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Groups Voice Opposition to Data Reporting Requirements for State, Local Borrowers

October 1, 2022

by Paul Ciampoli
APPA News Director
October 1, 2022

The American Public Power Association (APPA) has joined with 17 other members of the Public Finance Network in writing Senate leaders in opposition to data reporting requirements for state and local borrowers included in the Financial Data Transparency Act of 2022.

The Public Finance Network consists of state and local governments and other tax-exempt bond issuers, borrowers and municipal market professionals.

The bill would require the Municipal Securities Rulemaking Board (MSRB) to require state and local governments to report financial information using uniform reporting categories, or “data standards,” which may require costly updates to financial systems or extensive workarounds.

The changes would take effect no later than two years after final rules implementing the change are promulgated.

The concern is that the provisions of the Financial Data Transparency Act of 2022 (S. 4295) were added as an amendment to H.R. 7900, the National Defense Authorization Act for Fiscal Year 2023 (NDAA). The NDAA passed the House in July, and a companion bill (S. 4534) has passed the Senate Armed Services Committee.

State and local governments “do not oppose transparency and accessibility of information, and in fact, significant financial transparency standards are already in place,” the Sept. 29 letter noted.

“Most issuers of municipal securities (e.g., entities represented by the undersigned groups) adhere to governmental reporting standards established by the Governmental Accounting Standards Board (GASB), while others follow standards as determined under state law. In whole, issuers of municipal securities exhibit transparency to stakeholders through very established and standardized means.”

APPA and the other groups voiced concern about the impact of the Financial Data Transparency Act’s Section 203 on state, county, municipal, public utilities, hospital and education entities required to submit financial information to the MSRB for several reasons.

“Among others, a primary concern is that this provision would result in an unfunded mandate on state and local governments due to the increased costs to ensure systems are able to comply with future standards,” the letter said.

“Further, this provision represents a substantial federal overreach into the content and structure of issuer disclosures, and more broadly the accounting and reporting principles of government entities, contrary to the principles of federalism,” the groups argued.

Also, Section 203 “could create more confusion and ultimately reduce transparency by forcing vastly different kinds of governmental entities to report using a rigidly standardized schema or taxonomy.”

Power Restored to One Million Customers in Puerto Rico

September 28, 2022

by Paul Ciampoli
APPA News Director
September 28, 2022

LUMA Energy on Sept. 27 announced that it has restored electric service to 1 million of its 1.5 million customers in Puerto Rico who lost power as a result of Hurricane Fiona.

As part of the prioritization of restoration to critical customers, LUMA also shared it has restored power to 131 hospitals and 946 Puerto Rico Aqueducts and Sewers Authority facilities.

As part of its overall and regional restoration efforts, LUMA is continuing to shift its field utility workers to areas in the south and west of Puerto Rico that were hit hardest by the hurricane, with impacts that included severe flooding, and up to 103 mph winds.  

LUMA is continuing to project service will be restored to more than 64-77% of customers by September 28, 2022, while 77-91% of customers are anticipated to be restored by Friday, September 30.

Restoration on a given day can fluctuate and continue to depend on a number of factors, including ongoing damage assessments and real-time repairs, adequate generation including energy reserves to protect and balance the system and access to critical facilities most impacted by the hurricane.

Hurricane Fiona impacted many parts of the electric grid and generation facilities across Puerto Rico, especially in the Ponce and Mayagüez regions that suffered severe damage to roads and critical infrastructure.

Grid and generation infrastructure in these regions were also significantly affected by the severe weather brought by Hurricane Fiona which included 12-30+ inches of heavy rain, winds between 85 and 103 mph and widespread flooding.

LUMA is prioritizing repairs for essential critical services, like hospitals, and is increasing the number of crews in the regions hit hardest. Out of the over 2,000 utility workers mobilized across the island, 460 are now working in the Mayagüez region and 244 in the Ponce region for a total of approximately 35% of mobilized workers addressing areas with the most severe damage. 

In June 2020, Puerto Rico Electric Power Authority and the Puerto Rico Public-Private Partnership Authority selected LUMA Energy to operate, maintain and modernize the electricity transmission and distribution system of PREPA for fifteen years through a public-private partnership.

Energy Permitting Reform Proposal Pulled from Government Spending Bill

September 28, 2022

by Paul Ciampoli
APPA News Director
September 28, 2022

Sen. Joe Manchin (D-WV) on Sept. 27 asked Senate Majority Leader Charles Schumer (D-N.Y.) to remove energy permitting reform legislation from consideration as part of a government spending bill prior to a vote on the spending bill, which is known as a Continuing Resolution (CR).

