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November 9, 2024

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CAISO Retools Transmission Plan for Reliability, Renewables

CAISO published a draft transmission plan Monday that identifies 46 transmission projects needed over the next decade to incorporate more than 40 GW of renewable resources essential for advancing the state’s transition to 100% clean energy and maintaining grid reliability.

“The need for additional generation of electricity over the next 10 years has escalated rapidly in California as it continues transitioning to the carbon-free electrical grid required by the state’s clean-energy policies,” CAISO said in the plan. “This in turn has been driving a dramatically accelerated pace for new transmission development in current and future planning cycles.

“To help ensure we have the transmission in place to achieve this transition reliably and cost-effectively, the ISO’s 2022-2023 Transmission Plan reflects a much more strategic and proactive approach to better synchronize power and transmission planning, interconnection queuing and resource procurement,” the plan says.

The more proactive approach was outlined in a memorandum of understanding that CAISO, the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) signed in December. It provided a “new blueprint for our state” with closer links between the planning processes of each entity, CAISO CEO Elliot Mainzer told the ISO Board of Governors in February. (See CAISO CEO Lauds Transmission Planning Agreement.)

The new transmission plan is the first to be prepared under the MOU.

It is based on the CPUC’s projections that the state needs to add at least 40 GW of new resources by 2032 in a base-case scenario and 70 GW in a “sensitivity” scenario “reflecting the potential for increased electrification occurring in other sectors of the economy, most notably in transportation and the building industry,” the plan says.

“The network upgrades are recommended in this plan to make all of the base amounts available and, in Southern California, to also make most of the sensitivity amounts available as well,” it says.

The CPUC has already indicated it will provide the 70GW scenario as its base case next year, so the “remaining network upgrades needed to achieve the sensitivity amounts will be approved next year” in CAISO’s annual update to its 10-year transmission plan.

Interconnection Zones

In preparing the plan, CAISO analyzed projected resource additions within 14 transmission interconnection zones. The Southern California Edison (SCE) Northern zone, for example, will need 11.6 GW of new resources under the base case scenario and 16.9 GW under the sensitivity portfolio, primarily through a buildout of utility-scale solar and battery storage.

Critical resources identified in the plan include:

  • 17 GW of solar generation in the deserts of Southern California and the Central Valley, and in areas of Nevada and Arizona.
  • 3.5 GW of in-state wind generation.
  • 1 GW of geothermal development in the Imperial Valley of far Southern California and in southern Nevada.
  • Battery storage projects co-located with renewable generation projects and stand-alone storage near Los Angeles, San Francisco and San Diego.
  • 4.5 GW of in-state transmission upgrades necessary to import out-of-state wind energy from Idaho, Wyoming and New Mexico.
  • 3-5 GW of wind generation off the coast of Central California.

“To achieve these outcomes, the ISO has found the need for a total of 46 transmission projects, the vast majority of which would be built in California. They range in projected costs from $4 million to $2.3 billion, for a total infrastructure investment of an estimated $9.3 billion,” CAISO said.

Major projects include a new 500-kV transmission line from the Arizona border to Imperial County, a new 500 kV transmission line from southern Imperial County to San Diego and the Los Angeles Basin, and upgrades to existing 500-kV and 230-kV lines along the Interstate 10 corridor, which runs from Los Angeles toward Phoenix.

“Together, these upgrades provide access to east Riverside County, Imperial County and Arizona solar generation, Imperial Valley geothermal, and New Mexico wind generation,” the transmission plan says.

Other notable projects include a new 500-kV transmission line from southeastern Nevada to the Los Angeles Basin and “rebuilding of existing southeastern Nevada 230-kV transmission inside the ISO to 500 kV, providing access for Eldorado and Pisgah area solar generation, southeastern Nevada solar and geothermal generation, and Wyoming and Idaho wind generation.”

‘Next Major Installment’

CAISO identified 24 reliability-driven projects, totaling $1.76 billion and 22 policy-driven projects needed to meet the state’s climate goals, totaling $7.53 billion.

In addition, the ISO has been working with out-of-state transmission developers to bring wind from Wyoming via the planned TransWest Express line and from New Mexico via the planned Sunzia line to the CAISO boundary.

Developers for the transmission projects have sold capacity on their lines to “resource developers seeking to access California markets,” the plan says. “That work is ongoing, and the timing of those projects is driven by the developers and their subscribers.”

CAISO said it had also studied the need for transmission for North Coast offshore wind based on the sensitivity portfolio provided by the CPUC.

“As the study was only informational and set the stage for future planning, no projects were recommended for approval in this 2022-2023 plan,” it said. But with “growing volumes” of offshore North Coast wind identified in the CPUC’s 2023/24 planning cycle, the “ISO expects to make a decision on North Coast transmission in next year’s transmission plan.”

In a blog post, Mainzer said the 2022/23 transmission plan “represents the next major installment of infrastructure investment required to meet California’s long-term clean energy goals. In close coordination with regulatory agencies, load-serving entities and other key stakeholders, we endeavored to address the state’s reliability and policy needs in the most cost-effective and efficient way possible.”

CAISO has scheduled a stakeholder meeting April 11 to discuss the draft plan and expects to seek approval from its Board of Governors in May.

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Nevada Resolution Seeks to Bring Renewables to Yucca Mountain

A Nevada lawmaker has introduced a resolution urging the federal government to use Yucca Mountain, once proposed as a dumping ground for the nation’s nuclear waste, as a site for renewable energy.

