New Michigan Study Supports Increasing Renewable Energy Mandate

A new study from the Michigan Energy Office and Public Service Commission—ordered by Governor Rick Snyder—shows the state can triple its renewable portfolio standard, achieving 30% renewables in the state’s portfolio by 2035. Michigan’s two key utilities – DTE Energy and Consumers Energy– are on track to meet the current 10% renewable target next year. Governor Snyder also ordered similar reports on energy efficiency programs, electric choice and “additional areas.”

The report points to improvements in wind turbines’ efficiency and cost-competitiveness as the key factors in the ability to meet 30%. Additionally, the report cites Michigan’s inclusion in PJM and MISO markets as ameliorating reliability and price volatility concerns. Access to the broader market – both to buy and sell renewable energy – and long-term power contracts mean Michigan’s consumers are able to capitalize on cheap, clean energy without worrying about the intermittency of renewable resources.

Indeed, because wind energy is proving to be so cost-competitive in the regional markets, DTE and Consumers have slashed their monthly surcharges for renewables by 85% and 79%, respectively. The report notes that additional transmission infrastructure could help “facilitate the introduction of wind power where it might not otherwise” have been feasible, and points to the recent development of transmission lines in the “Michigan Thumb.”

As we at Americans for a Clean Energy Grid have identified in our PJM and MISO studies, expanded transmission can help drive even further savings for customers in the region. Because wind has zero fuel costs, its inclusion in wholesale energy markets reduces energy prices across the region by kicking out more expensive generation on the margin. This “price-suppression effect” creates savings that are passed along to consumers. Our studies showed that the average MISO household can save approximately $150 a year by doubling the amount of wind in the market. In PJM, the region can save $7 billion annually in 2026 by doubling the states’ renewable portfolio standards. In both studies, the savings are net savings – after paying for significant investments in high-voltage transmission to deliver renewable energy from strong resource regions to population centers.

The Michigan findings follow on the heels of the Public Utility Commission of Ohio’s report that its state renewable portfolio standard could save customers nearly $30 million in 2014. It is the latest in a growing realization that a clean energy future is an affordable energy future. State mandates are creating jobs, lowering energy bills, and protecting the climate. Michigan’s study shows increasing renewable energy in the state is technically and economically attractive. Hopefully the states policymakers will see the writing on the wall and move to enhance the state’s renewable portfolio standard.


It’s All Connected – Regional Transmission Planning in the Southeast

Cross-posted from AOL Energy, published 11/13/12.

It’s All Connected – Regional Transmission Planning in the Southeast
by Bill White

More than two weeks have passed since Hurricane Sandy brought the Eastern Seaboard to a standstill. Although life is slowly returning to normal, Sandy joins a long series of painful reminders of how dependent 21st century America is on reliable electricity: it powers nearly every facet of our lives. The potential silver lining in the wake of Sandy’s devastation is the influx of interest in our outdated and inadequate transmission grid, highlighting long ignored issues from the benefits of buried transmission lines to the importance of an integrated, redundant, resilient grid – built to withstand even Sandy’s fury.

A robust and modern electric grid is also essential for taking advantage of America’s unmatched renewable energy resources. Wind and sunlight cannot be delivered to customers from their best sources – mostly remote areas and offshore – using railcars and pipelines like coal, oil, and gas; they need transmission lines. In the Southeast, where wind and solar are relatively scarce, transmission lines are critical for bringing cheap and abundant renewable resources from other regions. The Tennessee Valley Authority (TVA), which provides power to nearly all of Tennessee and other Southeastern areas, is now importing wind power from eight wind farms in the Midwest. Alabama Power, a subsidiary of Atlanta-based Southern Company, last year made one of the largest wind purchases ever from producers in Oklahoma.

Several changes under way promise to accelerate the nascent interregional “trade” in cheap renewable energy. Dozens of outdated and inefficient coal plants across the Southeast will be shutting down over the next several years as new air pollution rules take effect; businesses and consumers are demanding more clean energy; and vehicle electrification is growing rapidly, especially in the Southeast. Nearly three percent of electric vehicles sold in the United States this year were registered in Tennessee. Not coincidentally, almost all of these were Nissan Leafs – soon to be manufactured at a plant in Smyrna. But electric vehicles are only as green as the power plants that charge them, and in the Southeast today, coal generates about half of the electricity. How the region invests in transmission will largely determine whether the power from retiring coal plants will be replaced by renewable resources.

A new planning framework unveiled last year by the Federal Energy Regulatory Commission, Order 1000, asks utility transmission planners to work together to solve the transmission challenge across large regions by avoiding duplication and building only those upgrades needed to strengthen the grid, improve reliability, increase efficiency, and integrate large amounts of renewable energy.

Additionally, Swiss engineering firm ABB Group announced a technological breakthrough last week that could solve the problem of transmission losses over very long distances. ABB’s new circuit breaker for high-voltage DC lines – far more efficient than AC lines over long distances – will allow large amounts of renewable electricity to be delivered over thousands of miles, for instance, from Iowa to Tennessee.

Americans have always responded to crises by replacing what was lost with something better, stronger, and smarter: building an even stronger foundation for future growth and prosperity. Let’s not wait for the next Sandy to modernize our electric grid – our most important infrastructure investment for the future of the Southeast – and the nation.

