Laura McCarty

One of the top priorities for all utilities will need to be clearly and effectively communicating all the costs associated with the "energy transition." "Half of the average consumer bill has nothing to do with what fuel is used to generate electricity. It reflects the cost of transmission and distribution. And those costs are rising fast, according to consumer advocates. Utilities are spending heavily to ramp up their transmission infrastructure as electricity demand grows because of the advent of electric vehicles and data centers for artificial intelligence applications. Increasingly, those costs will be passed along to consumers." “I expect it to accelerate,” wrote David Springe, executive director of the National Association of State Utility Consumer Advocates, in an email to Barron’s. “A lot of spending has yet to hit the consumer bill.” Ten percent rate increases are beginning across the country during a period where natural gas prices are rock bottom and the cost of capital is rising like the sun. Hard to buy the argument that inflation will soon moderate and the Fed will cut rates soon. But if inflation does moderate somewhere down the road, it will not be because of lower electricity prices. There is no kicking this can down the road #communication #utilities #inflation #electricity #costofcapital #interestrates

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📈 Corporate PPA activity in the ERCOT market has reached 1.8 GW, YTD 2024. Data from the Enerdatics Energy Transition PPA database indicates that ERCOT has seen ~1.8 GW in corporate power purchase agreements (PPAs) since the start of 2024, constituting over 60% of the U.S. total. 💡 Tech giant Microsoft leads the way, having secured ~800 MW across three deals. Meanwhile, new entrants such as UnitedHealth Group, Sonoco, and AdventHealth are also stepping up their sustainability efforts. 🏆 Key Suppliers Making Waves: > Regional Leaders: Primergy, Leeward Renewable, Scout Clean Energy > International Players: Orsted, ENGIE 🤝 Positive PPA negotiations in ERCOT are driven by the market's lower land and interconnection costs, which help mitigate higher interest rates and supply chain issues. 🌟 Top Deals to Note: > Microsoft and Primergy Solar: 408 MW from Ash Creek solar project > Hyundai and Matrix Renewables: 147 MW (Hyundai’s first U.S. PPA) > RTX and ENGIE: ~38 MW from Priddy wind project #CorporatePPA #ERCOT #RenewableEnergy #Sustainability #Microsoft #Hyundai #RTX #ENGIE #Orsted #Primergy #LeewardRenewable #ScoutCleanEnergy #UnitedHealthGroup #Sonoco #AdventHealth

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Capacity market prices for energy in PJM surged, signaling a crucial demand for additional generation. PJM Interconnection's footprint is set to allocate $14.7 billion for capacity in the 2025/26 delivery year, a substantial rise from $2.2 billion in the previous auction. Stay informed about the energy sector's evolving landscape: [Link to the article] #EnergyMarket #CapacityAuction #PJMInterconnection

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Interregional transmission can provide many benefits -- yet power markets and grid operating practices are not set up to fully capture these benefits. This new report by the National Renewable Energy Laboratory for the DOE Grid Deployment Office lays out the barriers that need to be addressed to realize the full value of existing and new interregional transmission: https://lnkd.in/ekzximcU One of the necessary steps to improve seams-related inefficiencies is "intertie optimization," which we addressed here: https://lnkd.in/ew3QtcpQ and here: https://lnkd.in/dptXMG3t Great work by Christina Simeone, PhD and Amy Rose! #gridmodernization

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A new analysis examines the 'Regulatory Gap' between utilities and their regulators, which is cause for them to focus on taking the easy route and building local transmission when it would be much more valuable to build large interstate transmission lines. 🛣️ ⚡ This 'Regulatory Gap' exists in Missouri and is partially driven by PISA legislation, which requires grid investment and allows certain recovery of it. Sadly, these grid improvements still aren't addressing reliability and aging infrastructure issues in the lower income or minority neighborhoods, and a large chunk of investment is being put into more affluent neighborhoods. https://lnkd.in/gQiMgztj

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BEYOND UTILITY PROCUREMENT: What URA's forensic utility bill review can do for your company. Most medium to large businesses have a really good grasp on their energy procurement getting the best prices on electric and natural gas. Great! However this alone falls short from ensuring your utility bills are optimized. In fact, it's far from it. Even with the cheapest rates locked in, we've found that 72% of commercial businesses are still overcharged on their complex monthly invoices by 16% to 23%. Having qualified billing experts analyze your bills, like URA's team, you'll quickly uncover where & how much your utility companies are overbilling you. We increase profitability by reducing your costs; and best of all it's a fast turnaround, at no risk, zero out of pocket cost, no vendor changes, and minimal effort from your team. We sit on your side of the table as you and are only incentivized by saving you money, not by selling you new vendors, products and services. Nothing to lose and a whole lot to save! Reach out to me if you'd like to learn more.

