Massachusetts Gov. Charlie Baker on Wednesday held a ceremonial signing of a $16billion transportation bond bill that allocates funding for modernizing the state’s transportation system, including the electrification of buses.
“The Transportation Bond Bill builds upon our administration’s ongoing commitment to create a 21st-century mobility infrastructure that will prepare the commonwealth to capitalize on emerging changes in transportation technology and behavior,” Baker said.
The legislation includes roughly $5.1 billion to continue modernizing the Massachusetts Bay Transportation Authority (MBTA) and $50 million for the Complete Streets program to build streets that encourage more walking and biking.
“The MBTA is pleased that the legislature and the governor included funds within the recently enacted transportation bond bill for vehicle electrification,” a spokesperson for the agency said in an email statement. At a January board meeting, the authority presented a bus transformation program that calls for funding to provide battery-electric buses (BEBs) in North Cambridge and Quincy by 2024, if the infrastructure can support it.
The Massachusetts Bay Transportation Authority will use funding from a recently signed transportation bill to expand its program to put more battery electric buses, like the Flyer Xcelsior seen here, into service. | MTATransitFan, CC BY-SA 4.0, via Wikimedia Commons
Currently, there is a BEB pilot project active on Silver Lane in Boston. A new $370 million bus maintenance facility in Quincy is designed to accommodate 120 BEBs when it opens in 2024, with room to grow to accommodate future demand.
MBTA estimates it will cost about $4.5 million to build new bus maintenance facilities needed to electrify the bus system. It will cost about $100 million to $130 million to purchase 80 to 100 BEBs to replace diesel buses.
To achieve climate goals, MBTA said a new electrified maintenance facility will be needed every two to three years. The agency also predicts that it will need to budget and plan for the purchase of solely electric buses, instead of the hybrid ones currently in use, at least 14 years before complete electrification.
Systemwide charging infrastructure will also be needed to support the BEB operations, but MBTA did not give a costestimate for those facilities.
The MBTA plans to purchase the BEBs for North Cambridge and Quincy next winter.Two new grant programs allow construction of designated bus lanes so that buses arenot caught idling in traffic in places where homes are only a few feet from the thoroughfares.
Long Island can support 19.5 GW of new, low-impact solar development, according to a three-year study led by the Nature Conservancy and Defenders of Wildlife.
The potential solar capacity would produce more electricity than Long Island needs, Jessica Price, landscape conservation ecologist for the Nature Conservancy, said Friday in a webinar on the study’s findings. “We are not advocating that all that solar needs to be built,” she said. “But it illustrates that there are ample low-impact sites available.”
The findings are part of the Long Island Solar Roadmap, an effort to advance mid- to large-scale solar power on the island. Low-impact sites, as identified in the study, are rooftops, parking lots and ground-mounted solar on disturbed lands.
The study found that 80% of the viable low-impact sites are on private property. That finding points “to the importance of private property owners as part of the solution” to building more renewable energy, Price said. “It can’t be a government-only solution.”
The full report will be released at solarroadmap.org in early March.
Market Barriers
Grid upgrades needed to increase hosting capacity for distributed generation and enable high levels of interconnection will drive up solar project costs, Price said.
The study recommends addressing high project costs by lowering soft costs, such as permitting. Price said data provided in the study also can be used to target grid upgrades to areas with high potential for solar development.
An additional barrier to solar development is limited access to incentives, according to the study. “There is an absence of resources available to those 80% of private property owners that would actually be the host or owners of these systems,” Price said.
The study suggests that new incentives be created to encourage low-impact siting.
“Rather than being location agnostic, we have some recommendations for how different players can encourage low-impact versus high-impact siting,” Price said.
Interactive Map
The Roadmap project included the development of an interactive web-based map that identifies low-impact solar sites on Long Island. The interactive map is available at solarroadmap.org/maps.
The Long Island Solar Roadmap project developed an interactive map that identifies areas of opportunity for mid- to large-scale, low-impact solar on Long Island. | Long Island Solar Roadmap
The map allows users to click on parcels and see the solar potential by technology type. One parcel along the southern coast in Islip, for example, has the potential to host about 10.3 MW of solar, consisting of 1 to 1.3 MW on rooftops and 9 MW on parking lots. Another parcel at Long Island MacArthur Airport could host 223.5 MW of ground-mounted solar.
PPL officials are looking for the sale of its U.K. utility to help fund billions of dollars in clean energy and infrastructure investments in the U.S.
