The NW Energy Coalition hosted our annual Spring Conference across two half-day sessions on May 4 and May 9. Before we dive into a recap of the conference’s panels, we’d like to thank our sponsors, without whom this event would not have been possible!
May 4: Local Energy Resources and Resiliency
The first morning of the conference, May 4, kicked off with a welcome from Nancy Hirsh, Executive Director of the NW Energy Coalition. Nancy then introduced the moderator for the first panel of the conference, Marli Klass, Energy & Environmental Justice Policy Associate with the NW Energy Coalition.
Marli kicked off the panel, “Local Energy Resources and Resiliency,” by introducing a paper that the NW Energy Coalition published a few years ago, The Harmonious Grid, which was later referenced in the panel. Marli then introduced the four panelists:
- Amy Cilimburg, Executive Director, Climate Smart Missoula
- Scott Gibson, Energy Storage and Emerging Technologies Department Manager, Snohomish County PUD
- John Seng, Policy Manager, Spark Northwest
- Otto Braided Hair, Jr., Co-Founder and Interim Chair Advisory Board, Indigenized Energy
Each panelist had an opportunity for an opening statement, answering the question, “What does community energy resiliency mean to you in your work and in your local community?” Panelists were prompted to share an example project.
John Seng kicked off opening statements by contrasting energy resiliency – ensuring energy infrastructure is safe and reliable – with community resiliency, or “creating and supporting the conditions and resources that allow communities to thrive on a day-to-day basis.” He further explained community resiliency as minimizing future climate change and preparing communities for the aspects of climate change that are here now. John shared an example of a project that Spark Northwest helped support: a 50-kW rooftop solar array for a Lummi Nation school. He shared some words from Bernie Thomas, Director of Education at the Lummi Nation school, to close out, emphasizing that these projects are just one aspect of a broader movement to change how we produce and use resources and relate to the environment.
Amy Cilimburg was up next, explaining that Climate Smart Missoula is focused on resiliency and mitigation of climate change. Specifically, Climate Smart Missoula works on the built environment and works to address energy burden, improve weatherization programs, and tackle the impacts of wildfire smoke. They have launched an initiative called Electrify Missoula to help get resources for clean, safe homes to low- and moderate-income communities. They also launched a carbon-offset footprint project to raise funds by having people voluntarily pay to offset travel emissions, for example. Funds are reinvested into local affordable housing towards heat pumps, weatherization, and more.
Scott Gibson followed Amy and shared a battery and microgrid project that Snohomish County PUD put together in Arlington, WA. The purpose was to experiment with everything one could do with storage and a microgrid: renewable energy integration, grid support and resiliency, peak shaving, and more. Scott emphasized the need for the energy grid to be able to recover quickly from extreme weather events.
Opening statements were closed out by Otto Braided Hair, Jr. who began by sharing a story about stopping a coal mine in 2016. Otto explained that his Tribe’s culture is intertwined with nature and connected the work we all do to mitigate climate change to a deeper fight for protecting nature. Otto works to promote renewable energy, starting with solar, and has completed a demonstration project on Northern Cheyenne Tribe land as well as Standing Rock land. The Northern Cheyenne Tribe is also expecting a proposal for a 400 MW project. He is also working on zoning preferred locations on the Tribe’s land for renewable energy to ensure the protection and preservation of historic sites.
After opening statements, Marli launched into Q&A with the panelists, starting with the question, “Can you speak about the opportunities that distributed energy resources, energy efficiency, and demand management (also known as managing customer load) would provide to communities, and also the challenges in connecting these resources to the future grid?”
Scott shared that Snohomish County PUD has applied for Washington Clean Energy grants for two more microgrid projects: one with the Tulalip Tribe and one in South Everett. Scott explained that these two projects will help the utility learn how microgrids can help benefit both the grid and the community.
Amy spoke to the fact that there is not a lot of funding in Montana for these types of projects and that the large investor-owned utility, Northwestern, is not supportive of clean energy. Climate Smart Missoula is focusing on local co-op projects, highlighting their more creative projects to inspire others to think of these types of projects.
