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APPA-Funded Study Provides Heat Pump Water Heater Guidebook and Calculator Tool for Public Power Utilities

February 17, 2022

by Vanessa Nikolic
APPA News
February 17, 2022

A new American Public Power Association-funded study has resulted in the development of a new guidebook and calculator tool which will be useful for public power utilities interested in adopting grid-interactive heat pump water heaters (HPWHs). 

American Municipal Power, Inc. (AMP), a joint action agency representing 134 members, routinely explores beneficial electrification opportunities to help its member utilities with load growth while addressing peak demand on the grid. VEIC, a non-profit organization aiming to reduce the economic and environmental costs of energy use, approached AMP about forming a partnership to study the potential for grid-interactive HPWHs in AMP member communities. AMP was eager to collaborate with VEIC and move forward with the study with the help of grant funding by the American Public Power Association’s Demonstration of Energy & Efficiency Developments (DEED) program.

AMP’s Assistant Vice President for Energy Policy and Sustainability, Erin Miller, played a key role and served as the project manager for AMP. She worked with VEIC, AMP’s cross-departmental team, and its members to develop the work products. 

During the project, Miller appreciated collaborating with her team and hearing from AMP members. 

“It was definitely a group effort, we had several members providing us guidance, and staff across departments were engaged,” Miller said. “VEIC was a great partner; we worked with Emily Lewis O’Brien and Chris Badger, and we built off of previous work conducted by Hawaii Energy and Environmental and Energy Study Institute (EESI).” 

Prior to the start of the project, the team had three goals according to Miller. They wanted to study the market potential of HPWHs in AMP’s members’ service territory, develop guidance and a program for public power utilities wishing to learn more about the technology, and develop a tool for utilities to discover what their customers’ economic and environmental benefits would be if customers switched to a grid-interactive HPWH from an electric-resistance, natural gas, oil, or propane-powered water heater.   

The Grid-Connected Heat Pump Water Heater (HPWH) Guidebook contains an introduction to HPWHs, HPWH control, service provider options for HPWH control, and HPWH program case studies. 

“The Guidebook developed in this project contains a wealth of information for utilities on grid-interactive HPWHs,” Miller said. “In particular, utilities with a high percentage of customers with electric resistance water heating have the greatest peak-saving potential from adding grid-connected HPWH, while utilities with a high percentage of customers with oil/propane water heat can add new load from grid-connected HPWH with minimal peak impacts.” 

The Guidebook also helps develop recommendations to maximize benefits for both customers and utilities by addressing market opportunities and barriers and offering best practices for program design, equipment installation, and utility integration into demand response programs.  

Miller said the Excel-based Grid Connected Heat Pump Water Heater Calculator Tool is designed to assess the customer economics for installing a HPWH under different scenarios and geographic locations. Component information on fuel costs, etc. is supplied for 10 towns in AMP’s region; other users can add their own town’s energy cost data to use the tool. 

Together, the Guidebook and Calculator can help public power utilities understand both the opportunity and options for offering a grid-connected HPWH program in their territories.  

DEED members can learn more about the project in the DEED Project Library. Additional details about the DEED program are available here. 

Louisville, Ky., Eyes Municipalization, Seeks Consultant For Study

February 16, 2022

by Paul Ciampoli
APPA News Director
February 16, 2022

The Louisville/Jefferson County Metro Government is seeking proposals for a municipalization feasibility study.

In early 2020, Louisville Metro Mayor Greg Fischer formally signed Louisville Metro Resolution No. 0009, Series 2020, in which the Louisville Metro Legislative Council resolved to support, among other things, a 100 percent clean, renewable electricity goal for Louisville Metro government operations by 2030.

“Louisville Metro is exploring a variety of supply- and demand-side pathways to achieve this goal, attempting to gather unbiased and decision supportive information to inform next steps to pursue this goal,” the RFP for the study noted.

In an interview with Public Power Current, Allison Smith, Assistant Director, Office of Advanced Planning and Sustainability at Louisville Metro Government, noted that in order to achieve the 100 percent renewable energy goal, “we partnered with” the National Renewable Energy Laboratory (NREL).

In the first phase of working with NREL, “we spent about a year going through what our possible options are to reach our goal,” she said.

Smith noted that Kentucky is in a vertically integrated energy market. “We have a regulated monopoly,” with an investor-owned utility, Louisville Gas & Electric (LG&E).  

“We are not able to contract for renewable energy directly with a company. We have to go through our local utility. That really is limiting,” she said.

“NREL helped us identify what are the routes that we could get to our goal,” Smith said.

“We are now entering phase two. We’ve identified three possible routes.”