During last week’s fourth-quarter earnings call, PPL CEO Vincent Sorgi said the sale of Western Power Distribution (WPD) — the distribution utility for parts of England and Wales — is progressing and could be announced in the first half of this year. PPL made the decision to sell WPD following a “comprehensive strategic review” last year by the company’s board of directors. (See PPL to Sell UK Operations, Focus on US.)
Sorgi said the goal this year is to focus on “repositioning” PPL as a purely U.S.-focused utility company and “delivering long-term value for our customers and our shareowners.”
“We believe a sale of the U.K. business will simplify our business mix, strengthen our balance sheet and enhance the company’s long-term earnings growth rate,” Sorgi said. “In addition, we believe it will give the company greater financial flexibility to invest in sustainable energy solutions.”
Infrastructure and Renewables
Despite the challenges experienced in 2020 with COVID-19, Sorgi said PPL was able to build on the $27 billion the company has invested in the last decade, completing more than $3 billion in infrastructure improvements over the year. He said of that, nearly 90% was focused on transmission and distribution infrastructure aimed at strengthening grid resilience, incorporating new technology and advancing PPL’s clean energy strategy.
PPL’s headquarters in Allentown, Pa. | PPL
Sorgi highlighted PPL’s securing of regulatory approval for a 100-MW solar power purchase agreement to meet increasing customer demand for clean energy in Kentucky and the expansion of customer participation in the company’s solar share program. LG&E and KU is expanding its solar share facility in the spring, adding two new solar sections to the facility in Simpsonville that will eventually consist of eight 500-kW sections.
PPL’s Safari Energy business added more than 90 MW of solar capacity to its portfolio, Sorgi said, increasing its own capacity to 110 MW. The new capacity is contracted to be a long-term power purchase agreement.
In August, PPL joined a five-year industry initiative designed to accelerate the development of low-carbon energy technology and decarbonization across the economy. PPL partnered with the Electric Power Research Institute (EPRI) and the Gas Technology Institute (GTI) to sponsor the initiative.
“We recognize that going even further faster than the goals that we’ve set to address climate change requires new ideas, technology and systems that can be delivered safely, reliably and affordably,” Sorgi said.
PPL has outlined more than $14 billion in investments from 2021 to 2025, Sorgi said, supporting its continued monetization of the transmission and distribution networks and to “advance a cleaner energy future.” (See PPL Spells out $14B International Tx Upgrade Plan.)
Sorgi said the forecasted spending represents a $1 billion increase of incremental capital expenditures from 2021 to 2024 compared to the spending plan first introduced last year. The increases include $400 million in Kentucky to support the full deployment of advanced metering infrastructure and $300 million in Pennsylvania for additional transmission investments and funding for IT initiatives focused on smart grid technology.
Biden Administration
Sorgi was asked his thoughts on what the Biden administration’s energy policies will mean for PPL. He said the company is closely monitoring developments at the federal level, but it has been too early to determine their specific effects on regulations and the economy.
He said it’s clear climate change will play a key part in the decisions of the administration, so PPL will “remain engaged” in talks about the administration’s goals and ways to successfully advance some of its policies.
One of the biggest issues will be rejoining the Paris Agreement, Sorgi said, which will lead to more aggressive carbon-reduction commitments. He said the targets being discussed would require major advancements in technology.
While the industry has been supportive of the overall goals, Sorgi said, “we don’t quite have agreement on how to get there and the ability of the industry to meet those aggressive targets.”
Earnings
PPL CFO Joseph Bergstein Jr. announced the company’s earnings, saying its profits fell 16% in 2020, as COVID-19 impacted the economy across the board. The company earned $1.47 billion last year, on revenue of $7.6 billion, compared with $1.75 billion on about the same revenue during 2019.
In the fourth quarter, PPL earned $290 million ($0.45/share), down from $364 million ($0.48/share) in 2019. Revenue was flat at $1.9 billion.
Bergstein said that in Pennsylvania, the largest dips in electricity usage remain in retail and service industries, including restaurants, bars and hotels, as the businesses are impacted from closures and limitations from pandemic regulations. He said PPL expects sales to remain down until restrictions are ended or relaxed.
FERC last week rejected a contested settlement agreement between SPP and GridLiance High Plains and remanded the proceedings back to the chief administrative law judge to resume hearing procedures (ER18-99).
In an order approved at its open meeting Thursday, the commission said SPP’s 2019 settlement offer was contested and could not be approved under any of the four Trailblazer approaches for approving contested settlements.
