TVA Prices $500 Million Of New 30-Year Bonds
September 9, 2022
by Paul Ciampoli
APPA News Director
September 9, 2022
The Tennessee Valley Authority (TVA) recently priced $500 million of new 30-year maturity global power bonds, with an interest rate of 4.25 percent.
The offering marked TVA’s first 30-year bond since 2012 and the 4.25 percent rate is tied as the second lowest ever for a TVA bond of 30 years or longer in maturity.
Despite an increase in interest rates in the first half of the year, long-term rates remain at historically low levels, creating an opportunity for TVA to secure long-term funding at attractive levels, TVA noted.
“We were pleased to see a window of stability develop in recent weeks, and an opportunity for TVA to take advantage of still historically low long-term rates,” said TVA’s Treasurer and Chief Risk Officer Tammy Wilson. “With one of the nation’s largest electric power systems, TVA is a natural issuer of longer-maturity bonds, and the success of this transaction shows the confidence investors have in TVA and the strength of the public power model.”
Strong demand for high quality investments of longer duration contributed to the success of the offering, TVA said. The bonds drew interest from a variety of investors including asset managers, pension funds, and insurance companies, among others.
“The new 30-year bond fits well in TVA’s debt profile, which has a low number of bonds maturing in the early 2050s. TVA debt levels remain at the lowest levels in over 30 years, and the new bonds will help TVA maintain stable interest costs for decades to come,” added Wilson.
Bank of America, Morgan Stanley, RBC Capital Markets, and TD Securities served as joint book-running managers for the transaction. The proceeds of the bonds will be used to refinance existing debt and for general power system purposes.
The new bonds will mature on September 15, 2052 and are not subject to redemption prior to maturity. Interest will be paid semi-annually each March 15 and September 15. Application has been made to list the bonds on the New York Stock Exchange.
TVA Board Holds Base Rates Steady, Increases Customer Credits for FY23
In other recent news, TVA’s Board of Directors on Aug. 31 maintained a stable course for wholesale base electric rates in fiscal year 2023, consistent with long-range financial plans to keep base rates flat through the end of the decade.
Over the past ten years, TVA’s effective wholesale power rate has maintained an average of about 7 cents per kilowatt-hour, giving families needed relief from the pandemic, and record inflation and fuel prices, TVA said.
In addition, due to strong operational and financial performance, the Board increased a previously approved Pandemic Recovery Credit back to 2.5 percent for all customers, providing about $230 million.
APPA’s Joy Ditto Details How Public Power Will Benefit From Inflation Reduction Act
September 8, 2022
by Paul Ciampoli
APPA News Director
September 8, 2022
Joy Ditto, President and CEO of the American Public Power Association (APPA), recently detailed how public power utilities are poised to benefit from the recently enacted Inflation Reduction Act (IRA).
President Biden on Aug. 16 signed into law the IRA, which will extend and expand various energy tax incentives and give public power utilities direct access to such credits through a refundable direct payment tax credit.
“We’ve been working on this for over twenty years,” said Ditto on a recent episode of White House Chronicle, which is hosted by Llewellyn King.
Since the 1992 Energy Policy Act, “we’ve been looking at this idea of parity or comparability in the tax code for publicly-owned utilities, for other not-for-profit utilities like rural co-ops so that we can really be unleashed in the marketplace as we continue to drive toward a cleaner energy future,” she said.
The mechanism in the IRA, a refundable direct pay credit, “allows us to take advantage of these tax credits that have been available to our for-profit brethren for many years both in the form of an investment tax credit and a production tax credit.”
In the short term, “we first have to get implementation through Treasury, through the Internal Revenue Service,” she noted.
“We will need to work” with the Treasury Department “to make sure that this is implemented correctly.” She said that there is already good precedent in current tax rules and regulations for many of the elements it will take for implementation.
Ditto noted, for example, while state and local entities do not file annual income tax returns, Treasury does already have a mechanism in place for them to claim a refund of federal gasoline excise taxes, from which they are exempt. “We’re hopeful that IRS and Treasury” will use some of those precedents to implement this, she said.
The congressional Joint Committee on Taxation valued these tax credits at $22 billion a year, so “this means billions of dollars in incentives for us going forward,” she said.
Noting that she has spoken with several APPA members in recent weeks, Ditto said that “they are excited, ready to move on some of these projects that maybe they’ve been holding off on.” In the longer term, “You’re going to see a variety of projects come online in the public power side.”
