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Legislation amends tax credit proposal to include public power utilities

May 20, 2021

by Paul Ciampoli
APPA News Director
May 20, 2021

Rep. Earl Blumenauer, D-Ore., has amended and reintroduced legislation from the 116th Congress to allow entities with little to no tax liability to still take advantage of energy-related investment tax credits (ITC) and production tax credits (PTC).

The bill in the 116th Congress, which ended on Jan. 3, 2021, had allowed for the transfer of such tax credits to other project partners.

The Renewable Energy Incentive Act introduced on May 13 would instead allow for the direct payment of energy-related ITC and PTCs as refundable tax credits. The bill has also been modified to include public power utilities as eligible entities.

In a May 13 letter to Blumenauer, Joy Ditto, President and CEO of the American Public Power Association, expressed thanks to the lawmaker “for working to ensure that the Renewable Energy Investment Act will allow all electric utilities, including public power utilities, to benefit from incentives intended to encourage critical energy investments needed to transition to cleaner generating technologies. This will make these incentives fairer and more effective.”

Ditto noted that federal tax expenditures are the primary tool Congress uses to incentivize energy-related investments. However, such incentives do not work for tax-exempt entities, such as public power utilities. “That means public power utilities are deterred from owning such facilities as a direct result of federal policy — and explains why 80 percent of the nation’s (non-hydropower) renewable energy generating capacity is owned by merchant generators,” she wrote.

The Renewable Energy Investment Act “is designed to address this inequity by allowing for the direct payment of energy production and investment tax credits to any entity that owns the project. This would remove the financial disincentive for public power utilities to own such facilities, which are needed to transition to cleaner generating technologies and address climate change, and would allow the full value of these credits to pay for additional investment or be passed on to our 49 million customers,” Ditto said.

Rochelle Municipal Utilities in Illinois breaks ground on new substation

May 19, 2021

by Peter Maloney
APPA News
May 18, 2021

The City of Rochelle and Rochelle Municipal Utilities in Illinois have broken ground for a $13.8 million substation to serve new industrial growth.

The substation will provide 34.5 kilovolt (kV) and 13.8 kV service to support growth in the city’s southern corridor and increase reliability for nearby industries and create the ability for businesses to have redundant electrical feeds.

The City of Rochelle purchased just over 16 acres for the construction of a new substation in 2019.

The substation will also introduce a new voltage class so the city can provide electricity to larger users. In another first, the substation project was split into two yards with the distribution yard owned and operated by Rochelle Municipal Utilities and the transmission yard owned and operated by investor-owned Commonwealth Edison.

Last June, the City of Rochelle sold its transmission assets to Commonwealth Edison. The transaction included about 20 miles of 138-kV lines and associated facilities at the utility’s No. 2 substation.

Commonwealth Edison already had the personnel and equipment needed to maintain and operate the assets as its transmission system surrounds the Rochelle Municipal Utilities’ facilities, allowing Commonwealth Edison to reduce Rochelle’s annual operating costs. Rochelle Municipal Utilities owned and operated the transmission lines since August 1, 2015.

“For a community of our size to be home to three electrical substations is unheard of,” Mayor John Bearrows said in a statement. “The investment our community is making in reliable power for residential, commercial and industrial customers is key to our future growth.”

“Funding project of this magnitude is only possible with the foresight of our Mayor, Council and Staff,” City Manager Jeff Fiegenschuh said in a statement. “Our financial management is top notch and as a result, we can provide the infrastructure to attract development and create jobs.”

Rochelle, about 80 miles West of Chicago, has a population of about 10,000 people and is known as the Hub City because several transportation routes, including two major railroads, pass through the city.

Ribbon cutting held for new Guam Power Authority utility-scale battery energy storage system

May 19, 2021

by Paul Ciampoli
APPA News Director
May 18, 2021

Officials from Guam’s Consolidated Commission on Utilities and Guam Power Authority (GPA) on May 14 cut a ceremonial ribbon to mark GPA bringing a utility-scale battery energy storage system (BESS) onto Guam’s island-wide power grid.

