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June 6, 2024

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Offshore Wind Projected to Save New Englanders $630M per Year

A new analysis prepared for the Sierra Club concludes offshore wind energy would be a money-saver for New Englanders, despite the high cost of construction. 

The six-state region relies heavily on natural gas for power generation, the report explains, and the cost of gas can be quite high, particularly in winter. 

“Charting the Wind” projects that bringing 9 GW of offshore wind online would save $2.79 or $4.61 per month per average residential customer, depending on whether a midrange or high-price gas scenario is used. The total would be $630 million in an average year in the midrange model, the authors write. 

Synapse Energy Economics, which prepared the report, notes there are additional benefits to be gained by shifting from natural gas generation, beyond the savings on utility bills. 

These include the climate and public health improvements yielded by reducing the power sector’s emissions of carbon dioxide, nitrogen oxides, sulfur dioxide and fine particulate matter.  

Also, the average $3 billion spent per year to buy natural gas for power generation in New England goes out of the region. Slashing gas use could keep a significant percentage of that money in the regional economy. 

The Sierra Club, a proponent of offshore wind energy, commissioned the report to counter some of the criticism being leveled at the offshore wind industry as it gains a foothold in U.S. waters — particularly after multiple projects from Massachusetts to Maryland were sidelined or canceled in the past year because of soaring costs. 

“Opponents of offshore wind argue that building out offshore wind infrastructure is too expensive, often without any empirical support for that contention,” Sierra Club staff attorney Sarah Krame said during a news conference June 4. “Recent increases in the cost of offshore wind and the cancellation of contracts for development of offshore wind have further raised questions about the costs and benefits of this renewable resource.” 

Synapse Vice President Melissa Whited said the authors specifically chose the highest recent construction cost as their baseline for calculating the savings for New England offshore wind, even though they hope the current financial pressures will moderate as the industry matures in the United States. 

(That would be $150.15/MWh, the weighted all-in cost of the two most recent contracts agreed upon in New York — Ørsted’s Sunrise Wind and Equinor’s Empire Wind. See related story, Empire, Sunrise Wind Back Under Contract in NY.) 

To calculate a savings of $2.79 or $4.61 per month for each New England family, Synapse modeled 9 GW of wind power feeding into the grid and performed a regression analysis of its impact on supply and demand curves.  

Wind through turbine blades is free, but natural gas prices fluctuate sharply, particularly in New England, where as much as 35% of the supply is imported LNG on peak days. 

“So, once we conducted this regression analysis, we found that adding all that offshore wind and shifting the supply curve would drop the price between 45 and 60% depending on the year,” Whited said. “And we use 23 historical weather years to account for that variation.” 

Josh Berman, a senior attorney with Sierra Club’s environmental law program, pointed out an important confluence of factors: Offshore winds blow strongest in winter, when gas constraints are highest in New England. 

“In addition, on a daily basis, offshore wind is highly complementary to solar power, having its lowest output in the middle of the day when solar generation is high and having higher operation at times when solar power is less available,” he said. 

NetZero Insider asked about the savings calculation. New York state projects Sunrise and Empire would cost utility customers an extra $2.09 a month on average, while the New England report projects monthly savings of $2.79 or $4.61 per customer using the same $150.15/MWh construction cost estimate. 

The answer is volatility, or lack of it. 

“You have different markets and different structures of those markets,” Whited explained. “We also are more gas-constrained in New England. And so what we see is during the winter when the pipelines are operating at capacity, we have very expensive generators and oil-fired generators coming online, and the wholesale electricity market prices just skyrocketing in New England.” 

She added: “You get a slightly different effect, a slightly more muted effect in NYISO because they have a different supply curve.” 

Recent history holds an example in New England that might challenge the savings model projected. 

Rhode Island Energy managed an offshore wind solicitation for Rhode Island in mid-2023, when the cost and supply chain crises were worsening. Only one proposal was submitted, and it was rejected as too costly for ratepayers. (See Rhode Island Energy Rejects Revolution Wind 2 Proposal.) 

Whited said she did not know what the proposed cost of that project would have been. 

In response to multiple contract cancellations along the southern New England coast and the offshore wind industry’s struggles, Connecticut, Massachusetts and Rhode Island joined in October 2023 for the first-ever multistate solicitation, seeking proposals for 6,000 MW of capacity. 

Projects totaling 5,454 MW were submitted by the March 27 deadline for bids. No decision has been announced on the proposals, and no indication has been offered regarding whether the construction costs would be more or less than $150/MWh. (See New England States’’ OSW Procurement receives 5,454 MW in Bids.) 

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Empire, Sunrise Wind Back Under Contract in NY

Two offshore wind projects have rebounded from the financial turmoil of 2023, finalizing replacement contracts with New York for 1,734 MW of capacity. 

Empire Wind 1 and Sunrise Wind were among a flurry of contract cancellations from Massachusetts to Maryland in the past year as costs soared to the point that construction became untenable. The two New York contracts announced June 4 are informed by the setbacks of the past year, in which developers recorded billions of dollars in impairments and government managers saw development pipelines built over the course of years shrivel in a matter of weeks. 

Importantly for the state, Empire and Sunrise are mature proposals, with key approvals in hand and onshore construction already underway. If built as planned, they will be the largest power generation projects in New York in more than a third of a century and an important piece of the state’s decarbonization and economic development strategies. 

“New York is leading the nation to build the clean energy industry, create good-paying jobs and advance our climate goals,” Gov. Kathy Hochul (D) said in a statement. “Offshore wind is a critical piece of our clean energy blueprint to address the climate crisis, and our investments are building a healthy, sustainable New York so that future generations can thrive.” 

New York has a 2035 goal of 9 GW of installed offshore wind. 

