Today’s lede: DOE’s Perry defends presidential directive to intervene in competitive wholesale power markets. At an event in Texas, Energy Secretary Rick Perry said coal and nuclear power plants are retiring at “alarming” rates, threatening the U.S. power grid and constituting a national emergency that justifies the Trump administration’s plans to intervene in electricity markets and financially support uneconomic baseload generation, Matthew Daly Reports for the Associated Press.
Speaking in Austin at a cybersecurity conference, Perry said coal and nuclear plants “are retiring at an alarming rate that, if unchecked, will threaten our ability to recover from intentional attacks and natural disasters.” The remarks echoed those of DOE Under Secretary Mark Menezes, who filled in for Perry as a keynote speaker at the Energy Information Administration’s 2018 energy conference in Washington, D.C. (click through here).
“The president is right to view grid resilience as a serious national security issue,” Perry said, adding that he is taking steps as directed by the president to keep coal and nuclear plants operating.
Daly notes the statement from PJM Interconnection that there is “no need for any such drastic action” to maintain reliability of its system (click through here). He also quotes John Hughes, president and CEO of the Electricity Consumers Resource Council, which represents large industrial electricity end-users, as warning the administration’s contemplated market intervention would “devastate U.S. manufacturing” and destroy competitive wholesale electricity markets.
“Fuel security and resilience are phony issues,” Hughes said, calling concerns about national security a “pretext” that allows the federal government “to pick winners and losers in the energy markets” by propping up uneconomic power plants that have struggled to compete against cheap, abundant natural gas and renewable energy such as wind and solar power, Daly writes.
The AP story also quotes David Hayes, executive director of the State Energy & Environmental Impact Center at NYU Law School, saying there is no legal basis for the planned market intervention. “It would be a fool’s errand for the Department of Energy to try to concoct a national security argument as a solution to a problem that does not exist,” said Hayes, a former deputy Interior secretary under President Barack Obama.
Rep. Don Beyer, D-Va., also decried Trump’s directive as unjustified. “Donald Trump is ginning up a fake grid emergency to bail out donors in the coal industry while ignoring a real grid emergency that has killed thousands of Americans in Puerto Rico,” Beyer said, calling the planned market intervention a “blatantly corrupt” effort to reward coal industry supporters such as Murray Energy CEO Robert Murray and others who made major donations to Trump’s presidential campaign.
In Austin, Energy Secretary Perry pushes for coal and nuclear bailout. Energy Secretary Rick Perry spoke in Austin today about a new Department of Energy plan to bail out failing coal and nuclear power plants in the name of national security. The former Texas governor said these plants keep their fuel on-site, making them more resilient in the event of an attack or natural disaster. “The president is right to view grid resilience as a serious national security issue,” Perry told attendees at the Department of Energy conference on cybersecurity. “And he’s directed me to prepare immediate steps to stop the loss of these critical resources.”
Exelon CEO would rather see FERC develop a market-based solution. Perhaps no other company stands to gain as much from the Trump administration’s developing effort to intervene in competitive power markets to support economically struggling baseload coal and nuclear power plants than Exelon Corp. But company CEO Chris Crane told Utility Dive’s Gavin Bade his company would prefer to see a process under way at the Federal Energy Regulatory Commission seeking a market-based approach play out.
“We would much prefer a market fix that is based off of a design basis that says, ‘Here’s your vulnerability and here’s what plants should be compensated at,’” Crane told Utility Dive at the Edison Electric Institute’s annual conference in San Diego.
Crane indicated he did not see the situation as an emergency warranting extraordinary intervention in the marketplace. “It’s hard to declare an emergency in PJM when you have a high reserve margin,” he told Utility Dive. Crane said while he “appreciates the administration’s focus . . . we’ve been pushing for more market design support from DOE and through the markets.”
Exelon would prefer the administration allow a proceeding before the Federal Energy Regulatory Commission address the issue, Bade reports. In January, after rejecting the administration’s first effort at enacting consumer subsidies for uneconomic generation facilities, FERC initiated a fact-finding proceeding to define grid “resiliency” and develop market-based approaches to address any threats to grid resiliency.
“That’s exactly what we want to see,” Crane said. “Right now we have a [resiliency] docket and we have the ISOs looking at what can be done.”