John also chimed in, explaining that historically, distributed energy resources (DERs) have only been available to the wealthy people that can afford them. Spark Northwest is looking at mechanisms that will allow lower income communities to also benefit from DERs. For example, within the Greenhouse Gas Reduction Fund, there is a $7 billion residential solar program for low-income families. They are working to ensure that federal and state funding is aligning with the Justice40 initiative so that benefits truly flow to vulnerable communities.
Nancy followed up on the conversation by highlighting the need for workforce development, so that we have the labor to build and maintain these community scale projects.
The Q&A then shifted to questions from the audience, with a question about how vehicle-to-grid (V2G) works. Scott explained that their Arlington microgrid wanted to learn about how electric vehicle batteries can discharge back into the grid to help capacity. Electric vehicle fleets could add up to several MW of storage that may just be sitting there and could be adding capacity back into the grid.
A second question from the audience asked whether there are opportunities for self-generators (for example, people that have rooftop solar) to be paid for sending energy back into the grid. Scott believes that as those types of resources become more valuable and needed, policies could change. In the Northwest, electric load is growing and resource adequacy is becoming more and more important, meaning policies and the market will eventually value those resources more.
Marli then asked one more question: “How can customer-side resources support community resiliency in the face of climate change? How do we support communities to have access to and opportunities for ownership of community energy projects?”
John said programs and funding that will allow the build out of resiliency hubs at community level are very important. He emphasized the need for flexible funding that could even help with job training in the green sector.
Amy followed up, saying that Climate Smart Missoula is looking at funding for workforce development and getting more women into the green economy. She closed by stating that resiliency is not just about the grid – it’s also about people.
Scott explained that their work with the Tulalip Tribe is a direct response; the Tribe wants backup power for extreme weather while also gaining daily benefits from the microgrid. He emphasized that collaboration is key.
May 4: The Value of Markets and Transmission Expansion to the West
The second panel of the conference, “The Value of Markets and Transmission Expansion to the West,” kicked off after a short break. Nancy introduced the moderator, Fred Heutte, Senior Policy Associate with the NW Energy Coalition.
Fred then introduced the three panelists:
- Spencer Gray, Executive Director, Northwest & Intermountain Power Producers Coalition
- Leah Rubin Shen, Managing Director, Advanced Energy United
- Kathy Anderson, Senior Manager of Real Time Operations & Markets, Idaho Power
Fred kicked things off with an introduction to markets. Fred set up the discussion by explaining that since the Energy Policy Act of 1992, the Northwest has been moving towards a more organized approach to power markets. There have been new market developments in recent years, including the Western Energy Imbalance Market (WEIM), that have been moving the region closer to a regional transmission operator (RTO). Fred said the question is what are these markets for and where do we want to go with them?
Fred went on, explaining that power markets are different from other commodity markets (think soybeans or steel) because the delivery of power is only possible via the grid, which requires close management. But power markets can increase reliability, decrease overall costs, reduce curtailment of renewable energy, and reduce carbon emissions. Fred then shared a graphic to explain what the different markets are that the West currently has and is considering.
The WEIM has been operating since 2014, and the West is weighing two proposals for a Day-Ahead Market, working towards an RTO/ISO. To learn more about markets, please visit our Markets Month series.
Leah then began opening statements by answering the prompt, “Why are markets important for the clean energy transition?” Leah explained that the most efficient way to decarbonize is by sharing resources across the West, which markets enable. As we electrify buildings and transportation, markets will become more pivotal for decarbonization, while also saving customers money.
Kathy followed Leah by further expanding, saying that organized markets have the potential to optimize resources more reliably and affordably. The WEIM is a good example, providing an estimated $3.4 billion of gross benefits since 2014. Transmission is the foundation to moving power, allowing us to capture economic benefits from resources. However, there is not enough transmission in the Northwest so new transmission is needed, which is one of the largest problems we face. Building new transmission takes planning, permitting, and funding. Permitting is the hardest part – Idaho Power has been working for 17 years to build a major transmission project. We don’t have time for that kind of delay if we are going to meet decarbonization goals, so we need a way to address this.
