards that all federally funded chargers will have to meet, including any installed under the CFI program.
CFI is meant to build on NEVI, which is focused on “enabling long-distance trips along the national highway system,” according to Monday’s funding announcement.
Beyond reducing greenhouse gas emissions and accelerating the adoption of EVs, CFI’s specific goals include supplementing — but not supplanting — private sector investment, promoting “broad public access to a national charging and alternative fuel infrastructure network,” and implementing environmental justice objectives.
The CFI funds are divided into two programs, each receiving $1.25 billion, according to the DOT. The Community Program will “strategically deploy publicly accessible EV charging infrastructure, and hydrogen, propane or natural gas fueling infrastructure in communities,” The focus here will be on installing chargers in public locations such as public or privately owned parking facilities, public buildings, public schools and public parks.
Awards for this program will range from $500,000 to $15 million and may be used to contract with a private, third-party entity. Projects will be “expected to reduce greenhouse gas emissions and to expand or fill gaps in access to publicly accessible infrastructure.”
The Corridor Program will put chargers along “designated alternative fuel corridors.” Minimum awards here will be $1 million, with no maximum amount, and the funds must be used to contract with a private third party.
The first round of funding, covering 2022 and 2023, will provide $700 million for CFI, divided equally between the Community and Corridor programs. Applications are due May 30, and organizations can submit applications for and receive funds from both programs.
NEVI vs. CFI
The FHWA, which will oversee both CFI programs, will prioritize projects “that address environmental justice, particularly for communities such as rural and low- and moderate-income neighborhoods that may disproportionately experience the consequences of climate change and other pollutants,” the press release said.
Both programs will also require projects to be accessible to and usable by individuals with disabilities, according to the funding announcement.
“FHWA is committed to helping towns and cities, large and small, build modern, sustainable infrastructure that promotes equity and opportunity for their local economies and net-zero emissions for the nation by 2050,” Administrator Shailen Bhatt said. “By encouraging the adoption and expansion of EV charging and alternative fuels, CFI Program investments have the potential to significantly address the transportation sector’s outsized contributions to climate change.”
Launched in February 2022, NEVI was “initially focused on enabling long distance trips along the National Highway System,” according to the CFI funding announcement. But the state plans submitted to FHWA for the first round of funding also pointed to challenges in implementing the program.
For example, many states reported that charging stations could not be installed every 50 miles in certain remote regions without adequate electric distribution systems. Other regions, where distribution systems were already constrained, would need significant upgrades to handle the 150-kW DC fast chargers required under federal standards.
CFI is intended to build on NEVI, with several specific goals, including supplementing but not supplanting private sector investment, improving broad public access to “a national charging and alternative fuel infrastructure network,” and advancing environmental justice goals.
Technical standards for both programs include requirements for each charging station to include at least four DC fast-charging ports or Level 2 (L2) charging ports. DC fast chargers are required for charging stations on AFCs and must have industry-standard connectors (plugs) that allow them to charge any EV.
Merged IMM-PJM Issue Charge on Multi-schedule Modeling Endorsed
VALLEY FORGE, Pa. — The PJM Market Implementation Committee on Wednesday endorsed a problem statement and issue charge to explore multi-schedule modeling of combined cycle generators in the market clearing engine (MCE).
According to the problem statement, combined cycle generators have a larger number of configurations that can be modeled in the MCE, which raises performance impact challenges. The engine is currently designed to look at each schedule that a generator offers into the energy market as a separate logical resource. While most resources offer only one or two, it’s possible for the number to be much higher for combined cycle units, potentially leading to an exponential increase in solution times.
The statement says that a typical 2×1 combined cycle unit would have at least six configurations, meaning that if it offers two schedules into the market, it would be represented by 12 logical resources. (See “Feedback on Issue Charge, Problem Statement for Combined Cycle Modeling,” PJM MIC Briefs: Dec. 7, 2022.)
Both PJM and the Independent Market Monitor had offered proposals that left stakeholders divided over the best way to frame the discussion and whether to go forward at all. After stakeholders deferred voting on the proposal during the January MIC meeting, the Monitor suggested amendments to PJM’s issue charge, and the two were able to merge their proposals. (See “Stakeholders Disagree on Approach to Combined Cycle Modeling,” PJM MIC Briefs: Jan. 11, 2023.)
