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Snohomish County PUD projects to maintain high reliability levels, meet growing demand

June 23, 2021

by Paul Ciampoli
APPA News Director
June 23, 2021

Snohomish County PUD crews this summer will be making electric system improvements and completing preventative maintenance projects in an effort to ensure the Washington State PUD maintains high levels of reliability through the storm season and meets growing demand, it said on June 15.

The PUD has work scheduled on many of its substations, including standard maintenance, equipment replacement and automation upgrades. PUD crews will install a new transformer at its Paine Field Substation, which serves both industrial and residential customers.

Construction on the new Twin City Substation in Stanwood, Washington, is scheduled to be substantially complete this summer. The new substation will replace the North Stanwood Substation and will increase reliability to Stanwood and Camano Island. In July, PUD crews will also rebuild overhead circuits and install underground circuits on a highway near the new substation.

In the Woods Creek area outside Monroe, Washington, the PUD will replace more than 50 distribution poles and install transmission lines to connect the circuits from the PUD’s Woods Creek and Lake Chaplain substations. The work will improve reliability for the City of Everett’s water treatment plant at Lake Chaplain and the PUD’s Jackson Hydroelectric Project powerhouse.

The PUD will also perform work this summer in preparation for new large commercial customers arriving. Crews will install two new underground feeder circuits to eventually energize the new Northpoint development, which spans 10 properties in the Smokey Point area and relocate infrastructure to eventually serve a new Costco. 

And later this summer, PUD crews will relocate approximately 60 transmission and distribution poles in Edmonds, Washington, to help with a road improvement project to increase accessibility for sidewalks.

Along with two projects that will extend fiber optic and communication equipment to improve reliability, the PUD plans to replace hundreds of aging poles, assess and treat thousands of poles and replace dozens of miles of aging underground cable.

And the PUD’s vegetation management team will have a dozen crews trimming trees across the utility’s service territory throughout the summer. The PUD trims trees on upwards of 450 circuit miles each year to aid in reliability, it noted.

Colin Hansen installed as chair of the APPA Board of Directors

June 23, 2021

by APPA News
June 23, 2021

Colin Hansen, executive director of Kansas Municipal Utilities (KMU) in McPherson, Kansas, was installed as chair of the American Public Power Association Board of Directors during APPA’s National Conference in Orlando, Florida, on June 23.

Anthony Cannon, general manager and CEO of Greenville Utilities Commission in Greenville, North Carolina, is chair-elect for 2021-2022. David Osburn, general manager of Oklahoma Municipal Power Authority in Edmond, Oklahoma, is vice chair. Jolene Thompson, president and CEO of American Municipal Power, Inc. in Columbus, Ohio, is immediate past chair. Layne Burningham, president and CEO of Utah Municipal Power Agency in Spanish Fork, Utah, is treasurer.  

Hansen says one of his key goals is to tell the stories of small public power systems

“One of the things that makes my job so interesting, but also very challenging, is that the defining characteristic of my membership is the small size,” Hansen said in remarks made at the national conference. “I serve 118 public power systems in Kansas and the median size of those 118 public power systems is a utility that serves 932 customers. In fact, only eight of our members serve more than 5,000 customers,” he said.

“If you look more broadly across the United States at the 2,000 public power systems, 82 percent of those serve fewer than 10,000 customers and almost half serve fewer than 2,000 meters,” Hansen noted.

“So given the unique nature of my organization and the Kansas public power community, one of the primary goals in my year as board chair is to tell the stories of the small public power systems, learn the stories of the small public power systems and shine a light on the innovative, professional, resilient and reliable small systems run by incredibly dedicated and energetic public power professionals all across the country,” Hansen said.

“This is not to say that we won’t continue to uplift the absolutely amazing work being done by our large public power systems,” he went on to say. “From SMUD and GRDA to Austin Energy, SRP, LADWP and so many others” including KMU’s largest member, the Kansas City Board of Public Utilities. “Thank you for being public power leaders.”

Hansen said that like large public power systems, smaller public power systems are “doing some really incredible things to.”

