Heartland Consumers Power District Helps New Ulm Public Utilities Reap REC Windfall
September 22, 2021
by Peter Maloney
APPA News
September 22, 2021
New Ulm Public Utilities in Minnesota has been able to reap the benefits of renewable energy while boosting its revenues by about $300,000 with the help of its wholesale power supplier, South Dakota-based Heartland Consumers Power District.
New Ulm Public Utilities, like other utilities in the state, is required to generate or procure 25 percent of their total retail electric sales from renewable sources by 2025.
Aside from building a wind farm or solar power facility to generate renewable energy, one way to meet that requirement, especially for utilities that do not produce their own electricity, is to buy renewable energy credits (RECs).
Each REC is unique and represents 1 megawatt hour (MWh) of electricity. A REC can be bought or sold, or the regulatory value of the REC can be claimed by retiring it.
The validity and status of RECs is verified through the Midwest Renewable Energy Tracking System (M-RETs), which tracks renewable energy generation and assists in with renewable portfolio standard compliance and is used to manage and trade RECs.
To meet its renewable requirement, New Ulm Public Utilities acquires RECs through Heartland, whose resource mix includes wind energy from the Wessington Springs Wind Energy Center, a 51-megawatt (MW) wind farm in Jerauld County, South Dakota.
New Ulm currently receives 5.5 MW of wind energy around the clock from Heartland. Of the 167,000 MWh of energy New Ulm purchases from Heartland, about 29 percent, or 48,000 MWh is from wind energy, meaning that New Ulm acquires 48,000 RECs each year. New Ulm’s renewable energy purchases give the public power utility more wind energy than it needs to meet the state’s requirement.
In addition to providing wind energy to New Ulm Public Utilities, Heartland helps administer New Ulm’s RECs through M-RETs by maintaining a separate New Ulm holding account under Heartland’s M-RETS account.
As demand for RECs rose over the past year, pushing prices higher, Heartland approached New Ulm about selling its excess RECs. Heartland marketed New Ulm’s surplus RECs and sold them for a net price of $5.04 each, totaling over $317,000.
“Heartland continuously monitors the REC market,” Nate Jones, Heartland’s chief operations officer, said in a statement. “Like any market, the recent increase in demand for RECs has driven the price up. That proved beneficial as New Ulm had excess certificates to sell. We are happy to provide this service on their behalf.”
Heartland provides wholesale electric energy to 29 cities and municipal electric systems in South Dakota, Minnesota, Iowa and Nebraska. It also provides energy solutions to six public institutions in South Dakota and has a unit contingent contract with North Iowa Municipal Electric Cooperative Association.
CPS Energy Signs MOU To Deploy Used EV Batteries For Storage
September 21, 2021
by Peter Maloney
APPA News
September 21, 2021
CPS Energy in San Antonio, Texas, has signed a memorandum of understanding (MOU) to test recycled electric vehicle batteries to store energy produced by solar panels.
Under the MOU, signed with OCI Solar Power and Hyundai Motor Group, the parties aim to install an energy storage system. by September 2022. The storage system was developed by Hyundai, which is also providing the used, or “second life,” batteries at no cost. OCI Solar Power will procure some of the storage system components and supervise construction. CPS Energy will operate the storage system. All the partners will share data from the project.
After about seven or 10 years of use, a lithium-ion battery is no longer suitable to power an electric vehicle, but the battery still has enough capacity to be used in a stationary storage application.
Stationary storage powered by used electric vehicle batteries could exceed 200 gigawatt-hours (GWh) by 2030, according to a 2019 analysis by McKinsey & Co.
“We are taking a very important step in advancing our technology in regards to battery storage, thanks to this new collaboration with OCI Solar Power and the Hyundai Motor Group,” Fred Bonewell, chief operating officer at CPS Energy, said in a statement. “Evaluating these innovative technologies is key to discovering the next firming capacity that would be needed to replace fossil fuels.”
CPS Energy already has a 10 megawatt (MW), 1 hour duration battery storage system it installed about two years ago as part of a 5 MW solar facility. The $16.3 million project was done in partnership with the Southwest Research Institute, which provided the land.
