Search
`
October 11, 2024

Posted on

ISO-NE Elects 2021 Board of Directors Slate

ISO-NE announced the election of its four-person 2021 Board of Directors slate on Thursday, which will expand the board to 11 members for one year. 

Incumbent Michael Curran and newcomers Caren Anders, Steve Corneli and Catherine Flax comprised the slate elected to serve three-year terms starting Oct. 1. The new members will replace the retiring Kathleen Abernathy, the current chair, and Philip Shapiro.

The slate was nominated by the Joint Nominating Committee (JNC), a panel comprising seven current board members, NEPOOL’s six sector leaders and Massachusetts Department of Public Utilities Chair Matthew Nelson, representing the New England Conference of Public Utilities Commissioners. The NEPOOL Participants Committee also voted on the slate, which reached the required 70% support for endorsement.

“Caren, Steve and Catherine bring a wealth of diverse experience and knowledge to the ISO New England Board of Directors,” ISO-NE CEO Gordon van Welie said. “This experience and knowledge will be a benefit to all of New England as the region moves towards the clean, reliable grid of the future.”

While the election of the four-person slate pushes the board to 11 members, it will return to 10 when Vickie VanZandt retires in 2022. (See “Five Advance to Next Interview Round for Board Positions,” NEPOOL Participants Committee Briefs: May 6, 2021.)

Shapiro, according to the minutes from a July 21 executive session of the PC, said that the “exceptional quality” of the new candidates for the board and the significant turnover in membership looming in the next several years both made the effort of choosing three new candidates “extraordinarily challenging” for the JNC. As a result, waivers to the Participants Agreement to accommodate a four-person slate were approved by the PC.

Anders, Corneli, Flax Join; Curran Re-elected

A transmission expert, Anders, an executive adviser for Quanta Technology, works with utility clients. Her career includes leading Duke Energy’s transmission organization, overseeing 2,100 employees responsible for serving seven million customers. Before joining Duke, Anders served as vice president of transmission and substations at Exelon. She holds a bachelor of science degree in mechanical engineering from the University of Pennsylvania and an M.B.A. in finance from Drexel University.

Principal and owner of Strategies for Clean Energy Innovation, Corneli focuses on the efficient deployment of clean resources for a range of clients including think tanks, distributed energy technology companies and clean energy and environmental advocates. Before his consultant work, Corneli served as senior vice president of policy, strategy and sustainability at NRG Energy. He has also worked as a consumer advocate within the Minnesota Attorney General’s Office for seven years. Corneli holds a bachelor of arts from St. John’s College in Santa Fe, N.M., and an M.P.A. from the University of Minnesota’s Humphrey Institute, with a concentration in energy, environment, and technology policy.

This year, Corneli participated as a speaker during a wholesale market design technical forum organized by New England states. He said any successful energy market designed for rapid decarbonization would need to find efficient portfolios of complementary clean energy resources. (See NE States Considering Different Market Models.)

Flax is president of private investing at X Machina Capital Strategies, focusing on investments related to energy transition in the oil and gas arena. She is an economist who has worked as a senior executive in several investment banks’ energy, power and commodities businesses. Flax also served as global head of commodity finance at J.P. Morgan and managing director and head of commodities, Americas, at BNP Paribas during her career. She has also served on a range of industry and corporate boards and advisory boards. Flax holds a bachelor of science in economics and finance from Texas A&M University, and a master’s in economics from Brown University.

Curran joined the RTO’s board in 2019 after serving as chair of the MISO Board of Directors. Curran spent most of his career in the financial services and investment community, including the Boston Stock Exchange, where he was chair and CEO. Before joining the stock exchange, Curran was managing director and chief operating officer of Kemper Funds and International Mutual Funds for Zurich Scudder Investments. He is a graduate of Dickinson College.

Posted on

FERC, NERC Share Findings on February Winter Storm

FERC and NERC staff on Thursday presented a series of recommendations to prevent a recurrence of the February winter storm that led to unprecedented outages in the Midwest and left hundreds dead and caused billions of dollars in damages in Texas (AD21-18).

The joint inquiry team put much of the blame on a lack of gas supply that took more than 61 GW of power offline, calling for the electric and natural gas industries to strengthen their winter preparedness and coordination to prevent a recurrence.

FERC Chairman Richard Glick | © RTO Insider LLC“This subject literally is a matter of life and death,” FERC Chair Richard Glick said during the commission’s open meeting. Noting that state officials have acknowledged more than 200 Texans died during the storm and that a “significant percentage” died because of a lack of energy, he said, “In this day and age, we had people who froze to death because of power outages. That’s beyond unacceptable.”

Glick hearkened back to the 2011 winter weather event in Texas, which led to similar winterization recommendations.

“That recommendation was watered down to guidelines that few generators followed,” he said. “The biggest single reason [for the outages] was the vast majority of generators hadn’t winterized their facilities. I guarantee you that this time, FERC will not permit these recommendations to be ignored or watered down.”

NERC CEO Jim Robb joined Glick for a press conference after the meeting.

“I want to share [Glick’s] commitment … that this is not going to be a paper report that’s just going to sit on someone’s shelf and be valued because of the length of it and the weight of it,” he said. “We’re really going to be committed to putting this into action.”

Robb did throw a shoutout to ERCOT’s operators, who brought the grid back from the brink of collapse as they scrambled to meet record winter demand while dealing with a massive loss of generation. (See ERCOT: Grid was ‘Seconds and Minutes’ from Total Collapse.)

“I think it is impressive that the operator managed to not let the entire Texas grid collapse. That’s not much comfort to those without power for six or seven days, but I think there’s something to celebrate there,”  he said.

