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November 15, 2024

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With Three Mile Island Restart, Debate Continues on Co-located Load in PJM

Data centers and other concentrated electric consumers are increasingly seeking to purchase their power directly through nuclear generators in PJM, raising concerns among state regulators, consumer advocates and utilities that they may be able to skirt paying their fair share. 

Five years after shuttering, Three Mile Island Unit 1 is being resurrected as the Crane Clean Energy Center (CCEC) to supply Microsoft with energy through a power purchase agreement, while Talen Energy is seeking to amend the interconnection service agreement (ISA) for its Susquehanna Nuclear Plant to reduce its output to PJM and instead supply a co-located data center sold to Amazon Web Services. (See Constellation to Reopen, Rename Three Mile Island Unit 1 and Talen Energy Deal with Data Center Leads to Cost Shifting Debate at FERC.)  

The latter has drawn protests from Exelon, American Electric Power and the Pennsylvania Public Utility Commission arguing that more information is needed about how the configuration may affect the grid and whether it will benefit from ancillary services, such as black start and regulation, without being assessed proper transmission fees. 

During a Sept. 24 hearing on co-located load held by the Maryland Public Service Commission, FirstEnergy Chief Risk Officer Abigail Phillips said nuclear generation can help meet a resource adequacy gap identified in 2029, with load forecasts driven by data centers and thermal resource deactivations outpacing development in PJM. 

“Right now it doesn’t seem like the capacity markets are paying for those capital costs of generation, and the price signals that PJM talked about this morning are increasing the prices, but in the past auction, no new dispatchable generation is going to come online,” she said. “So how long is it going to take to make those price signals work, and how long are we willing to wait and depend on that before we need to do something to get new generation on in Maryland and the rest of PJM?” 

Data center developers could be choosing to co-locate with dependable generators out of a concern that the PJM grid may not offer the same security it traditionally has, Phillips said, which underscores the need to determine how to ensure adequate capacity. Additional nuclear generation could hold the promise to meeting resource adequacy needs and climate goals at once, she said. 

“Nuclear is getting back into the conversation as a part of a zero-carbon solution. I know Maryland has clean energy goals, and I think that having nuclear back in the game is going to be helpful with achieving long-term capacity and long-term goals, not only for Maryland, but for PJM and the country,” Phillips said. 

Greg Poulos, executive director of the Consumer Advocates of the PJM States, drew a distinction between the CCEC and co-located load requests, saying that most advocates are supportive of bringing new nuclear generation online as the balance between supply and demand grows increasingly tight in PJM. Whereas the CCEC will bring about 835 MW of new generation online to serve existing load, he said co-location may be taking generation out of the markets to serve load not considered part of the grid and exempt from service charges. 

Where Poulos does see common ground between the CCEC PPA and co-located load configurations is the potential for major market impacts caused by the addition of large data centers, whether they are in or out of PJM’s market. 

He stressed that consumer advocates are supportive of the economic development that data centers promise the states they locate within, so long as there are rules to ensure that they pay their fair share for any services they consume or grid impacts they prompt. Co-location could also push transmission costs lower by reducing the need for new lines, he said. 

Advocates are also concerned about market power, Poulos said, with the potential for generation owners with a broad portfolio within a tight zone having the ability to pick a resource to take out of the market and push energy and capacity prices higher. Generators could contract with a data center to provide power well below the regional clearing price, knowing that other resources in their portfolio will clear at a higher price. Co-located configurations have the potential to distort price signals even without market manipulation by removing large volumes of load and generation from a zone, he said. 

“The market is supposed to provide the appropriate price signal, but if you have this other massive load being served in the same area offline, so to speak, it could impact the price signals. It could make them not accurate so the price signals aren’t reasonable in the market and for consumers,” Poulos said. 

PJM stakeholders had considered several proposals to change the market rules for co-located configurations last year, but none of them received majority support, and the topic was dropped. Poulos said it’s unlikely stakeholders will be able to make progress while FERC and state commissions are looking at the topic, and it will likely have to be FERC that makes the first move on the broad legal and jurisdictional questions. (See “Proposed Rules for Generation with Co-located Load Rejected,” PJM MRC Briefs: Oct. 25, 2023.) 

The RTO issued guidance around co-located configurations recommending that parties receive firm transmission service while stating that it does not have the authority to prevent private contracts between generators and load seeking to co-locate off the grid. (See “Additional Guidance on Co-located Load,” PJM MRC Briefs: April 25, 2024.) 

During the PSC hearing, Aftab Khan, PJM’s executive vice president of operations, planning and security, said the RTO has requests to study about 8 GW of co-located load configurations, mostly to serve data centers. When such requests are received, he said PJM conducts the “necessary studies” to ensure there is no adverse impact to the grid. Any required transmission upgrades to support the configuration are identified and must be implemented at the cost of the generator before the co-located load can come online. 

He said PJM considers non-network load co-located with interconnected generators to also be electrically connected to the RTO’s grid and benefiting from ancillary services, but it has no way of assessing fees. 

