Western Hydrogen Hub Holds Promise for UT and the West

The piece originally ran in the Salt Lake Tribune on June 14, 2022 and can be accessed here:

https://www.sltrib.com/opinion/commentary/2022/06/14/steve-handy-western/

Steve Handy: Western hydrogen pact shows the energy transition is working for Utah

The same states that developed fossil fuels can now boost transition to low-carbon energy.

There’s never been a better time to live in a major energy-producing state like Utah. The world needs stable and affordable sources of energy and we can provide them.

That’s true for oil and natural gas, which Russian President Vladimir Putin is using as a geopolitical weapon in his war against Ukraine. But it’s also true for new energy sources and, thanks to market forces, those sources continue to get cheaper, cleaner and more widely used by consumers and businesses across our economy.

In fact, I believe the states that played a central role in developing fossil fuels over the decades will be just as important in the transition to low- and zero-carbon sources of energy – if not more important.

Case in point: Utah’s involvement in a multi-state partnership to spearhead clean hydrogen production in the United States. Called the Western Inter-State Hydrogen Hub, it brings together officials from Utah, Wyoming, Colorado and New Mexico.

Hydrogen is remarkably clean and flexible. It can provide on-site power generation for office towers, data centers and other large commercial buildings. It can fuel electric motors, especially in large vehicles like trucks, buses and locomotives, which don’t perform as well with heavy batteries.

Large engineering firms like General Electric and Siemens are also working on turbines that can burn hydrogen to generate large volumes of electricity in much the same way that natural gas-fired turbines support the power grid today.

The big difference, however, is that when hydrogen is used as a fuel source, there are no carbon emissions. The only “exhaust” is water vapor.

But the way we currently produce most hydrogen in the U.S. – from natural gas – does result in significant carbon emissions. Therefore, if we can capture and store those emissions, or produce hydrogen directly from water in a zero-carbon process called electrolysis, it will unlock a massive new source of clean energy.

That’s the purpose of the Western Inter-State Hydrogen Hub: To leverage the experience and infrastructure of four Western states across oil, gas, wind, solar and other energy sources to make large-scale clean hydrogen production a reality.

Utah is “the best place in the nation for energy development projects, including clean hydrogen,” said Gov. Spencer Cox when the clean hydrogen partnership was announced. By applying the “resources and expertise” in our state, “clean hydrogen is not just a possibility, it’s inevitable.”

Clean hydrogen research and demonstration projects have been taking place in this four-state region for some time. But the decision to pursue a formal partnership was prompted by the passage of the Bipartisan Infrastructure Law.

The infrastructure law passed Congress with broad political support – including from Republican Utah Senator Mitt Romney – and it includes $8 billion in funding to support the creation of at least four clean hydrogen hubs around the country.

No siting decisions have been made, but the Western Inter-State Hydrogen Hub stands head and shoulders above the competition for two principal reasons.

First: Power companies, oil and gas firms and manufacturers in our region are already working on clean hydrogen infrastructure. Taxpayers will get the best return on their investment by working with leading states that have skin in the game.

Second: The energy economy of tomorrow won’t just magically appear. It will be a natural evolution of the energy economy we have today.

And today, more than 15 percent of the nation’s energy is produced in Utah, Wyoming, Colorado and New Mexico, even though we account for less than four percent of the nation’s population.

The infrastructure and workforce that supports our economy with a mix of fossil fuels and clean energy today can be repurposed to support 100 percent clean energy tomorrow. It’s just common sense.

There’s no better place to develop energy than in Utah and our neighboring states. It was true in the past, it’s true today – and it will be true in our clean energy future.

TWW Partners with Gary R. Herbert Institute for Public Policy

TWW, along with the Utah Valley Chamber of Commerce and CRES, partnered with the Gary R. Herbert Institute for Public Policy at Utah Valley University for a panel discussion on How Market Forces are Driving a Change in Utah’s Energy Landscape on May 19th.

The event was moderated by former Utah Governor Gary Herbert and included a panel of energy policy experts. Rep. Steve Handy, Dist 16; Landon Stevens, Conservative Energy Network; and Steve Ryder, EVP/CFO of Clearway Energy Group.

The panel discussed the changing energy landscape in Utah and across the country as well as the impacts of different policies impacting the energy sector.

The event was covered by the Daily Herald.

AZ Utilities and Universities form New Carbon Neutral Economy Center

Four Arizona utilities and the state’s three public universities are forming a new coalition with the goal of attaining a carbon neutral economy in Arizona. Arizona Public Service, Salt River Project, Tucson Electric Power, and Southwest Gas, along with Arizona State University, the University of Arizona, and Northern Arizona University, will together play a crucial leadership role in helping Arizona move the state toward a robust carbon-neutral economy.

