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November 19, 2024

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SPP Markets+ Tariff Sparks Concerns for PacifiCorp, NV Energy

Although PacifiCorp has formally committed to joining CAISO’s Extended Day-Ahead Market (EDAM), the utility is still voicing concerns about a competing day-ahead market, SPP’s Markets+, in a FERC filing. 

In its April 29 comments, PacifiCorp asked FERC to reject the proposed Markets+ tariff, but allow SPP to refile it without the tariff’s “Markets+ transmission contributors” transmission availability option. The utility said the option “purportedly empowers transmission customers to ‘contribute’ their transmission rights on nonparticipating systems.” 

In a separate filing, NV Energy also expressed concerns regarding the “transmission contributors” option. 

But other comments filed by the April 29 deadline — including those from three Arizona utilities and a member of the Arizona Corporation Commission — supported the Markets+ tariff. 

Transmission Providers, Contributors

PacifiCorp became the first Western entity to formally commit to one of the two competing day-ahead markets April 26 when it signed an implementation agreement with CAISO for EDAM. (See PacifiCorp Fully Commits to CAISO’s EDAM.) 

But as a major Western grid operator, PacifiCorp is concerned about potential impacts of transmission provisions in Markets+. 

Under the proposed tariff, one source of transmission would be from transmission service providers who sign a Markets+ agreement. Transmission could also come from market participants who contribute their rights from transmission providers who aren’t Markets+ participants. 

But it’s unclear how those so-called Markets+ transmission contributors “would be entitled to make such decisions on behalf of transmission providers,” PacifiCorp said. 

In addition, allowing transmission customers to potentially offer transmission rights to different day-ahead markets “is uneconomic and inefficient,” PacifiCorp said, and could potentially undermine EDAM operations. 

NV Energy said it has asked for clarification on the issue of contributors’ transmission rights. Although SPP has proposed a “service flow constraint” respecting transmission contributors’ and transmission service providers’ capabilities, the tariff “is not clear as to the entity that can establish the Service Flow Constraint and ‘carve out’ this transmission capacity from the market,” NV Energy said. 

NV Energy also urged SPP to keep working to ensure interoperability between Markets+ and Western Power Pool’s Western Resource Adequacy Program (WRAP). 

“SPP should confirm that the Markets+ tariff maintains the ability of the transmission service providers participating in Markets+ to provide support to WRAP wheel-out and wheel-through transactions on a firm basis, even if the need arises after the close of the day-ahead market run,” NV Energy said.  

Arizona Support

Three Arizona utilities — Arizona Public Service (APS), Tucson Electric Power (TEP) and Salt River Project (SRP) — supported the Markets+ tariff, pointing to the proposal’s independent governance and the stakeholder-driven development of the tariff. 

They view the requirement that Markets+ participants be WRAP members as another plus. 

“The defined RA standard for WRAP ensures Markets+ programs will maintain adequate resources,” TEP said in its filed comments. “The requirement also establishes uniformity, which imparts a high degree of simplicity and transparency for resource adequacy in Markets+.” 

The utilities’ comments echo those in an April letter to SPP from 26 entities supporting Markets+. (See 26 Western Entities Signal Continued Support for Markets+.) 

Commissioner Nick Myers of the Arizona Corporation Commission also weighed in to support Markets+ “as a market option in the Western region.” 

Myers said that as a member of the Markets+ State Committee (MSC), he could contribute to discussions on addressing different greenhouse gas policies within the market. 

“The Markets+ tariff strikes a balance by adopting a market design that enables states with GHG regulations to meet their identified goals without holding market participants in other states to the same GHG policy requirements,” Myers said in filed comments. 

SPP filed its proposed Markets+ tariff with FERC on March 29 and asked FERC to issue an order on the tariff by July 31. (See SPP Files Proposed Markets+ Tariff at FERC.) 

SRP was among commenters who supported that time frame. 

“Approval on this timeline will provide Salt River Project and potential market participants certainty regarding market rules and allow the timely development and testing of the systems and processes necessary to implement Markets+,” SRP said in filed comments. 

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NERC Seeks Comment on Changes to Mediation Procedures

NERC is seeking comments from industry stakeholders on revisions to its Rules of Procedure (ROP) for the ERO’s Compliance and Certification Committee (CCC) to conduct hearings and mediate disagreements between it and its regional entities. 

NERC staff and the CCC developed the revisions together, and the committee agreed at an April 26 meeting to post the changes for feedback. The comment period began April 30. 

