ERCOT Delays In-person Meetings Until 2022

ERCOT has delayed the return of in-person stakeholder meetings until 2022, citing recent increases of cases of the COVID-19 Delta variant and the grid operator’s upcoming move to a new headquarters facility in Austin, Texas.

The grid operator said it expects to resume in-person gatherings with the Technical Advisory Committee’s meeting Jan. 26. The TAC get-together is scheduled to be held in ERCOT’s new facilities in the MetCenter business park.

In a market notice sent to members and market participants last week, ERCOT said it had determined “that it is prudent and reasonable to delay resumption of in-person stakeholder meetings.”

ERCOT had planned to resume in-person meetings in September.

MISO Fined $500,000 for CIP Violations

ReliabilityFirst has assessed MISO a $500,000 fine for violating critical infrastructure protection standards.

The violations’ details are scant. The regional entity and RTO reached a settlement in late July after confidential talks.

Keri Glitch, MISO’s chief information security officer, said all but one of the violations were discovered over the course of a regular assessment of business operations that covered 2017 to 2019. MISO self-reported nine of the violation’s 10 issues, she said.

Glitch said none of the issues put the RTO’s security at risk.

“Because of the confidentiality, MISO is limited in what it can say,” Glitch said during an Aug. 18 Advisory Committee teleconference. “All of the compliance issues have been remediated, and there was no security threat.”  

MISO will spread the penalty across market participants on a pro rata share for the operating days when the violations occurred. Glitch said all recovery is planned to take place this year.

The penalties are being assessed under the MISO tariff’s Schedule 34, “Allocation of Costs Associated with Reliability Penalty Assessments.” The provision allows staff to assign penalty costs to members if NERC or an RE finds that they “directly contributed to or were a root cause(s) of a confirmed violation.”

Most members will be charged $500 to $8,000, Glitch said. The largest assessed penalty will be $24,000.

Glitch said MISO has only one previous fine, of $79,000, over the last decade.

“NERC enforcement is getting tougher, and the penalties are getting larger,” Glitch said. “We were not provided any details of how the fine was actually calculated.”

“We did our best to provide as much information as we could but still stay within those bounds of confidentiality,” the grid operator’s chief customer officer, Todd Hillman, told members.  

MISO offered no other comment about the violations. 

MISO Central Tx Projects Face $2B in Upgrade Costs

A group of generation projects in the MISO Central planning region has amassed an eye-popping $2 billion in network upgrades.

The cluster of 102 projects, representing 15.7 GW of capacity, entered the generator interconnection queue in 2019 and will need $1.9 billion in upgrade costs to synch to the grid, MISO planners said during a Central Subregional planning meeting on Aug. 17. The Central planning region contains portions of Missouri, Illinois and Indiana and part of Kentucky.

Solar and wind projects account for the bulk of the cluster. Hybrid resources, storage facilities paired with onsite renewable generation, are also included.

MISO engineer Miles Larson said the upgrade costs will dwindle as more developers in the 2019 schedule reach decision points and cancel their project plans.

“You’re going to see this number continue to drop for the rest of the study cycle,” Larson told stakeholders.  

Historically, only about 20% of generation projects that enter the queue eventually connect to the MISO system. The grid operator completed a record number of interconnections the past two years, bringing about 10 GW of capacity online both years.

Stakeholders pointed out that the Central 2019 cycle’s upgrade costs account for about half of those in MISO’s 2021 Transmission Expansion Plans (MTEP 21). The portfolio contains 368 projects costing $3.4 billion. The Central region accounts for 95 of the projects at about $590 million, but upgrade costs in the queue are separate from the MTEP’s annual transmission spending.

The GI queue currently contains 552 projects representing 83 GW of capacity. Staff is still processing interconnection requests from a July application deadline that are all but certain to send the queue ballooning to the 100-GW highs seen in 2020.

“We have every indication that we’re going to have a large study cycle,” Larson said. He also predicted high upgrade costs for the Central region’s 2020 batch of projects.

MISO’s Central region currently contains the most active projects in the queue at 222. They could add an additional 36.4 GW of capacity to the region.

The Central project count nearly doubles that of the East (119 projects, 15.7 GW). MISO South has 99 project hopefuls representing 14.5 GW of capacity. The West planning region — often criticized for its inadequate transmission capacity that hinders new generation — contains the fewest projects with 94, accounting for 13.7 GW.

Oregon Study to Examine Benefits, Risks of RTO Participation

Oregon’s Department of Energy (ODOE) is seeking input from power industry stakeholders to help produce a study that could convince lawmakers to obligate the state’s utilities to participate in an RTO.

The effort comes on the heels of the passage of Senate Bill 589, which requires the department to prepare a report outlining the “benefits, opportunities and challenges posed by development or expansion of regional transmission organization” in Oregon.

In kicking off the initiative last month, the ODOE appointed an Oregon RTO Advisory Committee to help guide the process. The committee includes representatives from the state’s two investor-owned utilities (Portland General Electric and PacifiCorp), consumer-owned utilities, independent power producers, the legislature, the governor’s office, organized labor and environmental groups.

