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Public Power Utilities Take Proactive Approach In Response To Supply Chain Challenges

May 21, 2022

by Paul Ciampoli
APPA News Director
May 21, 2022

Public power utilities are taking a proactive approach when it comes to meeting the ongoing challenges caused by supply chain disruptions through a series of actions that include working to boost inventory levels, placing orders into next year and expanding communication and relationships with developers.

[This is the second of a three-part series detailing public power’s response to supply challenges. Click here to read the first part of the series].

Lenoir City Utilities Board Sends Letter to Developers And Contractors

On March 15, 2022, M. Shannon Littleton, General Manager for Tennessee public power utility Lenoir City Utilities Board (LCUB), sent a letter to developers and contractors related to supply chain issues.

“Due to LCUB’s rapid growth and supply chain issues that the entire nation is facing, our procurement, engineering, and operations teams have become increasingly concerned about inventory of materials like transformers, power poles and meters,” Littleton wrote.

“As suppliers started to miss delivery dates, our teams began to meet regularly to develop a strategy to mitigate the impact of the delays through our design, procurement, and construction processes. We are managing inventory the best we can by creating alternative designs to maximize efficiency and seeking out new products and manufacturers,” Littleton said in the letter.

“Even with our efforts, more must be done to ensure we have adequate reserves to address weather events and provide permanent power to a growing system,” he said.

“We have decided to reserve single-phase equipment for completed construction projects and service restoration, when needed. Single-phase equipment is used primarily for residential and small commercial projects. The impact to builders is they will not be able to use a temporary power supply during construction unless there is existing infrastructure that we can connect to; they will have to rely on a generator,” Littleton wrote, adding that new permanent installations may also experience delays.

“There is no exact timeline on a resolution, but this situation is very fluid and will improve in time as equipment manufacturing delays are rectified,” he said in the letter.

Nebraska’s North Central Public Power District Keeps Eye On Supply Chain

In a recent Q&A with Public Power Current, Doyle Hazen, General Manager and CEO of Nebraska public power utility North Central Public Power District (NCPPD), described how NCPPD has taken a proactive approach when it comes to addressing supply chain issues.

“NCPPD has been monitoring the supply chain and the material markets through our relationships with our vendors,” he said. “We started ordering additional material and special equipment (transformers and reclosures) in late 2021. Proactively, we have been ordering into 2023 to stay ahead of our normal maintenance requirements, our work plan projects and expected growth of our system,” Hazen noted.

“The relationships we have with our vendors and other service providers are key in NCPPD’s ability to provide services and build projects on time. By knowing early where the market was going with our purchases both in price and availability, NCPPD was able to meet its customers’ needs. Although there is no guarantee of continued supply in any number of items, NCPPD monitors supply on a monthly, weekly and daily basis,” he said.

Mason PUD Issued Supply Chain Disruption Alert

Washington State’s Mason PUD 3 in September 2021 issued an alert in which it said that supply chain disruptions, unpredictable lead times, and unexpected price spikes of common materials “has the PUD and its customers increasingly uneasy about being able to meet construction timelines for electrical and fiber optic projects.”

The PUD said it was monitoring the situation very closely with its suppliers. “During this period, Mason PUD 3 is working to boost our inventory levels and search for additional product beyond our normal supply chains and construction practices. Although we don’t want to cause alarm, we do think that customers need to prepare accordingly,” it said.

The PUD said at the time it issued the alert that it was seeing major shortages and issues in the following areas related to the utility industry:

JEA Official Details Mitigation Strategies

At a February 2022 board meeting for Florida-based public power utility JEA, Jenny McCollum, JEA’s Chief Procurement Officer and Director of Procurement and Inventory Planning, said that “JEA started to see major disruptions around the beginning of 2021 and felt the impact across most of our inventory items.”

She said that “the specialized electric items were hit the hardest at first, followed by our water wastewater materials and then our safety items. More recently, though, we have felt impacts across all commodities including execution of our capital projects.”

McCollum said that “all of the areas of the supply chain are being affected,” which starts with the inability of manufacturers to source raw materials, transportation issues due to port closures, shipping container shortages, increased fuel costs and difficulty in hiring staff,” which has prevented most manufacturers from being able to meet normal demand, resulting in a reduction in capacity.”

