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Grand Rapids Public Utilities collaborates on solar-plus-storage project

December 11, 2020

by Paul Ciampoli
APPA News Director
December 11, 2020

A solar-plus-storage project in the City of Grand Rapids, Minn., is the result of a collaboration between Minnesota public power utility Grand Rapids Public Utilities and several other parties.

US Solar is developing the two-megawatt solar array and one-megawatt/2.5-hour energy storage battery on city-owned land near the Grand Rapids/Itasca County Airport.

The solar array will include single-axis trackers and bifacial modules which significantly increase the efficiency of the solar array.

The project is expected to start producing energy for Grand Rapids Public Utilities customers by the end of 2021.

Along with US Solar and Grand Rapids Public Utilities, other parties involved in the project are Minnesota Power, a subsidiary of investor-owned Allete, the Itasca Clean Energy Team, and the City of Grand Rapids.

US Solar plans to install a mix of pollinator-friendly, low lying, deep-rooted plants throughout the array. This native pollinator habitat supports bees, butterflies, and other local wildlife. This vegetation has also been proven to decrease stormwater runoff and improve the quality of soil, water, and air, US Solar said in a Dec. 10 news release.

A recent article in Public Power Daily detailed how public power utilities across the country are working hard on biodiversity efforts in their communities and one example of these efforts can be found in their support of pollinator populations.

In terms of positive economic benefits, Grand Rapids Public Utilities ratepayers “will receive affordable, reliable, clean energy throughout the 25-year life span of the project,” US Solar noted. The project represents over $6 million in private investment and will support over 25 construction jobs.

Over the course of the project term, it will generate over $465,000 in local tax revenue and land lease payments that will benefit the City of Grand Rapids and its residents.

NYPA board OKs new strategic plan, as well as diversity and inclusion effort

December 11, 2020

by Paul Ciampoli
APPA News Director
December 11, 2020

The New York Power Authority’s (NYPA) Board of Trustees on Dec. 8 approved a new strategic plan, VISION2030, which focuses on five strategic priorities to achieve the clean energy goals of NYPA’s customers and the state.

NYPA said that the strategic priorities to achieve the clean energy goals include NYPA’s intention to:

Partnering with customers

NYPA said that it will partner with its customers and the state to meet their individual energy goals in alignment with the state’s Climate Leadership and Community Protection Act “by providing clean and affordable energy, along with innovative, integrated customer solutions.”

NYPA will help its customers decarbonize by working with them to realize climate leadership projects in energy efficiency, renewables generation, optimized electrification and digitization. There will be a 70% renewable energy supply provided by 2030 in a cost-effective manner.

NYPA will also enable 325 megawatts of distributed and customer-sited solar by 2025 and facilitate 450 MW of storage projects by 2030.

In addition, NYPA noted that the transition to electric vehicles is being accelerated through the installation of charging stations for EV drivers, including chargers built for transit agencies to electrify buses, and through EVolve NY, NYPA’s public fast charging network.

Decarbonization

NYPA said that in order to lead the transition from natural gas to even cleaner electricity, it will be a first mover in developing and demonstrating new low-to-zero carbon technologies and short- and long-duration battery storage.

NYPA will evaluate the economic performance of its gas fleet “and pursue a collaborative approach with policy makers, community members and the private sector as it advocates for market rules and policies and aims to achieve zero-carbon emissions by 2035,” ahead of New York Gov. Andrew Cuomo’s 100% zero-emission electricity by 2040  goal. NYPA also will commit to supplying its customers with carbon-free electricity by 2035.

NYPA recently signed an agreement with environmental justice groups to assess how its natural gas-fired peaker plants, six in New York City and one on Long Island, can be transitioned to utilize clean energy technologies while continuing to meet the unique electricity reliability and resiliency requirements of New York City.

Potential siting of battery storage and hydrogen blending at the plants is under consideration.

Growing transmission to connect renewables

As part of VISION2030, NYPA aims to be the leading transmission developer, owner and operator for New York State.

Building new transmission infrastructure to move distant renewable energy resources is critical to the integration of renewables, such as land-based and off-shore wind and solar, into the bulk power system and achieving the goal of 70% renewable electricity by 2030, it said.