By way of example, Hansen noted that the City of Lindsborg, Kansas, a town of 3,500 people, has an “innovative and progressive small public power system. The city leads the way for other Kansas public power systems on adoption of electric vehicles, with the city even purchasing its own Tesla and charging stations to encourage greater tourism in Kansas and load growth for the utility.”

Sioux City, Iowa, which serves 2,700 electric customers, “has been defined by quietly demonstrating bold planning and visionary thinking for well over half a century. All the way back in the 1950s, the city began purchasing hydropower from dams on the Missouri River and even had some years where a hundred percent of the city’s power was provided via hydropower,” Hansen said. In the 1960s, the city moved to convert the electric distribution system to underground lines to improve the utility’s reliability and the city’s aesthetics, he noted.

Another example is the City of Norway, Mich., Hansen said. “Norway is a city of fewer than 3,000 people in Northern Michigan, where they operate their own Sturgeon Falls hydro electric plant and can provide up to 95 percent of their electricity using renewable and carbon free resources,” Hansen said.

“In many small public power systems all across the country, the city took on providing these services because they would have had to do without otherwise,” he noted. “Norway, for example, was one of the first communities in the nation to build its own cable TV system.”

Meanwhile, streetlights were switched on with electricity for the first time in May 1920 “and they have been lighting downtown Jackson Center, Ohio, ever since. Today, Jackson Center has a population of nearly 1,500 and even though their located in a rural area, approximately 1,700 people commute daily to work in the village.” Hansen noted that “the city boasts a great deal of industry including Airstream, the American iconic aluminum travel trailers. Airstream began manufacturing their trailers in Jackson Center in 1952. Today, the company employs more than 1,000 people and turns out over a hundred trailers a week.”

While Kansas-based McPherson Board of Public Utilities only serves just over 8,000 customers in Central Kansas, it has 235 megawatts of generating capacity, Hansen said. He noted that 77 percent of its electric sales are to industrial customers. “With industrial rates 26 percent lower than the national average – not to mention the reliability ratings of 99.99 percent through a fully redundant electric system – the utility has spurred incredible economic development in Central Kansas, serving a vibrant and diverse industrial base that includes plastics, fiberglass insulation and pharmaceuticals.”

Hansen also provided examples of how small public power systems have proven their resilience and grit, as well as noting that both large and small public power systems are “about visionary and urgent leadership and living with urgency.”

In a recent episode of APPA’s Public Power Now podcast, Hansen and Thompson discussed the transition from Thompson as chair of APPA’s Board of Directors to Hansen. Thompson reviewed her accomplishments as board chair, while Hansen detailed what his priorities will be as board chair.

Board members

Hansen chose five members of the board to serve with the officers on the APPA Executive Committee.

They are: John Haarlow, CEO and general manager of Snohomish County PUD in Everett, Washington; Nicholas Lawler, general manager of Littleton Electric Light and Water Departments in Littleton, Massachusetts; Russell Olson, CEO of Heartland Consumers Power District in Madison, South Dakota; Michael Peters, president and CEO of WPPI Energy in Sun Prairie, Wisconsin; and Kimberly Schlichting, chief operating officer and senior vice president of power supply of Delaware Municipal Electric Corporation, Inc. in Smyrna, Delaware.  

Newly elected to the APPA board this year are: Tony Pochard, electric utility director of Anderson Municipal Light and Power in Anderson, Indiana; Paul Mahlberg, general manager of Kansas Municipal Energy Agency in Overland Park, Kansas; David Geschwind, executive director and CEO of Southern Minnesota Municipal Power Agency in Rochester, Minnesota; James Fuller, president and CEO of MEAG Power in Atlanta, Georgia; Paul Lau, CEO and general manager of SMUD in Sacramento, California; Jonathan Hand, executive director of Electric Cities of Alabama in Montgomery, Alabama; and David Carroll, general manager of Paducah Power System in Paducah, Kentucky. 

Five board members were re-elected to new three-year terms: Laurie Mangum, energy services director of City of St. George in St. George, Utah; Edward Krieger, power system director of Piqua Power System in Piqua, Ohio; Darrel Wenzel, CEO and general manager of Waverly Utilities in Waverly, Iowa; David Osburn, general manager of Oklahoma Municipal Power Authority in Edmond, Oklahoma; and Daniel Beans, electric utility director of Redding Electric Utility in Redding, California. 