She said that “the raw materials that are affecting us the most” are steel, copper, resin, aluminum and brass. The materials most impacted include transformers, valves and fittings, wire and cable, manholes and safety supplies.

“This crisis has caused focus, the need for speed and flexibility and collaboration across the company to take a comprehensive approach to mitigation efforts,” McCollum said.

Among other things, JEA is reducing terms to new contracts “and we’re adding flexibility to make price adjustments to align to the changing market.” In addition, JEA has diversified its supply base.

She pointed out that one key advantage for JEA is its use of a category management approach to procurement. This approach allows JEA “to be in a position to be nimble and quick and gives us a holistic view to all contracts and future spend plans.”

McCollum also said that “we’re expanding our communication and relationships with developers on their future plans. We are also partnering with suppliers to reserve capacity.”

At the same time, JEA is keeping an eye on the demand side of the equation when it comes to supply chain issues.

McCollum noted that the expansion of electric vehicles means that JEA is competing with EV manufacturers for the electric grade core steel “that we use in our transformers. So where their consumption in the past has been insignificant, we are seeing a major shift and there aren’t many suppliers in the market that can keep up with the growing demand.”

One new way that JEA is addressing current supply chain issues is by harvesting transformers. That means if there are transformers in JEA’s territory that are not being utilized for load due to businesses moving to another location in Jacksonville or going out of business, the utility pulls that transformer from the field and sends it to investment recovery to refurbish it. JEA then places it back into the system for new developments or repair/maintenance work.

Hannibal Board of Public Works General Manager Details Supply Chain Issues at Board Meeting

Darrin Gordon, General Manager of Missouri public power utility Hannibal Board of Public Works, addressed supply chain issues at a March 21, 2022, Hannibal Board of Public Works board meeting.

At the meeting, Gordon noted that APPA has reported that nationwide, the U.S. supply chain for electric grid equipment is becoming increasingly disrupted and that utilities were reporting increasing scarcity of electric grid components, with transformers and wires becoming scarcer.

“Those are essential,” Gordon said. “Every single one of our customers is touched by those items and with that, as that scarcity increases,” so does the delivery time and costs are escalating “and we haven’t seen the end of that yet.”

He noted that “consistently, we’ve always tried to maintain a stockyard of those parts that we may need.”

In the short run, the utility has been able to acquire items off the market, but “that market is getting more and more scarce and that stockpile that we have may become less and less adequate and the cost of keeping that is going to increase.”

TVPPA Communications Advisory Group Launches Supply Chain Toolkit

Meanwhile, the Tennessee Valley Public Power Association Inc.’s (TVPPA) Communications Advisory Group has developed a supply chain toolkit of resources.

TVPPA is the nonprofit, regional service organization that represents the interests of consumer-owned electric utilities operating within the Tennessee Valley Authority (TVA) service area.

TVPPA created the communications toolkit in response to member discussions about the challenges of sharing information about supply chain disruptions, particularly as they relate to transformers and other materials critical to servicing the needs of consumers and communities.

TVPPA members include both municipal and electric cooperatives, and they serve more than nine million people in Alabama, Georgia, Tennessee, Mississippi, Kentucky, North Carolina and Virginia.

Klickitat PUD Faces Critical Electric System Equipment Shortages

In late March 2022, Washington State’s Klickitat PUD said that it was starting to experience critical electric system equipment shortages due to the global shortage of materials and longer delivery delays from many vendors.

Jim Smith, the PUD’s General Manager, said that with material delivery delays and increased construction volumes, the utility was short on stock for its standard pad mounted transformers. These transformers take high voltage power from the PUD’s distribution lines and convert it to the 120 and 240 volts delivered to residences and businesses when underground power lines are used.  Transformers are on order and the PUD expects deliveries throughout the year, it said.

“We have been communicating with new customers and developers for months that we were expecting these shortages,” said Smith in a statement. “Existing customers should also realize that we are facing the same supply chain issues that they are seeing in stores. Delivery times are getting longer and prices are increasing across many materials.”

He noted, for example, that these transformers “normally have about a 16-week delivery time and were $1,500 each a year ago. Delivery is now more than a year out and they are being quoted at $6,000 each.”

