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November 16, 2024

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DC Circuit Backs Kentucky Munis on Transmission Rate ‘Pancaking’

FERC failed to consider the impact of potential rate increases when it allowed Louisville Gas and Electric (LG&E) and Kentucky Utilities (KU) to partially exit market power mitigation measures, the D.C. Circuit Court of Appeals ruled Friday (19-1236).

The court vacated parts of a March 2019 order and rehearing orders in September 2019 and September 2020 (ER19-2396, ER19-2397). (See FERC Again Rejects LG&E-KU Mitigation Exit.)

The commission imposed rate de-pancaking provisions to resolve horizontal market power concerns after LG&E and KU merged in 1998 and left MISO in 2006. The utility was acquired by PPL (NYSE:PPL) in 2010.

As a condition for allowing the utility to leave MISO, FERC required it to agree not to charge its wholesale power customers duplicative “pancaked” transmission rates for power shipped to or from MISO, so long as the RTO did the same.

In March 2019, the commission agreed the de-pancaking provisions — spelled out in the utility’s Schedule 402 — could be removed because loads located in its market would have access to enough competitive suppliers.

But the commission sought to protect customers that had made business decisions based on the de-pancaking provisions by requiring LG&E and KU not to end de-pancaking during a transition period. It set the transition at 10 years for the cities of Paducah and Princeton, Ky. (P&P), which had invested in the Prairie State coal-fired generator connected to the MISO grid.

The D.C. Circuit said that while “the commission reasonably found that sufficient competition would survive the return of pancaking, it was arbitrary and capricious for the agency to ignore the effect pancaking would have on rates.” It also said FERC failed to adequately explain two aspects of its transition requirements.

While there were no more than seven competitive wholesale energy suppliers for the grid when FERC approved the LG&E-KU merger, by 2018, more than 100 suppliers could competitively sell to the grid, the commission said.

LG&E and KU’s “neighbors include some of the largest independent grids on the continent — MISO and PJM Interconnection LLC — giving those customers ready access to independent power suppliers,” the court said.

But the court said FERC erred in “backhanding the effect that pancaking would have on rates.” It quoted an expert for municipal utilities protected by Schedule 402 who estimated that the end of de-pancaking would raise municipalities’ rates by at least 15%, with one customer’s rates rising 47%.

“Importantly, this rate analysis goes beyond just looking at competition because, as the commission has recognized, markets do not always function perfectly,” the court said. “Yet here, the commission expressly refused to even consider the effect ending de-pancaking would have on electricity rates. The commission held, instead, that because de-pancaking was imposed to protect competition, that was the only factor it needed to consider in ending the program.

“By refusing to consider the material effects of its order on customer rates — a factor that its own regulations identify as a key component of the public interest, the commission engaged in ‘unreasoned, arbitrary and capricious decision-making,’” the court concluded.

The court said that although vacating the commission’s action may cause some disruption, “that disruption seems unlikely to be severe, as our decision implicates in large part the same type of rates that are required to be de-pancaked in the short term under the transition mechanism. We therefore vacate the commission’s decision to permit [LG&E and KU] to end de-pancaking under Schedule 402 and remand for the agency to reconsider its decision in light of the direct and indirect effects ending de-pancaking would have on customers’ rates.”

Win for LG&E/KU

LG&E and KU claimed one victory in the appeal, convincing the court that FERC acted arbitrarily in extending the de-pancaking of P&P’s rates related to their investment in a hydroelectric project until their power agreements expire in 2057.

“That reasoning cannot be reconciled with the commission’s determination that the transition mechanism was meant to extend de-pancaking only for a ‘limited period of time.’ The commission had just said that 10 years of mitigation was enough to protect P&P’s similar long-term investment in Prairie State. Yet here, the commission concluded that mitigation must continue for an additional 38 years — simply because the hydropower agreements contained a concrete end date of 2057.

“That makes no sense. If 10 years of protection suffices for an ownership interest that continues ‘indefinitely,’ something in the neighborhood of 10 years would seem the relevant time frame to protect another exceptionally long investment,” the court said. “The commission failed to explain why the fact that an agreement will terminate by a date certain justified extending the mitigation term for nearly four decades.

“Should the commission conclude on remand that the public interest supports ending de-pancaking under Schedule 402, it must either better explain this aspect of the transition mechanism or take a fresh approach to the question,” the court said.

‘Inexplicable’ Rejection

The court also said FERC’s reasoning for declining to protect the entirety of the Kentucky Municipal Power Agency’s  eight-year transmission reservation with MISO was “inexplicable.”

“The commission’s holding that transmission reservations are not ‘separate financial commitment[s]’ meriting independent protection was conclusory and inconsistent with the plain criteria of the transition mechanism,” the court said. “The commission’s competition finding does nothing to justify reaching a different result for transmission reservations than it did for power purchase agreements. The commission’s claim that de-pancaking Energy Agency’s entire transmission reservation would unduly extend its remedy to future power agreements was also baseless. …

“If the commission chooses again to end Schedule 402 de-pancaking on remand, it must come forward with a logical explanation for its decision here that is consistent with the purpose and scope of the transition mechanism, or it must extend de-pancaking on reasoned terms to Energy Agency’s transmission contract,” the court said.

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SPP MOPC Approves Change Addressing Fuel Limitations

SPP stakeholders Friday unanimously approved an urgent revision request that expands the ability of market participants facing fuel limitations to include opportunity costs in their mitigated offers.