Former Missouri regulator cites tight supply in Calif., Texas to support market intervention on behalf of baseload coal. President Trump’s directive to the Department of Energy to intervene in competitive power markets to provide financial support to uneconomic baseload coal and nuclear plants “is grounded in sensible and necessary planning,” Terry Jarrett, a lawyer and former Missouri utility regulators, writes in MarketWatch.com.
“Coal has proven to be the most reliable, affordable option for electricity generation, with a unique ability to undergird baseload power requirements that can’t simply be dismissed. Coal plants are uniquely resilient in storing on-site fuel supplies and powering nonstop through long-term weather events,” Jarrett writes. “The administration is absolutely right to shore up baseload power. It’s simply a prudent, necessary step to ensure the viability of the nation’s infrastructure in the years to come.”
Trump’s coal plan finds critics inside the West Wing. White House officials have yet to reach a consensus over a Department of Energy proposal to subsidize ailing coal and nuclear plants, a top aide told a group of clean energy advocates at the White House yesterday. Francis Brooke, a senior energy adviser to President Trump, told members of the Business Council for Sustainable Energy that it could take months to decide the fate of a DOE plan to help struggling coal and nuclear facilities, according to two people in attendance. In his meeting with clean energy advocates, Brooke encountered some of the plan’s harshest critics. Wind and solar interests have joined the oil and gas industry in denouncing the plan, saying it is unnecessary and would saddle consumers with additional costs. Brooke’s comments left one attendee with the impression that the plan faces serious opposition from some senior officials in the White House. A White House official offered a different view. “The resilience of the power grid was only discussed in passing during the meeting, and like with all policies, the administration is running a rigorous interagency policy process,” the official said. “All options are being discussed, and at this time there is not a set timeline.”
Documents reveal a lobbying blitz by FirstEnergy as Trump mulled bailouts for coal and nuclear power plants that could cost consumers billions. A new filing in the bankruptcy case for FirstEnergy Solutions details how lobbyists at Akin Gump, Washington, DC’s top-earning lobbying firm, spent hundreds of hours in April working on a renewed campaign to secure bailouts for the utility’s coal and nuclear power plants from the Trump administration and state lawmakers in Ohio and Pennsylvania. The nearly $1 million that FirstEnergy Solutions is now known to have paid Akin Gump for its political work in the first four months of 2018 has brought the bankrupt utility a step closer to winning a federal government bailout that clean energy advocates warn could cost consumers $8 billion.
Bailing out the coal industry will hurt consumers. President Trump’s plan to subsidize money-losing coal and nuclear plants makes no economic sense and runs counter to the free market ideology of the party he leads. But it will make the operators of those plants very happy while consumers across the country foot what could be an extraordinarily expensive bill.
Did Trump just propose the opposite of pricing carbon? The Trump administration is scrambling the economics of climate change by proposing to subsidize carbon emissions rather than tax them. President Trump’s plan to prop up struggling coal plants moves in the opposite direction from what energy producers, greens, economists and even oil companies have been asking for: a tax on carbon dioxide. The ramifications could reverberate through the highest-emitting sectors for years to come — if only because of the signal the plan sends. Utilities and energy companies, which look several decades into the future when planning investments, have been operating under the assumption that a carbon tax or other types of regulations would eventually add new costs for releasing CO2. For instance, the utility giant American Electric Power Co. is executing a pivot to natural gas and renewables to help cut its emissions 80 percent over the next 30 years. Trump’s move throws big new questions at those plans. “If there’s one thing companies and investors like, it’s certainty. And this type of intervention flips the table on everybody,” said John Larsen, a Rhodium Group analyst who tracks power markets.
The climate stakes of Trump’s power move. The emerging White House plan to throw an economic lifeline to struggling coal-fired and nuclear power plants would likely thwart progress on cutting greenhouse gas emissions, even though nuclear generation is the largest U.S. source of zero-carbon power, some analysts tell Axios. This underscores how climate advocates increasingly fearful of a wave of nuclear plant closures — a topic we recently explored here and here — are still without policy allies in the White House despite the Trump administration’s support for the fuel.
There’s a chance Trump’s power bailout actually cuts emissions. According to a Bloomberg New Energy Finance report issued Tuesday, coal-fired plants may not actually run more even if the Trump administration creates capacity payments for them. Rewarding reactors with the same, however, would probably lead to more nuclear production and could displace millions of tons of carbon dioxide a year, BNEF analyst William Nelson said in the report.
