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November 7, 2024

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NAESB Starts Gas-electric Coordination Project

The North American Energy Standards Board (NAESB) has started a standards project aimed at improving coordination between the natural gas and electricity markets, with the goal of helping to prevent issues like those that beset the bulk power system during February’s winter storms.

In a press release issued Tuesday, NAESB said its board of directors voted to approve the project, which was proposed by SPP, at its meeting Thursday. The organization hopes to complete the new standards and submit them to FERC by the end of next year.

February’s cold snap brought extremely low temperatures to large parts of Texas and the Midwest and led to widespread generation outages, derates or failures to start that lasted for days in some cases and led to more than 23 GW of manual firm load shed. (See Slow Storm Restoration Sparks Anger in Texas, South.) A report by staff from FERC, NERC and the regional entities released last month found that natural gas facilities accounted for more than 50% of generator failures, both in terms of the number of units and in their total nameplate capacity. (See FERC, NERC Release Final Texas Storm Report.)

The joint report urged that Congress, state legislatures, and regulatory agencies require natural gas facilities to implement and maintain cold weather preparedness plans, and that generator owners and operators “identify the reliability risks related to their natural gas fuel contracts.”

Staff also called on the electric and natural gas industries to strengthen their winter preparedness and coordination, in light of the mutual interdependencies exposed by the storms. For example, some parts of the gas distribution system failed because they lacked power, leading to further outages at gas-fired generators.

NAESB’s project is intended to build off of the joint report’s findings, as well as the work of its own Gas-Electric Harmonization Committee, which “has been meeting since June to … complement the joint inquiry.”

The organization has worked with FERC on gas-electric coordination before; the commission first adopted coordination standards submitted by NAESB in Order 698, issued in 2007. FERC in 2015 approved an update to the standards with Order 809. The standards provide requirements for communication between interstate pipelines and gas-fired power plants regarding fuel requirements and operational issues that might impact gas delivery.

Earlier this year the commission ordered utilities to implement the latest version of NAESB’s Standards for Business Practices and Communication Protocols for Public Utilities (RM05-5). (See NAESB Standards Gain Final FERC Approval.)

In an email to ERO Insider, a spokesperson for SPP said February’s storms drove home to the RTO the importance of fuel supply issues, leading the organization to add its first member from the gas pipeline industry, Southern Star Central Gas Pipeline, in order to “strategically align with fuel resources and enhance the coordination between the electric and gas industries.” The email called NAESB’s standards project a chance to “kick-start the industry process with gas and electric market participants already at the table.”

“I am pleased that the NAESB board of directors endorsed this standards project and determined to place the item on all three quadrant annual plans with a goal of initiating the development of new and enhanced gas and electric coordination business practices early next year,” said Michael Desselle, SPP’s chief compliance and administrative officer, as well as the chairman of NAESB’s board.

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ERCOT In-person Meetings Delayed to February

ERCOT has pushed back the resumption of in-person stakeholder meetings from January to February, the grid operator said Tuesday.

The grid operator had expected to resume face-to-face meetings next month with the Jan. 26 Technical Advisory Committee. It told market participants the meeting will now revert back to a virtual format. Staff will provide another update in January to “manage expectations.”

The postponement was caused by a delayed transition to ERCOT’s new headquarters facility, which was approved by the Board of Directors in 2020. The 37,000-square-foot facility was expected to be ready in January.

Stakeholder meetings will continue to be conducted virtually, as they have been for almost two years now.

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FERC Grants Comment Extension for MISO Capacity Filing

FERC has granted stakeholders a 24-day extension until Jan. 14 to file comments on MISO’s plan to redefine its capacity market during the 2023-24 planning year. Interested parties originally had until Dec. 21 to comment.

MISO has requested commission approval to conduct four seasonal capacity auctions, with separate reserve margins and using a seasonal accreditation based on a generating unit’s past performance during tight conditions (ER22-495).

The grid operator has also filed separately to create a minimum capacity obligation, where a MISO load-serving entity must demonstrate that at least 50% of the capacity required to meet their peak load is secured ahead of the voluntary capacity auction (ER22-496).

The RTO originally intended that a minimum capacity rule would be part of the seasonal auction design, but stakeholders said including the rule could risk FERC’s rejection of the entire capacity design.

The grid operator made both filings on Nov. 30 despite stakeholder discomfort with the design’s capacity accreditation and minimum capacity requirement components. They asked MISO to only file the seasonal auction and do further work on the availability-based accreditation before sending it to FERC. (See Last-minute Unease over MISO’s Seasonal Accreditation.)

Entergy asked for more time to comment on the seasonal auction and accreditation and a coalition of clean energy groups asked for an extension of the minimum capacity obligation. Both said the filings were too long and complex to digest and file comments before the holidays.

“The MISO region is experiencing significant shifts in generation resource retirement, increased reliance on intermittent resources, significant weather events with correlated generator outages, and declining excess reserve margins,” the RTO explained in its filing.

Organization of MISO States President Julie Fedorchak said the current annual reserve margins and accreditation have clearly become inadequate.

“The dynamics of the system are far, far different today,” she said during MISO’s December Board Week.