South Fork Wind gave the state its first offshore electricity. What it lacks in size — 132 MW — it makes up in bragging rights as first utility-scale project completed in U.S. waters. 

Lengthy History

Equinor/bp and Ørsted/Eversource Energy were awarded contracts for Empire and Sunrise, respectively, in New York’s 2018 solicitation.  

Inflation and interest rates soared in 2022. The two sought increased compensation from the state in June 2023, had their request rejected in October, were invited to rebid in November and were awarded tentative contracts in February. Those contracts are now finalized. 

Empire Wind 1 has a contracted nameplate capacity of 810 MW and is expected to generate first power in 2026. It received the green light from the U.S. Bureau of Ocean Energy Management in November. Equinor has begun rebuilding the South Brooklyn Marine Terminal as a hub for its own projects and for the industry. 

Equinor and bp have severed their partnership, giving Equinor sole ownership of Empire. It is looking for a new partner and expects to make a final investment decision on the project later this year. 

“Empire Wind 1 is a defining project for Equinor, and the [purchase and sale agreement] is an important milestone in de-risking and ensuring a robust path forward as we work toward delivering first power,” Molly Morris, president of Equinor Renewables Americas, said in a statement. 

Sunrise has a contracted nameplate capacity of 924 MW and also is expected to generate first power in 2026. Ørsted and Eversource announced their final investment decision in the project in late March, on the same day BOEM gave Sunrise the green light. Onshore transmission infrastructure work already has begun. 

Award of a final contract is one of the milestones that would trigger Ørsted’s buyout of Eversource’s half of the Sunrise project. Others — FERC and BOEM approvals — are yet to come. 

The new contracts carry a sharply higher upfront cost for ratepayers along with the promise of an unquantifiable societal benefit from decarbonizing the grid and billions of dollars in economic activity. 

The original contracts had an all-in average development cost of $83.36/MWh in 2018 dollars, with an average residential monthly bill impact of 73 cents. New York said the new contracts carry a weighted average all-in lifetime development cost of $150.15/MWh, with an average monthly bill impact of $2.09. 

This story was updated with additional information about the Ørsted-Eversource partnership.

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Stakeholders Support ISO-NE Long-term Tx Planning Filing, with Caveats

Stakeholder groups submitted comments to FERC last week in support of ISO-NE’s proposal to create a new longer-term transmission planning (LTTP) process to facilitate more forward-looking transmission investments to meet looming needs (ER24-1978). 

The new process was developed with the New England States Committee on Electricity (NESCOE) and features a default cost allocation method in which costs can be regionalized if the project is expected to bring net benefits. 

LTTP requests for proposals would be issued by ISO-NE at the request of NESCOE, and the RTO would evaluate and select a preferred solution. States then could submit an alternative cost allocation method or decide to terminate the process. (See NEPOOL TC Approves Process for States’ Transmission Needs.) 

The proposal also includes a supplemental process for projects that do not pass the cost-benefit threshold; individual states could agree to cover the costs in excess, while the remaining costs would be regionalized. 

ISO-NE filed the proposal with FERC prior to the commission’s Order 1920, which requires transmission providers to plan at least 20 years into the future, evaluate solutions with a set list of criteria and establish a default cost allocation method to apply if states are unable to reach an agreement on cost. (See FERC Issues Transmission Rule Without ROFR Changes, Christie’s Vote.) The commission issued the order May 13; it goes into effect 60 days after its publication in the Federal Register; and compliance filings are due 10 months after that. 

Advanced Energy United, NESCOE, RENEW Northeast, a coalition of climate nonprofits and the Connecticut Municipal Electric Energy Cooperative (CMEEC) all submitted comments in support of ISO-NE’s proposal, applauding the agreement as an important step in proactive transmission planning. 

United wrote that the proposal is “urgently needed,” noting that “the first Order No. 1920-compliant planning cycle will not start for at least two years, with selection of transmission facilities slated to occur three years after that.” 

However, the clean energy trade association expressed concern the proposal “fails to fully leverage the benefits of transmission competition” by tilting the playing field in favor of incumbent utilities. 

“The proposal makes it very difficult for nonincumbents to offer any solutions that require new equipment on a PTO’s [participating transmission owner’s] existing transmission system,” United wrote. 

Nonincumbent transmission owners “are prohibited from identifying or installing new equipment needed for upgrades on existing lines without partnering with the incumbent PTO,” the organization added. 

These concerns were echoed in comments by RENEW and a joint filing by New Hampshire Transmission and LS Power. The latter two argued the proposal makes the same mistakes as an RFP issued by ISO-NE in 2019 to address reliability concerns associated with the retirement of the Mystic Generating Station. Most of the submissions were disqualified for relying on the land of incumbent transmission owners, which ultimately led to tariff changes intended to fix the issue, the companies said (ER22-733). 

“Under the limitations included in the proposal, only an incumbent transmission owner will be permitted to submit comprehensive solutions to identified needs,” the companies wrote, adding that the proposal contains a “a de facto [right of first refusal] for incumbent PTOs.” 

RENEW urged FERC to accept the filing as is but called on ISO-NE to initiate an additional phase of revisions to address the concerns about incumbents. 

In testimony submitted with its filing, ISO-NE said requiring complete solutions would increase “the likelihood of the process successfully leading to development of transmission solutions, rather than having the process terminate because the submitted longer-term proposals cannot be combined in a manner that addresses the identified needs.” 

CMEEC supported the proposal, calling it “a meaningful step towards the more comprehensive planning approach envisioned by the commission.” 

“The selection of projects through competitive solicitation should allow for consideration of transmission solution proposals that feature joint ownership arrangements with consumer-owned utilities,” which could provide “myriad benefits” including financial benefits for ratepayers, tax exemptions, lower cost of debt and reduced siting risk, CMEEC wrote. 

