ISO-NE will publish the results of its capacity auction next week after the D.C. Circuit Court of Appeals lifted a stay retaining the capacity supply obligation of the Killingly Energy Center.
ISO-NE has also begun plotting out the schedule for next year’s capacity auction, FCA 17, a process which has been delayed as well by the Killingly saga.
In a presentation to the NEPOOL Participants Committee on Thursday, ISO-NE Resource Qualification Manager Alex Rost said that activities for FCA 17 will start in April and that the auction will take place on March 6, 2023, a month later than usual.
The process will be compressed in at least two sections to make up for the lost time, Rost said.
That plan is not final, and ISO-NE said it’s asking market participants for feedback before it publishes the schedule.
Financial Assurance Proposal Update
Also at Thursday’s Participants Committee meeting, Competitive Power Ventures delayed a vote on its proposal to revamp New England’s financial assurance rules, adding new penalties for developers who miss key milestones. (See NE Stakeholders Propose Retirement, Financial Assurance Changes.)
The proposal, which has been discussed at several NEPOOL stakeholder meetings in the last few months, recently came under criticism from the renewable energy advocacy group RENEW Northeast.
RENEW wrote in a memo that the changes call for “excessive levels of Financial Assurance that would create an unnecessarily high burden for new entry, beyond what would be needed to incent the proper behavior.”
The group said it’s not opposed to increasing the required FA before each capacity auction, but that level should be a “careful balance” that doesn’t create overly punitive barriers for entry.
RENEW also challenged some of the language in CPV’s proposal as unclear. CPV is expected to revisit the proposal in other NEPOOL meetings over the next few weeks.
Consent Agenda
The committee also unanimously approved revisions to Planning Procedure No. 11 (Planning Procedure to Support Geomagnetic Disturbances) to conform to and support the requirements of NERC Reliability Standard TPL-007-4 (Transmission System Planned Performance for Geomagnetic Disturbance Events), as recommended by the Reliability Committee at its Feb. 15 meeting.
Staff from WECC and the Texas Reliability Entity said Thursday that repeated disturbances involving distributed energy resources (DER) in recent years show that integrating distributed energy resources into the bulk power system will take close coordination between NERC, the regional entities and industry.
The staff members were speaking at a Texas RE webinar to discuss last year’s Odessa disturbance. During the event, which occurred May 9, a fault in a combined cycle power plant near Odessa, Texas, caused nearly 20 solar photovoltaic (PV) and wind facilities, some as far as 200 miles away, to suffer reduced voltage.
NERC and Texas RE last September released a report on the event that concluded the power industry is not moving fast enough to implement NERC’s reliability guidelines, while also urging FERC and the ERO to add binding requirements related to reporting and correction of performance abnormalities. (See NERC-ERCOT Report Reviews Texas Solar Issues.)
Steve Ashbaker, WECC | Texas RE
Thursday’s webinar compared the Odessa disturbance to recent incidents in the Western Interconnection, also involving performance drops by solar and wind facilities, to emphasize that the issue is not limited to one region.
Steve Ashbaker, WECC’s reliability initiatives director, said that just in the last year, the West has dealt with four events involving disruption to power output from DERs: the Victorville disturbance on June 24; Tumbleweed on July 4; Windhub on July 28; and the Lytle Creek Fire on Aug. 25. This is the same number of events seen in the previous five years, indicating a significant increase.
James Hanson of WECC’s event analysis department pointed out that the rise in disturbances parallels the penetration of DERs, particularly solar panels, in the Western Interconnection. Generation interconnect requests for solar power have risen from a bit more than 10,000 in winter of 2016 to nearly 100,000 in summer 2021. This trend represents a growing “reliance” on solar power in the interconnection, Hanson said, which means system planners need to be aware of the unique characteristics of DERs, which have contributed to these incidents.
Older Plants Lack Flexibility
The most important factor is not the recently installed plants but the older ones, which have been involved in multiple events. The reason, he said, is that these veteran plants do not incorporate the technology controls that allow greater flexibility in newer facilities.
“We have some legacy plants here that have inverters that are eight to 10 years old, and … their settings can’t be altered, so you can’t disable the momentary cessation settings … as the newer, modern technology can be disabled,” Hanson said.
Ashbaker also pointed out that the “data resolution” provided by many inverters is low due to infrequent sampling; many plants have equipment that records data only every five minutes, even though faults can be cleared in as little as 50 milliseconds. This denies investigators the information they need to determine the cause of incidents and recommend actions to fix the underlying issues.
Mark Henry, Texas RE | Texas RE
Another common issue pointed out by Mark Henry, Texas RE’s director of reliability services, is the lack of accurate models for DERs and other “weak areas in the grid” that leave grid operators with little idea what to expect in the event of a problem.
“We want to be able to understand the characteristics of this equipment,” Henry said. “We’d like the equipment all to perform fully within expected specs, but we also understand that inverter-based resources are different than the synchronous generation that we’re more used to. And it turns out that we’ve got to have very sophisticated models that use electromagnetic transient analysis. … When I started my career, that was a very rare thing to see that sort of analysis. Now it’s becoming more routine.”
The presenters reiterated the earlier report’s calls for utilities to follow the recommendations of NERC and their regional entities but went further by urging listeners to volunteer for the groups in those organizations working to set those guidelines. They emphasized that equipment manufacturers, regulators and registered entities need to hear from each other in order to manage the system properly.
“We have abundant opportunities for dialogue between all the parties involved with this, and we expect to see more of that. We expect that NERC will have a very active role with their staff and engaging the different people who are involved,” Henry said. “There’s a lot of work that has to be done, and everyone can expect that we will be reaching out to engage on these things … to a higher degree.”
In 2021, the U.S. pulled in $105 billion in capital investments in the clean energy transition, installed 37 GW of new wind and solar, along with 42 MW of battery storage, and put 657,000 new electric vehicles on the road, more than double the 325,000 EVs sold in 2020.
