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Governor declares correction of any billing errors tied to ERCOT as legislative emergency item

March 10, 2021

by Paul Ciampoli
APPA News Director
March 10, 2021

Texas Gov. Greg Abbott on March 9 declared the correction of any billing errors related to the Electric Reliability Council of Texas (ERCOT) as an emergency item for the current legislative session in the state.

The emergency item includes any inaccurate excessive charges and any issues regarding ancillary service prices, Abbott’s office noted.

The Public Utility Commission of Texas (PUCT) recently declined to take action in response to a report from the independent market monitor (IMM) for ERCOT that a decision by ERCOT last month resulted in $16 billion in additional costs to ERCOT’s market, of which roughly $1.5 billion was billed to load-serving entities (LSEs) to provide make-whole payments to generators for energy that was not needed or produced.

The decision in question was made by ERCOT as the grid operator grappled with extreme stress on the state power grid in the wake of an arctic blast.

Texas Lt. Governor calls for correction to $16 billion error

In related news, Texas Lt. Gov. Dan Patrick on March 8 called on the PUCT and ERCOT to correct the emergency pricing error.

Patrick said that ERCOT has a procedure for correcting pricing errors but has declined to act so far.

“According to the ERCOT Nodal Protocol Section 6.3 (6) (a), ERCOT has 30 days from the event to correct errors in pricing. Today I am calling on both the PUC and ERCOT to follow the recommendations of the IMM and correct these mistakes,” he said. “Correcting this $16 billion error will require an adjustment, but it is the right thing to do. It will ultimately benefit consumers and is one important step we can take now to begin to fix what went wrong in the storm.”

Texas House members unveil series of bills in wake of power outage hearings

Meanwhile, Texas House Speaker Dade Phelan on March 8 unveiled the first phase of House legislative reforms in the wake of recent hearings in the Texas Legislature that examined rotating outages implemented by ERCOT in February after an arctic blast hit the state.

TVA signs deal for solar-plus-storage project for Facebook

March 10, 2021

by Peter Maloney
APPA News
March 10, 2021

The Tennessee Valley Authority (TVA) on March 4 said it is partnering with Origis Energy to develop a 150-megawatt (MW) solar and 50-MW, 250-megawatt hour (MWh) battery storage facility in Lowndes County, Mississippi, to support two Facebook data centers in the Tennessee Valley.

Origis, through a long-term power purchase agreement with TVA that was signed on Facebook’s behalf, will own and operate the facility. The project, which is part of TVA’s Green Invest program, is scheduled to be complete in late 2023, pending environmental reviews.

“Our region is ready for companies who want to use renewable energy to achieve their sustainability goals,” Chris Hansen, TVA vice president of origination and renewables, said in a statement. “Green Invest is more than a renewables program; when businesses relocate here, jobs are created and people can find work – revitalizing both rural and urban communities.”

In August, TVA signed a Green Invest deal for a 70-MW solar project in Madison County, Tennessee, to support Facebook’s operations in the region. In that deal, TVA partnered with Nashville-based solar developer Silicon Ranch. The developer is funding construction of the solar facility and will own and operate the plant, which is due online in fall 2022.

In all, Facebook has announced purchases totaling 597 MW since 2018 that will be generated by solar farms linked to TVA’s grid in Alabama, Tennessee and Mississippi. The project in Lowndes County, however, is Facebook’s first renewable energy project in Mississippi and its first large energy storage project.

Through its Green Invest program, TVA matches demand for green power from large business and industrial customers with renewable projects that TVA puts together with its development partners. The utility says the program confers to commercial customers the benefits of TVA’s scale and negotiating expertise in building power projects.

The program also helps attract new businesses to the region, TVA says, citing the 250 construction jobs, as well as full time jobs for as many as five full-time operations and maintenance personnel that the Lowndes County project will create.

The Green Invest program is also available to local power companies in TVA’s territory. In January 2020, TVA announced a partnership with Nashville Electric Service and Vanderbilt University for a 35-MW solar project in Bedford County, Tennessee. Last March, TVA entered into a deal to secure 212 MW of solar power for Knoxville Utilities Board’s customers.

In February, TVA said it has increased its contracted solar power capacity by 60 percent, to 2,129 MW, since October 2020 and that it expects to add 7,000 MW to 10,000 MW of solar energy by 2040.