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NIA: Cost, Risk Sharing Needed to Grow Advanced Nuclear Pipeline

Speaking in Waynesboro, Ga., on May 31, Energy Secretary Jennifer Granholm celebrated the completion of Units 3 and 4 at the Vogtle nuclear power plant with a call for the United States to “draw up some more battle plans for more reactors” and triple its nuclear capacity by 2050. 

But according to a new report from the Nuclear Innovation Alliance (NIA), significant barriers remain for moving beyond first-of-a-kind (FOAK) projects like Vogtle to the nearly 200 GW of nth-of-a-kind (NOAK) advanced nuclear projects the U.S. will need to reach that 2050 goal. 

The first new reactors built in the U.S. since 2016, Vogtle’s two units have come online seven years late and $17 billion over budget, leaving subsequent projects surrounded by perceptions of risk, whether real or not, and under pressure to show they can execute on budget and on time. While the Department of Energy is funding a handful of advanced nuclear demonstration projects, “material financial commitments (i.e., signed contracts and spending on project development) to additional projects have been slow in coming,” the report says. 

These projects are generally smaller and use different, more advanced and efficient technologies than the existing 94 reactors at the 54 power plants that make up the U.S. nuclear fleet, which provides nearly 20% of the nation’s power. For example, X-energy, one of the developers receiving federal funds from DOE, is working with Dow to install four 80-MW small modular reactors (SMRs) at the company’s Seadrift, Texas, plant, where it manufactures a range of plastics and other products.  

What’s needed for a healthy pipeline of NOAKs will be a clear set of best practices, accelerated permitting, supply chain buildout and innovative approaches to cost- and risk-sharing for project developers and offtakers, the report says. 

“Faster growth and clean, firm energy is key to the growth objectives of large offtakers” and may make them more willing to accept more development risk, said Stephen Greene, a senior fellow at NIA and author of the report. 

“To accelerate commitments to advanced nuclear, energy offtakers may need to accept a greater portion of the project risks than they do through traditional offtake agreements, such as providing part of the capital commitment to address anticipated costs,” Greene said, speaking at a launch webinar for the report June 3. 

Offtakers sharing costs and risks could receive “compensation later, such as an adjustment to offtake costs or participation in project returns,” the report says. “The most impactful private-sector action would be for offtakers to make capital commitments to provide a backstop of project completion costs,” and the Department of Energy also might chip in to cover at least part of any cost overruns, the report says.  

Kreshka Young, Dow’s North America business director for energy and climate, said her company is financing the upfront development of the X-energy SMRs like any “project in our normal course of our capital planning, and it will go through our normal capital approval process.” 

Dow eventually could look for partners, as offtakers or owners, Young said, but she expects the company’s ownership and business models likely will evolve over time. “But again, at this stage, with the risk levels where they are, the perceptions of risk especially where they are, Dow is today the primary owner of the project.”  

“The real emphasis of the report is how to make projects more attractive to capital markets,” Greene said. “Additional financing either from private-sector participants or from new federal capabilities is a kind of assurance that I think capital markets are going to need, especially for initial projects to address … both the perceived and the real risk of cost overruns.” 

Other topline findings and recommendations in the report include: 

    • Due to the higher costs of FOAKs, the only way these projects pencil out is if they are developed as part of “an intended multi-project deployment plan (through which the cost of early projects can be shared among the projects).” Costs also can be shared via an “order book” of a number of projects of the same design. 
    • In the absence of ongoing, widespread nuclear construction, the U.S. must rebuild its supply chain for new plants, in particular, for the high-assay low-enriched uranium (HALEU) used in advanced and small modular reactors. 
    • Reforms are needed to streamline and speed permitting of new projects at the Nuclear Regulatory Commission (NRC). In a separate overview of potential NRC reforms, NIA noted licensing for advanced and small modular reactors “is challenging because the current licensing pathways have been tailored to conventional, large light water reactors.” 

So far, the NRC has certified the design for only one SMR, the NuScale reactor, and authorized construction of a test advanced reactor developed by Kairos Power, according to the report.  

From FOAKs to NOAKs

Throughout its construction, Vogtle’s repeated delays and cost overruns made the project a point of controversy, particularly for Georgia Power customers who will pick up $7.56 billion of the price tag for finishing the two units. A report in The Atlanta Journal-Constitution estimated that paying off that extra cost could increase utility bills by 10%.   

But with the two units completed and online, Granholm and others at DOE have hailed Vogtle as a major success.  

The expanded plant will be producing roughly 35 million MWh of power per year for the next 80 years, “so that is a multigenerational asset,” said Julie Kozeracki, director of strategy at DOE’s Loan Programs Office, which provided about $12 billion in loans for Vogtle.  

Kozeracki stressed that the lessons learned from the construction of Unit 3 resulted in lower costs and shorter timelines for Unit 4.  

“Many of the challenges faced at Vogtle were true first-of-a-kind issues,” she said. “So, for example, construction began without a complete design, without a mature supply chain, without a trained workforce. But in the course of building Vogtle, we’ve now solved these issues. … 

“Unit 4 was roughly 30% cheaper and more efficient than Unit 3,” she said, and the time needed for testing plant systems went from 94 days at Unit 3 to 42 days at Unit 4.  

“So the worst thing we could do would be to stop after two units,” Kozeracki said. “Vogtle 3 and 4 are a downpayment for everyone to capitalize on.” 

Larger reactors, like the Westinghouse API 1000 reactors used at Vogtle, also can offer economies of scale, which may be particularly attractive to industrial and data center customers looking for large amounts of firm, clean power. 

Many existing nuclear sites have room for additional reactors, she said. Vogtle is the only site in the U.S. with four reactors. “Multi-unit nuclear sites are 30% cheaper to operate than single-unit sites, but we have currently 19 single-unit sites. We have 31 sites with two reactors, three with three reactors … so we have a lot of room to grow.” 

