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November 17, 2024

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Why Gene Rodrigues Came out of Retirement to Lead DOE’s Office of Electricity

WASHINGTON ― After 23 years working on demand-side programs at Southern California Edison and another eight as a consultant at ICF International, Gene Rodrigues was four months into retirement in 2022 when he got “the call,” to serve as assistant secretary at the Department of Energy’s Office of Electricity. 

“There were two things that made this irresistible to me,” Rodrigues said in a recent interview at DOE headquarters. “I saw this as my opportunity to give back … my opportunity to actually serve all the American people.” 

Rodrigues felt a more personal pull as well. “I’m the son of a father who was a career military person and a mother who came from her native land and became a U.S. citizen,” he said. “So, it was engrained in me since I was a kid growing up around parents with that kind of background that serving the public is not just something you do; it’s an obligation that we all have, and this was my opportunity to kind of honor my parents in the same way.” 

Known for his deep industry knowledge and engaging personality, Rodrigues aced his confirmation hearing before the Senate Energy and Natural Resources Committee and was sworn in as DOE’s assistant secretary for electricity delivery and energy reliability on Jan. 9, 2023. In practical terms, his main job is leading the Office of Electricity (OE), which works with DOE’s 17 National Laboratories “on solving really big problems, making discoveries and breakthroughs around everything from battery chemistry to materials science … that will help us to advance the grid; to make a truly 21st-century grid,” he said. (See Former NRG CEO Faces Tough Questions at Senate ENR Hearing.) 

Rodrigues sees the OE as part of a continuum running from the labs to DOE’s Grid Deployment Office (GDO), which has been awarding billions in funds from the Infrastructure Investment and Jobs Act to help utilities upgrade their distribution and transmission systems. OE does the science ― and gets fewer headlines ― and GDO does the infrastructure, he said. 

“We take basic science discoveries and prove them out through research and demonstration activities that help the market to get confidence in these new technologies [and] new operational approaches,” Rodrigues said. The OE focuses on advances in “components and systems, in controls and communications and in grid-scale storage, making them not just accessible but trusted by the folks who are making massive investments, and that helps to accelerate their adoption in the real world.” 

In May, for example, the OE awarded $15 million in grant money to three projects demonstrating different long-duration storage technologies, including vanadium redox flow batteries and supercapacitors, both of which can provide 10 hours or more of storage. 

Rodrigues sat down with RTO Insider for a wide-ranging conversation on the work that OE is doing and why he spends a lot of his time, not in his D.C. office, but in the field, working with utility representatives, regulators and customers, all looking for new solutions to the core problems of the energy transition. The quotes from the interview here have been edited and condensed. 

RTO Insider: We know DOE is looking at the role of artificial intelligence in advancing and accelerating the energy transition. What role does the OE have in that? How can it use AI to bridge some of the gaps in technology and policies? 

Rodrigues: “We aren’t the shop that specifically works on it, but within science and innovation, we have folks who are 100% focused on what are the potentials of using AI that can help us leapfrog to make the grid even more reliable, resilient and secure. When you look at the grid, you see this incredibly complex network of poles and wires connected to generators, both large central station in faraway places and the solar panels on the roof of my house, connected to a whole bunch of devices in the home. So, it’s absolutely clear to me as the assistant secretary for the Office of Electricity that we can’t train people to be able to operate a system that complex at the speed of the flow of electrons through wires. But guess what? We can use distributed intelligence to help people make one wise and virtuous choice to participate in a program that helps them financially, helps them with reliability and resilience, but also helps manage this increasingly complex grid. That’s the incredible promise of artificial intelligence.” 

We can’t talk about AI without talking about data centers, the increasing amounts of electricity they will need and how some utilities are reacting, saying they need to build more natural gas plants. What’s the way forward here? 

“Utilities and the folks who are building these data centers, what they have to do is start working in a way that’s more collaborative than in the past because that collaboration allows two things to happen. No. 1, it allows the utilities to plan thoughtfully about where and how to best serve that load using their existing system and whatever expansions are required, [and] how that process can be expedited. The second thing is some of these large data centers are looking at how they can be a constructive participant in the load by using load flexibility. Sometimes these data centers are [built] by firms that have data centers in different parts of the country, and they can move some of that computing load from one place to another to help balance out the energy. And so those are very, very interesting opportunities.” 

One thing we’ve been hearing a lot about at industry conferences is the need for new approaches to cost and risk allocation. Do you see any opportunities there? 

“I think there’s some genius in rethinking cost allocation and risk sharing in our industry, and let me suggest one thing here as an example. In today’s world, we have the potential to make suboptimal decisions around transmission planning and investment if we allow ourselves to be boxed into thinking that an individual utility should only look at the costs incurred in its service territory and try to offset them only with the benefits that are accrued in that service territory. 

“As we have more interconnections for broader geographies, it allows you to do two things on a reliability and resilience foundation. It allows you to import energy when needed to make up for [when] a storm goes through and you lose some generating capacity locally. But on the other side, it allows you to export energy to a wider area of our nation in ways that might create economic opportunity for the people within a state. So, as we think about how to justify cost and transmission investments, we need to be thinking not just in terms of the artificial boundaries of a service territory in the region, but how interconnections outside of a service territory and even between regions can be truly cost-effective investments in ensuring not just reliability, but resilience.” 

Covering utilities and conferences, we always hear about pilots and demonstrations but not necessarily how a utility is expanding a pilot across its systems. How does the industry break out of this perennial cycle of pilots and risk-averse utilities and regulators? How are you doing that at OE? 

“There’s an old joke in our industry, that every utility wants to be the first to be second. And that makes sense when you think about the awesome responsibility of ensuring reliability. It’s awfully hard to move away from what’s been proven in the past over and over and over again. But I would say this: I think progressive utility leadership and progressive regulators and policymakers are understanding the issue that the energy field is changing in such a way that just relying on the techniques and the tools and the products and the approaches of the past is not the safe approach. 

“That is why it’s so important for me in this bridge role between basic science of discovery and deployment, to not sit here in the office and just write white papers about how keen and wonderful technologies are but actually to go out and work with utilities and utility associations in partnership to overcome whatever hurdles they have. Some of it is certainty about economics. We have a tool coming out of our office ― Reconductoring Economic and Financial Analysis (REFA) ― and the idea is that because reconductoring is not something that’s been done time and time again throughout the industry, we’ve created a tool to help decision-makers in the utility and in the regulatory bodies to assess the economic benefit of reconfiguring an existing transmission thoroughfare with high quality, highly efficient, advanced technology. 

