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August 31, 2024

NW Hydro Outlook Improves as Drought Retreats — in Some Areas

The Pacific Northwest stands out as an exception to the increasingly dire water supply situation gripping the wider West, boding well for the region’s hydroelectric potential heading into summer.

While regional officials in Southern California last week imposed “unprecedented” water-use restrictions on 6 million residents in the region and the state confronts declining reservoirs and dismal snowpack levels, Washington state faces the summer with dramatically improved water conditions compared with a year ago.

According to data released Thursday by the U.S. Drought Monitor, about 49% of Washington is not experiencing drought conditions, mostly areas from the Cascade Range to the coast. At this point last year, just under 9% of the state was designated as not being in drought after an exceptionally dry spring.

About 17% of the state is designated as being in “severe” drought, compared with nearly 30% a year ago, and no areas are currently in “extreme” drought, versus just under 4% last year.

A “drought” means that rainfall is less than 75% of normal and that hardships are expected because of a lack of water.

Some areas of Central and Eastern Washington still experiencing drought should eventually benefit from the runoff issuing from unusually high snowpack levels at upper elevations. Snow telemetry data from the U.S. Natural Resources Conservation Service show snow water equivalent (SWE) is currently at 215 to 221% of the average in the Upper, Central and Lower Columbia regions, 289% of the average in the Upper Yakima region, and 347% of the average in the Central Puget Sound region.

The improving conditions prompted Washington to dramatically cut back on its drought emergency late last month.

Last July, Gov. Jay Inslee declared a drought emergency for 96% of the state, citing the severe effects of climate change. Last year’s declaration sped up processing for emergency drought permits and allowed temporary transfers of water rights. The cities of Seattle, Tacoma and Everett were not included in the drought emergency because they have significant amounts of stored water.

As of May 26, all of Washington from the Cascade Mountains and to the west were removed from this designation. Most of Eastern Washington, except for four areas, was designated as a drought advisory area. A “drought advisory” means that rainfall is now above the 75% mark but could potentially drop below.

Five watersheds clumped in from areas spread across parts of eight northeastern Washington counties are still in states of “drought emergencies” because they have not received enough rainfall to recover. This land covers about 9% of the state. The drought emergency area covers parts of Spokane, Lincoln, Grant, Adams, Whitman, Stevens, Okanogan and Pend Oreille counties.

“2021 saw extreme temperatures and near record-low precipitation across much of the state,” Jeff Marti, the Washington Department of Ecology’s drought coordinator, said in a May 26 press release. “In 2022, conditions have been much more normal, but we’re still trying to make up a deficit in some places. Extending the drought declaration for these areas will give us more tools to manage water supplies and respond to changing conditions.”

Impacts from last year’s drought that are expected to continue through this summer include low soil moisture, dried-out ponds, earlier-than-normal curtailments for irrigators in Colville, the Little Spokane River and Hangman Creek, and low reservoir storage in Okanogan County, the press release said.

Mixed Conditions in Oregon

To the south, in Oregon, the picture is decidedly more mixed.

Oregon Drought Monitoring (US Drought Monitor) Alt FI.jpgNorthwest Oregon has emerged from drought after heavy rainfall this year, but conditions are worsening in other parts of the state. | U.S. Drought Monitor

A year ago, the entire state was experiencing drought, with nearly three-quarters designated as being in severe to “exceptional” drought conditions. After a spring of persistent and heavy rains, the northwest corner of Oregon — about 19% of the state, including the Portland metro area and lower Willamette Valley — has emerged from drought.

But the outlook has worsened farther inland, with the portion of Oregon classified as being in exceptional drought (the highest designation) expanding to 11.8%, from 3.5% a year ago, concentrated in the central part of the state east of the Cascades. An even larger portion of the state is in extreme drought, in an area stretching from Eastern Oregon to the south and west, along the California border.

As in Washington, Oregon SWE levels generally far exceed averages for this time of year, with the basin containing the Hood, Sandy and Lower Deschutes rivers at 349% of normal; the Umatilla, Walla Walla and Willow rivers region at 280% of normal; and the Willamette River basin at 219%. The only region with critically low snowpack is the drought-stricken Lake County region in Southern Oregon, currently at 15% of average.

‘A Bit of Good News’

The heavy snowpack in the Northwest should help recharge the region’s extensive network of hydroelectric dams this summer, although some industry observers are still cautious. The largest of those dams, mostly operated by the Bonneville Power Administration, sit in Central Washington or along the Oregon-Washington border on the Columbia River. Others dot smaller rivers in the region, many of them tributaries to the Columbia.

