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January 21, 2025

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Trump to Declare ‘National Energy Emergency’ to Ramp up Oil, Gas Production

Minutes after he was sworn in as 47th president of the United States, Donald Trump pledged to bring down energy prices by immediately declaring a “National Energy Emergency” and signaled his intention to rapidly increase production of oil and gas to underpin both economic growth and national security.

“We will drill baby, drill,” Trump said in his 30-minute inaugural address. “America will be a manufacturing nation once again, and we have something that no other manufacturing nation will ever have: the largest amount of oil and gas of any country on Earth. And we are going to use it. … We will bring prices down, fill our strategic reserves up again, right to the top, and export American energy all over the world. We will be a rich nation again, and it is that liquid gold under our feet that will help to do it.”

Trump also pledged to end the “Green New Deal” and “electric vehicle mandate,” terms which he and Republican lawmakers have used as negative labels for former President Joe Biden’s clean energy policies and the EV tax credits and other incentives in the Inflation Reduction Act.

Following the inauguration, the White House provided an outline of the energy emergency declaration and other expected executive actions on energy policy.

The apparent intent of the emergency declaration would be to “use all necessary resources to build critical infrastructure.” Other actions would be focused on streamlining permitting and reviewing for potential rollback all regulations resulting in “undue burdens” on energy production and use, as well as on mining for “non-fuel” minerals.

The White House did not specifically state whether the declaration would lift any of the Biden administration’s restrictions on LNG export facilities or oil and gas leasing on federal lands, or whether Trump’s definition of critical infrastructure will include high-voltage interregional transmission.

EPA’s finalized limits on power plant and vehicle tailpipe emissions will likely fall into the regulations considered undue burdens.

As expected, Trump will also once again withdraw the U.S. from the 2015 U.N. Paris Agreement on climate change, aimed at limiting the increase in global average temperature to 1.5 degrees Celsius by 2050. (See Trump Pulling U.S. Out of Paris Climate Accord.)

A long-time opponent of wind power, he also intends to end leasing for wind farms on federal land, which could include both on- and offshore leasing.

Finally, the president will “empower consumer choice” in EVs and a range of household appliances, including washing machines, dishwashers, showerheads and toilets, likely through potential rollbacks of federal energy-efficiency standards.

The White House had yet to announce the signing of any executive orders as of press time.

Appointments

The White House did announce a series of presidential appointments and nominations for acting leaders and subcabinet positions, respectively.

At DOE, Ingrid Kolb will be acting secretary of energy, pending confirmation of Trump’s nominee, Chris Wright, CEO of Liberty Energy. A career administrator, Kolb has directed DOE’s Office of Management since 2005.

Another career administrator, Walter Cruickshank, will become acting secretary of the interior, pending the confirmation of former North Dakota Gov. Doug Burgum. Cruickshank is currently deputy director of the Bureau of Ocean Energy Management.

Preston Wells Griffith, who served as a special adviser on energy and acting assistant secretary of energy during the first Trump administration, has been nominated to be DOE’s undersecretary for infrastructure, replacing David Crane.

And Dario Gil, senior vice president and director of research at IBM, has been tapped as DOE’s undersecretary for science, replacing Geraldine Richmond.

LPO’s Last Hurrah

Trump may have limited ability to claw back IRA tax credits and incentives. According to a final “Investing in America” report from the Biden administration, about $100 billion, or 90%, of IRA funding available through the end of 2024 has been “obligated” with signed contracts, which will make any claw back attempts difficult.

The report also noted that EPA had obligated all of the $27 billion it received for the Greenhouse Gas Reduction Fund, with $20 billion going to a national clean energy funding network of community development banks and $7 billion going to the Solar for All program, aimed at funding solar projects for low-income communities.

DOE’s Loan Programs Office pushed through a final surge of deals, announcing three loans with final contracts totaling more than $16.5 billion on Jan. 17, including:

    • $15 billion to Pacific Gas and Electric for its Project Polaris, which will upgrade transmission with grid-enhancing technologies, increase hydropower and energy storage, and deploy virtual power plants;
    • $996 million to Ioneer to develop its Rhyolite Ridge project in Nevada, which will produce lithium carbonate to be used in EV batteries; and
    • $584.5 million to Convergent Energy and Power for utility-scale solar and storage projects to improve grid resilience in Puerto Rico.

In one of his final reports as LPO director, Jigar Shah said the office has a pipeline of more than 160 applications seeking more than $200 billion in loan guarantees for a range of projects.

Reactions

New York Gov. Kathy Hochul (D) and New Mexico Gov. Michelle Lujan Grisham (D), co-chairs of the U.S. Climate Alliance, stated that “we will continue America’s work to achieve the goals of the Paris Agreement and slash climate pollution.”

Formed after the first withdrawal in 2017, the Climate Alliance is a bipartisan organization of U.S. governors from states that have committed to reducing emissions in line with the agreement.

“Our states and territories continue to have broad authority under the U.S. Constitution to protect our progress and advance the climate solutions we need. This does not change with a shift in federal administration,” Hochul and Grisham wrote in a Jan. 20 letter to the U.N. Framework Convention on Climate Change.

Andrew deLaski, executive director of the Appliance Standards Awareness Project, said Trump’s plans to roll back appliance efficiency standards “would not help families and would only raise their total costs.”

“Test after test has found that efficient new dishwashers, washing machines and showerheads perform far better than old models,” deLaski said.

Heather O’Neill, CEO of Advanced Energy United, called on Trump to recognize that his “promise to achieve greater energy abundance in America must include leveraging the incredible, proven power of advanced energy technologies.”

