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November 13, 2024

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What’s Next for Massachusetts’ FCEM Proposal?

Massachusetts kicked off the year by giving new life to a longtime goal of many climate and clean energy advocates in New England: developing a Forward Clean Energy Market.

The FCEM idea has been floating around New England since at least 2016, when it was put forward by renewable energy companies.

It has evolved into a proposal that the Massachusetts Department of Energy Resources (DOER) put out in the first week of January, relying on help from consultants at the Brattle Group and Sustainable Energy Advantage. (See Massachusetts Floats FCEM Proposal.)

“Our current market structures and the current procurement process, although they provide a lot of incentives, it’s difficult to scale those both in size and speed,” Joanna Troy, Massachusetts’ director of energy policy and planning, said in a recent webinar.

That’s why the state has put forward the regional plan, aiming to accelerate the development of clean energy sources to help Massachusetts and the region’s other states meet their ambitious goals.

But with the document now out and making the rounds, the question floating around New England’s energy stakeholders is: “Now what?”

As the state tries to advance its plan to start a regional clean energy market, it will have to face down a heavily bureaucratic stakeholder process, a cautious grid operator, and the general inertia of a region that remains way behind on its decarbonization goals.

The key to Massachusetts’ proposal, energy and climate experts say, is that it remains flexible and gives states some leeway to transition their own existing, patchwork clean energy incentives into a regional market over time.

“It’s tailored to the fact that the region has a bunch of renewable energy decarbonization goals that have different flavors to them,” said Pete Fuller, a consultant at Autumn Lane Energy Consulting.

“What the DOER and their consultants have done here is to try to meet the region where it is and create a platform … that will enable the region to meld existing policies and objectives into this new platform. I’m very encouraged by that,” Fuller said.

The proposal includes four types of clean energy certificates with varying degrees of resource specificity; plus it would allow states to offer their own individual RECs or other existing incentives on the regional platform.

That would let the New England states access the market without necessarily making any changes to their existing statutes — at least at first.

Susannah Hatch, director of clean energy policy at the Environmental League of Massachusetts, echoed that understanding of the FCEM plan’s design.

“It’s an additive feature to existing markets currently being administered by ISO-NE, which would still allow states to explore procurements outside of it,” she said.

But she said she’ll be watching closely to see how the market would address the fact that sometimes cost isn’t the overriding factor in procuring energy.

“Renewable energy sources are not apples to apples,” she said. “We definitely want to make sure that the market incentivizes a balanced renewables portfolio for New England.”

Big Governance Questions to Answer

What’s prevented FCEM from moving from concept to reality is primarily a complex set of questions about how the market would be governed.

To what extent would ISO-NE be involved? Would the market be FERC-jurisdictional? How would the states share control of its design and operation?

The Massachusetts proposal recognizes the difficulty of answering those questions and puts forward a preliminary plan that includes creation of an independent nonprofit governed by representatives of the six states, which would work alongside ISO-NE and have the ability to propose rule changes to FERC.

But it also mentions possible alternatives and says the states will keep studying.

“The fact that Chapter 1 of the report is governance highlights the importance of that topic and hopefully jumpstarts those conversations so that we can begin to resolve this stuff and put some real certainty to a structure, rather than the sort of speculative conversations we’ve been having,” Fuller said.

As far as ISO-NE is concerned, the ball is fully in the states’ court.

ISO-NE spokesperson Matt Kakley said the grid operator is “reviewing the proposal and awaiting further guidance from the New England states on whether this is a path they’d like to pursue.”

Fuller said the RTO is a “cautious beast.”

“And they are very anxious that the states lay out a clear plan and really provide a definitive direction,” he said. “Once the states do that, then I think the ISO will engage, and I think we can all get into problem solving.”

Troy said that the state’s priority is getting feedback from the public.

After that, she said, Massachusetts will “continue discussion within the NESCOE setting with other states before determining what or if an additional NEPOOL or process would be necessary.”

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MRO Identifies Top Risks for 2023

The Midwest faces several new risks in 2023, including cybersecurity threats and supply chain difficulties, according to the Midwest Reliability Organization’s 2023 Regional Risk Assessment, released Monday.

MRO prepares its risk assessment each year as a supplement to the ERO Enterprise’s publications, such as NERC’s Long-Term Reliability Assessment (LTRA), State of Reliability Report and Reliability Risk Priorities Report, focusing on the risks specifically facing utilities in MRO’s footprint. The report was developed by MRO staff with input from the regional entity’s three advisory councils: Compliance Monitoring and Enforcement (CMEP), Reliability, and Security.

NERC’s LTRA, released in December, identified the Midwest as one of the areas at highest risk of energy shortfalls in the coming decade, largely because of generation retirements “outpacing the new resource additions and not keeping up with resource adequacy criteria.” (See NERC Warns of Ongoing Extreme Weather Risks.)

MRO’s new report echoed this warning, specifying that the new generation being introduced is both “dispersed [and] variable” and “perform much differently than conventional resources.” The consequence of the first issue is that reserve margins for the region’s utilities are becoming tighter; the second means that new modeling assumptions are needed to account for the difference in the new assets’ performance.

These factors were among the eight “most likely and impactful” risks of the 17 that MRO staff identified in the latest risk assessment. Also included in the highest risk category are:

  • generation unavailability during extreme cold weather;
  • insider threats;
  • overhead transmission line ratings;
  • phishing, malware and ransomware; and
  • supply chain compromises.