BC Snowpack (British Columbia Ministry of Forests) Content.jpgAs in its U.S. neighbors to the south, snowpack in the British Columbia is above normal for this time of year. | British Columbia Ministry of Forests

Speaking at a WECC summer readiness workshop May 24, Amanda Sargent, senior resource adequacy analyst at the NERC regional entity, noted that Pacific Northwest hydroelectric output last year was 14% below the 10-year average, based on data from the U.S. Energy Information Administration. But conditions have changed drastically since the start of the current water year last September, when all of Oregon and Washington were in some level of drought.

“Is it going to be like it was last year? Are we going to see the same effects? It’s impossible to say,” Sue Smith, WECC resource adequacy analyst, said at the workshop. “But I did want to point out that compared to last year, our net generation is higher. It was higher in January, and it was higher in February,” the last months for which data were available.

Another encouraging sign for hydro production can be found in British Columbia — the source of the Columbia River — where government-owned utility BC Hydro operates a massive hydroelectric network on the Columbia and Peace rivers that typically produces ample electricity surpluses exported to the rest of the Western Interconnection.

In “a lot of our service territory right now, the snow levels — or the snow water index, as we refer to them — is quite high, quite healthy,” Brett Hallborg, senior system control manager at BC Hydro, said during the WECC workshop. “So that’s a good news story for BC Hydro and its resource adequacy. But it’s also probably a bit of good news for WECC and its resource adequacy [that] we do have quite a bit of water.”

The most recent data available show SWE at 118% of normal in the Peace River basin and 123% in the Upper Columbia basin.

Hallborg noted that cool weather this spring has delayed this year’s snowmelt, a condition that applies equally to Oregon and Washington.

“And, in fact, just recently in a kind of a new climate change-type storm, we got some fresh snow fall in each of those areas, which is a little unheard of even for us at this time of year,” Hallborg said.

ERCOT Expecting Record Demand this Week

ERCOT is expecting demand to peak at over 70 GW this week, as above-normal temperatures continue to bake the Lone Star State.

The Texas grid operator last week projected peak demand of 74.9 GW for Monday and more than 75 GW on Tuesday. Both would break its all-time record of 74.8 GW, set in August 2019.

Demand before noon Sunday had already hit 55.1 GW. During the same interval Saturday, demand peaked at 51.1 GW. In its last summer resource adequacy report, ERCOT forecasted a record peak demand of 77.3 GW this year.

Austin 10 Day Forecast (Apple-The Weather Channel) Content.jpgTriple-digit temperatures are projected to swamp Austin this week. | Apple/The Weather Channel

Temperatures are expected to exceed 100 degrees Fahrenheit all week in Austin. Temperatures in the Houston region along the Gulf of Mexico are predicted to hit the mid-90s, compared to the normal high of 90 F.

ERCOT closed out May by setting another peak demand mark for the month on its last day at 71.7 GW. The monthly record had been 67.3 GW set in 2018, but that was exceeded several times before May 20.

The grid operator said it had more than 91 GW of resources to meet demand, but it has been bedeviled by forced and maintenance outages that have taken more than 20% of the thermal fleet offline. That outage number was down to 6% on Sunday.

Renewable resources have helped filled the gap by regularly providing 20 to 25% of ERCOT’s energy.

The grid operator has already issued two operating condition notices (OCNs), its lowest-level communication in anticipation of a possible emergency condition, before the summer months begin. Any emergency condition comes when staff determine the system’s safety or reliability is compromised or threatened.

The first OCN was issued on May 3 and extended several times through May 20. A second OCN was issued for May 28-30.

ERCOT asked Texans to conserve electricity on May 13, which officials later termed a “request.” Interim CEO Brad Jones has said he is “confident” about the summer, while Public Utility Commission Chair Peter Lake continues to say the grid “is more reliable than it has ever been before.” (See ERCOT, PUC Say Texas Ready for Summer.)

New York Climate Law Key in Crypto, Buildings Bills Going to Governor

Three bills that passed the New York legislature last week in the final hours of its session seek to embed the state’s climate law into decision-making processes for certain cryptocurrency mining operations and heating and cooling for buildings.

Here’s a look at what the bills will achieve if Gov. Kathy Hochul chooses to sign them.