“Our folks here in the Office of Electricity ― it’s kind of a fun thing we do ― I always talk to them about impact [slams hand on table], and I always slam the table when I talk about impact because that is really what our job is. It’s not just to do research, development and demonstration, but it’s to ensure it gets adopted in an accelerated fashion and at scale in the real world.” 

Do you have any success stories you can share? 

“When the supply chain issues started being raised by industry and brought to the table here in the Department of Energy, the tip of the spear was distribution transformers. We brought together a convening of manufacturers, the folks who produce electrical steel, the folks from utility associations, all of them came to the table, and we discovered some things. One was there was simply way too much diversity in the design specifications for these transformers, and that slowed down the ability of manufacturers to build [them]. And we discovered that there was too little flexibility in the specification of individual components; so, if you said, ‘I want [a certain] component,’ and that wasn’t available, then it stopped your ability to complete a product instead of using something else. 

“So, we added representatives from EEI, APPA, the public power folks and rural electric co-ops ― got their engineers around the table with the manufacturers, and we facilitated discussions around how could we put together a matrix of components substitution, so that we would get out of this problem of running into a bottleneck when one component wasn’t available. And the other thing they are doing, and they’re continuing to work on as we speak, is how can we maybe bring a little more rationality to the diversity in distribution transformer design?” 

One of the ongoing challenges of the energy transition is just getting public buy-in on the need for more transmission. Everyone wants clean, reliable, affordable power; they want more of it, and they want it faster, but no one wants wires anywhere near where they can see them. How can the OE address that? 

“The answer to that is fairly clear. You can’t look at transmission and sell it on its technological features, even though the folks who have engineering degrees in our department love to talk about how high-tech the components and systems are that we work on. I think we really have to get to a conversation in this country that gets people to lose their sense of complacency about the engineering marvel that it is that when you push a switch, the lights come on. We’ve had over a century of that kind of reliability, and we’ve just taken for granted all this engineering, economic magic that just happens in the background. You don’t need to think about it.  

“It is time for policymakers, for regulators for legislators, for people planning and operating and investing in the grid to think about it. So, will transmission ever be sexy? I don’t think so. But it should be more in front of mind because we have options available to us today that will help us to ensure reliability, resilience, security and affordability into the future. And if we don’t think about, consider and adopt and even embrace those new technologies and new approaches, then we’ll be mired in the approaches of the past. And that’s not how to lead the world in a giant, clean energy revolution that is being undertaken as we speak.” 

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TOs Approve Transferring Transmission Plan Filing Rights to PJM

Transmission owners have approved transferring filing rights over PJM’s planning protocols to the RTO through a package of amendments to the Consolidated Transmission Owners Agreement (CTOA).

The June 13 vote at the Transmission Owners Agreement-Administrative Committee (TOA-AC) greenlights the revisions to be filed at FERC, following a May 31 communication from the PJM Board of Managers announcing it had agreed to the proposed amendments.

The proposal would remove Schedule 6, which details the Regional Transmission Expansion Plan (RTEP), from the Operating Agreement (OA) and create a new corresponding Tariff Schedule 19. The proposal would also move the RTEP dispute resolution processes to the Tariff and cleanup references and definitions to point to the Tariff instead of the OA. During the May 6 MC meeting, PJM Associate General Counsel Jessica Lynch said the substance of the RTEP would remain unchanged by the shift.

Shifting the RTEP process to the Tariff would allow PJM to revise its planning processes through a Federal Power Act (FPA) Section 205 filing, which would not require the endorsement of the PJM membership and would not require a finding that the existing governing documents are unjust and unreasonable, as would be the case with a Section 206 complaint. The PJM board communication also stated that the 60-day timeline for FERC to respond to a 205 filing would allow faster action when prompt action is needed.

“It has become very clear that PJM will need to be more proactive and nimble in its planning efforts. As has been referenced in prior discussions, most all other ISOs/RTOs (and indeed virtually all other transmission planning public utilities in the United States) have Federal Power Act (FPA) Section 205 filing rights over transmission planning, which allows these entities to independently propose rules to FERC, and perhaps most importantly, receive a reaction from FERC, whether positive or negative, within 60 days. The Board views this ability to receive feedback from FERC in a timely manner as strategically important in determining how best to plan the PJM system for the energy transition in the coming years,” the board wrote.

The Members Committee voted against endorsing the revisions during its May 6 meeting, where the changes received 25% sector-weighted support. Several stakeholders argued that empowering PJM with unilateral filing rights over regional transmission planning would allow it to bypass the stakeholder process and that the proposed dispute resolution process included would create an inappropriate barrier to MC endorsed OA amendments being filed at FERC. (See Members Vote Against Granting PJM Filing Rights over Planning)

During the May 8 Public Interest and Environmental Organization User Group (PIEOUG) meeting, Ari Peskoe, director of the Electricity Law Initiative at Harvard University, said the language would allow create a “shadow governance” where CTOA signatories could challenge PJM prospective Section 205 filings, PJM regional plans, or other PJM actions through a confidential mediation process. He also argued that it would allow utilities to pre-empt PJM planning by submitting similar, but more expensive, projects of their own. (See Consumer Advocates, Environmentalists Urge Holistic Thinking at PJM)

Peskoe told RTO Insider he believes the CTOA amendments would violate the FPA and should be rejected by FERC. He said it’s unfortunate the PJM board accepted the agreement.

The May 31 letter from the PJM board said the RTO continues to value the stakeholder process, however there may be times that changes are needed even in the face of a deadlocked membership.

“As PJM has stated many times, having FPA Section 205 rights will not curtail stakeholder discussion of planning matters – never has it been more important to have stakeholders weigh in on the issues before us. But should Member consensus be unattainable, having FPA Section 205 rights will allow for PJM to still move forward with an FPA Section 205 filing with FERC, and in turn, receive a timely reaction from the Commission on a given planning rule change. This will better position PJM to continue to fulfill the reliability needs of consumers as we advance through this energy transition.”

Exelon Director of RTO Relations & Strategy Alex Stern told RTO Insider that the proposal would reinforce PJM’s independence and ensure that PJM, as the FERC-jurisdictional public utility, holds the authority to act when it determines reliability warrants change. He said that authority would be no different than what exists today for the RTO on the markets side.

