California Utilities Unveil Plans for Retail Electric Rate Reforms
April 17, 2023
by Paul Ciampoli
APPA News Director
April 17, 2023
Pacific Gas & Electric, Southern California Edison Company and San Diego Gas & Electric recently submitted residential electric rate reform proposals to the California Public Utilities Commission that call for a customer income verification process that would be administered by a third-party contractor supervised by the CPUC.
The electric rate proposals come in response to a state law (AB 205) passed in 2022 requiring the California Public Utilities Commission to adopt a fixed price based on household income to help fund electric delivery infrastructure such as poles, wires, meters and customer service. The CPUC must adopt a new electric rate structure no later than July 1, 2024.
“Current residential rate structures based primarily on volumetric rates do not reflect cost of service, are not equitable, and do not send appropriate price signals to encourage broader 6 adoption of greenhouse gas reducing technologies,” the investor-owned utilities said in their April 7 filing.
They said that the artificially high volumetric rates in existing residential rate structures pose affordability challenges for many lower- and moderate-income customers, very high bills for larger users, and monthly bill volatility.
The utilities said their proposals to combine an Income Graduated Fixed Charge (IGFC) with lower volumetric rates on all residential rate schedules will improve equity.
“Our proposals will bring customers’ rates closer to the cost to serve them, result in greater month-to- month bill stability, and provide low-income customers with bill reductions, on average, relative to the current rate structure.”
They also said the lower volumetric rates will encourage decarbonization by making transportation and building electrification more affordable. “More cost-based electricity prices will compare more favorably to prices of gasoline and natural gas.”
Income Verification is Key Part of Proposal
The utility said that an important part of their proposal is the recommendation that income verification for purposes of assigning customer households to the appropriate IGFC level be administered by a third-party contractor supervised by the CPUC, as is done for a state program for telecommunication companies.
The utilities noted that they currently perform a limited form of income verification in the narrow context of opt-in discount programs.
“However, the process of assigning all of California’s residential electric customers to income categories is unprecedented, and requires capabilities and processes that are best administered by a state agency – and are far beyond prior utility experience and capabilities,” they told the PUC.
“Adding the resources and systems necessary for the energy utilities to perform such income validation would not be cost effective. Doing so also raises sensitive issues of consumer privacy, cybersecurity, and utility-customer relations.”
Utilities Detail Benefits of Proposals
SDG&E, PG&E and SoCal Edison said that their proposals provide several benefits compared to the current, primarily 4 volumetric, rate structures for the IOUs’ residential electric customers.
Specifically, they said that while the energy environment in California “continues to evolve rapidly, the residential rate structure for investor-owned, regulated utilities has become outdated and misaligned with the new energy landscape.”
As the three utilities continue to build and maintain necessary critical infrastructure to help enable California’s energy transition, collecting residential customers’ fixed costs through volumetric rates unfairly shifts fixed costs from lower to higher-use customers and disincentivizes beneficial uses of electricity, they said.
Because nearly all of their fixed costs are recovered through such volumetric prices, “the price customers pay when they turn on their lights is substantially higher than the marginal cost of providing that electricity.”
They went on to say that while they have proposed to substantially reduce volumetric electricity rates for all residential customers, the proposals also recognize many customers may not be able to electrify in the near term.
A key priority of the proposals is to provide bill savings for customers in specific income brackets. The IGFC proposals provide annual bill savings for these customers, on average, without changing their energy consumption, according to the utilities.
CPUC Public Advocates Office Also Weighs In
Meanwhile, the Public Advocates Office at the CPUC (Cal Advocates) also weighed in at the Commission in the proceeding.
The office proposed an IGFC framework “that promotes affordability and encourages electrification by reducing volumetric rates, provides additional bill discounts for low-income customers, and recovers the electric utility’s cost to serve in a more equitable manner than current rates,” it said in an April 7 filing.
“Absent an IGFC, persistently high volumetric rates will continue to exacerbate affordability issues over time and discourage electrification,” the office said.
Cal Advocates recommended the Commission adopt an IGFC based on Cal Advocates’ proposed structure presented in its filing for all residential default and optional rate schedules.
It said this structure consists of progressively higher fixed charges across three identical income brackets for California Alternative Rates for Energy (CARE) and non-CARE residential customers.
The differentials (i.e., the difference in fixed charge levels between income brackets) are set higher between the second (i.e., customers making between $50,000/year and $100,000/year) and first (i.e., customers making less than 12 $50,000/year) income brackets to provide more reductions to low-income customers whereas the differential is set lower between the third (i.e., customers making more than $100,000/year) and second brackets to facilitate implementation of the IGFC.