Building Codes

The Advanced Building Codes, Appliance and Equipment Efficiency Standards Act (A10439) would strengthen New York’s appliance efficiency standards and align the state’s building codes with the Climate Leadership and Community Protection Act (CLCPA). The bill would update the state’s energy law to go beyond merely encouraging the conservation of energy to promoting the “clean energy and climate agenda,” which includes reducing greenhouse gas emissions in new and rehabilitated buildings.

Application of the bill’s measures would save consumers $15 billion in utility costs by 2035, of which $6 billion is in low- to moderate-income households, according to the legislature’s bill analysis.

The Natural Resources Defense Council called passage of the bill a “big win for New Yorkers.”

“The legislation will result in a reduction of GHG emissions of 17 million tons, which is comparable to taking more than 3.5 million cars off the road for a year,” Samantha Wilt, senior policy analyst for NRDC’s climate and clean energy program, said in a statement.

A new definition of life-cycle cost in the bill would guide regulators’ consideration of the cost-effectiveness of potential amendments to the state energy conservation construction code. Regulators would be required to consider the estimated cost of acquisition, operation, maintenance and construction of an energy system over the life of a building, with specific attention to cost of fuel, among other things.

The bill also would ensure that efficiency standards and regulations do not increase emission of co-pollutants, such as sulfur dioxide and nitrogen oxides, or burden disadvantaged communities.

All provisions of the bill would take effect within six months of enactment.

Thermal Networks

The Utility Thermal Energy Network and Jobs Act (S9422) would change the definition of New York’s electric and gas utilities so they can own and operate thermal energy networks and supply thermal energy to consumers. It would also direct the Public Service Commission to initiate a proceeding within three months of the bill’s enactment to advance development of thermal networks to meet the GHG emissions and equity goals of the CLCPA.

Utilities would have three months from enactment to propose at least one, and up to five, thermal network pilot projects, ensuring at least one pilot per territory is within a disadvantaged community.

Thermal energy, as defined in the bill, refers to piped, noncombustible fluids that transfer heat in and out of a building to eliminate GHG emissions of heating and cooling processes. A thermal network would be defined as the infrastructure that supports a utility-scale project that supplies thermal energy.

Another provision of the bill seeks to support utility workers potentially affected by the downsizing of the gas system, with a priority placed on their transition for the operations and maintenance of thermal networks.

The Building Decarbonization Coalition, together with a group of union organizations and climate advocates, applauded passage of the act and called on Hochul to “act quickly” to sign the bill. The bill would take effect immediately.

Crypto Mining

A bill (A07389) that would amend New York’s environmental conservation law seeks to place a temporary moratorium on cryptocurrency mining operations that use an authentication method called proof-of-work (PoW) to validate blockchain transactions.

The PoW method uses substantial amounts of energy because of the high level of computations necessary for the process. Large cryptocurrency mining operations have sprung up around the PoW methodology, including some in New York, and the increase has prompted concerns about the associated energy use potentially preventing the state from meeting its GHG emission reduction targets.

Annual global energy use for PoW authentication is equivalent to that of Sweden, according to the legislature’s bill analysis.

For two years from the bill’s enactment, New York environmental regulators would not be able to issue an air permit to a fossil fuel-fired power plant that provides electricity for PoW cryptocurrency mining. They also would not be able to renew an air permit for a facility that plans to increase electricity supply for PoW mining.

To help the state understand the effects of PoW mining on energy use and the environment, the Department of Environmental Conservation would develop a generic environmental impact statement for the cryptocurrency operations in the state.

While environmental advocates applauded passage of the legislation, the Blockchain Association called it “misguided” in a tweet Friday. “We encourage all pro-tech New Yorkers to make their voices heard and ask the governor to veto” the bill, it said.

NY Contracts More Than 2 GW in Solar and Storage Projects

New York Gov. Kathy Hochul on Thursday announced awards for 22 solar and energy storage projects totaling 2,078 MW, the state’s largest land-based renewable energy procurement to date.

The New York State Energy Research and Development Authority estimates the projects will drive over $2.7 billion in private investment and create over 3,000 short- and long-term jobs while helping achieve the state’s environmental goals.

The Climate Leadership and Community Protection Act requires the state to obtain 70% of its electricity from renewable sources by 2030 and to make the grid net-zero by 2040.

“These projects will allow us to not just meet but exceed our goal of obtaining 70% of our electricity from renewable resources and will further cement New York as a national leader in the fight against climate change,” Hochul said.