“Our power grid faces real challenges, and at a moment when wildfires and extreme temperatures threaten lives across the country, it’s clearer than ever that we need to deepen our investments in advanced energy solutions that increase resilience and lower costs,” O’Neill said. “We urge the administration to embrace the market forces and tax cuts that are empowering states to meet their energy needs and goals.”

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SPP MOPC Briefs: Jan. 15, 2025

Real-time Dispatchable Transactions

The SPP Markets and Operations Policy Committee on Jan. 15 approved tariff revisions that would implement dispatchable transactions in the real-time energy market.

Dispatchable transactions, already instituted in the RTO’s day-ahead market, allow market participants to submit dynamic schedules, which SPP evaluates and dispatches economically. RR653, passed with 95.56% stakeholder approval, essentially would extend the existing dynamic interchange transaction framework to the Real-Time Balancing Market.

The goal, said Yasser Bahbaz, SPP senior director of market development, is to increase market participation, especially at the seams. Market participants could change their bids and offers up to 30 minutes prior to the operating hour. “The advantage here is that now we would have a transaction product in real time that we could economically assess and dispatch in real time, and we’d determine whether it’s economically favorable to serve our market,” Bahbaz said.

“Because it is a dispatchable transaction, the market will have every opportunity to assess that transaction,” Bahbaz said in addressing some stakeholder concerns. “So we think this is better than having fixed schedules, in some ways, because we would be able to assess ramp, and to the extent that we can take in imports or have exports, it would be co-optimized with what we have. … The nice thing about this product is that it is fully flexible.”

Steve Sanders, strategic adviser for the Western Area Power Administration, said that while the organization was supportive of the product’s concept, “this proposal is not there yet. It lacks the effectiveness of market-to-market seams coordination and zonal resource optimization, with several risks to both product manipulation, effects to internal market optimization, and reliability during abnormal or emergency operating conditions.”

“I think we are committed to solving these issues together with staff” and the Market Monitoring Unit before the proposal is filed with FERC, Sanders continued. “Our goal would be that, to the extent that we have a product that would pass the FERC hurdle and provide benefits to the market and not create issues, that would be a desirable outcome.”

American Electric Power’s Richard Ross — chair of the Market Working Group, which recommended approval of the revisions — asked Bahbaz whether any of WAPA’s concerns gave SPP pause in moving forward with them. “Do you think we need to do additional work as a group before this is approved, or can we overcome these concerns during the FERC filing?”

“From SPP’s standpoint here, I think it’s important for us to move this forward,” Bahbaz answered.

Jodi Woods, SPP director of market monitoring, said the RTO addressed many of the MMU’s concerns with the proposal, “but we do still have some outstanding ones that we’re continuing to monitor. … We’re going to follow it through implementation … including potentially recommending additional tariff language.”

Extension for FERC Order 881 Implementation

The MOPC approved asking FERC for an extension to comply with certain requirements of Order 881, from July 12 this year to Sept. 1, 2026.

Issued in 2022, Order 881 directs transmission owners and providers to end the use of static line ratings, and to use ambient-adjusted ratings (AARs) and seasonal ratings instead. FERC allowed three years to implement the requirements.

In December 2023, FERC found that SPP’s plan was mostly in compliance but that it had not properly explained whether and, if so, how the use of AARs would affect existing market processes (ER22-2339).

Since then, the RTO’s Ambient Adjusted Ratings Implementation Task Force has worked to develop the timelines and other requirements for the calculation and implementation of AARs. But members of the task force recommended to the Operations Reliability Working Group (ORWG) that based on TO readiness, staff should request an extension to comply with the AAR requirements.

Based on a survey conducted Dec. 20, 2024, only 24% of members said they would be ready on SPP’s targeted go-live date of July 1. According to the ORWG, a minimum of 67% of impacted members, and a minimum of 90% of impacted lines and flowgates (“critical mass”), are needed for implementation.

It also wants more time for testing, preferably not while SPP works to integrate RTO West, and avoiding a peak season for implementation.

Responding to COO Lanny Nickell on how the Sept. 1 date was chosen, SPP’s Charles Cates said staff were confident that implementation could not be achieved any earlier than April 1, 2026. “But they also don’t want us to take too much time.”

Advanced Power Alliance’s Steve Gaw asked if SPP had any idea how much delaying implementation of AARs, which he noted can reduce transmission congestion, would cost.

Cates answered that it would be “minimal to none. The budget that we have accounted for the project, we are not anticipating to change at this time. There may be some additional staff costs as we implement this, but those will be embedded.”

“That was a great answer to a question I didn’t ask,” Gaw replied. “My question was, how much are we potentially costing the market by not implementing 881 in a timely manner?”

“We’re not sure. We have not done in a while an ambient-adjusted market study,” Cates said.

Gaw then noted the survey showed that 71% of members said they would be ready by Dec. 1, 2025, surpassing staff’s 67% threshold. “Why did you all feel like that that wasn’t a better date, at least to get us up and running sooner with this?” he asked. “I think FERC might scrutinize this fairly significantly because of the extent of the delay.”

Cates responded by saying staff expected SPP’s request to be among the shorter extensions among the RTOs, with some asking for up to 2028, “and I certainly understand why.” Specific to SPP, “we have a lot of deliveries coming for the West integration. So we need to be very careful with how we stage this and not interact with that project.”

