Search
December 28, 2024

Posted on

Podesta: US Automakers Will Scramble to Meet EV Tax Credit Provisions

WASHINGTON ― The Biden administration will deliver long-awaited guidelines for the domestic content provisions of the Inflation Reduction Act’s electric vehicle tax credits by Friday, White House Senior Adviser John Podesta told a packed ballroom at the SAFE Summit on Tuesday.

The administration has also threatened to veto H.R. 1, a Republican energy package that could roll back certain provisions of the IRA, Podesta said during a “fireside chat” with Robbie Diamond, CEO of SAFE (formerly called Securing America’s Future Energy). But the White House still hopes to work across the aisle for bipartisan legislation to streamline and accelerate permitting of energy projects.

Podesta’s top-line pronouncements kicked off the two-day summit, which focused on a “minerals to markets” analysis of U.S. efforts to end its dependence on China for the critical minerals and battery components needed to decarbonize the U.S. transportation sector, which pumps out 27% of the country’s greenhouse gas emissions. President Biden wants 50% of all new passenger vehicle sales to be EVs by 2030.

But the domestic content provisions, written into the IRA by Sen. Joe Manchin (D-W.Va.), are complicated and “very technically challenging … to implement,” Podesta said. Under the law, the Treasury Department was supposed to issue the guidelines by Dec. 31 but pushed the release back to March.

The 30D tax credit, as it is officially known, provides consumer incentives of up to $7,500 for the purchase of a new EV. The two-part credit includes $3,750 for EVs assembled in North America and another $3,750 “based on the whether the minerals [in the EV battery] are produced or processed in North America or a free-trade country,” Podesta said.  

Specifically, the law requires that 40% of the value of critical minerals in an EV battery — such as lithium, cobalt and nickel — be produced and processed in North America or a free-trade country, while 50% of the value of other battery components must be similarly sourced, with the percentages increasing annually.

The law also contains a $4,000 tax credit for the purchase of a used EV, similarly, split in two.

What this means, Podesta said, is that “in the near term, auto companies are kind of scrambling to meet the terms of the credit. But over the very near term, I think we’ll see both the supply chain and the production of electric batteries [and] vehicles in the United States happening quickly. And so I’m very optimistic that this program will deliver on its promise to get people into electric vehicles.”

The Biden administration may also have found a workaround for the domestic content provisions, with its announcement on Tuesday of a new agreement with Japan on critical minerals. The agreement “memorializes the shared commitment of the United States and Japan with respect to the critical mineral sector to facilitate trade, promote fair competition and market-oriented conditions for trade in critical minerals,” according to a press release from the U.S. Trade Representative.

The IRA has a very vague definition of what constitutes the kind of free-trade agreement that will qualify a foreign automakers’ EVs for the tax credit, and Biden and Ursula von der Leyen, president of the European Commission, recently agreed to work on a similar agreement for the EU.

Permit Twice as Fast 

Building out that supply chain — which will require opening new mines, processing plants and other factories — will also mean cutting down the sometimes decades-long time frames needed to permit such projects, Podesta said. For example, he said, getting to Biden’s goal of 50% EV sales by 2030 will increase electricity demand and the need for high-voltage DC transmission.

“We need to increase our high-voltage, high-performance transmission in the electric sector by 60% by 2030,” Podesta said. “In order to do that, we need to permit twice as fast as we’ve been permitting, maybe even faster than that, quite frankly. … It’s a tremendous bottleneck, both [having] the ability to build high-voltage transmission as well as the problems of interconnection, of [a] balkanized grid.”

Biden supported a Manchin-proposed bill aimed at improved permitting, which died on a 47-47 vote in the Senate in December. Republican opposition was more political than based on “substance of what was in the legislation,” Podesta said. “It would have been very helpful. … It was a balanced bill that dealt with energy security.” (See Manchin Permitting Bill Falls Short in Senate.)

On the other hand, Podesta slammed H.R. 1, the Republican energy bill now in the House of Representatives, which, he said, “has nothing that deals with these clean energy challenges.”

Dubbed the Lower Energy Costs Act, the GOP bill would repeal “several very important provisions in the Inflation Reduction Act, particularly those oriented towards providing support for middle- and low-income Americans,” he said. “It’s got some very dubious environmental giveaways, including exposing workers to hydrochloric acid.”

The bill’s provisions on permitting are largely focused on changes to the National Environmental Policy Act and oil and gas permitting. (See Republicans’ Opening on Permitting Is Missing Electric Tx.)

Debate on H.R. 1 is ongoing in the House, where Republican leaders may attempt to turn some of the bill’s provisions into bargaining chips in negotiations over raising the debt ceiling, according to a report in The Hill. While the bill could pass in the House on a party-line vote, it will likely die in the Senate. Even so, “we’ve issued a veto threat,” Podesta said.