The proposed changes apply to Appendix 4E of the ROP and are meant to bring this section in line with the ROP revisions FERC approved in May 2022. Those updates concerned the governance and integrity of NERC’s System Operator Certification Program and moved responsibility for credential maintenance from the ERO’s Reliability and Security Technical Committee to the Personnel Certification and Governance Committee, along with changes to the Compliance Monitoring and Enforcement Program. (See FERC Partially Rejects NERC CMEP Changes.) 

According to a statement, the proposed ROP changes are “relatively non-substantive but help to ensure Appendix 4E is consistent and up to date with other provisions of the ROP.” The revisions would affect three sections of the appendix: 

    • CCCPP-004-3 — CCC hearing procedures 
    • CCCPP-005-2 — CCC hearing procedures for use in appeals of certification matters 
    • CCCPP-006-3 — CCC mediation procedures 

In the first section, NERC removed references to challenges brought by regional entities. This change was motivated by the dissolution of the SPP Regional Entity and the Florida Reliability Coordinating Council, which were the last REs required to comply with NERC’s reliability standards; as a result, NERC will only hear challenges from registered entities “monitored directly by NERC.” 

NERC added language to the section clarifying that hearing officers, technical advisers and members of hearing panels must disclose potential conflicts of interest related to the proceedings before them. Additional updates were made to align the document with NERC’s current nomenclature preferences. 

For the section concerning hearings over certification appeals, NERC updated the template for the procedure from the previous version published in 2010. Other changes are intended to bring the section in line with the CCCPP-004-3 revisions, including the conflict-of-interest and nomenclature updates. 

The final section concerns the CCC’s role in mediating disagreements or disputes between NERC and the REs relating to the ERO’s performance audits of RE compliance programs. NERC’s ROP and delegation agreements require it to perform such audits at least once every five years. 

These updates clarify the CCC’s role as “an acceptable, impartial, third-party panel” to assist both NERC and the RE involved “in voluntarily reaching an acceptable resolution” of whatever issues are in dispute. They specify that at the direction of NERC’s Board of Trustees, the CCC’s chair will appoint three committee members to serve on the mediating panel. 

Mediators will be “disinterested parties [who] shall not be registered in the [RE] or … otherwise have any conflicts prohibiting the member from playing a role in the disagreement or dispute.” The revisions also state that mediators would be required to attend a training course before the negotiations begin. 

The comment period will end June 14, after which the CCC will work with ERO staff to review and respond to comments. 

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Data Center Load Growth Driving PPL’s Plans

Rising demand from data centers will lead to increased investment in transmission in PPL’s utility territories, and the company is even working to serve Data Center Alley in Northern Virginia with a competitive transmission project, executives said May 1 during a first-quarter earnings call. 

“We continue to advance plans to support prospective data center development in both Pennsylvania and Kentucky,” PPL CEO Vincent Sorgi said. “As we work with data center companies, we feel we are very well positioned to serve their needs for a variety of reasons. For starters, we have capacity on our grids such that the needed investment by the data centers is not too significant.” 

That allows them to connect to the grid quickly, in line with their desired commercial operation dates. Both Pennsylvania and Kentucky have cheap land for the facilities, while Rhode Island Energy is near major population centers in New England. 

“In Pennsylvania, we continue to see record numbers of requests within our service territory, including some very large centers that are projecting more than a gigawatt of load at full capacity,” Sorgi said. “We currently have approximately 3 GW of data center demand in advanced stages. The potential upside for PPL comes in the form of additional required investments in transmission and returns on the related rate base through the FERC formula rate.” 

Sorgi said that 3 GW should come online beginning in 2026. The power purchase agreements with those facilities enable PPL to begin readying its system, and it would be reimbursed if they do not go forward. 

PPL expects to know more about specific data center projects going forward in its territories later this year and into 2025. 

Each planned data center now would require $50 million to $150 million in investments depending on its size and specific needs. Every $125 million in investment translates into earnings per share of 1 cent, Sorgi said. 

Current customers in Pennsylvania should benefit from the additional data centers because they will spread the cost of transmission across a wider rate base, he added. 

“The more significant upside potential from additional data center to demand is due to the vertically integrated nature of our Kentucky business,” Sorgi said. “A significant ramp in electricity demand could also result in incremental generation needs in our service territory. Any additional generation investment would also represent upside to our current capital plan.” 

The data centers proposed in Kentucky are smaller and would only require PPL to spend $25 million to $75 million on its wires, but the chance for new generation, likely a new combined cycle natural gas plant, makes them potentially more profitable than the Pennsylvania projects, Sorgi said. 

