Advanced Energy Perspectives

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.

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.”

While the typical electric vehicle in the minds of most consumers may be a compact urban car or possibly a luxury sedan – call it “Tesla Envy Syndrome” – 2020 has been the Year of the Electric Truck. Large companies, including Walmart, PepsiCo, and Sysco, have announced plans to begin replacing their fleets with electric trucks, and the pandemic’s increase in residential delivery has prompted Amazon, FedEx, and UPS to speed up the switch to electric. Market analysts predict rapid growth in this sector through the next decade. This is in large part due to the savings from reduced fuel and maintenance costs over the life of electric trucks. But with major product announcements this year, the savings and performance benefits of electric-powered vehicles will soon be available to pickup drivers too.