Page 960 – RTO Insider

March 18, 2021January 18, 2024

World Puts Gasoline in the Rearview Mirror

Crushed by COVID and facing increasing efficiency standards and competition from electric vehicles, worldwide gasoline demand has likely peaked, the International Energy Agency reported Wednesday.

“World oil markets are rebalancing after the COVID-19 crisis spurred an unprecedented collapse in demand in 2020, but they may never return to ‘normal,’” IEA said in its latest medium-term report “Oil 2021.”

“Rapid changes in behavior from the pandemic and a stronger drive by governments towards a low-carbon future have caused a dramatic downward shift in expectations for oil demand over the next six years.”

Although overall oil consumption, and that of aviation fuels, are expected to rebound beyond pre-COVID levels, gasoline consumption likely peaked in 2019 at 26.6 million barrels per day (mbd). Demand fell by a record 2.9 mbd last year because of government stay-at-home policies.

“Gasoline demand is unlikely to return to 2019 levels, as efficiency gains and the shift to electric vehicles eclipse robust mobility growth in the developing world,” IEA said.

Although gasoline growth will continue in Indonesia, India and China “as middle-class consumers seek greater mobility,” IEA said, developing countries’ demand will be insufficient to offset declines within the 37 Organization for Economic Co-operation and Development (OECD) countries, which have been tightening fuel efficiency standards.

IEA predicted that overall gasoline use will fall by 690 kbd from 2019 through 2026, when it will level off at 25.9 mbd.

EV Growth, Fuel Economy

In 2019, the European Union approved a target of an average of 95 g of CO2/km for new passenger cars beginning in 2020. EVs’ market share rose from 3% of European sales in 2019 to 11% in 2020, while the share of hybrids rose to 12% from 5.7%.

In January, President Biden ordered a review of the Trump administration’s Safer Affordable Fuel-Efficient (SAFE) rule, which reduced fuel economy improvements to only 1.5% annually for model years 2021-2026. Biden is expected to return to at least the 5% annual improvement under the Obama administration’s Corporate Average Fuel Economy (CAFE) standards.

IEA’s base case projects electric vehicles will reach 60 million globally by 2026 but says stronger government incentives and improved charging infrastructure could boost that by 50% to 90 million.

Also reducing gasoline demand will be changes to commuting patterns, which are expected to outlive the pandemic. IEA said that while only 8% of the global workforce teleworked before the pandemic, “recent studies suggest that up to 20% of jobs can be done from home on an ongoing basis.”

Behavioral Changes

Total oil demand fell by 8.7 mbd last year, to 91 mbd, and is not expected to return to pre-pandemic levels before 2023.

“Aviation fuels, the hardest hit by the crisis, are expected to slowly return to 2019 levels by 2024, but the spread of online meetings could permanently alter business travel trends,” IEA said.

In addition to reduced commuting and air travel, oil demand will be depressed by governments “focusing on the potential for a sustainable recovery as a way to accelerate momentum towards a low-carbon future,” IEA said. “The outlook for oil demand has shifted lower as a result of these trends, raising the prospect of a peak sooner than previously expected if governments follow through with strong policies to hasten the shift to clean energy.”

Oil producers responded to the drop in demand by reducing planned spending on upstream investments and expansions by one-third in 2020. “The outlook for the tight oil industry has been tempered by an apparent shift in the business model towards spending discipline, free cash flow generation, deleveraging and cash returns for investors,” the report said.

Future demand growth will come from rising populations and incomes in emerging and developing economies, IEA said, with 90% of the increase from the Asia Pacific region.

The petrochemical industry will be central to growth, with ethane, liquefied petroleum gas and naphtha responsible for 70% of the projected increase to 2026.

Overshooting Net Zero by 2050

Still, IEA said current government policies are insufficient to reach midcentury goals for net-zero emissions.

The agency’s base case, which assumes existing industry plans and government policies, forecasts global oil demand rising by 3.5 mbd between 2019 and 2025.

“Further fuel efficiency improvements, increased teleworking and reduced business travel, much stronger electric vehicle penetration, and new policies to curb oil use in the power sector … could reduce oil use by as much as 5.6 mbd by 2026, which would mean that oil demand never gets back to pre-crisis levels.”

The agency said immediate cuts in global oil demand would be required to meet 2050 net-zero targets, predicting current policies and plans will have only a “marginal” impact on demand over the next six years.

Although 127 countries representing 75% of global CO2 energy-related emissions have set goals for net-zero carbon emissions between 2050 and 2060, only 12 countries have proposed or enacted legislation to meet the targets, IEA said.

