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January 15, 2025

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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.

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Virginia Legislators Introduce Bills to Deal with Data Center Growth

Northern Virginia legislators on Jan. 14 introduced a package of bills to address growing demand from data centers that they hope to pass in a short session that is scheduled to adjourn next month. 

“Data centers have been operating without guardrails in the commonwealth, and the costs are being shouldered overwhelmingly by a handful of districts, including mine,” said Sen. Russet Perry (D), whose district covers parts of Arlington, Fairfax and Loudoun counties, the last of which is home to so-called “Data Center Alley.” 

“We want Virginia to remain a leader in innovation and technological advancement, but there remains a dire and pressing need to ensure the preservation of our resources and protect the pocketbooks of our constituents,” she continued. “It’s not easy to strike that balance, but this legislative package does just that.” 

Virginia is home to the largest concentration of data centers in the world, and growth in the sector is on pace to double overall demand for power in the next decade. It could cause the average residential customer’s electricity bill to rise by $37/month by 2040, Perry said at a press conference in Richmond. 

All of the bills to address data center growth last session were effectively put on hold so the Joint Legislative Audit and Review Commission (JLARC) could publish a report on the sector’s impact, Perry said. That report was released in December. (See Virginia Legislature Report Tackles How to Meet Demand from Data Centers.) 

The legislative package picks up some recommendations from the JLARC report. Its backers divided their effort into four pillars: protecting families and businesses (cost allocation), enhancing transparency around development, responsibly managing resources and incentivizing efficiency. 

Perry and Sen. Richard Stuart (R) introduced Senate Bill 960, with the companion House Bill 2101 being introduced by Dels. Michelle Maldonado (D) and Michael Webert (R). They would require the State Corporation Commission to ensure that other customer classes do not subsidize data center growth. 

“What we have seen, at least in my district, is that we are going to inherit quite a bit of infrastructure due to our growing energy needs,” said Webert, whose district covers parts of Fauquier and Culpeper counties, just south of Loudoun. “And my constituents are very, very much concerned about that, and so that’s one of the reasons why I agreed to co-patron the piece of legislation with Michelle. Comprehensive action from the General Assembly in the form of recognizing data centers as a unique customer class and assigning their share of cost seems like a fair thing to do.” 

The transparency pillar would be fulfilled by HB 2035, which would require the Department of Energy Quality to track and publish energy, water and emissions data from data centers above 30 MW. The other bill in the pillar, HB 1601, would require large data centers applying for local permits to offer more data on noise impacts and the local utility to update localities on any new infrastructure required. 

Responsibly managing resources is covered by HB 2027, which would require the SCC to review applications for any high load facilities with demand above 25 MW. The process would have to review grid reliability, cost impacts, economic contributions of the facilities and the demand’s impact on Virginia’s energy and environmental policies. 

Del. Rip Sullivan (D) and Sen. Creigh Deeds (D) are working on legislation that would link tax incentives for data centers to energy efficiency and renewable energy procurement for the fourth pillar, but those bills have yet to be filed. 

“I haven’t spoken with the governor directly about this, but what I will say is that we are not trying to say, ‘No data centers,’ or anything like that,” Perry said. “But what we are trying to say is that our communities deserve a seat at the table.” 

The forecasted growth for the sector is unsustainable, she added. 

Gov. Glenn Youngkin (R) briefly touched on data centers in his annual State of the Commonwealth speech Jan. 13 before the General Assembly, noting they support 74,000 jobs, $9.1 billion in GDP and billions in revenue that localities use for education, public safety and other services. 

“We should continue to be the data center capital of the world and make sure Richmond is doing what is necessary to support that goal,” Youngkin said. “Different communities will make different decisions on data centers, but these must be their decisions. And Richmond should not stop them from capitalizing on these incredible economic opportunities.” 

The Data Center Coalition, an industry trade group, said it looked forward to working with legislators this session to ensure the continued responsible growth of the sector. In a statement from its president, Josh Levi, the group said that the JLARC report validated Virginia’s leadership in data centers. 

“The report notes the many local, state and federal agencies that oversee policies and regulations surrounding data center development and are empowered to protect Virginians while managing potential environmental and community impacts,” Levi said. “JLARC also confirmed that data centers currently pay the full cost of service for the energy they use and suggests the State Corporation Commission has the technical expertise and is best positioned to ensure this continues as additional generation and transmission are deployed to support economic growth.” 

The Piedmont Environmental Council supports each of the bills that have been introduced, noting that unconstrained growth of data centers could lead to peak demand of 60 GW by 2050, which is nearly three times its current peak of 22 GW. 

“Now is the time for action. Without state oversight and increased local disclosures, we are headed for a catastrophic collision of unprecedented energy demand and a shortage of generation capacity,” PEC President Chris Miller said in a statement. “Dominion is signing contracts for power it does not have and does not have a realistic plan for providing. Right now, our state’s leaders are playing a game of chicken with our energy grid.” 

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NY Defers Action on Controversial Cap-and-invest

Development of a greenhouse gas emissions cap-and-invest system first proposed two years ago is getting pushed further down the road in New York.

Gov. Kathy Hochul (D) made no mention of the controversial concept in her State of the State address Jan. 14, and there is only limited mention of it in her printed version.

The program has been in development for well over a year but has bogged down amid concerns that the billions of dollars to be extracted from greenhouse gas-emitting industries could translate to higher prices, job losses or other negative impacts for New Yorkers.

Much of the governor’s address, in fact, was devoted to proposals that would reduce costs or increase financial benefits for low- and middle-income New Yorkers.