Still, going forward will require a rebalancing of risks, especially for utilities, Kozeracki and Greene said.  

Regulated utilities often cannot recover the high upfront costs of siting, permitting and construction of a new nuclear plant until it goes into operation and “the electricity rates they can charge to customers are not structured to incorporate that degree of risk,” the report notes. 

“Tech companies like Google, Microsoft and Amazon have so much to gain with [nuclear] assets coming online,” Kozeracki said. “And they are growth companies that are in a position to take risk, and they have the cash on hand to take some of that risk. So, I think in order to execute on an effective energy transition, utilities are going to have to learn to become more like growth companies.” 

“The objective is to get over the hump of concerns about risk and get to a point where we’re building these projects more in the regular course,” Greene said. “Then the companies that are building them will have the ability to take those risks.” 

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Senate Energy Committee Advances Biden’s FERC Nominees

The Senate Energy and Natural Resources Committee advanced all three of President Joe Biden’s nominees to FERC with broad margins in a business meeting held June 3. 

“Two of the five seats on the commission are already vacant, and a third will expire at the end of the month,” committee Chair Joe Manchin (I-W.Va.) said, referring to Commissioner Allison Clements (D). “Confirmation of these three nominations will ensure that the commission has a full complement of five commissioners continuing important work. I believe all three are well qualified and intend to vote for all three.” 

Manchin, while still caucusing with the Democrats, recently left the Democratic Party to become an independent. 

Clements’ term expires June 30; if she leaves before a replacement is approved by a floor vote in the Senate and sworn in, FERC could lack a quorum. Commissioners can stay on past their term’s expiration if a replacement has not been confirmed until Congress adjourns at the end of the year, but Clements has not said exactly when she plans to leave. 

“By one estimate, the commission regulates activities that account for 7% of our nation’s economy,” committee Ranking Member John Barrasso (R-Wyo.) said. “And for that reason, we must fulfill our responsibility to maintain a quorum on the commission.” 

FERC was left without a quorum at the beginning of President Donald Trump’s term for seven months, meaning it could not vote out any orders, and Barrasso said he does not want that situation repeated. He also supported all three nominees. 

Several committee members voted against the nominees, but none were in doubt, with both David Rosner and Lindsay See advancing by a 16-3 vote and Judy Chang by 15-4. 

FERC must have at least two members who are not in the president’s party; the current makeup is 2-1, with Commissioner Mark Christie the lone Republican. 

Rosner is a FERC staffer who was detailed to the ENR Committee and generated opposition from the left, with Sen. Bernie Sanders (I-Vt.) voting against him, despite being backed by the Democrats. 

Chang, another Democratic pick, also faced some opposition from Republicans. She is a longtime industry expert who served as undersecretary of energy and climate solutions in former Massachusetts Gov. Charlie Baker’s (R) Executive Office of Energy and Environmental Affairs. 

The Republicans put forward See, who is the solicitor general of West Virginia, having argued that state’s and others’ cases against the Obama EPA’s Clean Power Plan, which led to the “major questions” doctrine. 

Sen. Josh Hawley (R-Mo.) voted against all three nominees as a protest against the Grain Belt Express transmission line being developed by Invenergy, which could be in a National Interest Electric Transmission Corridor designated by the Department of Energy — giving FERC backstop siting authority over its path through his state. (See On the Road to NIETCs, DOE Issues Preliminary List of 10 Tx Corridors.) 

“FERC has the ability to countermand state authorities, essentially to bypass the state regulatory process and designate the land — including potentially taking it,” Hawley said. 

At their confirmation hearing, Hawley had asked all three nominees to guarantee they would take into account the interests of local farmers and residents and not “rubber stamp” DOE’s corridors. 

“I was particularly disappointed to [hear] the answer of Ms. See, who would not answer my question,” Hawley said. “And I just want to say as a Republican, I’m not going to vote for other Republican nominees who will not stand up to the power grab that is happening all across the country, and of which my state in particular has been a victim.” 

In response, Barrasso read off a written answer See had given to that question that will sound familiar to anyone who follows FERC, where its members take pains to avoid stating their opinions on specific cases that come before them to avoid having parties file recusal motions against them. 

Hawley “accurately asked” See to exercise caution when approving transmission lines, and she responded she would follow the law, Barrasso said. 

“She went on to say, ‘Sensitivity to how federal actions affect state and local communities is essential when making policy decisions,’” Barrasso said. “And she added, ‘I would consider a proposal’s consequences for local landowners important to the public interest analysis.’” 

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ACEG Report Lays out the Case for Proactive Planning in PJM

PJM should adopt a more proactive transmission planning process to deal with the changing resource mix and growing demand on its system in the coming 15 years, according to a report released June 4 by Americans for a Clean Energy Grid (ACEG). 

“Transmission Planning for PJM’s Future Load and Generation” was written by Grid Strategies and David Gardiner and Associates. 

“This report takes a deep dive into some of the inputs that PJM needs to take a closer look at in conducting more holistic scenario planning,” ACEG Executive Director Christina Hayes said in an interview June 3. “PJM has been making progress in evolving its transmission planning in recent months, and we’re excited about those efforts. We know that more will be required in implementing Order No. 1920, and we believe this report provides a road map to doing so.” 

Skeptics of proactive planning argue that transmission plans are full of uncertainty and speculation, but ignoring the massive changes impacting the energy industry and continuing to plan reactively will not address those concerns, the report says. Uncertainty is best addressed by incorporating the best data on the future resource mix and running different scenarios to determine the optimum set of solutions, as Order 1920 requires. 

The report forecasts demand will be higher than the forecast PJM released early this year by about 8% in its “Expected” scenario and 18% for a high-growth scenario. Even those scenarios might be conservative given the continual announcements of new manufacturing facilities and data centers. 

