Maine considers hybrid, EV fees for highway fund

Saturday, February 17, 2018

A Maine legislative committee is considering a proposed law that would add a surcharge on the annual registration of hybrid and battery-electric motor vehicles, to raise money for the state's highway fund -- but as with previous efforts to raise fees on hybrid and electric vehicles, the 2018 proposal is facing opposition from some quarters as contrary to state policy.

At issue is a bill named, "An Act To Ensure Equity in the Funding of Maine's Transportation Infrastructure by Imposing an Annual Fee on Hybrid and Electric Vehicles." Also known as LD 1806, the bill would impose surcharges, dedicated to the Highway Fund, on the annual registration of a hybrid and battery-electric motor vehicles. It defines hybrid motor vehicle as an automobile or pickup truck powered by a combination of a fuel combustion engine and electric motor, and would impose a $150 annual fee on hybrids. It defines battery-electric motor vehicle as "an automobile or pickup truck the primary motive power of which is an electric motor," other than a low-speed vehicle, and would impose a $250 annual fee on battery-electric motor vehicles.

According to an analysis posted on Autoblog.com, if LD 1806 is enacted, the amount Maine electric vehicle (EV) and hybrid drivers would pay in lieu of gas taxes "would be tops in the nation."

Rather than imposing new fees on hybrids and electric vehicles, previous legislatures had extended tax exemptions to hybrid and clean fuel vehicles. State law supports the deployment and integration into the electric system of advanced electric storage and peak-reduction technologies, including plug-in electric and hybrid electric vehicles.

According to Maine's 2015 Comprehensive Energy Plan, at that time alternative vehicles remained a relatively small percentage of Maine’s vehicle fleet, but "the state should consider partnerships with large fleet owners to transition to alternative vehicles including natural gas, propane, and electricity."

But with the state highway fund facing a significant deficit relative to its budget in 2017, last year the legislature considered several bills that proposed raising fees on hybrid and electric vehicles to fund roads. One bill, LD 1226, An Act To Keep Maine's Transportation Infrastructure Safe by Providing More Sources of Revenue for the Highway Fund, would have imposed an annual registration fee of $250 on hybrid vehicles and $350 on electric vehicles, rather than the typical $35 annual fee for passenger vehicles.

Last year the legislature did not enact LD 1226, but it did carry over a similar bill for further action in 2018. LD 1149, An Act To Provide Revenue To Fix and Rebuild Maine's Infrastructure, would impose a $200 surcharge, dedicated to the Highway Fund, on the registration of hybrid motor vehicles, battery-electric motor vehicles and hydrogen fuel cell motor vehicles. LD 1149 was carried over by the legislature for further action this year and could be taken up again, although the more recently printed LD 1806 covers similar ground.

The committee heard testimony on LD 1806 on February 13, 2018, much of which was critical of imposing new fees. According to the committee calendar, a work session on the bill is scheduled for February 22.

US intelligence threat assessment on cyber, energy, infrastructure risks

Friday, February 16, 2018

The U.S. intelligence community has released an unclassified report presenting its assessment of the global context and how threats could affect U.S. actions. The latest Worldwide Threat Assessment finds increasing risk of cyber attacks and threats to U.S. infrastructure, as well as impacts from climate change.

The 28-page report released February 13, 2018, Statement for the Record: Worldwide Threat Assessment of the US Intelligence Community, describes a variety of global and regional threats.

While a disclaimer notes that the order of topics addressed does not necessarily imply the relative importance or magnitude of threats covered in the report, the first category of global threat addressed is cyber threats. According to the assessment, "The potential for surprise in the cyber realm will increase in the next year and beyond as billions more digital devices are connected — with relatively little built-in security — and both nation states and malign actors become more emboldened and better equipped in the use of increasingly widespread cyber toolkits. The risk is growing that some adversaries will conduct cyber attacks — such as data deletion or localized and temporary disruptions of critical infrastructure — against the United States in a crisis short of war. "

Illustrating this threat, the report notes that state-sponsored cyber attacks against Ukraine and Saudi Arabia in 2016 and 2017 targeted multiple sectors across critical infrastructure, government, and commercial networks, including disruption of Ukrainian energy-distribution networks. The report projects that in the next year, "Russian intelligence and security services will continue to probe US and allied critical infrastructures."

