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November 8, 2024

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SPP Regional State Committee Briefs: Jan. 30, 2023

Commissioners Approve 90-10 Split on JTIQ Cost Allocation

SPP’s state regulators last week approved staff’s proposed cost allocation for the five projects in the RTO’s Joint Targeted Interconnection Queue (JTIQ) study portfolio.

The Regional State Committee, which has specific authority over cost allocation, accepted several recommendations from the Cost Allocation Working Group during a virtual quarterly meeting Jan. 30.

The JTIQ study with MISO was designed to find potential projects on the RTOs’ northern seam that could reduce congestion and allow additional resources, primarily wind farms, to interconnect with the two systems. The RTOs’ staff have proposed a cost allocation that assigns most of the portfolio’s $1.06 billion in costs to generation. (See MISO, SPP Propose 90-10 Cost Split for JTIQ Projects.)

The RSC unanimously approved the CAWG’s recommendations that:

  • generators bear 90% of the portfolio’s capital costs and that load cover the remaining 10%;
  • load’s portion of the JTIQ’s annual transmission revenue requirement (ATRR) be based upon adjusted production costs, as outlined by the RTOs’ joint operating agreement; and
  • allow each building transmission owner to recover the non-capital construction costs allocable to generator interconnection customers through the TOs’ formula rate template in their respective regions.

The commissioners also unanimously approved the CAWG’s recommendation that SPP staff ensure the portfolio is implemented in a “reasonable manner” to improve its chances of securing U.S. Department of Energy funding to improve the benefit-cost ratio for all SPP load. SPP and MISO have joined forces with the state of Minnesota and the Great Plains Institute to apply for DOE grants from the latter’s $10.5 billion Grid Resilience and Innovation Partnerships (GRIP) program. (See “SPP, MISO Applying for DOE Funds to Help with JTIQ Portfolio,” SPP MOPC Briefs: Jan. 17-18, 2023.)

The committee revised the CAWG’s motion by adding the word “reasonable” before “manner” to address a complaint from North Dakota Public Service Commissioner Randy Christmann.

“What I’m reading here is that we are willing to implement this in whatever manner the DOE comes up with in order to get them to pay for our desires,” he said. “That just basically commits us to agreeing to anything they come up with. I’m fine with pursuing the DOE funding, as long as we’re not committed to doing whatever they want.”

Three of the committee’s 11 members — representing Louisiana, North Dakota and Oklahoma — voted against the CAWG’s recommendation that SPP’s 10% load share in the current portfolio and the next study of the southern party of the MISO-SPP seam be regionally allocated on a load-ratio share basis consistent with previous RSC policies.

“I don’t think we should be making our allocation decisions based on balancing our regions,” Christmann said. “I don’t like the idea of passing something based on its pluses and minuses and saying we’re going to do this one regionwide, and in exchange, we’ll do whatever the southern end comes up with regionwide to whether it meets the criteria or not.”

David Kelley, SPP vice president of engineering, said the recommendation was consistent with other policies the RSC has reviewed and approved. He said the grid operator’s experience with importing and exporting power during winter storms proves additional transmission interconnections between regions provides “greater reliability and resiliency … going forward.”

Texas Public Utility Commissioner Will McAdams said he views the JTIQ portfolio as a “building block of a greater reliability framework” where everybody chips in.

“If you have a need on a seam, you’re going to build transmission just like road planners build highways. If you build a highway, everybody gets to use that,” he said. “We’re going to need to replace new generation, and the guiding principle for me is I would rather that new generation settle in our SPP footprint to where our RTO can control those resources … and then if they have excess, sell into MISO during scarcity periods at a profit to help reduce the cost on their loads.

“To me that makes sense, and if we see that occur in both the SPP northern area as well as the South, then that benefits everybody,” McAdams added.

Christmann proposed a separate motion that the JTIQ portfolio only receive construction notifications when the executed generator interconnection agreements can pay for 50% of the eligible engineering and construction costs.

“We’re preparing to do an approval to construct based on the fact that GI customers are going to pay 90%. That can be our plan, but if they don’t come through, somebody is going to pay the costs of that project or these projects,” he said.

John Tuma 2022-04-24 (RTO Insider LLC) FI.jpgJohn Tuma, Minnesota PUC | © RTO Insider LLC

Minnesota Public Utilities Commissioner John Tuma acknowledged Christmann’s concerns but pointed out that no one is forcing companies to invest in generation and that they’re capable of making their own judgments.

“I’m hoping they make the right judgment because they got to come in front of me for recovery,” Tuma said.

“If you’re a generator interconnection customer going through the process, you don’t have any certainty that the transmission will be there,” Kelley said. “Signing up to pay for transmission that may or may not be there is not something that they could get financing for.”

“My concern is that this unravels the way we normally get these people signed up for projects. … This solves a lot of the problems,” Tuma said. “I think it also jeopardizes the DOE funding because a condition like this could put a lot of the projects and ability for these projects to go forward in jeopardy. We are messing with some financial situations that I think are going to unravel what we’re doing with JTIQ and the ability to get this paid at a reasonable rate.”

Christmann’s motion failed, receiving only supporting approval from members representing Louisiana, Nebraska and Oklahoma.

Saying she valued the conversations during the discussion, SPP CEO Barbara Sugg expressed a “high degree of confidence that the generators will be there.”

“We still have a lot of work to do in the partnership with MISO that is already proving to be beneficial for both SPP and MISO and our states and our end-use customers,” Sugg said. “We’ve got to keep this moving forward.”

Missouri’s Rupp Opposes RCAR III

The RSC approved the Regional Allocation Review Task Force’s third Regional Cost Allocation Review (RCAR III) of SPP’s highway/byway transmission cost-allocation methodology.

The mechanism assigns 100% of all 300-kV or above transmission upgrades’ ATRR to all 17 transmission zones on a regional basis using a load-ratio share. One-third of upgrades with voltage ratings between 100 and 300 kV are allocated regionally and two-thirds to the host zone’s transmission customers.

RCAR III, the first such review since 2016, indicated every zone exceeded the RARTF’s 0.80 benefit-cost threshold and w above 1 when analyzing projects approved for construction since June 2010 and in service prior to 2020.