The department took its second step last week by creating a portal on its website to solicit opinions and expertise from a broader sweep of stakeholders and residents. The questionnaire begins with a survey asking respondents to share their opinions about the top benefits and challenges of developing an RTO for Oregon. It then poses a series of “foundational” questions that seek stakeholders’ insight into:

  • any legal barriers Oregon entities might face in joining an RTO;
  • whether Oregon’s net benefits from an RTO might be greater or less than those benefits identified in previous technical analyses, and whether further analysis is needed;
  • what costs retail customers might assume from utility membership in an RTO — and how those costs might be balanced against benefits; and
  • what core principals should guide the state’s evaluation of joining an RTO.

A series of technical questions asks respondents to share their thoughts on:

  • transmission rates and revenues in an RTO;
  • transmission planning and operations, including generator interconnection processes, planning and expansion, and cost allocation;
  • potential benefits or consequences with respect to renewable resources, including deployment, location and impacts on in-state manufacturing of clean energy technologies and related jobs; and
  • possible environmental impact from an RTO, such as changes to the dispatch of thermal generating units and the challenges from greenhouse gas accounting over different regulatory regimes.

The questionnaire additionally seeks input on RTO governance design, asking participants to identify best practices and to consider how a governance structure would ensure “meaningful” state oversight and protections for retail customers. The survey concludes with questions about the best market design, alluding to examples such as the real-time Western Energy Imbalance Market (EIM), the EIM plus a day-ahead market, a full West-wide RTO or multiple RTOs.

Responses are due by Sept. 13. The Advisory Committee will hold its first meeting Sept. 20, followed by another on Oct. 6. The ODOE expects to deliver a draft report to the committee by Nov. 24, and the final study will be submitted to the legislature by Dec. 31.

Momentum Building?

Oregon’s move to examine RTO participation is part of a growing trend among Western states. In May, Nevada lawmakers passed a sweeping energy bill (SB448) that included a provision requiring the state’s transmission owners to join an RTO by 2030. (See Colorado Utilities Examine Market Membership.) Colorado followed suit with a similar bill (SB 72) in June.

And last month the Arizona Corporation Commission asked to establish a new proceeding to investigate the “question of mandatory or voluntary participation in regional transmission organizations” by the state’s utilities. (See Arizona to Weigh RTO Membership.)

The Western power sector has for decades flirted with the idea of a West-wide RTO or subregional organized markets, but agreement has proved to be elusive in a region in which many participants are suspicious of the increased federal oversight an organized market entails and wary of any arrangement dominated by California.

In 2016, California Gov. Jerry Brown postponed CAISO’s efforts to extend its own market into other parts of the West after in-state critics expressed fears that the plan was being rushed to meet legislative deadlines, while out-of-state critics remained apprehensive of what they called a “California-centric” proposal. (See Governor Delays CAISO Regionalization Effort.)

The following year, legislators failed to pass a bill outlining mandatory steps for CAISO to follow as it pursued regionalization. (See CAISO Regionalization, 100% Clean Energy Bills Fizzle.)

Another regionalization bill, introduced in 2019, would have transformed the ISO’s governance structure from one controlled by California officials to a multistate body, addressing a key concern of Westerners reluctant to sign up to a market subject to the outsized influence of California. That bill died in committee, in part because of opposition from labor unions concerned about a loss of in-state renewable energy project construction jobs. The bill also divided environmental groups, with some — including the Sierra Club — worried that a more closely integrated market relationship with coal-burning states would compromise California’s aggressive environmental objectives. (See CAISO Expansion Bill Dies in Committee.)

But where CAISO’s regionalization efforts have sputtered, the expansion of its voluntary, real-time EIM has progressed steadily since it was launched in 2014. By 2023, it will include 21 members representing about 78% of the electricity load in the WECC area. The ISO is also working to expand the scope of the market with day-ahead trading, a measure that falls far short of creating an RTO. (See CAISO Proposal Sets Course for EIM Day-ahead.)

A recent U.S. Department of Energy-funded study initiated by Utah Gov. Spencer Cox’s Office of Energy Development in collaboration with state energy offices in Colorado, Idaho and Montana found that a West-wide RTO would yield about $2 billion on annual benefits by 2030, nearly triple the returns of an EIM day-ahead market, reducing production and capacity costs by $599 million and $718 million, respectively. (See Study Shows RTO Could Save West $2B Yearly by 2030.)

The study found that Oregon would be the third-largest beneficiary of annual benefits at $148 million, behind Washington ($351 million) and California ($319 million).

Texas RE Board of Trustees Briefs: Aug. 18, 2021

A joint inquiry on the devastating effects of Winter Storm Uri on ERCOT and other Midwest RTOs will “clearly” call for “reforms in multiple areas,” NERC CEO Jim Robb said Wednesday.

