Utilities Are Just Trying to “Keep the Lights On”

Utilities are expected to provide power that is affordable, resilient, and free from cyber threats all while “keeping the lights on,” said former Deputy Secretary of Energy Mark W. Menezes, now President and CEO of the United States Energy Association (USEA). USEA’s September 12th press briefing included a discussion on The Transformative Future for Utilities: Turbulent and Exciting. Experts included NERC Vice President Howard Gugel, CPS Energy President & CEO Rudy Garza, and Rayburn Electric Cooperative President & CEO David Naylor. Speakers discussed the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) and what could be delaying funding for energy related infrastructure.

Utilities noted that the funding was a “slog” and a “slow go of trickling down.” USEA Program Manager Elliot Roseman noted that a bottleneck does exist as private equity flocks to renew their applications to take part in the new funding source. Regional transmission organizations (RTOs) are also applying, but there is a “confusion of money into DOE” and there are a lot of restrictions placed on agencies. USEA is focused on getting the funding out the door and is hopeful that they will start to see results of the legislation soon. That said, EnerSys CTO and Senior Vice President Joern Tinnemeyer pointed out that lithium-ion cell manufacturing is already seeing immediate funding, which is allowing them to move into new revenue sectors.

A few key takeaways from the briefing:

• While the BIL and IRA are historic pieces of legislation that provide tax incentives, grants, and loans to foster the development of the energy systems to meet renewable energy goals, the road map for how to get there seems to be missing. Demand is expected to double by 2050 and utilities are finding it difficult to implement what Congress has tasked them with. Therefore, experts pointed out that policy coordination is necessary on all levels from federal to state and local to meet the demands of the clean energy transition offered in the BIL and IRA.
• Battery storage and long-term duration storage remains a costly initiative. Storage is how renewable energy produced from sources such as wind and solar can be stored and used later when the wind isn’t blowing, and the sun isn’t shining. Currently long-term storage is one of the more costly options and experts are hopeful that costs will come down in the coming years with additional investment and new technologies—the same way the cost curve has come down for renewables like solar and wind.
• Cyber threats are a constant and growing concern. Rudy Garza of CPS Energy commented that attacks on the grid are increasing, and that CPS is investing in a new enterprise system to enhance their ability to protect their outdated system against thousands of attempted attacks every day.
• When the topic of natural gas versus electricity comes up the group agreed that the two are in fact symbiotic and rely on each other and that one will not entirely replace the other, at least not by 2050.
• David Naylor of Rayburn Electric Cooperative noted a 10% annual growth in demand on the grid, which doesn’t begin to consider additional electric vehicles and additional storage. He said they are just trying to keep their heads above water and keep the lights on.