PPL also was awarded a $100 million to $150 million project under a competitive transmission process to serve some of the major data center load in Northern Virginia, where PJM is expecting 7,500 MW of new demand later this decade, Sorgi said. (See PJM Board Approves $5 Billion Transmission Expansion.) 

Data Center Alley shows that the facilities tend to co-locate, Sorgi said, and PPL expects that trend to repeat around the country as more facilities are needed to meet artificial-intelligence applications’ growing demand for computing power. 

“It’s not necessarily just one-and-done,” he added. “If they can build one there, their intention is to expand upon that. And so, I think you’ll start to see data center hubs start to get created around the country. Obviously, there’s economies of scale if they’re kind of bundling together, and … that creates a demand for transmission into those areas.” 

PPL reported $307 million ($0.42/share) in net income for the first quarter, a 7.7% increase from the same period last year, off a 4.6% decrease in total revenue, at $2.304 billion. 

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Audit Faults NY Renewables Office on Speed of Reviews

The New York state office created to expedite permitting of large-scale renewable energy development should offer a better accounting of permitting speed, an audit concluded. 

The Office of New York State Comptroller on April 24 reported the findings of its review of the New York Office of Renewable Energy Siting. 

The audit said that while the process has gotten faster since the formation of ORES, it still is quite slow — 1,333 days from start to finish, on average. 

In its reply to the audit, ORES countered that it takes only 239 days on average to issue a siting permit, once an application is deemed complete, and as such, ORES is well within its statutory deadline — 365 days. 

The audit countered that highlighting the speedy final phase of the process obscures how slow the process is and prevents a better assessment of the progress the state is making toward its clean energy goals. 

The pace of progress in New York is well known if not exactly quantified — developers, lawmakers and regulators alike regularly express the need for speed. 

RTO Insider has covered presentations by ORES Executive Director Houtan Moaveni in 2023 and 2024. He generally has focused on how ORES has sped up review of completed applications and increased the number of permits issued. But he also has acknowledged the delaying effect of incomplete applications. 

ORES was created in 2020 to help the state meet the goals of its 2019 Climate Leadership and Community Protection Act. Its role is to issue siting permits for land-based renewable energy proposals with capacity of 25 MW or greater; projects rated at 20 to 25 MW can also opt in. 

As of April 30, ORES has permitted 15 projects and denied one application; nine applications are designated “incomplete” and four “complete” applications are under review. 

None of the 15 permitted projects has been completed and contracts for 10 have been canceled. 

ORES is empowered to ignore local laws in pursuit of the state’s climate goals, but it also is charged with ensuring that environmental, social and economic factors are fully considered. As a result, a lot goes into an application, and it takes time to put together a complete and correct application. ORES will bounce an incomplete application back to the applicant. 

The audit acknowledges that ORES cannot control an application’s quality or an applicant’s responsiveness but suggests ORES could provide a more realistic accounting of the total time needed to obtain a permit. 

Moaveni, in a written reply roughly as long as the audit itself, lauds the performance of his staff as they set up the first office of its kind in the nation. In each review, ORES has met every deadline the Legislature set for it, he said, generally by a wide margin. 

Moaveni said ORES concurs there is a need to constantly evaluate the timeliness of its performance but said it already tracks and reports each step of the process. 

He added that the state Legislature did not place a time limit on application completion because each project and each developer is different. 

“ORES takes no solace in issuing a notice of incomplete application, and is working steadily at improving both tracking of applications and communication with the applicant community on application requirements,” Moaveni wrote. 

Transmission Addition

ORES recently has been assigned an expansion of its duties: It now will provide the same type of one-stop shop for environmental review and electric transmission permitting. 

The Renewable Action through Project Interconnection and Deployment (RAPID) Act included in the recently approved 2024/25 New York state budget will remove ORES from the state Department of State and embed it in the state’s utility regulator, the Department of Public Service. 

It has become apparent since the climate law’s passage that the state’s bulk and local transmission facilities need significant upgrades to handle the increased load that will be placed on them in the clean energy transition, the bill explains, so review of transmission upgrades must be consolidated and expedited. 

ORES now will be the Office of Renewable Energy Siting and Electric Transmission, although it appears it will retain the ORES acronym. 

The RAPID Act saw pushback for the same reason ORES is unpopular in some places: It will allow unelected state officials to override local regulations, thus undercutting the state’s strong home-rule tradition. 

But RAPID was embedded into the state budget, as are many contentious proposals, and the budget vote is an all-or-nothing proposition. 

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Huge Load Growth Propels AEP to Strong 1Q Earnings

American Electric Power said April 30 that 10.5% growth year over year in data centers and other commercial load within its 11-state footprint can be attributed to prior investments in transmission infrastructure.  