With energy policy increasingly divisive and politicized, Podesta said, Biden is not waiting on Congress to advance his clean electricity and transportation agendas.

On the permitting front, “we’ve reorganized the White House to create a permanent council amongst the cabinet secretaries,” he said. “I’ve served in in three White Houses. I have never seen the top tier of political appointees pay attention to individual permitting decisions. That’s always well down; things get stuck, they drift.

“No one sort of gets in and unties the knot, [but] the president is demanding action from us, and we’re going try to produce that,” he said.

Tax Credit Pushback 

The IRA’s EV tax credits have had a bumpy path to implementation as consumers and car dealers alike try to untangle the law’s limits not only on domestic content but on consumer income and EV prices. To qualify for the credit, the manufacturer’s suggested retail price for a light-duty passenger vehicle cannot exceed $55,000. The limit for SUVs and pickups is $80,000.

The income limits are $150,000 per year for individuals, $225,000 for single heads of house and $300,000 for couples filing joint tax returns. The Treasury Department issued the guidelines for these requirements in December.

The delay on guidelines for the domestic content provisions was widely seen as a result of the pushback from U.S. allies in Europe and Asia, who argued that the requirements were exclusionary and would draw investment away from their markets to the U.S.

Speaking at the Washington, D.C. Auto Show in January, Stavros Lambrinidis, the European Union’s ambassador to the U.S., warned against a “subsidy war” between the U.S. and Europe. (See Tracking the Contradictions of the US EV Market at the DC Auto Show.)

“At the end of the day, if we’re going to be reaching our climate goals, we need to have consumers being able to select the cars they prefer from all the available options among countries that compete fairly in trading,” Lambrinidis said. “And if we cut that off, what you have is probably cars that cost more … so we basically undermine our capacity to meet our climate goals.”

With domestic content provisions on hold, Treasury has allowed qualifying consumers to claim the full $7,500 tax credit on EVs bought since Jan. 1, provoking an angry reaction from Manchin. Taking to the Senate floor, he made an unsuccessful bid for a quick vote on a bill that would have forced Treasury to immediately implement the domestic content provisions. (See IRA’s EV Tax Credits Spark Senate Debate.)

Jeffrey Morrison 2023-03-29 (RTO Insider LLC) Content.jpgJeffrey Morrison, vice president for global purchasing and supply chain at GM | © RTO Insider LLC

But some U.S. automakers began thinking about domestic supply chains well before passage of the IRA, said Jeffrey Morrison, vice president of global purchasing and supply chains for General Motors, during his fireside chat with David Shepardson of Reuters.

The law is “completely aligned with what we’re trying to do,” Morrison said. “We had this strategy, probably a year or a year and a half before the IRA came out. We knew that the capacity we needed wasn’t there. We had to build new capacity, and we wanted to have a more resilient value chain … than what exists today. So, we were already on a path of how do we look at critical minerals and all the chemical processing that’s required to make battery components and battery cells and how do we rebuild that.”

GM is working with companies in “allied countries;” for example, its partnership with Korea’s LG Energy Solution (LGES) to produce the Ultium battery packs for its electric models. The two companies in December announced plans to expand a production facility in Tennessee, and LGES just announced expanded plans for an Arizona battery plant. (See LG Energy Solution Quadruples Size of Ariz. Factory Plan.)

The IRA’s tax credits, domestic content provisions and all, are “wind in our sails,” Morrison said. “The challenge really is how do you pick the right partners? And then how do you execute as fast as you possibly can to get there with what ends up being major industrialization projects?”

Posted on

SERC Board of Directors/Members Briefs: March 29, 2023

FORT LAUDERDALE, Fla. — Representatives of SERC Reliability’s member entities joined the regional entity’s Board of Directors here for its first meeting of the year on Wednesday, during which attendees discussed the challenges the grid faces — including severe weather and physical violence — and SERC’s role in addressing them.

“When you’re looking at how [we are] going to navigate these waters, and how SERC can be the best region for its stakeholders and for its mission, it is that we have to be strategically focused; we can’t get overwhelmed with the trees and lose sight of the bigger picture that’s happening in the forest,” CEO Jason Blake said. “We must be advancing our operations in a way that makes sure that we’re not only successful today, but we are well positioned for tomorrow.”

Peterson Warns of Vulnerabilities to ‘Bad Guys’

Bill Peterson, SERC’s senior manager of training, outreach and communication, briefed those at the members’ meeting on the threat of physical violence — or as he called it, “bad guys, guns and bullets.”

