Russians hacked into US electric utilities: 6 essential reads


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U.S. power grid cyberattacks expose critical infrastructure to Russian hackers, DHS warns, targeting SCADA, smart grid sensors, and utilities; NERC CIP defenses, microgrids, and resilience planning aim to mitigate outages and supply chain disruptions.

 

Key Points

U.S. power grid cyberattacks target utility control systems, risking outages, disruption, requiring stronger defenses.

✅ Russian access to utilities and SCADA raises outage risk

✅ NERC CIP, DHS, and utilities expand cyber defenses

✅ Microgrids and renewables enhance resilience, islanding capability

 

The U.S. Department of Homeland Security has revealed that Russian government hackers accessed control rooms at hundreds of U.S. electrical utility companies, gaining far more access to the operations of many more companies than previously disclosed by federal officials.

Securing the electrical grid, upon which is built almost the entirety of modern society, is a monumental challenge. Several experts have explained aspects of the task, potential solutions and the risks of failure for The Conversation:

 

1. What’s at stake?

The scale of disruption would depend, in part, on how much damage the attackers wanted to do. But a major cyberattack on the electricity grid could send surges through the grid, much as solar storms have done.

Those events, explains Rochester Institute of Technology space weather scholar Roger Dube, cause power surges, damaging transmission equipment. One solar storm in March 1989, he writes, left “6 million people without power for nine hours … [and] destroyed a large transformer at a New Jersey nuclear plant. Even though a spare transformer was nearby, it still took six months to remove and replace the melted unit.”

More serious attacks, like larger solar storms, could knock out manufacturing plants that build replacement electrical equipment, gas pumps to fuel trucks to deliver the material and even “the machinery that extracts oil from the ground and refines it into usable fuel. … Even systems that seem non-technological, like public water supplies, would shut down: Their pumps and purification systems need electricity.”

In the most severe cases, with fuel-starved transportation stalled and other basic infrastructure not working, “[p]eople in developed countries would find themselves with no running water, no sewage systems, no refrigerated food, and no way to get any food or other necessities transported from far away. People in places with more basic economies would also be without needed supplies from afar.”

 

2. It wouldn’t be the first time

Russia has penetrated other countries’ electricity grids in the past, and used its access to do real damage. In the middle of winter 2015, for instance, a Russian cyberattack shut off the power to Ukraine’s capital in the middle of winter 2015.

Power grid scholar Michael McElfresh at Santa Clara University discusses what happened to cause hundreds of thousands of Ukrainians to lose power for several hours, and notes that U.S. utilities use software similar to their Ukrainian counterparts – and therefore share the same vulnerabilities.

 

3. Security work is ongoing

These threats aren’t new, write grid security experts Manimaran Govindarasu from Iowa State and Adam Hahn from Washington State University. There are a lot of people planning defenses, including the U.S. government, as substation attacks are growing across the country. And the “North American Electric Reliability Corporation, which oversees the grid in the U.S. and Canada, has rules … for how electric companies must protect the power grid both physically and electronically.” The group holds training exercises in which utility companies practice responding to attacks.

 

4. There are more vulnerabilities now

Grid researcher McElfresh also explains that the grid is increasingly complex, with with thousands of companies responsible for different aspects of generating, transmission, and delivery to customers. In addition, new technologies have led companies to incorporate more sensors and other “smart grid” technologies. He describes how that, as a recent power grid report card underscores, “has created many more access points for penetrating into the grid computer systems.”

 

5. It’s time to ramp up efforts

The depth of access and potential control over electrical systems means there has never been a better time than right now to step up grid security amid a renewed focus on protecting the grid among policymakers and utilities, writes public-utility researcher Theodore Kury at the University of Florida. He notes that many of those efforts may also help protect the grid from storm damage and other disasters.

 

6. A possible solution could be smaller grids

One protective effort was identified by electrical engineer Joshua Pearce at Michigan Technological University, who has studied ways to protect electricity supplies to U.S. military bases both within the country and abroad. He found that the Pentagon has already begun testing systems, as the military ramps up preparation for major grid hacks, that combine solar-panel arrays with large-capacity batteries. “The equipment is connected together – and to buildings it serves – in what is called a ‘microgrid,’ which is normally connected to the regular commercial power grid but can be disconnected and become self-sustaining when disaster strikes.”