ERCOT had to make do without an average of 34 GW of generation Feb. 15-17, according to the inquiry, equivalent to nearly half of its all-time winter peak of 69.9 GW before it began to lose generation.

The study team said the storm led to the largest controlled firm load-shed event in U.S. history and the third largest loss of load, trailing only the August 2003 Northeastern blackout and the August 1996 West Coast blackout. More than 1,000 generating units in the Midwest experienced either an outage, a derate or a failure to start from Feb. 8 to 20.

The team laid much of the outages’ blame on freezing generator components and fuel-supply issues. The report said all fuel types were affected but that 57% of the 1,045 impacted generators were natural gas-fired units that primarily faced fuel-supply challenges.

Cold weather conditions on Feb. 15, 2021 | NOAA

Referring to comments from Texas politicians and others who pointed fingers at renewable resources, Glick said, “Today’s report makes it clear that the facts don’t support this rhetoric. This should make us rethink the current approach to assess when dispatchable generation should be available.”

The preliminary report makes nine key recommendations, including changes to mandatory reliability standards that build upon those developed in the wake of a 2019 joint inquiry into a prior cold weather event and recently approved by FERC. (See FERC Approves Cold Weather Standards.)

The recommendations include:

  • require generator owners to identify and protect cold weather-critical components;
  • build new or retrofit existing units to operate to specific ambient temperatures and weather based on extreme temperature and weather data;
  • take into account the effects of wind and precipitation in winterization plans;
  • create corrective action plans for generator owners that experience freeze-related outages; and
  • ensure the system operator is aware of the generating fleet’s operating limitations so that they can plan mitigation actions.

The preliminary report also recommends that generator owners be provided the opportunity for compensation and recovery of the costs of building or retrofitting to operate to a specific temperature, and that Congress, state legislatures and jurisdictional regulators require gas facilities to prepare and follow cold weather preparedness plans.

“We can’t allow this to happen again,” Glick said. “This time, we must take these recommendations seriously, and act decisively, to ensure the bulk power system doesn’t fail the next time extreme weather hits.”

Glick said the storm’s effects would have been much worse in SPP and MISO had they not been able to import power from PJM. He said ERCOT’s lack of interconnections with the other U.S. grids and its limited ability to import power was “unfortunate.”

“ERCOT is essentially an island unto itself,” Glick said, repeating a familiar expression among Texans who relish their freedom from FERC jurisdiction. “That is very short-sighted. That is nothing more than cutting off your nose to spite your face.”

The Texas Public Utility Commission is looking into strengthening its connections with the Eastern and Western Interconnections. ERCOT has also included an item to “assess the potential costs and benefits of increased transmission both internal and external to ERCOT and increase coordination with other power regions” in its 60-point roadmap to grid reliability.

“Changes are obviously needed to protect Texans from future winter weather events … and ERCOT is working closely with the PUC to aggressively implement [new state legislation],” ERCOT spokesperson Leslie Sopko said in an email. “We fully expect the report’s findings to complement the positive impact of the PUC’s market-redesign work sessions and our 60-point Roadmap to Improving Grid Reliability.”

Asked about ERCOT’s isolation and the PUC’s discussion of interconnections without involving FERC, Glick said he “couldn’t care less” about jurisdiction.

“All I care about is making sure that we don’t have a repeat of what happened last winter, which was tragic,” he responded, saying jurisdictional issues are for Congress to decide. “We just need to work with our friends at the PUC and other policymakers in Texas to encourage a greater level of interconnection. We can work out the concerns that they have about FERC jurisdiction; we can work that out down the road.”

The Texas Reliability Entity has scheduled a winter weatherization workshop Sept. 30 to review the cold weather standards and share best practices in preparing generators for severe winter weather.

“I appreciate the recommendations outlined within the report to improve grid reliability,” Texas RE CEO Jim Albright said in a statement. “We’ll continue to work with our stakeholders within the Texas Interconnection via outreach and training such as [the workshop].”

In an emailed statement, SPP spokesperson Meghan Sever said the RTO’s initial assessment of the preliminary findings and recommendations is in “strong alignment” with FERC’s.

“We’ve both determined that fuel-supply issues were at the heart of the reliability issues we experienced, that strong interconnections and effective communication helped to minimize the impacts of the storm, and that better coordination between the gas and electric industries is needed to mitigate the threats of similar events in the future,” she wrote. “We’re working hard to implement the recommendations that came from our own analysis and expect much of what we are working on to satisfy FERC and NERC’s recommendations.”

American Electric Power, a major player in the MISO and SPP markets, said it relies on the “collective reliability” of the combined fleet.

“Therefore, AEP supports the development of NERC standards that will assure that all generators in the regions are preparing for these conditions in a comparable fashion,” spokesman Scott Blake said in an email. “Similarly, we support efforts to improve the weatherization protection for the natural gas infrastructure, including having pipelines share the state of weatherization of their equipment with generators that may be adversely impacted.”

The inquiry team comprised nearly 50 staff members from FERC, NERC and its regional entities: Midwest Reliability Organization, Northeast Power Coordinating Council, ReliabilityFirst, SERC Reliability, Texas RE and WECC. The Department of Energy and the National Oceanic and Atmospheric Administration also contributed.

The final report is scheduled to be released before winter.

Posted on

Climate Alliance Governors Embrace ‘Friendly Competition’

States are “moving the needle” on climate change but must continue to challenge the federal government and each other, members of the U.S. Climate Alliance said Thursday.

“Local communities — states, provinces, cities, counties — we have the ability to be more ambitious than our federal … partners. Across the globe, we have the ability to act more quickly. We have the ability to be more innovative,” said Washington Gov. Jay Inslee during a discussion with New Mexico Gov. Michelle Lujan Grisham and Hawaii Gov. David Ige.