Three major projects to help the state meet its changing transmission needs are currently underway:

Hydropower

NYPA said it will preserve and enhance the value of NYPA’s hydropower assets, which account for approximately 25 percent of New York State’s electricity, as a continued core source of carbon-free power and as a source of flexibility and resilience as the state’s grid evolves.

“Retaining assets in good repair, actively advocating for policy and market rules recognizing hydro benefits to the grid and evaluating alternative contracting or offtake arrangements will help optimize the benefit of hydropower for New Yorkers,” it said.

A 15-year, $1.1 billion life extension and modernization program, first announced in July 2019, is currently underway to significantly extend the operating life of NYPA’s flagship Niagara Power Project, one of the largest hydroelectric projects in the U.S.

Canals

Meanwhile, NYPA said it will continue to reinvigorate the New York State canal system primarily through the Reimagine the Canals initiative announced by Cuomo earlier this year. Simultaneously, NYPA and the Canal Corporation will work to ensure that these investments safeguard the Canal’s role as a driver of economic growth for New York State.

Priorities will be supported by four-year financial plan

The Authority said that the strategic priorities will be supported by NYPA’s recently approved four-year financial plan.

The financial plan includes five foundational pillars:

Board approves diversity, equity and inclusion plan

In other action, the Board of Trustees at its Dec. 9 meeting, approved a Diversity, Equity and Inclusion plan that NYPA said will expand customer energy products and services in underserved and environmental justice communities to help customers lower utility costs and meet their environmental and sustainability goals.

The approvals support development, retention, promotion and engagement of staff through training, career and leadership programs, and support hiring of a workforce that reflects the diverse communities NYPA serves, the Authority said.

NYPA said that through the plan, students of color will have more opportunities to join and advance in the clean energy sector. A recent article in Public Power magazine also outlined NYPA’s diversity, equity and inclusion efforts in further detail.

Also, in order to further meet Cuomo’s goal for procuring at least 30% of products and services from minority and women owned businesses (MWBEs), NYPA will increase funding to its supplier diversity programs – through mentoring, outreach and education initiatives – to drive up participation of MWBEs in the organization’s supply chain.

Additional details on the plan are available here.

Plan for Southeast energy exchange market previewed for regulators in the Carolinas

December 11, 2020

by Paul Ciampoli
APPA News Director
December 11, 2020

A group of Southeast energy companies on Dec. 11 offered a courtesy preview to state utility regulators in North and South Carolina of a filing the group plans to submit to the Federal Energy Regulatory Commission for the creation of a centralized, automated, intra-hour energy exchange called the Southeast Energy Exchange Market (SEEM).

The companies involved intend to file for approval from FERC by the end of the year and to begin operations as early as fourth quarter 2021.

Founding members of SEEM are expected to include:

Participation in SEEM is open to other entities that meet the appropriate requirements. Some utility commitments will take place following FERC approval.

SEEM is a 15-minute energy market, the first of its kind for the region, that will use technology and advanced market systems to automatically match participants with low-cost energy to serve customers across a wide geographic area, according to a news release related to the market.

The new SEEM platform will facilitate sub-hourly, bilateral trading, allowing participants to buy and sell power close to the time the energy is consumed, utilizing available unreserved transmission.  The exchange is an extension of the existing bilateral market.

As part of their evaluation, SEEM members performed a detailed study to assess the costs and benefits of forming such a platform.

An independent third-party consultant estimated the platform’s total benefits to members and their retail customers range from $40 million to $50 million annually in the near-term, potentially growing to $100 million to $150 million annually in later years as more solar and other variable energy resources are added.

After validating the concept of forming this market with the study, SEEM members discussed the potential structure and benefits with numerous energy regulators, policy makers, consumer advocates, non-governmental organizations, energy associations, solar developers and business customers. Feedback helped strengthen the platform agreement by adding more transparency measures, according to the news release.

SEEM members will maintain local control of their generation and transmission assets and participation is voluntary.

Many of the member companies operate within state guidelines and directives, so having full control over their respective generation and transmission resources is an important governing requirement.