The issue charge was revised to add education on the current schedule selection process as a key work area and expanding the out-of-scope section to include topics under the Cost Development Subcommittee’s purview, unit-specific parameter review, cost-based start-up and no-load load cost rules, and the requirement that parameters be mitigated during emergencies and hot/cold weather alerts.
Deputy Monitor Catherine Tyler said the changes will allow for the discussion to cover the issues identified in PJM’s white paper without affecting existing market power provisions.
Paul Sotkiewicz, of E-Cubed Policy Associates, said the calculation constraints should have been identified and brought before stakeholders far sooner, as it leaves little time for stakeholder deliberation before General Electric — which provides the MCE software — completes its collection of design preferences and begins building its Next Generation Markets Systems (nGEM), including any multi-schedule modeling components.
The committee will begin holding special sessions on the issue later this month.
Proposals on Rules for Generation with Co-located Load Presented
Stakeholders discussed proposals to create rules for generation with co-located load, addressing whether they are subject to ancillary service charges, FERC– or state-jurisdictional, and able to retain their capacity interconnection rights (CIRs).
A proposal from the Monitor and a joint Constellation Energy-Brookfield Renewable Partners package had been considered by the MIC last year, but they were dropped after a poll found little support for either in November. The central question in the previous discussions was whether generators with co-located load not directly connected to the PJM grid should be able to retain the CIRs for the portion of their output supplied to load. (See “Limited Support for Co-located Load Proposals,” PJM MIC Briefs: Dec. 7, 2022.)
Constellation made the case that when highly interruptible loads are paired with generators, allowing those generators to maintain their capacity ratings would create a dispatchable capacity with rapid ramping capabilities. It also would have defined the load as not being FERC-jurisdictional and not subject to ancillary service charges. The Monitor’s proposal would have codified the existing practice of requiring generators in such a configuration to relinquish a share of their CIRs based on the output serving the co-located load. Both those proposals continue to stand in the proposal matrix.
The Advanced Energy Management Alliance (AEMA) presented a proposal that would treat all co-located load as receiving service from the grid, arguing that the energy produced by the generator is FERC-jurisdictional and must be supplied to a wholesale customer. The load would be treated as receiving wholesale energy by firm point-to-point transmission and served to the grid at the LMP level. The generator would retain its full capacity rights and be levied the PTP costs. Presenting the package, Bruce Campbell, of Campbell Energy Advisors, said it carries the bonus outcome of designating load meters as wholesale rather than retail, which he believes PJM lacks the authority to require.
PJM presented its own package during last month’s MIC meeting that would allow generators to retain their CIRs but make them subject to ancillary service charges, such as black start, regulation and reserves, effectively on load’s behalf. (See “First Read of PJM Proposal on Co-located Load,” PJM MIC Briefs: Feb. 8, 2023.)
Discussion on Local Considerations for Net CONE
Stakeholders continued laying the groundwork for proposals to address how local factors such as regulations and legislation could impact the net cost of new entry (CONE), with much of the discourse centering on whether new CONE areas could be created to reflect such considerations. (See “Local Considerations for Net CONE,” PJM MIC Briefs: Feb. 8, 2023.)
The options matrix was revised to include feedback from the meeting to include the calculation of gross CONE, the creation of new CONE areas for regions with restrictions that may impact asset lifespan and the relationship between gross CONE for price-separated locational deliverability areas (LDAs).
Sotkiewicz defended the addition of a design component item for new gross CONE areas, stating that he believes PJM has previously held that the number and sizing of CONE areas cannot change. He pointed to Illinois and New Jersey as regions with legislation that could impact generators’ lifespan or operations to the extent that it may be necessary to break them out as their own CONE areas.
“PJM has indicated that it is not open to change in the Quadrennial Review filing,” he said.
PJM Senior Counsel Chen Lu said the issue was raised in the Quadrennial Review at the “11th hour” and the RTO told FERC that it felt it was better to address the topic through the stakeholder process. Sotkiewicz responded that he felt that was inaccurately characterizing the filings in the review and that PJM made it clear in its responses that it was not appropriate to even look at localized net CONE (ER22-2984).
“We just didn’t think it was appropriate to consider this in the Quadrennial Review at the 11th hour … so we never foreclosed raising this issue with the broader stakeholder group,” Lu said.