Assessing the evolution of power sector carbon intensity in the United States. This work is the first to develop a transparent method to compute the emissions intensity for the U.S. electricity sector from 2001 through 2017 at different temporal (annual, quarterly, monthly) and regional (US, NERC, and state) levels. We find that between 2001 and 2017 the average annual CO2 emissions intensity of electricity production in the United States decreased by 30%, from 630 g CO2 kWh−1 to 439 g CO2 kWh−1. This change in CO2 intensity is attributable to an increase in generation from natural gas and wind accompanied by a reduction in coal-fired power generation. http://iopscience.iop.org/article/10.1088/1748-9326/aabe9d
Latest DOE subsides are the equivalent of opioids for the coal industry. In its latest effort to supersede market forces and pick winners of its own choosing, the Trump Administration is directing the Department of Energy to protect uneconomic power plants from market competition. This order follows the release of a draft memo from DOE indicating how the agency is considering activation of seldom-used national security provisions to force some grid operators to buy power from uneconomic coal and nuclear power plants.
Community activist decries utility spending against Iowa municipalization effort. A concerted effort by community activists in Decorah, Iowa, to separate from Alliant Energy and establish a municipally owned utility in the city failed by three votes in a recent election. “The ‘no’ campaign, financed exclusively by Alliant Energy, outspent the grassroots ‘yes’ campaign 5-to-1, according to state campaign disclosure reports,” community organizer Tabita Green writes in a Des Moines Register op-ed complaining of the out-of-state utility company’s “meddling in our local democratic process.”
NRECA launches ‘branding’ effort. Politico reports that the National Rural Electric Cooperative Association has launched a new branding campaign inside the Beltway on the role of electric co-ops. The ad campaign is set to run through July and will highlight some notable co-op facts. See the campaign landing page here.
More electric industry news of note:
This technology could fundamentally change our relationship to electricity. An “operating system” for power could double the efficiency of the grid. A great deal of the electricity in the United States goes to waste. Much is lost in the initial generation of electricity. And much is lost through the use of inefficient devices, like incandescent light bulbs that heat up a filament to produce light. But power is also lost in between, on the grid, as it is carried along hundreds of miles of wires, repeatedly shifted between different voltages, and converted from AC to DC and back, all in the split second between the time it enters the grid and the time it powers your computer. Now a research and development lab-cum-start-up out of North Carolina’s research triangle has begun commercializing a technology it says can measure and manage electricity with a level of accuracy and precision far beyond any existing technology, using a cutting-edge application of real-time computing.
Colorado integrates storage into utility planning process. Colorado Democratic Gov. John Hickenlooper signed legislation on Friday to encourage the installation of energy storage in the state and to integrate storage procurement mechanisms into utilities’ long-term planning processes. House Bill 18-1270 (click through here), also known as the “Energy Storage Procurement Act,” sets a deadline of Feb. 1, 2019, for the Colorado Public Utilities Commission to develop procurement rules. Utilities will be able to file applications for rate-based projects by May 1, though they cannot exceed 15 MW. This is the second energy storage bill Colorado lawmakers have passed this year. In March, Hickenlooper signed a measure that focused on consumer-installed storage (click through here).
‘Greens’ urge N.J. governor to clamp down on CO2 emissions from power plants. The Murphy administration is being urged to ratchet down on greenhouse-gas emissions from power plants when it rejoins a regional initiative to limit climate-harming pollution. In a letter to two Cabinet officials, several environmental organizations recommended an ambitious cap on carbon pollution in 2020, when New Jersey re-enters the Regional Greenhouse Gas Initiative, a multistate program aimed at combating climate change. New Jersey had been part of RGGI until 2011, when former Gov. Chris Christie pulled the state out of the initiative, citing cost to utility customers. Lawmakers sought to rejoin the program but were blocked by repeated vetoes by Christie. Gov. Phil Murphy already has signed a law authorizing the state to rejoin RGGI and negotiations are ongoing. The size of the cap is considered crucial to clean-energy advocates who argue that if it’s too modest it could undermine some of Murphy’s most significant environmental policies and the overall effectiveness of RGGI.
