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January 16, 2025

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Trump DOE Nominee Wright Seeks to Assuage Senate Democrats

Chris Wright, President-elect Donald Trump’s nominee to head the Department of Energy, positioned himself as a supporter of an all-of-the-above approach to developing generation and transmission before the Senate Energy and Natural Resources Committee on Jan. 15.

In doing so during his three-hour confirmation hearing, Wright — the CEO of Liberty Energy, a natural gas fracking company — acknowledged climate change is real and sought to allay Democratic concerns that the department would favor fossil fuels, though he declined to make specific commitments.

In a typical exchange, Sen. Martin Heinrich (D-N.M.), ranking member of the committee, asked Wright for an assurance that the work of the department’s Grid Deployment Office would be continued “to support the kind of transmission projects that increase reliability and save consumers money.”

Heinrich referred specifically to the Heritage Foundation’s Project 2025 and its recommendation for eliminating the GDO, which has overseen transmission upgrade and expansion initiatives such as the Grid Resilience and Innovation Partnerships program, funded with $10.5 billion from the Infrastructure Investment and Jobs Act.

Without mentioning GDO, Wright said he was “aligned” with Heinrich and, if confirmed, “will seek to find the best ways to improve our transmission grid, including expansion and new lines.”

On the Republican side, Wright provided a nuanced answer to a question from Sen. John Hoeven (R-N.D.) on how to overcome skepticism to increasing fossil fuel production in the U.S. and globally.

“You have to understand that there isn’t dirty energy and clean energy,” Wright said. “All energies are different, and they all have different tradeoffs. Different geographies or locations have climates more favorable to this energy versus that energy. So, it’s a complicated dialogue, which means it’s not easy to get people to share this broader perspective on it.”

Without the growth of new energy technologies, “we wouldn’t have as much energy as we have today,” he said, but “it’s proven very hard to displace hydrocarbons in the global energy system.”

He also told Sen. Dave McCormick (R-Pa.) that he would support new research on fossil fuel innovation.

Sen. Mike Lee (R-Utah) | Senate Energy and Natural Resources Committee

“Fossil fuels, again, have powered the world throughout my lifetime and will continue to do so,” Wright said. “Even though it’s a critical technology for us, there’s been less interest in it; less interest to talk about it. I don’t share those aversions. I am all about new technology to improve energy sources across the board … including hydrocarbon energy sources.”

Trump’s nomination of Wright as secretary of energy on Nov. 16 was met with mixed reactions, praise from Republicans and cautious optimism from some Democrats who noted his education at the Massachusetts Institute of Technology and University of California, Berkeley and a resume that includes stints in nuclear, wind and solar energy.

He started Liberty in 2011 and has built the company into a major player in the natural gas industry by developing highly energy-efficient fracking equipment. Liberty has also invested in sodium-ion energy storage and next-generation geothermal, and Wright sits on the board of Oklo, a developer of small modular reactors.

A Colorado native, Wright was introduced at the hearing by Sen. John Hickenlooper (D-Colo.), who readily admitted to a long history of disagreeing with the nominee on many energy issues.

“He is indeed an unrestrained enthusiast for fossil fuels in almost every regard,” Hickenlooper said, but “he is a scientist who is open to discussion, and he is, again, a scientist who is a successful entrepreneur and has that ability to assess what is possible and what isn’t.”

‘The Hype over Wildfires’

But Wright’s nomination has been opposed by some who have pointed to his record of past social media and video pronouncements downplaying the impacts of climate change and denying the existence of an energy transition. Such statements, and his financial support for Trump’s campaign, drew some of the sharpest questions at the Senate hearing.

Sen. Alex Padilla (D-Calif.) cited a social media post in which Wright wrote, “The hype over wildfires is just hype to justify more impoverishment from bad government policies.”

Sen. Alex Padilla (D-Calif.) | Senate Energy and Natural Resources Committee

When Padilla pushed him on the statement ― asking if “given the devastation that we’re currently experiencing in Los Angeles, do you still believe that wildfires are just hype?” ― Wright answered, “I stand by my past comment.”

Padilla also asked the nominee if he would stand up to Trump or other administration officials if they pressured him to withhold or suppress research from DOE or the National Laboratories.

“I would follow the scientific method,” Wright said. “I will be honest in integrity and follow the laws and statutes of our country.”

Sen. Mazie Hirono (D-Hawaii) brought up the April 2024 fundraising dinner Trump held at Mar-a-Lago for oil and gas executives, during which he asked for $1 billion in campaign donations and pledged to roll back Biden administration environmental rules.

Responding to Hirono, Wright said he was at the dinner but denied that Trump made a pitch for donations or promised regulatory rollbacks.

GOP Back in the Chair

The hearing was also the first session of committee under its new Republican chair, Sen. Mike Lee (R-Utah), who set the tone for the session with a blistering critique of President Joe Biden’s energy policies.