The coalition’s work will operate in a new ASU-based center called the Center for an Arizona Carbon-Neutral Economy, housed within the Julie Ann Wrigley Global Futures Laboratory on the ASU Tempe campus. The Center will begin its work by pursuing the creation of a regional clean hydrogen hub under the framework of the Infrastructure Investment and Jobs Act, which was signed late last year and establishes program guidance and funding to create regional clean hydrogen hubs across the country. In Arizona, a hub would include hydrogen producers, consumers, and a connected infrastructure.

A successful regional clean hydrogen hub will help address difficult-to-reduce carbon emissions as well as grow Arizona’s economy, attract new businesses, and create high-quality jobs. Once operational, a new hydrogen hub would also support a reliable and resilient electric grid, provide clean energy for the electric, transportation and industrial sectors, and create economic development opportunities.

Arizona’s universities are optimistic about what the coalition can accomplish, and are eager to work together to explore the most effective ways to develop a sustainable and thriving carbon neutral economy.

Arizona’s utilities are similarly enthusiastic. Of the coalition, APS CEO Jeff Guldner said,

“The need to address the causes and impacts of climate change has never been more important. By partnering with Arizona’s universities and peer utilities, this statewide hub will help advance hydrogen as a clean-energy solution with tremendous potential to accelerate decarbonization. It also will further Arizona’s reputation as a national leader in the clean energy transition while creating economic opportunities for our state and its people.”

Likewise, Laura Nelson, vice president of sustainability and public policy for Southwest Gas, said,

“Southwest Gas is committed to helping our customers and the communities we serve achieve emissions reductions goals. Advancing hydrogen technology and increasing availability of hydrogen to the market is strategically important to achieving our clean energy goals. With existing infrastructure that can be used to transport this powerful clean fuel, Southwest Gas is excited to work with this coalition and stakeholders to lead efforts to bring a regional hydrogen hub to our state.”

Arizona is already making great strides toward greater deployment of clean and renewable energy resources and growing the clean economy. Further research, development, and deployment of hydrogen through the Center for a Carbon-Neutral Arizona has the potential to significantly reduce even further carbon-emissions while continuing to grow and strengthen Arizona’s economy.

TWW Supports Competitive Community Solar in Arizona

TWW’s Doran Miller submitted comments to the Arizona Corporation Commission today highlighting why it makes sense for the ACC to support and explore a docket on competitive community solar policies for Arizona.

Community solar presents an area of tremendous potential growth for solar energy by broadening the potential customer base to 100% of homes and businesses, thereby significantly expanding access to affordable clean energy for residential and commercial customers alike. However, this can only happen if “the right federal, state, and local policies can institute a supportive regulatory environment.”

TWW believes that creating competitive community solar policies will help unlock significant investment in Arizona as evidenced in a market analysis for the potential cumulative investment in the sector:

“According to a 2015 study by the National Renewable Energy Laboratory (NREL), nearly 50 percent of households and businesses at that time were unable to host a PV system due to factors like not owning the building or insufficient roof space. NREL estimated that by opening the solar market to these customers via community solar programs, “shared solar could represent 32%–49% of the distributed PV market in 2020, thereby leading to growing cumulative PV deployment growth in 2015–2020 of 5.5–11.0 GW, and representing $8.2–$16.3 billion of cumulative investment.”

Read TWW’s full comments here: https://docket.images.azcc.gov/E000019275.pdf

Arizona Corporation Commission All Source Bidding Rules Make Sense for Consumers 

This piece originally ran in The Western Tribune on April 29, 2022 and can be accessed here.

Earlier this year, the Arizona Corporation Commission voted down, by a vote of 3-2, the energy rules package it had been considering for more than three years. The package would have required utilities to generate 100% of their energy from carbon-free sources by 2070, more robust energy efficiency standards, battery storage provisions, and critical updates to the Integrated Resource Plan (IRP) and purchased power agreement processes. 

The Commission was heavily criticized for ending years of work, but what was largely missing from that criticism was any mention of what happened after the energy rules were voted down: Chairwoman Marquez Peterson brought forward a separate proposal to open a new docket, moving forward with rulemaking on the IRP reform provisions on their own. 

Looking on the bright side

This is good news for Arizona and provides a reason to be optimistic. While the carbon-free standards of the now-defunct energy rules package certainly garnered the most headlines, the IRP process reforms, and all-source RFP provisions contained therein, will significantly benefit ratepayers by ingraining transparency, competition, and market forces in the resource planning process. These are important protections for ratepayers and will lead to a more efficient and effective power delivery system for the state of Arizona

Additionally, it will create a more open energy market that gives clean and renewable energy sources — which are now more cost competitive than ever — a real chance to compete for a place in Arizona’s energy arena.  