“Under any configuration, co-located load is electrically connected and synchronized to the PJM system when consuming power and therefore benefits from the use of the transmission system and ancillary services, such as black start and regulation services,” Khan said. “PJM network load accounts for such services, but there are no transmission or ancillary service charges to the off-system load. PJM previously tried to address this with proposed rule changes for ancillary services, but the proposal did not achieve the consensus of the PJM members.” 

Independent Market Monitor Joe Bowring also said the load is part of PJM’s grid and the broad impact should be holistically studied to identify impacts, rather than examined through amendments to generators’ ISAs. 

“All load, including co-located load, is on the grid, affects the grid and benefits from the grid,” Bowring said. “As a result, decisions about co-located load affect all customers.” 

Bowring said the Monitor’s analysis of co-location configurations did not find a substantial difference between cost allocation to consumers regardless of whether the load is considered part of PJM’s network or if the large load additions were made miles away from the generator. Instead, he said the underlying issue is how PJM identifies and studies large consumers. 

“It’s not just a question of co-located load; it’s a question about load in general. … What that illustrates and emphasizes is that the analysis has to be done carefully,” he said. 

Phillips told the PSC that it’s critical that the consequences of allowing generators to take their output off the market to serve non-network load is fully understood, both in terms of costs and reliability. 

“Any reduction in dispatchable, on-demand generation that’s available to serve residential customers should be analyzed before we make any changes to policy or regulation. We have to really understand when you co-locate and what that does to capacity, both short term and long term, how does that trickle down into who’s paying for it, who gets the benefit, and we have to make sure it’s not only cost affordable, but [also] we maintain that reliability,” she said. 

In a white paper published Sept. 23, Tony Clark, former FERC commissioner and senior adviser at Wilkinson Barker Knauer, and Vincent Duane, principal at Copper Monarch and former senior vice president of law, compliance and external relations at PJM, argue that allowing data centers to co-locate with nuclear generators allows them to avoid lengthy waiting periods while transmission upgrades necessary to accommodate their load are planned and built. But it can also alter power flows to require network upgrades before other networked loads can interconnect. They call for a cost allocation methodology that recognizes the benefits co-located load and generators receive from being part of the grid. 

“We would not advocate assigning to the co-locating generator the full cost impact of its withdrawal (as is done under the ‘but for’ test for new interconnections),” they wrote. “Nevertheless, the underlying principle — rooted in cost causation — offers a path to assign to the co-location arrangement its share of these cost impacts, thus restoring them to the position they would be in had they connected in the traditional manner.” 

Clark and Duane raise similar concerns about cost allocation for ancillary services and note that nuclear units receive public benefits, such as tax credits, grants and accelerated depreciation from the federal government and states. They argue that makes it especially questionable to allow units to leave RTO markets to serve private load. 

“From this perspective, nuclear generation is uniquely imbued with the public interest, making it unsettling if not unseemly for units, once the first data center comes knocking, to pull up stakes and desert customers that for decades have had their back,” they wrote. 

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Brattle Paper Weighs Pros and Cons of Utility-owned Generation in NY

Allowing utilities to own generation again in New York state could speed up their deployment, according to a Brattle Group white paper prepared for Consolidated Edison released Sept. 24.

“Con Edison has been the champion for renewable energy generation for its customers for decades,” Vice President of Distributed Resource Integration Raghu Sudhakara said in a statement. “We believe that utility ownership of renewable energy will provide New Yorkers with additional renewable generation for the green energy that they need when they need it, and with the highest value.”

The state’s Climate Leadership and Community Protection Act requires 70% of load be met with renewables by 2030 and full decarbonization by 2040, which translates into the need to add tens of thousands of megawatts to the grid over the next decade.

Currently renewables outside of Long Island are largely procured with New York State Energy Research and Development Authority contracts and New York Power Authority ownership, the paper says. NYSERDA runs competitive solicitations, and while it has attracted some new supplies, since the end of 2020, it has only procured 2.7 GW of new onshore wind and solar.

“New York greatly needs to add large amounts of renewable resources in the next decade if it is going to meet the state’s ambitious decarbonization and renewable generation goals,” Brattle Principal and report co-author Metin Celebi said in a statement. “Utility ownership of renewables alongside private ownership of assets could not only help expedite the development of new renewable resources but ultimately even save utility customers in the state money, alongside other benefits.”

The paper evaluated the costs customers would incur during the first 30 years of operation for a new 100-MW onshore wind or solar facility under both utility and private ownerships, with different scenarios based on energy market prices, financing costs, contract durations and repowering assumptions. The renewable projects were identical except for the different ownership, with the only difference in final costs to customers based on cost recovery mechanisms, expected rates of returns and how tax credits are treated.

Allowing utility ownership “with sufficient guardrails against anticompetitive behavior” could allow customers to benefit from the advantages of both utility ownership and private ownership of renewables. When power prices are high and the cost of capital is high for private developers, utility-owned generation saves up to 14% compared to private developers, but other scenarios have privately owned renewables coming in cheaper for consumers by up to 11%.