“Over the past four years, the [Biden] administration has dismantled domestic energy production, canceled leases, and weaponized regulations to discourage investment in pipelines and critical energy infrastructure,” Lee said. “Instead of unleashing American energy, this administration has instead decided to reduce our access to energy, and they’ve reduced many of these tools within the Department of Energy to political tools for advancing extreme climate policies that prioritize ideology over innovations, security and affordability. These failures have caused devastating harm.”

Sen. John Hickenlooper (D-Colo.) | Senate Energy and Natural Resources Committee

He called on Wright to “ensure that the Department of Energy returns to its founding and all-important purpose,” which he sees as “producing more energy here at home.”

Similarly, Sen. Jim Justice (R-W.Va.), one of the committee’s new members, made a pitch for the centrality of fossil fuels in U.S. energy policy and its economy. “The moment in time when you absolutely believe that we can do without fossil fuels in this world today, you’re living in a cave,” he said.

According to the U.S. Energy Information Administration, U.S. crude oil production hit a record 13.2 million barrels/day in 2024, and the U.S. remains a major natural gas exporter.

Despite some hard questions from Democrats, Wright appeared to have enough bipartisan support to win committee approval and have his nomination voted on by the full Senate.

In his opening statement, Wright echoed Trump’s energy policies aimed at increasing “baseload” resources and rolling back regulations. If confirmed, Wright said his immediate priorities at DOE will be to restore U.S. energy dominance by unleashing American energy at home and abroad; protecting and accelerating the work of the National Labs to promote innovation and U.S. competitiveness; and removing barriers to building new energy projects.

“Energy has been a lifelong passion of mine, and I’ve never been shy about that,” he said. “President Trump shares my passion for energy, and if confirmed, I will work tirelessly to implement his bold agenda as an unabashed steward for all sources of affordable, reliable and secure American energy.”

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Shapiro Warns of ‘Reevaluation’ of PJM if Capacity Prices not Addressed

Pennsylvania Gov. Josh Shapiro on Jan. 13 urged PJM Board of Managers Chair Mark Takahashi to “intervene with” RTO leadership to revise the design of the capacity market before conducting the 2026/27 Base Residual Auction (BRA) to avoid an “unacceptable” increase in capacity market prices.

The letter follows a complaint the governor filed with FERC in December seeking to revise the auction’s price cap by setting it at 1.5 times the net cost of new entry (CONE); the status quo is the greater of gross CONE or 1.75 times net CONE. Arguing that 1.5 times net CONE is the highest price necessary to ensure that the reference resource is profitable, Shapiro said the existing price cap could cause consumers to overpay by as much as $20 billion, a claim he repeated in the letter (EL25-46). (See Pennsylvania Seeks Lower PJM Capacity Price Cap in FERC Complaint.)

“As I have directly related to PJM’s leadership team in multiple conversations, I find the specter of such a vast wealth transfer to be unacceptable,” Shapiro wrote. “In light of this prospect, it is irresponsible for PJM to push to conduct the next auction without directly addressing widespread concerns over the price cap.”

If capacity prices continue to “spiral needlessly upwards,” it “will prompt me to call for more sweeping changes, including a reevaluation of the responsibilities that states have entrusted to PJM,” Shapiro warned.

Shapiro noted that a lower price cap has been advocated for by the Independent Market Monitor, Organization of PJM States Inc. (OPSI) and the governors of Illinois, Maryland, Delaware and New Jersey.

“The PJM board could choose to resolve the ‘cloud of uncertainty’ that recent statements describe by instructing PJM staff to support these common-sense measures on an expedited basis at FERC,” Shapiro wrote, appearing to refer to the RTO’s response to a complaint about reliability-must-run agreements that public interest organizations filed in September. (See FERC Approves PJM Capacity Auction Delay.)

“A failure to hear the voices of Pennsylvania consumers speaking against this market failure will cause me to question whether Pennsylvania should remain within a construct that inflicts such unjust outcomes on our consumers.”

PJM spokesperson Jeff Shields said the RTO is taking actions that will address the issues raised in Shapiro’s letter, pointing to an announcement of initiatives to speed generation interconnections and changes to the capacity market that have been filed at FERC.

“We appreciate the governor’s letter and have reached out to his office to discuss next steps,” he said in an email.

Shapiro requested that Takahashi respond to his letter by Jan. 16.

Gregory Poulos, executive director of the Consumer Advocates of the PJM States, told RTO Insider that advocates are concerned about rising capacity and transmission costs and he is glad to see state leaders taking action.

Move to Consolidate

Since filing his complaint last month, Shapiro has motioned to have it consolidated with two dockets for proposals PJM has made seeking to revise elements of its capacity market, arguing that they are insufficient so long as the price cap remains unchanged (ER25-682, ER25-785).

One proposal includes reverting the reference resource to a combustion turbine, modeling the output of some generators operating on reliability-must-run agreements and adding tariff language that resources categorically exempt from the requirement that they offer into the capacity market do not hold “safe harbor against allegations of the exercise of market power that benefits an affiliated portfolio of market manipulation power.”