Compounding the supply chain problem is a large increase in new construction in Klickitat County, the PUD said. The PUD would normally see about $1.4 million in new electric construction activity each year. In 2021, this increased to $2.8 million and the same is expected for 2022.

“The PUD Commissioners have directed staff to commit the funds required to allow us to keep two years of inventory in stock, rather than the normal six to twelve months,” said Smith. “We have the funds to be able to acquire these additional materials to support the increased growth in the county, but with limited supply and elevated usage, there is only so much we can do,” he said.

Public Power Utilities Respond To Supply Challenges, Detail Mitigation Strategies

May 19, 2022

by Paul Ciampoli
APPA News Director
May 19, 2022

Public power utilities across the country continue to grapple with supply chain issues across a range of materials but they are proactively responding to this challenge through a wide range of mitigation strategies.

Those challenges and mitigation strategies were detailed recently at the American Public Power Association’s (APPA) Supply Chain & Management Summit, which was held on May 5-6, 2022.

 [This is the first of a two-part series detailing public power’s response to supply challenges].

At the summit on May 5, Edward Thomas, Jr., Manager, Materials Demand, at Florida’s Orlando Utilities Commission (OUC), noted that utilities “have a strong track record when it comes to recovery preparations for weather events and natural disasters.”

However, the health crisis caused by COVID-19 “created some unique challenges” that he said were foreign to the industry such as widespread quarantines, workforce and supply chain disruptions “that further complicated our traditional contingency plans,” he said.

With respect to raw material shortages, Thomas said that low inventories have caused cascading issues with material production with manufacturers. There is also a backlog of orders. “Suppliers have reported to us that it is the sheer amount of demand for materials compounded by the shortages in skilled labor.”

As for the primary materials impacted by the supply chain crunch, Thomas mentioned transformers and switchgear, wire and cable, water meter and meter boxes and lids. Chemicals are also be affected. He noted in his presentation that during the height of the pandemic, OUC experienced shortages of oxygen used in its water plants to ozonate the water for disinfection and removal of hydrogen sulfide.

While the current state of the supply chain has presented a host of challenges, it also offers opportunities, Thomas said.

The way things have been done before “and business as usual is not an option for us any longer,” he said.

Thomas said in his presentation that there is increasing pressure on utilities, suppliers and manufacturers to transform and evaluate and review the planning of capital projects as well as regular scheduled maintenance.

He also highlighted communicating with strategic supply chain stakeholders on volume for the next quarter when available, which includes materials, utility planning, suppliers, manufacturers and customers.  

In outlining supply chain mitigation strategies and potential solutions, Thomas highlighted OUC’s strategic partnerships with suppliers and manufacturers. The utility holds monthly scheduled meetings with operations, suppliers and manufacturers to discuss orders and any delays. OUC has also collaborated with suppliers “to hold material at their location based on annual monthly usage, while our project orders were being shipped direct.”

OUC is also working to educate and notify developers and builders within its service area. A letter was drafted with assistance of OUC marketing and communications updating customers about delays and adjusting materials allocated for their specific phased projects, Thomas said.

Another summit panelist, Hud Allworth, Manager, Materials Management and Warehouse, at Washington State’s Snohomish PUD, noted that supply chain issues created more noticeable impacts to a wider range of materials by mid-2021.

Many materials providers and manufacturers were still closed or had reduced production. Others had difficulty ramping production back up, saw supply shortages, experienced transportation pressures and faced labor shortages.

Suppliers began notifying the PUD that lead times were increasing, Allworth said. “In September 2021, we went to our Board of Commissioners and asked for an emergency declaration” to address the supply chain pressures.

In his presentation, he listed the following critical materials impacted by the supply chain crunch:

With respect to mitigation strategies, Allworth noted the following in his presentation:

“We expect continued supply chain disruption” and anticipate this will remain a top priority for the PUD into 2023, he said.

Jeffrey Stewart, Director for Louisiana public power utility Lafayette Utilities System (LUS), spoke at the summit on May 6.

He noted that since 2017, Louisiana has been hit by tropical storms and hurricanes and detailed existing mutual aid activities involving LUS. Currently, mutual aid only covers labor and equipment necessary for power restoration, Stewart said.