The EU will use higher carbon prices and policies supporting renewable development and energy efficiency to meet its targeted 55% reduction in greenhouse gas emissions by 2030 over 1990 levels. “Legislative details, to be revealed in June 2021, will likely focus on power and buildings in the next 10 years as strong legislation of vehicle CO2 emissions already exists through 2030,” IEA said. “Transport and industry decarbonization will accelerate post-2030.”

China, which continues to increase its use of coal, last year pledged to reach carbon neutrality before 2060 and peak CO2 emissions before 2030.

March 18, 2021

RI Seeks Munis’ Input on Microgrid Funding

Rhode Island is seeking input from municipalities to ensure a plan to fund community microgrids meets their needs.

The state’s Office of Energy Resources (OER) issued a request for information to supplement a report issued several years ago on the framework for a microgrid program to reduce greenhouse gas emissions, enable the integration of renewables and provide resilience for critical facilities during outages.

“In 2020, OER identified funding through the Regional Greenhouse Gas Initiative (RGGI) to support a microgrid program, and we’ll be partnering with the Renewable Energy Fund to deploy this program,” Shauna Beland, administrator of renewable energy programs at OER, said Wednesday.

While anyone can respond to the call for input, OER is seeking comments specifically from Rhode Island cities and towns, Beland said during a webinar on the proposed Microgrids for Resilient Municipalities program.

community microgrids — Rhode Island officials said that the Stafford Hill microgrid in Vermont, seen here, is an example of the infrastructure that could be funded by the planned Microgrids for Resilient Municipalities program. | *Dynapower Energy*

“We didn’t want to do a top-down program design where we just issue [a request for proposal] or [a request for quote] for feasibility or construction without a detailed understanding of what [municipalities] might need,” she said. Input from the public, she added, “will directly inform program design and identify what types of funding need to be prioritized with our limited funds.”

Rhode Island’s 2019 Plan B allocation for RGGI proceeds sets aside $1.5 million for the Microgrids for Resilient Municipalities program.

She said that among the critical details, the request for information will support how the program defines public benefits that a microgrid project must provide to qualify for funding.

“We’ve defined a public benefit as an identifiable benefit that can be accessed by members of the public works or accessed by members of the public,” Beland said. Examples, she added, include a municipal complex with a 911 call center that would stay operational during a power outage or a senior center that can keep refrigerators on for medication.

Beland said OER also wants input on its proposal for program eligibility. OER would like applicants to meet one of the following criteria:

a municipality that has participated in the Rhode Island Infrastructure Bank’s Municipal Resilience Program and that owns, operates or maintains the critical infrastructure component of a proposed microgrid; or
a municipality that has an energy manager or committee that can lead a microgrid project, and that owns, operates or maintains the critical infrastructure component of a proposed microgrid.

OER also will consider non-municipal applicants that are under contract with a municipality that meets one of the first two criteria.

The Municipal Resilience Program, Beland said, “gets municipalities thinking about what their needs are related to resiliency.”

“We would like to make sure that municipalities are thinking resilient, thinking about resiliency holistically, and then from that decision-making process think about a microgrid project,” she said.

OER is accepting input on the program through April 9.

This article was updated on March 18 at 9:30 a.m. EDT to correct the RGGI funding allocation for the microgrid program.

March 18, 2021November 8, 2023

California Must Triple Capacity to Reach 100% Clean Energy

California can reach its goals of providing retail customers with 100% clean energy by 2045 but will need to build renewable generation and storage resources at a record pace over the next quarter century to get there, a new report found.

Senate Bill 100, signed by Gov. Jerry Brown in 2018, set the state’s clean energy target and required an initial progress report, which was released Monday and presented to the California Energy Commission (CEC) on Wednesday. The 178-page report was the product of a joint effort by the CEC, the California Public Utilities Commission (CPUC) and the California Air Resources Board, with modeling and analysis performed by energy consulting firm E3.

CEC Chair David Hochschild said the analysis made it clear that California can achieve what many had widely dismissed as unrealistic.

“We’re in a moment where what was previously considered mythology — the vision of getting to 100% clean energy — just a couple of years ago … is now law in 17 states, and it’s President Biden’s energy goal for the United States,” Hochschild said. “California can take great credit for being a part of driving that vision forward, and this report will be an important milestone.”

Meeting the mandates of SB 100 will require a massive undertaking costing billions of dollars, the analysis determined. The state will need to nearly triple its solar and wind resources along with an eightfold increase in battery storage, it found.

The biggest increase must be in utility-scale solar, the report said. The state had 12.5 GW of large solar arrays in 2019 but needs 69.4 GW by 2045. Customer solar such as rooftop arrays will need to increase from the current 8 GW to more than 28 GW in the same time frame, it said.