The Natural Resources Defense Council’s Christy Walsh also noted the survey results and wondered how much of that 71% actually would be ready in October. “I understand you don’t want to implement something new in the middle of winter — that makes complete sense — but we’re constantly hearing we have a resource adequacy problem. … If we have 71% of people ready to free up some transmission constraints on the transmission system where we have more resources adequacy, that just seems like an easy win,” she said.

Evergy’s Jeremy Harris, chair of ORWG, noted that under SPP’s current timeline for implementation, its ratings database, the Limit Exchange Portal (LEP), was supposed to have begun testing Nov. 1. It still has not been delivered. “So from a TO/TOP perspective, we have little faith in SPP’s timeline, and we need this extension because we will need to connect to it, and SPP doesn’t even have the tool.”

“That still doesn’t explain to me why we have a survey that says 71% think they’ll be ready by the end of this year,” Walsh countered. “I’m hearing separately, ‘but not really.’”

Harris responded that he expected that if the survey were conducted today, there would be fewer members saying they would be ready based on the fact that the LEP tool still was not ready.

The extension request was approved with 94.44% support.

Expedited Resource Adequacy Process

In a relatively close vote, the committee endorsed developing a proposal to create a one-time process to quickly add generation to meet load-responsible entities’ resource adequacy needs outside of SPP’s generator interconnection procedures.

“Given the concerns by some stakeholders to come up with a process to meet those [RA] needs,” SPP’s Steve Purdy said.

The proposal largely is based on MISO’s Expedited Resource Adequacy Study, which it hopes to file by February. (See MISO Tells Board RA Fast Lane in Interconnection Queue is a Must.) Both essentially would create a “fast lane” for projects that are deemed necessary to maintain reliability.

In SPP’s case, the projects would be determined by the LREs themselves. And the RTO is relying on its Regional State Committee’s endorsement “to undergird and provide justification for the deviation from established FERC policy,” Purdy said. “It’s not truly a GI study; it’s a resource adequacy study that involves interconnection of new resources,” though it would follow certain procedures for studying projects.

The process would be open to any generator type, though there would be a capacity ceiling determined by SPP based on LREs’ load projections. Projects would be required to have a proposed commercial operation date within five years of its submission; if SPP’s preferred timeline is approved, that would be by 2030.

The goal is for the MOPC to approve the formal revision request in April, with RSC and Board of Directors approval in May.

“I think SPP staff has done a remarkable job in a very short time,” Golden Spread Electric Cooperative’s Mike Wise said. “I think this is a good example of SPP staff responding to stakeholders’ concerns and developing a product that really can meet their needs.”

Other stakeholders representing LREs voiced their support. But several stakeholders voiced opposition based on the ongoing work on SPP’s Consolidated Planning Process (CPP).

APA’s Gaw said, “We really don’t know what this exact proposal is going to look like when it gets into [revision request] form. We’ve got serious concerns with this proposal for a number of reasons,” among them being that stakeholders already have spent “countless hours” on the CPP, but this new proposal seemed to be taking precedence.

He also argued that MISO is letting states determine their RA needs, while “this is entirely left up to the load-responsible entities, and I don’t know how the states are going to be able to manage ensuring consumer protections.”

“CPP is something that would address a lot of the concerns that we have right now, and MISO is not in the same position as SPP is,” AES’ Shilpi Sunil Kumar said. “I would request staff to keep that in mind, that we don’t need to do exactly as MISO is doing because their concerns and problems are different.”

Invenergy’s Arash Ghodsian said that, as he told MISO with its proposal, “we need some transparency on some of the details” about the affected-system aspect. “There’s probably room for some improvement, but the details at this point are very important if we’re going to provide support.”

Purdy responded that SPP likely would need to propose revisions to its Joint Operating Agreement with MISO.

Lucas to Succeed Nickell as COO

Nickell opened what he said likely would be his last MOPC meeting as the committee’s secretary with a brief speech as he prepares to take over for SPP CEO Barbara Sugg on April 1.

“I’m super excited — really excited — to be SPP’s next CEO; to have the opportunity to lead this organization,” Nickell said. “My goal for SPP is really simple: … I want SPP to be the best. The best RTO in the country. That really shouldn’t be that hard to do because we already have the best employees, and we already have the best stakeholders.”

After his remarks, Nickell announced that Antoine Lucas, vice president of markets, will take over as COO.

“I’m really excited about this new opportunity, particularly the increased role in the stakeholder process that comes along with it,” Lucas said.

Nickell also reminded attendees of SPP’s inaugural Energy Synergy Summit, announced the previous day, to be held March 3-4 in Dallas.

In its announcement, the RTO billed the event as “a deep dive into resource adequacy, load and generation interconnection, grid modernization, and the policies and partnerships needed to support them.”

“This is going to be a tremendous opportunity for our stakeholders and anyone who’s interested in … figuring out how to add resources quicker while doing it reliably, and adding load, not only quicker but also reliably,” Nickell said. “Trying to meet both the expectations that I know a lot of our members have: ‘I need more resources, and I want to serve this load that I know is coming.’ That is what the purpose of this summit is: to talk about both those issues.”

Nickell was asked whether this would be the first in an annual series. “I suspect that we’ll need to do that,” he replied, though he seemed to imply this new event really is a continuation of the RTO’s Resource Adequacy Summit, held in 2023. “This time we thought, ‘Man, we need to combine the topics of resource adequacy and load growth, and specifically the kind of load growth that we’re seeing … with big data centers.”

The deadline for registration is Feb. 24, while the special room rate for the Dallas/Fort Worth Airport Marriott, where the conference will be held, ends Feb. 10.

