Western Area Power Administration Desert Southwest Region Joins Western Energy Imbalance Market
April 10, 2023
by Paul Ciampoli
APPA News Director
April 10, 2023
The Western Area Power Administration Desert Southwest region, Texas investor-owned utility El Paso Electric and AVANGRID on April 5 formally began participating in the California Independent System Operator’s Western Energy Imbalance Market.
WEIM now represents nearly 80% of the demand for electricity in the Western interconnection.
Click here for additional details on other WEIM members, which include a number of public power entities.
As the WEIM has continued to grow, CAISO has been moving toward the launch of the Extended Day-Ahead Market, an initiative that was jointly approved in February by the ISO Board of Governors and the WEIM Governing Body.
When it goes live, the EDAM will offer WEIM partners the opportunity to participate in the day-ahead market, where the majority of energy transactions occur and even greater benefits are expected.
New Report Says U.S. is on Track to Close Half of Coal-Fired Capacity by 2026
April 10, 2023
by Paul Ciampoli
APPA News Director
April 10, 2023
In 2026, half of the coal-fired generation capacity in the U.S. will have closed since it peaked in 2011, according to a new report from the Institute for Energy Economics and Financial Analysis.
This is now the earliest date for this milestone since IEEFA began closely tracking coal-plant retirements, and it has moved up despite high prices for natural gas and construction delays for renewables largely caused by pandemic-induced supply disruptions.
By another measure — actual electricity generation — the U.S. has cut coal use even faster, producing less than 50% of coal’s 2011 power level in both 2020 and 2022.
Based on current announcements from utilities, coal capacity will fall to 159 gigawatts by the end of 2026, down from 318 GW in 2011, IEEFA said.
With more than 80 GW of power plants set to stop using coal between 2023 and the end of 2030 — a figure that includes mostly closures, with a limited number of conversions from coal to gas — total coal-fired capacity will fall to just 116 GW by 2030.
“And actual coal use is likely to continue falling even faster, as aging units face higher operation and maintenance costs, and utilities increasingly favor the responsiveness of gas generation and battery storage to complement the variable output from solar and wind, both of which continue to be built at a rapid clip,” it said.
By the end of this decade, more than 200 GW of the 318 GW of peak coal-fired power will have been retired, based on current announcements. By then, coal consumption by the power sector could fall to just half of this year’s expected level, to about 200 million tons, IEEFA estimates.
Click here for the report.
House Members Urge DOE to Withdraw Conservation Standards Rule for Distribution Transformers
April 10, 2023
by Paul Ciampoli
APPA News Director
April 10, 2023
More than 60 House members on April 3 urged Secretary of Energy Jennifer Granholm to withdraw the Department of Energy’s proposed rule to increase conservation standards for distribution transformers.
In December, DOE announced it was proposing new energy efficiency standards for distribution transformers.
Since 2021, electric utilities have been communicating their troubles with procurement of distribution transformers to DOE, the letter noted.
“The lead time for procurement of a distribution transformer can take 16 months or longer. This lead time is a significant problem for electric utilities seeking to bolster the reliability and resilience of the grid and other critical infrastructure, particularly against severe storms and other hazardous weather events,” the House members said in the letter.
“Furthermore, prolonged lead times and the lack of availability have made it difficult for utilities to provide transformers to homebuilders, city planners, and economic developers to get power to end users in new development areas,” the lawmakers said.
“There is no statutory requirement for DOE to issue an increase in efficiency standard. Despite this fact, DOE continues to push forward with a rulemaking that will only increase the energy efficiency of distribution transformers by a fraction of a percentage point,” they went on to say.
“The electric power industry is in no position to undertake this level of regulatory overhaul. Outputs fell far below the needs of the market before the proposed rule was noticed.”
A new efficiency regulation “that completely overhauls the manufacturing process will further exacerbate the significant delays in delivering distribution transformers. Until the industry receives the regulatory certainty it needs, the production backlog will only worsen,” the lawmakers said in urging Granholm to immediately withdraw the proposed rule.
Proposed Efficiency Standards for Distribution Transformers Would Worsen Shortages: APPA
The efficiency standards for distribution transformers proposed by DOE would worsen current distribution transformer supply shortages and, to the extent that they are even feasible, would impose significant costs on consumers, the American Public Power Association said.