Other MIC Actions
Stakeholders endorsed new default gross CONE and avoidable-cost rate figures updated through the Quadrennial Review. The new parameters will be used for the 2026/27 delivery year. All resource types, expect storage, will see their gross CONE figures increase largely because of changes in tax credits and new reference resources used for combined cycle and onshore wind resources. (See “Stakeholders Consider Recognition of Local Impacts to Net CONE,” PJM MIC Briefs: Feb. 8, 2023.)
The committee also partially endorsed revisions to Manual 11, with a portion of the changes removed for further discussion.
Maryland is set to fast-track adoption of California’s Advanced Clean Cars II (ACC II) rule, requiring that 100% of all new passenger cars, SUVs and pickup trucks sold in the state be zero-emission vehicles by 2035.
The Maryland Department of the Environment proposed the regulation to the Monday morning meeting of the state’s Air Quality Advisory Board, which quickly voted out a recommendation for the department to move ahead with enacting the standard, according to a press release from the Governor’s Office.
Announcing the proposed adoption later in the day in Baltimore, Gov. Wes Moore (D) said the new rule would be part of a “major transformation that is going to define this administration — and that’s how we turn Maryland from a state powered by oil and gas to a state powered by clean energy.”
With the passage of the Climate Solutions Now Act (SB 528) last year, Maryland now has nation-leading goals for greenhouse gas emission reductions: 60% below 2006 levels by 2031 and net-zero by 2045. ACC II “will be one of the state’s most important emission reduction measures,” the press release said.
As originally adopted in California last August, ACC II requires car manufacturers in a state to provide an increasing percentage of zero-emission vehicles (ZEVs) for sale each year. It defines zero-emission as including battery-electric, hydrogen fuel cell electric and plug-in hybrid vehicles.
Under the Advanced Clean Car II regulations, EVs will have to represent a growing percentage of vehicle sales in Maryland, beginning in 2026, and reach 100% by 2035.
ACC II also includes increasingly stringent low-emission vehicle standards aimed at reducing tailpipe emissions of gasoline-powered cars and heavier passenger trucks sold in a state.
According to an analysis from the Maryland Department of the Environment, the rule would reduce the number of gas-powered cars sold in the state by 383,000 by 2030 and by 1.68 million by 2035. In addition, between 2026 and 2040, the rule would cut nitrogen oxide emissions by 6,000 tons and carbon dioxide emissions by 82 million metric tons.
The analysis also estimated that such emission reductions could cut respiratory and cardiovascular illness in the state, along with lost workdays, providing in-state health benefits of close to $40 million per year by 2040. Figures from Baltimore Gas and Electric also show that EVs are cheaper to operate than gas-powered cars, potentially saving consumers hundreds of dollars per year.
Environment Secretary Serena McIlwain called the proposed regulation “a big step toward cleaner air and a more aggressive response to the threats posed by climate change.”
‘A Proven Policy’
The announcement also drew statements of support from both industry and environmental groups.
“As a business at the forefront of mobility solutions, we know that technology and market demand are both ready to support the transition to clean vehicles,” said Ryan Dalton, head of external affairs and policy for Siemens.“Strong state standards that reflect the escalating consumer demand and set clear expectations for market growth over the coming years are key to managing the transition.”
ACC II “is the best way to attract investment and provide predictability for manufacturers, companies, workforces and consumers alike,” Dalton said.
Kim Coble, executive director of the Maryland League of Conservation Voters, praised Moore and McIlwain for “acting so immediately to advance zero-emission vehicles and reduce harmful emissions. … The Advanced Clean Cars II rule is a proven policy for reducing greenhouse gases from transportation.”
California has been able to enact its strict clean car standards under a waiver, allowed by the Clean Air Act, which allows the state to enforce emission reduction standards that exceed the federal levels set by the EPA. Once such standards are adopted in California, other states may also adopt them.
California first enacted regulations aimed at cutting emissions from cars in the state in the 1990s, and the third iteration of the rules, passed in 2012 have since been adopted by 17 states. As of January, New York, Oregon, Vermont and Washington have adopted ACC II, and Massachusetts, Delaware and Colorado are considering it.
VALLEY FORGE, Pa. — PJM stakeholders appeared split last week over proposals to delay the RTO’s capacity auctions to incorporate market rule changes being considered by the Board of Managers.