Energy and climate were the very last topics in both her speech and the accompanying playbook.

In that playbook, it sounds like New York is doing at least a partial reset on cap-and-invest planning: In the coming months, it says, the lead agencies will “take steps forward on developing the cap-and-invest program, proposing new reporting regulations to gather information on emissions sources, while creating more space and time for public transparency and a robust investment planning process.”

Hochul writes: “New York needs to get the transition right and keep our state affordable for families.”

Ostensibly, the staff at various agencies have been doing just that since mid-2023. But finding common ground apparently has been difficult. (See Opposing Sides Want to Speed, Slow NY Cap-and-invest.)

The State of the State is the governor’s public opening hand in the lengthy, intertwined process by which the coming year’s budget and many key policy issues will be decided.

This year, Hochul has no fewer than 201 proposals in her plan, but like the thousands of proposals submitted by legislators, many may be modified or killed during negotiations before the April 1 start of the next fiscal year, and some may not even reach the starting line.

Hochul has several other proposals in the energy and environmental sectors.

Climate Investment

Hochul seeks more than $1 billion for creating jobs, reducing pollution and slashing household energy bills in what she called the largest single climate investment in state history.

This will pay for retrofits of housing; incentives for heat pump installation; making public infrastructure serve as “hubs of sustainability,” such as by building thermal energy networks on state-run college campuses; expanding green transportation options; and supporting businesses of all sizes in decarbonization efforts.

Nuclear

It has been apparent for a while that New York officials increasingly are interested in advanced nuclear power, even as they framed the polarizing concept in carefully neutral tones.

Hochul calls for creation of a “Master Plan for Responsible Advanced Nuclear Development,” and the state on Jan. 14 issued a “Blueprint for Consideration of Advanced Nuclear Energy Technologies.”

Hochul said in a news release that New York will lead a multistate initiative on advanced nuclear energy expected to launch in February.

Also, she said the state will support Constellation Energy Corp. in its pursuit of federal grant funding to support exploration of adding one or more advanced reactors at its Nine Mile Point facility in northern New York.

Public Power

Hochul said she will direct state agencies to enter into contracts with the New York Power Authority in pursuit of a 100% renewable energy goal for state agencies by 2030. This will include at least 500 MW of generation.

This is separate from — but not unrelated to — another NYPA initiative.

NYPA has a tentative framework for 3.5 GW of renewable energy projects, the first tranche of proposals under its recently expanded authority as a developer of renewable energy alone or in partnership with the private sector.

NYPA itself acknowledges that even if all those proposals go forward, many can be expected to be lost to the normal industry attrition process.

Public power advocates call for NYPA to aim much higher — 15 GW instead of 3.5 GW — as President Biden is replaced by President Trump and leadership of the energy transition falls to states. They hoped to hear more in the State of the State.

Reactions

Hochul’s non-action Jan. 14 on cap-and-invest apparently caught some supporters of the system by surprise.

Two separate reports were issued Jan. 13 by Switchbox and Resources for the Future, each commissioned by separate sets of climate advocates and each explaining in great detail the benefits that such a system would provide to communities and households through reduced emissions and financial assistance.

After the State of the State address, the Environmental Defense Fund’s Kate Courtin said in a news release:

“At a time when states with climate commitments should be stepping up to lead, New York is stepping back. By continuing to kick cap-and-invest down the road, Gov. Hochul is delaying the benefits that New Yorkers want — cleaner air, lower energy bills and more resilient communities. Meanwhile, the cost burdens from climate change-fueled disasters, like excessive flooding and severe storms, will continue to mount.”

Eric Walker at WE ACT for Environmental Justice had similar thoughts, and also criticized Hochul’s proposed $1 billion climate investment, which would be funded through tax dollars. He said via email:

“Today’s announcement is really a minimalist first step toward broader climate action. Instead of taking bold action, Gov. Hochul announced a plan that fails to meet the scale of the challenges we face. Worse, a billion-dollar state appropriation shifts the financial burden to struggling New Yorkers instead of holding the corporations responsible for pollution accountable. A robust cap-and-invest program is the long-term solution New Yorkers need to tackle pollution, improve air quality and deliver a just transition for our communities.”

Public power advocates also panned Hochul’s proposal, and they staged a protest outside the State of the State.

“The choice is clear, Gov. Hochul, New York can build 15 GW of public renewables or the state, like so much of the world, will continue to burn,” said Teddy Ogborn, an organizer with Planet Over Profit who was arrested during the demonstration. “With a climate denier as president, it’s more important than ever for New York to lead the way. New York can still meet its legally mandated climate targets, but Gov. Hochul must take action today.”

NYPA President Justin Driscoll, by contrast, was supportive. In a prepared statement, he said: “Gov. Hochul’s historic investment in climate mitigation is crucial for New York as we prepare for the ever more frequent 100-year storms and climate challenges. NYPA is proud to support this investment, work with organized labor and our partners in government to bring public power to public spaces and serve as a trusted advisor delivering innovative solutions to power New York into the future.”

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ISO-NE Introduces Proposed Resource Retirement Changes

ISO-NE plans to decouple resource retirements from the capacity auction process and adopt a two-year notification timeline for retiring generators, the RTO told stakeholders at the NEPOOL Markets Committee meeting Jan. 14.  

The proposal is one component of ISO-NE’s wide-ranging capacity auction reform project, which aims to transition the region to a “prompt” capacity market held just months before each capacity commitment period (CCP), instead of the current time frame of over three years. (See ISO-NE in 2025: Capacity Reforms, Tx Solicitation and FERC Orders.) 