Officials participating in the ribbon cutting included GPA General Manager John M. Benavente, P.E., Consolidated Commission on Utilities Commissioner Pedro Roy Martinez, Lt. Governor Joshua Tenorio, Governor Lou Leon Guerrero, Consolidated Commission on Utilities Chairman Joey Duenas; Senator Clynt Ridgell; Guam Public Utilities Commission Chairman Jeffrey Johnson, GPA ESS Project Manager Lorraine Shinohara, P.E., GPA Assistant General Manager Engineering and Technical Services John J. Cruz, Jr., P.E. and Guam Public Utilities Commission Chief Administrative Law Judge Frederick Horecky.

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 Fully operational on March 1, 2021, the project was designed and constructed by LG CNS. The system is comprised of two sites. One site is 24 megawatts (MW)/6 megawatt hours (MWh) in size, while the second site is 16 MW/16 MWh in size.

A video that provides an overview of the BESS can be viewed here.

GPA is on-track to achieve a 50% renewable energy mix by 2030 and a mandated 100% renewable energy mix by 2045.

The American Public Power Association offers a Public Power Energy Storage Tracker for association members that summarizes energy storage projects undertaken by members that are currently online.

In honor of Asian American and Pacific Islander (API) Heritage Month – commemorated each May – the American Public Power Association’s Public Power Current newsletter recently spotlighted the leadership roles our API colleagues have at public power utilities across the United States and at our U.S. territories in the Western Pacific. We kicked off our coverage by sharing updates from Guam.

Coalition launches state and local emergency rental assistance program dashboard

May 18, 2021

by Paul Ciampoli
APPA News Director
May 18, 2021

The National Low Income Housing Coalition has created a new tool for monitoring trends in state and local implementation of emergency rental assistance programs authorized under the Consolidated Appropriations Act. The funds can be used to pay rent and utility expenses.

The American Public Power Association (APPA) continues to work to keep members educated about guidance related to utility-related programs from the Consolidated Appropriations Act and the American Rescue Plan Act. APPA has regularly communicated with members announcing guidance, including the coalition’s new tool, and is providing updates to COVID relief provisions of interest to public power in the Consolidated Appropriations Act and the American Rescue Plan Act. 

In response to COVID-19 and its economic fallout, many cities and states have created or expanded emergency rental assistance programs to support individuals and families impacted by the pandemic, the coalition noted.

The December 2020 COVID-19 relief package included $25 billion in urgently needed emergency rental assistance for tenants with low incomes and established the emergency rental assistance program under the administration of the U.S. Department of the Treasury. The American Rescue Plan Act, enacted in March 2021, provides an additional $21.55 billion for emergency rental assistance programs for a grand total of $46.55 billion in emergency rental assistance.

The Treasury emergency rental assistance program includes an unprecedented amount of funding for emergency rental assistance to help renters stay stably housed, the coalition said.

The U.S. Department of the Treasury allocated the initial tranche of funds in late January 2021, as well as published several iterations of guidance from January through May. A dashboard developed by the coalition shares information about programs and key design and implementation features that enable them to serve the lowest-income and most marginalized renters in need of housing assistance.

The latest Treasury guidance strongly encourages flexible program design so that grantees may extend this emergency assistance to vulnerable populations without imposing undue documentation burdens. NLIHC said it will continue to monitor these trends.

The coalition has also provided an updated ERA program table to help renters locate programs in their areas.

As of May 12, 2021, the coalition has identified 344 emergency rental assistance programs, including 47 statewide programs, funded through the $25 billion Treasury emergency rental assistance program.

The group is developing an emergency rental assistance resource hub with additional materials to help programs implement practices for an equitable distribution of assistance to those most in need, it said.