On Feb. 24, PJM issued a letter invoking the critical issue fast path (CIFP) process to consider market rule changes to address concerns that plant retirements are occurring faster than PJM can connect new resources. The board also directed PJM staff to consider delaying upcoming auctions so that any changes could be implemented before the Base Residual Auction for 2027/28. (See PJM Board Initiates Fast-track Process to Address Reliability.)
PJM staff outlined two options at the March 8 Market Implementation Committee meeting. The more aggressive schedule would push the 2025/26 BRA, currently scheduled for this June, to May 2024. The following three auctions would each be pushed back six months, returning to the normal schedule with the 2029/30 BRA to be held in May 2026.
The less impactful change would leave the 2025/26 BRA timeline untouched and push the 2026/27 and 2027/28 auctions back six months to May 2024 and November 2024, respectively.
Either alternative could require the cancellation of the first or second incremental auctions (IAs), though PJM’s Peter Langbein said the third IA would still be held for each delivery year.
Many of the steps PJM goes through prior to an auction are chained together and dependent upon the completion of the stage before them, limiting how close together PJM can hold BRAs.
In 2021, FERC agreed to delay the BRAs for delivery years 2023/24 through 2026/27 in response to an order revising the market seller offer cap (MSOC). Without any additional delays, the schedule would return to the three-year lead time with the 2027/28 auction in May 2024. (See FERC Accepts PJM BRA Delays.)
Those in support of delaying the June BRA argued that auctions shouldn’t be held when problems have been identified and market changes are being considered. They said revised auction rules could result in more accurate prices and address the reliability concerns outlined in a whitepaper the RTO issued last month along with the board’s letter.
Erik Heinle, of Vistra, said PJM should adopt the more aggressive delay. He noted that market participants have been talking about postponing the 2025/26 auction since December, when PJM delayed posting the results of the 2024/25 BRA because of problems in the DPL South locational deliverability area. (See Capacity Auction ‘Mismatch’ Roils PJM Stakeholders.)
PJM displays potential alternative auction schedules during a stakeholder discussion on delaying future Base Residual Auctions during the March 8 Market Implementation Committee meeting. | PJM
“We have expressed concerns about the 2025/26 auction in June for a couple months now,” he said.
Jeff Whitehead, of the GT Power Group, said the current market rules allow PJM and the Independent Market Monitor to usurp sellers’ assessments of their risk with their own beliefs, which he said could lead to unjust and unreasonable results considering the risk presented by the Dec. 23 winter storm.
“It would be pretty irresponsible for PJM and market participants to move forward with any auctions until we can address some of those issues,” he said.
Market Monitor Joe Bowring said there is no substance to Whitehead’s assertions and that the market sellers’ preferred offer cap was in place for Winter Storm Elliott.
“Participants have no reason to assert that their own views of risk were not included in their offers,” he said in an email to RTO Insider. “Some participants are attempting to create a narrative in which Elliott did not represent a failure of the Capacity Performance market design and that it did not represent a failure on the part of many generators to respond and that somehow the only solutions are to weaken market power mitigation and arbitrarily increase capacity market prices. Those are not the answer.”
Supporters of a more limited schedule change said it would be disruptive to delay the 2025/26 auction because many pre-auction activities — including planning parameters, must-offer exception requests and unit specific market seller offer caps — are in process or already complete. They also argued that if PJM does not receive a quick approval from FERC, the rule changes may not be ready to implement for the 2025/26 BRA, undermining the rationale for delaying the auction.
Bowring said any auction schedule should avoid disrupting the 2025/26 auction, given that it has already begun.
“The process is already well underway and has been for some time … I think it would be a mistake to postpone that,” he said.
PJM’s Adam Keech said it’s likely that the Board of Managers will make a decision on whether and how to delay the auction schedule “relatively soon.”
Responding to stakeholder requests that the board members attend future Markets and Reliability Committee meetings to provide clarity on what they want to see in revised auction rules, Keech said that it was determined that since initiating the CIFP process was an action of the full board, it would not be proper to have a subset of the body come before stakeholders. Instead, he suggested that members write letters to the board with any questions or comments that they have on the process.
Responding to what they called “a time of significant dynamism,” the Department of Energy and the Environmental Protection Agency on Friday announced a new framework for “routine and robust communication” to manage the grid’s transition to clean energy sources.