FPL receives final approval to purchase the City of Vero Beach electric system and welcome 35,000 new customers this fall. The Florida Public Service Commission today approved Florida Power & Light Company’s proposed purchase of the City of Vero Beach’s electric utility, marking the final step in a nearly decade-long process. With today’s approval, FPL is on track to welcome the City’s approximately 35,000 customers into its system on Oct. 1, 2018. Vero Beach electric system customers should see immediate rate reductions as FPL customers while the purchase is expected to produce long-term savings of more than $100 million for FPL’s existing customers. “Eight years ago, the City of Vero Beach asked us to consider buying their system in the hopes of reducing the cost of electricity for its residents. Since that time, we have worked with the City, state and federal regulators, the Orlando Utilities Commission, the Florida Municipal Power Agency, 19 cities and many other stakeholders to make this a reality,” said Eric Silagy, president and CEO of FPL. “We are thrilled to reach the final step in a very long process, and we look forward to welcoming 35,000 new customers into the FPL family this fall.”
Average electricity bill in Florida community is $10/month because of solar power. In one Lake County community, people are paying less for electricity in a month than what it costs to buy a movie ticket. This is all because of solar power. Solar power is putting money back into the pockets of the people who live at ‘Trilogy Orlando,’ which is a 55 and older community where just about every home has solar panels. Homeowners only pay about $10 a month on average for electricity. In fact, Trilogy produces so much power that it sells the surplus back to the electric company.
Tarentum. Pa., looking for a new electricity supplier. Tarentum is going to be in the market for a new electricity supplier. The borough’s long-running arrangement to get electric from Talen Energy ended in May, borough manager Michael Nestico said. The borough buys electricity and operates its own distribution system. It has been renewing agreements with Talen, formerly PPL, for 10 years or more, Nestico said. But when the borough sought another renewal with Talen, Nestico said the company told the borough it was no longer in wholesale supply and would not renew it. To continue service, the borough, working with a consultant, negotiated a one-month supply agreement with West Penn Power. The rates did not change. “It had to be done,” he said. “We bought ourselves some time.” West Penn Power, however, would not enter into a contract with the borough, Nestico said. The borough will be seeking bids for a two-to-three year contract, Nestico said. A contract would be awarded in late June, and ratified by council at its July meeting.
California ponders wildfire relief fund as PG&E seeks rate-case delay. California legislators are quietly discussing a new disaster relief fund that, in the aftermath of last fall’s devastating wildfires, could take some of the financial pressure off utility companies such as Pacific Gas and Electric Co. The discussions come as the state awaits the results of official investigations into the causes of last year’s fires, which swept through both Northern and Southern California during intense windstorms. In both regions, power lines falling down or coming into contact with trees are widely considered as possible ignition points for the fires. No legislation to create the relief fund has been formally introduced, and several variations of the concept appear to be under discussion, people familiar with the proposals say.
Calif. utilities regulator may require power shut offs amid high fire danger. The California Public Utilities Commission wants to require utility companies to notify customers if power is cut off when wildfire danger is high. After last year’s devastating fire season in California, some in Yuba County, where the destructive Cascade Fire ravaged the Loma Rica area, are glad to see an effort to prevent future wildfires. “We’re all trying to help each other out,” Loma Rica resident Henry Russer said, as his community continues to rebuild. But Russer questions how effective the CPUC’s proposal will be, or how it could affect his life. “When it’s 115 degrees and they shut my power off, I’m gonna be pretty mad about it,” he said.
Carbon-free, locally controlled: Monterey Bay (Calif.) Community Power coming to homes in July. When area residents flip on the lights in July, the electricity will be coming entirely from carbon-free sources, under local government control — and at no extra cost to the consumer. Or so say the staff at Monterey Bay Community Power, the new locally controlled joint-power authority rolling out service to the counties of Santa Cruz, Monterey and San Benito. Created by an agreement between the three counties and 18 cities, including Santa Cruz, the agency operates under a model called community choice energy, or community choice aggregation. Jointly controlled by the local governments, it operates in partnership with investor-owned utility Pacific Gas & Electric Co. Driven by a desire to take local control of power, the community choice model allows local governments to opt for 100 percent carbon-free electricity.
Community choice programs are not delivering on clean energy for California. As the former mayor of San Diego, I can see why CCAs are attractive to some local lawmakers since they’re billed as cheaper and greener alternatives. But they aren’t delivering on their promises and it’s not a program I would have introduced to taxpayers. These programs produce very little new renewable energy, instead buying from existing sources, including out-of-state wind and solar farms. They take credit for improving our environment but they’re not actually reducing carbon emissions.