He found that microgrid systems could make military bases more resilient in the face of cyberattacks, criminals or terrorists and natural disasters – and even help the military “generate all of its electricity from distributed renewable sources by 2025 … which would provide energy reliability and decrease costs, [and] largely eliminate a major group of very real threats to national security.”

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German Energy Demand Hits Historic Low Amid Economic Stagnation

Germany Energy Demand Decline reflects economic stagnation, IEA forecasts, and the Energiewende, as industrial output slips and efficiency gains, renewables growth, and cost-cutting reduce fossil fuel use while reshaping sustainability and energy security.

 

Key Points

A projected 7% drop in German energy use driven by industrial slowdown, efficiency gains, and renewables expansion.

✅ IEA projects up to 7% demand drop in the next year

✅ Industrial slowdown and efficiency programs cut consumption

✅ Energiewende shifts mix to wind, solar, and less fossil fuel

 

Germany is on the verge of experiencing a significant decline in energy demand, with forecasts suggesting that usage could hit a record low as the country grapples with economic stagnation. This shift highlights not only the immediate impacts of sluggish economic growth but also broader trends in energy consumption, Europe's electricity markets, sustainability, and the transition to renewable resources.

Recent data indicate that Germany's economy is facing substantial challenges, including high inflation and reduced industrial output. As companies struggle to maintain profitability amid nearly doubled power prices and rising costs, many have begun to cut back on energy consumption. This retrenchment is particularly pronounced in energy-intensive sectors such as manufacturing and chemical production, which are crucial to Germany's export-driven economy.

The International Energy Agency (IEA) has projected that German energy demand could decline by as much as 7% in the coming year, a stark contrast to the trends seen in previous decades. This decline is primarily driven by a combination of factors, including reduced industrial activity, increased energy efficiency measures, and a shift toward alternative energy sources, as well as mounting pressures on local utilities to stay solvent. The current economic landscape has led businesses to prioritize cost-cutting measures, including energy efficiency initiatives aimed at reducing consumption.

In the context of these developments, Germany’s energy transition—known as the "Energiewende"—is becoming increasingly significant. The country has made substantial investments in renewable energy sources such as wind, solar, and biomass in recent years. As energy efficiency improves and the share of renewables in the energy mix rises, traditional fossil fuel consumption has begun to wane. This transition is seen as both a response to climate change and a strategy for energy independence, particularly in light of geopolitical tensions and Europe's wake-up call to ditch fossil fuels across the continent.

However, the current stagnation presents a paradox for the German energy sector. While lower energy demand may ease some pressures on supply and prices, it also raises concerns about the long-term viability of investments in renewable energy infrastructure, even as debates continue over electricity subsidies for industry to support competitiveness. The economic slowdown has the potential to derail progress made in reducing carbon emissions and achieving energy targets, particularly if it leads to decreased investment in green technologies.

Another layer to this issue is the potential impact on employment within the energy sector. As energy demand decreases, there may be a ripple effect on jobs tied to traditional energy production and even in renewable energy sectors if investment slows. Policymakers are now tasked with balancing the immediate need for economic recovery, illustrated by the 200 billion-euro energy price shield, with the longer-term goal of achieving sustainability and energy security.

The effects of the stagnation are also being felt in the residential sector. As households face increased living costs and rising heating and electricity costs, many are becoming more conscious of their energy consumption. Initiatives to improve home energy efficiency, such as better insulation and energy-efficient appliances, are gaining traction among consumers looking to reduce their utility bills. This shift toward energy conservation aligns with broader national goals of reducing overall energy consumption and carbon emissions.

Despite the challenges, there is a silver lining. The current situation offers an opportunity for Germany to reassess its energy strategies and invest in technologies that promote sustainability while also addressing economic concerns. This could include increasing support for research and development in green technologies, enhancing energy efficiency programs, and incentivizing businesses to adopt cleaner energy practices.

Furthermore, Germany’s experience may serve as a case study for other nations grappling with similar issues. As economies around the world face the dual pressures of recovery and sustainability, the lessons learned from Germany’s current energy landscape could inform strategies for balancing these often conflicting priorities.

