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April 24, 2025

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Gas Soars, Wind Slumps for GE Vernova

GE Vernova’s gas turbine sales pipeline grew 39% and its onshore wind orders dropped 42% in the first quarter of 2025 amid sweeping changes in the U.S. energy landscape. 

The company reported solid financials April 23 and provided details on its business segments. 

Natural gas again was a focus as CEO Scott Strazik spoke to financial analysts on a conference call. 

In the first quarter, GE Vernova booked 7 GW of orders and 7 GW of slot reservations that are expected to convert to orders, bringing the total gas turbine pipeline to 50 GW. 

Strazik said GE Vernova expects to ship 10 GW worth of gas turbines and take orders for 20 GW through the remainder of 2025, ending the year with a 60-GW backlog that will book up production capacity through 2028. 

Already, the company is signing agreements for gas turbines to be delivered in 2029, setting the stage for infrastructure investments that will shape the power sector for decades. 

A day after the earnings report, GE Vernova and Duke Energy announced agreement on a purchase of up to 11 of GE Vernova’s 7HA gas turbines — in addition to the eight recently secured. 

Meanwhile, the company continues to wind down its exposure to offshore wind, fulfilling its two remaining commitments — turbines for the Dogger Bank and Vineyard Wind projects — and recording a $70 million loss on termination of the last of the supply agreements for the 18-GW offshore turbine it decided not to bring to market. 

The company’s wind sector reported a net loss. Individually, onshore wind delivered its fifth straight profitable quarter. New orders were 43% lower than in the first quarter of 2024, however. 

“We remain cautious on the timing of an onshore order inflection in North America as customers continue to navigate growing interconnection queues, policy uncertainty and higher interest rates,” CFO Ken Parks said. 

The numbers reported April 23 reflect the rapid and sizable shift in energy priorities that came with the transition from President Biden to President Trump. 

“I continue to see this market normalizing to a higher-for-longer gas market,” Strazik said. “The world needs more dispatchable power generation to support economic growth and national security. Gas power will provide a significant amount of the incremental dispatchable power while also being the force multiplier for more renewables where wind and solar resources make sense.” 

Strazik drilled down a bit on the 50 GW of turbine orders and slot reservations: About 60% of them are from the United States, but the more recent ones are more heavily in the United States and more heavily associated with data centers. 

He said the 29 GW backlog is firm but there was more chance of fluctuation within the 21 GW of slot reservations, despite the large deposits that accompany them. “I see very little quote, unquote, cancellation risk, but there will be some movement that our supply chain will have to be nimble with, as the slot reservation agreements turn to orders and final dates get finalized.” 

An analyst asked for further insight about onshore wind, historically a strong U.S. market for corporate predecessor General Electric. 

Strazik said GE Vernova is highly confident in securing market share when onshore wind begins to rebound, but does not know when that inflection point will come, and when the 200 GW-plus of U.S. onshore wind projects in early stage development start to move forward. 

“We continue to see there be an important role for wind to play, but we need to see progress on permitting,” he said. “I think there is a real question on the price embedded in those projects that are in the interconnect queue. Where are the tax incentives going? I think clarity on permitting process today and ultimately incentives [is] going to be important in … those projects getting to closure.” 

GE Vernova projected solid financial performance for 2025 but acknowledged the moving pieces that could impact its bottom line. 

“While our end markets remain strong, we are not immune to the complexity of play, given the current outline of tariffs and resulting inflation,” Strazik said. “We do expect our cost to go up $300 [million] to $400 million in 2025.” 

GE Vernova reported net income of $264 million, or $0.91 per share, on total revenue of $8.03 billion for the first quarter of 2025, compared with a net loss of $106 million or $0.47 per share, on revenue of $7.26 billion in the same quarter of 2024. 

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Firm Fuel Proposal Continues to Confuse NYISO Stakeholders

NYISO returned to the Installed Capacity Working Group with more modifications to the tariff language and general structure of its firm fuel capacity accreditation proposal, though based on the conversation at the meeting April 21, stakeholders are still skeptical of it.

The ISO made the changes in response to the criticism it received from stakeholders, including the Market Monitoring Unit. (See NYISO’s Firm Fuel Proposal Criticized.)

But stakeholders peppered staff with hypothetical questions about how penalties and FERC referrals would be triggered and when. There were several times throughout the meeting that attendees asked for others to slow down so that they could follow their line of questioning.

The firm fuel capacity accreditation project is an effort to incentivize generators to secure firm fuel contracts with their suppliers before winter, when the ISO and the New York State Reliability Council are worried about fuel shortages.

Generators wishing to elect as firm would commit to being able to run for 56 hours over any consecutive seven-day period in December through February. They would declare Aug. 1 of the prior capability year that they are opting to be firm. Failure to perform because of lack of fuel would result in a financial sanction. (See NYISO Business Issues Committee OKs Firm Fuel Accreditation Concept.)

Nikolai Tubbs, associate market design specialist for NYISO, explained the adjustments to the structure of the penalties, while Zachary Smith, senior manager of capacity and new resource integration market solutions, fielded questions from stakeholders.

For any given “winter performance month,” the financial sanction would be assessed at a 1.5 multiplier if the reason for failure was within the generator’s control. Generators would lose their firm fuel accreditation (i.e., adjusted down to non-firm) via the “settlement adjustment modifier” if failures occurred outside of the generator’s control, or if the generator failed to have an operating plan or fuel contract in place for the whole month.

