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November 18, 2024

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Entergy Seeks Review of FERC’s Block on MISO Capacity Obligation

Entergy’s operating companies have mounted a campaign at the D.C. Circuit Court of Appeals to override FERC’s rejection of MISO’s minimum capacity obligation.

The company’s Arkansas, Louisiana, Mississippi, New Orleans and Texas subsidiaries maintain that MISO’s unsuccessful bid to require load-serving entities to demonstrate that they have obtained at least 50% of the capacity required to meet peak load obligations before auctions are held can be beneficial and help rectify capacity shortages. Entergy attorney Michael Griffen petitioned the D.C. Circuit Court for reconsideration in a Dec. 28 filing (22-1334).

FERC in late August and again in late October rejected MISO’s request to install a minimum capacity obligation. The commission found that the RTO did not prove that such a rule would address resource adequacy concerns or that it would incent members to construct new generation. (See Regulators, LSEs Ask FERC to Reconsider MISO’s Seasonal Capacity Accreditation.)

The grid operator disagreed. It has said that an obligation would foster sensible planning by its members and regulators and serve as a “guardrail” against reliance on its voluntary capacity auctions for anything more than residual capacity needs.

MISO has claimed that years of inexpensive capacity prices have accelerated generation retirements and held up new investment in generating facilities. It said some LSEs depend on its residual auctions to provide for all their capacity needs.

Entergy has also characterized a minimum capacity obligation as “a practical safeguard to ensure that LSEs engage in reasonable resource planning practices that will maintain reliability in the MISO region and help mitigate a capacity market free rider problem.”

The utility said that without the obligation, the RTO’s current resource adequacy construct allows LSEs to become too attached to auctions. It said the current environment “distort[s] planning, shift[s] substantial costs to other LSEs’ customers and ultimately negatively impact[s] reliability.”

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California Storms Fill Reservoirs, Build Snowpack

A series of Pacific storms are beginning to fill the lakes behind hydroelectric dams and to build snowpack for spring and summer generation, but California will continue to be gripped by drought without far more precipitation, officials said.

“It’s always great to be above average this early in the season, but we must be resilient and remember what happened last year,” Sean de Guzman, the state Department of Water Resource’s supply forecasting manager, said in a news release. “If January through March of 2023 turn out to be similar to last year, we would still end the water year in severe drought with only half of an average year’s snowpack.

“We still have a long way to go before the critical April 1 total,” de Guzman said. Months of heavy snow and rain will be needed to reach a historical average on that key date, the department said.

The latest storm was forecast to hit the state from Wednesday evening into Thursday, with heavy snow and rain and winds gusting to 60 mph or more.

“A powerful hurricane-force low pressure system located over the eastern Pacific is set to surge a plume of moisture and damaging winds into the West Coast beginning tonight,” the National Weather Service said on its website Wednesday. “The greatest impacts, which include damaging winds, excessive rainfall, and extremely heavy snow, is forecast to occur over much of California and into southern Oregon through Thursday.”

The ground remains saturated from a New Year’s Day deluge with strong winds that caused flash flooding, toppled trees and knocked out power to about 680,000 customers in the territories of Pacific Gas and Electric and the Sacramento Municipal Utility District.

The next storm could fell even more trees, the weather service warned.

“Be prepared for widespread power outages, downed trees and very difficult driving conditions,” it said on Twitter.

Atmospheric river weather systems, which bring large amounts of moisture from the central Pacific, could continue over the next two weeks due to a “persistent mid-level low pressure anchored over the North Pacific,” it said.

While the storms wreak havoc, they also bring much-needed water and snow to California, which has had three dry years in a row. With a Mediterranean climate, the state gets almost all its precipitation from December through February.

On Tuesday, the first snowpack measurement of the year showed it to be far above average in the north-central Sierra Nevada.

The Department of Water Resources (DWR) measured 55.5 inches of snow and a snow water equivalent of 17.5 inches — or 177% of average — at a main survey site in the mountains above Lake Tahoe.

“The snow water equivalent measures the amount of water contained in the snowpack and is a key component of DWR’s water supply forecast,” it said.

Statewide the snowpack was 174% of average for Jan. 3 and 64% of the average total for April, it said.

