Public power utilities play a key role in the expansion of electric buses
February 9, 2021
by Peter Maloney
APPA News
February 9, 2021
Public power utilities have been among the leaders in the electrification of public buses and their efforts continue to move forward in several cities.
Seattle City Light passed a major milestone in October when Seattle City Council approved the utility’s Transportation Electrification Strategic Investment Plan (TESIP), John Owen, the utility’s engineering supervisor for electrification and strategic technology, said. The approval “allows us to move forward under the legislation passed a couple years ago.”
That legislation, House Bill 1512, gave in the state the authority to spend funds on transportation electrification once they create a strategic plan for the outlays and it is approved by the utility’s governing body.
Prior to the passage of the bill in 2019, the Washington State constitution prohibited funds for fuel switching. There was an exemption for energy conservation, but it was unclear if the law barred incentives for technologies such as electric vehicle charging stations.
Seattle City Light’s planned strategic investments fall in two categories: program offerings, including customer-facing incentives, services, education and promotions, and electrification enablement, including the development of infrastructure needed to support transportation electrification.
Shortly after the city council approved the utility’s TESIP plan, Seattle City Light announced the installation of several public electric vehicle fast charging station in Seattle, part of a pilot program to install 20 fast chargers in the utility’s service area.
But while personal vehicles represent one part of the electric vehicle market, Seattle City Light expects the largest benefits of transportation electrification will come from the electrification of modes of transportation of high-mileage commercial fleets and from services that move large numbers of people, such as transit buses and ferries.
While electrification holds many benefits, such as reduced emissions and noise levels and lower fuel and overall cost-of-ownership costs, it is not without risk, especially when it comes to the electrification of large fleets, commercial or public.
In a report done last fall for Seattle City Light, the Rocky Mountain Institute found that the adoption of personal electric vehicles does not pose much risk for the utility, however, “spot loads associated with electrified buses or medium- and heavy-duty trucks have the very real potential to overwhelm available capacity and require grid upgrades.” Moreover, as those technologies rapidly improve, those segments of the transportation sector are “likely to electrify quickly because they are responsive to the favorable economics of electricity as fuel.”
Seattle City Light has been working with the Rocky Mountain Institute and with the Electric Power Research Institute (EPRI) to prepare for that transition, as well as coordinating departments within the utility and with other local government agencies to “prepare for a pretty intensive paradigm shift,” Owen said. For example, he said, Seattle City Light historically has not been in the business of installing and maintaining electric batteries.
Seattle City Light is also working with King County Metro, which owns and operates the county’s buses, including those in Seattle, the county seat. The county agency, which is among a handful of early adopters of electric buses in the country, has committed to moving to a 100 percent zero-emissions fleet powered by renewable energy no later than 2040.
As of June 2020, the agency had a fleet of over 1,600 buses of which about 185 were zero-emission buses, including 174 electric trolley buses that use overhead wires, and 11 battery electric buses. In January 2020, King County Metro agreed to purchase 40 battery electric buses and another 80 buses by the end of the year for about $130 million.
King County Metro has received a total of $20 million in grant funding to support the purchase, including $9.1 million from the Federal Transit Administration, partly from the Low-or-No Emission Vehicle Deployment Program, and $10.9 million from the Washington State Department of Ecology Volkswagen Settlement program. The agency is also seeking $3.3 million from the Washington State Department of Transportation’s Green Transportation Capital Program.
Seattle City Light is working with King County Metro to prepare for the transition by building a test facility at the agency’s southern bus depot that will have charging equipment from three different manufacturers to serve three different bus manufacturers. In the world of electric buses, “everyone has their own flavor, so it is a bit of contest how any bus can come into yard, land at any charger and get served,” Owen said.
For that project, Seattle City Light received technical assistance and concept design support from EPRI. “We will continue to work hand in hand with EPRI on testing and commissioning and expect to have the project online in the June timeframe,” Owen said.
Seattle City Light is also actively engaged with Washington State Ferries, part of the state’s Department of Transportation, which is electrifying the ferry to Bainbridge Island and plans to electrify the Bremerton ferry in about five years.
Charging those vessels will draw a lot of power. It is not desirable to build infrastructure large enough to serve that large a load if it is not in continuous use, Owen said, so the utility has begun a feasibility study to determine if it could tap some of the new transportation assets for energy storage that could be used to manage load and, depending on equipment ownership model selected, lower demand charges for the agencies.
The Port of Seattle also has plans to electrify infrastructure such as cranes and lorries. “We are looking forward to a whole lot of interesting things down the road,” Owen said.
Seattle and its utility may be further along on the road to transportation electrification than a lot of other places, but it is a trend that is being seen all across the nation. Owen’s advice to other utilities is to plan for the future and coordinate with other stakeholders. “We can save each other a lot of grief and aggravation if we work together as a team.”
Ambitious Goals in California
California also has ambitious goals for transportation electrification: having 5 million electric vehicles on the road in 10 years. In the state’s capital, the Sacramento Municipal Utility District (SMUD) has been active in transportation electrification for decades and in 2018, with the utility’s support, the capital region drove past the milestone of having 10,000 electric vehicles on the road.
Last spring, SMUD’s board adopted a goal of having net zero carbon dioxide (CO2) emissions by 2030 and a couple months later raised the bar even higher with a goal of absolute zero CO2 emissions by 2030, “the most aggressive goal for a utility of our size in the country,” Bill Boyce, supervisor of electric transportation at the utility, said.
But, unlike City Light, SMUD’s focus on fleet electrification has been less on public metropolitan buses. SMUD has been more aggressive on electrifying school buses in its region. “A huge portion of the funding for city transit buses comes from the federal government, and that funding is hard to come by,” Boyce said.
Meanwhile, SMUD has “been doing a lot of work with local school districts,” Boyce said. “Most of the funding comes from the state,” from agencies such as the California Air Resources Board (CARB) and the Sacramento Metropolitan Air Quality Management District (SMAQMD).
At the end of 2020, SMUD had 79 electric school buses in service its territory with a goal of having 100 buses in service by year-end 2021.
Electrification moves SMUD closer to meeting its emission goals, but it doesn’t come without its own set of challenges. SMUD estimates that meeting the new absolute net zero goal will increase its electricity needs by about 30% over the next 10 years or so.