“TVA continues to actively work with other utilities on the proposed Southeast Energy Exchange Market, which offers the potential of lower costs and optimized renewable energy resources that both support TVA’s mission of serving the Tennessee Valley,” said Jim Hopson, TVA Public Information Officer.

“The courtesy preview of the upcoming FERC filing shared today is another important milestone in SEEM’s formation,” he said.

“Santee Cooper will take up our required SEEM approval process after FERC has reviewed and made its decision on the proposed platform,” said Mollie Gore, Corporate Communications Director at Santee Cooper. “We do believe there is an opportunity for real, meaningful savings for customers here, plus the ability to better integrate renewables – which is helpful given Santee Cooper’s aggressive plans for new solar over the next decade. It is also very low risk, which is important.”

“We are pleased to be part of this effort to bring benefits to the southeast and our customers,” said Drew Elliot, Manager, Government Affairs at ElectriCities. “SEEM will maximize the investment in the transmission system and should allow better integration of renewables in the region. We see this as a no-regrets strategy to lower costs for customers due to the relatively quick set-up and low costs – both start-up and ongoing – compared to other wholesale market concepts.”

In a recent blog, Elise Caplan, Director, Electric Market Analysis, at the American Public Power Association, notes that the Southeast is the largest geographic area without some form of a centrally dispatched energy market.

“It is therefore no surprise that various entities are giving attention to the development of a coordinated energy market in the Southeast,” she wrote, noting the significant benefits that can be achieved.

While APPA does not have a position on whether some form of organized energy market should be adopted in the Southeast, Caplan said that there are some important lessons to be learned from other regions, which she details in her blog.

EPA finalizes rule to codify best practices for benefit-cost analyses under the Clean Air Act

December 10, 2020

by Paul Ciampoli
APPA News Director
December 10, 2020

The Environmental Protection Agency (EPA) on Dec. 9 finalized a procedural rule to codify best practices in the preparation, development, presentation, and consideration of benefit-cost analyses for significant rulemakings promulgated under the Clean Air Act.

The goal of the final rule is to assist interested parties to understand and evaluate the adequacy and accuracy of the benefit-cost analyses and the role the analysis played in significant regulatory decision-making.

The final rule consists of three main elements.

First, EPA will prepare a benefit-cost analysis for all future significant proposed and final regulations under the Clean Air Act.

Second, EPA is required to develop benefit-cost analyses following best practices from the economic, engineering, physical, and biological sciences.

The analysis must include a statement of need, an examination of regulatory options which would contribute to the stated objectives of the Clean Air Act, and to the extent feasible, an assessment of all benefits and costs of these regulatory options relative to the baseline scenario.

Third, EPA must increase transparency in the presentation of the benefits and costs resulting from significant Clean Air Act regulations. Specifically, the rule requires the preamble of significant proposed and final Clean Air Act regulations to include a section that contains a summary presentation of the overall benefit-cost analysis results for the rule, including total benefits, costs, and net benefits.

The final rule does not change any other requirements related to Clean Air Act rules specified in executive orders and existing guidance documents. For example, this final rule does not change the requirements for what types of analysis should be included in regulatory impact analyses prepared under Executive Order 12866.

The final rule becomes effective upon publication in the Federal Register but does not apply to final rules for which a proposal was published prior to the effective date.

The new rule was part of a broader effort to address cost-benefit analysis requirements for all new significant EPA regulations for water, hazardous waste, and toxics regulations in the next several years. However, the final rule will likely face legal challenges and revocation by the incoming administration of President-elect Joe Biden.

The American Public Power Association submitted joint comments with the National Rural Electric Cooperative Association offering general support for the overall goals of EPA’s efforts to increase transparency and consistency in undertaking a benefit-cost analysis under the Clean Air Act.

A copy of the pre-publication version of the final rule and fact sheet is available here. 

Decorah, Iowa, city council votes to create municipalization task force

December 10, 2020

by Peter Maloney
APPA News
December 10, 2020

The Decorah, Iowa, city council on Monday voted 6-1 in favor of forming a task force on the municipalization of the city’s electric power infrastructure.

The main job of the task force is to recommend to the city council how to move forward with respect to a feasibility study done about two years ago, Emily Neal, a member of the Decorah city council, who voted in favor of the measure, said.

