Today’s lede: California PUC takes stock, looks to frame electric policy for the future. The California Public Utilities Commission has unveiled “California Customer Choice: An Evaluation of Regulatory Framework Options for an Evolving Electricity Market,” a paper also known as the Green Book (click through here), that it says is intended to raise awareness of the challenges and opportunities in California’s rapidly changing electricity market and to advance a public dialogue.
“The state’s electric system has worked well the past 15 or so years, since the Legislature took steps to correct the problems that rose out of the energy crisis, but customers are now getting their electricity increasingly from rooftop solar, Community Choice Aggregators, and other non-utility sources,” CPUC President Michael Picker said. “In the last electricity deregulation we had a plan, however flawed. Now, we are deregulating electric markets through dozens of different decisions and legislative actions, but we do not have a plan. If California policy makers are not careful, we could drift slowly back into another predicament like the energy crisis of 2001.”
California effectively all but shut down customer choice in the wake of the state’s failed first-in-the-nation competitive electricity market restructuring. But technology and market forces have dramatically overcome policy. As the state reverted to a vertically integrated model, the regulatory process once again provided for overbuilding by utilities of generation capacity just as rooftop solar and community choice aggregation have resulted in customer declines putting put the state’s utilities into a full-blown panic. The Green Book report jumpstarts a stakeholder process designed to take the California market into the future without jeopardizing continued ratepayer funding for the utilities’ wires delivery network.
“Now, as the state adapts to an electricity market transformation driven by more providers and resource choices, this project offers lessons learned from its own history and the experience of other markets as a way to help California policymakers address the state’s electricity future,” the Green Book report says. The CPUC will take comments on the paper through June 4.
California to become first U.S. state mandating solar on new homes. The California Energy Commission is scheduled to vote May 9 on new energy standards mandating most new homes have solar panels starting in 2020, Jeff Collins reports in the Orange County Register. “If approved as expected, solar installations on new homes will skyrocket.”
Just 15 percent to 20 percent of new single-family homes built include solar, according to Bob Raymer, technical director for the California Building Industry Association. “California is about to take a quantum leap in energy standards,” Raymer said. “No other state in the nation mandates solar, and we are about to take that leap.”
Nuke subsidy opponents make last-ditch pitch to N.J. Gov. Murphy. Various interests described by Tom Johnson NJSpotlight.com as “a diverse group of business, labor, consumer advocates, policy wonks, and environmentalists” are making a last-ditch effort to convince N.J. Gov. Phil Murphy to veto or make changes in S2313 (click through here) requiring New Jersey electricity consumers to subsidize nuclear power.
“S2313 fails to strike a proper balance between utility consumers and the nuclear power industry, fails to protect New Jersey’s economy from unfair competition, is counter to the principles of open and transparent government and will compromise New Jersey’s clean energy future. While we do not oppose a subsidy for nuclear energy if it is first proven to be necessary, we do oppose, as would be required under S2313, taxpayer and employer subsidies when they are not needed and which are established behind closed doors by the interested parties and without ratepayer participation,” the varied interests said in a three-page letter to the governor (click through here).
Murphy has until early June to make a decision on the bill, but is widely expected to sign it since it was married with other legislative proposals boosting renewable energy, offshore wind and energy efficiency.
Merchant power plant developer touts investment in FirstEnergy’s back yard. The $4.6 billion invested to build four new, highly efficient gas-fired power plants in Ohio demonstrate that the public and policy makers have little to fear if utilities like FirstEnergy shutter old, inefficient power plants in the region, a merchant power plant developer maintains.
“What’s happening in the industry right now is equivalent to the automobile replacing the horse and buggy,” said Bill Siderewicz, president of Massachusetts-based Clean Energy Future LLC, which is developing two of the four plants in question. “What’s happening is companies like FirstEnergy had these plants and failed to modernize them. And now companies like ourselves are finding a market to produce electricity more efficiently and at less cost.”
It’s a signature of where growth in new energy will develop in America and what it will look like, Dan O’Brien writes in Youngstown’s Business Journal. “This section of northeastern Ohio and western Pennsylvania – with its abundance of natural gas from the Utica and Marcellus shales – has emerged as the fulcrum for the industry’s future.”