Spencer closed out opening remarks by stating that consumer benefits of organized energy markets are undeniable. His organization is encouraged to see the region moving towards a choice for organized markets and away from just bilateral markets. However, the organized markets being discussed in the region today are leaving valuable services on the table. For example, the transmission services, planning, and operations function of a full RTO will be left behind. The vision we should be driving towards is complementary intermittent generation profiles from across the West in order to decarbonize at a lower cost. For example, fully connecting wind power in Montana with solar power from the Southwest will make renewables as cost effective for customers as possible. While we work on current market negotiations, we also need to be discussing what market(s) will come next and need to be developing transmission now.
Fred then opened up the Q&A section by asking, “What are the costs of creating two wholesale markets and what does the Northwest have to lose if we have a market seam between two day-ahead markets?”
Leah answered first, referencing the State-Led Market Study. That study found that the biggest bang for the buck for the region is with the largest geographic footprint for both a day-ahead market and a full RTO. An Advanced Energy United study had the same outcome. If there is a seam between two markets, we won’t be getting as many benefits as is possible.
Kathy followed up, stating that Idaho Power is looking at the two market proposals on the table. She explained that seams create inefficiencies, which create costs. If there is not an interconnected transmission system that can optimize between the two markets, money is being left on the table.
Spencer closed out the question by emphasizing that it’s not just the generation resources and load, it’s also the transmission connectivity. Spencer is worried about the region’s current direction for different entities indicating they will join one of the two potential markets, which can create a gerrymandered seam.
The next question from Fred was, “In addition to grid connected resource, how important will customer-side resources be in managing the grid? How can markets incorporate these resources?”
Kathy opened up the discussion by explaining that Idaho Power has one of the top five demand response programs in the nation. They can reduce approximately 10% of their load on a summer day, which is extremely valuable. However, they have to be careful how this is implemented and cannot be calling on customers too often. These types of programs could be used in wholesale markets as a dispatchable resource, but Idaho Power doesn’t currently do so. Kathy also explained that solar and wind perform differently depending on the season, so markets need to be able to economically dispatch different resource types for the best value.
Leah closed out the question, saying that Federal Energy Regulatory Commission (FERC) Order 2222 set the stage for aggregated distributed resources. Order 2222 directs RTOs and ISOs to reduce barriers to customer side resource utilization in markets and is still under development.
Spencer chipped in to state that markets can offer clearer price signals and the ability to aggregate resources, providing transparency and better information.
Fred then pivoted to a question from the audience: “Don’t we need serious programs in the Northwest for demand response payments, similar to what National Grid does?”
Leah referenced California programs and said that even outside of a market construct, states and commissions can be setting up demand response programs that provide payments to participants.
Fred asked his next question, “How can a west wide organized market ease transmission expansion?”
Spencer kicked things off by explaining that right now, we have contract path-based transmission in the West. This is set up for a bilateral system where you’re making educated guesses about power flows. With an RTO, flow-based transmission allows you to run lines up to reliability limits, which is more efficient. Additionally, there may be ways for power to flow that we aren’t thinking about because we’re using a contract system. An RTO could provide more transparency into this and help with planning. However, cost allocation can still be difficult with an RTO.
Kathy followed up, saying she believes that through the incremental approaches we are currently taking in the West, we can reach flow-based transmission through the markets segment of an RTO without having a full RTO. For example, the WEIM is attempting to get towards a flow-based market and she hopes we can optimize the system with the two day-ahead markets proposals. With regards to congestion, we can start to identify congestion under an organized market and identify solutions.
Leah addressed transmission needs by separating them into three buckets: ease permitting process on the state level, take advantage of existing lines (for example, grid enhancing technologies), and develop transmission planning whether or not a market exists.
Fred followed up by asking the panelists to expand on grid enhancing technologies (GETs) and speak to the benefits of them.
Spencer explained that most GETs are a combination of software and hardware options for increasing the capacity of the current transmission grid under varying conditions. GETs make economic sense but they need more prodding from regulators to require utilities and non-utilities to incorporate them.
Kathy added that Idaho Power is looking at these options, but often, from a real-time implementation perspective, these types of tools are harder to implement than initially believed.
Fred’s next question zeroed in on new transmission. He asked, “What is best way to move forward developing new transmission lines?”
Spencer began by stating that we should start by thinking about permitting and siting reform both at the state and federal level. The best low hanging fruit, in his opinion, is expanding capacity for existing transmission since that would have a lower impact on land. However, we will need new lines and those will be difficult to build – it is important not to overlook real landowner concerns over impacts. There is a lot that can be proactively done before taking on siting.