The project aims to explore the potential for using batteries to shift solar power output to times when it is most needed on the grid. The solar-plus-storage project was also supported by a grant from the Texas Commission on Environmental Quality.
At 500 kilowatts (kW), the newly announced project using second life batteries will be much smaller than the solar-storage project. And while it may connect to a CPS solar project eventually, the scope of the new project will likely be wider than solar shifting.
“We are calling it a small scale limited deployment project,” Jonathan Tijerina, senior director of business and economic development at CPS Energy, said. The battery system will likely do “a little bit of everything. We’ll try a lot of different scenarios,” he said, adding that the MOU is still in the early stages and one of the next steps will be to finalize the use cases for the new battery system.
The MOU will also evaluate the recycled batteries over the three to five year life of the project to assess how long the batteries can perform.
Late last year, CPS Energy issued a request for proposals to add up to 900 megawatts (MW) of solar, 50 MW of energy storage and 500 MW of firming capacity as part of its FlexPOWER Bundle initiative designed to replace some aging generation capacity and introduce new technologies as firming capacity to help ensure energy reliability for San Antonio.
The FlexPOWER program is part of CPS Energy’s broader Flexible Path resource plan that aims to move the San Antonio area to a decarbonized future by 2050 or sooner. The new second life battery project fits within the framework of CPS Energy’s Flexible Path plan, Tijerina said.
As of October 2020, CPS Energy had over 500 MW of solar power and more than 1,000 MW of wind power.
TVA Launches Inaugural Green Bond Offering, Sets Interest Rate Record
September 21, 2021
by Paul Ciampoli
APPA News Director
September 21, 2021
The Tennessee Valley Authority (TVA) announced and priced a $500 million offering of 10-year maturity green bonds on Sept. 13, its first offering of a sustainability-focused financial instrument.
Based on TVA’s recently released Sustainable Financing Framework, the bonds will fund ongoing capital investments that build on TVA’s environment, social and governance successes and support meeting the goals of TVA’s Strategic Intent and Guiding Principles endorsed by the TVA Board of Directors in May 2021, TVA said.
A key intent of that document is to aggressively move TVA toward a sustainable, net-zero carbon energy future by 2050 while maintaining low costs and reliability, TVA noted.
“TVA’s financial position has strengthened over the past decade, and we are continuing our disciplined financial approach as we invest in the energy system of the future,” said John Thomas, TVA Chief Financial & Strategy Officer, in a statement. “Low cost financing for our strategic capital investments will contribute to keeping energy rates as low as feasible even as we make progress toward our net-zero carbon aspirational goal.”
The bonds carry a coupon interest rate of 1.500%, which sets a record for the lowest rate ever achieved by TVA on a 10-year financing. TVA’s previous record on a 10-year maturity was set in 2012, with a rate of 1.875%. The record low rate on the bonds will save TVA over $15 million in annual interest expense compared to bonds that matured earlier in 2021.
Proceeds from the sale will be used to fund TVA’s upcoming significant capital investments for increased renewable energy generation, energy storage, transmission system upgrades and development of advanced clean energy technologies.
A potential TVA solar project in northern Alabama and a potential TVA energy storage project in eastern Tennessee — both still undergoing detailed environmental reviews — are two possible uses of the funding.
As part of the green bond format, TVA expects to report on the allocations of net proceeds of the bonds annually until proceeds are fully allocated.
“TVA’s first green bond is a milestone for our financing program,” said Tammy Wilson, TVA Treasurer and Chief Risk Officer. The record-setting transaction “demonstrates that the financial community is focused on investments in cleaner energy, and supportive of TVA’s sustainability goals.”
TVA’s green bond offering drew over $2 billion in initial orders from a variety of investors, including money managers, state governments, insurance companies, and others.
Bank of America Securities served as Green Structuring Agent for the transaction, and joint book-running manager.
Barclays, Morgan Stanley, RBC Capital Markets, and TD Securities also served as joint book-running managers for the transaction.
The new bonds will mature on Sept. 15, 2031 and are not subject to redemption prior to maturity. Interest will be paid semi-annually each March 15 and Sept. 15.