Generators would be required to notify NYISO by Dec. 1 if they were unable to secure firm fuel contracts. If something goes wrong during the winter, such as a fuel contract getting canceled, the generator is also obligated to inform the ISO. This reverts their status to “non-firm” by applying the settlement adjustment modifier.

If NYISO learned that a generator failed to provide the required notice, the generator would be subject to the sanction with the 1.5 modifier and be referred to FERC. The ISO would also report to FERC if a generator supplied operating plans or fuel contracts that were “false or misleading.”

In response to a question about what would happen if a generator had no contracts by Dec. 1 but did for January and February, Smith said that it would get the settlement adjustment (be compensated as non-firm) for all three months.

“There’s no ability to cure,” Smith said. “You potentially have the worse multiplier if you also fail to perform. If you have the contracts in place for December and January, but they are not in place for February, only February gets the settlement adjustment absent any of the other failures to perform.”

Doreen Saia, a stakeholder representing generator interests, said that this implied that a failure in December would cause a settlement adjustment no matter what, but a generator might want to have contracts in place because if it didn’t, it would get hit with the worse financial sanction if it failed to perform.

“I think part of the problem is that this has been through so many iterations at this point that it would be a small miracle if the tariff said anything cogently or coherently,” Saia said.

The conversation turned toward hashing out when NYISO would refer a generator to FERC. Smith explained that after a failure to perform, the ISO had the ability to ask to review a generator’s contracts and plans, but that it might not always do so.

“If the entire gas system went out, I don’t think we’d need to get to reviewing your contracts,” Smith said as an example. “At that point it clearly didn’t matter what your contract said.”

But in other cases, Smith said NYISO would need to open an investigation into whether the failure to perform was in the generator’s control. Even in the case of an investigation, Smith would not state that the ISO would need to review contracts or plans in all cases. The ISO was reserving the right to look into plans and contracts in the event of a failure to perform.

“The NYISO is not making a judgment call on anyone’s plans, to whether or not they should have a penalty apply, absent a failure to perform,” Smith said. After some further discussion, Smith said NYISO did not want to be in the position of approving people’s operating plans; it just wanted to audit plans if there was a concern.

“There’s a lot of ‘ifs’ and ‘thens’ here,” one stakeholder said at one point during the meeting. “Might I suggest you put this into a flow chart?”

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SPP Stakeholders Open Discussion on Affordability

HOUSTON — SPP staff have opened a discussion into affordability and the grid operator’s proposed regionwide approach to improve decision-making and keep affordability as a key focus of the business strategy. 

To that end, CFO David Kelley shared with the Strategic Planning Committee a draft definition of affordability that defines it as the ongoing pursuit of “delivering regional solutions at a cost that balances near-term financial impacts with long-term economic sustainability” in SPP’s footprint. 

He said during the SPC’s April 16 meeting that the definition is supported by a model that incorporates transparency, proactive planning and stakeholder-driven decision-making to ensure costs and benefits are well understood and balanced over time. 

Kelley invited the SPC’s membership to meet with him and help refine the affordability model. Several were quick to respond during the meeting. They offered their initial thoughts on FERC’s efforts to place affordability on equal footing with reliability, clarifying the definition of affordability to ensure it’s easily understood, including regulators in the discussion, emphasizing the affordability of connecting in this region and defining where the committee will draw the line on affordability. 

“It’s very clear that FERC has put affordability on the same level as reliability. The previous FERC chairman made that very, very clear, and the current chair has not changed that view,” Golden Spread Electric Cooperative’s Mike Wise said. “So my encouragement is to keep affordability and reliability in the same sentence and the same focus, same level of concern.” 

“A lot of this looks through the lens of retail rates. That’s actually complicated, and like all of us in this room, we will use consumer costs to support a point,” said David Mindham, with EDP Renewables. “We’ve got to be careful that we’re not using this to support our business interests, as opposed to the customers’ interest.” 

Kelley said the genesis was the Finance Committee making it “abundantly clear” how important affordability was in presenting the budget, his first after being promoted to CFO. 

“This is intended to be something that is regional in nature. We as a regional organization, how would we view affordability, recognizing that every member in this room, and all 116 or 118 members that we have, would have their own unique view of affordability?” he asked rhetorically. “What is the lens that we will view the things that we’re bringing forward, whether it’s transmission, expansion plans or proposed changes to the [planning reserve margin] or changes to revolutionize our market? How are we viewing those things in terms of affordability?” 

The conversation continued into the next agenda item, a discussion of short-term reliability projects (STRP) that was facilitated by board member Irene Dimitry. She said the number, size and cost of the projects have grown tremendously, triggering a need to rethink the board’s treatment of these projects and how to make more informed STRP decisions. 

CEO Lanny Nickell clarified that a 30-day comment period was to gather SPC members’ feedback on proposed considerations and not whether STRPs should continue to be assigned to incumbent transmission owners or put out for competitive bids. 

“Personally, I believe this issue falls squarely in the reliability and affordability balance that we just talked about, and it sits squarely with the board,” board Chair and SPC Chair John Cupparo said after the discussion closed. “We didn’t ask for that responsibility, but we got it as part of [FERC’s] Order 1000 process. If the $3.2 billion [of STRPs] that we just approved in February was a one-time event, you might be able to justify leaving everything as is.  

“But it appears the 2025 ITP may be as big, if not bigger, and we don’t know what 2026 looks like. From my perspective, if this is a regular occurrence, we as a board have an obligation to define what safeguards mean and how we plan to execute that role.” 