The Market Monitoring Unit (MMU) drafted the revision request (RR452) over concerns that a potential rail strike and other coal-delivery issues could create difficulties in meeting system demand in late summer and this winter.

The measure creates a new circumstance for fuel limitations caused by abnormal fuel supply, transportation or market limitations not rising to the level of force majeure. Documentation must be provided to the MMU for its determination of eligibility on case-by-case basis. Current rail limitations fall under the new language.

The Markets and Operations Policy Committee passed the measure 56-0, with nine abstentions, during a special conference call. The change was added to the Integrated Marketplace’s protocols before the work week ended. The Market and Regional Tariff Working Groups also approved it.

Raleigh Mohr (SPP) Content.jpgMMU supervisor Raleigh Mohr | SPP

Raleigh Mohr, an MMU supervisor, said the Monitor saw a need for a transparent market mechanism to conserve scarce fuel when conditions do not rise to force majeure. He said the change is both a market benefit and a reliability benefit.

“Coal deliveries are falling short of nominated demand from our market participants,” Mohr said. “The market benefit is that the opportunity cost of the scarce fuel is transparent in the market price. The reliability benefit is that that this change would slow down or alleviate some of the issues being seen immediately with the coal transportation constraints … by assigning an opportunity cost to it.”

Oklahoma Gas & Electric’s Usha Turner spoke for several MOPC members concerned about RR452’s unintended consequences and its lack of parameters. She said that based on her reading of the protocols, “force majeure very clearly includes labor disputes, labor material shortages [and] restrictions imposed by lawfully established civilian authorities.”

“I’m not sure why the agreement of an opportunity cost adder isn’t already within the MMU’s authority,” Turner said. “It seems to me that the language is already there. So, the question is kind of, ‘Why do we need this language?’ We’re not adding something entirely new. That isn’t a declared force majeure or biofuel supplier or a permit limit by EPA or something specific. It is unbounded.”

To ease concerns, the MMU said it would update MOPC during its October meeting on the measure’s implementation and potential bounds to limit the scope of opportunity costs.

“There are tariff elements we have to work with. We want to see if this tool is effective,” MMU Director Keith Collins said.

Email Vote Held on Temporary RAS

MOPC declined to act on a last-minute agenda addition requesting endorsement of modification to a temporary remedial action scheme (RAS). However, members did agree to conduct an email vote that will close Friday.

The Transmission Working Group approved the temporary RAS early last week, revising its operation to not last more than two years. Invenergy’s Arash Ghodsian noted that the minor modification was the only change to a previously approved RAS.

Invenergy proposed the temporary scheme so that its Thunderhead Wind Farm can operate at its full nameplate capacity (300 MW) when it becomes operational later this fall. The facility, located in northeast Nebraska, was to interconnect with Nebraska Public Power District’s R-Line, a proposed 220-mile 345-kV line put on hold in 2020 when a U.S. district court revoked a federal permit because it would disturb the endangered American burying beetle during construction.

Without the R-Line, Thunderhead is limited to 195 MW. The RAS would detect when a nearby 345-kV line is open and trigger a direct trip of circuit breakers at Thunderhead.

The Operating Reliability Working Group and the System Protection and Control Advisory Group have joined the TWG in endorsing the proposal.

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NJ Celebrates Completion of First Phase 2 Community Solar Project

NEPTUNE TOWNSHIP, N.J. — The 500-kW community solar project covering the six roofs of a storage facility in this Northern Jersey town have yet to start pumping out electrons and utility bill savings to subscribers. But that didn’t stop the state Board of Public Utilities from celebrating the project Monday as the first to be completed in the second and final phase of its community solar pilot program.

The pilot was originally planned to run three years, but the large number of projects proposed during the first two years — 150 projects totaling 240 MW — persuaded the BPU to make the program permanent beginning in 2023. A straw proposal for the permanent program could be released in October or November, with the permanent initiative rolled out in early 2023, said Taryn Boland, chief of staff to BPU President Joseph L. Fiordaliso.

The agency earlier said it expects the permanent program to award projects totaling 150 MW each year.

The Neptune project is one of 10 community solar projects developed by Solar Landscape of Asbury Park on 800,000 square feet of roofs owned by Extra Space Storage, of Salt Lake City. Together, they will generate 6.5 MW and generate clean energy for 1,400 households. While completed, the first project is not yet operational due to grid connection issues.

Speaking at an event to celebrate the completion of the first project, Jane Cohen, executive director of the Governor’s Office of Climate Action and the Green Economy, said the Extra Space Storage projects demonstrate the “critical” importance of the community solar program.

NJ Community Solar Neptune (Solar Landscape) Alt FI.jpgA 500-kW community solar project covering commercial rooftops in Neptune Township, N.J. will provide enough clean electricity to power 1,400 homes. | Solar Landscape

 

“Community solar is the opportunity for everyone to receive the benefits of clean energy, including those lower energy costs, without the upfront capital, and without having to access a rooftop or ground level space for solar panels,” she said.

Federal officials have taken note of New Jersey’s progress, last week naming it as one of five states that will provide advice and input to a community solar initiative created by the U.S. Department of Energy and the Department of Health and Human Services.

“It’s a big deal,” Cohen said.  “This [federal] pilot program will result in cheaper, cleaner energy and a one-stop shop that will remove barriers to accessing these programs.”