MISO’s Richard Doying said the new accreditation is necessary because it no longer relies on a forced outage rate for generators, but on a question of “were you there when we needed you?”

“We’re trusting that we’re setting ourselves up for the situation that’s on the doorstep,” MISO Executive Director of Market Development and Design Scott Wright said during a special November workshop to discuss the filing with stakeholders.

MISO made two late additions to its seasonal proposal in November. It will now factor in when generation owners make facility upgrades that stand to increase their capacity accreditation. In those cases, the RTO said it will reflect the generators’ increased capability in accreditation values.  

The grid operator also said its zones can seasonally clear beyond its annual $257/MW-day cost of new entry (CONE). It said some seasons could clear in near-shortage conditions, making a clearing price of up to $1,000/MW-day appropriate.

Under MISO’s current planning resource auction setup, the maximum clearing price is set at CONE, which is calculated by dividing the new generator costs over 365 days. Now, CONE will be divided by a season’s days.

MISO said multiple seasons could possibly clear in near-shortage conditions, stacking revenues in excess of the annual CONE value. Should that happen, staff would retroactively reduce the clearing prices. Because the adjusted prices could create revenue sufficiency problems for generators MISO has proposed issuing make-whole payments in those instances.

Stakeholders have asked the RTO to first estimate the impacts of the auction’s greater offer cap. Some said pivotal suppliers in certain zones could manipulate an auction by making higher offers.

Staff has said suppliers are still bound to the Independent Market Monitor’s conduct thresholds and their own facility-specific reference levels.

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Stakeholder Soapbox: Low-cost, Reliable Power Service Depends on Large-scale Tx

By Barbara Tyran

Barbara Tyran (American Council on Renewable Energy) FI.jpgBarbara Tyran | American Council on Renewable Energy

As the frequency and severity of extreme weather events continue to increase and the clean energy transformation accelerates, grid operators and regulators across the country are faced with difficult decisions on how to ensure cost-effective, reliable service.

Two new studies illustrate the value of interregional transmission in solving an important part of this challenge. Their commonality reinforces the significance of their findings: We have the opportunity today to “read postcards from the future.”

The first, Potential Customer Benefits of Interregional Transmission, submitted by GE International to the American Council on Renewable Energy (ACORE), points to three geographic areas today with greater than 70% renewable penetration: California, Denmark and SPP. The report posits that the entire U.S. will have 20 to 50% renewable energy penetration by 2035. We can learn valuable lessons about load management and system operations from the areas with higher renewable energy penetration now. The report recommends examining the value of regionalization that has been validated for SPP, California and Denmark in an overall assessment for the broader U.S.

The second report, Fleetwide Failures: How Interregional Transmission Tends to Keep the Lights on When There is a Loss of Generation, highlights the asset value of the U.S. transmission system: 600,000 miles, of which 240,000 miles is intraregional and interregional high-voltage transmission. The report, written by Grid Strategies, describes the performance of the grid during several recent examples of extreme weather, including the 2021 Texas power outage, the 2021 California heat wave, the January 2019 Polar Vortex, and the 2017-2018 Bomb Cyclone. The analysis illustrates the benefits of interregional transmission access, which can serve as a “lifeline” during periods of interruption. As documented in other studies, including a FERC-NERC investigation, the localized nature of extreme weather underscores the important role of interregional cooperation and access to new electricity supplies. As an example, each additional gigawatt of transmission capacity connecting ERCOT with neighboring states in the Southeast could have saved $1 billion in damages and provided energy to 200,000 homes during February’s winter storm. 

Forced outages in PJM during the 2019 polar vortex (PJM) Content.jpgForced outages in PJM during the 2019 polar vortex | PJM

The “postcard from the future” in both reports aligns around the utilization of today’s best practices to guide future energy planning efforts. Because decarbonization mandates will likely continue/increase — as will extreme weather events — geographic regions with higher renewable energy penetration provide a window into how to operate future power systems reliably and affordably in the new paradigm. As pointed out in the GE report, resilience is based on three types of reliability: 1) adequacy (fuel diversity); 2) operations (flexibility); and 3) stability (grid strength). We can begin to address these three attributes today to achieve resilient decarbonization. The report concludes, based on contemporary experience, that interregional transmission access (“greater regionalization”) is the most cost-effective mechanism for achieving resilience in a world with higher renewable energy penetration.

Today’s experience also reveals that it is difficult to accurately evaluate consumer benefits on a regional basis and that guidance must be established at the national level in order to be fully effective.   

We can glean important information today from those geographic areas with higher renewable energy penetration that will help prepare us for a seemingly inevitable path ahead. Let’s study those examples now so that we arrive together in 2035 with empirical knowledge and confidence in our power system. Reading “postcards from the future” is smart and highly useful.

Barbara Tyran is the director of the American Council on Renewable Energy’s Macro Grid Initiative, which seeks to expand and upgrade the nation’s transmission network to deliver job growth and economic development, a cleaner environment and lower costs for consumers.

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Inslee Unveils $626M Climate Legislation Wish List

Washington Gov. Jay Inslee on Monday unveiled a $626 million climate change policy wish list for the state legislature to tackle in its upcoming session.