“I like to say here at AEP that we’re really wired for growth,” interim CEO Ben Fowke told financial analysts during the company’s first-quarter earnings call. “We’ve been making significant transmission investments over the years, and that’s going to allow us to accommodate this first wave of growth we’re seeing from data centers.” 

Fowke said additional infrastructure and “perhaps even generation” will be needed before the decade is up. The company plans to invest $27 billion in transmission and distribution infrastructure over the next five years to meet service requests that could add an additional 10 to 15 GW of load by 2030. 

“We’ve done a lot of groundwork to put ourselves in this position, and you’re also seeing data center load ramp up at the same time. That’s a natural trend,” he said. “The good news is we believe that the load growth coming on will be fair to all customers and, in fact, will help us keep our rates affordable across all our jurisdictions. That load growth benefits all customers.” 

At the same time, a voluntary severance program announced this month will save about $100 million in labor costs and “mitigate impacts from inflationary pressures and interest rates,” Fowke said. 

AEP told hometown newspaper The Columbus Dispatch that about 7,400 of its 16,800 employees are eligible for the program.  

The Ohio-based company reported earnings of $1.003 billion ($1.91/share) for the first quarter, compared to $397 million ($0.77/share) for the same quarter a year ago. 

Fowke replaced Julie Sloat as CEO in January when she was forced out after 14 months on the job. (See Interim CEO Fowke Explains AEP Leadership Change.) He said the search for a permanent CEO is “well underway” but will take six to 12 months. 

“We will take the time necessary to find the best candidate,” Fowke said. “Based on the talent pool that we’re looking at, we will find the right person to lead AEP.” 

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2023 Flat for Wind Turbine Makers in West, Huge in China

A new report indicates Western wind turbine manufacturers saw demand for their products ease in 2023 amid a stalled market, while Chinese companies saw surging demand due to their country’s rapid buildout of wind energy generation. 

The May 1 report by Wood Mackenzie indicates that for the first time, Chinese manufacturers accounted for four of the top five companies globally by 2023 sales capacity: Goldwind (16.3 GW), Envision (14.1 GW), Windey (10.1 GW) and Mingyang (9.9 GW).  

Denmark’s Vestas was the only Western manufacturer in the top five, coming in at No. 3 with 11.5 GW, the data and analytics company said in its report. 

The four Chinese manufacturers achieved their sales volume almost entirely in China, but competition in that country was intense enough that turbine prices dropped 16% for onshore models and 9% for offshore. 

Wood Mackenzie said Western manufacturers accounted for 93% of wind turbine sales outside of China. The top five in this category were Vestas (28.5% market share), Siemens Gamesa (24.3%), GE (18.1%), Nordex (15.9%) and Enercon (6.1%). 

And 2023 was the sixth year in the top position for Vesta, Wood Mackenzie said. It noted that GE’s ranking was due in part to the strength of its U.S. onshore market. 

GE Vernova, the recent spinoff of the conglomerate’s power business, released its first-quarter financial results April 25. 

During a conference call with financial analysts that morning, CEO Scott Strazik said the onshore segment of the Wind business recorded a positive EBITDA for the third straight quarter despite a lower volume of orders. The offshore segment saw improvement but still recorded a loss. 

The company expects onshore revenue to be substantially higher in the second half of 2024 than in the first, he said, but cannot say exactly when U.S. orders will pick up, due to trouble customers are having with permitting. 

“Importantly, we see North American developers rebuilding their project pipeline as evidenced by the growing onshore interconnection queues,” CFO Ken Parks said. 

Strazik said the company would work through its offshore wind segment backlog and remain “highly selective” on new orders. 

GE Vernova’s offshore segment was in the news April 19, when New York state canceled its entire third offshore wind solicitation because GE Vernova had opted not to bring to market an 18-MW variant of its Haliade-X turbine the company previously said it would develop. (See NY Offshore Wind Plans Implode Again.) 

Provisional contracts for three offshore wind farms totaling 4 GW of capacity had been designed around the 18-MW platform, and the prospect of using lesser-capacity turbines rendered the provisional contracts unworkable, the state said. 

A week later, on the conference call, Strazik did not directly address that issue except to say the company believes offshore wind will play an important role in the energy transition and appreciated the partnership of New York as it pursues its ambitious offshore wind goals amid repeated setbacks. 

However, he did speak about the U.S. offshore wind industry generally, and made no mention of a future 18-MW Haliade-X: 

“With the phase that offshore wind has been in generally over the last few years, it’s been hard to get projects to a point that they’re ready to thrive,” he said. 