Competition carves a path forward to carbon-free

Understandably, it’s easy for someone to overlook the IRP provisions in favor of the headline-grabbing carbon-free goals. When someone says 100% carbon-free by 2050, it’s easy to understand what that means (even without necessarily knowing where all that carbon-free energy will come from). The same cannot necessarily be said for the IRP reforms. After all, they are technical changes to process-related provisions in Arizona’s existing energy rules. But, if done correctly, these provisions have the potential to achieve the same clean energy outcomes that stakeholders involved in the energy rules hoped to achieve. 

How can that be? The answer is simple: by creating a multi-step Commission review process that includes truly competitive, all-source bidding as well as opportunities for meaningful stakeholder engagement and input, all of which are included in the new provisions. 

The problem with existing processes

The existing IRP process is focused on two things: how much energy we need (called the load forecast) and where that energy is going to come from (called the resource mix). 

Years ago, these determinations were made in Arizona as part of a utility’s rate case, and were often contentious. That is because utilities had every incentive to maximize the load forecast. The determination about which resources were needed to meet a utility’s energy demands, while once more straightforward, has similarly become increasingly fraught over the years. It was also incredibly difficult for stakeholders to track and engage on these issues, because rate cases tended to be long and complicated. But in 2010, the IRP process was stripped out of the rate case into its own proceeding, creating additional opportunities for oversight, monitoring over load forecast and resource mix as technologies changed, and better opportunities for stakeholders to engage. 

Likewise, the request for proposal (RFP) process, used to determine the resource mix, has also gone through some changes over the years. In fact, there was a time in Arizona that RFPs were not required at all, resulting in self-dealing on the part of utilities. To deal with that problem, the Corporation Commission created an RFP process that required independent monitoring to ensure bids were truly arms-length transactions. Since then, the RFP process has gone through a subsequent evolution, wherein the parameters of an RFP might only include certain resources (natural gas, for example) or are clearly written to apply to certain predetermined winners. As a result, the situation now is that resources that could meet the energy demands in an RFP — such as renewable energy technologies — might be excluded entirely from a bid. 

Out with the old, in with the new

The new IRP process has three distinct steps to deal with all of those issues to create a more modern process with a truly competitive energy market. 

First, the Commission will review and vote on the load forecast provided by a utility. This provides a far more robust process in terms of stakeholder participation and input, making it much more difficult for a utility to, for example, simply forecast exponential growth indefinitely, and Commissioners will need to agree on the load forecast before the process can continue. 

Once the load forecast has been agreed upon, a utility can move to the second step of the process which is to issue an RFP. That RFP must be reviewed and voted upon by the Commission before it goes out for bidding to ensure it’s truly all-source. This second review also builds in additional Commission and stakeholder oversight and engagement to ensure utilities are not trying to skew the playing field for any predetermined outcome. The all-source RFP will generate a true market response on the resources that could be utilized to meet energy demand, including everything from clean and renewable sources to nuclear to traditional sources of energy production. 

Unlike the current system, an all-source RFP will yield a snapshot of what is actually available and all relevant factors on the various resources. It can even provide information on resource diversity mix, including demand side options like installing thousands of smart thermostats as part of an overall bid to meet a utility’s needs. As clean and renewable energy technologies continue to evolve and become even more cost competitive, the all-source RFP process ensures that those resources are given an opportunity to compete. And, if they are truly the cheapest energy source — as evidence suggests — clean and renewable resources will represent a growing percentage of Arizona’s portfolio. 

Finally, once the bids come in, the utilities propose back to the Commission an action plan outlining the procurement steps. The Commission then reviews the proposal and casts a third and final vote.

With these updates to competitive all-source bidding, market forces will help create an inclusive and cost-competitive energy economy that, over time, can bring Arizona closer to meeting the same types of carbon-free goals for which stakeholders were advocating in the Commission’s original energy rules package. 

Doran Arik Miller is the Arizona Director of The Western Way, a nonprofit organization that builds support for commonsense market-driven solutions to environmental challenges that support the economy and improve the environment.

TWW Joins Heidi Ganahl in Tour of Eastern CO

TWW’s Greg Brophy joined Colorado Gubernatorial candidate Heidi Ganahl on a tour in Eastern Colorado this week. The tour included stops at the Quail Ridge Dairy and Northeastern Junior College’s Applied Technology Campus and focused on important issues impacting rural Colorado.

At Quail Ridge Dairy in Ft. Morgan, owners Chris and Mary Kraft gave an overview of their milking operations and the practices they employ to increase efficiency and use less resources.