APPA board members are chosen to represent 10 regions across the country.

FERC approves policy statement on state efforts to develop transmission facilities

June 22, 2021

by Paul Ciampoli
APPA News Director
June 22, 2021

The Federal Energy Regulatory Commission (FERC) on June 18 approved a policy statement that addresses state efforts to develop transmission facilities through voluntary agreements to plan and pay for those facilities. 

The policy statement, which was approved at the Commission’s monthly open meeting, notes that such voluntary agreements include agreements among: (1) two or more states; (2) one or more states and one or more public utility transmission providers; or (3) two or more public utility transmission providers, FERC staff noted in a presentation.

The policy statement also notes that voluntary agreements can further the Commission’s priority of developing cost-effective and reliable transmission facilities by, for example, providing states with a way to prioritize, plan, and pay for transmission facilities that, for whatever reason, are not being developed pursuant to the regional transmission planning processes required by Order No. 1000.  In Order 1000, which was issued in 2011, FERC reformed its transmission planning and cost allocation requirements.

The policy statement also clarifies that voluntary agreements are not categorically precluded by the Federal Power Act or the Commission’s existing rules and regulations. 

The policy statement provides an example of a recent Commission order accepting a study agreement that initiated a voluntary agreement process in the PJM regional transmission organization.

The statement notes that to the extent that states, public utility transmission providers, or other stakeholders believe that the relevant tariffs impose barriers to state efforts with respect to Voluntary Agreements, the Commission is open to filings to remove or otherwise address those barriers. 

Parties considering the use of such agreements are encouraged to contact Commission staff to discuss potential voluntary agreements, FERC staff noted.

FERC, NARUC unveil formation of federal/state task force on transmission

June 22, 2021

by Paul Ciampoli
APPA News Director
June 22, 2021

The Federal Energy Regulatory Commission (FERC) and the National Association of Regulatory Utility Commissioners (NARUC) on June 18 announced the formation of a joint federal-state task force on electric transmission, which FERC established through a related order issued at its monthly meeting.

“Members of this first-of-its-kind task force will explore transmission-related issues to identify and realize the benefits that transmission can provide, while ensuring that the costs are allocated efficiently and fairly,” FERC and NARUC said.

FERC’s order asks NARUC to nominate up to 10 state regulators to join FERC commissioners on the task force.  All task force meetings will be open to the public and will use a dedicated FERC docket for this process to provide stakeholders and the public with the opportunity to comment for the record.

Specifically, the task force will seek to identify barriers that inhibit planning and development of optimal transmission necessary to achieve federal and state policy goals, as well as potential solutions to those barriers, explore potential bases for one or more states to use FERC-jurisdictional transmission planning processes to advance their policy goals, including multi-state goals and explore opportunities for states to voluntarily coordinate to identify, plan and develop regional transmission solutions.

It will also review FERC rules and regulations regarding planning and cost allocation of transmission projects and potentially identify recommendations for reforms and examine barriers to the efficient and expeditious interconnection of new resources through the FERC-jurisdictional interconnection processes, as well as potential solutions to those barriers.

In addition, the task force will discuss mechanisms to ensure that transmission investment is cost effective, including approaches to enhance transparency and improve oversight of transmission investment including, potentially, through enhanced federal-state coordination.

Twenty-two individuals, eleven utilities earn national public power awards

June 22, 2021

by Paul Ciampoli
APPA News Director
June 22, 2021

Twenty-Two individuals and eleven utilities on June 22 were recognized for service to the American Public Power Association and the public power industry during APPA’s National Conference in Orlando, Florida. 

The individuals and utilities recognized at the ceremony were: 

Alex Radin Distinguished Service Award

This award is the highest award granted by the American Public Power Association. The award recognizes exceptional leadership and dedication to public power.

James D. Donovan Individual Achievement Award

This award recognizes people who have made substantial contributions to the electric utility industry, with a special commitment to public power. 