The measures have the support of several key Democratic leaders, whose party controls both legislative chambers in Olympia.

The wish list includes massive decarbonization efforts in buildings down to 20,000 square feet in size. The second largest source of Washington’s carbon emissions — 23.4% — comes from heating residential, commercial and industrial structures. 

Another item calls for plans to help Washington companies keep up with foreign competition as they trim their emissions. Tax rebates for buying new and used electric vehicles are also proposed. Money will be sought for hybrid electric ferries.

State money will be sought to help restart a dormant aluminum smelter with equipment that produces lower carbon emissions than before, and to build a solar panel manufacturing plant in the middle of the state. Many other programs also are scheduled to be included in a group of bills that Inslee’s allies will introduce to the legislature.

None of those bills have been filed yet. The 60-day legislative session begins Jan. 10, 2022.

‘Jobs Program Like No Other’

At a press conference Monday, Inslee said the $626 million is already on the state’s financial books. “These are existing revenues,” he said. “There are no new revenue sources in the package.”

The governor’s calculations do not include potential income from the federal Build Back Better program being debated in Congress. “Whatever comes out of that, we will massage the numbers” Inslee said.

Inslee acknowledged that none of his prior spending proposals have survived the legislature unscathed, but he voiced optimism that most of this package will likely make it through. “This is a jobs program like no other,” said Inslee, who has contended for years that a green economy will lead to more jobs.

At the press conference, state Sen. Reuven Carlyle (D), chairman of the Senate Environment, Energy and Technology Committee, said he believes Democratic support will be strong. “We have a policy framework, and this package builds on that infrastructure.”

The bulk of that framework lies in three Washington laws.

One sets overall carbon-reduction targets of 45% below 1990 levels by 2030, 70% by 2040 and 95% by 2050. A law passed last spring ordered carbon emissions from gasoline and diesel fuel sold in Washington be cut by 10% below 2017 levels by 2028 and 20% by 2035. Transportation accounts for 45% of Washington’s carbon emissions. Another law passed last spring was the nation’s second cap-and-trade bill following a California law. 

Washington’s cap-and trade law would create a system to set total industrial carbon emissions annually, a cap that slowly decreases through the years. Large emitters would submit bids to the state quarterly in an auction for segments of that year’s overall limit and be allowed to emit that amount in greenhouse gases. Companies would be allowed to buy, sell and trade those allowances. Washington policy makers anticipate the auctions will raise several hundred million dollars that the state can allocate to various programs.

Rep. Mary Dye, ranking Republican on the House Energy and Environment Committee, argued that Inslee’s proposals are ineffective. 

“The governor’s proposal to decarbonize buildings, to get rid of the natural gas industry and retrain workers whose jobs would be eliminated from his policies would do nothing to reduce deadly, destructive wildfires and the smoke they emit,” Dye said in a statement. “The governor’s proposal to spend millions of dollars in rebates for electric vehicle purchases would do nothing to prevent flooding or address drought that threatens our farmers. …  Where are his proposals to address the top concerns he mentioned at the beginning of the press conference?”

The Details

The biggest planks of Inslee’s requested legislative package include:

  • A push to have all new construction in the state “net zero ready” by 2034. “Net zero” in this context means a building’s heating sources result in no net carbon emissions. A 2019 Washington law allows the state to regulate the energy performance of buildings 50,000 square feet or larger. Inslee’s proposal would expand that regulatory authority to buildings down to 20,000 square feet.
  • A bill to require that gas utilities submit decarbonization plans to the Washington Utilities and Transportation Commission every four years. These plans would include emission reduction strategies and how to support renewable hydrogen and electrification efforts.
  • A call for the legislature to create a state climate office to coordinate all of Washington’s global warming measures.
  • A $50 million allocation to tackle how Washington companies can compete with foreign competitors that don’t have to implement carbon emission measures. These industries include steel and aluminum production, pulp and paper mills, and food processors.
  • A request to have tribal consultants advise on climate change matters, including early notification of ventures that would impact their lands and treaty rights. Inslee faced political blowback after vetoing that provision in the cap-and-trade bill passed last spring. 
  • The creation of tax rebates for residents buying EVs. To qualify for the rebate, a person would have to earn less than $250,000 as a single tax filer, or a couple less than $500,000 as a joint household filer. The proposed rebates are $7,500 for a new vehicle and $5,000 for a used one. An additional $5,000 rebate would go to an EV purchaser earning less than $61,000 annually, which is 60% of the state’s median income. 
  • Money allocated to build two 144-car hybrid electric ferries and to convert another regular ferry to a hybrid electric model.
  • Appropriations to help restart the dormant Italco aluminum smelter in Whatcom County in northwestern Washington. The proposed restart would come with equipment that would trim carbon emissions below August 2020 levels, when Alcoa shut down the plant, leading to the loss of 700 jobs. Two unidentified companies have expressed interest in buying and reviving the plant. A political wrinkle is that most of Whatcom County is in a legislative district represented by two Democratic House members and Republican Sen. Doug Ericksen, a climate change skeptic who is the legislature’s leading opponent of most of Inslee’s environmental measures. Ericksen’s position is usually that environmental measures kill jobs.
  • A state grant to help build a solar panel manufacturing plant in Grant County in central Washington.
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Dominion’s Solar and Onshore Wind Plans Draw Heat

Dominion Energy’s proposal to develop new solar and energy storage resources faced harsh criticism in hearings before the Virginia State Corporation Commission (SCC) Monday and Tuesday.