The federal agencies will develop an online platform to help households in the Low Income Home Energy Assistance Program (LIHEAP) and other low-income assistance programs sign up for community solar projects in their areas. Administered by HHS, LIHEAP helps low-income families with heating and cooling costs, as well as weatherization and energy-related home repairs. Other states that will advise the project are Colorado, Illinois, New Mexico and New York. (See HUD, DOE Aim to Boost Low-income Community Solar.)

Slow Installation

For all the developer interest in executing community solar projects in New Jersey, however, the pilot program has been slow to get them over the finish line. To date, just 17 of the 150 approved projects have been installed, with a combined capacity of 35.6 MW, or about 15% of the total capacity awarded, BPU records show. About 120 of the approved projects remain in the pipeline, records show.

The program faced criticism last year from developers concerned that the BPU was slow to announce the projects approved in the second phase and create the permanent program. (See Slow Progress of NJ Community Solar Pilot Draws Fire.)

The New Jersey Solar Energy Coalition, which represents 27 companies involved in solar development, said in May that the program has not advanced at the pace expected. Since then, only a few additional projects have come online, and developers have complained that it has been very difficult to get projects connected to the grid in some parts of the state. (See NJ Community Solar Slowly Advances and Solar Developers: NJ’s Aging Grid Can’t Accept New Projects.)

Solar projects across the nation have struggled with supply chain issues in the aftermath of the COVID-19 pandemic, and solar developers say getting municipal approvals has sometimes been slow in New Jersey.

BPU spokesman Peter Peretzman said there “are a number of issues that have resulted in slower than anticipated installation, including some issues common to the entire solar industry and some issues more specific to community solar.

“Our experience with the pilot program affords us an opportunity to understand and seek to address, where possible, the issues causing delays with community solar projects in the design of the permanent program,” he said.

Solar Landscape developed about half of the BPU’s installed projects and has completed all of the eight projects approved to go forward in the first phase of the community solar pilot. Shaun Keegan, the company’s CEO, said one reason for the pace of the company’s project completion is that the rooftop projects Solar Landscape pursues are easier and have fewer permitting difficulties than some other project types, such as carports and those on landfills.

Kevin Dunshee, the company’s chief commercial officer, said the company has worked hard to create a ready pool of trained staff; it recognized that there could be an elevated demand for solar panels, and so created an inventory in advance.

Meeting Low- and Moderate-Income Requirements

The company has not been hindered by the sometimes hard-to-meet BPU program rules designed to ensure that low- and moderate-income households benefit from community solar. The rules require that 51% of the subscribers be from that demographic.  

Finding those low- and moderate-income subscribers has not been easy for many community solar developers, who often partner with local non-profit and community organizations to spread the word.

“The 49%, we get pretty quickly,” Dunshee said, adding that they tend to be “people who don’t even necessarily care about the discount, they’re about green energy, they’d like the whole message of community solar.”

The low- and moderate-income portion of the subscribers is more difficult to attract, he said, “because you’re talking about people [who] can’t afford to make mistakes,” due to their economic circumstances.

“I think the most important thing for us is [to provide]) education, getting them to understand that this is a state program, it’s a Board of Public Utilities program, the discounts are guaranteed there’s no cost to get in or out,” he said.

For its Neptune project, Solar Landscape worked with Interfaith Neighbors of nearby Asbury Park, which provides affordable housing, nutrition, neighborhood revitalization and other services, and the Affordable Housing Alliance, a Neptune-based organization that works to provide housing and education.  

In a sign of the effectiveness of those partnerships, Solar Landscape announced that it is developing a project on another Extra Space Storage facility in Monmouth County that will provide power for all 130 residents of a nearby low-income property. As a result, 100% of the residents will be subscribers, the company said.

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Biden Initiative Aims to Up Federal Use of Performance Contracts

The Richard B. Russell Federal Building in Atlanta may soon be sporting advanced wind energy panels containing dozens of mini-turbines — 9 inches across — that could provide up to 2 million kWh per year of clean power for the building.

The innovative technology is just one part of a $117 million energy services contract that will cut energy use, energy bills and greenhouse gas emissions at 12 federal buildings across Georgia.

The contract between the U.S. General Services Administration (GSA) and Southern Company, one of the nation’s largest utilities, was announced Wednesday in Atlanta as part of the Biden administration’s new Climate Smart Buildings Initiative aimed at increasing federal agencies’ use of such energy service performance contracts (ESPC).

Under an ESPC, a private sector company finances and installs energy-efficient equipment on one or more federal buildings, with the goal of providing a guaranteed level of energy savings, usually for an extended term, which for federal contracts can go up to 25 years. The government pays the private company a predetermined amount for the upgrades, but only if the new equipment delivers the energy savings guaranteed in the contract.

As described in a White House fact sheet, these contracts “[pay] for today’s needed renovations with tomorrow’s bill savings without requiring upfront taxpayer funding.”

ESPCs are used in a range of institutional contexts, according to Mark Fowler, director of government affairs for Ameresco, a leading performance contracting company based in Massachusetts. In addition to federal contracts, his company also works with state and local governments and hospitals and schools.

In the case of the GSA contract with Southern Company, the utility has agreed to assure energy savings at the buildings by installing a range of energy and water efficiency upgrades including more efficient heating, cooling and lighting, digital building controls, low-flow and -flush water fixtures and the wind energy panels.

“The investments we’re making here in Georgia demonstrate how investing in sustainability is a triple win ― creating good-paying, clean-energy jobs, reducing energy costs and tackling climate change,” GSA Administrator Robin Carnahan said in an agency press release. “The federal government wants to lead by example by leveraging our scale and buying power to help drive these efforts.”