Light-duty vehicles are dispersed with most charging at home. The challenge is coming from heavy-duty vehicles and large fleets that will put much bigger demands on utility resources and could require expansion of distribution assets. “We are trying to start up really detailed planning to identify where all fleet vehicles” will be located. “It could require major grid infrastructure in the five year timeline,” which has the potential to drive up costs, Boyce said. “Planning for that is very critical.”
One of the keys to negotiating that transition is going to be energy storage, Boyce said, adding that SMUD is going to be working on how to use vehicles for energy storage. School buses, for instance, are usually not used during the summer. “I really think very positively that the vehicles are going to help us with this transition,” Boyce said.
The transformation that is under way is “a total rewrite of our electrical transportation sector, a total change,” Boyce said, and that is going to require people to install charging stations, perform maintenance. That creates the opportunity for job creation, so SMUD has gotten engaged in workforce training, partnering with vocational-technical schools and other community organizations to drive workforce development and “get people in the pipeline,” Boyce said.
SMUD accelerates its fleet electrification
In recent news, on Feb. 1, SMUD reported that it has partnered with Zeus Electric Chassis Inc. and the California Mobility Center to procure five custom, all-electric work trucks as it works to transition to an all-electric fleet.
The trucks are the only all-electric work truck chassis manufactured in North America in the medium duty class and will be customized for a variety of uses throughout SMUD’s service territory, SMUD said.
SMUD noted that it was introduced to Zeus through its work with the California Mobility Center, which was founded to serve as an innovation hub of policy, funding and commercialization of clean transportation technologies including autonomous transportation, electric vehicles, battery storage, shared mobility solutions, public transit and more.
Los Angeles
In California’s biggest city, Los Angeles’ mayor, Eric Garcetti, this month said the city now has over 10,000 commercial electric vehicle charging stations, putting the city two years ahead of schedule and giving it the most charging stations of any city in the United States.
As the chair of the Metro Board, Garcetti has directed the agency to adopt a plan to transition Los Angeles’ bus fleet to 100 percent zero emissions by 2030, making it the largest American transportation agency to embrace such a standard. The Metro Board is slated to finish electrifying the city’s G line buses in the first quarter and plans to convert the J Line by early 2022. Last spring, Los Angeles purchased 155 electric buses.
The city’s public power utility, the Los Angeles Department of Water and Power (LADWP), views the introduction of electric buses as a positive. They can help “improve grid utilization and sustainability by helping to manage peak demand and supporting renewable energy integration,” a utility spokesperson said. LADWP also is looking at electric buses for their potential to return stored energy back to the grid via vehicle-to-grid applications.
Those benefits do not come without challenges, however, which include keeping up with the pace of the infrastructure needed to supply load that electric buses will add to the grid. To address those challenges, LADWP is working with the city’s Department of Transportation (LADOT) and MTA Transit through biweekly calls to ensure that electric deployment plans and schedules are communicated and engineering plans are prepared to accommodate the increased load, both near term and long term.
So far, LADWP has helped LADOT install 255 charging stations to support 510 electric buses by 2028. LADWP also has created a fleet rate structure for electric fleet vehicle charging to provide LADOT the flexibility for varying electric bus charging strategies and changing customer needs.
LADWP has also developed a memorandum of understanding that establishes a funding commitment to facilitate the purchase and installation of charging infrastructure to support electric buses.
East Coast activity
On the other side of the country, The New York Power Authority (NYPA) in late December announced several initiatives aimed at increasing the number of electric buses in the state, including an award of $16.4 million from the Volkswagen settlement fund and $2.5 million targeted for school bus operators to acquire cleaner forms of transportation.
The Volkswagen funds are being made available under the New York Truck Voucher Incentive Program to five of the largest public transit operators in the state – the Capital District Transportation Authority, Niagara Frontier Transportation Authority, Rochester-Genesee Regional Transit Authority, Suffolk County Transportation, and Westchester County Bee-Line Bus System – to facilitate their transition towards 100 percent zero-emissions fleets by 2035. Combined, the five transit operators run more than 1,300 buses.
The voucher program covers all incremental vehicle value for the purchase of a zero-emission electric bus as long as the vehicle is housed at bus depots or operate on routes located within a half-mile of a disadvantaged community.
The voucher incentive program is also administering the $2.5 million for electric school buses with the same conditions.
NYPA also reached an agreement with the New York State Energy Research and Development Authority (NYSERDA) that includes more than $1 million in funding to help the five suburban transit operators develop plans to convert to all-electric buses, including the cost effective installation of charging stations. The funding is also designed to cover the cost of studies on large scale charging hubs and the need for high-speed charging to extend the range of electric buses. The overall goal is for the state’s transit agencies to reach 25% electric buses by 2025 and 100% by 2035.
NYPA is also partnering with the Metropolitan Transportation Authority on the installation of bus chargers at bus depots throughout New York City to help the authority in meeting its goal of having 500 electric buses by 2025 and a full electric bus fleet by 2040.
Looking further into 2021, NYPA has a project pipeline of nearly 60 charging station projects to serve electric buses and is working with the Department of Environmental Conservation to allocate Volkswagen diesel settlement funds.
“We are going to be building the charging infrastructure for transit buses, slowly but surely electrifying the public bus transit system here in New York,” Gil Quiniones, CEO and president of NYPA, said in an Association podcast.
Orlando
In Florida, Orlando’s transit agency, LYNX, added eight electric buses to serve its four LYMMO fare-free downtown circular routes. These new buses were funded through the Federal Transit Administration’s Low or No Emission Vehicle Grant. Through an additional federal grant, LYMMO plans to add six more buses to its fleet. The goal is for LYMMO to have a 100 percent zero-emissions fleet by 2025.
OUC, the region’s public power utility, is supporting the electrification effort by installing stations to charge the buses when they are not in service.
OUC is also providing assistance in the procurement of charging stations and batteries to help LYNX implement the project.
Burlington Electric Department
Meanwhile, Vermont’s Green Mountain Transit (GMT) and Burlington Electric Department (BED), on Jan. 28 unveiled for the public GMT’s first two electric-powered transit E-buses.
The new E-buses, scheduled to be in service this March, are the first electric transit buses in Vermont and will help reduce carbon emissions in Burlington and Chittenden County while providing clean, quiet transit along GMT service area routes.
