Page 944 – RTO Insider

April 9, 2021January 28, 2024

ISO-NE, NEPOOL File ‘Jump Ball’ on Updated ORTP Values

ISO-NE and NEPOOL jointly filed updated offer review trigger price (ORTP) values with FERC on Wednesday for Forward Capacity Market (FCM) parameters in the 2025/26 capacity commitment period (ER21-1637).

Filing under the “jump ball” provision of the Participants Agreement gives the RTO’s proposal and a stakeholder-backed alternative equal legal standing and provides the commission with discretion and latitude to adopt either measure. Both proposals accommodate changes and extensions to the federal tax credits for solar and wind developers passed by Congress in December.

ISO-NE’s ORTP proposal, created in concert with consultants Concentric Energy Advisors and Mott MacDonald, did not curry favor with stakeholders at a March 24 meeting of the NEPOOL Participants Committee. The consultants modified their treatment of tax credits in the discounted cash flow model, resulting in a revised ORTP value for solar resources. The RTO also made minor changes to each of its proposed ORTP values for the 16th Forward Capacity Auction because of the updated performance payment rate (PPR) value. Proposed tariff revisions include $1.381/kW-month for solar and removal of ORTP values for solar-plus-batteries resources. Despite the modifications, only 19.04% voted in support during a sector-weighted vote.

The PC did, however, approve modifications to ORTPs and tariff revisions from stakeholders. The first, from the Union of Concerned Scientists on behalf of RENEW Northeast, revised its proposed lithium-ion battery ORTP from $2.612/kW-month to $2.601. This reduction resulted from the ISO-NE modified PPR value for FCA 16. The second, from Advanced Energy Economy, Borrego Solar Systems, Enel X, ENGIE North America and RENEW Northeast, revised previously supported tariff revisions. They passed with 72.5% PC support. (See NEPOOL Participants Committee Votes on ORTP Values.)

“The NEPOOL alternative reflects that renewable energy and battery storage resources are already competitive and should not be subjected to [ISO-NE’s] administrative screen that uses artificially inflated cost estimates for these resources that could exclude them from the market,” Francis Pullaro, executive director of RENEW Northeast, said in an emailed statement. “[The RTO’s] proposal to erect barriers to participation in the market by renewable energy, particularly offshore wind, will only result in making prices artificially high for consumers while perpetuating financial advantages to conventional generators.”

Not a MOPR Referendum

ISO-NE told FERC that the filing should not be viewed as a referendum on the minimum offer price rule (MOPR). The RTO said its evaluation of the competitive cost of new entry (CONE) for offshore wind follows the same approach for calculating the ORTP for all technologies. In contrast, the NEPOOL proposal sets “an artificially determined ORTP at zero” for both OSW and solar, which is “functionally equivalent to having no MOPR … regardless of their true costs of entry.”

The RTO said that without an ORTP, the Internal Market Monitor would review no new capacity supply offers, and because OSW and solar are expected to dominate new entry in New England, setting the ORTP to zero would eviscerate the MOPR. It added that many New England states and stakeholders seek the elimination of MOPR, and that it recognizes the region must address concerns about the FCM’s failure to account for the capacity provided by sponsored resources that do not clear the market because of the rule.

“To be clear, ISO-NE intends to work with the states and stakeholders to achieve the elimination of the MOPR in a manner that maintains reliability,” ISO-NE wrote. “We understand the urgency felt by some stakeholders regarding the elimination of the MOPR. Nonetheless, we ask the commission to provide the region with the time needed to address such significant market changes, and not to uphold arguments that would seek to indirectly eliminate the MOPR through the adoption of inaccurate ORTPs.”

April 9, 2021

Industry Warns of Hidden Dangers in Cyber Incentives

FERC’s proposal for incentivizing public utilities to invest in cybersecurity improvements provoked a range of reactions from industry stakeholders in the comment period that closed earlier this week (RM21-3).

The commission introduced the proposed incentive structure in December, building on a white paper published last June that sought to build a complement to the current Critical Infrastructure Protection (CIP) standards (AD20-19). (See FERC Pushes Cybersecurity Incentives.) In light of industry comments on that white paper, the Notice of Proposed Rulemaking suggested a hybrid of two approaches.

The first of these, which FERC called the “NERC CIP incentives” approach, would permit public utilities to receive incentive rate treatment for applying the CIP standards to facilities that are not currently subject to their requirements. This would be achieved by:

voluntarily applying the requirements for medium- or high-impact bulk electric system cyber systems to low-impact systems, and/or the requirements for high-impact systems to medium-impact systems; and/or
voluntarily connecting all external routable connectivity to and from a low-impact BES cyber system to a high- or medium-impact system, which FERC termed the “Hub-Spoke” incentive.