Biden signs cybersecurity executive order focused on securing federal networks

May 18, 2021

by Paul Ciampoli
APPA News Director
May 18, 2021

President Joseph Biden on May 12 signed a cybersecurity executive order (EO) that focuses on securing federal networks and establishes a new government entity modeled after the National Transportation Safety Review Board to review major breaches.

Along with establishing a cybersecurity safety review board, a White House fact sheet notes that the EO will:

“Recent cybersecurity incidents such as SolarWinds, Microsoft Exchange, and the Colonial Pipeline incident are a sobering reminder that U.S. public and private sector entities increasingly face sophisticated malicious cyber activity from both nation-state actors and cyber criminals,” the fact sheet states. “These incidents share commonalities, including insufficient cybersecurity defenses that leave public and private sector entities more vulnerable to incidents,” the White House said.

The Colonial Pipeline incident “is a reminder that federal action alone is not enough. Much of our domestic critical infrastructure is owned and operated by the private sector, and those private sector companies make their own determination regarding cybersecurity investments. We encourage private sector companies to follow the Federal government’s lead and take ambitious measures to augment and align cybersecurity investments with the goal of minimizing future incidents,” the White House fact sheet said.

Colonial Pipeline was a recent victim of a cybersecurity attack involving ransomware.  Colonial Pipeline initiated the restart of pipeline operations at approximately 5 p.m. ET on Wednesday, May 12. “Since that time, we have returned the system to normal operations, delivering millions of gallons per hour to the markets we serve,” it said in a May 15 tweet.

EIA sees more renewable and coal generation this summer as electric sales rise

May 18, 2021

by Peter Maloney
APPA News
May 18, 2021

This summer could see an increase in renewable and coal-fired generation as electricity sales rise relative to last summer’s sales during the COVID-19 pandemic, according to the recently released Short-Term Energy Outlook (STEO) from the Energy Information Administration’s (EIA).

Electricity generation in the United States “will look different this summer compared with last summer as rising natural gas costs drive many electricity generators to switch to renewables and coal, the EIA said in its annual summer STEO, released May 11.

The summer STEO forecasts a 12 percent decline in electricity generation from natural gas, a 21 percent increase in generation from renewable sources, and an 18 percent increase in generation from coal over last summer, with the trend most pronounced in Texas and the Midwest.

“We believe renewable sources will primarily make up for the decrease of natural gas usage in Texas,” Stephen Nalley, acting EIA administrator, said in a statement. “Our forecast is that 28% of Texas’s electricity demand will come from renewables this summer, up from 21% in 2020.”

For total electricity sales, the EIA is forecasting a 1.5 percent increase this summer over last summer, with a 4.5 percent increase in sales to the industrial sector, and a 2.6 percent increase in sales to the commercial sector. The increases are primarily the result of rising COVID-19 vaccinations, fewer pandemic-related restrictions, and an improving economy, the EIA said.

The increased electricity use will be most notable in hotels, restaurants, and other businesses that faced hurdles in 2020 because of stay-at-home orders, Nalley said.

Milder summer weather and fewer travel restrictions, however, should contribute to a forecast 2.5 percent decrease in residential electricity use per customer this summer, according to the EIA report, though the agency noted that estimated household electricity use is still higher than the 2015-2019 average. The EIA expects U.S. households to pay about $446 on average for electricity from June 1 to August 31, a level similar to last year’s.

The STEO forecast relies on the macroeconomic model from IHS Markit, from which the EIA assumes U.S. GDP growth will be 6.2 percent in 2021 and 4.3 percent in 2022.

Origis Energy to develop solar farm in support of renewable energy needs for Knoxville

May 18, 2021

by Paul Ciampoli
APPA News Director
May 18, 2021

The Tennessee Valley Authority (TVA) recently announced the selection of Origis Energy to develop a 200-megawatt solar farm in Clay County, Miss., to support the renewable energy needs of Knoxville, Tenn.