As part of the Burlington net zero energy strategy, BED provided significant incentives, secured additional funding from the Vermont Low Income Trust for Electricity and, together with the Vermont Agency of Transportation (VTrans), helped secure further funding from the federal government to ensure that GMT had the resources necessary to expand electric transit options in Burlington.
The new E-buses arrived in Burlington in Janaury and were engineered and manufactured by Proterra at its East Coast headquarters in Greenville, S.C.
The E-buses have 324 kWh of battery capacity and will be charged overnight during off-peak hours with 100 percent renewably-sourced electricity at a GMT’s Burlington garage, BED said.
While Proterra indicates that the E-buses have an operating range of up to 187 miles on a single charge, actual range will depend on a number of variables, including topography, passenger loads, number of stops, and weather.
Proterra’s initial range estimates for GMT, based upon our local topography and weather and on comparing the actual range of Proterra buses that are serving other similarly-situated locations, are 140 miles in non-winter months and 100 miles in winter months. GMT will have an accurate sense of mileage range once the new E-buses are in full operation in their service environment.
E-Buses, Not Just for Big Cities
Larger cities are not the only ones shifting to electric buses. In 2015, Seneca, a city of about 9,000 people in western South Carolina, became the first city in the country to have a totally electric bus system when it deployed five battery-electric buses and two fast charging stations.
The purchases were funded with a $4.1 million grant from the Federal Transit Administration’s Transit Investments for Greenhouse Gas and Energy Reduction Program, a $1.8 million Bus Livability Program grant through the Federal Transit Administration, as well as private funds.
The funds allowed Seneca to replace its existing fleet of diesel buses with fast-charging battery electric buses built locally by Proterra in Greenville, S.C. The electric buses are operated by Clemson Area Transit, which runs a separate system in Clemson and provides local transportation in Seneca. The electric buses, cost about $900,000 each, are more expensive than diesel buses, but are expected to pay back the higher cost through lower fuel expenses in 12 years.
Separately, this month, Proterra announced it will become publicly listed company through a merger with special purpose acquisition company ArcLight Clean Transition in a deal that values Proterra at $1.6 billion and includes $415 million from Daimler Trucks, Franklin Templeton, Fidelity Management & Research, BlackRock, and other investors
In 2019, the city of Ames, Iowa, won a $1.66 million grant from the Department of Transportation to add electric buses and charging infrastructure to the city’s public transportation fleet. The city’s transit authority, CyRide, is using the funds to add to electric buses and replace diesel buses that have exceeded their useful life.
The funding also covers a 480-volt transformer, dispensing station and chargers, as well as facility modifications. The total project cost is $2.137 million.
The city utility’s role is to upgrade equipment to accommodate the new equipment, Donald Kom, director of Ames Electric Services, said. Currently, the electric bus project is still in the testing phase. “CyRide is going to test the electric buses and see how it goes,” Kom said. CyRide’s aim is to have zero-emission buses in its fleet by spring 2022.
There are 528 electric buses in service in the United States, according to a 2019 report from the Public Interest Research Group (PIRG). It is a small number relative to a nationwide fleet of about 65,000. But the number is growing.
The number of electric buses in 2019 was 29 percent higher than in 2018, according to PIRG. The research organization added that recent pledges by California, New York City and Seattle to transition to zero-emission fleets mean that 33 percent of all transit buses in the U.S. are committed to transition to electric fleets by 2045.
APPA fleet electrification report
The American Public Power Association has produced a report that outlines the various considerations and opportunities for fleet electrification, such as costs and incentives, charging infrastructure, and operations and maintenance.
By understanding this market, individuals at public power utilities, state/regional associations, and joint action agencies can make informed decisions as they consider electrifying their fleet and assist other fleet operators as they transition to EVs.
For more information, click here.
Bills would allow public power to access payroll, energy and investment tax credits
February 8, 2021
by Paul Ciampoli
APPA News Director
February 8, 2021
Public power utilities would gain access to payroll tax credits for emergency paid sick and family leave and to energy production and investment tax credits under two bills introduced in Congress on Feb. 4 and supported by the American Public Power Association.
The payroll tax credit legislation was included in the House-passed HEROES Act last year and has a good chance of being included in COVID-relief legislation that the House and Senate Committees are expected to begin debating this week.
The energy tax provisions were included in the House-passed Moving Forward Act last year and could be included in infrastructure legislation that the House and Senate are expected to take up later this year.
The Growing Renewable Energy and Efficiency Now (GREEN) Act (H.R. 848) was reintroduced by House Subcommittee on Select Revenue Mike Thompson, D-Calif., and cosponsored by all other Ways and Means Committee Democrats, including Chairman Richard Neal, D-Mass.
APPA has worked closely with the subcommittee on ensuring that the legislation benefits public power utilities, including special provisions to benefit tribal utility authorities while protecting their unique status under the federal Tax Code.
Ditto sends letter to Rep. Thompson
In a Feb. 4 letter sent to Rep. Thompson, APPA President and CEO Joy Ditto noted that the GREEN Act addresses the underlying inequity of providing investment incentives through the tax code. It does so by allowing for the direct payment of energy production and investment tax credits and carbon capture tax credits to any entity that owns the project.
“This would remove the financial disincentive for public power utilities to own such facilities, which are needed to transition to cleaner generating technologies and addressing climate change, and would allow the full value of these credits to pay for additional investment or be passed on to our 49 million customers,” she wrote.
Details on GREEN Act
Section 4 of the GREEN Act allows taxpayers to elect to be treated as having made a payment of tax equal to 85 percent of the value of the credit they would otherwise be eligible for under the investment tax credit, production tax credit or Tax Code Section 45Q credit for carbon capture and sequestration.
Rather than opting to carry forward credits to years when their credits exceed their tax liability or being prevented from claiming the credit at all in the case of public power utilities, taxpayers can take a reduced credit and request a refund of any resulting overpayment of tax. This allows entities with little or no tax liability to accelerate utilization of these credits or claim them when previously they would have been prevented from doing so. Tribal governments are treated as making a payment equal to the full value of the credit, instead of 85 percent.
Payroll tax credits
Meanwhile, the Supporting State and Local Leaders Act was introduced in the House and Senate on Feb. 4. The bill is H.R. 786 in the House, but a bill number is not yet available in the Senate.
It would allow state and local entities, including public power utilities, to claim payroll tax credits intended to offset the cost of providing emergency paid sick leave and emergency paid family leave as required under the Families First Coronavirus Response Act of 2020. It would also make these tax credits available to utilities that voluntarily extend these benefits through March 20, 2021.