While retiring resources currently are required to submit de-list bids through the forward capacity auction process over the four years prior to the relevant CCP, “the move to a prompt capacity auction necessitates a new mechanism to collect resource retirements,” said Kevin Coopey of ISO-NE. 

Coopey added that the new process “will be the mechanism to reduce or eliminate interconnection service” for both capacity interconnection rights and energy-only interconnection rights. ISO-NE plans to use the term “deactivation” for resources that are permanently exiting both the capacity and energy markets, and “capacity market deactivation” for resources strictly exiting the capacity market. 

Coopey said there are “natural tensions” between adopting a shorter versus a longer retirement notification timeline.  

“A shorter timeline allows participants to improve the efficiency of deactivation decisions by having better market information,” he said, while “a longer timeline allows the market, including entrants and the ISO, to better respond to deactivations.” 

ISO-NE also emphasized the importance of simplicity in the new retirement design to prevent confusion and allow participants “to access market information in a timely manner that enhances efficient decision-making.” 

Zeky Murra Anton of ISO-NE noted the RTO “evaluated timelines ranging from four years to six months” before landing on the two-year timeline. Relative to the current timeline, a two-year notification period would give generators more up-to-date information to enable more efficient retirement decisions while still providing time for the RTO and other participants to respond to issues created by retirements, he said.  

ISO-NE plans to review deactivation notifications for reliability and market power issues before publishing the information prior to each capacity auction.  

Murra Anton acknowledged that the shorter retirement notification timeline could present challenges if transmission issues are identified.  

“Experience with transmission construction shows the time from needs identification to completion is frequently longer than two years,” he said. 

If solutions are not feasible within the two-year time frame, ISO-NE’s tariff authorizes reliability must-run agreements to retain resources for local transmission reliability issues. 

ISO-NE will continue to work with stakeholders on the proposal at the MC in February. It plans to file with FERC the resource retirement and prompt auction reforms by the end of 2025, followed by a second filing in 2026 focused on resource accreditation and dividing CCPs into seasonal periods. The changes are intended to take effect for the 2028-29 CCP. 

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Calif. Lagging on Hydrogen Fueling Station Target, CARB Finds

Rather than expanding its network of light-duty hydrogen-fueling stations, California lost three stations last year, casting doubt on the state’s ability to meet a 200-station goal, a new report found. 

As of July 15, 2024, there were 62 light-duty hydrogen-fueling stations in California, down from 65 stations in 2023, according to the December 2024 report from the California Air Resources Board. Although four new stations opened during the year, seven stations owned by Shell closed, for a net loss of three stations. 

The number of hydrogen-fueling stations in CARB’s 2022 report was 60. 

CARB now projects 129 retail hydrogen-fueling stations in the state by 2030 — well short of the target of 200 stations by 2025 set by Gov. Jerry Brown in a 2018 executive order. 

The latest projections also have fallen behind those from CARB’s 2023 evaluation, in which 92 open stations were expected by the end of 2024, based on developer feedback. 

Link to FCEV Sales

CARB’s annual report on hydrogen-fueling station development tallies stations where drivers of light-duty fuel cell electric vehicles (FCEVs) can pull up, fuel and pay, like at a conventional gas station. Among the 62 retail stations counted in the 2024 report, seven were considered temporarily non-operational, but expected to reopen. 

The slow progress in station development also means projected sales of FCEVs have dropped. The report noted the close tie between automakers’ FCEV sales estimates and the rate of fueling station development, fuel supply cost and reliability, and range of FCEV models. 

“In multiple studies and surveys, consumers have repeatedly ranked charging and fueling infrastructure as a top concern for either purchasing a new ZEV or even using the ZEV they currently drive,” the report said. 

That sentiment could be key as California will require all new cars sold in the state to be zero-emission or plug-in hybrids by 2035. 

Through September 2024, 17,999 FCEVs had been sold in California, including 427 in the first nine months of last year, according to a California Energy Commission ZEV dashboard. 

In comparison, 293,747 battery-electric cars and 49,039 plug-in hybrids were sold in the state from January through September 2024. 

Shell Pull-out

Shell announced in February 2024 that it was permanently closing its seven light-duty hydrogen-fueling stations in California “due to hydrogen supply complications and other external market factors,” according to a notice from the company posted by the Hydrogen Fuel Cell Partnership. 

The announcement came after Shell asked the California Energy Commission to cancel grant funding the company had been awarded for 50 new hydrogen-fueling stations and one station upgrade. 

Reasons for canceling the grant included political and economic uncertainty, permitting hurdles, high construction costs and problems sourcing green hydrogen, according to a letter from a Shell official cited by CleanTechnica. 

Although slow progress on station development has been noted in CARB’s previous reports, reasons for the lag have shifted, the agency said. 

“Barriers identified in past analyses, including securing site access, permitting timelines, utility connection timelines and other site-specific issues, may still linger but are not the dominant issues today,” the report said. 

Instead, station developers have cited economic factors — including high inflation rates, low credit values from the Low-Carbon Fuel Standard program and the small size of the hydrogen refueling industry — along with trouble finding skilled, affordable contractors. 

Factors that could cause the pace to pick up are time limits on spending station-development grants, an expected resolution of hydrogen-supply bottlenecks in Southern California and efforts to address supply-chain issues, CARB said. 