The report also notes the complex global foreign intelligence threat environment facing the U.S. in 2018. While it identifies penetrating the US national decisionmaking apparatus and intelligence community as primary objectives for numerous foreign intelligence entities, the report notes that "the targeting of national security information and proprietary information from US companies and research institutions involved with defense, energy, finance, dual-use technology, and other areas will remain a persistent threat to US interests."

The report cites U.S. Energy Information Administration forecasts that 2018 West Texas Intermediate and Brent prices will average $58 and $62 per barrel, respectively, compared to $98 and $109 in 2013. Noting that oil prices have remained low since 2013, the report observes that oil-exporting countries continue to suffer from low prices, and that "their economic woes are likely to continue, with broader negative implications. Subdued economic growth, combined with sharp increases in North American oil and gas production, probably will continue putting downward pressure on global energy prices, harming oil-exporting economies." The report describes impacts of low oil prices on countries including Venezuela, Saudi Arabia and other Persian Gulf oil exporters, Angola, Nigeria, Russia.

The report also notes the existence and impacts of climate change. It observes, "Challenges from urbanization and migration will persist, while the effects of air pollution, inadequate water, and climate change on human health and livelihood will become more noticeable. Domestic policy responses to such issues will become more difficult — especially for democracies — as publics become less trusting of authoritative information sources."

According to the assessment, "The impacts of the long-term trends toward a warming climate, more air pollution, biodiversity loss, and water scarcity are likely to fuel economic and social discontent — and possibly upheaval — through 2018." It notes that the "past 115 years have been the warmest period in the history of modern civilization , and the past few years have been the warmest years on record." It cites extreme weather events in a warmer world as having the potential for greater impacts in the future, as well as increased challenges to government prompted by environmental concerns or water scarcity. The report also notes that nearly half the world's international river basins are exposed to gaps in the agreements governing water supply and dam development, exacerbating this concern.

ISO-NE 2018 Regional Electricity Outlook

Thursday, February 15, 2018

Regional electricity grid operator ISO New England, Inc. has released its 2018 Regional Electricity Outlook. According to the report, "the biggest challenge to the reliability of the grid is the lack of fuel infrastructure to supply the fleet of natural-gas-fired generators, further emission restrictions on oil-fired generation, and the reality that older oil and nuclear generators are becoming less economically competitive and may retire before the region has added sufficient new energy sources to replace them."

The report cites competitive forces has having "unleashed new approaches for producing electricity in a cleaner way and integrating technology that enables different types of resources to participate in the wholesale markets." It notes new resource types entering the wholesale market, including demand resources, and fast-responding energy storage devices.

With respect to energy supply, the 2018 outlook notes that the amount of wind and solar power in New England continues to grow "and is making a difference in how the ISO operates the power system and designs the wholesale markets." In 2017, the amount of new wind power seeking interconnection in New England surpassed proposed new natural-gas-fired generation for the first time, including significant amounts in Maine and offshore of Massachusetts.

On the demand side, it notes that significant investments in solar resources and energy-efficiency measures have moderated demand for wholesale electricity, but that electrifying the transportation and heating sectors to reduce their carbon emissions could lead to increased demand.

ISO-NE has previously identified the risk that power plants will run out of fuel as the foremost challenge to a reliable power grid in New England. Last month, ISO-NE released an operational fuel security study analyzing fuel security risks facing region's power plants under a wide range of hypothetical future scenarios. That report concluded that maintaining the electric grid's reliability "is likely to become more challenging, especially if current power system trends continue."