In a memorandum of understanding, EPA and DOE identified the increasing frequency of severe weather, coupled with the adoption of renewable generation and energy storage resources, as drivers of “ongoing change” in the bulk power system. They said the changes are only likely to continue thanks to investments in decarbonization from the Bipartisan Infrastructure Law and the Inflation Reduction Act. (See EPA’s Becker Breaks Down $32B of Federal Funding for Decarbonization.)
“A reliable electric power system is essential to our national security, continued economic growth and the protection of public health. That’s why DOE and EPA are uniting our long-standing efforts to ensure a robust and resilient system,” EPA Administrator Michael Regan said in a press release accompanying the MOU. He pledged to “support grid reliability and resiliency at every stage as [EPA] advances efforts to reduce pollution, protect public health, and deliver environmental and economic benefits for all.”
DOE and EPA identified their roles as helping to wrangle the “robust and multilayered system” — including stakeholders such as FERC, NERC, regional entities, state public utility commissions, utilities and public interest organizations — that maintain the reliability of the North American grid. The agencies said they intend to conduct “regular and effective communication and consultation” with stakeholders “within … statutory authorities and mandates.”
According to the MOU, both EPA and DOE have created internal bodies focused on electric reliability, with key staff designated as points of contact for routine interagency communication. The agencies are planning to meet at least twice a year to discuss their respective work on reliability, in addition to holding joint meetings as needed with NERC and other stakeholders to solicit input.
The agencies said their outreach efforts would revolve around five key areas:
Analysis, including “sharing information about modeling and analysis of electric power investments, operations,” and other topics, along with discussing additional data needed to evaluate risks;
Engagement with entities to identify current and emerging reliability risks, tools that may be useful in protecting reliability, and actions that might help maintain reliability;
Monitoring the BPS to identify any potential risks;
Short-term interventions within the agencies’ statutory mandates to address immediate reliability risks; and
Sharing information on implementation of policies and programs to protect reliability; investments in upgrades to generation, storage and distribution infrastructure; and policies that support reliability planning and infrastructure development.
NERC said in a statement that it “commends” the MOU and its goals of facilitating communication. The organization noted that its own reliability assessments have consistently shown increasing impacts from extreme weather and the changing generation mix, with most of the continent assessed at either high or elevated risk of energy shortfalls in the most recent Long-Term Reliability Assessment. (See NERC Warns of Ongoing Extreme Weather Risks.)
“We believe that the energy transition that is occurring can work reliably, but the pace of change needs to be managed, and we have stressed the critical need to evaluate the impacts of these polices on reliability,” NERC said. “NERC is encouraged by the MOU and looks forward to engaging with DOE, EPA and others in this important effort.”
HOUSTON — The energy transition and the march of new technology were key highlights of last week’s CERAWeek by S&P Global, which began 41 years ago with a focus on oil and gas.
The annual global energy conference attracted a record 7,200 executives, policy makers and others from 90 countries during what organizers called “the most innovative period in the history of energy.”
More than three dozen sessions were held on hydrogen energy alone. Members of the Biden administration were on hand to add context to the Inflation Reduction Act (IRA) and explain its incentives for all parts of the industry.
“The energy industry continues to grapple with the twin challenges of meeting the world’s growing energy demand while reducing emissions and redesigning the world’s energy systems for a lower carbon future,” CERAWeek chair and co-founder Daniel Yergin said in a post-conference message.
Among the more than 1,000 speakers was John Podesta, President Biden’s senior adviser for clean energy innovation and implementation and chair of the National Climate Task Force.
“It’s no secret that the energy industry is changing. In these halls experts are showcasing innovative energy technologies, clean hydrogen stations, sustainable aviation fuels, direct air capture,” Podesta said. “Just a few years ago, many of these technologies were considered no more than a pipe dream. There are many reasons for this shift — economics, energy security amongst them.”
Podesta highlighted the economics of the climate crisis, saying extreme weather disasters last year cost the nation $165 billion in damage. The year before, it was $155 billion.
“Instead of paying to adapt to a problem of our own making, we could be solving that problem. We’ll do that by producing clean energy,” he said. “And thanks to President Biden there’s never been a better time to invest in clean energy in America.”