“Over the last several weeks there has been broad consensus on the urgent need to address our nation’s flawed permitting system,” Manchin said in a statement. “I stand ready to work with my colleagues to move forward on this critical legislation to meet the challenges of delivering affordable reliable energy Americans desperately need. “

The Senate passed the CR on Sept. 27.

Manchin released the text of his energy permitting reform legislation, the “Energy Independence and Security Act of 2022,” on Sept. 21. Manchin is chairman of the Senate Energy and Natural Resources Committee.

As part of the Inflation Reduction Act signed into law on August 16, 2022, Manchin secured a commitment from Schumer, House Speaker Nancy Pelosi, D-Calif., and President Biden a vote on comprehensive permitting reform before the end of the fiscal year on September 30, 2022.

The updated bill text is similar to a draft that was previously leaked, although it includes some changes. 

Specifically, there are two new sections on the definition of natural gas and another that would authorize the Mountain Valley Pipeline.

The first new section clarifies that the Federal Energy Regulatory Commission (FERC) has jurisdiction to regulate interstate hydrogen infrastructure under the Natural Gas Act.

The second new section would authorize the Mountain Valley Pipeline and expedite its approval process. The updated language removes the specific judicial review section that was in the leaked draft bill.

The transmission language in the legislation is mostly the same as it was in the leaked version of the bill.

There are two small changes that were made to the transmission language. The first changes the wording that allows the Department of Energy to designate “any electric transmission facility proposed to be constructed or modified to be necessary in the national interest.”

The second change would clarify that the Department of Interior would be lead agency regarding Outer Continental Shelf lands.

These changes appear to address concerns raised by others on offshore wind transmission facilities, but do not address concerns raised by the American Public Power Association, the Edison Electric Institute and the National Rural Electric Cooperative Association on changes to the Federal Power Act and the scope of FERC’s authority to require the construction of certain electric transmission facilities.

While this is a setback for Manchin’s permitting reform effort, it will likely not be the last attempt to get it attached to legislation this year. 

The CR funds the government through December 16 and full funding measures will need to be taken up before then.  The National Defense Authorization Act (NDAA) also need to pass this year and are likely two vehicles that Manchin would seek to move his efforts forward on.

Click here for additional details on the legislation.

Federal Energy Regulators Propose Incentives for Voluntary Cybersecurity Investments

September 28, 2022

by Paul Ciampoli
APPA News Director
September 28, 2022

The Federal Energy Regulatory Commission (FERC) on Sept. 22 issued a Notice of Proposed Rulemaking (NOPR) to establish rules providing incentive-based rate treatment for utilities making certain voluntary cybersecurity investments.

In the Infrastructure Investment and Jobs Act of 2021, Congress directed FERC to revise its regulations to establish incentive-based rate treatments by encouraging utilities to invest in advanced cybersecurity technology and participate in cybersecurity threat information sharing programs.

Under the NOPR, cybersecurity expenditures would be eligible for an incentive including both expenses and capital investments associated with advanced cybersecurity technology and participation in a cybersecurity threat information sharing program. 

Also, eligible cybersecurity expenditures would be voluntary and have to materially improve the utility’s cybersecurity posture. FERC proposes to establish a pre-qualified list of cybersecurity expenditures that are eligible for incentives that would be publicly maintained on FERC’s website.

The incentives would take two forms: a return on equity adder of 200 basis points, or deferred cost recovery that would enable the utility to defer expenses and include the unamortized portion in its rate base.

Approved incentives, with certain exceptions, would remain in effect for up to five years from the date on which the investments enter service or expenses are incurred.

At the same time,  FERC terminated its earlier cybersecurity incentives NOPR (Docket No. RM21-3), which the American Public Power Association had opposed. 

Comments on the NOPR are due 30 days after publication in the Federal Register.  Reply comments are due 45 days after publication in the Federal Register.  

The NOPR is available here.

NYPA Project Demonstrates CO2 Reduction Potential of Green Hydrogen

September 27, 2022

by Peter Maloney
APPA News
September 27, 2022

The New York Power Authority (NYPA) recently concluded a demonstration project that showed decreased carbon dioxide (CO2) emissions when using green hydrogen blended with natural gas to generate power.

The demonstration project, at NYPA’s Brentwood Small Clean Power Plant on Long Island, was led by NYPA in collaboration with the Electric Power Research Institute (EPRI), General Electric and Airgas, an Air Liquide company.

While NYPA and other power companies already use hydrogen for equipment cooling, the Brentwood project marks the first retrofit of an existing U.S. natural gas facility that enabled use of green hydrogen blended with natural gas to fuel a power plant.

Green hydrogen is produced using renewable resources.