Original bill sponsors in the House are Representatives Brad Schneider, D-Ill., John Katko, R-N.Y., and Diana DeGette, D-Colo., and in the Senate, Tina Smith, D-Minn., and Richard Durbin D-Ill.
APPA strongly supports this bill and is listed as one of the supporting organizations on a Dear Colleague letter from the bill sponsors seeking additional cosponsors.
APPA, other groups call for a $10 billion emergency supplemental appropriation for LIHEAP
February 5, 2021
by Paul Ciampoli
APPA News Director
February 5, 2021
A group of national gas and electric utility associations, including the American Public Power Association, on Feb. 4 sent a letter to Congress calling for a $10 billion emergency supplemental appropriation for the Low Income Home Energy Assistance Program (LIHEAP).
The letter was sent to House and Senate Appropriations committee chairmen and ranking members.
“LIHEAP is the bedrock of America’s energy safety net, providing heating and cooling assistance to our most vulnerable, including the elderly, those with disabilities, and families with young children,” the letter noted.
“Unfortunately, even in healthier economic circumstances, LIHEAP need has proven to be far greater than the federal resources provided to serve vulnerable families. For example, in fiscal year (FY) 2019, despite low unemployment, a strong economy, and stable utility prices, only one of every six LIHEAP eligible households were able to be served.”
Now the situation “is substantially more dire,” APPA and other groups said.
Responding to the rising need for home energy assistance during the early stages of the pandemic, last year Congress “wisely appropriated an additional $900 million above the FY 2020 LIHEAP funding level in the CARES Act to address the growing crisis. Months later, the pandemic has worsened, and CARES Act funding has only covered a small fraction of low-income households needing support.”
Across the country, gas and electric utilities and deliverable heating fuel providers have developed billing programs to protect struggling American families during this pandemic, the energy groups told the federal lawmakers.
In many cases, utilities have voluntarily instituted moratoriums to prevent disconnections. In other circumstances, states have instituted broad billing moratoriums, in many cases alongside preexisting weather or seasonal billing moratoriums.
“Importantly, because energy service is vital to protecting people, we are committed to not disconnect anyone who is on a payment plan and stays current. However, while moratoriums may help customers manage their short-term financial condition, they are not a policy solution. All they do is push utility debt into the future, leaving low-income customers a higher, perhaps unmanageable, bill. In contrast, the LIHEAP program is a proven, efficient, appropriations-funded program that helps low-income households pay their energy bills,” the letter said.
The National Energy Assistance Directors Association estimates that utilities have accumulated approximately $30 billion in overdue bills since the beginning of the pandemic.
“Providing an additional $10 billion in supplemental LIHEAP funding in an upcoming COVID relief bill will only put a dent in America’s energy poverty problem. However, with additional funding, the program can expand utility bill payment assistance to millions more Americans experiencing unemployment and other economic hardship in the coming months due to the ongoing COVID-19 pandemic.”
While the Consolidated Appropriations Act enacted in December provides $25 billion for renter assistance – including for utilities – APPA has continued to work for increase LIHEAP funding to ensure that all customers can find relief.
Many people eligible for LIHEAP live in their own homes and so do not qualify for renter assistance. Likewise, LIHEAP is intended to be available through community action agencies in every county in the U.S., whereas the renter assistance program may not be universally available.
APPA asks members to consider signing letter in support of LIHEAP
Meanwhile, APPA is asking its members to consider signing a letter in support of LIHEAP.
The letter is the annual “All Parties” letter organized by the National Energy and Utility Affordability Coalition (NEAUC).
LIHEAP “is a critical, life-saving program that targets and serves the most vulnerable — including older Americans, individuals with disabilities, and children,” the letter said. “The majority of these families and individuals survive on less than $20,000 per year; many are on fixed incomes. Their pay does not increase when the cost of heating and cooling their homes increases. Living at the lowest levels of poverty, recipients of these funds make choices every day between food, medicine, or utilities – choices that have been exacerbated by the ongoing economic repercussions of the novel coronavirus outbreak.”
As utility debt grows, the threat of energy insecurity “looms for millions of American families who could afford their bills one year ago,” the letter said. “Many hardworking people lost one or more sources of income because of the pandemic and now are at risk of utility disconnection or cannot afford fuel delivery. In 2018 four out of five eligible households did not receive LIHEAP assistance because of lack of funding, and the number of households in need continues to increase during the crisis.”
It strongly urges Congress to maximize funding for LIHEAP for Fiscal Year 2022 “in order to prevent and address a catastrophic loss of energy access across the country as moratoria end, utility debt grows beyond the ability to pay for millions of newly eligible households, and coronavirus continues to infiltrate every state and sector from the highest office to the most overcrowded tenements and under-resourced neighborhoods.”
To sign the letter, go to the NEUAC website here. Signatories are listed by organization, not by individual, but individual contact information must be provided to sign.
Lawmakers send letters in support of LIHEAP
In other recent news, members of the Senate and House sent letters to House and Senate leaders in support of LIHEAP.
The Senate letter obtained 44 signatures, while the House letter obtained 65.
Moody’s affirms Heartland Consumers Power District credit rating
February 5, 2021
by Paul Ciampoli
APPA News Director
February 5, 2021
Moody’s Investors Service has released its latest credit opinion of South Dakota-based Heartland Consumers Power District with a rating of A2 and a stable outlook.
Moody’s previously upgraded Heartland’s rating to A2 from A3 in 2018, shortly after Heartland divested of ownership in the Missouri Basin Power Project (MBPP), namely 51 megawatts from Laramie River Station.
“This rating reflects not only the actions Heartland has taken to bolster our profile and create a stable future, but also the sound financial metrics of our customers,” said Heartland Chief Financial Officer Mike Malone in a statement.
The A2 ratings reflect the A2 weighted average credit quality of Heartland’s 27 full and supplemental requirements members. It also reflects the steps taken by Heartland to “right-size” its existing generation capacity through divestiture of capacity assets, including the stake in MBPP.
The sale of MBPP allowed Heartland to pay down outstanding credit line drawings related to bringing Laramie River Station into compliance with environmental standards, Heartland noted.
Heartland’s current baseload resource, Whelan Energy Center Unit 2, is in compliance with existing regulatory standards and not anticipating any environmental capital expenditures in the near future, it said.