Under the second approach, called the “NIST Framework,” incentive rate treatment would be provided to public utilities that implement elements of the National Institute of Standards and Technology’s Cybersecurity Framework, specifically automated and continuous monitoring. Following either the NERC CIP incentives or the NIST Framework approach would qualify public utilities for one of the following incentives:

Cybersecurity return on investment: applies a 200-basis-point adder to the return on equity for eligible cybersecurity capital investments.
Regulatory asset: allows utilities to seek deferred cost recovery for certain cybersecurity-related investment expenses.

ERO Fears Conflicts of Interest

Industry responses professed strong support for the idea of encouraging cybersecurity investments by utilities, but reactions were more nuanced when it came to the details of FERC’s proposals. NERC and the regional entities, for example, filed a joint comment urging the commission to “consider the implications for compliance monitoring and enforcement activities … [and] the standards development process” of the ERO Enterprise.

public utilities cybersecurity — | *Shutterstock*

The joint comment focused on the CIP Incentives approach and what role, if any, NERC and the REs are to have in monitoring its implementation. For example, they asked whether the voluntary application of CIP requirements to systems outside their applicability will be subject to evaluation or audit by the ERO Enterprise, and if the ERO Enterprise is to play any part in reviewing utilities’ application for incentives.

Additionally, NERC and the REs expressed concern that FERC’s proposal might “create financial reasons to oppose the standards development process [in which] industry stakeholders have a significant role.” They warned that expanding the scope of the CIP standards on a voluntary basis could create a perverse incentive for industry participants to block future attempts to make the expansion mandatory, because in the former case there would be no penalty for not following the requirements.

Incentive Mechanisms Questioned

The New England Conference of Public Utilities Commissioners (NECPUC) likewise agreed broadly that it “is appropriate for FERC to encourage utility cybersecurity development” while questioning whether an ROE adder and deferred cost recovery are the best mechanisms for incentivizing useful investments.

“It is important to note that cybersecurity poses different challenges than other areas of utility investment. A utility cannot achieve ‘cybersecurity’ through a one-time investment as with some traditional utility investments. … It requires a multifaceted and continuing approach,” NECPUC said. “In addition, while ROE adders may incentivize rate base investment … cybersecurity does not consist of merely, or even mostly, the type of physical assets that are traditionally included in rate base, particularly transmission rate base.”

Instead of exclusively pursuing these options, NECPUC urged FERC to “evaluate all the tools at its disposal … for example … permitting a broader set of cybersecurity expenditures to be added to rate base.” The organization also noted that FERC’s NOPR does not set out appropriate benchmarks or other evaluation tools to determine whether investments will achieve the desired results and suggested that the commission create a framework by which the effectiveness and value of proposed cyber improvements can be measured.

The Edison Electric Institute (EEI) praised the NOPR overall, saying the proposal “recognizes the importance of allowing utilities flexibility in determining the investments that are appropriate for them.” But while the organization said both the CIP Incentives approach and the NIST Framework approach are useful tools for incentivizing cybersecurity improvements, it suggested that the commission clarify how public utilities track their implementation of for the purposes of confirming their eligibility for incentives.

EEI also expressed concern with FERC’s proposal to “limit the eligible costs [for deferred cost recovery] to those associated with implementing cybersecurity upgrades” while excluding ongoing costs such as system maintenance and surveillance. It requested that the commission consider allowing utilities to capitalize these costs and include them in the rate base.

April 9, 2021

NY Power Panel Debates Gas Moratorium

New York state officials and appointed advisers disagreed Wednesday on the merits of a moratorium on new natural gas infrastructure, including pipelines and power plants, and on repowering of older generation units.

New York Gas Moratorium — Lisa Dix, Sierra Club | *NYDPS*

Lisa Dix, New York representative for the Sierra Club Beyond Coal Campaign and a member of the state Climate Action Council’s Power Generation Advisory Panel, called for the moratorium and referred to the Public Service Commission’s recently announced proceeding on gas planning (20-G-0131).

“The idea of the docket is really to come up with creative, flexible ways in which we can meet increased load, if that’s going to be an issue, or can figure out how to scale efficiency, demand response and storage to meet immediate needs,” Dix said.

The planning process will help stakeholders avoid continuing to build out gas infrastructure in the short term and also establish a comprehensive system, including a regulatory framework, for the long-term replacement of fossil fuel-fired generation, she said.

New regulations under the state’s Climate Leadership and Community Protection Act (CLCPA) require 40% decreases of methane and other greenhouse gases by 2030 and 85% cuts by midcentury.

Not so Fast

John Reese, senior vice president of Eastern Generation, said he opposed a moratorium for several reasons but not because of economic interests. The panel’s recommendations to the full council lay out a process for reducing fossil fuels as the state increases renewables in the system, and adding a moratorium before planners go through that process would essentially amount to giving up on it, he said.

“A moratorium today doesn’t consider all the factors we need to consider and basically imposes a Nancy Reagan, ‘Just Say No’; it forgets the substance and the complexity,” Reese said. “When you look at the rush to natural gas, there are two or three projects that are on the table and going through Article 10. No fossil fuel unit has ever made it through, I think, the new Article 10 legislation put in place five or six years ago.”

