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November 6, 2024

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Near-emergency Follows MISO’s Winter Warnings

MISO flirted with its first maximum generation event of the year early Friday, a month after it cautioned members that winter operations could be risky.

The grid operator announced conservative operations and a maximum generation warning before dawn Friday in its Central and North regions, where high temperatures were in the single digits and generation was forced offline. MISO’s morning peak surpassed 97 GW. By 9:30 a.m. EST, the RTO was able to end both the warning and conservative operations.

Real-time prices topped $230/MWh in MISO’s Indiana and Illinois trading hub during the evening peak.

The close call followed several warnings by MISO executives about natural gas and coal fuel security and forced generation outages during cold fronts. (See MISO Sounds Alarm on Potential Winter Fuel Scarcity.)

MISO maximum generation warnings direct market participants to update generation resource availability and load-modifying resource availability. They also ask transmission owners to ready reconfiguration options. Under conservative operations, members are asked to determine whether any generation or transmission maintenance can be rescinded or postponed.

To better manage winter hazards, the RTO is collecting weekly fuel surveys through February from about 400 generators to assess natural gas and coal fuel security. The task is unpopular among some generation owners, but MISO has been firm that it needs to better understand fuel positions during winter.

The grid operator also issued a cold-weather alert New Year’s Day for the Dakotas, Minnesota and Manitoba, Canada. MISO expected some areas within those states and province to see temperatures drop to -20 degrees Fahrenheit, prompting fuel restrictions. That alert did not escalate.

The RTO has singled out January as its riskiest period for the remainder of the planning year. It has said it expects a 101-GW system peak this month and 108 GW in available capacity to meet the demand. (See MISO Warns of January Emergency Procedures.)

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Clean Energy Group Denounces TVA’s SEEM Membership

A clean energy group that fears the Southeast Energy Exchange Market (SEEM) will stifle renewables is hoping that new appointees to the Tennessee Valley Authority will eventually lead to a more cost-efficient RTO.

The TVA board of directors will soon vote on whether to integrate into the new market. It next meets Feb. 10.

Maggie Shober, research director for the Knoxville, Tenn.-based Southern Alliance for Clean Energy (SACE), said President Biden’s four nominees to the TVA board could shake up the agency’s prevailing opinion on SEEM.

“I think they could take a critical look at SEEM and see if it aligns with their vision and the administration’s vision on what TVA could be and how they could lead the clean energy transition,” she said in an interview with RTO Insider.

However, Shober noted that Biden’s nominees have yet to receive a hearing. All five current TVA board members were appointed by former President Donald Trump. Only Jeff Smith has an energy background.

Shober also noted that two more board seats will open in May, when Smith’s and A.D. Frazier’s terms expire. At that point, the TVA board would dip below quorum.

Shober said SEEM would block independent and small developers’ renewable projects, and its design wouldn’t dictate any changes to utilities’ integrated resource plans.

“The IRP point is important because SEEM will not encourage or prevent any renewable development,” Shober said. “That’s not only likely to not be enough, but it will keep projects uncertain. You have to know that there’s going to be a buyer, and a buyer that is not going to block a project.”

SEEM is set to go live later this year. (See SEEM to Move Ahead, Minus FERC Approval and Panelists: SEEM Can’t Be Southeast’s End Goal.) SACE joined the Sierra Club, the Sustainable FERC Project, the Natural Resources Defense Council and other Southern public interest organizations in opposing SEEM’s creation.

“There are so many question marks about how this will work in practice and not lead to market manipulation,” Shober said, adding that SEEM participants seem to be “trying hard to preserve their business models” while avoiding a new RTO or energy imbalance market.

TVA has a goal to lower its carbon emissions 80% from 2005 levels by 2035; it plans to achieve net-zero carbon emissions by 2050.

TVA spokesperson Ashton Davies said the federal utility is “committed” to SEEM.

“SEEM will provide an avenue for TVA and neighboring utilities to more easily buy and sell energy intra-hour, including excess renewable energy,” she said in an emailed statement. “This platform aims to lower customer costs and optimize renewable energy resources, which supports TVA’s mission of serving the valley.”

TVA currently operates or contracts more than 1.6 GW of solar power.

Shober’s preferred approach is one where the Southeast and TVA create their own RTO, something she admits is a “long shot.” But she says SEEM might be useful in the long run.

“If there’s anything that comes out of the SEEM development, it’s that the utilities can work together and be constructive with something,” she said.

However, Shober said SEEM will likely derail more efficient and green market designs under consideration in the Southeast that could hasten a clean energy transition.

And she doubts that SEEM can evolve into a more fleshed out market for its participants. “I think the way it’s setting up with an algorithm and no central governance makes it harder to adapt it into something else,” she said.

A Vibrant Clean Energy report last year showed that an RTO design would save the Southeast $119 billion over a SEEM model by 2040. The report also said an RTO would facilitate the utilities’ clean energy goals and create about a million new jobs in the electricity sector.

Shober said she believes SEEM serves to dampen growing interest in a wholesale energy market in the Southeast.

“I think utilities were hoping to quell some of that,” she said. “This is not the kind of savings you’d see under an RTO.”