Moody’s recognized other actions Heartland has taken to strengthen their position and decrease costs.
Heartland issued $35 million in taxable debt in 2018 to buyout a no longer needed transmission service agreement with Nebraska Public Power District. The buyout led to the stabilization of otherwise escalating transmission costs. It also resulted in cash flow savings, Heartland noted.
Moody’s also noted Heartland’s fairly diverse capacity available, with about 27% being coal-based from WEC2.
The stable outlook reflects Moody’s expectation that Heartland’s financial position will remain relatively stable as it reduces leverage over the coming years. It also notes that ample levels of liquidity will serve as a buffer to address any outages or other underperformance in operations.
Moody’s utilizes the U.S. Municipal Joint Action Agencies methodology for Heartland’s rating.
S&P rates Guam Power Authority senior-lien revenue bonds “BBB,” with stable outlook
February 4, 2021
by Paul Ciampoli
APPA News Director
February 4, 2021
S&P Global Ratings on Feb. 1 released its credit rating on the Guam Power Authority’s (GPA) revenue bonds.
S&P Global Ratings’ long-term rating and underlying rating on GPA’s senior-lien revenue bonds outstanding are “BBB.” The outlook is stable.
In the credit rating agency’s opinion, GPA’s enterprise risk profile and financial risk profile were rated adequate.
In its credit overview, S&P reported its view of GPA’s adequate financial capacity to meet its obligations and its expectation that GPA will continue to adjust base rates or its levelized energy adjustment clause as needed to maintain stable financial metrics as the authority proceeds with its plan to significantly overhaul its power supply portfolio.
S&P also cited environmental, social and governance factors that impact GPA overall in the report.
“GPA acknowledges S&P’s comments, and is committed to continually improving our operations, including modernizing our fleet, expanding fuel diversity, adding more efficient and flexible renewable energy resources, complying with all environmental regulations and the addition of the new 198-mewagatt Ukudu base load power plant, all of which contribute to maintaining or strengthening GPA’s financial health,” noted GPA General Manager John Benavente, P.E.
“GPA’s energy demand demonstrated resiliency on an overall basis in fiscal 2020 ended Sept. 20, 2020, versus the prior year, with overall demand declining just 3% (including a 7% increase in residential demand offsetting 4%-19% reduced demand from commercial and industrial loads, with governmental and Navy loads down 7% and 3% respectively),” S&P said.
“We welcome this positive confirmation of GPA’s creditworthiness and resiliency in fiscal year 2020 by S&P, particularly in these challenging times of a worldwide health pandemic, and all its economic effects globally and here on Guam,” said Benavente. “This is good and welcome news for all ratepayers, the Authority and all of us who call Guam home,” said Benavente in a statement.
NTUA details accomplishments on CARES Act projects, prepares for next Light Up Navajo effort
February 4, 2021
by Paul Ciampoli
APPA News Director
February 4, 2021
The Navajo Tribal Utility Authority (NTUA) recently highlighted a number of significant accomplishments tied to its efforts over much of 2020 to extend, build, connect, and provide utility services to hundreds of families funded through Coronavirus Aid, Relief, and Economic Security (CARES) Act.
In mid-August, the Navajo Nation (NN) — the recipient of CARES Act funding — announced the award of $147,116,561 to NTUA to construct utility projects eligible under the CARES Act with the goal and purpose of preventing and combating the spread of COVID-19. Various NTUA multi-utility projects were identified in the Navajo Nation CARES Act expenditure legislation. These projects had to be completed by Dec. 30, 2020.
“We are grateful that Navajo leadership entrusted us to undertake this massive project by approving the CARES Act expenditure legislation,” said NTUA General Manager Walter “Wally” Haase. “This horrendous pandemic severely impacted the Navajo Nation and we prepared to do what we could in order to prevent the spread of the vicious virus.”
NTUA previously noted that prior to the approval of the NN CARES Act, it had been organizing internally to connect hundreds of homes through the Light Up Navajo II 2020 initiative (LUN II). NTUA and 34 public power utilities had a goal to connect the 350 homes starting in April 2020, but the COVID-19 pandemic delayed plans for LUN II event.
NTUA originally set a NN CARES Act goal to connect 510 homes by the December deadline, including the 350 families that were to be part of the LUN II project. LUN II was a result of the successful original Light Up Navajo (LUN I) initiative, which was completed in the Spring of 2019. LUN I had the support of 24 APPA communities and 133 electric line crew members who volunteered from all across the country to be a part of the historic event. The program was also supported by a $125,000 grant from APPA’s Demonstration of Energy and Efficiency Developments (DEED) program.
Rather than having the 350 families wait until Spring of 2022, NTUA submitted their homes along with many others for NN CARES Act funding. Because plans were underway for LUN II, including the commitment from 34 public power communities, NTUA already acquired all of the necessary Rights of Way and completed the NN land acquisition processes for the 350 families.
“These projects were shovel ready, as a result of the commitment of these 34 communities, 350 more families were connected to the grid, than would have been,” said Haase. “The Navajo people, especially the families that were connected, have always been extremely grateful to all the support they received from all of the Public Power communities. Your support has forever improved the lives of over 500 American families. THANK YOU!.”
Once the NN CARES Act legislation was in place, NTUA went to work trying to connect as many families as possible by working ten-hour days, including weekends and holidays, except for Thanksgiving Day and Christmas Day.
NTUA details accomplishments
In weekly progress reports for Navajo Nation leadership, NTUA has provided updates on the various multi-utility CARES Act projects. In the most recent update, NTUA reported that up until December 30, NTUA Districts and Electric Construction Department electric line crews and electricians worked 10-hour days, including weekends, except for Thanksgiving Day, Navajo Nation Family Day and Christmas Day. The Navajo Nation spreads across 27,000 square miles, across northern Arizona, northwestern New Mexico, and southeastern Utah.
While NTUA’s initial goal was to connect 510 families, it reported that it has exceeded this goal extending electricity to the homes of 209 additional families.
As a result of efforts by NTUA and neighboring utilities 719 families are now connected to the electric grid (665 families by NTUA crews; 54 families by neighboring utility crews). Six of these homes were connected after Dec. 30.
NTUA has one more CARES Act major 8-mile powerline project to complete: Salt Springs South, which consists of 12 homes. This project is expected to be completed by Feb. 19, 2021.