One route would be entering a virtual power purchase agreement or purchasing renewable energy credits. “That is certainly an option, but for a local government, that is purely a financial transaction, so there is some risk involved, especially with a virtual power purchase agreement, depending on how the market goes. And really that would not get us any of the local benefits that we are looking for in our transition to renewable energy,” Smith said. “We took that one off the table for now.”

A second option is to work with LG&E. Smith noted that large customers of LG&E can enter into a special contract with the utility “where they will build solar on your behalf and then that large customer negotiates a rate with LG&E that’s locked in for usually twenty years.”

Smith said that “we are working with NREL and LG&E to go through what would the criteria for this special contract have to be for it to make sense and for it to work for Metro Government. We’re talking about taxpayer dollars, so we do have to be financially responsible with that while still meeting our goals.”

The third option is municipalization.

Louisville Metro has identified the possibility of pursuing a partial municipalization of the Louisville Gas & Electric-owned distribution network which serves some or all of the municipal electric load. Louisville Gas & Electric is a subsidiary of investor-owned PPL Corp.

This partial municipalization would involve creating a new municipal electric utility to provide electricity service exclusively to municipally-owned and operated buildings.

In order to bring this partial municipalization into reality, Louisville Metro would need to pursue an “overbuild” of new, municipally-owned electric distribution infrastructure that will co-exist on top of LG&E’s existing distribution infrastructure while not being electrically connected, the RFP said.

This new distribution network would serve some or all municipal electric load with clean energy. This pathway would also involve connecting the new distribution network via a short, high voltage transmission line to the Midcontinent Independent System Operator, “and procuring clean, affordable and reliable electricity through existing market mechanisms (e.g., spot or day-ahead markets) and/or long-term power purchase agreements,” the RFP said.

Overall, the consultant will organize a partial municipalization cost analysis into two major demand scenarios:

The RFP is available here.

New Mexico Utility Regulators Says Legislature Is Best Suited For Public Power Study

February 16, 2022

by Paul Ciampoli
APPA News Director
February 16, 2022

In a recent letter to lawmakers in New Mexico, commissioners with the New Mexico Public Regulation Commission (PRC) said that the New Mexico Legislature, and not the PRC, is the proper body to conduct a study that would evaluate shifting the state’s electric sector to public power.

A group of New Mexico lawmakers recently asked the PRC to launch a study that would evaluate shifting the state’s electric sector to public power. The PRC subsequently held a hearing related to the petition from the lawmakers.

PRC Commissioners sent a letter on Feb. 3 to several New Mexico lawmakers in which the state utility regulators responded to the idea of the PRC conducting the study.

In the letter, the Commissioners said that after reviewing New Mexico House and Senate Memorials (SM 10/HM 20) related to the study, the PRC “takes no position on the merits of a state-level public utility for New Mexico. We believe that is the proper purview of the Legislature.” 

Memorials introduced in the New Mexico do not have the force of law. Memorials can be either joint or simple and require no action on the part of the governor. Joint memorials are acted on by both houses.

The state utility regulators said they have concerns about the proposed role of the Commission in the study and suggested that the stated goals of the memorials would be better served if it were conducted by the Legislature in cooperation with an outside entity.

The PRC is particularly concerned that the role proposed for it is potentially an improper one for it to fulfill.

“We do not believe that the Commission has authority over the subject matter of the study, nor should it exercise authority given its regulatory responsibilities,” the Commissioners said.

“The statutes delegating responsibility to the Commission, particularly the Public Utility Act, implicitly presuppose the existing electric service landscape of investor-owned utilities and member-owned rural electric cooperatives and direct the Commission to regulate accordingly,” the letter noted.

The New Mexico Public Regulation Commission Act’s “apparent limitation on the Commission’s power to study/investigate, suggests that it should not conduct a study the results and recommendations of which the Commission would be unable to act upon. 

Because the results and recommendations of the studies envisioned in SM 10 and HM 20 “can only be acted upon by the Legislature, a study conducted by the Legislature, independent of the Commission but with the Commission providing data and other information under its control, would be more appropriate,” the letter went on to say.

Putting aside whether, under the current statutory framework, participating in the study is a permissible activity for the Commission, the PRC Commissioners raised a number of additional concerns and questions.

The Commissioners pointed out that the PRC’s primary statutory responsibilities are to adjudicate matters to which the utilities are parties and to issue regulations to which the utilities are subject. 

“Having the Commission potentially advocate for or against a state-level public utility before the Legislature, making recommendations either in agreement with or in opposition to the utilities it regulates would, at the very least, raise the possibility of unresolvable conflicts of interest for the Commission when presiding over future matters to which the utilities are parties.”