Ashland, Mass., chooses to go 100% green energy. The Town of Ashland announced today, June 4, it has selected Public Power, LLC as the new supplier for its Community Choice Power Supply Program. And in a first for Ashland, all power purchased under the agreement will be considered “100% green” through National Wind. In addition to transitioning to green energy, the program will also continue to provide significant savings for Ashland ratepayers.
Hamler, Ohio, council schedules town meetings for electrical aggregation. Village council is moving forward in exploring possible electrical aggregation for Hamler. Pending confirmation from Palmer Energy Co. Energy Consultant Amy Hoffman, Hamler Council Monday tentatively scheduled two town meetings to discuss the new electric-provider option with village residents for June 25 and July 30, each beginning at 6:30 p.m. at the American Legion Post #262 in Hamler.
Residential time-of-use pilot program coming to Minnesota. A two-year pilot program will be rolled out to roughly 10,000 Xcel Energy residential customers in early 2020.
Montana county looks to limit Bitcoin operations. New or expanded cryptocurrency — or Bitcoin — mining operations could be limited in Missoula County under temporary emergency interim zoning that will be discussed during the commissioners’ June 14 meeting. On Monday, commissioners said they don’t know what action, if any, they’ll take on the measure. But they hope that public comments made at the meeting will help chart a path forward amid concerns over noise, the amount of energy used by the cryptocurrency mining operations, and how that energy consumption could affect consumers. “We definitely need to find more information. I want to hear the pros and cons,” Commissioner Cola Rowley said. “What the staff put together is fantastic, but I want more information from outside people, and I see that hearing as a way of getting that.”
Jenkins pushes for W.Va. electric utilities to pass on rate relief to consumers. U.S. Rep. Evan Jenkins (R-WV) prodded his home state’s utility regulator to get West Virginia electric companies in line with the rest of the country and file federally required plans detailing how savings they’ve garnered from recent government tax reform will provide rate relief to their customers. “The intent of our legislation was to benefit working-class families, seniors and small businesses, ensuring they see the positive impacts of tax reform,” said Rep. Jenkins, referring to the Tax Cuts and Jobs Act, signed into law Dec. 22, 2017.
Great Falls-area man takes lead in northeastern Montana PSC race. Sun River Republican Randy Pinocci held an early lead in the four-way Republican primary for Public Service Commission’s northeastern district. Pinocci had 34 percent of the vote, and former state legislator Rob Cook, of Conrad, trailed with 31 percent of the vote. Cory McKinney, of Great Falls, had 15 percent of the vote; and former Libertarian U.S. House candidate Mark Wicks, of Inverness, had 20 percent of the vote. Republican Commissioner Travis Kavulla, of Great Falls, is prevented by term limits from seeking re-election.
Viridity Energy Solutions and Consumers Energy to implement energy management & demand response solutions for Michigan customers. Viridity Energy Solutions Inc., a wholly owned subsidiary of Ormat Technologies, Inc., today announced that it has signed agreements with Consumers Energy, Inc. (“Consumers Energy”), to provide energy management and demand response software, services, and solutions to Consumers Energy customers in Michigan. Consumers Energy, Michigan’s largest energy provider, is the principal subsidiary of CMS Energy, providing natural gas and/or electricity to 6.7 million of the state’s 10 million residents in all 68 Lower Peninsula counties. Under the agreement, Viridity will provide its platform to enable Consumers Energy Virtual Energy Engineer (VEETM) services. Specifically, Viridity will serve as the technology and demand response services provider to Consumers Energy commercial and industrial customers. Viridity’s market-leading software and technology platform has been tailored to the progressive energy programs being implemented by Consumers Energy to assist their customers in effectively managing their energy costs. Viridity will provide a range of software and services, which will be offered under the Consumers Energy brand.
Hydro One and Avista receive regulatory approval of acquisition, concluding merger proceeding in Alaska. Hydro One Limited and Avista Corporation today announced that the companies have received approval from the Regulatory Commission of Alaska of their proposed merger subject to the following conditions: (1) Alaska Electric Light and Power Company’s capital structure is maintained at its previously ordered debt and equity levels, (2) there will be no rate recovery of transaction costs or premium associated with the acquisition, (3) assignment of costs related to services between Avista and AEL&P will be subject to review and approval by the RCA, (4) AEL&P continues to be operated independently with the same experienced management team as existed prior to the acquisition, and (5) the parties adhere to all commitments filed with the RCA on April 3, 2018.