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President Trump Names Mark Christie as FERC Chair

President Donald Trump named Mark Christie as FERC chair, hours after he was sworn in during a ceremony in the U.S. Capitol Rotunda.

“I am honored to be (appointed) FERC Chairman by Pres. Trump,” Christie wrote on X. “For (four years) I have emphasized protecting consumers from excessive power bills, meeting the reliability crisis driven by losses of dispatchable generation and failure to build new generation, in the face of rising demand.”

Meeting those priorities will be his first priority, and Christie added he believes states should be “full partners with FERC” in protecting consumers and ensuring reliability.

The President can pick the FERC chair from among sitting commissioners. The move means former Chair Willie Phillips will become just another commissioner, if he decides to stay. In his last press conference at the helm of the agency Jan. 16, Phillips declined to publicly discuss his plans.

“I told you all from the beginning: Reliability is job No. 1 of the commission,” Phillips said. “I am very proud of the work we’ve done to protect the reliability of our system for our nation.”

Phillips’ term runs through June 2026. If he stays on, Christie will work with a 3-2 Democratic majority for the first year and a half. Christie was appointed by Trump in July 2020, and his term expires this June, though he could be renominated. Even if he is not, he can stay until the end of the year when Congress adjourns absent a replacement being confirmed.

Christie said in an interview that the new job is “an awesome responsibility” and though he was chair of the Virginia State Corporation Commission, FERC is at a bigger scale.

“And the biggest thing you know at my age is you realize how many — literally millions of people — are going to be affected by what you do,” he said. “I mean, what we do affects their monthly power bills, and that is a tremendously daunting challenge. We’ve got to make sure that we do everything we can to minimize the impact on the people’s monthly power bills.”

Reliability will continue to be a big focus under Christie, as demand is growing while power plants continue to retire. He has talked about a reliability crisis in public remarks for several years.

“It is absolutely deteriorating, and that’s not my opinion,” Christie said. “We see that in the reports from NERC. You see it in the reports from the RTOs, like PJM. We continue to lose the very resources we need to keep the lights on and the heat pumps going.”

With a cold front hitting the East Coast this week, PJM could break its all-time winter demand record and has fewer resources than it did last year, he added.

FERC has no control over why demand is going up, which largely is due to the expansion of data centers in the development of artificial intelligence.

“We have to accept that we have to serve load, and that’s going to mean keeping the generating resources that we need and stopping the retirements and building the new resources,” Christie said. “Those are big issues, and we have to address them. It really is supply and demand. It’s no more complicated than that.”

Tightening supply and expanding demand generally means higher prices, so Christie will look for ways to control those. One position he’s made clear in numerous dissents is that transmission incentives should be reined in. He also said he wants to address local transmission projects, which in PJM are 80% of the recent construction and often are lightly regulated. (See How FERC Under Trump Might Advance Energy Affordability in 2025.)

“As a utility regulator, I know that you’re always faced with the challenge of balancing the need for utility assets like transmission and generation with the need to keep costs down for customers,” Christie said. “And it’s a tough balance … but it’s what utility regulators do.”

One issue that roiled the FERC world after Trump’s election was his campaign promise to remake how the federal workforce is overseen. What that means for an independent regulatory agency like the commission remains to be seen. (See Chatterjee Post Leads to Worries About FERC’s Independence, Staff Exodus.)

Without any formal guidance from the White House on the federal workforce front, Christie declined to comment.

While the administration and Senate have changed parties and that will have an effect on FERC, by design it will not have as big an impact as on other executive agencies.

“Things don’t change overnight at FERC, because obviously we’re a multi-member commission, and you have to have a majority to do anything,” Christie said. “But I think there’s a lot of agreement among my colleagues on the need to address these issues.”

Trump Also Elevates Wright to NRC Chair

Christie is not the only former state regulator to get a promotion on a federal regulatory agency. Trump tapped David Wright to be chair of the Nuclear Regulatory Commission in the same announcement. Wright has been on the NRC since 2018 and was on the Public Service Commission of South Carolina from 2004 to 2013, which included a stint as chair.

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Counterflow: A Climate ‘Game of Chicken’

It has become increasingly clear that environmentalists are engaged in a game of chicken, with Earth in the balance.

The environmental community by and large will not tolerate any consideration of Plan B, solar geoengineering (such as sand or salt in the stratosphere), which I’ve discussed before, contending this would discourage measures necessary to get to net zero (Plan A).

Gale Force Headwinds for Plan A

Meanwhile, the world isn’t adopting the requisite Plan A measures for a slew of reasons, such as the reality that renewable resources are expensive, especially when they have to be firmed up by storage to cover renewable droughts. And we need to remember that higher electric rates are themselves deadly.

Steve Huntoon

Carbon dioxide is the ultimate negative externality, meaning that any given reduction by any individual, state or even country provides no particular benefit to whoever makes the reduction. And that’s assuming that carbon reduction measures actually work — a Herculean assumption given actual results over the past 20 years.

And it won’t be enough to reverse the annual increase in the world’s carbon emissions (whenever that might happen). As The Economist points out, “what matters to the climate is not the rate of emissions, but the cumulative total. Until that stabilizes, all other things being equal, temperatures will continue to increase.”

Please note that Plan B need not last long if the environmental community is right that renewable energy actually is cheaper than fossil fuel energy or will become so. But so far that’s not what the world is experiencing, as I’ve discussed and as a recent Wall Street Journal op-ed piece reinforced.