The update also noted that on Jan. 19, 2021, NTUA returned $34,051,578 of unspent Navajo Nation CARES Act funds to the Navajo Nation with the understanding that it will be reverted into the Navajo Nation Hardship Fund to help families impacted by COVID-19, NTUA noted.
NTUA also used the update to provide the latest details on its off-grid residential solar program, neighboring electric utility partnerships, electric capacity projects and a number of water-related projects.
“The CARES Act was a tremendous challenge, our crews remained dedicated and moved these projects forward week by week,” Haase said. “Together, they demonstrated our commitment and dedication to extend and provide electricity to families. We did our best. I am extremely proud of what they were able to accomplish even under strenuous times.”
Electric connections after CARES deadline
Following the December 30 deadline, NTUA had 160 families that applied for electric connection remaining on the CARES Act list. While it will not be able to connect them under CARES Act program, NTUA is seeking to find creative solutions to get these families connected.
“When we reached the December deadline, there were still a number of families yet to be connected,” said Haase, explaining that weather, rough terrain, and COVID-19 circumstances delayed construction and thereby prolonged electric connections. “We didn’t want to postpone connection to these families so we are going to finish some of these projects. The families were patiently waiting when the CARES Act clock ran out.”
NTUA has identified potential funding sources to connect 26 of these families, partnering with organizations and individuals, including the Don Woods Family, and the Church of Jesus Christ of Latter-day Saints.
“The Church of Jesus Christ of Latter-day Saints is pleased to be an active partner with NTUA in the ongoing effort to connect families to electric services,” said Todd S. Larkin, General Authority Area Seventy for the Church. “We care deeply for the Navajo people and hope to continue in our efforts to be a blessing in their lives.”
In addition, NTUA also received contributions from the Kayenta Solar project, NTUA Wireless, and ATN International, Inc. (ATN).
“Connecting the under-served is core to our mission at ATN,” said Michael T. Prior, ATN Chief Executive Officer. “Normally we focus our efforts on the Navajo Nation and elsewhere on internet and mobile connections through our Choice wireless partnership, but there is nothing more essential than electrical power so we were honored to support NTUA’s critical commitment to connect these additional households on the Navajo Nation.”
In addition to these 26 homes, NTUA’s Kayenta Solar project will fund the connection of five homes in the Kayenta Chapter. The Navajo Nation Council Resources and Development Committee has approved the use of funds that NTUA saved on the construction of two Sihasin (meaning hope & empowerment in the Navajo language) powerline projects that will allow electric line crews to connect another 10 homes.
“We pledged to the community that the proceeds from the Kayenta Solar project would help fund electrification projects,” said Deenise Becenti, NTUA spokesperson. “Kayenta Solar is a blessing and will make it possible for at least five families to use electricity in their homes for very first time.”
NTUA said it has used other funding sources to connect dozens of families that were to be connected under Sihasin powerline projects planned for construction in 2021.
NTUA will be requesting permission from the Navajo Nation Council Resources and Development Committee to use those savings to connect an additional 26 families. Single families that are seeking funds to get connected are being encouraged to submit a Light Up Navajo III application, according to NTUA.
“It is our hope to host another Light Up Navajo initiative in April of 2022,” Becenti said. “We are organizing internally. The CARES Act answered so many prayers; however, there are thousands of families still waiting.”
APPA is in talks with NTUA to support next Light Up Navajo (LUN III) project
NTUA plans to launch another Light Up Navajo project as soon as it is safe to do so and the American Public Power Association is in discussions with NTUA to support the next Light Up Navajo project.
“Bringing people together to perform mutual aid without a storm is incredibly rewarding for the utilities involved and we’re looking forward to supporting future Light Up Navajo events,” said Alex Hofmann, Vice-President for Technical and Operations services at APPA.
California releases strategy to guide transition to 100% zero-emission vehicles
February 3, 2021
by Peter Maloney
APPA News
February 3, 2021
The office of California Governor Gavin Newsom has released its strategy for achieving the states’ ambitious zero emission vehicle emission goals.
Newsom in September 2020 signed Executive Order N-79-20 that stipulates that 100% of in-state sales of new passenger cars and light-duty trucks will be zero-emission by 2035 and 100% of medium- and heavy-duty vehicles sales must be zero emission by 2045 where feasible. For drayage trucks and off-road vehicles and equipment, the zero-emission target date is 2035 where feasible.
The state’s new Zero- Emission Vehicle (ZEV) Market Development Strategy falls under the purview of the Governor’s Office of Business and Economic Development (GO-Biz), which will work with multiple agencies across the state to implement the means of achieving the zero emission goals.
The report says the GO-Biz’s market strategy is centered on four market pillars: vehicles, infrastructure, end users, and workforce and rests on a foundation of five core principles: equity in every decision, embracing all zero-emission pathways, collective problem-solving, public actions drive greater private investment, and designing for system resilience and adaptability.
“The ZEV Strategy is structured to break down silos and ensure cross-cutting work throughout the California state government to achieve our ZEV goals,” the report said.
Within the four pillars, vehicles encompass new and used battery-electric and hydrogen fuel-cell electric vehicles of all duty classes, as well as equipment used for transporting people and freight, as well as industrial, agricultural and recreational equipment. The category also includes zero-emission solutions such as carsharing and micro-mobility options such as electric bicycles and scooters. Vehicles also includes zero-emission high-speed rail, locomotives, marine vessels, and aircraft.
The infrastructure pillar includes electric vehicle charging stations, hydrogen fueling stations, and the systems that supply them, as well as vehicle-grid integration, grid integration of fueling systems such as hydrogen production through electrolysis.
The end-user pillar includes consumers, riders, fleet operators, transportation network companies, car dealers, drivers, transportation planning agencies, program administrators, ports, regional and local governments and communities, trucking companies, and fuel providers.
The workforce pillar includes workers in supply chains, needed to design, manufacture, sell, construct and install, service and maintain zero-emission vehicles, infrastructure, distribution systems, dealerships, and charging and fueling stations. The workforce category also includes third-party support companies and agencies that work with zero-emission vehicle focused institutions that are critical to operating and expanding the zero-emission vehicle market, such as marketing and advertising firms, roadside assistance companies, financial institutions, insurance agencies, and recyclers.