Larry Hobart Seven Hats Award

This award recognizes managers of small utilities serving fewer than 2,500 meters. These managers have a very small staff and must assume multiple roles.

Harold Kramer-John Preston Personal Service Award 

This award recognizes individuals for their service to the American Public Power Association.

Spence Vanderlinden Public Official Award

This award recognizes elected or appointed local officials who have contributed to the goals of the American Public Power Association.

Robert E. Roundtree Rising Star Award

This award is a scholarship presented to future leaders in public power. The recipient receives a stipend to travel to an Association conference or training program to advance their education and development in public power.

Mark Crisson Leadership and Managerial Excellence Award 

This award recognizes managers at a utility, joint action agency, or state or regional association who steer their organizations to new levels of excellence, lead by example, and inspire staff to do better.

E.F. Scattergood System Achievement Award

This award honors American Public Power Association member systems with outstanding accomplishments.

Sue Kelly Community Service Award

This award recognizes utilities for their “good neighbor” activities that demonstrate commitment to the local community.

Energy Innovator Award

The Association’s research program, Demonstration of Energy & Efficiency Developments (DEED), nurtures innovation in public power. Each year, the program recognizes innovative utility projects with this award.

APPA, other groups urge DOE to incorporate foundational principles for supply chain security

June 22, 2021

by Paul Ciampoli
APPA News Director
June 22, 2021

As the Department of Energy (DOE) considers further action on energy sector supply chain security, any new measures must be risked-based, directives should be clear, prospective, and scalable, there should be a DOE focus on vendor risks and directives must be cost-conscious, the American Public Power Association (APPA), the Large Public Power Council (LPPC), National Rural Electric Cooperative Association (NRECA), and the Transmission Access Policy Study Group (TAPS) recently asserted.

The June 8 comments submitted by the four trade associations responded to a DOE Request for Information (RFI) seeking input from stakeholders to inform future recommendations for supply chain security in U.S. energy systems.

The RFI was issued on April 20 in conjunction with an announcement by DOE that it was revoking the “Prohibition Order Securing Critical Defense Facilities,” which took effect on January 16, 2021, and prohibited utilities that supply critical defense facilities from procuring  China specific bulk power system (BPS) equipment that pose an undue risk to the BPS, the security or resilience of critical infrastructure, the economy, national security, or safety and security of Americans.

The prohibition order was associated with Executive Order (EO) 13920, Securing the United States Bulk-Power System, which President Biden suspended for a 90-day review upon entering office in January. EO 13920 was briefly reinstated following the 90-day suspension, but the emergency declaration of the EO expired on May 1. 

Four foundational principles

In their joint comments, the four trade associations said that as a replacement for EO 13920 is considered, DOE should incorporate into its thinking four foundational principles as follows: 

New measures must be risk-based: The consideration of any new standards, measures, or prohibitions must be calibrated to reflect the risk of the related infrastructure or activity to the nation’s security or public health, APPA and the other groups commented.

The definition of Critical Electric Infrastructure in Section 215A of the Federal Power Act (“Critical Electric Infrastructure Security”) provides an important touchstone for prioritization of these efforts, specifying that “Critical Electric Infrastructure” means “a system or asset of the bulk power system, whether physical or virtual, the incapacity or destruction of which would negatively affect national security, economic security, public health or safety or any combination of such matters,” the groups said.

“Key elements of this definition focus attention on the bulk power system (as opposed to distribution systems), and on the impact that the incapacity of such system may have on national (not local) security, economics and public health or safety.”  

 Directives should be clear, prospective, and scalable: APPA, LPPC, NRECA and TAPS said that clarity in connection with any directives, with respect specifically to the facilities that are addressed, and the nature of any activity prescribed or prohibited, is critical. “Ambiguity can be costly and time consuming and ultimately undermine the effectiveness of the directive. Further, directives should be prospective only, and effective only once all definitions and required regulations are in place. Again, ambiguity as to whether the directive applies to infrastructure already in place, or to activities and contracting already underway, will be both costly and may adversely affect grid reliability. Finally, where possible, directives should be scalable, in recognition of widely varying size and capabilities of affected electric utilities.”          