Dominion is asking the SCC to approve its annual Renewable Portfolio Standard (RPS) Development Plan, which it filed Sept. 15 to comply with the Virginia Clean Economy Act (VCEA), which requires the utility to reach 100% clean electricity by 2045 (PUR-2021-00146).

Dominion is asking the SCC to approve:

      • its CE-2 plan to build and operate 13 utility-scale projects totaling 661 MW of solar and 70 MW of energy storage and related interconnection facilities;
      • two small solar projects totaling 4 MW;
      • 24 power purchase agreements (PPAs) for 32 resources totaling 253 MW of solar and 33 MW of energy storage; and
      • cost recovery for three utility-scale solar projects totaling 82 MW (CE-1), which the SCC approved in April at an estimated cost of $10.4 million (PUR-2020-00134). (See Virginia SCC Gives IOUs a Pass on RPS Plans — for Now.)

Dominion attorney Elaine Sanderlin Ryan of McGuireWoods said Monday that the company opposes an SCC staff suggestion to increase stakeholder input in the request-for-proposals process. “If it’s not broken, don’t fix it,” she said. She also opposed a request by environmental group Appalachian Voices to allow interested parties to submit additional models of future power production and consumption for the company to run.

“When left to its own devices, Dominion does not prepare or even attempt to prepare viable least-cost plans,” Will Cleveland, senior attorney with the Southern Environmental Law Center, said Monday on behalf of Appalachian Voices.

Energy Department also Calls for Stakeholder Group

The Virginia Department of Energy weighed in Tuesday, saying that while it supports approval of Dominion’s projects it “has concerns regarding the efficiency of planning and procurement for RPS compliant generation” and supports commission staff’s proposal to form a stakeholder group to help the company refine its request for proposal (RFP) procedures.

Virginia Energy Director John Warren said that the VCEA’s targets “require large-scale investments to occur within a near timeframe.”

“While the company’s current proposal represents an important step towards RPS and storage goals, there is a much greater volume of generation due to be proposed and built in the coming years, and it is essential that the company is operating a fair, transparent and efficient process for planning and procuring future projects,” he said in a filing.

Warren said the stakeholder group should “at a minimum, review general RFP development, including process transparency, scoring criteria and the value of employing an independent evaluator.”

The Solar Energy Industries Association also expressed concerns while supporting Dominion’s CE-2 projects. “We believe that this represents a diverse set of projects, and that these facilities will help the company comply with its mandatory obligations under the VCEA,” attorney William Reisinger said Monday on behalf of the group.

However, he said, the solar industry finds it “extremely concerning” that Dominion is saying it may not be able to meet the 1% RPS carveout for 2021 and may have to pay the $75/MWh deficiency payment for noncompliance. That should only be done as a “last resort,” and there are sufficient resources in Virginia for the company to meet the compliance goal, said Reisinger, who was also speaking for the Chesapeake Solar and Storage Association (CHESSA).

Walmart, which operates 94 stores and two distribution centers in Dominion’s territory, also expressed reservations about the utility’s RPS plans. “We see significant costs under VCEA that are not borne by the company or solar developers; they are borne by the customers,” Carrie Grundmann, attorney with Spilman, Thomas & Battle, said Monday. She urged the SCC to compel Dominion to adopt lower-cost power purchase agreements (PPAs) rather than build out its capacity at a higher cost.

On Tuesday, her cross-examination of Emil Avram, Dominion’s vice president of business development, led to a tense exchange. The subject was a clause of the VCEA that states that “35% of such [renewable] generating capacity procured shall be from the purchase of energy, capacity, and environmental attributes from solar or onshore wind facilities owned by persons other than the utility.”

“Is there anything in the code says that only 35% can come from PPAs?” Grundmann asked him. She had argued in her opening statement the day before that the company was treating this figure as a ceiling, which meant that Dominion had to build or acquire 65%, a method that she said would be more expensive for customers.

“It’s clear to us that the law says 35% must come from third parties,” Avram said. “It doesn’t say at least, it doesn’t say at most, it doesn’t say approximately. It says 35%.”

An attorney for the utility objected to Grundmann “badgering” Avram after they went back and forth on this point for several minutes.

As of Aug. 31, Dominion said, it had 1,958.1 MW of solar and onshore wind nameplate capacity, including operating facilities, those under construction and those that have been proposed, including the CE-2 projects it is now asking the SCC to approve. PPAs constituted 788.8 MW of that total, and another 52 MW qualify as distributed solar under the VCEA, because they are 3 MW or lower capacity projects.