“These revisions are a big step that those who own transmission don’t take lightly,” he said. “They afford PJM greater independence to plan the energy grid. This requires stakeholders, including Exelon, to compromise. However, to support reliability during the energy transition, Exelon believes it is critical that PJM has every tool at its disposal.”

As the PJM board noted in its May 31 correspondence, the lack of support at the MC for the revisions underscores the need for PJM to have the ability to operate independently from its membership when necessary.

Stern added that comments stakeholders made prior to the MC vote showed a mistaken belief that the membership, rather than PJM, has public utility rights and responsibilities to control regional planning. He said that is not the case under the status quo and creates a dynamic where PJM is responsible for planning a reliable grid without having the needed control over how it conducts that planning.

“With generation deactivations accelerating, energy demands increasing and a portfolio of new generation waiting to interconnect, PJM’s ability to ensure future reliability and affordability for customers is critical and would be enhanced by PJM having the ability to bring critical regional transmission planning issues to the Commission at the time it believes appropriate and as intended when PJM was formed,” Stern said.

Stern said there have been several efforts to expand PJM’s planning processes in the past that have been stymied by deadlocks in the stakeholder process, including establishing a paradigm for storage as a transmission asset (SATA), as well as efforts to enhance interregional planning. (See Vote Delayed on PJM SATA Proposal)

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New England Stakeholders Talk Community Engagement at Roundtable

BOSTON — Early and meaningful engagement with host communities will be an essential component of expediting energy permitting and siting processes, panelists said at Raab Associates’ New England Electricity Restructuring Roundtable on June 14. 

“We are in a change-or-die moment,” said the Rev. Mariama White-Hammond, former chief of energy, environment and open space for the city of Boston, adding that the pace of clean energy deployment must accelerate rapidly to meet the need to decarbonize.  

To meet the moment, utilities and project developers will need to collaborate with many of the communities and organizations they fought in the past, she said.  

“There is a question of who will hold the power,” White-Hammond said. “Will it be the technocrats, investors and government officials, or will it be all of us?” 

Ultimately, developers will face significant backlash if they try to force through projects without incorporating community input in the decision-making process, White-Hammond added. 

Penni McLean-Conner of Eversource Energy echoed the need to work with communities in the early stages of project development and consider community input when weighing the tradeoffs of project alternatives. 

“Eversource is committed to an enhanced community-centric approach,” McLean-Conner said, adding that the company hopes new energy facilities can be seen as opportunities rather than burdens by residents. 

One key to changing this conversation is understanding and respecting the historical inequities faced by these communities, McLean-Conner added. 

“We can’t assume we know or have all the answers,” she said. “We need to incorporate their shared experiences and unique perspectives into our thinking going forward.” 

Larry Susskind, professor of urban and environmental planning at MIT, said project developers should work with a range of stakeholder representatives and organizations to reach “informed consensus” within a “confidential space for joint fact-finding and collaborative problem-solving.” 

Once developers identify the unique needs and concerns of a host community, they should negotiate and sign binding community benefit agreements they submit to the state during the permitting process, Susskind said. 

Getting community benefit agreements right is “as much about compensation as it is about mitigation,” Susskind said, adding that “we need to think in terms of bartering to create benefits, not just minimizing costs.” 

Permitting and siting has been a major topic of conversation for Massachusetts lawmakers over the past few months, with key legislators indicating it’s a top priority for a potential climate bill they hope to pass by the end of the current session in July. 

Legislative leaders of the House and Senate have been working with the Healey administration to develop a compromise bill that likely will revolve around the recent recommendations of the state’s Commission on Energy Infrastructure Siting and Permitting. (See Mass. Commission Issues Recs on Energy Project Siting, Permitting.) 

The Massachusetts Senate plans to take up a climate bill centered around permitting and siting reform this week.  

The state commission recommended consolidating state and local permitting and siting processes and requiring authorities to issue permits within 15 months of verifying that an application is complete.  

Michael Judge, undersecretary of energy at the Massachusetts Office of Energy and Environmental Affairs, said the state’s Energy Facilities Siting Board (EFSB) historically has taken between one and four years to approve a project, “after which the project still needs to get all other permits.” 

“This isn’t working for anyone,” Judge said, adding the state is unlikely to meet its climate mandates without permitting reform.  

Adam Chapdelaine, CEO of the Massachusetts Municipal Association, which represents the state’s 351 cities and towns, expressed his “concern about getting consolidated permitting right” while preserving the rights and role of municipalities. 

He recommended initially adopting an opt-in consolidated local permitting program to inform the consideration of statewide reforms to local permitting. 

In response, Judge emphasized that, under the commission’s proposal, local permitting would remain under local control but would need to be expedited and consolidated under one permit parallel to the EFSB approval process.  

He said making the local permitting reforms optional could lead to an “inconsistent framework” for smaller projects that are subject only to local permitting, potentially creating longer timelines for some smaller projects.  

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Counterflow: Fusion is Getting Increasing Attention

2024 is the 35th anniversary of the discovery of cold fusion! 

OK, just kidding. 

Back to reality: Renewable resources generally are not dispatchable. We are searching high and low for an economic solution to this problem because dispatchable resources like coal and natural gas emit carbon.  

Certainly it is wise to maintain existing nuclear plants, as I urged long before it became fashionable. But other resources remain highly problematic.  

New nuclear fission, such as small modular reactors, has a very high cost. Although a recent Atlantic article says we should take a leap of faith because failure is not an option (citing the siting challenges of large wind, solar and transmission), hope is not a plan. 

Long-duration battery storage is extremely costly, as I discussed in my most recent column. Green hydrogen electricity is a pipe dream (no pun intended), as I discussed before. 

The Fusion Revival

Fusion is getting increasing attention as a possible salvation. 

I’m here to tell you that commercial fusion is another fantasy. 

The old saying is that commercial fusion is 30 years away and always will be.1 An Oak Ridge director of fusion energy research said at a conference: “The projected time to realize the ultimate goal of commercial fusion always seems to be 25 or 30 years away.” He said that in 1986 — 38 years ago. So even then it was a cliché. 

‘Net Energy’

But the hoopla continues, most recently about “net energy” being generated in fusion tests (for example).

Two things about such tests that don’t get reported in the media: first, that the amount of energy generated is trivial. The most energy generated in a fusion test, at the U.K.’s Joint European Torus (JET), is 69 megajoules. That sounds like a lot, but it is the equivalent of 19 kWh. Basically, it could power one American household for about two days. (The monthly average is 900 kWh.) 