Beaming into the Texas Reliability Entity’s Board of Trustees virtual meeting, Robb said the joint FERC-NERC report will be discussed during FERC’s Sept. 23 meeting. The final report will be issued in November.

Robb said he couldn’t discuss specifics because the report is still being developed, but he allowed that one of the central themes is the electric industry’s coordination with the natural gas sector.

“Natural gas is now the critical fuel to ensuring electric reliability, and our mindset hasn’t caught up with that yet,” he said.

Other reports conducted by SPP and various Texas entities have reached a similar conclusion that the lack of coordination with the gas industry resulted in gas facilities being caught up in controlled outages. That further exacerbated fuel-delivery issues as Uri’s historic freezing temperatures shut down gas wellheads and compressor stations and restricted fuel deliveries. (See “Grid Operator Releases Report on Performance During Winter Storm,” SPP Board of Directors/Members Committee Briefs: July 26-27.)

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NERC CEO Jim Robb | Texas RE

NERC has filed its long-awaited cold weather standard for FERC approval, but that standard is based on the 2018 cold-weather event along the Gulf Coast that affected MISO and SPP.

“We fully anticipate there will be modifications to the cold weather standard,” Robb said.

On Tuesday, NERC released its annual State of Reliability Report on the bulk electric system. The report focuses on system performance trends and emerging reliability risk, the health of the interconnected system and measures the success of NERC’s mitigation activities. (See NERC: Extreme Weather, Resource Changes Cause Mounting Concern.)

While Robb said the report “underscores” cyber and extreme weather risks, it also highlighted the grid’s performance.

“We ought to step back and celebrate the fact the grid performed extremely well, despite operating under pandemic conditions,” he said. “Everything is getting better. That’s a real testament of the industry.”

Robb said Hurricane Laura — which hammered Louisiana and wiped out much of the transmission around Lake Charles — and the California wildfires accounted for much of the report’s negative numbers.

“This shows how one or two extreme events can really change the way the grid preforms and how people experience it. Next year will be another jaw-dropping indicator of that,” he said, referring to February’s winter storms. “Extreme weather is not so common. What’s different now is that the grid really needs to be planned and operated for more tail events than we have in the past.”

Texas RE Steps Up Readiness Work

Texas RE CEO Jim Albright said staff is already stepping up its readiness activities for the coming winter. On Monday, they will convene about 150 generation owners for a private discussion on winter preparations. That will be followed by a Sept. 30 winter weatherization workshop with ERCOT staff.

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Texas RE CEO Jim Albright | Texas RE

“We look at this as an opportunity to engage with the industry,” Albright said. Noting parallel work taking place at ERCOT, the [Texas] Public Utility Commission and NERC, he said, “We’re in this transitional period. We’re just trying to balance those [workstreams] and be informed.”

Staff also plans to schedule an event when the federal inquiry into February’s events is released in November.

“We want go out in front of folks and walk through it with them,” General Counsel Derrick Davis said.

Mark Henry, Texas RE’s director of reliability services, said staff has visited 31 generation sites this summer and shared summer readiness tips.

Ransomware Attacks a Growing Threat

Manny Cancel, a senior vice president at NERC and CEO of the Electricity Information Sharing and Analysis Center (E-ISAC), briefed the board on his organization, which was created in 1999 as a resource center to help members prepare for and reduce cyber and physical security threats to the North American electricity industry.

He said the “volume and velocity” of recent ransomware attacks is “overwhelming.”

“The good news is, we’re providing timely and actionable information,” Cancel said. E-ISAC “discourages paying a ransom,” he said, “but sometimes, that’s not possible.”

His worry? That smaller cooperatives and municipalities don’t have larger companies’ ample resources to counter cyber threats.

PUC’s Glotfelty: ‘No Looking Back’

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Jimmy Glotfelty, Texas PUC | Texas RE

Other guests during the board meeting included NERC Trustee and Vice-Chair Bob Clarke; Chris Ekoh, interim public counsel for the Office of Public Utility Counsel; and Jimmy Glotfelty, the PUC’s newest member.

“I’ve been drinking out of a fire hose with the events of February and all the dockets here at the commission,” Glotfelty said. “It was so surreal when I got appointed. I was nominated on Friday, sworn in Tuesday, and approved by the [state] Senate on Wednesday. There’s no looking back now.”

Texas RE Chair Tabbed for Another Term

The board’s nominating committee said it has recommended Chair Milton Lee be nominated for another three-year term on the board. Lee’s nomination will be considered in December.

Lee is the only board member whose term is expiring this year.

“There was a robust discussion about how valued Milton Lee is,” Director Suzanne Spaulding, the committee’s chair, said.

Southern California Edison to Install 4,500 Miles of Covered Conductor

The California Public Utilities Commission approved a major rate hike for Southern California Edison on Thursday, much of which will pay for the utility’s plan to install 4,500 miles of insulated wire in high-risk areas to prevent its equipment from igniting wildfires.

