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NewsData's "People in Power" is an exciting new biweekly podcast that explores issues in the energy industry, featuring expert guests from a wide range of backgrounds. Hosted by veteran energy journalists Jason Fordney and Abigail Sawyer of California Energy Markets and including appearances by writers from sister publication Clearing Up, People in Power will explore trends such as development of a Western wholesale electricity trading market, the transition to a more electrified world of new infrastructure and transportation, renewables integration and reliability, wildfire response and mitigation, and many other topics. "People in Power" draws from an unprecedented pool of expertise and insight in a way never seen before! It's available on all major podcast platforms as well as at www.newsdata.com.
Intro:
Welcome to NewsData's Energy West, a podcast about the energy
industry today and where it's going tomorrow.
Dan Catchpole:
Hello, I'm Dan Catchpole, reporter with NewsData's Clearing Up.
Joined by my co-host and editor of NewsData's California Energy
Markets, Jason Fordney.
We're here with some of our top stories.
Jason, what do you have for us this week?
Jason Fordney:
Good morning, Dan. Today, I'll be talking about the California
Energy Commission recently approved new load management
standards and hourly rate information.
This was a three year process that just culminated.
I'll also be talking about my column, which was entitled
"Curious Opposition to Proposition 30.
Who Should Pay for EVs and Wildfire Prevention?" So we'll be
digging into the Prop 30 topic a little bit.
And finally, California Independent System Operator urging the
California Public Utilities Commission to procure more energy
sort of aimed at EV integration.
So that's what's happening in California.
What's going on in the Northwest?
Dan Catchpole:
Well, in the Northwest, we got a report that the Northwest fell
short of its six year target on energy efficiency.
An update on what BPA is doing with the $500 million it over
collected in revenue.
And a new FERC projection or new projection from FERC about the
massive amount of solar power that it
expects to be built out in the next three years.
So how about you start us off with that load management story?
Jason Fordney:
For sure. California Energy Commission, at its October 12th
meeting, approved these new standards.
They're designed to give consumers more information about their
electricity usage and potential costs.
Also designed to bolster grid reliability could ultimately
provide $243 million in net benefits across
15 years, according to the CEC, and the potential to reduce
annual peak hour electricity use by
120 gigawatt hours.
Central to the system is a new computer software.
It's called the Market Informed Demand Automation Server, or
MIDAS, which will provide hourly rate
information that can be downloaded by third party developers
freely obtained for that variable
rates. Development of the standards started in 2019.
They applied to the state's three investor owned utilities, its
largest publicly owned utilities, Los Angeles
Department of Water and Power and SMUD.
Those that deliver more than 700 gigawatt hours of energy each
year to customers,
75% of all electricity sold in the state.
So four amendments were ultimately approved to cover the rate
database automation services, hourly rates, customer education.
Some excitement about this from the CEC.
So, yeah, looking for some more transparency for energy usage.
Commissioner Patty Monahan said The passage of these rules is a,
quote, "dream come true in this nerdy
world of energy," unquote, which I'm pretty sure includes us,
don't you think, Dan?
Dan Catchpole:
I definitely think it does.
Jason Fordney:
So, yeah, you can find out more newsdata.com.
That was our lead story this week.
And back to you for Northwest.
Dan Catchpole:
Fascinating story. Thank you, Jason.
Jason Fordney:
Sure.
Dan Catchpole:
Well, despite a strong start, the Northwest fell short of its six
year target of adding 1400 average megawatts of energy
efficiency, according to the Northwest Power and Conservation
Council.
The council set the target in its seventh power plan, which it
adopted in 2016.
The region came close to hitting its target.
It added 1305 average megawatts, about 93% of the goal between
2016 and 2021.
The Northwest was ahead of pace as recently as 2019, but it fell
far behind over the last two years due to
decreased spending by utilities and the Bonneville Power
Administration on efficiency investments.
Those budget reductions were planned well before the COVID-19
pandemic hit, and Northwest Power and Conservation Council
analysts raised concerns about the budget trends as early as
2018, saying we might not hit the target.
And they turned out to be right.
The pandemic, though, also contributed to the decline, according
to council staff in a presentation to the council recently.
Jason Fordney:
I see. Well, it looks like some of those predictions came true.
Dan Catchpole:
Yeah. And they're recommending the latest power plan, the 2021
power plan.
It significantly reduced the amount of energy efficiency that is
being recommended to be built
out in the Northwest, driven mostly by just falling cost of
clean energy resources.
Energy efficiency is no longer the default low, least cost
resource
in the northwest.
Jason Fordney:
Oh, that's very interesting.