Second, this isn’t really net energy. When the JET was running, it consumed 700 to 800 MW (yes, megawatts). 

As for the 3.88 megajoules generated at the U.S. National Ignition Facility, the claim is made of “net energy” because 3.88 megajoules generated are more than 2.05 megajoules “delivered to the target.” The net of 1.83 megajoules would power a 100-W lightbulb for all of five hours. 

But more importantly, this formulation ignores the 322 megajoules it took to power the 192 lasers to “deliver” the 2.05 megajoules.2 It’s not “net energy” — it’s negative energy. The ratio of energy consumed to energy generated is about 83 to 1.  

Reality Check from a Retired Nuclear Fusion Physicist

Part of the problem with fusion is that we’ve spent $100 billion on it, and thereby created an industry dependent on huge taxpayer subsidies and on hoopla to keep those subsidies coming. Experts not dependent one way or another on the public’s money are few and far between. 

But I did find this sobering analysis by a nuclear fusion physicist who worked on nuclear fusion experiments for 25 years at the Princeton Plasma Physics Lab in New Jersey, and who is … retired.3 Here are some of his key points: 

    • huge parasitic power consumption 
    • tritium fuel not fully replenished 
    • radiation damage and radioactie waste
    • nuclear weapons proliferation 
    • outsized operating costs.

His follow-up article focused on the colossal International Thermonuclear Experimental Reactor (ITER) in France, originally scheduled to test its “first plasma” in 2020 and achieve full fusion by 2023. However, the schedule was pushed back to test first plasma in 2025 and achieve full fusion in 2035, and now the schedule is … nobody knows. The ITER has been portrayed repeatedly as using 50 MW to generate 500 MW, but the reality is that it will use 300 MW to generate 0 MW of electric energy. 

If, after reading his analyses, you still think there’s a realistic future for commercial fusion, then I admire your optimism. And there are three dozen fusion startups that might welcome your investment dollars. 

Path Forward

The fact remains we have no realistic, affordable way to maintain resource adequacy in a net-zero future other than to keep a fleet of natural gas plants around that can be dispatched as needed — maybe not many hours a year, but enough. This will vary across regions. And they’ll have to be compensated to be available and flexible as needed. In the organized markets, they’ll have to get meaningful capacity payments to stick around. In the cost-of-service states, they’ll have to get regulated compensation. The carbon emissions of the gas plants can be offset/captured as different states deem worthwhile. 

This is not rocket science.  

Speaking of rocket science, let me repeat from a couple recent columns4 that regardless of what we might do here and in Europe, humanity as a whole is gonna need Plan B: solar geoengineering. There is no realistic alternative, at least for the near and medium terms (until perhaps those 30 years for commercial fusion to become reality). 

“We all have to take a chance. Especially if one is all you have.” — Capt. James T. Kirk, “Tomorrow Is Yesterday,” 1967. 

Columnist Steve Huntoon, principal of Energy Counsel LLP, and a former president of the Energy Bar Association, has been practicing energy law for more than 30 years. 

 

 

1 A collection of articles about fusion spanning decades as published by the Bulletin of the Atomic Scientists is here: https://thebulletin.org/collections/fusion-energy/

2 https://www.scientificamerican.com/article/nuclear-fusion-lab-achieves-ignition-what-does-it-mean/ (“NIF’s 192 lasers consumed 322 megajoules of energy in the process.”)
https://pubs.aip.org/physicstoday/online/42581/National-Ignition-Facility-earns-its-name-for-a https://www.vice.com/en/article/xgwpkk/jet-reactor-fusion-energy-record-setting-breakthrough

3 https://thebulletin.org/2017/04/fusion-reactors-not-what-theyre-cracked-up-to-be/#post-heading. An interesting and very readable anonymous posting by an electrical engineer in the industry is here, https://www.reddit.com/r/fusion/comments/10buldl/what_are_the_biggest_hurdles_facing_companies/

4 https://energy-counsel.com/wp-content/uploads/2023/08/World-of-Hurt.pdf; https://energy-counsel.com/wpcontent/uploads/2022/05/We-are-Going-to-Need-a-Plan-B-RTO-Insider-5-10-22.pdf A recent Economist article on the Antarctic ice melt also sounds the alarm, https://www.economist.com/interactive/science-andtechnology/2024/03/27/antarctica-earths-largest-refrigerator-is-defrosting

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Calif. Clean Transportation Program Needs Equity Emphasis

California’s funding of zero-emission vehicle (ZEV) infrastructure must be more equitably allocated to disadvantaged communities, according to advisory committee members for the state Energy Commission’s (CEC) Clean Transportation Program Investment Plan.  

“We have the highest prevalence of asthma in Imperial County in comparison to the rest of the state of California and the rest of the nation. … From the moment we arrive here, we are persistently assaulted … with carcinogens and irritants that are causing respiratory problems and cancer,” committee member Luis Olmedo, executive director of the nonprofit Comite Civico del Valle, told NetZero Insider. “For that reason, it is extremely important that we transition to net-zero transportation and the net-zero economy as swiftly and as quickly as we possibly can.”  

Details of the Clean Transportation Program were discussed at a June 7 meeting hosted by the CEC, where industry experts grappled with how best to spend the almost $100 million available annually.  

“How do we spend our money wisely to accelerate zero-emission transportation and do it in a way that’s very attentive to equity?” CEC Commissioner Patty Monahan said at the meeting. “We need to ensure that Californians who are too often left behind in the transition to clean energy and left behind in terms of facing disproportionate burdens of air pollution, we need to make sure those communities benefit.” 

Established in 2008 and recently extended through July 2035 under Assembly Bill 126, the Clean Transportation Program promotes accelerated development and deployment of ZEVs and related infrastructure to meet California’s goal of electrifying 100% of passenger vehicles and drayage trucks by 2035 and 100% for medium- and heavy-duty trucks by 2045. It receives an annual investment of up to $100 million using funds collected from vehicle and vessel registration, license plate and smog abatement fees.  

Through 2023, the program was responsible for installing or planning more than 33,300 chargers for ZEVs, creating block grants to incentivize light-duty EV charging infrastructure projects, and allocating funding for 96 publicly available hydrogen fueling stations. It also awarded more than $107.4 million in ZEV infrastructure incentives to 190 projects through the nation’s first commercial vehicle fleet incentive project, called Energy Infrastructure Incentives for Zero-Emission Commercial Vehicles, and more.  

