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Energy Permitting Reform Proposal Pulled from Government Spending Bill

September 28, 2022

by Paul Ciampoli
APPA News Director
September 28, 2022

Sen. Joe Manchin (D-WV) on Sept. 27 asked Senate Majority Leader Charles Schumer (D-N.Y.) to remove energy permitting reform legislation from consideration as part of a government spending bill prior to a vote on the spending bill, which is known as a Continuing Resolution (CR).

“Over the last several weeks there has been broad consensus on the urgent need to address our nation’s flawed permitting system,” Manchin said in a statement. “I stand ready to work with my colleagues to move forward on this critical legislation to meet the challenges of delivering affordable reliable energy Americans desperately need. “

The Senate passed the CR on Sept. 27.

Manchin released the text of his energy permitting reform legislation, the “Energy Independence and Security Act of 2022,” on Sept. 21. Manchin is chairman of the Senate Energy and Natural Resources Committee.

As part of the Inflation Reduction Act signed into law on August 16, 2022, Manchin secured a commitment from Schumer, House Speaker Nancy Pelosi, D-Calif., and President Biden a vote on comprehensive permitting reform before the end of the fiscal year on September 30, 2022.

The updated bill text is similar to a draft that was previously leaked, although it includes some changes. 

Specifically, there are two new sections on the definition of natural gas and another that would authorize the Mountain Valley Pipeline.

The first new section clarifies that the Federal Energy Regulatory Commission (FERC) has jurisdiction to regulate interstate hydrogen infrastructure under the Natural Gas Act.

The second new section would authorize the Mountain Valley Pipeline and expedite its approval process. The updated language removes the specific judicial review section that was in the leaked draft bill.

The transmission language in the legislation is mostly the same as it was in the leaked version of the bill.

There are two small changes that were made to the transmission language. The first changes the wording that allows the Department of Energy to designate “any electric transmission facility proposed to be constructed or modified to be necessary in the national interest.”

The second change would clarify that the Department of Interior would be lead agency regarding Outer Continental Shelf lands.

These changes appear to address concerns raised by others on offshore wind transmission facilities, but do not address concerns raised by the American Public Power Association, the Edison Electric Institute and the National Rural Electric Cooperative Association on changes to the Federal Power Act and the scope of FERC’s authority to require the construction of certain electric transmission facilities.

While this is a setback for Manchin’s permitting reform effort, it will likely not be the last attempt to get it attached to legislation this year. 

The CR funds the government through December 16 and full funding measures will need to be taken up before then.  The National Defense Authorization Act (NDAA) also need to pass this year and are likely two vehicles that Manchin would seek to move his efforts forward on.

Click here for additional details on the legislation.

Salt River Project Commits to Supporting Next Phase of SPP Markets Development

September 21, 2022

by Paul Ciampoli
APPA News Director
September 21, 2022

Public power utility Salt River Project (SRP) is one of several Arizona entities that have committed to supporting the next phase of the Southwest Power Pool’s (SPP) “Markets+” development, SPP said recently.

SRP, along with Arizona Electric Power Cooperative, Arizona Public Service Company and Tucson Electric Power join seven other entities who previously committed to supporting market development.

In a late August 2022 letter, the four Arizona entities declared their intent to work with SPP to build a market that includes “both a workable governance framework and a robust market design. This will be an important milestone that will enable us to collectively move forward to the next phase.”

These entities combined serve over 20,000 MW of peak demand in the desert southwest.  With this announcement, SPP has now received interest in supporting the next phase of Markets+ development from entities that serve over 50,000 MW of combined peak demand.

Since December 2021, SPP has been working with western stakeholders to learn what they would like out of a proposed day-ahead and real-time market. Based on its potential customers’ input, SPP will develop the Markets+ draft service offering, which will explain how Markets+ will address things like governance structure, market design and transmission availability.