 Directives must be cost-conscious: Closely related to the precept that any new measures must be calibrated to reflect varied risks, DOE must be mindful of the cost of any directives, the groups told DOE. “The cost of electric service is a key factor in the nation’s economic health, and the reality of varying, but finite resources and budgets suggests that over-spending on security measures may compromise grid reliability in other respects. This is especially important to consumer-owned, not-for-profit public power utilities and rural electric cooperatives, who are owned by the consumers they serve and must bear any new costs imposed by new requirements.“

DOE should focus on vendor risks: The groups said that the electric utility industry’s ability to influence the security measures undertaken by industry suppliers is limited, and particularly so for smaller utilities. Though vendors are outside the direct authority of the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation, “DOE may use its influence to affect supplier practices by encouraging suppliers to adopt shared security practices, and to foster security certification upon which the industry can rely.”   

APPA, LPPC, NRECA, and TAPS also responded to a series of questions outlined in the RFI.

In conclusion, the Associations urged DOE “to directly engage with vendors that provide equipment to electric utilities to address any concerns the department may have about risks in the supply chain. The vendors are best suited to address such questions. Any new measures, directives, requirements, or prohibition authority that DOE chooses to pursue regarding electric infrastructure must be risk-informed, clear, prospective, and scalable, and take cost into account to avoid unintended consequences to grid security and reliability.”

San Diego city council members unveil plan that includes municipalization study

June 21, 2021

by Peter Maloney
APPA News
June 21, 2021

San Diego city council members Sean Elo-Rivera, Joe LaCava, and Monica Montgomery Steppe recently said that work has begun on an energy independence plan for the city that includes conducting a public power feasibility study.

A public power feasibility study would provide an analysis of the viability of municipalization for San Diego. The study would include an analysis of the costs, benefits, and process of creating an alternative to an investor-owned utility.

The scope of the study would include estimates of:

Additional items identified through a community engagement process could be included for analysis in the study.

The announcement of the energy independence plan came on the heels of a May 25 vote in which the city council approved a new franchise agreement between the city and SDG&E that could run for as long as 20 years. The agreement was ratified 6 to 3, just meeting the two-thirds super majority required for passage.

Council members LaCava and Montgomery Steppe voted against the measure. Council member Elo-Rivera voted in favor of it.

“On Tuesday, I voted in support of the Mayor’s proposed Franchise Agreement and committed to the community that I would take immediate action to ensure San Diego is better positioned the next time we determine our energy future,” Elo-Rivera said in a statement. “I’m proud to stand with two colleagues who fought hard for the best franchise deal possible as we look toward the future and begin the process of building a path toward energy independence.”

Another element of the energy independence plan calls for the creation of an energy independence fund. The three council members said they would work with Mayor Todd Gloria and the city’s Environment Committee to create an Energy Independence Fund that would allocate a minimum of $1.2 million of SDG&E’s franchise bid payments over the next five years.

The $1.2 million is the difference between the amount SDG&E will pay annually to the city over the first five years of the agreements, a total of $10 million, and the projected franchise revenue, $8.8 million, from the city’s proposed fiscal year 2022 budget.

The funds would create a pool of money for strategic investments, such as a refund payment to exit the agreement with SDG&E. The funds would create opportunities for alternatives that would make potential “off-ramps” from IOU electric service viable, the three council members said.

The franchise agreement runs for 10 years with an automatic renewable for another 10 years. But the agreement also gives the city the option to void the automatic renewal if that option is supported by a two-thirds of the city council. The extension can also be voided if the city decides to create a public power utility.

The new franchise agreement also includes accountability and transparency measures and the formation of a Compliance Review Committee to review audit findings, assess compliance with agreement terms, and provide input to the mayor and city council.

In an April 2020 consultant’s report, NewGen Strategies and Solutions estimated the capital costs of severing electric and gas systems in San Diego from SDG&E could run from $219 million on the low end to as much as $2.45 billion.

The report also found that electric power customers would fare better under public ownership, compared with SDG&E ownership, under low- and base-case scenarios but would save money under the high-cost scenario.