Application has been made to list the bonds on the New York Stock Exchange. The bonds will be issued, maintained and transferred through the book-entry system of the Federal Reserve Banks.
TVA said that the terms of the bonds are consistent with TVA’s Sustainable Financing Framework. The framework outlines the categories of strategic capital projects where the proceeds may be allocated, including renewables, energy storage, energy efficiency, transmission investments that support TVA’s clean energy goals, and research and development expenditures related to other categories identified in the framework.
TVA obtained a second-party opinion on its framework from global analytical firm Sustainalytics, which concluded that TVA’s Sustainable Financing Framework is credible, impactful and aligned with relevant sustainability and green bond standards and principles.
The Sustainalytics opinion and other details can be accessed from the ESG Information for Investors section of TVA’s Investor Relations website at www.tva.com/investors or directly by clicking here.
Salt River Project Brings 25-MW Battery System Online In Peoria, Ariz.
September 21, 2021
by Peter Maloney
APPA News
September 21, 2021
Salt River Project (SRP) has brought a 25-megawatt (MW), four-hour duration battery storage facility into operation at its Bolster substation next to its Agua Fria power plant in Peoria, Arizona.
The public power utility plans to charge the batteries at night when power prices are less expensive and discharge them during periods of peak energy demand.
“Battery storage is an extremely important and growing component of SRP’s 2035 Sustainability Goals to reduce our carbon footprint,” Kelly Barr, SRP’s chief strategy, corporate services and sustainability executive, said in a statement. “The Bolster Substation Battery System adds to our already considerable investment in battery storage and further allows us to offset carbon-emitting resources by storing energy and providing it to our customers when they need it most.”
The battery system consists of a series of Tesla Megapacks connected directly to SRP’s energy grid and is the largest stand-alone battery storage system in Arizona. SRP said the battery system’s renewable-charging capability will increase over time as it continues to add more solar energy resources to its grid.
This summer SRP announced an expanded commitment to add 2,025 MW of utility-scale solar energy by 2025.
Following that announcement, SRP in August announced three new solar plants that together will be capable of delivering 500 MW. Facebook will be the largest customer of the new facilities, taking 450 MW to support its newly announced data center in Mesa, Ariz., and to help meet the company’s 100 percent renewable energy commitments.
SRP recently contracted for the output from the Sonoran Energy Center, which would be the largest solar-charged battery project in Arizona and give SRP one of the largest commitments to energy storage in the nation. The utility has also contracted for the approximately 88-MW Storey solar and storage project to be built south of Coolidge. Both projects are scheduled to become operational in June 2023.
In addition to the new Bolster substation storage project, SRP receives power and collects data from two pilot battery storage projects: the Pinal Central Solar Energy Center, a 20 MW, integrated solar energy and battery storage plant in Casa Grande, and the Dorman battery storage system a 10 MW, 40 megawatt-hour stand-alone battery storage system in Chandler.
Sean Worthington Named New General Manager of Washington State’s Clallam PUD
September 20, 2021
by Vanessa Nikolic
APPA News
September 20, 2021
Clallam County Public Utility District (PUD) No. 1 in Washington State recently announced that Sean Worthington has been selected as the PUD’s next general manager upon the retirement of current general manager, Doug Nass.
Worthington is currently the finance manager and treasurer and has served the PUD for eight years.
The PUD decided it was best to select an internal candidate that has familiarity with local issues such as Washington State’s Clean Energy Transformation Act, as well as existing relationships with regional utility organizations.
Nass will retire in January of next year. Worthington will assume his new role shortly after.
Founded in 1940, Clallam PUD is a not-for-profit electric utility that serves over 30,000 customers in Clallam County, Washington. The PUD has 145 employees.
Groups Urge Treasury Department To Offer Guidance On COVID Relief Utility Assistance Taxation
September 20, 2021
by Paul Ciampoli
APPA News Director
September 20, 2021
The American Public Power Association (APPA) has joined with 16 other organizations in asking the Department of Treasury to issue guidance clarifying that residential utility assistance funded through the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) is not includable in individual income.
