Comments of Advanced Energy Economy in Docket AD21-10-000

UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION ) ) Electrification and the Grid of the Future ) Docket No. AD21-12-000 ) ) PREPARED REMARKS OF JEFF DENNIS, MANAGING DIRECTOR AND GENERAL COUNSEL, ADVANCED ENERGY ECONOMY Advanced Energy Economy (AEE) appreciates the opportunity to participate in this important discussion of the accelerating trend of electrification of the nation’s economy. We applaud the Commission for initiating an examination of how the Commission and stakeholders should prepare for electrification, and the opportunities and challenges that electrifying transportation, residential and commercial buildings, and other sectors will present for the electric grid. State, local, and emerging federal policies are requiring steep reductions in greenhouse gas emissions across all sectors of the economy. Achieving these reductions requires an electricity system made up of predominantly zero-carbon advanced energy generation technologies, serving increasingly electrified transportation and residential and commercial buildings. Ensuring that the bulk electric system is adequate to satisfy the demands of decarbonization and electrification, and that wholesale markets cost-effectively integrate all of the advanced energy technologies that will be deployed, should be a focus for the Commission in the years ahead. I. About Advanced Energy Economy AEE is a national association of businesses that are making the energy we use secure, clean, and affordable. AEE is the only industry association in the United States that represents the full range of advanced energy technologies and services, both grid-scale and distributed. Advanced -1- energy includes energy efficiency, demand response, energy storage, wind, solar, hydro, nuclear, electric vehicles, and more. AEE also supports the work of the Advanced Energy Buyers Group (“AEBG”), a coalition of large buyers of advanced energy technologies who use them to meet sustainability and clean energy goals.1 II. ElectrIfication is accelerating in response to a combInation of low and zero carbon polIcy dIrectives, cost declInes and performance Improvements In advanced technologies for generating and utilIzIng clean electrIcIty as a fuel source, and consumer preferences for those technologies. The key drivers of electrification in the United States are federal, state, and local policies requiring decarbonization of various sectors of the economy; technology advancements and cost declines in advanced energy technologies that produce and utilize clean electricity as their primary fuel source; and individual consumer preferences. Several major policies focused on decarbonization of the economy have been enacted by state and local governments in the past several years, and to date, those policies have been a primary driver of electrification trends overall. According to the Environmental Protection Agency (“EPA”), the top sectors contributing to total U.S. greenhouse gas emissions in 2019 were transportation (29%), electricity (25%), industry (23%), and commercial and residential (13%).2 Recognizing these leading contributors to overall carbon emissions, these policies have focused on decarbonization of electricity supply first, followed by the transportation and residential and commercial building sectors. 1 These remarks represent the views of AEE staff, and do not necessarily represent the views of any AEE or AEBG member. 2 EPA, “Sources of Greenhouse Gas Emissions”, available at https://www.epa.gov/ghgemissions/ sources-greenhouse-gas-emissions. -2- As the Commission knows well, 18 states plus the District of Columbia and Puerto Rico have 100 percent clean electricity standards or goals, with many of those enacted in statute.3 These policies lay the foundation for clean electricity to be a core pillar of state efforts to broadly address greenhouse gas emissions across the economy. From among these jurisdictions, 12 states plus the District of Columbia have economy-wide decarbonization targets or goals, and beyond those there are additional states with economy-wide decarbonization targets that have not adopted 100 percent clean electricity targets. The New England states, for example, have all set limits or goals to reduce greenhouse gas emissions by 80 percent or more by 2050.4 New York’s 2019 Climate Leadership and Community Protection Act calls for a 40 percent reduction in economy-wide greenhouse gas emissions by 2030, and an 85 percent reduction by 2050.5 California law accelerates the growth of advanced energy and renewable resources by requiring the state’s electricity providers to achieve a 100% clean and zero carbon goal by 20456, and an Executive Order establishes a goal for the state to become carbon neutral, economy-wide, by 2045.7 Local governments have also adopted a range of policies aimed at achieving decarbonization of their communities that include a prominent role for electrification. Over 204 cities and counties in 37 states have 100% clean energy commitments or achievements, and cities overall are driving significant deployment of carbon-free renewable energy.8 In addition, 3 See, e.g., Advanced EnerGy Economy, Map: States with 100% Clean or Renewable EnerGy Goals (March 2021), available at https://info.aee.net/map-states-with-100-clean-or-renewable-energy-goals. 