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Welcome to the eighth 2024 issue of Currents - our e-newsletter focused on energy topics.
We are very pleased to announce that we are reaffirming our commitment to Mansfield Certification for 2024-2025. Since joining Mansfield in 2023, Spilman has made strides in increasing the transparency and accessibility of its advancement processes, ensuring all talent at the firm has equitable opportunities for leadership roles and activities. Click here to learn more about the Mansfield Certification.
In addition, 66 of our attorneys were selected by their peers for inclusion on the 2025 Best Lawyers list, five were selected as Best Lawyers "Lawyers of the Year," and 19 others were selected as Best Lawyers "Ones to Watch." Best Lawyers' methodology is designed to capture the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area. Click here to see the entire list of recognized attorneys.
SPILMAN EVENTS
You are cordially invited to our event "Your Business in the Digital Era: Legal and Commercial Challenges" on September 19 from 1-5pm in Pittsburgh, PA. This forum, intended for business owners and risk management professionals, is offered free of charge to clients and friends of the firm. We will address cybersecurity threats, data privacy, legal and ethical concerns with AI in business operations, intellectual property protection, and how to avoid and protect yourself from litigation. Click here to learn more and register.
On October 4, we are hosting our 2024 North Carolina SuperVision Labor & Employment Symposium in Winston-Salem, NC. This complimentary 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 register.
SPONSORED EVENTS
We are sponsoring and looking forward to the WV Chamber of Commerce's Annual Meeting and Business Summit being held August 28-30 at The Greenbrier in White Sulphur Springs, WV. The Business Summit is a highlight of the year and brings together the best and brightest in this region. Click here to learn more and register.
On September 16-18, we are sponsoring the WV Economic Development Council's Annual Fall Conference in Martinsburg, WV. The WVEDC conference promises three days packed with insights, innovations, and inspiration. Click here to learn more.
Thank you for reading!
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Is Nuclear the Panacea to Data Center Load Growth? | |
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By Carrie H. Grundmann and Schenley N. Kent
Per public data, after years of relatively flat load growth around the country, sharp increases in load growth and load growth projections have occurred, primarily from large-scale computing data center facilities and, to a lesser extent, cryptocurrency. Data centers are large consumers of electricity, often representing the single largest user on a utility’s system, and needing power 24/7/365. For example, in the Commonwealth of Virginia, 25 percent of the state's electricity capacity is dedicated solely to data centers. Some of the companies leading the growth in data center development – Amazon, Google, Microsoft, and Meta – also have announced aggressive carbon reduction goals, with many of these entities pledging net zero emissions by 2030.
This load growth is coming at a challenging time for the electric grid, which has been adding an increasing number of intermittent renewable resources like wind, solar, and to some extent, batteries, while many base-load coal plants have been retiring. With the recent passage of EPA Rule 111(b) and (d), in the near term, increasing pressure will be placed on the future operation of natural gas plants, another source of base load generation.
Click here to read the entire article.
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The Supply/Demand Problem: Reading the Signals from the Recent PJM Capacity Auction | |
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By Carrie H. Grundmann
The United States is facing a supply and demand problem in the electric sector, raising serious concerns not only about energy affordability but the reliability of the grid.
On Tuesday, July 30, 2024, PJM Interconnection, LLC (PJM), the regional transmission operator for a 13-state region, including West Virginia, Virginia, Ohio, Pennsylvania and other neighboring states, announced the results of its capacity auction results for the 2025/2026 delivery year. The purpose of the Capacity Auction is to procure power supply resources for electricity needs in the PJM region on a future-looking basis. With a clearing price of $269.92/MW-day, the auction results represent a nine-fold increase over prior auctions.
While an increased clearing price from PJM’s capacity auction was expected, the magnitude of the increase took many by surprise.
Click here to read the entire article.
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“The state Supreme Court is considering written arguments in the case over whether a program to cut pollution from power plants should be allowed in Pennsylvania.”
Why this is important: The Pennsylvania Supreme Court (Supreme Court) is accepting written arguments to determine whether Pennsylvania's participation in the Regional Greenhouse Gas Initiative (RGGI) should be allowed. RGGI is a multi-state program that imposes a price and declining cap on carbon dioxide emissions from power plants, which critics argue is an unconstitutional tax that will cost jobs. In the lower court, opponents of RGGI succeeded in blocking RGGI from being implemented.
According to the article, the Supreme Court allowed an additional climate advocate party to join the case, a party that is arguing that the Environmental Rights Amendment (ERA) in the Pennsylvania Constitution permits the government to put a price on pollution. Separately, the article notes that Governor Shapiro has proposed a Pennsylvania-only cap and trade program for powerplants that would serve as an alternative to RGGI. While the outcome of the Supreme Court case remains uncertain, it appears that Governor Shapiro and his administration remain interested in curbing power plant emissions at the risk of increasing costs to businesses and consumers.
--- Steven W. Lee
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“Despite the disruption, Jen Easterly said the outage was a ‘useful exercise’ to determine the resiliency of critical infrastructure organizations.”