SACE has said that the SEEM utilities’ savings claims of $40 million annually would, at most, amount to $1/year for residential customers whose utilities are served by the new market.

Shober said TVA’s inclusion will give SEEM a needed east-to-west direction. She pointed out that Associated Electric Cooperative Inc. likely wouldn’t be able to connect with Duke Energy or Southern Co. without TVA’s participation in the new market.

Shober also said documents obtained through a recent request under the Freedom of Information Act from SACE show that TVA — along with Southern and Duke Energy — spearheaded SEEM’s creation as early as last January.

“It’s pretty clear that TVA was involved in developing the SEEM idea from the get,” Shober said.

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Nevada Awarding $8M to Replace Diesels

The state of Nevada is awarding up to $8 million in grants to replace diesel trucks and buses with cleaner vehicles while offering a caveat to recipients: The diesel vehicles must be permanently taken out of service.

The grants are the latest round of funding from the Diesel Emission Mitigation Fund (DEMF), which was created with the state’s share of Volkswagen settlement money. The application deadline is Jan. 31. Details on applying are here.

The funds are available to public agencies and private businesses in the state to help replace diesel-powered vehicles and equipment, including medium- and heavy-duty trucks and school buses, shuttle buses, or transit buses. Forklifts, locomotive freight switchers and airport ground support equipment are also eligible.

The grant will cover the difference between the cost of a new, diesel-powered vehicle or piece of equipment and the cost of a zero-emission or alternative-fuel replacement.

Applicants who received funding in previous cycles of the DEMF are not eligible in this round, according to the Nevada Department of Environmental Protection (NDEP), which is administering the grants.

Early Retirement

One key to the grants is that they are funding only the early retirement of diesel vehicles. Proposals to replace diesel equipment or vehicles that are scheduled to be retired within the next three years will not qualify.

And once funds are awarded, the recipient must render “permanently inoperable and available for recycle” the diesel vehicle or equipment being replaced, according to an NDEP webinar on the grant opportunity.

That includes drilling a hole 3 inches or larger in the engine block and cutting the chassis in half between the front and rear axles.

“You can’t take your old piece of equipment and sell it on the used vehicle market,” Sig Jaunarajs, supervisor of the Planning and Mobile Sources Branch at NDEP, said during the webinar.

“The idea is … that piece of equipment is going to die and will not be producing emissions anymore,” Jaunarajs said. “That’s how we can count that emissions benefit.”

While NDEP will work with grant recipients in cases in which drilling a 3-inch hole in the engine block is difficult, Jaunarajs said, it won’t be enough to drill a quarter-inch hole “that you can plug very easily and that engine will come back to life.”

Documentation such as photos will be required to show that the vehicle is permanently out of service.

VW Settlement

The Diesel Emission Mitigation grants are being funded by Nevada’s share of the Volkswagen settlement.

Volkswagen pleaded guilty in 2017 in a criminal case alleging it installed “defeat devices” on diesel vehicles sold in the U.S. in order to cheat on emissions tests. In settlements of a civil case with the U.S. and California, VW created a $2.9 billion trust fund to be used to offset excess emissions of nitrogen oxides, NDEP said.

Nevada is receiving $24.8 million through the settlement, with $19.5 million going toward DEMF projects; $4.1M for the Nevada Electric Highway, an EV charging infrastructure program; and $1.2M for the Nevada Clean Diesel program.

Two previous cycles of the DEMF program issued $9.2M to fund the replacement of 29 trucks, 22 school or transit buses and 174 pieces of airport ground support equipment.

Eighty percent of the funded projects involved replacing diesel vehicles or equipment with battery-electric alternatives.

Although NDEP has about $8 million remaining in VW settlement money, officials said during the webinar that they don’t expect to use it all during this funding cycle.

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Insurance Companies Suing ERCOT, Generators

More than 100 insurance companies are suing ERCOT and power generators for their policy holders’ “significant property damage” during last February’s winter storm, adding to the mountain of legal woes facing the Texas grid operator.

The 137 companies banded together to file their lawsuit Dec. 28 in the Travis County District Court’s 459th Judicial District and asked for a jury trial (D-1-GN-21-007413).

They included as defendants 37 “power generation companies” — from industry heavyweights Luminant and NRG Energy down to individual wind farms — for failing to prepare for the 2020-2021 winter season by adhering to voluntary weatherization standards.

The insurance companies charge that ERCOT and the generators were “at fault” for the dayslong power outages that resulted in hundreds of deaths and billions in property damage. According to a report from the Texas Department of Insurance, insurers have received more than 500,000 claims stemming from the winter storm. The report estimated that, as of July 2021, the companies will have to pay about $10.3 billion in losses.

The lawsuit said that while ERCOT has conducted weatherization-compliance spot checks since 2013, staff would regularly find that 25 to 35% of the generators were deficient and/or not complying with weatherization rules.

“ERCOT and the [generators’] unwillingness to accept or adopt any minimum weatherization standards runs contrary to the common law of Texas,” the insurance companies said.

According to the lawsuit, Texas courts hold electric companies to the burden of showing they exercise “due care” in supervising and maintaining their facilities. It cited precedent that the interruption of service is not an event “that occurs without a cause.”