The Article 10 process, which governs how generating resources are sited, is incredibly complex and requires an immense amount of study on everything from economics, fuel, emissions and environmental justice, Reese said.

“It isn’t like projects that are currently being worked on are suddenly going to pop up without input and without consideration of these factors,” he said. “I think a moratorium is harmful and not necessary.”

Sarah Osgood, director of policy implementation at the state’s Department of Public Service, chaired the meeting, which was the final public comment session before the panel makes its final scoping plan recommendations to the CAC. (See Cut Peakers, Boost Storage, NY Climate Council Hears.)

“What has been communicated from the Climate Action Council is that, if we don’t have full agreement on any of the recommendations, we can put forth alternative viewpoints,” Osgood said. “Basically they indicated that not all the panel members are necessarily in alignment on an option, but we can still” recommend ideas that only a portion of the panel supports.

NYISO Executive Vice President Emilie Nelson said that building out renewable energy and storage and focusing on the transmission buildout that will be required to deliver that energy will decrease the energy produced by fossil fuel.

“This focus is the critical priority, combined with planning the phase-down of fossil fuels, and I believe why the CLCPA is structured in such a way that we first need to get to 70% renewables in 2030,” Nelson said. “The concept of a gas moratorium goes beyond the concepts they had in the CLCPA and takes solutions off the table that may become important during this broad transformation. So certainly I think focusing on the well informed planning study work in the near term makes a lot of sense.”

Public Input

Callers during the public comment session included Sam Lehr, policy manager for the RNG Coalition, who said he appreciated the panel being open to the idea that green hydrogen and renewable natural gas (RNG) can both be used alongside other resources in achieving carbon neutrality in the power generation sector.

“RNG is included as an important greenhouse gas reduction strategy in the climate plans in a number of jurisdictions, including in E3’s June 2020 analysis, which highlights the role of bioenergy-based electricity in New York,” Lehr said.

Upstate and downstate, the E3 study projects 9.5 GW of storage installed by 2050, nearly 25 GW of offshore and onshore wind, and nearly 46 GW of solar. (See NY Climate Action Council Looks at Deep Decarbonization.)

“I want to encourage the panel to take on the urgent need for New York to plan for the phaseout of the four upstate nuclear reactors,” said Timothy Judson, executive director of the national environmental organization, Nuclear Information and Resource Service and a cofounder of the Alliance for a Green Economy in New York. “These are some of the oldest and most uneconomic nuclear power plants in the world actually … and a number of those reactors would have closed by now except for the $7.6 billion nuclear subsidy that the PSC enacted with the Clean Energy Standard in 2016.”

Under current New York state policy and regulations, upstate nuclear facilities will be within the resource mix until at least 2030. The panel is recommending that the contribution of nuclear power to the 2040 resource mix and any additional policy actions needed should be evaluated prior to the cessation of the zero-emissions credit (ZEC) program in 2029. (See NY Court Rejects Challenge to ZEC Program.)

“There are enormous climate and environmental justice opportunity costs to this [ZEC] program … and the PSC never conducted analysis of alternatives to the ZEC program, although ample information was presented in the CES proceeding,” Judson said.

Taylor Scarpa, a student at Syracuse University and a legislative associate at the New York Public Interest Research Group, said that New York must have a just transition and urged the panel to put forth a 100% renewable action plan to the CAC.

April 9, 2021

Kauai Solar + Pumped Hydro Project Raises Questions

Kauai residents are concerned about the details of a proposed solar plus pumped hydro storage project that Kauai Island Utility Cooperative (KIUC) says could produce a quarter of the island’s energy requirements.

KIUC is working with AES to build the $200 million West Kauai Energy Project (WKEP) in an effort to extend the availability of solar-generated energy into the overnight hours.

Kauai Solar plus Pumped Hydro — Map shows the proposed design for the West Kauai Energy Project | *KIUC*

The utility is awaiting approval from the Hawaii Public Utilities Commission to build a 35-MW solar array and 70-MWh battery storage system on 350 acres in the Waimea district of western Kauai. The energy produced would feed into the grid and pump water into an underused reservoir, which would be released at night through turbines to produce power.

The proposed storage value of the project is hefty: The pumped hydro portion would store a potential 1,500 MWh of energy, a much larger payload than Kauai’s two battery storage systems from AES (100 MWh) and Tesla (52 MWh).

Called “the first project of its kind in the world” by KIUC CEO David Bissell, WKEP aims to produce 25% of Kauai’s energy requirements, pushing the utility past its goal of generating 70% of its power from renewables by 2030. WKEP is projected to reduce GHGs by 80,000 tons per year. Bissell described WKEP as a “legacy” project that can be used for at least 100 years.

WKEP’s design will attempt to use fragmented infrastructure. Three reservoirs at different elevations, Mana, Pu’u Opae and Pu’u Lua, are underused and do not meet Hawaii’s dam safety standards. WKEP would connect the reservoirs via underground pipes and a ditch, place two hydroelectric turbines at key points and pump water up as needed. The reservoirs are designed to be used for irrigation and firefighting, so the ability to refill them as needed provides reliability. Pu’u Lua is also host to a trout fishing program, which would be bolstered by the rejuvenation of the reservoir.