Natural gas customers would enjoy “significantly lower rates” than SDG&E under all cost scenarios, if the city paid a purchase price that reflected the cost to replace and improve SDG&E’s assets less depreciation.

Work underway to develop a NAESB base contract for voluntary renewable energy certificates

June 21, 2021

by Paul Ciampoli
APPA News Director
June 21, 2021

Whether it is successfully responding to the COVID-19 pandemic and natural disasters or building a more united and comprehensive response to the evolving threat of cyberattacks, connectivity has provided the public power community with the ability to successfully respond to these challenges, said Joy Ditto, President and CEO of the American Public Power Association (APPA), at APPA’s National Conference in Orlando, Fla., on June 21.

Public power’s connectivity “is important because we are a community,” Ditto said. “That is an important part of who we are. I say that not just to tout the importance of APPA, although of course your membership and participation are crucial, but because it defines who we are as part of the broader electric sector.” 

For over 80 years, the entire public power community “has not only shared information and insights into best practices but have grappled with difficult federal policy issues. Issues such as transmission rates, regional transmission organizations and wholesale electricity markets, comparable tax incentives, environmental regulation, cyber security, and climate change policy, to name several.”

On the issue of climate change, “in early 2020 you all coalesced around a broad position that Congress should act on climate change in federal legislation. You’ve made it clear that that legislation should ensure that the affordability and reliability of electricity must be weighed equally with greenhouse gas emissions reductions – this is a three-legged stool.“

Ditto noted that she often remarks that public power utilities “are representatives of the variety of perspectives embodied in our great country – and if your blue, red and purple communities in large cities and very small towns can come together around difficult policy positions like this one, then anything is possible. It gives me hope.”

In addition to working through a myriad of COVID-19 related challenges this year public power’s connectivity “helped us through many natural disasters. The public power mutual aid network has been an enduring testament to our connection – one that some surmised might suffer in the pandemic.”

Joy Ditto speaking at Nat Con
APPA President and CEO Joy Ditto speaks
at first day of APPA National Conference on June 21

In addition, public power’s connectivity “helps us to have a more united and comprehensive response to another evolving threat: cyber-attacks. From threats garnering national headlines such as the SolarWinds compromise and the Colonial Pipeline ransomware attacks – our communities are seeing how critical infrastructure is threatened by cyber criminals and nation-state adversaries thousands of miles away,” Ditto said.

“As far as we know, a cyber-attack has not yet resulted in a power outage in the U.S. to date, but we do know that public power utilities are not immune to such attacks, and we are dedicated to helping you mitigate your risk.”

“By curating the most critical information, finding ways to tailor industry information for public power, and connecting regularly as a community – our connectivity helps to protect us,” Ditto said.

 A full, fair seat at the transition table

“We know that members, reflective of the country as a whole, approach climate change topics from very different angles depending on their resource mixes,” she said.

A CEO-led task force has created multiple working groups to determine if there are areas of consensus on federal climate legislation, such as a clean energy standard.

“It’s clear from the conversations thus far that most agree that a net-zero carbon emissions goal by 2035 is unachievable by the majority of public power utilities and that a 2050 goal would still be difficult, but perhaps more achievable if there are breakthroughs in technology and the siting and permitting process is reformed. Infrastructure buildouts are often hampered by lengthy federal permitting processes. Given the scale at which transmission and new generation will need to be built, Congress and the Administration need to address this significant obstacle to getting to net-zero emissions.”

But these discussions “have shown that public power has significantly reduced greenhouse gas emissions and will continue to do so if given additional time, comparable tax incentives, and stranded cost recovery — and assuming major technological breakthroughs that will help with maintenance of reliability and affordability,” Ditto went on to say. 

“We each have a deep commitment to our communities – wanting to be the best providers we can be, to embody environmental stewardship, to practice safety and reliability, and to uphold the tenets of the public power model. Acting on what the community wants means being nimble. That can be hard.”

Mitigating climate change “is one of the biggest issues of our time, and we are the ones on the ground who have to tackle it head on,” she said.