Bill White is a Senior Vice President at David Gardiner & Associates, with more than fifteen years of managing public-private partnerships advancing action on energy and climate change.

utility worker

Larry Bell Misleads Readers in Forbes

Columnist Larry Bell recently published a misleading critique of the state of the American renewable energy industry in his article “Too-Green-To-Fail Energy Policies Fail Achievement Tests.” Mr. Bell made a slew of errors (including misidentifying FERC Chairman Jon Wellinghoff as “Jon Wellington,”), many of which were pointed out by Michael Goggin in his article, “Fact Check: Larry Bell’s List of Errors.” To give you an idea of the number of erroneous statements in Mr. Bell’s article, consider this excerpt from Mr. Goggin’s response:

I’d recommend going back and reading the DOE report, as you’d find that it directly refutes almost all of your attacks on wind energy. For example, it’s hard to claim that wind energy isn’t abundant, when the report identifies enough economically viable wind resources to meet our electricity needs a dozen times over. It’s also difficult to attack wind’s emissions benefits when the report concludes that 20% wind would reduce CO2 emissions by 825 million tons in the year 2030 alone and 7.6 billion tons cumulatively, in addition to large amounts of other harmful pollutants. Moreover, the report finds 20% wind would save 4 trillion gallons of water cumulatively by 2030 and substantially reduce natural gas prices by diversifying our energy portfolio away from fossil fuels. The DOE study also finds 20% wind could create over 500,000 new jobs, making it difficult for you to claim that wind energy is not a powerful job creation tool.

Unfortunately, the misstatements don’t stop there. Mr. Bell also attacks the Midwest ISO’s (MISO) Multi-Value Projects (MVP) cost allocation proposal by stating that, “Federal Energy Regulatory Commission (FERC) Chairman Jon Wellington [sic, Wellinghoff] announced plans to impose a $300 million to $500 million surtax on utility bills to cover the costs of creating renewable power transmission lines across 13 Midwest states.” To begin addressing this misinformed statement, characterizing this as Mr. Wellinghoff’s plan is simply incorrect. Not only did the MVP plan originate from the Midwest ISO, but 83% of MISO states approve of the proposal. In addition, MISO’s proposal would proportionately allocate costs from new transmission lines to ratepayers based on reliability and economic benefits, not arbitrarily spreading the costs around as Mr. Bell would have his readers believe. What’s more, these additional costs are a small proportion of consumers’ utility bills, averaging about 7% nationwide and only 4% in MISO member Michigan. If every single “Starter Project” line proposed under the MVP plan were approved (an unlikely scenario that would cost $5 billion), Midwest ISO ratepayers’ utility bills would only increase by $0.60 per month — a number that looks much different than Mr. Bell’s alarmist “$300 million to $500 million surtax.”

The United States should make much-needed investments in transmission infrastructure to harness location-constrained renewable energy resources that will increase U.S. energy independence, increase national security, reduce costly blackouts, reduce greenhouse gas emissions, and create good manufacturing and construction jobs that can’t be outsourced. Misleading arguments such as Mr. Bell’s will unfortunately maintain the status quo, keeping the United States dependent on dirty fossil fuels and foreign oil instead of utilizing this opportunity to transition the United States towards a clean and safe energy future.

utility worker

Update from Capitol Hill: Draft Transmission Bill from Rep. Sensenbrenner

Representative James Sensenbrenner (R-Menomonee Falls, Wisconsin) recently released a discussion draft of a bill to amend the Federal Power Act to require regional transmission plans.   A brief summary of the highlights follows.
FERC, in consultation with electric reliability organizations, transmission operators, transmission owners and states, must designate one or more regions in both the Eastern and Western Interconnections to create transmission regions to be represented by a “regional transmission planner” within one year of enactment.  Any entity with an existing planning process (such as an RTO or ISO) may submit an application to FERC for approval as the regional transmission planner for a designated region.  FERC will rule on the application within 18 months. If no regional transmission planner is approved, or is not submitted by regions in a timely manner, FERC shall either designate a planner or assume the role itself.
No later than 2 years following FERC’s approval of a planner, and every two years following, the regional transmission planner must submit transmission plans to FERC that are designed to enhance grid reliability and security, encourage diverse resource generation, and show that upgrading high voltage transmission lines helps regions achieve their energy and transmission goals.
The discussion draft requires that the regional transmission plan be consistent with FERC order 890 standards, incorporate input from state and local policymakers, maintain a broad geographic and market scope, and to take efficiency and other resources into account.
The draft also addressed cost allocation. No later than 18 months following enactment, FERC must require that all cost allocation methodologies adhere to a clear and consistent set of regulatory principles.
Certificate of Public Convenience and Necessity (CPCN)
Regional planners may submit a request to issue a CPCN for a regional transmission project.  The request will be based on necessity to comply with reliability criteria, ensure congestion relief, enhance energy supply diversification, and strengthen the development of smart grid technology.  Regional transmission projects that receive a CPCN could fall under federal siting authority if:
  • Transmission facility is part or all of a regional transmission project;
  • The state in which transmission facility is to be sited does not have the authority to approve the facility or consider interstate benefits;
  • Applicant for a transmission permit does not qualify in a state because the applicant does not serve end-use customers in the state;
  • State commission has not issued a decision within one year after the applicant’s request was submitted; or
  • State authorized siting but placed unreasonable conditions.