The report’s authors ranked each of these risks as posing a moderate or major risk to bulk power system reliability, and either “possible” or “likely” to occur. MRO said that these risks “will be focus areas for 2023 mitigation action plans … to help improve or develop controls and increase awareness of these risks within MRO.”

The report also adds three risk areas that were not included in last year’s risk assessment: compromise of sensitive information by malicious actors; increased penetration of internet-connected devices on utility systems increasing the risk of remote infiltration; and availability of necessary materials and equipment because of supply chain disruptions, such as those caused by the COVID-19 pandemic. MRO considered each of these risks possible but posing a minor threat to grid reliability.

Six of the 14 risks that were found in both this year’s and the previous year’s assessments changed their ranking in the new report, with most increasing in either impact or likelihood. Bulk power model assumption accuracy and energy reliability planning both increased from “possible” to “likely” because of “limited mitigating actions” since last year.

Line ratings went from a minor to moderate risk because of “uncertainty introduced by FERC Order 881,” which requires the use of ambient-adjusted ratings for short-term transmission requests for all lines impacted by air temperature. (See FERC Denies Rehearing, Clarifies Order 881 on Line Ratings.) An “increasingly challenging job market” caused the “tightening supply of expert labor” risk to increase from “possible” to “likely,” and the “inadequate [inverter-based resources] ride-through capability” decreased in impact but increased in likelihood.

Only one risk dropped in both impact and likelihood: “misoperations due to human errors” was ranked as “possible” but with “negligible” impact, thanks to “guidance provided by an ERO and FERC report on protection system commissioning programs and the limited impact of a single misoperation on the bulk power system.”

“The risks highlighted in this report provide valuable insight to the challenges the industry faces and the policies and regulations that will help define a variety of proposed solutions,” MRO COO Richard Burt said in a press release. “This report and others published by the ERO Enterprise underscore the need for multiple stakeholders to work together in a coordinated and collaborative fashion towards the common goal of reliable and secure power grid.”

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Community Choice Aggregation Benefits in Mass. Quantified

A newly published study finds that community choice energy aggregation programs have resulted in cost savings for residents in 79% of the Massachusetts municipalities that have developed them.

The report, released Monday by the University of Massachusetts Amherst, also found that community choice energy (CCE) programs in the state are contributing to sustainability goals: Some 60% of the default CCE packages analyzed have a higher percentage of renewable energy certificates (RECs) than required by the Massachusetts Renewable Energy Portfolio Standard, and almost a third were 100% RECs.

In a news release, Marta Vicarelli, an assistant professor of economics and public policy at UMass Amherst and principal investigator in the study, said the results suggest that CCE programs stabilize prices, increase consumer protection and support the transition to sustainable energy.

Also, she said, “by expanding local renewable energy markets, CCE programs contribute to local economic development.”

The study compared CCE package prices with the local utility’s monthly residential basic service rates and found the CCE prices were lower in 79% of the municipalities. Savings ranged as high as 2.55 cents/kWh and averaged 0.88 cents/kWh. The data ran only through October 2021 and so do not reflect any higher level of savings created by recent price volatility.

For municipalities with a percentage of RECs higher than state requirements, the numbers were slightly different: More localities (89%) achieved savings, but the average amount saved was lower (0.84 cents/kWh).

The study also branched into the more subjective aspects of CCE, such as community attitudes toward sustainability, and it went beyond market data to include focus groups, an online survey and interviews with local leaders about their experiences implementing the programs.

“To our knowledge, this is the first study assessing in detail the performance of a CCE program in the United States by both analyzing market data as well as the self-reported experience of municipalities,” Vicarelli said.

In November 2021, when the UMass Amherst Sustainable Policy Lab collected the market data for its study, 157 of the 351 municipalities in the state had adopted CCE programs; 97 of them responded to the online survey that was part of the study.

Among the findings:

  • Money was the driving factor most often: 56% of municipal officials surveyed said rate reduction was the primary goal for the local CCE program, compared with increased use of renewable energy (27%) and price stability (16%).
  • Motive often aligned with politics: 32% of municipalities that swung Democratic in the last two presidential elections cited higher renewable energy as their primary goal, compared with only 6% of those that swung Republican.
  • The roadblock most often reported (26%) in implementing a CCE program was the slow process of approval by the state Department of Public Utilities — more than a year in some cases.
  • Smaller municipalities, which typically have fewer resources, often had trouble setting up their CCE programs (43%), with the most common complaint being difficulty understanding state regulations.
  • Once a CCE program was in place, administrative costs were not cited as a problem by any officials surveyed.

Under state rules, residents who do not opt out are automatically enrolled in the default package in their municipality’s CCE program when it is put in operation. They can opt to switch to packages with different percentages of RECs and different prices, if they are available, or they can also opt out.

Almost a quarter of Massachusetts municipalities surveyed said the automatic opt-in created resentment among their residents.

As of early 2023, 176 municipalities have obtained DPU approval to run CCE programs, the largest of which is Boston. The city is currently posting a standard rate (32% renewable energy) of 11.29 cents/kWh, with an opt-down option (22% renewable energy) of 10.9 cents and an opt-up option (100% renewable energy) of 13.987 cents. Prices run through December 2023.

Boston Community Choice Electricity indicates the basic Eversource Energy residential rate (22% renewable energy) is 25.776 cents through June 2023. Sixty-one percent of residential customers were in municipal aggregation in 2021, the last year for which statistics are available in the DPU repository.

