White House Report Assesses Impact Of Cryptocurrencies On The Electric Grid
September 12, 2022
by Peter Maloney
APPA News
September 12, 2022
A new White House report recommends government agencies should take steps to minimize the environmental impact associated with cryptocurrency mining.
The report, Climate and Energy Implications of Crypto-Assets in the United States, by the White House Office of Science and Technology Policy, calls for “the Environmental Protection Agency (EPA), the Department of Energy (DOE), and other federal agencies to provide technical assistance and initiate a collaborative process with states, communities, the crypto-asset industry, and others to develop effective, evidence-based environmental performance standards for the responsible design, development, and use of environmentally responsible crypto-asset technologies.”
Those steps should include standards for very low energy intensities, low water usage, low noise generation, clean energy usage by operators, and standards that strengthen over time for additional carbon dioxide-free generation.
If those measures prove to be ineffective, the Biden administration “should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining,” the report said.
The report also recommends the DOE work with the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC) to conduct reliability assessments of current and projected crypto-asset mining operations on electricity system reliability and adequacy and, if needed, develop or update reliability standards to ensure system reliability under the growth of crypto-asset mining.
In addition, the Energy Information Administration (EIA) and other federal agencies should consider collecting and analyzing information from crypto-asset miners and electric utilities to enable evidence-based decisions on the energy and climate implications of crypto-assets, the report said.
And the White House Office of Science and Technology Policy “could establish a National Science and Technology Council subcommittee to coordinate with other relevant agencies to assess the energy use of major crypto-assets,” the report said.
The United States is estimated to host about one-third of global crypto-asset operations, which currently consume about 0.9 percent to 1.7 percent of total U.S. electricity usage, a level similar to all home computers or all residential lighting in the United States, the report noted.
U.S. crypto-asset activity is estimated to result in approximately 25 to 50 metric tons of carbon dioxide per year or 0.4 percent to 0.8 percent of total U.S. greenhouse gas emissions, a level similar to emissions from diesel fuel used in railroads in the United States.
While there are a variety of cryptocurrencies, two are estimated to be responsible for most electricity usage. Bitcoin is estimated to account for 60 percent to 77 percent of total global crypto-asset electricity usage, and Ethereum is estimated to account for 20 percent to 39 percent of electricity usage.
Both Bitcoin and Ethereum use proof-of-work consensus mechanisms that are designed to require more computing power as more entities attempt to validate transactions in exchange for digital “coins” to help disincentivize malicious actors from attacking the network.
An alternative consensus mechanism, proof-of-stake, uses less energy but it is not as widely used. Ethereum, however, has promised to launch Ethereum 2.0, which would use a proof-of-stake consensus mechanism, the report said.
There are other potential uses for blockchain technologies, such as keeping track of environmental attributes such as renewable energy credits (RECs) or managing distributed energy resources (DERs), but the benefits of using those technologies would need to outweigh the additional emissions and other environmental externalities that result from their use, the report said.
MISO Now Includes Energy Storage As An Eligible Resources In Its Market
September 12, 2022
by Peter Maloney
APPA News
September 12, 2022
The Midcontinent Independent System Operator (MISO) recently included energy storage in its market portfolio for the first time.
The inclusion of Electric Storages Resources (ESRs) enables resources, such as batteries, pumped storage facilities and compressed air energy storage, to participate in MISO’s Energy and Operating Reserves Markets as supply or demand.
ESRs are flexible resources that can help reduce peak demands, manage congestion and provide backup power for major disruptions because they can respond quickly and switch between injection (discharge) and withdrawal (charge) modes, MISO said.
The near-term benefits of the new ESR model are modest due to the small volume of storage resources. However, the new model positions MISO ahead of the increased storage participation anticipated with higher penetration of renewables and distributed energy resources over the next five to 10 years, the ISO said.
In 2021, applications of energy storage projects surpassed wind power in MISO’s interconnection queue for the first time. Solar projects were the single highest category with nearly 44 gigawatts (GW) of projects, followed by about 12 GW of storage projects and about 9.1 GW of wind projects.