APPA on September 27 from 2-3 p.m. EDT will host a one-hour webinar “Public Power and the Energy Tax Provisions of the Inflation Reduction Act.”
Registration is free and only open to APPA utility members (including joint action agencies and state associations).
More information about the webinar, including a link to register can be found here.
New DOE ‘Earthshot’ Program Aims To Cut Costs For Geothermal Energy
September 8, 2022
by Peter Maloney
APPA News
September 8, 2022
The Department of Energy (DOE) has set a new goal of making enhanced geothermal systems (EGS) more widely available by cutting its cost by 90 percent to $45 per megawatt hour (MWh) by 2035.
Enhanced geothermal systems drill wells deep below the Earth’s surface, at least 4,000 feet deep, and then inject fluids into human-made reservoirs where the natural heat and pressure creates steam that can be extracted and used to power a turbine.
Geothermal energy currently generates about 3.7 gigawatts (GW) in the United States, but a substantial amount of geothermal energy is not accessible with current technology. The DOE estimates that more than five terawatts of heat resources exist in the United States and that capturing a small fraction of that potential could affordably power over 40 million American homes.
The DOE said its Enhanced Geothermal Shot seeks to aggressively accelerate research, development, and demonstrations of EGS technology to better understand the subsurface, improve engineering to drill more wells faster, and capture more energy with larger wells and power plants.
EGS can also enable technologies for widespread deployment of geothermal heating and cooling that would allow buildings and whole communities to decarbonize, the DOE said.
Because geothermal technology relies heavily on drilling and construction, the workforce is similar to that of the oil and gas industry and presents an opportunity to transition skilled workers and entire communities from fossil fuels to clean energy, the DOE said.
“Achieving the Enhanced Geothermal Shot will go a long way toward reaching President Biden’s goals of 100% carbon pollution-free electricity by 2035 and net-zero emissions across the U.S. economy by 2050,” according to the DOE.
The DOE’s Enhanced Geothermal Shot is the fourth “Shot” announced in the agency’s Energy Earthshots Initiative that aims to break down scientific and technical barriers to tackling the climate crisis.
New York Awards $16.6 Million For Long-Duration Storage Projects
September 8, 2022
by Peter Maloney
APPA News
September 8, 2022
New York recently announced $16.6 million in awards for five long duration energy storage projects, as well as $17 million in competitive funding available for projects that advance development and demonstration of scalable long duration energy storage technologies, including hydrogen.
The five long duration projects awards are going to:
- Borrego Solar Systems — $2.7 million to develop, design and build two stand-alone energy storage systems and perform field demonstrations of a six-hour zinc hybrid cathode energy storage system in New York City to help demonstrate that zinc hybrid technology is economically competitive with lithium-ion;
- JC Solutions (dba RCAM Technologies) — $1.2 million to develop a 3D concrete printed marine pumped hydroelectric storage system that integrates with offshore wind development;
- Nine Mile Point Nuclear Station — $12.5 million to demonstrate nuclear-hydrogen fueled peak power generation paired with a long duration hydrogen energy storage unit;
- Power to Hydrogen – $100,000 to develop a reversible fuel cell system for hydrogen production and energy storage called the Clean Energy Bridge that aims to help facilitate the system’s readiness for demonstration and commercial adoption; and
- Roccera — $100,000 to evaluate and demonstrate a commercially viable solid oxide electrolyzer cell prototype for clean hydrogen production with a corresponding scalable, more efficient manufacturing process.
The additional $17 million in funding is targeted at the development and demonstration of energy storage projects that are 10 to over 100 hours in duration at rated power.
Parties submitting bids for the awards, which is being administered by the New York State Energy Research and Development Authority (NYSERDA), must only include innovative, long duration energy storage technologies that are not yet commercialized. NYSERDA will make awards in the following project categories: product development, demonstration projects, and federal cost-share projects.
The state agency said submissions should advance, develop or field-test hydrogen, electric, chemical, mechanical or thermal-electric storage technologies that will address cost, performance, siting and renewable integration challenges, such as grid congestion, hosting capacity constraints, and lithium-ion siting in New York City. The deadline for proposals is Oct. 17, 2022.
Fire Department regulations make siting lithium-ion batteries difficult in New York City.
This type of funding support is critical to ensuring that stored renewable energy from solar or wind is available for long periods of time and can be utilized to ensure a reliable grid of the future.” Doreen Harris, president and CEO of NYSERDA and co-chair of the Climate Action Council, said in a statement.
