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November 8, 2024

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Michigan Zero-carbon Proposal Draft Sent to Whitmer

LANSING, Mich. — Michigan would have at least 2 million electric vehicles and get 50% of its electricity from renewable energy by 2030 — while ending coal use by 2035 — under a draft climate proposal sent to Gov. Gretchen Whitmer (D) Friday.

The Department of Environment, Great Lakes, and Energy’s (EGLE) proposed Healthy Climate Plan, a roadmap for reaching carbon neutral status by 2050 required by a 2020 executive order by Whitmer, will be open to public comment through Feb. 13.

“Michigan communities and families are taking hit after hit from power outages, extreme heat events, flooding and sewer backups caused by intense rains,” the report said. “Our farmers are struggling to adjust and survive as temporary thaws result in frozen fruit blossoms thinking spring has come early, drenching storms inundate fields one day and then disappear into extended periods with no rain at all, and new insects migrate from warmer climates each year threatening our gardens, forests and crops. Disease-carrying ticks — in places we have never seen them and in previously unimaginable numbers for our state — add hassles and health risks to the outdoor [adventures] so many of us cherish.”

Input

In a letter accompanying the proposal, EGLE Director Liesl Eichler Clark said the plan was “first and foremost a Michigan plan.”

“We heard from environmental justice, public transit, and local food advocates; an array of business executives and labor leaders; academic experts and local government officials; and concerned residents of all political persuasions and walks of life,” she said.

The Council on Climate Solutions — 14 residents and representatives from the Departments of Agriculture and Rural Development, Labor and Economic Opportunity, Natural Resources, Transportation, Health and Human Services, Treasury and the Public Service Commission — provided detailed recommendations, along with the Climate Justice Brain Trust and others.

Clark, who chaired the climate council, called the proposal comprehensive, impactful and considerate of how residents’ pocketbooks will be affected.

But in reviewing the draft — which winnowed down dozens of proposals made by the council’s workgroups on issues like transportation, buildings, agriculture and equity — some council members urged the state to take bolder action.  

“Can we make this more aspirational?” Jonathan Overpeck of the University of Michigan, one of the more outspoken council members, said at a meeting Tuesday. Proposals such as permitting coal use until 2035 allow “people to say we’re just kicking it down the road,” he said.

The council will review comments on the draft Feb. 22 before issuing the final proposal to Whitmer by March 14.

The draft plan’s main goal is to cut carbon emissions by 28% by 2025 and 52% by 2030 before reaching carbon neutrality by 2050.

Benchmarks

To reach that goal, the plan calls for a 50% renewable energy standard by 2030 and 100% renewable energy in state buildings by 2025, with a 40% reduction in their energy intensity by 2040. Although coal once generated most of Michigan’s electricity, the report noted, only one coal-fired power plant will operate beyond 2028, according to utility retirement schedules.

MI Electric Utility Carbon Goals (Michigan Public Service Commission) Content.jpgMichigan’s electric utilities have pledged to cut their carbon emissions by between 80 and 100% by 2050. | Michigan Public Service Commission

The plan also calls for putting solar generation facilities on state-owned land and for the state to help local governments in developing “best practices” for their own solar projects.

To meet the transportation goals, the proposal calls for establishing low-carbon fuel standards and incentives for EV purchasers. It also recommends the state move to more fuel-efficient vehicles and EVs — the Michigan State Police recently tested an electric Ford Mustang as a potential pursuit vehicle — along with aiding local governments and school districts toward climate friendly fleets.

The plan also calls for the state to electrify public transit and boost access to it. The Detroit area has struggled for decades to develop a public transit system that serves both the city and suburbs, and expanding public transit, especially in Metro Detroit, has long been a goal of environmentalists.

To address building emissions, the proposal recommends investing in the Michigan Saves Green Bank, a nonprofit bank set up to help finance home and commercial energy efficient projects.

The proposal says the state, which last updated its building code in 2015, should adopt the 2021 International Energy Conservation Code. It also calls for annual waste-reduction goals of 2% for electricity and 1% for natural gas.

However, the proposal does not call for an end to natural gas use, as some members of the council and environmentalists speaking at public comment sessions through 2021 had called for.  

To ensure equity and justice, the plan says 40% of state funding for climate-related initiatives should benefit economically disadvantaged communities, echoing President Joe Biden’s “Justice40” initiative. The state proposal also calls for adjusting job training programs to assist students getting jobs in clean energy.

Economic Impact

The plan portrays its recommendations as essential to both continuing the state’s leadership in automobile production and attracting new businesses, citing research that lists clean energy and sustainability among the top factors in corporate location decisions. It noted Site Selection magazine’s 2021 Sustainability Rankings listed the state at No. 3 for sustainable development, with Grand Rapids and Lansing ranked the U.S.’s No. 2 and No. 6 metros.

The plan also said the changes will ensure that the state — “with the highest concentration of engineers in the nation and a skilled trades workforce ranked in the top ten” — remains a leader in auto production as GM, Ford and Chrysler transition from internal combustion engines to EVs.  