“We find PJM will need an additional 623 TWh of annual energy generation by 2040 to meet this resource gap under our Expected scenario — equivalent to 76% of PJM’s 2023 generation,” the report says. “Under the High scenario, PJM faces a larger resource gap in 2040 and will need to nearly double current energy generation by adding 798 TWh. The increase is driven by higher electrification estimates leading to larger load growth and higher amounts of generation retirements due to shorter plant lifespan assumptions.” 

The biggest difference between PJM’s load forecast and the two scenarios in the report is the latter assume higher demand from electrification and higher generation retirements. The electrification estimates in the report are based on projections from the National Renewable Energy Laboratory, while the report says PJM’s Independent Market Monitor has estimated higher retirements than the RTO itself. 

“I think the one thing we can be certain of with every single demand forecast we have seen recently is that they will all be wrong. Right?” Hayes said. “Nobody is going to forecast the future with 100% certainty.” 

But one thing that is certain is that several factors are leading to higher demand, and it makes sense to ensure transmission is ready to meet that on time, she added. 

“We do need to be thoughtful and measured in how we plan for it,” Hayes said. “But in doing so, we need to take the long view because if we wait until it’s upon us, we’re either going to have outages, or resources that we want to keep in the United States are going to end up being located outside the United States, which is a national security problem. Or we’re going to develop the grid in a more expensive way.” 

The Regional Transmission Expansion Process in place now includes a short-term reliability process looking out five years and another reliability planning process that looks out 15 years, both using base cases based on power flow models that includes capacity cleared in the market and only announced retirements. Retirements require only 90 days’ advance notice. 

Better anticipating retirements can help significantly, as seen recently with the Brandon Shores coal plant in Baltimore. PJM found the grid would need $785 million in transmission upgrades for it to retire reliably; those will take until 2028 to complete, 3.5 years from the plant’s desired retirement, the report says. A reliability-must-run deal for the plant might cost consumers an additional $250 million a year, which could have been avoided or lowered with proactive planning. 

“In Order 1920, FERC did a good job of identifying the various factors, looking at fuel costs and market impacts and likely resource retirements, and doing a deep dive on what the generation resource mix is likely to be in five to 10 to 20 years, and rolling those factors into multivalue, holistic planning,” Hayes said. 

Another issue in PJM is a growing share of renewables as state and federal policies, lower costs and consumer demand push more and more onto the grid. While some states have policies driving that transition, others are not interested in it at all. Hayes argued that holistically planning the entire grid would even benefit the latter. 

“There’s a lot of flexibility in FERC’s rule to allow states with additional goals to assume part of the costs and ensure that states that also partake in the economic/reliability benefits contribute as well,” Hayes said. “It’s the idea of a region being seen as a region rather than a loose collection of states; it is just more cost effective for the region to plan transmission together and then allocate the costs.” 

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Federal Briefs

Manchin Leaves Democratic Party, Files as Independent

Sen. Joe Manchin last week officially left the Democratic Party and registered as an independent. 

“Since becoming a United States senator in 2010, I have seen both the Democratic and Republican parties leave West Virginia and our country behind for partisan extremism while jeopardizing our democracy,” Manchin said in a statement. “Today, our national politics are broken and neither party is willing to compromise to find common ground.” 

Manchin, who chairs the Senate Energy and Natural Resources Committee, is not seeking re-election. West Virginia Gov. Jim Justice (R) is seeking the seat in November and is expected to win. Senate Majority Leader Chuck Schumer had urged Manchin to leave the party but run for re-election. Justice’s decision to enter the Senate race was seen as a key factor in Manchin’s decision not to seek re-election. 

More: Axios; The New York Times 

Republican AGs Ask SCOTUS to Block Climate Change Lawsuits

Republican attorneys general in 19 states have asked the Supreme Court to block several Democratic-led states from pursuing climate change lawsuits against the oil and gas industry in their own state courts. 

The request comes as dozens of states and local governments have filed lawsuits alleging that fossil fuel companies deceived the public about the risks of their products contributing to climate change. The lawsuits claim billions of dollars of damage from severe storms, wildfires and rising sea levels.  

The GOP attorneys contend only the federal government can regulate interstate gas emissions, and states have no power to apply their own laws to a global atmosphere that reaches beyond their borders. 

More: The Associated Press 

Increasing Use of Renewables in US Yields Billions in Benefits

A new study published in Cell Reports Sustainability finds emission reductions provided $249 billion in climate and health benefits in the U.S. 

By increasing its use of renewable energy between 2019 and 2022, the U.S. has not only slashed its carbon emissions but also improved air quality, yielding hundreds of billions of dollars of benefits, the report found. During that period, by reducing fossil fuel power plants, the nation’s use of wind and solar power cut its carbon dioxide emissions by 900 million metric tons. 

“These findings can help us target future wind and solar development to provide the greatest climate and health benefits,” said Jeremiah Johnson, a climate and energy professor at North Carolina State University whose work was cited in the study. 

More: The Guardian 

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Company Briefs

PGE joins Grid United, ALLETE in 3,000-MW East-west Tx Line

Portland General Electric last week signed a nonbinding memorandum of understanding with Grid United and ALLETE in the development of the North Plains Connector, an approximately 415-mile HVDC transmission line. 

The $3.2 billion project would be the nation’s first HVDC transmission connection among three regional U.S. electric energy markets, including MISO and SPP. 

The parties will now work to finalize definitive agreements regarding PGE’s participation, which is expected to involve a 20% ownership share of the project. 

More: Portland General Electric 

Hydrostor Chooses Denver for HQ

Canadian energy storage company Hydrostor is opening its U.S. headquarters in Denver, the company announced last week. 

Chief Development Officer Tom Duckett said the company plans to hire 20 more people this year, boosting the Denver staff to about 30. The company employs roughly 100 people worldwide. 