The second would extend the must-offer requirement to apply to intermittent and storage resources. (See PJM Capacity Market in Flux Going into 2025.)

Shapiro urged FERC to accept PJM’s changes “as well as [emphasis added] the reform proposed by the commonwealth in its Section 206 complaint. Adopting the reform proposed in the commonwealth’s complaint before the next auction is necessary to protect consumers across the PJM footprint.”

PJM opposed the motion to consolidate, stating the governor’s complaint is outside the scope of the RTO’s filings and combining them could impair the ability to resolve the dockets in time for the 2026/27 BRA, which is scheduled for July. Given the shorter timeline for the commission to act on the complaint, PJM said consolidating the dockets would leave it with less time to decide on matters unrelated to Shapiro’s complaint, such as the must-offer requirement.

The PJM Power Providers and Electric Power Supply Association also jointly opposed the motion, stating that PJM’s proposed revisions would have substantial impacts on capacity market prices that should be considered separately from Shapiro’s complaint. It also argued that complaints under Federal Power Act Section 206 cannot be used to “shoehorn its preferred rate into a utility’s pending [Section] 205 proposal changing its own rate.”

The groups also requested that FERC extend the comment period on the Pennsylvania complaint to after Feb. 7, the deadline for FERC to act on PJM’s first filing.

Shapiro responded that his $20.4 billion estimate already assumes that PJM’s proposals are approved, underlining the need for more thorough changes.

The Monitor commented that the complaint addresses issues with PJM’s capacity market that would not be resolved by approving the two proposals and that it should be considered as expeditiously as possible without a lengthening of the comment period.

“Complaints have made proposals to address identified issues that PJM omitted and made constructive proposals to address PJM’s flawed proposals. The complaint of the commonwealth of Pennsylvania has raised a critical issue related to the maximum price in the auction that it is essential to address prior to the auction and that PJM failed to address,” the Monitor wrote.

OPSI commented that the governor’s complaint mirrors one of the requests the organization made in two letters sent to the PJM board in September and November requesting that it lower the price cap. It supported the motion to consolidate, saying that the commission must act quickly if changes are to be implemented for the 2026/27 auction, noting that PJM has stated that it would need an answer on its capacity market filing by Feb. 21.

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CARB Drops Multiple EPA Waiver Requests Ahead of Trump Inauguration

California regulators have withdrawn their request for federal approval of a statewide ban on diesel truck sales after 2035, saying they’ve run out of time before President-elect Donald Trump returns to the White House. 

In a letter to U.S. EPA dated Jan. 13, Steven Cliff, executive officer of the California Air Resources Board, said CARB was withdrawing its request for a waiver and authorization under the Clean Air Act for its Advanced Clean Fleets regulation. 

In similar letters on the same day, Cliff withdrew waiver requests for CARB’s In-Use Locomotive standard and portions of two other regulations, the Commercial Harbor Craft and Ocean-Going Vessels At-Berth regulation and the Transport Refrigeration Unit Engine standards. 

Withdrawal of the waiver requests comes just days before President-elect Donald Trump’s inauguration Jan. 20. 

“While we are disappointed that U.S. EPA was unable to act on all the requests in time, the withdrawal is an important step given the uncertainty presented by the incoming administration that previously attacked California’s programs to protect public health and the climate and has said will continue to oppose those programs,” CARB Chair Liane Randolph said in a statement provided to NetZero Insider. 

Under the federal Clean Air Act, California may set its own vehicle emission standards as long as they’re as stringent in aggregate as federal standards. EPA must issue a waiver for the state to enforce the regulations. Other states may then choose to adopt California’s rules rather than sticking with federal standards. 

In November, Gov. Gavin Newsom traveled to D.C. to push for federal approval of pending Clean Air Act waivers, ahead of the incoming Trump administration.  

His efforts were partly successful. On Dec. 18, EPA approved a waiver for California’s Advanced Clean Cars II rules, which require manufacturers to provide an increasing percentage of zero-emission cars for sale in the state each year. By 2035, all new cars sold in the state must be zero-emission or plug-in hybrid. (See EPA Approves Waiver for California’s Advanced Clean Cars II Rules.) 

Eleven other states, along with D.C., have adopted ACC II. 

CARB’s emission standards for small off-road engines, such as those used in landscaping equipment, received an EPA waiver Dec. 19. And CARB received waivers this month for portions of its Commercial Harbor Craft and Transport Refrigeration Unit Engine regulations. 

But time ran out on a waiver for CARB’s in-use locomotive standard, which was considered a groundbreaking measure to replace the worst-polluting diesel locomotives with cleaner engines by 2030 and to transition to 100% zero-emission locomotives over the next three decades. (See CARB Approves Clean Locomotives Regulation.) 

The CARB board approved the regulation in April 2023 and a waiver request was submitted to the EPA in November 2023.  