Senate Joint Resolution 4, introduced by state Sen. James Ohrenschall (D), was heard last week by the Senate Natural Resources Committee. The committee took no action.

SJR 4 “urges the federal government to use Yucca Mountain for the development and storage of renewable energy.” If passed, the resolution would be sent to federal officials, including the president, vice president, House speaker and energy secretary.

Not long ago, Yucca Mountain faced a “scary future” as the nation’s disposal site for high-level radioactive waste, Ohrenschall told the committee.

Now, he said, there’s an opportunity for “positive uses,” such as renewable energy or research.

“And if these positive uses happen, then I think it becomes exponentially less likely that the federal government will be able to say, ‘No, we need to take all the nation’s high-level radioactive waste and spent nuclear fuel, transport it across the country and send it here to Yucca Mountain,’ which I think puts not only our constituents in danger, but citizens around the country,” Ohrenschall said.

Renewable energy at Yucca Mountain has been discussed previously, including in a 2011 report from the U.S. Government Accountability Office that looked at alternative uses for the site. The report said a potential challenge to energy-related uses was the lack of nearby transmission.

On Thursday, supporters of SJR 4 noted NV Energy’s plans for Greenlink West, a roughly 350-mile transmission line that will run past Yucca Mountain and the neighboring Amargosa Valley community.

“We are in what they call the sweet spot for Greenlink and all the transmission lines and such,” said Carolyn Allen, chair of the Amargosa Valley Town Board.

Renewable energy development at Yucca Mountain would bring an array of benefits to the town, said Allen, who called SJR 4 “an excellent bill.”

“It can bring research,” she said. “It can bring new people that want to live there and raise families there.”

One person spoke in opposition to the resolution. Dylan Keith, assistant director of government affairs for the Las Vegas Chamber of Commerce, said the chamber supports renewable energy research and development.

But “the chamber has had a long-standing opposition to any development with the Yucca Mountain project,” Keith said.

Committee member Sen. Ira Hansen (R) said the nation’s move toward electrification and the growing demand for electricity raise complex questions. He said one issue is what to do with used solar panels and asked whether Yucca Mountain could be used as a disposal site.

“In the next 20 or 30 years, we’re going to have hundreds of thousands of those,” Hansen said. “What are you going to do with the old panels?”

Yucca Mountain was designated as the sole location for a national nuclear waste dump when Congress amended the Nuclear Waste Policy Act in 1987. Since the 1980s, the U.S. Department of Energy has spent billions of dollars studying Yucca Mountain as a disposal site for nuclear waste. The 230-square-mile site is about 100 miles northwest of Las Vegas.

But faced with strong opposition from the state of Nevada and Native American tribes, Congress stopped funding Yucca Mountain in 2010. In 2021, the Biden administration stated its opposition to using Yucca Mountain as a nuclear waste site. Instead, the administration has shifted its focus to “consent-based siting,” in which nuclear waste is stored in communities that agree to accept it.

In preparing its 2011 report on alternative uses for Yucca Mountain, GAO interviewed experts who had a wide variety of suggestions. Those ranged from a command center for unmanned aircraft, weapons testing, public emergency communications or a secure data storage site.

Energy-related ideas included a commercial energy park, with nuclear, solar and wind power generation. Research was another suggested use, with potential topics including carbon capture or compressed air or pumped hydroelectric energy storage.

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NERC’s Robb, Cancel Discuss Evolving Reliability Challenges

NERC CEO Jim Robb felt “sobered by the amount of work in front of us” but confident that the ERO can address the electric grid’s “hyper complex risk environment,” he said in a media call Wednesday to mark the five-year anniversary of his joining the organization.

The rapidly changing grid and its implications for reliability were a major theme of the call, which also featured Manny Cancel, a senior vice president at NERC and CEO of the Electricity Information Sharing and Analysis Center (E-ISAC), discussing physical and cybersecurity challenges. Robb said the switch from conventional spinning generation to solar, wind and other inverter-based resources (IBRs) should spur stakeholders to rethink how they provide “essential reliability services.”

“We really need to shift our thinking around reliability away from capacity installed plus reserve margin, which really accounts for random events that occur out on the grid, [and] to recognize that we now have a generation mix that’s increasingly impacted by common conditions,” Robb said. “Wind droughts, solar droughts — these things can affect a large amount of generation, and not in a random way. We really need to get our heads around that dynamic and the uncertainties around fuel as we think through the sector’s ability to serve [the] energy needs of customers.”

Shifting toward intermittent generation also means utilities nationwide have increasingly adopted natural gas as a balancing resource, Robb said, making coordination between the electric and gas industries critical. This is not always easy, he acknowledged, saying that while “the gas industry is amazing at what it does,” it “wasn’t designed to serve highly variable loads like electric power.”

Manny Cancel (NERC) Content.jpgE-ISAC CEO Manny Cancel | NERC

Using gas as a lynchpin for the generation fleet has therefore created strains that both industries need to work on together, with help from policymakers and regulators as well, Robb continued, adding that “it’s as hard to start a new gas pipeline … as it is to build electric transmission.”

“Because of electrification policies, electric transportation and moving space heating toward an electric fuel, we’re going to be growing load, and we’re having enough trouble just keeping up with where we are right now,” Robb said.