“Today’s announcement of 22 exciting new clean energy project awards demonstrates that New York state continues its strong commitment to clean our electric grid, and the renewable energy industry is seriously stepping up to develop and invest in New York. We look forward to the construction jobs and pollution-free power these projects will deliver,” Anne Reynolds, executive director of the Alliance for Clean Energy NY, said.

The 22 large-scale projects feature several solar facilities combined with co-located storage, including the 350-MW Ridge View Solar Energy Center in Niagara County with 20 MW of storage; the identically sized Columbia Solar Energy Center in Herkimer County; the 240-MW Rich Road Solar Energy Center and 20-MW storage facility in St. Lawrence County; and the 250-MW Fort Covington Solar Farm with 77 MW of co-located storage in Franklin County.

MISO Annual Transmission Package Nears $4B

A draft version of MISO’s 2022 Annual Transmission Plan (MTEP 22) calls for $3.8 billion in spending for 364 of the footprint’s new transmission projects, a $500 million increase over a February draft. (See Initial MTEP22 Portfolio has $3.3B in Costs.)

During a series of subregional planning meetings last week, stakeholders learned MTEP 22’s $3.8 billion value is an increase over the $3 billion MTEP 21 portfolio, which had 335 projects.

MTEP 22 contains about $1.5 billion earmarked for projects addressing aging existing infrastructure, $1 billion for projects accommodating load growth, $580 million in necessary baseline reliability projects to meet NERC standards, another $530 million in projects to solve more garden variety reliability issues and nearly $250 million in projects to interconnect new generation.

MISO South has been assigned 30 projects, valued at $810 million. Six of the 10 most expensive projects are located in the region. The projects, submitted by Entergy’s Texas, Louisiana and Arkansas subsidiary to meet load growth, range in price from almost $96 million to $50 million.

The most expensive MTEP 22 project is Duke Energy’s $100 million addition of a West Lafayette, Ind., substation, also driven by growing load.

During a Central Subregional Planning meeting Wednesday, MISO’s senior manager of transmission expansion planning, Thompson Adu, said the RTO is currently “resource constrained” on MTEP planning work because it continues to simultaneously plan the long-range transmission portfolios. (See MISO Makes Business Case on Long-range Tx Plan.)

The grid operator will hold another series of subregional planning meetings in early September to lay out the final MTEP 22 report. MISO’s Board of Directors will consider the portfolio’s approval in December.

FERC Partially Accepts NYISO BSM Compliance Filing

FERC on Thursday accepted NYISO’s proposal to implement its revised buyer-side market power mitigation (BSM) rules for the current class year, but it ordered an additional filing by Aug. 1 to establish a specific effective date (ER20-1718-003).

The commission approved NYISO’s revisions, which allow the ISO to evaluate projects being driven by New York state public policy first, in February and ordered a compliance filing proposing an effective date for the changes, but one that was no later than the next class year.

NYISO did so in March, proposing that the revisions take effect immediately following the completion of class year 2021 that same month. (See NYISO Files BSM Compliance, Extension Request.)

FERC said that was fine, but that the ISO still needs to specify a date and include conforming tariff revisions based on that date.

Commissioner James Danly dissented, calling the brief letter to NYISO “yet another unlawful order that should never have [been] issued.”

“There is no material, legitimate basis to justify NYISO’s discriminatory treatment prioritizing the evaluation of public policy resources before non-public policy resources, independent of any other consideration, including cost,” Danly said.

Ohio Lawmakers Propose Bill to Ensure Public Represented on PUC

Two Ohio lawmakers this week introduced legislation to significantly alter the composition of the state’s five-member Public Utilities Commission by requiring the governor to appoint one member from a list of candidates chosen by the office of the Ohio Consumers’ Counsel (OCC).

Under H.B. 690, the OCC, rather than the PUCO Nominating Council, would have the responsibility to vet and submit the names of three consumer-oriented candidates to the governor for appointment.

The governor would not be permitted to reject all three, and any OCC-recommended appointment would be subject to approval by the state Senate.

The PUCO Nominating Council would continue to screen candidates for the other four seats on the commission for gubernatorial appointment.

The introduction of the legislation follows Republican Gov. Mike DeWine’s reappointment in February of a long-time utility lawyer to a second five-year term after the Nominating Council, chaired by a utility lobbyist, rejected candidates with a consumer background.