At the same time, according to the 2022 Sustainable Energy in America Factbook, U.S. greenhouse gas emissions rose 5.8% year over year, and climate disasters cost the country $145 billion in damages. Meanwhile, high natural gas prices opened the way for coal-fired generation to once again become competitive in wholesale power markets. Coal produced 22% of the nation’s electricity in 2021, the highest level in 14 years, the Factbook says.
A joint project of the Business Council for Sustainable Energy (BCSE) and BloombergNEF (BNEF), the 2022 Factbook was one of two major energy industry reports released Thursday, with each providing different and somewhat conflicting views of the U.S. energy transition.
The U.S. Energy Information Administration’s Annual Energy Outlook 2022 reported that fossil fuels will continue to dominate through the middle of the century even as renewables and electric vehicles ramp up.
“We don’t see liquid fuels and natural gas losing their place as the top two sources of energy in the United States through 2050,” said EIA acting administrator Stephen Nalley during an announcement webinar.
The 2022 Factbook provides a chart-packed, by-the-numbers look at a U.S. and global clean energy transition that has become unstoppable but still faces many uncertainties as to its speed, costs and evolving portfolio of technologies and fuel sources.
A key chart in the report compares the $80 billion in energy research and development funding — mostly for nuclear, hydrogen and carbon capture — in the Infrastructure Investment and Jobs Act with the $300 billion in incentives and tax credits for renewables, storage, transmission and manufacturing in the stalled Build Back Better Act.
“We need every technology that we can bring to bear, and we need them to be affordable, deployable and practical” to reach economy-wide decarbonization, BCSE President Lisa Jacobson said in an interview with RTO Insider. “Investments are needed in many innovative technologies, in addition to dramatically scaling up what we have readily available today.”
At a prerelease press briefing on Thursday, other energy industry officials spoke of the need to ramp up investments, deployments and the policies that will support them. Dan Whitten, vice president of public affairs at the Solar Energy Industries Association (SEIA), said solar deployments could drop in 2022 “if we don’t get this right.”
SEIA is particularly focused on the tax credits for manufacturing in Build Back Better, which he said are “critical, both in terms of investing in facilities and also in supporting production of everything from ingots to cells to wafers to panels themselves. We’ve got make that commitment.”
Records for Venture Capital
For Ethan Zindler, head of Americas for BNEF, one of the report’s biggest takeaways is the growth in investment and renewables deployment in 2021, which he called “a truly blockbuster of a year.”
“In the flows of capital, almost every type of asset class or way that money could get deployed into the sector, it did,” Zindler said. “We saw records for venture capital investment. It was everything from early-stage technologies to deployment of existing and commercially viable technologies … which reflected a lot of bullish sentiment on the part of investors.”
<img src="https://rtowww.com/wp-content/uploads/2023/06/140620231686782058.jpeg" data-first-key="caption" data-second-key="credit" data-caption="Renewables accounted for about 45% of the $105 billion invested in U.S. clean energy assets last year, with EVs not far behind at 34% of the total.” data-credit=”BloombergNEF” data-id=”6152″ style=”display: block; float: none; vertical-align: top; margin: 5px auto; text-align: right; width: 500px;” alt=”Clean energy assets (BloombergNEF) Content.jpg” data-uuid=”YTAtODQ1MjE=” align=”right”>Renewables accounted for about 45% of the $105 billion invested in U.S. clean energy assets last year, with EVs not far behind at 34% of the total. | BloombergNEF
Renewables took the largest chunk of new U.S. investment, $47 billion (45%), followed by electric transportation at $35 billion (34%), he said. And investment in hydrogen doubled to $200 million.
Paralleling those investments, the solar industry added 24 GW of new power to the grid and wind added 13 GW, helping to push renewables’ contribution to U.S. power generation — including hydropower — to a new high of 21%.
Transmission also saw record-breaking investments from both utilities and independent developers, close to $28 billion, an 11% increase from 2020, according to the factbook. But, despite the hundreds of gigawatts of renewable energy projects in interconnection queues across the country, BNEF is predicting a slight downtick and plateau in coming years.
Transmission investments jumped 11% to $27.5 billion in 2021. | EEI
“I don’t think the issue is the lack of available capital,” Zindler said. “The challenge is lack of investible projects … [caused by] the incredible challenge it takes to get a transmission project permitted.”
Emily Duncan, director of federal government relations for National Grid and BCSE board chair, pointed to the indefinite hold on construction of the $1 billion Hydro-Quebec transmission line following a 2021 vote by Maine voters against the project.
“We’re living that right now,” Duncan said. The uncertain fate of the project “is a perfect example of just how important this transmission problem really is — the fact that we are going to have to run transmission through states that may not directly benefit from it. And how do we square that moving forward?”
Cost of Renewables Matters
Offering a more cautious view of the energy transition, EIA’s Annual Energy Outlook begins with the premise that meeting global demand for cheap power will keep fossil fuels a growth industry in the U.S. Oil and gas production will continue to boom, hanging on to their top spots as the two biggest sources of energy in the U.S. through 2050, despite increasingly high rates of renewable energy growth, the report says.
“We see the United States continuing to produce record amounts of crude oil, natural gas and natural gas plant liquids through 2050 under a wide variety of assumptions examined in the reference case and side cases,” Nalley said.
Driving that trend is a nearly 50% baseline increase in global energy consumption between now and 2050, bringing with it hefty international demand for oil and gas.
Corporate procurement of renewable energy is expected to add hundreds of terrawatt-hours of new renewable energy to the grid by 2030. | BloombergNEF, The Climate Group, company announcements
On the emissions front, the report’s look at a number of scenarios — a reference case and eight “side cases” — finding that the ongoing energy transition decreases emissions until 2037, but then they begin to gradually tick upward again. EIA assistant administrator Angelina LaRose said the upward trend reflects “an increase in overall energy usage as a result of increasing population and economic growth,” as well as assumptions about current laws and regulations holding in place.
The share of renewables in the U.S. electricity generation mix more than doubles from 2021 to 2050 according to the outlook, with wind leading the way in the next few years and solar taking over after 2024. By 2050, the EIA sees solar at 22% of electricity generation and wind at 14%.