NERC has an important role to play in educating the various governmental agencies that oversee the development of the grid and gas system, Robb said; this takes the form of putting “steadfast protection … around NERC’s objectivity and rooting our perspectives in science and technology” as the ERO communicates with regulators.

He said the organization’s 2022 Summer Reliability Assessment, and its warnings about the impact of severe weather and transmission outages, “provoked a very strong and positive response in terms of interagency communication” about the importance of reliability services. (See West, Texas, Midwest at Risk of Summer Shortfalls, NERC Says.) He also pointed to a recently announced memorandum of understanding between the Environmental Protection Agency and the Department of Energy as a sign that regulators are taking the challenge seriously. (See DOE, EPA Team Up on Reliability Efforts.)

Cancel also discussed the importance of cross-industry collaboration in the security space, calling the E-ISAC a “conduit to the industry” for government agencies, “not only for information sharing, but also to discuss policy and other issues.” He said the E-ISAC’s level of engagement with policymakers “has never been stronger,” while its relationship with its counterparts in other critical industry sectors has also become tighter since Russia invaded Ukraine last year.

Additionally, Cancel pointed to his organization’s efforts to combat supply chain weaknesses through its vendor affiliate program. The program, launched last year, is intended to give vendors a voice in the debates over supply chain issues and provide their “keen insights” on the risk landscape.

“They are doing things from a product perspective … to protect themselves too. We can certainly learn from them, and they can be a powerful voice, particularly the vendors that are used pervasively across the electricity sector,” Cancel said. “That’s not only going on through the [E-ISAC]; it’s going on through other venues [like] trade associations, [and] the government has [been] having dialogue with the vendor community. … I’m not declaring victory, and underscoring that has to continue, but [it’s] a very important step forward.”

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Rest Stop Operator Seeks Piece of $166M NJ EV Charger Push

A rest stop operator is negotiating with the New Jersey Turnpike Authority (NJTA) to install electric vehicle chargers along the state’s two main highway arteries under a $166 million program, according to the agency.

The NJTA board on March 28 authorized the continuation of talks with Applegreen NJ Welcome Centers, which operates restaurant facilities at rest stops along the New Jersey Turnpike and the Garden State Parkway, which also is managed by the authority. Applegreen, based in Ireland, sells food and fuel at 121 sites in the U.S. Northeast and South.

Service areas on the two highways currently host 76 chargers — 70 on the turnpike and six on the parkway, NJTA spokesperson Tom Feeney said. Of the turnpike chargers, 64 are operated by Tesla, six by EVgo, which also operates all six on the parkway, he said.

The authority’s announcement comes as the state seeks to increase the number of chargers statewide, believing — like other states — that a key element to jump-starting a broad embrace of EVs is to remove the fear that a vehicle could run out of power with no charging nearby to replenish the battery.

New Jersey has 943 public charging locations, 164 of which offer DC fast chargers and 802 offering Level 2 charging, according to the public EV charging locator run by the New Jersey Department of Environmental Protection.   About 95% of the state is within a 25-mile radius of a DC fast charger, according to the site.

About 90,000 EVs are registered in New Jersey, a small fraction of the 6 million light-duty vehicles on the road, but a big jump up from approximately 30,000 EVs in the state at the end of 2019. New Jersey policy calls for 330,000 light-duty plug-in electric vehicles registered in state by 2025, along with 400 fast chargers and more than 1,000 Level 2 chargers by the same date.

Expanding the Charger Network

Feeney said the talks with Applegreen have not yet determined where and how many chargers would be installed if negotiations are finalized. But the deal would “greatly expand the number of EV charging stations at turnpike and parkway service areas,” he said.

Elements of the deal already have been agreed to, according to the authorization approved by the agency. Applegreen “will construct EV charging facilities and construct or secure the construction of related utility infrastructure at authority rest service areas,” the order says. The company also will operate and manage the facilities, the order says.

NJTA would pay $24 million in the deal, but there has been no agreement on “customer pricing structure or revenue sharing,” according to the order.

Pamela Frank, CEO of ChargEVC-NJ, a coalition of industry groups, consumer advocates and environmentalists that promotes EV adoption, welcomed the announcement and especially the authority’s $24-million commitment to the project.

“It’s a very good initiative,” Frank said, adding that she expects the deal to add hundreds of chargers along the two highways. “The good news is you’re going to see [chargers] on the parkway; you’re going to see [them] on the turnpike on all of these stops that are owned and operated” by the contractor, she said.

The biggest benefit, however, could be that the project will bring the power cables from the grid needed for chargers at the rest stop charging site, which is often the biggest cost to the charging station, she said. So even if there are not many plugs at the start, due to the limited demand at present, they can be easily added.

New Jersey ranks 15th among states in the number of publicly available non-Tesla fast chargers, according to an analysis of federal data by ChargEVC-NJ, Frank said, noting that seven East Coast states rank higher. The state has about one public EV plug per 24,000 vehicles of all kinds on the road, about the same as the U.S. as a whole, she said.

Multiple Incentive Programs

The federal government awarded the state $104 million in funds from the National Electric Vehicle Infrastructure (NEVI) program, which requires states to identify alternative fuel corridors (AFCs), major state and interstate highways where EV charging stations would be located every 50 miles. EVs can fully recharge in about an hour using the fast-charger ports now available.

