House Members Urge DOE to Withdraw Conservation Standards Rule for Distribution Transformers
April 10, 2023
by Paul Ciampoli
APPA News Director
April 10, 2023
More than 60 House members on April 3 urged Secretary of Energy Jennifer Granholm to withdraw the Department of Energy’s proposed rule to increase conservation standards for distribution transformers.
In December, DOE announced it was proposing new energy efficiency standards for distribution transformers.
Since 2021, electric utilities have been communicating their troubles with procurement of distribution transformers to DOE, the letter noted.
“The lead time for procurement of a distribution transformer can take 16 months or longer. This lead time is a significant problem for electric utilities seeking to bolster the reliability and resilience of the grid and other critical infrastructure, particularly against severe storms and other hazardous weather events,” the House members said in the letter.
“Furthermore, prolonged lead times and the lack of availability have made it difficult for utilities to provide transformers to homebuilders, city planners, and economic developers to get power to end users in new development areas,” the lawmakers said.
“There is no statutory requirement for DOE to issue an increase in efficiency standard. Despite this fact, DOE continues to push forward with a rulemaking that will only increase the energy efficiency of distribution transformers by a fraction of a percentage point,” they went on to say.
“The electric power industry is in no position to undertake this level of regulatory overhaul. Outputs fell far below the needs of the market before the proposed rule was noticed.”
A new efficiency regulation “that completely overhauls the manufacturing process will further exacerbate the significant delays in delivering distribution transformers. Until the industry receives the regulatory certainty it needs, the production backlog will only worsen,” the lawmakers said in urging Granholm to immediately withdraw the proposed rule.
Proposed Efficiency Standards for Distribution Transformers Would Worsen Shortages: APPA
The efficiency standards for distribution transformers proposed by DOE would worsen current distribution transformer supply shortages and, to the extent that they are even feasible, would impose significant costs on consumers, the American Public Power Association said.
The electric industry is currently experiencing a critical shortage of distribution transformers, “and the efficiency standards included in the NOPR would likely exacerbate a supply shortfall that has already reached crisis levels, threatening electric reliability, economic development, and the ongoing transition to lower-emitting generating resources,” APPA argued in its March 27 comments to DOE regarding the NOPR.
FEMA Approves First Phase of Puerto Rico Electric Power Authority Microgrid Project
April 10, 2023
by Paul Ciampoli
APPA News Director
April 10, 2023
The Federal Emergency Management Agency on March 29 approved the first phase of the Puerto Rico Electric Power Authority’s project to design a new solar-powered microgrid system for the island municipalities of Vieques and Culebra, located east of the main island.
The total cost of the project is nearly $97 million across two phases and will be fully funded by FEMA’s Hazard Mitigation Grant Program.
The microgrid, which will be able to function independently from the main grid, includes a 12.5-megawatt solar-based system for Vieques and another 3-megawatt system for Culebra. The grids aim to increase power generation capabilities and leverage renewable energy through solar panels, making the project more sustainable, FEMA said.
The first phase of this project, which accounts for over $10.2 million of the total project cost, will consist of architectural and engineering design services, a geotechnical study and an electrical load assessment, among other preconstruction activities.
FEMA’s HMGP program provides funding to state, local, tribal and territorial governments so they can develop hazard mitigation plans and rebuild in a way that reduces, or mitigates, future disaster losses in their communities. Funds for projects under this program are obligated in phases as preliminary steps are completed that may lead to the approval of additional funding obligations.
Puerto Rico has access to roughly $4 billion in HMGP funding, the maximum allocated by Congress. To date, FEMA has allocated nearly $3 billion under this program in addition to over $29 billion under its Public Assistance program to help the island rebuild after Hurricane María.
Public Power Utilities Recognized by APPA for Reliability Efforts with Certificates of Excellence
April 5, 2023
by Paul Ciampoli
APPA News Director
April 5, 2023
The American Public Power Association has honored 219 public power utilities with a “Certificate of Excellence in Reliability” for reliable performance in 2022.
Utilities that are subscribers to APPA’s eReliability Tracker service are eligible to earn these certificates. To earn a certificate, a utility’s 2022 System Average Interruption Duration Index must fall in the top quartile of all utilities’ SAIDI numbers averaged from the past five years based on Energy Information Administration Form 861 survey data.