His presentation opened with December’s attacks on two Duke Energy (NYSE:DUK) substations in Moore County, N.C. More than 40,000 of the utility’s customers lost power after unknown attackers damaged transformers at the substations with rifles, causing them to leak coolant; service was restored after four days in what Peterson called a “herculean effort” on the part of Duke’s crews. (See Duke Completes Power Restoration After NC Substation Attack.)

Jason Blake Lee Xanthakos 2023-03-29 (RTO Insider LLC) Alt FI.jpgSERC CEO Jason Blake (left) and Chair Lee Xanthakos | © RTO Insider LLC

 

Investigators have yet to identify the assailants involved in the incident, or any motive, but Peterson noted that the Moore County attacks have already provided inspiration for other malicious actors. For instance, he pointed out, neo-Nazi leader Brandon Russell — charged earlier this year with trying to disable electric substations in Baltimore — explicitly held up the December attacks as a model for his plot to cause mass chaos by setting off cascading outages in the city. (See Feds Charge Two in Alleged Conspiracy to Attack BGE Grid.)

Peterson also warned that transformers are more vulnerable to interference than many realize. Although the Moore County attacks drew national attention, with FERC calling for an investigation into NERC’s reliability standards, there were two other similar incidents in North Carolina in the previous and subsequent months that passed almost without comment.

In November four transformers at a substation in Jones County were found with bullet holes in their cooling fins; the incident left 17,000 customers without power. Then in January, a transformer at another substation was found leaking oil from bullet holes in its cooling fins. No outages were reported from this incident.

Peterson acknowledged that not all gunfire incidents are deliberate sabotage; he observed that bullet holes “tend to trend up around hunting season.” But he warned attendees that this should not obscure the real and growing threat of domestic violence on the system, noting that there are thousands of substations around the country, many located in rural areas and hard to protect, and that transformers in most facilities are highly visible from outside — an assessment with which board Chair Lee Xanthakos agreed.

“I was manager of [Dominion Energy’s] substation group for years, and I do remember having an incident where someone shot a fin on a transformer, [but] it didn’t cause an outage,” Xanthakos said. “So I think it happens a lot more than we think, but … it draws attention when there’s an outage. That’s when we notice it, but I think it’s happening all the time in the background.”

SERC Set for 10% Budget Rise

Board members approved SERC’s draft business plan and budget for 2024 at Wednesday’s meeting. The draft budget will now be submitted to NERC and posted for public comment; once the comments are in, SERC will revise the draft. The board will consider the final budget in June before sending it to NERC to be submitted to FERC, along with the rest of the ERO Enterprise budgets, by August.

George Krogstie 2023-03-29 (RTO Insider LLC) FI.jpgSERC CFO George Krogstie | © RTO Insider LLC

SERC’s budget is set to rise by $2.9 million next year, CFO George Krogstie said, for a total of $31 million. The increase is partly because of the planned hiring of three full-time equivalent positions: two in information technology and security, and one in training.

Krogstie said the IT positions are needed in order to meet the growing cybersecurity challenges; as for the training hires, they will enable the RE to build a formal, comprehensive internal training program rather than the department-by-department approach in effect now. He acknowledged that the current approach is “not very efficient [and] not as effective as it needs to be.”

Krogstie reminded attendees that SERC’s lease on its office in Charlotte, N.C., expires in January 2025. The RE hopes to start setting aside money in 2024 for its office move, as well as for salary increases that will be necessary in order to keep its hiring competitive with the rest of industry.

Members Approve Director Slate

SERC also welcomed four new directors after members voted to approve them at Wednesday’s meeting. Christopher Peters from Entergy and Kevin Walz from Florida Public Utilities will represent the Investor-Owned Utility sector, replacing Ameren’s Shawn Schukar and Florida Power & Light’s Manny Miranda. Stacy Dochoda, formerly of the Florida Reliability Coordinating Council, joined as the ISO/RTO/Reliability Coordinator sector representative.

Members also agreed to renew the terms of independent Directors Deborah Wheeler and Shirley Bloomfield, along with Municipal sector representatives Tim Lyons and Ricky Erixton, and the Cooperative sector’s Greg Ford and Lisa Johnson.

Finally, Bob Dalrymple was confirmed to replace Arnold Singleton, who left the board in September. Dalrymple was chosen as his successor at the board’s last meeting in December. (See “NGC Describes Leadership Shuffle,” SERC Board of Directors Briefs: Dec. 14, 2022.)

Posted on

Vistra, EPSA Protest MISO’s Show-cause Order

Two competitive electricity organizations have protested FERC’s recent show-cause order to MISO that will ultimately downsize resources’ capacity accreditation values.