SPP Waits on Executive Orders

Kelley told the committee members interested in the grid operator’s perspective on the Trump administration’s energy executive orders issued April 8 will have to wait until the SPC meets virtually in July or holds a special meeting. 

“[That] flurry of orders did just come out last week, and we are still looking into them and evaluating potential implications,” he said. “I can commit to you that once our team has gone through them and developed an approach for how we might want to engage with any elected officials or otherwise and we need to inform the SPC of what our plans and intentions are or get feedback from you, we will schedule some time. 

“We understand the SPC’s role in these types of activities.” 

He said members should direct any feedback or specific requests to Kevin Bryant, the RTO’s first executive vice president of stakeholder affairs and chief strategy officer, who goes by “KB.” Bryant’s team is coordinating the executive order review and will facilitate the committee’s future conversations on the EOs. 

SPC Scope Changes Add Members

The SPC endorsed revisions to its scope that include increasing its membership from 14 to as many as 29, matching the Members Committee’s sector representation. The MC participates in board meetings and provides advisory votes to the directors. 

The sectors will select their representatives to fill the 14 vacant seats, following SPP’s normal processes. The board also can add one of its members to the SPC. The Corporate Governance Committee and the board will review and approve the selections. Current members will not be affected. 

Kelly said the scope changes reflect SPC’s new focus on ensuring that “we’re staying on the forefront of the pace of change that is happening with our industry and certainly, the things that are affecting SPP,” as determined by members’ feedback. 

The CGC also will consider the changes and make a recommendation to the board. The directors will select the nominees in August. 

The nominations have been submitted, but two sectors (the Independent Power Producer/Marketer and the State Power Agency) have more candidates than open seats and will have to settle on their final slate. 

SPP Releases FERNS Report

A planned presentation and discussion of Brattle Group’s Future Energy Resource Needs Study (FERNS) was rescheduled for the July SPC meeting, but the report itself already has been published. 

Among its findings, the report predicts renewable generation will grow “significantly,” even without federal tax credits or other clean energy policies. Brattle said because of renewable energy’s abundant availability in the SPP footprint and declining technology costs, carbon-free generation’s share could reach about 90% by 2050. It predicts the RTO will serve growing loads “reliably and affordably” through a combination of fossil-fueled generation, wind, solar, nuclear, hydro and battery storage resources. 

Engineering Vice President Casey Cathey said the study was aggressive in 2023 and that SPP already has surpassed the study assumptions.  

SPC members also approved transitioning the Future Grid Strategy Advisory Group to the Grid Transformation Advisory Group, advising and reporting to the SPC. It will continue as an advisory group, reporting directly to the SPC, and collaborate with other groups and staff while focusing on developing ideas that bring long-term strategic advantage. 

Mike Skelly Lunches with SPC

Renewable energy entrepreneur Mike Skelly, escorted by board member Stuart Solomon, crashed the SPC’s pre-meeting lunch. He then looked on as the meeting began. 

“I heard there was a lunch here,” he explained to an SPP stakeholder inquiring about his presence. 

Skelly attended the Gulf Coast Power Association’s spring conference in the morning before making the seven-block trek to the SPC’s hotel.  

“How could you tell? Was it because of this?” he said to RTO Insider, flipping his brightly colored tie. 

Skelly grew Horizon Wind Energy, now part of EDP Renewables North America, and founded Clean Line Energy. Clean Line went under in 2017 in the face of legal, political and bureaucratic obstacles. Skelly since has co-founded Grid United, where he is the CEO. 

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Consumer Groups Invoke DOJ Stance in Stalled Complaint on ROFRs in MISO Planning

A collective of consumer groups has invoked a recent letter from the U.S. Department of Justice to get FERC to act on its three-year-old complaint against MISO for deferring to state right of first refusal laws in regional planning.

The complaint — from the Industrial Energy Consumers of America, the Coalition of MISO Transmission Customers and others — asks FERC to force MISO to brush off state ROFRs when planning transmission (EL22-78). FERC has yet to address it. (See Consumer Collective Again Asks FERC to Strike ROFR Laws from MISO Planning.)

In mid-April, Paul Cicio of Industrial Energy Consumers of America entered a letter into the record from the DOJ to Iowa State Sen. Jesse Green (R), urging the Iowa Legislature to rethink a reintroduction of the state’s ROFR law that was overturned in 2023. (See Iowa ROFR Law Overturned, Throwing Multiple MISO LRTP Projects into Uncertainty.)

Iowa legislators in early 2025 reintroduced an Iowa ROFR bill in the Senate (SB 1113).

The collection of consumer groups challenging MISO’s regard for ROFRs in planning has said Iowa provides a case study in the delay and litigation that ROFR laws introduced. It argues MISO should be able to disregard them.

The March letter from Assistant Attorney General Abigail Slater calls competition a “core organizing principle of the American economy” and said ROFRs’ bypass of competitive bidding disadvantages firms “that could offer lower prices, greater innovation and superior terms to Iowa’s utility customers.”

Slater reminded the Iowa Legislature that President Donald Trump declared a National Energy Emergency in early 2025 and that the DOJ has filed briefs in other cases that challenge the constitutionality of state ROFR laws.

“The bill turns a ‘preference for further investment in Iowa transmission infrastructure by electric transmission owners’ into a legal grant that shields incumbents from competition,” the letter said. “In some cases, incumbent operators will be best positioned to deliver high quality, cost-effective infrastructure projects quickly. But even in such circumstances the threat of competitive pressure from potential rivals will incentivize better outcomes like lower prices for consumers and more robust and innovative project designs. In other cases, non-incumbent firms may offer lower costs, and better project designs, and they should be allowed to compete on the basis of the better value they offer.”