The projects are intended to support New York’s Climate Leadership and Community Protection Act, which aims to install 3,000 megawatts (MW) of energy storage by 2030 while facilitating further development to 6,000 MW of energy storage.
New York Gov. Kathy Hochul has directed NYSERDA and the departments of Public Service and the Environmental Conservation with developing a regulatory clean hydrogen framework to measure emissions reductions and health benefits. Those efforts also include a clean hydrogen demonstration project for district heating and cooling, a Clean Hydrogen Prize Program to support clean hydrogen firms seeking to expand in the state, and the release of $27 million in NYSERDA Hydrogen Innovation funding to support product development and pilot and demonstrations projects,
Earlier this month, Maine and Rhode Island joined a New York-led multi-state clean hydrogen hub, expanding membership to include six states in the New England-MidAtlantic region.
CPS Energy Board Approves Contract For Rudy Garza To Serve As President and CEO
September 8, 2022
by Paul Ciampoli
APPA News Director
September 8, 2022
The Board of Trustees for San Antonio public power utility CPS Energy has voted to approve a contract for Rudy Garza to serve as President & CEO for the utility, effective immediately.
The board previously voted to enter 30-day contract negotiations with Garza during a special Board meeting on August 23, 2022.
Garza’s 3-year contract runs through January 31, 2026, and includes a 2-year extension option, at a salary of $655,000. There is no incentive or bonus pay.
While Garza served as Interim President & CEO for 10 months, he led the company to the approval of the first rate case in 8 years, approval for the next phase of energy efficiency and conservation programs, and discussions with the Board of Trustees and the Rate Advisory Committee on future power generation planning.
Garza has more than 25 years in the utility industry and has served as a leader in both the public and private sectors. Garza has a Bachelor of Science in Electrical Engineering from the University of Texas in Austin and a Master of Business Administration from the University of North Texas.
Garza is the first Hispanic leader to serve as President & CEO of the utility.
Before his Interim President & CEO role, he served as Chief Customer & Stakeholder Engagement Officer for the company.
Garza joined CPS Energy in 2012 and previously served as Senior Vice President of Distribution Service & Operations where he oversaw the maintenance and construction activity of the electric distribution system and has also served the company in the role of Vice President of External Relations.
Ann Arbor, Mich., City Council Advances Public Power Feasibility Study
September 7, 2022
by Paul Ciampoli
APPA News Director
September 7, 2022
The Ann Arbor, Mich., City Council on Sept. 6 voted 10-1 to contract with 5 Lakes Energy and NewGen Strategies and Solutions to conduct an energy options analysis and public power feasibility study.
The study approved by the city council will explore pathways to Ann Arbor’s goal of powering the grid with 100% renewable electricity by 2030.
This analysis is broken into three tasks. Task one will analyze various potential pathways for the city to reach its goal of 100% renewable energy. The second will conduct a phase I study into establishing a full municipal utility to provide 100% renewable electricity to all of Ann Arbor. The third will be a rate analysis of a sustainable energy utility, which would create a partial electric utility allowing residents to subscribe to programs intended to reduce their need for electricity from investor-owned utility DTE Energy, said Ann Arbor for Public Power, a nonprofit grassroots citizen group.
The city’s A2Zero climate action plan calls for a transition to 100% renewable power by 2030.
Ann Arbor for Public Power said it will continue promoting community discussion around municipalization and advocating for a transparent feasibility study process with opportunities for public engagement.
Department of Energy Seeks Input On Grid Resilience and Innovation Partnership Program
September 7, 2022
by Paul Ciampoli
APPA News Director
September 7, 2022
The U.S. Department of Energy (DOE) on Aug. 30 issued a Request for Information (RFI) seeking input on the $10.5 billion Grid Resilience and Innovation Partnership Program.
The RFI seeks information from states, Tribes, communities, utilities, project developers, and other key stakeholders to help refine the funding opportunity announcement that will be made later this year and to guide the implementation of the funding over five years to enhance the electric grid in support of President Biden’s Bipartisan Infrastructure Law, the Infrastructure Investment and Jobs Act.
“These programs will accelerate the deployment of transformative projects that will help to ensure the reliability of the power sector’s infrastructure, so all American communities have access to affordable, reliable, clean electricity anytime, anywhere while helping deliver on the President’s goal of 100% clean electricity by 2035,” DOE said.