CARB also suggested progress could be made in partnership with California’s hydrogen hub known as ARCHES, or Alliance for Renewable Clean Hydrogen Energy Systems. 

“The state should continue to support the production of clean hydrogen and lay the groundwork for ARCHES to scale up the market and drive down prices,” the report said.

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Company Briefs

Phillips 66 Purchases Epic NGL Pipelines

Phillips 66 said it would buy a Texas network of natural gas liquids pipelines and processing facilities from Epic NGL for $2.2 billion. 

Phillips said Epic’s NGL business consists of two fractionators, about 350 miles of pipelines and a roughly 885-mile NGL pipeline linking production in the Delaware, Midland and Eagle Ford basins to fractionation complexes and to the Phillips 66 Sweeny Hub. 

More: Houston Chronicle 

AEP Names Mihalik Executive VP, CFO

American Electric Power has named Trevor Mihalik executive vice president and chief financial officer, effective Jan. 20. Mihalik’s previous experience includes roles as group president, CFO, controller and chief accounting officer at Sempra. Mihalik will succeed Chuck Zebula, who will serve as senior adviser to the CEO before retiring in March. 

More: AEP 

Volkswagen to Restart ID.4 EV Assembly

Assembly of Volkswagen’s ID.4 EV is expected to restart soon in Chattanooga after all 200 employees that were furloughed in September returned to work Jan. 6. 

In September, Volkswagen reported it was recalling about 98,000 ID.4 electric SUVs, saying door handles may allow water to enter a circuit board assembly and cause the doors to open unexpectedly. 

Volkswagen reported ID.4 sales dropped 93.9% in the fourth quarter to just 646 units. That compared to sales of over 10,600 ID.4s in the same quarter a year earlier. For the year, ID.4 sales fell 55% to about 17,000 units, according to the company. 

More: Chattanooga Times Free Press 

Honda to Produce 2 EV Models at Ohio Plant

Honda says it plans to mass produce its new 0 series models at its EV hub in Marysville, Ohio, beginning in 2026. The new models will be the “Honda 0 SUV” and the “Honda 0 Saloon” and will feature automated driving technology and an in-house developed operating system. 

More: WCMH 

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State Briefs

KENTUCKY 

PSC Approves EKPC Solar Plans

The Kentucky Public Service Commission recently granted the East Kentucky Power Cooperative (EKPC) Certificates of Public Convenience and Necessity for the construction of two solar facilities. 

EKPC would construct a 96-MW facility in Marion County and a 40-MW facility in Fayette County. 

EKPC also plans to invest more than $2 billion to build about 2,000 MW of new generation, and to convert around 1,700 MW of existing coal-based units to co-fire with natural gas. 

More: Power Engineering 

LOUISIANA 

Entergy Seeks to Bill Customers for Hurricane Francine Recovery

Entergy last week asked the Public Service Commission for permission to bill customers more than $182 million for costs related to Hurricane Francine. 

The storm fee would vary based on monthly electricity usage. 

Francine made landfall Sept. 11 as a category 2 hurricane, causing more than 250,000 Entergy customers to lose power for several days.  

More: Louisiana Illuminator 

MAINE 

Gov. Mills Plans to Create Department of Energy Resources

Gov. Janet Mills recently proposed creating a Department of Energy Resources. 

A proposal in Mills’ two-year budget would recast the current Governor’s Energy Office into a cabinet-level Department of Energy Resources. Maine is the only northeast state that doesn’t have a cabinet-level agency dedicated to energy matters. 

More: Maine Public Radio 

MARYLAND 

Gov. Moore Plans $2B in Cuts, Including Climate Programs

Gov. Wes Moore last week said he plans to roll back spending on some of the state’s climate change goals as part of an effort to find $2 billion in cuts, the opening offer in negotiations with the General Assembly on how to close a looming budget shortfall. 

The cuts to climate programs may include reductions for ones reliant on federal support, such as the offshore wind program. Moore pointed to the incoming Trump administration as a reason for the cuts, noting it did not make sense for Maryland to continue investing as much in its climate goals when the state no longer has a federal partner to help. 

Maryland has some of the nation’s most aggressive goals in its clean energy transition. 

More: The Washington Post; Inside Climate News 

MONTANA 

PSC Elects New Leadership

The Public Service Commission last week voted to elect its new leadership, selecting Commissioner Brad Molnar (R-Laurel) as its president and Commissioner Jennifer Fielder (R-Thompson Falls) as its vice president. 

Molnar previously served on the PSC from 2004 through 2012 and was elected again in 2024. Fielder has served on the PSC since 2020 and was reelected in 2024. 

In addition to electing its new leadership, the PSC also welcomed Commissioner Jeff Welborn (R-Dillon). 

More: Montana PSC 

NEVADA 

NV Energy Seeks Rate Hikes to Fund Self-insurance Policies Against Wildfires

NV Energy is asking the Public Utilities Commission to allow it to establish a $500 million self-insurance fund to have adequate liability insurance in the event of a catastrophic wildfire alleged to “have been caused or exacerbated by utility equipment.” The fund would bring the utility’s coverage to close to $1 billion. 

The self-insurance policy would be funded by customers based on their electricity usage.  

The increased rates, if approved by the PUC, would go into effect Oct. 1. 

More: Nevada Current 

NEW YORK

State Approves Solar Project at Former Somerset Plant

The Office for Renewable Energy Siting and Electric Transmission recently approved a permit for a 125-MW solar array to be built at the site of the former Somerset Power Plant. 