Pumped storage is a vital aspect of WKEP, according to KIUC. “Solar plus storage technology provides short-term energy dispatch, around four to five hours,” but that would not manage an entire evening or long periods of cloud cover, the utility said.

The project’s design provides a simple system for increasing reliability: If batteries fail or fossil fuel plants trip offline, operators can open the reservoir gates and let water fall through turbines. It also minimizes the amount of shipping and recycling required once batteries degrade.

Residents Call for EIS

As eco-friendly as the project sounds, Kauai residents voiced concerns about it during a March 31 open house meeting with KIUC and AES. Some wondered why community solar would not be used to power the water pumps.

One resident asked whether KIUC receives a tax credit when it develops a solar farm and does not “use current solar panels that are already in the grid.”

“Tax credits are a part of that,” KIUC’s Bissell said. “To maintain and protect the tax credits associated with the project, we cannot take any energy from the grid for the first five years of operation.” WKEP could “potentially” draw from other solar resources after that, he said.

Another resident asked how much of WKEP’s energy would be produced by the hydroelectric portion of the project rather than solar.

“The solar panels are the ultimate source of most of the energy in this project,” Bissell said. “It’s a combination of solar panels and incremental hydro. … The incremental hydro is a relatively small part of what the water does. It helps make up for the efficiency in running the pumps versus a battery, and it’s what makes the project competitive… The water is necessary to make the solar project work.” He explained that the pumped hydro functions as a makeshift battery, which is preferable because “battery storage is too expensive.”

Several residents voiced concerns about the project disrupting nature and called for an environmental review. They asked whether wildlife would be disturbed and if the Waimea River, the primary water source for the project, would be affected. They also wondered about the impact of increasing the size of the reservoirs, and if the potential for discharge would affect coral reefs.

KIUC and AES officials responded that the project would rely on underground piping to avoid disturbing wildlife and that the Waimea River’s natural flow would be maintained. They said that rehabilitation and increased safety standards would ensure the reservoirs are safe. They acknowledged what is not used for irrigation would be discharged.

“I feel like an EIS [environmental impact statement] is 110% required for this project” one resident said, prompting another to ask, “Why are we not doing an EIS?”

Earthjustice attorney Elena Bryant said that the utility’s presentation at the open house didn’t specify what proportions of the diverted river flows would be used to generate hydropower, supply agricultural needs, be lost through evaporation and seepage, or be dumped or discharged.

“Another question that remains unanswered is how the project is going to be integrated and coordinated with the operations of [the Agribusiness Development Corporation] and [Kekaha Agriculture Association] to ensure maximum, reasonable, beneficial use of any and all diverted flows for actual water needs of bona fide agriculture,” Bryant said.

Dawn Huff, a consultant for KIUC, said the utility produced a draft EIS but not a final one. “We decided to follow the standard environmental review process and start with an EA [environmental assessment].”

“Ultimately, the decision to move to an EA was because we didn’t have any significant impacts that were found from all the studies that were done,” Bissell said.

KIUC expects to submit the EA to Hawaii’s Department of Land and Natural Resources this spring. If approved, WKEP is projected to become operational in 2025.

April 9, 2021

Tesla: NY Climate, ZEV Sales Laws ‘Out of Sync’

Tesla is hoping New York legislators will pass a bill this session to overturn the state’s ban on direct-to-consumer sales of zero-emission vehicles (ZEV) by manufacturers.

ZEV manufacturers are constrained in New York, and “that seems to be really out of sync with [the state’s] broader policy goals,” Albert Gore, director of public policy and business development at Tesla, said Thursday.

Sen. Todd Kaminsky (D) and Rep. Patricia Fahy (D) introduced companion bills (S 1763/A 4614) earlier this year to address that constraint. The bills would remove the current limit on the number of dealer registrations the state can issue to ZEV manufacturers if they do not have a franchised motor vehicle dealer in New York.

The companion bills are currently in their respective transportation committees.

Tesla’s sales model does not rely on franchises, and instead focuses on direct sales to control the educational process and cost structure for buyers, Gore said in a webinar hosted by New Yorkers for Clean Power.

New York ZEV Sales Laws — Tesla is hoping a bill currently before the New York legislature will open up the market for direct-to-customer sales in the state by zero-emission vehicle manufacturers. | © *RTO Insider LLC*

New ZEV market entrants, such as Rivian and Lucid, also are choosing the direct sales model, but they are even more constrained than Tesla in the state.

Tesla opened five stores in New York before legislators passed a law in 2014 banning direct sales. The law followed a failed lawsuit in which the Greater New York Automobile Dealers Association claimed the motor vehicle department improperly granted Tesla a permit to operate as a dealer.

The five original Tesla stores were grandfathered under the 2014 law, according to Gore, who said the current bill before the legislature is designed to support dealer franchises and allow ZEV manufacturers to grow.