Actions Across State Government

The report noted involvement in the climate council of numerous departments in addition to EGLE. “In order to meet the moment, every department must be a climate department,” it said.

EGLE has developed a the “Next Cycle Michigan” initiative to increase the state’s recycled materials supply chain. The Treasury Department has launched the Energy Transition Impact Project to help communities and workers affected by coal plant closures. The Department of Natural Resources is seeking strategies for responding to climate-based threats to natural resources. The Department of Labor and Economic Opportunity expanded job training and workforce development programs to include clean energy and mobility opportunities. The Department of Transportation developed Mobility 2045 to prepare transportation systems for climate challenges and new technologies.

Overall, council members were supportive of the EGLE proposal, but some wanted to see the state act more aggressively and take a leadership position among the states. Phil Roos, CEO of consulting firm Great Lakes GrowthWorks, said Tuesday it was clear the proposal was “really striving for leadership.”  But he said the state could adopt greater specificity and earlier deadlines.

Clark called the plan a “living document,” acknowledging that the state will have to make course corrections on the way to 2050. “Some of the solutions to get to a 100% decarbonized economy that deliver good jobs and justice for Michiganders are still very much on the drawing board. But much of the path to carbon neutrality is already well known to us,” she said. “While there are complexities in every aspect of this plan, most can be overcome if we simply commit to getting the job done and equitably sharing the burdens and benefits.”

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Baker Backs Bill to Eliminate Massachusetts OSW Price Cap

Massachusetts legislators are considering a bill that would remove the current price cap requirement for new offshore wind project bids.

“The price cap gets in the way of our competitiveness and discourages some developers from offering more creative, diverse and comprehensive proposals,” Gov. Charlie Baker said Tuesday. “Removing it would give bidders the flexibility to offer important added benefits to Massachusetts residents, including economic investment, job creation and reliability solutions, such as transmission and energy storage.”

While the price cap was important to the state’s early OSW procurement process, removing it responds to “signals” in the market, Baker said in hearing testimony before the Joint Committee on Telecommunications, Utilities and Energy.

But moving forward without the cap could risk driving up the comparatively low bids that Massachusetts received in its first three procurement rounds, Sen. Mike Barrett, co-chair of the committee, said during the hearing.

The costs for Sunrise Wind and Empire Wind in New York are 43% higher than Mayflower Wind’s winning $58/MWh bid in 2019 in Massachusetts, according to the U.S. Department of Energy. Revolution Wind’s bid in Connecticut is 68% higher than Mayflower’s bid, while Ocean Wind’s bid in New Jersey is twice that of Mayflower.

Under the current Massachusetts procurement process, regulators cannot approve a contract with a per-megawatt-hour bid, plus associated transmission costs, that exceeds the winning bid price from the previous procurement round.

Barrett urged Baker to consider alternatives to removing the cap, including removing the current requirement that project-related transmission costs be included in the bid price. The number of OSW developers, Barrett said, is too small right now to create market competitiveness. Only four developers have submitted their projects for Massachusetts’ three OSW procurements.

A provision in the procurement process protects the state from high bids by allowing utilities the right to reject a bid they do not like, according to Executive Office of Energy and Environmental Affairs Secretary Kathleen Theoharides.

In such a small market, Barrett said, Massachusetts does not have the luxury of rejecting bids. “It’s basically an oligopoly,” he said.

Lifting the cap may lead to somewhat higher per-megawatt-hour prices, Theoharides said in her testimony, but a price increase would come with more benefits that have been missing from previous bids.

“Getting additional benefits through a more flexible contract … that includes storage … hydrogen … and better interconnections means that ratepayers will save money not just from the one offshore wind contract but across the system with the additional benefits more creative contracts can provide,” she said.

Additional Changes

The bill (H.4204), which Baker filed in October, would transfer the authority for selecting winning bids from Massachusetts’ utilities to the Department of Energy Resources (DOER) to help speed up the contract negotiation process.

“Speed is important in future solicitations and especially important as we pursue somewhere on the order of 15 to 20 GW of offshore wind over the next 30 years,” Theoharides said.

While parties to the contract negotiations for Massachusetts projects “strive for consensus,” she said, disagreements still occur and have stalled the process in the past. If there’s no clear path to a consensus in future negotiations, DOER would be able to consult with an independent evaluator and make a final decision on the procurement.

“This ensures we can press forward swiftly and not allow an overly long process or disagreements to hinder our climate goals,” Theoharides said.

The bill also would codify new provisions to advance diversity and equity that were in the state’s most recent OSW request for proposals.

Bidders had to demonstrate how their projects would ensure the development of a diverse, equitable and inclusive workforce, as well as provide economic benefits for ratepayers, foster economic development and protect environmental justice communities.

“This legislation now captures these changes to the procurement criteria,” Theoharides said.

New Funding

Baker is seeking what he said would be a “game-changing investment” to advance clean energy innovation in the state.