The proposal would be the largest rollout of overhead covered conductor so far in the state’s efforts to prevent catastrophic blazes. The CPUC approved $3.3 billion in spending on SCE’s Wildfire Mitigation Programs, nearly $2 billion of it for the covered conductor project.

“The Wildfire Covered Conductor Program is SCE’s primary grid hardening wildfire mitigation solution in this [general rate case], representing over 90% of SCE’s capital expenditure forecast for wildfire management,” Administrative Law Judge Sophia Park wrote in her proposed decision, which commissioners unanimously adopted.

In its rate case, SCE sought to deploy 6,272 cumulative miles of covered conductor between 2019-2023, or 60% of its overhead conductor circuit miles, in its Tier 2 and Tier 3 high fire-risk areas at a total cost of $3.4 billion, Park noted.

The Utility Reform Network and others objected to the proposal as unnecessarily costly and expansive.

In response, Park scaled back SCE’s proposal to 4,500 circuit miles.

“The deployment of 4,500 circuit miles would address 98% of the wildfire risk in SCE’s [high fire-risk areas] at a cost that is $1.5 billion less than SCE’s request,” she wrote.

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Insulated lines run above an arid, fire-prone landscape in SCE’s service territory. | Elisa Ferrari/SCE

Park allowed that more might be better, and the CPUC said in a statement following the vote that SCE could increase its covered conductor deployment if needed, subject to further review.

“This proceeding created the opportunity for the CPUC to make strategic decisions on the future of Southern California Edison’s capital investments, including grid modernization … and safety investments in response to climate change risks such as wildfires,” lead Commissioner Genevieve Shiroma said in the statement.

Lines and Fires

The effort to harden the state’s grid against wildfires has grown urgent following years of immense and highly destructive blazes started by power lines. The Camp Fire in November 2018, ignited by a fallen Pacific Gas and Electric transmission line, was the deadliest and most destructive on record.

A tree falling on an uninsulated PG&E line is suspected of starting the Dixie Fire, the second largest wildfire in state history, which is still burning in the Sierra Nevada of Northern California after more than a month. As of Thursday, the fire had grown to more than 678,000 acres and was 35% contained. It has destroyed 1,217 structures and threatens thousands more homes, the California Department of Forestry and Fire Protection reported.

PG&E, too, has plans to install insulated wires in the tinder-dry foothills and coastal ranges of its vast service territory. Its 2021 wildfire mitigation plan called for 180 miles of new covered conductor. (See PG&E Files Wildfire Plan Under Intense Scrutiny.)

Last year the CPUC approved an SCE proposal to install 600 miles of covered conductor, which at the time was unprecedented. The utility estimated the cost at $428,000 per circuit mile, including replacing wooden poles with stronger composite ones and installing fiberglass crossarms as needed. (See CPUC OKs Largest Rollout of Covered Conductor.)

To allow SCE to work toward its new goal of 4,500 circuit miles, the CPUC approved a nearly 8% increase in the utility’s 2021 general rate case and authorized a revenue requirement of $6.9 billion for operations and investments. The amount was $730 million less than what SCE had requested and will result in an average increase of about $12 in residential customers’ bills.

The decision excluded $131 million in executive pay and bonuses that the company requested.

Monitor: PJM Energy Prices Rising but Still Competitive

Energy prices in PJM increased “significantly” in the first half of 2021 compared to last year, but prices remained lower than historical levels, the Independent Market Monitor reported.

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Joe Bowring, IMM | © RTO Insider LLC

In the second quarter State of the Market report for PJM released last week, Market Monitor Joe Bowring said the load-weighted average real-time locational marginal pricing was 57.8% higher in the first six months of 2021 than the same period in 2020, coming in at $30.62/MWh versus $19.40/MWh.  Almost 92% of the increase was a result of higher fuel costs, especially higher natural gas prices, Bowring said.

The report said energy prices in the first half of 2021 remained 9.5% below the five-year average for the first six months of the period from 2015 through 2019. Energy prices were lower in 2020 than any year since PJM markets were established in 1999. (See “Prices, Load Down,” PJM Monitor Sounds Market Power Alarms.)

Despite the increased energy prices, the Monitor said, “Our analysis concludes that the results of the PJM energy market were competitive in the first six months of 2021.”

By the Numbers

PJM load increased by 5.9% in 2021 compared to the first six months of 2020, the report said, citing colder winter temperatures, hotter summer weather and the economic recovery following the disruptions from the coronavirus pandemic.

The report said the cost of transmission continued to be greater than the cost of capacity in the first six months of 2021, with the total cost of wholesale power increasing by 28%, from $43.03/MWh in 2020 to $54.97 during the same period in 2021. 2020 marked the first time since the start of the PJM capacity market in 2007 that the cost of transmission was greater than the cost of capacity for an entire year, the Monitor said.

Higher energy prices and higher gas costs have made coal units more economic so far in 2021, the report said, with the total share of PJM energy produced from coal increasing from 17.6% in 2020 to 23.5% this year. The share of energy produced from natural gas decreased from 39.2% in 2020 to 35.6% in 2021, the report said, but remained the largest segment of generation in PJM.