The review was conducted using the Integrated Marketplace’s daily results paired with analysis on transmission planning models, limited to those projects in service before 2020. The task force said the methodology is expected to provide more reasonable results and avoid technical issues from past RCAR studies.

Still, RCAR III drew the ire of Scott Rupp, chair of the Missouri Public Service Commission, who cast the only vote against its approval, saying he couldn’t in “good conscience” attach his name to something “that’s just so bad.”

“I feel like I’m Pontius Pilate. I’m just washing my hands with this,” Rupp said. “We’re being told that, ‘Hey, this is the one that’s the best. This is the one that’s going to fix everything and look, everybody’s great.’ I can tell you personally, that things are not great.”

Utilities in southern Missouri have long complained about the RCAR process, saying system congestion has limited their ability to move energy. The City Utilities of Springfield transmission zone was the only one found deficient in the 2016 study; it was also among six zones, mostly in the Midwest, that was deficient in the 2013 review. (See “Cost Allocation Review Cycle Could Extend to 6 Years,” SPP Markets and Operations Policy Committee Briefs.)

In December, the southern Missouri region experienced extremely low voltages caused by resource trips, lack of deliverability and parallel system flows. Empire Electric District had to shed about 25 MW of load for 15 minutes on Dec. 22.

“Basically, what SPP has done is they’ve just taken the formula and they’ve tinkered with the methodology again until they got a result that they wanted, that would just quiet everybody that’s been having concerns,” Rupp said. “Southern Missouri has been saying, ‘Hey, we need help down here’ for 10 years. Every year, we do a lessons learned after one of these things, but the lesson we’ve learned is [we’re] going to get hosed.”

Saying she felt compelled to defend SPP’s honor, Sugg said she is very aware of the region’s problems and that she respected Rupp’s position.

“This is not the place for me … or anybody else to try to unpack all of the things that you said,” she told Rupp. “I will say … I am committed to us working to … alleviate some of the challenges that we face in that area. You’ve not seen the last of this, and please don’t think that I’m dismissing anything that you’ve said.”

The previous RCARs were completed every three years. FERC in 2017 approved SPP’s request to conduct the review every six years; the grid operator said that would save staff time and consulting costs. (See FERC Approves 6-Year Cycle for SPP RCAR Review.)

Safe Harbor Criteria Unchanged

The RSC also approved the CAWG’s recommendation to keep the current $180,000/MW safe harbor criteria for a network study’s directly assigned upgrade costs (DAUC) after customers request transmission service.

To qualify for safe harbor treatment from some or all DAUC, transmission customers must meet three base-plan funding criteria: a five-year minimum commitment term; 125% or less of load in all designated resources; and, if the designated resource is wind, that 20% or less of the designated resources come from wind.

Customer can request a waiver of the criteria, and the RSC and SPP’s Board of Directors have approved the requests under certain circumstances.

The CAWG reviews the safe harbor limit and criteria each year and conducts a more in-depth analysis every five years. The group has also opened an action item to continue studying performance-based accreditation’s effects on the 20% wind rule and the 125%-of-load resource limit.

John Krajewski, who consults for the Nebraska Power Review Board, told the committee the safe harbor criteria keeps transmission customers from being charged the full rate for service and the cost of any upgrades.

This policy “basically keep customers with these long-term requests from paying twice for the same facilities,” he said.

Krajewski shared the CAWG’s recent analysis of the safe harbor requirements. It indicated 18 of 49 load-serving entities are over the 20% limit, but that a vast majority of requests qualified under the safe harbor limit.

Ex-KCC’s Albrecht Chairs CAWG

Shari Albrecht (RTO Insider LLC) FI.jpgShari Feist Albrecht, KCC | © RTO Insider LLC

Former Kansas regulator and past RSC President Shari Feist Albrecht has returned to SPP as the CAWG’s chair.

Albrecht chaired the Kansas Corporation Commission during much of her eight-year tenure as a commissioner. She was succeeded by Andrew French in June 2020 after her second term expired.

She has rejoined the commission as a part-time consultant. As a member of the Utilities Division’s SPP Workgroup, her responsibilities include representing Kansas on the CAWG.

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Lawrence Berkeley Lab Sees New Transmission Value Spike in 2022

The Lawrence Berkeley National Laboratory on Tuesday released updated data showing that the savings for new electric transmission lines were higher last year than at any point in the last decade.

“Generally high electricity prices coupled with extreme weather events and other factors helped drive the high value for transmission,” LBNL said in a fact sheet on its findings.

The lab looked at congestion values and found that building major new lines between important power trading hubs would lead to significant savings. Congestion is correlated with the national average of wholesale electricity prices.

“Extreme conditions and high-value periods have an outsized role in driving this value, though named extreme weather events oftentimes do not play as large a role as more normal but infrequent conditions, such as infrastructure outages or demand forecast misses,” LBNL said.

The report found that interregional transmission lines would offer the largest values, as most — but not all — the transmission links with a value above $200 million per 1,000 MW were interregional. Smaller regional lines had a significant valley, with many ranging from $100 million to $200 million per 1,000 MW.

LBNL annual value (Lawrence Berkeley National Laboratory) Content.jpgA chart showing the mean and median values of LBNL’s hypothetical lines over the past decade | Lawrence Berkeley National Laboratory

 

LBNL looked into 64 hypothetical transmission projects, and their mean value was $220 million per 1,000 MW, or $25/MWh, while the median value was $193 million per 1,000 MW, or $22/MWh. Both the mean and median prices were higher than earlier years that LBNL studied.

The median value was significantly higher than in any other year, which indicates that higher transmission value in 2022 was a broad phenomenon across most of the country. That suggests a national cause, such as higher power prices, were behind the rise in transmission value.

LBNL saw higher mean values in 2018 and 2021, which indicates that certain events can drive extremely high transmission value in isolated regions. ERCOT and SPP saw transmission values spike in 2021 because of the February winter storm, the report said.

Transmission’s value is tied to high demand/high-priced hours, but the higher overall prices last year made that less true than some years. Some 50% of the lines’ studied value was from just 10% of hours and 37% was from only 5% of the hours in 2022, but from 2012 to 2021, a typical transmission line derived 50% of its value from just 5% of hours.