Cal Advocates estimates that this proposal will reduce overall volumetric rates by 16%-22% depending on the investor-owned utility compared to the same rate absent such a fixed charge.T
To mitigate impacts on low-income customers, Cal Advocates also proposes to redeploy the California Climate Credit to offset fixed charges to the greatest extent possible for customers in the first income bracket.
Click here for the filings made by the utilities, Cal Advocates and other parties in the proceeding.
Perseverance Pays Off for Cleveland Public Power’s First Female African American Lineworker
April 15, 2023
by Paul Ciampoli
APPA News Director
April 15, 2023
Ta’Jahnae Buchanan recently became the first female and first African American female to complete all requirements of the Cleveland Public Power lineworker apprentice program.
In a Q&A with Public Power Current, Buchanan said she was introduced to Cleveland Public Power’s intern-to-apprentice program by her grandmother.
“She didn’t have much information about this program — she just gave me an address and time and told me to be there.” Her grandmother emphasized what a great opportunity the program was for Buchanan.
She started her apprenticeship in 2019 — a four-year program. During her first and second year of the apprenticeship, she worked on cable pulling, framing poles and setting transformer cans and secondaries.
She also worked in the utility’s transformer shop, getting transformers ready for crews. Buchanan has also worked in the utility’s trouble dispatch office.
“This is such an exciting opportunity,” she said.
While Buchanan encountered obstacles during her apprenticeship, she noted that her perseverance paid off for her and helped her to complete the program.
In a CPP Linkedin post, Ammon Danielson, commissioner of CPP said, “We are proud of the hard work that Ta’Jahnae has put in to reach this pinnacle and we look forward to the role she will play as a mentor to those following in her footsteps.”
Report Says Industry Collaboration Needed to Ensure Reliability as EV Use Grows
April 15, 2023
by Peter Maloney
APPA News
April 15, 2023
A new report by the North American Electric Reliability Corp. and utility groups highlights the need for collaboration between electric utilities and the electric vehicle industry to ensure electric system reliability.
The report, Electric Vehicle Dynamic Charging Performance Characteristics during Bulk Power System Disturbances, was jointly developed by the California Mobility Center, the North American Electric Reliability Corp., and the Western Electricity Coordinating Council.
The report focuses on electric vehicle charging behavior during infrequent disturbances that originate from the high-voltage bulk power system. The events last no more than a few seconds, but if left unchecked they have the potential to cause catastrophic consequences for electric system reliability such as cascading blackouts and widespread power interruptions, the report said.
The report stresses the need for early engagement, collaboration and information exchange between electric utilities and the electric vehicle industry in anticipation of a projected increase in electric vehicle adoption and charging.
The Energy Information Administration forecasts that electricity consumption by the transportation sector will increase by more than a factor of 12 between 2021 and 2050 – from 12 billion kilowatt hours in 2021 to more than 145 billion kilowatt hours in 2050.
“By forming a working group to bring all EV stakeholders together, we can better accelerate innovation and help prevent grid reliability challenges before they happen,” Arlen Orchard, California Mobility Center chair, said in a statement. “This is precisely the type of cutting-edge cross-sector collaboration that the CMC seeks to foster.”
The rapid growth of electric vehicle charging is “unprecedented” and taking place at the same time electricity system operators and planners are addressing rapidly growing levels of inverter-based generation resources, extreme weather impacts, and increasingly malicious security threats, the report noted. The effect of these changes on the electric power system “will only intensify as the penetration of EVs on the grid increases,” the report’s authors said.
The report highlighted several potential effects from the rapid growth of electric vehicle charging stations, including:
- Demands on distribution providers to process electric vehicle charging load interconnection requests may increase faster than can be managed by providers and lead to delays in new interconnections.
- A significant increase in distribution system hosting capacity may cause operational problems in distribution systems requiring expensive, last-minute upgrades in order to accommodate EV charging demands.
- Large-scale changes to demand profiles due to unmanaged EV charging behavior, time-of-use rates, and distributed renewable energy resources may lead to resource adequacy shortfalls and create needs for short-term, emergency rationing, such as planned, rolling blackouts.
- The need for flexible ramping resources and reserves carried by balancing authorities and transmission operators may grow faster than has been anticipated in long-term planning studies.
The report put forward several recommendations that could provide a basis for further testing of for “grid friendly” electric vehicle charging practices, including:
- The electric vehicle industry should employ a steady-state control strategy that uses constant current control rather than constant power level control during normal operations.