MISO: Complaint Still Has No Legs

MISO, as it has for years, continues to oppose the complaint. In an early April response, it said the consumer alliance’s attempt to cut the state ROFR exemption from its tariff is a collateral attack on MISO’s accepted compliance under FERC’s Order 1000.

MISO in 2022 assigned several projects from its first, $10.4-billion long-range transmission plan (LRTP) portfolio to incumbent transmission owners in Iowa based on the valid state ROFR in place in Iowa at the time. The RTO pointed out that it wasn’t until early December 2023 that the Iowa District Court overturned the ROFR on a remand from the Iowa Supreme Court.

“MISO has been clear that, following the Iowa District Court’s decision on the merits, the Iowa ROFR law was no longer applicable, on a prospective basis,” the RTO said. It ended up using its variance analysis to examine project assignments in Iowa for the subsequent, $21.9 billion LRTP portfolio. MISO ultimately left that round of projects also to its incumbents, concluding the district court’s order did not change project assignments nor direct that projects be reclassified into competitive facilities. MISO also said the district court specifically said it was not a party to the court’s action.

“Far from indicating that the state ROFR exemption is unjust and unreasonable or otherwise unworkable, the tariff process worked in the Iowa case despite its complicated litigation posture and the attendant uncertainty,” MISO argued. “Further, to the extent the consumer alliance suggests that MISO must apply ROFR determinations retroactively for the state ROFR exemption to be just and reasonable, such a position lacks merit. The filed rate doctrine and the rule against retroactive ratemaking are clear that MISO cannot revisit such determinations without a binding legal directive from the commission, subject to the applicable FPA process.”

MISO acknowledged Indiana’s ROFR also is the target of fluid and complex litigation. (See 7th Circuit Lifts Injunction on Indiana ROFR, Remands LS Power’s Case.) The RTO said, so far, the ROFR has been in effect throughout the development of the second LRTP portfolio, and as such, it again assigned the lines to the incumbent transmission owners. It said it again would draw on a variance analysis to confirm project assignments in Indiana, if needed.

“MISO does not know what conclusion the federal courts ultimately will reach with respect to the constitutionality of the Indiana ROFR law. As the 7th Circuit recognized, there are many different unknowns at this time. … If the Indiana ROFR law is determined to be unconstitutional, MISO will give a prospective effect to any such determination, consistent with the filed rate doctrine and any directives from the commission,” MISO said.

The grid operator pushed back against the consumer alliance’s claims that MISO “default[s] to incumbent project assignment regardless of questions regarding the constitutionality of state laws.” It said it was simply applying its tariff as written.

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Oregon House Passes Bill to Shift Energy Costs onto Data Centers

The Oregon House of Representatives has approved a bill that would require data center developers to shoulder a larger share of their own energy costs in an effort to mitigate risk to smaller consumers. 

House Bill 3546, or the POWER Act, passed in a 41-16 vote on April 22. It empowers the Oregon Public Utility Commission to create a separate customer category for large energy users, such as data centers, and requires those users to pay a proportionate share of their infrastructure and energy costs. 

The legislation now moves to the state Senate. 

Rep. Pam Marsh (D), one of the bill’s chief sponsors, said the “explosion of huge technology facilities has upended” the traditional idea of distributing energy demand costs equally among consumers. 

“Since 2019, data center growth in [the Portland General Electric] territory has been equivalent to an increase of 400,000 residential customers, but residential demand has actually grown by only 63,000 people, or 24,000 customer accounts,” according to Marsh. “Without intervention, the cost created by the disproportionate demand of big energy users will be borne by residential and small business consumers who are already struggling.” 

The bill defines a large energy use facility as one that uses more than 20 MW. The law would apply only to Oregon’s investor-owned utilities. 

Additionally, under the bill, data centers must sign contracts for at least 10 years with energy companies to protect energy infrastructure investments. The contract requires the data center operators to pay for a minimum amount of energy based on the center’s expected energy usage during the contract period, and “[m]ay include a charge for excess demand that is in addition to the tariff schedule,” according to the bill. 

“If a utility is going to make investments to serve a large user, we need some assurances that those investments do not become a stranded asset that is essentially shifted to other ratepayers,” Marsh said. 

The bill also requires the Oregon PUC to provide the legislature with reports detailing trends in load requirements. 

Kandi Young, a spokesperson for the PUC, told RTO Insider that the commission “appreciates the legislature’s recognition of the challenges new large loads can present to utilities and their customers. The PUC already is working to help ensure that other electricity customers do not inappropriately pay for the costs to serve these large users of electricity and will work with stakeholders from all perspectives to implement additional policy direction on this issue should the bill be signed into law.” 

Pacific Power spokesperson Simon Gutierrez said the utility, a subsidiary of PacifiCorp, “supports HB 3546 as a meaningful framework to ensure continued economic growth with fairness for all customers.” 

“While the existing regulatory framework is established to protect customers and align the costs of energy infrastructure with the customers benefiting from these investments, the scale, pace and uncertainty surrounding this potential load growth [require] additional regulatory updates to protect all customers while creating a path for large customers to expand their businesses,” he said. 

Organizations like the Northwest Energy Coalition, BlueGreen Alliance and Sierra Club have supported the bill. 

‘Disparate Rate Treatment’

The bill also faced opposition. Republican Rep. Bobby Levy called it a “regulatory overreach.” 