Last month, eight entities in the Pacific Northwest announced their intent to commit to phase one of Markets+ development: Bonneville Power Administration, Avista Corp., Chelan County Public Utility District, Grant County Public Utility District, Powerex Corp., Puget Sound Energy and Tacoma Power.

SPP said that Markets+ is a conceptual bundle of services proposed by SPP that would centralize day-ahead and real-time unit commitment and dispatch, provide hurdle-free transmission service across its footprint and pave the way for the reliable integration of a rapidly growing fleet of renewable generation.

For utilities that see value in these services but who aren’t ready to pursue full membership in a regional transmission organization (RTO) at this time, Markets+ provides a voluntary, incremental opportunity to realize significant benefits.

SPP staff met with western stakeholders Aug. 9-10 in Portland, Oregon to review work done on the service offering and discuss outstanding items and next steps.

The draft service offering will be distributed Sept. 30, followed by a public comment period, with the final service offering distributed Nov. 18.

MISO Now Includes Energy Storage As An Eligible Resources In Its Market

September 12, 2022

by Peter Maloney
APPA News
September 12, 2022

The Midcontinent Independent System Operator (MISO) recently included energy storage in its market portfolio for the first time.

The inclusion of Electric Storages Resources (ESRs) enables resources, such as batteries, pumped storage facilities and compressed air energy storage, to participate in MISO’s Energy and Operating Reserves Markets as supply or demand.

ESRs are flexible resources that can help reduce peak demands, manage congestion and provide backup power for major disruptions because they can respond quickly and switch between injection (discharge) and withdrawal (charge) modes, MISO said.

The near-term benefits of the new ESR model are modest due to the small volume of storage resources. However, the new model positions MISO ahead of the increased storage participation anticipated with higher penetration of renewables and distributed energy resources over the next five to 10 years, the ISO said.

In 2021, applications of energy storage projects surpassed wind power in MISO’s interconnection queue for the first time. Solar projects were the single highest category with nearly 44 gigawatts (GW) of projects, followed by about 12 GW of storage projects and about 9.1 GW of wind projects.

The Federal Energy Regulatory Commission (FERC) in 2016 issued a notice of proposed rulemaking that would require regional transmission organizations and independent system operators to revise their wholesale power tariffs to better remove barriers to RTO-run wholesale market participation by energy storage resources such as large battery systems.

In 2018, FERC, in Order 841, voted to remove barriers to the participation of electric storage resources in the capacity, energy and ancillary services markets operated by regional transmission organizations and independent system operators.

In October 2019, FERC approved compliance filings by the PJM Interconnection and the Southwest Power Pool in response to a landmark 2018 FERC order that adopted rules aimed at removing barriers to the participation of ESRs in wholesale power markets.

APPA’s Joy Ditto Details How Public Power Will Benefit From Inflation Reduction Act

September 8, 2022

by Paul Ciampoli
APPA News Director
September 8, 2022

Joy Ditto, President and CEO of the American Public Power Association (APPA), recently detailed how public power utilities are poised to benefit from the recently enacted Inflation Reduction Act (IRA).

President Biden on Aug. 16 signed into law the IRA, which will extend and expand various energy tax incentives and give public power utilities direct access to such credits through a refundable direct payment tax credit.

“We’ve been working on this for over twenty years,” said Ditto on a recent episode of White House Chronicle, which is hosted by Llewellyn King.

Since the 1992 Energy Policy Act, “we’ve been looking at this idea of parity or comparability in the tax code for publicly-owned utilities, for other not-for-profit utilities like rural co-ops so that we can really be unleashed in the marketplace as we continue to drive toward a cleaner energy future,” she said.

The mechanism in the IRA, a refundable direct pay credit, “allows us to take advantage of these tax credits that have been available to our for-profit brethren for many years both in the form of an investment tax credit and a production tax credit.”

In the short term, “we first have to get implementation through Treasury, through the Internal Revenue Service,” she noted.