Vistra (NYSE:VST) and the Electric Power Supply Association (EPSA), a trade group representing competitive suppliers, said the commission should terminate its proceeding and immediately issue an order preventing MISO from updating the unforced capacity to intermediate seasonal accredited capacity ratio and lowering capacity credits.

They said a reworked ratio would upend load-serving entities’ supply plans that have been based on the capacity values MISO first published.

The grid operator is recalculating the ratio it uses to gauge supply in the capacity auction after FERC issued the show-cause order. It has delayed the first seasonal planning resource auction (PRA) until it can complete the calculation and notify market participants of any lowered accredited capacity values. (See FERC Order May Delay MISO’s 1st Seasonal Capacity Auction and Danly Addresses Capacity Auction Snafu at MISO Board Meeting.)

EPSA said a recalculated ratio “will create uncertainty by undermining bilateral agreements for the sale of capacity that have been entered into in advance of the PRA and upset the settled expectations of market participants that justifiably relied upon the ratio and seasonal accredited capacity values calculated by MISO.”

“The effect of recalculating the ratio will be to reset the seasonal accredited capacity values of [planning] resources over three months after these values were first posted and just days before the PRA offer window was scheduled to open,” Vistra said.

It said MISO’s commitment to revise seasonal accredited capacity values at the 11th hour “has cast a cloud of uncertainty over the MISO market.” It said revising the ratio at such a late stage will “fundamentally undermine” LSEs’ “carefully crafted supply plans” by decreasing resources’ accreditation.

Some LSEs’ self-supply and bilateral contracts made in advance of and outside the PRA will now be insufficient to cover resource adequacy obligations, Vistra said. It described a situation where LSEs are “forced to scramble to cover their now unmet resource adequacy requirements at the same time that other LSEs across the region are doing the same and as capacity values are decreasing — likely forcing LSEs to purchase capacity at a premium to its existing bilateral transactions and supply arrangements.”

“No amount of delay in the PRA will remedy the harm done to LSEs or customers by recalculating the ratio,” Vistra said.

Posted on

NY Climate Justice Panel Sets Disadvantaged Community Criteria

More than 1,700 of New York’s 4,918 census tracts are slated to be designated as disadvantaged communities (DACs), prioritizing them for future state and federal resources to address environmental justice issues as the state advances its clean energy transition.

On Monday, New York’s independent Climate Justice Working Group, which was created by the state’s Climate Leadership and Community Protection Act, unanimously approved the final environmental, population, geographic, health, historical and individual criteria for determining the 35% of census tracts that will be designated as DACs. (See NY CJWG Poised to Select a 35% DAC Coverage Threshold.)

The final criteria, which were developed in consultation with state agencies, environmental justice groups and the public, are based on 20 environmental and climate risk indicators, including pollution exposure, proximity to waste or processing sites, and flood risk. The criteria also consider 25 population and health indicators, including education, race, health sensitivities or housing, as well as individualized considerations for low-income households.

Census Tract Score (New York DEC) Content.jpgOverview of CJWG calculations of criteria indicators to achieve census tract score | New York DEC

 

The criteria also included the 19 census tracts that are federally designated as more than 5% tribal and indigenous land.

Several indicators were considered but not included in the final criteria, including prevalence of diabetes or lead contamination data, but these factors could potentially be considered for future evaluations.

Designating DACs was done through a process where weighted factor scores, which were calculated from indicator percentile ranks, were combined into two weighted component scores that were then added together to generate an overall score.

Census tracts whose overall score was in the top 29% of either statewide or regional scores were then designated as a DAC.

Roughly a dozen other tracts that contained at least 100 people but had insufficient census data to obtain appropriate scores will be designated as DACs.

The CJWG’s approval of the final criteria is a significant step in addressing evolving environmental risks and historical burdens by ensuring future clean energy or climate-resilience projects go to communities most in need.

The CJWG will review the DAC criteria annually to consider updating the indicators or methodology and track how DAC provisions are being implemented. It will discuss this iterative process at its meeting on April 4.

Public Support

CJWG member Sonal Jessel, director of policy at the environmental justice group WE ACT, said she voted in favor of the criteria because even if the CJWG did not “fill in all the gaps,” the group “did really great due diligence in moving through all of the concerns that came in.”

Statewide or Regional (New York DEC) Content.jpgTop 29% of census tract scores either statewide or regionally designated as a DAC | New York DEC

 

Jill Henck, clean energy program director with the Adirondack North Country Association, voted yes because, as a rural area representative, she appreciated how members were “cognizant of the fact that New York is a unique state,” and made efforts to include stakeholders living in rural communities just as much as those in New York City.