Treasury has issued similar guidance relating the Emergency Rental Assistance Program but has yet to do so for CSLFRF.
In a Sept. 15, 2021, letter organized by APPA and sent to Treasury’s office of the Undersecretary for Domestic Finance, the groups said they were writing in strong support of allowing utility assistance to households or populations facing negative economic impacts due to COVID-19 as an eligible use of CSLFRF as provided under Treasury’s Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule.
“There is a question as to whether such assistance to residential households and other non-business utility customers is includable in income,” APPA and the other groups noted. “As a result, households receiving such assistance must consider themselves at risk of additional tax liability and/or a decrease in income-based benefits, such as the Earned Income Tax Credit.”
The groups said that this question is also of concern to agencies, departments, and utilities implementing such assistance programs because they would be required to report this assistance as income to the Internal Revenue Service.
While the Feb. 1, 2022 deadline for filing such reports “seems distant, program managers must start making decisions on meeting such requirements now,” the letter pointed out.
“Finally, this needlessly raises complicated tax administration issues, such as the allocation of the value of assistance to multi-family households and the issuance of information returns to customers without, or without a known, Social Security or taxpayer information number,” the groups went on to say.
The groups believe that the Internal Revenue Code already indicates that disaster assistance, such as that provided under CSLFRF, is not includable in income. However, guidance mirroring that provided for the Emergency Rental Assistance Program at: https://www.irs.gov/newsroom/emergency–rental–assistancefrequently–asked–questions would provide needed assurances to program beneficiaries and program managers, the letter said.
LES Proposed Rate Decrease Would Mark Fifth Straight Year Without Rate Hike
September 19, 2021
by Paul Ciampoli
APPA News Director
September 19, 2021
The Lincoln Electric System (LES) Administrative Board’s Budget and Rates Committee recommended a systemwide decrease to retail electric rates in the 2022 budget and rates proposal during LES’ Administrative Board meeting Sept. 17. This would mark the fifth consecutive year without a rate increase for the Nebraska public power utility.
The rate decrease proposed for 2022 is about 1% systemwide, though most retail rate classes will see little to no change in their rate. Some residential customers may see minor changes to their monthly bills due to continued realignment of energy and facilities charges. Some large customers may see a decrease based on changes in LES cost to serve those customer classes.
The total proposed 2022 budget of $293.9 million allots $247.7 million for operating costs and the remaining $46.2 million for capital projects. This proposed budget is $12.2 million less in capital projects and $5.7 million less in operating costs than the 2021 budget.
Reductions in the 2022 budget compared to 2021 are primarily due to reductions in power costs and depreciation. In addition, the capital budget is lower following completion of the LES Operations Center.
The LES Administrative Board will take action on the 2022 budget and rates at its Oct. 15 meeting, after which it will be submitted to the Lincoln City Council for review.
Construction Set To Begin On Virgin Islands Water and Power Authority Undergrounding Project
September 19, 2021
by Paul Ciampoli
APPA News Director
September 19, 2021
Construction is set to begin this week on the first electrical underground project in St. Croix, Virgin Islands, the Virgin Islands Water and Power Authority said on Sept. 17.
Undergrounding of equipment in and around the Wilfred “Bomba” Allick Port and Transshipment Center at Krause Lagoon is a $2.5 million federally funded project with financial resources provided by the Federal Emergency Management Agency and the U.S. Department of Housing and Urban Development. J. Benton Construction Inc. is the contractor on the project, which aims to provide critical facilities with electrical equipment that is less vulnerable to hurricanes and windstorms. The work entails trenching and conduit installation.
“The undergrounding of facilities in critical areas is key during storm restoration and other emergencies,” said Virgin Islands Water and Power Authority Interim Executive Director Noel Hodge said the Authority is excited about beginning construction on this very important mitigation project on St. Croix. Interim Executive Director Noel Hodge. “The ports are critical to the movement of materials and supplies into the territory after a disaster and providing facilities that can lead to more efficient power restoration, bodes well for the future.”