The docket was opened in 2017 when SPP proposed tariff revisions to add an annual transmission revenue requirement (ATRR), a formula rate template and implementation protocols for GridLiance-owned facilities in Nixa, Mo. The RTO decided to place the facilities in transmission pricing Zone 10 because they served load located there.
Nixa’s (Mo.) transmission facilities are at the center of a dispute between GridLiance and other SPP members. | City of Nixa
Several parties protested, including several cities in the zone, Nebraska Public Power District and a group of SPP transmission owners. FERC set the Tariff revisions for hearing and settlement judge procedures in March 2018.
GridLiance eventually reached an agreement with the Missouri cities that was certified by an ALJ last year. At the same time, the judge determined several issues were “arguably policy concerns that do not constitute genuine issues of material fact” and that the record contained substantial evidence upon which FERC could reach a decision in accordance with Trailblazer.
The TOs said the real issue was the originally proposed cost allocation, which would not be improved by the settlement. The commission agreed, saying the alleged cost shift caused by the Nixa assets’ inclusion in the zone was not addressed by the settlement.
FERC said its review of the record “shows that there may be a significant rate increase for Zone 10 customers upon the inclusion of the Nixa assets.”
“Based on the issues raised by the [TOs] with respect to the cost shift caused by the inclusion of the Nixa assets into SPP that we are unable to resolve based upon the record before us, we cannot approve the settlement under the first Trailblazer approach,” the commission said.
FERC did not address the merit of the TOs’ other issues because it rejected the first Trailblazer approach based on the cost shift issue.
Under the Trailblazer precedent, FERC may approve a contested settlement:
“if [it] can address the contentions of the contesting parties on the merits.” The commission has held that it “cannot approve a contested settlement under this approach if some of the contesting parties’ positions are found to have merit or the record lacks sufficient evidence to support a finding on the merits.”
“as a package on the grounds that the overall result of the settlement is just and reasonable.” The approach requires a “detailed and independent cost-benefit analysis … versus continued litigation.”
“where it determines that the contesting party’s interest is sufficiently attenuated that the settlement can be analyzed under the fair and reasonable standard applicable to uncontested settlements, and the commission [makes] an independent finding that the settlement benefits the directly affected settling parties.”
“for consenting parties and sever the contesting party or any contested issue.”
Basin Electric Rate Order Sustained
FERC last week also sustained a September 2020 order that accepted Basin Electric Power Cooperative’s 2020 rate schedule and wholesale power contracts but that also opened an investigation under Federal Power Act Section 206 into the rates’ justness and reasonableness. The order also granted clarification requests regarding the proceedings’ scope (ER20-2441).
Basin Electric’s service territory | Basin Electric
In its September order, the commission found Basin’s rate schedule and power contracts with its 19 members raised factual issues that should be addressed through hearing and settlement judge procedures. It disagreed with intervenors’ arguments that a lack of withdrawal and termination procedures rendered the wholesale contracts unjust and unreasonable, saying each contract includes provisions requiring notice of termination for the contract term’s end. (See FERC to Investigate Basin Electric Rates; Danly Dissents.)
Wheat Belt Public Power District and McKenzie Electric Cooperative both filed clarification requests or, in the alternative, a rehearing of the September order. Dakota Energy Cooperative and Meeker Cooperative Light & Power Association filed a joint request for rehearing.
FERC denied the rehearing requests but granted Wheat Belt’s and McKenzie’s requests for clarification.
In other orders from last week’s meeting:
the commission conditionally accepted SPP’s compliance filing that lets interconnection customers know where in the RTO’s business practices manuals or other coordination documents they may find the modeling details staff use when studying a project as energy resource interconnection service or network resource interconnection service. SPP has 30 days to revise sections of its “Guidelines for the SPP GIP Process and Business Practices” document (ER20-945).
FERC approved an uncontested settlement agreement addressing the ratemaking treatment of Northwest Iowa Power Cooperative’s grandfathered agreements with MidAmerican Energy, saying it resolved all remaining issues set for the original hearing. The commission applied the Mobile-Sierra “public interest” presumption obligating it to treat any freely negotiated wholesale transaction as satisfying the requirement of justness and reasonableness unless it finds that the agreed-upon arrangements seriously harm the public interest (ER15-2115).
National Grid is participating in research to determine how to convert existing gas networks to support hydrogen that could be used for home heating, Kristin Munsch, the utility’s director for regulatory and consumer strategy, said Wednesday.
