Essential Energy Sector Update - Week 4 of June
No fluff roundup for Energy & Utility professionals
☀️ Good afternoon Friday!
The weekend is almost here, and so is your essential energy sector update.
This Week’s Highlights
1. IRA Tax Credit Negotiations
Senate preserves "start of construction" standard through 2028 while House version phases out by 2025. $15.5 billion in project cancellations since January include GM's $300M EV facility and Li-Cycle's $960M New York battery plant. Congressional deadline July 4.
2. Rate Increases Accelerate
Oncor requests 4.7% monthly bill increases, with storm recovery costs comprising nearly half. National average summer bills projected at $178/month.
3. Data Center Load Management
Texas S.B. 6 authorizes mandatory curtailment for 75MW+ interconnections during grid emergencies. ERCOT projects load growth from 87GW to 138GW by 2030.
4. NRC Commissioner Dismissed
Trump removed Christopher Hanson with 30+ advanced reactor applications in review pipeline.
5. Microreactor Policy Update
NRC approves factory fueling for transportable reactors under 20MW, streamlining deployment process by eliminating on-site fueling requirements.
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Regulatory & Policy Updates
IRA Tax Credit Standoff
House and Senate versions create fundamentally different timelines for clean energy credits. House uses "placed in service" standard, eliminating most credits by 2028. Senate preserves "start of construction" through 2028 for wind/solar, through 2036 for nuclear/geothermal.
House eliminates most credits by 2028 using "placed in service" standard
Senate preserves "start of construction" through 2028 for wind/solar, 2036 for nuclear/geothermal
Senate maintains transferability; House phases out rapidly
Both versions kill residential solar credits (25D) at year-end
NRC Down to Three Members Trump fired Commissioner Hanson. Current pipeline includes:
Construction permits for advanced reactors in Tennessee, Texas, Wyoming
835MW Crane and 800MW Palisades restart applications
Impact: Five-member commissions are twice as efficient as three-member panels
Industry Innovation Spotlight
Data Centers Drive Alternative Battery Technologies
AI facilities' unique power demands are creating real markets for technologies that never gained utility traction. Unlike traditional data centers with steady loads, AI operations experience rapid, significant fluctuations requiring different storage approaches.
XL Batteries: 333-kW organic flow battery pilot at Wyoming data center, contracts for up to 25MW if successful
Eos Energy: Zinc-based systems in talks with large data center developers
Focus on non-flammable storage handling frequent charge-discharge cycles
DOD Targets China-Free Battery Supply Chain
University of Texas Dallas launched a $23M battery manufacturing facility focused on solid-state technology for defense applications. The initiative responds to 2027 NDAA banning DOD procurement from six major Chinese battery companies including CATL, BYD, and Gotion High-tech.
Features 3,500-sq-ft "dry room" for moisture-sensitive manufacturing
Goal: Develop partnerships with battery cathode companies in Canada and Korea
Domestic cathode production remains impractical at scale
Market Movements
Policy Uncertainty Triggers Investment Retreat
E2's monthly tracking shows $15.5 billion in canceled clean energy projects since January as companies react to proposed IRA rollbacks. May's $1.4 billion in cancellations included major industrial commitments signaling broader retreat.
General Motors: Scrapped $300M EV manufacturing facility
Li-Cycle: Canceled four battery plants across three states, abandoned $960M New York facility
30 total projects canceled, closed, or downsized this year
Offsetting investments of $450M in May—led by Rivian's $120M Illinois supplier park—fall far short of losses.
Rate Pressures Mount Nationwide
Utilities face unprecedented cost pressures from storm recovery and infrastructure aging. Oncor's 4.7% rate increase breakdown reveals new utility economics:
Storm costs: Nearly half of increase for 31 annual weather events
Inflation impact: 20% addressing rising costs from 2021 baselines
Capital recovery: 25% for debt costs supporting $36B five-year plan
National summer outlook shows $178 monthly average bills despite 1% fewer cooling degree days expected. Real driver: electricity prices climbing from 16¢/kWh (2023) toward 17.6¢ (2026).
Storage Deployment Accelerates Regionally
Idaho Power's aggressive expansion reflects Western grid transformation. Utility currently owns 230MW energy storage with additional 330MW under contract and 250MW in 20-year PPAs. Draft plan calls for 705MW of 4-hour storage between 2026-2030 alongside renewable additions as 480MW of coal converts to gas.
Sustainability corner
Corporate Renewable Procurement Rules Under Review
Greenhouse Gas Protocol's once-per-decade Scope 2 update could reshape the voluntary renewable energy market. Technical Working Group evaluating requirements for hourly matching and narrow geographic boundaries.
Green Strategies survey of 100 leading corporate buyers shows potential impacts:
Smaller market boundaries: Could reduce procurement volumes 20-30%
Combined with hourly matching: Significantly greater negative impacts
Geographic restrictions: Would eliminate high-impact investments in fossil-heavy regions
Current framework enabled 100GW renewable deployment since 2015. Proposed "24/7" accounting faces resistance from companies warning about voluntary market stagnation.
Cities Report Emissions Progress
C40 Cities reports 7.5% per-capita emissions reduction between 2015-2024 across 100 major cities worldwide. Climate Mayors projects U.S. could achieve 54-62% emissions reductions by 2035 through state and local action following federal Paris Agreement withdrawal.
Operation and maintenance
Behind-the-Meter Flexibility Gains Priority
Clarum Advisors identifies customer-sited resource investment as premier "no-regret strategy" amid demand growth and supply chain uncertainties. Virtual Power Plants can defer capital expenditures while meeting near-term demand with minimal upfront risk.
Current deployment gap shows opportunity:
Less than 25% of residential solar includes battery storage
Only fraction of EV chargers are bidirectional
Most distributed resources operate isolated from grid optimization
Grid Enhancement Technologies Get FERC Framework
ACORE analysis of Orders 1920/1920-A establishes pathway for technologies offering immediate benefits while permanent transmission develops:
Dynamic line ratings: Real-time capacity adjustments
Advanced power flow control: Active electricity flow management
Transmission switching: Network reconfiguration optimization
High-performance conductors: Enhanced capacity on existing structures
25 documented case studies demonstrate reliability benefits with faster deployment than traditional transmission expansion.
- Parker