Hodge noted that in April, Virgin Islands Water and Power Authority broke ground on this and two similar underground electrical projects, in Golden Grove and Midland, “and we are now set to proceed with the start of construction on Tuesday.”
As with similar electrical undergrounding across the territory, the Container Port project will replace existing overhead electrical lines and equipment with underground equipment. “This lessens damage from future hurricanes and windstorms and also ensures more efficient service restoration in the aftermath of a natural disaster,” Hodge said.
Similar electrical undergrounding projects are slated for St. Thomas and St. John as part of a larger strategic transformation of the territory’s electrical and water utility.
OPPD Promotes Troy Via To Newly Created Position of COO, Vice President For Utility Operations
September 19, 2021
by Paul Ciampoli
APPA News Director
September 19, 2021
The Omaha Public Power District (OPPD) Board of Directors recently promoted Troy Via to the newly created position of Chief Operating Officer and Vice President for Utility Operations, effective Oct. 31.
Via is currently Vice President for Energy Delivery at Nebraska public power utility OPPD, having served in that role for the past three years.
He joined OPPD in September of 2013 as the Director of Energy Marketing and Trading. During his five-year tenure in that role, Via played a lead role in OPPD’s integration into the Southwest Power Pool and the District’s entry into the day-ahead market.
He actively engaged in enterprise risk management, including the development of OPPD’s derivative strategy. He has contributed significantly to economic development and played a key role on OPPD’s resource planning team. In addition, Via led the corporate Integrated Energy Marketplace strategic initiative.
In his new position, Via will provide overall leadership, strategic planning and long-term objectives for OPPD’s energy production and energy delivery groups. He will also oversee the ongoing decommissioning of the Fort Calhoun Station, a nuclear power plant that was shut down permanently on October 24, 2016.
The role will oversee the main energy operational capabilities to ensure OPPD’s continued commitment to affordable, reliable, and environmentally sensitive energy services.
Prior to joining OPPD, Via held progressively responsible positions with Dominion Resources and Aquila Energy.
He holds a bachelor of Business Administration degree with a focus in Finance from the University of Central Missouri.
WAPA Desert Southwest Region Agrees To Participate In CAISO’s Real-Time Energy Market
September 19, 2021
by APPA News
September 19, 2021
The California Independent System Operator (CAISO) on Sept. 15 signed an implementation agreement with the Western Area Power Administration Desert Southwest (WAPA DSW) region to participate in CAISO’s real-time energy market in 2023.
Operated by CAISO, the Western Energy Imbalance Market (EIM) footprint currently includes portions of Arizona, California, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming, and extends to the border with Canada.
WAPA DSW sells federal hydroelectric power and provides transmission service to nearly 70 municipalities, cooperatives, Native American tribes, federal and state agencies, and irrigation districts. One of those cooperatives, the Arizona Electric Power Cooperative (AEPCO), is comprised of six electric distribution cooperatives and five public power entities that combined serve more than 420,000 residential, agriculture, business and industrial customers.
The agreement applies to WAPA’s DSW region and Western Area Lower Colorado Balancing Authority. The latter includes generation resources in the Boulder Canyon and Parker-Davis projects (PDP) and the transmission systems of the Central Arizona Project, PDP and the Pacific-Northwest-Pacific Southwest Intertie Project.
In addition to the AEPCO sub-Balancing Authority area, participating Balancing Authority entities include the Central Arizona Water Conservation District, Southwest Public Power Agency and other DSW customers in Arizona, southern California and southern Nevada.
By 2023, the Western EIM will have 22 entities representing 84%of the demand for electricity in the Western Electric Coordinating Council (WECC), a non-profit corporation that works to advance a reliable electric system in 14 Western states, Northern Baja Mexico, and two Canadian provinces.
WAPA annually markets and transmits more than 25,000 gigawatt-hours of renewable power from 57 federal hydroelectric powerplants owned and operated by the Bureau of Reclamation, U.S. Army Corps of Engineers and International Boundary and Water Commission in 15 western and central states. WAPA also owns, operates and maintains a more than 17,000 circuit-mile high-voltage transmission system in the West. It is part of the Department of Energy.