However, it warned that this year could see a repeat of last winter when a wet December was followed by three dry months.

“Conditions so far this season have proven to be strikingly similar to last year when California saw some early rainstorms and strong December snow totals only to have the driest January through March on record,” DWR said.

The state’s major hydroelectric reservoirs are filling from the rains but some of the biggest lakes remain far below capacity, DWR said. Low water levels have hurt hydropower, adding to the state’s summer resource shortfalls.

Lake Oroville, which ran so dry that generation ceased in July 2021, stood at 39% of capacity on Tuesday and held 74% of its historical average total for this time of year. Lake Shasta was at 34% capacity and 57% of its historical average.

Others had filled past their historical averages. Folsom Lake near Sacramento filled to 141% of its average for the date and was releasing large amounts of water from the New Year’s storm. The reservoir, however, is about one-fifth the size of Lake Oroville and one-fourth the size of Shasta.

If above-normal rainfall continues into spring, it would extend the state’s recent pattern of multiple drought years followed by one year of heavy precipitation. The pattern is a product of climate change, the state’s top water official said in the news release.

“The significant Sierra snowpack is good news, but unfortunately these same storms are bringing flooding to parts of California,” said DWR Director Karla Nemeth. “This is a prime example of the threat of extreme flooding during a prolonged drought as California experiences more swings between wet and dry periods brought on by our changing climate.”

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Massachusetts OKs Sharing Cost of Maine Wind Power

Massachusetts electric distribution companies have been authorized to take on up to 40% of a two-part, $1.7 billion clean energy project in northern Maine.

The Massachusetts Department of Energy Resources, after consulting with the state Attorney General’s Office, notified Maine of the decision Friday.

The Maine Public Utilities Commission in October selected the 1-GW King Pine wind farm proposed by Longroad Energy and a 345-kV power line proposed by LS Power to help move the state closer to its renewable energy goals.

The transmission line is expected to cost ratepayers $2.78 billion, while the wind power is expected to provide a $1.08 billion benefit for a net cost of $1.7 billion over 30 years. But the PUC opted to also look for partnerships with other states that could reduce the cost of the projects to Maine ratepayers.

The DOER determined that the two projects would meet the standards set forth in Section 82 of last year’s Driving Clean Energy and Offshore Wind Act: They would provide cost-effective, clean-energy generation to Massachusetts ratepayers and help the state meet its decarbonization goals while improving energy security and reducing costs during the winter.

The department is additionally requiring that negative impacts be minimized to the extent possible; progress be demonstrated toward permitting and interconnection approvals; and a credible schedule and plans be in place.

It directed the EDCs to begin negotiations with the two projects’ developers for cost-effective long-term contracts that will be reviewed and approved by the Massachusetts Department of Public Utilities.

The Maine PUC has set a Jan. 15 deadline for its staff to report back on potential partnerships and recommend the next step. The Massachusetts DOER set a Feb. 28 deadline for Maine to obtain contract support to demonstrate the project’s viability.

The move comes as Massachusetts’ efforts to foster ocean-based wind power off its coast falter. Construction has begun on an 800-MW wind farm, but developers of two projects that would have a combined 1,600 MW capacity have said the financial terms are no longer viable because of escalating costs. (See related story, Mass. DPU Orders Commonwealth Wind Project to Continue.)

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Treasury Delays Key Rules for IRA’s EV Tax Credits

Consumers looking to cash in on the Inflation Reduction Act’s tax credits for electric vehicles, scheduled to have gone into effect Jan. 1, may have to wait until the Treasury Department issues rules aimed at ensuring the EVs receiving those credits are manufactured in North America, using critical minerals and battery components also produced on the continent.

The rules were due by the end of 2022, but Treasury and the Internal Revenue Service on Thursday announced they would not be issuing the rules until March 2023, saying existing rules, which base EV tax credits on battery size, would stay in effect.

Sen. Joe Manchin (D-W.Va.), chair of the Senate Energy and Natural Resources Committee, called for an immediate halt on all EV tax credits until the required rules are issued.

“The information released today from the Treasury Department outlining how they will be implementing the commercial and consumer EV tax credits bends to the desires of the companies looking for loopholes and is clearly inconsistent with the intent of the law,” Manchin said in a statement also released on Thursday. “It only serves to weaken our ability to become a more energy-secure nation.”