The certificates recognize utilities that have provided exceptionally reliable service and power to their communities.
“It’s encouraging to see year after year that public power’s track record for providing highly reliable service is backed up by data,” said APPA Director of Research and Development Paul Zummo. “These utilities are the best of the best when it comes to keeping the lights on. And these communities should be proud of their local power providers and appreciate the hard work that goes into earning this recognition.”
When looking at eReliability Tracker subscribers’ 2022 outage data, 91% of utilities that verified their 2022 outage data had a 2022 SAIDI that was below the average national SAIDI for 2017-2021 (according to EIA data). The data also includes investor-owned utilities and rural electric cooperatives.
This demonstrates that most public power utilities are above average in reliability when compared to all U.S. providers.
The list of winners is available at PublicPower.org.
Proposed Efficiency Standards for Distribution Transformers Would Worsen Shortages: APPA
March 29, 2023
by Paul Ciampoli
APPA News Director
March 29, 2023
Efficiency standards for distribution transformers proposed by the Department of Energy would worsen current distribution transformer supply shortages and, to the extent that they are even feasible, would impose significant costs on consumers, the American Public Power Association said.
The March 27 comments filed by APPA come in response to a DOE notice of proposed rulemaking on Energy Conservation Standards for Distribution Transformers issued late last year. If the rulemaking is adopted, almost all transformers produced under the new standard would feature amorphous steel cores.
“As a threshold matter, the NOPR’s proposal to tighten distribution transformer efficiency standards comes at an extremely precarious time for electric utilities and their transformer suppliers,” APPA said.
The electric industry is currently experiencing a critical shortage of distribution transformers, “and the efficiency standards included in the NOPR would likely exacerbate a supply shortfall that has already reached crisis levels, threatening electric reliability, economic development, and the ongoing transition to lower-emitting generating resources,” APPA argued.
“It is difficult to overstate the concerns of APPA members and other electric utilities about the current transformer shortage,” it said,
DOE’s analysis of the proposed standards “must account for the effects that the revised standards would have on suppliers’ ability to meet industry demands, and DOE should also consider the impact of the NOPR on near-term supply chain constraints. These considerations alone warrant reconsideration of the proposal to revise distribution transformer efficiency standards at this time.”
Even if DOE was to conclude that the distribution transformer supply chain crisis does not provide grounds to forego prescribing new efficiency standards at this time, the NOPR has not adequately supported a finding that the proposed standards would be technologically feasible and economically justified, as required by the Energy Policy and Conservation Act, the trade group said.
APPA said the NOPR fails to address several very significant costs and technical challenges that the revised efficiency standards would impose on distribution transformer suppliers, electric utilities, and/or electric consumers. “Indeed, the number and variety of important issues on which DOE seeks comments tend to show the highly provisional nature of the NOPR’s conclusions.”
APPA Survey
APPA noted that it conducted a survey of public power utilities in February and March 2022 on disruptions to the utility supply chain. One hundred twenty-one public power utilities responded to the survey, with 114 answering all questions. When asked to indicate which supply chain disruptions were most concerning to their utilities, 103 out of 121 respondents ranked transformers as their highest concern. An additional 13 ranked transformers as their second-highest concern.
Evaluating the survey data individually, and assuming no changes to the current conditions, 19 out of 91 utility respondents, or 21 percent will run out of new transformers within the quoted 12-month lead time for transformer shipments. Most of these utilities are larger public power utilities.
Contingencies public power utilities have used to address the transformer shortage include refurbishing their own transformers, purchasing transformers from other utilities (where possible), or harvesting unused transformers already installed in their systems, APPA said.
APPA Questions Assumptions Underlying NOPR’s Technical and Economic Analyses
DOE preliminarily concludes that the distribution transformer efficiency standards proposed in the NOPR are technologically feasible and economically justified.
“While APPA recognizes the complexity of performing the relevant technical and economic analysis to determine if the proposed efficiency standards satisfy EPCA’s statutory standards, APPA respectfully submits that certain of the assumptions underlying the NOPR’s technical and economic analyses are not adequately supported and/or overlook important considerations that are material to the conclusions.”