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Vermont Joins Northeast Clean Hydrogen Hub

Vermont has signed onto the multistate Northeast Clean Hydrogen Hub (NCHH), one of the many joint state proposals competing for some of the $8 billion in federal funding from the Regional Clean Hydrogen Hubs (H2Hub) program.

The state joins Connecticut, Maine, Massachusetts, New Jersey, New York and Rhode Island in the effort, alongside 47 other companies, nonprofits and academic institutions, including Dominion Energy, the Electric Power Research Institute and Princeton University, bringing the total number of partners to more than 100.

The proposal is being led by New York, which “is pleased to welcome the state of Vermont to a diverse group of partners,” Gov. Kathy Hochul said in announcing the move Thursday. “Adding this elemental resource to our clean energy economy toolbox will advance our collective emissions reduction and climate goals because like our joint effort, air has no borders.”

“To tackle climate change, we’ll need a multipronged approach that relies on innovation and cooperation,” Vermont Department of Public Service Commissioner June Tierney said. “In Vermont, we’re working to do our part and ready to collaborate with the other states across our region in exploring ways to promote a clean energy future.”

Hochul also announced that she had named Adam Zurofsky, previously New York deputy secretary for energy and finance, as interim director of the project. Zurofsky “will oversee the process of submitting a final application to the [U.S.] Department of Energy, working with the partner states and other stakeholders to maximize the impact of the hub and its ability to advance shared priorities.”

NCHH is seeking to become one of up to 10 regional hydrogen hubs in the H2Hub program, funded by the Infrastructure Investment and Jobs Act. (See DOE Opens Solicitation for $7B in Hydrogen Hubs Funding.) The New York State Energy Research and Development Authority (NYSERDA) submitted a concept paper for the NCHH on Nov. 7, and it has an April 7 deadline for its full proposal.

“The level of commitment and collaboration amongst this group demonstrates the scope and scale necessary to establish the ecosystem needed for the industry to grow and for the region to be a leader in clean hydrogen,” NYSERDA President and CEO Doreen Harris said.

Officials from other partner states also applauded Vermont’s move, including Connecticut Gov. Ned Lamont: “It’s great to have our neighbors to the north in Vermont join the Northeast Clean Hydrogen Hub and make what was already a strong coalition and candidate to secure designation.”

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Policymakers Working to Meet Spiking Demand of Data Centers in Virginia

Data centers have been a major business in Northern Virginia for decades, but a recent acceleration in their growth has policymakers working to make sure their high demand for electricity continues to be met reliably.

“Data Center Alley,” near Dulles Airport outside of D.C., is home to the largest concentration of data centers in the world, easily outpacing Silicon Valley, according to the Loudon County Department of Economic Development.

Northern Virginia has ties to the earliest days of the internet, from when the Defense Department’s Advanced Research Projects Agency (ARPA) set up ARPANET in the 1960s, Steven Gonzalez Monserrate said in an interview with RTO Insider. Gonzalez Monserrate has worked in the industry and is pursuing a doctorate in the Massachusetts Institute of Technology’s History, Anthropology, and Science, Technology and Society (HASTS) program on data centers’ impact on the environment.

“There’s another reason for it, which is national security,” Gonzalez Monserrate said. “So, a lot of the data centers in Data Center Alley are government-related as well.”

The cheap power from Dominion Energy (NYSE:D) has also led many data centers to plop down in its footprint. Data centers generally tend to cluster around each other because it minimizes the latency in internet connections, Gonzalez Monserrate said.

“People who play video games, for instance, or people who are doing trading on Wall Street, they need very low latency in the milliseconds to have a satisfactory experience,” he added. “And so, the closer that your data center is to you the one that you’re accessing and routing information, the lower the latency.”

The importance of lower latency is driving additional construction of new data centers, as are new trends on the internet such as the “metaverse,” Gonzalez Monserrate said.

The Virginia Department of Environmental Quality is taking comments on a proposal that would allow the 300 facilities in Northern Virginia to use their on-site diesel backup generation more often from March through July in case the transmission grid is too overloaded to send them power.

Dominion is accelerating several transmission projects to alleviate constraints around Data Center Alley, which makes up 20% of the utility’s overall demand and is the only major source of load growth there.

“This includes several reconductoring projects, substation expansions and two new 500/230-kV lines,” spokesman Aaron Ruby said in a statement. “The first of the projects will be completed in late June and will help alleviate the constraints.”

DEQ’s proposal, which cannot go into effect until after it has taken written comments from interested parties and held a public hearing late this month, was issued out of an abundance of caution, and the issues will not impact service to residential or small business customers in the area, he added.

Individual data centers can have demand of up to 100 MW. Gonzalez Monserrate said that most of that power is used to run the servers of the cloud or to provide cooling for them. Cooling is often around 40% of the demand for more efficient facilities, though it can be higher than that, he said.

PJM has approved $627.62 million worth of transmission upgrades around Data Center Alley to avoid reliability violations observed in 2024 and 2025, which Dominion will build by 2025. Both houses of Virginia’s General Assembly have unanimously voted out bills, Senate Bill 1541 and House Bill 2482, that call on the State Corporation Commission to approve those upgrades within 270 days.

But load growth from new data centers has outpaced even those new lines, with PJM explaining it was opening a third window to the 2022 Regional Transmission Expansion Plan to deal with expanded data center demand expected through 2028.