The CEC provides an annual investment plan update that guides the allocation of program funding for transportation solicitations for the upcoming fiscal year. Proposed investments for 2024/25 totaled $1.52 billion with the addition of National Electric Vehicle Infrastructure program funds, according to Benjamin Tuggy, Clean Transportation Program Investment Plan project manager at the CEC. Of that total, $656 million is allocated to light-duty charging infrastructure, $810 million to medium- and heavy-duty charging, $46 million to “emerging opportunities” and $3 million to ZEV workforce development.  

The CEC requires that more than 50% of funds go to projects that benefit low-income or disadvantaged communities. The Communities in Charge program, which is run by CALSTART and deploys Level 2 chargers, provided $68 million over two funding windows, all of which went to projects in disadvantaged communities, Marissa Williams, a supervisor in the CEC’s Fuels and Transportation Division, said during the meeting.  

Additionally, the CALeVIP 2.0 program, which is administered by the Center for Sustainable Energy and deploys DC fast chargers, also distributed $68 million, with a requirement that all projects be in disadvantaged communities.  

‘Equity Equals Capital’

But despite the emphasis on equity, some advisory committee members said disadvantaged communities still weren’t being adequately considered. Olmedo told NetZero Insider that while funding is being allocated to low-income communities, it often goes to those in metropolitan areas “where the market is,” creating EV deserts in rural communities like his own.  

“We have a lot of EV deserts in California. Companies aren’t going to go and invest there because the market isn’t there,” Olmedo said at the meeting. “The other thing that makes it even more challenging is when you have other state agencies like GO-Biz [Governor’s Office of Business and Economic Development] directing developers to go where the market is and specifically where they have adopted a streamlined permitting process. So, these programs are working against each other to continue to make it more difficult for these EV deserts to thrive.”  

Olmedo pointed to legislation that requires permitting agencies to develop a streamlining mechanism, saying it is well intentioned but creates unintended barriers for low-income communities that may not have an internal permitting agency or the staff and resources required. GO-Biz created a map that shows which cities have streamlined permitting processes, signaling developers to “go there,” Olmedo said. 

“That communication is what we characterize as redlining in our communities, making it harder when you’re signaling to developers not to come here. You’re creating an EV desert” he said. “There’s a lot of times a misalignment in communication between the Energy Commission, who’s like ‘Hey, let’s build, build, build,’ and then GO-Biz … saying, ‘Yes, build, but build over there.’ So, that became very problematic.” 

In an interview with NetZero Insider, advisory committee member Rev. Dr. Charles Dorsey described how state efforts to distribute funding for clean transportation or other resources don’t adequately consider disadvantaged communities. In particular, he pointed to problems with the state’s processes around requests for proposals, which pit disadvantaged communities against bigger organizations that have won awards in the past.  

“The structure and the requirements of the proposal automatically create barriers for companies that are led by people of color,” he said. “You have a limited number of contractors who can actually equitably apply.”  

“They believe that just by putting the proposal out, that it is equal competition. It is not. Because they designed the proposal without considering the barriers that are already in place,” Dorsey said.   

Both Olmedo and Dorsey think the state should better address inequities built into its processes. Olmedo emphasized the importance of including more nonprofits in the process instead of prioritizing for-profit companies that can make money quicker. He noted at the meeting that Comite Civico Del Valle was one of the first nonprofits to receive funding from the CALeVIP 2.0 grant program, which says “a lot about how the state has been wrong in how it has prioritized its investment.”  

“If you go to rural communities, you’re not going to make a profit in the next three years,” he said. First, you [have to] create reliable EV infrastructure, and then disadvantaged, low-income communities can take the risk of buying an electric vehicle. Because you have less income, you can’t risk not having reliable infrastructure, because that might mean you don’t get to work on time. That might mean that by the end of the day, you don’t have a job.”  

Collaborating with nonprofits and investing in a three-to-five-year plan can create a market in rural communities that ultimately will help California meet its decarbonization goals, Olmedo said. He’s optimistic the Clean Transportation Program will bring EV infrastructure to rural, disadvantaged areas, as long as enough money is invested.   

“What we need is capital, and we need to make that a commonly used term whenever we talk about disadvantaged communities,” Olmedo said in the meeting. “Don’t give us more paper. Don’t give us more education. Yes, that is necessary, but equity equals capital, and these programs need to be designed to bring equity and capital into these rural clean transportation deserts.”  

While many advisory committee members at the meeting said the allocation of the $1.52 billion was appropriate, Dorsey emphasized he won’t know until there’s a formal process in place to overcome investment barriers for disadvantaged communities.  

“When you ask me if the spread is right, you’re also asking me if the process is right,” Dorsey said. “And I can’t answer that question.” 

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Stakeholder Soapbox: A New Twist on Capacity Markets in Japan

Reliability is a global problem that requires local solutions. For more than 15 years, PJM’s solution has been its forward-looking capacity market, the Reliability Pricing Model. Meanwhile, on the other side of the world, Japan recently enacted major reforms to its energy system. Those reforms have included a PJM-inspired capacity auction first held in 2020 for the 2024 delivery year and a related long-term decarbonized power resource auction inaugurated this year. 

Japan’s energy reforms are of increasing importance globally, including to U.S. companies and investors. A weak yen has spurred investment in Japanese energy projects, and foreign- and U.S.-owned energy companies have started winning major capacity contracts in Japan’s new system. Recent developments in Japan have revealed, however, that its market differs in significant ways from those in the U.S. — including from the very PJM capacity market on which Japan modeled its own. 

A Modified PJM Capacity Market in Japan

When Japan embarked on its energy reforms, it formed a study group to examine foreign capacity markets, including PJM’s, and to make a proposal for how best to ensure long- and midterm reliability in its energy markets. Ultimately, the study group concluded a capacity market similar to PJM’s model (and the model used in the U.K.) would work best. 

The capacity market system Japan ultimately adopted shares the same basic structure as PJM’s. It is presided over by a private transmission organization called the Organization for Cross-Regional Coordination of Transmission Operators (OCCTO). Like PJM, OCCTO runs a centralized capacity auction where generation resources offer to sell capacity for a price, and the auction’s clearing price is ultimately set at the point where supply and demand curves cross. 