In addition to demanding that Treasury and the IRS put the credits on hold, Manchin also said he would soon “introduce legislation that further clarifies the original intent of the law and prevents this dangerous interpretation from Treasury from moving forward.”

At issue are the IRA’s provisions setting out eligibility requirements for its “clean car” tax credits. Beginning this year, to qualify for the credit, an EV’s battery must contain at least 40% critical minerals mined and processed either in the U.S. or in a country with which the U.S. has a free-trade agreement. The percentage will go up 10% each year, topping out at 80% after 2026.

Similarly, the law requires that 50% of other battery components be made or assembled in North America, with an annual 10% increase that will reach 100% in 2028.

To qualify for the full $7,500 credit for a new EV, both the critical mineral and battery component requirements must be met. If only one is met, the credit is cut in half.

But while the numbers may be clear, Treasury and the IRS said, defining how they will be determined could be more complex, citing questions and concerns “from vehicle manufacturers and a broad range of stakeholders” about the new requirements.

In a white paper issued with the announcement, the agencies said, “The broad stakeholder interest in these new requirements has highlighted the importance of continued communication with stakeholders while Treasury and the IRS develop proposed guidance on these requirements.”

For example, the white paper notes that neither the IRA nor any other federal statute defines “free-trade agreement.”

Some of the criteria suggested in the white paper include “whether an agreement reduces or eliminates trade barriers on a preferential basis, commits the parties to refrain from imposing new trade barriers, establishes high-standard disciplines in key areas affecting trade (such as core labor and environmental protections), and/or reduces or eliminates restrictions on exports or commits the parties to refrain from imposing such restrictions, including for the critical minerals contained in electric vehicle batteries.”

The white paper also sets out a tentative proposal for a complicated, transitional process for determining compliance with the critical mineral requirement for the next two years. Manufacturers would have to identify individual supply or “procurement” chains for the critical minerals they use, determine if 50% of each mineral comes from the U.S. or a free-trade agreement country, and then calculate “the percentage of the value of qualifying critical minerals contained in the battery.”

“To determine this percentage, the sum of the values of all qualifying critical minerals (determined separately for each procurement chain) contained in the battery is divided by the sum of the values of all critical minerals contained in the battery,” the white paper says.

An equally complicated, four-step process is proposed for determining if a vehicle meets the percentage requirements for battery components.

While Treasury has made no direct response to Manchin, a department spokesperson stressed in an email to NetZero Insider that in the guidance issued thus far, “Treasury is simply following the tax laws and the IRA as written.” The department has also held multiple stakeholder meetings and is continuing to review comments it has received, the spokesperson said.

‘Tweaks’ to Rules?

But beyond any vagueness in the law, Treasury’s efforts at delay could be rooted in rising tensions between the U.S. and long-time allies over the impact of the tax credits, according to industry analysts ClearView Energy Partners.

“Pushback intensified in recent weeks, including European concerns that a combination of generous U.S. incentives and relatively low American energy prices could lead to the deindustrialization of the continent,” ClearView said in a recent email. “However, multiple allied automakers criticized requirements associated with the IRA’s expanded EV tax credit, and the White House appears to have prioritized its response to that issue accordingly.”

President Biden has signaled that the guidance on the EV tax credits coming in March could contain some “tweaks” to the critical mineral and battery component requirements, according to ClearView, hence Treasury’s three-month delay on issuing the guidelines.

Should the IRS heed Manchin’s call for a hold on the credits, it could mean more confusion and frustration for potential EV buyers. The IRA’s EV tax credits are already complicated, linked to a vehicle’s manufacturer’s suggested retail price and consumers’ household income.

EVs with an MSRP of more than $80,000 for a van, SUV or pickup truck, or $55,000 for other cars, are not eligible for the tax credits. Consumers earning more than $150,000 — or $225,000 for a single head of household or $300,000 for couples — are also not eligible.

According to information from Treasury, an EV ordered or purchased before, but not actually on the road until after the critical mineral and battery component rules are released, will still be subject to them.