PJM’s 2023 Load Forecast Report showed Dominion’s peak load growing at a rate of 5% per year over the next decade. The rest of the RTO is expected to grow by just 0.8% per year, with some regions seeing demand drop over the decade. In a presentation to the Transmission Expansion Advisory Committee in January, PJM said that its summer peak prediction for 2022 was off by 732 MW as Dominion had peak demand of 21,156 MW. That is expected to grow to 35,789 MW by 2033.

“This growth primarily driven by data center loads, which have been increasing at an unprecedented rate and will require significant new capital investment,” Dominion CEO Robert Blue said on the firm’s earnings call Wednesday. (See related story, Dominion Energy Sees Loss in Q4; Earnings Fall for 2022.)

Adding more transmission projects to the 2022 plan will ensure that the infrastructure is available before the demand shows up, PJM Director of System Planning Dave Souder told RTO Insider at the TEAC meeting Tuesday. The rate of load growth driven by the industry is fairly new, and it is starting to impact other regions.

“Until recently, it has been atypical; however, there has been a significant data center load growth in the Dulles Airport area,” Souder said.

The biggest internet companies in the world all have data centers in Northern Virginia, including Amazon, which is a major player industry through its Amazon Web Services subsidiary. The tech giant also picked nearby Arlington as its second headquarters in 2018, and in January it announced it would build another $35 billion worth of data centers in the state by 2040, which was welcomed by Gov. Glenn Youngkin (R).

“Virginia will continue to encourage the development of this new generation of data center campuses across multiple regions of the commonwealth,” Youngkin said. “These areas offer robust utility infrastructure, lower costs, great livability and highly educated workforces, and will benefit from the associated economic development and increased tax base, assisting the schools and providing services to the community.”

While the major players in the industry have committed to efficiency and renewable energy to meet their data centers’ demands, Gonzalez Monserrate cautioned that some in the industry were not focused on such efforts at all.

“It’s important to note that most data centers out there are not Google, or Amazon, or these giant facilities with a lot of capital; many of them are actually really poorly resourced or poorly run, or in aging facilities that don’t have the resources to be energy efficient,” he added.

Devin Leith-Yessian contributed to this article from Valley Forge, Pa.

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Lawmaker Introduces Bill to Turn CAISO into RTO

SACRAMENTO, Calif. — A key state lawmaker introduced a bill Wednesday that could eventually transform CAISO into a regional transmission organization with an independent governing body, including members from other Western states.

Assembly Bill 538, by Assemblymember Christopher Holden, would allow CAISO to develop a governance proposal to reach that end, requiring approval from the California Energy Commission and the state legislature. Under the bill, a Western states committee would have an equal number of representatives from states whose transmission owners participate in CAISO. The bill says the committee would “provide guidance” to the ISO on “all matters of interest to more than one state,” but the body’s exact role — including its part in selecting board members — remained unclear Wednesday.

“Centralizing dispatch operations and transmission planning with the rest of the region would significantly enhance electrical reliability and affordability for California households,” Holden, chair of the Assembly Appropriations Committee, said in a statement. “California could go it alone, but then we would be a proverbial energy island. The bottom line is California can reduce cost, ensure we keep the lights on and importantly, achieve our clean energy goals by collaborating with other Western states.”

Holden’s prior efforts in 2017/18, when he chaired the Assembly Utilities and Energy Committee, failed to persuade enough of his fellow lawmakers to relinquish control of CAISO’s Board of Governors, whose five members are appointed by the California governor and confirmed by the state Senate.

Circumstances have changed since then, with strained supply in the West during extreme weather, especially in California. More states, cities and utilities have adopted 100% clean energy goals like California’s, requiring new transmission to move wind and solar power long distances. And two states, Nevada and Colorado, enacted requirements that their major transmission owners join RTOs by 2030.

In addition, CAISO faces 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.

Last year Holden won 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 as a way to restart regionalization discussions.

The report is due to lawmakers by the end of February. A draft report, prepared by the National Renewable Energy Laboratory, cited a range of studies that show significant benefits for California and the West in terms of cost savings, grid reliability, transmission planning and meeting clean-energy goals. (See CAISO Issues Report on Western Regionalization Studies.)

In recent weeks, the movement toward greater regionalization, and calls for one or more RTOs in the West, have grown.

A plan by CAISO to add a day-ahead market to its Western Energy Imbalance Market cleared the Board of Governors and the WEIM Governing Body on Feb. 1. (See CAISO Approves Day-ahead Market for Western EIM.)

On Monday, a group that calls itself Lights on California, said it planned to advocate for California to be part of an RTO and for CAISO to become a regional organization. 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. (See New Coalition Aims for California to be in RTO.)

Trust Needed

Advanced Energy United reacted to Holden’s bill introduction Wednesday with a statement that said, “We applaud Assemblymember Holden for his leadership in jumpstarting a thoughtful and action-oriented conversation around regional grid collaboration. California should work with the rest of the West to strengthen energy reliability, affordability and accelerate our progress toward 100% clean energy.

“This is the moment for action. Today, 85% of electricity demand in the West is under a 100% clean goal,” it said. “California should not miss this opportunity to lead the way.”

Vijay Satyal, deputy director of regional energy markets for Western Resource Advocates, said in an interview that the bill represents a “clearer understanding” of the interconnected West.