The data for the costs of the power plants and how much money they are likely to make in the energy markets came from the National Renewable Energy Laboratory. The utility cost of capital is based on what the New York Public Service Commission has approved — 6.75% — while the private cost of capital is based on current market conditions at 6.99%.

“The cost of capital for private renewable developers is uncertain, especially recently due to supply chain constraints, which have put further risk on the development of renewable energy projects in the United States and New York in particular,” the report says.

To account for uncertainty, the study includes higher costs in one scenario: 7.5% for private solar developers and 9% for wind developers.

“We find that the customer costs are broadly comparable between the utility ownership option and the private ownership option,” Brattle said. “However, in the scenarios we analyzed, customer costs for new solar generation tend to be slightly lower under private ownership, while utility ownership tends to result in lower costs for new onshore wind generation.”

Ultimately, both ownership models result in a similar level of costs, and the different ownership models come with their own pros and cons, the paper says.

Utility-owned generation can help bring more renewables online and offers effective project execution and risk management to provide benefits and cost savings under some circumstances.

“However, utility ownership would likely shift most risks currently borne by private owners to electricity customers with respect to asset performance and investment cost overruns,” the report says. “In addition, depending on the implementation rules, utility ownership may raise concerns about cross-subsidization of costs and the availability of open access to information on the transmission and distribution systems to all developers of renewable generation in the state.”

The state will need 110 GW of nameplate capacity and 240 TWh of energy by 2040, but most of the projects in NYSERDA’s last five solicitations have been canceled, the paper notes. Of the 85 projects awarded by the authority between 2018 and 2021, all but eight have been canceled.

In its most recent solicitation in November, of the 68 projects that bid, 60 of them had been previously awarded contracts from which they backed out. NYSERDA ultimately picked 24 of those, representing 2.4 GW of capacity.

With the cancellations, the percentage of load served by renewables in 2022 was down compared to 2014. And with demand growth back in the mix, the gap is only getting wider.

The paper specifically highlights Dominion’s Coastal Virginia Offshore Wind Project as a successful utility development, noting that the firm financed and built a Jones Act-compliant vessel to install the project. The lack of such vessels was overlooked by some competitive suppliers, which led to project abandonments.

“Ideally, regulated utilities’ particular understanding of the regulatory and permitting environment in New York state, a direct interest in a highly reliable energy system in the state and a long-term commitment to the state increase the likelihood of project completion,” the paper says. “However, there is still no guarantee in this regard, given utilities’ exposure to similar market forces that would also impact competitive suppliers, including financing costs, rising capital costs and supply-chain limitations.”

In addition to competitive concerns, which crop up in part because the utilities own the transmission and distribution systems their competitors also need to connect with, the paper also says that letting the utilities into development would put the risk of failed projects onto customers.

“Despite the significant project cancellations described above, as a result of New York’s competitive procurement model, which allocates risks and benefits to private companies instead of customers, customers have not borne the costs of these canceled projects,” the paper says. “In contrast, if the costs of a canceled utility-owned project were determined to be prudently incurred, those costs would be recoverable from customers.”

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Data Centers Contribute to 60% Increase in San Jose Load Forecast

Data centers are contributing to significant load growth and project needs in Silicon Valley, according to CAISO representatives speaking at the Sept. 23 kickoff meeting for the ISO’s 2024/25 transmission planning process. 

While the San Jose area — a 115-kV network between the Newark and Metcalf substations — has seen the largest forecast increases, the greater Bay Area also has seen large load growth. 

In the 2021/22 transmission planning cycle, the California Energy Commission forecast about 9,500 MW for the Bay Area, a figure that since has grown to about 12,000 MW.  

“The Bay Area in general has grown, and that’s fuel switching; that’s EV; that’s just growth in general,” Jeff Billinton, CAISO director of transmission infrastructure planning, said in the meeting. “We’re also doing a sensitivity because there is a significant number of interconnections that PG&E is receiving for data centers in that area.” 

The San Jose area saw particularly significant load forecast increases, said Binaya Shrestha, manager of regional transmission north at the ISO. In the 2024/25 planning cycle, the region saw an increase of about 3,400 MW in the base case and 4,200 in the long-term sensitivity scenario. As a result, a project approved in the 2021/22 cycle, as well as the overall long-term transmission plan for the area, was re-evaluated. 

The ISO is considering alternatives to the previously approved project: a multi-terminal HVDC configuration that would connect the San Jose B converter to the Newark HVDC converter, meant to address load serving issues. When the project was approved, the long-term load in the area was about 2,100 MW. 

“Coming to this cycle, 24/25, when we look at the load in the long-term scenario in 21/22, it’s about a 60% load increase,” Shrestha said. 

A sensitivity case was developed to evaluate how an increase of load in the area would affect the proposed project and whether there was flexibility to expand the plan to serve more load. The ISO found that addition of the project would cause “severe overloads.” 

