Administrator & CEO @BonnevillePower. Teacher, writer, editor @uchicago @AmericanAffrs. Husband & father. Feed = my personal take.
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Out today: My @AmericanAffrs essay trying to reset the often-fever-pitched conversation about data centers & energy, with concrete ideas for how growth can be accelerated and legacy consumers can be protected -->
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Things just got real at the Kavulla household. Twin girls: home today. Your prayers and well wishes are very welcome as Laura, the 3-year-old and I contend with the new arrivals.
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Some Californian plugged his Tesla into an unattended electric outlet in rural Montana, an above-the-fold news event in the local weekly, but settled up with the local electric co-op before skedaddling. Hilarious, charming story all around.
montanafreepress.org/2023/07…
Drive this in a small town
What happened when a Tesla came to Ekalaka, Montana.
montanafreepress.org 18
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How does this claim make it by the @nytimes fact checkers? Both these states are leaning heavily on gas-fired generation...
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The result is now final & fully litigated: Oklahoma Natural Gas residential customers will pay between $5.72 to $7.82 per month for *25 years* to pay off *a single week's worth* of natural gas. I have never seen anything so crazy.
southwestledger.news/news/20…
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A rare find: An electric utility arguing that its "obligation to serve" (often cited as the reason why it should get to be a monopoly) is conditional & that it has unilaterally imposed a moratorium on serving a certain type of customer (data centers & crypto)
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Oklahoma Natural Gas is proposing that customers who turn off their gas service to go all-electric should pay a "termination fee" equal to $875-$1,375 per residential customer.
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I've worked in the Montana electric utility space for seven years and had never heard of Whitefish Energy until the #PuertoRico story broke
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Superb idea that puts Congress on the spot to exercise an authority they rarely choose to, while clarifying the parameter of the uncertainty they could resolve -->
The late Justice Ruth Bader Ginsburg did several interviews with the Historical Society of the D.C. Circuit from 1995-2014. She stipulated that the transcripts would be available 5 years after her death. Those transcripts are now public. dcchs.org/judges/ginsburg-ru… H/T @palmore_joe
I've been reading through them and have found some intriguing nuggets. An example: this reference in Interview 6 (August 19, 1998) to a suggestion from the late Second Circuit Judge Robert Katzmann that when circuits divide on the proper interpretation of a statute, Congress could be notified and asked to resolve the ambiguity (an interesting idea post-Loper Bright). Similar to federal courts certifying questions to state supreme courts on unsettled matters of state law.
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Another day, another monopoly utiltiy getting its massive gas costs passed through to a captive base of ratepayers. denverpost.com/2022/05/13/ju…
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Data center growth & electricity demand have been a big “known unknown" since before yesterday. It's hardly prophetic, but here's what I thought obvious earlier this month – & wow, did DeepSeek put a fine point on it. A short 🧵
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Also notable: PJM clocked in Monday at 161 gigawatts -- which exceeds the parameters that PJM is procuring for in its coming capacity auction for delivery in 2026-27,
In other words, actual demand already has leapfrogged the market operator’s projected demand.
A few thoughts in charts on how America's grid is holding up through the East Coast heat wave.
1 Strong performance of Demand Response in PJM (see actual vs forecast) &
2 Load persisting (blue line past forecast) as solar drops, humidity persists
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What does it say that the Big DOE Fusion Announcement is the rare front-page mainstream news story about energy -- but third-rung news at energy trade-publication outlets?
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The @LBNL & @TheBrattleGroup teams have an excellent study out this week on what's feeding electricity price changes over the past 5 years.
Legislators should be required to read or get a briefing on it before taking any vote on electricity policy! Highlights & my commentary🧵
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Cool map from @NERC_Official out today showing drivers of electricity demand growth by region -->
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Yesterday was a momentous day: the first full day home from hospital for my wife & new baby Julius, the Feast of the Assumption of Mary, and my birthday. I could not have asked for anything more gratifying than the gift of having my family safe and together at home.