“The cost of renewables matters,” LaRose said. In one of the agency’s side cases, with low renewable costs, gas and nuclear generation fall compared to the reference case. In another, with renewables remaining at today’s costs, solar and wind still grow but gas prices remain competitive, and all of the energy sources keep growing.
“In the absence of changes in policy, the market is primarily driven by cost,” LaRose said. “There’s the potential for much variation.”
A ramp-up in electric vehicle sales, from 340,000 in 2021 to 1.52 million in 2050, starts to put a dent in the share of gasoline-powered vehicles in the reference case, which fall from 92% of light-duty vehicles in 2021 to 79% in 2050.
“There are a number of factors, including declining battery costs,” said Erin Boedecker, EIA’s team leader for energy consumption and efficiency modeling. “Also, an increasing number of available models on the market, and that’s expected to continue. And there’s a growth in the consumer market for longer-ranged electric vehicles, particularly in light trucks, in our projection period.”
WASHINGTON — FERC Chairman Richard Glick told Congress Thursday he has no regrets over the natural gas policy statements a split commission issued last month, rejecting criticism that he had overstepped the agency’s authority and increased uncertainty for developers.
FERC voted 3-2 along party lines on Feb. 17 to update its 1999 policy statement on natural gas infrastructure certificates (PL18-1) and release guidance on how it will evaluate the impacts of projects’ greenhouse gas emissions in its environmental analyses (PL21-3). (See Split FERC Updates Policies on Gas Infrastructure Applications.)
Glick defended the policy statements during a two-hour hearing before the Senate Energy and Natural Resources Committee, where Chairman Joe Manchin (D-W.Va.) and his Republican colleagues accused FERC’s Democratic members of pursuing a partisan climate agenda that undermined U.S. energy security.
Glick and his fellow Democratic commissioners, Allison Clements and Willie Phillips, said the statements were needed because projects have been remanded or vacated by federal courts because of insufficient environmental analyses by regulators, including FERC.
‘Beyond the Pale’
An angry Manchin opened the hearing by accusing FERC’s Democrats of “elevat[ing] environmental considerations above American energy reliability, security and independence.” After the hearing, Manchin joined Republicans and Democrats in both the House and the Senate to announce a bill that would bar the importation of Russian crude oil, petroleum products, LNG and coal until the country ends its invasion of Ukraine.
“To … put up barriers to natural gas projects and the benefits they provide, while Putin is actively and effectively using energy as an economic and political weapon against our allies is just beyond the pale,” Manchin said. “If we could actually get natural gas infrastructure built it would not only help with the energy transition, here at home that would also help keep costs down for American families, create good-paying jobs, and strengthen our ability to use energy as a geopolitical tool to fight for our values abroad and support our strategic partners.”
Republicans followed with their own fusillade, with Sen. Steve Daines (R-Mont.) accusing the FERC of “kneecapping energy providers,” and Sen. Mike Lee (R-Utah) saying the commission was pursuing a “radical climate agenda [that] makes us more vulnerable to attack.”
“These policies are going to make it next to impossible to build any new natural gas infrastructure or upgrade our existing facilities in the United States,” said ranking member Sen. John Barrasso (R-Wy.). “These orders were among the chief objectives of Commissioner [Allison] Clements’ former employer, a group with a mission to block pipelines.” Clements worked for a decade at the Natural Resources Defense Council.
Republican commissioners James Danly and Mark Christie, who had dissented on the policy statements, also were critical.
Danly said the majority put “far too much weight on a handful” of narrow court rulings and said the new policy would cause reliability problems for the electric grid.
Christie said he would have agreed to reduce the reliance on precedent agreements between corporate affiliates to prove the need for pipeline capacity and to measures guaranteeing due process to property owners and communities.
“On the contrary, what the majority did was essentially assume it had the power to rewrite both the Natural Gas Act (NGA) and the National Environmental Policy Act (NEPA) under the rubric of addressing climate change,” he said. “But that is a power that this commission does not have; only you — the elected legislators in Congress — have that power and you have not delegated that power to us.”
Glick: No Agenda
Glick said the majority made its decisions “based solely on the applicable law and the facts in the record,” insisting, “I have no other agenda.”
“The D.C. Circuit has spoken on several occasions, and unless the court’s interpretation is reversed, we have no choice but to follow with unambiguous guidance,” he said.
The commission received defenses from the panel’s Democrats and Independent Sen. Angus King (I-Maine).
Sen. Mazie Hirono (D-Hawaii) said it was “outrageous” that the commission had relied on contracts between corporate affiliates.
King recalled having to comply with environmental regulations while seeking a permit for a 2 MW hydropower project. “We had to do environmental analysis of wetlands; we had to work with U.S. Fish and Wildlife; we had to look at the effects on the water surrounding the project and fish passage and all of those issues,” he said. “And here we are saying that the FERC can’t require the examination of the most serious environmental threat that this country and world has ever faced — I think that’s preposterous.”
King said critics had made a case for FERC to work with stakeholders to clarify the order and reduce uncertainty. But, he added, “the fundamental premise is that this is an environmental impact. Methane is 80 times worse than CO2. And it’s the low hanging fruit of climate change.”
More or Less Uncertainty?
Glick said he was confident that the policy statements “will lead to project orders that are more legally durable.
“I think developers of energy infrastructure would agree that when regulatory agencies ignore judicial directives, or cut corners, the courts typically vacate permits and send the agencies back to the drawing board. This often adds a significant amount of time and hundreds of millions, if not billions, of dollars of additional costs onto a project.”
But Republicans said the commission’s actions would increase litigation and chill investments, with Barrasso citing a letter of complaint from Alan Armstrong, CEO of Williams Co., which transports about 30% of the natural gas in the U.S.
“There is no question that it will be wielded against every major natural gas project, future or pending, making the costs and uncertainties of even pursuing a project exponentially more daunting,” said Christie.