“We have been approached and asked for our position by policymakers, members of the media, and more. And while we share our perspective, we know that our position and actions are both aspirational and grounded – we need to be,” Ditto said.

“We are the ones who must temper the ideals of making a transition with the practical realities of where the technology and industry capabilities are in terms of cost and reliability. And we need a full, fair seat at the transition table. That’s why one of our top advocacy priorities is comparable tax incentives. Because you can’t leave out 30% of the industry, which is us combined with rural cooperatives, and still expect to get to 100% of anything.“

APPA is encouraged by the direction of policy discussions in Washington, D.C., on this issue, which is “a testament to our ongoing lobbying efforts. We’re on the brink of gaining access to a comparable tax incentive for clean energy development in the form of a direct-pay refundable credit.”

There is bipartisan support for the Clean Energy for America Act, which includes a provision for the credits, and the act has the backing of key leadership in both the House and Senate. When passed, this type of credit will allow public power utilities to directly own applicable energy projects and pass the savings from the incentives back to customers.

Work underway to develop a NAESB base contract for voluntary renewable energy certificates

June 17, 2021

by Paul Ciampoli
APPA News Director
June 17, 2021

Wholesale and retail entities have been holding a series of virtual meetings through the North American Energy Standards Board (NAESB) to develop a NAESB base contract for voluntary renewable energy certificates (RECs) and the technical implementation that could lead to the digitization of the contract.

Details of the effort were recently outlined by Elizabeth Mallett, Deputy Director of NAESB, in an Energy Central post and in a Q&A with Public Power Current.

In the May 25 post, Mallett points out that corporations worldwide are increasing their commitments to employ renewable energy in their day-to-day operations by procuring RECs to meet their renewable claims. RECs are market-based instruments that represent the right to one megawatt-hour of renewable generation.  RECs are purchased for state renewable portfolio standards to maintain compliance requirements, but there is also a growing market for voluntary RECs that has bloomed over the past decade as corporations strive to demonstrate their claims of renewable electricity usage and meet corporate goals, she noted in her post.

“As this market has grown, the need for standardization has become more apparent, as opportunities to increase efficiency and eliminate redundant terms and processes present appear throughout the industry. For example, standardization decreases the need for administrative staff to learn regional or state-by-state terms and improves the speed of transactions when consumers deal with multiple states or regions,” Mallett said in the post.

May 28 was the deadline to submit early comments regarding the NAESB Draft Base Contract for RECs. After approval of a final draft by the NAESB subcommittee later this year, a subsequent 30-day comment period will be announced. 

Mallett told Public Power Current that industry members that suggested the standardization of voluntary RECs provided several reasons, including:

NAESB REC Contract spurred by recommendation from TVA

The NAESB REC contract was spurred by a recommendation from Tennessee Valley Authority (TVA) that NAESB consider a REC contract for distributed ledger technology, or blockchain technology. 

Mallett notes in her post that the proposed development effort is divided into two parts. “First, NAESB considered the development of the contract general terms and conditions.  Next, the technical implementation for the contract is under consideration. The participants will identify the data elements and structures needed to execute the contract electronically, including the information needed to develop the terms and conditions for one or more ‘smart contracts’ to be utilized on distributed ledger technology.”

In December 2019, Joint Subcommittees held a kick-off meeting during which participants aimed to first gain consensus on definitions and use cases. Subsequent meetings continued to analyze terms and issues identified through subcommittee conversation, such as tracking through retirement, fundamental requirements of attestation declarations, billing details, etc., Mallett said in her post.  “To date, NAESB has hosted nineteen meetings to discuss the NAESB REC Contract and technical implementation and about thirty-seven entities have participated.”

In a June 1 meeting, the participants dived further into the technical implementation, such as common datasets and data dictionaries. “As the technical implementation development proceeds, aspects of the contract may need to be revisited, especially in light of the informal comments received on the contract before the June meeting,” Mallet noted.

NAESB is divided into three quadrants that represent the wholesale and retail gas and electric industries: the Wholesale Electric Quadrant (WEQ), the Wholesale Gas Quadrant (WGQ), and the Retail Gas and Electric Markets Quadrant (RMQ). 