California 300-MW Energy Storage Facility Goes Offline

February 16, 2022

by Paul Ciampoli
APPA News Director
February 16, 2022

A 300-megawatt (MW) energy storage facility in California is offline at the same site where another storage facility went offline last year.

Late on February 13, the early detection safety system activated in the 100-MW Phase II building at Vistra’s Moss Landing Energy Storage Facility, Vistra reported.

“As is our protocol at all of our facilities, we contacted off-site emergency response out of an abundance of caution. The building’s systems contained the event without the need for the outside assistance. There are no injuries to personnel. An investigation is underway to determine what caused the safety system to activate,” the company said.

While this is in its very early stages, “what we know is the water-based suppression system released water that contacted some batteries.”

Vistra said that there is early evidence that water hoses leaked and that some batteries shorted, creating smoke in the building, similar to what was observed with a September 2021 incident at Vistra’s 300-MW Phase I facility next door.

The suppression system contained the event, and the 100-MW Phase II system is currently offline.

The Phase I facility was not affected by Sunday’s incident. “We have been in the process of incrementally bringing the Phase I facility back online but have decided to pause restart activities while we assess the Phase II incident and will incorporate any learnings,” the company said.

DOE Establishes Infrastructure Law’s $9.5 Billion Clean Hydrogen Initiatives

February 16, 2022

by Paul Ciampoli
APPA News Director
February 16, 2022

The U.S. Department of Energy (DOE) recently announced two requests for information (RFI) to collect feedback from stakeholders to inform the implementation and design of the infrastructure law’s Regional Hydrogen Hub and the Electrolysis and Clean Hydrogen Manufacturing and Recycling Programs.

The law includes:

The RFIs will gather input from a range of stakeholders, including regional leaders, local groups, environmental justice community members, researchers, technology developers, businesses among others to inform the design of clean hydrogen programs, DOE said.

Topics under the Hydrogen Hubs Implementation Strategy RFI include solicitation process, funding opportunity announcement structure, and implementation strategy; equity, environmental and energy justice and priorities; and market adoption and sustainability of the Hydrogen Hubs.

Topics under the Clean Hydrogen Manufacturing, Recycling, and Electrolysis RFI include manufacturing and supply chain of clean hydrogen equipment and components; approaches to recycle hydrogen end use technologies including fuel cells; and development, testing and integration of electrolyzers. 

Feedback received from these RFIs will also support DOE’s Hydrogen Shot efforts to cut to cost of clean hydrogen to $1 per 1 kilogram in one decade.  

Click here for the RFIs.

Click here for resources and opportunities for public power tied to the infrastructure law curated by the American Public Power Association.

Electric Utility Board Votes In Favor Of Lubbock Power & Light Transition to Retail Competition

February 16, 2022

by Paul Ciampoli
APPA News Director
February 16, 2022

The Electric Utility Board for Texas public power utility Lubbock Power & Light (LP&L) on Feb. 15 voted in favor of transitioning LP&L to the competitive electric market in Texas, paving the way for Lubbock to once again have retail electric competition.

The Electric Utility Board vote was the first in a two-step approval process required for LP&L to begin the necessary work to move to retail competition.

Should the City Council also vote in favor at next week’s regularly scheduled meeting, LP&L hopes to transition to competitive retail electric service in late 2023. This would mark the first time a municipally owned utility voluntarily deregulated since Texas Senate Bill 7 first became law in 1999.

Under retail electric competition, LP&L would no longer serve as the city-owned electricity provider. Instead, customers could “shop” from multiple retail electric providers, each offering their own plans, pricing and contract terms. The retail providers would be responsible for buying and selling power, while LP&L would continue to own and maintain all transmission and distribution infrastructure, such as poles and lines.

In 1999, Texas legislators signed Senate Bill 7 into law, aimed at allowing retail electric providers to compete for customers and thereby provide Texas residents with the best possible electric rates and plans to meet their unique needs.

Lubbock residents once had a version of retail electric competition in which customers could choose between two electric providers — LP&L and SPS. In 2010, the City of Lubbock purchased distribution assets from SPS to become the sole electric provider for the majority of Lubbock residents.

The two systems were evenly distributed throughout the city since both companies served customers in nearly every neighborhood, referred to as alley-by-alley competition. Since the time of the sale, LP&L managed both systems, but they were not combined. LP&L took the first step to combine the systems in May 2021, migrating 70% (approximately 83,000 customers) of its system to the Electric Reliability Council of Texas (ERCOT).

LP&L hopes to migrate the remaining 30% (about 24,000 customers) to ERCOT in summer 2023, to get all LP&L customers in the same grid.