“It is connected by resources; it is connected for reliability reasons; and a centralized market would enable more resource diversity, bring in more clean energy resources, and strengthen grid reliability,” Satyal said.

The declining cost of renewable power and increasing demand for it means “you are seeing growing momentum to recognize that we need a larger connected market,” he said.

Passing Holden’s bill during the two-year legislative session that began in December will require greater trust among Western states, he said. Prior attempts failed because California did not want to cede partial control of CAISO, and other states, especially those in the more-conservative interior West, were unwilling to let California control a multistate transmission orginization.

“What hopefully will change this time is trust,” Satyal said. “That trust has to be built with a new market structure.”

CAISO declined to comment, saying it had not seen the bill in print yet. Previously CEO Elliot Mainzer said, “There’s a strengthened recognition of the need to work together in the West and the benefits of working together.” CAISO, he said, stood ready to work with Holden on his push for “broader governance reform.”

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Initial MTEP 23 Ignites Familiar Arguments over MISO South’s Reliability Spending

[EDITOR’S NOTE: A previous version of this article incorrectly quoted MISO’s Trevor Armstrong as Trevor “Anderson.”]

MISO’s preliminary 2023 Transmission Expansion Plan (MTEP 23) will double recent spending, driven by a record number of proposed baseline reliability projects in MISO South.

MTEP23 has a proposed investment of $7.8 billion, nearly twice that of standalone packages over the last five years.

Almost half of the 2023 transmission planning cycle’s tab goes to essential reliability projects in the South, as deemed by transmission owners. That prompted many stakeholder questions and assurances from MISO that it will examine proposals for larger, combined project opportunities.

The project cost estimate includes $4.1 billion of baseline reliability projects (BRPs), $757 million in generator-interconnection projects, $2 million in market participant-funded projects, and $2.9 billion in “other” category projects. The RTO defines the latter as transmission owners’ projects needed for load growth and to address existing facilities’ age and condition.

MISO South accounts for $3.6 billion of the baseline reliability projects, equal to previous MTEP packages’ total cost. Entergy Louisiana submitted more than half of the South’s BRPs, with 13 projects costing $2.4 billion.

BRPs are proposed by transmission owners, not cost shared, and billed only to the local transmission zone in which they’re located. TOs typically deem the projects necessary to meet reliability criteria. MTEP 22’s BRPs accounted for $545 million of the package’s total $4.3 billion. (See Stakeholders Endorse MISO’s Final MTEP 22.)

This year’s drastic increase in MISO South reliability transmission investment raised eyebrows among stakeholders, who said staff should determine whether some of the larger projects should be classified as regional.

During a Feb. 3 South Subregional Planning meeting, MISO’s Trevor Armstrong said planners are aware of the record number of BRPs put forth by MISO South TOs.

During a series of subregional planning meetings this week and last, staff emphasized that the projects are merely proposals at this point. MISO has yet to perform independent assessments to determine whether the projects can effectively solve system issues.

“We’ll be talking to our transmission owners about alternatives to some of these projects,” Armstrong said. “I’d like to note that these projects have only been proposed; they still have to go through all the usual MTEP analyses.”

Southern Renewable Energy Association Executive Director Simon Mahan asked whether any of the BRPs will be evaluated to potentially become market efficiency projects (MEPs) or long-range transmission plan projects, which are allocated on a subregional basis. Staff promised test results by the third round of subregional planning meetings in September.

“I know that there are a lot of questions around this process,” Furnish said, adding that MISO will hold discussions on the projects’ eligibility at future subregional planning meetings. She also said staff can schedule technical study task force meetings if it appears that South BRPs qualify as regional projects.

“We’ve never had a market efficiency project built in MISO South,” Mahan said.

Armstrong said MISO could even extend its December deadline for approving certain MTEP 23 projects. He said some of the BRPs proposed in the South are complex and it will take several engineering hours to ascertain whether a more comprehensive project is needed.

“When you say that you might delay certain projects out of this MTEP cycle … when might be hearing about this?” Mahan asked.

Furnish said MISO will have a better handle later this spring.

Stakeholders asked whether MISO’s tariff stipulates that it must first conduct a market congestion planning study to recommend MEPs. Those normally identify MEPs. Furnish said she didn’t think the RTO’s rules were that “prescriptive.”

The skepticism over the MISO South BRPs continues a debate over whether the grid operator is adequately exploring project alternatives. Last year, a spate of expedited project recommendations in the region led some stakeholders to question whether the RTO is engaging in thorough and cost-effective transmission planning. (See Stakeholders Doubt MISO Study of Alternative Tx Projects.)

During a West subregional planning meeting Tuesday, planners reassured stakeholders that MTEP 23 project classifications won’t be confirmed until late summer.

Expansion Planning Manager Zheng Zhou said if MISO finds that a project meets the criteria for both a BRP and an MEP, the MEP classification will take precedence and the project will be allocated as such.

“Alternatives are a hot topic,” Zhou said.

He urged stakeholders to remember that MTEP23 amounts are preliminary and subject to change. He also said that it’s sometimes impossible to find a “cheaper, more economic” solution for certain localized issues.

During Wednesday’s East subregional meeting, Thompson Adu, senior manager of expansion planning, said MISO may look into more expensive projects than originally proposed that resolve a host of problem areas. On the other hand, he said, staff may discover that some local upgrades have no viable alternative.

Stakeholders have until May to propose alternatives to the TOs’ project proposals.