“When a power failure occurs, there is a defect somewhere says,” the lawsuit said.

ERCOT did not respond to a request for comment. However, the grid operator has consistently claimed sovereign immunity when sued, noting it is funded by generators’ transaction fees.

The issue could be decided in two unrelated cases before different state appellate courts. ERCOT is battling San Antonio municipality CPS Energy in the Fourth Court of Appeals over charges of “exorbitantly high, illegal” wholesale costs during the storm. (See CPS Energy Wins Round 1 vs. ERCOT.)

Separately, the Fifth Court of Appeals in Dallas has heard arguments over a 2016 complaint against ERCOT by Panda Power Generation Infrastructure Fund. Panda argues that it spent $2.2 billion to build three new power plants based on the grid operator’s faulty and misleading projections of the state’s future energy needs.

The Texas Supreme Court last March declined to review an appellate ruling granting ERCOT immunity from lawsuits. (See Texas Supremes Sidestep Ruling on ERCOT Lawsuit Shield.)

In other litigation, more than 400 Texans have filed 170 lawsuits against ERCOT and utilities over the February outages. The state officially lists the death toll at 246.

Gas Production Drops Again

FERC, NERC, academia and the electric industry have reached consensus that February’s outages were mostly from gas infrastructure’s lack of winterization, which reduced fuel supplies to gas-fired generation units. (See FERC, NERC Release Final Texas Storm Report.)

This past weekend, gas supplies again dropped during Texas’ first cold snap of the season. Bloomberg said gas production in West Texas’ Permian Basin fell to its lowest levels since last February, leading to the loss of more than 10% of ERCOT’s generation.

Naturally, that raised questions among industry experts and observers.

“Yes, poor performance of gas suppliers last weekend ‘raises questions,’ but more importantly, it provides answers,” tweeted Stoic Energy President Doug Lewin. “The answers are they didn’t winterize; they’re not ready; and Texans are again vulnerable if there’s another extreme cold snap like 2011 or 2021.”

Lewin is among those who have criticized the gas industry’s lack of winterization, saying the electric industry’s more robust winterization practices are rendered useless when gas doesn’t flow. (See ERCOT, PUC Say Grid is Ready for Winter Weather.)

The Texas Railroad Commission, which regulates the state’s natural gas industry, has not required gas facilities to winterize this winter, as has the electric industry. Gas companies can also opt-out by paying a $150 fee and asking for an exemption. The gas network is being mapped to determine those facilities critical to power production, but that process isn’t expected to be finished until 2023.

The cross-industry group working on the study have filed a progress report with the Public Utility Commission. It lists several best practices that “should be implemented … to prepare facilities providing natural gas critical to the electricity supply chain to maintain service in an extreme weather event.”

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New Jersey Targets Port Cargo-handling Emissions

This year is going to be a cleaner, greener one at the Port of New York and New Jersey as a new rule went into effect Jan. 1, requiring that certain new cargo-handling equipment at the facilities be zero emission.

Similarly, the New Jersey Department of Environmental Protection began the year with a proposed rule aimed at cutting carbon dioxide and other polluting emissions — such as nitrous oxides and fine particulate matter (PM2.5) —produced by cargo-handling equipment at the Port of New York and New Jersey and several far smaller ports in South Jersey.

Based on similar regulations enacted in California, the DEP’s proposed rules, would require owners and operators of new and existing diesel-powered cargo-handling equipment to replace it with newer, less polluting models or install a cleaner engine into existing equipment. The requirements cover a variety of vehicles, from the yard tractors that move containers around the terminal to mechanical equipment that can pick up, stack and load and unload containers to and from trucks.

The DEP will be seeking public comment on the proposed rules over the next two months.

Specifically, the proposal aims to cut the emission of nitrogen oxides (NOx) and PM2.5 “through replacement with engines or equipment that meet the most stringent emissions control technology standard or through the application of the most stringent emission control strategy.”

Long-term exposure to PM2.5 has been associated with asthma, lung cancer and premature death, while NOx contributes to ozone, which can damage an individual’s respiratory tract and cause breathing difficulties, said the DEP statement outlining the rules.

The zero-emission mandate is part of the operating rules, or port tariff, issued by the Port Authority of New York and New Jersey (PANYNJ) to all companies that lease terminals at the port, with modifications introduced at the start of each year. The latest addition requires that certain new cargo-handling equipment added to the port’s vehicle fleet be zero-emission, which the authority says can only be fulfilled with electric equipment.

The PANYNJ’s new guidelines follow the port’s Oct. 28 commitment to cut the port’s greenhouse gas emissions in half by 2030 and reach net-zero emissions by 2050, in part by reducing the emissions from the 1,200 pieces of cargo-handling equipment at the facility. Overseeing the largest port on the East Coast, the PANYNJ said it would reach those goals by transitioning “to clean zero-emissions electric port material-handling equipment, to the maximum extent practicable.”

The new tariff requires that any new ship-to-shore cranes, which move cargo on and off ocean vessels, and rail-mounted gantry cranes, which move and stack containers, must be zero emission equipment. Likewise, any new yard tractors, which move containers internally around the port, added to the port fleet after Jan. 1, 2025, must be zero-emission vehicles.