The electric industry is currently experiencing a critical shortage of distribution transformers, “and the efficiency standards included in the NOPR would likely exacerbate a supply shortfall that has already reached crisis levels, threatening electric reliability, economic development, and the ongoing transition to lower-emitting generating resources,” APPA argued in its March 27 comments to DOE regarding the NOPR.
FEMA Approves First Phase of Puerto Rico Electric Power Authority Microgrid Project
April 10, 2023
by Paul Ciampoli
APPA News Director
April 10, 2023
The Federal Emergency Management Agency on March 29 approved the first phase of the Puerto Rico Electric Power Authority’s project to design a new solar-powered microgrid system for the island municipalities of Vieques and Culebra, located east of the main island.
The total cost of the project is nearly $97 million across two phases and will be fully funded by FEMA’s Hazard Mitigation Grant Program.
The microgrid, which will be able to function independently from the main grid, includes a 12.5-megawatt solar-based system for Vieques and another 3-megawatt system for Culebra. The grids aim to increase power generation capabilities and leverage renewable energy through solar panels, making the project more sustainable, FEMA said.
The first phase of this project, which accounts for over $10.2 million of the total project cost, will consist of architectural and engineering design services, a geotechnical study and an electrical load assessment, among other preconstruction activities.
FEMA’s HMGP program provides funding to state, local, tribal and territorial governments so they can develop hazard mitigation plans and rebuild in a way that reduces, or mitigates, future disaster losses in their communities. Funds for projects under this program are obligated in phases as preliminary steps are completed that may lead to the approval of additional funding obligations.
Puerto Rico has access to roughly $4 billion in HMGP funding, the maximum allocated by Congress. To date, FEMA has allocated nearly $3 billion under this program in addition to over $29 billion under its Public Assistance program to help the island rebuild after Hurricane María.
CPS Energy President and CEO Rudy Garza Raises Supply Chain Concerns Tied to DERs
April 9, 2023
by Paul Ciampoli
APPA News Director
April 9, 2023
The growth in the development of technologies such as solar farms or battery storage will face some limitations due to supply chain constraints, Rudy Garza, President and CEO of San Antonio, Texas-based public power utility CPS Energy said on March 31.
He made his comments during a recent U.S. Energy Association briefing related to challenges facing distributed energy resources and virtual power plants.
“Whether it’s solar farms or battery storage or whatever the case might be, I think the growth in the development of these technologies will absolutely face some limitations from a supply chain standpoint because I don’t think our supply chain issues will go away for the next probably two to three years,” he said.
Garza noted that CPS Energy has been “talking about virtual power plants through our Save for Tomorrow energy plan, which is our energy efficiency and conservation program, for ten years.”
He noted that while VPP has become “a trendy topic across the country,” it is something “we’ve been involved in for quite some time now.”
Virtual power plants, generally considered a connected aggregation of distributed energy resource technologies, offer deeper integration of renewables and demand flexibility, the Department of Energy notes on its website.
“We know that we’ve got three hundred megawatts – give or take – of distributed energy resources in San Antonio right now. We know individually that they’re placed in locations where they’re not going to cause issues on our distribution grid,” Garza said. “But if that became three thousand megawatts, obviously we’d be in a much different situation.”
He noted that “we’re actually working with some technology partners to figure out how to model the distribution planning work that we have to do to really create that future energy bank that will exist as market signals are being sent, as rates are developed that monetize distributed resources in a way that looks like a central station.”
Garza added that “our operations centers will look much different because we’ll need screens that will show us where the solar is, where the batteries are, where the demand response is.”
In January, the Board of Trustees for CPS Energy voted to approve a generation planning portfolio that includes a blend of gas, solar, wind and energy storage.
Public Power Utilities Recognized by APPA for Reliability Efforts with Certificates of Excellence
April 5, 2023
by Paul Ciampoli
APPA News Director
April 5, 2023
The American Public Power Association has honored 219 public power utilities with a “Certificate of Excellence in Reliability” for reliable performance in 2022.
Utilities that are subscribers to APPA’s eReliability Tracker service are eligible to earn these certificates. To earn a certificate, a utility’s 2022 System Average Interruption Duration Index must fall in the top quartile of all utilities’ SAIDI numbers averaged from the past five years based on Energy Information Administration Form 861 survey data.
The certificates recognize utilities that have provided exceptionally reliable service and power to their communities.
“It’s encouraging to see year after year that public power’s track record for providing highly reliable service is backed up by data,” said APPA Director of Research and Development Paul Zummo. “These utilities are the best of the best when it comes to keeping the lights on. And these communities should be proud of their local power providers and appreciate the hard work that goes into earning this recognition.”