Hydrogen is a versatile source of energy that presents the opportunity to use existing infrastructure to meet climate goals, Munsch said during a virtual panel event hosted by the Northeast Energy and Commerce Association.
Space and water heating is the second largest source of emissions in Massachusetts, according to data from the Massachusetts Clean Energy Center, and most New England buildings are currently heated by fossil fuels.
Large wind projects, such as those in the U.K. and Europe, are producing an oversupply of energy that can be used for hydrogen production, independent energy market researcher Brad Bradshaw said during the panel discussion. The stranded electrons can be monetized by powering water electrolysis to produce hydrogen, which can then be put in pipelines for things like steel manufacturing or blending with natural gas.
“It seems to meet a lot of challenges” related to Massachusetts’ climate goals, Munsch said.
Because hydrogen is not a new industry, it already has an extensive supply chain, Bradshaw said. Handling the storage and transportation of hydrogen is “done in a well-experienced industry and a safe, economical manner.”
National Grid is exploring supply chain options for hydrogen that could include using facilities like the one in this rendering to make hydrogen from excess wind power. | Shutterstock
Research is now focused on how to “pipe the hydrogen within homes safely and test [hydrogen] with different appliances,” he said.
“Several boilers are already manufactured around the world that take in 100% hydrogen to produce heat for homes, so it’s not really challenging,” Bradshaw said. “It’s just new.”
Excess solar and wind from grids in New York and Maine can be converted to hydrogen and transported cost effectively in high-capacity compressed tube trailers to places like Boston to help decarbonize the gas system, he said.
In the U.K., where the utility is headquartered, National Grid is researching different “flood rates” of hydrogen to a network of more than 100 residential buildings and commercial office spaces, Munsch said. The utility is learning from colleagues in the U.K. about what kind of pipes to use to transport hydrogen.
“The question now is how does it behave differently in our distribution systems,” Munsch said, as New England has “a lot of old pipes.”
National Grid has also partnered with the New York State Energy Research and Development Authority and Stony Brook University’s Institute for Gas Innovation and Technology to assess the impact of introducing hydrogen to infrastructure in New England.
In New York, National Grid has a proposal pending for a multiuse hydrogen production and utilization facility in collaboration with Standard Hydrogen Corp. The renewable natural gas produced will be injected into National Grid’s gas distribution system. The facility would also incorporate carbon capture, utilization and sequestration.
Research into hydrogen as a source of thermal energy is a “question of keeping all of our options open” for the anticipated increase in electrification of sectors such as heating and transportation, Munsch said.
Below is a summary of the issues scheduled to be brought to a vote at the PJM Markets and Reliability and Members committees on Wednesday. Each item is listed by agenda number, description and projected time of discussion, followed by a summary of the issue and links to prior coverage in RTO Insider.
RTO Insider will be covering the discussions and votes. See next Tuesday’s newsletter for a full report.
Markets and Reliability Committee
Consent Agenda (9:05-9:10)
B. The MRC will be asked to endorse proposed revisions to Manual 40: Training and Certification Requirements resulting from a periodic review. The Operating Committee endorsed the revisions Feb. 11. (See “Manual 40 Changes Endorsed,” PJM Operating Committee Briefs: Feb. 11, 2021.)
Endorsements/Approvals (9:10-11:00)
1. Black Start Unit Testing, CRF, Involuntary Termination, MTSL and Substitution (9:10-10)
A. Members will be asked to endorse a proposal addressing black start unit involuntary termination, substitution rules, capital recovery factor (CRF) and minimum tank suction level (MTSL). Greg Poulos, executive director of the Consumer Advocates of the PJM States, introduced the proposal on behalf of the Delaware Division of the Public Advocate at the January MRC meeting after proposals from PJM and Dominion Energy failed to receive endorsement. (See PJM MRC/MC Briefs: Jan. 27, 2021.)
B. Susan Bruce of the PJM Industrial Customer Coalition and Sharon Midgley of Exelon will also ask stakeholders to endorse an alternative PJM proposal on the same issue on first read. The proposal received 43% stakeholder support at the OC in December.
2. Storage as a Transmission Asset (SATA) (10-10:40)
The MRC will be asked to endorse PJM’s proposal for addressing how storage should be considered in the Regional Transmission Expansion Plan, along associated tariff and Operating Agreement revisions. Stakeholders endorsed the proposal at the Planning Committee in December. (See PJM PC OKs RTEP Rules for SATA.)