The tariff also requires that other types of new equipment that serve the port’s cargo and cruise ship terminals must meet Tier 4 emissions standards, which are the Environmental Protection Agency’s (EPA) toughest standard for NOx and PM2.5 emissions from diesel engines. The EPA has estimated that the standard could cut PM2.5 and NOx by more than 90%.

Seeking Environmental Justice

The DEP rules are Gov. Phil Murphy’s latest effort to cut emissions from the transportation sector, the largest source of emissions in New Jersey. As in other states, the challenge is particularly urgent around ports, due to the volume of diesel trucks and other equipment used and the proximity of low-income and minority communities, which raises environmental justice concerns.

Murphy is seeking to put the state on course to generate zero emissions by 2050, with a strong focus on promoting the use of electric vehicles, especially trucks. The governor has worked to increase the number of EV chargers around the state and allocated funds to provide incentives to subsidize the purchase of EV truck and vehicles. Last month, the state adopted rules that require truck manufacturers to make electric trucks a rising proportion of their vehicle sales in the state. (See NJ Adopts EV Truck Sales Mandate.)

The DEP’s cargo-handling equipment rules are aimed at the owners and operators of port or rail terminals that use equipment such as yard trucks or gantry cranes. The proposed rules would also apply to anyone who uses, sells, leases, rents or purchases the equipment, and would cover other ports on the Delaware River, among them Camden, Paulsboro and Salem, as well as rail yards in Newark, Elizabeth, Jersey City and South Kearny.

Norfolk Southern and CSX Transportation, which operate the rail yards, did not respond to a NetZero Insider request for comment. However, Andy Saporito, executive director of the South Jersey Ports Corp., which operates four cargo terminals, said his team will review the rules and develop a plan to meet them.

“We strive to operate our ports cleaner and greener,” he said, noting that his agency has already taken steps in line with the rules. Two years ago, the ports spent $2 million to upgrade a portion of their fleet to low-emission movers, cranes and vehicles, and was awarded $6.6 million in 2021 to buy 23 electric yard tractors.

The DEP rules require that all cargo-handling equipment in the covered facilities meet either California emission standards or the EPA’s Tier 4 standards within certain time frames, depending on the type and age of the equipment. Equipment that is more than 20 years old must be brought in line with the rules within two years, but equipment made since 2007, which is inherently cleaner, must be replaced or upgraded within five years.

If no replacement equipment is available that meets either standard, the DEP will, in certain circumstances, approve an alternative. In addition, the DEP might approve equipment that does not meet all its requirements if the average of all the vehicles in a fleet meets the emissions standards.

The Challenge of Reducing Port Emissions

Based on data compiled by PANYNJ, the DEP estimates that by 2028, the “emissions benefits” of the rules will be 6.4 fewer tons of PM2.5 emitted and 82 fewer tons of NOx. The cumulative benefits from 2024 to 2035 would be a reduction of 38 tons of PM2.5 and 500 tons of NOx, the DEP said.

Yet the DEP’s outline of the rules also shows their limits and the challenges facing the state in seeking to cut emissions at its ports. Cargo-handling equipment, said the 2019 Multi-Facility Emissions Inventory compiled by the PANYNJ, was only the third largest source of pollution, accounting for 18% of PM2.5 and 9% of NOx at the Port of New York and New Jersey.

According to the inventory, only about 40% of the 1,200 pieces of cargo-handling equipment at the port are below the Tier 4 emissions standard set out by the DEP, and so would have to be replaced if the proposed rules were to take effect.

The largest source of emissions at the port, heavy duty vehicles, accounted for 42.8% of the PM2.5 and 32.4% of NOx, the report said.

Nevertheless, the report also shows that the authority has had some success in cutting emissions. The NOx and PM2.5 emissions at the port have declined since 2006, despite a 47% increase in the volume of cargo handled.

Some port stakeholders have taken steps to cut emissions on their own. In August, Red Hook Container Terminals, which operates the smallest of six container terminals in the port, unveiled a fleet of 10 Chinese-made electric yard tractors, which move containers around the port. (See: Port of NY-NJ Unveils Fleet of 10 EV Trucks).

The state provided partial funding for the tractor purchase, using money from the Volkswagen settlement. Another $850,000 from the settlement was allocated to purchase a mobile electric crane at the Port of New York and New Jersey, while $2.3 million went to two straddle carriers, which move containers at the port, and $6.6 awarded to buy the 23 electric yard tractors at South Jersey ports. (See: NJ Targets Ports for EV Incentives).

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FERC Denies Motion of Kittell Estate in GreenHat Case

FERC on Wednesday denied a motion from the estate of one of the owners of GreenHat Energy for the commission to drop its enforcement action after it emerged last fall that Office of Enforcement lawyers violated regulations related to the electricity market manipulation case (IN18-9).

Lawyers for the estate of Andrew Kittell, one of three owners of GreenHat, made a filing in October, arguing that a series of emails between Enforcement’s Division of Investigations (DOI) lawyers Thomas Olson and Steven Tabackman were “not only unlawful, but deceptive.”

