Search
`
November 13, 2024

Posted on

Calif. Governor Proposes $6B in Climate Budget Cuts

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Some proposed program cuts include:

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

ERO Submits E-ISAC Outreach Clarifications to FERC

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

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

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

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

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

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

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

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

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

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

Posted on

NY Company Plans 60-stall EV Charging Station for Queens

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

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

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

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

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

Posted on

Hochul Highlights Cap and Invest in State of the State Address

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

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

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

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

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

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

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

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

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

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

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

Other Notable Proposals

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

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

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

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

Reactions

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

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

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

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

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

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

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

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

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

Posted on

ERCOT Claims Immunity Before Texas Supreme Court

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted on

New California Energy, Climate Laws Go Live

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

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

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

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

Carbon Capture

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

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

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

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

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

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

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

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

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

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

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

Transmission Planning

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

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

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

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

Posted on

NYISO Stakeholders Still Concerned About DER Participation Model

NYISO on Friday presented the Installed Capacity/Market Issues Working Group (ICAP/MIWG) with draft revisions to its distributed energy resource participation model that included feedback, though stakeholders continued to express concern over what they said is a lack of clarity.

NYISO has identified several concepts within the FERC-approved model that it says require revisions to both clarify and better align them with ongoing software updates, including how utilities share data with the ISO, removing previous unused models and adjusting certain calculations. Harris Eisenhardt, NYISO market design specialist, told stakeholders that in response to stakeholder feedback, the ISO attempted to clarify the types of changes to an existing DER or group of DERs that would result in a supplemental review.

Stakeholders were still confused, however, about how aggregation makeups would be adjusted over time and how those changes would impact utilities’ construction costs and information-sharing. Mike Cadwalader, president at Atlantic Economics, summarized the concerns by saying that NYISO has made “an improvement but is not there yet.”

Aaron Breidenbaugh, director of regulatory affairs at CPower Energy Management, said NYISO needs to be specific about the types of DER changes that qualify for review, as utilities “may not realize that by making a change, they’re triggering a whole review process.”

Matt Cinadr, a power systems operations specialist with The E Cubed Co., and Mark Younger, president of Hudson Energy Economics, both expressed concern about how invertor-based resources would be treated in the new model. Cinadr said, “These things need to be widely understood as we move forward with inverter-based resources” because the unknowns around them “will cause a lot of people a lot of headaches.”

Stakeholders were also concerned about the lack of details or timeline of the transition to the new model. Greg Campbell, senior attorney with NYISO, sought to alleviate by saying that the ISO “plans on including in its filing what the transition process will be” and that “timing and transition information will be included.”

NYISO will seek approval of the revisions at the Feb. 15 Business Issues Committee meeting and the Feb. 22 Management Committee meeting. It then anticipates starting the DER transition process in the third quarter of 2023.

Julia Popova, NRG Energy’s manager of regulatory affairs, said it would be important for NYISO to include any “hardwired deadlines” in their filing, as this would give stakeholders a better sense of how the transition will progress.

Peter Fuller, an energy consultant who works with NRG, summarized the mood of the room, saying, “It’s January, and DER is supposed to go live later this year,” so NYISO “needs to figure out how they’re going to do this.”

Final LCR Results

Final 2023-2024 LCR Results (NYISO) Content.jpgFinal 2023-2024 LCR Results | NYISO

 

NYISO also presented the ICAP/MIWG with results for their updated locational minimum installed capacity requirements (LCRs). They showed that Zone K’s (Long Island, excluding Brooklyn and Queens) LCR increased by 0.1% to a total of 105.2%, raising the total New York Control Area’s Installed Reserve Margin (IRM) by 0.1% to 20%.

The ISO will present the final LCR results at the Jan. 23 Operating Committee meeting and seek stakeholder approval.

Posted on

NY Utilities Propose Plan to Coordinate Decarbonization Efforts

A group of New York utilities last month jointly filed a proposed framework designed to “facilitate the development of a fully decarbonized electric system” in the state by improving coordination among stakeholders.

The seven utilities submitted the Coordinated Grid Planning Process (CGPP) proposal to the Public Service Commission (PSC) on Dec. 27 to ensure that “work on planning and developing the infrastructure needed to support the clean energy resources to meet the milestones stipulated in the [Climate Leadership and Community Protection Act] can begin without delay.”