Under the first phase of New Jersey’s NEVI plan, from 2022 to 2024, state officials designated 12 highways as AFCs, among them the turnpike and parkway. The plan calls for the state to use the NEVI funds to install four 150-kW chargers at least every 50 miles at locations less than a mile from the highway exit.

The state also has several of its own funding programs designed to stimulate the installation of chargers. The state Board of Public Utilities (BPU) in June expanded a program that awards incentives for chargers installed at tourist sites, in a bid to attract EV-driving visitors. The program offers up to $2,000 for a Level 2 charger and up to $5,000 for a fast charger, along with subsidies for make ready costs. (See NJ Boosts EV Charging Program for Tourist, Multifamily Locations.)

Another state program awards funds to support the installation of chargers at multi-family dwellings, and a third program, called It Pay$ to Plug In, provides incentives of up to $750 for a Level 1 charging port installed at workplaces, public places and other locations, and $4,000 for a Level 2 charging port.

In October, the BPU approved $16.15 million in funds from the Regional Greenhouse Gas Initiative to create the state’s first program designed to promote the installation of fast chargers for medium- and heavy-duty (MHD) electric vehicles. (See NJ BPU Approves $16M for 1st MHD EV Charger Program.)

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PJM Presents Alternative Capacity Auction Schedule

PJM presented a draft proposal to delay the next four Base Residual Auctions (BRAs) to the Members Committee during a special meeting on Tuesday.

The alternative schedule would move the 2025/26 auction, currently scheduled for this June, to June 2024; the following three auctions would be held every sixth months thereafter. Auctions would return to their regular timing of being held three years in advance of the 2029/30 BRA, which would be held in May 2026. (See PJM Board of Managers to Seek Capacity Auction Delays.)

The tightened schedule would also continue the current practice of canceling incremental auctions (IAs) when they take place within 10 months of the BRA or would be within the same year as the corresponding delivery year. The first two IAs for the 2025/26 auction and following year’s would be canceled, leaving only the third IA in place. Two IAs would be held in the 2027/28 and 2028/29 delivery years, before going back to the normal three per year.

PJM’s tariff requires that it consult with the MC and Transmission Owners Agreement-Administrative Committee (TOA-AC) at least seven days prior to making a Federal Power Act Section 205 filing with FERC. The TOA-AC, whose meetings are closed to the public, met on Tuesday after the MC.

Pre-auction activities will continue until PJM has received an order from FERC to ensure that the 2025/26 BRA can still be held in June should the commission reject the filing. Should the commission approve the filing, PJM’s Tim Horger said those activities will be rerun leading up to the auction’s new date.

Horger said the filing is based on the premise that FERC will approve the capacity market overhaul that the Board of Managers plans to approve and have filed by Oct. 1 within 60 days. If the commission were to take longer and reach a decision as late as March, Horger presented a potential alternative that would delay the 2025/26 BRA to October 2024 and delay the following four auctions. The schedule would go back to normal with the 2030/31 auction in May 2027.

The draft filing shown to the MC only seeks the capability to change the timing of auctions through the 2028/29 delivery year, necessitating an additional FERC filing for the alternative Horger presented.

Poulos-Greg-2020-02-20-RTO-Insider-FI.jpgGreg Poulos, Consumer Advocates of the PJM States (CAPS) | © RTO Insider LLC

Greg Poulos, executive director of the Consumer Advocates of the PJM States (CAPS), said requiring a filing by Oct. 1 and setting June 2024 in stone for the 2025/26 BRA would limit stakeholders’ ability to extend discussions on capacity market changes through the Critical Issue Fast Path (CIFP) process. He noted that PJM has delayed the release of its report on the December 2022 winter storm to July, which he argued also leaves little time for review and to incorporate findings into proposals. (See PJM Presents More Detail on CIFP Proposal.)

The report will be especially important for state consumer advocates, Poulos said, as they are not market participants and lack the insight into the storm’s impact that those directly affected by it possess. A short timeline for making these decisions could put advocates in the position of voting on proposals to recommend to the board without having all the necessary information, he said.

Poulos also questioned whether there is a plan for how PJM would act if FERC approves the auction delay but ultimately rejects the eventual capacity market proposal.

Horger responded that PJM is aware of that possibility and that the risk will have to be addressed should it manifest.

Vistra’s Erik Heinle asked if PJM will request expedited consideration of the filing to reduce the amount of pre-auction activities that market participants must engage in.

PJM Senior Counsel Chen Lu said the decision to make the filing under Section 205 was intended to reduce the amount of time to receive a determination, but PJM will consider asking for expedition.

Ian Oxenham, legal specialist for the New Jersey Board of Public Utilities, urged PJM to not seek expedited consideration, saying that it could deprive commenters of the time needed to evaluate the filing.

“PJM should be very hesitant to shorten that comment period,” he said.

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IRA Tax Credits Draw Clean Energy Projects to Coal Communities

Millions in new funding and bonus tax credits are heading to new clean energy projects in U.S. “energy communities” — the cities, towns and counties where the closure of coal mines, coal-fired power plants and other fossil fuel projects has meant lost jobs and tax revenue, according to Tuesday’s round of White House announcements,

Rolled out at the meeting of the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization (Energy Communities IWG), the announcements included:

  • new guidance from the Treasury Department on the Inflation Reduction Act’s 10% bonus credit for clean energy projects located in energy communities. A new map from Treasury and the IWG shows wide swaths of the country qualifying as energy communities, from Nevada to the Dakotas to Texas and the Mid-Atlantic coal belt in Pennsylvania, Ohio and Virginia;
  • $16 million in funding from the Infrastructure Investment and Jobs Act for demonstration projects in North Dakota and West Virginia that “will extract and separate rare earth elements and other critical minerals from coal ash, acid mine drainage and other mine waste,” according to a White House fact sheet;
  • another $450 million from the IIJA for additional clean energy demonstration projects on current and former mine lands. DOE estimates the U.S. has 17,750 mine land sites, covering 1.5 million acres, which could produce up to 90 GW of clean energy; and
  • an interagency memorandum of understanding that will set up rapid response teams to provide outreach and technical support to energy communities to ensure they can access funding and other opportunities.