If successful, Decorah would form a public power utility and would no longer take electric power from Interstate Power & Light (IPL), a subsidiary of investor-owned utility Alliant Energy.

Decorah residents supporting municipalization say a municipal utility would invest more heavily in renewable energy and those investments would remain local and return more money back to the community. “Motivations vary from person to person, but for me municipalization means local power and local dollars staying in our community,” Neal said.

The task force is charged with making a recommendation among four options:

The feasibility study was funded in 2017 by the advocacy group Decorah Power with the support of the Decorah city council. The study, conducted by NewGen Strategies & Solutions, examined the costs and benefits of forming a public power utility – called a Municipal Electric Utility (MEU) in the study – and found that Decorah could save about $5 million annually by setting up its own utility. The study found that Decorah’s 8,000 residents could save about 30% on their electric bills compared with taking service from IPL. Decorah’s 25-year franchise agreement with IPL ended in June 2018.

In the study, NewGen put the cost of municipalization at about $5 million and said the costs could be funded by issuing $5.5 million of 20-year, 5% taxable bonds. In addition, NewGen estimated startup costs for a MEU at about $2 million, about half of which would be costs associated with the regulatory process of seeking approval from the Iowa Utilities Board to set up a utility. The set-up costs could be funded with a $2 million, 20-year, 3.5% tax-exempt bond issuance, NewGen said.

Alliant Energy also commissioned a feasibility study and the report, by Concentric Energy Advisors, estimated start-up costs and the cost of buying its assets that serve Decorah at $51 million.

In May 2018, Decorah residents voted on a referendum that would have authorized the city council to pursue a MEU. The measure failed by three votes, 1,385 to 1,382.

“It often takes two or three passes before a municipalization goes through,” said Neal, who was a volunteer for Decorah Power before she was on the city council. She noted that the vote was very close and there has been “tons of misinformation” surrounding the vote and the proposal was “not promoted very well. For those who think it is a good idea, it is worth doing again.”

In addition to considering the four options with respect to the feasibility study, the task force will convene stakeholders and listen to their concerns and interests and will “draft some comments to give to the Iowa Utilities Board to inform them about the MEU process and the undue hardships when even exploring the issue,” Neal said. The aim, she said, would be to see if the utilities board could help “level the playing field. It is a David and Goliath fight” to take on an investor-owned utility. “We are using public dollars.”

Meanwhile, the task force has a year to study the issues and make its recommendations. Beyond that, the city would have to hold another referendum to gain voters’ approval before presenting a proposal to the Iowa Utilities Board. State rules also require that the city establish a legal utility entity before it can apply to municipalize its electric service.

In 2015, Decorah set up a telecommunications utility entity when it was considering municipalizing phone and internet service, but ultimately found the idea was not feasible.

The last Iowa city to create a public power utility was Anthon, in 1976. Since then, a municipalization effort in Iowa City failed in 2005 when 67% of residents voted against the effort. And in 2008, the Iowa communities of Everly, Kalona, Rolfe, Terril and Wellman pursued municipalization but failed when the utilities board rejected their proposal.

The American Public Power Association offers a variety of resources related to municipalization.

Moody’s says 2021 outlook for public power is stable

December 10, 2020

by Paul Ciampoli
APPA News Director
December 10, 2020

Moody’s Investors Service said its outlook for the U.S. public power sector is stable because the rating agency expects the sector to be relatively resilient through the ongoing global recession.

“Public power utilities’ business model inherently helps maintain stability; they provide essential services in a non-profit oriented manner, have strong liquidity and have self-regulated rate-setting ability to help manage cost recovery,” Moody’s said in a Dec. 7 report.

At the same time, the rating agency said that while it expects financial metrics to weaken over the next 12-18 months as a result of lower sales revenues and continued moratoriums on service disconnects, “metrics should still remain within our range for a stable outlook.”

Load demand

Moody’s expects overall net negative load demand nationally for 2020, with continued recovery and demand growth through 2021.

But loads have not declined evenly throughout the country because of varying degrees of shelter-in-place orders and weather-related reasons, it pointed out.