Battery storage is regarded as key to maintaining the reliability of a grid largely dependent on unpredictable renewable resources. The negligible amount of battery storage now connected to the grid must grow to nearly 50 GW by 2045, the report found. The analysis envisions a relatively small increase in long-duration storage such as pumped hydropower.

It projects more than doubling onshore wind from 6 GW to 12.6 GW and adding 10 GW of offshore wind, which currently does not exist and will likely prove controversial in California.

The buildout rate dwarfs state efforts so far. “Over the last decade, California has built on average 1 GW of utility solar and 300 MW of wind per year, with a maximum annual build of 2.7 GW of utility-scale solar and 1 GW of wind capacity,” the report said. The state may need to add an average of 6 GW of new renewable resources and storage annually to meet its goals.

The effort will add at least $4.5 billion to the annual cost of electricity by 2045, it said.

The cost will be offset by social benefits such as cleaner air and better public health along with thousands of jobs in the manufacturing and installation of wind and solar resources and in the development of new clean energy technologies, the report stated.

“Achieving 100% clean electricity by 2045 is not only a bold pursuit, but a wise one,” CPUC President Marybel Batjer said in a statement. “Such action is required to avoid the worst impacts and costs of climate change and to ensure the delivery of safe, affordable, reliable and clean power to all Californians.”

March 18, 2021November 2, 2023

Nevada Bill Would Tax EV Charging

As more fuel-efficient cars and electric vehicles hit the roads, the Nevada legislature is looking for ways to make up for declining gas tax revenue that funds highway repairs.

The issue came up during a committee hearing Monday on Senate Bill 191 sponsored by Sen. James Settelmeyer (R).

The bill would impose a 10% surcharge on electric service sold by an EV charging station. Charging station operators would collect the surcharge from customers and send it each month to the Department of Motor Vehicles. From there, the money would go to the state treasurer and into the state Highway Fund.

The Senate Committee on Growth and Infrastructure heard comments on the bill on Monday but took no action.

In presenting the bill to the committee, Settelmeyer admitted the legislation could be a long shot.

“This is not April Fool’s Day,” he said. “But you actually have the Senate minority leader in front of you with a two-thirds bill seeking to increase taxes.”

The potential advantage of SB191 is that it takes a simple “pay at the pump” approach, Settelmeyer said. People who charge their vehicle at home would not pay the surcharge, and there would be no surcharge if the electric service was provided at no cost.

Settelmeyer said there were discussions of possibly amending the bill to give some of the collected surcharge to counties, which are responsible for maintaining many of Nevada’s roads.

He said the bill could also be modified to apply a surcharge to other EV energy sources, such as hydrogen.

“Who knows what the future holds,” he said. “Let’s try to be far reaching so we don’t have to come back and do this again.”

Paying for Roads

Lynn Chapman, treasurer of the Independent American Party of Nevada, said the group supports SB191 even though it usually doesn’t support tax increases.

“Everyone uses the roads and highways,” Chapman said. “But only diesel and gas vehicles are the ones that are targeted to pay the big bucks for our roads and highways.”

Katherine Stainken, policy director with Plug In America, said the bill would hurt EV drivers who use public charging stations — often lower-income drivers who live in multifamily housing.

And, typically, 20% or less of EV charging is done at stations, meaning the surcharge would raise a limited amount of money for roads, Stainken added.

Matt Rubin, clean energy policy analyst with Western Resource Advocates, said the surcharge would make it less economically feasible to run charging stations, which already face costs from upgrading electric distribution systems.

Nationwide Issue

The question of how to ensure gas taxes keep up with funding needs for roads is one that’s being asked across the U.S.

The Natural Resources Defense Council has proposed a two-part system to address the issue.

In the first part, the gas tax would be indexed to inflation and total fuel consumption. For example, if the inflation rate was 1% and total fuel consumption decreased by 1% in a year, gas taxes would increase 2% the following year, according to a blog post on the council’s website. Some states already adjust their fuel taxes based on inflation, NRDC said.

The second part of the NRDC system would be to assess an annual fee on EVs based on the miles-per-gallon-equivalent rating of the model, the gas tax and the number of miles driven each year. NRDC said EVs aren’t currently a significant contributor to transportation funding shortfalls.

Working Group Proposed

In Nevada, the Legislative Committee on Energy, which meets between the legislature’s biennial sessions, plans to introduce a bill to require the Nevada Department of Transportation to form a working group to look at a range of transportation issues.

Those would include an analysis of the NRDC gas tax model as well as Utah’s road usage charge program.