“We will need to work” with the Treasury Department “to make sure that this is implemented correctly.” She said that there is already good precedent in current tax rules and regulations for many of the elements it will take for implementation.

Ditto noted, for example, while state and local entities do not file annual income tax returns, Treasury does already have a mechanism in place for them to claim a refund of federal gasoline excise taxes, from which they are exempt.  “We’re hopeful that IRS and Treasury” will use some of those precedents to implement this, she said.

The congressional Joint Committee on Taxation valued these tax credits at $22 billion a year, so “this means billions of dollars in incentives for us going forward,” she said.

Noting that she has spoken with several APPA members in recent weeks, Ditto said that “they are excited, ready to move on some of these projects that maybe they’ve been holding off on.” In the longer term, “You’re going to see a variety of projects come online in the public power side.”

APPA on September 27 from 2-3 p.m. EDT will host a one-hour webinar “Public Power and the Energy Tax Provisions of the Inflation Reduction Act.”

Registration is free and only open to APPA utility members (including joint action agencies and state associations).

More information about the webinar, including a link to register can be found here.

Department of Energy Seeks Input On Grid Resilience and Innovation Partnership Program

September 7, 2022

by Paul Ciampoli
APPA News Director
September 7, 2022

The U.S. Department of Energy (DOE) on Aug. 30 issued a Request for Information (RFI) seeking input on the $10.5 billion Grid Resilience and Innovation Partnership Program.

The RFI seeks information from states, Tribes, communities, utilities, project developers, and other key stakeholders to help refine the funding opportunity announcement that will be made later this year and to guide the implementation of the funding over five years to enhance the electric grid in support of President Biden’s Bipartisan Infrastructure Law, the Infrastructure Investment and Jobs Act.

“These programs will accelerate the deployment of transformative projects that will help to ensure the reliability of the power sector’s infrastructure, so all American communities have access to affordable, reliable, clean electricity anytime, anywhere while helping deliver on the President’s goal of 100% clean electricity by 2035,” DOE said.

The three programs are: 

DOE expects to release the final Funding Opportunity Announcement for FY22 and FY23 funding that will solicit concept papers and applications later this year. 

DOE is requesting feedback through the RFI on the proposed implementation strategy for these three programs. Comments must be received by October 14, 2022, by 5 p.m. EDT and can be submitted by emailing GDORFI@hq.doe.gov.

Public Power Utilities Express Interest In Participating In SPP Market Development

September 3, 2022

by Paul Ciampoli
APPA News Director
September 3, 2022

The Southwest Power Pool (SPP) recently announced that six additional entities including a number of public power utilities have expressed interest in participating in the next phase of the development of a western market.

Avista Corp., Washington State’s Chelan County Public Utility District and Grant County Public Utility District, along with Powerex Corp., Puget Sound Energy and Washington State’s Tacoma Power join Bonneville Power Administration (BPA).

In a letter Aug. 19, the six Pacific Northwest entities declared their intent to work with SPP to develop a western market that “supports reliability and delivers value to our customers.”

Since December 2021, SPP has been working with western stakeholders to learn what they’d like to see out of its proposed day-ahead and real-time market. Based on its potential customers’ input, SPP will develop the Markets+ draft service offering, which will explain how the proposed service will address things like governance structure, market design and transmission availability.

In August, BPA was the first western utility to formally commit to funding further development of SPP’s “Markets+.”

This group of seven entities represents a well-connected footprint with extensive transmission capability, a large fleet of clean flexible hydro resources, and a peak load over 30,000 MW, which is already 50% larger than the smallest RTO, ISO-New England, SPP said.

Markets+ is a conceptual bundle of services proposed by SPP that would centralize day-ahead and real-time unit commitment and dispatch, “provide hurdle-free transmission service across its footprint and pave the way for the reliable integration of a rapidly growing fleet of renewable generation,” SPP said.