Why this is important: CrowdStrike is a U.S. cybersecurity firm with 43 U.S. states and nearly 300 companies in the Fortune 500 as clients; not to mention clients in the U.K., India, France, Australia, and other nations. They offer a wide array of services, most of which is end point monitoring: the practice of continuous monitoring and management of devices that connect to a network, such as computers, mobile devices, and servers. On Friday, July 19, 2024, much of the world stopped when a CrowdStrike update containing a defect in a single content update for Windows hosts caused an out-of-bounds memory read. Out-of-bounds memory reads are a type of memory access error that can cause crashes, incorrect behavior, or security vulnerability. Thousands of flights were grounded. In some states, 911 lines were down. Hospital patient records systems were down. And, many industries across the globe felt the impact.
The most important aspect of this event was that this was not an attack. Save for the defect, the system update would have happened normally as all other updates have in the past and we never would have collectively been forced to realize our interconnected vulnerability. We can be sure that the enemies of the United States took notice. Top brass at the Cybersecurity and Infrastructure Security Agency (CISA) noted the events as a big lesson. Hackers from China have already made clear that U.S. infrastructure, drinking, and wastewater systems are prime targets. The CrowdStrike incident proved how many nations, companies, and the comforts of modern society are vulnerable. The focus now is on building resilience in our networks and working to drive down the recovery time. Diversifying service providers or using local versus cloud-based software are a few simple considerations that could make a difference. Regardless, awareness must spread and actions must be taken to reinforce critical systems in a way that will prevent total collapse. --- Sophia L. Hines
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“It stays cool on its own, even during a crisis.”
Why this is important: China has now developed, tested and proven the design of a new nuclear reactor power plant that can keep itself cool during power outages. Traditional reactors in power failures, when cooling pumps and water circulation fail, can go into runaway heating and cause a disaster known as a nuclear meltdown. The new design is a pebble bed reactor in operation since 2022 and is similar to what nuclear-powered submarines use. It has undergone two full tests of its ability to recover from total power loss—one in August of 2023 and one in September of 2023. The helium coolant circulated and kept the reactor at a maximum temperature of 870 degrees Celsius. (In 2011, Fukushima reached 2800 Celsius — still below what its containment vessel could control). Nuclear power growth has been stopped by the threat of meltdown and massive accidents such as Chernobyl in northern Ukraine (then part of the Soviet Union), Fukushima in Japan and Three Mile Island in the U.S. In the West, small modular reactors are under development with test reactors that are also designed to prevent nuclear meltdown. --- Mark E. Heath
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“Coal powers growth in India & China, gas burn in U.S. sets new record as wind goes AWOL.”
Why this is important: Electricity generation powered by wind and solar is increasing, but the worldwide share of total electricity generated by intermittent renewables remains at the same low level because other sources of generation are growing just as fast. China and India are adding huge amounts of coal, gas and nuclear-generating capacity, as they chase the economic growth created by reliable and abundant electricity that developed countries have already experienced. Nothing about this development is likely to change in the near future. --- David L. Yaussy
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“The Department of Energy released its cost analysis for 11 technologies one day before announcing several funding and innovation opportunities for long-duration storage developers.”
Why this is important: Long-term electricity storage technology to support the nation’s electricity grid has in recent years been viewed as a potential boon to facilitating the move toward renewable generation technologies and resolving the substantial attendant questions related to rising capacity costs and system reliability. The U.S. Department of Energy established a 2021 goal to reduce the cost of such technologies by 90 percent, using a 2020 baseline for lithium-ion batteries, the predominant storage technology. To that end, the DOE recently evaluated 11 storage technologies to determine what savings may be obtained from implementation of such innovations. While the study did not find a clear technology winner, nor cost savings within the Department’s targeted range, the DOE expects that the data will spur additional investment in “a diverse portfolio of storage technologies” and is continuing to support the launch of energy storage projects in support of an expanded storage market. --- Barry A. Naum
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“Four former landfill sites in Cleveland and Cuyahoga County will get solar arrays as part of $129 million in funding from the U.S. EPA.”
Why this is important: Four landfills and a brownfield site in Ohio have received a $129 million grant to install solar from the Inflation Reduction Act. Using new systems to put solar onsite without damaging the landfill liners will add 28 MW of electricity. The grant will also add 35 MW of solar and 10 MW of battery storage to a brownfield site in Ohio. Together, the projects will eliminate 1 million metric tons of CO2 in 25 years. --- Mark E. Heath
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By Mitchell J. Rhein
A federal district court in Texas has set aside the Federal Trade Commission’s (FTC) final rule that bans most noncompetition agreements (the Noncompete Rule). The final rule was scheduled to go into effect on September 4, 2024, but the court’s order indefinitely sets aside the rule and prohibits the FTC from enforcing it.
Click here to read the entire article.
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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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What are your areas of interest? If there are particular industries or issues that you would like to hear about, email us! We have a large number of attorneys willing to weigh in on the issues that impact you and your business.
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