Ensuring resilient and efficient PJM electricity supply. A new IHS Markit report value of cost-effective nuclear resources in the PJM power supply portfolio (click through here) examines the effect of five nuclear closures in the PJM Interconnection, finding the closures will reduce annual net benefits for consumers from PJM grid-based electricity by about $8 billion per year over 2013-2016. That “translates into a consumer net benefit per kilowatt-hour of PJM nuclear generation of about 3 cents per kWh,” the report, prepared for the industry-funded advocacy group Nuclear Matters, concluded.
Coal Plant Redevelopment Roadmap: A guide for communities in transition. Many communities with decommissioned coal plants find themselves stuck in the early stages of redevelopment. Redevelopment is complicated because it takes place through a continuum of actions that are controlled by public, private, and community actors. However, strategies have emerged for municipalities to build capacity to plan for the closure, facilitate transparent stakeholder engagement, and create a streamlined redevelopment process that maximizes benefits to the community.
Other electric industry news of note:
Germany’s electric cars are coming for Elon Musk and Tesla. BMW, Audi, Mercedes have Tesla fighters hitting market soon. “The vehicles I’ve seen are far superior to anything Tesla has,” said Mike Jackson, chief executive officer of U.S. vehicle retailer AutoNation Inc. “They are in a massive pivot and shift away from diesel investment into electrification in both pure electric and plug-in hybrid.”
Short-seller says Tesla stock is worth ‘zero’. Short-seller Mark Spiegel said he believes Tesla will suffer from new competition in the electric-car market. The noted skeptic of the electric-car maker reiterated his bearish stance on the company saying his speech “almost seems redundant” after Musk’s bizarre conference call performance last night. “Tesla is still a zero,” he said. “Tesla’s financials are horrible and worsening even before massive competition coming later this year.”
Peterbilt latest truck maker to compete with Tesla Semi. Tesla’s claims about its electric truck have created some disbelief in the truck industry. Some simply don’t believe Tesla can deliver what they claim, while others are trying to compete with their own trucks, like Daimler with the E-FUSO Vision ONE and Cummins with its own prototype. Now, Peterbilt becomes the latest truck maker with an all-electric class 8 truck program to compete with Tesla Semi. The truck maker announced a partnership with Meritor and TransPower, who will supply all-electric drivetrain systems for two Peterbilt vehicle platforms.
Electric Shock: Buffett-backed BYD plunges on profit warning. Shares in Warren-Buffett-backed BYD, one of China’s largest makers of new energy vehicles, fell 2.1 percent to a seven-month low at the Hong Kong Stock Exchange today after the company warned its Jan.-June net profit may plunge as much as 83 percent from a year earlier. Profit is being hurt by lower subsidies for new electronic vehicles and heated competition in the traditional auto market, the company said late Friday. Today’s loss added to a 5 percet dive on Monday. The fall in BYD’s shares is a setback for a business that has been a new energy vehicle pioneer in China as well as a welcomed investor in the United States.
Southwest Power Pool pursuing grid expansion plan without Colorado utility, for now. Plans to integrate Rocky Mountain electricity service providers and power generators into the Southwest Power Pool may have dimmed. Both the Mountain West Transmission Group and the Southwest Power Pool had stated the expansion would boost affordability and reliability of electricity provided across the Great Plains and Rocky Mountain grids. But Xcel utility Public Service Co. of Colorado announced it was backing out of the plan. Now, remaining members of the Mountain West Transmission Group and representatives of the Southwest Power Pool, which manages the grid that serves Oklahoma utilities, other power distributors and their customers, must sort out whether or not pursuing the expansion still makes sense.
KCP&L supports Kansas City’s clean energy agenda. Kansas City Power & Light is on board with Kansas City’s clean energy goals, which include powering 100 percent of city operations with renewable energy within three years; achieving Energy Star certification for 90 percent of municipal buildings over 25,000 square feet within five years; developing energy efficiency and community solar programs for city employees to participate in at home; and developing an electric-vehicle purchasing plan and procurement collaborative for fleets of public and tax-exempt entities. “We found that there was an alignment between the direction the city wants to go [and] the business model that KCP&L is pursuing,” said Dennis Murphey, the city’s chief environmental officer.