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Dominion Energy Sees Loss in Q4; Earnings Fall for 2022

Dominion Energy (NYSE:D) on Wednesday announced a net loss for the fourth quarter of $42 million and net income of $994 million for the entire year of 2022.

Earnings were down according to GAAP, but operating earnings for the fourth quarter were $903 million, up from $752 million a year earlier. Differences between the two were from the impairment of some nonregulated solar generation facilities, the market-to-market impact of economic hedging activities, gains and losses on nuclear decommissioning trust funds, regulated asset retirements and other adjustments.

The firm delivered earnings and dividend growth in line with its guidance, while providing safe, reliable and affordable energy to consumers, CEO Robert Blue said on an earnings call.

“We’re very focused on ensuring that our customers are not priced out of the significant long-term benefits that will result from our decarbonization and resiliency investment programs,” Blue said. “On that same theme, 2022 was a significant year in terms of advancing our regulated, decarbonization and resiliency strategy.”

The Virginia State Corporation Commission approved several investment programs eligible for rate riders, including the company’s offshore wind farm, new solar and storage facilities, grid upgrades, and license renewals for its four nuclear reactors in the state at North Anna Power Station and Surry Power Station.

Additional rider-eligible investments currently under SCC review include additional solar and storage projects in Dominion’s third annual clean energy filing, and high-voltage transmission needed to serve growing customer demand and data center load.

Dominion also owns nuclear plants in other states, including the Millstone Nuclear Power Plant in Connecticut that is under a long-term contract with the state that proved beneficial to customers, Blue said, saving them $300 million last year as power prices in New England were up. The plant is important to the entire region of New England, especially in terms meeting its states’ goals of decarbonization reliably, he said.

“We see the possibility of being able to take action with policymakers to give us the certainty we would need in order to extend the life of millstone and have that valuable resource for New England for some time to come,” Blue said. “We don’t have, as yet, a specific approach to that, but we’re certainly interested in engaging with policymakers on that.”

Dominion has been involved in discussions in Richmond, Va., over the future of how it will be regulated in the state, with multiple bills moving through the legislature this session, which runs until Feb. 25. The legislature is working on two bills that Blue highlighted on the earnings call: one with a series of changes to how the SCC sets its rates, and another that would allow Dominion to get a partner to help it build its 2.6-GW Coastal Virginia Offshore Wind project.

The Virginia Senate passed Dominion-backed legislation on the SCC’s ratemaking authority in a 27-13 vote on Tuesday, with all but two of the “no” votes coming from Democrats.

Senate Bill 1265 included language about recovering deferred fuel costs, requiring the SCC to set its rates at the average of a peer group of other large utilities in the South and removing $350 million from rate riders and putting them into base rates. Its companion bill in the House of Delegates, House Bill 1770, passed by a 52-47 vote on Tuesday as well, with the no votes coming from Democrats.

The legislature has to work out any differences between the two bills and others involving the SCC’s authority. The governor would then have until March 27 to sign, veto, or offer amendments to legislation, which could kick the process back to the legislature that meets on April 12 to deal with the governor’s actions. Gov. Glenn Youngkin then has until mid-May to act on any legislation passed or amended during that reconvened session a month prior.

Blue resisted offering any predictions on what would ultimately come out of the process on the earnings call. Dominion is working on a review of its overall business, but the direction that will take will be dependent on legislative outcomes in Virginia.

“Having a clear and definitive understanding of the future Virginia regulatory construct is a key input for the business review,” Blue said. “Therefore, legislation timing will influence the cadence at which we’re able to share more details about the business review in the future.”

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IEA: Renewables to Provide 90% of World’s New Power Generation

Ninety percent of new generation built to meet global electricity demand over the next three years will be renewables and nuclear, according to a new report from the International Energy Agency released Wednesday.

While worldwide energy demand grew only about 2% in 2022, Keisuke Sadamori, director of energy markets and security at IEA, predicted a more robust 3% growth rate in demand per year through 2025. Emerging economies’ demand for power will be a key driver, as will advanced economies’ push for electrification to decarbonize their transportation, industrial and food sectors, Sadamori said during a media briefing on the report Tuesday.

To meet that demand, renewables will add 2,449 TWh of power to global grids by 2025, with nuclear playing a more modest role with an additional 303 TWh, and fossil fuels edging down.

“Renewables will make up over one-third of the global generation mix by 2025,” the report says. “This trend is supported by government pledges to increase spending on renewables as part of economic recovery plans, such as the Inflation Reduction Act in the United States.”

“And we should note that the substantial growth in renewables will need to be accompanied by accelerated investments in grids and flexibility, such as energy storage systems, for their successful integration into the power system,” Sadamori said.

While the U.S. market is not a primary focus of the report, the global trends discussed correspond to the current opportunities and challenges of the electric power sector here.

For example, the report’s view on the U.S. industry is mixed, predicting only modest gains in demand in the next few years. While the U.S. surpassed prepandemic levels of electricity demand in 2022, IEA sees a 0.6% drop this year “due to an expected slowdown in economic activity, before returning to an annual growth of about 1.2% in 2024 and 2025.”

However, renewables will continue healthy growth, with wind energy up 19% over 2022 levels by 2025, and solar up 56%, supported by clean energy spending in the IRA.

The U.S. Energy Information Administration recently released its predictions for new electric power generation in 2023, with renewables, storage and nuclear providing about 86% of the expected growth in supply. Solar leads with more than half of the new generation, a total of 29.1 GW.