Kathy weighed in to agree with the need for permitting overhaul. We need to be creative about existing systems and new lines. There are important transmission considerations from a reliability perspective, such as fire risk.
Leah echoed Spencer and Kathy, enforcing the fact that there are real challenges with respect to land-use. One potential option is looking towards brownfields or existing infrastructure to mitigate land-used challenges.
Fred went to the audience for the next question: “What is the next step to start difficult conversations about siting and permitting new transmission lines?”
Kathy began by emphasizing the need to start having those conversations among states at a regional and at the federal level. Regional coordination could be much better. We also need to figure out what the work is and begin to do it.
Another question from the audience was, “What are your thoughts on the WA transmission planning bill that just passed (SB 5165) in Washington State?”
Spencer’s organization supported SB 5165, which requires the state to do non-project environmental reviews and tribal consultation to give the state the sense where natural corridors could be. Additional funding for state agency staff to analyze this issue was also provided, which, in Spencer’s opinion, is just as important as the bill. Spencer also believes that Bonneville Power Administration (BPA) needs compensation reform from Congress to staff up and do this important work.
The last question from the audience asked, “Why can’t we leverage eminent domain by creating transmission expansion laws to deal with the new transmission blockage?”
Leah said the politics of eminent domain are tricky and could end up creating a backlash that can set the work back.
May 9: Resource Adequacy & Reliability
On the second day of the conference, Nancy welcomed the audience back and introduced the first panel, “Resource Adequacy & Reliability.” She turned it over to the moderator, Lauren McCloy, Policy Director with the NW Energy Coalition.
Lauren then introduced the three panelists:
- Sarah Edmonds, Executive Director, Western Power Pool (WPP)
- Kris Raper, Vice President of Strategic Engagement and External Affairs, Western Electricity Coordinating Council (WECC)
- Jennifer Light, Director of Power Planning, Northwest Power and Conservation Council (NWPCC)
Kris Raper kicked off opening statements, answering the prompt, “How can we build confidence in customers, policymakers, regulators, and utilities that we can maintain a reliable grid with adequate resources during the clean energy transition?”
Kris believes that creating a clean and affordable grid while maintaining reliability will require collaboration. Climate change has inhibited our ability to share resources as we historically have. Last year, the WECC board determined that the four highest reliability risks were extreme weather, resource adequacy, cybersecurity, and the impact of emerging technologies. Markets & transmission will help maintain reliability, but we will need to coordinate as well.
Sarah Edmonds went next, explaining that the Western Resource Adequacy Program (WRAP) is a large piece of the answer of maintaining reliability. WRAP is a compliance program that is a pool for resource adequacy. By combining resources, we can more effectively leverage load, resource, and transmission diversity than we could if everyone stood alone. Combining resources in this way would be cheaper and more efficient overall. The WRAP is an “insurance policy” for members that will be there if the members need it on the worst days. Below is a map of the WRAP, as well as its members.
The WRAP is a FERC jurisdictional resource adequacy program, the first (and potentially only) program of its kind. The functionality of the compliance program will be phased in over a transition period, according to the timeline below.
Jennifer Light closed out opening statements by honing in on the Northwest region from the more expansive western view of Kris and Sarah. Jennifer spoke about the role of the NWPCC as a planning body that publicly gathers input from around the region to develop a 20-year regional energy strategy. In between the plans, the NWPCC puts together a 5-year adequacy assessment.
Lauren then pivoted to the Q&A section of the panel, asking, “Why are utilities concerned about resource adequacy and reliability as we decarbonize our electric system, and why is resource sharing imperative as we decarbonize?”
Sarah started by explaining that historically, utilities worked in siloes, each making their own assumptions about markets when deciding to procure new resources or purchase short term energy capacity. Today there is more scarcity of resources, more extreme weather events, more retirements of resources, and more variable clean energy, all of which require those siloed assumptions to be broken down for more transparency. The WRAP aggregates information from participants, creating more transparency to show what the region needs to remain reliable.
Kris also chimed in, adding that both utilities and their regulators are concerned about resource adequacy. Weather events, decarbonization, and electrification are posing new challenges. Regulatory commissions are being asked to respond to “everything everywhere all at once” and oftentimes they don’t have the same resources and staffing to respond as utilities do.