The Fear Factor

Let me address one other objection to solar geoengineering — that it might do scary things (just plug it into Google and you’ll get a parade of horribles). This objection ignores that we have been putting toxic aerosols like sulfur dioxide into the atmosphere for a couple of hundred years. As I discussed before, these toxic aerosols have greatly reduced global warming from what it otherwise would be, and the recent reduction in toxic aerosols due to regulation is greatly adding to global warming from what it otherwise would be. Yes, it’s ironic.

The key takeaway is that solar geoengineering could replace the toxic aerosols of the past with non-toxic aerosols like sand or salt. Not very scary.

Wrapping up

Where does that leave us? Because the environmental community cannot change the economic fundamentals driving decisions by most of the world, it should reconsider its demand that the world suffer the consequences of these decisions. The environmental community should constructively engage on Plan B.

The impossible dream should not be the enemy of the possible good.

P.S. For something completely different: If you’re a fan of classic rock, I’ve compiled, dare I say it, “iconic” videos from that bygone era.  And best wishes for the new year!

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PUC Steers VT Legislature Away from Clean Heat Standard

Vermont’s Public Utility Commission continues to shy away from the Clean Heat Standard mandated in a landmark 2023 law. 

The PUC on Jan. 15 reported to the state Legislature that while the standard (with changes) would be “theoretically workable … the commission does not believe that this program is well suited to Vermont.” 

The PUC recommended that legislators consider other ways to reduce greenhouse gas emissions — such as a fuel tax, thermal efficiency benefit charge or a biofuel blending requirement, or some combination of these or other alternatives. 

A few months earlier, the PUC determined the credit-trading system envisioned in the legislation would be costly and complex and that it made no sense for a small state to create such a system on its own. (See Vermont PUC Rejects Heating Fuel Credit Trading Concept.) 

In the Jan. 15 report, the PUC said its task — study the costs and benefits of the system while designing it — was complex and difficult and that its conclusions should be treated as a very rough estimate. 

With that caveat, it said the Clean Heat Standard could carry program costs of $956 million in its first decade, with an impact on fuel oil prices gradually rising from 8 cents per gallon in the first year to 58 cents in the 10th year. 

The estimated value of the greenhouse gas emissions reductions yielded by the standard over the same decade would be $477 million. 

The PUC said its recommended alternative mechanisms would be less complex and have lower administrative costs than the Clean Heat Standard. 

The fuel tax option would be simple and efficient, the PUC said, as it would be an expansion of the fuel tax mechanism that for many years has been sending money to the low-income Weatherization Trust Fund. 

A thermal efficiency benefit charge could function similarly to the electric energy efficiency charge collected by the state’s electric distribution utilities and could run alongside the fuel tax that fuel dealers collect. 

Neither of these alternatives would achieve the greenhouse gas emissions reductions required under the Global Warming Solutions Act of 2020, the PUC wrote, but increasing the amount of biofuel burned in Vermont would accomplish this, and a blending requirement could be complementary to the fees. 

Legislators now must decide whether or how to implement the Clean Heat Standard. Democrats still control both chambers of the Legislature but have lost seats since 2023, when they overrode a veto by Gov. Phil Scott (R) to make the Clean Heat Standard a law. 

Local media reports suggest legislators remain concerned about the financial impacts of such a system, particularly on lower-income Vermonters who spend a larger portion of their income heating their homes during the state’s long, cold winters.  

Vermont has among the highest percentages of homes heated with fuel oil of any state. 

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DC Circuit Vacates LNG Rail Safety Rule from First Trump Administration

A three-judge panel on the U.S. Court of Appeals for the District of Columbia has vacated a safety rule on transporting liquified natural gas over rail.

The Sierra Club, a group of state attorneys general and others filed an appeal of a rule crafted by the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) authorizing LNG’s transportation in newly designed tank cars with no permit required.

“The new final rule … imposed no limit on the number of LNG tank cars that could be included in a single train and set no mandatory speed limit for trains that carry LNG,” said the Jan. 17 decision.

One company was considering a single train with 80 cars carrying LNG, when a group of environmentalists said that the explosive force of just 22 cars full of LNG would be the equivalent of the atomic bomb dropped on Hiroshima.

In addition to being highly flammable, LNG has the risk that if its temperature rises, it can expand and place tremendous pressure on tanks leading to an explosion. If it is spilled without igniting, it can form an ultra-cold gas cloud that quickly expands, severely injuring people and damaging property in its path, the court said.

PHMSA determined shipping LNG by rail would have no significant impact on the environment and declined to prepare an environmental impact statement. Sierra Club and other petitioners argued that the National Environmental Policy Act required the agency to craft an EIS and its failure to do so was arbitrary and capricious. The court agreed, vacating the rule for additional proceedings at PHMSA.

Historically, LNG could be transported only by truck or pipeline, and shipping it by train required a special, one-off permit. That changed after President Trump issued an executive order in 2019, which told PHMSA to issue a blanket approval for shipping LNG by rail.

The agency authorized that the fuel could be shipped in tank cars that had been operating on the rails for decades and were designed to carry cold, dense gases. The rules for shipping similar chemicals involved communication, and the rail industry adopted a voluntary speed limit of 50 mph when trains had more than 20 cars with them. PHSMA proposed no such limits to trains hauling LNG.

Opponents criticized the rule for failing to take the risk of an accident seriously and for failing to put a speed limit or a cap on the number of cars. They also argued the train cars to be used, DOT-113 tank cars, had seen 14 breaches in prior incidents and petitioners questioned their record, as did the National Transportation Safety Board.