The governors lead three of the 25 states in the alliance, which was created in response to former President Donald Trump’s announcement that the U.S. would withdraw from the Paris Agreement. Alliance members commit to taking actions to meet the Paris Agreement’s goal of limiting global temperature increases below 1.5 degrees Celsius.

“We are moving the needle big time,” Inslee said during the session, part of the Climate Week NYC events. “We just need … to develop these relationships to encourage other governors, mayors and the like to join us … with specific commitments and actual things that can be implemented rather than vague, amorphous long-range kind of statements of intent.”

Inslee said the states in the alliance are engaged in “friendly competition.”

Clockwise from top left: Taryn Finnessey, U.S. Climate Alliance; New Mexico Gov. Michelle Lujan Grisham; Washington Gov. Jay Inslee and Hawaii Gov. David Ige. | U.S. Climate Alliance

“We want people to be inspired by us. When Michelle does something great in New Mexico that inspires me to up our game in Washington. When I do something here, it might inspire Gov. Ige.”

“We think this is going to bode well in Glasgow [the site of the COP 26 United Nations climate meeting]. We’re looking forward to it. This is the moment we don’t intend to waste.”

“We want to demonstrate what’s working in our states,” Lujan Grisham said. “We’re decarbonizing the utility sector. We’re working with the federal government and other states to decarbonize the transportation sector. We’ve got measures in place to decarbonize the agricultural sector. … Without the work by the other governors … I don’t have a platform to take to my legislature to implement. I can show that it works because it’s working in other states.”

Ige said his state’s ambition is beyond net-zero emissions, with a goal of being carbon negative by 2045. “We know that we need to sequester more than we put into the air if we’re going to ensure to keep the world from heating up beyond 1.5 degrees.”

Lujan Grisham predicted New Mexico’s geology and access to oil and natural gas will make it a “hydrogen hub,” using the fuel to decarbonize transportation.

“It’s quite likely that New Mexico is the first place in the country that converts a [fossil fuel] power plant to a hydrogen plant,” she said. “And as we do that, we will be doing carbon sequestration.

“I think those innovations will lend themselves to replication worldwide,” she added. “And I think we’re actually, potentially competing on that front with the [United Kingdom]. And that’s exactly how that should look. Those best practices will replicate themselves. And every time they do, they’ll be a little bit better, state to state, country to country, region to region.”

For his part, Inslee cited a Washington company that invented a silicon anode that it says could extend electric vehicle batteries’ capacity by 50% and another that has nearly completed the world’s first all-electric commuter airplane. “There are … hundreds of jobs in my state because of this,” he said.

“I know we’re concerned about how fast climate change is going, but we ought to be thrilled at the pace of job creation going on,” he added. “Look, the states in this Climate Alliance are the states with the fastest economic growth. And that’s not a coincidence; it is a cause of our economic growth.”

Posted on

Oil Majors Prepare to Produce Hydrogen

Policies calling for drastic reductions in CO2 emissions in the coming decades have transformed hydrogen from an oil refinery chemical to a top production priority for oil and gas companies.

In a push to stay relevant in a decarbonized future, major oil and petrochemical companies are scrambling to offer hydrogen as a fuel source to replace fossil fuels. Meanwhile, think tanks and universities are focusing on how to clean up hydrogen made from natural gas and bring down the price of “green” hydrogen made by using renewable energy to electrolyze water.

During a Reuters webinar Wednesday, hydrogen experts from London-based BP, Norway’s Equinor and Spain’s Repsol made clear that their companies are not about to be left behind if hydrogen becomes the fuel of the future envisioned by governments.

Shirley Oliveira, vice president of hydrogen services at BP, said her company wants to take a 10% share of clean hydrogen sales in core European markets by 2030.

“We think that hydrogen has a particular role to play in certain industrial sectors … that are hard to abate [for carbon] where they need concentrated high heat energy,” Oliveira said.  Hydrogen will also have applications in “heavy duty transportation” through the electrification of trucking and buses using on-board fuel cells, she added.

“We already produce a fair amount of gray hydrogen and have a lot of experience handling gray hydrogen,” Oliveira said, referring to the type of hydrogen produced with steam reforming of methane, which leaves behind CO2.

BP is looking at replacing gray hydrogen with “lower-carbon” — or blue — hydrogen, which would rely on technologies that capture and sequester CO2 in the production process.

“It’s also really important to help shape this market. We see it as a very dynamic. Helping to build demand is absolutely critical,” she said.

Henrik Andersen, vice president of low-carbon technology at Equinor, which supplies 25% of natural gas used in Europe, said the company has ramped up its carbon capture and sequestration (CCS) activities in the last three or four years.

“We want to supply our gas customers with a solution that enables them to meet a net-zero target — and that means CCS and hydrogen. In CCS, the ambition is to capture and store 15 to 30 million tons of carbon dioxide per year,” Anderson said.

Anderson said CCS is embedded in Equinor’s strategy as “one of our key strategic pillars.”

“We really see this as something where we can contribute because of competence and skills. … We are out in the market today with our natural gas products, and the future is really hydrogen,” he said.

Tomas Malango, hydrogen director at Repsol, said hydrogen is also one of his company’s key pillars for decarbonizing, and that Repsol hopes to contribute more to the development of green hydrogen than blue.

“We need to … [use] all the technologies available, look at which one is going to make the transition with the lowest cost for our society, and push technology development, which I think is something that can help us to move faster.