The utilities include Central Hudson Gas & Electric, Consolidated Edison, Long Island Power Authority, Niagara Mohawk Power/National Grid, New York State Electric & Gas, Orange & Rockland Utilities, and Rochester Gas and Electric.

The proposal envisions a 20-year planning horizon that includes “a repeating three-year process with approximately two years for a system study followed by Commission review,” which will identify both “the electric grid expansions that can aid in unlocking renewable generation capacity and provide energy headroom” and “opportunities for expansion of the bulk transmission system to advance CLCPA objectives.”

This proposal is the product of a multiyear effort that involved numerous iterations and revisions and has been seen as critical to New York’s energy goals by aligning stakeholders, driving consistency between CLCPA-based studies, and informing market policymakers. (See NY Officials, Stakeholders Discuss Utilities’ Tx Planning Process Proposal.)

The CGPP would be coordinated among various stakeholders, such as NYISO, individual utilities and consumers, who will be represented by a proposed Energy Policy Planning Advisory Council (EPPAC).

The EPPAC is intended to serve as an independent stakeholder group that advises “utilities’ system planners on the development of a set of generation build-out scenarios.” It will also be responsible for reviewing the final CGPP report before it is submitted to the PSC for approval.

The utilities said the EPPAC is intended to “ensure stakeholder representation remains a strong and constructive component” of decarbonization efforts and asked the PSC to “provide guidance concerning the recovery of reasonable costs that will be incurred” throughout the CGPP’s stages.

CGPP Stages

Each CGPP cycle would be broken into six, overlapping stages, with the first cycle anticipated to start in mid-2023.

The plan’s supporters foresee that the conclusion of each cycle will produce an “efficient and orderly system expansion that builds on prior assessments and eliminates ambiguity regarding project status in subsequent CGPP cycles.”

The sequenced stages are intended to give the PSC the opportunity to recommend local transmission and distribution (LT&D) projects mid-cycle and identify whether a public policy transmission need (PPTN) process should continue or a new one be initiated.

The first stage consists of a data collection and coordination process in which “utilities and the EPPAC will review and, as necessary, enhance the scope of the upcoming planning cycle,” as well as “determine the assumed zonal allocation for future distributed energy resource (DER) development.”

Stage one will also allow utilities to “run the capacity expansion model for up to three scenarios with the potential for several sensitivities on the selected scenarios,” which would then be shared with the EPPAC to identify “three generation build-out plans selected from the three initial scenario cases.”

In stage two, utilities will use the three scenarios developed by the EPPCA to “develop detailed short circuit and power flow models that will be used in subsequent CGPP stages to assess local transmission systems.”

Stage three consists of an assessment in which utilities evaluate local conditions to determine whether LT&D system upgrades “are necessary to accommodate the integration of DER and utility scale generation resources.”

During stage four, utilities will review the current portfolio of projects to ensure no unintended impacts on the grid, though the report stresses that the CGPP review would not replace NYISO-administered interconnection process requirements.

Stage five includes a least cost planning assessment in which utilities “identify a portfolio of LT&D and bulk projects that will facilitate the achievement of the State’s policy objectives at the least cost to customers.”

The last stage sees development of the final CGPP, which identifies and recommends “projects that were found to be beneficial in the least cost planning assessment” and are “needed to ensure the timely and cost-effective attainment of CLCPA policy goals.”

At the end of each CGPP cycle, the PSC will review the final report and vote on whether to approve recommended LT&D projects. Utilities will then have 30 days to initiate the next cycle.

CGPP reports approved by the PSC will be included in the NYISO planning process and describe the benefits of pursuing a bulk solution to public policy transmission needs.

NYISO Impact

The utilities initially developed the CGPP framework in collaboration with NYISO and expect it to be “complementary to and, where applicable, coordinated with NYISO comprehensive system planning processes,” according to the plan.

ISO representatives will be included on the EPPAC, along with other state agencies, and they will “act as a technical consultant to stakeholders” by “assessing system limitations and developing the optimal portfolio of solutions.”

Furthermore, the first CGPP cycle will use existing NYISO databases, such as Gold Book forecasts, and any project identified through the PPTN process will be made available for NYISO to consider for inclusion in planning.

Opinions and Comments

The CGPP “stems out of a recognition of the need for infrastructure buildout in order for the electric system to achieve Climate Leadership and Community Protection Act (CLCPA) goals,” Ryan Hawthorne, vice president of electrical engineering and operations at Central Hudson Gas & Electric, said in email to RTO Insider.