PHMSA did require some upgrades for the cars to carry LNG, including a thicker outer tank and better steel, calling the new model a “120W9” car. It also authorized the new cars to carry a higher density of LNG, raising it from 32.5% of total volume to 37.3%.

The agency required special monitoring equipment for all LNG cars and required trains with 20 in a row, or 35 in total, to have special braking technology. Railroads also were required to consider safety risk factors such as population density when scheduling LNG shipments.

After President Biden assumed office, PHMSA suspended the July 2020 rule, but it did not complete a replacement.

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SCE Faces Scrutiny and Risks Amid LA Wildfires

Though no utilities have been blamed for the deadly wildfires in Los Angeles so far, stakeholders have cautioned that companies like Southern California Edison are not completely out of the woods and still face financial and legal risk. 

Commenting on the wildfires in a Jan. 16 newsletter, investment bank Jefferies noted that electrical monitoring company Whisker Labs did not find evidence of a major transmission line fault before the Eaton Fire erupted. The blaze burned more than 14,000 acres, causing damage to thousands of structures and at least 17 fatalities, according to officials. 

However, Whisker Labs found there were energized distribution lines west of Eaton Canyon despite warnings about high winds prior to the fire’s start, the newsletter stated. 

Whisker Labs cannot point to a specific source for any fault event, but “based off of multiple faults detected in the lead up to the fire’s reported start time, the team confirmed with certainty there were energized distribution lines west of the fire,” according to Jefferies. 

SCE, one of the area’s largest utilities, told RTO Insider on Jan. 13 that no fire agency has suggested its facilities were involved in igniting the Eaton Fire. 

Local utility Pasadena Water and Power also operates in the region. 

Still, if SCE’s equipment is found to be at fault down the line, the utility’s credit rating could take a hit, Moody’s Ratings cautioned in a report Jan. 16, per Reuters. The report also said the company could see financial damage if the California Wildfire Fund runs out of money. Utilities pay into the fund to receive reimbursements for some wildfire claims. 

Additionally, legal challenges are already starting to trickle in. Some affected by the Eaton Fire filed lawsuits against SCE last week, alleging the blaze began under one of the company’s transmission towers. SCE has also received preservation notices from counsel representing insurance companies. 

Another issue is whether SCE took adequate measures to mitigate risks under its California Public Utilities Commission-approved Wildfire Mitigation Plan, Jefferies contended. 

“To date, we have not seen evidence supporting ‘serious doubt’ of prudency, but we will be closely looking to see whether EIX followed its preemptive safety power shutoffs to the letter,” Jefferies stated. 

Fire agencies are investigating whether SCE equipment was involved in the smaller Hurst Fire, the utility announced Jan. 12. 

SCE said the Hurst Fire was reported at approximately 10:10 p.m. and that a 220-kV circuit experienced a relay at 10:11 p.m. A downed power line was discovered at a tower associated with the circuit, and “SCE does not know whether the damage observed occurred before or after the start of the fire,” the utility added. 

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NYISO Operating Committee Approves LCR for 2025

The NYISO Operating Committee has approved the final Locational Capacity Requirements for the 2025/26 capability year. These were the same LCR values presented earlier to the ICAP working group.  

The LCRs, expressed as a percentage of the peak load forecast, represent the minimum capacity New York’s generators and load-serving entities must maintain within each of the downstate zones, which have transmission constraints.  

“I’m going to vote yes because the ISO did the LCR study consistent with all its rules,” said Mark Younger of consulting firm Hudson Energy Economics. “However, I am quite concerned that we still have a major inconsistency between the transmission security needs that are represented in the TSLs [transmission security limits] and ultimately affect the LCR.” 

2025-2026 final LCR results | NYISO

Younger said this had been an issue for several years, had been undercutting price signals and was more important now because the ISO had found a reliability need in its most recent RNA. 

Operations Report, December 2024

NYISO also presented the monthly Operations Report for the previous month. The peak load, 23,065 MW, occurred Dec. 23, 2024. 

Over the last month of 2024, 2,736 MW of land-based wind, 136 MW of offshore wind, 6,048 MW of behind-the-meter solar and 571 MW of front-of-the-meter solar were installed. Additionally, 63 MW of energy storage was installed.  

Aaron Markham, vice president of operations, noted that NYISO was taking preparatory action for severe winter weather. NYISO said it was prepared to meet anticipated demand for the current cold snap.  

NYISO expected demand to peak at 24,400 MW on Jan. 21 and 24,200 MW on Jan. 22. 

NYISO’s 2024/25 Winter Assessment found that 29,514 MW of resources were available statewide; 2,275 MW were available through emergency dispatch. 

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NECA Conference Previews the Future of Markets in the Northeast

BOSTON — Managing the often-at-odds priorities of affordability, reliability and decarbonization will require a delicate balance of innovation, market reforms and stability, industry experts told attendees of the Northeast Energy and Commerce Association’s Power Markets Conference on Jan. 16. 

Speakers discussed some of the major changes on the horizon for the region’s wholesale markets as grid operators prepare for significant load growth and an increasingly distributed and intermittent resource mix.  

ISO-NE is undergoing a major effort to reform its capacity markets, which includes resource accreditation updates and changes to the timing and format of capacity auctions. FERC accepted similar accreditation changes for NYISO in July, which will take effect in 2026. (See FERC Accepts NYISO Capacity Accreditation Changes, with 1-Year Delay.) 

Chris Geissler, director of economic analysis at ISO-NE, said the RTO is trying to design the accreditation methodology so “everyone is essentially selling the same product.” 