Utah charges an alternative-fuel vehicle fee for electric cars each year on top of the annual registration fee. The road usage charge program allows owners of electric or hybrid vehicles to opt out of the flat fee and instead pay 1.5 cents per mile, according to the program’s website. The mileage-based fee is capped at the amount of the flat fee.

Privacy Concerns

Settelmeyer said he didn’t think his bill would create an economic hardship for most people. He said the cost of a charge at a Level 2 station is about $1.50 an hour, and so a seven-hour charge would cost about $11. The $1.10 surcharge in that case “isn’t going to kill them,” he said, and would provide some money for the state’s dwindling Highway Fund.

Settelmeyer said he’s open to working with lawmakers on other possible solutions to the problem. But he warned that mileage-based systems might not go over well with residents.

“Some of my constituents don’t really like the idea of telling Uncle Sam how many miles they tend to drive on a regular basis,” he said.

March 17, 2021

Icahn Capital Given 2 Seats on FirstEnergy’s Board

FirstEnergy on Tuesday announced it had reached an agreement with Icahn Capital to add two of the conglomerate’s employees as new members to the utility’s board of directors, effective this Thursday.

FirstEnergy in February announced during an analyst call that it had learned that Carl Icahn was buying up to $920 million of its shares. Icahn had not contacted the company at that point. (See FirstEnergy Shares Jump on Icahn Investment.)

The agreement to expand the board to include Icahn’s representatives also “provides that Mr. Icahn and his associates will not exercise substantial influence or control over FirstEnergy or any of its subsidiaries,” the company said in a release.

The announcement came just hours after former U.S. Attorney David DeVillers, in remarks before the governing board of the Ohio Consumers’ Counsel, made it clear that the investigation is continuing into how former Ohio House Speaker Larry Householder and four associates orchestrated the 2019 passage of House Bill 6, creating a $1.3 billion public bailout of nuclear power plants previously owned by FirstEnergy.

Icahn Capital FirstEnergy — FirstEnergy’s Akron, Ohio, headquarters | *DangApricot, CC BY-SA 3.0, via Wikimedia Commons*

Noting that the grand jury investigating the case had been in recess from November until March 1 because of a spike in COVID-19 cases, DeVillers said the probe is now active again, with the grand jury meeting weekly.

“I suspect that you’re going to hear a bit more about that case, in regards to the other side of things. … You have an indictment and you have five or six people in it … and after the indictment, the investigation doesn’t stop,” he said.

“And if they find more people that may be involved through the superseding indictment, and more individuals are added to that indictment or more charges are added to the indictment, that’s not unusual and specifically not unusual in the present case,” he said.

In response to a question from Consumers’ Counsel Bruce Weston, DeVillers also said that corporations can be charged and, if found guilty, can be fined. Often corporations at that point cooperate in order to lessen the fines, he said.

FirstEnergy’s board in recent months has fired five top executives, including former CEO Charles Jones, who was appointed in 2015 after his predecessor, Anthony Alexander, abruptly left the company.

As DeVillers began his remarks, he noted that he had just learned that one of the five people his office had indicted in the HB 6 investigation had been found dead.

Neil Clark, 67, indicted on federal racketeering conspiracy charges in July 2020 along with Householder and three associates, was found dead Monday in a parked car near Naples, Fla. A handgun was found in the car. An autopsy is pending.

Clark had insisted he was innocent of the charges even after two others pleaded guilty in October 2020. He was a long-time Columbus, Ohio, lobbyist and former budget director for the Ohio Republican caucus. In October he announced he was writing a “tell-all” book about his years in the lobbying business.

March 17, 2021

OPSI Asks PJM to Consider State Regulators for Board

The Organization of PJM States Inc. (OPSI) is asking PJM to consider candidates who have state regulatory experience as the RTO searches for two new members of the Board of Managers this year.

The board’s Nominating Committee is currently weighing candidates to replace outgoing board members Ake Almgren and John Foster, with a slate of nominees to be presented to stakeholders for a vote by April.

PJM Board of Managers — PJM Chair Ake Almgren | *PJM*

In the letter sent to committee Chair Charles Robinson on Friday, OPSI requested that PJM “broaden its diversity of expertise” by selecting at least one candidate with state regulatory experience.

“Having individuals on the board with firsthand knowledge of the need for fair balancing of interests faced by regulators entrusted with implementing public policy directives should be a priority,” OPSI President and Delaware Public Service Commissioner Harold Gray said.

PJM has an opportunity to add individuals with an understanding and background of complex issues as the RTO is experiencing “unprecedented change driven largely by public policy mandates,” Gray said.