The office was able to quickly approve the plans because of Executive Law 94-c, which allows for an expedited permitting process for solar projects bigger than 25 MW. 

Construction is expected to begin in late 2025 or early 2026. 

More: WGRZ 

NORTH DAKOTA

Gov. Armstrong Names Kringstad to PSC

Gov. Kelly Armstrong last week named Jill Kringstad to the Public Service Commission, effective immediately. 

Kringstad, the commission’s director of business operations, replaces Julie Fedorchak, who was recently sworn in as the state’s member of the U.S. House of Representatives. 

More: North Dakota Monitor 

Tree Hitting Power Lines Started October Wildfire

High winds caused tree limbs to fall onto power lines, starting a wildfire in October that killed two men, the North Dakota State Fire Marshal said in a recent report. 

The fire was discovered around 3 p.m. Oct. 5. The report said winds exceeding 60 mph caused a tree about 12 feet from a power line to fall onto the line. The live wire then sparked a fire that spread. 

The distribution line was owned by Mountrail-Williams Electric Co-op. 

More: North Dakota Monitor 

OHIO 

State’s Largest Solar Project Comes Online

EDF Renewables and Enbridge recently announced that the 577-MW Fox Squirrel Solar project is now fully operational. 

The project, which is spread across 3,444 acres in Madison County, is the largest solar facility in the state. 

The project became operational in three phases. The first phase began delivering electricity to the PJM grid in December 2023, the second in July 2024 and the final phase in December 2024. 

More: pv magazine 

OKLAHOMA 

Lawmakers File Appeal to Overturn OG&E Rate Increase

Three Republican lawmakers filed an appeal with the Oklahoma Supreme Court to overturn a $127 million Oklahoma Gas and Electric rate increase approved by the Corporation Commission. 

Reps. Tom Gann (R-Inola), Kevin West (R-Moore) and Rick West (R-Heavener) labeled themselves in their appeal as “captive customers” of OG&E and said they are directly affected by the rate increase, which is about $10/month for the average residential customer. 

More: The Oklahoman 

TEXAS 

Houston City Council Denies CenterPoint’s Latest Rate Hike Application

The Houston City Council last week denied CenterPoint Energy’s latest rate hike application, which staff said would have raised the average household’s monthly bill by $1.83. 

CenterPoint’s latest application is a “distribution cost recovery factor” application, which the PUC is allowed to consider for only 60 days. “The city of Houston cannot determine if CenterPoint’s request is reasonable or complies with DCRF requirements until we have reviewed the application and questioned CenterPoint about details within the filing,” Administration and Regulatory Affairs Public Information Officer Billy Rudolph said. “The short deadline for a municipality to make a decision on a DCRF filing means the city of Houston will not have completed its review before the deadline has expired.” 

CenterPoint is expected to appeal the denial to the Public Utility Commission. The PUC must decide on the request by Feb. 3. 

More: Houston Chronicle 

VIRGINIA 

Commission Recommends Bill to Create Review Board for Large Energy Projects

The Commission on Electric Utility Regulation voted 7-5 in support of draft legislation to create the Energy Facility Review Board, which would evaluate certain large solar and energy storage project proposals and provide its input to local governments. 

Under the proposed legislation, a local government that rejects a solar proposal that the new board recommends would have to explain why, and a rebuffed developer or property owner could appeal the locality’s decision to a circuit court. The bill would also require localities to adopt solar ordinances consistent with a statewide model that the board would devise. 

The board would consist of 11 members. Nine would be directors or other employees of state agencies, while two would be representatives of the locality where the project would be located. 

More: Cardinal News 

Legislation Aims to Block Appalachian Power Increases

Del. Will Morefield (R-Tazewell) said he is preparing legislation designed to block the State Corporation Commission from approving any Appalachian Power rate increase for two years. 

The legislation “would give the Commission on Electric Utility Regulation enough time to make recommendations to the General Assembly on what efforts can be made by the General Assembly to help reign in the rising cost of electricity,” Morefield said. 

On Nov. 20, the commission released a final order approving a $9.77 million base rate increase — roughly one-tenth of the $95.1 million originally sought. The average Appalachian Power residential bill is about $174/month. 

More: Herald Courier 

WYOMING 

Rocky Mountain Power to Cancel Planned Coal Retirements

Rocky Mountain Power has canceled the retirements of its four coal-fired plants. 

Dave Johnston units 1, 2 and 4; the Jim Bridger Power Plant; the Naughton Power Plant; and the Wyodak Power Plant are all no longer scheduled for retirement. However, most of the facilities are slated to undergo a conversion. 

In 2020, the Legislature passed a law requiring coal-fired plants to add carbon capture technology by 2030. That has since been pushed back to 2033. 

More: Cowboy State Daily 

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Federal Briefs

Earth Breaks Yearly Heat Record, Lurches Past Warming Threshold

Earth recorded its hottest year ever in 2024, with such a big jump that the planet temporarily passed a major climate threshold. 

It’s the first time in recorded history the planet was above a hoped-for limit to warming for an entire year, according to measurements from four of six research teams. Scientists say if Earth stays above the threshold long-term, it will mean increased deaths, destruction, species loss and sea level rise from the extreme weather that accompanies warming. 

Last year’s global average easily passed 2023’s record heat and surpassed the long-term warming limit of 1.5 degrees Celsius that was called for by the 2015 Paris climate pact, according to the European Commission’s Copernicus Climate Service, the United Kingdom’s Meteorology Office, Japan’s weather agency and the private Berkeley Earth team. 