Eddie Bautista, executive director at NYC Environmental Justice Alliance, said CJWG members “all get the period of time we’re living in and understand that climate change will affect everyone, but its impacts are not evenly felt, and the [approved criteria] is a big step to rectifying that.”

Elizabeth Furth of the New York Department of Labor said the votes of approval ensure “disadvantaged communities throughout New York State can realize the many benefits from our transition to a green economy.”

Two CJWG members, who despite voting in favor, took time to share several issues about the criteria in its current form.

Rahwa Ghirmatzion, executive director at PUSH Buffalo, spoke on behalf of the Seneca Nation of Indians, who submitted a letter that outlined significant concerns, particularly about industrialization near their territories and representation.

The Tribe wrote that it rejects “the idea that destruction of territory can be offset by benefits provided by the state or a developer,” and the “cumulative impacts of industrial development on the nation, its cultural resources, and its environment cannot be counterbalanced by economic development, financial support, jobs or other forms of monetary financial benefit.”

Elizabeth Yeampierre, executive director of UPROSE, a Brooklyn-based sustainability organization, was disappointed that diabetes, which can disproportionally impact disadvantaged populations, did not make it into the final criteria.

However, Neil Muscatiello, director at the Bureau of Environmental and Occupational Epidemiology at the New York Department of Health, emphasized during his vote that, although there were “limitations and gaps,” these can all be addressed in the next annual update and diabetes will be among the first considered.

CJWG Chair Alanah Keddell-Tuckey cast her affirmative vote saying she was proud to work with a group who “did not create these problems,” but were “willing to stand up regardless of the pushback and criticism to fix the thing that they did not break.”

Keddell-Tuckey said there were “cynical” people who, particularly during the pandemic, “lay the blame on the victims, rather than admit we were dealing with generations of redlining, income inequality and malicious zoning practices.”

Basil Seggos, commissioner of the Department of Environmental Conservation, said in a statement after the vote that the CJWG’s work ensures “no less than 35% with the goal of 40% of the Climate Act’s benefits are directed to disadvantaged communities.”

Doreen Harris, CEO of the New York State Energy Research and Development Authority, said “the final adoption of this criteria solidifies New York State’s commitment to climate justice for those underserved communities,” and the CJWG’s “clearly defined guidance will help us realize the equitable distribution of benefits from clean energy investments.”

Posted on

Industry Says DOE Proposal Would Exacerbate Transformer Shortages

The U.S. Department of Energy received pushback this week on its proposal to increase efficiency standards for distribution transformers, with industry comments arguing that the new rule would create additional problems for already shaky supply chains.

“If this proposal is implemented as currently contemplated, it would have serious consequences to NRECA members’ ability to provide affordable, reliable electric service to millions of Americans,” the National Rural Electric Cooperative Association said in comments filed Monday. “We urge the agency to reconsider the [proposed rules] as currently drafted and to issue a final rule that maintains the current standard.”

DOE estimated that its new standards would save utilities between $260 million and $5.3 billion between 2027 and 2056, which is based on savings in operating costs minus the increased product cost for the new transformers. The department has the authority to periodically update standards for transformers, and other equipment, as long as the new requirements are economically justified and technically feasible.

But NRECA said the proposal rests on flawed assumptions and ignores the challenges facing the distribution transformer market that are impacting all electric utilities, not just co-ops. DOE could focus on incentivizing amorphous steel core transformers, the group said.

Amorphous steel is a type of electrical steel that is produced by rapidly cooling molten alloy so that crystals do not form, which produces a thinner product than the more standard grain-oriented electrical steel (GOES). Electrical steel is a special iron alloy that includes small percentages of silicon to enhance its magnetic permeability.

“DOE’s top priority should be finding ways to support domestic distribution transformer manufacturers to increase production immediately and to sustain that output over the long term as electrification of the U.S. economy grows,” NRECA said. The current distribution transformer manufacturing base is struggling to meet demand, and DOE’s proposal would make that worse, it said.

“All segments of the utility sector have been sounding the alarm for more than a year about the supply chain constraints around multiple types of equipment they require to keep the lights on, with distribution transformers being the most acute challenge,” NRECA said. “It now takes more than a year on average for utilities to receive distribution transformers, compared with 60 days just a couple of years ago. Some domestic transformer manufacturers have stopped taking orders altogether.”

That backlog is only expected to increase absent government support as utilities invest in grid resilience and modernization projects, while federal and state policies drive more electrification, it added.

One of the potential fixes for the backlog is to signal to manufacturers that GOES will be increasingly needed going forward, and DOE’s standard would work directly against that, NRECA said. Manufacturers would have to change their production systems and where they source input materials, taking attention away from increasing supply to deal with the backlogs.