It also comes three years after DeWine appointed utility lobbyist Sam Randazzo, whose clients included FirstEnergy (NYSE:FE), to chair the PUC. Randazzo stepped down in November 2020, four days after the FBI raided his home after FirstEnergy revealed in a Securities and Exchange Commission filing that it had paid him $4 million before his appointment to close out a six-year consulting contract.

Rep. Laura Lanese (R), one of two primary sponsors of H.B. 690, said she introduced the legislation to make sure the public, “the first word in the name of the Public Utilities Commission,” gets represented.

“We have this office, the OCC, that has the expertise” to ensure public representation, she said.

Lanese noted that the OCC is already responsible for recommending a gubernatorial appointment to the Ohio Power Siting Board, which has authority over the development of power plants, including wind and solar, transmission lines and pipelines.

“We do it with the Ohio Power Siting Board, and there’s no reason for us not to do it with the PUC,” she said.

Co-sponsor Gayle Manning (R) could not be immediately reached for comment, but a number of Democrats immediately agreed to co-sponsor the bill.

Rep. Kent Smith, ranking Democrat on the House Public Utilities Committee, which is expected to hold initial hearings on the legislation, is listed as one of the co-sponsors.

“I think the voice of consumers needs to be amplified on the PUC,” Smith said. “And this would be a relatively simple way to ensure that a consumer voice would be there.”

Rep. Casey Weinstein, a Democrat who clashed with Randazzo when he was appointed to the PUCO, said he quickly moved to be a co-sponsor.

“I just want to see more consumer-focused representation on the PUC, and I think this is a creative way to get there. I have not liked the governor’s picks. I think it’s all industry-friendly folks. I completely disagree with the preponderance of the decisions that they’ve made. I think they seem to exist to protect the status quo. And I think that should be challenged,” he said.

A third Democrat, Rep. Dan Troy of suburban Cleveland, said he immediately decided to co-sponsor the bill when he saw it. “I’ll be co-sponsoring this because it’s one more seat at the table that has the ratepayers’ interests in mind,” he said.

The spokesperson for the OCC issued a statement in support of the legislation.

“Years ago the legislature required that the Ohio Power Siting Board would have a member, to be nominated by the Consumers’ Counsel and appointed by the governor, as the public’s representative on the board. That was a good idea for Ohioans,” Merrilee Embs wrote in an email responding to a request for comment.

“A similarly good idea is in House Bill 690 for reform of the PUCO. That’s especially important given the PUCO is out of balance with two of five commissioners having formerly worked for the utility industry,” Embs wrote. “Just recently the PUCO even had three of five commissioners who had worked for utilities — until a FirstEnergy scandal led the former PUCO chair to resign. …

“In the interest of justice for millions of utility consumers, we urge the legislature to enact House Bill 690.”

Interior to Cut Rent for Clean Energy Projects on Public Land

Renewable energy developers looking to build projects on public land may soon see the rent and fees they have to pay drop by more than half, Interior Secretary Deb Haaland announced Tuesday at a clean energy roundtable in Las Vegas.

The dramatic drop in the per-acre rent and per-megawatt fees developers pay is part of a drive by Interior and its Bureau of Land Management to help the Biden administration reach its 2025 goal of putting 25,000 MW of renewable energy projects on public lands, primarily in the West. Haaland also announced that the department will be setting up and staffing special units called Renewable Energy Coordination Offices (RECOs) “to prioritize robust environmental compliance coordination for renewable energy proposals.”

The RECOs will be located in BLM offices across the West, with one each in Arizona, California, Nevada and Utah, according to a DOI announcement.

In a statement included in the announcement, Haaland underlined the “important role” clean energy projects on public land will play in reducing U.S. greenhouse gas emissions and the department’s commitment to “coordination with local, state and elected officials, tribes, and conservation and industry groups.”

BLM Director Tracy Stone-Manning hailed the announcements as “bold steps” that will allow the agency “to attract renewable energy investments on public lands in a way that is environmentally sound.”

While Tuesday’s announcement was light on specifics — such as when the lower rates and RECOs will be rolled out — more detail can be gleaned from a progress report on renewable development on public lands that DOI and BLM submitted to Congress in March.

Authorized to reduce per-acre rental rates for clean energy projects in the Energy Act of 2020, the department implemented initial reductions in California’s Riverside, San Bernardino and San Diego counties in 2021 because of “significant increases in the fair market value for acreage rents” for solar and wind projects in those areas, the report says.