Additionally, LS Power, the project sponsor, identified a cost increase for the HVDC equipment, and worked with the ISO to develop alternatives to the project that could reliably deliver power without significant overloads or price increases. 

Multiple alternatives were considered, including high-capacity AC lines, a bi-pole multi-terminal HVDC, and a hybrid AC-HVDC solution. 

“Putting that all together, we are recommending a hybrid solution to move forward in this area,” Shrestha said. “That recommendation includes a 1,000-MW HVDC link between Metcalf and San Jose B, and we are changing the scope of the Newark HVDC to a high-capacity 230-kV AC line.” 

CAISO seeks to expedite approval of the altered project so it still can meet the 2028 planned in-service date, which “the area needs to be able to serve load.” 

The ISO also recommends a new 230-kV line connecting Newark and San Jose B. The scope change will be voted on by the Board of Governors in November. 

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WPP Board Approves WRAP Transition Plan Changes

The Western Power Pool’s Board of Directors has approved changes to the Western Resource Adequacy Program’s transition plan that include postponing the program’s “binding” phase by one year and reducing penalties for participants who come up short on RA obligations.

WPP said Sept. 24 that its board had approved the revised transition plan five days earlier, following through on a request by WRAP participants to push back the start of the program’s penalty phase by one year, from summer 2026 to summer 2027.

WPP staff working on the WRAP told RTO Insider through a spokesperson that the new timeline does not technically represent a delay because the program’s tariff gives WPP flexibility to begin binding operations anytime between 2025 and 2028.

Members of the WRAP’s Resource Adequacy Participants Committee (RAPC) requested a shift from the 2026 date in an April 22 letter addressed to “Western Stakeholders,” in which they warned that they face “significant headwinds” in securing energy resources in light of supply chain issues, forecasts for faster-than-expected load growth and increasing extreme weather events. (See WRAP Participants Seek 1-Year Delay to ‘Binding’ Operations.)

The RAPC on Aug. 29 voted to approve the revised transition plan, which — in addition to shifting the binding phase — also extends the WRAP’s “transition period” by one year to March 2029. (See WRAP Members Vote to Delay ‘Binding’ Phase to Summer 2027.)

Under the updated plan, during the transition period, participants who enter the binding phase but remain deficient in RA are allowed to pay a “discounted deficiency charge” if they fail to secure WRAP Operations Program capacity but show “commercially reasonable efforts” to do so.

The new plan also introduces the concept of “critical mass” into the program by setting a “participating load volume and participant threshold for a [WRAP] subregion below which participants may participate in a nonbinding manner” after the transition period ends.

Inclusion of that concept entails tariff changes that would allow participants to choose to be nonbinding for seasons when critical mass is not achieved in their subregion. The critical mass thresholds would be 15 GW of load and three participants for the Southwest/East Diversity Exchange (SWEDE) subregion, and 20 GW of load and three participants for the Northwest’s Mid-C subregion.

The transition plan changes were put out for public comment and reviewed by the WRAP’s Committee of State Representatives before being submitted to the WPP board, which also voted Sept. 19 to approve seven WRAP business practice manuals and a set of corrections to the program’s tariff.

“This is our robust stakeholder process and independent governance structure on display,” WPP CEO Sarah Edmonds said in a statement. “With the input and direction we’ve received on both the tariff and the business practice manuals, WRAP is well positioned to move forward.”

The WRAP tariff changes will now advance to FERC for approval.

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DHS Offers $280M in Grants for Cyber Investments

The Department of Homeland Security is looking for recipients for $279.9 million in grant funding to invest in cybersecurity for fiscal 2025, which begins Oct. 1. 

The grants are part of the State and Local Cybersecurity Grant Program (SLCGP), which Congress established in the Infrastructure Investment and Jobs Act of 2021. (See Bipartisan Infrastructure Bill Offers Funding for Grid, EVs.) 

The SLCGP, along with the Tribal Cybersecurity Grant Program (TCGP), provides about $1 billion in funding over four years. Both programs are intended to support state, local, territorial and tribal governments in reducing cyber risk and building resilience against cybersecurity threats. Entities may apply for the grants until 5 p.m. Dec. 3, 2024. 

The DHS Cybersecurity and Infrastructure Security Agency (CISA) jointly administers SLCGP and TCGP with the Federal Emergency Management Agency (FEMA). CISA serves as the subject matter expert on cybersecurity issues, while FEMA administers grants and oversees the use of appropriated funds. 

In a press release, CISA Director Jen Easterly said the programs would help “governments lay a solid foundation for building a sustainable and resilient cybersecurity program for the future.” 

According to the Notice of Funding Opportunity (NOFO) issued by DHS, SLCGP applications can be submitted by designated State Administrative Agencies (SAA). States and territories will be responsible for distributing sub-awards to local entities. The IIJA requires local governments to receive at least 80% of awarded funds, with at least 25% to be distributed to rural areas. 