“I learned a lot about the efficiency of a dairy farm,” Ganahl said. “Every aspect of the farm creates amazing results of importance for the people of Colorado. I’m also impressed with how much care and love there is for the animals.”

At NJC’s Applied Technology Campus, Ganahl toured the wind technician training facility, hearing from instructors and students on the importance of hands on training that students receive.

The tour also included a visit inside the program’s nacelle model which houses the gear box and generator in a wind turbine. The nacelle was built by students at NJC from donated parts and equipment to help with training.

The tour was covered by the Ft. Morgan Times and Sterling Journal Advocate.

Hydrogen Policy Moves Forward in AZ

As Arizona continues to take a leadership role in clean and renewable energy technology–in particular when it comes to research, development and innovation–it is absolutely critical that the state has policies in place that will support the innovation sector.

In particular, efforts within Arizona to explore and bolster the use of hydrogen as an alternative energy source are gaining ground. For example, last year the U.S. Department of Energy awarded a grant of $20 million to study the production of clean hydrogen from nuclear power at Palo Verde Nuclear Generating Station in Phoenix. In addition, Arizona-based Nikola Motors is working to develop hydrogen fuel cell technology for the commercial trucking industry, and Southwest Gas has teamed up with Arizona State University to to study how hydrogen-blended natural gas can further reduce carbon emissions while still providing clean and reliable energy. These are but just a few examples, though there are more–which is why supportive policies to continue this trend are so important.

Fortunately, Senator T.J. Shope (R-Coolidge), has been a champion of hydrogen technology in the Arizona Legislature. This year, Senator Shope sponsored two bills to support Arizona’s hydrogen industry. The first, SB1396, was signed by Governor Ducey on April 22 and establishes a legislative hydrogen study committee to “investigate and evaluate existing laws and regulations and recommend legislation related to the production, distribution and storage of hydrogen.” The second, SB1599, would have exempted hydrogen from Arizona’s transaction privilege tax, but unfortunately it failed to advance through the legislature.

Senator Shope’s attention to Arizona’s hydrogen economy is exactly the type of approach we need from Arizona’s elected officials. Policies to support the research, development and deployment of new and innovative sources of alternative fuels will help ensure Arizona remains at the cutting edge of clean energy.

AZ Lands Huge Investment for New Battery Manufacturing Facility

This week, the Arizona Commerce Authority (ACA) announced that LG Energy Solutions will be investing $1.4 billion to build a cylindrical-type battery facility in Queen Creek, Arizona. This facility will be the first of its kind for LGES in North America. Construction on the facility is slated to begin this summer and production will commence in 2024. The facility is expected to bring thousands of highly-skilled high-paying jobs to the area and the state as a whole.

Cylindrical batteries offer high-density, compact energy storage ideal for applications like electric vehicles. According to the announcement by the ACA, the state-of-the-art Arizona facility aims to establish LGES’s presence in North America’s cylindrical battery market while also providing opportunity for further expansion. LGES’ Queen Creek facility will feature a cutting-edge smart factory system including remote support, manufacturing intelligence, logistics automation and more.

Of the announcement, Governor Ducey said, “Global technology leaders like LG are choosing Arizona because of our world-class business environment, advanced workforce, unbeatable quality of life, and culture of innovation - one that’s delivering unparalleled opportunity for current and future generations.”

Arizona’s energy innovation sector, including high-tech manufacturing, semiconductors, electric vehicles, and batteries, is flourishing. The state has seen recent multi-billion-dollar investments from global technology leaders such as Intel and TSMC, EV makers such as Lucid, Nikola, and ElectraMeccanica opening or expanding production operations in the state, and other battery storage and clean tech companies joining Arizona’s ecosystem.

Sandra Watson, President and CEO of the Arizona Commerce Authority, highlighted Arizona’s acceleration in recent years toward becoming a hub of clean energy and tech innovation. “With LG Energy Solution’s announcement, Arizona has cemented our reputation as the world’s production capital for cutting-edge battery technology. This high-tech facility further anchors Arizona as a hub for electric vehicles and sustainable technologies, bolstering our already robust EV supply chain.”

Echoing her remarks, Chris Camacho, President and CEO of the Greater Phoenix Economic Council, another economic development agency, noted, "The addition of LG Energy Solution's high-tech battery manufacturing facility to Queen Creek is a massive investment that solidifies the market's position as a hub for battery technology and energy storage and is significant for Greater Phoenix as it continues to attract global leaders in emerging industries.”

All of this is good news for Arizona, and underscores the importance of ensuring the state has the right policies in place for it to continue on this positive trajectory.