Knoxville Utilities Board’s (KUB) investment in the project will enable 50 megawatts of new battery storage technology that will increase power grid resiliency, TVA said.

KUB provides electric, natural gas, water, and wastewater services to more than 468,000 customers in Knoxville and parts of seven surrounding counties.

Scott Fiedler, a TVA spokesperson, noted that KUB will receive renewable energy credits (RECs) generated from the solar facility.

A REC is a market-based instrument that represents the property rights to the environmental, social and other non-power attributes of renewable electricity generation. RECs are issued when one megawatt-hour of electricity is generated and delivered to the electricity grid from a renewable energy resource.

Last November, KUB announced that 20% of Knoxville’s electricity will be generated from renewable sources. KUB’s investment in more than 500 MW of solar will help Knoxville meet its goal to reduce greenhouse gas emissions by 80% by 2050, compared with 2005 levels.

Origis Energy will supply solar energy through a long-term power purchase agreement through TVA’s Green Invest program. Origis will develop, build, own and operate the plant using industry-leading land stewardship techniques.  Origis will complete the facility in late 2023, pending environmental reviews.  

Since 2018, Green Invest has attracted nearly $2.7 billion in solar investment and procured over 2,100 MW of solar on behalf of its customers, TVA said.

Jeff Lyash, President and CEO of TVA, discussed the Green Invest program in a recent episode of the American Public Power Association’s Public Power Now podcast.

California ISO says grid better positioned for this summer, but reliability risks remain

May 18, 2021

by Paul Ciampoli
APPA News Director
May 18, 2021

The California Independent System Operator (CAISO) expects electricity supply conditions for the upcoming summer to be in better shape than last year, but the power grid is still susceptible to stress during extreme heat waves that extend across the West, according to the CAISO’s summer outlook released on May 12.

The 2021 Summer Loads and Resources Assessment projects the energy grid will have more capacity to meet demand in 2021 than it did in 2020, “a critical element for averting rotating power outages, such as those that occurred last August,” CAISO noted in a news release.

CAISO’s annual summer assessment evaluates expected supply and demand to help prepare for the hot weather months of June through September.

CAISO said the additional capacity is the result of resource procurement ordered by the state. A series of market redesigns and policy changes in CAISO’s system taken since September 2020 along with improved communication and coordination protocols has improved overall preparedness for this summer, it said. “However, if heat events similar to those that gripped the western states region last summer occur, imported energy from other states could be limited, and the power grid will be at risk of supply shortages and possible emergency conditions,” the grid operator said.

This year’s outlook includes roughly 2,000 megawatts (MW) of additional, readily available resources coming online to serve ISO net peak demand compared to this time last year, including battery storage that is expected to absorb excess renewable energy in the middle of the day, and inject it back into the grid after sunset when solar generation goes offline, the grid operator said.

The state and CAISO are continuing to pursue other opportunities to add an additional 1,000 to 1,500 MW of new resources to the system by summer.

The 2021 forecasted peak demands are about the same as last year under normal weather conditions.

However, extreme heat events are becoming more likely.

By incorporating last August’s historical heat wave into the assessment, it pushes weather previously regarded as extreme into what is now considered more normal ranges, CAISO noted.

The grid operator reported that California’s hydroelectric energy supplies will also be significantly lower than normal, with the state weathering a second consecutive year of below normal precipitation. Snowpack water content peaked at 60 percent of normal, similar to last year’s conditions, and reservoir levels have decreased to 70 percent of normal.

Meanwhile, imports will play a substantial role in this summer’s power grid reliability.

The assessment measured the likelihood of energy deficiencies and system emergencies, finding that at typical import levels based on historical data, there is a low probability of grid stress. But results based on analyses of more limited import levels associated with a widespread heat event showed that the probability of having to rely on measures to reduce load during emergency conditions, including rotating power outages, increases significantly during high demand conditions.

