Get smarter, faster, with the EnerKnol Pulse, the newsletter bringing you the most important energy news of the past week. All powered by the EnerKnol Platform. In this edition, the Trump administration's trade war with China escalates targeting solar inverters and batteries; Georgia lawmakers express concern over more than $2 billion in new cost overruns for Georgia Power’s shaky Vogtle reactor project; New Jersey approves the largest ever single-state offshore wind solicitation in the nation as it seeks to capture expiring federal tax credits.

September 24, 2018


Featured Topics

Climate & Green Energy

Electrifying Transport

Rates & Power Markets

Developing the Grid

Fuels & Pipelines


Featured Entities

AECOM

Avista

Bayonne Energy Center

Con Edison Transmission

Dominion Energy

Duke Energy

EQT Midstream Partners

Mexico Pacific Limited

NextEra

NorthWestern Energy PG&E

Piedmont Natural Gas

RGC Midstream

Southern Company

SPP

SunPower

WGL Midstream

Top News

U.S. Imposes Tariffs on $200 Billion Worth of Chinese Goods Including Batteries, Citing Unfair Trade Practices

The Trump administration issued a 10 percent import tax which will apply to $200 billion worth of Chinese goods, including inverters used in renewable energy installations as well certain types of batteries. According to the U.S. Trade Representative’s Sept. 18 announcement, the tariffs go into effect on Sept. 24 and are set to jump to 25 percent on January 1, 2019. The escalation of the trade war with the world’s largest producer of solar cells and components follows an investigation that concluded in March finding that China’s policies and practices related to U.S. technology transfer and intellectual property are unfair and hurt U.S. commerce. The administration said that retaliatory action from China would be countered with tariffs on about $267 billion in additional imports. Earlier this year, the Trump Administration imposed 30 percent tariff on crystalline silicon photovoltaic cells and modules, which are expected to have a small impact on electricity generation from end-use solar installations, according to the U.S. Energy Information Administration.

Georgia Lawmakers Seek Cap on Vogtle Nuclear Project to Protect Ratepayers

More than a dozen members of the Georgia General Assembly, in a Sept. 19 letter to the owners of the Vogtle nuclear plant, expressed concerns over the “ever-escalating cost” of the project and urged them to establish a cost cap to protect electric ratepayers from cost overruns. The lawmakers noted that, last month Georgia Power, a subsidiary of Southern Company, announced a $2.3 billion cost increase, just eight months after taking over the project construction. Although, Southern Company said it will absorb Georgia Power’s share of the costs, the letter said it would disproportionately burden customers of electric cooperatives and city utilities. Georgia Power, which has a 45.7 percent stake, took over as the main contractor, following bankruptcy of reactor designer Westinghouse Electric, to continue the project despite cost overruns and delays. Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, and Dalton Utilities own 30 percent, 22.7 percent, and 1.6 percent, respectively, in the plant.

New Jersey Launches Largest 'Single-State' Solicitation For 1.1-Gigawatts of Offshore Wind Power

The New Jersey Board of Public Utilities approved an application window for 1,100 megawatts of offshore wind capacity, the first step towards meeting the state’s 3,500-megawatt goal by 2030, according to a Sept. 17 press release. Developers can file applications from Sept. 20 to Dec. 28. The board plans to review the applications by July 1, 2019, to allow enough time for developers to qualify for the federal tax credits scheduled to expire at the end of 2019. These credits are expected to cover 12 percent of the total project cost. The U.S. offshore wind industry is picking up pace as eastern states are setting aggressive wind energy procurement goals. Massachusetts, Rhode Island, and Connecticut recently contracted for offshore wind capacity totaling 1.4 gigawatts.