“But through our iteration with our customers and where we’re going, I want to tell you, we’re excited about our future product here, a 15.5-MW product that has an ability to have a power boost up to 16.5 MW. We’re working hard to have that prototype running by the end of 2025. And when we look at where we are with our Haliade-X product today, the 14-megawatt product, by the time you get into 2026, we’re going to have somewhere in the neighborhood of 5 million to 6 million operating hours with that product.” 

Strazik appeared to indicate the terms of GE Vernova’s current backlog of orders are unfavorable. 

“We’ve been pretty consistent for a while that we are only going to add to that backlog with materially different economic terms than what is in our backlog today. And that’s a combination of many things: price, other terms and really leaning in on projects that are set to thrive. And there’s a lot of complexity in offshore wind that we’re all learning from, and we’re going to keep working on it every day.” 

Wood Mackenzie Principal Analyst Endri Lico gave an assessment of the wider market: 

“Western OEMs practiced commercial discipline, showing little appetite for price reduction to grow market share. 2023 saw some improvement in financial performance as some of the supply chain disruptions eased, but quality and reliability issues have emerged as another source of instability for western OEMs,” Lico said. 

The never-ending drive toward bigger and better turbines, with their potential of greater return for developers on investment, have been blamed for some of these quality control problems — it prolongs the research and development phase, and it complicates attempts to achieve standardization or economies of scale. (See Big Offshore Wind Plans Face Multiple Major Obstacles.) 

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FERC Approves Changes to SPP’s GI Process

FERC has accepted SPP tariff revisions designed to increase study deposits for generator interconnection requests, add a nonrefundable application fee and clarify the process of evaluating modifications to requests. 

In an order issued April 30 and effective May 1, the commission found the revisions will improve the efficiency of SPP’s GI request process, reduce administrative burdens for both the RTO and its interconnection customers, and clarify modification study procedures (ER24-1362). 

“These revisions will contribute to increasing the overall efficiency of the generator interconnection process, which will help ensure that interconnection customers are able to interconnect to the transmission system in a reliable, efficient, transparent and timely manner,” FERC wrote. 

SPP said processing costs to study proposals have averaged $7,100 per request and they have exceeded $10,000 per request for two of its three most recent study clusters. The RTO’s GI process has been plagued by developers filing requests to gauge costs or withdrawing those requests, leading to frequent restudies. Staff still are processing study clusters dating back to 2017; the queue numbered 1,139 requests for 221 GW when the backlog-clearing effort began. 

The grid operator will increase the study deposits for new requests to align with the framework required by FERC Order 2023, which ranges from $35,000 to $250,000 depending on the generating facility’s size. Proposed projects of fewer than 80 MW will be responsible for a $35,000 deposit, plus an additional $1,000/MW. Replacement requests will pay $60,000 to $120,000, generating facility modification requests $10,000 to $60,000, and surplus interconnection service requests $15,000 to $60,000. 

SPP said the proposed revisions will streamline the study process and reduce the financial exposure for itself and its members by increasing study deposits. It said requiring a $10,000 nonrefundable application fee for each interconnection request will mitigate the “significant” financial risk between the deposits and actual study costs.  

FERC found that while SPP’s proposed application fee was double that established in Order 2023, the RTO had proved the new fee, to be adjusted every three years for inflation, “reasonably reflects” the costs to process interconnection requests before a cluster’s close.  

The commission said while some tariff revisions deviated from FERC’s pro forma Large Generator Interconnection Procedures, SPP still demonstrated the proposed variations are just and reasonable.

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FERC Approves COD Waiver for EDP Solar Farm in MISO

A FERC-approved waiver of MISO’s commercial operation deadlines for an Arkansas solar farm is a microcosm of the footprint’s struggle to overcome supply chain issues to bring new resources online. 

FERC on April 30 approved EDP Renewables’ request to extend the final COD for its Crooked Lake solar farm from May 1 to Aug. 1 (ER24-1402). EDP said supply chain issues have dogged the project in the northeast corner of Arkansas. 

In MISO, a developer’s interconnection agreement can be terminated if the new generator fails to achieve commercial operation three years after it originally told the RTO it would be operating for profit. MISO is currently reworking the COD policy in its interconnection procedures after becoming aware of several new generation projects held up by supply chain complications. (See MISO to Relax Commercial Operation Deadlines in Interconnection Queue.) 

EDP began developing the 175-MW solar farm in 2016 and signed a generator interconnection agreement with MISO and transmission owner Entergy Arkansas in 2018. It began construction on Crooked Lake at the end of 2022.  