There are, however, several key differences between Japan’s market and PJM’s. For example, unlike PJM’s system, participation in OCCTO’s capacity market is never required for participation in Japan’s wholesale electricity markets.  And unlike PJM, OCCTO does not administer the wholesale electricity market itself: Another organization, the Japan Electric Power Exchange, does. 

Perhaps most critically, OCCTO’s and PJM’s systems are different because they are governed by different legal frameworks. OCCTO is authorized and governed by Japan’s 2015 amended Electricity Business Act, while PJM (like other U.S. RTOs) is governed by the Federal Power Act. Those laws impose materially different restrictions, based on different national policies. The FPA, for example, embraces what U.S. courts have long called the filed-rate doctrine, which forbids retroactive rate changes. That prioritizes pricing predictability, even when doing so may result in higher-than-necessary consumer prices. Japan, by contrast, has not adopted the filed-rate doctrine; it has prioritized lowering consumer prices instead. 

A Focus on Reducing Prices

Japan’s focus on reducing prices has been especially clear in its management of its new capacity markets. Since the first capacity auction in 2020 yielded prices far higher than expected, Japan’s energy regulator — the Electricity and Gas Market Surveillance Commission (EGC) — has been on the lookout for ways to ensure that OCCTO’s capacity auction prices remain as low as possible. That has been especially clear in the EGC’s handling of the 2022 capacity auction for the 2026 delivery year. 

First, after the 2022 auction closed but before results were announced, the EGC discovered that one capacity supplier’s offer was too high because of a mistake. In consultation with OCCTO, the commission took the unprecedented step — one that no statute or auction rule permitted — of requiring that the offer be corrected and the resulting capacity price for all participants be changed accordingly. 

Second, this year, the EGC discovered another “misbidding” mistake — this time, after the 2022 auction results had been announced and the supplier had been awarded a contract. The commission and OCCTO promptly announced that they would amend the supplier’s contract to reduce the contracted capacity price. Recognizing that such a change was also unprecedented, the organizations emphasized that such an adjustment should be made only when the resulting capacity price would be lower, to protect consumers. 

Will Japan Adopt Something Like the Filed-rate Doctrine?

Japan’s energy and capacity markets are, in many ways, still in their infancy. Japan might still develop or adopt something akin to the filed-rate doctrine, or it might reject the doctrine expressly. Either way, Japan cannot help but recognize that market forces demand some degree of pricing predictability. Even in the recent misbidding investigations, for example, Japanese regulators showed they are sensitive to the same concerns that motivate the filed-rate doctrine. They could have undone the entire 2022 capacity auction this year after they discovered that misbidding affected the clearing price, but they did not. Instead, they amended only the responsible supplier’s contract while recognizing that amending such established contracts should be a rare event — one limited to situations where it will protect consumers without destabilizing market expectations. 

Even without a formal filed-rate doctrine, in other words, Japan’s capacity markets are not the Wild West. Japan cannot make reneging on capacity prices a habit, because participation in the capacity markets there is entirely voluntary. To incentivize participation and ensure reliability for consumers, if nothing else, Japan will need to safeguard the predictability of prices once they are set. Whether it will formally adopt the filed-rate doctrine, or something like it, in the years to come remains to be seen. 

 

Eri Akiyama is an attorney with Nagashima Ohno & Tsunematsu with a practice that includes energy and other complex civil litigation. She served as an international associate at MoloLamken LLP in New York from September 2023 to June 2024. 

Jennifer Fischell is a partner at MoloLamken with a practice focusing on energy and complex civil litigation, administrative law and appeals. She has clerked for judges at all levels of the federal judiciary, most recently for U.S. Supreme Court Justice Elena Kagan. 

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Clements Says Order 1920 Will Help States, not Usurp Authority

WASHINGTON — FERC Commissioner Allison Clements said last week that Order 1920 will make it easier for states to address the changes facing the industry. 

Rehearing requests have come into FERC, and some states are argue the commission cannot impose the new transmission planning and cost allocation rules on them, Clements said at the annual meeting of the Energy Bar Association’s Northeast Chapter. The issue of states having the authority to protect their consumers from costs of external policies drove Commissioner Mark Christie to dissent from the order, which Clements and Chair Willie Phillips responded to in a concurrence. (See FERC Issues Transmission Rule Without ROFR Changes, Christie’s Vote.) 

“Good luck to the states who think they’d be better off going at this alone. Good luck to the economic development opportunities that your state faces. Good luck to the health and safety of your citizens in extreme weather,” Clements said. “I mean, I don’t know that there’s any other way to get there besides all the solution sets, and regional transmission and inter-regional transmission has to be at the top of that list, at least in the FERC-jurisdictional bucket.” 

The changes ultimately are an incremental step from what FERC did more than a decade ago in Order 1000, and it rests on a firm legal framework, Clements said. It should stand up in court in the face of any appeals. 

“The reality is that this money is getting spent every year anyways, $20 [billion] to $40 billion a year on annual spending on transmission,” Clements said. “It has to be the commission’s responsibility to try and direct that money towards more cost-beneficial outcomes for customers.” 

Along with Order 1977 implementing the commission’s rules on National Interest Electricity Transmission Corridors, and Order 2023 that revised interconnection queue rules, 1920 is meant to help address the rapid changes the industry is facing from new demand to a changing resource mix, Clements said. 

“I think the whole time I’ve been here, I’ve been focused on what I set out to do in this role, which is to facilitate affordable and reliable electricity as the world around us changes,” Clements said. “It’s not our job to dictate where the world goes; it’s our job to facilitate affordable and reliable electricity service in light of where it’s going.” 

Until this year, load growth in most of the country had been flat, but that has changed with new demand from data centers, reshoring manufacturing and ongoing efforts at electrification. It’s unclear how much demand will grow, even in the near future, she said. 

“I don’t think we know that it’s going to be a 5% increase in U.S. consumption in the next five years,” Clements said. “We can estimate that; we can model that; we’re sure to be wrong.” 

The new demand is cropping up in specific areas, and potential shortages are going to occur only part of the year, but investments to bolster the grid are likely to be “low regrets” for the near future, she added. 

“I think we’re not yet at the point where we need to start worrying about the ‘no one’s going to show up,’” Clements said. “The top thing I hear from companies, whether it’s tech companies or advanced manufacturing companies, is that we are shopping for location, with the No. 1 priority being, ‘where is there available capacity on the grid?’” 