FERC released the emails after Olson, who is part of the litigation staff in the GreenHat proceeding, disclosed them to Enforcement management. (See Estate of GreenHat’s Kittell Lobbies FERC to End Enforcement Action.)

In November, FERC said it determined that GreenHat and its owners violated the Federal Power Act by “engaging in a manipulative scheme” in PJM’s financial transmission rights market, issuing a total of $242 million in fines for the company’s 890 million-MWh default in 2018. The commission assessed civil penalties of $179 million on the company and $25 million each on owners John Bartholomew and Kevin Ziegenhorn. It also directed GreenHat, Bartholomew, Ziegenhorn and Kittell’s estate to disgorge more than $13 million in unjust profits, plus applicable interest. (See FERC Levies $242M in Fines on GreenHat, Owners.)

GreenHat acquired the largest FTR portfolio in PJM between 2015 and 2018, but defaulted on the portfolio in June 2018, leaving PJM stakeholders to cover more than $179 million in the market. When the company defaulted, FERC said, GreenHat had only $559,447 in collateral on deposit with PJM. (See Doubling Down — with Other People’s Money.)

<img src="//www.rtoinsider.com/wp-content/uploads/2023/06/140620231686782829.jpeg" data-first-key="caption" data-second-key="credit" data-caption="

GreenHat’s significant growth in exposure and MTA loss

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FERC said in Wednesday’s order that it was “troubled by the exchange of emails between decisional staff and litigation staff,” but the email exchange did not rise to the level of having to dismiss the case.

“The commission reviewed the prior allegations regarding the investigative process in this case and found such allegations to be without merit,” FERC said in its order. “With regard to the October 2021 notice, we need not decide here whether the Tabackman-Olson email exchange identified in the notice violated the commission’s regulations because we conclude that the conduct at issue here would not warrant the extraordinary remedy of dismissal.”

Email Exchange

In the email exchange disclosed in October, Olson notified the commission that he received emails through his personal Gmail accounts on Sept. 17 and 18 from Tabackman, who was serving as decisional staff in the GreenHat case. The two were discussing a pair of U.S. Supreme Court case decisions that Tabackman believed could strengthen FERC’s case.

Tabackman urged Olson not to reveal where he received the information on the cases, saying, “You never heard that here.”

Olson questioned Tabackman on whether the latter sent information on 1940’s U.S. v. Summerlin and 2006’s Marshall v. Marshall with the GreenHat case in mind, “or something else?”

Tabackman responded, “Yes — you should be familiar with them — though you should not mention how you came upon them.”

After receiving another email from Tabackman on Sept. 18 that referenced Tabackman’s work with the decisional team, Olson realized the emails “constituted a violation of the commission’s separation-of-functions regulation.”

The regulation prohibits any employee assigned to work on an enforcement proceeding or assisting in a trial “to participate or advise as to the findings, conclusion or decision, except as a witness or counsel in public proceedings.”

FERC removed Tabackman as a counsel of record in its federal court case.

In its motion, lawyers for the estate of Kittell, who killed himself by jumping off the San Diego-Coronado Bridge in California on Jan. 6, 2021, argued that the commission should drop all enforcement action against the estate, ban Tabackman and Olson from any future involvement in the investigation and “order other offices within the commission to investigate what happened.”

FERC said in its order on Wednesday that the email exchange “addressed procedural matters that might arise under California probate law in the state probate proceeding on the Kittell estate.” The commission said the procedural matters discussed in the emails were not an issue before FERC, but it decided to refer the matter to the OIG for an investigation.

The commission said the OIG “declined to take further action and deferred to the commission to proceed as appropriate” after finishing its investigation. “FERC said the commission’s Designated Agency Ethics official and staff conducted an internal administrative inquiry into any other communications regarding the Kittell matter and found no other violations.

FERC said it expects its staff to “conduct themselves in accordance with the highest ethical standards and is committed to ensuring that the subjects of investigations receive due process, both in perception and reality.”

“Because the commission ‘is charged with safeguarding the integrity of our nation’s interstate energy markets,’ it is obligated to take necessary and appropriate action when it finds violations of the statutory and regulatory prohibitions on manipulation of those markets,” FERC said in its order. “Moreover, numerous courts have recognized that administrative agencies are charged by Congress to enforce laws on behalf of the American people and thus dismissal of an agency enforcement action may run counter to the public interest. Accordingly, absent extreme circumstances such as a violation of Constitutional due process, courts generally will not set aside agency decisions based upon a violation of procedural rules.”

The commission determined that there was “no evidence” that the Kittell estate was harmed by the email exchange between Tabackman and Olson.

“To the degree that there was any harm from the email exchange, OE staff appropriately remedied that harm by immediately disclosing that exchange, thereby providing respondents with an opportunity to respond, and, as discussed, the commission both referred the matter to the OIG and tasked the commission’s designated ethics official to conduct an inquiry to assess whether additional prohibited communications occurred to confirm our decisions in this case were reasoned and unbiased,” FERC said in its order. “Accordingly, we find that dismissing the action would serve no purpose other than to deprive the public of justice in the underlying matter.”

Danly Dissent

FERC Commissioner James Danly issued a dissent in the order. Danly previously had harsh words for PJM in the case, saying the RTO was partially to blame for the result of the default and had a “share of the blame that must rightly be assigned to PJM.”