“When we’re talking about green hydrogen, essentially it’s a matter of the cost of energy [to electrolyze], which is 70- something percent of the total cost of the green hydrogen. I think the deployment of the renewable system to support green hydrogen is one of the challenges of green hydrogen deployment itself,” Malango said.

‘Lead Horse’

Also on Wednesday, the Energy Futures Initiative (EFI), a think tank established in 2018 by former U.S. Energy Secretary Ernest J. Moniz, released an 81-page study, “The Future of Clean Hydrogen in the United States.”

Based in part on private interviews with 72 U.S. companies, including investors, the energy industry and manufacturers, the report found broad interest in hydrogen both as a fuel for heavy trucks and as a substitute fuel for gas turbine-powered generation.

The report also reviewed the cost of hydrogen produced from natural gas as compared to hydrogen produced through electrolysis of water, using electricity generated either by wind and solar or nuclear power plants. About three-quarters of hydrogen produced today is from natural gas.

An earlier EFI report, released in conjunction with the AFL-CIO, noted that gray hydrogen, produced from natural gas, could become cleaner blue hydrogen if the carbon dioxide produced by the process were used in other industries or sequestered deep underground. The theme of a webinar that accompanied that report was blue hydrogen as a job creator (See Shale Gas Could Decarbonize Ohio River Industrial Valley Industry).

In introductory remarks at Wednesday’s EFI webinar, held as part of New York City’s Climate Week, Moniz noted that while hydrogen is now a “specialty chemical,” it will be “the lead horse in deep decarbonization” of the economy. It will also be studied as a fuel and as a method of long-term energy storage, he said.

“The reality is, today, we have many, many companies. Some publicly and some below the radar, engaging in hydrogen activities. We thought that a foundation for our future studies would be, in fact, to find out what these companies are thinking, where are they putting their money down, how are they seeing this value chain evolve,” he said, explaining the point of the study and Wednesday’s published report.

Jennifer DiStefano, a project manager and senior analyst for the study, said the interviews led to some new insights into emerging clean hydrogen markets.

“We found that there’s broad-based interest in developing hydrogen technologies across nearly every sector of the economy. Companies ranging from data centers, to cement makers, to transit agencies and traditional oil and gas companies are all exploring hydrogen applications, internally, while also sometimes seeking more ambitious projects through partnerships.

“Second, we found that many firms are developing strategies to repurpose existing assets to use hydrogen to help them move more quickly up the learning curve and also lower their costs,” she said.

DiStefano also noted that the Biden administration’s proposed $3.5 trillion infrastructure bill includes $8 billion over five years to help the industry develop four “hydrogen hubs,” including “a range of hydrogen production pathways.”

In other words, the Department of Energy would be funding projects producing hydrogen from water using renewable electricity, as well as other projects pulling hydrogen from methane and either sequestering the left-over carbon dioxide or finding new industrial applications to consume it.

As for replacing natural gas in pipelines as multiple companies were found to be investigating, DiStefano said the top limit of such blends is thought to be 20% hydrogen without damage to the pipelines.

She said several companies interviewed were developing “heavy-duty hydrogen vehicles” that could be commercialized soon. Those vehicles would include 18-wheeler long distance electric trucks as well as metropolitan electric buses powered with electricity generated by on-board fuel cells.

“Hydrogen offers a particularly compelling decarbonization option, according to our interviews, for fleets of medium- and heavy-duty vehicles, such as buses and long-haul trucks, due to its fast-refueling time and improved range over battery electric vehicles. And during the interviews, some companies were optimistic that buses could serve as a good foundation to strengthen the hydrogen market for heavy-duty vehicles since buses have the combination of high duty cycles and also the availability of public funding,” she said.

This rush to hydrogen — now energized by the upcoming COP 26 UN conference in Glasgow beginning Nov. 1 — accelerated in the U.S. early in the year with the Biden administration’s announced goals of reducing carbon emissions 50% by 2030 and reaching net-zero emissions by 2050. The DOE announced a hydrogen shot challenge in June. (See Granholm Announces R&D into Green Hydrogen as 1st ‘Energy Earthshot’.)

And the UN’s Climate Change 2021 Assessment issued in August made it clear that reductions in carbon emissions will be crucial to a livable planet. (See Too Late to Stop Climate Change, UN Report Says).

Posted on

FERC Approves PPL Acquisition of Narragansett

FERC on Thursday approved PPL’s purchase of Narragansett Electric in Rhode Island from National Grid for $3.8 billion, giving the Pennsylvania-based company a foothold in ISO-NE (EC21-87).

The commission found that the transaction would not have any effect on horizontal or vertical market power, nor would it have an adverse effect on rates. It made the latter determination over the protest of Rhode Island Attorney General Peter Neronha, who argued that PPL and Narragansett did not include enough information in their application. FERC did not directly address this argument, but it pointed to the companies’ five-year hold-harmless commitment as enough to satisfy its analysis of the deal’s impact on rates.

Neronha also protested the fact that the application did not contain information as to how PPL would continue to support Rhode Island’s climate goals, such as home energy-efficiency programs. FERC agreed with PPL that this was not relevant to the transaction. For its part, PPL said that Narragansett would continue to comply with state climate policies.

No other parties challenged any other aspects of the application.

PPL announced the deal in March, along with a separate, $11 billion agreement to sell its U.K. utility business, Western Power Distribution, to the London-based National Grid. (See PPL to Sell UK Business, Acquire Narragansett Electric.) Narragansett is the largest electricity transmission and distribution service provider in Rhode Island, as well as a natural gas distributor, serving about 780,000 customers.

PPL said it expects to complete the transaction by March 2022. It still needs approval from the Rhode Island Division of Public Utilities and Carriers. In its application with the agency, it had asked that a final order be issued by Nov. 1, in time for when heating demand ramps up in the state.