The proposed accreditation framework is intended to quantify how a resource would perform during the periods with the greatest reliability risks, meaning that assumptions related to the resource mix, outages and demand profile could have major effects on how different resources are valued. 

For example, adding wind capacity would improve grid reliability during the periods with high wind, reducing the reliability value of subsequent additions of wind resources, Geissler said.  

Meanwhile, energy storage likely will be complementary to weather dependent resources. Increasing the amount of solar or wind power on the system could improve the reliability contributions of energy storage, Geissler noted.  

Michael Borgatti, senior vice president of RTO services and regulatory affairs at consulting firm Gabel Associates, said the nearly 10-fold increase in prices in PJM’s most recent capacity auction should serve as “a cautionary story for all other RTOs across the country, including NYISO and ISO-NE.” (See PJM Capacity Prices Spike 10-fold in 2025/26 Auction.) 

Capacity prices are “a symptom of how you set the underlying supply and demand fundamentals,” Borgatti said, adding that PJM determined its capacity need on an unprecedented extreme scenario. 

“PJM built its capacity model on the backs of Winter Storm Elliott,” Borgatti said. “They wanted to make sure their model reflected the possibility of these big dangerous storms matching up with the highest load.” 

Despite the high prices in PJM, uncertainty regarding potential changes to PJM’s capacity market makes it hard for developers to invest in new resources that could help address the lack of capacity, Borgatti said. 

New Market Mechanisms

While ISO-NE’s capacity accreditation reforms likely will increase compensation for dispatchable resources that provide winter reliability benefits, ISO-NE has indicated new market mechanisms may be needed to support resources that are called upon only in extreme situations. (See ISO-NE: New Mechanisms May be Needed to Ensure Future Grid Reliability.) 

The RTO’s Economic Planning for the Clean Energy Transition (EPCET) study, published in October, found a major need for dispatchable resources to meet a higher and increasingly variable winter peak. The resources, ISO-NE noted, “may only run once every few years.” (See ISO-NE Study Lays Out Challenges of Deep Decarbonization.) 

The EPCET study also found ISO-NE’s energy market likely will decrease in value as renewables supported by power purchase agreements (PPAs) come online, with the capacity market and PPAs increasing in importance. The RTO also outlined concerns that the current PPA model will struggle to support new resources starting in the mid-2030s.  

“We’re going to need steel in the ground,” said Jeff Turcotte, assistant vice president of government affairs at the Electric Power Supply Association. “Markets are going to have to continue to signal that investment.” 

“If we are thinking about big ideas and big investments … some of those answers are already out there.” Turcotte said, pointing to the Pathways Study, which Analysis Group conducted for ISO-NE in 2022.  

Cutler Cleveland, professor at Boston University | © RTO Insider LLC 

The Pathways Study considered several strategies for decarbonizing the grid to meet state goals and ultimately concluded that net carbon pricing would be the most cost-effective way to reduce power sector emissions in the region. (See Draft Study Weighs Tradeoffs of CO2 Pricing, FCEM for ISO-NE.) 

However, adopting net carbon pricing would require buy-in from all six New England states, which so far has prevented further development of this proposal. 

“ISO-NE has made it very clear that it thinks net carbon pricing is the most efficient way to decarbonize the grid,” said Ashley Gagnon, senior director of Massachusetts’ office of Federal and Regional Energy Affairs. “From Massachusetts’ perspective, we’re always interested in having conversations about new market mechanisms to in connection with the future grid.” 

Cutler Cleveland, associate director of the Institute for Global Sustainability at Boston University, emphasized the importance of rapid decarbonization.  

“It’s quite clear that we’re not moving quite as fast as we need to avoid the wheels coming off the bus,” Cleveland said, outlining the wide range of severe consequences climate change is projected to have on human mortality, disease vectors, air and water quality, and labor productivity. 

“Business as usual with decisions driven only by market forces will not work,” he said, adding opposition from politicians and the public to climate policies — including carbon pricing — “is a real problem.” 

Demand Response and Load Flexibility

Another major topic of the conference was how the region can unlock savings by shifting demand away from peak hours as the electrification of transportation and heating accelerates. 

The costs savings of reducing the region’s peak load could be massive: ISO-NE’s 2050 Transmission Study found that a 10% reduction in the projected 2050 peak could save nearly $10 billion. (See ISO-NE Prices Transmission Upgrades Needed by 2050: up to $26B.) 

Across the region, utilities are working on advanced metering infrastructure (AMI), which should enable incentives for residential customers to decrease peak demand. In Massachusetts, the utilities plan to complete their rollout of AMI by 2030, which likely will be followed by some form of time-varying rates. (See Mass. Electricity Rates Working Group Issues Recommendations.) 

While there was some disagreement between speakers about whether policymakers should focus on automating demand response or rely on real-time pricing to incentivize behavioral changes, most agreed automating demand response for willing customers will be an important piece of the puzzle.  

George Twigg, executive director of the New England Conference of Public Utilities Commissioners (NECPUC), said residential demand response likely needs to be automated to reach a wide scale. He noted that the commercial and industrial sectors — despite the attention given to the residential sector — likely hold the greatest potential for demand response.  

Austin Dawson, deputy director of energy supply and rates at the Massachusetts Department of Energy Resources, said the state likely will need “some significant reforms” to rate design to make the most of advanced metering infrastructure, adding that long-term recommendations from the state’s Interagency Rates Working Group should be released later in January. 

While electric vehicle load probably is the easiest to shift, “I don’t think we can write off heating load as a flexible end use,” Dawson noted.  

