Advanced Energy Perspectives

Last week, the Indiana Utility Regulatory Commission (IURC) issued its final order in a proceeding to examine Duke Energy Indiana’s coal-fired unit commitment decisions during the Fall of 2019. While the IURC ultimately declined to order Duke to refund customers for the financial losses it knowingly incurred, the Commission rightly acknowledged that today’s changing energy landscape has complicated the way coal plants should operate. AEE had hoped that the IURC would go further to protect customers from the financial harm caused by Duke’s uneconomic operating practices, but the Commission did push Duke to move toward a better decision-making process for future commitment decisions. With those now under a bit more scrutiny, we look forward to working with Duke on the alternatives we proposed to help the utility give up its costly coal addiction in its 2021 Integrated Resource Plan.

Nevada has taken many important steps toward creating an electrified transportation future. In June, Governor Sisolak announced the Clean Cars Initiative, which is a program designed to bring more low-emission and zero-emission cars and light duty trucks to Nevada dealerships. Then, the Nevada Climate Strategy and Division of Environmental Protection’s 2020 Greenhouse Gas Emissions Inventory report echoed the need for thoughtful state policy to expand consumer choice and build out charging infrastructure in order to transform the transportation sector. In addition to their focus on cars and light trucks, they both recognize that electrifying medium- and heavy-duty vehicles will also be critical to meeting  the state’s commitment to a zero-emission future. Fleet ownership will be the key.

Over the past several months, our Indiana team has been intervening in a proceeding before the Indiana Utility Regulatory Commission (IURC) to examine Duke Energy Indiana’s coal self-commitment practices. Self-commitment refers to a process by which a utility instructs the regional market within which it operates – in this case, the Midcontinent Independent System Operator (MISO) – to dispatch the utility’s own resource unit regardless of whether or not it is the cheapest available at the time. Many vertically integrated utilities have been using this mechanism to run their expensive coal plants more frequently than economics would otherwise dictate. They do this because it is not their shareholders who suffer financial losses, but rather their captive ratepayers: When the cost to operate these units exceeds the market clearing price, utilities pass along the difference to customers, in part through fuel adjustment clause proceedings. AEE is working to curb this self-serving utility practice.

Creation of a wholesale energy market in the West got a stamp of approval from Nevada last week when a legislative committee sent a letter to state officials urging them to support western regionalization – and citing AEE’s principles for doing so. “The West may meet its near-term clean energy policy targets” with current arrangements, committee chair Daniele Monroe-Moreno wrote. “However, to achieve long-term clean energy targets, western states and utilities must move towards even more flexible options and coordinated operations.”

Under the Sisolak Administration, Nevada has emerged as one of the states leading this country’s transition to a clean electricity grid. This week, it becomes a leader in the electric transportation transformation as well. That’s because Gov. Sisolak announced a Clean Cars Nevada initiative to give Nevadans more options for low- and zero-emission vehicles when they go shopping for a new car or truck. By initiating the process (pursuant to Section 177 of the federal Clean Air Act) to adopt more stringent emissions standards for vehicles than those in place nationally, Nevada will also set itself up as the next hot market for electric vehicles (EVs) and related charging station development.