The governor’s office said the zero-emission vehicle strategy will be updated at least every three years and each state agency is required to submit a brief action plan annually, starting March 1, 2021, that will serve to set the agency’s priorities.
The strategy report also said that GO-Biz will develop annual priority summaries for each pillar, along with an equity engagement and implementation strategy. The “pillar priority documents will focus on harmonizing policy and implementation to get to scale with a target of being posted by March 15th each year,” the report said.
A corresponding public ZEV Strategy website will house the documents related to the strategy and track the state’s progress towards meeting the Executive Order targets, agency objectives, and pillar priorities.
Although California has made great strides in cleaning up its air, the Los Angeles region and the San Joaquin Valley “still suffer from the worst air quality in the nation,” the strategy report said.
And while greenhouse gas emissions are falling across the state, led by the electricity sector, transportation still accounts for nearly 50 percent of the total greenhouse gas emissions, with medium- and heavy-duty trucks being the largest source of vehicle pollution even though they comprise only 2 million of the 30 million registered vehicles in California, the report noted.
Separately, the California Air Resource Board (CARB) has undertaken a series of regulatory steps to address emissions from the transportation sector – specifically from medium- and heavy-duty vehicles, and especially from fleet vehicles.
In June 2020, CARB adopted the Advanced Clean Truck rule, requiring truck manufacturers to transition from diesel to electric zero-emission trucks beginning in 2024. The first-in-the-world rule would require that every new truck sold in California will be zero-emission by 2045. It includes both a manufacturers Zero Emission Vehicle (ZEV) sales requirement and a one-time data reporting requirement (by April 1) for large entities and fleets, including most of California’s public power utilities.
In August 2020, CARB adopted the Heavy-Duty Low NOx Omnibus Regulation requiring manufacturers to comply with tougher emissions standards, overhaul engine testing procedures, and further extend engine warranties to ensure that oxides of nitrogen (NOx) emissions are reduced to help California meet federal air quality standards and critical public health goals. NOx is a primary component in the formation of smog. The On-Road Heavy-Duty Certification Program certifies new incomplete or diesel medium-duty engines and vehicles, heavy-duty engines and vehicles (including hybrid, fuel cell, and electric vehicles), and alternative fuel retrofit systems.
Because the transportation sector is the largest contributor of greenhouse gas emissions in the state, accounting for approximately 40% of statewide emissions in 2016, CARB is now undertaking a regulatory effort to convert the state’s public and private fleet vehicles to zero emission. The Advanced Clean Fleet rule would seek to help achieve the 2045 ZEV goal. According to CARB, the initial focus will be on larger fleets with vehicles that are suitable for early electrification, their subhaulers, and large entities that hire them. The goal is to accelerate the number of medium and heavy-duty zero-emission vehicle purchases to achieve a full transition to zero-emission vehicles in California as soon as possible. California’s public power utilities are supportive of electrification efforts and have been engaged in the effort. This includes noting that unique role that specialized utility equipment plays in emergency response situations – including mutual aid – whereby certain specialized utility vehicles may not be suitable for all-electrification.
“The California electric transportation goals are very aggressive and our Members are leading the efforts to prepare their communities to be electric friendly,” said Randy S. Howard, General Manager of Northern California Power Agency. He shared the recent study results on the need for electric charger infrastructure shows California has nearly 67,000 public and shared chargers installed, with an additional 121,000 planned, leaving a need for 62,000 additional chargers to meet the state’s goal of 250,000 chargers (pursuant to Executive Order B-48-18).
To meet the state’s goal of 5 million EVs by 2030, 968,000 chargers are needed.
To meet the Governor’s Executive Order N-79-20, which sets a target for 100 percent of passenger vehicle and truck sales to be zero-emission by 2035, it’s expected that 1.5 million chargers will be needed for passenger vehicles, and an additional 157,000 chargers will be needed to support medium- and heavy-duty vehicles in 2030.
Silicon Valley Clean Energy funds programs aimed at deep decarbonization
February 3, 2021
by Paul Ciampoli
APPA News Director
February 3, 2021
California community choice aggregator (CCA) Silicon Valley Clean Energy (SVCE) has selected four proposals to fund from a spring 2020 application round of an SVCE grant program that seeks to address key technical, market and policy barriers to achieving deep decarbonization.
The application round targeted innovative solutions for community-wide energy resiliency, SVCE said on Jan. 29.
“Public safety power shutoffs, heat waves, and rolling blackouts have put energy resilience at the forefront and highlighted the critical need for enhanced solutions to ensure a smooth transition to a carbon-free grid,” it said.
SVCE selected the program proposals to fund from the spring 2020 application round of Innovation Onramp.
The Innovation Onramp program was launched to leverage SVCE’s “unique position to engage and support the innovation ecosystem in addressing key technical, market and policy barriers to achieving deep decarbonization in our service territory and beyond,” the CCA says on its website.
SVCE provided additional details on the four pilot projects that were selected to further resiliency for SVCE communities.
Under one pilot Span.IO will install its smart electrical panels in homes across the SVCE service territory, addressing several key barriers to the all-electric transition and community resilience.
Under a second pilot, Extensible Energy and Community Energy Labs will demonstrate that load management technology can reduce electricity costs and enable schools to cost-effectively install battery back-up and serve as community resilience centers.
Under a third pilot, Outthink will provide e-bikes to four income-qualified residents and implement low-cost streetscape modifications to demonstrate the benefits and challenges of mode shifting and active transportation.
And under the fourth pilot, Electron will develop a prototype of an SVCE-owned local marketplace for load flexibility from distributed energy resources such as battery storage and smart thermostats, to unlock the value that they can provide to customers and the broader SVCE community, the CCA said.
SVCE noted that applications are now open for spring 2021 Innovation onramp funding. For this round, SVCE has dedicated $100,000 to provide seed funding to third parties with building decarbonization solutions.
The ideas funded through this round will complement the efforts described in the Building Decarbonization Joint Action Plan, which was recently adopted by the SVCE Board of Directors.
The American Public Power Association has initiated a new category of membership for community choice aggregation programs.
New report charts path to net-zero carbon emissions by 2050
February 3, 2021
by Paul Ciampoli
APPA News Director
February 3, 2021
Achieving net-zero carbon emissions in the U.S. by 2050 is feasible, according to a new report from the National Academies of Sciences, Engineering, and Medicine. The report, the first of two, presents a technical blueprint and policy road map for the next 10 years of the nation’s transition to net-zero carbon emissions.