The announcements are part of President Biden’s bigger drive to highlight the successes of his “Investing in America” agenda and the programs and projects funded by the IIJA and IRA. The IWG has “driven more than $14.1 billion in federal investments to energy communities” over the past two years, according to a report also issued Tuesday.

Ali Zaidi (Energy Communities IWG) Content.jpgNational Climate Adviser Ali Zaidi | Energy Communities IWG

“There’s enormous untapped potential in these communities, from fossil fuel workers whose skills we need to build the industries of the future, to existing facilities that can be retooled and repurposed, to local entrepreneurs and universities … working to attract talent and investment,” White House Senior Adviser John Podesta said at the IWG meeting.

National Climate Adviser Ali Zaidi stressed the importance of creating new jobs that will let residents stay in their coalmining communities. “It’s not just … we say, ‘Hey, we’ve got a job for you in a completely different geography,’” Zaidi said.

“It’s the places that folks have invested in, not just in this generation, but for many a culture, a community, a sense of place and purpose and dignity. That’s all embedded in geographies … places [that] will be the venue where we come up with the ideas that we forge together and implement together,” he said.

‘An Extra Dime’

The 10% bonus tax credit for energy communities could be a major draw for investment in energy communities, adding 10% on top of any other investment or production tax credits the IRA provides for clean energy projects, Treasury Secretary Janet Yellen said.

“Many energy communities have the knowledge, the infrastructure and the resources to take advantage of the clean energy transition, but in many cases these communities could benefit significantly from an initial public investment to jumpstart that process,” she said.

Janet Yellen (Energy Communities IWG) Content.jpgTreasury Secretary Janet Yellen | Energy Communities IWG

The bonus credit “generally means that if you’re a solar farm operator in a coal community, you get an extra dime on the dollar for your investment in a new facility,” Yellen said, adding that developers will also have to pay prevailing wages and have registered apprenticeship programs to take full advantage of the bonus.

The IRA provides a 30% investment tax credit or a 2.75-cent/kWh production tax credit for renewable energy projects. The impact of adding the 10% bonus credit to those incentives  “is just going to be incredible,” said Tom Cormons, executive director of Appalachian Voices, a community nonprofit in Virginia. It will provide the boost needed to bring on “scores of projects that otherwise would not have penciled out or gotten over the finish line in places where it can be a little harder than others to get clean energy projects going on the ground,” he said.

The IRA provides a particularly broad definition of energy communities, and the Treasury Department guidance spells out the various ways a community can quality. Any community where a coal mine has closed since 2000, or any county adjacent to that area is identified as an energy community, as are areas where a coal-fired power plant has closed since 2010. So are “brownfield” sites where construction of any new projects or repurposing of existing infrastructure “may be complicated by the presence or potential presence of a hazardous substance, pollutant or contaminant,” the guidelines say.

Communities can also qualify if they have a minimum of .17% employment or 25% of tax revenue directly related to fossil fuel production or use and an unemployment rate higher than the national average.  

Echoing Cormons, Hy Martin, chief development officer for D.E. Shaw Renewable Investment, said the IRA’s clean energy tax credits, including the 10% bonus, have “catalyzed several hundred millions of dollars in investment that we have committed to communities, specifically coal communities across the country …

“Without that kind of clear policy signal, those commitments wouldn’t have been made by us and certainly by our peers in the private sector,” Martin said.

‘Irresistible for Investment’ 

Jennifer Granholm (Energy Communities IWG) Content.jpgEnergy Secretary Jennifer Granholm | Energy Communities IWG

Energy Secretary Jennifer Granholm also talked up the impact of the IRA, saying the law’s tax credits and other incentives are making energy communities “irresistible for investment.”

But Granholm’s main announcements Tuesday came with funding from the IIJA, the $16 million for the North Dakota and West Virginia demonstration projects and the $450 million for clean energy projects on mine lands.

The $16 million will be evenly split between North Dakota and West Virginia and used for “front-end engineering and design studies to determine how to extract critical minerals from coal mine waste streams, of which there are an abundant amount across the country,” Granholm said.

“Those efforts are going to help us stand up a first-of-its-kind facility that produces essential materials for solar panels, for EVs, for wind turbines … while at the same time cleaning up polluted land and water,” she said.

Sen. Joe Manchin (D-W.Va.) also welcomed the funding, saying that by reclaiming water from mining waste, “we will ensure that we are producing these materials in the cleanest way possible while addressing environmental liabilities.”

The $450 million will target projects using a “range of technologies — geothermal, energy storage, power plants [with] carbon capture,” Granholm said. “They’re going to show us how we can reactivate or repurpose existing infrastructure, like transmission lines and substations, while creating new opportunities for economic development.”