In his dissent issued Wednesday, Danly said the ethics of prosecutors “must be above suspicion,” and for the commission to do “anything less than fully consider and respond to these claims damages our credibility.”

“Under these circumstances, the movant and the public deserve an answer,” Danly said in his dissent. “And while I acknowledge that enforcement and the commission have taken some action to redress enforcement’s misconduct, our enforcement program would be better served by issuing a commission order with a clear-eyed and unflinching response to the misconduct alleged in both the Oct. 5, 2021, motion and the respondents’ answer to the order to show cause.”

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Conn., ISO-NE not Seeing Eye to Eye on Winter Reliability Worries

A mild start to winter in New England has done little to ease the chill between the region’s grid operator and Connecticut’s energy regulator.

An exchange of letters between the two, published by the RTO this week, shows a continuation of a familiar back-and-forth that has intensified coming into this winter.

Katie Dykes, commissioner of the Connecticut Department of Energy and Environmental Protection, wrote to ISO-NE President Gordon van Welie on Dec. 17, following a push by the RTO to communicate with the press and public about the potentially precarious state of the region’s grid this winter. (See ISO-NE: New England Could Face Load Shed in Cold Snaps.)

“I am deeply concerned that the ISO appears, at least in its public statements, to be more concerned about our fuel security risks this winter, yet the ISO has done less than in previous years in terms of using the available tools to ensure the region has the fuel supplies we need,” Dykes wrote. She asked the RTO to answer eight questions, including about generators’ LNG arrangements and why it has not reinstituted its winter fuel-buying program for this year.

Van Welie responded on Dec. 23, making clear that the RTO feels it has done all that it can and that state and regional policy changes are needed to find a long-term solution. He laid out what ISO-NE has done in recent years to mitigate winter fuel security concerns, many of the steps revolving around communication, situational awareness and data sharing.

He noted that the fuel-buying plan (Winter Reliability Programs) was only a temporary measure and also that it “subsidized the carbon-intensive, oil-fired generators that the region is trying to wean itself from.” ISO-NE has no plans to reinstate them unless FERC directs it otherwise, van Welie wrote.

He instead pointed back to state and regional policymaking as the best long-term solution.

“We are concerned that the energy adequacy problem may get worse over time until policymakers and stakeholders in New England can successfully engineer a clean energy replacement for the current balancing energy source, which is largely natural gas,” he wrote. “This is unlikely to occur without policy support, since the available technologies to provide a reliable long-duration balancing energy source are currently expensive.”

In an interview, Dykes said she appreciated the response, which focused on the RTO’s recent history of winter fuel security actions, but that it did not fully answer her specific questions regarding LNG supply and the prospect of resuming past winter reliability programs for the current and impending winters.

“They’re the grid operator,” she said. The RTO is “institutionally responsible” for assessing risks and being aware of what solutions are necessary. “Our inquiry was intended to drill into the ISO’s plans or lack thereof for addressing the risk this winter that they have been raising alarm about.”

“It’s not acceptable to have a region facing the possibility of catastrophic outages should the temperature stay low for multiple days,” Dykes said. “This is New England.”

So far, temperatures averaging 5 degrees Fahrenheit higher than normal have resulted in lower demand and temporarily eased worries about the grid. The latest 21-day forecast shows only short periods of low temperatures, ISO-NE COO Vamsi Chadalavada told the NEPOOL Participants Committee in a presentation Thursday.

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Report: NY Road Transport Emissions Up 12% Since 1990

New York’s first climate law-compliant greenhouse gas emissions report has found the state’s overall emissions are down from 1990 levels, but transportation stood out in the analysis as the top sector needing improvement.

Emissions increases in a group of sectors reveal the state has “enormous challenges” ahead in its work to reduce emissions 85% from 1990 levels by 2050, Department of Environmental Conservation Commissioner Basil Seggos said in a statement.

The Dec. 30 report, which covers 1990-2019, found that statewide GHG emissions decreased 6% for the period and 17% from 2005 to 2019. Road transportation emissions, however, increased 12% for the 30-year period and represented 17% of statewide total emissions in 2019.

While the report said the increase for road transport was substantial for the 30-year period, the biggest jump happened between 1990 and 2005. In that time, emissions grew from 56 million metric tons of carbon dioxide equivalent (MMT CO2e) to 69.8 MMT CO2e, then they dropped over the next 12 years to 62.8 MMT CO2e and stayed flat through 2019.

The state’s buildings sector, while having higher total emissions than the transportation sector, had an overall decline from 1990 to 2019 from 87 to 72.6 MMT CO2e. Of the residential, commercial and industrial subsectors, however, residential building emissions showed the only overall increase for the period. The subsector emissions increased from 39 to 46 MMT CO2e in the first 15 years after 1990, then they settled at 40.7 MMT CO2e in 2019 following some minor annual fluctuations caused by weather patterns.

Overall for the buildings sector, emissions increased 40% from natural gas and decreased 54% from other fuels, which include wood, distillates and coal.