Because the bill would prohibit ZEV manufacturers from selling directly to consumers while having a franchised dealer, it “protects existing franchise dealers from what they would characterize as unfair methods of competition by their franchisors,” Gore said.

Franchise laws governing ZEV manufacturer direct sales vary by state. Gore said markets in 19 states are open for direct sales, and New York is not alone in seeking to alter dealer franchise laws.

A bill (SB 127) to allow direct ZEV sales to consumers in Connecticut passed out of the transportation committee March 24 for a vote in the House and Senate. The Connecticut Automotive Retailers Association opposes the legislation, saying on its website that Tesla favors a system “that will have no economic commitment locally.”

Mike Stanton, CEO of the National Auto Dealers Association, addressed the issue in a blog post March 15, saying direct sales are not needed for EVs.

“Direct sales could cripple EV adoption as more and more EV owners are forced to deal with higher prices and the headache of longer and longer wait times for even basic service,” he said.

April 9, 2021

NJ Solar Proposal Seeks More Market Competition

New Jersey’s Board of Public Utilities released a proposal Thursday to restructure the solar development and incentive programs to help the state meet its goal of quadrupling solar energy capacity to 17.2 GW by 2035.

Known as the Solar Successor Program, the straw proposal outlines a two-tier system designed to introduce more competition into the development of large solar projects. It does so, in part, by setting up solicitation processes for different categories of projects larger than 2 MW, such as basic grid supply projects or built-environment projects such as rooftops.

Projects smaller than 2 MW would be encouraged with fixed-rate incentives to provide consumers and financers a “clear understanding of the expected value of the incentives associated with each MWh of generation by a given project.” The BPU will solicit public and stakeholder input at four hearings and a board meeting to be held between April 21 and May 3.

New Jersey Solar — Under proposed changes to New Jersey’s solar incentives, behind-the-meter projects would receive fixed payments, based on project type. | *Shutterstock*

The 60-page proposal says the finished plan would be the final step toward creating “a long-term, durable solar incentive program” that helps the state meet its solar energy goals and “supports a thriving and stable solar industry,” while also protecting ratepayers.

Future Growth

The state initially reassessed its solar incentive programs in 2018 at the direction of Gov. Phil Murphy, who has set a goal of 100% clean energy by 2050. Murphy wants the solar sector, which currently has a capacity of 3.5 GW, to generate 32 GW by 2050.

With 130,000 residential solar installations and more than 7,390 net-metered commercial and industrial projects totaling 1,695 MW, New Jersey is ranked seventh in the country for installed solar capacity. In January, the state’s first community solar project came online, as part of a pilot program designed to spark development of community solar. With several projects online, the first phase is designed to install 78 MW of energy, and a second phase is expected to add projects totaling 150 MW. (See Billing Key to NJ Community Solar Growth.)

Vote Solar, a national advocacy group for solar energy, welcomed the new proposal and the opportunity to further shape it.

“A robust and equitable solar successor program is critical for attaining New Jersey’s clean energy goals and rebuilding the economy after the pandemic,” said Elena Weissmann, regional director for the Mid-Atlantic region. “As always, the devil is in the details. We’ll continue to advocate for incentives and requirements that ensure solar deployment and its associated benefits serve New Jersey’s overburdened and environmental justice communities.”

Vying for Approval

The search for a modified path forward began with Murphy’s signing of the Clean Energy Act in 2018. The law required the BPU to shut down its Solar Renewable Energy Certificate (SREC) Program when solar installations reached 5.1% of the state’s electricity sales, in part, because it was seen as unnecessarily expensive and the values of SRECs were volatile.

The program hit the 5.1% threshold in April 2020, and the BPU’s replacement program kicked in, awarding Transition Renewable Energy Certificates, which have a fixed value that depended on the project.

Elements of that program remain in the latest proposal, in the guidelines for projects smaller than 2 MW. The transition program will remain in effect until the Solar Successor program is in place.

Explaining the rationale behind the proposal, the BPU said state incentives needed to be “sufficiently robust to rapidly expand upon the existing 3.5 GW of installed solar and quickly scale new solar generation to approach these goals.”

In the case of utility-scale, “grid supply” projects and net-metered nonresidential projects above 2 MW, an annual competitive solicitation process would create cost-based competition for projects in different categories such as commercial rooftop projects or landfill or brownfield projects.

“The model has the potential to significantly expand market segments, such as grid supply on warehouse rooftops and other types of grid supply projects, that have thus far been limited by administrative or regulatory barriers,” the proposal says.

Fixed Incentives

Behind-the-meter projects of 2 MW or less, including residential off-grid projects, and community solar projects, would receive a fixed incentive set by the BPU, according to the proposal. Payments for each megawatt hour of solar electricity produced would vary depending on the project type, such as ground mount, rooftop or canopy. The program would set out a fixed, guaranteed term for incentive payments to provide developers with the stability needed to finance projects.