Hawthorne said “the CGPP is meant to create an integrated planning process to identify local transmission and distribution needed to support these goals, while working in concert with existing planning processes (such as bulk transmission solutions through the NYISO).”

“The state of our current position is a lack of integrated system planning, and the CGPP is there to help close that gap in order to plan optimal solutions to meet growing interconnection needs,” he said

“What is being proposed is a very smart process,” Paul Hines, vice president of power systems at EnergyHub, said in an interview. As power grids become increasingly “messy things” because of an influx of new technologies, it becomes critical for utilities to have “careful planning processes that maintain reliability,” he said.

Hines said he was encouraged by the CGPP’s 20-year planning horizon, given the need to consider the long-term perspective of how distributed resources will change the “physics of how the grid operates.”

But Hines was also wary of the GGPP’s focus on bulk grid assets, despite the growing relevance and value of distributed assets, such as behind-the-meter solar and distributed batteries. He said it is “important to advance the modeling of these distributed assets.”

Should stakeholders discover that current modelling systems are inadequate or antiquated, they should push each other to “advance the modeling of these assets” because these resources will become a growing portion of the state’s grid, he said.

Posted on

Ohio Law Amended to Declare Natural Gas a Form of ‘Green Energy’

Ohio Gov. Mike DeWine late Friday signed legislation declaring natural gas a form of “green energy” and requiring state agencies to negotiate with gas and oil developers that want to drill laterally under state properties, including state parks.

The declaration making fossil gas “green” starts by defining green energy as “any energy generated by using an energy resource that does one or more of the following: releases reduced air pollutants, thereby reducing cumulative air emissions, [and] is more sustainable and reliable relative to some fossil fuels.”

The change was among five unrelated amendments inserted in the last days of 2022 into a bill regulating the state’s poultry industry.

H.B. 507 had wide bipartisan support in both the House of Representatives and Senate when introduced and approved months earlier. Democrats withdrew their support of the bill in December when the amendments were added in a Senate committee, immediately approved by Republican majorities in the Senate and sent to the House for the same treatment.

Declaring natural gas green has been a goal of The Empowerment Alliance, an anonymously funded 501(c)(4) nonprofit founded in 2019 with Ohio roots. TEA lobbied state lawmakers, arguing that defining natural gas as green is a way to oppose the Biden administration’s efforts to champion renewable energy technologies while ignoring the gas industry’s role in reducing carbon and other emissions over the last decade by replacing coal. A spokesman said TEA has plans to lobby lawmakers in other states.

In Ohio, TEA has also lobbied county officials in rural counties to declare gas as green. And handful of county commissions adopted such resolutions, though the Ohio Department of Natural Resources (ODNR), not local governments, regulates the oil and gas industry, including permits to drill.

In contrast, changes in state law a year ago reduced the authority of the Ohio Power Siting Board over wind and solar projects by giving county commissioners the final say on every wind and solar project and giving them the authority to declare their county off-limits to any solar and wind development.

A second amendment to H.B. 507, proposed by the Ohio Oil and Gas Association and immediately opposed by environmental groups, requires state agencies to negotiate leases with oil and gas developers that want to drill laterally under state property to access oil and gas.

State agencies have had the authority to negotiate such leases with ODNR’s Oil and Gas Land Management Commission but have never reached an agreement on a specific project.

The amendment does not give oil and gas developers the right to move drilling rigs and shale fracturing equipment onto state land. Ohio shale gas wells typically begin with a vertical well up to 8,000 feet deep before branching into lateral wells drilled 1 to 2 miles through shale rock, which is later fractured with liquids under high pressure, releasing the gas.

In signing H.B. 507, DeWine did not address the issue in the bill’s declaration making fossil gas green. And he downplayed the significance of the language requiring state agencies to negotiate gas and oil leases.

“I believe the amendments in House Bill 507 do not fundamentally change the criteria and processes established by the Ohio General Assembly in 2011 that first established the policy of leasing mineral rights under state parks and lands,” he said in a statement issued at the close of business Friday.

“In addition, I am instructing the director of the Department of Natural Resources to continue to follow the processes first established by the General Assembly in 2011 in this area. This includes continuing my administration’s policy of prohibiting any new surface use access in our state parks.”

Posted on

NJ Retools Electric MHD Truck Charger Proposal

A revised version of the New Jersey Board of Public Utilities (BPU) straw proposal designed to stimulate the development of chargers for medium- and heavy-duty (MHD) electric trucks would provide extra support for private fleets that put chargers in overburdened communities but would also place greater demands on the fleets.