3. Competitive Exemption OA Revisions for SATA Resources (10:40-11)
Contingent on approval of the SATA proposal, Sharon Segner of LS Power will introduce a friendly amendment with OA revisions specifying, among other things, that SATA resources are ineligible for qualifying as immediate-need reliability projects.
Members Committee
Consent Agenda (1:20-1:25)
B. Stakeholders will be asked to endorse proposed Tariff Attachment K and OA Schedule 1 revisions addressing market rules for real-time values. The package was endorsed with a sector-weighted vote of 4.9 (98%) at the January MRC meeting. (See “Real-time Values Market Rules,” PJM MRC/MC Briefs: Jan. 27, 2021.)
D. Members will be asked to endorse proposed tariff and OA revisions related to stability limits in markets and operations. The package was endorsed with a sector-weighted vote of 4.05 (81%) at the January MRC meeting. (See “Stability Limits Endorsed,” PJM MRC/MC Briefs: Jan. 27, 2021.)
Endorsements/ Approvals (1:25-2:25)
1. MC Resolutions (1:25-2:25)
Midgley and Jim Davis of Dominion Energy will ask stakeholders to endorse a proposal, along with associated OA revisions, developing rules to address sufficient member approval of a resolution at the MC. Poulos will review an alternative proposal.
MISO said its members collectively saved about $3.5 billion in 2020 for choosing RTO membership over going it alone on the grid.
The grid operator’s 2020 value proposition study showed that it provided between $3.1 billion and $3.9 billion in regional benefits. The annual value proposition study compares utility benefits of RTO membership versus flying solo.
MISO chalked the savings up to improved reliability, more efficient use of the region’s existing assets and reduced need for new assets.
Despite the pandemic, the cost reductions didn’t change much from a year earlier, when MISO said it saved members between $3.2 billion and $4 billion. For the past four years, the grid operator has claimed annual cost savings between $3 billion and $4 billion. (See MISO Estimates up to $4B in 2019 Benefits.)
Spokesperson Brandon Morris said the pandemic didn’t affect value proposition results because MISO was able to consistently maintain normal reliability and operations functions.
“Our member utilities’ shared commitment to serving the footprint reliably — combined with relatively stable year-over-year load levels as compared to 2019 — resulted in a 2020 value proposition which was largely shielded from the devastating impacts of COVID-19,” Morris told RTO Insider.
“The value proposition has been relatively stable for the past few years at about $3.5 billion,” Strategy and Business Development Adviser Brad Decker told stakeholders at a teleconference Feb. 19 to discuss the savings.
MISO has documented more than $30 billion in benefits to its members since 2009. “This benefit has grown as MISO has grown,” Decker said.
Broken down, MISO estimated it has saved members between $384 million and $447 million because of its ability to offer improved reliability and perform compliance tasks on behalf of its members.
The RTO said members also avoided spending another $517 million to $572 million because it dispatches existing assets efficiently and offers energy regulation and spinning reserves.
“Before MISO, the region operated as a decentralized, bilateral market,” Decker said. “Now, the day-ahead and real-time market processes are used to minimize total production costs.”
But MISO said its most attractive benefit is its members’ diminished need to build new generating assets, worth between $2.47 million to $3.22 million in savings.
The grid operator said its footprint diversity accounted for about $1.9 billion to $2.4 billion of that reduced need for assets. Decker said the RTO’s geographic expanse means load can rely on other generation assets because weather and demand fluctuate by region.
“If you shared a car with your neighbors, you have fewer cars in garages, and that’s exactly what’s happening under footprint diversity,” Decker said.
Other drivers of the reduced generation need were MISO’s efforts to better incorporate wind into the resource mix, which it valued at a $450-$517 million savings to members, and its demand response programs, which it valued at $116-$211 million.
“MISO’s regional planning enables more economic placement of wind resources, reducing the overall capacity needed to meet required wind energy output,” Decker said.
A plan to build small community solar projects and reduce electric bills for some low-income residents in Nevada is facing pushback from consumer advocates, who object to passing program costs to nonparticipating ratepayers.
The proposed Expanded Solar Access Program is the result of Assembly Bill 465, passed by the Nevada legislature in 2019. The Public Utilities Commission of Nevada has been conducting a rulemaking since mid-2019 to spell out details of the program, which would be run by the state’s monopoly electric provider, NV Energy.
AB465 specifies that the cost of the discount for low-income customers must be spread across all of the utility’s ratepayers.