The BPU said the agency staff believes that the system would be easy to understand and “implementable in a short time frame.” It also would give the BPU board the ability to adjust the incentive levels, while providing “an incentive structure that is both fixed and known in advance and provides a low-risk incentive structure for developers, thereby encouraging investment of at-risk private capital.”

Jeff Tittel, director of the New Jersey Sierra Club, said the proposal is a “step in the right direction,” but needs some adjustment. He said the threshold of 2 MW for off-grid residential projects that do not feed electricity into the grid is too low, and larger projects should be allowed in that category.

“We think the numbers should be larger to allow for more solar like that,” he said, suggesting projects up to 10 MW should be eligible for the program.

April 9, 2021November 5, 2023

Cap-and-trade Bill Squeaks Through Washington Senate

The Democrat-controlled Washington Senate on Thursday narrowly passed a cap-and-trade bill designed to trim industrial carbon emissions.

Senate Bill 5126, sponsored by Sen. Reuven Carlyle (D), was approved by a 25-24 vote split almost along party lines. Three Democrats joined 21 Republicans in opposing the legislation. It now goes to the Democrat-dominated House.

The bill would require Gov. Jay Inslee’s office to appoint a task force by July 1 to lead brainstorming efforts on a creating a cap-and-trade program administered by the Washington Department of Ecology.

Under Carlyle’s bill, the task force would create a system to annually set total industrial carbon emissions in the state — a cap that slowly decreases through the years. Four times a year, large emitters would submit bids to the state in an auction for segments of that year’s overall limit and be allowed to emit that amount in greenhouse gases. Companies will be allowed to trade, buy and sell those allowances.

The bill anticipates the auctions would raise several hundred million dollars every budget biennium that the state can allocate to low-income neighborhoods and communities of color.

Preliminary recommendations would be due by Nov. 1, with final recommendations ready to be sent to the legislature by Dec. 1.

The program would tackle facilities that emit 25,000 metric tons or more of carbon emissions annually. There are at least 100 such facilities in the state, including the oil, cement, steel, power industries and large food processing plants.

“Sometimes, you need to step out and do the right thing for the environment and the planet,” Sen. Jesse Salomon (D) said.

Carlyle, chairman of the Senate Environment, Energy and Technology Committee, said,” We do have a responsibility to grow our economy with a smaller carbon footprint.”

“This is a crony-capitalist shell game,” Sen. Phil Fortunato (R) said, referring to the buying and trading features of the bill.

Sen. Shelly Short (R) said, “We’re turning the economy over to an unelected agency,” referring to the Ecology Department.

“We do not do complicated things well, and this is very complicated,” said GOP Senate Minority Leader John Braun.

The bill contains many requirements that the task force must consider. These include the mechanics of measuring emissions and enforcing the proposed regulations, how to set up auctions in which companies would obtain their pollution limits, how the auction revenue should be distributed to disadvantaged communities, how to prevent industries from gaming the new system and how environmental justice issues should be tackled.

A 2021 Washington Department of Ecology report put the state’s carbon dioxide emissions at 99.57 million tons in 2018. It shows that from 2016 to 2018, the transportation sector was the largest contributor at nearly 45% of emissions, followed by industry (19%), electricity consumption (17%) and agriculture (7%). A 2008 law calls for overall emissions to be reduced to 50 million tons by 2030, 27 million tons by 2040 and 5 million tons by 2050.

Republican Countermeasure Fails

Sen. Doug Ericksen, the Republicans’ leader on environmental issues — and a climate change skeptic — argued that trimming carbon emissions is Washington will not effectively cut emissions worldwide.

“Nothing in this will do anything to impact climate. … It’ll just drive jobs out of Washington State. …. It’s not about greenhouse gases, but it’s about raising taxes in Washington,” Ericksen said.

He argued Washington’s manufacturers won’t be able to compete with a more pollution-friendly China.

And he added that the bill’s effects on the state’s five oil refineries will raise gasoline prices by at least 26 cents per gallon, though he didn’t cite a source for that figure.

Carlyle countered that the bill would improve Washington’s climate, with a ripple effect of improving the health of the state’s residents, which translates into a stronger economy. He said the bill will be a strong contribution to meeting the carbon trimming goals of the Paris climate accords.

Ericksen slammed the climate pact, saying, “The Paris accords do not put America first.”

Carlyle noted that the bill routes a significant chunk of cap-and-trade auction revenue to low-income neighborhoods and communities of color, which are disproportionately exposed to carbon pollution.

Ericksen opposed that plank, arguing that all Washington residents are affected equally by carbon pollution.

The cap-and-trade concept surfaced in Washington in 2013, with Inslee first proposing it as a law in 2014. Until recently, Republicans hostile to major emissions measures controlled the Senate, discouraging the Democrat-controlled House from pushing any type of cap-and-trade measure. Democrats took over the Senate in 2018, building up big enough majorities in both chambers to provide cushions for SB 5126 to potentially pass.

State senators introduced two bills to trim carbon emissions this session to reduce carbon pollution to 5 million tons by 2050 — SB 5126 and SB 5373, sponsored by Sen. Liz Lovelett (D).

