Welcome to the fourth 2024 issue of Currents - our e-newsletter focused on energy topics.
We are proud to sponsor the WV Manufacturers Association's Manufacturing Energy Growth Summit being held May 6-7 at Oglebay Resort in Wheeling, West Virginia. This regional event brings together manufacturing and energy leaders, state and local officials, economic development professionals, and friends of industry and energy from West Virginia, Ohio, and Pennsylvania. Click here to learn more and register.
We are pleased to be a Silver Sponsor of the West Virginia Workers’ Compensation Association's Conference being held June 12-13 in Charleston, West Virginia. Spilman attorney Dill Battle is a host of the conference where topics to be covered include a live IME demonstration, the nuts and bolts of a new claim, strategies for safe and effective return to work, regulatory update, and claim handling strategies for preexisting conditions given recent court decisions. Click here to learn more and register.
Join us on June 21 for our 2024 SuperVision Labor & Employment Symposium - The Future of Work: Legal Strategies for Employers in a Dynamic Landscape. Spilman attorneys will be discussing a variety of topics designed to inspire your confidence in navigating complex employment decisions. This symposium is tailored for business owners, HR professionals, and anyone who manages employees. Dive into a day of invaluable insights on topics such as remote work; workplace investigations; AI, emerging technologies, and privacy; union avoidance; workplace violence; and more. Click here to learn more and register.
Thank you for reading!
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Solar Powered Generation Sees Significant Growth while Some Solar Energy is Increasingly Blocked from Production |
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Our Currents focus article this month is on developments in the growth of solar electric power generation and obstacles to future growth that are occurring around the U.S. from environmental groups and other energy producers attempting to limit the advancement of renewables. As someone who regularly writes about energy production and is Co-Chair of the firm’s MSHA and OSHA Safety practice groups, I will take a deep dive into these issues.
Click here to read the entire article.
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“West Virginia Gov. Jim Justice (R) vetoed a measure that would raise the allowable size for a solar plant operated by state utilities, citing concerns about its effects on the coal industry.”
Why this is important: The article explains Governor Justice’s veto of a bill that would have expanded the ability of the monopoly utilities in West Virginia to increase their own investment in solar facilities, including provisions allowing for cost recovery from captive ratepayers with a return. The Governor vetoed the bill despite the fact that West Virginia’s super-majority Republican Legislature had passed the bill overwhelmingly. Governor Justice claimed the veto was necessary as the bill would have otherwise imperiled West Virginia’s coal-fired power plants; although the Governor did not meaningfully explain how that would occur under the bill, the veto does have negative consequences for West Virginia’s economy. In pertinent part, a key reason why the Legislature passed the bill is because many large manufacturing and industrial interests in West Virginia want to acquire renewable energy, and the Governor’s veto will make it that much more difficult for West Virginia to attract and retain new and existing business and industry. In turn, it will be important for the Legislature to consider other means to allow large users to have access to the renewable power market. --- Derrick Price Williamson
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“Pennsylvania’s energy future hangs in the balance amid a federal pause on liquified natural gas production, leaving taxpayers on the hook for more costly and less reliable power.”
Why this is important: This article discusses some critics’ concerns about the impact of President Biden's temporary pause on liquefied natural gas (LNG) exports, arguing that it could lead to costlier and less reliable power in Pennsylvania. According to the article, advocates who support using LNG in the state believe that Pennsylvania's natural gas resources should be utilized to support local workers and prevent the state from falling further behind Texas, Alabama, and Louisiana in energy production. Republican legislators argue that the hold on LNG exports undermines economic and environmental goals and they have proposed the creation of an LNG hub in southeast Pennsylvania to generate jobs and revenue for the state. Industry leaders argue further that the pause serves political interests and benefits foreign competitors like Russia, China, and Iran. --- Schenley N. Kent
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“Va.’s virtual power plant program enrolls hundreds of public facilities that agree to reduce or shift their electric demand to relieve strain on the grid.”
Why this is important: This article discusses the asserted benefits of “virtual power plants,” a phrase generally used to refer to a connected aggregation of distributed energy resources (think battery storage or electric water heaters and smart thermostats) that can be deployed collectively to address periods when grid stress (i.e., demand) is high. Rather than building new resources to address peak demand like a gas peaking unit, virtual power plants, which harness resources that already exist, can be deployed to reduce peak demand. Additionally, according to the article, these resources can avoid or delay the need for a utility to build costly new generation resources. As load growth is experienced around the country, including in service territories in our region (Virginia and North Carolina, for example) the value – and need for – these types of resources are growing.
Utilities are proposing programs that take advantage of these virtual power plants. The author notes an ongoing successful program deployed by Rocky Mountain Power in the western United States as well as other examples around the country. Duke Energy in North Carolina has recently obtained approval from the North Carolina Utilities Commission for such a program. Beginning in May 2024, Duke will begin enrolling interested residential customers in a virtual power plant pilot program known as PowerPair. Under this program, residential customers that install solar + battery storage can receive monthly credits from the utility if they opt to allow the utility to control their battery a set number of times a year to address periods of peak demand.
While the author notes that there has been a growing interest in virtual power plants, he also recognizes that there has also been some opposition by utilities who often profit from building new generation. With significant backlogs in bringing new resources online, the author suggests that regulators can play a role in forcing utilities to harness the benefits of virtual power plant resources. Not only do many of these resources already exist, but they are often the cheaper option for ratepayers. --- Carrie H. Grundmann
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“The scale of the project transforming swathes of barren salt desert on the edge of western India into one of the most important sources of clean energy anywhere on the planet is so overwhelming that the man in charge can’t keep up.”