Energy storage deployments had a record fourth quarter

March 10, 2021

by APPA News
March 10, 2021

The United States set a new record for energy storage deployments in the fourth quarter, according to the just released U.S. Energy Storage Monitor from Wood Mackenzie and the U.S. Energy Storage Association.

A total of 2,156 megawatt-hours (MWh) of new energy storage capacity came online in fourth-quarter 2020, a 182 percent increase from third-quarter 2020, and a new quarterly record, according to the report’s authors.

Energy storage deployments also set a record in the fourth quarter in terms of power rating, that is, how much power can flow in or out of a battery at any instant.

Energy storage deployments reached 651.2 megawatts (MW), a 37 percent increase from third-quarter 2020 to fourth-quarter 2020, and 3.5 times increase from fourth-quarter 2019.

The report attributed most of the increase to two storage projects in California installed as four-hour capacity resources and totaling 400 MW.

The authors of the report also noted the prominent role front-of-the-meter (FTM) projects had in the surge in energy storage deployments. Four out of every five megawatts deployed in the fourth quarter were in front of the meter, contributing 529 MW out of the 651 MW of deployed in the quarter, they said.

Residential storage deployments also had a strong showing, with 90.1 MW installed in the fourth quarter, setting a new quarterly record and representing a 73 percent increase over the previous quarter. Residential deployments accounted for 14 percent of the storage projects deployed in the fourth quarter. The rise in residential storage deployments was driven in large part by homeowner interest in California, the report’s authors said.

The non-residential storage sector is growing more slowly, however, deploying only 76.5 MW in the fourth quarter, a 13 percent increase from the previous quarter. The relatively weaker showing of non-residential installations was partly the result of a project slowdown as a result of COVID-19 restrictions, the report said.

“The data truly speaks for itself,” Dan Finn-Foley, head of energy storage at Wood Mackenzie, said in a statement. “The US installed 3,115 MWh of storage from 2013 through 2019, a total that 2020 beat in a single year. This is the hallmark of a market beginning to accelerate exponentially, and momentum will only increase over the coming years,” he said.

For the full year, a total of 1,464 MW, 3,487 MWh of new energy storage projects came online in 2020, a 179 percent increase in megawatt terms over storage additions in 2019.

The “ability of solar-plus-storage to provide backup is increasingly driving sales even in markets without additional incentives, particularly states that suffer from regular power outages. We expect an uptick in home battery sales in Texas in the aftermath of February’s devastating outages,” Chloe Holden, Wood Mackenzie research analyst, said in a statement.

Looking ahead, the report’s authors expect the U.S. energy storage market will add five times more megawatts of storage in 2025 than was added in 2020, with FTM storage continuing to contribute between 75 percent and 85 percent of the new additions each year.

“2020 is the first year that advanced energy storage deployments surpassed gigawatt scale – a tremendous milestone on the path to our aspiration of 100 GW by 2030,” Jason Burwen, U.S. Energy Storage Association’s Interim CEO, said in a statement.

Texas House members unveil series of bills in wake of power outage hearings

March 9, 2021

by Paul Ciampoli
APPA News Director
March 9, 2021

Texas House Speaker Dade Phelan on March 8 unveiled the first phase of House legislative reforms in the wake of recent hearings in the Texas Legislature that examined rotating outages implemented by the Electric Reliability Council of Texas (ERCOT) in February after an arctic blast hit the state.

Members of the Texas House have filed or will file the following legislation:

Reforming Electric Reliability Council of Texas Leadership: HB 10 restructures the ERCOT board, replacing the unaffiliated members with members appointed by the Governor, Lt. Governor, and Speaker of the House. HB 10 also requires all board members to reside in the state of Texas and creates an additional ERCOT board member slot to represent consumer interests.

Protecting Consumers and Hardening Facilities for Extreme Weather: HB 11 requires electric transmission and generation facilities in the state to be weatherized against the spectrum of extreme weather Texas may face. Utilities will be required to reconnect service as soon as possible and prevent slower reconnections for low-income areas, rural Texas, and small communities, Phelan’s office said.

Alerting Texans During Emergencies: HB 12 creates a statewide disaster alert system administered by Texas Division of Emergency Management (TDEM) to alert Texans across the state about impending disasters and extreme weather events. The alerts will also provide targeted information on extended power outages to the state’s regions most affected. This system builds off the model used in Amber, Silver, and Blue Alert systems.

