This Week's Energy & Utilities Brief - Week 2 of February

Feb 14, 2025

Good morning Friday, hello weekend!

⚡Here are the need-to-knows from our industry this week.⚡

Key Takeaways

Grid Reliability in Focus: Surging demand ;-) , transformer shortages, and Canada tariff threats strain northern U.S. grids. Thermal reserves and VPPs emerge as stopgaps.
FERC Fast-Tracks PJM’s Interconnection Plan: Approved 50 “shovel-ready” projects to address capacity shortfalls by 2026. Critics warn of renewable energy inequity.
Transformer Crisis Deepens: Lead times hit 3+ years; manufacturers invest $1.5B+ but standardization remains elusive.
State vs. Federal Clashes Escalate: PA sues over frozen IRA funds; 22 states challenge Trump’s energy policies.
VPPs Gain Momentum: 105 state policy actions in 2024 signal DER aggregation as a low-cost grid flexibility tool.

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FERC Greenlights PJM’s “Shovel-Ready” Interconnection Plan
- Approved a fast-track process for up to 50 projects (10 GW potential) to address PJM’s projected capacity shortfalls by 2026. Critics argue it prioritizes fossil fuels over renewables.
- Implication: Accelerates near-term generation but raises equity concerns for renewable developers in the queue.
Pennsylvania Sues Federal Agencies Over IRA Funding Freeze
- Gov. Shapiro’s lawsuit challenges restrictions on $3.1B in IRA/IIJA funds for solar, weatherization, and orphaned well programs.
- Implication: Signals escalating state-federal clashes; 22 states now contest Trump’s energy policy shifts.
Canada Tariff Threatens Northern Grid Reliability
- A proposed 10% U.S. tariff on Canadian electricity imports risks retaliatory export cuts by Ontario and B.C., complicating New England/NY grid stability.

Duke University: Existing Grid Can Absorb “Significant” Flexible Load
- Report finds U.S. grids could integrate 76–126 GW of new load (data centers, EVs) with minimal curtailment (0.25–1% downtime).
- Takeaway: Flexible load strategies could defer costly grid upgrades while supporting electrification.
Virtual Power Plants Gain Policy Traction
- 38 states took 105 VPP-related actions in 2024. Colorado and Maryland mandated utility VPP programs; Xcel seeks 125 MW in Colorado.
- Trend: VPPs emerge as a low-cost, rapid-response solution to load growth.

Exelon’s Data Center Pipeline Doubles to 17 GW
- Load forecasts turn positive (+1.3% growth through 2028), driven by hyperscalers in PJM. Exelon urges states to “complement markets” with regulated solutions.
Transformer Shortages Worsen
- Lead times hit 3+ years for large units. Manufacturers like Hitachi and Schneider invest $1.5B+ to expand capacity, but standardization remains a hurdle.
Canadian Hydro Imports Hit Decade-High Prices
- Drought-driven hydropower shortages in B.C. pushed 2023 import costs to 10-year highs, straining Western U.S. utilities.

Breaking: Pennsylvania’s $156M Solar For All grant (including $70M for Philadelphia) remains frozen despite a federal court order, stalling 700+ MW of solar for disadvantaged communities. Gov. Shapiro’s lawsuit against the Trump administration is now joined by 22 states.
Immediate Impact:
- Tribal Nations: Completed solar installations for the Chippewa Cree and Oglala Sioux Tribes (8kW/household) are operational, but future rounds are paused.
- Massachusetts: $156M Solar For All and $1.2M air monitoring grants blocked, defying court rulings.
- Missouri: 23 electric school buses sit unused due to frozen IIJA funds.
Big Picture: The EPA’s $7B program, designed to serve 900K+ households, faces collapse. Legal experts warn the freeze sets a dangerous precedent for federal-state climate partnerships.

Brattle Study: EVs and heat pumps could slash marginal generation costs by $200/kW-year in zero-emission scenarios, supporting New York’s 8.5 GW flexibility goal by 2040.
Obstacle: NY’s $249.8M Solar For All grant (critical for community solar and workforce training) is frozen, complicating efforts to align DER growth with CLCPA targets.

Why This Matters:

Equity at Risk: Solar For All’s freeze disproportionately harms low-income and Tribal communities.
Grid Stability: Delays in DER deployment threaten NY’s ability to manage surging demand cost-effectively.

Transformer Crisis Threatens Grid Resilience
- Aging infrastructure, extreme weather, and demand growth strain supplies. Utilities stockpile “storm spares,” but mutual aid networks face pressure.
PJM’s Surplus Interconnection Rule Unlocks 26 GW
- FERC-approved changes let batteries and hybrids tap underused grid capacity, speeding interconnection for paired resources.
SoCal Edison Rebuilds Post-Wildfire Grid
- 400+ transformers replaced in Eaton/Palisades fire zones; highlights rising O&M costs from climate-driven disasters.

Thanks for reading → share with your coworkers who care to be informed :-)

- Parker