He emphasized the importance of research and pilot programs to prepare for the transition to a winter-peaking system, which ISO-NE expects to occur in the mid-2030s. 

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PJM MRC/MC Preview: Jan. 23, 2025

Below is a summary of the agenda items scheduled to be brought to a vote at the PJM Markets and Reliability Committee on Jan. 23. Each item is listed by agenda number, description and projected time of discussion, followed by a summary of the issue and links to prior coverage in RTO Insider. 

RTO Insider will cover the discussions and votes. See next week’s newsletter for a full report. 

Markets and Reliability Committee

Consent Agenda (9:05-9:20)

B. Endorse proposed revisions to Manual 01: Control Center and Data Exchange to conform to FERC‘s approval of PJM’s second phase of hybrid generation rules. The package also includes changes identified through the manual’s periodic review.

C. Endorse proposed revisions to Manual 1 to establish alternative communication protocols for use during an unexpected​ outage of PJM’s EMS Real Time Assessment (RTA) capabilities. (See “Several Manual Revisions Endorsed,” PJM MRC/MC Briefs: Dec. 18, 2024.)

Issue Tracking: EMS Telemetry Protective Measures

D. Endorse proposed revisions to Manual 27: Open Access Transmission Tariff Accounting and Manual 29: Billing resulting from their periodic review. The changes include removing outdated references and spelling corrections.

E. Endorse proposed revisions to Manual 38: Operations Planning drafted through its periodic review.

Endorsements (9:20-11:05)

  1. Manual 14H: New Service Requests Cycle Process Revisions (9:20-9:45)

PJM’s Jonathan Thompson will present revisions to Manual 14H: New Service Requests Cycle Process to add to PJM’s site control requirements for projects in the interconnection queue. Renewable developers have objected to the changes, arguing that they will require them to hold onto land not necessary for their projects, while PJM has held that a common standard is needed. Voting was delayed from the committee’s December meeting. (See “Vote on Site Control Requirements Deferred,” PJM MRC/MC Briefs: Dec. 18, 2024.) 

The committee will be asked to endorse the proposed Manual revisions at this meeting. 

Issue Tracking: Site Control Modification Clarification 

  1. Modeling Users Forum (MUF) Charter (9:45-10)

PJM’s Jeff Schmitt will review a proposed charter that would convert the Data Management Subcommittee (DMS) to the Modeling Users Forum. The change would facilitate having more frequent meetings that focus on modeling tools and more long-term initiatives. 

The committee will be asked to approve formation of the Modeling User Forum at this meeting. 

  1. Deactivation Enhancements Senior Task Force (DESTF) (10-10:25)

PJM’s Chantal Hendrzak is set to present a proposal to rework how generators operating on reliability-must-run (RMR) agreements are compensated, the advance notice generation owners must provide PJM ahead of bringing a unit offline, and added transparency around related processes, such as the RMR revenue allocation zonal rate and Independent Market Monitor determinations of market power. The DESTF supported the PJM-sponsored proposal over two others offered by the Monitor and RTO. 

The committee will be asked to endorse the proposed solution and corresponding tariff revisions. Same-day endorsement will be sought at the Members Committee. 

Issue Tracking: Enhancements to Deactivation Rules 

  1. ELCC Accreditation Issue Charge (10:25-10:40)

PJM’s Michele Greening will present revisions to an issue charge addressing how PJM’s effective load carrying capability (ELCC) framework is used in resource accreditation. The change would add a key work area examining how market participants can hold greater certainty in ELCC ratings between the Base Residual Auction (BRA) and delivery year. 

The committee will be asked to approve the revised issue charge upon first read at this meeting. 

Issue Tracking: Capacity Market Enhancements – ELCC Accreditation Methodology 

  1. 2025/2026 RPM 3rd Incremental Auction Installed Reserve Margin (IRM) and Forecast Pool Requirement (FPR) (10:40-11:05)

PJM’s Josh Bruno will present a proposal to revise the IRM and FPR parameters for the third 2025/26 Incremental Auction (IA). Rising load growth in the 2025 Load Forecast has led to shifting ELCC ratings for resources participating in the third 2025/26 Incremental Auction (IA). (See “Stakeholders Discuss Revised IRM and FPR Values for 3rd Incremental Auction,” PJM PC/TEAC Briefs: Jan. 7, 2025.) 

The committee will be asked to endorse the 3IA IRM and FPR upon first read at this meeting. Same-day endorsement will be sought at the Members Committee. 

Members Committee

Endorsements (11:55-12:35)

  1. Manual 34 Revisions (11:55-12:05)

Greening will present revisions to Manual 34: PJM Stakeholder Process to codify a process for the RTO and members to follow after FERC rejects a stakeholder-endorsed proposal. 

The committee will be asked to approve the proposed revisions at this meeting. Lynn Horning, of American Municipal Power, will move the motion and Ruth Price, of the Delaware Division of the Public Advocate, will second the proposed revisions. 

  1. Deactivation Enhancements Senior Task Force (DESTF) (12:05-12:20)

Hendrzak is set to present the DESTF-endorsed proposal to the Members Committee should the MRC approve the changes. 

The committee will be asked to approve the proposed solution and corresponding tariff revisions at this meeting. Same-day endorsement will be sought at the Markets and Reliability Committee. 

  1. 2025/2026 RPM 3rd Incremental Auction (3IA) Installed Reserve Margin (IRM) and Forecast Pool Requirement (FPR) (12:20-12:35)

Bruno will present the proposal to revise the IRM and FPR parameters for the third 2025/26 IA, should the MRC endorse the proposal.