When looking at eReliability Tracker subscribers’ 2022 outage data, 91% of utilities that verified their 2022 outage data had a 2022 SAIDI that was below the average national SAIDI for 2017-2021 (according to EIA data). The data also includes investor-owned utilities and rural electric cooperatives.
This demonstrates that most public power utilities are above average in reliability when compared to all U.S. providers.
The list of winners is available at PublicPower.org.
Advanced Nuclear Reactors Could Add Jobs to Regions with Coal Retirements
April 5, 2023
by Peter Maloney
APPA News
April 5, 2023
Advanced nuclear technology, particularly small modular reactors, could bring a net increase in local jobs to communities hard hit by the retirement of coal plants, according to a report from the Bipartisan Policy Center.
According to the report, Can Advanced Nuclear Repower Coal Country?, the coal power plant industry lost 12 percent of its workforce between 2019 and 2022, and another one quarter of the nation’s coal plants are scheduled to retire by 2029. The report also noted that 77 percent of coal plant jobs are transferable to nuclear plants with no new workforce licensing requirements.
The report estimated there could be a net increase of more than 650 jobs in regions where small modular reactions replace retired coal plants. In addition, workers at nuclear plants earn higher wages compared with workers at coal plants, which could provide a boost to local tax revenues.
The report’s authors highlight that several recent developments lend support to a coal-to-nuclear transition, specifically the Nuclear Regulatory Commission’s issuance of a final rule certifying NuScale Power’s small modular reactor design.
In addition, they noted the Inflation Reduction Act includes tax credits that make advanced nuclear projects and new energy investment in coal communities more attractive to investors, and the Fission for the Future Act, included in the bipartisan CHIPS and Science Act, authorizes $800 million to support coal-to-nuclear projects. And some states have overturned bans on new nuclear projects, including Montana, West Virginia, and Connecticut.
By design small modular reactors have many characteristics that make them well suited to replace coal plants, for instance, their modular design allows for flexible electrical output and gives them the ability to match the output of a retiring coal plant, the report’s authors said.
Using a retired coal site for an advanced nuclear plant also has cost advantages, the report said. Small modular reactors can reuse coal plant transmission infrastructure, reducing construction cost and avoiding some permitting challenges. A retired coal plant’s electrical equipment and steam-cycle components, as well as its transmission and administrative buildings, can be repurposed, cutting construction cost by 17 to 35 percent, the report said.
There are, however, challenges that would have to be overcome to accomplish a nuclear-to-coal transition, the report’s authors said. For instance, coal plant retirement and small modular reactor operation dates would have to be aligned for a smooth workforce transition and to prevent existing transmission and water infrastructure from being utilized by another project.
Cleveland Public Power Collaborating with Port of Cleveland on Modernization Project
April 5, 2023
by Paul Ciampoli
APPA News Director
April 5, 2023
Cleveland Public Power plans to collaborate with the Cleveland-Cuyahoga Port Authority on the port’s electrification and warehouse modernization project.
As the international gateway for cargo entering and exiting the region via maritime transport, the Port of Cleveland handles a diverse mix of cargo primarily imported from Europe. The cargo includes specialty breakbulk cargo, such as steel coil, tin plate, and various steel shapes/plate and other specialty cargo.
Modernization of this 67-year-old facility will bring the terminal’s Warehouse A to a state of good repair, continue the implementation of the Port Authority’s Stormwater Master Plan to improve the quality of stormwater discharging into Lake Erie, and make necessary electrification investments to prepare the Terminal for its next 50 years of operation, the public power utility said.
This is a multi-phase project and CPP “will play an integral role in making necessary power upgrades to electrical feeds coming into the Terminal and establish Warehouse A as the Port’s electrical distribution hub,” the utility said.
This hub will allow the Port to provide new electrical service to the locomotive storage area in Warehouse A and the newly constructed maintenance facility.
A critical sub-element of this project is to coordinate with CPP on the future power requirements of the Port Authority’s General Cargo Terminal, which projections indicate will substantially increase as portions of the Terminal’s operations are electrified.