Lauren moved onto the next question, “How can a combination of clean energy technologies and customer side resources help ease resource adequacy & reliability concerns? How can this combination of resources help reduce demand peaks, therefore ensuring a more reliable system?”
Jennifer kicked off the answers by referencing an analysis NWPCC did where they found that if everyone built their own resources and didn’t share, a build out of three times the current size of the Western Interconnection would need to occur. As we deeply decarbonize, moving buildings, transportation, and industrial loads onto the electric system, there are some real challenges. However, demand side tools such as energy efficiency and demand response can add real value by shaping the system and reducing loads. Energy efficiency can also allow other resources to be saved for when they are needed, providing flexibility. Finally, energy efficiency can reduce the amount of reserve capacity needed on the system. As a region, folks are still wrapping their heads around demand response and figuring out how to utilize it. According to NWPCC modeling has found a need for regular daily shaping from demand response, rather than demand response that is called upon a few times a year.
Kris used the example of California using demand response this past summer as a case study for how powerful and helpful demand response programs can be. Kris’s main concern is that as people are called upon to reduce energy consumption through a demand response program more and more, their participation (and therefore the effectiveness of the program) can vary greatly.
Sarah brought in the perspective of WRAP, explaining that compliance programs require resources to be dependable and show up when called upon. One challenge for WRAP is figuring out how dependable resources are. California has had issues with demand response programs meeting the expectations that forecasters had.
Jennifer circled back to energy efficiency to state that they have been witnessing resiliency benefits from energy efficiency, for example, weatherization during a heat wave. We need to value other non-energy benefits as we value our resources.
Lauren then pivoted to questions from the audience, starting with a request for more information about demand response aggregators and how this new type of resource could play a role in the Northwest.
Jennifer began by explaining that there are many different types of demand response. New ones need more testing over time to be confident about what kind of role they can play.
Kris also chimed in, explaining that the more people that sign up for demand response programs helps the program since it adds flexible options for balancing. But at the same time, more people make the system more complex to balance from the operator’s perspective.
Lauren pivoted to the next question, “How successful have resource adequacy operations been in the West?”
Kris began by framing the fact that the West moves in incremental steps – “evolution not revolution.” The West has the Energy Imbalance Market (EIM) through the California Independent System Operator (CAISO), which has proven itself as providing real benefits for balancing and reducing costs to consumers. The Southwest Power Pool (SPP) also has a Western Energy Imbalance Service that has provided benefits to the West. Both SPP and CAISO are both putting together their day-ahead markets, Markets+ and Enhanced Day-Ahead Market (EDAM), respectively. Governance is a real challenge in setting up markets in the West, since we have many independent states, governors, and commissions. It is going to take collaboration and negotiating to continue baby steps towards a reliable, affordable and clean energy system.
Jennifer added that transparency and consistency in how we talk about these issues is key. The goal is to connect all of these efforts so we can help each other.
Sarah followed up, saying that WRAP, WECC, and NWPCC are collaborating and figuring out how they can help each other move forward.
Lauren turned to a question in the chat, “In a region that is so reliant on hydropower, how can resource diversity help accommodate salmon recovery goals?”
Sarah started by stating that the WRAP is resource agnostic – that is for utilities, customers, and decision makers to decide. However, if a resource type may operate differently in the future, they adjust their rules and convey information about that deficit.
Jennifer said that in the NWPCC’s last plan, they were able to use climate change data to better reflect when hydropower will be available and to what extent. Estimating hydropower’s supply and variability is a key part of identifying how to best help salmon recovery. The region must also be able to lean on other supply-side resources, while energy efficiency can lower the overall load.
Kris zeroed in on reliability, using electrification of transportation as an example. Transportation electrification was full steam ahead but the situation on the ground changed, with supply chain issues slowing the speed of uptake. Hydropower is an important part of the Northwest’s system, and we cannot shut it down too quickly, in case the situation on the ground changes. Reliability must come first.
Lauren then went to the audience for questions. One audience member asked, “What has the WRAP learned about resource diversity? What kinds of things are emerging that we should be paying attention to?”
