Ari Peskoe

Transmission planning needs major reforms, including loosening the grip incumbent transmission owners have on the process, a panel of experts said Thursday during a roundtable hosted by the R Street Institute, a think tank. ... In the short term, transmission operators determine who produces power and how much they produce, and in the long term they guide decisions about where to build new transmission, which opens opportunities for new sources of power, according to Ari Peskoe, director of Harvard Law School’s Electricity Law Initiative. "So really, control over transmission is in a lot of ways control over the industry," Peskoe said.

As Justice Stephen Breyer prepares to step down from the Supreme Court later this year, legal experts are highlighting a lesser-known piece of his legacy — an impact on clean energy and electricity markets. Yesterday, President Biden formally announced Breyer’s plans to retire at the end of this court term during an event at the White House. The 83-year-old justice has served for 28 years on the high court, and four decades as a federal judge (Greenwire, Jan. 27). ... “Breyer opened the door to a practical view of FERC’s jurisdiction that is adaptable to new technologies and is not fixed by the industry structure that existed when Congress passed the [Federal Power Act] in 1935,” said Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School, in an email.

A decade after federal regulators opened the door to competition for development of large transmission projects, states — acting at the request of incumbent utilities — are slamming it shut. ... “That’s particularly true in MISO where regional projects basically disappeared as competition went into effect,” said Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School’s Environmental and Energy Law Program. “One reason that’s happening is because it’s so much easier to spend your money where there’s no competition and basically no oversight than to risk going through a competitive process.”

The Biden administration’s plan announced yesterday to pump $20 billion into expansion of the nation’s transmission networks will target “shovel ready” projects that deliver clean energy, at the same time a nationwide grid expansion is planned and advanced, according to an administration official. ... DOE’s initiative could also inform FERC’s potential transmission reforms by providing additional, informed research and analyses on transmission needs, said Ari Peskoe, director of the Electricity Law Initiative at Harvard University. Typically, FERC has relied on industry players to identify transmission solutions, even though the independent agency and others have argued that the industry has “underinvested in large-scale projects,” Peskoe said.

As Republican state officials insist that Canadian oil pipelines are necessary to lower energy costs for American consumers, the fossil fuel giant operating those pipelines is suddenly citing the climate crisis its products are creating as a rationale for raising those prices higher, according to new documents reviewed by The Daily Poster. Last month, Ohio Republican Gov. Mike DeWine—who has raked in nearly $400,000 from fossil fuel industry donors—demanded the Biden administration keep open Enbridge's controversial Line 5 pipeline, which runs under the Great Lakes, as a way to reduce energy prices. But Enbridge just dropped a bombshell undercutting that argument: The firm told government regulators that climate change means its tar sands pipeline network only has 19 years left of economic life. That assertion could allow the company to jack up the tolls that its customers pay to transport oil through its pipelines, because pipeline operators are authorized to recoup their operational costs through rate increases—and a shorter timetable means higher levies. "There is something ironic about pipeline companies like Enbridge conceding that they can see the writing on the wall, they're not going to be competitive or needed less than 20 years from today, and as a result they have to raise prices today to account for that," said Ari Peskoe, director of the Electricity Law Initiative at the Harvard Law School. "There's something incongruous about that."

Willie Phillips, confirmed Tuesday night to the Federal Energy Regulatory Commission, is poised to be the tie-breaking vote on two proceedings that will shape the future of the U.S. power grid, electric markets and the clean energy rollout. He could vote on a market pricing rule benefiting nuclear and renewable generators that took effect in PJM Interconnection, the country’s largest regional grid operator managing the flow of power to 65 million people in the eastern states. And he’s expected to weigh in on a proposed new wholesale market created by a group of large electric utilities in the Southeast, including Southern Co. and Duke Energy and Tennessee Valley Authority. Opponents say the new market could crowd out independent renewable generators. ...“It’s a huge set of issues on the plate for FERC,” said Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School.