IEA also tracks a major shift in power demand, from the U.S. and Europe to Asia. Between 2015 and 2025, China will grow from using 25% of the world’s electricity to 33%.

US has Lowest Power Price Increases

But the growth of renewables may not necessarily result in the broad reductions in carbon emissions needed to meet the Paris Agreement’s target of a worldwide net-zero economy by 2050.

Carbon emissions climbed to record highs in 2022, pushing the world well off a path to net zero, Sadamori said.

Worldwide, the electric power sector produces about 40% of global CO2 emissions, he said. The 2022 increase was largely from increased fossil-fueled generation in Europe, with Russia’s invasion of Ukraine pushing up power prices, especially in the unregulated markets of some European countries. Despite record inflation, the U.S. saw the lowest level of wholesale power price increases among advanced economies, the report says.

Sadamori believes the increase in CO2 emissions is temporary and will come down as the U.S. and Europe ramp up programs for deploying renewables and nuclear. But the decrease in emissions in the West could be offset by ongoing fossil fuel generation in Asia.

Africa presents a particularly sensitive challenge. The continent represents about 20% of the world’s population but only 3% of its electric power generation. Whether it can build out a primarily renewable electric power system remains uncertain.

IEA also sees ongoing complexities in the interaction between increased renewables on the grid and the increased frequency and severity of extreme weather events, which can drive sudden spikes in demand while also exposing system vulnerabilities.

“Mitigating the impacts of climate change requires faster decarbonization and accelerated deployment of clean energy technologies,” the report says. “At the same time, as the clean energy transition gathers pace, the impact of weather events on electricity demand will intensify due to the increased electrification of heating, while the share of weather-dependent renewables continue to grow in the generation mix.”

Energy Efficiency First

“In such a world, increasing the flexibility of the power systems while ensuring security of supply and resilience will be crucial,” the report says. Diversity of supply will be needed to ensure security, Sadamori added.

Accelerating a clean energy transition should focus first on energy efficiency with substantial government support “because the energy efficiency will lead to smaller amounts of new energy requirements,” Sadamori said. “So, that means the renewables and nuclear can provide more of the growth of the entire electricity demand.”

The report also points to vulnerabilities in the U.S. grid, such as the widespread power outages during the December winter storm. Maintaining and making “wise use” of dispatchable fossil fuel resources, in particular for emergencies, should not lead to increased carbon emissions, Sadamori said.

He also said that IEA sees carbon capture and sequestration as a long-term solution for emissions reductions, but not in the next three years. The technology is “kind of a work in progress,” Sadamori said. “It is being developed, but I don’t think they can make a substantial dent in CO2 emissions in the coming years.”

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New House GOP Majority Moves to Aid Fossil Fuel Sector

House Republicans and Democrats squared off Tuesday over a series of 17 proposals from the new GOP majority to lessen environmental and other regulatory barriers to domestic energy production.

Each side made their points in exchanges with witnesses generally aligned with their own points of view, stressing the importance of passing or not passing the measures.

As more than one Democrat pointed out, however, entire pieces of the Republican package stand little chance of becoming law because of opposition from the Democrats who control the Senate and White House.

The joint Energy, Climate, and Grid Security Subcommittee and Environment, Manufacturing, and Critical Materials Subcommittee legislative hearing was titled “Unleashing American Energy, Lowering Energy Costs and Strengthening Supply Chains.”

As the name implies, the measures being discussed would codify some items on the wish lists of U.S. fossil fuel companies and their Republican allies.

The GOP took control of the House only a month ago, and most of the 17 bills and resolutions had not yet been formally introduced Tuesday morning as testimony started.

Among other things, the bills would:

  • bar a moratorium on fracking;
  • repeal the methane emissions tax included in the Inflation Reduction Act of 2022;
  • improve state and federal interagency cooperation to build interstate natural gas pipelines;
  • repeal all restrictions on import and export of natural gas;
  • repeal the greenhouse gas reduction fund;
  • authorize the Environmental Protection Agency to issue flexible air emissions permits for certain facilities; and
  • ban import of certain uranium from Russia.

Witness Testimony

The witnesses at the hearing ranged from a former FERC member to a leader in the environmental advocacy legal organization Earthjustice.

Rep. Brett Guthrie (R-Ky.) sprinkled personal experiences and world events into a statement on the importance of the U.S. producing enough fuel for itself and friendly nations and asked for witnesses’ thoughts.

Jeffrey Eshelman, II, CEO of the Independent Petroleum Association of America, said: “If we continue to produce oil here at home, those are jobs that remain; if we would stop exporting the oil, those jobs disappear. It actually helps when we’re producing more here and … exporting, to keep those wells pumping. … It helps our allies, and it helps our own national security.”

Rep. John Sarbanes (D-Md.) asserted that the GOP drive to “unleash American energy” is often designed to unleash profit-making by big oil companies by eroding bedrock environmental laws at the expense of the health and safety of American people. He asked if there was truly a binary choice between protecting the safety of communities and producing energy.

Raul Garcia, legislative director for healthy communities for Earthjustice, said: “We can absolutely do both. We have the technology, and, in fact, some of the legislation presented today would actually curtail that technology, which is sad to see.”