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Another 40 GW of solar and wind capacity coming to the U.S. power grid this year could generate ~10 GW of baseload-equivalent generation because of its intermittency. Will the wave of renewable installs be enough to flatten natural gas’ power gen gains this summer? Yes, likely, say analysts. However, one wrinkle is Canada, according to Wood Mackenzie. The northern neighbor has uncharacteristically flipped to a net importer of U.S. power (5 GW swing in April) and could provide uplift to U.S. generation this summer. Worth checking if Canada-bound electrons are in your model. Natural Gas Intelligence https://lnkd.in/e4iUpp-a

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Inflation in energy costs (gas and electricity) is very prevalent globally. Most utility "innovations" call for rate hikes. Regulators need to introspect on innovations that lead to actual lowering of rates. In undergrounding, we offer one such cost lowering solution www.biosirus.com

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File under: energy regulatory observations, #RTO #complaints / #waivers when there are #tariff issues that don't make sense. I read a fair number of daily orders from / filings with the Federal Energy Regulatory Commission and this granting of a complaint against PJM stood out as a quick one to highlight for a few reasons. First, the level of tax-codification (like Shakespeare, I'll invent the words I need) that RTO tariffs have undergone. Read the intro paragraph of the order capturing the crux of the issue. My goodness. I cover issues across ISOs/RTOs from PJM, to NYISO, CAISO, and of course ISO-NE as well non-888/2000 regions like BPA and public utility districts and everyone has their own rules. For companies doing business in the US (which, for example, is common with generation, transmission developers, and large loads), it's like needing to be fluent in several languages. Observation: no wonder #FERC has some aspirations to more standardized language to at least create a bit of standardization in the tariff tower of Babel. Second, the complaint as a consensus tool. It's human nature to want to be right. Evolutionary, it's a mark of power. And power means safety. Humans are wired that way for survival, and it takes some self-awareness and reflection to engage the rational cortex over the non-verbal and much older limbic system and to hit the pause button to a challenge. The term "complaint" doesn't always help and neither does the "party v. party" case caption. The whole structure connotes conflict. Here, Dominion filed a waiver with a complaint in the alternative because PJM interpreted its tariff to not allow for a resource submission given a change in entity type. But instead of simply defending the tariff, PJM acknowledged the issue and supported a fix if the also supported waiver wasn't granted. FERC granted the complaint to fix the issue generally rather than a one off. While the stakeholder process - and all the interests that are encompassed therein - can make agreement to a change like this more difficult, the complaint and waiver processes are paths that can and should be used especially where time matters. One of the most critical things for those administering the rules to understand is: a delay is not harmless, a "comeback next time" is not without victims. Many projects have to have all elements align to move forward. Other issues may be more durable but can add needless costs to consumers, and those add up. This "how can we work with parties" approach is great to see and hopefully we'll see more of it. From capacity markets to interconnections, there is a lot of room for win-wins. Also, great to see Commissioner Rosner's name on these. #energy

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Demand Response: A Key to Reducing Peak Load Pressure on Utilities Demand response is not a new topic and keeps getting rebranded as something else every few years. The basic idea behind Demand Response is that the utility, when needed, sheds load that volunteered into the program when it makes financial sense or for reliability reasons. Usually, it is more the former than the latter. Shedding load is usually the last-ditch thing that a utility wants to do, but if someone is part of a Demand Response program, they are volunteering to be a front-line solution. What are some reasons for utilities to want Demand Response load? The first is just that as generation is dispatched, it generally is dispatched from the cheapest megawatt to the most expensive megawatt. This can be related to the efficiency of a unit. For example, an old coal plant might not be as efficient as newer plants at turning water into steam, and that might be a reason it is dispatched only during peaks. Often, peaker generation is not just old units but gas turbine generators. These units are in the 60-80 MW range. These units are half as efficient as combined cycle gas generation plants, which are in the 1000 MW range but are built explicitly to serve peaking loads with having a lot of unused capacity. The cost for peaking generation is very expensive, not only due to units being dispatched from cheapest to most expensive megawatt but mainly due to low utilization rates. There are fixed costs associated with just having and maintaining generation. On base units, units that run 90%+ of the time, these fixed costs are spread out over a large number of hours so fuel cost tends to be more of a driver for cost per MWh. With peaker units, their utilization might be seasonal or just a few weeks a year. This drives up run costs because fixed expenses are spread over only a few hours a year. To give you an idea of the difference, inside ERCOT, it is normal for electrical prices to be around $20-30 per MWh. During system peaks, electrical prices can spike above $1000 per MWh. These high prices are necessary to pay for the peaker units and incentivize people to build peaker generation. Inside of ERCOT, there has been a problem with getting generator companies to build additional peaker generation and the market cap kept getting raised to $9,000 per MWh to try to incentivize people to build more generation. It was lowered after the 2021 Texas Blackout to $5,000 per MWh. The cap is in place to prevent market manipulation as was done by Enron. The second reason why utilities like demand response load is for reliability reasons. Occasionally, the grid starts running short on capacity, usually on a hot summer day, and shedding load would help keep the grid from potentially having brownouts. Market prices for unregulated regions would spike, too, during these shortages, so it often isn't just the only reason. #electricalengineering #utilities #renewables #energystorage #substations