The bill would authorize a $750 million transfer from the state’s COVID-19 response fund to the Clean Energy Investment Fund.

The fund, Baker said, would support emerging clean energy innovators, institutions and businesses; provide funding to colleges, universities and vocational technical institutions; and assist regional employment boards.

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TVA Comes Under Congressional Spotlight

The U.S. House of Representatives Committee on Energy and Commerce last week put the Tennessee Valley Authority on notice that it’s concerned about the federal utility’s rates and clean energy goals.

The committee on Thursday sent TVA a letter posing 16 questions on electricity affordability and renewable energy investment. Representatives said they were troubled that TVA wasn’t making enough progress on emissions reduction and that its prices are no longer affordable.

“Specifically, we are concerned that Tennessee Valley residents pay too much for electricity, which particularly impacts low-income households in Tennessee,” the committee wrote. “The committee is also concerned that TVA is interfering with the adoption of renewable energy by its commercial and residential customers and, while it is making progress on decarbonization, it must do more this decade.”

TVA ratepayers’ bills exceed the national average, the committee said. It pointed out that Memphis’ low-income residents have among the highest energy burdens in the country while TVA has scaled back its energy efficiency programs in recent years.

The committee said its questioning serves to “understand the extent to which the disparity between TVA’s low rates and its high customer bills is driven by the organization’s decision to deprioritize energy efficiency and impose fixed fees that keep rates low but cost ratepayers money.”

The committee asked whether TVA would commit to more energy-efficiency measures and requested information on the utility’s current and future energy-efficiency savings and on its local power companies’ energy efficiency programs. It also asked TVA to explain its “underinvestment in solar and wind resources” and detail its wholesale contracts with qualifying facilities under the Public Utility Regulatory Policies Act.

TVA must also furnish information on its rate changes over the last five years and its reasoning behind its 2018 decision to introduce fixed charges to its local power companies.

The committee also said it wants to know “whether TVA plans to update its decarbonization goals and next integrated resource plan (IRP) to comply with President Biden’s executive order and to reflect TVA’s statutory role as a national leader in technology and environmental stewardship.”

It asked what TVA is doing to reduce its natural gas reliance and whether the utility would retire its entire coal fleet earlier than its stated goal of 2035. The committee requested the status of the environmental impact statements for the planned retirements of TVA’s Cumberland and Kingston coal plants.

The Biden administration has a goal of zero emissions in the electricity sector by 2035. TVA has a target to lower its carbon emissions 80% from 2005 levels by 2035; it plans to achieve net-zero carbon emissions by 2050. Clean-energy proponents have criticized TVA’s goals as sluggish. (See Green Groups Pressure TVA on Open Meetings, Decarbonization.)

Finally, the committee asked the utility to explain its participation in the defunct Utility Air Regulatory Group, a lobbying organization that opposed environmental standards. (See TVA Sued Over Contributions to Trade Groups.) The Center for Biological Diversity sued the TVA for passing on membership dues to ratepayers, leading to a FERC notice of inquiry over the appropriateness of recovering trade association dues in utility rates. (See FERC Questions Ratepayer Funding of Trade Association Dues.)

Reacting to the letter, TVA pointed that it has already reduced emissions 63% from 2005 levels and currently supplies almost 60% of its power from carbon-free resources.

TVA spokesperson Ashton Davies said the utility is “actively pursuing emerging technologies, from carbon capture to advanced nuclear, while supporting national clean energy initiatives, such as a robust electric vehicle charging infrastructure.”

Davies also said TVA’s rates are lower than 80% of the nation’s largest utilities.

“Even with TVA’s low energy costs, we recognize the challenge of high-energy burden in our region. TVA is in partnership with 153 local power companies and other organizations to help address the root-causes of this issue, including the need to weatherize and implement energy efficiency measures in buildings and housing,” Davies said in a statement to RTO Insider.

TVA has until Feb. 2 to respond in writing to the committee’s inquiry.

Southern Alliance for Clean Energy Executive Director Stephen A. Smith lauded the committee’s action. In a statement, he welcomed the “renewed Congressional oversight of this unregulated federal monopoly catering to the elite at the expense of the masses.”

“TVA has lost its way in serving the salt of the Earth people of the Tennessee Valley,” Smith said. “With a board of directors that condones the tasteless acts of cutting efficiency programs to help people lower their bills and blocking customer-owned clean energy, while simultaneously awarding excessive salaries and a jet-setting lifestyle to their executives, TVA has lost touch with its core service mission.”

Smith added that the “privileged rubberstamp of the TVA board structure is failing our people.”

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Con Ed: 2021 DR Programs Rise in MW Value, Enrollment

Consolidated Edison (NYSE:ED) on Thursday reported its demand response programs increased only slightly in megawatt value last year but dramatically in enrollment, which climbed by approximately 250% compared to that of 2020 (Case No. 14-E-0423).

The company and five other investor-owned utilities in New York filed individual dynamic load management (DLM) performance reports for the state’s Public Service Commission to consider at a hearing Thursday.