Each state must receive at least 1% of the total available grant funding, according to the SLCGP fact sheet; this mandate also applies to the District of Columbia and Puerto Rico. American Samoa, Guam, the U.S. Virgin Islands and the Northern Mariana Islands each have a minimum allocation of 0.25%. Additional funds will be allocated “based on a combination of state population and rural population totals.” 

To receive grants, states and territories must have a CISA-approved cybersecurity plan and a cybersecurity planning committee and charter. Plans must be submitted by Jan. 30, 2025. Entities that already have a CISA-approved plan do not need to revise it unless the agency notifies them that it does not meet requirements, but CISA indicated that “there are no additional plan requirements” in FY 2025.  

CISA also reminded applicants that implementing the agency’s cybersecurity best practices is a “key requirement” of cybersecurity plans. The NOFO provided a list of practices for entities to incorporate: 

    • multifactor authentication; 
    • enhanced logging; 
    • encrypted data at rest and in transit; 
    • discontinued use of unsupported or end-of-life software and hardware that are accessible from the internet; 
    • restricted use of known, fixed, and default passwords and credentials; 
    • the ability to reconstitute systems from backups; 
    • rapid bidirectional information sharing between CISA and state, local and tribal entities; and 
    • migration to the .gov internet domain. 

CISA said incorporating the recommended best practices will help entities reach the baseline outlined in its cyber performance goals. 

“In the modern threat landscape, every community can — and too often does — face sophisticated cyberattacks on vital systems like hospitals, schools and electrical grids,” said Homeland Security Secretary Alejandro Mayorkas. “Our message to communities everywhere is simple: Do not underestimate the reach or ruthlessness of nefarious cyber actors. Through initiatives like the [SLCGP] we can confront these threats together.” 

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MISO, TVA to Enter Agreement on Emergency Purchases

INDIANAPOLIS — MISO and the Tennessee Valley Authority say they’re poised to strike an agreement on emergency energy transactions after months of RTO leadership complaining that TVA doesn’t return the favor of energy transfers in times of need.

The two have confirmed they will file an agreement with FERC to codify emergency purchases between the federal utility and the RTO.

According to TVA, the agreement is between MISO and two authorized TVA purchaser utilities. It will allow MISO to “act on their behalf to purchase power from TVA during certain emergency conditions, consistent with TVA’s obligations under the TVA Act,” TVA spokesperson Scott Fiedler said.

MISO said the draft agreement is not publicly available yet.

“We are focused on establishing a process for the provision of emergency energy during emergency events to support reliability on our respective systems, as well as provide terms for compensation,” MISO spokesperson Brandon Morris said. MISO did not comment on the degree it expects emergency transfers from TVA to benefit its operations.

During MISO Board Week in Indianapolis on Sept. 17, Vice President of System Planning Aubrey Johnson said in early October, TVA operators will visit MISO’s control room in Little Rock, Ark., to perform desktop exercises to familiarize themselves with MISO operations.

Johnson said he and other MISO leaders in turn will travel to Chattanooga, Tenn., to celebrate the emergency energy agreement the two should have completed by then.

The agreement is meant to forge a more symbiotic relationship between the two. Prior to the agreement, MISO leadership expressed disappointment in TVA because although MISO has assisted TVA with exports — especially during the late December 2022 winter storm — TVA as a rule didn’t flow power to MISO. (See “JOAs with Neighboring Systems?” MISO Winter Recap Centers on December Emergency.)

“TVA is an interesting animal in the Eastern Interconnect. They are limited in who they can sell power to,” Executive Director of Market Operations J.T. Smith said when the agreement was in the works in spring.

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MISO Tries to Win over Stakeholders on New LMR Capacity Accreditation

INDIANAPOLIS — Stakeholders appear wary of MISO’s proposed, availability-based accreditation method that it plans to file with FERC by the end of the year for the RTO’s approximately 12 GW of load-modifying resources (LMRs). 

MISO wants to accredit LMRs based on past performance levels by the 2028/29 planning year. It would split them into two categories — those that can respond in 30 minutes or less and those that can’t — and accredit them accordingly. (See MISO Proposes to Split LMR Participation, Accreditation into Fast/Slow Groups.) 

The LMR Type II category would have a maximum response time of 30 minutes and presumed availability for all maximum generation emergency step 2 events. An LMR Type I class would carry a maximum response time of six hours and be called up earlier, when MISO declares a maximum generation alert. The RTO has long said it needs to be able to access LMRs outside of actual emergency declarations. 

MISO plans to use a similar accreditation to its proposed, availability-based method for its more traditional generation resources. However, to measure demand response, MISO said it would use backward-looking meter data from hours when capacity advisory declarations are in place to accredit resources. The RTO plans to draw on data from a minimum of 65 historical hours per season over the past year and will give more weight in accreditation to performance during hours when capacity advisories escalate into maximum generation events, alerts or warnings. 

The RTO would cap accreditation at an LMR’s maximum stated capability during registration and reduce accreditation when LMR owners submit inaccurate availability information. Currently, MISO does not tie the accuracy of LMR availability data to accreditation values. 

