Despite the unprecedented challenges brought on by the COVID-19 pandemic, competitive power suppliers stepped up in 2020 to play a pivotal role in our nation’s response, providing uninterrupted electricity, supporting recovery efforts and prioritizing employee safety throughout. Through it all, the competitive power markets in which EPSA member companies operate achieved important milestones and progress in emissions reductions, innovation and affordability.
Powering Through the Pandemic
EPSA’s members stayed committed to powering the nation in the wake of a public health crisis, while also helping procure safety supplies for essential industry workers and lending critical aid to customers facing financial hardship due to the pandemic. Without seeking bailouts or additional taxpayer support, EPSA member companies pledged more than $6 million in emergency aid and funding for energy relief programs, first responder protective equipment and funds for teachers and food banks. Competitive power suppliers also provided much needed customer assistance in the form of payment extensions and late fee waivers, deferred payment plans and customer aid programs. Over the summer, COVID-19 furthered industry discussions seeking innovative solutions to power generation challenges such as maintaining reliability when demand shifted due to many states’ stay-at-home orders.
Focusing on Customers and Voters
Amidst the pandemic, EPSA’s advocacy prioritized feedback from the American people as they grappled with the economic hardships associated with COVID-19 shutdowns and as they looked ahead to the 2020 election in November. EPSA released poll data showing that 90% of Americans favor competitive, affordable energy solutions to reduce emissions. The poll also found that 83% of Americans want Congress to focus on encouraging reliable and affordable electricity. The majority of the country, according to the poll, also supports reducing emissions efficiently and at the least cost – allowing all resources to compete to deliver the best outcomes.
Convening Critical Conversations on Carbon Pricing
As momentum grows to support competitive tools to reduce emissions, such as carbon pricing, EPSA joined a diverse coalition from the energy industry including renewable developers, trade associations, advocates and policy experts to ask the Federal Energy Regulatory Commission (FERC) to seriously consider how carbon pricing could be implemented in and would impact the wholesale markets where electricity is bought and sold. FERC answered the call by hosting a day-long technical conference, featuring EPSA member company leaders and other experts. We were then pleased to see FERC introduce a proposed carbon pricing policy statement to guide future discussions – which we said should support market-based solutions to address emissions, unifying economic and environmental goals.
Informing Real Solutions
Presenting real, cost-effective solutions to achieve emissions reductions remained a top priority for EPSA and its members throughout the year. In partnership with Energy + Environmental Economics (E3), EPSA released a new study that provides important insight into the most efficient, impactful and cost-effective ways to decarbonize the grid over the next decade. According to the study, the region served by PJM Interconnection, the nation’s largest grid operator, can achieve deeper decarbonization by 2030 at a lower cost to consumers by pursuing market-based policies such as carbon pricing compared to fragmented and restrictive clean energy policies and subsidies. For example, the study found a modest carbon price of $10/ton could reduce emissions in the PJM region by 28% at a cost that is $2.8 billion less than a business-as-usual approach that includes current restrictive policies and subsidies. The study’s findings provide empirical support for EPSA’s commitment to achieving decarbonization and clean energy development through encouraging competition and efficiency over discriminatory policy, mandates and other payment programs. It has gone on to inform productive conversations at the FERC and PJM.
In addition to the findings from the E3 study, EPSA and its members made significant strides in facilitating understanding of environmental goals and policies to support decarbonization and reduced costs for consumers. The Carbon Tax Center (CTC) announced in May that U.S. power sector emissions fell below the targets set by former President Obama’s Clean Power Plan a decade early. Much of that can be attributed to consistent market dynamics that drive consumer-focused innovation and the shift away from coal for power generation and toward more reliance on cleaner natural gas – despite changing political winds.
Leading Competitive Clean Energy Development and Innovation
EPSA member companies led the broader industry in developing battery storage, wind power and efficient natural gas generation in 2020, lending more credence to the industry’s commitment to demand-focused innovation and cost-effective lower carbon power generation. Competitive power suppliers continue to pave the way for grid integration of renewable energy and battery storage. Projects include LS Power and Vistra Corporation’s large-scale battery projects in California and New York, and Tenaska and Capital Dynamics’ collaboration to bring 2,000 MW of clean energy to the California ISO. EPSA members’ renewable investments have sustained momentum even in a year of uncertainty, particularly Calpine Corporation’s wind developments in New York, and TransAlta’s wind farms in New Hampshire, Pennsylvania and Minnesota.
In addition to adding new renewable generation in PJM markets, Competitive Power Ventures (CPV) announced in August that it will soon break ground on a new 1,250 MW natural gas power plant in Illinois, harnessing competition to deliver lower prices, reliable service, and reduced emissions to consumers. CPV’s Fairview Energy Center, an innovative 1,050-MW power plant in Pennsylvania, won POWER Magazine’s Top Gas-Fired Plant Award for using best-in-class combined cycle technology and serving as “a model for how an energy company and a power plant can help rebuild a region.”
Showcasing Industry Leaders
In association news, EPSA saw changes in its leadership this year, as Curtis A. “Curt” Morgan, president & CEO of Vistra Energy, was named EPSA Chair in April, a seat he will hold through April 2021. This year, Vistra led the charge on energy transitions by announcing the retirement of 6,800 MW of coal-fired power plants by 2027, while investing more than $1 billion in solar and storage projects in 2021 and 2022. The shift will reduce Vistra’s emissions by 60% by 2030 (vs. 2010 baseline), continue to use natural gas to support the reliability of the grid, and put the company on a path to net-zero emissions by 2050. Thad Hill, President & CEO of Calpine Corporation assumed Morgan’s previous post of vice chair, and Eastern Generation CEO Mark Sudbey continues to serve as secretary-treasurer.
Focusing on the Future
There’s no question 2020 was full of challenges and unexpected obstacles for the nation, but EPSA and our member companies have persevered – putting consumers’ needs first, prioritizing the health and safety of all Americans and continuing to make progress to meet environmental goals. With a new administration taking office in 2021 and critical state policy discussions ongoing, EPSA and our members look forward to tackling the challenges that lie ahead, securing a competitive future for American power generation and continuing their leadership on these critical priorities. Competition drives down costs, gives more choice to consumers, and encourages innovation – America’s power grid cannot move forward without it.
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