The 2018 Regional Electricity Outlook notes that while ISO-NE plays a role in addressing regional fuel-delivery constraints, "it will be up to market participants and state officials to take actions to secure forward fuel arrangements or bolster supply- or demand-side infrastructure." The report identifies potentially appropriate investments as including "enhancements to natural gas infrastructure or the supply chains for liquefied natural gas and oil; relaxation of rules to allow easier permitting and operation of dual-fuel resources; investments in even more renewable energy and any transmission needed to deliver it; or further measures to significantly reduce demand on the power system or the gas system," or some combination of these.

While reliability is core to the grid operator's priorities, the report acknowledges that New England's policymakers, businesses and citizens also value economic and environmental goals. The report specifically highlighted what it called "the reliability, economic, and environmental consequences of our situation: that regional action to resolve fuel-security risks will involve costly infrastructure investments and perhaps the retention of certain critical energy resources, but inaction will also come with a bill for high energy prices when energy supply is constrained—as well as the potential for greater risks to power system reliability and higher emissions."

FERC performance report and budget request

A U.S. energy regulatory agency has published a report detailing its fiscal year 2017 performance and requesting an appropriation of $369,9000,000 in funds from Congress for fiscal year 2019, to be offset by fees on regulated industries.

The Federal Energy Regulatory Commission or FERC is an independent regulatory agency, housed within the U.S. Department of Energy. The Commission has statutory jurisdiction over many aspects of the nation's wholesale electricity, natural gas, hydropower, and oil pipeline sectors. 

FERC's FY 2019 Congressional Performance Budget Request / FY 2017 Annual Performance Report describes the Commission's mission assisting consumers in obtaining reliable, efficient, and sustainable energy services at a reasonable cost through appropriate regulatory and market means. It recites the Commission's 3 goals: ensuring just and reasonable rates, terms and conditions; promoting safe, reliable, secure and efficient infrastructure; and mission support through organizational excellence.

The Commission recovers the full cost of its operations through annual charges and filing fees assessed on the industries it regulates as authorized by the Federal Power Act (FPA) and the Omnibus Budget Reconciliation Act of 1986, which requires it to “assess and collect fees and annual charges in any fiscal year in amounts equal to all of the costs incurred . . . in that fiscal year.” This revenue offsets the Commission's appropriation, resulting in a net appropriation of zero.

The report projects a FY 2019 appropriation of $369,900,000 "for necessary expenses of the Federal Energy Regulatory Commission to carry out the provisions of the Department of Energy Organization Act." This represents an increase of $2,300,000, or about 0.6%, over the Commission's FY 2018 budget request. The report describes its activity as requiring 1,465 full-time equivalents (FTEs) to execute its mission in FY 2019.

Maine Gov. LePage's 2018 State of the State and energy policy

Tuesday, February 13, 2018

Maine Governor Paul R. LePage delivered his final State of the State address this evening. Here's a recap of some of his remarks on energy policy in previous speeches of that sort.
Addendum as of 9 PM: WMTW has posted a transcript of Governor LePage's 2018 State of the State speech on its website, as prepared. That draft covers topics including "skyrocketing property taxes," Medicaid expansion, and fiscal responsibility. It calls for increased investment in Maine and workforce development. It proposes bonds focused on commercializing technologies, as well as on research and development, saying, "We must invest in commercialization as we do in research." However the prepared remarks did not mention energy, nor does it directly reference energy policy.

Nevertheless, the Bangor Daily News reports that his remarks as delivered did address energy, calling for lower energy prices.

FERC hydro dam safety post-Oroville

As federal hydropower regulators examine how a California dam's spillway failed, an independent forensic team has released its final report on the Oroville Dam spillway incident -- and regulators have asked all other hydropower licensees to review the report and hold internal discussions on how the findings may apply to their own facilities and overall dam safety program.

Oroville Dam is a 770-foot high earthfill embankment dam on the Feather River in Northern California. Its service spillway was severely damaged during operations on February 7, 2017; water levels continued to rise, eventually overtopping and eroding the emergency spillway, threatening the stability of the structure on February 12, 2017.  Over 180,000 people were evacuated.