Yeah, very interesting.
Yeah, I was sort of wondering why, but you explained it very
well.
So good coverage there from Clearing Up.
Back in California, my Bottom Lines column, I tackled Proposition
30 and curious opposition to this proposition.
So Proposition 30, which will be put to voters on November 8th,
would tax those earning
more than $2 million for zero emission vehicle incentives
charging stations and wildfire prevention
would raise up to 5 billion per year beginning in 2023.
So California, as we know, is very enthusiastic about ZEVs, as
we call them, zero emission vehicles.
But this time, Governor Gavin Newsom is opposing Proposition 30.
He appeared in a television ad against it, saying it's a money
grab by ridesharing company
Lyft, who has put $45 million behind Proposition 30.
The theory is that Lyft is, you know, they have a EV requirement
and that Governor Newsom
thinks that the company is just trying to put that money to the
taxpayers.
What I pointed out in my column, you know, typically wildfire
prevention and ZEV programs
are funded by everyday taxpayers.
For instance, California, the 2022 budget, which Governor Newsom
signed, allocates 6.1 billion over five years
for ZEVs.
And about 3.5 billion of this was allocated in the last week of
the budget session.
And then we have hundreds of millions of dollars of federal money
coming in for for Zev
implementation. And if you look at some of the big people
opposing Proposition 30,
and I don't want to suggest anything here, but they are some of
Governor Newsom's biggest funders for against his
recall campaign.
So I did find that interesting.
Of course, the governor has signed an executive order putting
California 100% ZEVs by 2035.
But in this case, he doesn't like this one.
And, you know, I also point out that many, many companies
benefit from state tax funded
programs. Volvo North America recently got 2 million from the
CEC.
And, of course, many clean energy companies benefit from
programs like this.
So, yeah, interesting situation.
We'll see what happens.
November 8th, some E3 study came out saying there would be 1.6
times more chargers
outside of disadvantaged communities and three times more
chargers in disadvantaged communities.
With Proposition 30, if it passes, that would go from yeah, that
would take us to about 16 million
chargers. So you would be seeing quite an increase in charging
infrastructure and ZEVs under this ballot measure.
But getting some high level opposition to that.
So yeah, interesting situation.
Proposition 30 will be decided next month.
Dan Catchpole:
It will be interesting to see the outcome.
Jason Fordney:
Yeah, you know, Californians are all about clean energy, all
about electric vehicles.
I don't know how many people are aware of this opposition, and
there's some other people opposing it, too.
But yeah, we'll see what happens.
And again, I don't take a position on Prop 30.
This is just my observation of the debate that's happening.
Dan Catchpole:
We're looking forward to follow up coverage from California
Energy Markets.
Jason Fordney:
All right.
Dan Catchpole:
Well, back in the Northwest, BPA is returning $350 million of
surplus revenue to customers to keep public
power costs down.
The federal power marketer over collected its revenue by about
$500 million, primarily during the last
fiscal year, fiscal year 2022.
In part due largely to strong excess power sales.
Bonneville also plans to use $100 million of that excess revenue
to pay down debt, and the remaining $50 million will go to
non-recurring maintenance costs for existing fish and wildlife
mitigation programs.
The plan is part of a settlement with public power entities, and
the settlement calls for holding the preferred power rate at
no greater than $35.64 per megawatt hour, while keeping short
term and load growth tier two
rates at $63.83 per megawatt hour in fiscal year 2024.
And going down to $60.25 per megawatt hour in fiscal year 2025.
Now, for people who aren't BPA aficionados, the preferred power
rate is the rate that its
primary customers, public power customers, get.
And the tier two rates is what's sold beyond that, either excess
or additional needs that the public
power entities sign up for or to other entities such as investor
owned utilities and other customers.
That's why the tier two rates are higher because BPAs mission is
to provide reliable, cheap
public power.
Jason Fordney:
A laudable goal.
And wow flush with money.
We're talking $350 million.
Dan Catchpole:
Nice position for BPA to be in.
Jason Fordney:
Yes.
Dan Catchpole:
It's a nice change from a lot of the fiscal stories about BPA
over the past ten years.
They've come through a really rough patch in finances, but they
have really gotten themselves into a better position.
There's also been some changes in the market that have benefited
them, but just like changes in the market caught them, put them
in a tough position with cheap natural gas, really affected
their revenue projections, among other things.
But they're in a much healthier position.
Still have work to go.
Jason Fordney:
Awesome. Awesome. Good news there.
Back to California.
California's grid operator says the state needs to procure more
power in coming years, partly to accommodate electric vehicles.