4 See The Brattle Group, “AchievinG 80% GHG Reduction in New EnGland by 2050” at 8 (September 2019), available at https://brattlefiles.blob.core.windows.net/files/17233_achieving_80_percent_ghg_reduction_in_ new_england_by_20150_september_2019.pdf. 5 New York State, Senate Bill 6599 (2019-2020 Session), available at https://www.nysenate.gov/legislation/bills/ 2019/s6599. 6 California, Senate Bill 100 (2017-2018 Session), available at https://leginfo.legislature.ca.gov/faces/ billNavClient.xhtml?bill_id=201720180SB100. 7 California Governor, Executive Order B-55-18 to Achieve Carbon Neutrality (September 10, 2018), available at https://www.californiabiodiversityinitiative.org/pdf/executive-order-b-55-18.pdf. 8 See, e.g., UCLA Luskin Center for Innovation, “ProGress Toward 100% Clean EnerGy in Cities & States Across the U.S.” (November 2019), available at https://innovation.luskin.ucla.edu/wp-content/uploads/ -3- municipalities across the country, from Houston, Texas, to Los Angeles, California, have made commitments to electrify their municipal fleets, which range from light-duty passenger vehicles to medium- and heavy-duty trucks and buses.9,10 Municipal governments are also implementing policies to support the transition to fully electric buildings. In 2019, Berkeley, California, became the first city in the United States to prohibit natural gas in all new building construction.11 Federal policies to address climate change and reduce greenhouse gas emissions are now beginning to join these state and local policy efforts, and can be expected to drive electrification of the economy even further. The President’s January 27, 2021, Executive Order on “Tackling the Climate Crisis at Home and Abroad,” for example, directs the federal government to procure clean electricity to power its own operations, and to purchase all clean and zero-emissions vehicles for use in its fleets, a move that will drive significant demand for electric vehicles.12 In addition, the United States rejoined the Paris Agreement,13 and on April 22, 2021, the President announced a target of reducing U.S. greenhouse gas emissions by 50-52 percent from 2005 levels by 2030.14 2019/11/100-Clean-EnerGy-Progress-Report-UCLA-2.pdf; Goncalves, T., Liu, T., World Resources Institute, “How US Cities and Counties Are GettinG Renewable Energy” (June 2020), available at https://www.wri.org/insights/how-us-cities-and-counties-are-getting-renewable-energy. 9 Environment Texas, TexPIRG, Frontier Group, “An Electric Vehicle Toolkit for Local Governments and Texas Communities” (March 2021), available at https://environmenttexas.org/sites/environment/files/ reports/FRG%20Texas%20EV%20Toolkit%20Feb21%201.4.pdf. 10 City of Los AnGeles, “Mayor Garcetti Announces that City of Los AnGeles is Now Home to LarGest Electric Vehicle Fleet in the U.S.” (March 2016), available at https://www.lamayor.org/ mayor-garcetti-announces-city-los-angeles-now-home-largest-electric-vehicle-fleet-us. 11 Southwest Energy Efficiency Project, “BuildinG Electrification: How Cities and Counties are ImplementinG Electrification Policies” (2020), available at https://swenergy.org/pubs/building_electrification 12 “Executive Order on Tackling the Climate Crisis at Home and Abroad”, Section 205, available at https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/27/executive-order-on-tacklinG-the- climate-crisis-at-home-and-abroad/. 13 U.S. Department of State, “The United States Officially Rejoins the Paris Agreement” (January 2021), available at https://www.state.gov/the-united-states-officially-rejoins-the-paris- agreement/#:~:text=On%20January%2020%2C%20on%20his,becomes%20a%20Party%20again%20today. 14 The White House, “FACT SHEET: President Biden Sets 2030 Greenhouse Gas Pollution Reduction Target Aimed at CreatinG Good-Paying Union Jobs and Securing U.S. Leadership on Clean Energy Technologies” (April 2021), available at https://www.whitehouse.Gov/briefinG-room/statements-releases/2021/04/22/fact-sheet-president- biden-sets-2030-greenhouse-gas-pollution-reduction-target-aimed-at-creating-good-paying-union-jobs-and- securinG-u-s-leadership-on-clean-energy-technoloGies/. -4- To achieve the steep greenhouse gas emissions reductions these state, local,

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