The company said Crooked Lake was impeded by a slower-than-expected delivery of the control building for its high-voltage substation when the project was nearly finished. The company said despite it and its vendor’s best efforts, the building arrived too late to meet its construction schedule. EDP said that “extended time frames for procurement of control building components, such as relay panels, automatic transfer switches and Cisco communications equipment, had a cascading effect” that resulted in a three-month delay. 

EDP said a waiver of the COD would allow it to energize the solar farm “without forfeiting … interconnection service, completed network upgrades or substantial investment.” 

FERC said EDP acted in good faith to seek the limited waiver, which won’t harm third parties. 

MISO late last year reported that it is sitting on about 50 GW in generation projects that have earned stamps of approval to connect to the system but aren’t completed because of supply chain delays. (See MISO: Reliability Risk Upped by 49 GW in Approved but Unbuilt Generation.) 

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White House CEQ Finalizes NEPA Changes, Rolls Back Trump Rule

The White House Council on Environmental Quality on April 30 finalized a rule meant to modernize the federal environmental review process under the National Environmental Policy Act (NEPA). 

The “Bipartisan Permitting Reform Implementation Rule” sets clear deadlines for agencies to complete environmental reviews; requires a lead agency; sets specific expectations for lead and cooperating agencies; and creates a unified and coordinated federal review process. The rule implements parts of the Fiscal Responsibility Act of 2023 and provides agencies with other tools to improve the efficiency and effectiveness of environmental reviews. 

It creates new ways for agencies to establish categorical exclusions, the fastest form of environmental review. It is meant to accelerate reviews for projects that agencies can evaluate on a broad, programmatic scale, or that incorporate measures to mitigate adverse effects. 

The rule promotes early public engagement in the review process to cut conflict, speed up project reviews, improve project design and outcomes, and decrease the likelihood that final decisions are overturned in court. The changes apply to a range of projects, including electric transmission and generation, electric vehicle charging, wildfire management and semiconductor manufacturing. 

Agencies will be able to use new and more flexible methods to establish categorical exemptions for “low impact” projects such as solar, storage, electric vehicle charging and transmission. The rule also encourages using shared analysis to avoid agencies duplicating work. 

Projects with long-lasting beneficial impacts, such as environmental restoration activities without significant adverse effects, will not require environmental impact statements under NEPA. The rule clarifies that agencies should consider the effects of climate change in environmental reviews and encourage identification of reasonable alternatives that will mitigate climate impacts. 

“These reforms will deliver smarter decisions, quicker permitting, and projects that are built better and faster,” CEQ Chair Brenda Mallory said in a statement. “As we accelerate our clean energy future, we are also protecting communities from pollution and environmental harms that can result from poor planning and decision-making while making sure we build projects in the right places.” 

The rule rolls back one issued under the Trump administration, which changed how agencies evaluate the significance of a proposed action’s environmental effects. It removes “onerous” requirements on what public comments must contain to be considered by agencies and removes provisions attempting to curtail judicial review. 

It also seeks to advance environmental justice and promote meaningful public input by promoting early engagement with communities and fostering community buy-in. 

The rule received criticism from Sen. Joe Manchin (D-W.Va.), who is working on legislation to speed up federal permitting processes. 

“At a time when everyone agrees that it takes too long to build infrastructure in this country, the administration’s new NEPA regulations will take us backwards,” Manchin said in a statement. “All the White House had to do was implement the common-sense, bipartisan permitting reforms in the Fiscal Responsibility Act that all sides agreed upon; but once again they’ve disregarded the deal that was made [and] the intent of the law that was signed, and are instead corrupting it with their own radical agenda. This will only lead to more costly delays and litigation.” 

Manchin said he plans to offer a resolution of disapproval under the Congressional Review Act so the CEQ can issue a rule that complies with the FRA. 

The Natural Resources Defense Council welcomed the changes. 

“NEPA leads to better decisions — and better outcomes — for everyone, and it is a relief to finally see it revitalized,” NRDC Executive Director Christy Goldfuss said in a statement. “Meaningful community engagement is the key to unlocking our clean energy future. It leads to better projects that face less opposition on the back end.” 

“We are thrilled to see NEPA strengthened and restored,” said Sam Wojcicki, senior director of climate policy for the National Audubon Society. “This new rule is a significant win in protecting communities from environmental harm and [for] ecosystems that birds and other wildlife depend on for their survival.” 

Electric Power Supply Association CEO Todd Snitchler said the final rule “takes reliability efforts backwards.” 