For utilities that see value in these services but who aren’t ready to pursue full membership in a regional transmission organization (RTO) at this time, Markets+ provides a voluntary, incremental opportunity to realize significant benefits, according to SPP.

SPP staff met with western stakeholders Aug. 9-10 in Portland, Oregon to review work done on the service offering and discuss outstanding items and next steps. The draft service offering will be distributed Sept. 30, followed by a public comment period, with the final service offering distributed November 18. Interested parties will make a commitment to fund further market development in early 2023.

SPP is a RTO that 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.

APPA’s Delia Patterson Reappointed To Serve On DOE Electricity Advisory Committee

September 3, 2022

by Paul Ciampoli
APPA News Director
September 3, 2022

Delia Patterson, Senior Vice President of Advocacy and Communications and General Counsel at the American Public Power Association, has been reappointed to serve another term on the Department of Energy’s (DOE) Electricity Advisory Committee (EAC).

Each member of the EAC is appointed by the U.S. Secretary of Energy for a two-year term. The group reports to the DOE’s Assistant Secretary for Electricity and meets three times a year to advise DOE on a variety of electricity issues.

The 37 members of the EAC come from across the energy community, including state and regional entities, utilities, cybersecurity and national security firms, the natural gas sector, equipment manufacturers, construction and architectural companies, non-governmental organizations, and other electricity-related organizations.

During their two-year term, the EAC members advise DOE on current and future electric grid reliability, resilience, security, sector interdependence, and policy issues.

They periodically review and make recommendations on DOE electric grid-related programs and initiatives, including electricity-related research and development programs and modeling efforts.

Members also identify emerging issues related to electricity production and delivery and advise on federal coordination with utility industry authorities in the event of supply disruptions and other emergencies.

She was first appointed to the EAC by then-Secretary of Energy Rick Perry, who served in the administration of President Trump.

Patterson recently joined the advisory board of E Source, a research, consulting and data science firm for the utility sector.

She was also elected president of the board of directors of the Energy Bar Association this year.

Patterson is also a member of the Lawrence Berkeley National Laboratory Future Electric Utility Regulation Advisory Group, and an associate member of the Commodity Futures Trading Commission Energy and Environmental Markets Advisory Committee. 

In addition, she is on the board of the Women’s Energy Resource Council and is the member of APPA’s executive leadership team who leads energy policy formulation and advocacy before federal agencies, federal courts, and various energy policy forum.

Colorado Springs Utilities Becomes Active Participant In SPP Energy Imbalance Service Market

August 18, 2022

by Paul Ciampoli
APPA News Director
August 18, 2022

Public power utility Colorado Springs Utilities became an active participant in Southwest Power Pool’s (SPP) Western Energy Imbalance Service (WEIS) market at midnight on Aug. 1, which took place after more than a year of preparation.

Colorado Springs Utilities joins eight other western utilities already participating in the market, with three others scheduled to join in April 2023: Xcel Energy-Colorado, Platte River Power Authority and Black Hills Colorado Electric LLC.

“Participation in the Western Energy Imbalance Service Market is a significant step in our pursuit of clean energy goals and sends a strong signal that we’re doing everything possible to secure a reliable electric grid and reduce energy-related costs for our customers,” said Colorado Springs Utilities CEO Aram Benyamin in a statement.

Colorado Springs Utilities is also part of an SPP-coordinated effort by several utilities to evaluate membership in the SPP regional transmission organization (RTO).

While SPP administers the WEIS market on a contract basis to nonmembers, it provides RTO members a suite of services including market administration, transmission planning, reliability coordination and more.

A 2021 SPP-Brattle study estimated the WEIS participants’ move to RTO membership would produce $49 million in benefits and those would grow with additional western members. The western utilities’ evaluation of membership is expected to conclude later this year, with the terms and start dates of interested parties’ membership agreements to be announced then.