According to the fact sheet, the new initiative “is expected to catalyze $8 billion of private sector investment by 2030,” create 80,000 jobs and cut GHG emissions from federal buildings by as much as 2.8 million metric tons a year ― “the equivalent of removing 600,000 gas-powered cars from the road.”

The initiative will also leverage $250 million from the Infrastructure Investment and Jobs Act, the fact sheet said, “to promote innovative decarbonization strategies through performance contracting,” like the Windwall panels planned for the rooftop of the Russell Building in Atlanta.

Developed by Alabama-based American Wind Inc., the panels generate wind power through the “ducted,” smaller turbines, which each sit in a “shroud” or collar that funnels wind into the turbine and increases the wind velocity, said Dan Yost, the company’s chief marketing officer.

“They actually use different math than traditional wind turbines,” Yost said. “We can manipulate the velocity of the wind, so essentially, [the] panels of our wind turbines increase the ambient wind speed by around three times.”

And sitting high on an urban commercial rooftop, the panels also have a very low cut-in speed ― when they start producing power ― of 1.5 mph and can keep spinning with winds as high as 140 mph, according to company spec sheets. They can also operate in extremely low and high temperatures.

The Russell Building will have three 100-kW panels, according to the GSA, and each panel is about 10 feet by 11 feet, Yost said.

‘Get Them Done’

Federal efforts to promote performance contracting are not new. Under successive challenges from former President Barack Obama, federal agencies signed $4.2 billion in performance contracts between 2011 and 2016, with 21 federal agencies awarding contracts for 340 projects.

While many of those projects continued during the Trump administration, advocates say the number of new contracts and investments recently hit an all-time low, with only $251 million in contracts signed in 2021. Biden wants to increase those numbers to a “sustained” $1.2 billion a year by 2030, according to the fact sheet.

A commitment to performance contracting must come from the top, said Jennifer Schafer, executive director of the Federal Performance Contracting Coalition, an industry group.

“When there was never anything coming from the [Trump] White House that said, ‘Hey, these things are good; use them to achieve your goals,’ people just said, ‘It’s a lot of work; we not going to do it. The administration doesn’t care if [we] do,’” Schafer said.

“It certainly will make a difference to have the White House come out and say, ‘We have an initiative around these contracts; get them done,” she said.

Ameresco also sees the initiative as a strategically well-timed opportunity, Fowler said.

“Despite all of the new infrastructure funding investments that Congress has authorized over the last couple of years, there is still a significant gap and need within federal facilities for deferred maintenance and infrastructure backlogs that are going unaddressed,” he said. “Performance contracts offer a really great solution for these entities to address some of their big infrastructure needs and improve their efficiency, improve their resilience.”

Ameresco has done multiple federal projects, including installing over 150 kW of solar panels at the National Archives and Records Administration facility in College Park, Md., but agreed that federal requests for proposals for performance contracts have fallen off.

The allocation of IIJA funds for performance contracting, as outlined in the fact sheet, should provide another significant boost for the industry, Schafer said, allowing federal ESPC agreements to go “deeper.”

“How do you get to net zero? You can’t always do that from energy savings alone,” she said. “You may not be able to achieve all the resiliency you want from energy savings alone, so a little money might go a long way,” for example, by helping to install a microgrid.

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Cyber Ambassador Nominee Says US Leadership Needed

President Biden’s pick to head the State Department’s recently launched Bureau of Cyberspace and Digital Policy pledged Wednesday to “elevate and integrate cyber and digital policy in U.S. diplomacy” and build productive cybersecurity relationships with the nation’s allies.

Nathaniel Fick’s comments came during his confirmation hearing before the Senate Foreign Relations Committee, where he was joined by four other nominees to various diplomatic posts. The State Department created the new bureau in April; currently it is headed by Jennifer Bachus, a career foreign service official. If confirmed, Fick would also become the first Ambassador at Large for Cyberspace and Digital Policy.

Introducing Fick at Wednesday’s hearing was Sen. Angus King (I-Maine). King noted that Fick — who is also from Maine — has extensive cybersecurity experience, having served as a Marine in Iraq and Afghanistan, later as CEO for the nonprofit Center for a New American Security working on “issues of … international ramifications of cyber,” and then as CEO of cybersecurity software developer Endgame. He is currently general manager of information security for Elastic, an online search company that acquired Endgame in 2019.

“If you took a blank sheet of paper and tried to design a person to fit this new position, you would have come up with someone of Nate Fick’s extraordinary qualifications and background,” King said.

King also reminded his fellow senators that the creation of the cyber ambassador post was a recommendation of the Cyberspace Solarium Commission, of which King was the co-chair. He urged the committee not only to confirm Fick to the new post, but to approve the Cyber Diplomacy Act, which passed the House of Representatives last year and would formally establish the new bureau as a permanent addition to the State Department.

“The idea here is, we want someone who gets up every morning thinking about the international ramifications of [cybersecurity], and that’s what this office will do,” King said. “I commend the administration for taking the initiative to create this [bureau] within the State Department, but I believe we also need legislation to codify the existence of the office so it’s not something that may come and go with the whim of a particular administration.”

Fick Pledges Leadership, Positive Vision

Fick told the committee that he saw three key focus areas in his new role. First, he said the U.S. must work to strengthen adherence to the international framework surrounding cybersecurity laid out by the United Nations, which “affirms that international law applies to state conduct in cyberspace and lays out norms” that guide members’ behavior in cyberspace. He also agreed it was essential for the U.S. and its allies to ensure there are consequences for their peers who engage in egregious misconduct online, echoing a stance that King has taken in the past. (See King, Mandia Warn of ‘Unlimited’ Cyber Dangers.)