Trump Administration Eases Rules on Methane Emissions From Oil, Natural Gas Drilling

The Bureau of Land Management on Sept. 18 issued final revisions to an Obama-era rule aimed at reducing the waste of methane, a potent global warming pollutant, from venting, flaring, and leaks during oil and natural gas drilling operations. The final rule largely re-establishes the requirements that were in place before the 2016 rule, which, the agency said, was unnecessarily burdensome and duplicative with existing regulations. The move follows a sweeping executive order that President Trump issued last year aimed to undo the prior administration’s climate regulations and agency actions that potentially burden domestic energy development. BLM estimates that 73 percent of wells on federal leases are considered marginal or low-producing wells, which would have suffered due to additional compliance costs without the revisions. Those wells supported $2.9 billion in economic activity in 2015, the agency said. The rollback is estimated to save as much as $2.08 billion over 10 years due to reduced compliance costs. The rule comes on the heels of the U.S. Environmental Protection Agency’s proposal to curtail monitoring requirements for leaks of methane from drilling operations.

Climate and Green Energy

U.S. Announces Solar Tariff Exclusions, SunPower Gets Boost

The U.S. Trade Representative on Sept. 19 granted exclusions from import duties for certain solar products. These include 45-W off-grid solar panels, 120-W flexible and semi-flexible off-grid panels designed for motor vehicles and boats, 90-W frameless panels in colors other than black or blue, back contact solar cells, and modules using U.S.-made solar cells. Solar developer SunPower Corporation announced that its “interdigitated back contact” or IBC solar cells and modules benefit from the exclusion, supporting the company’s planned acquisition of the SolarWorld Americas facility in Oregon. The Trump administration slapped tariffs on panels in January after bankrupt solar manufacturers Suniva and SolarWorld asked for relief, citing a flood of cheap, foreign imports. The tariffs will phase down from 30 percent in increments of 5 percentage points over three years. SunPower Corporation is a subsidiary of Total Solar International SAS. SolarWorld Americas Inc. is a subsidiary of SolarWorld Aktiengesellschaft.

EPA Declines Delaware, Maryland Petitions on Cross-State Ozone Pollution Citing Lack of Evidence

The U.S. Environmental Protection Agency on Sept. 14 denied petitions from Delaware and Maryland asking the agency to address smog pollution blowing across their borders from coal-fired power plants in other states. The states sought action under the Clean Air Act’s “good neighbor provision” that requires the agency to control upwind states’ air pollution that impair the ability of downwind states to meet their ozone standards. The agency said it does not have enough evidence that the upwind states violate the provision, and that cost-effective control strategy is already being implemented in the identified sources under the Cross-State Air Pollution Rule. Delaware complained against emissions from sources in Pennsylvania or West Virginia. Maryland alleged that three dozen units in Indiana, Kentucky, Ohio, Pennsylvania and West Virginia were not operating their pollution control equipment efficiently during the ozone season.

U.S. Energy Department Examines Smart Technology Trends in Setting Efficiency Standards

The U.S. Energy Department is seeking information to better understand the emerging smart technology market, including any energy efficiency trends in smart appliances and commercial equipment. Recognizing the investments in innovative products, the department said that the request for information will ensure that the department does not hamper innovation in the process of setting efficiency standards. The move comes after the U.S. District Court for Northern District of California ruled in February that the department unlawfully stalled energy efficiency standards finalized under the Obama administration, in a win for environmental groups and 11 states that filed the lawsuit. Those rules were estimated to save consumers and businesses $8.4 billion over 30 years. Last year, the department sought information about market-based approaches to revise the conservation program, after putting several efficiency standards on hold. Comments are due within 60 days.

U.S. Energy Department to Invest $120 Million in Research Center to Advance Next Generation Battery Technology

The U.S. Energy Department announced funding to renew the agency’s innovation hub dedicated to battery science over five years, according to a Sept. 18 press release. The Joint Center for Energy Storage Research, established in 2012, addressed major scientific challenges in electric storage including efforts to lay the foundation for doubly-charged magnesium batteries instead of singly-charged lithium, as well as designing computational methods that screened more than 24,000 compounds for new battery concepts and chemistries. The center will focus on multivalent designs with higher energy capacity than lithium-ion batteries and innovative flow-battery concepts for the power grid. The department also selected 10 projects as part of an initiative called “Duration Addition to electricitY Storage,” or DAYS, to facilitate long-duration energy storage that can last up to 100 hours.