The NOPR’s assumptions about transformer availability and cost are not adequately supported. The use of more accurate industry data would shows the lack of economic justification for the proposed revised standards, APPA said, noting that transformer lead times and prices continue to increase.
Supply Chain Constraints May Negatively Impact Reliability
Transformer lead time delays make it more difficult to connect electric vehicle supply equipment and interconnect renewables, potentially inhibiting utilities’ ability to transition to lower- and non-emitting resources, APPA said.
It noted that the North American Electric Reliability Corporation has highlighted the reliability risk associated with the transformer shortage, noting in its most recent Winter Reliability Assessment, that “[i]nadequate supply of distribution transformers could slow restoration efforts following winter storms.”
These supply chain issues are directly harming consumers, the association said. “Transformer unavailability has led to delays in housing construction, forcing thousands of new-home buyers to wait as work is halted on new home construction for months at a time. Among public power utilities, one in five projects were deferred or canceled.”
APPA urges DOE to Reconsider NOPR
APPA urged DOE to reconsider the NOPR or delay the implementation until the transformer supply base is strengthened enough to increase supply, reduce costs, and greater diversity of component suppliers exists.
APPA also said that DOE should rework the cost-benefit case with the realistic numbers included in all responses to the NOPR.
Mich. Public Power Utility Grand Haven Board of Light & Power Details Strong Reliability Performance
March 24, 2023
by Paul Ciampoli
APPA News Director
March 24, 2023
Michigan public power utility Grand Haven Board of Light & Power is performing significantly better than both state and national averages across a range of reliability areas.
On March 16, the utility presented the 2022 distribution system reliability indices during a Board of Directors meeting.
The Distribution Reliability Report provides insight into many areas of utility operations, including outage tracking, restoration, and overall system reliability. In all areas the Grand Haven Board of Light & Power is performing significantly better than both state and national averages.
“The BLP has, over the past seven years, invested a considerable amount of money in both our transmission and distribution systems including improving our vegetation management program. The annual reports let us know the return on these improvements for the benefit our customers,” said Board Chairman Mike Westbrook.
Robert Shelley, distribution and engineering manager at the utility, updated the Board on the status of the electrical system’s overall health and reliability. Shelley informed the Board of Directors that electric utilities use three common statistics in measuring distribution system reliability: System Average Interruption Duration Index, System Average Interruption Frequency Index and Customer Average Interruption Duration Index.
SAIDI represents the total length of time an average customer experiences a non-momentary power interruption during the year. For SAIDI, the BLP’s system average outage duration is 2.75 hours, which is below the national average of 7.93 hours and also significantly less than the state average of 14.85 hours.
SAIFI measures the frequency of interruptions. The BLP’s reported frequency of interruption index of 1.38 is lower than the national average of 1.44 and also lower than the state average of 1.65.
CAIDI represents the average restoration time to restore electrical service to the average customer. The BLP’s reported restoration time of 1.99 hours is much less than the national average of 5.52 hours and also significantly less than the state average of 9.01 hours.
Shelley told the Board that it has taken careful planning and engineering to help us achieve these results, but it is also a direct reflection on the dedicated employees of the utility.
Shelley also reported that BLP customers experienced no significant outages during February’s ice storm that blew through Michigan knocking trees and limbs down and cutting power to 700,000 homes and business in other service territories.
The Grand Haven Board of Light and Power serves approximately 15,000 customers in the City of Grand Haven, City of Ferrysburg, Grand Haven, Spring Lake and Robinson Townships.
Department of Energy, Environmental Protection Agency Sign Reliability MOU
March 11, 2023
by Paul Ciampoli
APPA News Director
March 11, 2023
The U.S. Department of Energy and U.S. Environmental Protection Agency on March 9 signed a joint memorandum of understanding under which the two agencies will collaborate on efforts to boost electric grid reliability.
The new MOU on Interagency Communication and Consultation on Electric Reliability builds upon longstanding engagement from DOE and EPA with the power sector and further commits the agencies to routine and comprehensive communication about policies, programs, and activities regarding electric reliability. This includes sharing information and analysis, and ongoing monitoring and outreach to key stakeholders to proactively address reliability challenges.