APPA helps to coordinate mutual aid events and offers resources to its members related to mutual aid.

Mutual aid efforts have “strengthened the relationship of APPA members over time,” Stewart said. “The last thing we all want to do is experience a hurricane, but it happens. It’s part of what we do. It’s part of how we operate and getting the assistance from up to 2,000 other members is a huge, huge benefit to being a part of APPA.”

With respect to supply chain issues, Stewart said that LUS is seeing increased prices and a shortage of material across a range of areas. He noted a shortage of supplies in things like transformers and fleet vehicles.

LUS is “trying to find creative ways to get our material.” The utility is looking at the option of leasing standard vehicles and trucks. “We’ve discussed the idea of setting aside material” for storms. But there are not “a whole lot of solutions because the supply isn’t there to implement some things.”

Mutual Aid for Materials  

Stewart touted the idea of creating mutual aid for materials, “just like we do for the labor and equipment, especially during hurricane season.”

This would involve one centralized location for finding available materials and utilize three tiers of materials.

As things stand today, if a utility needs a specific type of transformer at a certain voltage level, “it may be 25, 35, a hundred phone calls before I can find anything and that’s regardless of material supply shortages or anything like that,” he said. “I don’t know everybody’s operating voltage.”

Other Public Power Utilities Also Addressing Supply Chain Challenges

Other public power utilities have also been grappling with supply chain issues.

In September 2021, Texas public power utility CPS Energy issued a news release noting that the coronavirus pandemic, labor shortages, and other events have caused major production interruptions for many manufacturers at an international scale.

“Current demand for products and supplies are dramatically exceeding the available supply, which is putting a strain on supplies that CPS Energy and other utilities use daily,” the utility said at the time.

CPS Energy said that an increasing list of raw materials were causing challenges for manufacturing including:

“CPS Energy is working diligently to minimize the impact of material supply shortages,” it said, noting that CPS Energy was taking a highly creative approach to the materials shortage challenges.

“These supply constraints are not unique to our community,” said Maria Garcia, CPS Energy’s Vice President of Supply Chain, in the news release. “Our peer utilities across the country are taking similar actions to ours such as diversifying their specifications and suppliers to allow for greater flexibility in procuring these critical items, without sacrificing product safety, resiliency and reliability.”

In a May 10 email update, CPS Energy spokesperson Dana Sotoodeh said it is important to note that when discussing supply chain challenges that San Antonio is one of the fastest growing metros in the nation.

She detailed the following general updates: 

CPS Energy has responded by diversifying its supplier base, expediting shipments where possible, negotiating contracts to keep current pricing in place and refurbishing equipment to increase its lifespan.

The utility is also:

New Braunfels Utilities

Another Texas public power utility, New Braunfels Utilities (NBU), posted a supply chain alert on its website in which it noted that developers of new construction are impacted due to material shortages for distribution wire, cable, and transformers to complete planned developments. “Lead time for these materials is now calculated in months rather than days. Buyers at NBU are working diligently to source these materials and find alternate sourcing when available,” the utility said in the alert.

NBU said that it had been notified by multiple vendors that its contracted deliveries of wire, transformers, and other equipment were significantly delayed due to dock delays, labor shortages, and other issues. In some instances, they are citing delays of up to 100 weeks, the utility noted.

“These delays of needed material and equipment will affect the start date for new construction projects,” NBU said.

It pointed out that it “is working diligently to locate alternative sources for the equipment needed to proceed with new construction projects. Our purchasing team is dedicated to finding additional vendors and materials to keep project delays to a minimum.”

To help mitigate the impact of supply chain issues, “any and all developer requirements must be completed prior to material and equipment being reserved. This means all easements, fees, and civil work are required to be completed before NBU will release a project to Purchasing to confirm the needed materials are available.”

Southwest Power Pool Anticipates Sufficient Energy Resources For This Summer

May 14, 2022

by Paul Ciampoli
APPA News Director
May 14, 2022

Southwest Power Pool (SPP) expects to have enough generating capacity to meet the regional demand for electricity through the summer season, the grid operator said on May 12.