“We’re pleased with FERC’s decision, which puts us one step closer to concluding an acquisition we believe will drive significant value for Rhode Island families and businesses and strengthen PPL,” CEO Vincent Sorgi said in a statement. “As we await final approval, we look forward to partnering with Narragansett Electric’s talented team to deliver energy safely, reliably and affordably to Rhode Island customers.”

Posted on

FERC Rejects Panda Hummel Settlement

FERC on Thursday rejected Panda Hummel Station’s proposed settlement on its annual revenue requirement for reactive service under the PJM tariff, remanding the proceeding to the chief administrative law judge to resume hearing procedures (ER19-391).

The commission sided with comments by its trial staff who found the proposal for the 1,153-MW natural gas-fired combined cycle generation station in Snyder County, Pa. to be a “settlement in name only.”

“The terms are egregiously one-sided and the ‘settlement’ annual revenue requirement (ARR) is not the result of a negotiated compromise among the participants, but rather is an amount of Panda Hummel’s own choosing,” staff said.

FERC said it has an “independent responsibility” to consider the public interest in reviewing filings and may approve a settlement contested by trial staff, even if staff “raises material issues of fact.”

“The commission recognizes the importance of comments submitted by trial staff, as trial staff represents the public interest in settlement and hearing proceedings, and, when appropriate, has rejected settlements where trial staff was the only participant to object,” FERC said. “Here, we have carefully considered Panda Hummel’s arguments and find that the settlement rate may be excessive, such that we cannot find the settlement to be fair and reasonable and in the public interest. Thus, we find that it is appropriate to resume hearing procedures in this proceeding.”

Panda Hummel Settlement

In November 2018, Panda Hummel proposed a rate schedule that included an annual reactive service revenue requirement of $6.7 million.

After the commission responded by ordering hearing and settlement judge procedures, Panda Hummel filed a proposal offering to reduce its ARR for reactive power to $5.6 million. Panda Hummel said its original filing “based certain costs and inputs on budgets or estimates.” The reduced ARR updated those figures —  operations, maintenance,  administrative and general costs — with actual expenses, the company said.

I’ve made the change onlineThe proposed settlement also laid out the methodology used to calculate the revenue requirement, stating that major equipment costs included in the revenue requirement were similar to ones approved in 2018 by the commission for the Public Service Enterprise Group Keys Energy Center, a 755-MW combined cycle gas plant in Maryland (ER18-1222).

Panda Hummel argued that FERC approved costs from the PSEG Keys settlement “for a generator that is not materially different from the facility except that it is smaller in size and has lower cumulative costs for its major equipment.”

Settlement Responses

FERC trial staff responded that the settlement was not fair or reasonable because it gives Panda Hummel “the sole right to accept any modifications and effectively gives Panda Hummel the unilateral power to decide when refunds are made.” The staff contended that there was no way to verify the settlement’s annual revenue requirement and that it contained a “fundamental lack of certainty because it is expressly reliant on issues being examined in separate cases.”

Staff also argued that the settlement should be rejected because it “seeks to bypass the commission’s settlement and hearing processes.” They said allowing Panda Hummel to “unilaterally select its own revenue requirement, eschew its burden of proof obligation, avoid an assessment of its rates and scrutiny of its costs, and forego settlement and hearing procedures” was not fair or reasonable.

In its decision, the commission said it found Panda Hummel’s proposed methodology in the settlement to be “flawed” and included inputs that are “inconsistent” with FERC policy.

“We disagree with Panda Hummel that PSEG Keys’ as-filed costs as reflected in the PSEG Keys settlement can be adopted by any plant that shares some similarities with it, without any further inquiry,” the commission said. “In any event, the commission’s approval of the PSEG Keys settlement is non-precedential.”

The IMM made its own comments regarding the Panda Hummel settlement in August 2020, saying it “opposes the unilateral offer of settlement to the extent that the settlement would not be analyzed on its merits, including under the just and reasonable standard.” The IMM also argued that trial staff is the “only participant raising cost of service issues and the settlement should not be approved without addressing these issues.”

The commission said the IMM failed to file an affidavit or supporting evidence regarding its challenges to the revenue requirement and that the primary objection “appears to raise a policy issue regarding whether trial staff’s objection to a settlement should render it contested and subject to the just and reasonable standard.

“This issue, in addition to not being a disputed issue of material fact, is outside the scope of the settlement,” the commission said.

Settlements Approved

The commission approved uncontested settlements regarding reactive supply and voltage control for the Michigan Public Power Agency (ER21-2348) and Story County Wind (ER20-1906-001).

The commission also approved an uncontested settlement reducing the transmission revenue requirement (TRR) for DATC Path 15’s ownership of the Path 15 Upgrade — an 84-mile, 500-kV transmission line along the existing Path 15 corridor in California — from $25.6 million to $20.5 million from June 13, 2020 through June 12, 2022; $18.8 million from June 13, 2022 through June 12, 2023; and $18.5 million from June 13, 2023 through the next rate case (ER20-1006-001). DATC had originally proposed a TRR of $21.7 million.

Also approved was an uncontested settlement reducing Wisconsin Electric Power’s return on common equity from 11% to 9.85%, effective July 1, 2020 (ER21-1965; EL20-57). Cloverland Electric Cooperative had challenged Wisconsin Electric’s 11% ROE as excessive.

Rich Heidorn Jr. contributed to this report.

Posted on

Overheard at National Clean Energy Week

According to Public Service Enterprise Group (NYSE:PEG) CEO Ralph Izzo, the first step in getting to a 100% decarbonized grid is simply “getting people to use less energy than they use today, without sacrificing quality of life or activities they find valuable.”