Hydrostor chose Denver as its U.S. base in part because of its industrial activity, Duckett said. 

More: The Denver Post 

Recurrent Energy Closes BlackRock Investment

Canadian Solar-owned Recurrent Energy last week announced the initial closing and funding of an investment in its platform by BlackRock through a fund managed by its Climate Infrastructure business. 

Once the transaction is fully complete, BlackRock’s $500 million investment will represent 20% of the outstanding fully diluted shares of Recurrent on an as-converted basis. Canadian Solar will continue to own the remaining majority shares of Recurrent. 

Recurrent expects to have 4 GW of solar and 2 GWh of storage in operation in the U.S. and Europe by 2026. 

More: Renews 

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State Briefs

ALABAMA 

EPA Formally Denies Plan for Coal Ash Waste

EPA last week formally denied the state’s plan to allow Alabama Power and other utilities to continue storing coal ash in unlined pits. 

The state’s Department of Environmental Management said it was disappointed in the decision and would appeal. The state’s coal ash program “meets all the legal, environmental and other requirements for approval. The program and the permits issued under the program are leading the way in protecting the public and the environment,” the department said. 

EPA first announced a proposed denial of the plan last August, saying it did little to protect humans and the environment. The decision marked EPA’s first-ever denial of such a state plan.  

More: Inside Climate News 

FLORIDA 

New Gainesville Regional Utilities Authority Members Sworn in

Five members of the Gainesville Regional Utilities Authority board were sworn into office last week, officially marking the return of the authority following a brief hiatus after all four former members resigned because of a lawsuit that challenged the eligibility of the Gov. Ron DeSantis appointees to hold their positions. 

Ed Bielarski, the former general manager of GRU, was sworn in, along with Craig Carter, Eric Lawson, David Haslam and Robert “Chip” Skinner. 

Bielarski was elected chair, while Haslam was named vice chair. Carter and Lawson are two of the former members who had resigned. 

More: Gainesville Sun 

ILLINOIS 

ICC Rejects Peoples Gas Request for More Pipeline Funding

The Commerce Commission last week rejected most of a request from Peoples Gas to tack $7.9 million onto a rate hike for emergency work tied to the utility’s pipeline replacement program. 

The commission voted to add just $1.6 million “out of an abundance of caution” to the $303 million hike approved for Peoples last fall. 

Earlier this year, the utility asked for a rehearing to allow additional spending on the pipeline project, which was halted pending an investigation by the commission, as estimated costs have ballooned from $2 billion to $11 billion since 2007. 

More: Chicago Sun-Times 

Lawmakers Move to Pause, Regulate CO2 Pipeline Development

Gov. JB Pritzker last week said he plans to sign a bill that will ban new carbon dioxide pipeline projects until the federal government sets new safety rules. 

The moratorium would expire on July 1, 2026, if the U.S. Pipeline and Hazardous Materials Safety Administration doesn’t finalize safety rules by then. The bill also requires monitoring of injection wells for at least 30 years after they close, a process that must be approved by the state and federal government. 

More: IPM News 

MAINE 

PUC Rejects Settlement with Electricity Maine over Complaints

The Public Utilities Commission last week rejected a proposed settlement with competitive electricity provider Electricity Maine, ruling that the agreement calling for customer refunds and the opportunity to switch to different rate plans falls short of what’s needed to punish the company given its hundreds of consumer complaints. 

The PUC voted 2-1 against the agreement and asked a hearing examiner to set a “timely schedule” to resolve the dispute. The decision will prolong a case that has been pending since February 2023. 

The settlement would have given refunds to about 18,000 customers, ranging from less than $10 to nearly $4,000 based on how much electricity they used. However, Chair Philip Bartlett II said it was not in the public interest. 

More: Portland Press Herald 

MICHIGAN 

Consumers Energy Seeks Rate Increase for Wildfire Mitigation

Consumers Energy last week filed for a rate increase with the Public Service Commission for $325 million to address wildfire mitigation. 

The utility said the money would be spent on burying power lines and infrastructure upgrades, along with prioritized tree trimming and equipment upgrades in areas where there is increased wildfire risk. 

The request would add about $10 to the average residential bill. 

More: Detroit Free Press 

Consumers Fined over Faulty Meters, Delays in Services

Consumers Energy has agreed to pay $1 million after the Public Service Commission investigated complaints of malfunctioning electrical meters, violations of rules on estimated billing, and significant delays in providing new electric and gas service. 

According to a statement from the PSC, the metering issue was tied to Consumers’ transition from 3G cellular meters to 4G. The commission also said the utility violated its standard requiring 90% of new service installations to be completed within 15 days. 

More: Michigan Advance 

Wind, Solar Farm Law Won’t Make November Ballot

A proposed ballot initiative to repeal the state’s new renewable energy permitting law will not appear before voters in November. 

Officials with Citizens for Local Choice had until 5 p.m. on May 29 to turn in the 356,958 signatures needed to place the measure on this fall’s ballot. The group did not meet that deadline. 

The initiative emerged soon after Gov. Gretchen Whitmer last fall signed a suite of bills that aim to transition the state to 100% clean energy by 2040. As part of the package, the law changed the way large-scale wind, solar and battery storage arrays are approved and puts permitting authority in the state’s hands. Opponents argued it deprived communities of the right to make their own land-use decisions. 

More: Bridge Michigan 

MINNESOTA 

Judge Rules Xcel’s Negligence in Coal Plant Accident Merits Refunds

Administrative Law Judge Ann O’Reilly last month concluded that Xcel Energy’s negligence contributed to a catastrophic equipment failure in 2011 at the company’s Sherco 3 power plant in Becker and merits a refund of certain costs to customers. 