Data centers are “legally operating businesses already regulated under existing PUC authority, and they provide critical infrastructure, jobs [and] economic development, especially in rural areas,” Levy said. “Under this bill, they would face entirely separate tariff schedules, new reporting burdens and regulatory uncertainty, not because they’ve done anything wrong but because they’ve grown and used power efficiently.” 

Writing in opposition to the bill in March, the Data Center Coalition, a membership association, said it “supports the underlying intent of HB 3546, and the data center industry is committed to paying its full cost of service.” 

But “no customer, industry or class should be singled out for differential or disparate rate treatment unless that approach is backed by verifiable cost-based reasoning,” DCC wrote. “Data centers are but one large end user of electric utilities and part of a larger portfolio of end users driving increased electricity demand. Any rate design that focuses on a single end use, without showing a measurable difference in service requirements or cost responsibility, risks creating unjustified distinctions among similar customers.” 

Shannon Kellogg, vice president of public policy at Amazon Web Services, which has been operating data centers in Eastern Oregon since 2011, provided neutral testimony, writing that “a significant bottleneck to bringing new carbon-free energy projects online is the interconnection process to the grid.” 

“To unlock these projects, it is important for transmission infrastructure and regional energy systems to modernize and expand quickly, and we are working closely with lawmakers and regulators to accelerate these changes,” Kellogg wrote. 

The proposed legislation comes as data center growth in Oregon has increased rapidly. The amount of data centers seeking service “is unprecedented,” according to an Oregon Citizens’ Utility Board presentation. 

In December 2024, WECC predicted that annual demand in the Western Interconnection would grow from 942 TWh in 2025 to 1,134 TWh in 2034. That 20.4% increase is more than four times the 4.5% growth rate from 2013 to 2022 and double the 9.6% growth forecast in 2022 resource plans. (See West to See ‘Staggering’ Load Growth, WECC Report Says.) 

Similarly, the Pacific Northwest Utilities Conference Committee’s Northwest regional forecast for 2024 found that electricity demand would increase from about 23,700 average MW in 2024 to about 31,100 aMW in 2033, an increase of more than 30% in the next 10 years. 

In February, Washington Gov. Bob Ferguson directed three state agencies, electric utilities and other groups to collaborate in developing a report recommending policies for addressing with data center energy use. (See Wash. Governor Orders Study to Explore Data Center Impact.) 

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Texas RE Speaker Emphasizes Human Role in Security

Devin Ferris, the Texas Reliability Entity’s manager of critical infrastructure protection compliance monitoring, did not mince words in his briefing on cyber readiness at the regional entity’s Spring Standards, Security and Reliability Workshop on April 23.

“It’s important to understand what we’re up against. The threat landscape is changing; the speed at which it is changing, the volume the sophistication of those threats, is ever-increasing,” Ferris said. “Attackers are using [generative artificial intelligence], and that’s changing the game on certain things. These attackers are able to gain initial access quickly, weaponize whatever they’re doing, exploit it, and be out of there and cover their tracks.”

Despite his invocation of AI and other new technologies, Ferris emphasized that one of the biggest risks entities face is an old one: human error. But, he continued, this danger also represents an opportunity.

“You hear a lot in the security world [that] people are the weakest link in security,” Ferris said. “That could be true, but I truly believe if you shift your mindset on that, you could turn it on its head. You can create a culture of security, and they are going to be the strongest link in that.”

The theme of Ferris’ presentation was the risks posed by low-impact grid cyber systems, which NERC defines as systems not considered a significant risk to grid security. He told attendees that while some might assume these systems are low priority, Texas RE and the ERO in general have devoted considerable attention to them in recent years because “there’s a lot of growth in that space,” particularly with the rapid spread of internet-connected inverter-based resources “that are more than likely going to be low-impact.”

In his presentation, Ferris aimed to help utilities prepare for compliance audits of CIP-003-8 (Cybersecurity – security management controls). The standard requires entities to have “consistent and sustainable security management controls that establish responsibility and accountability to protect [high-, medium- and low-impact] cyber systems against compromise that could lead to misoperation or instability in the” grid.

Rather than give the bulk of his time to compliance, Ferris said he wanted listeners to think more about risks, saying that “if you mitigate these risks, you can effectively still … achieve compliance. It’s going to be a byproduct of that.”

For example, he noted that CIP-003-8 requires entities to permit only “necessary” inbound and outbound electronic access. With many new IBR facilities relying on remote connections, this requirement creates a challenge for utility staff.

“One of the risks that you have is if you haven’t identified what’s necessary, and you’re proactively looking to see if access is still needed on a periodic basis, you may not be able to address it, and so the compliance and risk overlap,” Ferris said. “And when you do these reviews, if you’re documenting what the justification … or your business need is, it’s going to help you make sure that only necessary rules are in place and that you still need them as access changes and you implement new technologies, or there’s different threats you’re trying to mitigate.”

He then returned to the theme of human error, noting that phishing and social engineering frequently are used by attackers to gain a foothold in a target system. Without knowledgeable, educated staff, he warned, utilities remain vulnerable to such attacks, especially with their systems increasingly dependent on remote connections.

Ferris said that multifactor authentication (MFA) can be an effective way to mitigate the phishing and social engineering risks, but he urged listeners to remember that “some are better than others.” An MFA approach that uses a hardware key may be more effective than one that depends on text messages or an app.

Human attention remains the most important factor, Ferris said, as much for physical security as for cybersecurity. Whether it involves periodic checks of cyber access permissions or walk-downs of fences and other physical infrastructure, utilities must maintain awareness of who is allowed into their systems and why.