Through 2020, Dominion says, 322.8 MW in solar and onshore wind generation facilities had reached the commercial operation stage, including PPAs, company-owned systems, and company-owned “ring-fenced” resources that are not under contract with a potentially eligible “accelerated renewable energy buyer.” The VCEA exempts such buyers from the costs of the RPS.

By the end of this year, Dominion expects to add another 240 MW to the total, followed by 492.5 MW next year, 1,063.1 MW in 2023 and 740 MW in 2024.

From 2025 to 2035, Dominion projects it will add approximately 14,865.1 MW more in capacity, which “will offset the 16,100 MW target for the development of solar and onshore wind” set by state law. As a result, the company expects its carbon dioxide output to decline from the 2021 total of more than 15 million metric tons per year to 5 million tons in 2035, although there will be a slight increase in this pollution in the next few years.

Cost

Dominion said the cost of the RPS program to residential customers who use an average of 1,000 kWh/month would rise from 37 cents/month this year, to $5.11 in 2022, and increase more than five-fold to $28 by 2035. Under a different “directed methodology,” the total added to monthly bills in 2035 would be $43.22, the company said.

Advocacy groups were not impressed with Dominion’s plans. “Once again, I believe Dominion has failed to conduct adequate long-term, least-cost implementation planning, and the commission should reject the plan proposed here,” consultant Karl Rabago said in written testimony submitted Nov. 16 on behalf of Appalachian Voices. “Given the company’s failure to submit least-cost VCEA compliant plans for the past two proceedings, I recommend that in future proceedings, the commission require the company to perform a set number of modeling runs and sensitivities as prescribed by other parties.” Additionally, he said, SCC staff, industrial and commercial customer groups, and environmental and consumer groups should be permitted to submit alternative plans.

In written testimony submitted Nov. 17, the Virginia Department of Environmental Quality and other state agencies focused on steps Dominion would have to take to protect the Chesapeake Bay, wetlands and other sensitive areas for its planned projects to go forward.

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New Jersey Lawmakers Back Municipal Bonds for EV Purchases

New Jersey lawmakers backed legislation Monday that would allow local governments to issue bonds to fund the purchase of electric vehicles, adding to the surge in legislation focused on promoting clean energy that lawmakers hope to approve before the session ends in mid-January.

The Assembly Appropriations Committee voted 10-1 with no comment to advance the bill, A-2208, which would create an exception to an existing law that prohibits local and county governments from bonding projects that have a useful life of less than five years. The law also prevents governments from issuing bonds for the purchase of passenger vehicles and station wagons.

The bill approved Monday would amend that law to permit counties and municipalities to bond for passenger cars and station wagons that are “solely fueled by a battery or equivalent energy storage device charged from an electricity supply external to the vehicle or by a renewable power source.”

The committee’s support for the bill followed the advance last Thursday of several clean-energy related bills that lawmakers would like to send to the desk of Gov. Phil Murphy by the term ends. Bills that are not enacted by mid-January would have to be refiled to move forward.

Master Plan Triggers Competing Views

Among the most high profile and contentious of the bills that moved in recent days was A5720. The bill, advanced by the Assembly Science, Innovation and Technology Committee on a 4-2 vote, would codify into law the main elements of the 2019 Energy Master Plan crafted by Murphy. The vote follows support for the bill by the full Senate in June. (See Lawmakers Back Putting NJ’s Clean Energy Plan into Law.)

At the time of the Senate vote, the bill provided a way of ensuring that Murphy’s aggressive clean energy goals would stay in place even if he lost his re-election fight on Nov. 2. Murphy won re-election with a 2.9% margin against Republican Jack Ciattarelli.

The bill would codify key planks of the plan, including the goal of putting 330,000 light-duty vehicles on state roads by 2025. Other parts of the bill would require the state’s mass transit agency, New Jersey Transit, to have in development at least one battery-powered train by 2025 and that New Jersey generate 7.5 GW of offshore wind by 2035.

The bill, which now needs the support of the full General Assembly to land on Murphy’s desk, sparked a vigorous debate over the Master Plan’s merits, and whether the proposals are realistic enough to sustain the rigidity of codification into law.

Ray Cantor, vice president of government affairs for the New Jersey Business & Industry Association, one of the state’s largest business advocacy groups, argued that the plan failed to meet the most important criteria of being affordable and ensuring that the state’s energy system is reliable. He also expressed concern that the Murphy administration had never calculated the cost of meeting its requirements.

“The Energy Master Plan was meant to be a fluid document to be updated every three years based on new information, new technology [and] new policy directions,” he said. “This would lock it in place in 2021.

“This bill would set unattainable goals, unachievable goals,” he said. “And when that happens, regulators then make bad decisions. They tend to push the limits and make requirements that can’t be met. They waste money.”

Kate Gibbs, deputy director for the Engineers Labor-Employer Cooperative, which represents operating engineers and their employers, added that the plan is “not rooted in reality.”

“It’s more about virtue signaling and relies more on political science than the laws of physics,” she said. “Passing this legislation is setting our state up for a very expensive gambit, one that New Jersey residents and businesses cannot afford. And that will put an incredible strain on the potential for long-term economic development.”