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I did not realize there was a NIMBY awards show.
wsj.com/articles/energy-proj…
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A major shout-out to @californiapuc's Energy Division for the publication of a thought-provoking proposal for a new retail market / rate design structure.
Done right, it could create the world's first, genuinely two-sided electricity market where demand actively participates.
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One of the weirder things to happen lately in the power markets:
California has become a huge exporter during its peak season. Meanwhile the rest of the West has hollowed out its fossil capacity, leaning on Cali's battery/gas/renewable abundance.
(thank you Cali ratepayers!)
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.@ERCOT_ISO out today with a negative reserve margin projection: 15,000 MW shortfall, starting in 2026 (next year!)
That gap is going to close -- either by generation, storage & demand response additions; or by forgone economic opportunities for AI. That's the choice.
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Delighted to be giving a keynote entitled "GET REAL" to @SPGlobal's Power Traders forum here in D.C. this Friday, about why the overforecast of demand is problematic & what policies can inject some reality into this sector.
Here's a sneak peak!🧵
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Happy to announce I'll continue to fight the good fight next year & beyond. I'm joining the folks at @RSI -->
rstreet.org/2018/10/08/r-str…
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Omg they're going to rate-base a spaceship
This just in: Renowned technologist & engineer @elonmusk to speak at #EEI2023! From electric transportation to space travel, energy storage, & much more, Musk is leading radical change across the global business & technology landscape. Register today ➡️ eei.org/2023
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So I had to buy an oreo in order to get a beer today. Reason? Montana's cabaret license which only allows beer/wine sales with a food purchase.
Policymakers: someone will always work around your work-around. Better to address issue head-on.
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The Manchin-Schumer legislation is a Transmission Trifecta for @FERC.
It would make electric-transmission a matter of clear national policy, similar to how phone/internet regulation went "federal" a generation ago. Short 🧵 on the Trifecta's 3 elements
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My wife just heard the good word that her student loans have been forgiven in their entirety after 10 years of public service -- candidly, an unbelievably generous government program.
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Might want to sit this one out? ...
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ERCOT is out with an analysis of the causes of plant outages during Winter Storm Uri. You’ll definitely want to look at the “important notes” section because this methodology invalidates the major takeaway that some may draw from this analysis -->
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It appears we may have the first energy-related agency action falling victim to Chevron's being overturned: a long-running case about PURPA where a Montana solar-and-battery combo was said to be below the law's 80 MW "power production" limit to qualify as a "small facility"
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A Bronx barber tells Trump that his energy bills went from $2,100 to $15,000 since Biden and Kamala took over.
Trump’s response: “WHAT??”
Community note
Javier Rodriguez, the Bronx barber with a $15,000 utility bill, is the unlucky victim of a billing error, according to Con Edison, the city's utility for electric, gas and steam," wrote Southall. "A spokesman said that the company has been working with him to resolve it." rawstory.com/trump-bronx-ba
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First week of class for my "Utilities & Electricity Markets" class @UChicago's @HarrisPolicy coming up and definitely not used to the "Hi Professor" salutation on the emails I am getting.
And as promised #energytwitter, here's the syllabus: app.box.com/s/dujt9zsjym90dn…
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Texas's ERCOT has about $2.5 billion in defaults as of today. 73% of that is a single entity -- Brazos Electric Co-operative. A monopoly with cost-based rates, whose power plants underperformed, not a freewheeling, "deregulated" power company.
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The situation in Texas escalated dramatically overnight, blackouts in both ERCOT & MISO -- about as far apart as possible in terms of how the electricity industry is organized -- now in effect. Please stay safe, and my prayers especially for those with infants & elderly at home.
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There's a lot going on in yesterday's PJM capacity auction -- intended to ensure enough power resources exist to supply projected demand from mid-2025 to mid-2026. Let me break down a few items & ask some questions🧵
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Calpine's CEO Andrew Novotny gave a provocative speech this week, pushing back on @ERCOT_ISO & utility forecasts of data center growth.
He says to expect 5-10 GWs, not 22 GWs forecast by ERCOT (or >70GWs by utes!) Why the difference?🧵
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BREAKING: This afternoon, Massachusetts' utility regulator approved an increase for the "regulated" rate for residential electricity customers of the state's largest electric utility.