The low-regrets case is bolstered by the fact the grid has plenty of room for improvement with advanced grid-enhancing technologies (GETs) that can affordably make the existing system more efficient, she said. The Brattle Group estimates such technologies could double the amount of renewables online now absent major investment in new transmission, but even if the reality is half that, GETs are a worthy investment, Clements said. 

Clements will step down this month after the open meeting June 27, having served three and a half years. Her replacement, Judy Chang, was confirmed by the U.S. Senate the same day she spoke. 

“It has flown by for me, personally. I’m not sad for it to be over for my sake and my family’s sake,” Clements said. “But … all of the work we’re doing is pretty important. You know, I’m really proud of helping to establish our first Office of Public Participation. I think it’s a really long row to hoe to think that you’re going to actually engage members of the public in our esoteric, technocratic conversations, but we’re on our way.” 

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Texas Supreme Court Rules for ERCOT, PUC During Uri

The Texas Supreme Court has ruled ERCOT and the Public Utility Commission were within the law when they raised wholesale prices to more than 300 times above normal during the deadly February 2021 winter storm that came within minutes of bringing down the grid.

The high court on June 14 reversed a state appeals court’s ruling that the PUC’s order to raise wholesale prices to their $9,000/MWh cap during Winter Storm Uri violated state law.

The Supreme Court said the commission met the requirements of the Public Utility Regulatory Act’s (PURA) Chapter 39 — added when ERCOT was opened to retail competition — when it issued the emergency orders in a desperate effort to bring generation back online to meet demand. It also found that the commission “substantially complied” with the Administrative Procedure Act’s procedural rulemaking requirements (23-0231).

“The [PUC] has the expertise to manage the electric utility industry; the courts do not,” Chief Justice Nathan Hecht said, writing for the 7-0 majority. (Two justices recused themselves.) “The Court of Appeals thus strayed from its lane by inquiring whether the orders could have used ‘competitive rather than regulatory methods’ to any greater extent than they did.”

The Texas 3rd Court of Appeals in March 2023 reversed the PUC’s emergency orders and raised the issue of repricing the market transactions during the storm. The court found the commission’s actions “entirely” eliminated competition and were contrary to state law. (See Texas Court Reverses PUC’s Uri Market Orders.)

Luminant initiated the proceeding after it incurred $1.6 billion in losses when forced to buy backup power at the system cap and gas supplies at equally exorbitant prices. (See Vistra’s Winter Storm Loss Deepens to $1.6B.)

The PUC argued that Luminant’s ability to recoup its losses in the administrative proceeding was speculative because ERCOT does not maintain a fund of money.

ERCOT “just facilitates market transactions — and any payment would come out of the pocket of other market participants,” the high court said. “Essentially, the commission’s argument is that the egg cannot be unscrambled.”

The court noted that Chapter 39 directs the PUC to establish protections entitling customers “to safe, reliable and reasonably priced electricity, including protection against service disconnections in an extreme weather emergency.”

It said the law also “expressly” directs ERCOT to “ensure the reliability and adequacy of the regional electrical network” and gives the commission “complete authority” to ensure that ERCOT adequately performs that duty, including rulemaking related to the grid’s reliability.

The Supreme Court heard oral arguments in January. (See Texas Supremes Hear Arguments Over Uri’s Prices.)

When the PUC issued its directive to ERCOT on Feb. 15, 2021, the grid operator’s algorithm was setting prices as low as $1,200/MWh, even though generation was dropping offline. Under ERCOT’s market construct, prices are designed to increase during scarce conditions to incentivize more generation to come online.

The problem was there wasn’t enough generation during the first two days of the storm because of frozen equipment or lack of fuel supplies. ERCOT kept prices at the $9,000 cap — since reduced to $5,000 — until Feb. 19, resorting to rolling blackouts to keep the grid stabilized.

The emergency order resulted in $16 billion of market transactions that ERCOT’s Independent Market Monitor said were incorrectly priced during the 33 hours that followed the end of firm load shed. The PUC declined to reprice the transactions. (See “Monitor: $16B ERCOT Overcharge,” ERCOT Board Cuts Ties with Magness.)

Some of the $16 billion balance has since been securitized. Other transactions have been settled outside ERCOT and can’t be undone, according to legal experts.

The court also dismissed a lawsuit by RWE Renewables Americans and an RWE wind farm, finding that the 3rd Court of Appeals did not have jurisdiction over the proceeding (23-0555).

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SPP’s REAL Team Approves Base PRMs, Sufficiency Value Curve

SPP’s Resource and Energy Adequacy Leadership (REAL) Team approved a proposed tariff change June 13 that would codify its work and some votes over the past six months.

The revision request (RR622) would set separate base planning reserve margins (PRM) at 36% and 16% for the winter and summer seasons, respectively, effective with the 2026 summer. It would also clarify that the sufficiency valuation curve is effective for three years, beginning at the same time.

“I think it dawned on us, and probably a number of you in the room, that it wasn’t exactly clear,” Casey Cathey, SPP vice president of engineering, told the REAL Team.

The tariff change would also implement the 2023 loss-of-load expectation study that determined the appropriate PRMs for both seasons.

The Market Monitoring Unit (MMU) offered cautious support for the change, saying it supported the 36% and 16% PRMs and the sufficiency valuation curve’s extension. However, it also recommended that SPP continue to monitor generation’s performance during the next winter storm “and the one after that.”

“We see those as a minimum that should be approved,” the MMU’s John Luallen said, referring to the PRMs. “But with that said, I want to point out that in the last three winter storms, SPP found [itself] in a situation where they could not serve their load with accredited capacity. They had to rely on non-accredited capacity and on imports.”

The Monitor’s concern is what’s not in RR622, Luallen said. He said the sufficiency valuation curve lowers the deficiency payment, which, combined with a cost-of-new-entry value that the MMU believes is not quite accurate, could be sending the wrong market signals.

“If [the CONE]’s not updated for another four years, it will be even further from accurate,” Luallen said. “In our mind, it discounts an already discounted number, which is fine except that if the deficiency penalty gets low enough, then it could not have the signal that it needs for [load-responsible] entities to get the capacity. They could choose to just pay the penalty instead. So, we’re concerned about the signal this could be sending.”

The REAL Team approved the package 9-4. American Electric Power, Arkansas Electric Cooperative Corp., the Oklahoma Corporation Commission and the Oklahoma Municipal Power Authority provided the opposing votes, mirroring their votes on the related policies.