More: The Associated Press 

Pentagon to Ban China’s Largest EV Battery, Tech Firms

The Pentagon last week said it will ban China’s largest EV battery manufacturer and its largest tech firm beginning in June 2026, barring them from Defense Department contracts. 

In a notice in the Federal Register, the Defense Department published a list of firms that it deems to be operating in the United States for, or on behalf of, the Chinese military or that contribute to China’s military buildup. The list, mandated annually by Congress since 2021, now includes CATL, the world’s largest EV battery-maker that supplies Tesla. It also lists Tencent, China’s most valuable technology company. 

Both CATL and Tencent have called the designation a “mistake” and said they have never engaged in any military related business. 

More: The Washington Post 

US GHG Emissions Drop Just 0.2% in 2024

The U.S.’s efforts to cut its climate change pollution stalled in 2024, with greenhouse gas emissions dropping just 0.2% compared to the year before, according to estimates published by the Rhodium Group. 

Despite continued growth in solar and wind power, emissions levels stayed relatively flat because demand for electricity surged nationwide, which led to a spike in the amount of natural gas burned by power plants. 

Since 2005, U.S. emissions have fallen roughly 20%. But to meet its climate goals, emissions would need to decline nearly 10 times as fast each year as they’ve fallen over the past decade. 

More: The New York Times 

BLM Approves Arizona Solar Project

The Bureau of Land Management has approved the 600-MW Jove Solar Project in Arizona. The project will be constructed in La Paz County. It will span 3,495 acres of public land and 38 acres of county land. 

More: KAWC 

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PJM PC/TEAC Briefs: Jan. 7, 2025

Planning Committee

Stakeholders Discuss Revised IRM and FPR Values for 3rd Incremental Auction

VALLEY FORGE, Pa. — PJM’s Andrew Gledhill presented a proposal to the Planning Committee to revise the installed reserve margin (IRM) and forecast pool requirement (FPR) for the third 2025/26 Incremental Auction (IA) to account for higher load growth identified in the preliminary 2025 load forecast. 

While the proposal initially was brought as a voting item, PJM told stakeholders it plans to conduct more analysis before publishing the forecast and will bring the proposal back for consideration after that point. No changes are anticipated to the IA planning parameters, which are scheduled to be published Jan. 26.

The rising load growth is expected to cause reliability risk to become more concentrated in the winter, increasing from 86.9 to 96.2% of expected unserved energy (EUE), causing effective load-carrying capability (ELCC) ratings for most resources to shift. Onshore and offshore wind, which tend to perform better in the winter, would see their ratings go up 7 and 11%, respectively, while all other resources would remain the same or see hits to their ratings. Storage particularly would see ratings fall by 10 to 15%, depending on resource duration, and demand response also would decline by 8%. All other resources would see declines of between zero and 3%. 

The IRM would increase from 17.8 to 18.5% under the proposal, and the FPR would fall from 0.9387 to 0.9263, both following a trend. Revisions approved in March 2024 increased the IRM by 0.1% to 17.8% and saw the FPR decrease to 0.9387 from 1.1165. (See “Revised Reserve Requirement Study Values Endorsed,” PJM MRC/MC Briefs: March 20, 2024.) 

Several stakeholders said the revisions would be a significant change in the planning parameters used to conduct the 2025/26 Base Residual Auction and IA, undermining investors’ ability to use auctions as a data points guiding decision-making and creating a possibility that units with diminished ratings could be forced to cover shortfalls in the obligations they received in the BRA. 

“How are investors supposed to make any decisions when you have such huge changes between the Base Residual Auction and Incremental Auctions?” asked Paul Sotkiewicz, president of E-Cubed Policy Associates, comparing the ELCC analysis to a “random number generator” into which stakeholders have no insight. 

Preliminary 2025 Load Forecast

PJM’s Molly Mooney presented preliminary figures for the 2025 load forecast, which estimates that load growth will escalate to about 2% annually in the summer and 2.4% in the winter.  

Last year’s forecast projected 1.6% of summer load growth and 1.8% in the winter.  

The complete 2025 forecast is set to be published in mid-January. (See “Preliminary Large Load Adjustment Requests for 2025 Load Forecast,” PJM PC/TEAC Briefs: Dec. 3, 2024.) 

The expected growth is sharpest in the first few years of the forecast through 2033, when it slows for the remainder of the 20-year lookahead. Compared to the 2024 forecast, the difference is starkest in the winter, with about 22.4 GW of new load expected in the first five years on top of that already projected last year; an additional 11.1 GW in additional load is forecast for the following nine years. 

Focusing on the 2030/31 delivery year, over 90% of the winter load growth above what already was forecast last year is expected to be from large load additions (LLAs), such as data centers and chip manufacturing facilities in several zones. Those additions increase the 2024 forecast by 11.8%, while electric vehicle load decreases by 0.8%. 

LLAs have been the focus of stakeholder attention over the past year, with a proposal endorsed in May to revise how capacity obligations to serve LLAs are assigned to load-serving entities. Some also seek more information on how PJM reviews LLA forecasts produced by utilities, arguing that forecasting practices could vary and one project could be brought to multiple utilities, raising concerns of double counting. (See “New Approach to Large Load Addition Capacity Assignments Endorsed,” PJM MRC Briefs: May 22, 2024.) 

Calpine’s David “Scarp” Scarpignato noted that the 2025 forecast is the first to use a 20-year window, which he said could undersell the scale of the load growth in the initial years of that period when just looking at the annualized growth rate. 