Both agencies have designated a team of experts on electric reliability to serve as points of contact for routine communications across the agencies. In addition, the agencies will meet on an at least semiannual basis to provide updates about policies, programs, and activities pertaining to electric reliability, share information and analysis, and discuss ongoing monitoring and outreach activities.
The U.S. already has in place a multilayered system of institutions, policies, and practices to ensure that our infrastructure for generating, transmitting, and distributing electric power maintains the highest standards of reliability, the agencies said.
“The MOU ensures that, with the sound application of existing authorities and policy tools, DOE and EPA can continue to support the ability of the power sector to maintain electric reliability and seize new reliability opportunities presented by clean energy advancement.”
EPA and DOE anticipate continued consultation with the Federal Energy Regulatory Commission on electric reliability challenges.
NYPA Wins FAA Approval For Beyond Line of Sight Drone Operations
February 28, 2023
by Peter Maloney
APPA News
February 28, 2023
The Federal Aviation Administration has granted the New York Power Authority approval to fly drones beyond the visual line of sight of the pilot.
FAA regulations require pilots to maintain visual contact while operating a drone. The FAA-granted waiver allows operators to conduct operations without the pilot or an observer being able to see the unmanned aircraft or to scan the surrounding airspace throughout the entire flight. Routes, however, must be pre-planned and the drone must remain within 50 feet above ground level or within 50 feet of structures.
NYPA says the waiver will enable it to conduct fully remote drone operations such as asset and vegetative management inspections at its Blenheim-Gilboa Pumped Storage Power Project in Schoharie County.
NYPA chose the Blenheim-Gilboa Pumped Storage Project as a first use-case to prove the technology’s application, primarily because of the sparser population in the region.
“Drones will become an even more valuable tool as we expand our capability to detect infrastructure issues and support our mapping and land management responsibilities,”
Justin Driscoll, NYPA acting president and CEO, said in a statement. “Being able to capture images remotely, regardless of weather conditions or distances, will allow us to track and evaluate our assets more efficiently and safely.”
The waiver was obtained with the help of Skydio, a U.S. drone and software manufacturer providing equipment and advisory services.
“Our application demonstrated to the FAA that we are ready to enhance our program and capabilities,” Peter Kalaitzidis, manager of NYPA’s unmanned aircraft systems program, said in a statement.
NYPA already operates drones at several sites throughout New York State to monitor asset health, including for inspection of transmission lines, vegetation management and monitoring of overgrown trees, and spillway erosion mapping. The agency has more than 40 employees trained as drone pilots.
“Having this waiver removes limitations and unlocks opportunities moving forward,” Kalaitzidis said. “We will continue to explore potential uses for this technology that will benefit the Authority and hopefully the industry at large. At present, we are developing the procedures, mitigation steps and hardware so we can best use these resources over the next few years.”
Resolutions Approved at Legislative Rally Address Transformer Supply Chain Crisis, Direct Pay Tax Credits
February 28, 2023
by Paul Ciampoli
APPA News Director
February 28, 2023
The American Public Power Association’s Legislative and Resolutions Committee on Feb. 28 approved eight policy resolutions during APPA’s 2023 Legislative Rally in Washington, D.C.
The member-sponsored resolutions will guide APPA’s advocacy efforts for 2023 and beyond.
Included among the approved resolutions was one on the supply chain crisis for distribution transformers. In the resolution, APPA urges immediate federal efforts to address the current supply chain crisis for critical grid components, such as transformers, which threatens public power utilities’ ability to provide reliable and affordable power.
Another resolution addresses direct pay tax credits. APPA believes Congress should abandon the indiscriminate, across-the-board spending cuts imposed by sequestration and remove the needless threat of statutory Pay-As-You-Go Act sequestration from refundable direct pay tax credits for public power utilities.
A third resolution approved at the Rally relates to the infrastructure permitting process. APPA is urging federal policymakers to streamline federal permitting and siting rules to help facilitate the construction of energy infrastructure necessary to provide affordable and reliable electricity and to integrate more renewables onto the grid.