OPSI argued that the qualification criteria contained in PJM’s September announcement of the replacement search, “fall short.” The RTO said that a “preferred candidate may have expertise and experience in public utilities laws and regulations,” or prior “day-to-day experience in state or federal regulation; possibly a former state or federal public utility regulatory commissioner.”

The organization pointed out that five grid operators’ boards already have board members with state regulatory experience, including ERCOT, which requires the chair of the Public Utility Commission of Texas to sit on the board as a non-voting, ex officio member.

The other current board members are NYISO’s Ave Bie, former chair of the Wisconsin Public Service Commission; SPP’s Joshua Martin, former chairman of the Delaware Public Service Commission; MISO’s Nancy Lange, former chair of the Minnesota Public Utilities Commission; and ISO-NE’s Mark Vannoy, former chairman of the Maine Public Utilities Commission.

Sally Talberg, former chair of the Michigan Public Service Commission, also briefly served as chair of ERCOT’s board until last month’s winter storm. (See ERCOT Chair, 4 Directors to Resign.)

“PJM would not be unique to require this of its board, as other regional transmission organizations or independent system operators have already included such background on their respective boards,” Gray said.

OPSI also recommended PJM “maximize the number” of new voting board members who currently reside within the RTO’s service area. The letter said having board members from the PJM region “would add vital understanding of state policies and issues within the PJM footprint.”

“As you deliberate and ultimately decide upon qualified candidates for the next members of the PJM Board of Managers, now and moving forward, we urge you to consider the fundamental improvements that OPSI’s two recommendations would provide, and to nominate accordingly,” Gray said.

Almgren, the current chair of the PJM board, has been a part of the RTO since 2003. He took over as chair in 2018, replacing Howard Schneider, who served on the board from its inception in 1997 until retiring.

Almgren has headed his own energy technology consulting company, Orkas, since 2003. He also served on the Department of Energy’s Electricity Advisory Council from 2014 to 2017.

Foster, the chair of the Risk and Audit Committee, has also been a board member since 2003. A certified public accountant, Foster previously was vice president, treasurer and principal accounting officer of Compaq and senior audit manager with PricewaterhouseCoopers.

March 17, 2021

ISO-NE Consumer Liaison Group Discusses Biden Energy Policies

The ISO-NE Consumer Liaison Group’s first meeting of the year March 12 featured a discussion on the impact of the Biden administration’s energy policies on New England consumers.

The CLG meets quarterly and serves as a public forum between the RTO and New England consumer organizations and advocates to exchange information about the economic impacts on the region’s bulk power system and wholesale electricity markets.

“There are still battles about natural gas pipelines and other infrastructure, so we’re still very much, as the rest of the country is, in the fossil fuel era,” said David Cash, dean and associate professor at the John W. McCormack Graduate School of Policy and Global Studies at the University of Massachusetts-Boston. “It’s that whole era that the Biden-Harris administration is attempting to move out of.”

Cash said that “any time” New England spends money on imported natural gas, “those are dollars that are leaving the region.” He added that the “volatility of energy costs” and “$20 billion a year on fossil fuel subsidies” also mean consumers’ taxes support a “well established, 100-year-old sector.” He said vulnerable communities bear the economic costs and public health impacts of maintaining the status quo.

ISO-NE Consumer Liaison Group — ISO-NE headquarters in Holyoke, Mass. | *ISO-NE*

“These racial inequities of energy-related health burdens and environmental justice of the current fossil fuel system are intertwined with issues of wealth disparities, education and other social inequities,” Cash said.

President Biden, he noted, laid out “aggressive goals” in an executive order, such as 100% net-zero emissions by 2050 and 100% carbon-free electricity by 2035, plus $2 trillion for clean energy spending on buildings, cars, transportation in addition to wind, solar and battery storage. There is also “a real focus on American union labor and American-made materials for infrastructure.” Environmental justice is “integral to the energy transformation that needs to happen.”

“The term ‘justice’ is used 32 times in this 15-page document,” Cash said. Disadvantaged communities dependent on the fossil fuel economy would receive 40% of the proposed $2 trillion investment.

However, David Springe, executive director of the National Association of State Utility Consumer Advocates, said his group is “very concerned about cost, and how that cost gets addressed in any given state is subject to state policies.”

“One of their policies they announced was that they want to put in 500,000 [electric vehicle] chargers by 2040, which is a huge amount,” Springe said. “A lot of those chargers are obviously going to affect the distribution-level system, in terms of where those chargers get in, and honestly the Biden administration has been a little unclear about whether they’re going to also include as part of that money, the upstream, make-ready costs for electric vehicles.”