During a Sept. 23 stakeholder workshop, WPPI Energy’s Steve Leovy said he was concerned that the sample size of hours during which capacity advisories are in effect is too small to be a good indicator of LMR performance. He said MISO’s capacity advisories seem too infrequent to use as a basis for accreditation.  

Other stakeholders said one year’s worth of data might not be adequate to create a stable, year-to-year accreditation. They pointed out that a particularly heat wave-laden or mild summer could skew the numbers, especially for those LMRs tied to air conditioning loads.  

MISO said it will turn to other previous years as needed if the past season doesn’t have the requisite 65 hours. Joshua Schabla, an economist in MISO’s market design group, also said the RTO intends to account for temperature-based adjustments in the accreditation. 

MISO said it needs the split classification because its long-lead-time LMRs are incapable of deploying in the time it takes for emergencies to materialize. The RTO experiences maximum generation alerts most frequently, with 20 occurring between 2020 and 2023, compared to 10 warnings, four maximum generation emergency step 1 events and five maximum generation emergency step 2 events in the same time frame. 

“Resources that deploy earlier can be used effectively, even if the event escalates quickly,” Schabla said. “In practice, we need these long-lead resources to be called up during maximum generation alerts.”  

MidAmerican Energy’s Dennis Kimm asked for more nuance beyond the two capability classes. He said MidAmerican has several LMRs that can respond within two hours but none that are ready within 30 minutes. Leovy advocated for the 30-minute requirement to be bumped up to a two-hour response time. 

Schabla said LMRs are more highly accredited than any other in its resource stack, yet the LMRs are less available than any other in its resource stack. “There’s a fundamental disconnect here.” 

Though MISO officially has about 12 GW of LMRs, staff have said MISO receives only about 7 GW to 8 GW worth of movement during emergencies. 

Schabla said the gap does not necessarily mean LMR owners are doing anything wrong or gaming the system. He said it likely represents a “misalignment between what is accredited and what is available.” 

In August, Reliability Subcommittee Chair Ray McCausland called the LMR response rate “eye-opening” and “a huge concern.” 

The RTO currently has an “inability to access many of the megawatts available in a useful time frame,” Executive Director of Market and Grid Strategy Zak Joundi said at MISO Board Week this month. The inability is magnified by the fact that MISO currently must declare an emergency before gaining access to load adjustments, he said.  

“We want to make sure [that] if someone is clearing the Planning Resource Auction, we can access those resources and they can deliver,” Joundi said. 

Joundi acknowledged to board members that stakeholders were dissatisfied with MISO’s timeline.  

“Ultimately, we want to make sure the rules we file at FERC are effective,” Joundi said. “Our goal is not necessarily to discourage the megawatts that are important. We want to make sure there are megawatts that we can leverage under the circumstances that we do.” 

MISO will again discuss LMR accreditation with stakeholders at its Oct. 9 Resource Adequacy Subcommittee meeting. 

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California GHG Emissions Decreased 2.4% in 2022

California’s greenhouse gas emissions fell by 2.4% in 2022 compared with the prior year, with the largest decrease seen in the transportation sector, according to a report released Sept. 20 by the California Air Resources Board.

The state’s total GHG emissions were 371 million metric tons (MMT) of CO2 equivalent in 2022, a figure that includes emissions from imported electricity. The decrease from 380 MMT in 2021 resumes the generally declining trend of GHG emissions that the state has seen since 2004.

The year 2021 was an exception to that trend, when GHG emissions grew by about 3%. The emissions increase in 2021 was viewed as rebound from the COVID-19 pandemic, which sent GHG emissions plummeting in 2020.

According to the CARB report, the transportation economic sector accounted for 39% of California’s GHG emissions in 2022, followed by the industrial sector at 23%. The electricity sector contributed 16% of the state’s GHG emissions: 11% from in-state generation and 5% from imports.

Transportation sector emissions fell by 5.2 MMT in 2022, a 3.6% decrease. Emission decreases were seen for passenger vehicles as well as heavy-duty vehicles. CARB attributed the drop to the increased use of renewable fuels and growth in the zero-emission vehicle market.

Emissions from electricity generation fell by 2.6 MMT, or 4.1%, in 2022 due to increases in in-state solar power and hydropower and an increase in imported wind power, according to the report.

GHG emissions dropped in five out of seven sectors that CARB tracked. Emissions were up by 1.7% in the residential and commercial sector, which CARB attributed to an increase in commercial activity following the pandemic. On the residential side, emissions fell slightly in 2022.

California’s agricultural sector accounted for 8.0% of statewide GHG emissions in 2022. Livestock emissions, which are responsible for 70% of the sector’s emissions, fell in 2022 due to the use of methane digesters funded by the California Climate Investments and incentivized by the Low Carbon Fuel Standard, CARB said.

Assembly Bill 32 of 2006 set a state limit of 431 MMT of GHG emissions in 2020. California emissions dropped below that limit in 2014, six years ahead of schedule. Now the state is working to reduce GHG emissions to 260 MMT by 2030, a limit set by Senate Bill 32 of 2016.