The final week of 2022 came with another major winter storm, which showed the role of transmission in helping to manage periods of grid stress as the average transmission link derived 7% of its annual value over that week. The total annual value of transmission lines was much more tied to the winter storm in PJM, MISO and the Northeast, where the storm provided 10 to 22% of transmission lines’ values.

The report noted that if all the hypothetical lines it studied were actually built, they would have diminishing returns. Because wholesale power markets use marginal pricing, the transmission value metric LBNL calculated represents the value of the next unit of transmission.

The lines studied would be impacted by a saturation effect as additional construction brings down their value, but LBNL said that the links connect “hub” pricing nodes that represent prices over a region and might not be as sensitive to saturation effects as a more localized pocket of demand.

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WEC Touts Renewable Investment in Year-end Earnings

WEC Energy Group’s (NYSE: WEC) leadership last week plugged the billions they will spend on transforming their utility’s energy mix in a year-end earnings call.

WEC reported fourth quarter earnings Feb. 2 of $252.7 million ($0.80/share), compared to the $224.2 million ($0.71/share) it netted for the same period last year. The utility recorded year-end net income of $1.4 billion ($4.45/share), compared to the $1.3 billion ($4.11/share) over 2021.

WEC Energy Group Executive Chairman Gale Klappa told financial analysts that the company plans to spend $20.1 billion over the next five years, up from $17.7 billion it initially targeted in 2022. He said the spend, as outlined in an updated environmental and social governance progress plan, is the “largest five-year investment plan in our history.”

Klappa said management expects the plan to drive compound earnings growth of 6.5% to 7% per year through 2027.

The plan will position WEC for “efficiency, sustainability and growth,” Klappa said. The plan includes more than $7.3 billion in new renewable investments in solar, wind and battery storage, a “major commitment to renewable projects” that is now a cornerstone of the utility, he said.

WEC announced last month it will acquire an 80% interest totaling $250 million for the first phase of the 250-MW Samson Solar Energy Center in northeast Texas.

WEC CEO Scott Lauber said the utility’s $160 million, 80-MW Red Barn wind farm in Wisconsin will come online in the next few months and its Badger Hollow II solar facility and the Paris Solar Battery Park in Wisconsin will likely go into service within the year, contingent on panel delivery.

Lauber noted that the Wisconsin Public Service Commission last year approved WEC’s purchase of the $451 million Darien Solar Energy Center. Its 225 MW of solar capacity and 68 MW of battery storage is expected online in 2024.

Laubner said the 300-MW Thunderhead Wind Farm in Nebraska is now in service; WEC has a $338 million, 80% stake in the project. He said he expects that the utility will finalize a $412 million, 90% interest in the 250-MW Sapphire Sky in Illinois in the coming weeks.

WEC plans to achieve carbon neutrality by 2050 and phase out coal use by 2030 so that it’s only a backup fuel.

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PJM Stakeholders Discuss Capacity Market Changes After Winter Storm

PJM’s Independent Market Monitor has proposed a plan to eliminate performance assessment intervals (PAIs) and related penalties from the RTO’s capacity market, saying the non-performance charges stemming from the late-December cold snap have threatened the functioning of the market.

“Winter Storm Elliott provided the first real test of the [capacity performance] design. Elliott showed that the CP design does not provide effective incentives,” Monitor Joe Bowring said during the Jan. 31 meeting of PJM’s Resource Adequacy Senior Task Force.

Under the Monitor’s design concept, capacity resources would only be paid the capacity price when they are available in a given hour and would be required to have firm fuel, which entails access to dual fuel, multiple pipelines or a defined amount of onsite fuel storage, plus weekly testing to ensure that the resources can produce when called upon.

Capacity resources would also be subject to a must-offer requirement. When energy is valuable, resources that provide energy will be paid the high market prices for energy and reserves, as the energy market provides the correct energy pricing, Bowring said.

“If we can’t handle two days of cold weather without having a massive dislocation, we need to rethink how this market is designed,” Bowring said. “The penalties create potential threats to the incentives to invest in existing resources and to invest in the new resources that will be needed in the next three to five years.”

Bowring also said his design would replace the effective load carrying capability (ELCC) accreditation model for intermittent resources. By only paying such resources when they are delivering energy, he said the change would recognize that intermittent resources are not always available while still allowing them to be compensated for when they are online.

“ELCC is very quickly going to end up with a marginal value of zero for standalone solar and wind while continuing to have a performance obligation equal to its full capability. … What I’m proposing is something very different, which is paying capacity only when it’s available,” he said.

That tension between the reduced megawatts that qualify as capacity and the obligation to perform at the full megawatt value of the resource will make offering intermittent resources as capacity increasingly untenable under the ELCC approach.

The Monitor’s proposal would build on FERC’s 2021 rejection of the CP market seller offer cap (MSOC) and “would recognize that the capacity performance model was a failed experiment,” Bowring said. (See FERC Backs PJM IMM on Market Power Claim.)

“The only purpose of the capacity market is to make the energy market work. The fundamental mistake of the CP design was to attempt to recreate energy market incentives in the capacity market,” Bowring said. “The CP model was designed on the assumption that shortage prices in the energy market were not high enough and needed to be increased via the capacity market.”

Bowring noted that the CP design focuses on a small number of critical performance assessment hours, imposing large penalties on generators that fail to produce energy only during those hours. He said the use of capacity market penalties rather than energy market incentives created risk.

“While there are differences of opinion about how to value the risk, this CP risk is not risk that is fundamental to the operation of a wholesale power market. This is risk created by the CP design in order, in concept, to provide an incentive to produce energy during high demand hours that was even higher than the energy market incentive,” he said.

PJM has said that generators may be facing total penalties between $1 billion and $2 billion for as much as 46,000 MW in capacity being offline during the storm, including over a third of gas resources. That has raised concern about significant amounts of generation leaving the market, either through default or determinations that there is too much risk in the exchange. (See PJM Gas Generator Failures Eyed in Elliott Storm Re view.)

“Everybody knew what the potential penalties were. Nonetheless, the behavior did not match … that expectation. … Massive penalties are not the answer here,” Bowring said.

David “Scarp” Scarpignato, of Calpine, suggested that a third product may be needed alongside energy and capacity resources, noting the impact the fuel requirements would have on certain gas generators.