34 cents/kwh, not including distribution charges and other fees. 2x the previous winter.
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Arizona's 3 largest utilities have 107 registered lobbyists working in Phoenix. There are 90 legislators. Quite the ratio.
The utilities' big priority this year is to stop their ratepayers from having alternative choices in their energy provider.
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Massachusetts utilities will be charging customers hundreds of millions of dollars for smart meters -- but, ridiculously, that doesn't mean those meters will actually be used to settle customers' actual demand.
Instead, utilities are telling regulators that they will continue to rely on hypothetical "profiles" of customer usage. The practical consequence is that "virtual power plants" and innovative rate designs could not monetize market-based value--and if they got a revenue stream at all, it'd be based on regulators' guesses about the value those things provide.
As usual, I find myself asking how the smart grid is so dumb!
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In the "it's not good, Bob" news category, it seems @MISO_energy has had a computational error that has caused their capacity market to systematically overprocure resources for 7 years, with just the latest year's financial impact nearly ~$300MM.
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We should all agree data centers ought to be on the hook for grid-upgrade costs they cause.
But many policies proferred to do that send no price signal on where to locate on the grid that will make the best use of the grid & cause the least costly integration of data centers.🧵
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A few thoughts in charts on how America's grid is holding up through the East Coast heat wave.
1 Strong performance of Demand Response in PJM (see actual vs forecast) &
2 Load persisting (blue line past forecast) as solar drops, humidity persists
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We signed a contract on a house in Maryland (my wife's home state!) this week. So it seemed only fitting our Sunday dinner is a crab boil. Slightly more complexity to the dining technique as vs. steak.
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It sure looks like a single 200-MW bitcoin facility plopped down in North Dakota is costing mom-and-pop customers of @MontanaDakota ~$20M/year (so ~$140/customer?) in dubious congestion charges, per the utility's complaint to @FERC
(pdf) elibrary.ferc.gov/eLibrary/f…
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Let's take a look at @pjminterconnect's capacity auction, shall we?
This market is tighter than a pair of skinny jeans. Only 17 MWs of capacity [solar, it would seem] was offered but did not clear (out of 134,205 MWs). 🧵
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Hey energy regulators -- you should shop your policy ideas to regulated parties, for sure, but keep in mind that your ideas shouldn't need their consent. Regulation of monopolies isn't a negotiation. It's something that requires independent fact-finding, thought, and action.
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If you NIMBY a Buc-ee's in Virginia, you get a data center instead. Sorry, them's the rules
Popular Texas-based travel center chain Buc-ee's wants to build a second Virginia location in Stafford, but Wednesday night, several residents begged the county planning commission to reject its plans. fox5dc.com/news/stafford-nei…
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And as a reminder: Those under contract to provide some of that gas that became unavailable can simply wave their hands, declare force majeure due to freeze-offs, and face no financial consequences/replacement obligations whatsoever, even if what they sold is called "firm".
Today’s S&P Global shows an ~25% drop in production in the Permian. ERCOT reported gen fleet winterized & ready last week. @TXOGA claim that they produce as long as power is on isn’t all true. Gas needs commensurate winterization requirements to those required of generators.
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Bro has discovered "Spring"-->
More and more Wind-Water-Solar every day.
14 straight days & 55 of 87 (63.2%) in 2025 with 100% WWS on the main grid of world's 5th-largest economy!
69% of 24-h demand met by WWS 3/28
Record wind output year to date 119.2 GWh 3/28
WWS output 8.5x fossil gas output 3/28
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Utilities don't earn a profit on tree trimming.
They do earn a profit on, say, capitalized leases for "mobile generation" -- ~$800M investments that don't seem to have been highly effective post-Beryl.