The “Joint Subcommittees” refers to the WEQ Business Practices Subcommittee and the RMQ Business Practices Subcommittee — two separate NAESB subcommittees which have been holding joint meetings since December 2019 to draft the NAESB Base Contract for RECs.

Mallett told Public Power Current that during the June 1, 2021 meeting, participants discussed the informal comments received on the draft contract. Informal comments were submitted from Bonneville Power Administration (BPA), J. Weinstein Law and Southern Company. Additionally, work papers from TVA were posted for the meeting. The entirety of the June 1 meeting comprised a review of the informal comments from BPA, she said. These comments suggested modification to the terms and conditions, section number updates, and basic formatting changes. 

The Joint Subcommittees held another meeting on June 8, 2021. During this meeting, additional comments were considered and participants continued to discuss the BPA and J. Weinstein informal comments.

“Looking ahead, after the review of informal comments on the draft contract, the subcommittees will focus on the development of technical implementation documents, such as addressing data dictionaries, and data sets for invoicing and other aspects of the transactions to support the contract,” Mallett said. She noted that the technical implementation will be technology neutral, allowing for the use of the contract in its paper form, or electronically — for example, on a distributed ledger, also known as blockchain.

Per the NAESB process, if the subcommittees vote to adopt the NAESB REC Base Contract, then a thirty-day formal comment period will be held to solicit further comments from any interested parties.  Next, the RMQ and WEQ Executive Committees will determine whether to adopt, remand, or reject the effort, after reviewing the draft NAESB REC base contract along with any comments received during the thirty-day formal comment period. If approved by the Executive Committees of the RMQ and WEQ, the draft NAESB REC base contract will be posted for ratification by the NAESB WEQ and RMQ membership. Once ratified, it will be made available to the industry.

NAESB is a nonprofit 501(c)(6) standards development organization. NAESB has about 300 member entities whose volunteers develop gas and electric commercial business practice standards to support industry priorities. The NAESB process is accredited by the American National Standards Institute (ANSI) and, therefore, remains an independent body that is open to and inclusive of all interested industry parties.

NAESB follows a balanced voting procedure to reach consensus-based decisions and to maintain a balance of interests within the organization and NAESB has a strict no advocacy policy, Mallett noted.

If ratified by the NAESB membership, NAESB will publish the NAESB REC base contract in the next version of its WEQ and RMQ business practice standards and, as with all NAESB work products, the NAESB REC base contract will be copyrighted, she said.

Maine’s House of Representatives passes bill that would create state consumer-owned utility

June 16, 2021

by Paul Ciampoli
APPA News Director
June 16, 2021

Maine’s House of Representatives on June 15 voted 76-64 in favor of a bill that would create a consumer-owned utility in the state called Pine Tree Power. The bill now moves on to a vote in the Maine Senate.

The Maine Legislature’s Energy, Utilities, and Technology Committee on June 1 voted to advance the legislation, LD 1708. 

The consumer-owned entity that would be created under the bill would take over the electric service now provided by Central Maine Power and Versant Power. Central Maine Power Company and Versant Power (formerly known as Emera Maine), are majority owned by Iberdrola of Spain and Emera of Canada, respectively.

LD 1708 passed the committee with minor revisions suggested by state utility regulators and should go to the Senate for initial floor votes in the next week, according to a group called Our Power, which supports the creation of a consumer-owned utility in the state.

In a recent editorial Maine’s Portland Press Herald said it supports the bill. “The new utility would be governed independently, use no state funds and the taxpayers would not be on the hook for any of its debt. We don’t need to be scared about a different business model, especially when the one we have now is not working,” the editorial said.

Poll finds strong support for the creation of a consumer-owned utility in Maine

Meanwhile, newly conducted public opinion polling shows that 75% of registered voters from across the state of Maine say they support the idea of replacing Central Maine Power and Versant with a local non-profit consumer-owned utility, according to research conducted by SurveyUSA.

According to SurveyUSA, 38% strongly support the idea; 37% say they somewhat support. Just 10% are opposed to the idea, while 7% somewhat oppose and 3% strongly oppose.

The research was conducted by SurveyUSA for Our Power.