But the bill does not contain a similar provision for other costs of the program, according to the Bureau of Consumer Protection (BCP), which is part of the Nevada Attorney General’s Office. Yet PUCN’s proposed regulation states that “all costs related to the Expanded Solar Access Program are public policy costs that must be charged to all customer classes of an electric utility.”
“The only subsidy allowed under Assembly Bill 465 to be charged to nonparticipating customers is that of the low-income discount,” Senior Deputy Attorney General Michael Saunders said in a Feb. 16 letter to PUCN. “The Expanded Solar Access Program was intended to be a stand-alone program with its costs covered by participating customers.”
The letter reiterated concerns that BCP expressed in written comments last year. And PUCN’s regulatory operations staff, which is separate from the agency’s decision-making side, have also expressed concerns about spreading program costs other than the low-income discount to all ratepayers.
“This outcome does not seem just and reasonable since remaining ratepayers will receive no direct benefit from this program,” Assistant Staff Counsel Shelly Cassity said in a May 29 letter to the commission.
NV Energy did not respond to requests for comment on the Expanded Solar Access Program. A spokesperson for the attorney general’s office said BCP could not comment on issues related to rulemaking.
PUCN held a workshop and a hearing last week on its draft regulation for the program. The commission now plans to release a revised draft, to be followed by another written comment period and hearing.
As outlined in AB465, which was sponsored by Assemblywoman Daniele Monroe-Moreno (D) of North Las Vegas, the Expanded Solar Access Program would include three to 10 community-based solar projects in areas with a concentration of low-income residents. NV Energy would own and operate the solar facilities, which would be connected to the company’s distribution system.
NV Energy would also include at least one utility-scale solar resource in the program. The utility-scale facility is necessary to make the program affordable to residents, NV Energy officials said during hearings on the bill.
Program participants would fall into three categories:
nonprofits and disadvantaged businesses, including those owned by minorities or low-income residents,
residents whose income falls below 80% of the area median, and
residential customers who show that they cannot install their own solar projects because of rental agreements or site constraints.
The program would establish its own electric rates. Low-income residents in the program would be guaranteed a reduced rate. Other participants would have “stability and predictability” in their electric rates, although reduced rates are not guaranteed.
In another provision, the Nevada Department of Employment, Training and Rehabilitation would work with employers and the International Brotherhood of Electrical Workers to create solar job opportunities and a training program.
Break from Tradition
Monroe-Moreno has noted that AB465 is not a traditional community solar program.
In general, community solar programs allow participants to buy or lease part of an off-site solar photovoltaic system. The programs are also known as shared solar or solar gardens. As of June, community solar projects were found in 39 states and Washington, D.C., according to the National Renewable Energy Laboratory within the U.S. Department of Energy.
Nevada came close to enacting a community solar bill during the 2017 legislative session.
Senate Bill 392, by Sen. Mo Denis (D) of Las Vegas, would have allowed community solar gardens run by subscriber organizations, with individual subscribers receiving a credit on their electric bill for their share of electricity generated by the solar garden.
The legislature passed SB392, but then-Gov. Brian Sandoval vetoed it, saying he was concerned that community solar gardens would operate as small utilities, only without the same level of regulation.
Sandoval was also concerned about the bill’s timing. Nevada residents were preparing to vote in November 2018 on the Energy Choice Initiative, which would have moved the state from an electric monopoly to a competitive market. The initiative failed.
AB465 garnered support from organizations including the Sierra Club Toiyabe Chapter, Western Resource Advocates, IBEW and the Nevada State AFL-CIO. Supporters pointed to the bill’s environmental and workforce benefits.
Nevada Conservation League representative Kyle Davis said during a Senate committee hearing that although the bill wouldn’t create a traditional community solar program, it would be “a step forward, especially for low-income ratepayers.”
But some groups opposed AB465.
The Solar Energies Industry Association, a national trade group, objected to the fact that the bill would allow solar projects approved as long ago as 2018 to be included in the program. SEIA said it would prefer that the program add new solar projects.
The Coalition for Community Solar Access shared SEIA’s concern. The group also said it wasn’t clear how much program participants would save on their electric bills.
Those issues and others “make this bill … an unnecessary and deeply flawed experiment for the state, especially with tried-and-true best practices to be leveraged from over a dozen other states,” CCSA Executive Director Jeff Cramer said in a May 2019 letter to the Senate Committee on Growth and Infrastructure.
FirstEnergy officials updated investors Thursday on the ongoing investigation into the fallout from House Bill 6 during its fourth quarter earnings call while also disclosing billionaire investor Carl Icahn is looking to acquire a stake in the company.