Under the bipartisan IRA, the Department of Energy has made billions of dollars available for demonstration projects and energy technologies, Podesta said. He said the Commerce Department, under the Chips and Science Act, is overseeing another $50 billion in investments to the domestic semiconductor industry, which is critical to the battery and solar industries.
“We’re setting the rules of the road to grow the economy from the bottom up … that will make clean energy jobs, good paying union jobs,” Podesta said. “And then it’s all up to all of you to grab the baton and to run with it. You just have to walk around the [technology-focused] Agora [exhibit hall] to see what the possibilities might look like. Now you can grow your clean energy investments by taking advantage of these new laws and create good-paying jobs while you’re at it.”
Responding to a question about pushback from other countries over the U.S. government’s support of clean energy, Podesta said, “We want European industry to succeed, but nothing beats American leadership on climate, innovation, technological development. We’re proud of the accomplishment of this bill.”
Addressing Issues with China
Podesta and John Kerry, the administration’s special presidential envoy on climate, both addressed China’s role in the global energy industry during their separate conversations.
Podesta said the U.S. needs to ensure supply chains are secure and “in friendly hands” to avoid authoritarian regimes blackmailing the rest of the world.
“The only way to do that is to kind of disperse supply, secure supply, and do it with our friends and allies, and I think, quite frankly, they agree with that,” he said. “We want to try to find a path forward where, particularly on these supply chain questions, we have a collaborative relationship with our allies and partners. It’s just clear to say directly, that China has too much of a chokehold on critical minerals, on critical mineral processing, and clean technologies and solar machines. We let that go. That was a mistake. We need to get it back, and we’re seeing that happen.”
While describing U.S. efforts to build domestic manufacturing for clean energy technologies, Podesta said Chinese companies will need to participate. He conceded that the government will need to balance China’s involvement with concerns over reliability and energy security.
“The Chinese are going to be big players. They have a big domestic market. They’re already the leaders in electric vehicles,” Podesta said. “We’re aware of that, but we can’t be beholden to only Chinese supply for these critical materials, when they have indicated that they’re perfectly prepared to use their economic power when it serves their interests in a strategic way.”
Sen. Joe Manchin (D-W.Va.), chairman of the Senate’s Energy and Natural Resources Committee and another CERAWeek participant, issued a statement in response.
“It is beyond irresponsible for someone speaking on behalf of the White House to not only condone but also advocate for sending American tax dollars to Chinese companies,” Manchin said. “We have a dire dependence problem, and comments like this make it clear that this administration doesn’t care about the energy security of this nation. I will do everything in my power to prevent this administration from welcoming China to take federal dollars with open arms.”
Kerry, a former secretary of state, senator and presidential candidate, pointed out that the U.S. and China are the world’s two largest economies and two largest emitters. He agreed that the relationship between the two superpowers is currently difficult, “certainly the most difficult we’ve seen, certainly in my lifetime,” but that China remains one of the largest investors in renewable energy.
Asked whether he sees a prospect for developing “something constructive,” Kerry responded, “I do. I absolutely do.”
“I’ve met with the Chinese many times over the last few years,” he said, pointing to joint agreements on accelerating the transition from coal and deforestation. (60% of the world’s illegal logging goes to China, Kerry said).
“You have these things that just get in the way in a very serious way,” Kerry said, listing a series of global issues. “I regret to say that in the last months, the intensity has ratcheted up. The Chinese helped us on a number of different, very sensitive issues. We cooperated on the Iran nuclear agreement; we cooperated on [the] Paris [climate treaty]. I do think we can surmount this, and we have to. The United States and China have to find a way to define the differences … so that we can avoid the roiling of the markets and begin to deal intelligently with the world’s greatest issues.”
Kerry Calls for One Direction
Former U.S. ambassador (Mexico and Ukraine) Carlos Pascual closed his discussion with Kerry by noting the latter had extended his commitment as envoy through the end of the year.
“I take that as a …” Pascual began.
“As a sign of insanity?” Kerry interjected.
“ … reflection of your passion and commitment, but also one of hope,” Pascual continued.
Kerry likened the challenges facing the industry to the Allies’ collaborative effort during World War II.
“There were certain things we needed to do to win the war,” he said, using as an example a Michigan automobile plant’s ability to produce a B-24 bomber every hour. The decisions were made at the top, Kerry said, but it was the “people at the mid-level of engagement who made their own decisions because they were given a responsibility to get something done” that made the difference.