Why this is important: India needs energy, as its middle class grows and demands more of the luxuries that Americans take for granted, like air conditioning and refrigeration. Large solar installations such as this one in a western desert could be a good match to the high electrical demand during daytime temperatures. The challenge will be to supplement it with cost effective sources of energy production or storage for nights and cloudy days. As a practical matter, that will require more nuclear or fossil fuel-fired generators. --- David L. Yaussy
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“Exports will slump 6.3% for the year, according to US Energy Department figures.”
Why this is important: The collapse of the Key Bridge in Baltimore is having a significant impact on U.S. coal exports. Since the collapsed bridge blocked the harbor entrance/exit, exports declined by 35 percent. It is now predicted the shutdown will drop U.S. coal exports by 6.3 percent for the year as total U.S. coal exports decline from 100.8 million tons to 94.5 million tons. Salvage crews are working around the clock to remove the bridge’s steel and concrete structure from the harbor entrance. When completed, the harbor can reopen for exports, but no timetable has been announced for when that will occur. As U.S. domestic coal consumption drops, exports have become vital to providing sales outside the continental U.S. for American mining companies. --- Mark E. Heath
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“Such legislation would make Pennsylvania the first major fossil fuel-producing state to adopt a carbon-pricing program.”
Why this is important: The article discusses Governor Josh Shapiro's plan to boost the state's renewable energy sector. Governor Shapiro aims to join a coalition of other states in support of federal legislation promoting clean energy. In the article, Governor Shapiro emphasizes the economic benefits of transitioning to renewable energy, including job creation and lower energy costs. Shapiro's initiative aligns with broader efforts to address climate change and reduce greenhouse gas emissions. According to the article, neighboring states have set ambitious goals to source 50 percent or more of their electricity from renewables by 2030, raising concerns that Pennsylvania might need a similar approach to a clean energy economy. However, Republican lawmakers who control the Senate have some reservations about Governor Shapiro's renewable energy plan and have warned that carbon pricing could raise electricity bills, fray the electricity grid, hurt in-state energy producers, and drive new power generation to other states. --- Schenley N. Kent
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“Supporters of adding nuclear energy to that mix had touted the bill's passage as a pivotal moment for Kentucky's energy future.”
Why this is important: Six state legislatures (including Kentucky) have lifted bans on new nuclear facilities since 2016, leaving 10 states with bans still on the books. While many states appear to focus on establishing or increasing nuclear development, there will inevitably be contention regarding the particulars of said development. Senate Bill 198 would have created the Kentucky Nuclear Energy Development Authority, a nonregulatory state government agency with a mission to support and facilitate the development of nuclear energy across the Commonwealth of Kentucky. Many states have similar authorities with similar missions. Unlike many other states, Senate Bill 198 allowed non-governor appointed members to serve on the Development Authority’s Board, including a representative from each of the four investor-owned electric utilities operating in the Commonwealth. The Republican supermajority legislature will have an opportunity to override the veto, but be prepared for further politically centered delays to nuclear development across the states. --- Joseph C. Unger
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“SMR bills could get additional ratepayer protections.”
Why this is important: With the close of the Virginia General Assembly’s 2024 Legislative Session, a number of utility regulatory bills made their way to Governor Youngkin. One piece of legislation involved utility cost recovery related to small modular reactors (SMR), a burgeoning technology that is expected to commercialize small nuclear reactors (200-300 MW) at scale. While there are presently no SMRs in commercial operation in the United States, the technology is being viewed as a potential key to reducing carbon emissions.
The bills before Governor Youngkin – SB 454 and HB 1491 – provided cost recovery to the state’s investor owned utilities, Dominion Energy and Appalachian Power Company, in order to get a site ready for SMR and to obtain the necessary federal licenses. Upon reviewing the bills, Governor Youngkin has proposed amendments to them. While some viewed the Governor’s amendments as adding ratepayer protections, the author notes that others were concerned the amendments also removed other important ratepayer protections. In addition, the current proposed legislation does not address the ability of non-utility power producers to develop SMR technologies competitively without the need for ratepayer funding. As of this week, the General Assembly is considering whether to adopt or override Governor Youngkin’s amendments. --- Carrie H. Grundmann
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“Close to half now say they would not buy an EV.”
Why this is important: Wealthier consumers who wanted to buy an electric vehicle, often as a second car, have done so, and now sales of EVs have started to plateau. Other car buyers are expressing reluctance to purchase EVs due to concerns about price, charging opportunities, and range anxiety. Limitations on battery technology during frigid weather was widely reported this past winter, which was not particularly cold in the United States. Getting to 60 percent of new purchases by 2030, as the Biden administration wants, will be impossible at the current rate of adoption. --- David L. Yaussy
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“Under the proposed plan, coal plants opting out of installing carbon-removal technology may face closure two years earlier than initially anticipated, according to Bloomberg.”
Why this is important: The Biden administration is considering rule changes that would result in coal-fired electrical plants closing two years early in 2038. Plants than do not capture carbon from emissions were originally given until 2040 to cease operations. Now, the plan would reduce the deadline by two years and require the plants to capture carbon emissions by 2038 or close. The Biden administration promoted the rules by press release, stating: "These final carbon pollution standards will protect public health, reduce harmful pollutants, and deliver billions of dollars in climate and public health benefits." The proposal will face significant pushback from coal mining companies and many states that believe coal-fired plants are closing too fast, leaving the U.S. electrical grid at risk for collapse in high-demand events like summer heat waves and strong winter storms. --- Mark E. Heath
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Here is a round-up of the latest statistics concerning the energy industry.
ELECTRICITY
PETROLEUM
NATURAL GAS
COAL
RENEWABLES
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