Con Ed’s DR programs include its commercial system relief program (CSRP); distribution load relief program (DLRP); auto DLM; term DLM; and the residential Bring Your Own Thermostat (BYOT) program.

Under the DLRP, customers receive notification two hours before a DR event, which is called to address an isolated need. In contrast, the utility’s customers receive notification at least 21 hours before a CSRP event, which is called in response to systemwide peak demand.

Con Ed reported a slight decrease in enrollment in the CSRP and DLRP during 2021, which was the first year of the term and auto DLM programs. The term program is a day-ahead peak-shaving program that incentivizes customers to provide load relief with 21 hours of notice or more, while auto program participants agree to provide load relief on not less than 10 minutes advance notice.

The term and auto DLM programs offer fixed pricing for contract lengths of three to five years and longer-term price certainty compared to tariff-based programs, which can change pricing annually.

The PSC in September 2020 modified DLM implementation plans for the six utilities, all related to storage, saying the initial plans “resulted in a bias towards short-term, low-capital-investment solutions” because of their yearly performance structure (18-E-0130). (See “DLM Incentives Extension,” NYPSC Accepts CLCPA Environmental Review.)

Hearing facilitator Robert Cully, utility engineering specialist at the New York Department of State, asked whether the increase in term and auto DLM enrollments was related to the decrease in CSRP and DLRP enrollments, and whether there was a downward trend in overall enrollments.

A shift in program participation has definitely driven some of the decreases, said Marlon Argueta, energy efficiency program manager at Con Ed, “but when you look at the overall number of available megawatts for DR, it has definitely increased as a whole, and we expect to see that continue over the next few years.”

Aggregators drove the growth in participation by leveraging widespread deployment of advanced metering infrastructure to enroll residential and small business customers in their programs, which make up the majority of new customer enrollments, but each contributes much smaller megawatt reductions.

Shifting Load

David Ahrens, managing director at Energy Spectrum, asked why peaks were different within the four different call windows that Con Ed has in its CSRP program than in previous years.

In general the peaks are shifting more toward the day than the night, Argueta said.

“We are seeing a large movement in terms of how these call windows are aligned … and we have a sense that this is all being driven by some of the things that are happening right now in in the service territory, so COVID-19 brings a lot of folks into working from home and has driven a lot of the load towards residential areas,” Argueta said.

This shift is happening across the system, and of the more than 80 networks in the Con Ed system, the company’s analysis this year determined that 33 had shifted their peaks, meaning they changed call windows repeatedly, he said.

CSRP Reservation Payment (Con Edison) Content.jpgSummary of CSRP reservation payment option enrolled and achieved impact in 2021 | Con Edison

“This is not arbitrary; really the purpose of this program is to reduce network peaks, and we try to closely align those four hours the best we can to maximize the benefits that these programs bring to our system, and it seems that only one network now is peaking from 7 to 11 p.m., so that’s a significant change,” Argueta said.

Peter Dotson-Westphalen from CPower, an energy management company that manages some DLM programs for Con Ed and National Grid, asked for clarification on whether events called that may extend past midnight are still considered to be mandatory.

Under tariff revisions pending before FERC, participation will be mandatory before midnight, just as currently anything beyond midnight will only receive performance payments, Argueta said.

Ultimately, the DR programs are about allowing Con Ed to defer the need to build infrastructure, knowing that it has these resources to rely on, said Griffin Reilly, the company’s section manager of targeted demand management.

“We have some of these networks peaking for longer than eight hours in the day, and to really be able to defer infrastructure builds, we’re going to need resources that can respond for that long,” Reilly said. “How we do that is going to be a big part of the discussions we have this coming summer leading into potential changes that we’ll make for the program next year.”

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Rent Provision Sparks Pushback on Wash. Buildings GHG Bill

A rent control plank prompted the greatest opposition to a Washington Senate bill to trim the carbon footprint of roughly 50,000 buildings in the state.

Senate Bill 5722 is being modified to include a cap on rent increases in order for building owners to receive state money to trim carbon emissions from their structures, Anna Lising, senior policy adviser to Gov. Jay Inslee, told the Senate Environment, Energy and Technology Committee Thursday at a public hearing. The bill is part of Inslee’s package of climate-related legislation unveiled in December. (See Flood of Climate Bills to Greet Wash. Lawmakers.)

While the size of the incentive fund is currently not in the bill, speculation emerged in Thursday’s hearing that it could be in the range of $150 million.

The bill by Sen. Joe Nguyen (D) calls for the state’s Department of Commerce to set draft standards to trim carbon by Dec. 1, 2023, for buildings ranging from 20,000 to 50,000 square feet. A 2019 law already addresses the carbon footprints of buildings that are greater than 50,000 square feet, which number about 10,000 in the state. The state must inform the affected building owners by July 1, 2025.

The Commerce Department would fine-tune the standards and submit a report to the legislature in 2029. It would have to adopt the standards in 2030, and the new rules would go into effect in 2031.