Monitor Proposes Interconnection Queue for Large Loads

The Independent Market Monitor proposed a new interconnection process for large loads that could pose significant impacts to PJM reliability, akin to how generators are studied before being brought online in terms of network upgrades, as well as how the new load would affect resource adequacy. 

If PJM determined that an LLA would jeopardize reliability, Monitor Joe Bowring said the RTO should have the authority to form a queue and impose delays to in-service dates until any necessary generation or transmission is brought online. He said planning by PJM needs to address not only transmission, but also generation and operations to ensure the system can reliably meet the loads. 

There are tensions, Bowring continued, between existing PJM consumers, traditional load growth and the LLAs that are driving ballooning forecasts and requiring market redesigns. Reconciling those must be done in a rational way that avoids inappropriately shifting any costs associated with serving new load onto existing customers. The status quo does not offer PJM a voice in how large loads come online, he said, arguing that private bilateral deals do not offer a satisfactory solution because they lack the transparency of a full planning process. 

“Of course all load should be served; the question is how to do it reliably” and at least cost, he said. 

Stakeholders were mute in opining on the merits of the proposal, though some transmission owners commented that they are limited in the conditions they can place on load interconnections. Some asked how a large load required to go through the study process would be distinguished from more traditional additions. 

Bowring told RTO Insider there are several components of the proposal that require more thinking through and consultation with stakeholders, including the definition of large loads. He noted that many data centers being planned in the footprint have requested to come online with a relatively small initial load but would scale up to as high as 1 GW over the course of several years, creating more challenges for classifying large loads. He said he plans to bring the discussion up again at the Members Committee webinar scheduled for Jan. 21. There also are jurisdictional questions that would have to be answered before the process could be implemented. 

“It clearly needs to happen, and those with the jurisdictional authority need to talk to one another,” he said. “I think it’s clearly something that needs to be considered carefully and acted on before reliability is affected.” 

Other Committee Business

PJM has launched a new Grid Optimization Solutions webpage, where it has published four technical reference guides and educational materials on the implementation of grid-enhancing technologies. It includes information on PJM’s deployment of advanced conductors, dynamic line ratings and topology optimization, as well as its analysis of advanced power flow controllers. 

Stakeholders also endorsed revisions to the TO/TOP Matrix that reflect NERC’s EOP-11-4 standards on emergency operations, as well as changes to indexing between the manuals and PJM’s Reliability Audit Program. PJM’s Gizella Mali said no new responsibilities are included for TOs. The committee also endorsed review of the matrix charter with no changes made to the document. 

Transmission Expansion Advisory Committee

Update on Recommended Tx Upgrades in 2024 RTEP Window 1

PJM presented an update on the package of transmission upgrades it plans to recommend to the Board of Managers for inclusion in the 2024 Regional Transmission Expansion Plan (RTEP), which includes about $4.6 billion in projects focused on meeting rising power flows from the west to east. 

Staff plan to bring the proposal to the board in the first quarter. (See “PJM Unveils Recommended Projects for 2024 RTEP Window 1,” PJM PC/TEAC Briefs: Dec. 3, 2024.) 

The initial $5.8 billion cost estimate aggregated from all the projects included has been optimized by PJM, reducing the cost by more than $1 billion. Changes include revising Dominion’s Kraken Loop project to consolidate two proposed 765/500-kV substations into one, named Yeat, where the loop would terminate, deferring some of the 230-kV upgrades associated with the loop, and excluding a rebuild of the 230-kV Carson-Clubhouse line in Dominion’s package of transmission reinforcements. 

Much of the need stems from rising data center growth in Northern Virginia, centered around “Data Center Alley,” near Washington Dulles International Airport, as well as electric vehicle and electrification trends.  

Prior to announcing the recommended projects, PJM said it had expanded its assessment to include the preliminary 2025 load forecast with the aim of ensuring that the upgrades could hold up to higher load growth. That raised objections among some TOs who argued that changing the factors PJM used to evaluate projects after they had been submitted was unfair and benefited incumbent utilities with more insight into expected LLAs. (See “PJM Presents Shortlist of Projects for 2024 RTEP Window 1,” PJM PC/TEAC Briefs: Nov. 6, 2024.) 

The proposal includes a new 765-kV line that would run from the John Amos substation in West Virginia, through the Welton Springs facility, and terminate at a new 765/500-kV Rocky Point substation in Virginia. That site also would be looped into 500-kV lines running between the Doubs, Goose Creek, Aspen and Woodside substations. Construction of the corridor from John Amos to Rocky Point would be assigned to FirstEnergy, with Transource doing upgrades in the AEP region. 

The $704 million Kraken Loop proposal would create a new 500-kV line running from North Anna, passing the Ladysmith substation to the east and turning north to a new Kraken substation. It would continue to the new Yeat substation in Fauquier County. Kraken also would be cut into the existing 500-kV Ladysmith-Possum Point line. 

Supplemental Projects

FirstEnergy presented a $15.8 million project to replace a 500/138-kV transformer and other equipment at its Pruntytown substation in the APS zone because of obsolescence and difficulty sourcing replacement parts. The project is in the conceptual phase with a possible in-service date of June 30, 2029. 

PPL presented a conceptual $242 million project to serve a new service request in New Buffalo, Pa., by building a new 500/138-kV substation, to be named for the town, along the 500-kV Juniata-Alburtis line. The 9.6-mile segment of existing line that would run from New Buffalo to Alburtis would be rebuilt as a double circuit as part of the project. The in-service date is May 30, 2028. The customer is expected to come online in 2027 with an initial load of 200 MW, growing to 1 GW in 2031. 