The project used blends of 5 percent to 40 percent hydrogen to identify and document any effects on the operation of General Electric’s LM-6000 combustion turbine engine and found that CO2 emissions decreased as the amount of hydrogen increased.

In addition, at steady state conditions, the exhaust stack levels of nitrogen oxides (NOx), carbon monoxide, and ammonia showed that emissions could be maintained below limits mandated by the New York State Department of Environmental Conservation using the existing post-combustion technologies and with no known detrimental effects on the gas turbine operations.

The results could prove consequential for power plant operators to begin testing and using hydrogen fuels to lower CO2 output with minimal or no required modifications to plant systems, NYPA said.

In March, New York, Connecticut, Massachusetts, and New Jersey formed a coalition to develop a proposal to become one of at least four regional clean energy hydrogen hubs designated by the Bipartisan Infrastructure Investment and Jobs Act. In September, Maine and Rhode Island joined the coalition.

Puerto Rico Sees Power Restoration Progress Over the Weekend

September 25, 2022

by Paul Ciampoli
APPA News Director
September 25, 2022

LUMA Energy reported that as part of ongoing Puerto Rico Hurricane Fiona recovery efforts, approximately 50 percent, or 732,324 of customers had their power restored as of Saturday, Sept. 24.

LUMA said that it has continued conducting damage assessments and critical repairs, and has been focusing on connecting critical customers, such as hospitals and other essential services.

As part of combined restoration efforts, LUMA continues to coordinate with the Puerto Rico Electric Power Authority (PREPA). and other private generation operators to reenergize critical generation facilities and increase the amount of available generation so LUMA can restore service to more customers.

Along with approximately 50% of customers restored as of Sept. 24, LUMA reported:

In June 2020, PREPA and the Puerto Rico Public-Private Partnership Authority selected LUMA Energy to operate, maintain and modernize the electricity transmission and distribution system of PREPA for fifteen years through a public-private partnership.

Puerto Rico Power Restoration Efforts Advance

September 21, 2022

by Paul Ciampoli
APPA News Director
September 21, 2022

Nearly 300,000 customers in Puerto Rico have had their power restored in the wake of Hurricane Fiona as of the afternoon of Sept. 20, with continuing efforts to reenergize the grid and restore power as quickly and safely as possible, LUMA Energy reported.

Damage assessment, restoration and reenergization efforts by LUMA and its partners continued across Puerto Rico following the severe impacts of Hurricane Fiona.

LUMA said it has fully deployed a field response crew of over 2,000 utility field workers who are working in difficult conditions to repair the grid and restore power across Puerto Rico as quickly and safely as possible, including additional utility field workers provided by Quanta.

All emergency response efforts are being coordinated through the LUMA Emergency Operations Center (LEOC) and includes close consultation with the Government of Puerto Rico, Municipalities, Federal Emergency Management Agency (FEMA), Puerto Rico Emergency Management Bureau (PREMB), Puerto Rico Electric Power Authority (PREPA), the U.S. Department of Energy Support Function #12 and other government agencies to coordinate a unified response.

Among the LUMA crews mobilized and responding to the impact of Hurricane Fiona include:

The Department of Energy (DOE) reported that as of 1:00 PM EDT Sept. 20, Puerto Rico had approximately 1.18 million outages (80% of customers).

On the afternoon of September 18, Puerto Rico experienced an island-wide power outage due to impacts to distribution and transmission damage from Hurricane Fiona, which caused a system imbalance that tripped generation units offline.

Following the island-wide outage, PREPA, in coordination with the transmission and distribution operator LUMA, began procedures to restart generation and restore customers.

Salt River Project Commits to Supporting Next Phase of SPP Markets Development

September 21, 2022

by Paul Ciampoli
APPA News Director
September 21, 2022

Public power utility Salt River Project (SRP) is one of several Arizona entities that have committed to supporting the next phase of the Southwest Power Pool’s (SPP) “Markets+” development, SPP said recently.

SRP, along with Arizona Electric Power Cooperative, Arizona Public Service Company and Tucson Electric Power join seven other entities who previously committed to supporting market development.

In a late August 2022 letter, the four Arizona entities declared their intent to work with SPP to build a market that includes “both a workable governance framework and a robust market design. This will be an important milestone that will enable us to collectively move forward to the next phase.”

These entities combined serve over 20,000 MW of peak demand in the desert southwest.  With this announcement, SPP has now received interest in supporting the next phase of Markets+ development from entities that serve over 50,000 MW of combined peak demand.

Since December 2021, SPP has been working with western stakeholders to learn what they would like out of a proposed day-ahead and real-time market. Based on its potential customers’ input, SPP will develop the Markets+ draft service offering, which will explain how Markets+ will address things like governance structure, market design and transmission availability.