Western Minnesota Municipal Power Agency Board Approves Solar Plus Storage Agreement
April 5, 2023
by Paul Ciampoli
APPA News Director
April 5, 2023
The Western Minnesota Municipal Power Agency’s Board of Directors has approved a build-own-transfer agreement with US Solar for the development and construction of the Marshall Solar Plus project in Marshall, Minnesota. The action followed a recommendation by the Missouri River Energy Services Board of Directors.
The solar project will have a rated capacity of 10 megawatts and is expected to produce about 22,470 megawatt-hours of electricity annually. Marshall Solar Plus will include over 26,000 solar panels on 57 acres of land owned by WMMPA and a substation owned by Marshall Municipal Utilities.
WMMPA will also install a 5 MW battery energy storage system. WMMPA intends to have controls on the battery system to allow energy to be stored or injected into the grid based on conditions at the time.
Site-grading work has already begun and will be completed prior to construction of the project. US Solar will obtain state and local permits for the project as it develops, designs and constructs the project. US Solar was selected in part because of their substantial track record in Minnesota, having developed and completed over 85 individual projects.
WMMPA expects to submit an application to MMU in the near future with the intent to finalize an interconnection agreement. WMMPA will provide financing for the project.
WMMPA is a joint-action agency made up of MRES members in Minnesota. It has provided financing for all of the major generation and transmission facilities with which MRES serves its 61-member municipal electric systems in Iowa, Minnesota, North Dakota and South Dakota.
MRES has a power supply agreement with WMMPA obligating MRES to pay for and WMMPA to supply the entire output of WMMPA-owned facilities. MRES, in turn, has long-term power sales agreements with its members to supply them with wholesale power, energy and transmission to serve their customers.
MMU is a community-owned, not-for-profit municipal utility serving the residents and businesses of Marshall, Minnesota. MMU provides electricity and water service to over 6,500 customers, along with a variety of energy services.
APPA Highlights Impact of Treasury Department’s Energy Communities Guidance on Public Power
April 4, 2023
by Paul Ciampoli
APPA News Director
April 4, 2023
The American Public Power Association on April 4 said it appreciates the Treasury Department’s release of guidance on energy communities.
APPA said it continues to review the guidance, but key aspects appear to provide clarity and reliability where needed. In turn, the energy community provision is a key element of the Inflation Reduction Act (IRA) and could provide substantial benefits to public power utilities, which serve customers in every state (except Hawaii), as they transition to clean technologies.
In addition to extending and expanding a variety of critical energy tax incentives, the IRA created a refundable direct pay mechanism to ensure that all utilities can benefit from these incentives, including bonus credits for projects sited in energy communities.
Without such a mechanism, public power utilities and electric cooperative utilities — which both operate as non-profit, tax-exempt entities — would be effectively blocked from owning tax creditable energy projects.
These utilities collectively serve nearly 30 percent of U.S. customers, so allowing them to benefit from energy tax provisions for projects they own makes these tax incentives more effective, while also ensuring that no communities — including energy communities — are left behind.
Since the IRA’s enactment, APPA has asked that implementing guidance be clear, simple, and certain. For example, Treasury’s guidance allows a safe harbor for entities which qualify as energy communities when project construction begins. This is a step in the right direction, which APPA appreciates.
APPA said it will continue to review the guidance, “but again appreciate the work being done here by the Treasury Department, Internal Revenue Service, and Department of Energy.”
While these are draft proposed regulations, Treasury said that the regulations are effective as of April 4. Treasury did not say when it would formally introduce the proposed regulations but that stakeholders can rely on the proposed regulations until final guidance is published.
Additionally, Treasury is seeking comments regarding possible data sources for determining a community’s fossil fuel tax revenues. Comments should be submitted by May 4, 2023. At this time, Treasury is not seeking comments on other issues covered by the draft regulations.
Treasury has also launched a “mapping tool” to help communities determine whether they qualify as an energy community.
First, the map shows the census tracts and directly adjoining tracts that have had coal mine closures since 1999 or coal-fired electric generating unit retirements since 2009. These census tracts qualify as energy communities.
Second, the map shows the metropolitan statistical areas (MSAs) and non-metropolitan statistical areas (non-MSAs) that have had 0.17% or greater direct employment related to extraction, processing, transport, or storage of coal, oil, or natural gas. Annual employment rates at the county level for 2022 will be released later this month and the map will be updated to show the MSAs and non-MSAs that meet both the 0.17% employment threshold and the unemployment rate requirement.
The map does not indicate which areas might have a qualifying brownfield site, but Treasury believes that guidance alone should be sufficient for a community to make that determination.