“The key to all of this, to remain compliant and be reliable and address those risks, is, are you controlling the access? Because that’s what the standard says you have to be able to control,” Ferris said.

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NextEra Energy Continues to Rack up Renewables Deals

NextEra Energy posted solid first-quarter financials and said its renewables portfolio continued to grow even as President Donald Trump began implementing pro-fossil fuel policies.

CEO John Ketchum said during an April 23 conference call that wind, solar and storage are indispensable now as the U.S. expects to need a lot more megawatts because renewables can be brought online much faster than natural gas generation and much, much faster than nuclear.

He called renewables “a critical bridge” to a future when other technologies can be brought online at scale.

Until fairly recently, many people were calling natural gas the “bridge fuel” to a decarbonized future. But natural gas has problems, said Ketchum, whose company is an all-of-the-above energy provider operating renewable, nuclear and natural gas generation.

The cost to build a gas plant has tripled in just a few years, and Trump’s tariffs will drive the cost higher, he said. Meanwhile, companies building LNG export terminals, factories and data centers have lured away the skilled workers who would build gas plants, and gas turbine manufacturers are booked up with yearslong wait times on new units.

“Gas is such a long-term solution,” Ketchum told analysts on the conference call. “We’ve gone up from four and a half years to build a combined cycle unit to six or longer.”

This state of affairs, he said, calls for energy realism — understanding the high demand and embracing all solutions — and calls for energy pragmatism — recognizing that some solutions are not ready today and accepting the tradeoffs this implies.

“Renewables and battery storage are the lowest-cost form of power generation and capacity,” Ketchum said, “and we can build these projects and get new electrons on the grid in 12 to 18 months.”

The U.S. is expected to need more than 450 GW of new generation by 2030, he said, and only 75 GW of that is expected to be natural gas fired. Canceling every planned coal retirement would yield only about 40 GW more. Meaningful increases in nuclear generation are 10 years away at best and likely to be much more expensive than gas when they arrive, he added.

In this scenario, NextEra expects to thrive, despite renewables suddenly falling into presidential disfavor.

In the first quarter, subsidiary NextEra Energy Resources originated 3.2 GW of new renewables and storage and scored its largest-ever quarter for solar and solar-plus-storage origination, bringing its project backlog to 28 GW.

Meanwhile, subsidiary Florida Power & Light placed 894 MW of new solar generation into service, bringing its owned-and-operated solar portfolio to more than 7.9 GW — the most of any U.S. utility.

“We continue to see a lot of appetite for renewables,” Ketchum said.

And what of the actual and threatened tariffs that are causing such consternation in so many sectors of the economy? NextEra began to get ready for this years ago. Because it is so large and its competitors are mostly small, it had the leverage and buying power to shift tariff risks onto suppliers in most of its contracts, Ketchum said. NextEra forecasts only $150 million in tariff exposure through 2028 on $75 billion in projected capital expenditures, he said, and may be able to negotiate that exposure down as low as $0.

It also shifted to U.S.-made components, where possible.

“We didn’t just wake up on Nov. 6 and say, ‘Oh my God, what do we do about our supply chain?’” Ketchum said. “We’ve been thinking about this for years, and so we put the right things in place.”

NextEra reported first-quarter revenue of $6.25 billion, up from $5.73 billion a year earlier, and GAAP net income of $833 million ($0.40/share), down from $2.27 billion ($1.10/share).

Adjusted (non-GAAP) earnings were $2.04 billion ($0.99/share), up from $1.87 billion ($0.91/share).

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All-electric Rebuild After L.A. Fires Could be Better than Dual-fuel, Report Finds

Los Angeles leaders should consider rebuilding the more than 20,000 structures destroyed by the January 2025 wildfires as all-electric rather than as dual-fuel despite the potential higher life cycle costs of all-electric buildings, a new report finds. 

After the fires, which burned for much of January, L.A. Mayor Karen Bass issued an executive order that temporarily waived the city’s all-electric building code requirement for rebuilding projects in fire areas, the report by the U.C. Berkeley Center for Law, Energy and the Environment says.  

Typically, an all-electric new single-family home can be $7,500 to $8,200 cheaper to build than a dual-fuel home, while installing a gas line to a new home can cost between $500 and $2,000, according to the report.

But in the neighborhoods burned by the fires — specifically the Pacific Palisades and Altadena — much of the existing natural gas underground piping was undamaged. This negates savings typically found on new construction sites where natural gas infrastructure must be built from scratch.  

Along with reusing existing gas piping, rebuilding homes as dual-fuel homes could be cheaper due to bills: Natural gas bills in L.A. currently are lower than electricity bills for most residents, the report says.  

“Given the possibility of high electricity costs into the future, the most cost-effective option over the building life cycle may be a dual-fuel rebuild, but this scenario is uncertain and necessarily affected by the context of the climate transition in California,” the report says. 

In the long run, all-electric homes could end up as a better investment for a homeowner if more buildings in the region switch to electric-only service. In such a future, there would be fewer ratepayers to share the burden of gas recovery costs, thereby increasing the cost of gas bills.   

All-electric buildings also provide other benefits to homeowners, such as improved indoor air quality, the report says. Natural gas contains volatile organic chemicals (VOCs) that are associated with numerous adverse health impacts and generate indoor air pollution even when appliances, such as stoves, are turned off. Switching from a gas stove to electric induction can reduce indoor nitrogen dioxide air pollution by over 50%, the report says. 