“Norms are more effective in binding together our allies than they are in dissuading our adversaries,” Fick said. “To reduce the frequency and severity of damaging cyber incidents, we must collaborate across the U.S. government and with partners around the world to deter malicious cyber activity and impose meaningful consequences on states that engage in it and those that willfully harbor cybercriminal organizations.”

Fick’s second key priority is to promote fairness in the global digital economy by preserving “the free flow of data across international borders” while also ensuring that data privacy and confidentiality are respected. Promoting fairness also means supporting open and transparent standards, as well as ensuring that new innovations are available for all to access. Third, Fick said the U.S. must partner with the private sector, civil society, and other governments to “champion a positive vision for digital freedom and digital inclusion while working to combat digital authoritarianism.”

Portman Warns Against Overlap

Rob Portman (Senate Foreign Relations Committee) FI.jpgSen. Rob Portman (R-Ohio) | Senate Foreign Relations Committee

Committee members expressed no serious reservations about either the nominee or the new bureau. However, Sen Rob. Portman (R-Ohio) voiced concerns about how Fick’s role would fit in with other recent appointments to leading cybersecurity posts in the administration. In particular, Portman said Fick’s position “overlaps with the office of the National Cyber Director,” currently held by Chris Inglis, the first cyber director who was confirmed last year. (See Inglis, Easterly Define Roles in Confirmation Hearing.)

“We seem to keep adding more and more top cybersecurity positions to our government, and the org chart troubles me,” Portman said. “More importantly, what troubles me is that without accountability, I’m worried that things will happen and it’s too easy to point fingers, as we saw in the Colonial Pipeline incident; you probably recall [that] everyone was pointing fingers.”

Fick responded that the rationale for the new office is to give the State Department a voice in the administration’s discussions about cybersecurity that it has not previously had. Especially in light of the cyberthreats posed by Russia, China and other rivals of the U.S., Fick said that “diplomacy should be our tool of first resort.” However, he also said he shared Portman’s concerns about mission overlaps and would work to avoid them.

“I think in addition to my military experience, my experience building and leading a business instilled in me an appreciation for a clear chain of command and … kind of a wry sense that it is always easy to add, but it’s hard to subtract,” Fick said. “I have full confidence that we can carve out the right swim lanes, and I hope that, if confirmed as the inaugural ambassador leading this office, we could create clear lines of responsibility that outlive any individual.”

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FERC Orders ‘Paper’ Hearing on PJM FTR Collateral Dispute

FERC ordered a “paper” hearing Tuesday to determine whether it should require a 99% confidence level in setting collateral requirements for financial transmission rights traders or the 97% level that PJM and most of its stakeholders have sought.

The commission accepted and suspended PJM’s proposed tariff revisions subject to refund. It issued an eight-page list of questions to be answered, saying that the evidence provided thus far failed to address its concerns that PJM’s requirements may be insufficient to protect stakeholders against losses (ER22-2029, EL22-32).

On Feb. 28, FERC rejected PJM’s proposal to modify the FTR credit requirement with an initial margin calculation from a historical simulation model (HSIM) using the 97% confidence interval, saying the RTO failed to support its proposal because its independent auditors validated the model at a 99% confidence interval. It directed PJM to make a filing within 60 days to show cause why its existing FTR credit requirement remains just and reasonable or explain what tariff changes will remedy the commission’s concerns (ER22-703). (See FERC Rejects PJM’s FTR Credit Requirement Proposal.)

At the Members Committee meeting March 23, stakeholders endorsed a motion for PJM to refile the original proposal “accompanied by some new supporting rationale.” The motion received a sector-weighted vote of 3.9 out of 5 (78%). (See Stakeholders Encourage PJM to Defend FTR Filing.)

Supporters of the filing said PJM credit revisions had demonstrated a significant drop in the failure rate of FTR portfolios and a reduction in potential collateral shortfalls.

But the Organization of PJM States Inc. (OPSI) and the Independent Market Monitor said the 97% confidence interval was unsupported. The IMM said PJM failed to justify why it selected 97% when the International Swaps and Derivatives Association uses a 99% confidence interval in its HSIM.

Among the questions asked by the commission was whether, compared to the 99% confidence interval, 97% causes the PJM market and its customers to subsidize collateral for FTR market participants and exposes the entire PJM membership to potential default costs.

It also asked how structural differences between the PJM FTR market and exchanges regulated by the Commodity Futures Trading Commission might justify the use of a lower confidence interval.

In compliance with the order, PJM told stakeholders it would implement the new FTR credit requirement effective today, coinciding with the close of the 2023/26 FTR long-term auction bidding window that opened Monday.

The RTO said it will make any collateral calls required by the revised credit requirement Thursday, after the bidding window closes.

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California PUC Adopts Submetering for EV Charging

The California Public Utilities Commission on Thursday established the first program of its kind in the nation by adopting a submetering protocol to allow electric vehicle owners to be billed separately for charging at lower rates than the rest of their electricity use.

“Submetering makes EV charging cheaper and will help spur the growth of electric vehicles throughout the state,” Commissioner Clifford Rechtschaffen said in statement following the unanimous vote. “It’s a practical solution to one of the important barriers to widespread EV adoption.”

The program uses submeters embedded in charging equipment as a way to avoid having to install costly second utility meters in homes and locations where electric trucks and buses charge. The submeters can transmit electric-use data via Wi-Fi or cellular networks.