For the season lasting June-September 2022, SPP anticipates that the demand for electricity will peak at 51.1 gigawatts (GW) and also studied scenarios with higher-than-expected demand.

Its fleet of member utilities’ conventional and renewable generating resources will be prepared to serve at least 55.5 GW, taking both planned and a margin of unplanned outages into consideration. SPP’s all-time peak demand for electricity was 51 GW, which occurred July 28, 2021.

SPP’s studies consider factors including:

SPP assesses electricity supply and demand from a high-level, regional perspective and bases its studies on data provided by generator and transmission owners and member utilities who directly serve residential, commercial and industrial customers.

While SPP anticipates sufficient resources to meet the demand across its 14-state balancing authority area, the summer seasonal assessment did identify potential local issues that it will address with the entities responsible for serving load in those areas. SPP will likewise address potential fuel-supply constraints with generator owners and operators on a case-by-case basis.

On May 12, 2022, SPP declared a Resource Advisory effective May 13-14 in response to higher-than-normal temperatures and other factors.

The advisory required no action on behalf of the general public but was meant to raise awareness among generation and transmission operators regarding circumstances that could require action on their part to prevent impacts to regional reliability.

New England Experienced Historically Low Demand For Grid Electricity In Early May

May 14, 2022

by Paul Ciampoli
APPA News Director
May 14, 2022

Mild temperatures, sunny skies, and typically low Sunday demand for electricity combined on May 1, 2022 to result in the lowest demand for grid electricity on record in New England, ISO New England reported on May 5.

Consumer demand for electricity from the bulk power grid dropped to 7,580 megawatts (MW) during the afternoon hours, the lowest mark observed by system operators since ISO New England began operating the system in 1997.

Sundays typically see lower electricity demand than other days of the week, and afternoon temperatures on May 1 were in the 50s and 60s across New England, lowering overall demand for electricity in the region. Production from behind-the-meter solar resources was estimated at more than 4,000 MW of electricity during this period, further tempering demand on the bulk power grid, ISO New England said.

While May 1 represents a record, it was the continuation of a trend seen across New England as rooftop solar installations have become more popular, it said.

The region has already seen nearly as many so-called “duck curve” days, during which demand from the bulk power system is at its lowest in the afternoon hours and not overnight, in 2022 as in all previous years combined.

These trends are expected to accelerate over the coming years as behind-the-meter solar continues to grow in New England, according to the ISO’s recently-released 10-year solar forecast.

MISO Warns It Could Face Supply Shortfalls This Summer

May 10, 2022

by Peter Maloney
APPA News
May 10, 2022

The Midcontinent Independent System Operator (MISO) region could face electricity shortages this summer, according to a recent assessment by the grid operator.

MISO in late April projected a summer peak forecast of 124 gigawatts (GW) compared with 119 GW of projected regularly available generation within the ISO’s territory because of forecasted warmer-than-normal temperatures in the region.

“Under typical demand and generation outages, MISO is projecting insufficient firm resources to cover summer peak forecasts,” MISO said in a presentation during a late April workshop on summer readiness.

The projected shortfall would have to be filled with increased, non-firm imports and possibly emergency resources, it said.

“The seasonal assessment aligns with the cleared resources identified in the 2022-2023 Planning Resource Auction, which indicated capacity shortfalls in both the north and central regions of MISO and leaving those areas at increased risk of temporary, controlled outages to preserve the integrity of the bulk electric system,” J.T. Smith, MISO’s executive director of market operations, said in a statement.

Severe weather poses one of the key threats to the MISO region. “There is evidence that severe weather events that impact electric reliability have been increasing since the early 2010s,” a January 2022 MISO report found. “For example, in January 2021 the Electric Power Research Institute found that hurricanes are increasing in intensity and duration, extreme heat events are increasing in frequency and intensity, and cold events are increasing in frequency.”

At the same time, MISO today “operates with less excess capacity than in the past because MISO’s large footprint has facilitated the sharing of reserve capacity, a direct benefit to customer rates,” the report said. “Nevertheless, many thermal resources have recently retired from service due to economic, regulatory, and environmental pressures, and the aging thermal assets that remain in service may be more prone to unplanned outages and face supply chain issues.”