Twenty-seven percent of Washington’s carbon emissions come from buildings, the second largest emitter behind vehicles at 45%. In 2018, Washington’s carbon emissions totaled 99.57 million metric tons (MMT). A 2008 law set emission goals of 50 MMT by 2030, 27 MMT by 2040 and 5 MMT by 2050.

“We cannot meet our greenhouse gas limits without substantial action in the building sector,” said Emily Salzberg, an official with the Commerce Department.

The rent control cap prompted pushback from construction, real estate, utilities and business lobbyists. They argued that linking rent control — tentatively set for four years after the improvements are made — with receiving state aid for that work will lead building owners to stay away from applying for state financial help.

“We want the government to have more skin in the game with the incentives,” said Rod Kauffman, president of the Building Owners and Managers Association of Seattle King County.

Environmental groups, the cities of Shoreline and Olympia, and several private citizens supported the bill. Twelve people testified in favor of the bill and 13 against it. Three hundred twenty-eight people signed up to state their positions without testifying with 290 supporting the bill and 38 opposing it.

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MISO Walks Back Size Limit on DER Aggregations

MISO on Thursday told stakeholders it had removed a 10-MW size limit on aggregations of distributed energy resources (DERs) from its FERC Order 2222 compliance proposal.

During a Distributed Energy Resources Task Force (DERTF) meeting, DER Program Manager Kristin Swenson said MISO removed the limit and will not propose a size limit on either aggregations or a single asset within an aggregation.

The RTO surprised stakeholders late last year by announcing the 10-MW limit. It has been on record multiple times saying it wouldn’t limit the size of aggregations in its markets under Order 2222.

Several stakeholders attending a late November DERTF meeting said it was the first they heard of a maximum threshold on DER aggregations. Staff cited market power concerns and simplified generation outage coordination for setting the size limit.

Swenson said MISO may have to revive discussions on size limits if unusually large aggregations seek wholesale market access. She said staff expects most aggregations to be relatively small but said it’s possible that an 80-MW wind farm on the distribution system could expect to participate in the markets without first entering the generator interconnection queue.

The grid operator plans to rely on its electric storage resource participation model to let DER aggregations participate in the wholesale market. It also said aggregations must be limited to a single pricing node and must self-commit. MISO has said it will not provide output forecasts for the aggregations. (See MISO Draws on Storage Model for DER Aggregations.)

The RTO is currently drafting the compliance filing.

“We’re in the crunch time here. There’s going to be a lot of tariff language,” Swenson warned stakeholders late last year.

Staff has said they don’t expect the Order 2222 compliance to cover all DER applications in the wholesale market.

“We have a lot to learn about DERs and how they will participate in the market,” Swenson said.

MISO is also contemplating whether it needs a forum to discuss DERs after it achieves FERC compliance.  

The DERTF is slated to sunset July 31. Stakeholders are debating extending the sunset date by a year or transitioning it into a working group to address evolving and growing DER participation.

MISO says stakeholders can modify the group and reestablish a charter that doesn’t explicitly mention Order 2222 compliance once the RTO has a compliance ruling. It is accepting stakeholder input on whether to maintain a dedicated DER stakeholder group.

WEC Energy Group’s Chris Plante predicted more DER issues will need to be discussed once states have more assets on their distribution systems.

MISO legal counsel Michael Kessler said he doesn’t see a need for stakeholder work on Order 2222 or DER aggregation participation until FERC’s ruling.

“We’re going to be in a hold mode waiting on FERC,” Kessler said.

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New Mexico Draft Bill Targets Net Zero by 2050

With the New Mexico legislature’s 2022 session scheduled to start Tuesday, the state has released a discussion draft of a bill that would set a statewide target of net-zero greenhouse emissions by 2050.

The bill, known as the Zero Emissions Economy Act, would also set an interim target for reducing GHG emissions by 50% below 2005 levels by 2030.

The New Mexico Environment Department (NMED) distributed the draft bill by email this week. Comments will be accepted through noon on Jan. 18 and may be sent to 2022act@state.nm.us.

The bill would allow the use of carbon offsets to help meet the 2050 net-zero goal. But even with offsets, GHG emissions would be capped at 10% of 2005 levels in 2050 and beyond.

This would “provide a check on absolute emissions to ensure they do not increase just because they are offset,” NMED said.

The bill would require the New Mexico Energy, Minerals and Natural Resources Department (EMNRD) and NMED to release an annual greenhouse gas inventory, showing progress toward reaching GHG reduction goals. Each year agencies would also assess the impacts of climate change on disadvantaged communities and whether new policies are needed to meet the GHG reduction targets.

NMED would have until June 30, 2025, to petition the Environmental Improvement Board to promulgate rules to lower GHG emissions from sources subject to the Air Quality Control Act.

Camilla Feibelman, director of the Sierra Club Rio Grande Chapter, said the group was still reviewing the draft bill. But she noted that the bill’s 2030 goal of reducing GHG emissions by 50% relative to 2005 levels was more ambitious than the 45% reduction that the governor set as a 2030 target in 2019.