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NY Great Lakes OSW Too Expensive, Study Determines

Developing wind power on the two Great Lakes bordering New York would entail a set of challenges so expensive as to be uncompetitive with other renewable energy options, a new report concludes.

The New York State Energy Research and Development Authority last week submitted its Great Lakes Wind Energy Feasibility Study and supporting material to the state Public Service Commission, which in 2020 instructed NYSERDA to undertake the study.

NYSERDA recommended shelving the lake wind concept for at least the near term.

The study indicates that modeling shows potential for as much as 2 GW of nameplate wind power capacity in Lake Erie and 18 GW in Lake Ontario.

But it also flags several sticking points:

  • Lake Ontario is so deep that development there would rely on floating turbine technology, still in its infancy.
  • Both lakes ice up in the winter.
  • An entire onshore supporting infrastructure would need to be created, along with points of interconnection for the electricity generated.
  • Unlike the extensive OSW capacity that the state is developing in the Atlantic Ocean, the Great Lakes are far removed from the densely populated New York City region, where the need for clean energy is greatest.
  • The construction vessels used to erect offshore wind farms will not fit in the locks that lead to the Great Lakes.

A white paper submitted with the study concludes that wind farms in the two lakes would be substantially more expensive for ratepayers to support than other projects under Tier 1 of the state’s Clean Energy Standard, such as terrestrial wind and solar. That does not include construction of ports, ships and points of interconnection, which would be additional costs for ratepayers to bear.

NYSERDA began conducting the study in February 2021. Some support was offered for the idea of Great Lakes wind during the public input process, but extensive concern was raised about its impact on wildlife and on views from the shore.

Preserving the viewshed would be a significant limiting factor; siting turbines at least 12 miles offshore would limit the potential hosting capacity in Lake Erie to just 200 MW, for example.

There’s also widespread sediment contamination in the Great Lakes, a legacy of the industrial history of the cities along its shores. That contamination is not well-mapped, NYSERDA notes, nor is it known what effect construction would have on the contaminants.

“After completing the feasibility study and considering these various dimensions collectively, NYSERDA recommends that now is not the right time to prioritize Great Lakes wind projects in Lake Erie or Lake Ontario,” the white paper indicates.

But it adds: “Taking no action now does not mean there may not be an opportunity to advance Great Lakes Wind at some point in the future. The resource may become a feasible contributor to New York State’s goals in the future as the state advances toward its mid-century goals.”

An organization advocating for offshore wind buildout said the study made a convincing case.

“While New York needs a serious buildout of renewable energy sources and there is documented potential for wind resources in the Great Lakes, it’s clear from the report that the focus should remain on solar, land-based wind and offshore wind power in the Atlantic. Right now, these are the more critical, substantial and cost-effective opportunities,” New York Offshore Wind Alliance Director Fred Zalcman told NetZero Insider.

There is extensive interest in offshore wind as an emissions-free source of electricity, with the Biden Administration setting a goal of 30 GW installed capacity by 2030.

Just one facility is online in the U.S., producing up to 30 MW off the Rhode Island coast, but a few others are under construction and many more are in some stage of development.

Only one is in freshwater — the 20.7 MW Icebreaker project near Cleveland in Lake Erie — and it is still in development, more than 13 years after it was proposed.

NYSERDA said the Ohio project could eventually help inform New York’s decision-making process on wind turbines in its Great Lakes waters.

A previous proposal to build a freshwater wind farm in New York proved highly contentious. After nearly four years in the review process, developers in early 2019 withdrew their plans for a 108 MW project near Watertown, in the northeast corner of Lake Ontario.

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DOE: 33 of 79 Preliminary Hydrogen Hub Applications Chosen

Industry, private developers and state governments from every region of the nation applied for federal funding to create hydrogen hubs consisting of industries or transportation companies interested in switching from carbon-intensive fuels to hydrogen.

Seventy-nine groups offered to invest a total of $157 billion for a chance to qualify for $7.5 billion in federal H2Hub matching grants, according to an unpublicized report now available on the Department of Energy Office of Clean Energy Demonstrations’ website. The report notes that DOE would require about $60 billion were it to approve all of the applications.

The department does not plan to announce or identify those applicants it has discouraged, nor identify those it has encouraged, to file a full application by close of business April 7.