“Conservation will be pivotal to cushioning the grid when it needs it the most, typically during hot summer evenings when demand remains high for air conditioning use and solar production is going offline,” CAISO said.

In coordination with the California Public Utilities Commission, CAISO will issue Flex Alerts when system conditions are forecast to be tight, as it has done in prior years. Flex Alerts are voluntary calls to consumers to cut down on electricity use from 4–9 p.m. The state and CAISO are planning to launch a refreshed Flex Alert campaign in June to alert residents earlier of a potential supply shortage and spread the conservation message more widely.

Grid stability will also be improved through expanded communications and coordination among utilities and stakeholders in the state and across the West, CAISO said. The CAISO and its partners will continue to seek out and use extraordinary measures during emergencies, in an effort to avoid rotating outages, it added.

Elliot Mainzer, President and CEO of CAISO, discussed the state power grid’s summer outlook in an episode of the American Public Power Association’s Public Power Now podcast.

LADWP joins effort to bring down green hydrogen costs via commercialization

May 18, 2021

by Peter Maloney
APPA News
May 18, 2021

The Los Angeles Department of Water and Power (LADWP) this week joined a coalition that aims to bring down the cost of green hydrogen.

LADWP, along with the Green Hydrogen Coalition and other partners, launched HyDeal LA, a collaboration of developers, green hydrogen off-takers, integrators, equipment manufacturers, investors, and advisors.

The group aims to work together to bring the cost of green hydrogen down to $1.50 per kilogram (kg) in the Los Angeles Basin by 2030 by creating a commercial green hydrogen cluster at scale.

Hydrogen created by electrolysis powered by generation sources such as wind, solar or hydro power is considered “green” from an environmental standpoint.

Green hydrogen can enable deep reductions in carbon dioxide emissions and can be used in a variety of applications, such as a fuel for a power plant or for a steel mill or for a hydrogen fuel cell vehicle. Green hydrogen also can provide long-duration seasonal energy storage.

In addition to LADWP, participants in HyDeal LA include 174 Power Global, Mitsubishi Power, and Southern California Gas. Implementation partners include Clifford Chance, Marathon Capital, and Strategen.

In its first phase, HyDeal LA participants will design the competitive supply chain necessary to achieve $1.50/kg delivered green hydrogen in the LA Basin. They also will work toward achieving in-principle agreement on the necessary terms and conditions to achieve production, storage, transport and delivery of green hydrogen at scale.

“Green hydrogen is the key to reliably achieving 100% renewable energy,” Martin Adams, LADWP’s general manager and chief engineer, said in a statement. “We are pleased to join the HyDeal LA effort, which includes an innovative and expanding vendor and development community, to support and help catalyze the supply chain needed to achieve large-scale, low-cost green hydrogen power supply for our local in basin plants.”

Separately, LADWP is leading the effort to turn the Intermountain Power Project in Delta, Utah, to the world’s first gas turbine designed and built to operate on entirely on green hydrogen by 2035.

HyDeal LA is part of HyDeal North America, a commercialization platform launched by the Green Hydrogen Coalition that is dedicated to deploying green hydrogen at scale for multi-sectoral decarbonization.

HyDeal LA is modeled after HyDeal Ambition, a similar project in Europe committed to producing and purchasing 3.6 million tons of green hydrogen annually for the energy, industry, and mobility sectors at about $1.83 per kilogram before 2030.

In a November report, S&P Global Ratings said the cost of producing hydrogen from renewable resources would need to fall by over 50 percent, to $2.00 or $2.50 per kilogram, by 2030 to make it a viable alternative to conventional fuels.

The levelized cost of renewable power accounts for about 60% of cost of green hydrogen, S&P said, adding that a $10 per megawatt hour decline in the power price reduces the cost of hydrogen by $0.4 to $0.5 per kilogram.

Other factors in the cost of green hydrogen are the capital costs of electrolyzers and capacity utilization factors. Increasing utilization to 50 percent from 40 percent would reduce the cost of hydrogen by $0.2 to $0.3 per kilogram.