The technologies — from LED light bulbs and smart thermostats, to energy-efficient appliances — are here, Izzo told a virtual audience at National Clean Energy Week’s Policy Makers Symposium. But, he said, “one of the policy changes that’s important to help bring about the embracing of these technologies is to allow the utility to profit as much from investing in technologies that reduce throughput as we do from technologies that enhance throughput.”

With regulations in New Jersey that provide such incentives, Izzo said, “our shareholders are indifferent as to whether we invest money in a programmable thermostat or a transformer or substation.” PSEG would be investing $1 billion in energy-efficiency programs over the next three years, he said.

Izzo was speaking on Wednesday, the second day of the symposium, which provided an overview and significant insights into the mainstreaming of the clean energy transition in the U.S. and how certain, more traditional sectors of the energy industry are positioning themselves to be part of a low- or no-carbon economy. No representatives from solar or wind companies or associations spoke at the event.

The symposium also heavily focused on the ongoing congressional negotiations over the bipartisan infrastructure package and $3.5 trillion budget reconciliation bill, and what key incentives and initiatives in the two bills will survive to reach President Biden’s desk.

Izzo spoke in favor of the Clean Electricity Performance Program (CEPP) in the budget reconciliation bill, which would provide incentives to utilities to meet mandated clean energy targets and penalize those that don’t. The CEPP, tax incentives and a price on carbon could, he said, help create “more of a national market as opposed to a balkanized, fragmented, state-by-state market, and you’d really see investment levels take off.”

PSEG announced in June that it was pushing up its target for cutting its greenhouse gas emissions to net zero from 2050 to 2030. It is “in the process of completely exiting the fossil fuel business” through a combination of plant closures and sales, Izzo said. While the utility’s energy mix going forward will be nuclear, offshore wind and solar, he said, developing carbon capture and storage technologies should be a national priority.

Natural gas “is so abundant and so low-cost that perhaps the nation would be wise to continue to preserve some optionality around that, as long as we can mitigate the carbon attributes,” he said.

Carbon-free Technologies Initiative

Similarly, a panel on Tuesday centered on the Carbon-Free Technology Initiative, an alliance of energy advocacy groups and investor-owned utilities, with a focus on advancing a portfolio of carbon-free resources, from advanced nuclear and geothermal, to CCS and zero-carbon fuels, such as hydrogen. These technologies are needed to fill the “24/7 dispatchable gap” as the deployment of solar, wind and storage accelerates over the next decade, said Armond Cohen, executive director of the Clean Air Task Force, a member of the initiative.

Jeff Lyng, director of energy and environmental policy at Xcel Energy, noted that his company is planning on nearly doubling its solar, wind and storage resources in Colorado and adding close to 6 GW of wind, solar and storage in Minnesota. Such deployments must be paralleled with the development of other carbon-free technologies, Lyng said.

“I think we can all appreciate that that’s going to take time. That’s going to take focus, and I think we really have to keep it in the ‘important and urgent’ quadrant, because we’ll need these technologies in the 2030s to achieve those carbon-free aspirations,” he said.

Getting there will mean research and development that goes beyond a single pilot project, Cohen said. “The first of a kind is always going to be very high cost and may not fully represent to the commercial community that something has been de-risked,” he said.

“Let’s not just do one and walk away and assume the market’s going to deal with it,” he said. “Unless we can do a substantial cluster of deployments of the technology, we’re really not going to get those economies of scale and learning that issue into the commercial space.”

Supply Chain

Anyone who cares about clean energy should also care “about accessing minerals in an environmentally responsible way,” said Sen. Lisa Murkowski (R-Alaska), who delivered Wednesday’s keynote on the urgent need to build out a domestic supply chain for critical minerals, such as lithium, cobalt, nickel, zinc and copper. These minerals are a key part of solar and energy storage supply chains, and the dependency of the U.S. industry on foreign sources — especially in China — is “unacceptable,” requiring a holistic, whole-of-government approach, Murkowski said.

“A truly complete supply chain” should include not only mining, but processing and refining minerals, she said. “I think our country right now is at a crossroads when it comes to critical minerals. We can move forward without action, continue to look the other way [or] we can take the other path. We can acknowledge the challenge; we can face it head on.”

As passed in the Senate, the bipartisan infrastructure bill would extend Department of Energy loan guarantees to critical mineral projects, which “would open an avenue of new financing [and] make available technical expertise and resources at the department,” Murkowski said. Permitting reforms to expedite “responsible mining” of critical minerals on public land are also in the bill, she said.

Speaking on a panel following Murkowski’s keynote, Anthony Staley, vice president of the metals division at The Doe Run Co., known primarily for lead extraction and recycling, underlined the connection between clean energy and the need for rapid development of domestic supply chains for critical minerals. For the U.S. to meet its emission-reduction commitments under the Paris Agreement, it might have to increase its production of critical minerals fourfold, he said.

“But in order to generate the raw materials we need, we need to make sure that we produce them in a clean way,” Staley said. Companies like Doe Run face “a lot of the regulatory hurdles and international competitive costs disadvantages associated with strategic subsidies and inconsistent environmental standards from other countries,” he said.

Permitting a new mine can take seven to 10 years, and such delays “decrease the mineral value at a mine by about one-third,” Staley said. Further, even well established companies like Doe Run ship their minerals to China for processing.

“This always strikes me as really curious, because when you look at other countries, the first thing they do upon finding a mineral resource is immediately legislate that the processing of those minerals and metals is done within the confines of the country,” he said.