“The role of gas fired generation highlights the importance of ensuring that PJM has current, detailed and complete information on the gas supply arrangements of all generators and that PJM consider rules requiring capacity resources to have firm fuel supplies,” the report said. “It is also essential that FERC consider and address the implications of the inconsistencies between the gas pipeline business model and the power producer business model and the issue of market power in the gas commodity market under extreme weather conditions.”

Theoretical net revenues from the energy market increased for all unit types in the first half of the year, the report said, jumping by 69% for a new combustion turbine, 53% for a new combined-cycle unit, 3,288% for a new coal unit and 57% for a new nuclear plant compared to 2020. Total energy uplift charges increased by $55.7 million (236.8%), the report said, from $23.5 million in the first six months of 2020 to $79.2 million in 2021.

Total congestion increased by $174.2 million (97%), from $179.8 million in 2020 to $354 million in 2021. The report found that only 46% of total congestion paid by customers for the 2020/21 planning period was returned to customers through the auction revenue right and self-scheduled financial transmission right (FTR) revenues offset, while the goal of the FTR market design is to “ensure that customers have the rights to 100% of the congestion that customers pay.”

“When there are binding transmission constraints and locational energy price differences, customers pay more for energy than generation is paid to produce that energy,” the report said. “The difference is congestion. Congestion belongs to customers and should be returned to customers.”

Recommendations

The Monitor made two new recommendations for PJM and stakeholders to examine.

In the energy market, the IMM recommended that PJM calculate the probability of reserves falling below the minimum reserve requirement based on a 10-minute forecast error rather than a 30-minute forecast error and on forced outages in the 10-minute rather than the 30-minute look-ahead window if the RTO implements extended downward sloping operating reserve demand curves. The change would model the uncertainty in the inputs to real-time security-constrained economic dispatch, the Monitor said. (See FERC Approves PJM Reserve Market Overhaul.)

The IMM also recommended that units not be paid lost opportunity cost uplift when PJM directs a unit to reduce output based on a transmission constraint or other reliability issue. The report said there is no lost opportunity because a unit is required to reduce for the reliability of the unit and the system. (See “Fast-start Pricing Revisions Endorsed,” PJM MIC Briefs: Aug. 11, 2021.)

FERC Accepts NERC’s ROP Changes

FERC on Tuesday announced it has accepted NERC’s latest compliance filing from May, approving the changes it contained to NERC’s Rules of Procedure (ROP) regarding the organization’s use of All Points Bulletins (APB), and its clarification of NERC’s relationship with the Electricity Information Sharing and Analysis Center (E-ISAC). (RR19-7)

The commission ordered NERC’s compliance filing in January as a follow-up to NERC’s five-year performance review, attempting to address concerns about its information-sharing arrangement with the E-ISAC. (See FERC Orders Audits of All REs by 2023.) The changes to section 1003 of the ROP also pertain to the E-ISAC, requiring it to “share all APBs with [FERC] staff no later than at the time of issuance,” in accordance with FERC’s January order. (See NERC Clarifies Information Sharing, APBs in Compliance Filing.)

FERC’s order stemmed from NERC’s previous compliance filing in September 2020, which clarified various aspects of the APB process, including the threshold for sending the bulletins and procedures for approving them. (See NERC Files ROP Changes with FERC.) At the time, NERC said its current practice is to share APBs with FERC at the time of issuance, if not before, but the commission requested that NERC make that practice an explicit requirement.

E-ISAC Info Sharing Clarified

The rest of NERC’s compliance filing dealt with whether the E-ISAC violates registered entities’ confidentiality when sharing information with the ERO Enterprise to assist in standards development. Specifically, FERC ordered NERC to provide more clarity on its intention to use data provided by the E-ISAC in reliability gap analyses that would “determine whether any modifications to the CIP [Critical Infrastructure Protection] standards are necessary to address a security risk.”

NERC’s compliance filing in June 2020 claimed that E-ISAC personnel are generally prohibited from sharing any voluntarily reported information with non-ISAC staff at NERC, with limited exceptions. Anonymized and aggregated E-ISAC data — or data about specific companies that is publicly available through other avenues — may be used to inform development of reliability standards.

The May filing provided more detail about these information exchange procedures, along with information about their evolution. Since the information sharing was launched last year, physical and cyber security analysts from the E-ISAC have met every month with NERC’s reliability standards staff and CIP experts to discuss the “security threat landscape.” Discussions typically cover industry-wide security trends and threats or incidents from the previous month.

During these meetings, E-ISAC staff “take care to only share information consistent with the code of conduct,” such as anonymized and aggregated data.

Along with these meetings, the E-ISAC now regularly shares reports, APBs and other issuances with CIP standards development personnel; when this information concerns specific entities, it is subject to restrictions in the code of conduct. Data such as reports on specific threats or vulnerabilities “provided by [a] government partner or security vendor,” which does not concern specific entities, may also be provided.