Looking ahead, the team’s workload includes ramping resource adequacy, an issue heightened by the increasing addition of intermittent renewable resources.

“What is ramping capacity?” SPP’s Charles Hendrix asked by way of explanation. “As load is increasing or decreasing, can your resources follow that load?”

“There’s a lot of data out there, but here’s what’s happening in real time,” Cathey said, using a graph of forecasted wind and solar resources to make his point. “We’re trying to figure out ways to incent and better value ramp.

“It should not be alarming to LREs in terms of what the system needs today. We have enough rampable capacity today. The question is, how long can we sustain it? Does it send a strong signal around dispatchable resources?” Cathey added. “That’s part of the reason we’re trying to add this requirement.”

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Survey to Begin for Planned Calif. Floating Wind Farm

An autonomous underwater vehicle will soon slip out of sight off the north California coast, mapping thousands of acres of seabed as a first step toward construction of the floating wind farm envisioned there. 

The data gathered in the coming months will give a better picture of the ecosystem in the lease area and any obstacles, hazards or sensitive sites that lurk a half mile or more below the surface. And it will inform RWE when it puts together a construction and operation plan for the 1.6-GW project it has named Canopy Offshore Wind Farm. 

The site characterization surveys are similar to the early-stage work the German company has done for its 19 existing offshore wind facilities with one key exception: Lease Area OCS-P 0561 is 1,760 to 3,400 feet deep.  

RWE has contracted with Norwegian firm Argeo to survey the depths with one of the fluorescent-painted uncrewed micro-submarines that it also uses for offshore oil, gas and mineral applications. It will arrive on site this month. 

A third of a century after the first commercial offshore wind farm came online, more than 70 GW of capacity is installed worldwide, almost all of it firmly affixed to the seabed with a rigid foundation in shallow water.  

RWE is one of many companies and governments trying to extend the success of fixed-bottom wind to floating wind in deeper water — it launched a 3.6-GW tubular steel demonstrator off Norway in 2021 and a 2-GW twin-hull concrete demonstrator off Spain in 2023. 

RWE is preparing proposals in France, Norway and the United Kingdom, but it expects Canopy Wind to become its first operational floating farm sometime in the mid-2030s. 

Project Director Rob Mastria spoke to NetZero Insider on June 13 with a look at what is ahead.  

The underwater work starts this month with the geophysical survey. 

The autonomous underwater vessel glides about 130 feet above the seabed, using sonar to avoid obstacles and using a digital camera to make a photographic mosaic of the environment where the turbines would be moored and where the export cables would run. 

The geotechnical survey gets right down to the bottom, using equipment that collects sediment samples and biological information. 

Subsequent research and design work will build on the results of these two surveys. 

Back on land, different work is being done. 

“We need to really have two major focus areas,” Mastria said. “The first is building relationships and collaborating with the local community in the Humboldt area and tribal nations, trying to make sure we develop those points of connections and relationships so that we can share information back and forth. The second pillar is really working on the market development in California.” 

As elsewhere, there has been pushback against offshore wind on the West Coast because of feared impacts on the scenery and fishing industry, and developers are working to overcome this. They also need to help create a supporting industrial and infrastructure ecosystem that does not now exist. (See West Coast OSW Will Require Robust Supply Chain.) 

RWE, which bid $158 million for its 63,338-acre California lease in a 2022 auction, looks internally and externally to build the confidence to make these investments, Mastria said. 

“It’s a combination of believing in floating, knowing that there’s vast opportunity in the future for it because there’s only so much area in shallow water depths that can be used, but it also comes down to what I’ll call market signals,” he said. 

“We have a federal policy of wanting to have 30 GW of offshore wind by 2030. California has its own state targets for offshore wind, 25 GW by 2045.” 

He added: “California has always been a leader in the climate change space and wanting to really incorporate renewable energy into the grid there. This is a technology that can play a major role in helping California meet its clean energy goals.” 

The long development timelines for Canopy and wind farms in the four other lease areas along the California coast give some room to prepare the transmission, manufacturing, workforce and port facilities needed for the new industry, Mastria said.  

The company has already taken steps in that direction: The protected species observer training program it put together graduated a class of 19 area residents in April. These people or others certified in the task will be on duty on vessels around the clock while underwater survey work is in progress, watching for marine mammals in the vicinity. 

RWE is the only wind power developer to hold leases off all three mainland U.S. coasts: Atlantic, Pacific and Gulf of Mexico. The underwater, political and market conditions are different in each, just as fixed-bottom and floating wind are different from one another, creating three distinct sets of hurdles to clear. 

But RWE frames the question as how to build a wind farm, Mastria said, not whether it is possible. 

“We have a ton of experience, and we know that this works,” he said. “We have, in addition to our projects, a global floating team. So that’s a team that focuses on advancing floating technology, doing assessments to monitor the state of the market and how the technology solutions are developing.” 

Mastria has worked 16 years in the renewable energy industry, the past four of them in offshore wind. Notably, he was project development director for New York’s South Fork Wind, which this year became the first utility-scale offshore wind farm completed in U.S. waters. 

South Fork is a bright spot in the Northeast offshore wind industry, where most projects have canceled contracts or been canceled altogether since early 2023 due to rising costs and supply chain constraints. 

Most of the affected Northeast proposals remain in active development, but advancing to construction will take longer and cost more, in most cases. 

Among the casualties has been Community Offshore Wind, RWE’s two-phase joint venture with National Grid Ventures.  

In the past 12 months: 

Community’s 1.3-GW Phase 1 contract with New York had to be spiked when General Electric halted development of an 18-MW turbine. (See NY Offshore Wind Plans Implode Again.) 

New York “waitlisted” the 1.3-GW Phase 2 proposal so the state could concentrate on getting two mature projects back into the pipeline after they balked. (See Sunrise Wind, Empire Wind Tapped for New OSW Contracts.) 

The partners withdrew a 1.3-GW proposal in New Jersey when the financials did not pencil out. (See NJ Awards Contracts for 3.7 GW of OSW Projects.) 

A recurring theme in the early stages of West Coast offshore wind development has been the need to avoid the setbacks seen on the East Coast. (See Strategy Offered for Success of Future West Coast OSW Sector.) 

Mastria offers the same message. 

“One of the things that I try to do is bring the experience from what has been done on the East Coast to try to make sure that the way we set up how offshore wind will work on the West Coast learns from those experiences on the East Coast and smooths the way based on the experiences that the industry has had,” he said.