The reduced rates for states, recently published by BLM, range from $8.09/acre in New Mexico to $48.93/acre in Oregon. The reduced rate for all of California is $75.13/acre.

‘Vast Contiguous Areas’

Siting renewable energy on public land remains a potential flash point at the local level. For example, the recently approved Oberon solar project in Riverside County was opposed by some environmental groups, which see it as a threat to sensitive desert ecosystems and animals, such as the desert tortoise and fringe-toed lizard, as reported in The Desert Sun.

But with Biden’s ambitious climate goals and the need to rapidly ramp up solar and wind, “vast contiguous areas available for onshore renewable energy are sparse,” the DOI-BLM report argues. “Therefore, public lands … have a unique role to play” in renewable development.

According to the report, in fiscal year 2021, BLM helped develop 2,890 MW of solar, wind and geothermal energy on public land, a 35% increase over 2020.

Going into 2022, the agency had a pipeline of 54 solar, wind and geothermal projects totaling 33,000 MW that it is prioritizing for permitting by 2025, the report says. BLM is targeting approvals for 3,595 MW of solar in 2022, rising to 13,524 MW in 2024.

The pipeline also includes six interconnection transmission lines — or “gen-ties” — connecting renewable projects to the grid, with a total capacity of 1,732 MW. Four major transmission lines are also on the agency’s priority list: Greenlink West and North, both in Nevada; SunZia, in Arizona and New Mexico; and Transcanyon Cross-Tie, connecting Nevada and Utah.

Processing all those projects and staffing the RECOs will require at least 56 new hires, according to the report, and anticipated projects in states such as Idaho, Montana and the Dakotas could result in an additional RECO with a staff of 10.

Permitting has long been a pain point for renewable energy and transmission development, but whether the DOI initiatives will be enough to move projects forward on expedited timelines remains uncertain. While interconnection queues across the country sit with backlogs of hundreds of megawatts of projects, supply chain delays and the Commerce Department solar tariff investigation have put major dampers on solar development.

ERO Warns Inflation, Cyber Investments to Keep Boosting Budgets

Inflation and investments in cybersecurity are likely to continue driving budget increases across the ERO Enterprise for the next several years, staff at NERC’s regional entities warned in a webinar hosted by the ERO’s Finance and Audit Committee on Wednesday.

The webinar was meant to provide more context for NERC and the REs’ draft 2023 business plan and budgets. NERC posted the drafts last Wednesday; the organization is seeking comment on the documents through June 24 and plans to submit the final budgets to its Board of Trustees for approval at its next open meeting in August. (See NERC Plans Big Budget Hike for 2023.)

The draft budgets indicate that the ERO Enterprise’s efforts to reduce the costs of the economic hardships of the COVID-19 pandemic are coming to an end, as NERC predicted when it released the preliminary 2022 budget last year. (See NERC: Post-COVID Budget Rises Likely.) NERC’s planned 13.5% budget increase ($12 million) is its biggest by percentage since 2015, when the creation of the Cybersecurity Risk Information Sharing Program spurred an 18.3% growth. It is also significantly higher than the 7.1% increase from 2021 to 2022.

The REs are all planning budget hikes of their own, ranging from the Texas Reliability Entity’s budget of $17.7 million, up 3.2% from this year, to the Midwest Reliability Organization’s $23 million, up 15% from 2022. NERC also expects to raise its assessment next year, as does every RE except for WECC, which is planning a 17.2% reduction.

Presenters at Wednesday’s webinar included finance heads from every RE, discussing the drivers of their expected budget increases. A common theme was the need for REs to resume investing in needed improvements that many had deferred in recent years to avoid raising assessments and burdening utilities that were themselves struggling with adapting to the pandemic.

Lam Chung (NERC) FI.jpgLam Chung, MRO | NERC

“We are sort of working our way back out of that hole that we’ve created for ourselves … in light of the financial and economic situations of the last several years,” said Lam Chung, vice president and engineer for strategy, innovation and finance at MRO.

For many REs, the most significant investment needed is in cyber and physical security. ReliabilityFirst, for example, plans to increase its budget by 6.7%; 48% of this increase consists of security initiatives and salaries for new security personnel.

Texas RE also plans to add an additional full-time-equivalent position in its information technology department, while WECC expects a 12.2% increase in its operating expenses because of costs associated with computer improvements and enterprise security tools. SERC Reliability CFO George Krogstie said his organization is “completing … a multiyear shift from third-party to in-house IT expertise,” which has resulted in “greater autonomy to manage our network.”