Policy actions on EVs rose quarter to quarter, report says

May 18, 2021

by Peter Maloney
APPA News
May 18, 2021

Forty-eight states and the District of Columbia took a total of 521 actions related to electric vehicles during the first quarter, an increase from the 461 actions taken by 47 states and D.C. in first-quarter 2020, according to a new report by the NC Clean Energy Technology Center.

Of the actions catalogued in the first quarter of this year, most, 133, were related to regulation, followed by 125 actions related to financial incentives, and 101 actions related to market developments.

Among the most notable actions taken, the report cited the New Jersey Board of Public Utilities’ approval of electric vehicle programs proposed by Atlantic City Electric and PSE&G New Jersey during the quarter. Atlantic City Electric’s program has a budget of $20.7 million. and PSE&G’s program has a budget of $166.2 million. Both programs include make-ready incentives for different customer types and demand charge alternatives for fast charging stations.

In Virginia, lawmakers passed two bills in March, one establishes an electric vehicle rebate program and an electric vehicle grant program, the other establishes an electric vehicle grant program. The rebate program begins in 2022 and provide rebates of at least $2,500 for the purchase of electric vehicles. Income-qualified residents will be eligible for an additional $2,000 rebate. The grant program provides awards on a competitive basis to school boards and non-profits to assist with the replacement of diesel school buses and vehicles with electric buses and vehicles.

The report also cited Colorado where the state’s Public Utilities Commission issued a decision in January approving Xcel Energy’s proposed transportation electrification plan that provides electric vehicle rebates program for low-income customers, residential home wiring rebates, a school bus electrification program, the development of utility-owned fast charging stations in underserved areas, utility deployment of charging stations for multi-family housing, and commercial charging rates, among other elements.

In Oklahoma, the report cited the state legislature’s bill adopting a tax of $0.03 per kilowatt hour (kWh) on the sale of electricity used to charge electric and hybrid vehicles. The tax begins in 2024 but will not apply to charging stations in service before November 2021, those with less than 50 kilowatts of capacity, or those that supply electricity free of charge, including private residential stations. The bill establishes a registration fee for electric vehicles and provides a tax credit for the amount of charging taxes paid.

In Kansas and North Dakota, the report noted that legislatures in those states passed bills allowing electric vehicle charging stations to resell electricity to the public without being classified as a public utility as long as the electricity used for vehicle charging is purchased from a retail electric supplier.

The actions in Oklahoma Kansas and North Dakota fit into a wider trend identified by the NC Clean Energy Technology Center. State lawmakers across the country have been considering fees on electric vehicles, primarily road usage fees based on miles traveled and taxes on electricity used for vehicle charging.

Legislatures in Georgia, Minnesota, and Nevada also considered taxes on electricity used for vehicle charging, while lawmakers in California, Minnesota, Missouri, and Washington introduced bills adopting road usage fees for electric vehicles. A bill under consideration in Montana would institute a trip-based fee for electric motor trucks and truck tractors licensed in another state. In addition, several states are considering registration fees for electric vehicles with Oklahoma and South Dakota recently adopting new fees.

The report also said several utilities filed proposals in the first quarter related to transportation electrification programs. In Kansas and Missouri, Evergy requested approval for transportation electrification portfolios including charging station rebates and new rates designed for business and transit charging.

Jersey Central Power & Light filed an EV Drive Program proposal that includes make-ready incentives, off-peak usage credits, and utility deployment of fast chargers.

Indianapolis Power & Light filed a petition for an electric vehicle portfolio involving a managed charging program and off-peak charging incentive.

And in Washington State, Avista Utilities filed an application for a series of programs, including utility deployment of residential and commercial charging stations, DC fast charger deployment, and new commercial charging rates.

The NC Clean Energy Technology Center is a chartered Public Service Center administered by the College of Engineering at North Carolina State University.