“That’s what we need to do. Some of these things we need to be deploying faster, whether it’s solar panels or wind turbines, or whatever we need to organize ourselves,” he said. “If we can get people moving in the same direction, the same sense of purpose or with the same sense of urgency, I absolutely guarantee we can win this battle.
“But we can also lose it if we just continue business as usual and don’t do the organizing necessary and liberating the kind of ingenuity of those mid-level people.”
Panel: IRA to Accelerate Transition
Speaking on a panel debating how best to accelerate the transition to net zero in the U.S., Joseph Majkut, director of the Center for Strategic and International Studies’ energy security and climate change program, said the key is not to impose costs.
“We want to demonstrate that there are huge benefits that accompany energy transition for consumers who might be lowering prices, right?” he said. “We might be able to get costs down for workers for those in these new energy technologies. It’s manufacturing jobs to building a supply chain … by building, by demonstrating these benefits, you can build momentum behind energy transition, such that we can accelerate our efforts. Everybody in Washington if you kind of get them in a quiet enough room and away from a camera, they know that this is not going to help us meet our even near-term climate goals, definitely not our long-term climate goals. If we can demonstrate that energy transition will bring benefits, then the belief is that we can accelerate our efforts over time.”
Meghan Nutting, executive vice president of government and regulatory affairs for solar developer Sunnova, said the IRA’s investment in energy-transition technologies is the “most impactful” she’s seen in her 15 years in the industry.
“To say it’s a big deal is an understatement,” she said. “On the solar side, we have a 10-year runway for the 30% investment tax credit. That makes the investment tax credit even more valuable. We have $41 billion that will be invested in domestic manufacturing … so we don’t have to worry so much about trade conflicts and we can produce that capacity domestically and serve people locally.”
Majkut said that while the IRA is a substantial investment, it has “ruffled feathers in every cardinal direction.”
The IRA “carries with it a lot of attempts to capture those benefits here in the United States … and a focus on sort of an America-first climate policy,” he said. “The champions of this legislation have talked about jobs, jobs, jobs. They don’t as much talk about emissions, emissions, emissions, and that is going to provoke a competitive response not just from our allies, but from countries where we’re competing, like China.”
The rollout of renewable energy and transmission lines needs to greatly accelerate to meet climate goals, but “permitting reform” efforts should not trample important environmental protections, speakers said Tuesday on a World Resources Institute webinar.
The grassroots of the environmental community often focus on protecting one important piece of land from development, with Sen. Brian Schatz (D-Hawaii) reminiscing that he got involved in activism initially to protect some beaches.
“The tools that exist in state and county and federal law, and rule and process and procedure, enable people to stop bad projects,” Schatz said. “The problem is that they are now being weaponized to stop the kind of planet-saving projects that we need.”
It is necessary to reduce the time it takes to build a new transmission line, but Schatz warned of the real possibility that nothing gets done this Congress.
“It is very unclear to me what the House is going to do, whether they’re serious about doing something on a bipartisan basis, or whether they just want to do something that’s sort of a messaging bill with a bunch of American Petroleum Institute talking points,” Schatz said.
Changing permitting laws will get some attention, but Schatz said that the effort could move forward outside of Congress at the administrative level and among state and local governments.
Schatz worked on the last Congress’ biggest attempt to make reforms in the area, a proposal backed by Sen. Joe Manchin (D-W.Va.) that did not eliminate any bedrock environmental laws but required greater coordination among federal permitting agencies.
Another key to getting the work done on time involves early and effective outreach to impacted communities to address any concerns they have.
“To the extent that the whole conversation around climate action has been on K Street and Wall Street, that has to change; everybody has to benefit from that,” Schatz said. “So, what I hear from people who are in environmental justice communities is a little different from what I hear from environmental justice advocates on the Hill. The people in environmental justice communities want to participate in the clean energy revolution. The people who are on the Hill, I think, are a little bit more in an old-school mentality where stopping things is virtuous, no matter what you’re stopping.”
Maryland Public Service Commission Chairman Jason Stanek noted that permitting is a recent issue that was not debated much when he was a staffer on the U.S. House Energy and Commerce Committee for Republicans. But just last week, that committee voted out 15 bills on permitting.