The state has set a target of net-zero emissions by 2045.

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DOE Awards $3B to Tackle Gaps, Challenges in US Battery Supply Chain

The Smackover Formation in southwest Arkansas has one of the highest lithium brine concentrations in the U.S., which is why the Department of Energy is planning to invest $225 million in federal funds to help stand up an environmentally sustainable lithium extraction and purification project being developed by SWA Lithium. 

A partnership between Standard Lithium and Equinor, SWA is one of 25 battery supply chain projects DOE has selected to receive $3 billion in grants from the Infrastructure Investment and Jobs Act, according to a Sept. 20 announcement. 

“The selected projects will retrofit, expand and build new domestic facilities for battery-grade processed critical minerals, batter components, battery manufacturing and recycling,” the announcement said, as well as create 8,000 construction and 4,000 permanent operating jobs.  

Located in 14 states, the awardees represent the “most essential building blocks of the battery supply chain,” as well as a diverse range of companies, according to DOE. For example, Dow Chemical is set to receive $100 million to turn waste carbon dioxide into battery-grade electrolytes, while Silicon Valley startup Mitra Chem is up for a $100 million award to manufacture next-gen lithium iron phosphate battery components in Muskegon, Mich. 

“This award selection represents a pivotal moment for the entire U.S. battery industry,” said Vivas Kumar, CEO of Mitra Chem. “By bringing advanced battery production to American soil, we’re securing our energy future and positioning the U.S. at the forefront of the global electric vehicle revolution.” 

The company’s DOE grant is being topped up with a $25 million grant from Michigan, according to a Mitra Chem announcement.

Awardees must be able to match the IIJA funds dollar for dollar at least as part of the negotiations that will now begin to finalize contracts for the awards. The DOE announcement also noted that nearly 90% of the projects will be located in or adjacent to disadvantaged communities, and more than half have already signed or committed to signing project agreements with labor groups. 

The SWA project, for example, has committed to ensuring that 40% of workers and 20% of apprentices on the project will be local hires. 

“Taking action on climate change and rebuilding our domestic manufacturing capacity are mutually reinforcing goals,” said Ali Zaidi, White House national climate adviser. 

The “game-changing” awards announced Sept. 20 will “support the technologies that we need in the market today, the components that we will need in the future and the innovative technologies we need to advance our vision for a circular domestic battery supply chain,” Zaidi said. 

Breaking Chinese Dominance

With batteries a core technology for decarbonizing the grid and electrifying transportation, building out a domestic supply chain ― and breaking China’s dominance in critical mineral processing and battery manufacturing ― has been a political flashpoint and a high priority for the Biden administration.  

The success of these projects could also have a critical impact on EV adoption rates in the U.S., as half of the Inflation Reduction Act’s tax credits for EVs require that their batteries meet specific domestic content requirements. (See Will Final Rules on EV Tax Credits Help or Hurt US Market Growth?) 

Released in May, the Treasury Department’s final rules on the tax credits give automakers a two-year phase-in period for some of the domestic content provisions — for example, graphite — but also puts DOE’s awardees on relatively short lead times. 

Mitra Chem, for example, expects its plant in Muskegon to be online and ready to double the U.S. output of lithium iron phosphate by 2027. 

The current awards are the second round of grants for battery materials processing, manufacturing and recycling, following $2.8 billion in awards to 20 companies announced in October 2022.  

At the time of the first awards, DOE had set ambitious targets for companies building out U.S. supply chains, such as developing enough battery-grade lithium to manufacture 2 million EVs annually. Scale is still a factor in the second round, but DOE is also focusing on some of the main challenges facing the EV industry: from ongoing consumer anxiety about EVs’ range and charging times to the environmental impacts of lithium mining. (See DOE Awards $2.8 Billion to ‘Supercharge’ Battery Production.) 

With a $67 million grant, Albemarle US plans to retrofit a manufacturing facility in Charlotte, N.C., where it will produce advanced lithium anodes that will increase EV battery density and range, cut charging times and improving safety. Target output is 50 metric tons per annum. 

Forge Battery intends to use its $100 million grant for a first-of-its-kind facility, also in North Carolina, to manufacture high-performance lithium-ion battery cells for “underserved, specialized domestic markets,” including heavy-duty trucks, off-road vehicles, and aerospace and national defense applications. Production will begin in 2026 and reach full capacity — 3 GWh per year — by 2029. 

And the SWA project aims to be a model for sustainable lithium mining through its use of direct extraction technology, which draws lithium brine from aquifers, filters out the lithium and then reinjects it into the ground to create a closed-loop process. The first phase of the project could produce up to 22,500 MT of lithium carbonate per year, the company says. 

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Northeast Utility Commissioners Talk Costs of Grid Modernization

BOSTON — Increasing electricity prices must be met with a greater effort to reduce peak loads and protect low- and moderate-income ratepayers, several Northeast utility regulators said at Raab Associates’ New England Electricity Restructuring Roundtable on Sept. 20.