Faced with so many preliminary or “concept” applications, all filed by the Nov. 7 deadline, DOE appears not to have made final decisions on all applications until the end of December, based on the few announcements made by some of the “encouraged” applicants.

And the department is leaving the door open for 46 applicants it has tried to “discourage.” Though their initial applications were determined to be incomplete or not feasible, they are free to file a full application or join with one of the 33 groups DOE has encouraged.

In an effort to explain the process its reviewers used, the department said it favored groups that appeared to have the best chance of creating a working hub — hydrogen production and nearby hydrogen consumption — in the earliest possible time.

“The encouraged concept papers plan to develop all elements critical to a H2Hub: comprising production, end uses and connective infrastructure; demonstrating capabilities to execute a project plan or to attract and hire such capabilities; planning to deploy proven technologies; and indicating commitments to clean hydrogen and meaningful community benefits,” the report noted.

The report also tried to explain why it rejected, or discouraged, some applications.

“The 46 concept papers were discouraged for many reasons, but one of the most common reasons was papers that described concepts focused on only one element of the hub. Concept papers were also discouraged that would depend on technologies unready for commercial-scale demonstrations and projects whose elements were not readily suited to help catalyze a national clean hydrogen network.”

And the report specifically noted that those applicants who have just received an “encourage” review are not guaranteed a win next year.

“An encourage notification simply means that the proposal is on the right path towards submitting a full application. DOE expects significant competition amongst applicants, even if only encouraged applicants proceed.”

Energy Secretary Jennifer Granholm announced the availability of the grants at a September hydrogen conference in Pittsburgh attended by more than 6,000.

The grants, funded by the 2021 Infrastructure Investment and Jobs Act, are the first step toward moving industry and transportation from hydrocarbon fuels to hydrogen, and key to the Biden administration’s goal to decarbonize the economy by 2050.

DOE appears not to have contacted applicants until after Christmas, based on the few news releases issued by the groups that received a “thumbs up” response.

The department contacted the 79 groups that had submitted applications, “encouraging” 33 of them to file full-blown applications by April 7. Those groups officially “discouraged” may still file full applications, the report noted, or they can join the encouraged groups.

A media search Monday indicated the following hydrogen hub applicants had received a positive DOE review:

  • Hawaii Pacific Hydrogen Hub;
  • HALO Hydrogen Hub, proposed jointly by Arkansas, Louisiana and Oklahoma;
  • Western Interstate Hydrogen Hub, proposed by Colorado, New Mexico, Utah and Wyoming;
  • Pacific Northwest Hydrogen, proposed by Washington state and Oregon;
  • ARCH2, by West Virginia, Pennsylvania, Ohio and Kentucky; and
  • Obsidian Renewables, an Oregon solar developer.
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FERC Fines FirstEnergy over Ohio Bribe Payments

FERC last week ordered FirstEnergy (NYSE: FE) to pay a $3.86 million fine and submit annual compliance monitoring reports to the agency’s audit division for the next two years detailing compliance measures and procedures the company has put in place to comply with commission regulations.

The fine and mandated annual report to FERC’s enforcement division are part of a settlement (IN23-2) between the company and FERC auditors and approved by the commission Dec. 30. Auditors determined that FirstEnergy executives had repeatedly lied when asked in 2019 and early 2020 about the company’s expenses for lobbying and governmental affairs.

A subsequent probe made public in June 2020 by the U.S. Attorney for the Southern District of Ohio found that the company funneled more than $60 million through a dark money nonprofit 501(c)(4) corporation, Generation Now, to former Ohio House Speaker Larry Householder (R) between March 2017 and March 2020 for his efforts to pass legislation subsidizing two uncompetitive FirstEnergy nuclear power plants in northern Ohio.

Householder shepherded the passage of H.B. 6 in June 2019, providing a little over $1 billion in public funding over the coming seven years. The legislation was later repealed at the request of Energy Harbor, the new owner of the power plants.

Householder and four associates were subsequently indicted on federal racketeering charges. Householder’s trial in a federal district court is set to begin later this month, though jury selection could delay the start. FirstEnergy pled guilty to wire fraud in a deferred prosecution agreement in July 2021 and agreed to pay a $230 million fine. The company has also fired several top executives, including former CEO Chuck Jones.