Improving Coordination During Disasters: HB 13 establishes a council composed of ERCOT, Public Utility Commission of Texas, Railroad Commission, and TDEM leaders to coordinate during a disaster. The committee will identify challenges with fuel supplies, repairs, energy operations and prevent service interruptions from the wellhead to the consumer.

Weatherizing Natural Gas Infrastructure: HB 14 requires the Railroad Commission to adopt rules requiring gas pipeline operators to implement measures that ensure service quality and reliability during an extreme weather emergency, which covers winter and heat wave conditions.

Defending Ratepayers: HB 16 bans variable rate products for residential customers. These types of speculative plans resulted in exorbitant bills. “This bill will provide consumer protection to residential customers while still allowing the competitive market to flourish,” Phelan’s office said.

Protecting Homeowner Rights: HB 17 prevents any political subdivision or planning authority from adopting or enforcing an ordinance, regulation, code, or policy that would prohibit the connection of residential or commercial buildings to specific infrastructure based on the type or source of energy that will be delivered to the end user.

Texas lawmakers hold series of hearings over recent power outages

Texas lawmakers in early March held a series of hearings tied to ERCOT last month entering emergency conditions and initiating rotating outages in the state in the wake of an arctic blast.

Texas Lt. Governor says there may be a move to make ERCOT a state agency

March 9, 2021

by Paul Ciampoli
APPA News Director
March 9, 2021

In the wake of rotating outages implemented by the Electric Reliability Council of Texas (ERCOT) in February after an arctic blast hit the state, there may be a move to turn ERCOT into a state agency, Texas Lt. Gov. Dan Patrick recently said.

In an interview with a local Texas television show, Patrick was asked whether he thinks ERCOT should be “brought back into the fold” as a state agency. ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature.

“I don’t have that answer today,” Patrick said. “I’m starting with a clean sheet of paper. I’m starting from scratch and if that needs to happen then it should happen.”

ERCOT is a “private company that was basically hired by the PUC to” run the grid, he said. “But we as elected officials are held responsible for those actions. I don’t like being held responsible to a company that I have little to no control over,” Patrick said.

 “I think that we may see a move to bring ERCOT back in as a state agency or if it’s still a private  company, we’ll have many more controls including who sits on the board because we want to know who those people are,” he said.

Patrick calls for correction to $16 billion error

Meanwhile, Patrick on March 8 called on the Public Utilities Commission of Texas (PUCT) and ERCOT to correct the emergency pricing error that continued after the power shortage had ended and the major threat to the Texas grid had passed.

Patrick noted that in response to grid wide power shortages starting February 15, the PUC ordered ERCOT to institute the $9,000 per megawatt hour cost cap, which is designed to encourage increased power generation during an extreme shortage.

However, according to ERCOT’s Independent Market Monitor (IMM), Potomac Economics, ERCOT incorrectly extended that pricing intervention after the power shortage had ended. The $9,000 price should have ended at 11:55 PM on February 17. Instead, it continued throughout the entire day of February 18 into February 19th — 32 hours total ­– which resulted in an additional $16 billion in charges, Patrick said.

“The IMM identified a second significant error that also must be corrected immediately. ERCOT failed to cap ancillary service prices at $9,000 which resulted in prices rising as high as $24,000 a megawatt hour at intervals during the storm. Pricing should never have exceeded the $9,000 cap at any time,” he said in a news release.

The IMM has recommended that the PUCT exercise their authority to direct ERCOT to correct both these pricing errors, but the PUCT has declined to do so, Patrick noted.

The PUCT on March 5 declined to take action in response to a report from the IMM for ERCOT that a decision by ERCOT resulted in $16 billion in additional costs to ERCOT’s market, of which roughly $1.5 billion was billed to load-serving entities (LSEs) to provide make-whole payments to generators for energy that was not needed or produced.

Patrick also said that ERCOT has a procedure for correcting pricing errors, but has also declined to act so far.

“According to the ERCOT Nodal Protocol Section 6.3 (6) (a), ERCOT has 30 days from the event to correct errors in pricing. Today I am calling on both the PUC and ERCOT to follow the recommendations of the IMM and correct these mistakes,” he said. “Correcting this $16 billion error will require an adjustment, but it is the right thing to do. It will ultimately benefit consumers and is one important step we can take now to begin to fix what went wrong in the storm.”