Incentives matter, as I've tried to explain before!
americanaffairsjournal.org/2…
“The kicker, some customers say, is that CenterPoint repeatedly ignored requests to trim or remove trees that had been deemed unsafe.” Maybe CenterPoint should allocate more of the millions of dollars that Houstonians are forced to pay it to tree-trimming? chron.com/news/houston-texas…
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There's a certain type of very online activist who has gone from "There's no going back. Manchin burned the planet" to "The Joe Manchin Act of 2022? It is our salvation". All in two weeks' time! All without seeing the specifics! Twitter, man.
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Serving the public as a utility commissioner has been the pleasure of my life so far. Thank you to my constituents for the privilege of doing so! #mtpol
greatfallstribune.com/story/…
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Speaking of government programs that don't work: The "carbon market" in the eastern United States is *increasing* emissions in PJM, while costing ratepayers >$1B annually -->
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Good morning y'all -- and thanks for having me aboard. Time to get to work!
Breaking News: @nrgenergy brings on @TKavulla where he will work to advance competitive energy markets and customer choice. For more, read his latest blog: ms.spr.ly/6018TO0BE #Energy #Policy
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I played the role of ‘qualified skeptic’ at the got-to-build-the-national-grid-now-with-your-money panel at #CERAWeek23 this morning. Realizing my position is misaligned with the Current Thing, allow me to explain… 🧵
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Both in Europe and the U.S. -- for different reasons -- I've seen lots of commentary that suggests that the spot price of a megawatt-hour of electricity should be different based on what fuel/resource generated it. This makes very little sense.🧵
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California's grid operator apparently requested yesterday that U.S. Dept of Energy declare that an "electric reliability emergency" exists in the state & for "an initial period" of 60 days allow certain power plants to operate outside permit limitations. caiso.com/Documents/Sep7-202…
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Summer is behind us, so let's review the Texas electricity market's blockbuster performance for 2022. (graphs courtesy of upcoming @ERCOT_ISO board meeting). 🧵
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Because it's been a long week, you should allow yourself, as a treat, to read the absolute 🔥🔥 the Utah PSC is spitting out, which begins thusly:
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Still amazed that Oklahoma policymakers & regulators --- faced with a $1.8B book-value utility that spent $1.3B in gas in a single week -- never seriously considered "Hey, rather than sticking these costs to consumers, maybe we should consider a Chapter 11 restructuring?"
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.@ENERGY's out today with an order blocking the retirement of the 1.6GW Campbell power plant. It’ll probably be characterized as a bailout for uneconomic coal.
In reality, this plant wasn’t closing due to economics, but because of the perverse incentives of monopoly utilities🧵
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I'm in the Wall Street Journal weekend edition, arguing for presets for more major appliances to be responsive to the electric grid's reliability needs.
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My colleagues and I work tirelessly to break open utility monopolies that have a fierce grip on regulatory agencies, so I dressed as a monster named Regulatory Capture for Halloween.
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My colleagues on the EIM Governing Body surprised me at our last meeting with homemade, market-themed baby gear for the forthcoming Kavulla. Which is about the nicest and nerdiest thing one could do for me.
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The new argument for state-led offshore wind procurements in New England is:
We are going to buy it at $150/MWH, and it'll look real cheap as wholesale prices go *down*, reducing that wind power's market value from the $60s to the $30s! Huh?!
ctmirror.org/2024/10/16/wind…
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A round of applause for @VAStateCorpComm! The utility regulator is requiring @DominionEnergy to guarantee performance of its new offshore wind project -- 2nd only to the Vogtle nuclear plant in utility largesse of the modern era & amounting to $21.5B in costs to VA ratepayers 1/n
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It will never not be funny to me that the prefiled testimony in American utility commissions is written in Q/A format.
I'm always tempted to throw things in to jolt the reader to life, like "Q: You go too far! Do you have further evidence to support what you are propounding?"
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If a fast food chain surpasses an electric utility in its ability to communicate power outage status to the latter's customers, I think Freaky Friday rules are officially invoked, requiring each to take up the other's franchise -->
The Whataburger app works as a power outage tracker, handy since the electric company doesn't show a map.
Still nearly 1.9 million power outages.
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One of the biggest takeaways here is that the market works after all.