“There is no question that affordability is being strained today,” said Ron Gerwatowski, chair of the Rhode Island Public Utilities Commission, adding that electricity costs are likely to remain high for the foreseeable future.

U.S. Bureau of Labor Statistics data shows the Northeast has some of the highest electricity prices in the country, rivaled only by parts of the West Coast. The costs associated with transmission and distribution system upgrades and grid decarbonization could push rates even higher.

While investments in grid infrastructure and renewable generation may benefit ratepayers in the long-term, Gerwatowski stressed that many customers are “not worried about whether electricity rates will stabilize in the long-term, they’re worried about paying their electricity bills today.”

However, Gerwatowski also emphasized it is “oversimplistic, and not reasonable, to blame the strain on affordability solely upon the costs associated with any one individual initiative, especially our initiatives that are designed to advance renewable energy deployment in order to address carbon emissions.”

He said the region’s rates are being pushed up by inflation, the increasing need to replace aging grid infrastructure, high winter gas costs, utility biases toward capital expenditures and the decreasing availability of easy energy efficiency improvements.

Massachusetts Department of Public Utilities Commissioner Staci Rubin said LNG volatility and reliance on the Everett LNG import terminal also contributes to high rates, along with predatory third-party competitive suppliers.

Rubin said the ratepayer benefits of long-term renewable energy contracts often are not apparent to customers, noting that “things like price suppression do not actually show up on your bill.”

At the same time, “the entire clean energy transition cannot be funded entirely through electricity bills — we need to look for outside sources of funding,” Rubin said, emphasizing the importance of seeking and using all available federal funding.

Maine PUC Commissioner Carolyn Gilbert added that electricity bills are a “somewhat regressive means” to fund the clean energy transition. She said states must push to unlock cost and emissions savings from time-varying rates, echoing similar comments made by Gerwatowski.

“Any time there’s a potential to save money I think we have to go after it,” Gilbert said.

Lisa Wieland of National Grid, which owns electric and gas utilities in Massachusetts, said the company this fall is beginning a multiyear process of deploying advanced metering infrastructure (AMI) in the state. The company expects to bring AMI to between 750 and 1,000 of its approximately 1.3 million customers in the state by the end of the year and plans to roll out time-varying rates once it has completed most of its AMI deployment.

Gas Decarbonization

Reducing the region’s reliance on natural gas is essential to keeping energy costs manageable in the region, said Bradley Campbell, president of the Conservation Law Foundation.

“The energy transition can drive affordability,” Campbell said, adding that “the message that the clean energy transition is antithetical to affordability” is “a false narrative being pushed heavily by the fossil fuel industry.”

While the Massachusetts DPU has ruled the state will need to chart a course off gas to meet its climate goals (DPU 20-80), natural gas consumption in the region for buildings and electricity generation has ticked up in recent years, according to state’s most recent emissions inventory update and data from ISO-NE.

Gas prices remain a key driver of the region’s energy costs, with pipeline constraints driving up gas prices in the winter and leading to expensive out-of-market contracts for LNG. Enbridge, which owns the major natural gas pipeline into the region, has proposed a major project to expand its gas transmission capacity into the region, to the staunch opposition of climate activists.

grid

From left: Dan Berwick, New Leaf Energy; Lisa Wieland, National Grid New England; Claire Coleman, Connecticut Office of Consumer Counsel; and Janet Gail Besser, moderator | © RTO Insider LLC

“In a region where ratepayer misery is driven by gas price volatility, the message that we should double down on natural gas dependency in New England is not only unsound, it’s immoral,” Campbell said.

Disagreements between the Massachusetts Senate and the House over how aggressively the state should move away from gas have derailed progress on a wide range of other climate and energy issues, including a widely agreed-upon proposal to reform the permitting and siting processes for clean energy infrastructure. (See Mass. Gov. Healey Includes Permitting Reform in Budget Proposal.)

“Massachusetts siting reform failed to pass, despite broad consensus, because gas utilities would not agree to take the first steps needed to implement the DPU’s order on the future of gas,” Campbell said. He criticized both the administration of Massachusetts Gov. Maura Healey (D) and the utility industry for not moving more quickly to prepare for the transition away from gas.

At the same time, he expressed optimism about the administration’s newly created Office of Energy Transformation, which he said could “could provide the venue to forge consensus among stakeholders on how to speed the energy transition while advancing affordability.”

Solar Stagnation

Dan Berwick, CEO of New Leaf Energy, expressed concern about the stagnation of solar development in the state, noting that 2023 was “the lowest year for solar deployments in over a decade” in the state, with 2024 tracking to be even lower.

While large-scale solar projects are the cheapest form of solar in the state, “we’ve all but stopped doing big solar projects in Massachusetts,” Berwick said. He attributed the slowdown to interconnection delays and constraints on where solar projects can be sited to receive support from state programs.

“We have a much more restrictive land use framework for our clean energy developments than we do for other types of developments,” Berwick said, also expressing hope that “there’s an outcome that we ought to be able to find alignment on.”