The three programs are:
- Grid Resilience Grants ($2.5 billion): These grants support activities that will modernize the electric grid to reduce impacts due to extreme weather and natural disasters. This program will fund comprehensive transformational transmission and distribution technology solutions that will mitigate multiple hazards across a region or within a community, including wildfires, floods, hurricanes, extreme heat, extreme cold, storms, and any other event that can cause a disruption to the power system. This program provides grants to electric grid operators, electricity storage operators, electricity generators, transmission owners or operators, distribution providers, and fuel suppliers.
- Smart Grid Grants ($3 billion): These grants will increase the flexibility, efficiency, and reliability of the electric power system, with particular focus on increasing capacity of the transmission system, preventing faults that may lead to wildfires or other system disturbances, integrating renewable energy at the transmission and distribution levels, and facilitating the integration of increasing electrified vehicles, buildings, and other grid-edge devices. Smart grid technologies funded and deployed at scale under this program will demonstrate a pathway to wider market adoption. This grant program has broad eligibility, open to domestic entities including institutions of higher education; for-profit entities; non-profit entities; and state and local governmental entities, and tribal nations.
- Grid Innovation Program ($5 billion): This program provides financial assistance to one or multiple states, Tribes, local governments, and public utility commissions to collaborate with electric sector owners and operators to deploy projects that use innovative approaches to transmission, storage, and distribution infrastructure to enhance grid resilience and reliability. Broad project applications are of interest including interregional transmission projects, investments that accelerate interconnection of clean energy generation, utilization of distribution grid assets to provide backup power and reduce transmission requirements, and more. Innovative approaches can range from use of advanced technologies to innovative partnerships to the deployment of projects identified by innovative planning processes to many others.
DOE expects to release the final Funding Opportunity Announcement for FY22 and FY23 funding that will solicit concept papers and applications later this year.
DOE is requesting feedback through the RFI on the proposed implementation strategy for these three programs. Comments must be received by October 14, 2022, by 5 p.m. EDT and can be submitted by emailing GDORFI@hq.doe.gov.
Sunnova Seeks Approval To Build Solar-Storage ‘Micro Utilities’ in California
September 7, 2022
by Peter Maloney
APPA News
September 7, 2022
Sunnova Energy International has applied to the California Public Utilities Commission (CPUC) to develop solar-and-storage “micro-utilities” in California.
Sunnova’s wholly owned subsidiary Sunnova Community Microgrids California (SCMC) said it plans to target newly constructed homes where it can work with developers to design and implement mostly self-sustaining micro-utilities equipped with solar and storage facilities.
The company said the installations would be “largely self-sustaining micro-utilities by equipping new home communities with solar and storage to provide consumers with a better energy service that allows them to live in a more resilient home and community with latest-generation energy infrastructure.”
In its filing with the California commission, SCMC asked the CPUC to qualify it as a “micro-utility” and to request a certificate to construct and operate microgrids under California’s public utilities code.
The company hopes to build multi-property microgrids for residential and commercial customers in California and be the first solar and storage focused micro-utility company in the state able to own and operate behind-the-meter nanogrids, community assets, and front-of-the-meter distribution infrastructure.
SCMC community assets would include complete distribution infrastructure and energy assets including solar, battery storage, and emergency generation, the company said.
California’s first 100 percent renewable energy, front-of-the-meter, multi-customer microgrid, in Humboldt County, came online in June, providing energy resilience for a regional airport and a U.S. Coast Guard Air Station.
Maine And Rhode Island Join New York-led Clean Hydrogen Hub Coalition
September 7, 2022
by Peter Maloney
APPA News
September 7, 2022
Maine and Rhode Island have joined a multi-state clean hydrogen hub in the New England-MidAtlantic region, New York Governor Kathy Hochul announced late in August.
The newest members of the New York-led coalition join Connecticut, Massachusetts and New Jersey in the effort to develop a proposal to become one of at least four regional clean hydrogen hubs designated through the federal Regional Clean Hydrogen Hubs program included in the bipartisan Infrastructure Investment and Jobs Act.
In addition to the six states, the coalition includes 14 private sector companies, 12 utilities, 20 hydrogen original equipment manufacturers, 10 universities, seven non-profits, two transportation companies, and three state agencies.
Hochul’s office said New York would continue to engage with states and entities interested in joining the coalition.