MISO said it is possible to reliably operate its system with substantially lower levels of thermal resources, but “we need to ensure that the resources that replace them provide the commensurate capabilities needed to ensure reliable operations,” it said.

Looking forward, MISO also is concerned that the growing trend toward electrification – of transportation and heating, for instance – “could transform the region’s grid from a summer-peaking to a winter-peaking system, and that uncontrolled vehicle charging and daily heating and cooling load could result in two daily power peaks in nearly all months of the year.”

In preparation for the summer season, MISO said it has implemented training sessions and is conducting exercises with member companies “to prepare for the worst-case scenarios and to implement lessons learned and best practices,” but added, “during real-time operations, unplanned outages and other variables may require additional actions to maintain grid reliability.”

“We closely monitor the many challenges the summer season can bring and coordinate with our members and other grid operators for situational awareness,” Jessica Lucas, MISO’s executive director of system operations, said in a statement.

BPA Joins CAISO’s Western Energy Imbalance Market

May 10, 2022

by Peter Maloney
APPA News
May 10, 2022

The Bonneville Power Administration (BPA) is one of the newest members of the California Independent System Operator’s (CAISO) Western Energy Imbalance Market (WEIM).

“Joining the Western EIM is a monumental and meaningful step in the modernization of our operations that unlocks a range of benefits for Bonneville and our customers,” John Hairston, BPA administrator and CEO, said in a statement.

BPA is a nonprofit federal power marketer that sells hydropower from 31 federal dams in the Columbia River Basin, as well as power from the region’s only nuclear plant. BPA delivers nearly one a third of the power generated in the Northwest to more than 140 electric utilities.

BPA was joined in its May 3 entry into WEIM by Tucson Electric Power (TEP), which provides electric service to more than 438,000 customers in southern Arizona.

“The Federal Columbia River Power System is a vital source of clean energy that will bring significant resource diversity and transmission capability to the WEIM,” Elliot Mainzer, president and CEO of CAISO, said in a statement. “And with the participation of Tucson Electric Power, we have another highly valued partner in the Desert Southwest.”

The WEIM uses its technology to find and deliver the lowest-cost energy to members across a broad, multi-state region. With the addition of the new members, the WEIM will be better able to provide increased reliability and environmental gains through the real-time transfer of energy, CAISO said.

CAISO has operated the WEIM since late 2014 and now has 19 participants serving 77 percent of electric demand in the Western United States. In March, Tacoma Public Utilities and Avista Utilities joined the WEIM.

Building on the growth of the Western Energy Imbalance Market, CAISO has been working with WEIM members to develop an Extended Day-Ahead Market (EDAM).

On April 28, CAISO released its EDAM straw proposal. The straw proposal seeks to establish the framework for key design elements of the day-ahead market, as well as areas requiring additional work and stakeholder input.

Current plans call for implementation testing in 2023 and onboarding the first set of EDAM participants in early 2024.

Texas City Says Its City Government Is First In The Nation To Mine Bitcoin

May 3, 2022

by Paul Ciampoli
APPA News Director
May 3, 2022

Fort Worth, Texas, on April 26 said it became the first city government in the U.S. to mine Bitcoin.

The pilot program, launched by the Office of Fort Worth Mayor Mattie Parker and the City of Fort Worth in partnership with Texas Blockchain Council, “recognizes the exponential growth of the blockchain and cryptocurrency industries while advancing Fort Worth’s goal of becoming a leading center of tech and innovation,” the city said in a news release.

The Bitcoin mining machines will run 24/7 in a climate-controlled data center located at Fort Worth City Hall, where they will be housed on a private network to minimize security risk, the city said.

Bitcoin mining is the process by which new bitcoins are entered into circulation. “Mining” is performed using sophisticated hardware that solves an extremely complex computational math problem. The first computer to find the solution to the problem receives the next block of bitcoins and the process begins again.

By limiting the pilot program’s focus to three machines, the city said it will achieve the goals of responsibly assessing and executing a municipal Bitcoin mining program at a manageable scale. After six months, the city will evaluate the program.

Based on the number and type of machines being used, the city estimates each will consume the same amount of energy as a household vacuum cleaner.

The nominal amount of energy needed for the program is expected to be offset by the value of Bitcoin mined. Keeping the pilot program small enables the city to learn the potential impact and opportunities for Bitcoin.