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Interesting read on near term electricity reliability planning - growth of intermittent capacity; asset shifts; growing cyber-threats; sector-coupling gas & grid; inter-regional capacity markets and demand growth. A lot to digest. In my view, district energy systems fit perfectly in the mix to support cities, communities and campuses as the energy transition unfolds. https://lnkd.in/eFQr9uGs

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The EIA data browser is a cool tool for reviewing electricity statistics - used the tool to pull this figure looking at monthly retail electricity rates for a handful of states and the US from Jan 2001 to October 2024. The figure is indexed to the Jan 2001 value with the change in price relative to that starting point. https://lnkd.in/eT3Y6BYp

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NERC recommends adding 35,000 MW of interregional transmission capacity as "prudent additions" to address grid resiliency needs! Note that this assessment solely focuses on energy adequacy and the level of assistance likely available from neighboring regions during resiliency challenges, such as winter storms. The study does not, for example, consider: 1️⃣ Resilience support available from regions beyond the immediate neighbors (such as PJM's exports to SPP during winter storm Elliot). 2️⃣ A multi-value perspective that takes into account the added economic and public-policy benefits of interregional transmission, which often justify expanding interregional transmission beyond these NERC results (as DOE's National Transmission Planning Study has most recently shown). NERC report: https://lnkd.in/e_GuKkAk Utility Dive summary: https://lnkd.in/eW3U_E34 North American Electric Reliability Corporation (NERC) #gridmodernization

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Kudos to Grid Strategies LLC for pulling this together. This is one of the best "state of play" reports on energy demand growth around. It's well worth the read, but here are some key takeaways. Five-Year Load Growth Forecast Explodes: Electricity demand is projected to increase by 15.8% through 2029, with a 5-year growth forecast jumping from 23 GW to 128 GW. Data Centers as Key Drivers: Data centers alone could contribute between 65 GW and 90 GW of new demand by 2029, with AI-centric facilities making up 70% of this growth by 2030 Infrastructure Lagging Behind: Despite rising demand, only 55 miles of high-capacity transmission were built in 2023. Planned investments are increasing but remain insufficient to meet the forecasted load Regional Hotspots for Load Growth: Texas, Northern Virginia, Georgia, and the Pacific Northwest are leading regions for demand, driven by data center development, hydrogen plants, and industrial manufacturing. Challenges with Forecasting and Planning: Utilities face difficulties in accurately predicting load growth due to factors like data center energy use, hydrogen production, and electrification of transportation. New Financial Models and Tariffs: Utilities are adopting new tariffs requiring financial commitments from large loads, like data centers, to share infrastructure costs Opportunities in Energy Efficiency and Resilience: Improvements in energy efficiency, though slow, could reduce overall strain. Distributed energy resources (DERs) and Virtual Power Plants (VPPs) are potential solutions for enhancing resilience and grid flexibility Risks to U.S. Global Leadership: Delays in grid expansion could hinder economic and technological leadership in strategic industries like AI and advanced manufacturing.  #cloudcomputing  #cryptomining  #energyinfrastructure  #climatechange  #gridoptimization  #smartgrid  #batterystorage  #smartbuildings  #iot  #ev  #energytransition  #energynews https://lnkd.in/gTMVUYgh

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Vitesse Energy, LLC to Buy Bakken Pureplay Lucero in $220MM Deal Vitesse Energy will acquire Lucero Energy Corp.’s Bakken/Three Forks assets, including 25 net remaining locations, 1.9 net DUCs and 20 wells that are candidates for recompletions. Read the full story: https://lnkd.in/gpvguvxb

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This article discussion flies in the face of the market PJM has created. A market that only supports short term assets like wind and solar backed up by gas or batteries. In short it confirms the market flaws that have been claimed by utilities over many years, and should encourage support for creating market signals to create long lived assets like baseload generation plants.

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