Western States Respond to Regional Hydrogen Hub Strategy

Yesterday, Colorado, New Mexico, Utah, and Wyoming submitted joint response to the Department of Energy’s Regional Clean Hydrogen Hubs Implementation Strategy request for information process. The RFI seeks input from responders on the regional clean hydrogen hub provisions in the Bipartisan Infrastructure Law and how the Department of Energy should develop the overall Funding Opportunity Announcement solicitation process, structure and implementation strategy.  

The four state collaboration known as the Western Inter-States Hydrogen Hub (WISHH), highlighted the key attributes that will contribute to a successful regional hydrogen hub implementation effort, all of which the WISHH states are uniquely situated to provide as part of their collective effort.

The Bipartisan Infrastructure Law included $8 billion for the creation of four Regional Clean Hydrogen Hubs that will create jobs to expand use of clean hydrogen in the industrial sector and beyond.  These hubs will demonstrate the production, processing, delivery, storage, and end-use of clean hydrogen.  The hubs will have to demonstrate feedstock diversity, as the bill requires at least one hub produce hydrogen from nuclear energy, one from fossil fuels, and one from renewables.

Additionally, at least one of each of the hubs will be required to demonstrate hydrogen end-use in either electric power generation, industrial sector, residential heating or transportation. The four hubs are required to be located in different regions of the U.S. and, if feasible, there is preference that at least two hubs be located within natural gas producing regions.

Hydrogen energy has the potential to decarbonize multiple economic sectors, including heavy-duty transportation and steel manufacturing, create good paying jobs, and pave the way towards a grid powered by clean energy resources. Today, the U.S. produces about 10 million metric tons of hydrogen annually, compared to approximately 90 million tonnes produced per year globally.

While most of the hydrogen produced in the U.S. comes from natural gas through steam methane reforming, electrolysis technology, which uses electricity to produce hydrogen from water, is an emerging pathway with dozens of installations across the U.S. This technology could allow for the production of hydrogen using clean electricity from renewable energy including solar, wind, and nuclear power.

The state energy leaders of the WISHH include Thom Carter, Energy Advisor to Governor Cox of Utah; Randall Luthi, Chief Energy Advisor to Governor Gordon of Wyoming; Will Toor, Executive Director of the Colorado Energy Office; Sarah Cottrell Propst, Secretary of the New Mexico Energy Minerals and Natural Resources Department; and James Kenney, Secretary of the New Mexico Environment Department.

The next step will be for the Secretary of Energy to solicit proposals for regional hubs and then select the hubs before August of 2022.

TWW Talks Geothermal Energy with Colorado Sen. Rob Woodward

TWW’s Greg Brophy spoke with Colorado State Senator Rob Woodward (SD-15) about legislation he is carrying this year, SB-118. The bill would encourage the use of geothermal energy across Colorado and would put geothermal energy on equal footing with solar energy with respect to the permitting, installation, and other aspects of residential and commercial geothermal systems.  The bill would also provide an educational component to show how current geothermal systems can be used in residential and commercial applications and the associated cost savings for ratepayers. 

Sen. Woodward and Brophy also spoke about the importance of energy independence and how geothermal can play a role. They discussed how geothermal, as a very localized source of domestic energy which runs 24 hours a day, is impervious to cyber-attacks and has no fuel costs making it an ideal source for our nation’s “All of the Above” energy strategy.


Watch the full interview below.

TWW Supports Colorado Green Hydrogen Legislation

The Western Way supports, HB-1140, sponsored by Colorado Representatives Dan Woog (HD-63) and Donald Valdez (HD-62), the bill will pave the way for green hydrogen projects to be developed in Colorado.  Green hydrogen is defined as hydrogen that is produced by splitting water into hydrogen and oxygen using electricity from renewable resources.  Green hydrogen could be a critical component to energy storage and transportation and industry fuels in the near future.  HB-1140 from Representatives Woog and Valdez would allow for green hydrogen to be added to the state of Colorado’s resource list of allowable renewable energy resources to meet energy standards and the bill would also instruct the state to add green hydrogen to the state’s GHG emission reduction roadmap.  The bill would help spur new investments in hydrogen projects that are expected in the near future colorado.      

Companies and governments around the world are investing billions of dollars in research and development of hydrogen strategies, infrastructure, and deployment.   Colorado recently partnered with neighboring states to compete for $8 billion dollars for Regional Clean Hydrogen Hubs. 

Just last week a company in South Texas, announced plans to build the largest green hydrogen production and storage hub in the world.  The facility would utilize 60GW of behind the meter wind and solar and salt dome storage formations to provide up to 6TWh of energy storage.  That’s a big deal and a sign that this technology is being taken seriously by investors and developers. 