“Integrating more clean energy into the system will require the support of dispatchable generation,” Snitchler said. “If we are serious about meeting our energy reliability and policy needs during a time of rapid growth in electricity demand, we need critical investment in both dispatchable and renewable generation, fuel supply infrastructure, and transmission and distribution assets. 

“The Federal Energy Regulatory Commission, the North American Electric Reliability Corp. and grid operators are all flashing warning signs that dispatchable resources are being retired too quickly and aren’t being replaced with sufficient capacity with similar reliability attributes. In short, the clock is ticking. We need more infrastructure, not less, and it is disappointing that this rulemaking puts politics and aspiration ahead of the operational realities of the electric grid.” 

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DOE: AI Critical to US Clean Energy, Grid Modernization Goals

Imagine developing a big solar project and finding that getting it permitted will involve navigating federal, state and local regulations, each of which uses different terminology and data, making the whole process complex and time consuming.  

Now imagine having an artificial intelligence (AI) program that can organize and consolidate the various requirements of those regulations and identify the information that can be used across all of them.  

Streamlining and accelerating permitting is just one of the potential uses the Department of Energy envisions for AI to accelerate the U.S. power system’s transition to 100% clean energy and the modern, efficient, secure grid needed to reach that goal by 2035, according to two new reports DOE released April 29. 

AI for Energy: Opportunities for a Modern Grid and Clean Energy Economy looks at the near-term potential for AI to speed up, streamline and improve system planning, project siting and permitting, operations and reliability, and resilience.  

The report provides laundry lists of possibilities in each of these areas: for example, using AI to model the adoption of distributed solar and storage projects or virtual power plants to forecast impacts on load and load shape, as well as when and where distribution system upgrades will be needed. 

Other potential applications include: 

    • optimizing the planning, permitting and siting of electric vehicle chargers and supporting vehicle-to-grid charging to provide grid support services; 
    • optimizing energy use in buildings and developing models to predict buildings’ energy load shape, future consumption and coordination with the power system; and 
    • accelerating environmental reviews by extracting information, drafting documents and automating compliance checks. 

The second report, Advanced Research Directions on AI for Energy, explores longer-term opportunities and challenges, such as the information and workforce that will be needed to build the specialized AI models required for “dynamic coupling” of dispatchable generation with renewable and other variable generation.  

“These models must account for the varying and unpredictable nature of renewable resources over time and space,” the report says. “At the plant level, adaptive … models based on real-time measurements are needed to enable rapid adjustments to the system controls, which is essential for managing the changing dynamics of energy supply and demand.” 

The reports are part of a larger DOE drive to develop such AI models and other resources to adapt the uses of the now-omnipresent technology to advance President Joe Biden’s targets for decarbonizing the grid by 2035 and cutting U.S. greenhouse gas emissions across the economy to net zero by 2050.  

Biden issued a broad executive order on AI on Oct. 30, which gave DOE a six-month deadline for producing a public report on the potential uses of AI for energy and for developing applications to streamline permitting and environmental reviews. 

“Artificial intelligence can help crack the code on our toughest challenges, from combating the climate crisis to uncovering cures for cancer,” Energy Secretary Jennifer Granholm said in a press release summarizing DOE’s progress on these and other AI initiatives called for in the executive order.  

DOE is ramping up its work on AI “on multiple fronts to not only keep the U.S. globally competitive, but also to manage AI’s increasing energy demand so we can maintain our goal of a reliable, affordable and clean energy future,” Granholm said. 

Among its other efforts, DOE is providing $13 million in funding for a new VoltAIc Initiative, which aims to develop AI tools for streamlining permitting and environmental reviews of clean energy projects and infrastructure. DOE has partnered with the Pacific Northwest National Laboratory on one such tool, PolicyAI, an AI test bed specifically focused on environmental reviews under the National Environmental Policy Act. 

DOE has also formed a Working Group on Powering AI and Data Center Infrastructure, which could be issuing recommendations in June on meeting the power demands of AI and other data centers, according to the DOE press release. Another upcoming study from the Lawrence Berkeley National Laboratory will analyze the regional energy and water use of data centers across the U.S. 

AI ‘Hallucinations’

From search engines to popular consumer apps — Amazon, Trivago and Airbnb — AI has become inescapable, although the technology is not completely debugged. 

As defined in Biden’s original executive order and U.S. Code, AI is “a machine-based system that can, for a given set of human-defined objectives, make predictions, recommendations or decisions influencing real or virtual environments.”  