He said the majority was disingenuous in suggesting the statements were consistent with the commission’s prior handling of environmental impact analyses. “To compare drainage mitigation going through a wetland to ‘Oh, you’ve got to mitigate global climate change … that is a massive, massive step difference.”
Christie said he was certain that some licenses will be approved under the new policy but said they represented a “Potemkin Village.”
“I think what we’re going to see is the deterrent factor is so great, I think you’re going to see a lot of applications that are never going to get even proposed. And maybe that’s the point. Because who can raise $6 to $8 billion of risk capital based upon a standard that says, ‘try your luck.’”
Under questioning from Sen. Bill Cassidy (R-La.), Glick said the new policy would only require developers to mitigate fugitive gases associated with the pipeline’s construction and operation. But Danly said the statement goes far beyond that in “encouraging” mitigation of downstream emissions.
“It is, in my opinion, a classic case of doing indirectly what cannot be done directly,” Danly said. “The general premise in this shows you my judicial minimalist streak: Every time you get a multi-factor balancing test that is going to be done on a case-by-case basis by an administrative agency, what you effectively have is derogation of power to pick winners and losers at the whim of the decision maker. And that will be the case here, where I predict that you’re going to see favored parties being given the nod and those who aren’t will have their applications rejected.”
Looking Forward
Sen. John Hickenlooper (D-Colo.) said the issues raised by the pipeline debate are “similar to the issues we’re facing around [electric] transmission.
“Maybe it’s time that we get around the table and just discuss the legislative solution to gas and transmission at the same time,” he said, “because we really are running out of time” to address climate change.
Barrasso suggested Congress could seek to undo the policy under the Congressional Review Act.
“I’m now starting to think that perhaps we would be better off without FERC — which having been created by Congress, can be eliminated by Congress,” said Lee. “Perhaps it should.”
In an interview after the hearing, Glick said he had no regrets about how the commission issued the policy statements. “We have to move. These orders are sitting here,” he said.
“As I said before, give us some time. Let us pursue these orders. … And if you still don’t like it, call me back and scream at me some more. I’m going to take it, but at least see how we implement the policy statements.”
A newly appointed tribal representative to the California Air Resources Board’s environmental justice committee has questioned whether the timeline for the board’s climate change scoping plan gives her enough time to have a meaningful impact.
Jill Sherman-Warne is the first Native American tribal member appointed to CARB’s Environmental Justice Advisory Committee (EJAC).
CARB convened the EJAC in May to make recommendations on the agency’s 2022 scoping plan, a roadmap to achieving the state’s greenhouse gas reduction goals. Other EJAC members were added in August.
Sherman-Warne joins the committee just months before CARB expects to release a draft version of the scoping plan in May. Adoption of a final plan is expected by the end of this year.
“This process is happening so compressed for me that I’m concerned about really having true tribal engagement,” Sherman-Warne said Monday during her first EJAC meeting.
Sherman-Warne is executive director of the Native American Environmental Protection Coalition and an enrolled member of the Hoopa Tribe in Northern California. She referenced the challenge of working with all 109 tribes in California.
“I do want to do everything I can to ensure that they’re engaged, or at least have some knowledge about the process,” Sherman-Warne said during Monday’s meeting. “The timeline’s a big concern for me.”
Extension Denied
The scoping plan timeline is an issue that EJAC members have raised before. It’s possible the topic will be discussed during a joint meeting of the CARB board and the EJAC on March 10.
In October, the EJAC sent a letter to Gov. Gavin Newsom, asking for a six-month extension to the scoping plan schedule to give committee members more time to meaningfully engage with communities they represent. The members represent low-income communities and communities of color that have significant exposure to air pollution.
AB 32, the Global Warming Solutions Act of 2006, requires CARB to update the scoping plan every five years. The last update was in 2017. But the EJAC noted in its letter that the law allows the governor to extend the deadline “in the event of extraordinary circumstances.” (See EJ Committee Seeks Extension on CARB GHG Scoping Plan.)
CARB Chair Liane Randolph responded to the EJAC letter on behalf of Newsom, rejecting the committee’s request for more time.
“Gov. Newsom has charged CARB with completing the plan as quickly as possible, in line with what the climate crisis demands,” Randolph said in a letter to EJAC.
The scoping plan will identify strategies needed to meet GHG-reduction goals, and getting started on those strategies as soon as possible is critical, Randolph said.
And strategy implementation is an area where the EJAC can play a role, she added. Randolph has committed to keeping the EJAC going on a permanent basis, not just during scoping plan development.
“My commitment to continuing active engagement with the EJAC following adoption of the scoping plan presents an important opportunity for the EJAC to advise on the implementation of climate change policy, which is where the benefits intersect with communities,” Randolph wrote.
Concerns Remain
EJAC members have indicated in recent meetings that they’re still not comfortable with the timeline.
“We’ve been working at a breakneck speed to keep up with the pace of the scoping plan and to be able to engage in a meaningful way,” EJAC co-chair Martha Dina Arguello said during a CARB board meeting last month.
Arguello said the issue is two-fold. The timeline makes it difficult for EJAC members to be meaningfully engaged in the scoping plan development, she said, and it leaves little time to gather feedback from impacted communities. Arguello is executive director of Physicians for Social Responsibility — Los Angeles.
Also during the board meeting, EJAC member Kevin Hamilton described the committee’s first community engagement meeting, which took place last month with San Joaquin Valley residents.
Organizers expected about 50 attendees, but the meeting instead drew about 180 participants, overwhelming the Zoom platform, he said. Participants listened until the end of the session and brought many questions and concerns.
“[It] lets me know that if we did this across California, we might hear a very different story than one that we’re hearing at the Capitol,” Hamilton said. “And we need to act and make sure those voices are not only heard, but their concerns acted upon.”
Hamilton is co-director and co-founder of the Central California Asthma Collaborative.
During Monday’s EJAC meeting, Matt Holmes proposed taking the issue directly to the CARB board.
“We need to request that the board vote at the March 10 meeting for an extension of the timeline, if they want to have a fully informed and meaningful EJAC set of recommendations,” Holmes said. He is an environmental justice outreach coordinator for Little Manila Rising and represents the organization in the committee.