"Hydrogen City is a massive, world class undertaking that will put Texas on the map as a leading green hydrogen producer. Texas has been the world leader in energy innovation for over 100 years and this project is intended to cement that leadership for the next century and beyond," says GHI's founder and CEO Brian Maxwell.

Negotiations are ongoing with respect to end-use options for GHI produced green hydrogen, but these options include show the flexibility and potential uses of green hydrogen:

  • Green ammonia for export markets: GHI is exploring the opportunity to export green ammonia to Asia. Japan's Ministry of Economy, Trade and Industry (METI) plans to add 30 million tonnes per year of renewable ammonia to the country's fuel mix by 2050. "Japanese and Korean companies are interesting partners for us in this project given their countries desire to shift to green ammonia" says Maxwell.

  • Green ammonia for the fertilizer market: Higher natural gas prices has led to skyrocketing fertilizer costs for farmers. Fertilizer produced from green hydrogen can help remove unexpected price volatility.

  • Sustainable aviation fuel: GHI is in discussions with potential off takers of green hydrogen as a feedstock for sustainable aviation fuel (SAF). GHI believes Corpus Christi is well placed to become a major SAF production hub.

  • Sustainable Rocket Fuel: The company is looking at combining hydrogen with CO2 at the Port of Brownsville to create a green methane rocket fuel for launch operations in South Texas.

  • Fuel switching power plants: H2 can also be used as a natural gas substitute at power plants. Over 4GW of new gas power plants have been proposed in the US that can burn a combination of hydrogen and natural gas.

Idaho Governor Brad Little Leads with 'Working Lands, Working Communities' Initiative

This week Idaho Governor Brad Little convened the final workshop for his Western Governors’ Association Initiative, “Working Lands, Working Communities.”   The aim of the initiative that was launched last September was to examine the interdependent relationships between western communities, state and federal land resource management entities, as well as the role that local communities play in successful land planning and management processes.  WGA held workshops in Utah, Colorado, and Idaho to bring together policy experts and stakeholders. 

When Governor Little kicked off the initiative he noted, “The goal of (Working Lands, Working Communities) is to develop bipartisan strategies to support western communities seeking to improve cross-boundary management of lands, mitigate wildfire, and restore ecosystems.  We face the growing need for additional capacity, both intellectual capacity and physical infrastructure, to responsibly manage the abundant natural resources we are so blessed with in the West.  One challenge is to expand market support for active management on western working lands. A good example is examining potential markets for the relatively low-value timber and biomass that needs to be removed to reduce the threat of uncharacteristic wildfires.”

The final workshop that took place this week in Boise, ID looked at opportunities to pursue natural infrastructure solutions for economic development, how invasive grasses are a catalyst for wildland fires, expanding sustainable rangeland markets, and how Idaho has been successful at creating a sustainable forests products market which lowers wildfire risks and protects vulnerable watersheds. 

Governor Little noted the need for collaborative land management to continue the region’s economic growth and develop more resilient western communities for generations to come. 

"It’s important that we continue to look at improving how we make our communities more resilient," Gov. Little said. "Everybody says we want healthier watersheds, we want less catastrophic fire, we want (better management of) invasive species. Those overarching goals need to have legs under them –policies, recommendations, where to best invest the next available dollar – and that’s what we expect as a result of these panels."  

Read more about WGA’s ‘Working Lands, Working Communities’ Initiatives and watch the workshop videos here.

Energy Innovation Spotlight: XNRGY Announces Cutting Edge Manufacturing Facility

XNRGY recently announced the construction of a new cutting-edge manufacturing facility in the Greater Phoenix area. XNRGY is one of the largest custom air handling manufacturers in North America, and designs, engineers, and manufactures sophisticated, sustainable solutions focused on reducing both carbon footprint and energy consumption for sectors such as life sciences, healthcare, data centers, semiconductor cleanrooms and battery manufacturing facilities. 

XNRGY plans to build a state-of-the-art one million-square-foot facility in the Phoenix area. The facility will be designated as XNRGY’s headquarters and represents an estimated $300 million investment and more than 900 jobs for residents over time. With the Arizona facility, XNRGY’s total manufacturing capacity will increase by a factor of eight, to 1,250,000-square-feet.

The Arizona Commerce Authority touted the news, noting that the new facility will focus on “research and development, spearheading innovation to facilitate the rapid growth and demand for XNRGY’s mission-critical climate systems . . . . Applying vertical integration, full automation, and eliminating supply chain delays will expedite product delivery and significantly reduce product lead times compared to the industry average.”