- Electric vehicle chargers should operate with a power factor of 0.985 or higher, which should be maintained for alternating current voltages from 80 percent to 110 percent of nominal voltage.
- Electric vehicle chargers and supply equipment should have a programmable current consumption droop characteristic with a programmable range and a default value of 5 percent.
Ride-through performance and capability is also an important consideration, the report said. The authors recommended that electric vehicle chargers and supply equipment should remain connected during grid disturbances and should not require any advanced communications between devices or with the grid operators. Instead, converter protection and controls should respond automatically to modify electric vehicle charging behavior and operation.
However, the report’s authors also noted, “preliminary testing has confirmed that some EV chargers already appear to behave in a manner that is grid friendly during the very infrequent, short-lived times (lasting no more than seconds) when the grid is under stress. This is encouraging because it suggests that only modest changes might be required to make all EV charging and EVSE technologies operate in a grid-friendly manner.
In terms of next steps, the North American Electric Reliability Corp. and its industry stakeholders are developing and testing a new aggregate electric vehicle charging load model that can be used in bulk power system grid reliability studies. The report’s authors said the North American Electric Reliability Corp. would soon be releasing its findings on the usability of the aggregate electric vehicle charging load model, as well as the possible impacts to bulk power system grid reliability that will occur with rapidly growing electric vehicle charging loads across North America.
NERC Files Report with FERC Analyzing Effectiveness of Existing Physical Security Reliability Standard
April 15, 2023
by Paul Ciampoli
APPA News Director
April 15, 2023
The North American Electric Reliability Corporation on April 14 filed a report with the Federal Energy Regulatory Commission that analyzed the effectiveness of the existing NERC reliability standard addressing physical security of the bulk power system, Critical Infrastructure Protection reliability standard CIP-014.
The report, which was directed by FERC in a December 15, 2022 order, called for NERC to study the applicability criteria of the standard and the adequacy of the risk assessment and to assess whether a minimum level of physical security protections should be established for all bulk power system transmission stations, substations, and primary control centers.
“This evaluation was important given the heightened physical security threat environment and the high profile attacks which occurred in the fourth quarter of 2022. Our study outlines actions to strengthen the physical security standard and foster robust stakeholder engagement to consider additional risk-based enhancements,” said Jim Robb, NERC president and CEO, in a statement.
“Following recent events, industry and the E-ISAC developed and shared a physical security resource guide that detailed broader considerations in developing a physical security approach for all assets beyond those identified as critical by CIP-014. The actions outlined in our report will help further secure critical bulk power system assets and ensure the foundational protections of CIP-014 are keeping pace with a dynamic risk environment.”
Among the findings and follow-up actions outlined in the report is that NERC does not recommend expansion of the CIP-014 applicability criteria.
NERC said it will work with FERC staff to hold a technical conference to evaluate whether additional substation configurations should be included in the existing criteria.
Based on available data, NERC found no evidence that expansion of the criteria would identify additional substations as critical. Our review does suggest that additional data and analysis is needed on whether additional substations configurations warrant assessment under CIP-014.
A technical conference will identify which substations should be studied and establish data needs on a periodic basis to determine whether they should be included in the applicability criteria, NERC said.
The report found that the objective of the CIP-014 risk assessment requirement is appropriate, but should be refined to help ensure the assessment are performed using consistently and with the appropriate technical rigor. To promote consistency, NERC will initiate a standards development project to clarify risk assessment expectations, including for dynamic studies.
While NERC is not recommending a common minimum level of physical security protections, NERC finds that, given the increase in physical security attacks on bulk power system substations, there is a need to evaluate additional reliability, resiliency, and security measures designed to mitigate the risks associated with those physical security attacks.
NERC said it will work with FERC staff to hold a technical conference to further study appropriate levels of physical protections.
NERC said it advocates taking a risk-based approach to determine what level of investment would be appropriate based on local risk factors, regional system configuration, and the asset’s mean time to recover.
The technical conference will gather additional data on protection, response, and resiliency measures and discuss whether and how they could be appropriately incorporated into reliability standards or guidelines.
Chelan PUD on Track to Achieve Milestone for Broadband Access
April 15, 2023
by Paul Ciampoli
APPA News Director
April 15, 2023
Washington State’s Chelan PUD is on track to extend its wholesale broadband network to 85 percent of Chelan County by the end of 2026 — a goal identified in the utility’s 2015-2019 strategic plan.
PUD Commissioners recently discussed next steps for fiber expansion.