Springe said policies promoting electrification would increase retail prices through ISO-NE’s transmission planning and operations.

“Nothing that [ISO-NE] does is free,” Springe said. “Unfortunately, it all gets passed down to consumers.”

March 17, 2021January 21, 2024

Minnesota Power IRP Pledges End to Coal by 2035

Shutting down coal-fired power plants and adding 400 MW of solar and wind power in northeastern Minnesota are the primary objectives in Minnesota Power’s proposed integrated resource plan.

The state Public Utilities Commission has scheduled a virtual public hearing (E015/RP-21-33) on the plan for March 26.

The company’s 2021 IRP offers short-term (2021-2025) and long-term (2026-2035) visions for a path to being carbon-free by 2050. The company proposed increasing its renewable power output to 70% by 2030 from the current 50% level, and pledged to reduce carbon emissions by 80% and eliminate coal generation by 2035.

Bill inserts will inform customers of upcoming proceedings. Following the March 26 hearing, the commission will receive public comment until June 1. Minnesota Power will have until Aug. 2 to respond.

Since 2005, the energy company has retired, idled or reconfigured seven of its nine coal-fired generators, removing approximately 700 MW of coal-fired generation. Its 1,797-MW portfolio includes 973 MW of coal capacity at the Boswell Energy Center (BEC) and the idled Taconite Harbor Energy Center; 522 MW of wind; 172 MW of biomass/co-fired natural gas; 120 MW of hydropower; and 10 MW of solar. Transitioning from coal facilities to produce carbon-free power is the key aspect of both the short-term and long-term action plans in the IRP.

The short-term plan includes:

- - retiring the Taconite Harbor Energy Center facility in September 2021;
  - constructing three solar projects totaling approximately 20 MW in 2021 at the Laskin Energy Center in Hoyt Lakes, Sylvan Hydro Station near Brainerd and in Duluth;
  - adapting operations at BEC Unit 3 to move to economic dispatch within the MISO market in 2021, which the company said “will result in immediate carbon reduction while supporting reliability in the region and continuing to provide economic benefits for the local host community”;
  - preparing BEC 4 to transition to future economic dispatch conservation programs and electrification;
  - creating a program for industrial customers to enable between 100 and 200 MW of demand response, which might be needed during peak usage periods; and
  - adding 200 MW of new wind resources.

The long-term plan includes:

- - retiring BEC 3 by 2030.
  - adding 200 MW of solar resources;
  - pursuing up to 50 MW of long-term DR by 2030;
  - developing and implementing transmission solutions to address reliability issues related to the early retirement of BEC 3; and
  - investigating options to refuel or “remission” BEC 4 and associated reliability transmission as coal operations cease by 2035. The unit is jointly owned with WPPI Energy.

Impacts to the Regional Economy

Most actions proposed in the IRP have potential socioeconomic impacts to northeastern Minnesota. Preparations for BEC 3’s retirement, such as the solar and transmission additions to address reliability issues, are expected to have an immediate positive economic impact, adding 173 jobs per year and increasing annual GDP by $16.7 million.

Those short-term positive impacts will be offset after BEC 3 is retired in 2029 by long-lasting negative impacts to the region, the study predicts, with the loss of 107 jobs and a $23.2 million reduction in GDP.

“This highlights the challenge for communities and the broader region (i.e., northeastern Minnesota) to offset the economic impacts caused by coal unit retirements,” the plan says.

Achieving additional carbon reduction while maintaining affordability, reliability and the northern Minnesota economy will require technological innovation and maximizing existing infrastructure, according to the IRP’s analysis. Minnesota Power’s historical roots and its future success are tied to the region’s natural resources-based economy, as it serves some of the nation’s largest industrial customers in the iron mining and forest product industries.

BEC 3’s retirement will result in a 200-MW shortfall during winter peak demand, the plan anticipates. The company said it can rely more on the industrial DR portfolio, along with firm energy purchases, to manage these periods.

To make up for closing operations at BEC 3 and ceasing coal operations at BEC 4, the plan calls for adding 400 MW of new renewable resources.

BEC and its approximately 170 employees are significant drivers of the local economy, with 2018 property tax revenue from the plant accounting for almost 70% of Cohasset’s municipal tax base, almost 20% of the Grand Rapids School District tax base and 13% of Itasca County’s tax base.

An analysis evaluating job losses and other economic impacts found that retirement of BEC 3 by the end of 2029 would produce a reasonable cost burden for customers, but retiring BEC 4 that early would produce an undue burden.

The plan also recommends a ratepayer-backed bond issue to mitigate potential ratepayer impacts associated with retiring BEC 3 and 4. (See Green Transition Sparks Comeback for Utility Securitizations.)