Exelon presented a $22 million project to install 12 new 230-kV breakers at its Mount Zion substation in the PEPCO zone to limit the number of taps on one line, addressing the potential for multiple networked elements to go offline simultaneously. The project also would replace 24 disconnect switches, install relays at each new breaker and end station, and new telecommunications equipment. The project is in the engineering phase with an estimated in-service date of June 1, 2030. 

Duke Energy presented a $63 million project to build a new 345-kV substation, named Turner, to serve a new service request near Mount Orab, Ohio, which is expected to ramp up to 2 GW of load in 2029. The line would be cut into the 345-kV Stuart-Hillcrest line, with additional lines of the same voltage being built to the Pierce and Don Marquis substations and a 1.2-mile loop connecting Turner to the existing 345-kV Pierce-Kyger Creek line. The work would be split between Duke; American Electric Power, which owns the Don Marquis site; and the Ohio Valley Electric Corp., which owns Kyger Creek and would split the Turner facility with Duke. The project is in the scoping phase with a projected in-service date of June 1, 2029.

Dominion presented four projects to construct adjacent substations in Henrico County, Va., to serve nearly 1 GW of data center load expected to come online in 2029. The network would be linked with $51 million of 230-kV lines cut into the existing transmission between the Chickahominy substation and White Oak and Portugee sites. 

The $20 million Gray Bark substation would be cut into the Portugee-Chickahominy line and be configured in a 230-kV six-breaker ring configuration serving an ultimate load of 300 MW. Gray Bark would be linked to the $20 million Saltwood substation with two lines into a six-breaker ring serving 300 MW. Both substations are set to come online in the third quarter of 2027. 

A $20 million Thicket substation would be built along the Chickahominy-White Oak line to serve 255 MW with a six-breaker ring. It would be linked to Saltwood by one line and another to a $15 million Bunker substation configured as a four-breaker ring to serve 104 MW. Both are estimated to come online in the fourth quarter of 2027, and the overall project is in the engineering phase. 

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Newsom Budget Lays out Cap-and-trade Extension, Climate Spending

California lawmakers may consider extending the state’s landmark cap-and-trade program, following a request from Gov. Gavin Newsom in his 2025/26 budget proposal released Jan. 10.

“Although the current cap-and-trade program does not expire until 2030, considering extension sooner could provide greater certainty and attract stable investment,” according to the Climate Change and Environment chapter of the 2025/26 budget summary.

Cap-and-trade is considered a key piece of the state’s greenhouse gas reduction strategy and will be needed beyond 2030 to reach the state’s goal of carbon neutrality in 2045, Newsom’s budget said.

And discussions of an extension must include how cap-and-trade proceeds will be spent. The proceeds must support programs “that deliver effective pollution reduction results, support clean transportation and communities, and help address energy affordability,” the governor’s budget summary stated.

California launched its cap‑and‑trade program in 2012 and reauthorized it in 2017. The program sets a cap on GHG emissions that decreases over time. Carbon allowances are sold through government auctions, and purchasers can use the allowances to cover their own emissions or trade them to others.

In the first 10 years of cap-and-trade in California, proceeds provided $28 billion in funding to more than half a million GHG reduction projects through the California Climate Investments program.

In 2014, the California program was linked to that of Quebec.

Last year, Washington Gov. Jay Inslee signed Senate Bill 6058, which allows the state’s cap-and-invest program to link with the California-and-Quebec carbon market. (See Bill to Link Wash. Cap-and-trade with Calif.-Quebec Passes Both Houses.)

Climate Bond Spending

Newsom’s 2025/26 budget also proposes spending $2.7 billion from Proposition 4, a $10 billion climate bond measure that California voters approved in November.

The proposal includes $325 million for wildfire mitigation and forest resilience in 2025/26, at a time when wildfires are ravaging the Los Angeles area.

The budget allocates another $228 million in climate bond proceeds to prepare ports for offshore wind. And $50 million is earmarked for load reduction and backup generation to enhance electric grid reliability during extreme weather events.

In a separate proposal, Newsom wants to spend $2.3 million from special funds for the California Air Resources Board to develop regulations authorizing the use of E15 — a gasoline blend that contains 15% ethanol rather than the 10% ethanol in commonly used E10 blends. Newsom’s budget said the strategy could potentially increase existing gasoline supplies and lower gas prices.

The governor’s $322.2 billion budget, which Newsom described as balanced, now heads to the state legislature for review. However, the impact on the budget of the Los Angeles wildfires is not yet known. On Jan. 13, Newsom proposed providing at least $2.5 billion in additional funding for emergency response and to “jumpstart” recovery efforts.

Cap-and-trade Amendments

In addition to a potential legislative extension of California’s cap-and-trade program, the state Air Resources Board is working on amendments to the regulation.

CARB held a series of informal stakeholder workshops on potential regulatory updates in 2023 and 2024. The agency expects to release a regulatory package for public comment early this year.

One goal of an update is to increase the program’s stringency, “supporting a long-term carbon price signal aligned with the state’s 2045 climate targets,” CARB said in a workshop presentation.

According to an Oct. 15 market notice, the amendments are expected to include the removal of at least 180 million allowances from 2026-2030 to align with GHG reduction goals. A one-time cost increase for cost-containment provisions is also expected, to better align with the federal assessment of the social cost of carbon.

Among other possible revisions, regulatory updates will also reflect CAISO’s Extended Day-Ahead Market (EDAM).