The CPUC’s decision affects customers of the state’s three large investor-owned utilities — Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric — all of which offer special rates for EV charging.

The IOUs have run submetering pilot programs since 2014 at the CPUC’s direction. The pilot programs addressed issues such as the reliability and accuracy of submetering and how to store and transfer the raw meter data.

The decision excludes net energy metering (NEM) customers with rooftop solar because the utilities said they have no way to tell if their energy consumption, recorded by a submeter, comes from the distribution grid, local renewable generation or battery storage. The CPUC ordered additional study to find ways of allowing NEM customers to participate in submetering.

The commission adopted a two-year timeline for the IOUs to incorporate submetering into their billing systems.

“The submetering protocol is a fundamentally important means of accelerating the growth of electric vehicles,” the decision said. “The protocol reduces the cost of electric vehicle charging; consumers can avoid having to install a separate utility meter and can instead use the technology to have their electric vehicle charging measured and billed separately from their primary utility meter. Submetering thus promotes the adoption of electric vehicles, the deployment of vehicle-grid integration, and the realization of the corresponding electric grid benefits.”

California is by far the nation’s leader in EVs with more than 1 million on the road, roughly half those in the U.S. Rechtschaffen said that more than 16% of new vehicles sold in-state are now EVs.

Gov. Gavin Newsom issued an executive order in September 2020 requiring all new passenger vehicles sold in the state to be zero-emission vehicles by 2035 and included $10 billion in recent budgets to accelerate the transition.

The CPUC has authorized the IOUs to spend more than $1.5 billion on EV charging and to create menus of special rates for it so that charging it is less expensive than buying gas or diesel fuel.

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Judge Rejects BLM Coal Plans for Omitting Health Impacts

A federal judge has rejected two resource plans from Bureau of Land Management field offices in Montana and Wyoming, saying the agency didn’t disclose the health impacts of burning fossil fuels extracted from the planning zones.

BLM also didn’t consider alternatives that limited or eliminated coal leasing when it analyzed environmental impacts from the resource management plans, U.S. District Court Judge Brian Morris said in an order issued Wednesday. The resource plans were from the Miles City Field Office in Montana and the Buffalo Field Office in Wyoming.

The judge’s order gave BLM up to a year to conduct new coal screening and environmental review of the two resource management plans.

Conservation groups called the judge’s decision a victory.

“That a federal judge ordered the Bureau to consider a no-leasing alternative and disclose to the public how many people will be sickened and die as a result of the combustion of federal coal is groundbreaking,” Melissa Hornbein, a senior attorney at the Western Environmental Law Center, said in a statement.

Hornbein was one of the attorneys representing plaintiffs in the case, which included the Western Organization of Resource Councils, Montana Environmental Information Center, Powder River Basin Resource Council, Northern Plains Resource Council, Center for Biological Diversity, Wildearth Guardians and the Sierra Club.

Coal Producing Region

The Miles City and Buffalo field offices are within the Powder River Basin, which encompasses more than 13 million acres across Montana and Wyoming.

The basin produces about 40% of the coal in the U.S., along with oil and gas, the plaintiffs said in their complaint.

Under all alternatives considered for the Miles City resource plan, 775 million tons of coal from 9,730 acres would be strip-mined over 20 years, the complaint said. Alternatives analyzed for the Buffalo resource plan included strip-mining of 4.9 billion tons of coal from 36,620 acres.

BLM revised land management plans in 10 Western states in 2015 — including the Miles City and Buffalo plans — to add protections for sage grouse, according to Morris’ order. Conservation groups challenged the resource plans in 2016, saying they didn’t comply with the National Environmental Policy Act (NEPA).

The court sided with the plaintiffs and sent the resource plans back to BLM to correct deficiencies. In particular, the court asked BLM to evaluate alternatives that would reduce the amount of available coal and analyze the “downstream” environmental impacts of combustion of coal, oil and gas open to development under the plans.

Additional Analysis

In response, BLM performed additional analysis and approved resource management plan amendments and supplemental environmental impact statements for the plans.

But the conservation groups still weren’t satisfied and sued again in August 2020 in U.S. District Court in Montana.

In its new analysis, BLM looked at alternatives for the two field offices that allotted different amounts of land for coal leasing.

But the amount of coal production expected under each alternative was the same, and so BLM didn’t adequately consider a reasonable range of alternatives, Morris said in his order.

“BLM failed to consider any alternatives that would limit the expansion of existing mines,” Morris wrote.

In response to the previous court order to analyze the impacts of fossil fuel combustion, BLM looked at the effects of greenhouse gas emissions from burning coal derived from the planning areas. But the conservation groups said the analysis should have included other types of pollution, such as sulfur dioxide, nitrogen oxides, particulate matter, mercury and lead.

Morris said NEPA requires an environmental impact statement to consider indirect as well as direct impacts of a proposed action.

“BLM’s failure to consider the downstream impacts proves arbitrary and capricious, especially in light of the court’s prior order,” the judge wrote.

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West Coast NEVI Plans to Charge Up I-5 … and Beyond

Electric vehicle drivers seeking a West Coast odyssey along Interstate 5 should soon feel less range anxiety thanks to funding provided by the federal Infrastructure Investment and Jobs Act (IIJA).

But those looking to take Highway 101 will have to wait longer to be assured of convenient charging along that more scenic route along the coast.