The U.S. Chamber of Commerce also cautioned DOE in comments last week from moving ahead with the standard because of supply chain concerns. GOES represents 95% of new distribution transformer production, so amorphous steel production would need to expand greatly to meet the new standards.

“While there are only singular domestic sources for each of GOES and amorphous steel, GOES is at least already produced in levels that support the majority of domestic transformer production,” the chamber said. “Thus, shifting all distribution transformer production to rely exclusively on amorphous steel will require a dramatic increase in capacity for such steel, which will take time and will further constrain already limited transformer supplies.”

The only places amorphous steel can be imported from are China and Japan, which would only increase the industry’s reliance on components from China, the chamber said.

Posted on

NY Utilities to Seek $900M from DOE

Six New York utilities have indicated they will apply for roughly $900 million in federal loans and grants made available from the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) (22-M-0149).

The utilities are acting in response to Feb. 27 letters sent by the state’s Public Service Commission, which directed them to seek IIJA and IRA funds to support clean energy investments. (See Biden Signs $1.2 Trillion Infrastructure Bill.)

In the letters, PSC Chair Rory Christian wrote that he “views these federal programs as a singular opportunity to reduce costs to New York ratepayers, make critical reliability and resiliency investments in the electric grid, and further the attainment of the state’s energy policies as outlined in the state’s climate law.”

The PSC sent the letters to Orange & Rockland (O&R), Central Hudson Gas & Electric, Long Island Power Authority (LIPA), Consolidated Edison (ConEd), National Grid, New York State Electric and Gas and Rochester Gas & Electric (NYSEG/RG&E), and National Fuel Gas Distribution Corporation.  

In responses submitted March 24-27 National Grid (NYSE: NGG), ConEd (NYSE: ED), ConEd subsidiary O&R, NYSEG/RG&E and Central Hudson said they will collectively be pursuing hundreds of millions in U.S. Department of Energy loans or grants for enhancing the future grid, energy storage development, and resiliency upgrades.

National Fuel (NYSE: NFG) said it would not tap into DOE funds, since as “a gas-only utility” it does “not currently have any fully developed projects that would be eligible for federal funding,” but confirmed its was investigating hydrogen opportunities, which may be eligible in the future.

LIPA had yet to submit a response as of Monday.

The National Grid and Central Hudson letters included project spending plans, while the other three confirming utilities redacted much of that information, citing confidentiality, although they did briefly dive into monetary estimates.

ConEd anticipates “pursuing approximately $244 million in DOE funding;” O&R, about $125 million. NYSEG and RG&E will be jointly applying for $260 million.

Those utilities all plan to apply for funds from the Preventing Outages and Enhancing the Resilience of the Electric Grid program, while ConEd and O&R will apply to both the Smart Grid Investment Matching Grant and Long Duration Energy Storage Demonstration Initiative and Joint programs. ConEd and NYSEG/RG&E will also seek to tap the Clean Hydrogen Hubs program.

National Grid anticipates applying for $50 million from the Increase Capacity & Enhance Flexibility program for its “Future Grid” project, which the utility says will allow it “to deploy digital technology solutions to maximize the value of third-party distributed energy resources for customers.”

Additionally, the utility is applying for $200 million through the Preventing Outages and Enhancing the Resilience of the Electric Grid program, with $100 million to be invested into energy storage facilities in rural northeast New York around Ticonderoga and another $100 million spent on “weatherization of existing grid structures in eastern and western New York State and the hardening of existing infrastructure to improve resilience and speed of recovery in the face of climate change.”

National Grid said Ticonderoga “often experiences electrical outages,” so it proposes three battery storage systems be developed in the area to “improve reliability by carrying the energy load until crews arrive to make the necessary repairs.”

Central Hudson seeks roughly $8 million for the rehabilitation of two hydroelectric projects: the Dashville Dam and the Sturgeon Pool Hydroelectric Plant, which would be funded through the Hydroelectric Efficiency Improvement Incentive and the Maintaining & Enhancing Hydroelectricity Incentive, respectively.

The Public Utility Law Project on March 15 submitted a letter to the DOE in support of the New York utilities, saying “every dollar received from these funds can lower the revenue requirement impact on ratepayers.”

The DOE’s Loan Program Office has outlined processes to apply for IIJA and IRA loans or grants and some programs have started accepting applications.

Posted on

NYISO Receives ‘Exceptional’ Customer Survey Scores

NYISO obtained its highest recorded customer satisfaction and performance score in Siena College Research Institute’s seventh annual assessment, researchers told the ISO’s Management Committee meeting on Wednesday.

Siena, a well regarded pollster, assesses two important aspects to the ISO: customer satisfaction, which measures basic consumer interfacing and engagement; and assessment of performance, a measure of whether NYISO is “realizing [its] mission through [its] performance.”