“We also expect demand growth and recovery to vary depending on how long it takes local economies to recover. In the event of another national wave, there could be another significant reduction in commercial and some industrial activity, with more permanent job losses because of permanent closures of commercial establishments unable to recover.”

Depending on the proportion of industrial and commercial customers of particular issuers, as well as the types of industries located in their service territories, “some issuers may actually experience load demand growth, as in food products, hygiene and medical supply-related industries, as well as home improvement industries.”

The report said that although there was an increase in residential load demand across the board given shelter-in-place orders, “for the most part, this increase is not enough to offset the decline in commercial and industrial load expected for the full year 2020, as a result of significantly reduced commercial and industrial activity in the first half.” But demand has continued to improve since the peak declines observed in April and May.

Moody’s said that issuers with service territories with high poverty levels are likely to be more severely affected “because job losses during the pandemic have disproportionately fallen on lower income individuals, many of whom work in the commercial sectors where the virus has caused the most upheaval, such as retail, restaurants, apparel, hotels, entertainment and transportation.”

These workers will continue to face job insecurity as long as COVID-19 remains a health threat, “with implications for consumer confidence and spending, demands for social services, and in some economies, a further divide in access to healthcare.”

Although the Coronavirus Aid, Relief and Economic Security (CARES) Act funded $900 million to a program that helps low income households make home energy payments, “according to the American Public Power Association (APPA), more funding is needed,” the report noted.

Moody’s said that federal aid to local governments has provided only limited short-term relief and is unlikely to alleviate budgetary stress in 2021.

“The CARES Act stipulates that funds may be used only to cover coronavirus-related expenses, not to replace lost revenue. Further, the relief package has been focused on states, with cities and counties receiving no more than 45% of each state’s allocation. Disbursement of this aid is on a reimbursement basis for costs incurred through 30 December 2020.”

The rating agency’s forecast assumes limited additional federal aid.

Plans unveiled for 550-megawatt virtual power plant in California

December 9, 2020

by Paul Ciampoli
APPA News Director
December 9, 2020

Plans for a 550-megawatt virtual power plant (VPP) in California were unveiled on Dec. 7 by Sidewalk Infrastructure Partners (SIP) and OhmConnect.

The Resi-Station project will be funded by an $80 million commitment from SIP and developed in partnership with OhmConnect and will comprise hundreds of thousands of active customers with a fleet of in-home, smart devices that can deliver targeted energy reductions, orchestrated by OhmConnect technology that predicts, incentivizes, and coordinates energy use.

At full scale, Resi-Station will be the largest residential VPP in the world, according to SIP and OhmConnect.

SIP announced a $100 million transaction as part of its new advanced power grid platform, Resilia, which is focused on making electric systems bidirectional, transactive, and distributed. The transaction includes a $20 million investment in OhmConnect, Inc. and an $80 million commitment to the Resi-Station project.

The funding of the project commitment is subject to customary regulatory approvals.

In order to scale up Resi-Station, SIP and OhmConnect are partnering with Google to offer Nest thermostats to hundreds of thousands of participants in the OhmConnect software program enabling Resi-Station.

Additional information on the VPP is available here.

SIP builds, owns, operates, and invests in both advanced infrastructure projects and technology companies. SIP’s investors include Alphabet Inc., Google’s parent company, and the Ontario Teachers’ Pension Plan.

Moody’s assigns first-time A2 issuer rating to CleanPowerSF, with stable rating outlook

December 9, 2020

by Paul Ciampoli
APPA News Director
December 9, 2020

Moody’s Investors Service on Dec. 9 assigned a first-time A2 issuer rating to California community choice aggregator (CCA) CleanPowerSF. The rating outlook is stable.

CleanPowerSF is a not-for-profit, single jurisdiction community choice aggregator and a component unit of the City and County of San Francisco’s Public Utilities Commission (SFPUC), which has an extensive history of operations, Moody’s noted.

Moody’s said the A2 issuer rating for CleanPowerSF is underpinned by, among other things, the strength of its service area, the SFPUC’s long-standing experience operating large utility enterprises with energy procurement, a common pool of experienced employees, as well as access to the unrestricted portion of the city’s general fund liquidity pool in the case of an emergency.