The new proposal, which is scheduled for a public hearing on Jan. 17, seeks to “refine” the original package issued in June 2021 with several enhancements. Some were triggered by stakeholder arguments in a series of public hearings in August and September 2021 that with so many trucks working in and around overburdened communities, the BPU would need to offer more benefits to private fleets to get enough to act and significantly cut emissions in those areas.

The original proposal offered limited assistance to private fleets, mainly technical help provided by electric distribution companies. It focused on supporting the development of charging sites in overburdened areas that were open to the public.

The new package makes a private fleet eligible for incentives of up to 100% of the cost of “make ready” work — the pre-wiring of electrical infrastructure at a parking space for future installation of a charger — in overburdened areas. To receive the full subsidy, the fleet charging depot must be located in an overburdened community and must displace existing fossil-fueled vehicles rather than adding new electric vehicles to an existing fleet.

The fleet also must agree to participate in a “managed charging,” which requires it to charge vehicles in off-peak periods, generally overnight, to help reduce the load on the grid.

Legacy of Disinvestment

The MHD charger proposal is part of the state’s effort to cut emissions in its largest polluting sector, transportation, which accounts for about 42% of carbon emissions in the state. Long- and short-haul single unit and combination trucks account for 18% of the greenhouse gas emissions from road vehicles, with another 43% generated by light commercial and passenger trucks, according to the proposal.

At present, electric vehicles account for only a tiny number of the state’s 500,000 MHD trucks, which are major emissions contributors and are especially problematic to communities located near freight corridors, warehouses, distribution centers and ports.

The proposal says that although MHD trucks and buses account for only 4% of the vehicles on the road in New Jersey, they contribute nearly 25% of greenhouse gas emissions.

Gov. Phil Murphy wants the state to reach 100% clean energy by 2050, and the state’s 2019 Energy Master Plan assumes that 75% of medium-duty trucks and 50% of heavy-duty trucks will be electric by 2050.

“The physical and monetary costs of emissions in overburdened municipalities, particularly in urban settings, require ratepayer investment to ensure that EV adoption’s positive impacts are distributed equitably cross the state,” according to the proposal, which was released Dec. 22.

It adds that “staff is convinced that partial socialization of private fleet depots located in or primarily operating in overburdened municipalities is critical to meeting the governor’s commitment to improving environmental conditions in the communities struggling under the legacy of disinvestment and discrimination.”

The proposal does not require that a fleet depot to be located in the overburdened community to be eligible for benefits under the proposal. But if it isn’t, the fleet needs to “primarily operate” there, a phrase that has still to be defined but could include the fleet’s trucks driving a large portion of their mileage in the area, according to the proposal. In example, it cites the definition in the Zero-Emission Incentive Program (ZIP), which is run by the New Jersey Economic Development Authority (EDA) and awards purchase subsidies for light and medium trucks that in some circumstances hinge on the truck doing up to 50% of its miles in overburdened communities.

In another addition to the earlier proposal, the new package makes sites that install chargers higher than 500 kW, sometimes known as “ultra-fast” chargers, eligible to receive technical assistance from utility companies, who could then charge the cost to ratepayers. The earlier proposal allowed the utilities to provide technical assistance only to public and private fleets.

The assistance provided by the utilities is expected to range from picking site charging locations to planning for fleet and charging growth and determining “when, and if, additional grid support is needed,” according to the proposal.

The BPU straw proposal, in both the initial and revised forms, envisions private developers and investors installing, owning and operating EV service equipment and marketing the sites to customers. Utilities would help wire and provide the backbone infrastructure necessary but would not be able to own chargers developed under the program, except in certain circumstances, mostly when no other developer steps forward.

The proposal drew criticism from several fronts on its release. At one hearing, Zachary Kahn, senior policy adviser for Tesla, argued that the private fleets deserved more support because they were already making a serious investment in buying electric trucks and had shown they clearly had “significant skin in the game.”

An attorney for the Sierra Club, Zachary Fabish, said that regardless of whether a charger is private or publicly accessible, it would make the same contribution to reducing emissions and that is essential to combating climate change. (See NJ Electric Truck Rules Face Many Questions.)

In the latest proposal, the BPU says it is working to “define the appropriate level of ratepayer investment in this sector.”

“Many of the issues that this straw proposal seeks to explore include 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 buildout of an MHD EV ecosystem,” the proposal states.