The most significant sectoral emissions reduction between 1990 and 2019, at 65%, occurred in fuel for electricity caused by the transition away from the combustion of coal and petroleum fuels to natural gas, according to the report.

Coal emissions for electricity dropped from 25 to 0.46 MMT CO2e for the period, while natural gas emissions increased from 12.6 to 20.7 MMT CO2e.

Other Trends

In the agriculture sector, livestock management had the highest emissions, increasing 44% from 1990 to 2019. While animal feeding practices produced the highest emissions for livestock activities, manure management specifically saw the biggest emissions increase for the period. That trend, the report said, is because of policy changes regarding manure storage that protect water quality.

Activities in the forestry and land-use sectors removed 32.7 MMT CO2e in 1990 and 29.1 MMT CO2e in 2019. New York’s forest lands were the single largest emissions sink, but they sequestered 2.2 MMT less CO2 in 2019 than in 2005 because of forest land conversion, the report said.

Tracking of specific greenhouse gases showed that CO2 emissions declined by 39 MMT, or 15%, from 1990 to 2019, but hydrofluorocarbon emissions increased from near zero to 20 MMT CO2e for the period. That increase, the report said, is attributed to uptake in the residential and commercial buildings and industrial sectors as a refrigerant following the phase down of chlorofluorocarbon use.

The New York Climate Action Council, in its recently adopted draft scoping plan, recommended the state consider advancing a transition away from high global warming-potential (GWP) HFCs to low or ultra-low GWP HFCs or natural refrigerants.

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NJ Ramps up Wind Sector Support

New Jersey is doubling down on its efforts to create a new offshore wind sector, with $350 million set aside to award corporate tax credits to companies that make major investments in the sector and another $265 million allocated to help fund the creation of the New Jersey Wind Port.

The $265 million, which Gov. Phil Murphy and the legislature allocated in November from a fund created to pay down state bond debt, brings the total committed to the wind port to about $500 million. The funding commitments for the wind port, which is located on the Delaware River in Lower Alloways Creek, are now more than 25% higher than the project cost estimates of $300 million to $400 million released when Murphy first announced the project in June 2020.

In a separate move, the New Jersey Economic Development Authority (NJEDA) in December started accepting applications for a program, the Offshore Wind Tax Credit Program, that the agency expects will typically offer tax credits equal to 40 to 60% of a company’s qualified capital investments in a “major, land-based offshore wind industry project.” To be eligible, a business must invest $50 million or more in the project, or invest $17.5 million in the project if the company is a tenant in a space that the owner invested $50 million or more.

New Jersey is increasing its commitment to the wind sector as other states on the East Coast — among them Virginia, New York, Massachusetts and Maryland — are making their own investments to create an in-state offshore market that also could attract supply chain business from out-of-state projects.

“To me, the story is New Jersey is putting our money where our mouth is,” said Brian Sabina, chief economic growth officer for NJEDA, which oversees much of the expenditures on the wind port. “We are crystal clear that we believe New Jersey is, and will continue to be, one of, if not the, hub for offshore supply chain developments in the offshore wind industry in the U.S.”

New Jersey’s latest round of offshore wind funding follows a commitment of $200 million to the wind port put in the state budget by Murphy and the legislature in June and a $13 million commitment to the project by the New Jersey Board of Public Utilities (BPU). In addition, the governor and legislature awarded $44 million to the state Department of Transportation for a dredge project that will deepen the channel connecting the port and the main channel of the Delaware River.

Sabina said that the state is “not done” with allocating money to the project and suggested that one source of future funds could be the federal government, including the Build Back Better bill. However, that bill stalled in mid-December.

“This is not a one-year, one-time investment,” Sabina said of New Jersey’s commitments. “This is to start getting ahead on making the down payments on the infrastructure we need to drive our economy and our [economic] climate in the right direction.”

Proven Demand

New Jersey has set a target date of 2024 to complete the port, which broke ground Sept. 9. The port, and the effort to shape it as a hub that will serve the regional wind industry supply chain, are key parts of Murphy’s goal to create a state offshore wind sector that will generate 23% of the state’s energy by 2050. The state aims to create wind projects totaling 7,500 MW by 2035. (See NJ Breaks Ground On Offshore Wind Hub.)

The plans outlined on the wind port website, which calls it the first purpose-built wind port on the East Coast, include a 30-acre marshalling area for component assembly and staging; a dedicated overland heavy-haul transportation corridor; and a heavy-lift wharf with a dedicated delivery berth and an installation berth that can accommodate jack-up vessels. Nacelle manufacturers MHI Vestas and General Electric have committed to creating nacelle plants at the port, and the developers of the three offshore wind projects approved by New Jersey so far have also agreed to use the port. German manufacturer EEW Group is building a monopile factor in the nearby Port of Paulsboro. (See New Jersey Shoots for Key East Coast Wind Role.)

The BPU in 2019 approved the 1,100-MW Ocean Wind 1 project, developed by Danish developer Ørsted, and on June 30 approved Ørsted’s 1,100-MW Ocean Wind 2 and the 1,510-MW Atlantic Shores project, a joint venture between EDF Renewables North America and Shell New Energies US. The BPU is planning to hold three more solicitations over the next five years.