The City of Chandler, Ariz., recently began offering cryptocurrency as a payment option for Chandler residents to pay their utility bills.

FERC Directs Grid Operators To Report On Changing System Needs, Plans

April 25, 2022

by APPA News
April 25, 2022

The Federal Energy Regulatory Commission on April 21 directed the operators of six regional organized electric power markets to provide information regarding their changing system needs and plans for potential reforms. 

The California Independent System Operator Corp., ISO New England, Inc., Midcontinent Independent System Operator, Inc., New York Independent System Operator, Inc., PJM Interconnection, L.L.C., and Southwest Power Pool, Inc. have 180 days to file reports in response to the order.

The order follows a staff whitepaper and four technical conferences conducted in 2021 that explored the changing nature of the organized markets and their operations.  

The Commission received comments on the potential challenges associated with “one size fits all” solutions and is gathering additional information from each market operator to better understand how their unique resource mixes and load profiles impact their respective system needs across all their markets and their respective plans to address those needs. 

Reports are expected to comprehensively address current system needs given recent changes in resource mixes and load profiles; operator expectations regarding system needs over the next five years and ten years; whether and how each market operator plans to reform its markets to meet expected system needs.

Public comments are due 60 days following the filing of the reports. The Commission will review the reports and comments to determine whether further action is appropriate.

Grid Operators Across U.S. Report New Renewable Energy Records

April 19, 2022

by Paul Ciampoli
APPA News Director
April 19, 2022

New renewable energy records were recently set across the U.S., grid operators overseeing organized wholesale power markets in the U.S. said.

The California Independent System Operator (CAISO) set a new record on April 3, when 97.6 percent of electricity on the grid came from renewable energy.

The peak, which occurred briefly at 3:39 p.m., broke the previous record of 96.4 percent set on March 27, 2022. Before that, the grid’s record for renewable power was 94.5 percent, set on April 21, 2021.

The new milestone comes as CAISO integrates growing amounts of renewable energy onto the grid in support of the state’s clean energy goals.

The California grid also set a historical solar peak of 13,628 megawatts (MW) just after noon on April 8, and an all-time wind peak of 6,265 MW just before 3 p.m. on March 4.

Renewable peaks typically occur in the spring, due to mild temperatures and the sun angle allowing for an extended window of strong solar production.

CAISO analysis forecasts a potential for more renewable records in April.

The grid operator has collaborated extensively with the California Public Utilities Commission (CPUC), the California Energy Commission (CEC) and a broad group of stakeholders on market and transmission improvements to integrate increasing amounts of renewable energy.

More than 15,000 MW of grid-connected solar power capacity and almost 8,000 MW of wind are now online.

With California committed to a carbon-free power system by 2045, more solar and wind are expected, along with dramatic growth in storage capacity on the system, CAISO noted.

Another 600 MW of solar and 200 MW of wind are projected to be added to the state’s grid by June 1 of this year. The system currently has more than 2,700 MW of storage, most of it in lithium-ion batteries, and that number is projected to grow to about 4,000 MW by June 1.

SPP

Meanwhile, the Southwest Power Pool (SPP) set several renewable records on March 28 and 29, 2022.

At 2:42 a.m. Central time March 29, SPP set a new renewable energy penetration record of 90.2%, beating the previous record of 87.5% set May 8, 2021. This means SPP served 90.2% of the demand for electricity across its 14-state service territory with renewable energy sources and marks the first time a regional transmission organization served more than 90% of its load with renewables, SPP said.

Of total demand, 88.5% was served by wind, beating the previous wind penetration record of 84%, also set May 8, 2021.

SPP also set new wind and renewable production records.

At 9:25 p.m. Central time March 28, the SPP region produced a record 23,802 MW of renewable energy. The previous record of 21,820 MW was set Feb. 15, 2022. And at 10:34 p.m. the same evening, SPP set a wind production record of 22,915 MW, beating the previous record of 21,820 MW from Feb. 15.

SPP has more than 66 gigawatts of renewables in its generator interconnection queue.