Izzo on COVID

Deviating somewhat from the topic of the discussion, PSEG’s Izzo said the utility industry is not coming to grips with the changes to system reliability and resilience that are emerging as a result of the COVID-19 pandemic.

“People are working from home, and I think that many people will continue to work from home, even after we get higher penetration of vaccines and have the virus under control, and what that will mean is pretty profound for our industry,” he said. With people working in homes where most systems are electrified, outages will have deeper impacts.

“You can’t work, and more than likely your phone may not be fully charged, nor will your vehicle be fully charged, so you may not be able to call somebody, and you may not be able to get in the car and go to work,” Izzo said. “That’s a whole new set of reliability and resiliency [issues]. That’s going to require a whole new way of thinking and design.”

Posted on

Dragos: Global Grid Cyber Risk ‘High and Increasing’

A new report from cybersecurity firm Dragos warns that electric utilities around the world “remain at risk for a disruptive — or potentially destructive — cyberattack,” with a growing number of events targeting the electric industry, along with risks from supply chain vulnerabilities and ransomware attacks.

However, the report also notes that regulations surrounding electric utilities in developed countries are generally strong enough to “ensure a minimum level of security” and that the electric industry “leads other industrial sectors in security investments” in most of the world.

Dragos’ report covers the global threat landscape through June 2021, mainly highlighting threats to the security of utilities’ industrial control systems (ICS), which it called “high and increasing, led by numerous intrusions for reconnaissance and information gathering purposes.” The firm reported that it identified four new activity groups (AGs) in 2020, three of which — dubbed Talonite, Kamacite and Stibnite in the document — have been observed to target electric utilities.

New Groups Cover Range of Targets

Of the new groups, only Talonite directly targets the U.S. electric sector, focusing on “information gathering operations” that it carries out through “spearphishing techniques with malicious documents or embedded executables.” The group’s tendency to use multiple techniques and tactics in its intrusions makes it difficult to track and contain. Dragos noted that while it cannot definitively link Talonite with any other threats, there is “behavioral overlap” with the Chinese state-sponsored hacking group APT10.

Kamacite only arrived on Dragos’ radar last year, but the group has been active for over half a decade. It participated in the 2015 and 2016 attacks on Ukraine’s power grid, as well as “the persistent campaign targeting U.S. energy companies from late 2019 to mid 2020”; earlier this year federal security officials attributed all three attacks to Russian military intelligence, though Dragos does not link any of the AGs to specific state actors. (See Feds: Russia Behind Years of Hacking Attempts.)

The Kamacite group itself does not have ICS-targeting capabilities; Dragos says its role is “enabling the access for the teams that do,” including Electrum, Dragos’ name for the group that carried out the Ukraine power grid attacks. Kamacite uses “a combination of phishing with malicious attachments and external access via legitimate services … to gain initial access to victim organizations,” followed by a transfer of “operational control” to another entity to execute the ICS disruption.

The last of the new AGs, Stibnite, so far seems to be primarily focused on Azerbaijan, where it “launched multiple intrusion operations” against wind power plants and government entities in late 2019 and 2020. After gaining access to target networks through spearphishing campaigns, Stibnite uploads a custom malware called PoetRAT, apparently designed to steal sensitive documents.

Dragos calls this malware “part of a complete stage 1 operation” of the ICS cyber kill chain, a model of ICS attacks adapted from Lockheed Martin’s cyber kill chain framework. A 2015 white paper from SANS Institute describes stage 1 of such an attack as “espionage or an intelligence operation.” In keeping with this assessment, Dragos says Stibnite currently shows “no indication of disruptive or damaging capability or intent.”

Threats to Multiple Grid Segments

Along with identifying active threat groups, Dragos’ report includes an assessment of the threat landscape for electric power generation, transmission and distribution.

Under generation, the report notes that at least five AGs that have shown “the intent or capability” to access ICS networks of generation facilities: Xenotime, Dymalloy, Allanite, Stibnite and Wassonite. Of these, Xenotime, active since 2014, is “easily the most dangerous threat activity publicly known”: Dragos blames the group for the disruption of oil and gas facilities in Saudi Arabia in 2017, along with unspecified attacks against electric utilities in North America and the Asia Pacific region, and oil and gas companies in Europe, the U.S., Australia and the Middle East.

The other four AGs have shown no intent to disrupt or damage generation facilities, and Dragos points out there have apparently been no successful such attacks. However, the espionage activities that have been observed could serve to facilitate disruptive activities.

Kamacite and Electrum qualify as a combined threat to transmission operations, as Kamacite operates as an “initial access and facilitation group” for Electrum. While the activities of the two occurred in Europe, Dragos says the tactics could be modified to fit utilities in other parts of the world.

Kamacite is cited alone as a threat to distribution for having “enabled the first widespread outage caused by a cyberattack” in Ukraine in December 2015. The group used “existing tools in the operations environment” to shut down power to around 230,000 people for several hours — essentially taking over the utilities’ own controls rather than installing ICS-targeting malware as Electrum does.

Ransomware Could Target ICS Software

Dragos’ paper also discusses the “significant rise in the number of nonpublic and public ransomware events” affecting ICS environments, particularly in the electric sector. According to Dragos, 10% of the ransomware attacks against industrial and related entities between 2018 and 2020 targeted electric utilities, more than any other industry except manufacturing.

Several of the ransomware strains found in these attacks included “ICS-aware functionality,” meaning that they were programmed to look for ICS processes in whatever environments they might be loaded into. Such software “can have disruptive impacts on operations if it is able to bridge the [information technology]/[operational technology] gap due to improper security hygiene,” Dragos warns.