NERC’s reliability standards development personnel use this information:

  • to advise active standards drafting teams about emerging threats that they should try to address in their work;
  • as data points for evaluating proposed changes to the CIP standards; and
  • to evaluate the overall adequacy of the CIP standards to address “emerging security threats and vulnerabilities.”

FERC noted that “no adverse comments” were received in response to NERC’s compliance filing, though requests for rehearing may be filed with 30 days of issuance of the commission’s order. Barring outside intervention, Tuesday’s order “constitutes final agency action.”

Pitching Proposals for the Budget Reconciliation Bill

A group of former campaign staffers for Washington Gov. Jay Inslee wants the federal government to pay utilities to accelerate their transition to clean energy and penalize them if they lag on mandated targets. Fifty clean energy advocacy groups and private businesses want a new investment tax credit (ITC) to help shovel-ready transmission projects get built. And the Department of Energy would settle for an extension of the existing solar ITC to help cut the levelized cost of utility-solar to 2 cents/kWh by 2030.

Congress may officially be on summer break, but Democratic lawmakers continue to work on getting the $1.2 trillion bipartisan infrastructure package and their own $3.5 trillion budget reconciliation bill ready for passage when they return. The Senate passed both bills earlier this month, which means the focus for many clean energy advocacy groups and agencies has now shifted to the House of Representatives, where progressives have been pushing for more aggressive climate and clean energy policies and spending. (See Senate Democrats OK $3.5T Spending Package After Bipartisan Accord on Infrastructure.)

While advocating for specific policies — and billions in added spending — the challenge for these groups is to avoid even the appearance of “double dipping”: using the reconciliation bill to increase funding for programs already in the bipartisan package. In a series a recent reports, briefs and letters, advocates and their allies attempt to navigate that landscape via various alternatives and new initiatives.

Clean Energy Payment Program

The Clean Energy Payment Program (CEPP), in which the U.S. government would pay utilities to decarbonize, is one of the more aggressive of the provisions in the budget reconciliation package. A report from Evergreen Action — the group of Inslee’s former campaign staffers — argues that, as a budget item, the program can be passed as part of the reconciliation bill and is needed to push U.S. emission reductions beyond the uneven progress of state and corporate commitments to clean power.

Federal incentives would also mean that utility customers would not be picking up the tab for new clean energy infrastructure or stranded fossil fuel assets, the report says.

While not mentioning specific dollar amounts, the report states a “well designed” CEPP would pay utilities “for building or procuring clean electricity at the pace and scale necessary for an 80% clean nationwide average by 2030” and 100% by 2035. Clean energy targets would vary from utility to utility, depending on size and current progress on decarbonization, with payments based on megawatt-hours of power produced with zero or low emissions, as a percentage of their overall demand.

The “clean” megawatt-hours could be produced by wind, solar and hydropower as well as geothermal, nuclear, carbon capture and other technologies, the report says. The utilities would also be required to use these “clean energy performance payments” for specific purposes, such as reducing customer bills, supporting clean energy, paying off debt on fossil assets, or investing in distribution, transmission or storage.

Utilities not meeting their megawatt-hour targets would pay penalties. Evergreen Action says the initial appropriation for the program should be $150 billion to $180 billion.

The 30C Tax Credit

Getting more money for electric vehicle charging stations into the reconciliation bill will be tricky because the bipartisan infrastructure package already includes $7.5 billion for “alternative vehicle fueling infrastructure,” $5 billion of which is specifically earmarked for EV charging.

A recent report from Third Way, a center-left think tank, calls that money a good first step that would get about 400,000 new chargers installed — not quite the 500,000 envisioned in President Biden’s American Jobs Plan and well below the 1 million chargers Third Way says are needed.

Third Way’s solution to the double-dipping dilemma is for Congress to “extend and expand the 30C Alternative Fuel Refueling Property Credit, which provides a 30% tax credit to help people install chargers in their homes and helps businesses install chargers at workplaces and in public charging locations.”

The estimated cost to the government would be $1.95 billion over 10 years, the report says.

Beyond extending the credit, which will otherwise expire at year-end, the report recommends raising the credit cap from $30,000 to $200,000 for businesses, making it per charger rather than per location and making it “refundable,” so that it could be monetized even if an individual or business does not have a tax liability.

Accelerating Solar

To meet Biden’s 2035 clean energy goals, “solar deployment would need to accelerate three to four times faster than its current rate by 2030,” which would move solar from 3% to 40% of U.S. power generation by 2035, according to a DOE brief issued Tuesday.

But getting there will require ever deeper cuts in solar costs. DOE is setting new targets for reductions in the levelized costs of energy for all solar, with residential going from just under 13 cents/kWh in 2020 to 5 cents/kWh by 2030. The goal for the LCOE of commercial solar is 4 cents/kWh by 2030, and 3 cents by 2025 and 2 cents by 2030 for utility-scale.