The committee that wrote the report emphasized that immediate action and proactive innovation are required and recommended a portfolio of near-term policies to ensure equitable access to benefits generated as a result of this transition, mitigate harms to vulnerable populations and engage public participation in decision-making, and revitalize the U.S. manufacturing sector.
The report, Accelerating Decarbonization of the U.S. Energy System, says most near-term reductions in emissions would come from the electricity sector, electrification of vehicles, and home heating. Other industries such as aviation, shipping, steel, cement, and chemicals manufacturing will need further innovation to achieve cost-effective decarbonization, the report said.
Among other actions, the report calls on Congress and the executive branch to set an economy-wide emissions budget for the next several decades. Starting with a price of $40 per ton of carbon, increased annually by 5 percent, this budget will create an economic incentive to reduce carbon emissions and unlock innovation in every corner of the energy economy, according to the report.
To guide policymakers through the transition, the report lays out a number technological and socio-economic goals to reach by 2030 including, among others:
Producing carbon-free electricity: The nation needs to double the share of electricity generated by non-carbon-emitting sources to at least 75 percent. This will require deploying record-setting levels of solar and wind technologies, scaling back coal and some gas-fired power plants, and preserving operating nuclear plants and hydroelectric facilities where possible;
Electrifying energy services in transportation, buildings, and industry: Fifty percent of new vehicle sales across all classes should be zero-emission vehicles. The U.S. should replace at least 20 percent of fossil fuel furnaces with electric heat pumps in buildings and initiate policies so that new construction is all electric except in the coldest climate zones. Where industrial processes cannot be fully electrified, they should begin the transition to low-carbon heat sources;
Investing in energy efficiency and productivity: Total energy use by new buildings should be reduced by 50 percent. In existing buildings, energy used for space conditioning and plug-in devices should be lowered every year to achieve a 30 percent reduction by 2030. Goals for industrial energy productivity (dollars of economic output per energy consumed) should increase each year.
Planning, permitting, and building critical infrastructure: The nation should increase overall electrical transmission capacity by approximately 40 percent in order to better distribute high-quality and low-cost wind and solar power from where it is generated to where it can be used across the country. The U.S. should also accelerate the build-out of the electric vehicle recharging network and initiate a national CO2 capture, transport, and disposal network to ensure that CO2 can be removed from point sources across the country;
Expanding the innovation toolkit: The nation should triple the U.S. Department of Energy’s investment in clean energy research, development, and demonstration in order to provide new technology options, reduce costs for existing options, and better understand how to manage a socially just energy transition;
Promoting equity and inclusion: Policies should work to eliminate inequities in the current energy system that disadvantage historically marginalized and low-income populations. For example, the U.S. should increase funds for low-income households for home electrification and weatherization and for broadband Internet access for low-income and rural areas and increase electrification of tribal lands.
The report also outlines policies targeting specific energy supply and distribution goals to allow the electric power system to depend upon flexible demand enabled by pricing reforms and infrastructure upgrades.
“In addition, to ensure markets for clean energy work for all, the U.S. should establish manufacturing standards for net-zero appliances, require recipients of federal funds and their contractors to meet labor standards, and enforce Buy America/Buy American provisions for federally funded activities,” a news release related to the report states.
The study was undertaken by the Committee on Accelerating Decarbonization in the United States: Technology, Policy, and Societal Dimensions.
Southwest Power Pool launches Western Energy Imbalance Services (WEIS) market
February 2, 2021
by Paul Ciampoli
APPA News Director
February 2, 2021
Southwest Power Pool (SPP) launched its Western Energy Imbalance Services (WEIS) market at midnight Feb. 1. The real-time balancing market is the latest of SPP’s contract-based Western Energy Services to be implemented in the Western Interconnection.
Several regional utilities are participating in the market. Basin Electric Power Cooperative, Deseret Power Electric Cooperative, the Municipal Energy Agency of Nebraska (MEAN), Tri-State Generation and Transmission Association, the Western Area Power Administration (WAPA), and the Wyoming Municipal Power Agency announced in 2019 their intent to join the WEIS market.
WAPA’s agreement includes the firm electric service loads and resources of Pick-Sloan Missouri Basin Program–Eastern Division in the Upper Great Plains Western Area Balancing Authority footprint and the Loveland Area Projects and Salt Lake City Area Integrated Projects, in the Western Area Colorado Missouri Balancing Authority footprint.
SPP noted that many of the WEIS participants are now evaluating full membership in the SPP RTO. A 2020 SPP Brattle study found RTO membership could produce an annual savings of $49 million for both SPP and western entities, SPP said.
If Basin Electric Power Cooperative, MEAN, Tri-State Generation and Transmission Association and WAPA pursue membership in SPP, “SPP can extend the reach and value of its services and the synergies they provide when bundled under the RTO structure,” SPP said.
The real-time imbalance market is one of many services SPP offers to western utilities under its Western Energy Services umbrella.
In 2018, SPP became the administrator of the Western Interconnection Unscheduled Flow Mitigation Plan.
In 2019, SPP launched its Western Reliability Coordination service, through which it ensures the reliability of the bulk electric system in the west on behalf of 12 entities across seven states.
In 2020, SPP was hired by entities in the Northwest Power Pool to be the program developer for its regional Resource Adequacy Program.
SPP manages the electric grid across 17 central and western U.S. states and provides energy services on a contract basis to customers in both the Eastern and Western Interconnections.
El Paso Electric commits to joining CAISO’s Western EIM in 2023
Meanwhile, the California Independent System Operator (CAISO) has signed an implementation agreement with El Paso Electric (EPE) to join CAISO’s Western Energy Imbalance Market (EIM) in 2023, extending the real-time market to 12 western states.
Investor-owned EPE provides generation, transmission and distribution services to 441,200 retail and wholesale customers in a 10,000-square mile area of the Rio Grande valley in west Texas and southern New Mexico.
The Western EIM currently serves balancing authorities in nine states, which represents more than 60 percent of the total load in the Western Electric Coordinating Council.
The Western EIM is slated to expand this spring with the addition of Los Angeles Department of Water and Power, NorthWestern Energy, Turlock Irrigation District, Public Service Company of New Mexico, and the Balancing Authority of Northern California (BANC) Phase 2.