California Law Directs $85 Million For Community Support From Nuclear Plant Closure, Requires Carbon-Free Replacement

California Gov. Jerry Brown, a Democrat, signed legislation on Sept. 19 that directs the state public utilities commission to authorize full funding for the community mitigation settlement and employee retention programs that Pacific Gas and Electric Company proposed in its initial application seeking approval to retire the Diablo Canyon nuclear power plant. In January, the commission approved the closure of the plant in 2025 after its operating licenses expire as the plant has become uneconomical to operate. The commission authorized $222 million for employee retention, less than the company’s request of $350 million. The company’s request for $85 million for community impact mitigation was denied citing lack of legislative authorization. The legislation also requires that resource procurement plans to replace the plant’s retired capacity should not increase greenhouse gas emissions.

Electrifying Transport

New York Announces Rebates Up To 80 Percent of EV Charger Installation Costs

Governor Andrew M. Cuomo launched a rebate initiative providing $5 million for installing electric vehicle charging stations in public and private locations, such as apartment buildings, workplaces, and malls, according to a Sept. 18 announcement by the New York State Energy Research and Development Authority. The initiative offers a $4,000 rebate per Level 2 charging port, which provide up to 25 miles of electric range for each hour of charging. The agency said that installers can save up to 80 percent of the total cost depending on installation costs and the model or make of the charging station. The program supports the state’s Charge NY 2.0 initiative, which aims to have at least 10,000 charging stations across the state by 2021. The state has a goal of having 30,000-40,000 electric cars on the road by the end of 2018. Electric vehicles play a vital role in reaching the state’s goal of reducing emissions 40 percent by 2030 as the transportation sector is the largest source of emissions.

Illinois Regulator Examines Electrification of Commercial Fleet Amid Growing Adoption of EVs

The Illinois Commerce Commission held a policy session on the electrification of commercial fleets and buses and the effects of increasing electric vehicles in the transportation sector, according to a Sept. 19 press release. Panelists said that electric vehicles are gaining favor among commercial users due to lower maintenance costs, improved driving range, smaller environmental impact, and high diesel price volatility. They discussed available new technologies and infrastructure needed to support the growing demand for electric trucks and buses in urban regions, and underscored the importance of government support to bring more vehicles to the market. Challenges facing transportation agencies looking to adopt electrified fleets include upfront costs of buses, developing fueling infrastructure, learning real-world ranges, selecting suitable routes, and optimal pairing for bus operations and infrastructure. Panelists agreed that engaging the utility industry in the planning and design phases will lower costs and collaboration with other transit-related entities will determine the potential for sharing charging infrastructure. With regard to the regulatory landscape, panelists called for a competitive market place for electric vehicle adoption, charging stations paid for by public dollars and accessible by all consumers, as well as programs for low-income customers.

Pennsylvania Announces Grants, Rebates For EV Charging Stations Using $118 Million Volkswagen Settlement

The Pennsylvania Department of Environmental Protection announced up to $3 million in grants for installation of fast-charging stations and hydrogen fuel cell equipment for zero emission vehicles through 2019, according to a Sept. 19 press release. Applications for the grant program are due on Jan. 25, July 15, and Dec. 16, 2019. The department will also provide $3 million in rebates for Level 2 or 240-volt charging stations this year, allowing 180 days for applicants to complete their projects. The grants and rebates are part of the department’s “Driving PA Forward” initiative that seeks to lower nitrogen oxide pollution from vehicles. The programs are funded by the state’s share of the settlement with Volkswagen Group of America for cheating on U.S. Environmental Protection Agency emissions tests. Last year, Volkswagen agreed to criminal penalty for selling vehicles that turned on full emissions controls during testing but lowered them during normal driving.

Rates and Power Markets

NorthWestern to Pass $3 Million in Federal Tax Cut Savings to South Dakota Customers, Agrees to Two-Year Rate Freeze

The South Dakota Public Utilities Commission approved a settlement allowing NorthWestern Energy to refund $3 million in savings resulting from the federal tax reform that slashed the federal income tax rate to 21 percent from 35 percent effective Jan. 1., according to a Sept. 18 press release. The company agreed to a rate moratorium to avoid base rate increase until Jan. 1, 2021. Each residential electric customer will receive a one-time credit of $18 and natural gas customer will receive $9 by the end of next month.