Granholm stressed that applicants chosen for this funding will also have to submit community benefit plans to ensure that projects are “designed in a way that uplifts the whole community.” Community benefits will constitute 20% of the scoring for the awards.

“We don’t think these projects are going to be successful unless they have meaningful community and worker engagement,” she said.

Concept papers for the $450 million opportunity are due May 11, with full applications to follow on Aug. 31, according to DOE.  

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IPP Asks FERC to Dismiss PJM Performance Penalties over Elliott Outages

Independent power producer Nautilus Power asked FERC to dismiss PJM’s penalties against three of its generators that failed to operate during the December 2022 winter storm, saying two of the units were not needed to address capacity shortages and that the RTO failed to implement processes to address natural gas supply constraints.

In a complaint filed March 30, the company argues that the generators had not been properly notified that they would be required to go online and that the penalties would not incentivize any behavior that could avoid future charges.

The company wholly owns Essential Power, which owns a 383-MW natural gas generator in Lakewood, New Jersey, and Essential Power Rock Springs, which owns a 773-MW gas-fired generator in Rising Sun, Maryland. It has majority ownership of Lakewood Cogeneration, which owns a 237-MW generator with dual fuel capability. All three plants were hit with penalties related to Winter Storm Elliott on Dec. 23 and 24 (EL23-53).

“Under these circumstances, where the adverse impact to PJM was minimal, where the Nautilus Entities were not needed by PJM during many intervals of both [performance assessment intervals], where PJM itself failed to follow its own emergency procedures and therefore prejudiced the Nautilus Entities’ ability to respond to PJM directives, and where the imposition of nonperformance charges on the Nautilus Entities will impose a significant economic burden on the Nautilus Entities, the nonperformance charges that PJM intends to impose on the Nautilus entities are unjust and unreasonable,” the complaint states.

PJM has stated that it expects at least $1 billion in capacity performance penalties to be assigned to generators following a peak of 46,000 MW of outages during Winter Storm Elliott, with the single largest cause being gas-fired generators being unable to procure fuel. PJM and stakeholders have raised concern that the scale of the penalties could lead to widespread defaults, leading PJM to ask FERC to permit a longer payment period of up to nine months. (See PJM Weighs Options for Winter Storm Elliott Follow-up.)

All three generators listed in the complaint had not cleared in the day-ahead market and were not listed as being required in the reliability assessment and commitment (RAC) period and were unable to obtain fuel when they were called on by PJM to operate during the storm. Though the Lakewood generator possesses dual fuel capability, it was not able to procure the natural gas it needs for startup.

The complaint requests that FERC prevent PJM from assessing nonperformance charges to Essential Power and Rock Springs after 12 p.m. on Dec. 24, arguing that they were not needed during those periods. It also requests that Rock Springs not be subject to charges on Dec. 23 and for the first two hours of the Dec. 24 performance assessment interval (PAI), during which it states that it was not scheduled to operate.

As an alternative remedy, the complaint asks that all three generators be relieved of penalties for settlement intervals in which they were not running during both the Dec. 23 and 24 PAIs.

The argument that Essential Power and Rock Springs were not needed for reliability stems from LMPs falling around noon on the 24th, with prices being half what they were earlier in the day by 1 p.m. The complaint argues this shows that shortage conditions had alleviated and the maximum generation emergency and corresponding PAIs should have been lifted. However they remained in place until 10 p.m.

“Imposing substantial nonperformance charges on OPP and Rock Springs for nonperformance during intervals when they were not needed by PJM is highly unreasonable and arbitrary,” the complaint states.

The complaint also states that Rock Springs was not contacted for dispatch for two hours after the maximum generation emergency was initiated at 4:25 a.m. on Dec. 24, which it argued was an intentional decision by PJM dispatchers due to the likelihood that the generator coming online would have exacerbated a constraint and could have led to an outage. It noted that PJM has previously rejected self-schedule requests for that reason.

Nautilus argued that PJM failed to provide enough notice for generators to procure fuel by not declaring a winter weather alert giving generators 24 hours’ notice that they would be expected to be available. Instead it said the RTO “abruptly” jumped into emergency conditions and left gas generators to compete for limited pipeline capacity with elevated fuel costs. It argued the justification for high nonperformance penalties when the construct was proposed in 2015 was that generators would be given sufficient ability to prepare for emergencies and the risk would incentivize behaviors to avoid being charged.

“In its initial filing of the nonperformance charge proposal, PJM itself cited this progression of incremental steps as a justification for the severity of the proposal … However, in the course of the two days at issue in this complaint, PJM skipped right over these interim steps, going from a preliminary notice that a cold weather alert might be needed (that is, the cold weather advisory) straight to an emergency action,” the complaint argues.

It also said that due to firm day-ahead fuel service being sold in a package over weekends and the timing of the holiday weekend, generators would have had to purchase four days’ worth of fuel or vie for scarce single-day packages that might not be filled by pipeline operators giving preference to residential and commercial customers. Since both the PJM dispatch and the forecast the RTO relies upon, as well as pipeline operator practices, are outside of the control of generation owners, the complaint argues that the charges don’t incentivize any behavior other than potentially exiting the capacity market.

“The existing rules allow burdensome nonperformance charges to be imposed on natural gas-fired generators in circumstances where those generators have no reasonable opportunity to avoid those charges,” the complaint says.