Officials said it disclosed in its most recent filing with the Securities and Exchange Commission that it received a letter Feb. 16 from Florida-based Icahn Capital informing them that Icahn is making a filing with the Federal Trade Commission of its intention to acquire voting securities of FirstEnergy in “an amount exceeding $184 million but less than $920 million,” depending on market conditions. The company’s market capitalization is almost 18.5 billion.
FirstEnergy said it does not know whether Icahn or his associates have already acquired FirstEnergy stock, and it did not know his intentions regarding the company. The letter was the only contact so far with Icahn, officials said.
Icahn earned a reputation in the 1980s as a “corporate raider,” known for his hostile takeover and asset stripping of airline TWA. Icahn briefly served as an economic adviser in the Trump administration in 2017.
FirstEnergy’s share price jumped 7.2% to $34.25 by the end of trading on Thursday on the news involving Icahn, climbing as high as $35.36 per share after noon. Nearly 19 million shares traded hands, about three times as many on a typical day in the last year. The share price closed Friday at $34.03 on a trading volume of 5.3 million shares.
FirstEnergy President Steven Strah | FirstEnergy
“We thought it was noteworthy, and that’s why we’re just being open and transparent about it,” acting CEO and FirstEnergy President Steven Strah said. “We just don’t know enough at this point.”
An electric utilities industry analyst at KeyBanc in Cleveland said in a note to clients that Icahn was likely attracted because FirstEnergy is undervalued.
“We believe that there are multiple avenues for [FirstEnergy] to close its valuation gap where an activist could have an impact – up to and including a sale of the company,” said KeyBanc analyst Sophie Karp, who added that Icahn’s interest could result in a sale of the utility or of non-core assets.
HB 6 Investigation
Thursday’s earnings call was the first held since five FirstEnergy officials were fired in the wake of the fallout surrounding the alleged $61 million bribery scheme that resulted in the passage of HB 6 to rescue struggling nuclear plants in Ohio at a cost to the public of more than $1 billion. The scandal also claimed Ohio Public Utilities Commission Chair Sam Randazzo, who resigned after the FBI raided his home. Randazzo has not been charged in the Justice Department investigation of the scheme. (See PUCO Chair Randazzo Resigns.)
Neither FirstEnergy nor its former executives have been charged.
But on Friday, the Justice Department’s Southern District of Ohio announced that Generation Now, a nonprofit social welfare agency at the center of the purported racketeering scheme created to conceal more than $60 million in corporate money to former Ohio House Speaker Larry Householder, pleaded guilty to one count of racketeering conspiracy.
Householder and his longtime political strategist Jeffrey Longstreth signed the guilty plea on behalf of Generation Now. Longstreth pleaded guilty in October to an identical individual charge and faces up to 20 years in prison. Householder has pleaded not guilty and is awaiting trial. Stripped of his title as speaker, Householder continues to serve as a state representative. Strah, who took over for former CEO Charles Jones after he was fired in late October, said FirstEnergy is “deeply committed” to creating a culture in the company where its leaders “encourage open and transparent communications with all of our stakeholders.” (See FirstEnergy Fires Jones over Bribe Probe.)
“We are dedicated to re-emphasizing that every employee at every level has the responsibility to consistently act in accordance with our core values and behaviors and to speak up if they see inappropriate behavior anywhere in the organization,” Strah said. “At the same time, we’re taking decisive actions to rebuild our reputation and brand and focus on the future.”
Strah said FirstEnergy is continuing to cooperate with the Department of Justice and SEC as the investigation into the alleged bribery scheme continues.
Christopher Pappas, FirstEnergy executive director and independent board member, said the company’s internal investigation has not resulted in any new material to disclose. Pappas said investigators have found certain transactions, including vendor services, that were either improperly classified, misallocated to utility or transmission companies or lacked proper supporting documentation.
The transactions, Pappas said, resulted in amounts collected from customers that were “immaterial” to FirstEnergy and will work with regulatory agencies “to address these amounts.” The exact amounts were not disclosed.
“Our internal investigation continues to be thorough and robust and includes assistance from external law firms who are supported by several other consultants,” Pappas said.
FirstEnergy announced it has stopped making political contributions and will no longer make contributions to political nonprofit 501 (c) (4) organizations.
The company on Thursday also named John Somerhalder, a former executive with CenterPoint Energy in Texas, as vice chairman of FirstEnergy. Somerhalder will also serve as executive director and a member of FirstEnergy’s executive leadership team in a transitional capacity and is tasked with improving the company’s governance and rebuilding relationships with regulators.