District of Columbia Regulator Adopts Final Rules Governing Licensing, Bonding of Retail Electric Suppliers

The District of Columbia Public Service Commission on Sept. 19 issued final rules codifying the licensing and bonding requirements for retail electric suppliers into one chapter. The commission initially established standards in 2000 for requirements including electric consumer protection, licensing process, supplier coordination, and electronic data interchange. A subsequent order adopted bonding forms for electric suppliers. The commission initiated rulemaking in 2015 to combine the requirements. Last month, the commission included “nontraditional marketers” in the definition of “electricity supplier” finding that the Retail Competition Act does not allow for exclusions, reversing its prior decision.

Southwest Power Pool to Launch Reliability Coordination Services in West Next Year

Southwest Power Pool Inc., the grid operator for 14 states in the central U.S., said that over a dozen western utilities have committed to receive its reliability coordination services which will launch in the west in December 2019, according to a Sept. 17 press release. SPP is collaborating with Peak Reliability and the California grid operator to streamline operations in the Western Interconnection to ensure smooth transition of customers. The grid operator has served the Eastern Interconnection for over two decades and has expanded its services and territory several times. Earlier this year, the California grid operator also announced plans to develop its own reliability services to avert price hikes from the potential departure of the Mountain West Transmission Group from Peak – the grid operator’s current coordinator – and Peak’s partnership with PJM Interconnection LLC to offer market services.

Avista’s Cost Adjustments to Slash Gas Bills by 4.9 Percent For Idaho Customers

Avista Corporation’s purchased gas adjustment would lower gas bills by about 0.7 percent, according to a Sept. 18 press release from the Idaho Public Utilities Commission. The adjustment accounts for changes in costs incurred by the utility to purchase, store, and transport gas needed to serve its customers. Avista attributed the proposed rate decrease to continued low natural gas commodity costs, as well as lower transportation costs via interstate pipelines to the utility’s distribution system. These costs which fluctuate with market conditions are typically adjusted in the fall, but the commission approved a 6.4-percent cut in January – just three months after a 2.4-percent cut took effect in November 2017 – to better reflect market conditions. The utility also proposed a 4.2 percent cut for residential natural gas services through its fixed cost adjustment, a mechanism that allows customers to receive a rebate when the utility’s revenue surpasses costs and incur a surcharge when expenses are higher. The proposals would have the combined effect of lowering monthly residential bills by 4.9 percent from Nov. 1. Comments on the proposal are due by Oct. 10.

One-Third of U.S. Households Faced Energy Insecurity in 2015: EIA

About 31 percent of U.S. households faced difficulties in paying energy bills or meeting their heating or air conditioning needs in 2015, a year when overall energy-related spending was the lowest in more than a decade, according to a Sept. 19 report from the U.S. Energy Information Administration. The statistics from the agency’s most recent residential energy consumption survey reported that about 25 million households, or one in five, said they went without or cut back on necessities like food and medicine to pay their energy bills. The survey found that 14 percent of households received disconnection notices while 11 percent kept their homes at unhealthy or unsafe temperature. The agency said differences across geographic regions and between urban and rural residents was meager. Energy affordability is largely associated with the structural features of a residential building and socioeconomic characteristics, the agency said.

Developing the Grid

U.S. Agriculture Department Announces $400 Million to Upgrade Rural Electric Infrastructure

The U.S. Department of Agriculture is investing $398.5 million to improve rural electric service in 13 states, according to a Sept. 19 press release. The spending includes about $43.7 million for smart grid technology to enhance the reliability and efficiency of electric power systems. The loan will also finance an 81 MW solar photovoltaic farm by NextEra Energy Resources LLC in Arkansas. Most of the projects include smart grid elements, apart from line expansions. The agency will make the investment through its Electric Infrastructure Loan Program to fund projects in Arkansas, Colorado, Indiana, Iowa, Minnesota, Missouri, New Mexico, North Carolina, Ohio, Oklahoma, South Carolina, Texas, and Virginia. NextEra Energy Resources is a subsidiary of NextEra Energy Inc.