As for speed, all-electric construction tends to be faster than dual-fuel construction: Many rebuilt homes will need to issue separate gas and electric service requests, creating potential coordination issues. Additionally, electricity service will be restored to all homes and businesses regardless of the recovery approach, the report says. 

Policymakers should support streamlining all-electric construction and facilitating electricity affordability, while educating consumers about the cost effectiveness, speed, safety and sustainability of all-electric infrastructure, the report says. 

Last month, Mayor Bass issued an executive order directing city departments to streamline pathways for all-electric and fire-resistant construction.  

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Maine PUC Seeking Feedback on Transmission, Generation Procurement

The Maine Public Utilities Commission is seeking feedback and indications of interest for a procurement of generation and transmission capacity to connect at least 1,200 MW of clean energy in Northern Maine to ISO-NE.

State law requires the PUC to seek long-term contracts for generation in Aroostook County and for a new transmission line to connect it to ISO-NE. The sparsely populated county has significant clean energy potential owing to its high wind speeds, but Northern Maine is not directly connected to the ISO-NE system, instead connecting to the Eastern Interconnection through New Brunswick, Canada.

Policymakers and developers in the region have long seen the region as a potential source of cheap power. ISO-NE and the New England States Committee on Electricity (NESCOE) have focused the first Longer-Term Transmission Planning (LTTP) procurement on facilitating the interconnection of 1,200 MW of onshore wind and alleviating transmission constraints in the southern part of the state. (See ISO-NE Releases Longer-term Transmission Planning RFP.)

The PUC has said it aims for its procurement to be complementary to the LTTP procurement, which is being run by ISO-NE. In the request for information issued in early April, the PUC asked for feedback on how to best coordinate and sequence its solicitation with the LTTP process (DPU 2024-00099).

The RFI highlights some unique challenges and questions associated with coordinating the two procurements. ISO-NE’s request for proposals features a Sept. 30 submission deadline, and the RTO does not expect to select a project until fall 2026. There also is no guarantee that a project will emerge from this RFP, as NESCOE has the right to terminate the process even if a proposal is selected by the RTO.

If Maine waits until the conclusion of the LTTP process to proceed with its own procurement, this likely would push its process back for more than a year.

The state also must grapple with the challenges of simultaneously procuring generation and transmission. The PUC asked for input on the interdependencies between these two aspects of its procurement, as well as on potential “advantages or disadvantages to allowing or prohibiting combined or linked transmission and generation project proposals.”

The PUC is seeking feedback on potential contact adjustments and flexibility for generation projects to account for risks of transmission delays. The PUC also asked for input on long-term contract length, inflation adjustment mechanisms, mitigating permitting risks, the availability of federal funding and tax credits, and the potential impact of federal policy, tariffs and federal permitting requirements.

The RFI also includes questions about partnering with other states for the procurement, as the statute specifically directs the state to seek partnerships with other states and utilities. Massachusetts previously agreed to buy up to 40% of the generation and transmission capacity from an earlier iteration of this solicitation, but the Maine PUC terminated this procurement after LS Power said it could no longer meet its fixed price due to delays associated with negotiating contracts in Massachusetts (DPU 2021-00369).

In October 2024, the U.S. Department of Energy under President Joe Biden agreed to serve as the anchor off-taker for an Avangrid proposal to build transmission into Northern Maine, awarding the project up to $425 million to help de-risk the project. (See Long Road Still Ahead for Aroostook Transmission Project.)

At the time, Avangrid said it expected the PUC to announce winning bids at some point in 2025. This timeline now seems highly unlikely, and federal policy changes may pose a significant threat to the funding.

The PUC is requesting feedback from stakeholders by June 2, with supplemental comments due at the end of September. It also asked developers to submit indication of interest forms by June 2, which should include “a brief description of the project or projects they would develop” and “a description of how the project(s) would be impacted by different possible outcomes of the ISO-NE regional solicitation.”

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SPP MPEC Members Celebrate Markets+ Funding Order

DENVER — FERC’s approval of SPP’s Markets+ funding agreement and its recovery mechanism came as interested participants in the Western centralized day-ahead market were meeting with the snow-capped Rockies as a backdrop. 

They cheered when they were notified of FERC’s decision during their April 22 Markets+ Participant Executive Committee (MPEC) meeting. Then they went back to work. (See FERC Approves SPP’s Funding Plans for Markets+.) 

“We’re in go time,” MPEC Chair Laura Trolese, with The Energy Authority, told RTO Insider. 

“Getting the FERC approval was super exciting. We got FERC approval both on the Markets+ funding agreement but also the final order on the last items last week,” she said, alluding to the commission’s April 17 approval of SPP’s final compliance filing for Markets+. (See FERC OKs Final SPP Markets+ Compliance Filing.) 

“We needed those two things to move forward with implementation activities and timeline,” Trolese added. 

Joe Taylor, Xcel/PSCo | © RTO Insider

Joe Taylor, with Xcel Energy subsidiary Public Service Company of Colorado (PSCo), said his company was pleased with the approval, which he said was not unexpected. PSCo filed a request in February with the Colorado Public Utilities Commission to join Markets+ and recover costs from its funding agreement. (See PSCo Seeks to Join SPP’s Markets+.) 

“We made our filing assuming that [SPP’s request] was going to be approved, and it was,” Taylor said. “It was an expectation that the funding agreement would be approved, because then we can go forward and participate and execute that agreement.” 

SPP’s Carrie Simpson, who broke the news to MPEC, recognizes that Markets+ development faces a long and winding road ahead. 