XNRGY is committed to sustainability and minimizing environmental impact with a goal of achieving net zero emissions by 2030. Its innovative climate systems use significantly less water and power and reduce overall building energy consumption by integrating very high-efficiency refrigerant systems coupled with proprietary machines moving the air; immersion cooling is the next step for the company, and XNRGY has made clear that it “wants to be part of the solution to cool hyper-scale data centers without millions of gallons of water a day.” Every unit is custom-engineered and manufactured by XNRGY with the aim to achieve the lowest power usage effectiveness (PUE) rating, using materials that are specifically chosen to ensure long life, durability, and environmental protection.  

Of XNRGY’s move to Arizona, Sandra Watson, President and CEO of the Arizona Commerce Authority, said “XNRGY’s new manufacturing facility highlights the state’s attractiveness as a destination for manufacturing excellence. XNRGY is bringing their state-of-the-art operations to Arizona, highlighting the state’s vibrant industrial manufacturing sector. We are grateful to XNRGY for their commitment to Arizona and look forward to supporting them as they establish their first facility in the U.S.”

TWW Supports Colorado's Advanced Energy Legislation  

Advanced Energy legislation from Colorado State Senator Bob Rankin (R-Carbondale) and House Leader Hugh McKean (R-Loveland), was heard in its first Senate committee on February 15, 2022.  SB22-073 Advanced Energy Sources takes an all of the above approach to meeting Colorado’s future energy needs and emissions reductions goals. 

The bill encourages Colorado to look at the possibility of small modular nuclear reactors by authorizing a feasibility study.  The study would look at the policies, economics, safety, reliability and environmental impacts of the use of small modular nuclear reactors. 

The bill also increases the current limit of pumped hydro storage facilities from 15 MW to 400 MW, opening the door to larger utility scale pumped hydro storage projects.  Pumped hydro storage projects already must utilize renewable energy in order to be eligible under the definition of recycled energy so increasing the cap makes sense and would serve to benefit Colorado’s growing renewables industry. 

Proponents of SB22-073 including, TWW’s Colorado Director Greg Brophy, Colorado Rural Electric Association, ClearPath, American Conservation Coalition, Nuclear Energy Institute, and several others laid out the bipartisan argument for why an all of the above approach to Colorado’s resource mix makes sense and looking at the feasibility of small modular nuclear and increasing pumped hydro storage would help ensure reliability through increased baseload and long duration storage.   

“I am hopeful,” said Senator Bob Rankin. “I am hopeful that Democrats give careful consideration to this bill after hearing from professors, professionals, and experts in the field. I’m willing to work with Democrats however I can to get this bill across the finish line.”

In an opinion editorial published earlier this week, Judi Greenwald, the executive director of the Nuclear Innovation Alliance, stated that, “An essential first step to adopting advanced nuclear energy is for state policymakers, communities and stakeholders to understand the benefits of nuclear innovation…Colorado can start exploring this promising opportunity with a feasibility study for SMRs, as proposed in SB22-073.”

“Nuclear support has become a bipartisan issue in Washington for the first time in close to 40 years,” said Arthur Hyde of Segra Capital Management during his testimony. “Representatives on both sides of the aisle are beginning to understand the importance of investing in our nuclear future and are acting with a sense of urgency.”

SB-73 was laid over and the Senate Committee will vote on the bill on Thursday, February 17, 2022. 

Univ. of Wyoming Looks at Critical Mineral Production from Coal Byproducts

University of Wyoming’s School of Energy Resources (SER) recently published a study on the potential for domestic critical mineral and rare earth element production from unconventional sources located domestically in the United States. In particular the study provides a geologic assessment of critical minerals and rare earth element occurrences in coal fly ash sourced from the Powder River Basin, as well as a economic and policy analysis that explores a viable way to produce more of these critical minerals domestically from coal byproducts. 

The results of the study show that coal fly ash created from the combustion of Powder River Basin coal holds promise as an economic source of rare earth elements.

“We have really important work going on in SER and across UW through some key collaborations,” says SER’s Davin Bagdonas, the lead author on the study. “In addition to the assessment we conducted, we worked with SER’s Center for Energy Regulation and Policy Analysis for policy support, with the University of Wyoming Department of Economics, and partners at Colorado School of Mines and Idaho National Laboratory to assess the market viability for REE recovery from unconventional ore stocks. This study is very important because it highlights how necessary those three aspects are for successful project development in the future.”

The results of the study are expected to help drive a national conversation on ways to reduce reliance on foreign sourced rare earth elements and critical minerals.

“This highly anticipated article will serve as a very significant resource in a nationwide discussion,” says CEGR Director Fred McLaughlin. “Led by the Department of Energy, the U.S. has been investigating ways to reduce its reliance on REE imports, and to look at current waste products is environmentally astute. I’m very proud of our team for their efforts in providing an in-depth examination on a very timely and important topic.”