FERC auditors determined that not only had FirstEnergy misled the agency about the $60 million in dark money contributions for the passage of the bailout legislation, but that the company had also failed to mention that, between 2010 and January 2019, it had paid over $22 million to two small Ohio companies owned by Samuel Randazzo, a utility lawyer and long-time Ohio lobbyist who became chair of the Public Utilities Commission in 2019.

Gov. Mike DeWine appointed Randazzo Feb. 4, 2019.

Randazzo has not been charged. He resigned from the commission in November 2020, a few days after FBI agents raided his downtown Columbus condominium, leaving with several file boxes. Randazzo’s assets have been frozen.

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Mass. DPU Orders Commonwealth Wind Project to Continue

Massachusetts regulators on Friday denied Avangrid’s request to back out of power purchase agreements for the 1,200-MW Commonwealth Wind project it committed to build off the state’s coast.

Avangrid contends that it cannot obtain financing under terms of the PPAs negotiated with three electric distribution companies, and said it wants to rebid the project under the state’s next offshore wind solicitation.

In October, Avangrid sought to delay for one month the state Department of Public Utilities’ review of the PPAs, which DPU refused. Avangrid said in November that it would continue with the proceeding, then in December asked for dismissal, saying that the PPAs were insufficient to finance the project and that three companies — Eversource Energy, National Grid and Unitil — had refused to meet with it to work on a compromise.

On Dec. 30, the DPU approved the PPAs, saying Avangrid had not made its case and that “the companies have demonstrated that the pricing terms in the PPAs are reasonable for offshore wind energy generation resources.”

Avangrid spokesperson Craig Gilvarg disagreed, saying the company gave the DPU clear evidence that global economic and supply chain bottlenecks rendered the PPAs untenable.

“Avangrid is disappointed in the order issued by the Department of Public Utilities and continues to review the department’s decision while assessing its legal options,” he said via email Tuesday.

Avangrid has an extensive offshore wind portfolio in development worldwide, including the 800-MW Vineyard Wind I project under construction off the coast of Massachusetts.

Gilvarg said the company remains committed to making the Commonwealth Wind project work. “As we assess our options and pursue the best course for the project, we will continue to work closely with our business, labor, industry, environmental and community partners, as well as the incoming Healey-Driscoll Administration, to ensure Commonwealth Wind can move forward, maintain the same urgent timeline, and help Massachusetts meet its nation-leading climate target for 2030.”

Developers of another offshore wind project in Massachusetts, Mayflower Wind Energy, moved in parallel with Commonwealth Wind in the autumn of 2022, seeking to pause DPU review of their PPAs for the same reasons: high inflation, sharp interest rate hikes and supply chain shortages.

Developers of Mayflower, which would deliver 405 MW of wind power, have stopped short of seeking to void the PPAs, saying they would seek to resolve its issues through collaboration. But they emphasized those issues remain unresolved.

In a Dec. 23 DPU filing, Mayflower said that although it was taking a different path from Commonwealth, “Mayflower Wind respectfully must nonetheless agree with much of the factual analysis underlying Commonwealth Wind’s conclusion, especially as Mayflower is subject to these same facts, pressures and realities. … The project and tax equity financing required for the delivery of Mayflower Wind Project, along with the cost of such financing, has changed dramatically and unexpectedly as interest rates have risen sharply, presenting significant challenges to the Mayflower Wind Project’s economics.”

Mayflower also said Commonwealth’s motion to dismiss had disrupted the procurement process and asked the DPU to “allow time for coordinated, meaningful discussion among all interested parties” before making a final decision on the Mayflower Wind PPAs.

But the DPU approved the Mayflower PPAs in the same Dec. 30 order as it approved Commonwealth PPAs.

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Biden Names Phillips Acting FERC Chairman

President Biden on Tuesday named Commissioner Willie Phillips as the acting chairman of FERC, replacing Richard Glick after he departed at noon.

“It is an honor to be chosen by President Biden to lead FERC at such a pivotal moment,” Phillips said in a statement. “The work we do here at FERC is crucial to ensuring consumers have access to reliable, safe, secure and efficient energy services at reasonable cost. I look forward to continuing to work with my fellow commissioners and the FERC staff, as well as to prioritize public engagement, in pursuit of our important mission.”