Another positive is that the 50% reduction by 2030 would be actual emission reductions, without the use of offsets, she said.

“Taking real action to put greenhouse gas reductions in law … is essential,” she said.

In addition to the net-zero bill, Feibelman said she’s hoping to see a substantial “earth shot” investment in the state budget to drive a just transition on climate.

Steve Michel, deputy director of the Clean Energy Program at Western Resource Advocates, said WRA generally supports the bill.

“It’s moving us in the right direction, and it’s meaningful,” Michel told NetZero Insider.

Michel said he’d prefer a bill with more frequent benchmarks on the road to net zero, along with additional details on how to get there. And moving more quickly toward net zero would be preferable, he said, given the seeming acceleration of the climate crisis. Still, he called the bill an important step.

Governor’s Support

The state legislative session will run through Feb. 17. The focus of the 30-day session that takes place in even-numbered years is budgets, appropriations and revenue bills, as well as bills introduced at the behest of the governor — known as the “governor’s call.”

The bill is one of three that Democratic Gov. Michelle Lujan Grisham committed to including in her governor’s call during a two-day climate conference in October. The others are a bill that would establish a clean-fuel standard for transportation fuels and a hydrogen hub act. (See NM Draft Bill Would Encourage Hydrogen Buildout.)

In a January 2019 executive order, Lujan Grisham directed the state to join the U.S. Climate Alliance and set a goal for the state to reduce greenhouse gas emissions by 45% by 2030 compared to 2005 levels. The order also established an interagency climate change task force.

During the October conference, Lujan Grisham stressed the importance of codifying the GHG reduction targets into state law.

“If you don’t have that framework in statute, it’s too easy to not work as diligently or as quickly or as effectively,” she said.

The proposed legislation follows the failure of last year’s House Bill 9, the Climate Solutions Act. HB9 would have required “quantifiable and enforceable statewide greenhouse gas emissions reductions” of at least 50% percent below 2005 levels by 2030 and net-zero emissions by 2050. The bill stalled in committee.

Feibelman and Michel pointed to factors that might make this year’s Zero Emissions Economy Act more likely to succeed. The bill is much simpler than the Climate Solutions Act and has the direct backing of the governor, they said.

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PJM Reveals Preliminary Capacity Auction Timeline

PJM on Wednesday proposed moving the upcoming Base Residual Auction originally scheduled for later this month to the end of June to comply with FERC’s order partially reversing its decision on the RTO’s energy price formation revisions.

Pete Langbein, of PJM’s capacity market and demand response operations, updated the Market Implementation Committee on the capacity auction dates, saying FERC recognized the RTO will need to delay the BRA to implement a revised energy and ancillary services (E&AS) offset, a key variable in calculating the net cost of new entry (CONE) for resources in capacity auctions.

PJM must submit a compliance filing with the commission by Jan. 21 proposing a new schedule for the BRA and subsequent capacity auctions impacted by the delay. FERC reversed its approval of PJM’s forward-looking E&AS offset on Dec. 22 (EL19-58). The commission said PJM must now revert to the previous, backward-looking offset. (See FERC Reverses Itself on PJM Reserve Market Changes.)

Langbein said FERC is not requiring PJM to rerun capacity auctions that utilized the forward-looking offset because doing so would “undermine the expectations of the parties who are making commitments for the 2022/23 delivery year.”

“This is a little bit of a rock and a hard place based on the holiday gift we got from FERC,” he said. The switch will impact net CONE for the reference resource used in the variable resource requirement curve, the market seller offer cap (MSOC) and the minimum offer price rule. PJM plans on making the compliance filing “as straightforward as possible,” Langbein said.

“We want to make sure we allow time for any activity that gets impacted by the E&AS change.”

PJM needs to maintain the current 120-day time frame for the MSOC unit-specific review process, Langbein said. The RTO also plans to allow sellers to maintain previously submitted and approved gross avoidable-cost rates.

The auction delay will also result in an update to calculations of the capacity emergency transfer objective and capacity emergency transfer Limit and the load forecast. Langbein said the updates impact the reliability requirement, the fixed resource requirement commitment and the elimination of one additional energy efficiency installation period.

Langbein said pre-auction activities not impacted by the E&AS change or updates in the load forecast will maintain existing information that was already submitted for the auction.

Updated Auction Schedule

PJM is attempting to get back to the normal auction schedule by the 2027/28 BRA, Langbein said, and the proposed schedule will allow that to happen.

Langbein said PJM has proposed conducting the 2022/23 third incremental auction (IA) based on the existing schedule of Feb. 28 and continuing to use the forward-looking E&AS offset, as it was used in the 2022/23 BRA.

Proposed revised pre-auction activity schedule (PJM) Content.jpgPJM’s proposed revised pre-auction activity schedule. | PJM

The RTO wants to compress the timeline between auctions from 195 days to 175 days. The 2024/25 BRA would move from August to December; the 2025/26 auction would move from February 2023 to June 2023; and the 2026/27 auction would move from August 2023 to November 2023. The 2027/28 BRA would be back on schedule in May 2024.