Rep. Morgan Griffith (R-Va.) spoke of the coal bed methane capture project underway in his district, at the largest coalmine in the state. This technology could work to capture other leaks of the potent greenhouse gas, he said, “but they don’t get any credit for having a clean, efficient way because it’s the dreaded fossil fuel, it’s natural gas.”

Bernard McNamee, appointed a FERC commissioner by President Trump in 2018, said American innovation has produced many advances in energy production, and the methane capture Griffith described is one more useful tool. “It’s great to talk about, ‘We think we can go 100% renewable,’ but the reality is, with the technology we have today, we have to have dispatchable energy, and that’s going to come from natural gas, from the methane that’s captured at the coal seam.”

Mark Menezes, a deputy energy secretary under Trump, said there are multiple existing technologies that can protect the climate. “Remember, our quest here is not to choose one type of energy over another, our quest here to solve the climate problem is to reduce emissions.”

Rep. Larry Bucshon (R-Ill.) called out those pushing for widespread electric vehicle adoption while simultaneously opposing U.S. mines that would produce the lithium, cobalt and other materials needed for EV batteries. America, he said, needs to not rely on slave labor in Africa and the output of Chinese factories for these materials.

Katie Sweeney, executive vice president of the National Mining Association, thanked Bucshon for his words and said the proposed legislation would make more people aware of the critical connection between minerals and energy. “There isn’t any form of energy that doesn’t rely on minerals as the base of that energy … it’s not just the mines themselves but the processing that needs to take place here in the U.S.”

Rep. Scott Peters (D-Calif.) took some swipes at his Republican colleagues but spoke of the need for bipartisan updates to energy policy; he found some agreement from witnesses on both sides of the aisle.

He asked Menezes — who helped negotiate the Energy Policy Act of 2005 — about streamlining the approval process for interstate transmission construction. Menezes replied that then as now, there are probably more difficult things to accomplish than siting and building interstate power lines, but he couldn’t think of any. Such power lines will be critical to the green energy transition, he said, and “I think this is something that’s certainly within this committee’s jurisdiction to take another look at.”

Peters asked Tyson Slocum, director of the energy program at Public Citizen, whether the oil and gas industry would reduce its emissions of methane without the incentives and oversight contained in the Inflation Reduction Act.

“I don’t think so,” Slocum said. “I think you need to have that regulatory structure in order for the industry to make those investments.”

GOP Proposals

The prepared testimony of the six witnesses and the wording of the 17 pieces of proposed legislation are available on the House Energy and Commerce Committee webpage.

A summary of the legislation follows.

Three bills introduced:

  • H.R. 150, Protecting American Energy Production Act: Prohibits a moratorium on the use of hydraulic fracturing unless authorized by an Act of Congress.
  • H.R. 484, Natural Gas Tax Repeal Act: Eliminates the tax added to the Clean Air Act last year.
  • H.R. 647, Unlocking Our Domestic LNG Potential Act of 2023: Amends the Natural Gas Act to repeal all restrictions on the import and export of natural gas.

Fourteen bills and resolutions expected to be introduced:

  • Promoting Cross-border Energy Infrastructure Act: Establishes a more uniform, transparent and modern process to authorize the construction, connection, operation and maintenance of international border-crossing facilities for the import and export of oil and natural gas and the transmission of electricity.
  • A concurrent resolution expressing disapproval of the revocation by President Biden of the presidential permit for the Keystone XL pipeline.
  • Promoting Interagency Coordination for Review of Natural Gas Pipelines Act: Improves coordination among federal and state agencies reviewing applications for the construction of interstate natural gas pipelines.
  • Securing America’s Critical Minerals Supply Act: Amends the Department of Energy Organization Act to require the secretary of energy to conduct an ongoing assessment of the nation’s supply of critical energy resources, the vulnerability of the critical energy resource supply chain and the importance of critical energy resources in the development of energy technologies.
  • Critical Electric Infrastructure Cybersecurity Incident Reporting Act: Amends the Federal Power Act to authorize DOE to promulgate regulations to require critical electric infrastructure owners and operators to share information regarding cybersecurity incidents with DOE.
  • A bill to require the secretary of energy to direct the National Petroleum Council to issue a report on the importance of petrochemical refineries to U.S. energy security, and the opportunity to expand their capacity.
  • A bill to amend the Clean Air Act to prohibit the phase-out of gasoline and prevent higher prices for consumers and for other purposes.
  • A concurrent resolution expressing the sense of Congress that the federal government should not impose any restrictions on the export of crude oil or other petroleum products.
  • A bill to repeal section 134 of the Clean Air Act, relating to the greenhouse gas reduction fund.
  • A bill to authorize the administrator of the Environmental Protection Agency to waive application of certain requirements, sanctions or fees with respect to processing or refining of critical energy resources at a critical energy resource facility, and for other purposes.
  • A bill to amend the Toxic Substances Control Act with respect to critical energy resources, and for other purposes to address repeated delays with EPA reviewing and making legally mandated, timely determinations of pre-manufacturing notices for new critical energy resources and new uses of existing critical energy resources.
  • A bill to amend the Solid Waste Disposal Act to treat the owner or operator of a critical energy resource facility as having been issued an interim permit for the treatment, storage and disposal of hazardous waste, and for other purposes.
  • A bill to require the EPA administrator to authorize the use of flexible air permitting with respect to certain critical energy resource facilities, and for other purposes.
  • A bill to prohibit the U.S. from importing unirradiated low-enriched uranium produced in the Russian Federation.