The Federal Energy Regulatory Commission (FERC) in 2016 issued a notice of proposed rulemaking that would require regional transmission organizations and independent system operators to revise their wholesale power tariffs to better remove barriers to RTO-run wholesale market participation by energy storage resources such as large battery systems.
In 2018, FERC, in Order 841, voted to remove barriers to the participation of electric storage resources in the capacity, energy and ancillary services markets operated by regional transmission organizations and independent system operators.
In October 2019, FERC approved compliance filings by the PJM Interconnection and the Southwest Power Pool in response to a landmark 2018 FERC order that adopted rules aimed at removing barriers to the participation of ESRs in wholesale power markets.
Adrienne Lotto To Become APPA’s New Senior VP of Grid Security, Technical and Operations Services
September 10, 2022
by Paul Ciampoli
APPA News Director
September 10, 2022
Adrienne Lotto, Vice President and Chief Risk and Resilience Officer at the New York Power Authority (NYPA), will join the American Public Power Association (APPA) as APPA’s new Senior Vice President of Grid Security, Technical and Operations Services, starting on October 1.
“As we continue to enhance APPA’s existing portfolio of technical and operations services and programs and national mutual aid response as well as to build out new offerings to our members under our DOE cooperative agreements, Adrienne will bring her considerable energy, talent and intellect to help the excellent T&O team undertake this important work,” said Joy Ditto, President and CEO of APPA.
“Adrienne will also bring to bear her strategic abilities and relationships to help position APPA and public power vis-à-vis federal agencies such as DOE, the Department of Homeland Security, and the White House,” Ditto said.
“Public power plays a vital role in the lives of millions of Americans. I am grateful for the opportunity to join the APPA team, to partner with public power utilities and the federal government to ensure the sector remains secure and resilient into the future,” said Lotto.
“Adrienne has been an asset to the New York Power Authority, leading our risk management strategies to ensure NYPA remains resilient in the face of disruptive events like COVID19, supply chain disruptions, and current and future potential impacts of climate on our critical infrastructure facilities,” said Justin E. Driscoll, NYPA’s interim president and CEO. “NYPA has benefitted from a strong partnership with APPA and we know Adrienne will be key in leading resilience strategies, strengthening the industries’ mutual aid response and informing research and development for the grid of the future. “
Lotto joined NYPA in October 2019 as Senior Director for Energy Security and Resilience Programs, a role that she served in until January 2021 when she was named as NYPA’s Chief Risk and Resilience Officer.
In her current role at NYPA, Lotto sets NYPA’s strategic risk management and resilience vision and implements, oversees and monitors all risk management and resilience activities of NYPA. She also determines NYPA’s risk tolerance in alignment with the risk appetite set by the Board of Trustees and the Executive Risk and Resilience Management Committee.
Lotto developed NYPA’s first emerging threats program to mitigate NYPA’s key operational processes and functions from external threats and has regularly presented to NYPA’s Board of Trustees and executives on risk trends by developing and implementing key risk indicators and other metrics for a going-forward strategic view of risk.
While at NYPA, she has also partnered with the Authority’s research and development team to ensure projects mitigate cyber security and supply chain risk to enhance resilience and clean energy.
In addition, she worked strategically with federal agencies including the Department of Homeland Security and Department of Energy and has worked to strengthen public-private partnerships with New York State and trade groups and associations including APPA, the Electric Power Research Institute and the Large Public Power Council, among others.
Prior to NYPA, Lotto worked at the U.S. Department of Energy (DOE). From March 2018 to October 2018, she served as Chief of Staff in the DOE’s Office of Electricity and from March 2018 to October 2019 she served as Deputy Assistant Secretary of Infrastructure Security and Energy Restoration in the DOE’s Office of Cybersecurity, Energy Security and Emergency Response.
From July 2010 to March 2018, she served as Senior Deputy County Attorney for Risk and Compliance for the County of Putnam, N.Y.
Lotto received a Juris Doctor from the Pace University School of Law in New York and a Bachelor of Science from the State University of New York at Albany.
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.