Outlined in the brief, the department’s wish list for the reconciliation bill focuses primarily on tax credits, extending existing incentives like the production tax credit (PTC) for wind and the ITC for solar, along with similar, new credits for standalone storage and transmission. The PTC is due to sunset at the end of this year, and the ITC will step down for residential solar in 2023 and for commercial and utility-scale solar in 2024.

Ongoing funding for research and development, especially for building domestic clean energy supply chains, is also mentioned, along with support for low-income and community solar programs.

Electrons Need Wires

Whatever incentives offered, higher penetrations of clean energy, EVs and EV chargers cannot be achieved without more modern distribution and transmission. A recent report from Princeton University said Biden’s goal of a net-zero economy by 2050 will require a 60% expansion in high-voltage transmission by 2030. Another study from the American Council on Renewable Energy identified 22 high-voltage transmission projects that are “ready to go” with a little help from a transmission ITC. (See Transmission ITC Could Add 20 GW of New Capacity to Grid.)

Sent to key members of the House Ways and Means Committee on Aug. 11, a letter from 50 clean energy advocacy groups, utilities, businesses and labor called for a transmission ITC to help such “interregional, interstate, highway-type lines” that, it says, were cut out of the bipartisan infrastructure package. Further, it argues that the $73 billion for transmission in the package only earmarks $2.5 billion in borrowing authority for new transmission.

A transmission ITC would also offset the cost allocation issues that, the letter says, are not well addressed in the current U.S. regulatory structure.

“Even if the Federal Energy Regulatory Commission decides to act on its own authority in this area, that process has historically been time-consuming, characterized by significant uncertainty and subject to lengthy judicial review. A federal transmission ITC would give private capital the certainty it needs now to invest in the national, high-priority lines that will serve as the backbone for America’s clean energy grid,” the letter says.

Making the Transition Faster

The coming debates over the bipartisan infrastructure package and budget reconciliation bill will likely take place under multiple pressures, with the urgency called for in the recent climate report from the U.N. Intergovernmental Panel on Climate Change offset by hearings on the U.S. withdrawal from Afghanistan.

Committees across the Senate and House will be working out the details on different parts of the reconciliation package, with intensive negotiations and tradeoffs likely before both the bipartisan infrastructure and reconciliation bills get to Biden’s desk. For example, Leah Stokes, senior policy adviser to Evergreen Action, acknowledges that many details remain to be worked out about how to implement the CEPP, such as how much utilities would be paid or penalized and how the program would be administered, but she remains confident it could remain in the final bill.

DOE as program administrator would be able to draw on the experience and best practices of state agencies that have administered their own renewable standards, she said. In addition, some utilities are voicing support for a national clean energy standard, Stokes said, pointing to an April letter from 13 utilities to Biden. The utilities, including investor-owned, municipal and cooperative organizations, called for “a broad suite of regulatory and legislative policies to enable deep decarbonization of the power sector, including a clean electricity standard that ensures the power sector, as a whole, reduces its carbon emissions by 80% below 2005 levels by 2030.”

That support could be shifted toward the CEPP, Stokes said. “Many other utilities also are sort of coming around to: ‘Maybe we do want to make this transition faster, and maybe it does make sense to have support from the federal government so that we cannot push the costs onto our electricity customers,’” she said. “That support from the industry is going to be really important.”

Green Groups Pressure TVA on Open Meetings, Decarbonization

Environmental groups allege they’re being iced out of meaningful participation during Tennessee Valley Authority’s quarterly Board of Directors meetings as they call TVA’s aspiration for net-zero carbon emissions by 2050 painfully drawn out.

The federal agency has not held a meeting with live public input since February 2020. Before the COVID-19 pandemic, it held regular listening sessions a day prior to board meetings, giving residents a chance to speak directly to the board.

The Tennessee Valley Energy Democracy Movement (TVEDM), a grassroots organization, held a “Take Back TVA” rally outside of the agency’s Knoxville, Tenn., headquarters the same day as its Aug. 18 board meeting. The event also involved Southern Alliance for Clean Energy (SACE), Appalachian Voices, Center for Biological Diversity, and Sunrise Movement, a climate activist group.

The groups said their list of demands include a 100% clean energy goal by 2030, a commitment to retire all remaining coal plants and not build new fossil plants, protection of communities and workers facing exposure to coal ash, and good-paying union jobs during the clean energy transition. They’ve also demanded TVA restore public listening sessions.

TVA Board Chair John Ryder said the agency was holding the board meeting without a live audience to follow the Centers for Disease Control and Prevention’s protocols.

“I have to confess I have a great deal of disappointment over that,” he said, urging residents to get vaccinated. “The TVA board misses the opportunity to hear directly from the public.”

Ryder said that although all board members are vaccinated, they continue to sit six feet apart during meetings.

Ombudsman Wilson Taylor said TVA was eager to begin in-person listening sessions as soon as the pandemic eases. In the meantime, he urged stakeholders to reach out to him with input. TVA accepts written comments ahead of board meetings, and Ryder assured a virtual, muted audience that directors read the submissions.