PUC Commissioner resigns

In other news, PUC Commissioner Shelly Botkinhas resigned her role with the PUCT, effective immediately, the Commission said on March 8.

DeAnn Walker on March 1 resigned as chairwoman of the PUCT, days after she faced questions from state lawmakers at a hearing that examined the rotating outages implemented by ERCOT in the wake of an arctic blast.

Texas AG expands win­ter storm inves­ti­ga­tion into nat­ur­al gas price increases

March 9, 2021

by Paul Ciampoli
APPA News Director
March 9, 2021

Texas Attorney General Ken Paxton on March 8 said that he has issued a civil investigative demand (CID) to Intercontinental Gas Exchange, a natural gas exchange.

Paxton’s office said that the exchange “saw massive price increases during the February winter storm that swept through Texas.”

The CID issued to Intercontinental Gas Exchange follows on the heels of CIDs issued to ERCOT and other power companies regarding power outages, emergency plans, energy pricing, and more related to the winter weather event.

CIDs were sent to:

The CIDs sent to these entities are available here.

Paxton sues power provider

Paxton on March 1 filed a lawsuit against Griddy LLC “for violating the Texas Deceptive Trade Practices Act through false, misleading, and deceptive advertising and marketing practices,” Paxton’s office said in a news release.

“During the February freeze, Texas power companies failed to withstand the winter storm and left millions of Texans without power and heat during lethal, record-low temperatures across the state. Compounding this disaster, Griddy passed skyrocketing energy costs to customers with little to no warning, resulting in consumers paying hundreds or even thousands of dollars each day for electricity,” the news release said.

The lawsuit seeks injunctive relief from Griddy “to ensure that the Texans it serves will receive truthful and accurate energy service in the future, and to have the court order refunds from available sources,” Paxton’s office said.  

ERCOT in a Feb. 26 market notice said that it had revoked all rights of Griddy Energy LLC to conduct activity under the ERCOT protocols due to a payment breach.  

ERCOT said in the notice that it had initiated the mass transition of Griddy Energy customers on February 26 and that it was working closely with PUCT staff and affected market participants to ensure an efficient and effective transfer of customers to designated providers of last resort.

RFP seeks solar generation PPA bids for several AMP member utilities

March 9, 2021

by Paul Ciampoli
APPA News Director
March 9, 2021

American Municipal Power Inc. (AMP) recently launched a request for proposals (RFP) to procure renewable generation for several of its member utilities.

AMP is seeking responses for projects in the PJM Interconnection and delivered to the Louisville Gas and Electric Company (LGEE) interface. LGEE is an interface from PJM to the LGEE control area.

Total contract capacity ranges from 100-150 megawatts ac with a maximum capacity of 50 MW ac for the LGEE delivered project. Term preference for these projects are between 10-30 years.  Products are to include energy, capacity, and environmental attributes.

AMP is seeking bids for full attribute, solar generation power purchase agreements with a preferred commercial operation date of 2023. Key tenets of project consideration are project viability, price, congestion risk, and deliverability.

The Energy Authority (TEA) is the administrator for the RFP.

Responses are due by April 19, 2021 and the RFP is available here.

AMP is a nonprofit wholesale power supplier and service provider for 135 members, including 134-member municipal electric systems in the states of Ohio, Pennsylvania, Michigan, Virginia, Kentucky, West Virginia, Indiana, and Maryland and the Delaware Municipal Electric Corporation, a joint action agency with eight members headquartered in Smyrna, Delaware.

DOE offers up to $100 million in funding for clean energy technology R&D

March 9, 2021

by Paul Ciampoli
APPA News Director
March 9, 2021

The U.S. Department of Energy (DOE) recently announced up to $100 million in funding for clean energy technology research and development through its Advanced Research Projects Agency-Energy’s (ARPA-E) “OPEN 2021” funding opportunity.

“The first of billions of dollars of DOE R&D opportunities to be announced this year, this funding will help identify cutting-edge, disruptive clean energy technologies to address the climate crisis,” the DOE said in February.