LP&L worked closely with the Electric Utility Board and Lubbock City Council to develop a responsible path to retail electric competition, it noted.

Rather than offer customer choice to just 70% of LP&L’s customer base currently in the ERCOT system, the current plan is to transition in late 2023, once all customers can participate.

Texas Cold Snap Peak Comes Close To A Year Ago, But Grid Holds Steady

February 15, 2022

by Paul Ciampoli
APPA News Director
February 15, 2022

During the recent cold snap in Texas, demand for electricity in the Electric Reliability Council of Texas (ERCOT) peaked at 68,862 megawatthours (MWh), slightly below the peak demand of 69,215 MWh during a February 2021 winter storm that caused widespread power outages in the state, the Energy Information Administration (EIA) reported.

“However, this winter’s peak was still below the demand ERCOT forecast for February 2021 before widespread outages began, which resulted in lower actual demand than forecast,” EIA said.

This winter, demand on the peak day of February 4 was much lower than ERCOT’s day-ahead forecast, largely because temperatures were warmer than predicted.

“Unlike in February 2021, this winter’s storm didn’t cause major declines of natural gas production in Texas, and natural gas-fired power plants in Texas maintained their fuel supply during the cold weather,” EIA said.

In February 2021, weather-related production issues reduced peak natural gas production by 16 billion cubic feet (Bcf), according to data from IHS Markit, compared with a 3 Bcf decline in peak dry natural gas production this winter.

In addition, renewable generators, largely wind, maintained a high level of output during the coldest periods this winter, when demand for space heating was the highest, according to EIA.

Coal-fired and nuclear units did not experience outages, which occurred in February 2021.

In response to the ample supply, the ERCOT prices for wholesale electricity in the real-time market were below $100 per MWh during the recent storm, in comparison to prices that were as high as $9,000 per MWh during the February 2021 storm.

ERCOT Reforms

ERCOT in early February noted that it has implemented many reforms to increase the reliability of the Texas grid, including:

Judge Grants Preliminary Injunction Against Federal Social Cost Of GHG Order

February 15, 2022

by Paul Ciampoli
APPA News Director
February 15, 2022

A Louisiana-based federal judge agreed with a collection of states that they will be harmed as a result of an early 2021 Biden Administration move to set interim estimates for the social cost of greenhouse gas emissions for federal agencies to use. The judge granted a motion for a preliminary injunction filed by the 10 states.

In April 2021, 10 states filed a complaint against the federal government seeking declaratory and injunctive relief as a result of Executive Order 13990 (EO 13990).

EO 13990 reinstated the Interagency Working Group on Social Costs of Greenhouse Gas Emissions (SC-GGE). In addition, the Interagency Working Group was directed to publish interim estimates for the social cost of carbon, nitrous oxide, and methane — collectively referred to as SC-GHG estimates — for agencies to use when monetizing the value of changes in greenhouse gas emissions resulting from regulations and other relevant agency actions.

The states that filed the complaint are Louisiana, Alabama, Florida, Georgia, Kentucky, Mississippi, South Dakota, Texas, West Virginia, and Wyoming.

The states sought injunctive and declaratory relief on three grounds:

The court added a fourth prohibition to prevent the government from relying upon or implementing Section 5 of EO 13990 in any manner.

Section 5 required the government to form the Interagency Working Group, set preliminary SC-GHG values by February 20, 2021, and develop final values by January 1, 2022. The order also directed the government to “return to the guidance of Circular A-4 in conducting regulatory analysis.” 

Circular A-4 provides the Office of Management and Budget’s guidance to federal agencies on the development of regulatory analysis.

Court “Not Opining” On Scientific Issues

“To be clear, the court is ruling only on the actions of the federal agencies and whether the agencies, by implementing the estimates and considering global effects — violate the APA and whether President Biden upon signing EO 13990, violated the separations of powers clause of the United States Constitution,” wrote Judge James Cain of the U.S. District Court Western District of Louisiana-Lake Charles Division.

The court “has the authority to enjoin federal agencies from implementing a rule — mandated by an executive order or not — that violates the APA or violates the separation of powers clause,” Cain said.

“Importantly, the court is not opining as to the scientific issues regarding greenhouse gas emissions, their effects on the environment, or whether they contribute to global warming.

Executive Order Contradicts Intent Of Congress

Cain determined that EO 13990 contradicts Congress’ intent regarding legislative rulemaking by mandating consideration of the global effects.  “The court further finds that the President lacks power to promulgate fundamentally transformative legislative rules in areas of vast political, social, and economic importance, thus, the issuance of EO 13990 violates the major questions doctrine.”