Survey participants include both market participants and senior executives of market participants.

NYISO scored a 92.3 on satisfaction and 77.6 on performance, both of which were the ISO’s highest recorded scores, Institute Director Don Levy said. Its 86.4 overall score — which Levy termed “exceptional” — combines the two with 60% weighting for satisfaction and 40% for performance.

“The satisfaction score really is quite impressive,” Levy said. “You know, we have worked with a couple of the other ISOs across the United States, and their program is not as extensive as yours. … Clearly your numbers are really standing out.”

Levy cited ISO staff’s professionalism and desire to “meaningfully address” feedback from previous surveys.

The customer inquiry satisfaction score — a measure of whether customers instituting a “ticket” with the ISO is handled efficiently and professionally — was a “near perfect” 98.7, Levy said.

The only measure that declined in 2022 was executives’ assessment of performance, which declined to 74.8 from 75.8 in 2021. Scores for market participants, by contrast, increased from 78.2 to 80.4.

Levy said the ISO could improve its explanation of its procedures and policies but added that the ISO has “already been making improvements in these areas.”

The survey also found room for improvement on considering individuals’ input, advancing its technological infrastructure and “administering open and competitive markets.”

“I think [NYISO’s] team deserves some kudos” he said. “There really is no area that has a glaring need.”

Board Compensation

NYISO CEO Rich Dewey told the MC that the Board of Directors approved a $5,000 increase in directors’ annual retainer to $76,500, based on results from a benchmarking review.

The approved adjustment will be effective in April, when the new board calendar starts.

The review resulted in no changes to:

      • chair retainer: $50,000/year;
      • vice chair retainer: $12,500/year;
      • board committee chair retainer: $12,500/year;
      • board meeting compensation: $3,750/meeting day; or
      • board committee meeting compensation: $5,500/meeting day.
Posted on

Washington Confirms $300M Take for 1st Cap-and-Trade Auction

Washington’s Department of Ecology confirmed Tuesday that it raised almost $300 million from the state’s first quarterly cap-and-trade auction held in February.

According to the public proceeds report released Tuesday, the auction’s exact take was $299,983,267, in line with initial estimates released March 7. The report is intended to double-check those figures and provide state lawmakers with a clear picture of how much revenue is available to spend on programs to be supported by the auctions. (See Washington’s 1st Cap-and-Trade Auction Nets Nearly $300M.)

The proceeds have been deposited into the state’s treasury, according to the Ecology Department.

All 6,185,222 current vintage allowances were sold at a settlement price of $48.50 during February’s auction. The agency’s auction summary report issued earlier this month showed that 56 companies, utilities and public institutions bid into the auction, but it did not indicate which bidders were successful. Each allowance entitles a holder to emit one ton of greenhouse gases.

The 2021 Climate Commitment Act (CCA) created Washington’s cap-and-trade program and also established three funds to receive the revenue raised, including the:

  • Carbon Emissions Reduction Account, for projects that reduce transportation carbon emissions and support public and alternative transportation.
  • Climate Investment Account, used for the administration of the CCA and projects “that support the transition to clean energy, ecosystem resilience, and carbon sequestration.”
  • Air Quality and Health Disparities Improvement Account, for projects that help reduce criteria pollutants and health disparities in disadvantaged communities.

Programs funded from all three accounts are subject to appropriation by the legislature.  

In January, Washington officials told the Washington Senate Transportation Committee that the cap-and-trade auctions could raise almost $1.5 billion through fiscal 2024 and reiterated their contention that a new low-carbon fuel standard will raise gas taxes by about one penny per gallon.

Later this legislative session, the state Senate and House plan to allocate revenue from the first cap-and-trade auction. The Ecology Department estimates $484 million in cap-and-trade revenue for fiscal 2023 (July 1, 2023 to June 30, 2024) and $957 million in fiscal 2024.

Robert Mullin contributed to this article.

Posted on

MISO Board of Directors Briefs: March 23, 2023

Waivers May be Necessary to Retain Directors Past Term Limits

[Editor’s Note: An earlier version of this article said Director Nancy Lange is serving her final term on MISO’s Board of Directors. Lange is actually eligible to serve a third term on the board after her current term expires in 2024.]

NEW ORLEANS — Todd Raba, chair of MISO’s Board of Directors, said last week that it may pursue special term waivers next year to enable term-limited members to continue providing guidance and avoiding their loss of institutional knowledge.

Raba said during the board’s March 23 meeting that more than half of the independent directors will reach term limits next year and could begin leaving the board.