SPP is also working with numerous interested parties to develop a service offering called Markets, which it said is “a bundle of services that could centralize day-ahead and real-time unit commitment and dispatch, provide hurdle-free transmission service across its footprint and pave the way for the reliable integration of a rapidly growing fleet of renewable generation.”

For utilities that see value in these services but are not ready to pursue full membership in a RTO at this time, Markets+ provides a voluntary, incremental opportunity to realize significant benefits, SPP said.

SPP is finalizing a proposed market design for this service and will publish it for interested parties’ consideration in fall 2022.

President Biden Signs Bill That Provides Public Power With Direct Access To Energy Tax Credits

August 16, 2022

by Paul Ciampoli
APPA News Director
August 16, 2022

President Biden on Aug. 16 signed into law the Inflation Reduction Act (IRA), which will extend and expand various energy tax incentives and give public power utilities direct access to such credits through a refundable direct payment tax credit.

The U.S. House on Aug. 12 passed the IRA after the U.S. Senate passed the bill earlier this month.

The Joint Committee on Taxation estimates the value of energy-related tax incentives to be worth $25 billion in 2022 alone. However, because public power utilities are exempt from tax, they have not been able to take advantage of these incentives for projects they own. Rural electric cooperatives face a similar challenge. As a result, using the tax code to incentivize energy investments has excluded utilities serving nearly 30 percent of all retail utility customers in the United States.

Instead, to take advantage of these energy tax incentives, tax-exempt, community-owned utilities have had to enter power purchase agreements with third party developers — who often themselves would enlist a tax equity partner to monetize energy tax credits.

The result has been profound, the American Public Power Association (APPA) recently noted. For example, recent surveys of public power utilities showed they own just two percent of the non-hydropower renewable energy used to serve their customers: the remaining 98 percent had to be secured through power purchase agreements.

The IRA corrects this by allowing tax-exempt entities to claim energy tax credits directly. APPA has long supported this approach, which will lead to lower costs, local jobs, and more equitable energy service for all customers.

DOE Says It Does Not Plan To Issue Waiver Tied To Transformers At This Time

August 16, 2022

by Paul Ciampoli
APPA News Director
August 16, 2022

In a recent letter to the American Public Power Association (APPA) and the National Rural Electric Cooperative Association (NRECA), a Department of Energy (DOE) official said that DOE is “not planning to issue an industry-wide waiver of enforcement with respect to energy conservation standards for distribution transformers at this time.”

The letter from Kelly Speakes-Backman, Principal Deputy Assistant Secretary for the Office of Energy Efficiency and Renewable Energy at DOE, responded to a request made in May by APPA and NRECA. The groups asked for DOE to institute a temporary waiver of DOE’s distribution transformer efficiency standard in an effort to alleviate the acute shortage of distribution transformers.

DOE recognizes “that supply chain impacts will vary by company, by product, and possibly even by model,” wrote Speakes-Backman. “In exercising enforcement discretion, we take into account the full range of these circumstances and their potential impacts.”

She also acknowledged APPA’s participation in the “Tiger Team” formed under the Electricity Subsector Coordinating Council (ESCC) to further identify and address supply chain problems.

APPA continues to work through the ESCC and other forums to find solutions to alleviate the supply chain shortages, specifically with regards to distribution transformers. APPA has taken a number of actions to address ongoing supply chain challenges. APPA recently rolled out an additional feature to its eReliability Tracker that is available to all public power utilities and allows for voluntary equipment sharing by matching systems with the same distribution voltages. APPA also recently finalized a new supply chain issue brief. APPA members can download the issue brief here.

In a speech in June at APPA’s National Conference in Nashville, Tenn., APPA President and CEO Joy Ditto urged member utilities to share their supply chain challenges with APPA so that the trade group can relay details on these challenges to federal partners and discuss how critical burdens on the sector can be alleviated.

In May, APPA convened a supply chain summit that included participation from public power utility officials who discussed their supply chain challenges and mitigation strategies.