Presenters observed that the current rates of inflation — the U.S. Consumer Price Index was near a 40-year high in April, according to The Guardian — also complicates the budget process, with many complaining that even if they continue to hold most meetings virtually, they will likely still have to raise their meeting and travel budgets to keep pace with rising costs. The wave of inflation is also boosting costs of insurance and other services while putting pressure on REs to raise their salary offerings to stay competitive, especially for urgently-needed hires in cybersecurity.

“We have adjusted our merit increase for inflation, [which is] typically 3%; we’ve moved that to 4%. And we also have inflation increases in meetings and travel,” said Carol Baskey, treasurer at ReliabilityFirst. “We [also] have a newer, less experienced staff than in prior years, so there’s more training that we’re going to be taking on as well.”

Granholm Discusses Net-zero Tech at ARPA-E Energy Innovation Summit

DENVER — Leaders in energy innovation from across the U.S. traveled to Denver last week to participate in ARPA-E’s 2022 Energy Innovation Summit.

The three-day conference ended with a fireside chat led by U.S. Secretary of Energy Jennifer Granholm.

Granholm started by expressing her excitement to be back in person.

“Since the last time we met virtually, so much has gone on in the world, even yesterday, so much horrible stuff,” Granholm said, referring to the school shooting in Uvalde, Texas.

Jennifer Granholm 2022-05-25 (RTO Insider LLC) FI.jpgU.S. Energy Secretary Jennifer Granholm | © RTO Insider LLC

“[And] the war in Ukraine as well,” she continued. “The impacts on the global energy markets and the fact that gas prices are through the roof and people are really hurting. It just tells you that we have got to move.”

Granholm expressed frustration with the current legislature’s inability to “get the full array of our climate policy through,” but she said she remains optimistic.

“Technology is going to move forward regardless of what’s happening on the policy side, and this is how we are going to ultimately fix the biggest problems that are facing us,” she said.

Beth Zotter, CEO and co-founder of UMARO Foods, and Natron Energy CEO Colin Wessells joined Granholm for a conversation about the technologies their companies are working on to aid the transition to net zero.

Zotter’s company started out by producing algal biofuels out of seaweed to use in the transportation sector.

“UMARO Foods is really built on the vision that the ocean is the most scalable and efficient bioreactor for producing biomass,” Zotter said. She added that the company’s goal is to create the technologies that can unlock the ocean’s potential for producing clean energy.

Her company has moved into the food industry, using seaweed biproducts to produce plant-based foods to complement its existing biofuel production. UMARO plans to roll out plant-based bacon to restaurants in the coming months.

“Right now, algal biofuels need a high-value co-product to basically make the economics for large-scale biorefineries work out,” Zotter said. And with a growing demand for plant-based meat alternatives, it’s a new market opportunity, she added.

On the battery storage front, Wessells said, “Natron Energy is developing sodium-ion batteries to solve electricity reliability problems,” while avoiding widespread industry supply chain issues.

ARPA-E panel 2022-05-25 (ARPA-E) Content.jpgU.S. Energy Secretary Jennifer Granholm (right) participates in a fireside chat with Natron Energy CEO Colin Wessells (left) and UMARO Foods CEO Beth Zotter. | ARPA-E

“We’re removing the supply chain constraints,” he said. “We don’t have the lithium; we don’t have the cobalt; we don’t have the nickel; we don’t have the copper. We can onshore all these materials. We just use iron; we just use manganese.”

Natron is planning a large battery storage project in Holland, Mich., with its new sodium-ion technology. It plans to run about 600 MW of battery production per year of utility-scale grid storage for “data centers, telecom [and] short-duration grid storage. … This will be phase one of a longer-term growth plan,” he said.

With LG Energy Solutions’ investment in battery manufacturing for electric vehicles in March and the various auto manufacturers in the area, Wessells said Holland is poised to become a battery hub in the Upper Midwest.

Wessells said Natron’s goal is “to avert a doomsday scenario for grid storage, where if we don’t have the lithium minerals, we don’t have the grid storage we need.” Being independent of the mineral supply chain may allow Natron to fill the battery storage gap that will get the U.S. to net zero, he said.

Both companies were able to launch with help from funds awarded through ARPA-E grants. Granholm stressed the importance of government working with industry to fund technologies to avert climate change and aid the energy transition.