Sarah responded by saying things are still very new, with a couple of trial non-binding runs. They are aiming for a West-wide footprint but have found that there is not enough transmission connectivity between the Northwest and the Southwest, requiring them to create two sub-footprints inside the WRAP footprint. We need more transmission to connect the two regions and they are adding to the chorus of voices that are telling this to the federal government.
A second audience question focused on demand side opportunities: “What opportunities are there to engage with other sectors and entities to set determinations around load?”
Sarah kicked things off by giving an overview of the WRAP governance structure, which is intended to be open to any stakeholder.
Jennifer added that energy efficiency work is very local work. There is more work to be done at the utility level to reach out to communities. Another challenge is training the labor force to install energy efficiency and electrification tools.
Kris acknowledged that today’s landscape is much different than just a few years ago. Stakeholders today include corporations that care about their “green” image and communities that haven’t historically been involved in these issues. Energy decisions are no longer simply up to the utility.
Another question from the audience was about the path forward: “How do we make sure that everyone is talking to each other as we look at capacity needs, planning, and operation so that we have one vision forward?”
Sarah’s opinion is that WECC should bring everyone together, since it has a view of the whole footprint. There may not be one vision, but there should be understanding and fluency in each other’s programs.
Kris agreed that WECC is uniquely situated and is independent, resource agnostic, and interconnection-wide, which makes them a good resource. The only thing they promote is a reliable and secure grid. In Kris’s opinion, it will be hard to have one vision across the West since there are many independent and divergent states. But those barriers can be surpassed. There are so many organizations and groups talking already, and translation between them is important so they can collaborate.
The final question of the panel, one from the audience, was, “Where is equity playing a role in all of this?”
Kris started off by saying that low-income communities and groups have a much larger voice today, which is a great thing.
Jennifer added that a lot of these conversations benefit from local connections. Finding the correct consumers looks different in each community. This is a new perspective and NWPCC is still learning how to best incorporate it into their planning.
May 9: Keynote Conversation
Nancy once again welcomed the audience back from a short break and introduced the keynote for the conference, Sonia Aggarwal. Sonia is the CEO of Energy Innovation Policy & Technology LLC, a nonpartisan climate policy firm delivering research and analysis for informed decision making. Sonia previously served as the Special Assistant to President Biden for climate policy, innovation, and deployment. She helped shepherd through the development and passage of the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA).
Nancy kicked off the dialogue with Sonia by asking about her time at the White House and her role passing one of the most substantial climate policies in US history.
Sonia explained that the job was fast-paced and dynamic, full of thrills. She is filled with gratitude to be able to have worked at such a pivotal moment in climate history. Sonia said that President Biden genuinely, personally cares about climate and listens to science and analysis. One of her favorite experiences was being able to sit down and go through the numbers and analysis with the President. Sonia believes that there is a through line from the campaign promises of Build Back Better to BIL and IRA, showing that the President prioritized delivering greenhouse gas reductions while also supporting good jobs and putting low-income families first.
Nancy asked Sonia for her opinions on some of the issues that were discussed during the conference. Specifically, does she think that transmission and wholesale markets are the limiting factors to decarbonize the West? How optimistic is Sonia that we can appropriately site new transmission without running over stakeholders?
Sonia believes that transmission and markets are absolutely important issues to resolve, but there is no silver bullet. Given the time constraints of the climate crisis, we need to be looking at all solutions simultaneously. The fact that clean energy technology costs have dropped so much allows us to economically site renewables closer to transmission lines, reducing the need for new transmission. Additionally, new technologies can allow existing transmission lines to carry more energy, which can increase capacity without the headache of adding new lines. Sonia is optimistic that there are solutions that can move us forward on transmission but is not optimistic about the current process that is being laid out.
Nancy then asked Sonia if she had any thoughts about how to engage communities more effectively as we have conversations about siting new transmission or renewable energy projects.
Sonia said she has heard about interesting business models for transmission development that build payments to the communities that host new infrastructure into the costs of new transmission. She also believes there are some interesting examples from the recent Comanche 3 settlement in Colorado: Xcel Energy is offering plant operators different jobs in the same company, Xcel is building two solar + storage projects in the same county, and the Public Utilities Commission is replacing lost property taxes for 10 years from the coal plant. These are just a few commendable policy examples that can be replicated to ensure that developers of new projects take community needs into account. In the West, there have been fantastic efforts to map siting corridors and take into account costs and benefits, which should be replicated.