The first and second IAs would be canceled for the 2023/24, 2024/25 and 2025/26 BRAs. The first IA would be canceled for the 2026/27 BRA.

Langbein said the proposed schedule has not been finalized.

“We’re still collecting input,” Langbein said. “But based on what we have today, this is what the schedule would look like.”

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California PUC Takes Heat on Rooftop Solar Plan

The California Public Utilities Commission heard nearly three hours of public testimony Thursday on its proposal to dramatically reduce the amount homeowners receive for sending excess solar power to the grid.

The plan has sparked a heated debate that now includes movie stars, a former NBA great, billionaire Elon Musk and Gov. Gavin Newsom. The CPUC is scheduled to vote on the plan Jan. 27.

At issue is the state’s net energy metering (NEM) framework, which pays homeowners full retail rates for electricity without requiring them to fund grid maintenance or pay interconnection fees. (See California PUC Proposes New Net Metering Plan.)

A CPUC proposed decision in December called for wholesale changes to net metering by imposing a new avoided-cost rate that would consider the value of behind-the-meter generation for resource adequacy and grid reliability, potentially slashing the reimbursement rate to less than half the original rate. It would also impose an interconnection fee that does not currently exist, averaging about $40/month.

The CPUC said the net metering rules in place since the 1990s unfairly require average ratepayers to compensate homeowners who can afford the upfront costs of rooftop solar arrays.

“Our review of the current net energy metering tariff … found that [it] negatively impacts nonparticipating customers, is not cost-effective and disproportionately harms low-income ratepayers,” CPUC Administrative Law Judge Kelly Hymes wrote.

About half the testimony Thursday came from the rooftop solar industry, homeowners with solar, and others who support their cause. They argued that altering net metering rules will decimate solar adoption and benefit the state’s large investor-owned utilities, which stand to profit from utility-scale solar.

“One of the most important policies that helped grow rooftop solar in California is NEM, and with the ongoing climate emergency it’s critical that we get buildings off gas and transition to a fossil fuel-free future,” Berkeley Mayor Jesse Arreguin said as he urged the commission to reject the proposed decision.

The other half of the public comments came from residents who said their utility bills are too high because they subsidize rooftop solar, and from union workers who build utility-scale solar.

“I support the [proposed] decision,” Mark McCray, a member of the International Brotherhood of Electrical Workers, told the commissioners. “Rooftop solar costs six times more than utility-scale solar, and we simply cannot afford to overpay for a resource, especially now that we have a lot of wildfire costs. People are hurting financially from the COVID pandemic. The decision is what California needs for its clean energy future, so for more affordable electricity and for high quality jobs, please adopt the decision.”

The session was the first meeting with new CPUC President Alice Reynolds presiding. She replaced former President Marybel Batjer, who retired in December.

Martha Guzman Aceves, the lead commissioner in developing the proposed net metering decision, also left the CPUC late last year to head EPA’s Region 9.

With a new president and without Guzman Aceves, the fate of the net metering plan remains uncertain. Reynolds, a former energy adviser to Newsom, did not give any indication Thursday on whether she would support the proposal.

But on Monday, in a press conference announcing his 2022-23 budget plan, Newsom said he felt the NEM proposal needs more work. “Do I think changes need to be made? Yes, I do,” the governor said in response to a reporter’s question.

Celebrities also have entered the debate. Actors Edward Norton and Mark Ruffalo opined on Twitter that the CPUC’s plan was wrongheaded.

“Please don’t let new California net metering rules derail rooftop solar,” Ruffalo said on Twitter, addressing Newsom.

Norton posted a dozen times on Twitter about the proposal, saying “California utilities like PG&E want to maintain their monopoly and look for every opportunity to kill rooftop solar which liberates customers from their control.”

Tesla CEO Musk tweeted that the net metering proposal was a “bizarre anti-environment move” by the California government.

And former NBA star and commentator Bill Walton wrote an open letter to Newsom urging him to “do the right thing … and send this disastrous CPUC ‘solution’ back to the beginning.”

None of the celebrities offered public testimony at Thursday’s CPUC meeting.

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Researchers: New Policies, Data Needed to Respond to Climate Threats

Government officials and utility planners lack the tools and policies needed to address climate change, despite growing awareness that it is an increasing threat to infrastructure and public health, researchers said Wednesday.

“There’s clear evidence that [severe events’] likelihood and intensity are increasing under climate change. And yet there’s very little understanding of how to model their amplified impacts on infrastructure, energy systems and communities,” Roshanak Nateghi, a Purdue University professor of industrial engineering, told an Energy Bar Association webinar.

Nateghi, whose research focuses on the resilience of energy systems, said federal relief policies that are responsive to “rapid onset events” like hurricanes fail to recognize long-term threats such as droughts, heat waves and sea level rise.