Assessing Next Steps

The Advanced Clean Fleets (ACF) regulation also did not receive an EPA waiver.  

The regulation, which the CARB board approved in April 2023, requires truck fleet operators to start transitioning to zero-emission vehicles beginning in January 2024. The regulation applies to three categories of fleets: drayage fleets, state and local government fleets, and federal and high-priority fleets. Fleets are considered high priority if they have 50 or more vehicles or more than $50 million in annual revenue. The speed of the zero-emission transition depends on the type of fleet. (See CARB Adopts Clean Fleets Rule Despite Broad Skepticism.) 

In addition, ACF requires all new medium- and heavy-duty trucks sold in the state to be zero-emission starting in 2036. But without an EPA waiver, CARB cannot enforce the regulation. 

Randolph said in her statement that CARB is looking at ways to continue improving the state’s air quality.  

“The waivers and authorizations recently approved, along with other existing programs, will advance essential emissions reductions in key sectors as we assess next steps,” she said. 

Among regulations still in place is CARB’s Advanced Clean Trucks regulation, which requires truck manufacturers to sell an increasing percentage of zero-emission vehicles each year starting with model year 2024. The percentage varies based on the weight class of the truck. The ZEV sales requirements top out at 55% for class 2b-3; 75% for class 4-8; and 40% for class 7-8 tractors in 2035 and beyond. 

The CARB board adopted the ACT regulation in 2021 and received an EPA waiver for the rules. Ten states in addition to California have adopted ACT. 

In October, the CARB board approved Advanced Clean Trucks amendments intended to make it easier for truck manufacturers to comply with the regulation. (See Calif. Revises Clean Truck Rules to Ease Compliance.) 

The amendments also clarified that new medium- and heavy-duty trucks sold in 2036 and later must be zero-emission, consistent with the Advanced Clean Fleets regulation. 

It was unclear whether the ACT amendments need an EPA waiver to take effect. CARB didn’t respond to questions about the fate of the ACT amendments. 

Advocates had urged EPA to approve California’s waiver requests before the end of the Biden administration. 

Without approval of the waivers before Jan. 20, “the incoming Trump administration could either deny the waivers or refuse to act on them,” the Coalition for Clean Air said in a Jan. 2 release. 

If the waivers were issued, the Coalition said, the Trump administration could try to revoke them, “but the law offers protections against that, and California could prevail.” 

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BPA Not Currently Planning Any Major Resource Acquisitions

The Bonneville Power Administration is not planning to acquire any major energy resources but is taking steps to ensure it’s ready in case those predictions change, BPA staff said during a presentation of the agency’s 2024 Resource Program on Jan. 14.

“Until we have a little more certainty about what the load obligations will be placed on us under our new long-term power sales contracts that are under development, at this juncture, we’re not planning to acquire any major resources,” Suzanne Cooper, BPA senior vice president of power services, said during a webinar hosted by the Northwest Power and Conservation Council.

“But we’re taking steps to prepare in the event that we do need to acquire resources and augment the system,” Cooper added.

The comments came as BPA staff presented the agency’s 2024 Resource Program, which analyzes potential system needs and available resources. The biennial program study examines uncertainty in loads, water supply, natural gas prices and electricity market prices to develop least-cost portfolios to help meet BPA’s obligations.

For the 2024 program, BPA ran various sensitivities, including adding limits on access to the power market, to assess needs and potential solutions.

“Not surprisingly, we continue to rely heavily on energy efficiency, demand response and market purchases to meet BPA needs throughout all of the sensitivities,” said Allie Mace, manager of market analysis and policy.

Ryan Egerdahl, manager of long-term power planning, said BPA plans to publish the 2024 Resource Program document later this month and will start work on the 2026 program “basically immediately,” with an expected publish date in September 2026.

Additionally, based on comments from stakeholders during the development of the 2024 program, BPA will work on improving modeling capabilities in the next resource program by including additional assumptions, Egerdahl said.

Potential enhancements include assessing the capacity metric under extreme weather and low water to account for longer-duration extreme weather events than BPA has usually accounted for.

Extreme weather events are “lasting longer than three days, which has been our age-old assumption,” Egerdahl said.

“So, we’re considering having a longer-duration extreme weather event, and maybe looking at different water conditions like happened a year ago in January 2024 where the event was like five plus days and we had really low water,” he added.

Other enhancements include:

    • Reintroducing the balancing reserves study to Needs Assessment;
    • Connecting resource solutions to [Western Resource Adequacy Program] forward showing position;
    • Including additional candidate resource options;
    • Refining and refreshing characteristics for candidate resources, including performance of renewables;
    • Enhancing linkages between resource solutions, market assessment and needs assessment modeling.
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SERC Assessment Warns of Winter Vulnerabilities

In its 2024-2025 Winter Reliability Assessment, published Jan. 15, SERC Reliability reported that all subregions have enough resources to meet demand under normal conditions this winter. But the regional entity warned that extreme conditions could put the grid under strain and potentially lead to a high risk of energy shortfalls. 