Glick’s chairmanship officially ended at noon Tuesday, when the 117th Congress adjourned. Biden had nominated him for a second term, but Sen. Joe Manchin (D-W.Va.) refused to hold a confirmation hearing for him. Manchin, however, approved of Phillips’ appointment.

“Willie Phillips is a supremely qualified and reasonable person, and he understands the need to balance affordability and reliability,” he said in a statement. “I look forward to working with acting Chairman Phillips in his new position as we pursue an all-of-the-above energy policy that will enhance our national and economic security.”

The congratulations from Phillips’ colleagues flowed on Twitter after the news broke.

“The commission is in good hands as our nation continues the transition to the clean energy future,” Glick tweeted.

Allison Clements 2022-11-15 (RTO Insider LLC) FI.jpgFERC Commissioner Allison Clements | © RTO Insider LLC

FERC Commissioner Mark Christie said his former colleague in the Organization of PJM States Inc. would “do a great job.” Commissioner Allison Clements chimed in with her own congratulations, saying she hoped the commission would move forward on the many proposed rulemakings issued under Glick. (See FERC’s Work in 2022 Left in Doubt by Manchin.)

Biden was able to make the move, which was first reported by Bloomberg, because the president has the unilateral authority to name a commissioner already confirmed by the Senate as chair.

Phillips becomes the first Black person to helm the regulatory agency and was elevated to the top spot a little over a year after becoming commissioner. He was previously chairman of the D.C. Public Service Commission and has a 20-year legal career that includes working as assistant general counsel to NERC. He holds a law degree from the Howard University School of Law and a bachelor’s from the University of Montevallo.

Phillips is also the first former state regulator to run FERC since Pat Wood III ran the agency in early 2000s under President George W. Bush.

The “acting” designation means Biden is waiting until he nominates a person to fill Glick’s seat to name the permanent chairman. But ClearView Energy Partners said it is likely Phillips will be named the permanent chairman, and that “dealing with FERC gavel on an acting basis may simply be a matter of administrative expediency.”

In addition to Glick’s seat, Commissioner James Danly’s term is set to expire on June 30. Whomever is chosen for the two seats “could change the outlook for policy direction at FERC over the balance of Biden’s term,” ClearView said. “We therefore acknowledge that it is possible but not necessarily probable that a yet-to-be-identified individual may yet be nominated to FERC as chairman.”

Though Clements has been with the commission for a year longer than Phillips, ClearView said Phillips is likely to “draw less direct fire from GOP legislators in both chambers” given his experience and Clements’ more vocal support for the commission’s proposals to review natural gas infrastructure’s impact on climate change as part of its approval process.

The Electric Power Supply Association welcomed the designation, with its CEO, Todd Snitchler, urging Phillips to increase the commission’s focus on reliability as the grid transforms.

“While we recognize the need to address climate change, power outages and cost spikes have devastating consequences; reliability cannot be taken for granted in pursuit of aggressive policy aspirations not aligned with operational realities of the power system,” Snitchler said.

Phillips should “renew a commitment” to FERC’s core mission of ensuring adequate infrastructure, reliable power and well functioning competitive markets, he added.

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PUCO Staff Clears AEP on June Load Sheds

Ohio regulators cleared American Electric Power (NASDAQ:AEP) of any wrongdoing in its response to severe storms that left more than 240,000 Ohio customers without power for up to two days in June, but said the company should develop a more aggressive vegetation management program on its transmission lines.

About 606,000 AEP Ohio customers lost service between June 13 and 19, including 283,000 who were cut off because of load sheds ordered by PJM.

PJM ordered load sheds to prevent overloads and cascading outages between June 14 and 16 after a storm identified as a derecho downed transmission and distribution circuits and sent dangerous volumes of power onto remaining lines.

Failed AEP Lines Events 1 2 (Public Utilities Commission of Ohio) FI.jpgSix lines failed on June 14 and 15, causing AEP to shed loads. | Public Utilities Commission of Ohio

Some customers accused the company of racism for cutting power to poor areas of Columbus while continuing service to richer suburbs. But the staff of the Ohio Public Utilities Commission said there was no evidence that the company acted improperly. (See Vegetation Eyed in AEP Ohio Outages Following Storms.)