“Unfortunately, most of them were party-line votes,” Stanek said. “And as [Schatz] referenced, most of them are likely just messaging bills. We need to get serious about this conversation if we’re going to decarbonize; if we’re going to build the clean energy infrastructure that’s necessary to get us to where we’re going.”
“Permitting reform” has become shorthand for dismantling every kind of environmental protection related to building out the clean energy grid among many in Earthjustice President Abbie Dillen’s orbit.
“I think it behooves us to think about this framing in a big but much more discrete way, which is, how do we build out the clean energy that we need, as fast as we need to do and fairly?” Dillen said.
The issue goes beyond the federal government, with regional organizations, such as ISOs and RTOs, and states playing very important roles in building out the needed clean energy infrastructure, she noted. It would also help to give the federal government some more authority to be able to override some of the friction seen in the states and to give projects a one-stop shop for approval, Dillen said.
But it could prove difficult to pass any good legislation this Congress so it is important to use existing tools such as the Department of Energy’s and FERC’s limited backstop siting authority for transmission, Dillen said.
While it recently got amended by last year’s Infrastructure Investment and Jobs Act, that authority has been around for 18 years, and it has not led to the siting of a single transmission line, said American Clean Power Association General Counsel Gene Grace.
“There’s something amiss kind of with respect to federal transmission siting authority, in contrast with natural gas pipelines. … For all interstate pipelines, you go directly to FERC, and you can get a permit, and it’s not surprising,” Grace said. “When you look over the last decade, about 10,000 miles of gas pipelines have been built per year, compared to 1,800 miles of transmission lines.”
Transmission lines that are in the national interest should be sited at a one-stop shop, and Grace argued that should be FERC.
Texas regulators last week approved a settlement that clears the way for Lubbock Power & Light to complete its migration from SPP to ERCOT and begin offering retail choice to its customers.
The Public Utility Commission on March 9 approved an agreement between the utility and Southwestern Public Service (SPS) over the termination of a power contract that was to end in 2044. As part of the settlement, LP&L agreed to pay $77.5 million for the contract’s early termination (53529).
Golden Spread Electric Cooperative threw a late wrench into the proceeding in December when it filed opposition to the allocation of the termination payment between transmission and production functions. The co-op, which is connected to the SPS system, said the commission did not need to approve the allocation to green light the utility’s integration into ERCOT and that the issue should be adjudicated by FERC instead.
“The allocation of that payment is kind of a poison pill on the rest of the agreement,” PUC Chair Peter Lake said, pointing to LP&L’s plans to give its customers access to retail choice.
Golden Spread counsel James Guy agreed that the settlement’s proposed allocation wasn’t necessary for LP&L’s move into ERCOT. After a sidebar discussion with the other parties, the cooperative agreed to drop its opposition at the PUC. However, it reserved the right to take up the issue at FERC.
“Given the timing constraints we have … it has really never been our intent to slow the move of a group of consumers that are willing to go to ERCOT,” Guy told the commission. “We don’t intend and promise to not collaterally attack the commission’s order or make any argument of a lack of evidence for the order or anything along those lines.”
“Welcome to ERCOT,” Commissioner Will McAdams told LP&L and Lubbock city representatives.
The settlement applies to a little more than 25% of LP&L’s load, or about 170 MW. The bulk of LP&L’s load, about 470 MW, was smoothly migrated from SPP to ERCOT in 2021, the largest single transfer of customers in the latter’s history. That culminated a six-year engineering and regulatory effort that began in 2015. (See Six Years in the Making: LP&L Migrates Load to ERCOT.)
The PUC’s enforcement staff has recommended an administrative penalty of $1.75 million for Texas-New Mexico Power Company (TNMP) over its violation of metering and billing practices.
In a report, the commission’s Division of Compliance and Enforcement said the utility violated accurate meter-reading rules because it failed to make necessary changes to its advanced metering system.
A staff investigation found the utility had three-years’ notice that the system’s communication backbone was going to be discontinued but did not make replacement plans until halfway through the timeframe. They also said TNMP could have developed a back-up mitigation plan in case its vendor was unable to provide more than 170,000 new meters in time to avoid the “foreseeable” communications failures.
The results were prolonged, inaccurate estimates of power consumption for thousands of the utility’s customers.
TNMP has until March 28 to either accept the penalty or request a hearing. The recommended penalty will go into effect without a timely response.