AI applications are built on “foundation models,” which are “trained on,” or fed, massive amounts of publicly available data — generated by humans or machines — which can then be tapped for a variety of uses, depending on the prompts used or the questions asked. The drawback is that if an AI model doesn’t have the information to answer a question, it might “hallucinate” and provide an answer that sounds authoritative and convincing but is completely wrong, said Jeremy Renshaw, senior technical executive at the Electric Power Research Institute (EPRI). 

“It’s not like you can take one of the models, say ChatGPT … and just provide a bunch of prompts to it, and it’s going to get the right answer every time,” Renshaw said in an interview with RTO Insider. “It just doesn’t work that way. The tools are very powerful, for sure, but they can’t do everything. If you understand how to use them, and you find the right prompts or input questions, you can get better responses.” 

Given the complexity of the electric grid itself, both Renshaw and DOE acknowledge that building foundation models for the energy sector could be very difficult “and further worsened by the evolving dynamics of climate change,” according to the AI for Energy report.  

“Bridging the gap between the wealth of industry data that exists and the limited ability of the research community to access it remains a difficult task,” the report says. A figure in the report shows the multiple data streams ― on load forecasts, algorithm codes and equations, regulatory standards and risk metrics ― that must be “orchestrated” to create such a model. 

Renshaw explained it in less technical terms. “AI is a data-hungry machine,” he said. “So, the more data you can feed into it, the cleaner, the better, the higher-quality results you can get from the models. We have lots of grid operational data we can feed into models that can then understand the physics or patterns within the grid, and from that we can get … closer to things like optimal power flow or automated grid management. 

“They may still be years away, but that’s something that would be very impactful and very useful for the grid,” he said.  

The Advanced Research Directions report estimates that developing foundation models to support grid planning, operations and security will also mean putting together well-coordinated, interdisciplinary teams. The roster could include about 100 AI and data scientists, another 100 power system engineers and analysts, 200 software engineers and 100 cybersecurity professionals. 

While the size of individual teams could vary “depending on the size and scope of the [model], adopting a comprehensive approach involving these various skill sets is necessary to building confidence and accelerating momentum in the progress being made,” the report says. 

Utilities’ Incremental Path to AI

U.S. utilities are, by nature, risk-averse, so while many are now adopting AI, their initial applications appear to be supporting traditional operations, rather than advancing system decarbonization, for example, by improving renewable energy interconnection processes.  

Speaking at an EPRI seminar in March on demystifying AI, Chris Le, analytics product manager for Exelon, described some basic ways the company and its utilities are using AI. Exelon has developed a machine learning model to crunch the company’s extensive data on power outages and the time it takes to restore power, Le said. 

Machine learning is a kind of AI that uses algorithms and statistical models that can be applied to perform complex tasks without explicit instructions.  

In Exelon’s case, the company has been able to improve its reporting on estimated restoration times “by 900% within the 2-hour window, which is what most customers care about,” Le said. 

Another application has involved training an AI model to identify potential defects on the distribution system from aerial photography, he said. “We’ve trained models to achieve successive capabilities for us — first, just identifying components in the photos … [then] identifying specific defects on those photos and then, finally, determining defect severity based on our internal ranking system.” 

But AI is intruding on utility planning with increasing urgency via the proliferation of data centers across the country and their growing demand for power, largely due to AI. 

The AI for Energy report cites work currently underway at the Berkeley Lab, which indicates “that over half of data center load growth in recent years may have been due to AI, and it is expected to be the biggest driver of U.S. data center-related load growth in the near future.” 

Some utilities have responded to the data center boom by arguing for new natural gas plants to ensure supply and system reliability. The fast growth of data centers in Northern Virginia is a key factor in plans by the state’s largest investor-owned utility, Dominion Energy, to build new natural gas plants, according to coverage in the Virginia Mercury. 

But Renshaw and DOE both note that data centers and AI developers are working on reducing their substantial carbon footprints. Industry leader NVIDIA recently launched its new Blackwell platform, which it says will provide supercharged AI capabilities “at up to 25x less cost and energy consumption than its predecessor.” 

The company is also partnering with Schneider Electric to develop publicly available “data center reference designs” that will provide benchmarks for system performance and efficiency.  

DOE is pushing for further improvements in data center energy efficiency. “In 2020, the average data center used only 37% of its energy for cooling and other needs other than powering the IT equipment,” the AI for Energy report says. “The most energy-efficient data centers in the world use only 2 to 3% of their energy for such purposes.” 

DOE’s own Frontier supercomputer at Oak Ridge National Laboratory “uses advanced liquid cooling and other state-of-the-art techniques to achieve this 3% goal,” the report says.