The National Resources Defense Council, Environment New Jersey and Clean Water Action said that regardless of any deficiencies in the plan, the urgency of the need to combat climate change requires that legislators codify the main plan elements. That way there is a greater likelihood that the plan will be carried out, they argued, adding that the cost of not responding to climate change — through damage and destruction from extreme weather events — would be much higher.

Eric Miller, New Jersey energy policy director for NRDC, said the legislation would enable the state to keep its commitment to reducing carbon emission policies, such as the goal to produce 7.5 GW of offshore wind energy goals by 2035.

“Putting them into law is critical to prevent any potential for future backsliding on our climate commitments,” he said. “And it also provides a more stable regulatory environment. … We support codifying the 7.5-GW wind target, which currently just exists as an executive order, so that there’s certainty New Jersey will complete all of its planned offshore wind solicitations.”

Backing Microgrids, Low-carbon Concrete

Also Thursday, the Senate Economic Growth Committee voted 5-0 to back a bill, S3593, that would authorize the creation of a program to develop six electric microgrids around the state to provide power to charge medium- and heavy-duty EVs. The bill has yet to go before the full Assembly or Senate.

The program, to be created by the New Jersey Economic Development Authority in consultation with the Board of Public Utilities and Department of Environmental Protection, would require the authority to seek proposals for the creation one microgrid in each of the six utilities that serve the state.

The Senate Environment and Energy Committee backed two clean energy bills Thursday, including one, A2360, that would require electric utilities to charge “residential rates for service used by residential customers for electric vehicle charging at charging stations” in parking garages or other parking spaces tied to residential units.

While the New Jersey Chamber of Commerce, the South Jersey Chamber of Commerce and New Jersey Utilities Association opposed the bill, NRDC submitted comments in favor, as did the New Jersey Apartment Association. The Assembly passed the bill 68-4 in June.

The committee also backed a legislation, S3732, that would provide corporation business tax credits to concrete producers that provide more than 50 cubic yards of “low embodied carbon concrete” to a project built under contract with a state agency. Low-embodied means the concrete was made with a process that creates low carbon emissions. (See New Jersey Lawmakers Back Low-carbon Concrete.)

The producer could receive a credit valued up to 8% of the cost of the concrete, and the cumulative total of all the credits issued under the bill in the state could not exceed $10 million. The committee backed the bill 4-1.

Sen. Linda Greenstein (D), who sponsored the bill, said the aim is to encourage investment by New Jersey’s concrete manufacturers in the “latest low-embodied carbon concrete manufacturing techniques.” That would “increase supply and competition while building the infrastructure necessary for New Jersey to be at the forefront of this cutting-edge effort to reduce carbon emissions of construction materials,” she said.

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Wash. Senator Seeks Fee on Fossil Fuel Financers

A Washington state senator wants to create a “climate resiliency fee” on global financial institutions in the state that fund fossil fuel projects.

Sen. Reuven Carlyle (D), chairman of the Senate Environment, Energy and Technology Committee, announced his intention to introduce such a bill in a press release Monday. The bill has not yet been pre-filed for the Washington legislature’s 2022 session, which begins Jan. 10.

Carlyle’s press release said a state report estimates that Washington taxpayers spent more than $1.2 billion over the 2019-2021 biennium on climate resiliency costs “from forest fires to floods, ocean acidification to heat domes.”

Carlyle is calling for adding a surcharge to a financial institution’s business and occupation (B&O) tax, the state’s tax on a firm’s gross income. The press release did not address the size of the B&O surcharge, nor specify which global financial institutions operate in Washington.

The senator expects the surcharge to raise $80 million to $100 million annually for climate resiliency measures, such as creating public cooling centers, relocating infrastructure at risk from floods and sea level rise, and helping farmers and communities obtain critical water supplies during more frequent and severe droughts.

An analysis by Bloomberg Business of the world’s largest banks found that they invested more than $3.6 trillion combined into the fossil fuel industry in the five years immediately after the Paris Climate Agreement was signed, the press release said.

“One of the most profound lessons from the UN Climate Summit conference was that global banks have financed almost three times more fossil fuel than clean energy projects since the Paris Agreement in 2016. At the same time, these same banks have made commitments to design net zero portfolio investments by 2050. This bill is simply asking those funding climate change to pay a modest fee toward the cost that Washington taxpayers are currently spending on climate resiliency,” Carlyle said. 

The press release said global banks’ investments in fossil fuels increased between 2016 and 2021, despite those institutions’ commitment to meet carbon neutrality by 2050.

The bill would reduce the surcharge as the affected institution decrease its investment in fossil fuels — eventually reaching zero when a bank’s investments in fossil fuel projects reach 5% or less of its 2022 level.

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Overheard at gridCONNEXT 2021

WASHINGTON — About 200 attendees of GridWise Alliance’s gridCONNEXT conference Wednesday listened as John Rhodes — former New York Public Service Commission chair, now special assistant to President Biden for climate policy — hyped the administration’s ambitious climate agenda, optimistic that its many goals could be achieved.