That doctrine consists of two steps for the court to determine: (1) if the assertion of executive authority implicates matters of vast economic and political significance, and (2) if Congress has expressly and specifically delegated authority over the issue to the Executive.

In addition, the court found that EO 13990 was promulgated without complying with the APA’s notice and comment requirements.

The states argued that they easily meet the threshold requirement that if an injunction is not issued, they will suffer inevitable and irreparable harm.

The states noted that they are substantial producers of energy and rely upon tax revenues from energy production to perform their sovereign duties. As such, the increased SC-GHG estimates will cause regulatory standards affecting air quality, energy efficiency, power plant regulation to increase in stringency, which will directly harm the economies and revenues of the states.

Moreover, they said that Texas, Louisiana, Kentucky, Florida, Georgia, South Dakota, Mississippi, Alabama, West Virginia, and Wyoming and their citizens will all be imminently harmed by EO 13990 and the SC-GHG estimates by causing increased energy costs.

The states have sufficiently identified the kinds of harms to support injunctive relief, Cain said in his order.

Moreover, the court determined that the states have made a clear showing of an injury-in-fact, and that such injury cannot be undone through monetary remedies, “such that they need immediate relief now, lest they be unable to ever obtain meaningful judicial relief in the future.”

The court “agrees that the public interest and balance of equities weigh heavily in favor of granting a preliminary injunction,” wrote Cain on Feb. 11 in granting the motion for preliminary injunction in its entirety.

The American Public Power Association anticipates the United States will quickly seek appeal from the U.S. Court of Appeals for the Fifth Circuit, given the far-reaching impacts of the order on the Biden Administration’s SC-GHG initiatives.

Power Demand In Texas Grid Peaked At 68,862 MWh During Recent Cold Snap

February 15, 2022

by Paul Ciampoli
APPA News Director
February 15, 2022

During the recent cold snap in Texas, demand for electricity in the Electric Reliability Council of Texas (ERCOT) peaked at 68,862 megawatthours (MWh), slightly below the peak demand of 69,215 MWh during a February 2021 winter storm that caused widespread power outages in the state, the Energy Information Administration (EIA) reported.

“However, this winter’s peak was still below the demand ERCOT forecast for February 2021 before widespread outages began, which resulted in lower actual demand than forecast,” EIA said.

This winter, demand on the peak day of February 4 was much lower than ERCOT’s day-ahead forecast, largely because temperatures were warmer than predicted.

“Unlike in February 2021, this winter’s storm didn’t cause major declines of natural gas production in Texas, and natural gas-fired power plants in Texas maintained their fuel supply during the cold weather,” EIA said.

In February 2021, weather-related production issues reduced peak natural gas production by 16 billion cubic feet (Bcf), according to data from IHS Markit, compared with a 3 Bcf decline in peak dry natural gas production this winter.

In addition, renewable generators, largely wind, maintained a high level of output during the coldest periods this winter, when demand for space heating was the highest, according to EIA.

Coal-fired and nuclear units did not experience outages, which occurred in February 2021.

In response to the ample supply, the ERCOT prices for wholesale electricity in the real-time market were below $100 per MWh during the recent storm, in comparison to prices that were as high as $9,000 per MWh during the February 2021 storm.

ERCOT Reforms

ERCOT in early February noted that it has implemented many reforms to increase the reliability of the Texas grid, including:

Minnesota Public Power Utility Focuses On Bolstering Reliability

February 15, 2022

by Paul Ciampoli
APPA News Director
February 15, 2022

Minnesota public power utility Blue Earth Light & Water is pursuing a number of projects that will bolster its reliability.

In an interview with Public Power Current, Tim Stoner, General Manager of the Blue Earth, Minn., utility offered details on the projects.

One project involves a transformer upgrade. A second project is a reconductoring of a feeder, while the third project involves building out a looping project for two existing distribution transformers.

“The whole reason for all three of these projects” is for reliability purposes, Stoner noted.

Blue Earth Light & Water is a Diamond level Reliable Public Power Provider (RP3) as designated by the American Public Power Association (APPA). Diamond level is the highest level under the RP3 program.

APPA’s RP3 program is based on industry-recognized leading practices in four important disciplines: Reliability, safety, workforce Development and system Improvement.

Supply chain issues remain a concern for Stoner as it relates to the projects. “I don’t think we have a quote for a single transformer right now that’s under 52 weeks,” he said.

APPA and the Large Public Power Council recently provided comments including recommendations to the Department of Energy (DOE) in response to a request for information that DOE issued on energy sector supply chain issues.

Additional information about the utility is available here.