Power producers challenging a PJM Interconnection regional market rule are setting up a legal fight that could affect the electricity mix across chunks of the Midwest and eastern U.S. ... But there are questions in energy circles about whether Phillips might have to recuse himself because his position as chairman of the Public Service Commission in Washington, D.C., meant he considered the sticky PJM capacity market issue. Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School, said he doesn’t expect that to be an issue. “I say it’s low risk, because he didn’t work for the entity filing the proposal,” Peskoe said of the possibility of Phillips recusing himself.

The New York Independent System Operator's (NYISO) ROFR proposal comes as FERC is considering revising its rules governing transmission planning. Utilities want FERC to give them the right to build transmission lines in their footprints instead of opening those projects to a bidding process. ... Competition has generally worked well in New York for public policy transmission projects, according to Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School. However, the proposal marks the second recent attempt by New York transmission owners to monopolize transmission that will be built to facilitate the state's clean energy goals, Peskoe said in an email.

When GreenHat Energy collapsed after blowing millions speculating on power prices, it became plain: Energy traders are essentially gambling, and ratepayers back every bet. ... GreenHat traded in a market operated by the largest of the grid keepers, the RTO known as PJM Interconnection LLC. PJM (the name originally stood for Pennsylvania, New Jersey, and Maryland) directs power from 1,400 generators through 85,100 miles of high-voltage cables in 13 Eastern states and the District of Columbia. Its 65 million electricity consumers have been spared the widespread blackouts that have affected tens of millions of people in Texas and California lately, but they’ve paid for that stability. PJM is supposed to balance the interests of power companies, consumers, and communities, but for years it’s allowed major suppliers such as Exelon, Duke Energy, and American Electric Power to bill ratepayers for high-priced upgrades to sections of the grid where they predominate, according to an assortment of studies. Ari Peskoe, director of the Electricity Law Initiative at the Harvard Law School Environmental and Energy Law Program, says PJM’s reliable checkoff on new projects allows suppliers to preserve their market dominance and freeze out competition. It’s effectively “a protection racket” for the biggest providers, Peskoe says.

The New York Public Service Commission (NYPSC) is leading a protest asking federal regulators to reject a proposal that would give incumbent utilities a path to building certain transmission upgrades planned by third-party transmission developers. The state grid operator's right of first refusal (ROFR) proposal, which could give utilities a new income stream, would lead to unfair rate hikes, would fail to balance consumer and shareholder interests, and thwart the Federal Energy Regulatory Commission's efforts to inject competition into the transmission process, the NYPSC said in a Tuesday filing at the commission. ... Competition has generally worked well in New York for public policy transmission projects, according to Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School. ... "New York's policies are headed in the same direction, and they all point to a significant influx of clean energy over the next couple of decades," Peskoe said. "[The utilities] are trying to effectively tax clean energy policies by attempting to take a cut of the profits without any competition."

New rules affecting the electric power system issued by the Federal Energy Regulatory Commission should apply everywhere, including in parts of the country that lack organized power markets, FERC Chair Richard Glick said yesterday. ... The Midcontinent Independent System Operator has also urged FERC to apply future transmission planning reforms to both RTOs and non-RTOs, since leaving non-RTOs out of certain requirements could give utilities a reason to leave the organizations, said Ari Peskoe, director of the Electricity Law Initiative at the Harvard Law School Environmental and Energy Law Program. "Glick is clearly addressing a broader point, not just about transmission development," Peskoe said. "In general, FERC has to more actively regulate the utilities that are not in RTOs, in part to ensure that utilities not in RTOs will not stay out to avoid FERC rules and those already in RTOs won’t leave in order to avoid FERC rules."