AEP Ohio was required to take action within 30 minutes after PJM ordered the first of five load shed directives totaling 396 MW at 1:57 p.m. on June 14, PUCO staff said in its report Tuesday.

“After review of AEP Ohio’s actions during the load shed event, it is clear to staff that the company had very little time to communicate to its customers and to react to PJM’s directives in the selection of the circuits that needed a reduction in load,” it said. “The number of customers, the type of customers (residential, commercial or industrial), and the specific location of the customers are not readily available to the operations team and are not considered. The only criterion for selecting those feeds is the amount of load they are carrying.”

Staff said they believed the heat wave alone would not have caused any outages “and that it was only because of the damage caused by the storm that shedding load was necessary.” They noted that temperatures in the Columbus area reached highs of more than 95 degrees Fahrenheit days after the storm, but it resulted in no load shed orders.

Failed AEP Lines Event 3 (Public Utilities Commission of Ohio) FI.jpgFour transmission lines failed on the morning of June 15, including three that failed during the first event. | Public Utilities Commission of Ohio

But while staff said AEP Ohio had complied with state regulations, it said it was concerned about the utility’s transmission vegetation management program, particularly those outages attributed to “grow-in” vegetation — when vegetation comes into contact with lines but is still part of a growing plant.

“AEP Ohio has asserted that although the lines came into contact with trees and limbs that were still intact, it happened only because the storm itself impacted the vegetation in and around the [right of way] enough that the landscape changed,” the report said. “Staff understands this point and can accept that this may be the case. However, it believes that if the trees were in a position that allowed the storm to alter them to the point that they caused a grow-in outage, then perhaps they had not been trimmed enough.”

Although staff concluded that AEP complied with its commission-approved vegetation control plan, they said it “should re-evaluate its approach on its transmission vegetation management plan and move to a more cyclical trimming schedule, similar to its distribution plan.”

Staff also called for the utility to strengthen its community outreach plan for working with emergency responders and community organizations to supplement its own communications. “In both rural and urban centers, emergency responders and community organizations play a vital role in spreading valuable information and services to the communities that they serve,” staff said. “Efforts should be made to capitalize on this important community asset.”

Transparency Criticism

Merrilee Embs, spokesperson for Ohio Consumers’ Counsel Bruce Weston, criticized the report, saying the commission failed to involve the public and the Consumers’ Counsel, as the group and others had requested.

“That public process we called for has not happened despite the motion for an investigation that we, the Poverty Law Center and Pro Seniors filed at the PUCO in July,” she said. “Energy justice for hundreds of thousands of AEP consumers who lost their electricity should be served with a process that is transparent and inclusive of the public and their representatives. While we appreciate today’s PUCO report, it begs questions including why there would be outages from electric wires damaged by trees considering the money that AEP charges consumers for tree-trimming.”

The outages began after a line of storms moved through Ohio on June 13, damaging multiple electric lines throughout the state. Wind speeds reached as high as 90 mph and at least three tornadoes were reported.

Because the majority of the outages were caused by wind, trees or a combination of both, staff said it focused its investigation on circuit inspections and vegetation control for transmission lines.

After the first load shed directives beginning at about 2 p.m. on June 14, PJM issued a second set of load shed orders totaling 170 MW at about 7:30 p.m.

Staff noted that AEP’s system faced unusual strains as power was restored during the hot weather.

“While on hot days [air conditioners] are running throughout the area, they are not all running at the same time; it is staggered throughout the day, which serves to naturally levelize the overall load. But during the restoration period following a large storm outage, on a hot day, large numbers of customers are getting their power turned back on at the same moment. … So, all of their AC units turn on shortly after the power comes on and they run continuously for longer-than-usual periods because it takes time to reduce the temperature down to the level set on the thermostat.”

All customers affected by the two rounds of load sheds were restored by 9:48 a.m. June 15.

But the failure of four transmission lines that morning — including three that failed the day before — caused PJM to order additional load sheds totaling 479 MW.

The last of the affected customers had service restored by 4:51 a.m. on June 16, PUCO said.