“It’s just another important milestone. We’re grateful for it, and it will set us up for Phase 2,” she told RTO Insider. 

FERC issued two orders in approving SPP’s proposed funding mechanism: 

    • The first accepted SPP’s proposed $150 million Phase 2 funding agreement as a rate schedule under the Markets+ tariff, effective March 24 (ER25-1372).
    • The second granted SPP’s request to issue debt securities to cover the agreement and fund the market’s implementation over three years until its go-live date, effective April 21 (ES25-33).

SPP has set the go-live date as Oct. 1, 2027. 

In its Feb. 21 filings, the grid operator told FERC the funding agreement will ensure those participants that benefit from the market will fund its development and share in overhead costs. 

SPP said the funding agreement is a freely negotiated contract between the RTO and each of the eight entities that have agreed to participate in Phase 2 and provide collateral to SPP’s lender equal to the amount of their obligations: Arizona Public Service, Bonneville Power Administration, Chelan County (Wash.) Public Utility District (PUD), City of Tacoma, Grant County (Wash.) PUD, Powerex, Salt River Project and Tucson Electric Power. 

The funding agreement requires the entities to provide the collateral backstop to SPP’s lender in supporting the financing the RTO will use to develop Markets+’ systems, processes and operations during implementation. The collateral is equal to the amount of the entities’ Phase 2 obligations. 

SPP says the cost to repay the financing will be incorporated into Markets+ rates and will relieve participants from the burden of providing “large sums of money to directly fund Phase 2.” SPP is splitting the phase into two stages, with participants required at first to provide collateral equal to two-thirds of their Phase 2 obligation. The first stage expires six months after the initial funding threshold has been met, at which point participants must provide collateral equal to their full Phase 2 obligation. 

As a federal agency, BPA — the major industry player in the Pacific Northwest — can’t post collateral to back up its commitment. BPA instead will provide a letter of assurances from its COO that explains its authority to enter into the agreement and statutory obligation to pay part or all of its Phase 2 obligation, whichever is effective at the time.  

5 Steps of Funding

The funding agreement is composed of five stages: 

    • When the funding threshold is met by entities that are or represent at least two contiguous balancing authorities and not less than 200,000 GWh of 2023 net energy for load execute the funding agreement. That was met Feb. 13 when funding agreements first were signed. (See SPP Secures Funding to Begin Markets+ Phase 2.)
    • When financing conditions are met with the financing’s regulatory approval and when SPP executes the loan agreement.
    • When participants provide collateral to back financing determined by their Phase 2 obligation in the form of cash or a letter of credit. The obligation is the participant’s pro rata share of Markets+’s total cost less its Phase 1 and post-Phase 1 payments. (Funding participants withdrawing from the agreement must pay their Phase 2 obligation to SPP, protecting the remaining participants from the withdrawal.)
    • When SPP obtains funds drawn from the loan or received under the funding agreement to acquire, create and/or modify the systems and processes required to implement Markets+.
    • When financing costs are repaid after go-live. Phase 2’s implementation costs will be incorporated into market rates charged to participants through a tariff schedule. SPP will repay the financing as the costs are recovered and the lender authorizes the release of excess collateral on an annual basis. The funding agreement will terminate when SPP notifies participants that the financing has been fully repaid, including all principal, interest and fees.

FERC found the funding agreement will provide a framework for SPP to begin the market’s development phase. It said the funding participants’ provision of collateral and Phase 2 cost-recovery ensures that only Markets+ beneficiaries — and not SPP RTO members — are responsible for the development costs. 

The commission declined to direct SPP to provide a commitment that its RTO members will not be responsible for the financing costs. “SPP has already provided sufficient commitment that this will be the case,” FERC said. 

“In addition, the funding agreement itself does not implicate SPP RTO members in the event of a default or withdrawal of a funding participant,” the commission added. 

FERC rejected several concerns raised by public interest organizations (PIOs) around BPA’s connection to the agreement. The groups, which include Northwest Energy Coalition, Idaho Conservation League and Public Citizen, said the agreement effectively would obligate Bonneville to participate in Markets+ ahead of issuing its formal record of its participation decision (ROD) on its day-ahead market participation because it would be on the hook for providing up to $40 million in implementation costs to SPP even before releasing the ROD. They contended that either SPP’s filing had mischaracterized BPA’s commitment to Markets+ or the agency had been engaging in a “sham” process regarding its day-ahead market decision. 

“We disagree with PIOs that the funding agreement requires Bonneville (or any other funding participants) to participate in Markets+,” FERC wrote. “As PIOs acknowledge, the funding agreement requires a funding participant to pay its Phase 2 obligations in the event it decides to withdraw from the funding agreement; however, the funding agreement does not obligate any funding participant to proceed with Markets+ participation.” 

The commission found in its second order that while SPP didn’t meet FERC’s interest-coverage ratio threshold, the grid operator cited other factors that gave it a “sufficient alternative basis” to determine the RTO had “reasonable prospects for being able to service the proposed new debt securities.” FERC said the Markets+ tariff, approved this year, will provide for the recovery of all of the proposed indebtedness’ financing costs. 

“Furthermore, we note that SPP has secured commitments from the funding participants, which guarantees that SPP will be able to repay its debt obligations related to Markets+,” the commission wrote. It added that SPP’s plans to recover the implementation’s costs will not make its RTO members responsible for the market’s costs. 

FERC set the loan’s interest rate not to exceed the total of a one-month secured overnight funding rate and a spread determined by the amount of cash collateral obtained from the funding participants.