New Jersey is weighing a novel approach to developing electric transmission projects that observers say could soon be explored by other states and help drive renewables. New Jersey’s Board of Public Utilities announced Sept. 24 that it had closed a request for proposals from companies seeking to build transmission infrastructure to connect planned new offshore wind farms to the regional power grid. In a unique arrangement with the grid operator for the mid-Atlantic region, the Garden State has agreed to pay for a new transmission network without help from other states and use the power lines to link up a slew of wind projects expected to be built off the Jersey Shore. ... Voluntary transmission agreements could be particularly useful for states with offshore wind procurement plans, said Ari Peskoe, director of the electricity law initiative at the Harvard Law School Environmental and Energy Law Program. Offshore wind is generally going to be developed in predetermined locations, which would make it easier for one or more states to plan for the transmission lines through a voluntary agreement, Peskoe said. ... “There’s a lot on the table right now about transmission at FERC, and I suppose it’s also possible FERC might include this in a rulemaking further down the line,” Peskoe said. “But I think the current policy statement is really an invitation that states and RTOs explore this option if it makes sense.”

Like many ravaging storms that came before it, Hurricane Idaexposed the fragility of Louisiana’s power grid, knocking out electricity to hundreds of thousands of people and businesses, including nearly all of New Orleans. It also laid bare growing doubts about the ability of the state’s largest energy provider to protect against the effects of climate change, including the increasingly destructive weather it causes. ... Ari Peskoe, the director of the Electricity Law Initiative at Harvard Law School, said Entergy is “an extreme example” among old-school utilities that stand to lose from the building of regional transmission lines. “There is an incentive mismatch between what’s good for the public versus what a utility might want to do, which is to protect its legacy power plants that it can still make money off of,” Peskoe said.

Like many ravaging storms that came before it, Hurricane Ida exposed the fragility of Louisiana’s power grid, knocking out electricity to hundreds of thousands of…

The power grid serving nearly 20% of the U.S. population is about to throw a roadblock in President Joe Biden’s plan to decarbonize the electricity sector. PJM Interconnection LLC, which keeps the lights on for 65 million people from Chicago to Washington, D.C., is expected to clear a fleet of new natural gas plants-- and even extend the lives of some coal plants -- when it releases the results of its massive electricity auction Wednesday. That’s because Trump-era changes to the way the auction is structured give a leg up to fossil fuels, at the expense of zero-carbon sources such as nuclear, wind and solar. “The market has been trending toward renewables, but this is pulling it back,” said Ari Peskoe, director of Harvard Law School’s Electricity Law Initiative. “It’s fighting the future.” As much as 4 to 6 gigawatts of new gas capacity and several clunker coal plants could clear the auction, according to some estimates, while nuclear and renewables are expected to be the big losers. Such an outcome would further entrench fossil fuels in the biggest U.S. power market, and runs counter to the president’s goal of eliminating greenhouse gases from the power industry by 2035.

Private equity firms are proving there’s still plenty of profit in the U.S. coal industry despite a decade of falling demand for the fossil fuel. They are spending billions of dollars buying coal-fired plants on the cheap - and getting paid even when they are not providing power. Since the end of 2014, at least five U.S. private equity firms have bought coal plants in markets where regulators pay them to be on standby to provide emergency power when demand surges with extreme hot or cold weather, according to a Reuters review of U.S. regulatory disclosures and credit-rating agency reports...FERC did not respond to requests for comment, and the White House declined to comment. “I’m confident, in the next couple of years, FERC will order changes,” said Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School. Policy changes could make it harder for highly-leveraged private equity owners of coal plants, like Lightstone, to refinance their debts, according to Richard Donner, a credit analyst at Moody’s Investors Service. About $1.7 billion in the company’s debt comes due in 2024. Even so, Lightstone’s creditors are the ones with the greatest risk, according to Peskoe. “Somehow the private equity guys always make out OK,” Peskoe said. “It’s everyone else who doesn’t.”