SERC produces the WRA each year as a regionally focused companion to NERC’s winter assessment. The ERO published its most recent WRA on Nov. 14, 2024, finding expected demand for most areas to be higher compared to the prior year and warning that multiple regions face elevated risk of energy shortfalls during widespread extreme winter conditions. (See NERC Sees ‘Reasons for Optimism’ as Winter Approaches.) 

Like the NERC assessment, SERC’s WRA focused on the three months between December 2024 and February 2025. The RE’s staff collected, verified and validated data on generation and transmission resources, planned outages, and demand projections from entities in its footprint, including balancing authorities, generator owners and operators, planning coordinators, and transmission owners. Data collection began in the first quarter of 2024, with updates incorporated before publication. 

The report drew on the National Weather Service’s winter outlook issued in October 2024, which predicted above-normal temperatures and below-normal precipitation across most of SERC’s subregions. SERC noted in the report that, while “the aggregated load forecast total for the SERC region is typically higher in the summer months,” several of its subregions are either dual peaking or winter peaking — namely SERC Central, SERC East, SERC PJM and SERC Southeast. 

The vulnerability of these areas to winter conditions was a significant topic in the report, with SERC observing the U.S. suffered 20 separate billion-dollar weather and climate disasters (meaning events in which overall damages reached or exceeded $1 billion) just in the first eight months of 2024. The National Oceanic and Atmospheric Administration since has updated its list, with 27 billion-dollar events confirmed to have occurred in 2024. 

Billion-dollar weather and climate events in the U.S. through August 2024. | SERC

Several of these affected SERC’s footprint, including tornado outbreaks in January and April and the Central, Southern and Northeastern winter storm and cold wave in January. The report added that 2024 “was far from the most extreme year for cold weather events on the grid.” 

All subregions reported meeting NERC’s recommended reserve margin of at least 15% under SERC’s 50/50 forecast, which represents a load prediction with a 50% chance of being exceeded. However, under the 90/10 forecast, indicating a 10% chance of being exceeded, all but two subregions — SERC Florida and SERC MISO-South — indicated they would fall short of the recommended margins. 

The Central, East, Southeast and MISO-Central subregions were assessed as elevated risk, meaning a reserve margin of 6 to 14% for the 90/10 forecast, but the PJM subregion indicated a reserve margin of 4% under those conditions, putting it into the high-risk category. Additionally, SERC noted that all subregions except Florida would be below target reserve margins if load in a 90/10 scenario is underestimated by 10%. 

SERC noted several actions that could help with preparations for adverse conditions, including securing fuel inventories and natural gas delivery options. The RE also noted that some SERC entities have oil backups, while others have contracted firm gas storage to guard against supply interruptions. 

In addition, SERC said, reliability standards that have come into effect since the winter storms of 2021 and 2022 require generator owners to have winter preparedness plans and annual training, along with other preparations. The RE recommended that entities “pay special attention to their day-ahead load forecasting process” to avoid the kind of forecasting errors that led to the reliability issues associated with those storms. 

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DC Circuit Court Leaves ITC’s Abandonment Incentive Untouched Despite Iowa ROFR Uncertainty

The D.C. Circuit Court of Appeals has dismissed transmission customers’ argument against ITC Midwest receiving an abandonment rate incentive for an Iowa line segment included in MISO’s long-range transmission planning.  

That’s despite ongoing uncertainty over the fate of Iowa’s right of first refusal law.  

The court decided Jan. 14 that the collection of organizations — Resale Power Group of Iowa, the Industrial Energy Consumers of America, the Coalition of MISO Transmission Customers and the Wisconsin Industrial Energy Group — didn’t prove “imminent injury” from ITC Midwest being able to recover 100% of prudently incurred costs building the Skunk River-Ipava 345-kV line in Iowa if the project is canceled due to factors beyond ITC’s control (23-1334).  

The groups disputed the incentive on account of Iowa’s right of first refusal law being overturned in late 2023 and ambiguity surrounding which developer ultimately will build the segment of the long-range transmission project. (See Iowa ROFR Law Overturned, Throwing Multiple MISO LRTP Projects into Uncertainty.) They said ITC’s ownership is “uncertain” and likely “void” from the direction of the ongoing litigation and the incentive appears destined to expose them to the risk of higher rates in the future.  

However, the D.C. Circuit Court said the transmission customers couldn’t point to “concrete costs any one of them now confronts,” nor were they able to show that they “will ever suffer any injury” from the abandonment incentive if ITC continues to build the project as intended.  

“For their injury to occur, not only would the Iowa Supreme Court need to affirm a permanent and retroactive Iowa ROFR injunction, MISO would need to open competitive bidding for the project, and ITC would need to lose the bid, invoke the abandonment incentive, and demonstrate to the commission its costs were prudent and the resulting rates are just and reasonable and not unduly discriminatory,” the court said, agreeing with ITC that the “highly attenuated chain of possibilities” is predicated on “guesswork as to how independent decisionmakers will exercise their judgment.”  