Plans filed this week by California, Oregon and Washington to obtain funding from the Federal Highway Administration’s (FHWA) National Electric Vehicle Infrastructure (NEVI) program show all three states using their initial round money to prioritize the buildout of fast chargers along the I-5 corridor.

For California, that will entail deploying new chargers or upgrading existing ones at a number of I-5 interchanges with other east-west highways that the state is already working to make travel-ready for EVs. Oregon and Washington will seek to fill gaps along I-5, while setting the stage to cover the vast interior sections of their states.

Administered by the FHWA and U.S. Department of Energy through the Joint Office of Energy and Transportation (JOET), the NEVI program intends to build out a national network of 500,000 DC fast chargers (DCFCs) using $5 billion in IIJA formula funding granted to the states over the next five years. NEVI guidelines require states to install DCFCs of at least 150 kW along designated Alternative Fuel Corridors (AFCs) at distances no greater than 50 miles apart and within 1 mile of a highway exit.

All 50 states, plus D.C. and Puerto Rico, submitted plans to receive their share of funding by the Aug. 1 deadline, according to the FHWA. The agency now has until Sept. 30 to approve the plans. (See related story, States File Plans on Deadline for Federal EV Charging Funds.)

Oregon

While the goal of the NEVI program is to facilitate interstate travel for EVs, state plans are primarily focusing on local needs around charging in order to encourage adoption of clean transportation.

Oregon and Washington face similar challenges in deploying chargers in ways that overcome range anxiety. Both states contain heavily urbanized areas along the I-5 corridor west of the Cascade Range, where EV adoption rates are relatively high compared with national averages. In the sparsely populated areas east of the Cascades, where population centers are dispersed, residents are more skeptical of the practicality of electrifying transportation, given daily travel distances.

The Oregon Department of Transportation’s (ODOT) plan said the agency will use the state’s $52 million in NEVI funds to develop and upgrade 65 DCFC stations across Oregon, resulting at least 260 DCFC ports statewide and doubling the state’s fast-charging capacity.

According to the plan, just one corridor in Oregon is NEVI-compliant, a section of I-5 from Portland to Eugene. ODOT expects to make the rest of the state’s I-5 corridor, a major interstate freight route, NEVI compliant later this year with the initial round of funding. The state will also this year build out chargers along U.S. Route 97, a north-south highway stretching the length of Central Oregon from the Columbia River to the California border. The high-traffic I-205 corridor in the Portland metro area, adjacent to many disadvantaged communities (DACs), would also be upgraded this year.

Fiscal Year 2023 funding will focus on the east-west I-84, I-82 and U.S. 20 corridors. “U.S. 20 is a route of strategic statewide importance and a freight corridor that will provide additional rural EV charging coverage across the central part of Oregon,” ODOT’s filing states.

FY 2024 will focus on U.S. 26, U.S. 101 and I-405. “U.S. 26 will add additional coverage to Central Oregon, and completion of U.S. 101 will bolster the existing DC fast charging infrastructure along Oregon’s coast. Completion of I-405 will support the high traffic volumes and DAC populations it serves in the Portland metropolitan area,” the filing says.

ODOT said it will use the NEVI program to build on the stakeholder engagement pursued in last year’s Transportation Electrification Needs Analysis (TEINA) process, which worked to identify the state’s highest-need charging locations with an eye to serving urban dwellers in multifamily housing, rural areas and disadvantaged communities. (See Oregon Study Charts Explosive Growth of EV Chargers.)

ODOT says it will also not own, install or maintain any charging stations, but will instead partner with private sector companies after issuing “corridor-specific” competitive requests for proposals.

Washington

Washington will also partner with the private sector to build EV infrastructure, under the oversight of the state’s Department of Transportation (WSDOT).

“Funds made available under the NEVI formula program will be used to contract with third-party entities for the acquisition, installation, and operation and maintenance of publicly accessible EV charging infrastructure to ensure maximal efficient use of federal funding,” the WSDOT filing states.

Washington, which expects to receive $71 million in NEVI funds over the next five years, recently ranked as the third largest U.S. market for battery-electric vehicles. The state’s EV registrations increased from 57,338 in December 2019 to 96,961 in April 2022.

Washington’s plan contains no hard figures for charger deployments, instead noting the state will rely on its Zero-Emission Vehicle Mapping and Forecasting Tool (ZEV-MFT) — which is still under development — to site chargers with the guidance of the state’s Interagency Electric Vehicle Coordinating Council (IEVCC).

Chargers on portions of the state’s corridors already meet NEVI standards, including areas of I-5, U.S. 101 on the Olympic Peninsula and the east-west I-90 connecting the Seattle area to the eastern part of the state.

“The priority deployments [of EV chargers] will include completing the state’s north/south and east/west interstates, I-5 and I-90, respectively, to the federally defined built-out standards,” the filing says. “Secondary priorities for investments include completing the I-82/I-182 and U.S. 395 Alternative Fuel Corridors, followed by U.S. 101 and U.S. 195. State funding of DC fast chargers will supplement corridors that may not receive federal funding in the initial years of NEVI funding.”

WSDOT says it will reprioritize projects based on annual updates of the Washington State Plan for Electric Vehicle Infrastructure Deployment, as informed by ZEV-MFT and advised by the IEVCC.

California

With nearly 565,000 EVs registered in the state, California is by far the U.S. leader in EV adoption. As of February, the state had 71,236 Level 2 chargers and 7,158 fast chargers installed, according to figures provided by the office of Gov. Gavin Newsom. But only a small fraction of the state’s fast chargers are NEVI compliant, the state’s plan shows.