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SPP: 31 Entities Join in Markets+ Development

SPP said Tuesday that 31 utilities, public interest groups and other entities have officially joined the grid operator’s effort to develop and launch its Markets+ offering in the Western Interconnection.

The parties met an April 1 deadline to execute agreements allowing their participation in the first phase of the market’s development. That effort began last month after funding reached critical mass a month ahead of schedule. (See SPP Moving Quickly on Markets+’s Development.)

The funding agreements also give the participants voting rights in the first developmental phase.

“We’re encouraged to see such a varied group of entities taking an active role in the development of Markets+,” Antoine Lucas, SPP’s vice president of markets, said in a statement. “From utilities looking to improve reliability and reduce energy costs, to public interest organizations advocating for natural resources and policy outcomes, these diverse perspectives are a benefit to the value, effectiveness and efficiency of our products and services. There’s room for all those voices to have a say in the design and implementation of our market.”

SPP said that in exploring the potential benefits of regional day-ahead and real-time markets in the West, it has worked to ensure its market design would reflect all stakeholders’ perspectives. It recently rolled out the Markets+ independent governance structure that “gives meaningful say to several key audiences.” (See SPP Unveils Markets+ Governance Structure.)

Those audiences include:

  • utilities that serve load or own generation and will have assets participating in Markets+;
  • organizations representing public interests, and other groups that won’t participate in the market but will be affected by its design and operation; and
  • Western states and regulatory bodies, which can nominate representatives to a state committee.

Markets+ participant and stakeholder representatives will collaborate in committees and working groups to develop market protocols and governing documents that SPP will eventually file with FERC for approval.

“SPP’s independent governance, past experience accommodating participation of federal power marketing administrations and commitment to engage with stakeholders to ensure a balanced market between buyers and sellers are all encouraging aspects of Markets+ going into this next phase of development,” Public Power Council CEO Scott Simms said. “PPC looks forward to working with SPP and other stakeholders to further develop Markets+ and to build on the promising service offering developed last year.”

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NJ Allocates $70M in RGGI Funds for Heavy-duty EVs

New Jersey last week announced it allocated $70 million in Regional Greenhouse Gas Initiative (RGGI) funds to purchase 156 electric school buses, garbage trucks, shuttles and other heavy-duty vehicles, and began an outreach campaign to solicit public input on how to spend future funds.

The Board of Public Utilities (BPU), Department of Environmental Protection (DEP) and Economic Development Authority (EDA) on Tuesday held the first of four hearings in which agency officials laid out broad spending objectives and gave stakeholders an opportunity to voice concerns and offer ideas for future spending priorities.

The first hearing, an 80-minute online session with about a dozen speakers, was focused on clean transportation, which the latest figures from the state show accounts for 37% of its greenhouse gas emissions.

“Transportation was a major topic and our first strategic funding plan,” Helaine Barr, chief of the DEP’s Bureau of Climate Change and Clean Energy, told the meeting. “And I think that the state would like to carry that through into the next one as well.”

Future meetings will cover the broad range of clean energy topics (April 11); buildings, grid and refrigerants (April 13); and carbon sequestration (April 18).

Questions raised at the hearing included how school districts could access RGGI funding; whether the state had considered projects to reduce the reliance on private vehicles (not so far, but the suggestion could be considered, a state official said); and whether there were plans to use RGGI funds to help drivers in disadvantaged communities repair personal vehicles that failed the state’s emissions test.

Peg Hanna, assistant director of air quality monitoring and mobile sources at the DEP, said the state has not  considered a project such as the last one.

“I suppose we could consider it. I’m not sure we’re going to get a big return on investment,” she said. “Our greenhouse gas-reduction goals are so ambitious that focusing on decarbonization or electrification is really our first priority.”

Touting Transportation Initiatives

The state’s announced transportation investment comes as it seeks to jumpstart the embrace of electric vehicles of all types, and the installation of vehicle charging stations statewide, through a growing portfolio of programs.

The strategies include offering incentives for EV purchases, incentives for charger installation, and vouchers for the purchase of light- and heavy-duty trucks, among the largest sources of emissions. The state legislature last year approved the creation of a $45 million program that would create a pilot project to test electric school buses in 18 school districts. That’s expected to be launched in the next couple of months, Hanna told the hearing.

The $70 million will fund the purchase of 114 school buses, eight garbage and dump trucks, 26 shuttle and transit buses, and four forklifts. The vehicles will be put to work in 20 overburdened communities across the state.

Some of the funds also will also go to four projects to bring electric ride-sharing programs to “communities that lack access to reliable transportation,” according to the state. The project will be executed with Via Transportation and Blink Mobility, both of which operate ridesharing apps; Envoy America, which schedules transportation for senior citizens; and Zipcar, the car-sharing company.

Those spending decisions were made in the first phase of RGGI expenditures, which began in 2020. But the broad principles are the same, now and into the future, said Bob Kettig, assistant director of climate change, clean energy and sustainability element for the DEP. (See NJ RGGI Spending Focuses on Transportation.)

“A key tenant of what we are stakeholdering today, and [the] mandate to be good stewards of the investment of these proceeds, is that these investments have to show this reduction in energy consumption, this reduction in greenhouse gas emissions relative to the cost of the project or program,” he said.

Shaping Future Spending

Gov. Phil Murphy (D) directed the state to return to RGGI in January 2018, after his predecessor, Chris Christie (R), pulled it out in 2012.