Combustion turbine plants connected to only one pipeline would no longer be able to participate as capacity resources and therefore lose their capacity interconnection rights. Without the guaranteed access to the transmission grid when shortage pricing is in effect, those units may no longer be economical, he said.

Steve Lieberman, of American Municipal Power, said the majority of generator conversations around the MSOC come down to properly defining their units’ capacity performance quantified risk (CPQR) — the risk that they will face non-performance penalties. AMP has proposed one of six design concepts currently being discussed by the RASTF, along with the IMM.

“I believe what Winter Storm Elliott has taught us is we need to put the scalpel away and it might be time for the chainsaw. … We do agree CP is a failure; it was an experiment that we implemented after the polar vortex,” he said.

AMP’s proposed design includes a higher degree of fuel availability for capacity resources, namely dual fuel or onsite inventory, and would expand the use of ELCC accreditation to thermal resources.

“An approach that’s similar for thermals and non-thermals alike is our preference,” Lieberman said, adding that he has reservations about ELCC, but feels that having one accreditation approach for all resources is best.

Stakeholders Seek More Clarity on Offer Caps

With deadlines approaching for June’s 2025/26 Base Residual Auction, Jeff Whitehead, of GT Power Group, said that generation owners will soon have to make decisions about their CPQR and unit-specific offer caps. He said guidance from PJM and the IMM on what will be allowable would aid in the drafting of those figures.

He noted that without changes to the current auction schedule, there are few parameters that can be changed in time, primarily the performance assessment hour assumption.

“I think we need to come to a common agreement on what is a reasonable basis for including Winter Storm Elliott, or I’ll say more broadly the changes in the penalty risk view that comes out of that event,” he said.

Bowring said he believes the current MSOC construct is correct and the best way to incorporate the winter storm data into offer caps is by rerunning the simulations the Monitor conducts with the data from Elliott added in. Part of his consideration of the storm’s impact is that to an extent the emergency conditions were the result of generators being unavailable.

“We have to operate in a rational defined space, and that space is going to be calculating what we think the impact on CPQR is of the actual facts of Elliott,” he said. “Given that this is the first significant PAI event since the introduction of the CP model, it is unlikely to have a large effect on CPQR.”

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Berkeley Study Finds Rising PJM Interconnection Costs

A study released by the Lawrence Berkeley National Laboratory last month found that interconnection costs have been steadily rising for decades in the PJM region and are disproportionately high for renewable resources.

“The core finding that we’ve had for PJM is overall interconnection costs have increased both for projects that have completed all the required interconnection studies, as well as for those projects still moving through the interconnection process,” said Jo Seel, principal scientific engineering associate with the lab. The study is part of a series looking at interconnection costs for each RTO in the U.S.

Drawing off available interconnection studies released by PJM, the study found that costs for generators that have successfully connected to the grid have doubled from 2000 through 2019. The average for completed projects has grown even more sharply over recent years, rising from $29/kW between 2017 and 2019, to $240/kW between 2020 and 2022.

Costs are highest for projects that ultimately dropped out of the interconnection process, at $563/kW, which Seel said could point to network upgrades being a driving factor behind projects leaving the queue.

“It seems to me pretty likely that high interconnection costs make a certain set of projects infeasible and they cannot move forward,” Seel said. “We see that especially well for solar projects, where the upgrade requirements for some of these solar projects is up to nearly 40% of the overall project [capital expenditures] … that just breaks project economics, so I think that’s a pretty good explainer of why some of these solar projects then do not move forward and ultimately withdraw.”

The study also found a wide gap in network upgrades for different resource types. Natural gas carries some of the lowest costs, with an average of $24/kW, while offshore wind was the highest at $385/kW. Onshore wind saw average interconnection costs of $136/kW, while solar projects had costs around $253/kW.

Scale of Rising Costs Questioned by PJM

PJM Senior Director of Interconnection Planning Jason Connell said he believes the study overrepresents the extent that network upgrade costs have grown because of the inclusion of feasibility studies in the data. Because the studies identify the upgrades that an individual project would require to interconnect prior to cost allocation between projects, he said it could result in double counting of costs if multiple projects needed the same upgrade.

“The issue is that those projects for which they’re scraping the data are in various stages of completion: some very early on in the feasibility stage, and some have signed and executed an interconnection service agreement. It doesn’t make sense to compare them as an aggregate, because those study costs get refined the further along a project is in the study process,” he said.

Seel said that wherever possible, the Berkeley team looked for the most recent and accurate data available, and only a small number of feasibility studies were included in their data. In those cases, they sought to correct for the possibility of double counting and, he believes, were able to formulate accurate findings.

“We used the best available data to categorize these costs,” he said.

Independent Market Monitor Joe Bowring said data accessibility at PJM has long been a challenge, making it difficult for studies to be conducted.

“If PJM wants more accurate studies done, they should provide more accurate data,” he said.

As the grid becomes increasingly complex and built up, Connell said costs are bound to rise to a degree. While the first few projects in a region may require replacing equipment at a substation, subsequent installations may necessitate the reconducting of lines or substation rebuilds. Despite the growing investments needed, there’s been no slowdown in the number of new requests for interconnection studies across resource types, including developers looking to install renewables.

“Each upgrade is an order of magnitude of difference for each of the newer projects,” he said.

The new approach for studying interconnection requests approved by FERC last year could provide more clarity on the costs developers could face, Connell said. The new methodology clusters projects together both for identifying network upgrades and allocating costs. It also requires that deposits be made throughout the process to discourage speculative filings. (See FERC Approves PJM Plan to Speed Interconnection Queue.)

Seel pointed to the medium-term transmission plans conducted by MISO as another approach for lowering network upgrade costs. The RTO’s plans identify larger network upgrades, and it makes the necessary investments itself, rather than allocating the expense between individual generators based on interconnection requests. A more holistic and forward-looking approach to evaluating grid upgrades can create efficiencies that outweigh the investments, he said.

Bowring said he’s hopeful PJM’s new interconnection process will decrease costs by making the interconnection process more efficient and reducing speculative filings, but he believes that retaining competition and accurate costs in the buildout of transmission is important to ensuring that generation is sited in the most economical locations. Upgrade costs rising are appropriate so long as they reflect the reality of the cost to interconnect, he said.