Sabina said the number of companies interested in putting money into New Jersey’s offshore wind industry and wind port shows the state’s commitment is well placed. He cited the fact that 16 companies submitted nonbinding offers to become tenants at the wind port, including Siemens Gamesa Renewable Energy, Vestas-American Wind Technology and Beacon Wind. (See NJ Wind Port Draws Offshore Heavy Hitters.)

“Demand for this infrastructure is there,” Sabina said. “And that’s giving us the confidence to say, ‘Let’s start making sure that we’re ahead of the game in terms of the next phase of design and construction.’”

Jockeying for Out-of-state Investors

Sabina said the tax credit program grew out of the awareness that a vigorous competition between states and countries is underway for investment dollars in the offshore wind sector. New Jersey needed a way to attract “major Tier 1 suppliers and other major large, maybe Tier 2, manufacturing facilities to come and anchor their supply chains here in our state,” he said.

“We know that those same companies are considering investing in other states. We know those same companies are considering investing in other regions,” he said. “We needed a tool to help make sure that when we talk with those companies — Siemens, EEW, Vestas, GE — we had a tool to help them partner and help them de-risk their investments in our state.”

Applicants can apply for a tax credit that is equal to up to 100% of the investment, and the recipient can use the credit to reduce taxes or sell it to someone else seeking to do the same. To be eligible for a credit, companies must be in a business that is located in the state and is “related” to the offshore wind industry. The company, along with meeting the capital investment requirements, also must create jobs, starting at 100 jobs in the first year and rising to 300 jobs by the fifth year.

To get a credit equal to 100% of the project investment, the developer must show that New Jersey will receive an amount in sales, payroll, property and other taxes that is equal to 110% of the total capital investment. NJEDA officials say that their modeling shows most applicants will be eligible for credits equal to 40 to 60% of their capital investment.

“That’s really what this tool is about,” Sabina said. “If you’re going to do a large major manufacturing facility or other large offshore wind project, we want to have a tool to co-invest with you so that you can anchor your supply chain in our state, in our region.”

A similar effort to create an in-state industry has spurred efforts in Virginia, which announced in October that Siemens will establish a new plant for offshore wind blades at the Portsmouth Marine Terminal. That announcement followed two months after Dominion Energy said it would create a staging and assembly facility on 72 acres at the terminal.

In Maryland, developers of two offshore wind projects awarded by the Public Service Commission said they would use port facilities at Tradepoint Atlantic in Sparrows Point outside Baltimore and in Ocean City for marshalling, operations and maintenance. Sparrows Point is also the site of a planned monopile plant.

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New York to Invest $500M in OSW Infrastructure

New York will invest $500 million in offshore wind manufacturing and supply chain infrastructure and electrify 2 million homes by 2030, Gov. Kathy Hochul said Wednesday in her 2022 State of the State address.

The state entered 2022 having approved the largest transmission projects in New York in 50 years, with its first OSW project, South Fork, ready to put steel in the water and with officials having approved a plan for reaching emission limits set by the Climate Leadership and Community Protection Act (CLCPA). (See New York Set to Start Building Big in 2022.)

“With this investment, New York will lead the nation on offshore wind production, creating green jobs for New Yorkers and powering our clean energy future,” Hochul said.

New York will invest up to $500 million in the ports, manufacturing and supply chain infrastructure needed to advance its OSW industry, with state agencies and its Green Bank leveraging private capital to deliver more than $2 billion in economic activity while creating more than 2,000 green jobs.

Hochul also said that the New York Energy Research and Development Authority (NYSERDA) will launch its next OSW procurement this year, resulting in at least 2 GW of new projects. NYSERDA will pick up the pace on OSW transmission planning and conduct a study to identify strategic OSW cable corridors and key points of interconnection to the grid.

Anbaric Development Partners lauded the governor’s recognition of the need for a planned transmission system to deliver offshore wind power.

“Studies have continuously demonstrated that transmission planned to accommodate and integrate significant amounts of offshore wind is a much more cost-effective, environmentally sound and electrically reliable approach to integrating clean electricity,” Janice Fuller, Anbaric president for the mid-Atlantic region, said in a statement.

New York also will work to electrify 2 million homes or make them electrification-ready by 2030, and new legislation will seek to ensure that all new building construction reaches zero-emissions by 2027, Hochul said.

Building emissions cause more than one third of New York’s climate pollution, and the new plan will help more than 800,000 low-to-moderate income households secure clean energy upgrades.

“Gov. Hochul’s announcement of $500 million in investments for offshore wind, on the eve of the state’s third solicitation and the upcoming NY Bight Lease sale, is a win for New York communities, workers, businesses and our climate,” Allison Considine, senior campaign representative for Sierra Club, said in a statement. “This significant investment, when paired with commitments to double battery storage to 6 GW by 2030, planning to phase out dirty peaker plants and achieve 2 million all-electric homes by 2030, demonstrates that New York will continue to lead the nation in transitioning from fossil fuels to zero-emission electricity.”

The state-level move on building emissions follows action last month by the New York City Council, which voted to ban the use of natural gas for heating or hot water in new construction or renovations beginning in 2024. (See NYC to Ban Natural Gas in New Buildings Beginning 2024.)