Posted on

Report: Mass. Has Significant OSW Workforce Gaps for 1.6 GW Pipeline

More than half of the jobs needed to build Massachusetts’ first 1.6 GW of offshore wind (OSW) have a moderate to significant workforce gap in the state, according to a report released Wednesday.

The 2021 MassCEC Offshore Wind Workforce Assessment found a significant workforce gap for 36% of the occupations needed to develop the state’s OSW. An additional 27% have a moderate workforce gap, and 37% have sufficient workers.

Gov. Charlie Baker joined state and local officials at the New Bedford Marine Commerce Terminal to announce the release of the report, which BW Research Partnership prepared for the Massachusetts Clean Energy Center.

“As Massachusetts prepares for the construction of the first commercial-scale offshore wind project in the nation, our administration is focused on ensuring our workforce is trained, ready and offers pathways to employment for all residents, especially in the communities that can most benefit from this generational economic opportunity,” Baker said.

Massachusetts is most prepared to supply management and engineering professionals and maritime workers, but it lacks construction laborers, transportation workers and general maintenance workers, the report said.

Training

To help the state fill existing workforce gaps, the report identified relevant training options for individuals who are employed and need training or are already in an educational program, and people not currently employed.

Massachusetts has an opportunity to close the workforce gap in construction and operations by ensuring that people who already have jobs can access OWS safety training.

“Developers consistently identified [Global Wind Organization basic safety training] of a sufficient number of workers as the number one workforce development priority,” the report said.

In addition, the state could support organizations interested in participating in the OSW supply chain by connecting them with and funding certificate training, such as OSHA and Lean Six Sigma.

Current maritime workers also can fill specific workforce needs if they receive specialized training, but the report said recruiting in that sector will be a challenge. Members of the fishing industry, for example, can be adversarial, and navigation near project infrastructure requires more precision than other maritime work.

Those issues, however, are not insurmountable, the report said. The state can improve messaging around the economic opportunities for maritime workers and continue funding professional programs, such as the Fishing Partnership Support Services and Gloucester Fishermen’s Wives Development Program. Additional investment from the state in virtual reality technologies also will help the industry ensure OSW supply organizations can provide technical training for their products.

Education

Massachusetts has relevant vocational and higher education infrastructure that would allow the OSW industry to communicate job opportunities and connect with potential workers.

Filling construction and trade workforce gaps could be accomplished through early engagement in vocational-technical high schools in the state, according to the report.

“OSW stakeholders expressed that early exposure to the industry is key in physically and mentally preparing workers to endure water conditions,” the report said.

Existing higher education programs in the state also will support professionals interested in transitioning their skill sets to OSW.

“Initiatives like the development of a graduate certificate at [University of Massachusetts] (UMass) Amherst and OSW curricular and extracurricular development at UMass Lowell should continue to be supported and advertised,” the report said.

A partnership of Massachusetts academic institutions, called POWER US-MA, would benefit from state support to further its existing collaborations. The group lacks the resources for expansion, the report said, adding that its active research network and vision to expand “provides a valuable opportunity to the workforce development space.”

Equity

Removing barriers to entering the OSW workforce for people who have been unemployed long term will help the state create equitable job opportunities. People out of work for the longest in the state, according to the report, are primarily ethnic and racial minorities in lower-income households and communities.

A review based on state census tracts identified 28 towns that would benefit from focused workforce training and development opportunities. These “priority communities” meet key indicators for economic, demographic, social and housing criteria. All the towns meet the state’s definition of an environmental justice population, which includes an annual median household income that is no more than 65% of the statewide median household income.

Many potential workers in the priority communities “suffer from the trauma of poverty and may experience food insecurity, housing insecurity, transportation insecurity or substance abuse,” the report said. A pre-training program would help the individuals overcome those barriers to workforce entry.

State investments in priority communities could include transportation and housing support and pre-apprenticeship programs that recruit women, veterans and minorities.

Collaboration

The Massachusetts OSW sector does not exist in a bubble, and the state’s efforts to build a workforce to support the sector should acknowledge the programs and initiatives of other states in the region.

Through collaboration in the Northeast, the report said, the states will avoid duplicating their training efforts.

Developers want to secure a trusted workforce that can be used in projects throughout the region, the report said.

Some OSW occupations may be competitive geographically. Massachusetts, for example, could provide maritime workers, engineers, marine scientists, and industry professionals for projects in other states, according to the report. But to benefit from those synergies, the Northeast should create a centralized organization for OSW workforce development strategies, the report said.

Posted on

FERC’s Dodge Steps down as OER Head

Andy Dodge has left his position as director of FERC’s Office of Electric Reliability (OER), Chairman Richard Glick said at the commission’s open meeting Thursday. David Ortiz, who has served as the office’s deputy director for the past five years, has stepped in as acting director.

“I believe [these changes] will strengthen our bench to address growing threats to the reliability of the grid,” Glick said. “I want to thank Andy for his service in leading OER and thank David for agreeing to take on this added responsibility.”

OER oversees the development and review of reliability and security standards, as well as utilities’ compliance with those standards. It also leads or joins periodic reviews of the ERO Enterprise and utilities; leads or joins analysis and investigations of complaints, blackouts, near-misses or other issues with the bulk power system to determine whether standards were violated and if they are adequate for their purpose; and oversees NERC’s regular reliability assessments to identify constraints on the BPS. Joseph McClelland, the office’s inaugural director, now heads OESI.

Ortiz became deputy director of OER in April 2016 following a three-year stint as deputy assistant secretary for energy infrastructure modeling and analysis at the Department of Energy. He previously served as acting OER director for about nine months in 2018 after the departure of the previous director, Michael Bardee, stepping back when Dodge took over the same year.