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Electric MHD Truck Incentives Promoted in NJ

For years, Faith Krausman, a Montclair, New Jersey, veterinarian who specializes in treating animal arthritis, drove her SUV to make house calls to attend to her patients.

So, when a patient’s owner mentioned that she had applied for a government grant to buy an electric vehicle, Krausman — whose interest in protecting the environment began in high school — immediately saw the possibilities for her business, Vet-On-Wheels.

“I always wanted to have a van to do this with the house calls,” Krausman said. A tall van, which allowed her to stand up, could be refitted as a mobile animal clinic in which she could see the patients in the van, instead of going into their homes and potentially making a mess, she figured.

“I would be able to do my full exam in the van with my nurse assisting,” she said. “And the owners would also be very happy that I’m not dirtying up their floor, like with shaving fur and getting blood, and this and that. So, their homes are kept nice and tidy.”

Moreover, she added, while similar mobile clinics generate carbon emissions because they run a gasoline or diesel engine to power the clinic during the examination and any surgery needed, Vet-On-Wheels’ electric vehicle would be emissions-free.

Krausman, who is outfitting the van, spoke about her project at a forum Thursday held by the New Jersey Economic Development Authority (EDA) to promote the program that provided her with the incentives to buy the van — NJ ZIP (New Jersey Zero Emission Incentive Program). The agency is stoking interest in EV truck purchases as it prepares to launch the second phase of the program, with $46 million in funding available, at the end of March.

The effort is part of an ongoing push by the state to trigger greater use of electric trucks as vehicle selection increases, drivers and fleet owners become more open to the concept, and the state’s early electric vehicle (EV) promotion policies mature.

Alongside the expansion of the NJ Zip program, the New Jersey Board of Public Utilities (BPU) in January began accepting applications for a $16.1 million program that provides incentives for the installation of chargers for medium- and heavy-duty (MHD) electric trucks. Receipts from the Regional Greenhouse Gas Initiative (RGGI) fund the program.

In addition, after a final hearing on Jan. 17 to solicit stakeholder input, the BPU is putting the final touches on a proposed rule framework that would stimulate the funding and development needed to create private and public chargers serving MHD trucks around the state. Transportation accounts for 42% of emissions in New Jersey, and MHD buses and trucks, although only 4% of all vehicles on the road in the state, account for 25% of the pollution, according to the BPU. (See NJ Retools Electric MHD Truck Charger Proposal.)

“We’ve all had the experience of driving behind a bus or truck and smelling the thick metallic diesel exhaust that emerges in its wake,” BPU President Joseph L. Fiordaliso said in a statement to announce the opening of the charger incentive program. “Through smart and strategic programs and investments, like those featured in this charging program, we can achieve cleaner air in overburdened communities and cost savings for business owners.”

Costly But Worth It

Krausman and two other grant recipients spoke at the NJ ZIP forum Thursday to help educate small businesses on the benefits of EV truck ownership as the EDA launches the second phase of the program, the state’s largest designed to promote the purchase of EVs. EDA officials said interest in the program, which awards funding on a first-come, first-served basis, is high. About 450 people signed up to learn about the program and hear from successful applicants.

The voucher-based program has awarded applicants $39 million so far for the purchase of 370 trucks, 89% of which have been Class 4 vehicles and the remainder Class 3, 5 or 6 trucks. The second phase of the program expands the focus to include the purchase of Class 7 and 8 vehicles — the largest trucks on the road, which typically haul trailers — and provide grants to trucks that will be located or working anywhere in the state, rather than in specific target areas.

Moises Luque, CEO of the Supreme Green Team, a delivery company that serves warehouses, told the forum that creating an environmentally friendly business was so important to him that his entire fleet of six trucks are electric, all funded by NJ ZIP.

He estimated that his fleet has avoided six tons of carbon emissions and said running on electricity is cheaper than on fossil fuel, especially given today’s elevated gas prices.

“It’s a little costly upfront,” he said, of opting for EV vehicles. “However, in the long run, it is well worth it.”

The program’s second phase will award $20,000 for a Class 2b truck and $90,000 for a Class 6 truck, levels that are designed to cover 75% to 110% of the extra cost of an electric vehicle over a fossil fueled vehicle, according to the EDA. The program will award up to $135,000 for a Class 7 truck and $175,000 for a Class 8 truck.

About one third — about $15 million — of the funds will be set aside for small business and another third for businesses that are located or work in environmental justice and overburdened communities. Applicants can increase the amount awarded with bonus increases if they operate a certified woman-, minority- or veteran-owned business or commit to driving 50% of the vehicle miles in overburdened communities for three years. School bus purchases also warrant extra bonuses.

Jessie Phillip, whose company renovates commercial and residential properties, said the distance limitations of an EV truck and the fact that it takes longer to charge up than it does to fill a truck with gas are certainly a factor. But they also force him to be more organized — to know where charging points are located and to closely plan his charging schedules, he said.

EVs are in some ways easier to operate, he said, noting the lower maintenance needed and the ease of charging vehicles at home overnight.

“Hey, I don’t have a gas station in my house,” Phillip said.

Public or Private Fleets

New Jersey officials know that to spark a widespread embrace of electric trucks they need to ensure plenty of charging options around the state. The RGGI-funded program to encourage installation of chargers for MHD trucks is a key part of that effort, aiming to reduce the much-cited concern that EVs can be stranded with no power because the driver couldn’t find a charging station.

The program, which will accept applications through May 12, is designed to encourage trucking companies to go electric by focusing on the development of chargers in two main areas: community charging stations in locations that could serve several trucking companies and depots to serve private fleets.

Developers of public chargers can get up to 100% of the purchase and installation costs, including up to $225,000 toward the purchase and installation of 150-kW or greater dual-port, networked DC Fast Charger (DCFC).

Funding of up to $175,000 is available for the purchase and installation of 150 kW or greater dual-port, networked DCFC for use charging a private fleet. Applicants can apply for funding for up to six chargers. (See NJ BPU Approves $16M for 1st MHD EV Charger Program.)

Stimulating Private Investment

The BPU’s straw proposal, however, seeks to establish a framework in which private funds are the driving force for charger development. The proposal is focused on “questions about who should construct, own, operate, and pay for the MHD network necessary to make New Jersey a national leader in the adoption of electrified MHD fleets and the build-out of an MHD EV Ecosystem.”