The Public Utilities Commission must now decide whether to accept the judge’s ruling and issue the refund. The size of the proposed refund was not disclosed, but it would be less than $34 million, split among Xcel’s 1.3 million state customers. 

The November 2011 accident at the coal-fired Sherco 3 ripped giant turbine blades off their mountings, hurled shards of metal across the plant and triggered a fire. No one was hurt, but the plant was closed for repairs for 22 months. While it was, Xcel had to find replacement power on the wholesale market or from other plants. The PUC allowed Xcel to bill customers for the extra costs of replacement power. 

More: Star Tribune 

NEW JERSEY

Galloway Passes Resolution Against OSW Development

The Galloway Township Council last week passed a resolution opposing offshore wind projects. 

“The Township of Galloway further opposes any wind turbine projects along New Jersey’s coast, regardless of height of the structures and distance from New Jersey’s pristine shorelines, until proper studies are performed,” the resolution states.  

The council urged the Atlantic County executive and Board of Commissioners to pursue all appropriate action, including legal action, to prevent the approval and construction of wind turbine projects. 

More: The Press of Atlantic City 

Ørsted to Pay $125M for Pulling out of OSW Projects

Gov. Phil Murphy last week announced that Ørsted will pay the state $125 million for pulling out of two offshore wind projects. 

The settlement is less than half of the $300 million Ørsted originally guaranteed if it failed to build the first wind farms off the state’s coast. In October 2023, the company announced it had scrapped its Ocean Wind 1 and 2 projects because of inflation, rising interest rates and supply chain bottlenecks. 

The administration said it plans to use the money to further support offshore wind projects by investing in manufacturing facilities and other clean energy programs. 

More: The Philadelphia Inquirer 

OHIO 

Householder Pleads not Guilty to New Charges

Imprisoned former House Speaker Larry Householder last week pleaded not guilty to 10 additional felony counts brought against him by the state. 

Charges brought by Attorney General Dave Yost against Householder include one count of theft in office, two counts of aggravated theft, one count of telecommunications fraud, one count of money laundering and five counts of tampering with records. 

The indictment alleges Householder misused campaign funds to pay for his criminal defense in his federal case — for which he was found guilty of racketeering and sentenced to 20 years in prison — and failed to disclose fiduciary relationships, creditors and gifts on required ethics filings, including House Bill 6, the law that was at the center of a massive bribery scheme by FirstEnergy. 

More: The Associated Press 

Youngstown Explosion Caused by Cut Gas Line, NTSB Says

A crew working in the basement area of a building in Youngstown intentionally cut a gas line not knowing it was pressurized before a deadly explosion last week, the National Transportation Safety Board said. 

The agency said a preliminary investigation shows workers were in the basement of the 13-story Realty Tower, which contains apartments on the upper level, to clear out piping and other outdated infrastructure and debris in anticipation of a city project to fill in the area and replace the sidewalks. Workers smelled no gas before they started cutting the pipe. 

The explosion blew out much of the ground floor, killing a Chase Bank branch employee and injuring several others. Youngstown Mayor Jamael Tito Brown said in a news release that the city had contracted with a construction company called GreenHeart to perform private utility relocation in the basement of the tower. He said “there is no evidence” that cutting the gas line the NTSB mentioned was necessary to complete that work. 

More: The Associated Press 

OREGON 

PUC: State Can’t Limit PacifiCorp’s 2020 Wildfire Payouts

The Public Utility Commission last week ruled that PacifiCorp can’t limit how much it will have to pay for wildfire damage. 

The PUC rejected the request by Pacific Power’s parent company to limit how much it will have to pay by excluding noneconomic damages from its penalties, even in cases of gross negligence or willful misconduct. Both the PUC and PacifiCorp officials suggested it might require action from the legislature to limit the utility’s costs. 

More: Oregon Public Broadcasting 

VERMONT 

Scott Vetoes Lawmakers’ Priority Energy Bill

Gov. Phil Scott (R) last week vetoed a bill that would require state utilities to buy more renewable energy at a faster pace, with most utilities purchasing all their energy from renewable sources by 2030. 

Scott cited cost as his main concern, saying the bill would “will raise Vermonters’ utility rates, likely by hundreds of millions of dollars.” While members of the Public Service Department projected the bill would cost ratepayers $1 billion, the state’s Joint Fiscal Office later said the bill’s price tag would be less than half the department’s estimate. 

The bill would accelerate the state’s renewable transition, requiring most utilities to source 100% of their electricity from renewable sources by 2030 and all utilities to make the switch by 2035. 

More: VT Digger 

VIRGINIA 

Federal Judge Rejects Request to Halt Virginia Beach OSW Farm

U.S. District Court Judge Loren AliKhan last week denied a request from a coalition of conservative interest groups that sought to halt construction of Dominion Energy’s Coastal Virginia Offshore Wind project in Virginia Beach. 

The groups sued the Biden administration earlier this year, arguing federal agencies ignored threats to endangered whales when approving the project. The suit will move forward this fall, but the decision denied plaintiffs’ request for a preliminary injunction to stop construction while the lawsuit is decided. 

AliKhan said there wasn’t enough proof that plaintiffs would suffer irreparable harm from construction on the project moving forward. 

More: WHRO 

Hearne Named Director of Electric Utility Reg Commission

Carrie Hearne last week was hired as the executive director of the Commission on Electric Utility Regulation.  Hearne will take the role after five years at Virginia Energy, where she was the director of affordability and competitiveness.  The commission reviews requests to change the state’s energy laws and regulations. 

More: Virginia Mercury 

WASHINGTON 

Inslee Rejects Recommendation to Halve Wind Farm

Gov. Jay Inslee last week rejected a recommendation to cut in half a proposal for what would be the state’s largest wind farm. 