New Jersey State Lawmakers Introduce Bill to Foster Public-Private Partnerships For Energy Projects

New Jersey state Senators Paul Sarlo, a Democrat, and Steven Oroho, a Republican, introduced legislation on Sept. 17 that would encourage private capital investment to develop energy-related projects at government facilities that lack the ability to address the energy infrastructure needs. The bill seeks to leverage private sector financing and expertise at a time when the state is faced with budgetary constraints. The measure aims to lower the vulnerability of critical governmental facilities to threats posed by weather events such as Winter Storm Quinn that revealed the inadequacies of energy infrastructure. The bill would establish the criteria for governmental entities to award public-private partnership agreements and set competitive contracting procedures to govern these agreements. (S 2958)

Fuels and Pipelines

FERC Allows $5-Billion Atlantic Coast Pipeline to Restart Work After Federal Agencies Revise Permits

The Federal Energy Regulatory Commission on Sept. 17 allowed the Atlantic Coast pipeline to resume construction activities, a month after suspending all work on the line due to a court decision that vacated two federal permits. In August, the U.S. Court of Appeals for the Fourth District ruled that the permits issued by the National Park Service for crossing the Blue Ridge Parkway and the Fish and Wildlife Service for protection of endangered species were invalid. Subsequently, the agencies revised their permits which led the commission to revoke the construction freeze. The $3-billion Mountain Valley project was also ordered to halt construction after a court threw out federal approvals. The Atlantic Coast pipeline, designed to extend from West Virginia to ship supplies into Virginia and North Carolina, is a joint proposal by Dominion Energy, Duke Energy, Piedmont Natural Gas, and Southern Company Gas. The Mountain Valley project, which will serve Mid- and South-Atlantic regions, is a joint venture of EQT Midstream Partners LP, NextEra US Gas Assets LLC, Con Edison Transmission Inc., WGL Midstream and RGC Midstream LLC.

U.S. Energy Department Approves Natural Gas Exports to Mexican LNG Project

The U.S. Energy Department on Sept. 19 authorized Mexico Pacific Limited LLC to export up to 621 billion cubic feet per year of natural gas by pipeline for end use in Mexico and to re-export the gas after liquefaction in Mexico to countries with which the U.S. has a free trade agreement or FTA countries. The approval is for a period of 20 years, from the date of commencing exports or five years from the date of the department’s authorization. Mexico Pacific’s request to re-export the gas to non-free trade agreement nations will be reviewed separately. The company is developing a LNG production and storage facility in the State of Sonora, Mexico, from where the U.S.-sourced gas in the form of LNG will be delivered to markets in Mexico and re-exported to FTA countries. Mexico Pacific is owned by MPL Pacific Limited LLC, which is jointly owned by DKRW Energy Sonora Holding and ACAP Sonora Energy LLC. DKRW Sonora Holding LLC is a subsidiary of DKRW Energy LLC, and ACAP Sonora Energy is owned by a subsidiary of AECOM.

Macquarie Wins U.S. Approval to Sell 610- Megawatt Bayonne Gas Power Plant in New Jersey

The Federal Energy Regulatory Commission on Sept. 19 authorized NHIP II Bayonne Holdings LLC to indirectly acquire the outstanding equity interests in Thermal Bayonne Holdings LLC from MIC Thermal Power Holdings LLC. Thermal Bayonne is an indirect parent of Bayonne Energy Center LLC, which operates a 610-megawatt gas power plant in New Jersey, and Zone J Tolling Co. LLC, which operates as a power marketer. The New Jersey facility is connected to Consolidated Edison Company of New York and supplies the New York wholesale power market. MIC Thermal is a subsidiary of Macquarie Infrastructure Corporation. NHIP II Bayonne Holdings is a subsidiary of North Haven Infrastructure Partners II US Investments L.P. and co-investment entities. North Haven’ general partner is Morgan Stanley Infrastructure II Inc. a subsidiary of Morgan Stanley.