Potential applicants can visit ARPA-E’s newly launched OPEN 2021 website to access information and resources, including a teaming partner list for help forming new project teams and identifying potential collaborations, and webinars featuring program directors discussing technical areas they hope to pursue.

To apply for funding through OPEN 2021 click HERE.

The DOE said that since its founding in 2009, ARPA-E has provided $2.4 billion in R&D funding, and ARPA-E projects have attracted more than $4.9 billion in private sector follow-on funding to commercialize clean energy technologies and create sustainable clean energy jobs.

Power plant in Holland, Mich., prepares to retire $91 million of debt this year

March 9, 2021

by Paul Ciampoli
APPA News Director
March 9, 2021

Holland Energy Park (HEP), a power plant in Holland, Mich., is preparing to retire $91 million of debt this year, during only its fourth year of operation, pending final approval from the Holland City Council.

Additionally, there is a plan to retire an additional $40 million over the next two years, completely retiring the debt in a total of nine years since it was issued in 2014, the Holland Board of Public Works (BPW) said on March 8.

The $240 million power generation facility was financed with $160 million of debt and $80 million of reserves.

Originally, the Holland BPW planned to service the bonds for 25 years. Retiring the debt early will save tens of millions of dollars in interest.

The reduced cost results in a proposed rate decrease of about 10% for Holland BPW electric customers.

HEP is a combined-cycle power plant that produces electricity using natural gas. The plant has strengthened the community-owned electric utility since it came online in 2017, Holland BPW noted.

HEP provides the Holland BPW with more electricity than is needed, allowing excess capacity to be sold to other providers in Michigan.

The utility and the City of Holland have received significant value from selling HEP’s excess capacity, Holland BPW said.

In 2018, Holland BPW was able to reduce electric rates by an average of 6% for customers. This year, Holland BPW electric customers will receive another rate reduction, the second reduction in three years.

Also, the wholesale revenue made possible by HEP has allowed the Holland BPW to increase its annual contribution to the City of Holland from $6.6 million to $8 million.

Holland BPW said its electric rates rank among the lowest in Michigan. This year’s proposed rate decrease, which averages 10% across all customer classes, will save the average residential customer about $60 on their energy charges over the year.

If approved by the City Council in May, the new rates will go into effect on July 1, 2021.

The average Holland BPW residential customer now enjoys nearly a 40%, or $35 per month rate advantage to the investor-owned utilities in Michigan, Holland BPW noted.

Environmental paybacks are proven through reduced carbon dioxide emissions, the utility said.

HEP, along with investments in renewable energy sources, reduced CO2 emissions from Holland BPW’s portfolio by 46%. Additionally, HEP “has virtually eliminated emissions of sulfur dioxide, lead, and mercury from power generation sources in our community,” Holland BPW said.

Texas PUC declines to take action in response to report on $16 billion in additional costs

March 8, 2021

by Paul Ciampoli
APPA News Director
March 8, 2021

The Public Utility Commission of Texas (PUCT) declined to take action in response to a report from the independent market monitor (IMM) for the Electric Reliability Council of Texas (ERCOT) that a decision by ERCOT resulted in $16 billion in additional costs to ERCOT’s market, of which roughly $1.5 billion was billed to load-serving entities (LSEs) to provide make-whole payments to generators for energy that was not needed or produced.

“I think these are difficult decisions and they always have been,” said PUCT Chairman Arthur D’Andrea in commenting on repricing requests made by the IMM at a March 5 PUCT meeting.

“The IMM raised some good points and I think they’re very interesting and so we definitely should consider them,” he said.

With respect to the IMM’s suggestion of repricing the energy market, “it’s my understanding that unless we wanted to really disrupt the ICE [Intercontinental Exchange] markets, their deadline is today at 4 and so we would have to decide that now if we wanted to reprice that and I’m not inclined to do it today,” D’Andrea said.

“We did get a letter” from Texas Sen. Drew Springer “addressing this issue and I’m so grateful for legislative feedback on these questions,” he said. “On this question right now, we need to be just standing shoulder to shoulder with them. There cannot be any daylight between us,” D’Andrea said.

“On my part, I don’t intend to make any huge decisions without talking to all of them first,” he said

The PUCT didn’t vote to reject the IMM’s suggestion, “leaving the door open for a change of policy in coming weeks,” the Wall Street Journal noted in a March 5 article.