Lovelett’s bill would implement a tax of $25/ton of carbon emissions beginning Jan. 1, 2022. The tax rate would increase by 5% every year. Energy-intensive industries vulnerable to foreign competition would receive breaks.

That bill died in the Senate’s Environment, Energy and Technology Committee.

However, on the Senate floor Thursday, Republicans tried to replace the cap-and-trade proposal with a $15/ton carbon tax, which Democrats voted down.

April 9, 2021

Wash. Senate OKs Low-carbon Fuels Bill

The Washington Senate voted 27-20 on Thursday to approve a bill that would require an increased use of biofuels to cut carbon emissions from motor vehicles.

The bill would mandate that carbon emissions from gasoline and diesel fuel sold in Washington be cut by 10% below 2017 levels by 2028 and by 20% by 2035. It excludes emissions from fuel that is exported out of state or used by water vessels, railroad locomotives and aircraft. The goals apply to overall vehicle emissions in the state and not to individual types of fuels. Northwestern Washington has five oil refineries. It would go into effect Jan. 1, 2023.

Under this program, biofuels would likely be blended with petroleum-based fuels.

HB 1091 now goes back to the House of Representatives for the two chambers to hash out the tweaks added in the Senate. The House approved the bill Feb. 27. (See Amazon Backs Washington’s Low-carbon Fuel Bill.)

Washington carbon emissions — Washington’s low-carbon fuel standard would require refiners to reduce the carbon content of gasoline and diesel fuel sold in the state by 20% by 2030. | *Walter Siegmund, CC BY-SA 2.5, via Wikimedia Commons*

A 2008 law sets carbon-reduction targets of 45% below 1990 levels by 2030, 70% by 2040 and 95% by 2050.

A 2021 Washington Department of Ecology report puts the state’s carbon dioxide emissions at 99.57 million metric tons in 2018. The report shows that from 2016 to 2018, the transportation sector was the largest contributor at nearly 45% of emissions.

On Thursday, GOP senators heavily criticized the bill. Democrats, assured of a majority in Thursday’s vote, spoke little.

Republicans argued that the bill will increase gasoline prices because biofuels are more expensive than petroleum-based fuels. They contended that lowering carbon emissions in Washington is too insignificant a measure to help combat worldwide global warming. And increased gasoline prices will harm farmers, they said.

A few argued that lower-carbon fuels won’t actually decrease greenhouse gases, although they did not explain how they reached that conclusion. “If you think clean fuel is going to make your emissions cleaner, that’s false,” Sen. Keith Wagoner (R) said.

“People are going to spend a ton of money to get around,” Minority Leader John Braun said. “But they’re not going to get more roads, more bridges.”

“This bill is nothing but punitive,” Sen. Curtis King (R) said. “It doesn’t raise any money. It just raises the cost of gas.”

Democrats stressed that low-carbon fuels produce less pollution and, thus, lessens detrimental health effects. “We’re doing this for the kids with asthma, whose parent can only afford to live next to the freeway,” Sen. June Robinson (D) said.

April 8, 2021

NY Pushes Electrification with Heat Pumps

New York state and its utilities are leveraging new support at the federal level and investing $700 million in a program to encourage energy efficiency measures and building electrification, primarily through clean energy heat pump technologies.

New York Electrification — NYSERDA CEO Doreen Harris | *NY-GEO*

“Heat pumps and electrification are some of our most pressing challenges, as buildings are responsible for approximately a third of New York’s energy-related greenhouse gas emissions,” New York State Energy Research and Development Authority CEO Doreen Harris said Tuesday.

Through the state’s Clean Heat program, NYSERDA alone is investing $230 million, Harris told over 160 participants at a webinar hosted by the New York Geothermal Energy Association (NY-GEO).

To achieve a carbon neutral building stock by midcentury, as required by the Climate Leadership and Community Protection Act, new construction projects will need to be all-electric, and existing buildings will need to be updated to all-electric demand, she said.

“We are moving the needle on both of these priorities, and just last month we awarded $13 million to 14 all-electric, energy-efficient, carbon-neutral, multifamily buildings throughout the second round of our $40 million Buildings of Excellence competition,” Harris said.

Sending Signals, Creating Jobs

The heating market needs strong signals to move away from its current fossil-fuel comfort zone, according to Bill Nowak, executive director of NY-GEO.

The organization has seen cost-competitive heat pump proposals that were turned down “seemingly on the basis of familiarity more than anything else,” Nowak said.

The Geothermal Exchange Organization was pleased with measures passed in the federal end-of-year budget bill that support geothermal, COO Ryan Dougherty said. The bill included a tax credit extension through 2023 and the classification of geothermal heat pumps as renewable energy technology.

“The Biden infrastructure plan goes much farther than highways and bridges. … [It] calls for a 10-year extension of both production and investment tax credits and makes at least a couple calls out to clean energy and electrification of two million buildings,” Dougherty said.