The study is also notable for addressing the needed policy framework at the state and local levels that will drive research into commercial applications. 

“The policy environment at both the federal and state levels is uniquely aligned to support continued applied research, including commercial investigations, centered on REEs from Powder River Basin coal,” says Kipp Coddington, SER senior adviser and a contributing author of the study. “Understanding the economics of all of this is critically important. With the right policy mechanisms and business models in place, the state of Wyoming could play an important role in advancing these critically needed resources for the United States in the decades ahead. Doing so would ensure continued economic use of Powder River Basin coal, thereby benefiting both federal taxpayers and the citizens of Wyoming.”

 

AZ Corp Comm Docket on IRP Reform and All Source Bidding Moves Forward

Today, the Arizona Corporation Commission voted down, by a vote of 3-2, the energy rules package it has been considering for more than three years. The package before the Commissioners would have required utilities to generate 100% of their energy from carbon-free sources by 2070, with interim benchmarks until then. The package also included a more robust energy efficiency standard, battery storage provisions, and critical updates to the Integrated Resource Plan (IRP) and purchased power agreement processes—including competitive bidding, all-source RFP processes, and prudency reviews—that would have introduced more transparency and competition into the overall process.

Fortunately, today’s vote isn’t the end of the story: the all-source RFP and IRP provisions will still be moving forward. That is because, after the vote on the energy rules package, Chairwoman Marquez Peterson brought forward a separate proposal to open a new docket moving forward with rulemaking on the all-source RFP and IRP process reform provisions on their own. Explaining her motivation in proposing to open a new docket, Chairwoman Marquez Peterson stated that those two provisions are particularly important pieces of the package, and she felt it was important to move forward with them should the rules fail, as they ultimately did. Commissioners O’Connor and Olson agreed with her, and the proposal passed by a vote of 3-2.

This is good news for Arizona. While the carbon-free standards of the now-defunct energy rules package tended to garner the most headlines, the IRP process reforms, and all-source RFP provisions will significantly benefit ratepayers by ingraining transparency, competition, and market forces in the resource planning process. These are important protections for ratepayers and will lead to a more efficient and effective power delivery system for the state of Arizona. 

Although speed has not been the hallmark of ACC rulemaking, this docket should move forward on a more expedited basis than did the energy rules package. That is because the Commission will not need to start from scratch. Rather, ACC staff will benefit from all of the work that went into the Energy Rules, basing the new docket on what was included in that package.

The next step is for utilities staff to put together a draft rulemaking, at which point the Commission can vote to proceed to formal rulemaking. If all goes smoothly, Arizonans could see new final rules in six to nine months.

AZ Corp Comm Approves EV Plan that could have $28 Billion in Economic Benefits

Last month, the Arizona Corporation Commission (ACC) approved a comprehensive statewide transportation electrification plan. This plan is a critical step in moving Arizona closer to greater incorporation and adoption of electric vehicles. The bipartisan plan aims to further encourage adoption of electric vehicles, including light duty vehicles as well as medium duty trucks, transit buses, and school buses, and increase the build-out of charging infrastructure. 

With that in mind, the plan anticipates just over one million EVs on Arizona roads by 2030, and focuses on what utilities need to do for Arizona to reach that goal. In particular, the plan identifies some barriers to greater adoption including insufficient charging infrastructure and the need for grid planning and effective rate design, and includes steps to overcome these barriers such as requiring utilities to assist communities in identifying the best charging station locations, developing incentive programs for vehicles and charging infrastructure, and proposing new rates for vehicle charging.

The plan also makes economic impact estimates that under the medium adoption scenario, transportation electrification could provide a total lifetime net benefits of $9 billion to EV purchasers in Arizona by 2040 through lower total cost of ownership, and $12 billion to electric utility customers through downward pressure on electricity rates. Reductions in greenhouse gas emissions, local air pollutants, and gasoline consumption could also lead to $28 billion in benefits for Arizona as a whole.

The plan, which follows previously approved individual transportation electrification plans submitted by Arizona Public Service and Tucson Electric Power in 2019, requires regulated utilities to file electric vehicle proposals every three years, and to report each year on their progress in helping customers switch from internal combustion engine vehicles to EVs. The first plans are due on June 1.

The statewide transportation electrification plan is a positive step forward for Arizona in greater EV adoption. Arizona has lagged behind other states in EV investment despite technological and manufacturing advancements, economic and environmental benefits, and broad public support for EVs. In part, that has been due to the lack of regulatory certainty in this area. The ACC’s approval of a statewide plan provides much-needed momentum, direction, and regulatory support for EVs that will help Arizona not just catch-up with neighboring states, but surpass them in EV adoption.