Recruitment Challenges
Before Sherman-Warne joined the EJAC, CARB struggled to find a tribal representative for the committee.
The agency’s April 2021 solicitation for EJAC members was sent to a tribal email list, but received no responses from tribal representatives, according to a CARB memo in September.
CARB contacted a member of the legislature for possible referrals and worked with other state agencies on finding a tribal representative. The California Environmental Protection Agency shared the request several times with its Tribal Advisory Committee. EJAC members helped in the search as well.
Tribes contacted directly said they didn’t have time or resources to provide an EJAC representative.
The Strategic Growth Council, a state government committee that works on sustainability and equity issues, also got involved.
One of the council’s recommendations was to explain how the time and effort from the tribal representative would be reflected in the scoping plan update.
“It’s best to ensure that tribes understand the level of integration, especially since tribes are sovereign nations,” SGC said, according to CARB’s memo.
A bill that would have set a goal of net zero greenhouse gas emissions by 2050 has failed in the New Mexico Legislature, but proponents expect some version of the proposal to return next year.
State lawmakers also rejected a proposed low-carbon fuel standard and a hydrogen hub development act during the 2022 session, which ended on Feb. 17.
The state legislature holds a 30-day session in even-numbered years to focus on the budget, as well as bills in priority areas identified by the governor.
During a climate conference in October, Democratic Gov. Michelle Lujan Grisham committed to backing net-zero legislation, a hydrogen hub act and a clean-fuel standard in the 2022 session.
Rep. Nathan Small (D) introduced the net-zero proposal (HB6, also known as the Clean Future Act), which would have mandated a reduction in statewide greenhouse gas emissions to 50% of 2005 levels by 2030. The reduction would have been in “direct” emissions, without the use of offsets.
By 2050, the bill would have required a 90% reduction in direct GHG emissions with remaining emissions “at least matched” with offsets “generated by biological, technological, chemical, or geologic means” to achieve at least net-zero emissions.
The bill stalled after the House Government, Elections and Indian Affairs Committee voted on Feb. 11 to recommend a substitution for HB6.
The Sierra Club Rio Grande Chapter called the Clean Future Act’s failure a “disappointing outcome.” In a release, the group said the New Mexico Oil and Gas Association spent more than $256,000 on advertising against the bill in the final weeks of the legislative session.
Chapter Director Camilla Feibelman said previously that the proposal’s 50% direct reduction in GHG emissions by 2030 would be more ambitious than the 45% reduction that the governor set as a 2030 target in 2019. (See New Mexico Draft Bill Targets Net Zero by 2050.)
Alex DeGolia, director of state legislative and regulatory affairs for the Environmental Defense Fund, said the group plans to build on the momentum generated for the Clean Future Act during this year’s session to pursue similar legislation in 2023. Next year, state lawmakers will meet for a 60-day, rather than 30-day, session.
DeGolia said the 2030 target of cutting GHG emissions by half is particularly important. “Action sooner than later is essential.”
Clean-Fuel Bill Dies
Environmental groups were also disappointed with the failure of Sen. Mimi Stewart’s (D) SB14, the proposed Clean Fuel Standard Act, which would have directed the state Environmental Improvement Board to adopt rules to decrease the carbon intensity of transportation fuels. It would have created a system of credits that fuel producers could use to meet annual targets.
The bill said New Mexico could coordinate with states that have adopted a similar standard, such as California.
The Democrat-controlled Senate passed the bill on a 25-16 vote, but it died on a 33-33 vote on the last day of the session in the House, which Democrats control 45-24-1.
Hydrogen Controversy
Another bill that failed was HB4, the Hydrogen Hub Development Act introduced by Rep. Patricia Lundstrom (D). The bill would have established grant and loan programs for hydrogen hub projects, offered tax incentives for developing hydrogen facilities and authorized public-private partnerships.
The House Energy, Environment and Natural Resources Committee tabled HB4 on a 6-4 vote. But the proposal resurfaced when Lundstrom incorporated a revised version of the measure into a generic bill, HB227, the Albuquerque Journal reported. The bill was referred to the House Appropriations and Finance Committee, which Lundstrom chairs.
House Speaker Brian Egolf (D) reportedly pulled HB227 from committee, and the bill died.
The hydrogen bills had faced criticism from groups, including Pueblo Action Alliance and Youth United for Climate Crisis Action, which said the proposals “prioritize[d] investments in a fossil-fuel based technology to secure fossil fuel interests.”
“Hydrogen is not a ‘clean’ energy nor is it renewable,” the groups said in a release. “Hydrogen production is resource intensive and would impact our water resources.”
Lujan Grisham hasn’t abandoned the idea of New Mexico as a hydrogen hub, however. Last week, she joined the governors of Colorado, Utah and Wyoming in announcing that the four states would team up to develop a Western Inter-States Hydrogen Hub with facilities in each state. (See Mountain States Partner to Secure Hydrogen Hub.)
Efficiency Program Approved
Lujan Grisham did get to sign one bill, HB37, legislation creating a community energy efficiency block grant program in the state’s Energy, Minerals and Natural Resources Department. The bill passed the House 44-24 and the Senate 26-14.
HB37 is intended to reduce the energy burdens faced by low-income residents. People living below the poverty line spend 15% of their income on average to pay their energy bills, according to the Southwest Energy Efficiency Project (SWEEP), which supported the bill.
Lawmakers approved a $10 million appropriation to the program.
“It’s wonderful to see prioritization of resources to help low-income New Mexicans reduce their energy burdens while creating good-paying local jobs and fighting climate change,” Tammy Fiebelkorn, SWEEP’s New Mexico representative, said in a statement.
New Jersey’s first offshore wind project, Ocean Wind, has encountered its most public challenge as it seeks an easement from the tourist town of Ocean City to run cables, buried three feet underground, to an inland substation. Thus far, the town appears to oppose the easement, and the project developer Ørsted has asked the New Jersey Board of Public Utilities (BPU) to step into the fray to approve the easement regardless of the town’s wishes in the matter.