The BPU calls it a “shared responsibility” model that “promotes appropriate roles for both EDC and private investors as well as private efforts to drive MHD adoption.” The agency released a version in June 2021 and then reshaped it using stakeholder input from six public hearings, and released a new version in January (See NJ Retools Electric MHD Truck Charger Proposal.)   

The biggest change in the latest version is a shift to allow private fleets to obtain incentives and support for developing make-ready projects — those with the cables, equipment and infrastructure to hook up a charging station. To be eligible, private fleets must be located or primarily operate in overburdened communities.

Private fleet charging depots seeking incentives must also replace existing fossil-fueled vehicles with electric trucks rather than simply adding them and must also agree to participate in a managed charging program, requiring that 90% of its charging needs be done in off-peak periods to minimize the extra burden on the grid and help drive down electricity rates.

Charging Burden

Several speakers at the Jan. 17 stakeholder hearing expressed support for the revised proposal, but others had concerns, particularly over the managed charging requirements.

Zack Khan, senior policy manager for Tesla, which has developed the Semi electric truck, said the proposal does not go far enough in supporting private fleets. He called it “unnecessarily complicated and burdensome on fleets, when the priority should be getting the most zero emission trucks on the road in New Jersey as fast as possible.”

“We suggest the proposal be amended so that every private charging location for truck fleets be eligible for some level of make-ready funding,” Khan said. “If the state wants to target overburdened communities, which we support, it can make those chargers eligible for 100% of make-ready costs and make all others eligible for a lower amount, whether that is 50% or 75%.”

Khan said the managed charging requirement was “problematic” and could dissuade companies from electrifying their fleets if they’re concerned about limitations on “when and how they fast they can charge their vehicles.”

Nicholas Raspanti, director of business development for Zeem Solutions, a California company that develops fleet charging hubs, urged the BPU to be flexible in the requirement that 90% of charging be done off-peak.

“We feel that that could be overly burdensome,” he said, suggesting that the managed charging rules could impact the speed of EV truck adoption.

Judy McElroy, CEO of Fractal Energy Storage Consultants, called the BPU’s suggestion that utilities implement demand charges “the elephant in the room.” One suggestion in the proposal is that the managed charging rules could be enforced by increasing the charging cost during peak charging hours.

McElroy said that demand charges make sense from the utilities’ point of view, to make customers pay their share if they charge at peak hours, rather than making ratepayers foot the bill. But she encouraged the BPU to reevaluate the strategy.

“I commend the proposal on offering incentives to accelerate adoption, but unless there’s a vehicle to address the ongoing threat of demand charges, I don’t feel like this is scalable, sustainable or economically viable,” she said.

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New Coalition Aims for California to be in RTO

A new coalition of trade and environmental groups says California needs to be part of an RTO to achieve its clean energy goals and maintain reliability, adding its voice to those calling for Western organized markets and for CAISO to grow into a multistate RTO.

Calling itself Lights on California, the coalition’s members include national trade groups Advanced Energy United and the Solar Energy Industries Association, environmental organizations Natural Resources Defense Council and Environmental Defense Fund, and the California Chamber of Commerce, which wields significant influence in the state capitol.

Lights on California launched Monday with a news release and website, saying its purpose is to raise awareness about the “state’s options for building a more affordable, more reliable clean energy grid through participation” in a Western RTO and to advocate for that goal.

“We simply cannot afford to be left behind as the rest of the West looks for regional solutions that will enhance reliability,” Chamber of Commerce Policy Advocate Brady Van Engelen said in the news release. “An RTO is clearly one of the best ways to deliver it, providing a framework for tapping into vast wind, solar and other reliable, low-cost clean energy supplies across the West.”

The group’s announcement was the latest development in a reinvigorated effort to allow CAISO to become an RTO. Several prior attempts failed, the last in 2018, because lawmakers were unwilling to change the ISO’s rules to allow out-of-state members to serve on its Board of Governors.

Circumstances in the West have changed substantially in the years since, fueling a new push and giving advocates more hope of success.

The new conditions include strained supply in CAISO and its neighbors during Western heat waves, the need for new transmission to carry renewable power long distances across the West, and legal mandates for Colorado and Nevada transmission owners to join RTOs by 2030. In addition, more states are adopting clean energy and emissions reduction targets, which advocates say will be much easier to achieve in an RTO.

Potential competition from SPP, which plans to establish its own Western RTO, and from the Western Power Pool, whose Western Resource Adequacy Program could be a springboard to an RTO, are lending urgency to the latest CAISO governance reform effort.

The coalition cited last year’s unanimous passage of Assembly Concurrent Resolution 188, which asked CAISO to prepare a report for the state legislature summarizing studies of the benefits of regional market participation. Assemblymember Christopher Holden, who headed the 2017/18 effort to make CAISO a regional organization, authored ACR 188 with the intent of restarting the conversation on CAISO becoming an RTO. (See Plans Revive to Make CAISO a Western RTO.)

A draft of the report, performed by the National Renewable Energy Laboratory for CAISO, was published Jan. 13 with a final version due to lawmakers by the end of February. Among the studies it examined was one led by state energy offices in Utah, Colorado, Idaho and Montana that found an RTO covering the entire U.S. portion of the Western Interconnection could save the region $2 billion in annual electricity costs by 2030 and cut carbon dioxide emissions by 191 million metric tons. (See Study Shows RTO Could Save West $2B Yearly by 2030.)

“As the legislature considers how best to act on the CAISO/NREL findings, the Lights on California coalition will be working together to raise awareness about the benefits of an RTO for consumers, for businesses, for workers and for the environment,” the group said in its news release.

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Feds Charge Two in Alleged Conspiracy to Attack BGE Grid

The Department of Justice has charged neo-Nazi leader Brandon Russell and associate Sarah Beth Clendaniel with plotting to attack electric substations in Baltimore, saying they envisioned a “legendary” attack that would “completely destroy” the city.