California Independent System Operator told state regulators
they should act to procure more energy for 2026 to 2030.
This is a filing to the California Public Utilities Commission.
CPUC was taking comment on a staff paper on the Commission's
procurement program and near term actions to encourage additional
procurement. We've seen the PUC, obviously they ordered up 11.5
gigawatts.
So it's been a massive rush procurement rush for obvious
reasons.
CAISO joins the CPU's Public Advocate's Office.
However, two community choice aggregators, which would be MCE
and San Jose Clean Energy, they pointed to recent
legislative procurement, the Strategic Reliability Reserve.
They also made a filing to the CPUC saying the status of
baseline resources will not create such a significant system
reliability risk that necessitates an emergency procurement
order.
And they talk about the new Department of Water Resources
Strategic Reliability Reserve, extension of Diablo Canyon,
but CAISO said the Strategic Reserve does not replace normal
planning processes, which is actually a really good point, and
that the Diablo Canyon legislation has a provision that the
capacity cannot be used for integrated resource
planning. There's also the issue of CAISO's interconnection
queues, which are pretty clogged with interconnection
requests. CAISO says that forward procurement occurring while
ahead of the need would help reduce these bottlenecks.
And then one interesting point CAISO said the CPUC has not yet
added into its demand projections.
The forecast increased demand from electric vehicles developed
by the California Energy Commission.
That, of course, predicts higher load, significant higher load
beginning in 2028 from electric
vehicles. So that was our story in Friday's issue.
Read more at NewsData.com.
And yeah, CAISO is the one that runs the grid, so they have a
pretty big voice here in this
this debate. But we'll see what happens.
Dan Catchpole:
Yeah, well, it'll also be interesting to see if that Proposition
30 passes, how that will affect projections for EV adoption.
I'm sure it'll go up.
Jason Fordney:
Oh, absolutely. I mean, you're talking millions and millions of
extra chargers if that does pass, at least in
theory. Yeah.
EV load is becoming a big topic, you know, also access for
people that live in apartment buildings.
But, man, just hundreds of millions of dollars coming into EV
chargers in California.
And we should say, you know, a ZEV is not necessarily an
electric vehicle, too.
You also have hydrogen and other technologies.
Dan Catchpole:
Right. Although the vast majority of them for now are EVs.
Jason Fordney:
Yeah.
Dan Catchpole:
Well, last story I've got is a story out of Washington, DC,
actually.
So FERC expects that solar energy will make up nearly 62% of new
generation capacity coming online in the next three
years, according to an October 5th energy infrastructure update
issued by the agency.
FERC analysts identified 750 solar projects with a high
probability of being built.
Together, those projects would add about 67 gigawatts of
nameplate capacity.
Natural gas, though, is the next largest resource in the report.
FERC analysts project 109 highly probable new projects with a
combined capacity of nearly 21 gigawatts.
That's about 19% of the total projected new resources capacity
that they see being built out by 2025.
Wind rounded out the top three resources with more than 17
gigawatts of expected capacity or 16% of the
total capacity to be built again high that they consider highly
probable to be developed and coming online by the end of
2025. Well, the new natural gas fired plants are coming online,
FERC analysts also expect
135 natural gas fired facilities with nearly 18 gigawatts of
capacity to be retired
during that same period.
So the net total would be about three gigawatts of new natural
gas fired
capacity, give or take a few hundred megawatts.
However, with passage of the Inflation Reduction Act, many clean
energy advocates and experts expect that the
numbers for solar and wind actually will turn out to be under
estimations.
The estimate put together by FERC here was done before the
Inflation Reduction Act was signed into law in August.
Jason Fordney:
Wow. Interesting numbers.
Gas still up there, of course, not in California, but be
interesting to see the locations of those new plants.
And yeah, of course, we always have to think about transmission
.
Without more transmission, all this new generation is going to
have trouble reaching the places it needs to be.
Dan Catchpole:
Indeed. Well, that's all for me.
Dan Catchpole, thank you for listening.
Please rate and review this podcast wherever you listen.
Energy West is edited and produced by our colleagues at Pioneer
Utility Resources and Lucky Sound Studios.
You can find me on Twitter.
I'm @dcatchpole and Clearing Up is on Twitter @CUNewsData.
Jason Fordney:
And I'm on Twitter at @FordneyEnergy.
You can read more of our content at NewsData.com.
You get three free reads a month.
Thanks for listening, and we'll see you back here next week.
Intro:
You've been listening to NewsData's Energy West, a podcast about
the energy industry today and where it's going
tomorrow.