The BPU recently agreed to hear the case and selected Chair Joseph L. Fiordaliso to oversee and rule on the issue.
The case is the first test of a new law, S3926, passed in July 2021, that allows for the siting, construction and operation of “wires, conduits, lines, and associated infrastructure” on public land if needed to connect an offshore wind project to the grid, despite any opposition from local authorities as long as they are consulted. The bill stipulates that the connecting infrastructure should be buried underground. (See NJ Lawmakers Back Offshore Wind Bills.)
Before the 5-0 BPU vote agreeing to hear the petition, Commissioner Upendra J. Chivukula acknowledged the potentially groundbreaking decision facing the agency as it evaluates Ørsted’s request to secure the easement rights. “This is a new precedent, and we are getting into areas where the board has not been before,” he said.
Ocean City officials did not respond to NetZero Insider emails and a phone call seeking comment.
In its petition, Ørsted asked the board to rule that Ocean Wind meets the requirements of S3926 and can therefore move ahead with siting the cables on the proposed route without the town’s approval.
The company is seeking a 30-foot-wide easement running the length of the island, which is about eight miles long, for a 275-kV cable that will connect Ocean Wind’s turbines, about 15 miles offshore, to the PJM grid at a substation at a now closed coal-fired power plant in neighboring Upper Township.
In its petition and related affidavits, Ørsted said it has held multiple public hearings to explain the project and has also had numerous meetings with Ocean City officials but has yet to secure the municipality’s agreement on the easements. The developer argues that it needs the easements to keep the project on track and meet its commitment to the BPU that the first phase of the project’s commercial operation would start May 1, 2024.
‘No Room’ for Cables
Approved in 2019, the 1,100 MW Ocean Wind project is the first of three offshore wind farms given the green light by the BPU, and as the first, its ability to overcome permitting and other obstacles may carve a path forward that will inform and shape succeeding offshore wind projects.
Aside from Ocean Wind, the BPU has awarded leases to the 1,148 MW Ocean Wind II, also an Ørsted project, with 25% held by PSEG Renewables Generation, and Atlantic Shores, a 1,510 MW joint venture between EDF Renewables North America and Shell New Energies US. The state expects to hold at least three more solicitations with a goal of deploying 7,500 MW of offshore wind capacity by 2035.
Orsted has asked the New Jersey BPU to approve an easement running through the small coastal community of Ocean City, which will allow it to connect its offshore wind project to the grid. | Ørsted
Public sentiment about the Ocean Wind easement will be aired Monday when Ørsted holds an online public hearing focused on its proposal to run the cable under land that was improved under the state’s Green Acres program, which funds the creation and preservation of parkland.
Suzanne Hornick, an Ocean City resident and environmental activist, believes local opposition is strong, not only to the easement but to anything that would move the project forward.
“We do not want these cable bundles across our island,” said Hornick, who lives a few blocks from the proposed path of the cables. She is worried about damage to the ground and potential health hazards from electromagnetic fields emanating from the cables, she said.
“There’s no room here for that,” she said of the developer’s cable plan. “They want to come across our beach and our island, and the one main street in the middle of the island that gets you on and off… The area that they’re talking about is so narrow for such a huge cable.”
Local Opposition
Just how New Jersey will connect those 7,500 MW of offshore wind to the onshore grid will become increasingly important as the projects move through permitting and start construction. The BPU announced Monday that it has pushed back the date of its next solicitation, from September of this year to January 2023. The delay is partly to accommodate a BPU solicitation underway with PJM to help find solutions on how to upgrade the grid to handle the energy coming in from offshore wind projects. (See NJ Delays Third OSW Solicitation for PJM Tx, NY Bight Winners.)
The offshore wind projects, although warmly received by some environmentalists and public officials, have faced opposition from the fishing industry, which fears that the turbines will disrupt fishing areas and will create a dangerous environment for boats pulling nets. The tourism sector also has voiced concern that the sight of scores of turbines offshore could reduce the number of visitors coming to the state’s coast.
Similarly, local residents and property owners are worried about the impact for local properties resulting from construction to install cables and other equipment. (See NJ’s Offshore Wind Project Faces Criticism, Support.)
“Ocean City is a little, teeny … barrier island,” Hornick said. “The only thing that we have that maintains our quality of life and our community is our tourism.”
Overriding Home Rule
But Ørsted says the easements are necessary to apply for environmental permits for the project, as is the permission needed for the cable to run through land developed with state Green Acres funds. So far, however, despite discussions with the township stretching back to 2019, “Ocean Wind has been unable to obtain the required easements, consents and associated actions from Ocean City,” the petition said.
The company argues that if the BPU concludes that the easements, or rights of way, are “reasonably necessary for the construction or operation” of the project, S3926 allows the BPU to override municipal and county rules and issue its own order approving the easement.
Ørsted’s petition, however, argues that “in similar contexts involving public utility projects, both the Board and the courts of this State have long held that the welfare of the public generally transcends the municipal borders and local municipal concerns.”
The BPU’s intervention is “appropriate and important because local officials cannot be expected to balance local interests against the greater good of the public,” the petition says.
But others see S3926 as overriding New Jersey’s long-held tradition of home rule, which preserves the rights of local authorities to make decisions that affect their own back yards. Sen. Bob Smith (D), one of the bill’s sponsors, acknowledged the potential conflict but said the need to move swiftly to combat climate change made the measure necessary.
Ocean City officials voiced opposition to the bill before its passage. The township council voted 7-0 in June in favor of a symbolic resolution that said the law, if enacted, would “severely affect the ability of local governments to exercise home rule pertaining to the offshore wind farm project,” according to a local press report.
Hornick agrees. “We don’t have a choice anymore,” she said. “Our voices been taken away. And to me, that is the most un-American thing anybody could do.”
Joined by lawmakers and other state energy officials, the California Public Utilities Commission met Monday and Tuesday to deal with the looming crisis for ratepayers saddled with billions of dollars annually for fuel costs, wildfire prevention and the state’s switch to 100% clean energy.