Russell — a resident of Orlando, Fla., and the founder of Atomwaffen Division, which DOJ considers a “racially or ethnically motivated violent extremist” group inspired by Nazi beliefs — “provided instructions and location information” to Clendaniel, of Catonsville, Md., FBI agent Tom Sobocinski said at a press conference Monday morning. Clendaniel plotted to acquire the weapons for the attack and identified five substations to target, according to a media statement from DOJ.

“The accused were not just talking, but [were] taking steps to fulfill their threats and further their extremist goals,” Sobocinski said.

Conspirators Met While in Prison

The criminal complaint against Clendaniel and Russell is still sealed, but a copy of the complaint obtained by CNN went into more detail about the pair’s plans, as well as how the FBI discovered their operation. According to the complaint, the two have been acquainted at least since 2018, when they exchanged correspondence while both were incarcerated at separate facilities.

Brandon Russell Mugshot (Pinellas County Sheriff's Office) Content.jpgMugshot of Brandon Russell from his arrest in 2018. | Pinellas County Sheriff’s Office

Russell was imprisoned in January 2018 for possessing explosive material, after a former Atomwaffen member told investigators that Russell and other members were planning to attack infrastructure including power lines and a nuclear plant in Florida. When the FBI arrested him for the Maryland plot, he had just completed his five-year prison term and was on a three-year supervised release. The reason Clendaniel was in prison in 2018 was not given in the complaint, but it did explain that she had a history of drug and robbery convictions.

While in prison, Russell struck up an online correspondence in June 2022 with a third person working for the FBI, identified in the complaint only as “CHS [confidential human source]-1.” Russell encouraged CHS-1 to carry out attacks against critical infrastructure, specifically electrical substations. As part of their conversation Russell provided the informant with white supremacist publications that discussed attacking critical infrastructure and called “putting holes in transformers … the greatest thing somebody can do.”

Russell first mentioned Clendaniel to CHS-1 last month, saying she was “serious and can be trusted.” Later the same day Clendaniel introduced herself to the informant, saying that she was terminally ill and wanted to “accomplish something worthwhile” before she died.

The complaint only discusses the messages between Clendaniel and CHS-1 and between CHS-1 and Russell, with no record of messages sent between Clendaniel and Russell directly or of chats involving the three of them.

As the three continued to develop their plan over the next few weeks, Clendaniel identified five substations she planned to target in a “ring” around Baltimore and told the informant that she would like to destroy all of them in the same day. She told CHS-1 that a successful attack would “probably” cause a cascading failure of the local grid. The FBI later confirmed that all five substations were operated by Baltimore Gas and Electric, a subsidiary of Exelon (NASDAQ:EXC).

“If we can pull off what I’m hoping … this would be legendary,” Clendaniel said on Jan. 29, according to authorities. Clendaniel allegedly said if they hit several of the substations on the same day, they “would completely destroy this whole city.”

Russell’s conversations with the informant included comparing the planned substation attack to December’s mass outages in Moore County, N.C., when unknown attackers damaged two Duke Energy (NYSE:DUK) substations with rifles and caused more than 54,000 customers to lose power. (See Duke Completes Power Restoration After NC Substation Attack.) Asked by CHS-1 why specific substations were chosen, Russell explained that they were selected to have the biggest impact on the power grid.

Asked how many people could have been affected if the attacks had gone through as planned, Sobocinski said that the FBI “believes this was a real threat,” and that “our hope is that it would have been minimal, but we couldn’t … tell you what that result would look like.” While Sobocinski declined to provide details of the arrest, the complaint said that investigators determined that the people communicating with their operative were Clendaniel and Russell based on details they disclosed in their chat conversations. Agents who were familiar with Russell’s voice were also able to recognize him on voice messages left with CHS-1.

Incidents of Violence on the Rise

Russell and Clendaniel’s plans are reminiscent not only of the Moore County attacks, but also of a plot to damage electric substations to which three men pleaded guilty nearly a year ago. In that incident Christopher Cook, Jonathan Frost and Jackson Sawall each admitted to planning to destroy critical infrastructure in order to “sow hate [and] create chaos” inspired by “racially or ethnically motivated violent extremist views.” Like Russell and Clendaniel, the conspirators were caught by law enforcement before carrying out their goals. (See FBI: Conspirators Planned Grid Attack to Start Race War.)

The arrests come just days after the Department of Energy released a report showing incidents of deliberate physical damage to bulk power system facilities rose by 77% in 2023 from the year before. (See DOE: Physical Attacks, Sabotage Jumped in 2022.)

The charges against Clendaniel and Russell of conspiring to destroy an energy facility carry a maximum sentence of 20 years in federal prison.

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Low-carbon Propulsion is Changing Aviation

Commercial aviation can be carbon-free, say engineers and commercial airline planners who see the changes coming first in smaller electric aircraft built specifically for commuting and able to slip in and out of airports abandoned by major carriers.

Privately held Eviation, of Washington state, is one of a handful of companies designing electric aircraft powered entirely by batteries. Alice, its sleek nine-passenger electric commuter, successfully flew for the first time in September 2022, reaching an altitude of 3,500 feet. (See Electric Commuter Plane Takes Flight in Wash.)

Gregory Davis (BloombergNEF) Content.jpgEviation Aircraft CEO Gregory Davis | BloombergNEF

Eviation CEO Gregory Davis appeared last week at a BloombergNEF conference in San Francisco to talk about the company’s plans. He was joined in a seminar by representatives of Alaska Airlines and European aerospace company Airbus.

“We’ve shown that the technology exists to make an electric airplane, and it’s today’s technology,” said Davis. “We’ve addressed the technology of the batteries … in terms of the architecture and the certification of those batteries.”

The design of the aircraft — motor-driven props at rear behind the batteries and passengers in the front — was driven by “where we needed to put the batteries to make the aircraft perform properly,” said Davis.

The sleek fuselage and wings as aerodynamically efficient as possible were designed to maximize lift, he added.

“We’ve been working with the [Federal Aviation Administration]. We’re building a commuter category aircraft. So it is certified under a set of standards that are complimentary for the size of the airplane.”

The company is projecting it can begin selling Alice to fly routes of 250 nautical miles as soon as 2027, said Davis.

“That’s a regional market. It’s a market that really hasn’t been serviced globally and effectively in the past 20 to 30 years,” he added, explaining that airlines gradually discontinued service as airplanes became larger.