Rhodes spoke of a “zero-carbon electricity system by 2035 that’s reliable; that’s resilient to the weather that we know is getting more extreme; that is affordable and cost-effective for all Americans, especially low-income Americans, while creating millions of jobs.”

“That sounds like it’s Goldilocks; everything’s great,” Rhodes said. “The amazing thing is it’s actually possible. We just need to work to get there.”

Attendees were on board, but not just because they agreed with Rhodes’ rhetoric. There was a general sense of enthusiasm and optimism in the room — a dedicated event space run by Convene blocks from the White House — as they listened to panelists and speakers opine on a high-tech future in which everything is electrified, digitized and clean if the administration’s goals are achieved.

And like WIRES’ Fall Conference in late October, it was the first in-person event for many since the COVID-19 pandemic caused cancellations and transitions to online. (See Transmission Industry Hoping for Landmark Order(s) out of FERC ANOPR.) All attendees were required to be vaccinated and wear masks when not seated or eating. Additionally, attendees attached colored stickers to their nametag to indicate how comfortable they were with physical interaction: green meant hugs were OK; yellow for elbow bumps only; and red for social distancing. (This reporter did not see anyone hugging but chose yellow just in case.)

It was a sharp contrast to last year’s online-only event, in which speakers were obviously fatigued by both the pandemic and federal inaction on energy policy. (See Industry Eager for New Leadership on Tx, Climate.)

This year’s conference billed grid infrastructure as “the platform for decarbonization,” but for much of the conference, transmission took a backseat to everything it would enable. Attendees received a sales pitch from a Ford Motor Co. executive on its upcoming lineup of electric vehicles; an official from the Electric Power Research Institute spoke about a future in which all home appliances are grid-connected and controlled by the utility; and Maud Texier, Google’s carbon-free energy (CFE) lead, talked about how the company is aiming to procure 100% CFE at all times of the day, rather than just on an annual basis, by 2030.

The last of those presentations came the same day Biden ordered the federal government to procure half of its electricity from clean resources 24/7 by 2030. (See Biden Calls for Federal Procurement of 100% Clean Energy by 2030.) One of the slides in Texier’s presentation proclaimed that “24/7 CFE is the New Net Zero.”

Reality Check

Many speakers noted there was much to be done in the next decade or so to achieve Biden administration and company targets. Eric Dresselhuys, CEO of energy storage company ESS, was more blunt in his assessment. On a panel discussing approaches to decarbonization, Dresselhuys said “there’s no billions of dollars of investment that gets us anywhere close to what John Rhodes threw out; to total decarbonization by 2035. Round it to 2045; it doesn’t matter. The amount of work that has to get done is of a different scale.”

Eric Dresselhuys 2021-12-08 (RTO Insider LLC) FI.jpgESS CEO Eric Dresselhuys | © RTO Insider LLC

He said conference panelists often say, “‘We’re trying to decarbonize the energy system,’ like that’s a static thing. … But we’re going to electrify everything: transportation, buildings, natural gas; we’re going to make everything electric. Then we’ve got about 100 million people around the planet who do not have access to electricity. … And then we have 2.3 billion people who don’t have access to clean cooking fuels, so we have to fix that problem. Oh, and by the way, the population is going to grow to about 9 billion people in the time frame we’re talking about.

“When you add that up, that is an electricity system that is two-and-a-half times the size of the global electricity system that it is today. And we’re going to do it all with no carbon. …

“We need smart people thinking about how the arc of this development is going to happen over the course of the next 20 [to] 50 years. I kind of feel like when someone says ‘we’re going to get to decarbonization by 2040, 2045, 2050’ — that triggers, because we’re human beings, ‘I’ve got time.’ … That’s just a natural way for our brains to think. I would tell you that we are massively behind. I think in the best-case scenario we are at a fraction — 20% would be generous — in the wave of change that we need to come anywhere close to come to the slow end [2050]. … I’m sorry folks, but 2035 is a pipe dream.”

Shah on the Hot Seat

Jigar Shah, director of the U.S. Department of Energy Loan Program Office, sat down with Lee Krevat, CEO of Krevat Energy Innovations, for a live edition of Krevat’s podcast “Climate Champions.”

Shah was co-founder and president of Generate Capital, which finances clean energy infrastructure projects. He was also a co-host of “The Energy Gang” podcast produced by Wood Mackenize, in which he could be contrarian and offer somewhat brash opinions.

Meanwhile, in addition to his energy consultancy work, Krevat performs improv and, judging by how he concluded the session, free-style raps.

Jigar Shah Lee Krevat 2021-12-08 (RTO Insider LLC) Alt FI.jpgDOE’s Jigar Shah (left) and Lee Krevat, Krevat Energy Innovations | © RTO Insider LLC

 

Together, they made for an entertaining duo as they ate hot-sauce covered biscuits, borrowing the premise of the YouTube series “Hot Ones,” in which celebrities are interviewed while eating buffalo wings that gradually increase in spiciness.

Krevat asked Shah what “transformational” technology he was most excited about. Shah talked at length about the ability of electric vehicles to provide backup power during an outage, especially as working from home continues to normalize. “People say, ‘Well is there going to be enough demand for electric vehicles?’ And I’m like, ‘Well is there enough demand for resiliency at home?’ … I think you will see long queues of people waiting for electric cars for no other reason than to back up their house.”