Advancement in technologies — specifically in lower carbon resources, renewable energy, energy storage and demand-side resources — will be available in future years to help Minnesota Power meet its goal of carbon-free power generation by 2050, according to the plan.

March 17, 2021June 14, 2023

Diversity Panels Focus on Action and Impact in Clean Tech Programs

2020 was the year when clean tech, like other business sectors across the country, was put on notice that talking about diversity in the workplace was not enough. The Black Lives Matter movement that erupted in the aftermath of the killing of George Floyd shifted the industry’s focus to action and impact, according to speakers at two recent panels on diversity, equity and inclusion (DEI) in renewable energy and clean tech.

For example, at the Atlantic Council’s March 8 webinar on bridging the gender gap in clean tech, Jennifer Holmgren, CEO of carbon capture and recycling firm LanzaTech, reported that the company has now reached gender parity in its major science teams and has an employee-driven DEI group.

“They did a questionnaire that was really eye-opening for us on how people felt in the company,” Holmgren said. “Nobody ever asks, ‘Are you feeling uncomfortable?’ Some of these [initiatives] don’t happen top down. They bubble up, and people get together and become conscious of the need to act.”

At wind developer Siemens Gamesa, Abby Watson leads the company’s North American government affairs efforts and was also recently named co-director of a new Diversity, Equity and Inclusion Council. “We’re not only looking at our workforce, but we are also looking at our supply chain,” Watson said during a DEI-themed session at the American Council on Renewable Energy’s Policy Forum on March 10. “We spend a lot of money, and we are looking at how we can spend more of that money with women- and minority-owned businesses.”

The session also served as an introduction to some of the first women- and minority-owned companies selected for ACORE’s Accelerate program. Launched in December, the initiative provides these organizations a two-year free membership in ACORE, plus other networking and pro bono services to help them grow their businesses.

Talking about the new program, Watson said, “Just providing information about opportunities is not enough. There are real barriers that women- and minority-owned businesses face that larger, more established businesses don’t, especially when you’re looking at becoming a supplier to a large, multinational, publicly traded corporation.”

Dana Clare Redden, founder and CEO of commercial and low-income solar developer Solar Stewards, was on both panels. Her company is among the first group selected for the Accelerate program. One of her key issues was ownership.

“Participation is great, a great place to start,” Redden said at the ACORE session. “But it’s really ownership that tips the scales, whether that be through entrepreneurship or even the ownership of those energy assets. To create this diverse workforce, one of the simplest ways is to plan energy assets in Black and brown communities. When we hear about caps on big [solar] deployment, when we hear about barriers to [distributed generation], it really does seem like an equity issue,” she said.

Ownership and equity also require access to funding, said Kristal Hansley, founder and CEO of WeSolar, a community solar developer with a focus on developing projects in communities of color. Looking at growing efforts to put electric vehicle chargers in low-income and disadvantaged communities, Hansley said, “We can’t even break into that market unless we want to license existing [charging] software. We don’t have the capital. If we [get] the funding, we can put IT software folks together and come up with our own charging stations within our community. That’s the key part; that is the hardest barrier, and no one ever talks about that.”

Holmgren sees similar biases facing women innovators seeking venture capital for startups. “Our culture systemically supports approaches that select women out,” she said. “There aren’t enough women on the VC side, and therefore they’re not investing enough in woman leaders or founders. If you look at the questions that a woman gets asked versus a man there have been studies that show that when the men are asked questions when they’re raising cash, people want to talk about promotion, gains; for women, they ask them downside scenarios. So, it’s kind of a spiral.”

Meat on the Bone

The common thread in both the Atlantic Council and ACORE sessions was that to be successful, DEI initiatives must also drive cultural change inside organizations and at multiple levels. “You’ve got to make sure that once you have a diverse workforce in the door, they feel comfortable, safe and trusted, and bring their full selves to that mission,” Redden said during the Atlantic Council webinar.

Emily Reichert, CEO of Greentown Labs, a Massachusetts-based clean tech incubator, agreed, noting that, in her experience, startups with a diverse founding team go “farther faster. I haven’t done a scientific study to understand exactly why that is, but I would imagine it is because there are more voices at the table, there are more perspectives being shared.”

Watson talked about cultural change on a more pragmatic level, looking at the obstacles women face in training and getting technical jobs in the wind industry. Wind turbine technician is one of the fastest growing job categories in the U.S., but working on an offshore project may mean that technicians will spend two weeks or more at sea, living on a “hotel ship,” she said.