Nancy then raised energy markets, asking, “Recent studies have shown that a single West-wide wholesale power market is the most efficient and will bring the most economic benefits. Yet, the potential is high for two or more broad markets forming in the West. How do we avoid this outcome?”
Sonia explained that two markets will make transmission planning even harder, but it would not be impossible. One market, however, will deliver better benefits to the West.
Nancy then pivoted to a question from the audience, “What are the two or three things we should be doing to address the Justice40 initiatives?”
Sonia responded by saying that there are many programs that had resources allocated to them in the IRA or BIL but the details of the programs will be worked out at the state level. As states develop those program details, it will be helpful for them to look at the actions of states that have been successful in reaching lower income communities. Oftentimes, the hardest part is actually reaching those communities. Additionally, the Greenhouse Gas Reduction Fund is a program to watch, since it is attempting to go above and beyond, ensuring that lower income communities see benefits from clean energy projects.
Nancy followed up by asking how advocates can be sure utilities and decisionmakers are effectively using IRA & BIL funds and programs.
Sonia said that one of the biggest things advocates can do is to absorb the new reality created by these two bills, which have changed the “fundamental economic paradigm in our energy system.” Every aspect of our work is affected by these two bills in profound ways. We must be continually asking local leaders, decision makers, and utilities if they have absorbed that new reality and are incorporating it into their plans.
Nancy then turned to the next question: “Do you see a need for changes to the way utilities are regulated to help bring more attention to distribution system planning and investment to better harmonize customer side resources with the focus on utility scale resources?”
Sonia began by acknowledging that customer-side resources can play a huge role in delivering the cheapest, most reliable clean energy possible. One aspect to consider is the fact that there are many new technologies that we just don’t have a lot of experience operating, so more experience and experimentation is the main limiting factor. Another aspect is more fundamental: regulated utilities that earn a rate of return on capital investments are not incentivized to make the system low-cost, efficient, and clean. Performance based regulation could be one important tool to create a distribution system that can handle customer-side and distributed resources.
Nancy pivoted to a question in the chat: “With the length of the interconnection queues nationwide, can you help with identifying pieces of the IRA that really target how we get a handle on streamlining and increasing throughput on the queues?”
Sonia conceded that the IRA on its own will not be enough to fix this problem. There is a conversation happening at FERC on interconnection queue reform, which will be very important. There are also various efforts happening at RTOs around the country, which will need to coordinate with FERC. This is one of the toughest pieces to figure out. The economic reality now is that clean energy is such an attractive choice that there will be more motivation to address long queues so that benefits can reach customers quickly. The IRA was constrained by the fact that it moved through reconciliation, which could only address spending and earning, rather than policy reform.
Nancy followed up by asking what Sonia thought about a potential interconnection reform to prioritize projects that are ready to be built, rather than the current process which prioritizes the projects sequentially.
Sonia believes prioritizing projects that are ready to be built is a smart approach. She has also heard of a competitive renewable energy zone (CREZ) approach, where specific regions are identified as the ones to move to the front of the queue and then have developers compete to build projects. The most important thing is to improve the process and improve it quickly.
Nancy closed out with a final question on electric vehicles (EVs): “What are your top five recommendations for policymakers, regulators, and advocates to be mindful of as we advance electric vehicles?”
Sonia offered the following advice:
- Adopt Advanced Clean Cars II, Advanced Clean Trucks, and Advanced Clean Fleets to complement federal programs on electrification. An Energy Innovation study showed massive benefits to consumers if just 16 states adopted these rules.
- Put state incentives in place for EVs & EV infrastructure, targeting underserved locations.
- Ensure communities take advantage of four sources of federal money in BIL for electric school and transit buses.
- Work with utilities and regulators to develop comprehensive plans that proactively support EV charging and ensure the full potential of managed charging and complimentary rate design to realize full system benefits.
- Support EV-friendly building codes and streamlined permitting for EV charging infrastructure.
Nancy closed out the conference by thanking Sonia and acknowledging the big leap accomplished by the passage of the IRA & BIL.