“Well I hope you’re right because…” Krevat began.

“Well I know I’m right!” Shah interjected.

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Rooftop Solar Supporters Pressure Legislator to Eliminate Cap

LANSING, Mich. — Environmental and community-action groups are stepping up pressure on the chair of Michigan’s House Energy Committee in hopes of getting action on a bill to expand rooftop solar by ending the state’s 1% cap on distributed energy.

The effort by the Michigan League of Conservation Voters and other groups is targeting constituents in Republican Rep. Joe Bellino’s home of Monroe County to call on him to take action on HB 4236. The campaign, which includes online ads, billboards and advertisements, prompted more than 1,800 people to sign a Sierra Club-sponsored online letter backing the bill, with hundreds more in Monroe County contacting Bellino.

Bob Allison, deputy director of the LCV, said the campaign to push Bellino on the bill extends an effort begun last spring to shore up Democratic support as utility worker unions opposed the legislation. The state’s largest utilities, CMS Energy (NYSE:CMS) and DTE Energy (NYSE:DTE), also oppose it.

The new focus on Bellino is an effort to get movement on the bill, which was initially proposed in 2016, he said. “We’re drawing a line in the sand.  We’re not going to be placated with a hearing and a pledge of later action.   We want to see action now.”

Allison said it was critical to see some action on the legislation no later than June 2022, before all lawmaking is hung up in the election season.  If the bill passes the House, Allison said he is fairly confident it would pass in the Republican-controlled Senate.

HB 4236 is a priority of energy and climate change activists, who have urged its passage to the House Energy Committee and the Michigan Council on Climate Solutions, which is now working on its final recommendations for Gov. Gretchen Whitmer (D).

Enacted in 2016, the current cap is based on 1% of the utility’s average peak load for the previous five years. Utilities can change that cap, and CMS has done so, lifting it to 2%.

Bellino could not be reached for comment. But in an interview recently with Gongwer News Service, Bellino said his committee has not killed the bill and he wants to see the cap increased to 6%.

The utilities have argued repeatedly that they are subsidizing distributed energy providers, mostly small solar systems, which they said have shifted costs for their use of the grid to other ratepayers.

CMS spokesperson Katie Carey said the utility supports raising the cap on distributed generation, but “only if it’s done in a way to address the subsidy.” Carey said CMS sees renewable energy as “an important part of Michigan’s clean energy future,” and the utility is “committed to developing solar” as part of its future plans.

A study for the Public Service Commission concluded there was no economic reason to maintain the limit. (See Mich. Enviros Use Report for New Push to Remove Solar Cap.) PSC Chair Dan Scripps and other commission officials have said there is no indication of any cost shift.

One organization joining LCV’s campaign, the Michigan Conservative Energy Forum (MICEF), has run an ad in one publication showing a tombstone and a headline: “The Solar Subsidy is Dead!”

“There is no solar subsidy,” the ad says. “Take action on residential & community solar legislation.”

HB 4236 is sponsored by a fellow Republican on the committee, Rep. Greg Markkanen from Michigan’s Upper Peninsula where rooftop solar installations are becoming more popular. He has complained Bellino has not acted on the bill largely because of utility influence.

Allison said Bellino has not put the bill up for a vote despite clear bipartisan support.  Allison blamed much of that on large campaign contributions Bellino and others have received from the utilities.  They have talked with the House Speaker, Rep. Jason Wentworth (R), in hopes he could persuade Bellino to act, but Wentworth prefers giving committee chairs deference.

“We’ve been working on this since 2016, and now we have a situation where a majority of committee members say they could pass it with bipartisan support,” Allison said.

“The only people standing in the way of this bill are DTE and Consumers,” Allison said. “Michiganders are tired of paying the highest rates, and they’re tired of DTE and Consumers buying and selling legislators.”

State politicians have come under fire in recent months for accepting utility campaign donations, particularly after massive summer storms led to utility blackouts for about 1 million customers in the Detroit area. In August, DTE sponsored a fundraiser for Whitmer that collected nearly $50,000.

To push for committee action, Allison said the campaign is focusing on the high cost of electricity in the state — Michigan has the highest average retail rate in the Midwest, said the Energy Information Administration — and ongoing issues with reliability. With climate change and years of little upgrading of utilities’ infrastructure, Allison said, it’s reasonable to expect massive storms and service disruptions will recur in the future.

LCV’s campaign is backed by the group Vote Solar, and the social engagement group Michigan United, which focuses mostly on equity and justice issues.

Allison said LCV and other supporters are happy to talk about a compromise solution to move the bill.   Bellino’s proposal to raise the cap to 6% could be a good starting point for those discussions, he said.

In 2022, all 148 of Michigan’s legislators are up for election, and under its term-limit system, most of the 38 senators will not be eligible for re-election. The House also could face changes as many members seek to move to the upper chamber.

Michigan’s primary takes place in August. “The bill has got to get some real serious consideration in the first couple of quarters” to have a chance to pass in this legislative session, Allison said.