Since returning, the state has received about $372 million in auction funds and spent more than $240 million, leaving about $100 million not allocated, according to state officials.

The 153 projects funded include the incentivization of the purchase of 497 EVs, the planting of 17,000 trees and the restoration of 56 acres of forest, Kettig said. The money also will fund the restoration of 155 acres of wetlands. Combined the projects have avoided the emission of about 208,000 tons of carbon dioxide, he said.

The state’s RGGI scoping document released Tuesday sets out three broad funding priorities for potential initiatives from 2023 to 2025:

  • providing meaningful benefits to communities most affected by pollution and climate change;
  • sparking the electrification of different modes of transportation; and
  • launching the beneficial electrification and decarbonization of the residential and commercial buildings sector.

Kettig said the state is “teeing up” five broad initiatives in the next phase of RGGI fund investment. They include one to “advance healthy homes and incentivize a stronger electric grid” and another to “catalyze clean and equitable transportation.” A third seeks to strengthen the state’s forests, and a fourth promotes “blue carbon”: the capture of carbon in the ocean and coastal ecosystems by restoring marshes and other projects. The fifth initiative is to reduce the use of “highly warming refrigerants,” he said.

While transportation is the largest source of carbon emissions, electric generation accounts for 21% of state GHG emissions, and residential, commercial and industrial buildings together account for 34%.

Doug O’Malley, director for Environment New Jersey, questioned whether the state tracks how other states spend their money and whether New Jersey is “borrowing some of their best ideas.”

Officials said the state closely watches what other states do and has set up work groups to evaluate their strategies and projects.

Kettig said that although the 12 states that participate in RGGI have common policy goals, including greenhouse gas reduction, they each have their own regulatory framework that guides their investments.

“The individual funding decisions are totally within the purview of the individual states under their own policy and their own their own legal processes,” he said.

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FERC Accepts Unexecuted Agreements Filed in Protest

FERC last week accepted three unexecuted network upgrade agreements for wind farms in the Dakotas and Minnesota, filed by MISO interconnection customers in protest over the commission’s order reinstating transmission owners’ rights to self-fund the upgrades.

MISO restored TOs’ rights to self-fund in 2019 at FERC’s direction. The commission originally issued an order in 2015 preventing TOs from providing initial funding for network upgrades, but that decision was remanded by the D.C. Circuit Court of Appeals.

The court ruled in November that FERC did not adequately explain why it reinstated TOs’ option to finance network upgrades before the interconnection customers owning generation projects were given the chance. (See FERC Must Clarify MISO Tx Funding Decision, DC Circuit Finds.)

The financing change has been generally unpopular with some MISO generation developers. They say it could lay the foundation for TOs to discriminate against some interconnection customers and increase the cost of new generation. (See MISO TOs’ Self-funding Option Tested Again.)

FERC accepted two unexecuted facilities service agreements (FSAs) between the Oliver Wind IV and Northern Divide Wind facilities, transmission owner Otter Tail Power and MISO (ER23-998, ER23-999). It also accepted an unexecuted multiparty facilities construction agreement between the same four parties and Palmer’s Creek Wind Farm, Prairie Hills Wind, Campbell County Wind Farm 2, North Bend Wind Project and Union Electric Company (ER23-997).

The Oliver Wind IV and Northern Divide Wind farms said they refused to execute their FSAs to reserve the right to terminate them and be made financially whole should FERC revert to its initial findings on TO self-funding.

Oliver Wind IV also asked FERC to order an amendment to the agreement that states the changes “will be undone if the legal premise for [transmission owner initial funding] is later eliminated.”

Otter Tail disagreed with the request. “Unless and until the commission not only acts upon remand, but also reverses its prior position, the unexecuted FSA continues to reflect the state of the law today and should be accepted for filing,” it said.

FERC agreed with Otter Tail. The commission said it will not allow MISO interconnection customers to “retroactively annul and reverse” TO funding elections if it later decides to reverse the self-funding order.

The agreements “appropriately reflect the state of the law as of the date the agreements become effective,” FERC said. It said its response to the court’s remand remains pending, and it will address any request to annul funding elections “if and when” a Section 205 or 206 filing is made under the Federal Power Act.

“Neither a request for rehearing nor a petition for review stays the effectiveness or enforceability of a commission order,” the commission said.

MISO has been revising legacy interconnection agreements for TOs who wanted the self-funding option. (See FERC Accepts Documents in MISO TOs’ Self-fund Selection.)

Commissioner Mark Christie wrote identical concurrences to the orders to underscore his philosophy on who should pay for and profit from network upgrades. He said generation developers should bear the full “but-for” costs of their interconnection.

“Consumers (i.e., load) should not pay one nickel. They are not the ones seeking to profit from the interconnection,” Christie wrote. “New generation in RTOs is supposed to be driven by the market, not by integrated resource planning, as in non-RTOs. This is the compelling principle underlying participant funding of interconnection in RTOs.”

MISO interconnection customers are responsible for 100% of network upgrade costs, with a possible 10% reimbursement from load for network upgrades that are rated 345 kV and above.

Christie said that when generation developers pay the full interconnection costs, TOs should not be allowed to profit from the investment, “as the developer incurs a cost of capital, not the transmission owner.”

“Allowing the transmission owner to profit on someone else’s capital investment (i.e., through a return on equity) results in an unearned windfall,” Christie said. He added that he looked forward to addressing his points in the remand proceeding.