New York’s electric infrastructure in need of modernization, report says. New York’s aging electric infrastructure is inadequate to the carry the load of the state’s increasingly complex generation resources, and it could require multibillion-dollar modernization. The organization that manages New York’s electric grid — the New York Independent System Operator — delivered the assessment in its annual report. The 64-page document (click through here) outlines strategies to cope with the state’s thirst for juice in an industry facing upheaval. “It cannot be understated: this is a time for great transition for the power grid,” reads the opening statement of the report.
New York breathes easier as plans emerge for electrification, starting with new city buses. New York’s Metropolitan Transportation Authority announced a plan to adopt a zero-emissions electric vehicle fleet by 2040. This news is a welcome breath of fresh air. Transitioning away from diesel-fueled buses will improve the quality of life for all New Yorkers in numerous ways.
ISO New England hits milestone: More grid power used at night than midday. New England electricity consumers flipped the script one day last month, when mild weather and high solar output depressed daytime loads below those in the middle of the night. Officials say this is a first but had been expected, due the proliferation of distributed resources.
Is Socorro Electric Cooperative doing enough with renewable energy? That seemed to be the major question among members at its 73rd Annual Members Meeting this past Saturday at the Macey Center on the New Mexico Tech campus. SEC General Manager Joseph Herrera and Board of Trustees President Anne Dorough responded to questions about the cooperative’s commitment to using renewable energy.
Grid operators have sufficient ‘blackstart’ capability, study finds. Operators of the nation’s power grid have sufficient capability to quickly restore their systems using “blackstart” resources in the event of widespread outages, according to a new report by staff at the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation. The study is a follow-up to a 2016 joint FERC-NERC-Regional Entity staff review that assessed the plans of utilities for restoration and recovery of the bulk power system following a widespread outage or blackout. That review identified for further study issues dealing with availability of blackstart resources – generating facilities that can be started without support from the grid or that are designed to remain energized without connection to the rest of the grid. These blackstart resources are critical to maintaining the reliability and resilience of the nation’s transmission grid.
EIA: What is U.S. electricity generation by energy source? In 2017, about 4,015 billion kilowatthours (or 4.01 trillion kWh) of electricity were generated at utility-scale facilities in the United States. About 6 percent of this electricity generation was from fossil fuels (coal, natural gas, petroleum, and other gases). About 20 percent was from nuclear energy, and about 17 percent was from renewable energy sources. The U.S. Energy Information Administration estimates that an additional 24 billion kWh of electricity generation was from small-scale solar photovoltaic systems in 2017.
MidAmerican Energy to add 550 megawatts of wind to Adair County, Iowa. MidAmerican Energy has announced plans to build two new wind farms with a combined capacity of 550 megawatts in Adair County, which will be a part of the company’s previously-announced 2 gigawatt Wind XI project.
NRG Energy reports first quarter 2018 results. NRG Energy reported a first quarter 2018 net income of $233 million, or $0.88 per basic common share. Adjusted EBITDA for the first quarter 2018 was $549 million and cash from operations was $357 million. “I am pleased with our strong first quarter results and good execution against our Transformation Plan goals,” said Mauricio Gutierrez, NRG President and Chief Executive Officer. “Asset sales are underway and we expect to close them in the second half of this year. Right-sizing our portfolio and transitioning our platform to be more customer-driven leaves us well-positioned for market upside this summer and beyond.”
Vestas’ earnings fall as competition hits profitability. Fierce competition drove down Vestas’ profits in the first quarter of 2018, CEO Anders Runevad claimed. Vestas posted revenue of €1.69 billion for the quarter — down 10.1% from a year earlier — while its operating profit (Ebitda) fell 25% to €225 million. Its gross profit also fell 25% year-on-year, from €377 million to €281 million, according to its Q1 2018 results. The manufacturer ended the quarter with an “all-time high” order backlog value, however, with turbines and service agreements worth €21.6 billion — an increase of €1.6 billion year-on-year.
UK tidal power market could generate $1.9 billion by 2030. According to research released by Offshore Renewable Energy Catapult (click through here), the UK tidal stream energy market could reach $1.9 billion by 2030. The industry is also anticipated to support approximately 4,000 jobs in the review period. The report, dubbed “Tidal stream and wave energy cost reduction and industrial benefit,” finds the wave energy sector will fall behind tidal power by around 10 years. However, by 2040 the industry is expected to create $5.44 billion for the UK economy and support 8,100 jobs.