The full texts of all eight approved resolutions, including transmission policies, transmission joint ownership opportunities, and other topics, are available on the APPA the Policy Resolutions page.
APPA Urges FERC to Engage With Policymakers, Industry Partners on Transformer Challenges
February 27, 2023
by Paul Ciampoli
APPA News Director
February 27, 2023
The Federal Energy Regulatory Commission should engage with other policymakers and industry partners on distribution transformer supply chain constraints to support reliability, security, resilience, affordability, and economic development, the American Public Power Association said in recent comments filed at FERC.
The Feb. 17 comments address a number of issues covered at the December 7, 2022 technical conference on supply chain risk management convened by the Federal Energy Regulatory Commission and U.S. Department of Energy.
APPA was represented at the technical conference by Adrienne Lotto, APPA’s Senior Vice President of Grid Security, Technical and Operations Services.
In its post-technical conference comments, APPA noted that Lotto highlighted the current lack of availability of transformers, particularly distribution transformers, as a significant supply chain challenge facing the electric industry.
“It is vital that government understand that this issue is not about the associated costs of transformers, which has certainly gone up significantly during this supply chain shortage, but rather about the actual availability of these components due to extremely constrained supplies,” APPA said.
Lotto urged DOE and the Commission to engage on this issue, and to encourage its government partners to do the same.
Utilities Taking Extraordinary Measures
APPA noted that in order to help prevent supply chain constraints from adversely impacting reliability, utilities are taking extraordinary measures to meet current demand with limited supply. These measures include refurbishing older equipment and swapping equipment in the field to generate spares from underutilized equipment.
“These are necessary, last-ditch efforts to protect the safety of electric customers and sustain other sectors that depend on electricity, but they also move the industry further away from clean energy, efficiency, and affordability goals. Even with a strong mutual aid program in place, for the first time, public power utilities are raising concerns that they may not have the stocks to assist,” APPA said.
The industry is also working collectively to help respond to the distribution transformer shortage. The Electricity Subsector Coordinating Council has established a Supply Chain Tiger Team to address resiliency and security concerns arising from supply chain constraints. This team has identified labor and material availability as the greatest needs for manufacturers to immediately increase transformer production.
“The ESCC is an extremely important forum for responding to the distribution transformer shortage, and APPA encourages DOE to prioritize this effort and work with industry to develop a cohesive actionable plan to address the shortage.”
APPA has also urged other federal policymakers to act to help address the transformer supply-demand imbalance. “Notwithstanding these efforts, effective solutions have been difficult to achieve,” it said.
While acknowledging that the Commission does not have direct jurisdiction over the distribution transformer supply chain, APPA’s comments applauded “FERC and DOE for using their convening power to help highlight this critical industry concern. Consistent with Ms. Lotto’s preconference statement, APPA urges the Commission to engage with other policymakers and industry partners on this issue to support reliability, security, resilience, affordability, and economic development.”
FERC Does Not Need to Revisit Current Supply Chain Risk Management Reliability Standards
A panel at the technical conference addressed the current supply chain risk management reliability standards, and a portion of the discussion during this session (and others) related to whether the Commission should revisit the current SCRM standards.
Among the issues raised was whether the Commission should rethink the current approach of classifying Bulk-Electric System Cyber Systems as high, medium, or low impact based on the potential grid impacts that could result from a compromise of the asset.
Consistent with Lotto’s remarks, the consensus of the technical conference panelists was generally that the current SCRM standards are working effectively, with some suggesting that more prescriptive revisions to the standards could be counterproductive, APPA said.
Lotto noted that NERC and its stakeholders have been responsive to emerging risks and have revised the reliability standards where warranted. A number of panelists also highlighted the merits of the current NERC standards’ approach of classifying BES Cyber Systems as high, medium, or low impact.
Panelists emphasized the need for a layered, defense-in-depth approach to cybersecurity that emphasizes coordination between government and industry, including robust sharing of actionable information.
“APPA agrees with these sentiments, which caution against the Commission requiring additional mandatory security control requirements for the SCRM reliability standards at this time,” it said.