Director Phyllis Currie said the board needs to be “intentional” about its succession planning to avoid gaps in expertise. She said she would like the board to conduct an annual, nonpublic discussion about the talents it needs.

MISO’s board consists of nine independent directors and the RTO’s CEO. The independent directors are limited to three three-year terms, but its bylaws allow some board members to serve an additional term under certain circumstances.

Currie and fellow directors Mark Johnson were re-elected to their final terms that began in 2022. They will hit their three-term limit at the end of 2024.

Raba, H.B. “Trip” Doggett and Barbara Krumsiek were also re-elected late last year. Their final terms conclude at the end of 2025.

Director Theresa Wise will be up for her third and final election at the end of the year for a term that runs into 2026. Director Robert Lurie is currently finishing out his first term and will be up for his second election. Lurie joined the board in 2020 to serve the one-year remainder of a former director’s term, which does not count against his three-term limit.

Nancy Lange will complete her second term at the end of 2024 and is eligible to serve a third term that would run through 2027. Jody Davids joined the board at the beginning of 2021.

MISO last used a waiver for board members in 2017, when it retained Baljit “Bal” Dail for an additional three-year term. Dail served 12 years on the board. (See MISO Board of Director Briefs: Dec. 10, 2020.)

Board Approves MISO-PJM Project

The board unanimously approved a targeted market efficiency project with PJM.

The $200,000 project will upgrade a wavetrap on the Powerton-Towerline 138-kV tie line in Ameren Illinois and ComEd territory. It is expected to produce more than $7 million in avoided congestion benefits over its first four years of operation. (See MISO, PJM Staffs Endorse 1 TMEP Joint Project.)

Project costs will be split 72% to PJM and 28% to MISO. Ameren Illinois’ transmission pricing zone will cover all of MISO’s $57,000 tab.

The PJM board has already authorized the project.

Budget Reflects Hiring Uptick

MISO CFO Melissa Brown said the grid operator is poised to exceed this year’s budget for new hires.

“That’s really great for MISO that we’re getting back to a pre-COVID level of employment,” she told board members.

Staff expects to spend about $2 million more than its allotted $310.5 million base expense budget.

Given recent bank collapses, staff reassured the board and stakeholders that MISO’s financial relationships are with large, secure institutions and said they don’t foresee any risk.

Membership Applications Approved

Directors unanimously approved two membership applications, allowing City Water and Light of Jonesboro, Ark., to join as a transmission owner and Invenergy Transmission as a non-transmission owning member.

Jonesboro was already a market participant but sought TO status after acquiring transmission facilities. Invenergy Transmission will become a competitive transmission developer within MISO.

Posted on

FirstEnergy Hires Tierney as New Chief Executive

FirstEnergy’s (NYSE:FE) board of directors on Monday announced the appointment of a new CEO who is currently a senior executive at the investment company Blackstone (NYSE:BX).

Brian Tierney, 55, will join the Ohio-based company as president and CEO on June 1, succeeding board Chair John Somerhalder II, who has held the top management spot since September in addition to his board responsibilities.

Tierney has spent 28 years in the utility industry, 23 of them with American Electric Power, serving as executive vice president and CFO from 2009 to 2020. He was executive vice president of strategy in 2021 when he joined Blackstone as senior managing director and global head of infrastructure operations.

“Brian Tierney is a proven leader with deep experience in the energy industry, a unique blend of operational, financial and strategic skills, and a sterling record of driving growth and transformation within our sector,” Somerhalder said in a statement. “Over the last several years, we have taken decisive actions to reposition FirstEnergy for the future. The board’s search committee set out to identify a leader who could continue the important work underway to drive the company forward while bringing critical outside expertise and perspectives.

“We could not have selected a better suited candidate than Brian. We look forward to working closely with him to build on FirstEnergy’s momentum and enhance value for our shareholders and other stakeholders.”

Tierney is the company’s third CEO since the company fired Charles Jones in October 2020 after an internal investigation determined that he and two other top executives had violated the company’s code of conduct in a bribery scheme involving former Ohio House Speaker Larry Householder and the passage of legislation bailing out the company’s nuclear power plants in the state. (See FirstEnergy Fires Jones over Bribe Probe.)

The company appointed CFO Steven Strah as CEO the same day it fired Jones. Strah abruptly retired in September 2022 following the board’s announcement that it had completed a review of its top management team in accordance with the settlement of shareholder federal lawsuits. (See FirstEnergy CEO Abruptly Retires, Without Severance.)

Tierney’s appointment comes a little over two weeks after a federal jury in Cincinnati found Householder and a former Ohio Republican Party chairman guilty of racketeering conspiracy. (See Householder Convicted in FirstEnergy Bribery Case.) Both are planning to appeal as the Justice Department continues its investigation.