“Droughts and heat waves are amongst the most costly and lethal [events] in the U.S. Just one example is the Chicago heat wave back in 1995, where 50,000 customers lost power; over 700 people died,” she said. “And yet when you go back to the disaster relief database, you’ll see very disproportionately less … investment.”

EBA Panel 2022-01-13 (Energy Bar Association) Content.jpgClockwise from top left: Roshanak Nateghi, Purdue University; Heather Payne, Seton Hall University of Law; Judsen Bruzgul, ICF, and Michael Craig, University of Michigan | Energy Bar Association

 

Heather Payne, professor of energy and environment at the Seton Hall University School of Law, said the “poster child” for the disconnect is Kivalina, an Alaskan native village that has sought federal funding to relocate because of sea level rise “and yet has been denied that multiple times by [the Federal Emergency Management Agency] because they don’t view the impacts from climate change as within their discretion.”

Payne also cited the Nuclear Regulatory Commission’s 2019 decision to relicense the Turkey Point nuclear plant south of Miami through 2052 despite concerns over sea level rise.

Nateghi said FEMA’s policies encourage perverse incentives. “For FEMA to release some of those [disaster] funds … the damage needs to be a certain [number of] dollars per head. … So in a way, you’re encouraged to sustain a lot of losses … to be able to qualify.”

Lack of Data

The recognition that severe events can be longer in duration and cover a wider region demands “a different, or at least complimentary, approach to reliability, planning and investment,” said Judsen Bruzgul, senior director of climate resilience for consulting firm ICF International.

University of Michigan professor Michael Craig, who models regional power systems to test their resilience, said the industry hasn’t done enough research on how different parts of the power system will interact under extreme events.

In the past, utilities used decades of past meteorological data for planning. “That prior 40 years is not representative of what we will see in the future. … So where do I get my meteorological data now?” he asked. “The unsatisfactory answer is you get it from climate models. But the climate models were not built to give that data to utilities. They don’t capture these extreme events well. They’re not at the resolution that they want them at.”

Nateghi said utilities generally have access to some type of weather forecasting capability. “What I often find missing is a model that translates the climate impact to infrastructure impact. A lot of times I think that translation happens based on expert knowledge, which would have been fine if our climate system was stationary. But … that translation — based on gut feeling as opposed to in a data-driven way, which is guided by the physics of the infrastructure — is not always helpful.”

‘Duty to Serve’ Must Change

Payne, whose work focuses on the legal and policy changes needed for economy-wide electrification, said climate change requires a change to the common-law concept of utilities’ “duty to serve” all customers within their monopoly territory.

“As climate change alters the conditions of the natural world, utilities will find themselves in the situation where continuing to provide service, reinstalling infrastructure to provide service where it has been lost, or providing new service would be considered imprudent,” she argues in an upcoming paper.

“I take a fairly expansive view of what utilities and regulators can and should be doing,” she said Wednesday, reiterating arguments from a prior paper on what she calls the “natural gas paradox.”

“The first thing is that they need to not be making the problem worse, right? So you should not be putting any fossil fuel infrastructure into your system at this point. I mean, if you want to be part of the solution, I actually do view that it’s that simple.”

She said regulators should also repurpose existing spending on programs like energy efficiency in order to reduce ratepayers’ energy burden. “I can go to my local Home Depot, and energy efficiency money will make it so that I can purchase reduced-price LED light bulbs. I don’t think that’s necessarily the best use of our energy efficiency funds.”

Payne said she is dismayed by how little public participation there is in utility integrated resource plan proceedings. “I have looked at lots of IRP dockets where you have all of two filings: You have the initial plan that the utility put in, and you had order from the PUC accepting or adopting it. And that’s it,” she said. “Something that I think regulators need to work on is really finding more ways to have communication.”

Aligning Mitigation and Adaptation

Craig said researchers and planners don’t know yet whether it is possible to align adaptation policies with climate mitigation policies.

“These are things that we need to think of together rather than separately. These are long-lived assets: 20, 30, 40 years. So they’re going to be around as climate change intensifies.”

A carbon price that incentivized investment in low-carbon generation “does not necessarily make you more adapted to climate change,” he said. “You could be putting nuclear power plants or carbon capture and sequestration on the sea or on rivers that in 10 or 20 years … that are going to be affected by sea level rise.”

Craig said the traditional “beneficiary pays” principle of utility regulation can be unfair to those most impacted by climate change.

“You have situations where now people who are most impacted by climate change — wildfires are a perfect example — are exposed to tremendous costs, and upgrading the grid and those same communities might be the least able to fund it.

“If I have a rural community in Oregon that is now facing public safety power shutoffs, I can underground that line [at a cost of] millions of dollars. Can that community pay for it?” he said. “That is a challenge to me in terms of how we think about regulating and distributing these costs.”

ICF’s Bruzgul sees promise in the use of “adaptation pathways,” which seeks to escalate responses as the severity of climate impacts intensify rather than initially seeking the most expensive solutions.