The switch to electric will not only be clean; it will have a profound impact on how commercial aviation serves the public, he argued.

Pasha Saleh, head of corporate development for Alaska Airlines, said the company is working with ZeroAvia, a company planning to incorporate a 3-MW fuel cell into an existing conventional turbo-prop aircraft, a De Havilland DHC-8-400.

“Range is overrated,” he said. “The De Havilland has a 1,200-mile range, but airlines don’t use it for 1,200 miles. It doesn’t have a proper galley for heated food. You don’t want to be on a turboprop for three and a half to four hours.

“It turns out that 90% of the routes we use [the DHC-8] on are below 200 miles; some are 98 miles long,” he said, meaning the airplane is using just 15% of its capacity. “It really comes down to what is the seat cost, the mile cost of operating.

“And that’s what’s exciting to me when I look forward five to 10 years, is that with these new technologies — whether they’re pure hydrogen, electric, hybrid, whatever it is — as an airline, we want to find the right niche for the market we’re using, because right now, it’s not all just about one variable, like range.”

Hugo Wagner (BloombergNEF) Content.jpgHugo Wagner, Airbus | BloombergNEF

Hugo Wagner, an executive with Airbus, agreed.

“I think many people don’t realize that … aircraft gas turbines as of today aren’t really optimized for some critical parts of the journey, namely the taxi, takeoff and landing part, meaning that actually almost 60% of the fuel consumption of the aircraft is below the 2,000-nautical-mile range.”

Davis added, “What we’re doing is we’re taking the technology, and we’re designing for the way that people are actually going to use the plane.”

The U.S. has 5,000 airports, he added, but only 500 are actively used, he said.

“So, 60% of the population of the United States lives within 10 miles of an airport, and 95% lives within 25 miles of an airport. And yet, you’re going to spend 45 minutes to an hour and a half getting to the airport to get on your flight.

“We’re not using our infrastructure right now. … An electric aircraft and sustainable aircraft mean that the operating economics are flipped upside down. So instead of a longer-range flight being the most economically efficient flight for a turbine aircraft, for an electric airplane, you don’t need to climb for efficiency, so there’s no burden of climbing up to 25,000 feet to save on fuel if your aircraft is equally efficient at sea level as it is up at altitude.

“And moreover, with that your operating economics are the same on the first mile as on the last, so there’s no incentive to stretch your flight to maximize the point-to-point utilization of fuel. On the airplane, your electrons get consumed the same way.”

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FERC Orders Changes to PacifiCorp and NV Energy Interconnection Rules

FERC on Friday ordered show cause proceedings on PacifiCorp’s and NV Energy’s generator interconnection rules while approving, in part, rules aimed at limiting speculative projects in Nevada.

The first show-cause order (EL23-26) found that PacifiCorp’s large generator interconnection procedures might be unjust and unreasonable due to rules that trigger restudy of lower-queued customers when an interconnection customer suspends its agreement. The commission also questioned the requirement that the suspending customer pay for the restudies.

FERC Order 2003 requires interconnection customers to pay for their own studies, even if it is a restudy caused by another firm’s decision to withdraw its higher-queued project. The order also allows projects to suspend their interconnection agreements for up to three years, which gives developers flexibility to deal with permitting and other delays that are likely to impact large projects.

FERC issued a preliminary finding that PacifiCorp’s requirement is unjust and unreasonable because the company can require restudies when a developer only suspends its interconnection agreement, even though a restudy would not be needed if the project ultimately proceeds.

The second show-cause order (EL23-27) directs Nevada Power to show why its large generator interconnection procedures are just and reasonable despite not specifying a method for allocating the costs of network upgrades among interconnection customers in a cluster.

FERC has approved serial cluster studies for both ISO/RTOs and independent utilities, including PacifiCorp and NV Energy, subsidiaries of Berkshire Hathaway Energy. NV Energy’s 2013 update to its large generator interconnection procedures includes pro forma language that said it “may allocate the cost of common upgrades for clustered interconnection requests without regard to queue position,” but the procedures do not specify how those costs are allocated.

The specific costs significantly affect rates and should be included in the utility’s tariff, FERC said. Without specific rules on file, the commission said, it cannot easily determine whether any cost allocations are consistent with its precedent.

The two utilities must show cause as to why their rules are just and reasonable within 60 days, or they can propose changes under Section 205 of the Federal Power Act to address FERC’s concerns. A 205 filing would put the show-cause proceeding in abeyance while the commission considers the proposals.

The third order (ER22-2933) approves some changes NV Energy proposed to discourage speculative interconnection projects and allow projects that are ready to move forward with construction to get through the line faster. The utility has seen the number of requests to connect to its grid spike, and recently, 42% of them have either gone into default, been withdrawn, or have interconnection agreements under suspension.

To cut back on the speculative projects, NV Energy proposed increasing deposit requirements; eliminating the use of a “Preliminary Plan of Development” (a document used by the Bureau of Land Management when firms seek to build on federal land) as a form of site control; and setting a withdrawal penalty to hold remaining customers harmless from restudy costs. It also would create a graduated deposit structure based on project size, ranging from $75,000 for up to 50 MW; $150,000 for 50 to 200 MW; and to $250,000 for 200 MW or greater.

FERC approved the stricter site control requirements, including raising the deposit in lieu of site control from $50,000 to $250,000. Those rules will increase the likelihood that only commercially viable projects will have a place in the queue, FERC said.

The commission rejected the withdrawal penalties NV Energy proposed because it found that requiring such customers to cover restudy costs would prove too burdensome. Other utilities have withdrawal penalties, but they are more limited, FERC said.

FERC also rejected NV Energy’s proposal to require interconnection customers who suspend their agreements to pay for restudies of lower-queued projects. Because suspended projects still have the option to move forward, FERC ruled it would be “inefficient for [NV Energy] to conduct a restudy based on the assumption that a suspending interconnection customer is going to withdraw from the queue.”

The commission also rejected a rule that would have let Nevada Power assign the cost of network upgrades that were only triggered by one project in a cluster to that specific project. FERC found the language was not specific enough.

In discussing that rule, the commission also noted that it launched the second show cause proceeding against Nevada Power because its tariff does not include how the utility allocates the costs of network upgrades among interconnection customers in a cluster.