Advanced Energy Perspectives

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.

Over the summer, headlines proclaimed the news that Tesla, the global leader in electric vehicles (EVs), had decided to locate its next U.S. factory in Austin. Recently, Tesla’s famed founder, Elon Musk, even announced that he would be moving to Texas himself. None of this should come as a surprise. Texas has long been a leader in energy of all sorts, including advanced energy technologies like wind and solar power, so it’s only natural to add EVs to the mix. "Everything's bigger in Texas, and that includes Tesla," said Gov. Greg Abbott in a video interview posted to Twitter. “Tesla is moving here because of the free market principles that allow it to come here and be an innovator without government dictates… Texas will be number one in energy, including clean energy.” By welcoming Tesla, Texas has earned a place at the forefront of the forthcoming electric transportation revolution – and a new analysis shows Tesla could be just the start.

In August, we published our list of the top 10 utility regulation trends of 2020, so far. With a tumultuous 2020 largely in the rearview mirror, we now look back on the 10 trends that defined the utility regulatory arena this year. It is difficult to overstate the influence COVID has had on virtually every facet of the energy sector – and utilities were no exception. Nor is it possible to ignore the impact that extreme weather events have had on utility planning and operations. On top of that, the outcome of the presidential election promises to shape the federal energy regulatory landscape for years to come. Because of – or  perhaps in spite of – these transformational shifts, advanced energy is well-positioned for continued growth in 2021.

In October, the Federal Energy Regulatory Commission (FERC) issued a long-awaited order on plans submitted by PJM Interconnection (PJM) to implement the broad Minimum Offer Price Rule (MOPR) the agency ordered in late 2019. As we’ve detailed in prior posts, the broad MOPR that FERC has imposed in PJM and other regions threatens to exclude advanced energy resources supported by state policies from the centralized capacity markets, a result that could derail state clean energy ambitions and unnecessarily raise costs to consumers. While not approving the compliance plan in its entirety, FERC’s order did accept PJM’s proposal to provide flexibility in the application of the MOPR that could mitigate some of the MOPR’s anticipated negative effects, without eliminating them entirely. Meanwhile, court challenges to FERC’s MOPR policy in PJM are poised to begin, and the broader impacts of FERC’s MOPR-like policies in New York and New England continue to play out, all setting the stage for a new chapter in this ongoing state-FERC saga in the new year, this time with new FERC leadership.