President Biden framed his $2 trillion infrastructure plan as the American Jobs Plan and referred to well-paying union jobs as a way to build support for the plan across a broad spectrum of voters. (See Biden Infrastructure Plan Would Boost Clean Energy.)

There is potential for geothermal development under the infrastructure plan, according to Steven Schunk, an energy specialist at SUNY Geneseo.

“We may need to expand our definition to include new kinds of infrastructure, such as low-temperature district heating, that we’ve never built in the past but should in the future,” Dougherty said. “There’s nothing in the plan that points specifically to district systems, but there’s certainly potential for funding within the rough parameters.”

The Department of Energy, he added, has reached out to SUNY for information on district geothermal heating, “so clearly the administration is starting to think about the potential.”

NYSERDA likes to cooperate with other states on policies, standards and timelines, which are helpful for heat pumps and electrification, Harris said.

The agency’s statewide heat pump implementation plan calls for increasing the pool of skilled labor needed to boost the industry by training 14,000 workers across the heat pump supply chain, including 4,200 workers to sell, design and install systems.

“We’re very serious about building an industry here that can serve not only our goals, but perhaps export to other states as well, so the workforce development programs that we’re implementing are intended to benefit New Yorkers,” she said.

April 8, 2021

Massachusetts City Puts Energy Coach to Work

The city of Newton, Mass., has created a new government position designed to bridge the gap between the city’s goals and residents’ actions to address climate change.

Newton has been developing a plan to significantly reduce greenhouse gas emissions by 2025. Along with building walkable neighborhoods and planting trees, the city’s Climate Action Plan introduced an “energy coach” to help individuals adopt renewable energy upgrades to their homes, businesses and vehicles.

Liora Silkes, who stepped into the role earlier this year, is working with residents, builders and contractors to reduce carbon emissions.

Liora Silkes recently joined the Newton, Mass., city government as the first “energy coach,” a point person for individuals and businesses to contact with questions about energy efficiency upgrades and transitioning to renewable energy sources. | *Asha Iyer*

Residents can ask questions about everything from home retrofits and solar panels to electric vehicles and heat pumps and get free advice on how to make the transition.

“There’s been a lot of interest,” Silkes told NetZero Insider, “especially from individuals not well-versed in building science.”

Silkes has spent the past few weeks alternating between answering technical questions and guiding Newton residents through their first steps in understanding energy efficiency.

The benefit of consulting with an energy coach instead of a contractor is that the coach is not trying to sell a product, Silkes said.

There are a variety of programs and resources available to help residents convert to solar or improve home insulation, but the process of finding the right fit can be overwhelming. Some residents may not know these programs exist. Silkes said she connects residents to the resources they need to reduce emissions as much as possible in the most affordable way.

Newton’s residential and commercial buildings account for about 64% of the city’s GHG emissions. Helping Newton’s citizens with home energy upgrades is a vital part of achieving the statewide goal of net-zero emissions by 2050, Silkes said.

Local leadership believes the municipal energy coach position is the first of its kind in the U.S. In the face of rapidly approaching deadlines for emission reductions, it is also an important one, Jonathan Klein, a member of Newton Citizens Commission on Energy, told NetZero Insider.

The political environment for climate action is critical, but meeting the city’s goals is “up to many little decisions made by individuals,” Klein said.

He helped develop the full-time position, and he volunteers as a part-time energy coach for the community. Klein built a website to make it easier for Newton residents and businesses to schedule a free phone or video consultation. Other volunteer energy coaches available on the website include experts in solar, heating, insulation and electric vehicles.

One Newton woman bought a dental practice and knew it could be more energy efficient. The energy coaches connected her with a renovator who focuses on making small businesses environmentally sustainable. Another resident contacted Klein with questions about why the two bids he received on heat pumps were so different. Others reach out to make sure they are not being scammed by so-called solar energy companies offering lower energy bills.

“I truly believe that climate change is an existential threat, and I wanted to do something about it,” Klein said, but he also runs his own business and is raising a family. The full-time energy coach can make a stronger impact in the community because their workday and expertise are dedicated to helping individuals with the logistics of energy upgrades, he said.

Silkes graduated from Tufts University in 2019 with a bachelor’s degree in environmental studies and sociology; she previously worked for the energy efficiency incentives program, Mass Save.

She views her new role as a way to build on state and national programs like HeatSmart, which helps low-income households reduce energy use by advising them on how to change their heating habits and sources. Instead of advising individuals in a single area of energy use, Silkes has an opportunity to help individuals look at their insulation, heating and cooling, energy storage and transportation holistically.

Ann Berwick, Newton’s co-director of sustainability and former chair of the department of public utilities, said both policymakers and individuals have an obligation to work at attaining carbon neutrality. But there is a “general recognition that people need help figuring out how to address climate change, even people who want to.”

Berwick and Klein said they hope the energy coach model is replicated in other municipalities.

“We’re having this technological shift on the residential side of things,” Berwick said, so the introduction of an energy coach is “remarkable.”