Commissioners have committed $27 million from the utility’s Public Power Benefit Program to extend the broadband network to 9,256 additional homes and businesses by 2027.
So far, the PPB fiber project has extended access to 5,531 premises, with 3,725 more scheduled to be connected over the next three years.
The Public Power Benefit Fund uses revenues from surplus energy sales to support community-minded projects, which means the fiber expansion project was funded with no additional cost to customers.
Over the next six months, PUD staff will continue to develop a long-term plan for fiber expansion beyond 2026, including scope, schedule, resources and budget. As part of that process, the PUD is also considering alternative ways to provide internet access for rural, hard-to-reach areas.
California Regulators Grant Request to Dismiss Proposal for Community Microgrids
April 13, 2023
by Paul Ciampoli
APPA News Director
April 13, 2023
The California Public Utilities Commission recently granted a request to dismission Sunnova Energy’s plans to build community microgrids in California.
In September Sunnova Community Microgrids California, a wholly owned subsidiary of Sunnova Energy, applied to the CPUC for a Certificate of Public Convenience and Necessity for authorization to build and operate public utility microgrids and to set electric service rates for the microgrid customers.
In the application (22-09-002), SCMC laid out plans for the microgrids that would be built as part of new master planned residential communities of between 500 to 2,000 homes, as well as and select non-residential facilities that would be co-located in or an essential part of each community.
SCMC also requested the CPUC’s approval to provide bundled retail service under Section 2780 of the Public Utilities Code and requested authority to establish market-based rates for service and requested exemption from several CPUC general orders and rules, including its general order regarding advice letters and customer notice requirements and affiliate transaction rules.
In October, the Public Advocates Office (Cal Advocates), an independent unit of the CPUC, filed a motion to dismiss SCMC’s application. In the petition, Cal Advocates argued that SCMC’s requests are based on “unsubstantiated claims and lack the basic information” required for a CPCN. Cal Advocates also said SCMC did not demonstrate that its proposals would ensure rates are just, reasonable, and necessary.
In a February 2023 proposed decision, a CPUC administrative law judge recommended granting the challenge.
In an April 6 decision, the CPUC said that the exemptions sought by SCMC are unauthorized.
The Commission said that SCMC is seeking to be exempt from the Commission’s statutorily required function of conducting oversight of electricity rates to ensure that they are just and reasonable. To grant the authority being sought by SCMC, the CPUC said it would have to “abdicate its responsibility to ensure just and reasonable rates.”
The Commission also said that SCMC failed to provide the information required for a Certificate of Public Convenience and Necessity.
PUC Approves Rules for New Microgrid Incentive Program
Meanwhile, the CPUC on April 6 approved rules for a new Microgrid Incentive Program for Pacific Gas and Electric Company (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E).
The decision approves the program rules for the MIP, a $200 million program previously authorized by the CPUC to support the development of community microgrids in disadvantaged and vulnerable communities, as well as tribal communities, who have experienced and are likely to experience power outages.
It allocates $79.2 million for PG&E, $83.3 million for SCE, and $17.5 million for SDG&E to build complex projects that can operate independently for extended periods and serve multiple customers in disadvantaged and vulnerable communities. Projects selected under the MIP can receive up to $15 million in award funding.
The decision “aims to advance microgrid resiliency technology, distribute the benefits of microgrids equitably across these vulnerable communities, and provide insights for future actions that can enhance the resilience of the power system to benefit all customers,” the Commission said.
New England Again Sets Record for Low Demand on Regional Power System
April 13, 2023
by Paul Ciampoli
APPA News Director
April 13, 2023
For the second time in as many years, New England has seen record low demand for grid electricity. Preliminary data shows that demand for grid electricity hit a low of approximately 6,814 megawatts between 2 and 3 p.m. on April 9, nearly 750 MW less than the previous record of 7,580 MW set on May 1, 2022, ISO New England reported.
Sunny skies, mild temperatures, and a Sunday holiday were key factors in the new record, the grid operator said.
Sundays typically see lower electricity demand than other days of the week, and the Easter holiday has historically led to even lower consumer demand, ISO-NE said.
On April 9, temperatures were mild across New England, further lowering overall demand for electricity in the region. Production from behind-the-meter solar resources was estimated to be more than 4,500 MW throughout much of the afternoon, tempering demand on the bulk power grid.
The record low demand is just one example of the continued impact of rooftop solar installations in New England.
The region set a record in 2022 for so-called “duck curve” days, during which demand from the bulk power system is at its lowest in the afternoon hours and not overnight, and is on pace to surpass that mark in 2023.