In its draft filing for the FWHA, the California Department of Transportation (Caltrans) said its deployment plan for the $384 million in funding slated for the state will focus on continued investments in light-duty vehicle charging infrastructure, while also considering projects that can accommodate medium- and heavy-duty vehicles.

Calif NEVI plan (Caltrans) Content.jpgCalifornia has nominated 20 new corridors (in orange) as national Alternative Fuel Corridors, emphasizing routes in rural, disadvantaged and tribal area. | Caltrans

According to the filing, the California Energy Commission and Caltrans will jointly develop a competitive grant-funding opportunity (GFO) to solicit applications to install DCFCs along the state’s AFCs.

California has this year nominated 20 new corridors to become designated AFCs, emphasizing routes in rural, disadvantaged and tribal areas. Most of the new corridors would intersect I-5, and one further facilitates interstate travel by linking I-5 to U.S. 97 leading into Oregon.

“California will invite applicants to submit proposals for segments based on an analysis of gaps in the current network, future charger needs and geography. Specific sites for stations will not be identified,” Caltrans said in its plan.

Applicants are instead invited to submit proposals that meet minimum standards for DCFC power levels, number of chargers and maximum distance between chargers. Standards for corridor segments may also exceed NEVI standards, depending on location, traffic and existing electric utility infrastructure, the plan said.

Applicants can also propose to upgrade existing charging facilities to meet NEVI requirements, Caltrans said.

“To ensure efficient and effective deployment that aligns with broader goals, segments will be ranked according to funding priority. California expects to provide funding for projects in rank order until funding is exhausted. Each update of the deployment plan will assess completed solicitations and re-evaluate priorities,” the agency said.

Taken together, the three state plans should help realize the vision of the West Coast Electric Highway, a partnership among agencies and organizations in the states and the Canadian province of British Columbia to install fast-charging stations every 25 to 50 miles along I-5 and other major roadways in the region.

“The Electric Highway gives electric vehicle drivers ‘range confidence’ that recharging is available should they want to travel between communities or make long-distance road trips,” the collaborative says on its website. “Knowing that charging is easy and convenient helps encourage residents and businesses to buy and drive plug-in electric vehicles.”

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$36M Allocated to East Coast OSW Workforce Training Initiatives

Federal and private-sector funding totaling $36 million will support new offshore wind workforce development initiatives in Rhode Island, Maryland, Virginia and North Carolina.

GWO Training

Representatives of offshore wind developers Ørsted and Eversource Energy (NYSE:ES) joined Rhode Island Gov. Dan McKee Wednesday to announce the companies will dedicate $1 million for a partnership to establish an OSW training certificate program. Ørsted and Eversource are jointly developing the 704-MW Revolution Wind project off the coast of Rhode Island. In 2019, they committed $4.5 million to support offshore wind education and supply chain development in the state.

The new funding announcement, which is part of that $4.5 million, will help build a Global Wind Organization (GWO) safety training program at the Community College of Rhode Island (CCRI) in cooperation with the Rhode Island Department of Labor and Training, Rhode Island Commerce, the Rhode Island Building and Construction Trades Council, and Building Futures. GWO is a nonprofit organization founded by wind developers, including Ørsted, that has been publishing wind training standards since 2012.

CCRI expects to begin enrollment for the training program early next year, and the certification will be valid for two years.

ARPA Funding

The Maryland Department of Labor received $23 million in American Rescue Plan Act funding to establish an OSW workforce training system dubbed Maryland Works for Wind (MWW). U.S. Secretary of Commerce Gina Raimondo announced the award Wednesday along with 31 other grant winners under the APRA Good Jobs Challenge.

Ørsted, which is developing the 966-MW Skipjack Wind project off the coast of Maryland, applauded the Department of Commerce award.

MWW “positions the state to build a pipeline of skilled talent to support Skipjack Wind’s development and other projects in the U.S. and globally,” David Hardy, CEO of Ørsted Offshore North America, said in a statement.

Ørsted and US Wind have agreed to be hiring partners for the MWW program, according to the labor department’s application for the ARPA challenge. US Wind is developing the 300-MW MarWin and 808-MW Momentum Wind projects off the coast of Maryland.

The labor department expects to implement the program over three phases, which will cover program development through the end of this year, design from January to June 2023, and implementation from July 2023 to June 2025.

Program implementation will feature Tier 1 and 2 training options for welding, construction and logistics along with in-house union training for apprentices. The implementation phase will represent the final two years of the program, and the department expects it to coincide with the start of hiring by Ørsted and US Wind.

Virginia and North Carolina will receive an $11-million Good Jobs Challenge grant to the Hampton Roads Workforce Council in Norfolk for maritime training program development. The council, which covers the Hampton Roads region in Southeastern Virginia and Northeastern North Carolina, expects the program to train 950 maritime professionals for OSW-related jobs.

Other ARPA Awards

The Department of Commerce awarded an additional $70.2 million in ARPA challenge funds for clean energy workforce development. Those awards are:

  • $23.7 to the North Carolina Agricultural and Technical State University in Greensboro to establish the STEPs4Growth clean energy workforce training program;
  • $23.5 to the Washington Student Achievement Council in Olympia to establish a multi-sector workforce training program covering energy, healthcare, information technology, financial services, manufacturing and construction; and
  • $23 million to the Economic Development and Industrial Corporation of Boston to establish the Greater Boston Region Workforce Training System for energy and resilience, healthcare and childcare.