Plans for the $1.7 billion Horse Heaven wind farm originally included up to 222 wind turbines across 24 miles of the Tri-Cities area, plus three solar arrays covering up to 8.5 square miles. But last month, the Energy Facility Site Evaluation Council recommended slashing the proposal in half because nests of the endangered ferruginous hawk were found in the area. Inslee rejected the council’s recommendation and told the group to reconsider in hopes of expanding the project closer to its full potential. 

The council has deliberated over the Horse Heaven wind farm for more than three years. Now it has three months to consider the governor’s notes and revise its original recommendation. 

More: The Associated Press 

WISCONSIN 

Alliant Plans to Convert Sheboygan Coal Plant to Natural Gas

Alliant Energy last week announced it plans to convert its coal-burning power plant in Sheboygan County into a natural gas plant in 2028. 

The utility did not provide cost projections for the plant’s transition but said it will help retain the workforce at the Edgewater Generating Station as it continues to burn coal until 2028 instead of 2025. It is the second time Alliant has pushed back Edgewater’s retirement, which was initially planned for 2022. 

The transition still needs to be approved by the Public Service Commission. 

More: Wisconsin Public Radio 

Posted on

Pathways Backers Advance WEIM/EDAM Governance Proposal

Backers of the West-Wide Governance Pathways Initiative will move quickly on a proposal to alter the governance of CAISO’s Western Energy Imbalance Market (WEIM) and Extended Day-Ahead Market (EDAM) after voting to approve the plan May 31. 

The initiative’s Launch Committee unanimously endorsed step 1 of the “stepwise” proposal the group issued in April. The proposal calls for CAISO to revise the WEIM charter to elevate the oversight position of the market’s Governing Body over WEIM/EDAM matters to “primary” authority, rather than the “joint” authority it currently shares with the ISO’s Board of Governors. (See Western RTO Group Floats Independence Plan for EDAM, WEIM.) 

“We’re thrilled to be able to move forward with step 1 and start to engage with … CAISO in a different way,” committee Co-Chair Kathleen Staks, executive director of Western Freedom, said after the vote. 

The Launch Committee now will submit step 1 of the proposal to CAISO Board Chair Jan Schori and WEIM Governing Body Chair Andrew Campbell to kick off a stakeholder process at the ISO this month. 

Pathways backers anticipate CAISO will hold an initial public stakeholder call — with the Launch Committee presenting — in mid-June. That would be followed by a three-week comment period, a committee response period and a public meeting for a joint decision by the board and Governing Body in late July or early August. 

“Let me start by really thanking the Launch Committee for taking up the concept that the regulators had put forward last summer, fleshing it out and producing such an astonishing work product,” Oregon Public Utility Commissioner Letha Tawney said. 

Tawney was among the group of Western state energy officials who launched the Pathways Initiative last July to increase the potential for creating a single day-ahead electricity market for the region that expressly includes California and leans on the technical capabilities of CAISO. 

Arizona Corporation Commissioner Kevin Thompson, another initial supporter, commended the Launch Committee’s progress despite conflicts that arose at a previous private meeting of the committee in Phoenix. 

“There was some tension there in the room a little bit here and there,” Thompson said, “but to see where the stakeholders have moved the conversation to get us toward independent governance, and giving prior primary authority to the EIM as the governing board, is a step in the right direction that gets us away from the joint authority and starts moving us really closer towards independent governance.” 

The Pathways Initiative’s final proposal included a handful of changes from the original version, including expanding the responsibility of the Governing Body to respect both state and “local” policies in its decisions and highlighting the existing right of the body to institute a governance review process with the ISO board in the event of a mass withdrawal of EDAM entities from the market. 

The proposal also clarified the workings of the dual filing — or “jump ball” — process that would occur in the event the CAISO board disagrees with a tariff filing approved by the Governing Body and decides to submit a parallel filing with FERC.

Next Steps and Phases

The Launch Committee also voted to continue developing step 2 of the proposal, which will seek to transfer governance of the WEIM — and its associated future EDAM — to an independent “regional organization” (RO) that the Pathways group expects to establish next year. 

Step 2 poses greater challenges than the first step because it requires convincing the California legislature to pass a bill authorizing CAISO to transfer its authority over a large part of its market to the RO. While the Launch Committee itself will not be participating in those efforts, many of its members will be in their capacities as individual organizations with interests in the change. 

Launch Committee member Spencer Gray, executive director of the Northwest & Intermountain Power Producers Coalition, said step 2 also must address the “core tension” between the two options being considered for the structure of the RO, which relates to “the degree of institutional independence of the regional organization and the financial liability and responsibility that comes along with institutional independence.” 

Gray pointed to the series of “work streams” the Launch Committee has identified for its Phase II work plan, which focuses largely on issues embedded in step 2. The committee has appointed two leads to deal with each stream, which include:  

    • exploring the stakeholder process for the RO, including examining sector-based approaches and how to frame policies; 
    • dealing with CAISO-related issues; 
    • analyzing the existing CAISO tariff, which could entail identifying the functions of a balancing authority under a new market arrangement; 
    • addressing public interest issues, including considering the evolution of the WEIM’s Body of State Regulators; and 
    • addressing RO formation and governance, which would range from incorporation to board nomination to securing funding sources. 

Committee member Lisa Tormoen Hickey, a senior regulatory attorney with Interwest Energy Alliance, told meeting participants the Pathways Initiative will need to secure about $450,000 in funding for its Phase II activities through the end of the year. Those activities will include additional legal review for RO options, proposing an RO stakeholder process, making a final step 2 recommendation, and gathering and publishing stakeholder feedback on the recommendation. 

She said the committee estimates an additional $636,000 will be needed to complete Phase III activities, which will include establishing an RO “formation” committee, developing tariff amendments and bylaws, retaining a placement firm for selecting a board and management team, and monitoring California legislative and CAISO actions.