The two-day session on electric and natural gas rates examined ways to control costs and to pay for major projects using public revenues rather than ratepayer funds. Panelists included wildfire experts, utility executives and ratepayer advocates.
“TURN is here today to declare a state of emergency, an affordability state of emergency,” Mark Toney, executive director of The Utility Reform Network (TURN), said during a panel on non-ratepayer sources of funding for infrastructure upgrades.
Toney called for a timeout on rate increases until the CPUC can come up with alternatives to pay for soaring capital costs for the state’s three large investor-owned utilities.
PG&E electric ratepayers, for example, were hit with a $1 billion rate increase in January followed by a $1.1 billion increase on Tuesday. Together, the increases work out to a 19% rate hike in the past two months or about $28 per month for average households.
The January spike resulted from a $671 million increase in FERC-approved transmission rates and a $284 million increase in PG&E’s general rate case for program costs, the CPUC said.
Investor-owned utility rates have soared in recent years. | The Utility Reform Network (TURN
The additional increase this month came from natural gas prices that were $1.1 billion higher than PG&E had expected in 2021 and 2022. To cover the fuel costs, the CPUC approved a $769 million increase to PG&E’s Energy Resource Recovery Account (ERRA) and a $358 million addition for ERRA under-collection in 2021.
Southern California Edison and San Diego Gas & Electric have also seen significant rate increases
For SCE, the CPUC approved a January rate increase of 2.9%, working out to an average monthly bump of $3.99 in residential bills. The causes included the addition of $385 million to SCE’s general rate case for wildfire mitigation work, including vegetation management and installing covered conductor. Newer CPUC-approved increases for SCE, which take effect this month, reflect high natural gas prices and the recovery of $401 million in wildfire prevention costs.
Starting soon, SCE residential customers can expect an additional 7.7% bill increase, adding $11.48 a month on average. Between the January and March rate hikes, SCE residential customers will be paying nearly 11% more for electricity this year, or about an extra $12.50 per month.
San Diego Gas & Electric residential bills rose by 11.4% in January because of a $273.5 million boost to the utility’s revenue requirement, mostly based on high gas prices, and $38.5 million for transmission costs authorized by FERC, the CPUC said.
Billions of dollars more could be required to pay for infrastructure upgrades such as PG&E’s proposal to underground 10,000 miles of power lines to prevent wildfire ignitions. CAISO predicts new transmission may be needed to reach wind resources on the Great Plains and in offshore wind farms along the West Coast. Thousands of additional megawatts of solar, storage and other clean energy resources are required in coming years to achieve the state’s goal of supplying retail customers with 100% carbon-free energy by 2045, according to the CPUC and Energy Commission.
“We’re dealing with multiple imperatives right now: the imperative to decarbonize and stave off the worst impacts of climate change, the imperative to deal with some of the climate consequences that are already upon us, and the imperative to deal with rising costs,” Energy Commission Chair David Hochschild said. “We have to deal with all of those together. There’s not one we can leave off the list. This is the challenge ahead of us.”
Non-Ratepayer Funding
Among the major proposals discussed at the meeting were ways to use California’s large revenue surpluses to cover costs without adding to ratepayer bills or to pay for transportation and building electrification using fees for buying cars and homes.
“This discussion comes at an opportune time when the state general fund is experiencing large surpluses in the tens of billions of dollars,” CPUC Government Affairs Director Grant Mack said.
California has an estimated revenue surplus of $76 billion in the current fiscal year and $46 billion next fiscal year. The state received $25 billion this year through the American Rescue Plan Act of 2021, and the $1.2 trillion Infrastructure Investment and Jobs Act, signed by President Biden in November, appropriated $58 billion for clean-energy investment and energy efficiency, Mack said.
The flood of public funding could limit increases in electric rates, panelists said, though they cautioned that the surpluses may not last, based on California’s prior record of boom-and-bust fiscal years.
“I guarantee you we will not have a state budget surplus year in and year out,” Toney said.
Instead of relying on surpluses, he proposed paying for electric vehicle infrastructure and incentives with point-of-sale fees at dealerships instead of ratepayer fees. He also proposed funding building electrification in a similar way. Instead of spending hundreds of millions of dollars in ratepayer fees to electrify “10,000 homes here and there,” he recommended charging homebuyers a closing fee to pay for electric space and water heating upgrades.
In the realm of wildfire prevention, Michael Wara, director of the Climate and Energy Policy Program at Stanford University, said the state needs to better assess its spending to achieve the greatest impact.
For instance, he said, utilities are spending billions of dollars in ratepayer money to harden the grid and prevent wildfire ignition. Preventing ignitions is important but so is limiting the rapid spread of fires, he said.
Wara cited the 2018 Camp Fire, which spread so rapidly that it leveled the town of Paradise in hours, and last year’s Dixie Fire, which advanced so quickly at times that it eventually burned nearly 1 million acres.
“Wildfire risk also comes from how wildfires spread,” Wara said.
“It’s very expensive to reduce utility ignitions to zero” by installing covered conductor and burying lines “and we can only do that so quickly,” he said. “But if we get to a place where we can tolerate ignition safely [by reducing spread, for example] it might mean that we don’t have to make some of these incredibly costly, long-run infrastructure investments, because we’re managing the landscape in a way that creates safety.”
Last year, state investor-owned utilities proposed spending $8.5 billion in ratepayer funds on wildfire mitigation, he said. At the same time, the state plans to spend $1.5 billion in taxpayer revenues on fuel management and community protection and more than $4 billion on fire suppression.
To offset those costs, California could consider charging additional fees to ratepayers in high-threat fire areas because providing service there is more expensive, Wara said. While those residents could not feasibly cover their full cost of service, they could pay additional fees to cover fire prevention and suppression costs, he said.
A state fee that expired in 2017 charged many rural residents around $100 a year to help cover wildfire costs, so the precedent exists, he said. The purpose of such a fee is to protect ratepayers outside of fire zones, “particularly low-income people who do not live in high-risk areas,” Wara said.