Last month, eight entities in the Pacific Northwest announced their intent to commit to phase one of Markets+ development: Bonneville Power Administration, Avista Corp., Chelan County Public Utility District, Grant County Public Utility District, Powerex Corp., Puget Sound Energy and Tacoma Power.

SPP said that Markets+ is a conceptual bundle of services proposed by SPP that would centralize day-ahead and real-time unit commitment and dispatch, provide hurdle-free transmission service across its footprint and pave the way for the reliable integration of a rapidly growing fleet of renewable generation.

For utilities that see value in these services but who aren’t ready to pursue full membership in a regional transmission organization (RTO) at this time, Markets+ provides a voluntary, incremental opportunity to realize significant benefits.

SPP staff met with western stakeholders Aug. 9-10 in Portland, Oregon to review work done on the service offering and discuss outstanding items and next steps.

The draft service offering will be distributed Sept. 30, followed by a public comment period, with the final service offering distributed Nov. 18.

California’s SMUD Enters Agreement to Deploy Long Duration Energy Storage

September 21, 2022

by Paul Ciampoli
APPA News Director
September 21, 2022

California public power utility SMUD and ESS Inc. on Sept. 20 announced an agreement to provide up to 200 megawatts (MW)/2 gigawatt-hours (GWh) of long duration energy storage (LDES) that will be provided by ESS.

The agreement calls for ESS to deliver a mix of its long-duration energy storage LDES technology for integration with the SMUD electric grid beginning in 2023.

SMUD will deploy the LDES systems in support of its 2030 zero carbon plan, which aims to reduce thermal generation, maximize local solar generation, provide neighborhood resiliency, and increase social justice and equity. LDES is a key component in SMUD’s decarbonization plan, without compromising reliability or low electricity rates, SMUD said.

As part of this multi-year agreement, ESS intends to set up facilities for battery system assembly, operations and maintenance support and project delivery in Sacramento, creating local, high paying jobs.

In addition, SMUD and ESS plan to establish a Center of Excellence to expand the workforce and knowledge base for LDES technology in partnership with higher education institutions.

The center will provide advanced LDES technical training, creating a statewide skilled talent pool to help build and maintain California’s fast-growing long-duration energy storage resources.

ESS manufactures long-duration iron flow batteries for commercial and utility-scale energy storage applications.

The American Public Power Association’s Public Power Energy Tracker is a resource for association members that summarizes public power energy storage projects that are currently online. The tracker is available here.

U.S. Energy Storage Market Set New Record In Second Quarter 2022

September 18, 2022

by Paul Ciampoli
APPA News Director
September 18, 2022

The U.S. energy storage market set a new record in the second quarter of 2022, with grid-scale installations totaling 2,608 megawatt hours (MWh), the highest installed capacity for any second quarter on record, according to a new report released Sept. 14. 

According to Wood Mackenzie and the American Clean Power Association’s (ACP) latest U.S. Energy Storage Monitor report, grid-scale storage was boosted by a series of deployments in Texas, with the state contributing 60% of installed capacity this quarter. However, challenges to the sector remain due to delays. 

“Despite impressive growth, the U.S. grid-scale energy storage pipeline continues to face rolling delays into 2023 and beyond. More than 1.1 gigawatts (GW) of projects originally scheduled to come online in Q2 were delayed or cancelled, although 61% of this capacity, 709 megawatts (MW), is still scheduled to come online in Q3 and Q4 of 2022,” said Vanessa Witte, senior analyst with Wood Mackenzie’s energy storage team. 

“Supply chain issues, transportation delays and interconnection queue challenges were the main drivers behind delays in the commercial operations date for many projects,” Witte added.  

The U.S. Congress passed a solar investment tax credit (ITC) extension and standalone storage ITC as part of the Inflation Reduction Act.

The new law will support all segments of the energy storage industry, increasing deployment of solar-plus-storage systems while also incentivizing standalone facilities, Wood Mackenzie and ACP said. As a result, Wood Mackenzie forecasts 59.2 GW of energy storage capacity to be added through 2026. 

Residential storage also had its strongest quarter to date with 375 MWh installed in Q2, beating the previous quarterly record of 334.1 MWh in Q1 2022.  

Demand is rising in the residential segment with over 150 MW of residential storage installed for the first time, but ongoing supply shortfalls and rising prices have suppressed deployment. New solar installers continue to add storage to their product offerings, despite ongoing procurement issues. 

Community, commercial and industrial (CCI) storage continues to lag behind other market segments, with only 59.4 MWh of CCI storage installations seen this quarter, making it the lowest quarter recorded for MWh capacity since 2019.