“That’s an opportunity that’s going to be really difficult for people to access if they have childcare obligations and elder care obligations,” Watson said. “And so, we can not only work with states on funding the workforce piece but also look at the policies that need to be in place that help facilitate workforce participation. We need meat on that bone.”

But cultural change also means taking a long view, Holmgren said. “Anything we do in this space needs to be real,” she said. “It’s not about what you put on your website, or your statistics, or what you’re putting out there as goals. It’s about really building the infrastructure for the long haul, because all of this takes a really long time.”

March 17, 2021November 2, 2023

NY Greenlights 100-MW High Bridge Wind Farm

Northland Power’s 100-MW High Bridge wind farm in central New York will move forward to construction following the completion of a three-year application and review process.

The New York Board on Electric Generation Siting and the Environment last week granted the Toronto-based company a certificate of environmental compatibility and public need for the project in Guilford, N.Y. (18-F-0262).

The wind farm, sited on about 4,000 acres of privately leased and purchased land, will have up to 25 wind turbines. It will connect with the bulk power system via a 17-mile transmission corridor and a substation with a proposed, 5-MW energy storage system.

During the application review process, the New York Department of Public Service (DPS) received about 180 public comments, most of which “opposed the project, focusing on environmental health and family impacts as well as impacts on community character,” DPS Administrative Law Judge Erika Bergen said during a Siting Board meeting Thursday.

Comments in support of the project cited the economic benefits to the local community as well as broad support of renewable energy development to combat climate change, she said.

The order granting the certificate includes terms of a settlement between Northland subsidiary High Bridge Wind, the town of Guilford, DPS staff and the New York departments of Environmental Conservation, Health, and Agriculture and Markets, Bergen said.

The settlement proposal names the Guildford Coalition of Non-participating Residents (GCNR) as a party, but the coalition chose not to sign the settlement. The group’s 200 members are not under contract with the developer or being paid considerations for property leases, easements or “good neighbor” agreements.

GCNR, in a statement Friday, said the state “took another step towards environmental disaster by approving the construction of [the wind farm] against the desires of the majority of the town’s nonparticipating residents.”

The coalition is considering filing a petition for rehearing with the siting board and a lawsuit in state or federal court.

“The majority of the nonparticipating residents and landowners in this case feel that the size and location of this facility is not responsible nor in the best interest of reasonable green energy initiatives,” Bill Pratt, GCNR founding partner, told NetZero Insider.

Procedural Irregularities

GCNR claimed that there were “irregularities” in the Siting Board’s proceedings, specifically stating that it failed to issue a recommended decision by the judges for public review and objection.

The board, however, is not required to issue a recommended decision, a DPS spokesperson told NetZero Insider.

A recommended decision “is used only where the examiners have questions that they would like additional input on before making a final recommendation to the Siting Board, but there were no such concerns here,” the spokesperson said, adding that “we have had several Siting Board determinations without [a recommended decision].”

GCNR also claimed that the board did not hold local public comment hearings required by statute “under the pretext of COVID.”

DPS, in line with guidelines concerning social distancing and considering executive orders that suspended provisions of the Open Meetings Law, has conducted its meetings remotely since last March, the DPS spokesperson said.

Intervenor Funding

GNCR claimed that the Siting Board approved an “unfair distribution of funding to a town government that was supportive of the project.”

The final order awarded $82,787 to Guilford and $35,000 to GCNR.

In a request to reconsider the distribution, GCNR said that the award was unfair because the town received more than half of the available funds, while its position on the project was inconsistent with 70% of the town’s residents. The board denied the request on the grounds that GCNR had not demonstrated that 70% of residents opposed the project, according to the final order.

The board determined that the distribution was fair because the town represented the interests of every resident, whereas GCNR represented only the interests of its membership, which was small (200) in relation to the population of the town (2,922 in 2010).

Noise Impacts

During the application proceedings, GCNR asked the Siting Board to apply wind turbine sound level standards to the project that it said were adopted by the World Health Organization (WHO) in 2018. The board said in its order that WHO only made a “conditional recommendation” for wind turbine sound levels and that it rejected them because they rely on “low quality data.”

“Sound levels proposed by the settling parties are the same noise limits that we consistently have deemed appropriate to be protective of health and minimize potential annoyance for other recently approved projects,” the order said. The board plans to apply those standards to future projects, unless new evidence suggests the approach is not adequate, it said.

The standards are 45 A-weighted decibels equivalent sound level (dBA Leq) over eight hours at nonparticipating residences and 55 dBA Leq at participating residences. WHO recommends, for average noise exposure, reducing wind turbine noise below 45 dBA Leq over a whole day, with an additional 10-dBA reduction for nighttime hours and 5-dBA reduction in evening hours.