The court concluded the transmission customers lacked standing to challenge FERC’s decision.  

FERC originally granted ITC’s request for an abandonment incentive in August 2023, deciding the project could face siting, regulatory and environmental risks. Months later, the commission upheld its decision to grant ITC an abandoned plant incentive, though MISO consumer groups argued against it (ER23-2033-001). 

FERC Commissioner Mark Christie took issue with the abandoned plant incentive altogether and dissented from the order. The 345-kV line segment is part of MISO’s first, $10 billion long-range transmission plan.  

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CEC Workshop to Focus on Impact of Pathways Initiative

The California Energy Commission will hold a workshop Jan. 24 to discuss the West-Wide Governance Pathways Initiative, signaling that the state is gearing up to consider a proposal to alter CAISO’s governance structure to accommodate broader Western concerns about the ISO’s lack of independence from California politics. 

The meeting will be the first Pathways-related public event since the group’s Launch Committee voted in November 2024 to approve the “Step 2” proposal to create a new “regional organization” (RO) to provide independent oversight for CAISO’s Western Energy Imbalance Market (WEIM) and Extended Day-Ahead Market (EDAM). (See Pathways Initiative Approves ‘Step 2’ Plan, Wins $1M in Federal Funding.) 

It also comes three weeks after the start of the 2025 California legislative session, which will see the state’s key Pathways’ backers — likely to include labor and public power utility representatives — submit a bill to implement the Step 2 plan. Feb. 22 is the deadline for submitting legislation. 

“The goal in holding this workshop is to build a factual record capturing how current stakeholder groups and interested members of the public view regional electric grid cooperation through the Pathways Initiative,” the CEC said in its Jan. 14 meeting notice. “Additionally, the CEC hopes to foster a public dialogue around the benefits to Californians from Step 2 of the Pathways Initiative.” 

The workshop will include representatives from “key stakeholder groups including regulators, market participants, labor and environmental advocates” and feature discussion about the “potential economic and reliability impacts” of Pathways, according to the notice. The commission won’t take any votes on the matter, and the public is invited to make comments. 

“The current integration landscape before Western electricity system leaders looks quite different than just a few years ago,” the CEC said. “The carbon reduction goals, policy directives and economics driving the transition to clean energy systems continue to reshape the Western resource mix, prospective regional markets and the transmission planning needed to support these changes.”  

Pathways “is an ongoing topic of interest that pertains to evolving regional energy markets,” it noted. 

The CEC is holding the workshop as part of its 2024 Integrated Energy Policy Report Update proceeding, overseen by Chair David Hochschild and Co-Chair Siva Gunda. Industry stakeholders and members of the public can participate in person at the California Natural Resources Agency’s headquarters in Sacramento or call in online or by telephone (see notice for details). 

Pathways Updates 

The Pathways Initiative is embarking on key transitions this year after the group’s Launch Committee concluded its key task in 2024 with the approval of the Step 2 proposal. Those include appointment of the RO’s seven-member board and the start of work by the newly established Formation Committee charged with guiding the development of the new entity.

The new committee will include familiar faces from the older one, including Kathleen Staks of Western Freedom as chair, Evie Kahl of CalCCA, Jim Shetler of the Balancing Authority of Northern California, Scott Ranzal of Pacific Gas and Electric, Alaine Ginnochio of the Western Interstate Energy Board, Lisa Tormoen Hickey of Interwest Energy Alliance and Michele Beck of the Utah Office of Consumer Services.

Three members of the Western Energy Markets Body of State Regulators will also participate: Darcie Houck of the California Public Utilities Commission, Milt Doumit of the Washington Utilities and Transportation Commission and John Hammond of the Idaho Public Utilities Commission.

“So far, the Formation Committee has been working on mostly logistical items — meeting cadence for us, the [Launch Committee], and public stakeholder meetings, as well as a work plan that we will ultimately share with the public that will have more information about public engagement opportunities over the course of the next year,” Staks told RTO Insider in an email.

Staks clarified once again that neither committee will be engaging with the California legislature as formal entities.

“Those who engage in legislative efforts are doing so in their individual or organizational capacity, not on behalf of the [Launch Committee],” she said.

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Oceantic Emphasizes OSW’s Economic Benefits

A U.S. offshore wind trade industry association is reemphasizing the sector’s economic benefits ahead of the inauguration of a president who wants to shut it down.

Oceantic Network on Jan. 15 released “Offshore Energy at Work,” a new report that focuses on the thousands of jobs created and billions of dollars invested through more than 1,900 supplier contracts that span 40 states.

Oceantic places the total announced investment at more than $40 billion and notes much of it has its roots late in President Trump’s first term.