Clean Energy Investment
FirstEnergy reaffirmed its commitment to modernizing its grid and becoming carbon neutral by 2050. Last year, the company invested $3 billion in its distribution and transmission system and grid modernization. FirstEnergy continues to operate about 3,100 MW of coal-fired power plants in West Virginia, according to its most recent 10K filing. The company has committed to owning 50 MW of solar generation in West Virginia by 2030 and has pledged to look for other ways to reduce coal burning in the state. “We believe robust long-term organic growth opportunities are well aligned with the focus on electrification and the critical role the grid plays in supporting the transition to a carbon neutral economy,” Strah said.
The company recently announced a $19.6 million project to construct a new transmission substation in Trumbull County, Ohio, to support the energy demands of the electric vehicle industry expanding in the region. The new transmission infrastructure will provide electric service to Ultium Cells — a 3 million-square-foot EV battery-cell manufacturing plant backed by General Motors and South Korea’s LG Chem.
FirstEnergy has started construction on a new transmission substation in Trumbull County, Ohio, to support the expanding electric vehicle industry in the region. | FirstEnergy
In its strategic plan announced last month, FirstEnergy pledged to achieve carbon neutrality by 2050. It said all new light-duty and aerial trucks will be electric or hybrid vehicles beginning this year and 30% of the fleet will be electrified by 2030.
“This ambitious goal reflects our transformation to a regulated electric utility and our responsibility to help create a sustainable energy future,” Strah said.
Earnings
The company reported earnings of $1.1 billion ($1.99/share), on revenue of $10.8 billion for fiscal year 2020 and $242 million ($0.45/share) on revenue of $2.5 billion for its fourth quarter.
The year-end results were an improvement over 2019, when the company earned $908 million ($1.70/share) on revenue of $11 billion.
FirstEnergy CFO Jon Taylor said he expects a profit of $1.3 billion to $1.4 billion for the current 2021 fiscal year.
Consolidated Edison on Thursday reported net income of $1.1 billion ($3.29/share) for 2020, down about 18% from the previous year because of lower commercial and industrial demand during the COVID-19 pandemic and costs associated with Tropical Storm Isaias last August.
The company’s net income for the fourth quarter was $43 million ($0.13/share), compared with $295 million ($0.89/share) for the same period in 2019.
“I want to thank our essential frontline employees for their dedication and sacrifice throughout the pandemic. Their exceptional work in providing safe and reliable energy to New Yorkers has made a critical difference throughout this most difficult year,” CEO Timothy P. Cawley said in a statement.
Con Edison deployed a 1-MW generator to support the field hospital at the Brooklyn Cruise Terminal in Red Hook. | Con Ed
Last March, Con Ed began suspending utility service disconnections, certain collection notices, final bill collection agency activity, new late payment charges and certain other fees for all customers. The company estimates foregone revenues at approximately $61 million and $3 million for Consolidated Edison Company of New York (CECONY) — its utility subsidiary serving New York City and Westchester County — and Orange and Rockland Utilities (O&R), respectively.
The company estimates the financial impact from COVID-19 for the full year to be $102 million. CECONY’s C&I demand was down 15% for the year, with revenue for the sector down 13%; O&R’s were down 9% and 8%, respectively.
The New York Public Service Commission in January approved further investigation into the Isaias preparation and response by Central Hudson Gas & Electric, CECONY, O&R and PSEG Long Island. PSEG is not under PSC jurisdiction, but the other three utilities “now face maximum potential penalties of up to $137.3 million, with Con Edison and O&R also facing potential license revocation depending upon a finding of repeat violations,” the commission said. (See “NYSEG Dinged for Isaias; Other IOU Cases Pending,” NY PSC OKs Utility Storage Deployment, Cost Recovery.)
New York Gov. Andrew Cuomo on Friday announced that he is advancing legislation to eliminate caps on penalties to ensure they align with actual damages caused by specific violations and to establish a clear process for revocation of a utility’s operating certificate upon recurring failures.
PPL officials are looking for the sale of its U.K. utility to help fund billions of dollars in clean energy and infrastructure investments in the U.S.
FirstEnergy officials updated investors Thursday on the ongoing investigation into the fallout from House Bill 6 during its fourth quarter earnings call while also disclosing billionaire investor Carl Icahn is looking to acquire a stake in the company.
Consolidated Edison on Thursday 