But the groups say TVA’s explanations for abandoning all live public input are flimsy.

“Legislative bodies and agencies across the country have adopted virtual participation and public comment sessions in response to COVID-19, but TVA still hasn’t opened the door to public participation — even virtually — during its board meetings,” TVEDM countered in a press release.

Maggie Shober, SACE’s director of utility reform, said barring the public means the TVA board doesn’t have to hear from widows or ailing workers affected by the 2008 Kingston Fossil Plant coal-ash disaster.

“It’s a different thing to read comments at a meeting,” Shober told RTO Insider. “The idea that COVID [means] that they can’t listen to the public at all is ridiculous.”

Shober said SACE and TVEDM have held their own public listening sessions on Zoom with 100 speakers and attendees.

“We’re going to keep up the pressure. This is the beginning,” Shober said. “We’re not giving up.”

Decarbonization Calls

TVA is targeting an 80% reduction in carbon emissions by 2035 before reaching a net-zero carbon goal by 2050. The agency’s goal falls short of the Biden administration’s aim to decarbonize the nation’s electric grid by 2035.

By 2038, TVA still plans to emit more than 34 million tons of carbon dioxide on an annual basis, according to its latest 20-year integrated resource plan. It has shrunk carbon emissions 63% from 2005 levels.

SACE criticized the decarbonization timeline as too sluggish. It has said TVA’s plans for new fossil fuel plants makes meeting its 2050 decarbonization target improbable.

“While a step in the right direction, being coal-free is not equivalent to being carbon-free,” the group wrote in a May press release. “Without announcing formal resource plans that greatly increase utilization of clean energy like solar, energy efficiency, and battery storage that can be analyzed through an integrated resource planning [IRP] process, there is no guarantee TVA will reach net-zero emissions even by 2050.”

TVA CEO Jeff Lyash has said decarbonization will require license extensions at its three nuclear plants, adding small modular reactors, and making considerable investments in energy storage and carbon capture and sequestration. The agency has said it won’t extend the life of any of its coal units but only has one planned retirement: the 865-MW Bull Run Fossil Plant, which dates back to the ‘60s, by December 2023. Lyash has indicated TVA will retire its five remaining coal-fired plants by 2035. (See TVA May Retire All Coal by 2035.)

Most of TVA’s coal units began operations between 1951 and 1973. A decade ago, the federal corporation operated 11 coal plants. TVA is moving ahead with plans to build and energize by 2023 1,500 MW of natural gas capacity. It could add up to 17 GW in natural gas generation additions over the next 20 years, according to its latest IRP.

Shober said TVA’s plans to build up to three large gas plants to replace its retiring coal generation could saddle it with significant stranded costs.

“Planning to build gas plants after 2025, in 2028, 2030, is just not in line with what the Biden administration has planned,” she said.

The TVA board could look very different soon. President Biden in April nominated Beth Geer, chief of staff for former Vice President Al Gore; Robert Klein, vice president with the International Brotherhood of Electrical Workers; Kimberly Lewis, first minority owner of North Alabama’s only locally owned broadcast television station; and Michelle Moore, who led President Obama’s sustainability team, to the TVA board, a move that stands to make the federal corporation more climate conscious.

“It is the reality that TVA is living in a Biden administration with a Trump board,” Shober said. “The big question is how long it takes them to come to that realization [that 2050 is too late for decarbonization]. Because every day, week and month is time we’re losing if we want to limit warming.”

Escalating Peaks

COO Don Moul told the board that TVA has contended with 30 GW summer peaks, its highest since 2012, during July and August. He credited the organization’s coal, nuclear, gas, and pumped storage fleets for reliably managing the record demand.

“TVA’s fleet is one of the most diverse in the nation,” Lyash said. “That diversity enables us to deploy the most cost-effective resources.”

Lyash also touted Watts Bar Nuclear Plant’s Unit 2 as the “first new nuclear generation of the 21st century.” He said nuclear, storage and solar generation additions will help TVA meet its decarbonization goal. The green investment initiative includes about 2,000 MW of solar power currently, with a plan to have 10 GW of solar capacity by 2035.

“We’re proud of these reductions, but we’re not satisfied,” Lyash told directors. “We have much to do.”

TVA’s board meeting featured a prerecorded message from Knoxville Mayor Indya Kincannon, who thanked TVA for its decarbonization efforts and solar development. She said Knoxville’s emissions goals wouldn’t be possible without TVA’s dedication to clean energy.

But Lyash said most importantly, TVA supplies cost-effective power.

“It doesn’t matter how reliable, resilient or clean you are if no one can afford it,” he said. He added that TVA’s wholesale rates are projected to remain flat over the next decade.

Shober said the clean or inexpensive energy choice is false dichotomy.

“We’ve heard this for years. It stopped being a relevant talking point years ago,” she said. “TVA needs to update their talking points.”

Clean energy is more cost effective, and gas prices are on the upswing, Shober said. She said increasing gas prices are especially concerning for TVA, which passes fuel costs directly to its customers.