Since then, construction has begun on projects totaling nearly 5 GW of capacity, 21 shipyards have received $1.8 billion in vessel orders and $25 billion has been earmarked for creating and expanding a domestic supply chain and ecosystem.

The last number includes $277 million in workforce development, $383 million in research and development, the $1.8 billion for 50 new or retrofitted ships and boats, $5.2 billion for upgrades to 25 U.S. ports, $6.1 billion for supply chain or manufacturing and $11 billion for shared transmission infrastructure.

These investments range from places one would expect, such as an Edison Chouest shipyard on the Louisiana coast, to such unlikely places as the Ljungstrom steel fabrication plant in western New York, hundreds of miles from the ocean.

Building a domestic offshore wind industry has been a priority for President Biden for its expected economic and environmental benefits.

President-elect Trump, by contrast, has long held an abiding dislike for the giant wind turbines, and he ratcheted up his rhetoric on the campaign trail. As recently as Jan. 7, he told reporters he would seek to halt construction of “windmills” that he said harm whales and cannot operate without a subsidy.

However, another Trump priority is boosting the U.S. economy.

Just as the rest of the U.S. renewable energy sector has been doing since Nov. 5, the Oceantic report plays up the economic benefits, juxtaposing dollar figures in the millions and billions with anecdotes about individual Americans working in the field.

CEO Liz Burdock said in a news release: “The American offshore wind energy industry is creating thousands of jobs across a national supply chain, driving billions in supply chain investments and delivering reliable, homegrown energy to meet our country’s growing power needs while ensuring energy security for decades.”

She added: “This report tells a story of success, momentum, American ingenuity, and grit. Offshore wind energy is creating skilled jobs, revitalizing once-forgotten economies and offering new opportunities for personal growth and economic prosperity, proving that when offshore wind is working, so is America.”

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USDA Allocates $6B More for Rural Clean Energy

The latest tranche of USDA rural electric grants and loans exceeds $6 billion and is expected to spread benefits across 30 states.

The Department of Agriculture’s Jan. 10 announcements involve the Empowering Rural America (New ERA) and Powering Affordable Clean Energy (PACE) programs.

Rural electric cooperatives and communities will use the money to lower electricity costs, reduce emissions and support jobs.

New ERA and PACE were created by the Inflation Reduction Act in 2022 and were called the largest investment in rural electrification since the Rural Electrification Act of 1936. More than one in five rural Americans are expected to benefit from the clean energy investments, USDA said.

Most of this latest round of funding — loans and grants totaling $5.49 billion for 28 clean energy projects — is through New ERA. Roughly $565 million in partially forgivable loans was allocated through PACE for 26 clean energy projects.

USDA said it has obligated approximately $9 billion of the New ERA program’s $9.7 billion budget authority for more than $14.5 billion in loans and grants benefiting 35 states where rural electric cooperatives have committed to build or buy more than 13 GW of clean energy.

Adding in private-sector funds, total rural investment through New ERA is expected to exceed $35 billion, USDA said.

Awards range from a few hundred thousand to more than a billion dollars and are going to projects such as solar, wind and battery installations; demand side management; run-of-river hydropower; loan refinancing; distributed energy resource management systems; solar agrivoltaics; transmission upgrades; power purchase agreements; load management; and virtual power plants.

Meanwhile, partially forgivable loans obligated through PACE now total more than $1.6 billion, USDA said. Solar projects dominate the allocations, with some storage and hydro projects on the list as well.

Details about funding recipients are available on the New ERA website and the PACE website.

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Biden Wants Data Centers, Clean Energy on Federal Land by 2027

With days left in his administration, President Joe Biden issued an executive order Jan. 14, aimed at siting and permitting cutting-edge artificial intelligence data centers on federal land by 2027, along with the clean energy and transmission needed to power them.

These “frontier AI” facilities ― providing AI capabilities and services beyond the current state of the industry ― would be financed by the companies that build them without raising consumers’ electricity bills. Strong labor and environmental standards and community engagement also would be required, according to the comprehensive and extensively detailed order.

In a statement released with the order, Biden cited national security and economic competitiveness as key drivers for U.S. leadership in AI. “We will not let America be out-built when it comes to the technology that will define the future,” he said.

“This executive order will direct the Department of Defense and the Department of Energy to lease federal sites where the private sector can build frontier AI infrastructure at speed and scale,” Biden said. “These efforts are designed to accelerate the clean energy transition in a way that is responsible and respectful to local communities, and in a way that does not impose any new costs on American families.”

Biden envisions an aggressive timeline for designating sites for data center development and permitting the facilities, along with associated clean energy and transmission.

In less than two months ― by Feb. 28 ― the Defense and Energy departments would be required to identify at least three sites each on federal land that would be suitable for these projects and could be fully permitted and approved to begin construction by the end of the year.

High-priority sites would include those with access and proximity to “high-capacity transmission infrastructure with unused capacity,” existing fossil fuel plants that could be “repowered” with clean energy and “communities seeking to host AI infrastructure.”