An article by Ari Peskoe: Interstate transmission development is fragmented by local utility service territories. Parochial interests are impeding large-scale transmission projects, which in turn is slowing wind and solar deployment. The combination of discriminatory state laws and Federal Energy Regulatory Commission transmission planning rules shields utilities from competition within their local service territories and induces them to focus on developing small-scale local projects. These protectionist policies reinforce an anachronistic utility-by-utility approach to transmission planning that is failing to develop theregional transmission necessary to effectively decarbonize the power sector and mitigate the impacts of extreme weather. Consider Minnesota, where sixteen utilities own interstate electric transmission lines. A decade ago, the state legislature set that number in stone by granting these sixteen entities exclusive rights to build additions to their respective portions of the interstate power network. The state recently asked the U.S. Supreme Court not to invalidate that law because allowing a seventeenth entity to own transmission in Minnesota "would inject uncertainty" into the state’s power network and "risk unreliable transmission." These wholly unsupported claims, that belie the experience of transmission operators around the country, are at the heart of the state’s assertion that its exclusionary law has a legitimate basis and is not intended solely to protect local utilities from competitors.

A fundamental flaw in the freewheeling Texas electricity market left millions powerless and freezing in the dark this week during a historic cold snap. The core problem: Power providers can reap rewards by supplying electricity to Texas customers, but they aren’t required to do it and face no penalties for failing to deliver during a lengthy emergency. That led to the fiasco that left millions of people in the nation’s second-most-populous state without power for days. A severe storm paralyzed almost every energy source, from power plants to wind turbines, because their owners hadn’t made the investments needed to produce electricity in subfreezing temperatures...Within the competitive Texas power market, there is a strong incentive for generators to keep costs down to recoup their investments. The rapid buildout of wind and solar power, which are now among the cheapest sources of electricity, have pushed prices even lower in recent years, making it more difficult for gas and coal plants to compete. For plant owners, that presents a paradox: Should they add to their capital costs by preparing for severe cold snaps that occur only occasionally, or skip the preparation and risk tripping offline, missing out on high prices and exacerbating a potential supply shortage? “With everything there is a trade-off,” said Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School. “More resilience is potentially more expensive, but electricity is an essential service. These are hard decisions.”

President Joe Biden outlined ambitious new plansfor taking on climate change on Wednesday, but the most potent weapon may already be in his arsenal. The five-member Federal Energy Regulatory Commission is poised to play a pivotal role fulfilling Biden’s clean-energy ambitions, including his vow to strip greenhouse gas emissions from the power sector over the next 14 years. FERC could help Biden deliver on those promises by fostering carbon prices on electricity, propelling a massive build-out of high-voltage power lines and making it harder to build natural gas pipelines...Biden can’t count on help from Congress. With Democrats having only a narrow hold on the House and Senate, it’s unlikely both chambers will pass broad clean energy legislation, including a nationwide renewable power mandate. Enter FERC, which can accomplish many of the same goals, said Ari Peskoe, director of Harvard Law School’s Electricity Law Initiative. “FERC will be an indispensable player in the Biden administration’s clean energy agenda,” Peskoe said. “It’s the federal regulator of two major energy industries -- the power sector and the natural gas industry -- so it matters a lot in how this energy transition plays out.”

Welcome back to Transmission Week here at Volts! In my previous post, I explained why the US needs lots of new high-voltage power lines. They will help stitch together America’s balkanized grids, connect remote renewable energy to urban load centers, prepare the country for the coming wave of electrification, and relieve grid congestion. And oh yeah — we won’t be able to decarbonize the country without them... Today, we’re going to walk step by step through the process and show why they’re not getting built. At each stage, we’ll look at what Congress can do — and what Biden can do without Congress’ help — to get the process moving...As Ari Peskoe of the Harvard Electricity Law Initiative writes in a recent paper, “FERC was optimistic that [the IOUs’] central-planning development model would be replaced by ‘well-defined transmission rights and efficient price signals’ that would facilitate market-driven expansion.” When it didn’t quite work out that way, once again, in order 1000, “FERC employed several mechanisms to pry control over regional transmission development from IOUs and break the IOU-by-IOU planning model,” Peskoe writes...IOUs have engaged in a “shift away from regional projects, which must be developed competitively, to smaller or supposedly time-sensitive projects that IOUs build with little oversight and without competitive pressures,” Peskoe writes, and RTOs have implicitly or explicitly supported them in this shift.