The Washington Senate passed a bill Tuesday to require all “major” new publicly owned or leased buildings to be designed with all-electric energy systems in mind.
The House-originated bill (HB 1280) now goes to Gov. Jay Inslee for his signature.
The bill by Rep. Alex Ramel (D) passed the Senate 29-20, mostly along party lines. Ramel introduced the bill in 2021, when it passed the House but did not receive a Senate vote before the session ended. It sailed through the legislature unchanged this year.
As a greenhouse gas measure, the legislation requires that designers of public facilities with greater than 25,000 square feet of usable space, including schools, to consider all-electric systems and at least one renewable energy or combined heat and power system in their work. The bill also requires that these designs should include life-cycle cost analyses, the guidelines for which will be created by the Washington Department of Enterprise Services.
On Tuesday, Sen. Reuven Carlyle (D) and his chamber’s leader on environmental issues said, “We know that public leadership on this is important.”
In response, Sen. Shelly Short (R) and the GOP’s Senate leader on environmental issues, said the bill starts a slippery slope toward future actions, which she did not define or elaborate upon. “This seems like a piece that worries me as we go down the road,” Short said.
Sen. Mark Schoesler (R) framed his “no” vote as a protest against environmentalist efforts to tear down the four hydroelectric dams on the Snake River as a salmon recovery measure. He said it is wrong to require all-electric systems at the same time that hydroelectric dams are being targeted.
While breaching the dams has been discussed in the past two years — as well as off and on for the past 30 years — no solid studies or efforts have advanced beyond the speculation stage.
For years, analysts have assumed that any Russian military action against its neighbors would be preceded by a major cyber offensive against the target country and its allies, aiming to disable its electricity and other utilities, along with government, military and civilian communications networks.
Nearly a week into Russia’s invasion of Ukraine, that threat doesn’t seem to have materialized. While the U.S. Cybersecurity and Infrastructure Security Agency (CISA) has noted an outbreak of “destructive malware … affecting Ukraine and other countries in the region,” Ukraine’s infrastructure appears largely intact. President Volodymyr Zelensky and his government certainly seem to have no problems keeping their smart devices charged and connected to the internet, rallying resistance to Russian tanks and bombers.
Likewise, while CISA is currently in a “Shields Up” posture and has called for critical infrastructure operators to be vigilant, the agency still says it sees “no specific or credible cyber threats to the U.S. homeland” despite having warned in January that such attacks might be imminent. (See Utilities Warned of Cyberattacks amid Russia Tensions.)
But experts say it would be a mistake for cybersecurity professionals to label Russia’s cyber capabilities an empty threat. The fact that the country apparently has not deployed its arsenal doesn’t mean the arsenal is bare, they say, and with the invasion just days old, there is plenty of time for the country’s leadership to reconsider its strategy and bring out the big guns.
“It’s no different than any other wartime tactic; once you reveal your playbook, there’s going to be a countermeasure … attached to it,” Betsy Soehren-Jones, Fortress Information Security’s chief information officer, told ERO Insider. “You’ve got to be strategic in how you push out those playbooks, and it just hasn’t been time yet.”
Fortress CEO Alex Santos agreed with Soehren-Jones, likening the Kremlin’s cyber offensive forces to its hypersonic missiles. The world has known of the technology for years; Russia test-fired the system shortly before the invasion into Ukraine began; and the fact that Russian President Vladimir Putin has not yet used it is no guarantee that he will not do so.
Santos suggested that Russia’s strategy so far indicates a “calculation that they can take and achieve their military objectives with their traditional weapons,” rather than exposing their more advanced cyber capabilities to the eyes of foreign intelligence agencies. If the conventional attack fails to reach its goals and economic sanctions begin to bite, then Putin may decide to move more aggressively against both Ukraine and those supporting it, including the U.S., he warned.
“One of the things that Russia has historically done is … surveillance and harassment and sowing seeds of misinformation. You might say that SolarWinds was that kind of attack,” Santos said, referring to the 2021 incident in which hackers — identified by the U.S. as Russia’s Foreign Intelligence Service — planted malware in the SolarWinds Orion network management software used by thousands of organizations around the world.
“We may see sort of a gradual campaign over time of them continuing their programs of meddling [and] death by a thousand cuts kind of thing,” he continued.
Questions About Ukraine’s Cyber Defenses
Ukraine’s readiness in the event of a major cyber offensive is still considered an open question by many in the industry. The country seems to be holding its own against the WhisperGate and HermeticWiper malware, which cybersecurity professionals identified earlier this year and which CISA and the FBI warned about last week. Ukrainian government officials are also attempting to organize an international network of hackers to strike back against Russia in cyberspace.
But industry watchers remain concerned about Ukraine’s capacity to resist a major, well resourced operation like the ones that targeted the country’s power grid in 2015 and 2016. (See Six Russians Charged for Ukraine Cyberattacks.) Robert M. Lee, CEO of cybersecurity firm Dragos, warned in a media briefing last week that he feared the investment in needed cybersecurity improvements since then has been severely lacking.
“I’m not saying there hasn’t been good work. But that stuff isn’t related to their infrastructure. Do I think they are building up more knowledge about what to do? Sure. Do I think that their infrastructure and the defensive ability of those infrastructure companies are in any better place than they were in 2015? No, I do not,” Lee said. “I think that if Russia, as an example, wanted to take down the electric system in Ukraine, they would be much more prepared to do so than … in 2015 and 2016.”
The situation may be brighter in the U.S. Santos called NERC’s Critical Infrastructure Protection (CIP) standards “the most robust cyber regulatory construct” among any other utility sector, and NERC has been quick to reassure the public of the Electricity Information Sharing and Analysis Center’s (E-ISAC) preparedness to quickly coordinate a response to potential attacks.
“Security of the grid continues to be a key priority for NERC, the U.S. and Canadian governments, and industry,” the organization said in a statement on Monday. “The continued coordination across our industry helps ensure vigilance and allows us to respond quickly should the need arise — we know nearly 400 million North Americans are counting on us.”