At the same time, by March 15, the Bureau of Land Management would be required to identify sites on federal land under its jurisdiction that would be suitable for developing the clean energy projects to be built as part of the new data centers. The potential sites would have to be on federal land that has been designated as appropriate for utility-scale solar development.

The order defines clean energy as any generation producing few or no carbon dioxide emissions. Beyond solar, wind and storage, the order lists geothermal, nuclear fission and fusion, hydropower, hydrokinetic power ― such as wave energy ― and carbon capture, utilization and storage.

“Priority geothermal zones” would be identified by BLM, again by March 15, “based on their potential for geothermal power generation resources, including hydrothermal and next generation geothermal power and thermal storage.”

DOE and DOD then would launch competitive solicitations on March 31 for “non-federal entities” to lease federal land for data centers, to be followed by announcements of any winning proposals by June 30. The order calls for a framework to be developed, also by June 30, so winning proposals would be cleared to lease federal land designated for clean energy development for their data centers.

Other provisions in the order seek to accelerate interconnection of the projects, with DOE identifying “underutilized points of interconnection … that demonstrate the highest potential for uses associated with AI infrastructure.” Transmission developers and operators with lines near the projects would be required to “identify any grid upgrades,” including advanced conductors and other grid-enhancing technologies, that could expand capacity for interconnection.

To streamline permitting, the order calls for the major permitting agencies ― DOD, DOE and the Agriculture, Commerce and Interior departments ― to perform a “programmatic environmental review” of the environmental impacts of data center construction and operation, and potential options for mitigation. The programmatic review and other “categorical exclusions” could be used to accelerate environmental reviews.

Under the National Environmental Policy Act, categorical exclusions apply to actions or projects the government finds will not have significant environmental impacts and therefore do not require further NEPA review.

What Will Trump Do?

The Biden order represents an attempt by the outgoing president to respond to electricity demand growth from AI data centers with clean energy as opposed to the new natural gas plants some utilities plan to build.

Just how much power will be needed remains a moving target. A much-cited figure, traceable to a May 2024 analysis from Goldman Sachs, is that a ChatGPT query can consume nearly 10 times as much electricity as a standard Google search. Also released in May, a report from the Electric Power Research Institute estimated data centers would consume 9% of U.S. power by 2030. (See Data Centers and Demand Growth Top 2025 Agenda.)

More recent figures from the Lawrence Berkeley National Laboratory show that data centers, which accounted for 76 TWh, or 1.9%, of U.S. energy demand in 2018, hit 176 TWh, or 4.4%, in 2023. LBNL predicts future growth ranging from 325 to 580 TWh by 2028, or 6.7 to 12% of total U.S. energy demand.

At the same time, a new analysis from the National Renewable Energy Laboratory finds that “between 51 to 84 GW of renewable energy could be deployed on federal lands by 2035, requiring only around half of 1% of total federal land area in the contiguous U.S.” Federal lands technically could support up to 7,700 GW of renewable development, according to NREL.

Responding to Biden’s order, data center trade groups focused on the positive impacts for U.S. AI leadership, while skirting issues of permitting and transmission development.

Josh Levi, president of the Data Center Coalition, said the order “recognizes the essential role of the data center industry in advancing America’s national security and global economic competitiveness and promotes the rapid development of additional data center and energy capacity to support the nation’s leadership in AI.”

“U.S. AI leadership depends on a sustained and robust commitment to the technology’s development and deployment, including the essential infrastructure that supports its growth,” said Gordon Bitko, executive vice president of public sector policy for the Information Technology Industry Council. “Fostering the U.S. tech industry’s ability to work with the government and other partners to solve existing challenges such as permitting and electricity transmission will enable the U.S. to construct state-of-the art data centers powered by a resilient and diversified infrastructure.

“We urge the incoming Trump Administration to continue to work with industry to build the capacity the U.S. needs to advance this economic and security imperative,” Bitko said.

DCC and ITI both include major hyperscale developers in their memberships, such as Amazon, Microsoft and Google.

Neither clean energy industry groups nor environmental advocates had released statements on the order as of publication deadline.

However, given the size of hyperscale AI data centers, and the clean energy projects needed to power them, fast environmental permitting for projects on federal land may be difficult. One of the largest data centers in the U.S., the Citadel in Nevada, covers an estimated 7.2 million square feet, or about 165 acres.

Another key question is whether President-elect Donald Trump will consider moving ahead with the planned development of AI data centers on federal land or simply scrap it.

Trump and Republicans have advocated for economic development on federal lands, although their plans for energy development center on fossil fuel drilling and production, along with critical mineral mining.

At a Jan. 14 press conference, Trump heralded a $20 billion investment for data center development in the U.S., announced by EDGNEX Data Centers, a data center developer from the United Arab Emirates. The company is owned by DAMAC, a luxury real estate firm.

According to a Jan. 8 press release, EDGNEX plans a major move into the U.S. market and says it could double its investment in coming years.