The coalition members have agreed to work together to lay the groundwork for a proposal for the Department of Energy (DOE) funding opportunity expected to be announced in September or October with up to $8 billion in total funding available for regional clean hydrogen hubs.
They have also committed to collaborate with the New York State Energy Research and Development Authority (NYSERDA), New York Power Authority (NYPA), and Empire State Development (ESD) to develop a clean hydrogen hub proposal.
Partner states will also coordinate with their respective state entities to help align the consortium’s efforts with each state’s climate and clean energy goals. These include Connecticut’s Global Warming Solutions Act goal of reducing greenhouse gas emissions 80 percent by 2050, Massachusetts’ goal of reaching net-zero carbon emissions by 2050, New Jersey’s Global Warming Response Act goal of reducing greenhouse gas emissions 80 percent by 2050, Maine’s statutory goals to achieve carbon neutrality by 2045 and reduce gross greenhouse gas emissions by at least 80 percent by 2050, and Rhode Island’s commitment to achieving 100 percent renewable electricity by 2033.
The coalition also plans to continue to focus on the integration of renewables, such as onshore and offshore wind, hydropower, solar power, and nuclear power, into clean hydrogen production, and the evaluation of clean hydrogen for use in transportation, heavy industry, and power generation.
“This expanded collaboration with Maine, Rhode Island and other like-minded partners will significantly boost the value of our clean hydrogen hub proposal and make the Northeast a stronger, more multi-faceted contender for funding through the U.S. Department of Energy. Innovative technologies are showing the potential of green hydrogen as a fossil fuel alternative and the time is right to take a deeper dive into the many opportunities that will reduce greenhouse gas emissions, benefit the workforce and help build a clean energy economy,” Justin E. Driscoll, interim president and CEO of NYPA, said in a statement.
In February, the Department of Energy (DOE) released two requests for information (RFI) to collect feedback from stakeholders to inform the implementation and design of two of the DOE’s clean hydrogen programs, which in total call for investments of up to $9.5 billion.
In March, the governors of Colorado, New Mexico, Utah and Wyoming signed a memorandum of understanding to develop a proposal to vie for DOE’s regional clean hydrogen hub funding opportunity.
Pascoag Utility District, Agilitas Energy Bring R.I.’s First Utility Scale Battery Online
September 7, 2022
by Peter Maloney
APPA News
September 7, 2022
Pascoag Utility District (PUD), in partnership with Agilitas Energy, in July brought Rhode Island’s first utility scale a battery storage project online.
For Pascoag Utility District, the 3-megawatt (MW), 9-megawatt hour (MWh) battery installation helps it shave peak demand and deferred transmission costs. The public power utility entered the project as a non-wires alternative solution to upgrading or installing new transmission lines, which would have cost Pascoag between $6 million and $12 million.
“This project allowed us to save up to $12 million dollars for our customers by avoiding a costly rebuilding of transmission infrastructure,” Mike Kirkwood, general manager of Pascoag Utility District, said in a statement.
There was no cost associated with the project for Pascoag, however, the utility did complete work on a substation that was required for the battery project.
PUD received a grant of $250,000 from Rhode Island’s Office of Energy Resources (OER) for the substation project, which was also funded by an $1.4 million loan from the Rhode Island Infrastructure Bank and approved by OER through the state’s Efficient Building Fund program.
For its part, “Agilitas invested the necessary capital for construction, completed the engineering, procurement and construction for the battery project, and worked with PUD to commission this project,” Barrett Bilotta, president of Agilitas Energy, said via email. As part of the deal, Agilitas will split the transmission and capacity savings with the utility district. The savings come from avoided regional network service charges and installed capacity (ICAP) charges assessed by ISO-New England based on PUD’s peak load.
Agilitas, which owns and operates the battery project, uses it to provide energy to ISO New England grid when wholesale electric prices are high and charges the batteries from the grid when electric prices are low.
“As demand grows due to increased electrification and extreme weather conditions, we want to ensure Pascoag and Harrisville residents experience the same service and value they’ve come to expect,” Kirkwood said. “This project from Agilitas Energy was an easy, no-risk way to keep our operating costs down and deliver cleaner energy in the most cost-effective manner.”
Agilitas, based in Wakefield, Mass., acquired the Ocean State battery project in Rhode Island in April 2021 as part of its acquisition of New England Battery Storage, which added 25 MWh of energy storage capacity to its portfolio.