The rating agency noted that CleanPowerSF is a single jurisdiction CCA, rather than a joint power agency (JPA) CCA.

“In many respects, a city-operated CCA is similar to CCAs operated by JPAs in expanding clean energy choices,” Moody’s said.

Strengths of city-operated CCAs include governance and ownership by the city, linkage to the city’s oversight, with city councils having authority over the unregulated rate-setting process, and experience managing other services such as water and sewer, the rating agency said.

Moody’s said a key strength for CleanPowerSF’s credit quality and liquidity profile is its access to the City of San Francisco’s Treasury pool, which provides additional liquidity to CleanPowerSF.

As of the first quarter of 2020, the City’s pool was made up of approximately $11.2 billion in unrestricted cash, of which $1.2 billion is reserved for the benefit of SFPUC enterprise funds (including $98.3 million for CleanPowerSF).

The stable outlook reflects expectations that CleanPowerSF will maintain an adequate liquidity profile through Fiscal Year 2021 “despite load demand decline given some flexibility built-into its supply contract positions, while temporarily compressing its discount to PG&E rates.”

In addition, the stable outlook incorporates the rating agency’s expectation the CleanPowerSF’s economic service territory will remain strong and supportive of a clean energy value proposition offered by CleanPowerSF through the CCA model for customers in San Francisco, Moody’s said.

“Today’s announcement of an issuer rating of “A2” by Moody’s is a significant next step in the development of CleanPowerSF as San Francisco’s clean electricity provider serving more than 380,000 residents and businesses,” said SFPUC Chief Financial Officer Eric Sandler. “The rating confirms that CleanPowerSF is a high-grade utility enterprise, which will allow us to provide our services on a more cost-effective basis while continuing to meet San Francisco’s ambitious climate action goals.”

The American Public Power Association has initiated a new category of membership for community choice aggregation programs.

CPS Energy collaborates on smart streetlight sensor program

December 9, 2020

by Ethan Howland
APPA News
December 9, 2020

CPS Energy is teaming up with the city of San Antonio, AT&T and Itron to use smart technology to make streetlights more efficient and to be used as sources of environmental data collection.

Under the pilot project, AT&T and Itron are installing 45 smart streetlight sensors in three “innovation zones” in San Antonio, according to CPS Energy, San Antonio’s city-owned public power utility.

The sensors will include remote lighting controls and up to five “smart” use case applications: parking sensing, air quality, temperature, ambient noise and flood sensing, CPS Energy said Dec. 8.

The sensors on CPS Energy’s LED streetlights will tell the utility how its assets are functioning in near real-time, while improving service levels for customers.

The six-month pilot project is part of SmartSA, a consortium that includes CPS Energy, San Antonio, and other local entities. The effort aims to use data and technology to build a connected, inclusive and resilient community that supports high quality of life, according to the public power utility.

The pilot project will include data analysis to help CPS Energy determine how to use the sensors to best serve San Antonio and align with the city’s climate action and adaptation plan and ozone attainment goals, the public power utility said.

CPS Energy and SmartSA will prioritize protecting public privacy as it works on the pilot project and future smart city initiatives, according to the utility.

San Antonio’s innovation zones were established in 2017 to test new technologies. In a survey last year, city residents identified environmental quality, pedestrian safety and traffic congestion as key challenges in the zones, according to CPS Energy.

Setting up pilot projects in the zones is the first step towards developing practical solutions to the challenges, the utility said.

CPS Energy and its partners plan to assess the pilot project in the summer before installing the sensors across the city.

CPS Energy serves 840,750 electric customers and 352,585 natural gas customers in and around San Antonio.

Allison Clements sworn in as FERC Commissioner

December 9, 2020

by Paul Ciampoli
APPA News Director
December 9, 2020

Allison Clements was sworn in as a member of the Federal Energy Regulatory Commission (FERC) on Dec. 8.

Clements, a Democrat, fills the seat on the Commission vacated by Cheryl LaFleur in August 2019. Clements’ term runs through June 30, 2024. 

Her nomination was confirmed by the Senate on November 30, 2020, along with Republican Mark Christie, who has not yet been sworn in. Christie will serve a term expiring June 30, 2025.