Following the incident, an independent forensic team studied the incident. The independent forensic team's report was released on January 5, 2018. It found that the incident "was caused by a long-term systemic failure of the California Department of Water Resources (DWR), regulatory, and general industry practices to recognize and address inherent spillway design and construction weaknesses, poor bedrock quality, and deteriorated service spillway chute conditions."

On January 26, 2018, the Commission published a letter to licensees presenting the Oroville Dam Independent Forensic Team's final report. In that letter, the Commission asked licensees and their Chief Dam Safety Engineers/Coordinators to "read this report, share it with your senior executives as well as all your dam safety staff and discuss how the findings may apply to your own facilities and overall dam safety program.

According to the Commission, that report concludes that flaws in the Oroville Dam Spillway existed since construction that were missed by the owner, regulators, and consultants. In the Commission's words, "It is very clear that just because a project has operated successfully for a long period of time does not guarantee that it will continue to do so." Emphasizing a safety-oriented corporate culture, the Commission also highlighted the report's finding that "compliance with regulatory requirements is not sufficient to manage risk and meet dam owners' legal and ethical responsibilities." The Commission's letter to hydropower licensees and exemptees highlights the importance of communication between dam safety staff and senior executives as part of an Owner's Dam Safety Program, and stated its expectation that regulated dam owners will have internal discussions to ensure facility safety.


Sabine Pass LNG tanks leaked, says regulator

Monday, February 12, 2018

U.S. regulators of natural gas infrastructure have issued an order requiring the owner of a liquefied natural gas terminal in Louisiana to remove part of that facility from service, following the discovery of unintended releases of LNG from the facility.

At issue is Sabine Pass Liquefaction, LLC's Sabine Pass Liquefaction Facility. The company is a subsidiary of Cheniere Energy, Inc. The Sabine Pass LNG terminal includes five LNG storage tanks with capacity of approximately 16.9 billion cubic feet equivalent (Bcfe), two marine berths that can accommodate vessels with nominal capacity of up to 266,000 cubic meters and vaporizers with regasification capacity of approximately 4.0 Bcf/d, adjacent to a series of liquefaction trains. The facility has received U.S. Department of Energy authorization for export of LNG by vessel.

According to a Corrective Action Order issued by the Pipeline and Hazardous Materials Safety Administration on February 8, 2018, on January 22, 2018, workers at the Sabine Pass plant discovered a release of LNG from a storage tank at the facility. The order states that LNG escaped from the tank into the annulus -- the space between the tank's inner and outer walls -- which eventually caused cracks in the outer tank wall and the pooling of LNG in a secondary containment area. It also says that the federal investigation into this incident discovered additional LNG releases from multiple cracks in another tank at the site, with evidence of "brittle failures" in the carbon steel outer tank wall.

The order says Sabine took steps upon discovery of the incident including commencing de-inventorying LNG from the tank, reducing system pressures, and deploying an emergency management team. Sabine reported no injuries or fatalities as a result of the incident, and there were no reported fires or explosions. The cause of the incident has not yet been determined.

The PHMSA order requiring corrective action includes a finding "that the continued operation of the Affected Tanks without corrective measures is or would be hazardous to life, property and the environment." It describes unintended releases of LNG as "rare ... low -frequency, high-consequence" events which "can result in a serious hazard to people and property." It notes, "To date, Sabine has been unable to correct the long-standing safety concerns described above involving the Affected Tanks, cannot validate the exact source or amount of the LNG that may have leaked into the annulus of the Affected Tanks, and cannot identify the circumstances that allowed the LNG to escape containment in the first place."

The order requires Sabine to develop a timeline and plan for removing the two "Affected Tanks" and their associated systems from service. A third tank is described in a footnote to the order as having experienced releases of LNG from the inner tank into the annular space, but is not included as one of the "Affected Tanks" covered by the order requiring corrective action. It requires Sabine to develop a work-plan including tank-specific purging plans, a root-cause analysis plan, a detailed repair and modification plan, a continuing operation plan for facilities that remain in service, and a plan to return the affected tanks to service, and prohibits Sabine from returning the affected tanks to service until authorized to do so by the Director of PHMSA.