During debates around shoveling subsidies to then-uneconomic nuke plants' shuttering, including TMI, we heard they could never come back once closed.
Turns out that isn't true!
However big you think this Microsoft nuclear deal is, I am telling you, it's bigger.
One of the biggest power deals ever.
~$800 million/yr for 20 years
$16 BILLION for one nuclear reactor
From a 40-year-old reactor, just to get to age 60.
We now have a market for newbuild.
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As predicted, this legislation is a hot mess. Basically, it is a proposal to create a utility without the protections traditionally afforded to consumers when government chooses to grant certain businesses these special privileges to. Let’s dive in. 1/
I haven’t seen a bill around this concept yet, but you can be sure if the concept as glossily described in public is too cute, then what’s buried in legislative text is a real howler.
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The idea that RTOs are the "embodiment of taking a sledgehammer to utilities' monopoly power" is a remarkable delusion to harbor.
Interconnection queues are clogged with speculative projects in the name of competition, each trying to minimize network upgrade costs and maximize profits. That goes even for RTOs, which are the embodiment of taking a sledgehammer to utilities' monopoly power.
So why do the greens and antitrust left still blame monopoly -- and by that we mean of course regulated public utilities, not, like Facebook -- for slow deployment of power resources?
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Everyone is hair-on-fire about @pjminterconnect capacity prices, but the fact is, if you're out in the market trying to buy electric generating capacity now, you're paying a pretty penny everywhere.
This table put together by my great team @nrgenergy. I'll have more to say about it soon!
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Excited to be teaching "Utilities and Electricity Markets: Regulation in the United States" this Spring @UChicago @HarrisPolicy.
It is going to be lit.
epic.uchicago.edu/opportunit…
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The biggest action on pricing carbon isn’t in Congress these days – but @FERC. The agency took a final round of comments today on whether/how carbon-pricing should happen in regional power markets. Let’s check in on that, shall we? [thread]
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This outage happened only a week after after the Louisiana PSC voted to shut out additional private investment in competitive generation in the state, reinforcing the utility monopoly that is fraying around the edges
(@davantelewis was the lone dissenting view - kudos to him)
Let’s be clear this power outages is the lack of investment in transmission capacity, capacity, reduction, investments, in demand response, and energy, efficiency, and the regional transmission organization holding the local utilities accountable. I will take action.
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Please welcome Utah to the map on Electricity Choice. @GovCox signed SB 132 into law this week, allowing large customers (>100MWs) to take service from third-party providers.
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.@FERC has asked me to present at next month’s Resource Adequacy Technical Conference: a hot ticket!
I’ll break apart my observations in a couple threads—starting with an explainer of why some capacity markets seem to produce a lot of angry headlines, while others do not. 🧵
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Perhaps you haven't bought your nieces and nephews their Christmas presents yet? If not, consider:
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.@ERCOT_ISO is out with a projection of what the grid looks like if we take their demand projections seriously***
Which is to say: >40 GWs of voluntary demand reponse on stressed winter days (dark blue), and even so not enough to avoid involuntary load shed (dark red)
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Just your typical Calgary street scene, broadcasting RTO energy prices to the populace-->
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"Behind the meter" seems to be going by the wayside because it's predictably not delivering the "speed-to-market" that the maneuver was predicated upon.
This debate is a bit of a distraction, & has obscured two even more 🔥 policy debates: 🧵
NEWS: Talen Energy announced a new 1,920 MW PPA with Amazon at Susquehanna, expanding from 960 MW total capacity in the original agreement (existing including 300 MW BTM and FERC rejected expansion to 480 MW). AWS aims for full delivery by 2032 through 2042. AMZN will keep 300 MW BTM in the interim and move to FTM after grid connection is established to reduce regulatory hurdles and transmission costs. Seems to imply low $80s-MWh relative to the ramp provided in the deck & 95% utilization This aligns with recent headline on Amazon's $20bn PA datacenter plans.
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A relative included in my Christmas present a mailer she'd received 10 years ago from my campaign for @MT_PSC. (One person summed up the vibe as: He's a nerd but he's on our side.)
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