Proposed California PUC Decision Could Scuttle Sunnova’s Microgrid Plans
February 21, 2023
by Peter Maloney
APPA News
February 21, 2023
In a proposed decision, a California Public Utilities Commission administrative law judge recommended granting a challenge that would deny Sunnova Energy’s plans to build community microgrids in California.
In September Sunnova Community Microgrid California, a wholly owned subsidiary of Sunnova Energy, applied to the CPUC for a Certificate of Public Convenience and Necessity for authorization to build and operate public utility microgrids and to set electric service rates for the microgrid customers.
In the application (22-09-002), SCMC laid out plans for the microgrids that would be built as part of new master planned residential communities of between 500 to 2,000 homes, as well as and select non-residential facilities that would be co-located in or an essential part of each community.
SCMC also requested the CPUC’s approval to provide bundled retail service under Section 2780 of the Public Utilities Code and requested authority to establish market-based rates for service and requested exemption from several CPUC general orders and rules, including its general order regarding advice letters and customer notice requirements and affiliate transaction rules.
In October, the Public Advocates Office (Cal Advocates), an independent unit of the CPUC, filed a motion to dismiss SCMC’s application. In the petition, Cal Advocates argued that SCMC’s requests are based on “unsubstantiated claims and lack the basic information” required for a CPCN. Cal Advocates also said SCMC did not demonstrate that its proposals would ensure rates are just, reasonable, and necessary.
Cal Advocates also contended that the CPUC should not consider SCMC’s application before a regulatory framework for multi-customer microgrids is developed in the commission’s ongoing Rulemaking 19-09-0091 and noted that the commission “rejected the same proposal to rely on the microutility statute that SCMC proposes.”
The Utility Reform Network, Southern California Edison, Pacific Gas and Electric, and San Diego Gas and Electric also filed protests with the CPUC seeking dismissal of SCMC’s application.
In the proposed decision, Administrative Law Judge Colin Rizzo granted Cal Advocates’ motion to dismiss because the motion is not improper, the exemptions SCMC seeks are unauthorized, and SCMC fails to provide the information required for a CPCN.
The proposed decision has no legal effect until and unless the CPUC hears the item (Agenda ID #21361) and votes to approve it. At the earliest, the item may be heard at the CPUC’s April 6 business meeting.
California does, under Section 2780, provide for an “electric microutility” to be the sole-source of generation, distribution, and exclusive electricity sales to a customer base of fewer than 2,000 customers, but in the proposed decision Rizzo noted that SCMC was seeking “numerous exemptions from statutory requirements for electrical corporations based on its proposed characterization as an ‘electric microutility’ under Section 2780.”
However, the statute defines an “electric microutility” as an electrical corporation that is regulated by the commission, thus, “by the express terms of the statute, an ‘electrical microutility’ must also meet the definition of an ‘electrical corporation,’” a conclusion already affirmed in the commission’s microgrid rulemaking, which rejected “the assertion that under Section 2780, we can exempt ‘microutilities’ from the requirements applicable to electrical corporations,” Rizzo wrote in the proposed decision.
And while SCMC argued that granting Cal Advocates’ motion to dismiss would be a “drastic” remedy that “may be true in the abstract,” the argument “would be more persuasive were there not already an ongoing rulemaking,” Rizzo said. Further, rather than seeking modification of a prior commission decision, SCMC instead was seeking “a divergent, contrary ruling in a totally new proceeding.”
“SCMC is seeking to be exempt from the Commission’s statutorily required function of conducting oversight of electricity rates to ensure that they are just and reasonable,” Rizzo wrote. To grant “SCMC this authority, the Commission would have to abdicate its responsibility to ensure just and reasonable rates,” Rizzo said.
“It is curious and concerning that the PAO, a presumably independent division of the CPUC who is charged with representing the public interest, is seeking to dismiss our microgrid application before it gets any opportunity to be heard through a public hearing,” said Meghan Nutting, Executive Vice President for Government and Regulatory Affairs, at Sunnova.
“Our application clearly outlines the reliability, rate, environmental, and other public interest benefits that community microgrids can provide. This proposed decision is troubling and disappointing for a state that has set such bold climate targets yet is struggling with making steady progress on them,” she said.