Construction Nears on New Salt River Project Large-Scale Battery Storage Facility
April 13, 2023
by Paul Ciampoli
APPA News Director
April 13, 2023
Officials from Arizona public power utility Salt River Project, Plus Power LLC and the City of Avondale, Ariz., on April 12 gathered for a ceremonial groundbreaking to kick off construction mobilization at a new large-scale battery facility.
The facility will store up to 250 megawatts, or 1,000 megawatt hours, and will be the largest standalone battery facility built in Arizona once online in 2024.
Storage from the project will serve SRP customers during times of peak electricity demand and facilitate the continued integration of renewable resources into the SRP power system, the utility noted.
The Sierra Estrella facility is one of two battery storage projects SRP announced in fall of 2022 with Plus Power, with both projects scheduled to come online by summer of 2024.
The other, a 90 MW, or 360 megawatt-hour, project called Superstition Energy Storage, will soon be built in Gilbert, Ariz.
These projects along with additional battery contracts that SRP has entered, will help SRP surpass 1,100 MW of battery storage by 2024, which is among the largest utility-scale battery investments in the Western U.S.
Sierra Estrella Energy Storage will utilize lithium-ion technology manufactured by Tesla. Plus Power will design, build, and operate the facility to updated national safety codes and standards for Battery Energy Storage Systems.
Plus Power is coordinating with the Avondale Fire Department to prepare a thorough emergency response plan for the facility. In the coming months the two organizations will conduct onsite training to ensure local first responders are engaged in safety planning throughout project construction and operation.
SRP said it will continue to develop and deploy evolving storage technologies safely and cost-effectively as part of the SRP’s commitment to reducing carbon intensity (from 2005 levels) by more than 65 percent by 2035 and 90 percent by 2050.
SRP has also closed the largest coal plant in the Western U.S. and will have retired approximately 2,600 MW of coal-fired generation by 2032.
With these strategic resource additions and decisions, nearly half of all retail energy delivered to SRP customers will come from carbon-free resources by 2025.
BPA Rebuild Project Aimed at Easing Transmission Congestion
April 13, 2023
by Peter Maloney
APPA News
April 13, 2023
The Bonneville Power Administration is seeking public feedback on a proposed project to help resolve transmission congestion on its grid.
The project involves the rebuilding of an approximately 3-mile-long segment of the White Bluffs to Richland No. 1 115-kilovolt transmission line from the Stevens Drive Substation south to the Richland Substation.
The Bonneville Power Administration says the rebuild is necessary to help reduce the occurrence of unplanned power outages in the Tri-Cities area of Kennewick, Pasco and Richland in southern Washington State.
Over the past five years, the Richland–Stevens Drive 115-kV line has experienced 15 unplanned outages, Bonneville Power Administration said. Six of the outages were resolved by dispatchers who were able to remotely reclose breakers to restore service without investigation or repairs. Five of the outages occurred during peak loading periods in the spring and summer.
If no action is taken, conditions could result in more frequent, longer, or more widespread power interruptions to customers in the area, the Bonneville Power Administration said.
The proposed project calls for rebuilding the existing, single circuit transmission line between Stevens Drive and Richland that consists of wood H-frame and monopole structures. The line would be rebuilt as a 115-kV double-circuit line on steel monopole structures.
The work would include replacing the existing conductors, H-frame wood pole structures, wood monopoles, selected steel structures and all hardware. The work would also require equipment upgrades at five substations.
The Bonneville Power Administration put the initial cost estimates for the project at between $15 million and $21 million.
EPA’s Proposed Federal Vehicle Emissions Standards Aimed at Boosting Shift to EVs
April 13, 2023
by Paul Ciampoli
APPA News Director
April 13, 2023
The U.S. Environmental Protection Agency on April 12 announced new proposed federal vehicle emissions standards that are aimed at accelerating the country’s shift to electric vehicles.
The first set of proposed standards are multi-pollutant emissions standards for Model Years 2027 and later light-duty and medium duty vehicles, while the second set of proposed standards would apply to heavy-duty vocational vehicles (such as delivery trucks, refuse haulers or dump trucks, public utility trucks, transit, shuttle, school buses) and trucks typically used to haul freight.
The proposed standards are projected to accelerate the transition to EVs, EPA said. Depending on the compliance pathways manufacturers select to meet the standards, EPA projects that EVs could account for 67% of new light-duty vehicle sales and 46% of new medium-duty vehicle sales in model year 2032.