“In a decade’s time, our region has gone from thinking of 25% renewable-penetration levels as nearly unreachable to a point where we regularly exceed 75% without reliability concerns,” SPP Senior Vice President of Operations Bruce Rew said. “We’re able to manage wind generation more effectively than other, smaller systems can because we’ve got a huge pool of resources to draw from.”

SPP manages the electric grid and wholesale power market for the central United States. SPP and its group of member companies coordinate the flow of electricity across approximately 60,000 miles of high-voltage transmission lines spanning 14 states.

NYISO

In late March, the New York ISO reported that the addition of about 750 MW of new behind-the-meter (BTM) solar facilities over the past year helped the state set a new record for BTM solar production.

The NYISO estimated that BTM solar production reached a record of 2,328 MW during the noon hour on Tuesday, March 22. The previous record of 2,034 MW was reached on April 23, 2021. The NYISO estimates the state’s total BTM solar capacity at just under 3,500 MW. 

When estimated BTM solar production peaked at 2,328 MW on March 22, total bulk power system load was 15,167 MW. Energy provided by BTM solar reduces the amount of load served by the bulk power system, NYISO noted. Without those BTM resources, total bulk power system load would have been about 17,495 MW. 

The NYISO estimates BTM production by sampling data from thousands of solar installations throughout the state. The NYISO’s solar forecasting system uses these samples to estimate the impacts of BTM solar at look-ahead periods from 15 minutes to seven days.  The solar forecasting system also uses high quality meteorological measurements from the University at Albany’s Mesonet, a weather network consisting of 126 weather stations, with at least 1 in all 62 counties in the state of New York.

President Biden’s Proposed Budget Calls For Significant DOE Spending Increases

April 12, 2022

by Paul Ciampoli
APPA News Director
April 12, 2022

The Department of Energy (DOE) would see significant spending increases under a budget proposed recently by President Joe Biden.

Much of those increases, according to the budget, were made possible by or build on the Infrastructure Investment and Jobs Act (IIJA) signed into law last year.

The appropriation for DOE’s Office of Energy Efficiency and Renewable Energy (EERE) would nearly double under the budget with $4 billion allocated to “accelerating the research, development, demonstration, and deployment of technologies and solutions to cut energy costs through low-cost clean energy resources.”

Additionally, the Advanced Research Projects Agency-Energy (ARPA-E) would receive $700 million to expand its scope beyond energy technology focused projects to include climate adaptation and resilience innovations.

The Weatherization Assistance Program would receive $500 million, which DOE estimates could cover 50,000 homes.  As part of that, $100 million would be targeted to low-income families under what is being called the Low-Income Home Energy Assistance Program (LIHEAP) Advantage pilot program. The program would retrofit LIHEAP qualifying households with energy efficient electric appliances and systems.

LIHEAP itself would receive $4 billion, a $225 million increase from the 2022 enacted level. However, the administration is proposing amending LIHEAP to allow states to divert LIHEAP funds toward water assistance, in light of the expiration at the end of 2023 of the Low-Income Home Water Assistance Program (LIHWAP) created under the American Rescue Plan Act.

The American Rescue Plan Act provided $500 million for LIHWAP, so if funding continued at that level, the overall amount provided under LIHEAP under the budget proposal for energy assistance would actually decline.

Also, as part of the Administration’s Justice40 pilot program, the Department of Health and Human Services – which administers LIHEAP – “plans to increase efforts to prevent energy shutoffs and increase support for households with young children and older people, and high energy burdens,” according to the budget.

The budget includes an American Public Power Association-supported request for $9 million to the Environmental Protection Agency for a coal combustion residual federal permit program. This program was fully funded at $9 million in the FY 2022 Appropriations bill. 

The budget also proposes a “reserve” for legislation that reduces costs, expands productive capacity, and reforms the tax system. “Because discussions with Congress continue, the Budget does not break down the reserve among specific policies or between revenues and outlays,” the budget states.

At a White House briefing, staff clarified that these changes could include the provisions of the Build Back Better Act. Likewise, a Treasury Department explanation of revenue provisions in the budget does not include Build Back Better Act provisions, but instead simply assumes the Build Back Better Act is the baseline off which the budget’s revenue provisions would be built.

The budget does not propose selling the Power Marketing Administrations or the Tennessee Valley Authority, in whole or in part.