In conclusion, Germany is poised to witness a historic decline in energy demand as economic stagnation takes hold. While this trend poses challenges for the energy sector and economic growth, it also highlights the importance of sustainability and energy efficiency in shaping the future. As the nation navigates this complex landscape, the focus will need to be on fostering innovation and investment that aligns with both immediate economic needs and long-term environmental goals. The path forward will require a careful balancing act, but with the right strategies, Germany can emerge as a leader in sustainable energy practices even in challenging times.

 

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Dewa in China to woo renewable energy firms

Dewa-China Renewable Energy Partnership advances solar, clean energy, smart grid, 5G, cloud, and Big Data, linking Dewa with Hanergy and Huawei for R&D, smart meters, demand management, and resilient network infrastructure.

 

Key Points

A Dewa collaboration with Hanergy and Huawei to co-develop solar, smart grid, 5G, cloud, and resilient utility networks.

✅ MoU expands solar PV and distributed generation in Dubai and China

✅ Smart grid R&D: smart meters, demand response, self-healing networks

✅ 5G, cloud, and Big Data enable secure, scalable smart city services

 

A high-level delegation from Dubai Electricity and Water Authority (Dewa) recently visited China in bid to build closer ties with Chinese renewable and clean energy and smart services and smart grid companies, amid broader power grid modernization in Asia trends.

The team led by the managing director and CEO Saeed Mohammed Al Tayer visited the headquarters of Hanergy Holding Group, one of the largest international companies in alternative and renewable energy, in Beijing.

The visit complements the co-operation between Dewa and Hanergy after the signing MoU between the two sides last May, said a statement from Dewa.

The two parties focused on renewable and clean energy and its development, including efforts to integrate solar into the grid through advanced programs, and enhancing opportunities for joint investment.

Al Tayer also visited the Exhibition Hall and Exhibition Centre of the Hanergy Clean Energy Exhibition spread over a 7,000-sq-m area at the Beijing Olympic Park.

He discussed solar power technologies and applications, which included integrated photovoltaic panels and their distribution on the roofs of industrial and residential buildings, residential and mobile power systems, micro-grid installations in remote regions, solar-powered vehicles, and various elements of the exhibition.

Al Tayer and the accompanying delegation later visited the Beijing R&D Centre, which is one of Huaweis largest research institutes, known for Huawei smart grid initiatives across global markets, that employs over 12,000 people. The centre covers the latest pre-5G solutions, Cloud, Big Data, as well as vertical solutions for a smart and safe city.

"The visit is part of a joint venture with Huawei, which includes R&D projects to develop smart network infrastructures and various mechanisms and technologies, aligned with recent U.S. grid improvement funding initiatives, such as smart meters for electricity and water services, energy demand management, and self-recovery mechanisms from errors and disasters," he added.

 

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Energy Efficiency and Demand Response Can Nearly Level Southeast Electricity Demand for More than a Decade

Southeast Electricity Demand Forecast examines how energy efficiency, photovoltaics, electric vehicles, heat pumps, and demand response shape grid needs, stabilize load through 2030, shift peaks, and inform utility planning across the region.

 

Key Points

An outlook of load shaped by efficiency, solar, EVs, with demand response keeping usage steady through 2030.

✅ Stabilizes regional demand through 2030 under accelerated adoption

✅ Energy efficiency and demand response are primary levers

✅ EVs and heat pumps drive growth post 2030; shift winter peaks

 

Electricity markets in the Southeast are facing many changes on the customer side of the meter. In a new report released today, we look at how energy efficiency, photovoltaics (solar electricity), electric vehicles, heat pumps, and demand response (shifting loads from periods of high demand) might affect electricity needs in the Southeast.

We find that if all of these resources are pursued on an accelerated basis, electricity demand in the region can be stabilized until about 2030.

After that, demand will likely grow in the following decade because of increased market penetration of electric vehicles and heat pumps, but energy planners will have time to deal with this growth if these projections are borne out. We also find that energy efficiency and demand response can be vital for managing electricity supply and demand in the region and that these resources can help contain energy demand growth, reducing the impact of expensive new generation on consumer wallets.

 

National trends

This is the second ACEEE report looking at regional electricity demand. In 2016, we published a study on electricity consumption in New England, finding an even more pronounced effect. For New England, with even more aggressive pursuit of energy efficiency and these other resources, consumption was projected to decline through about 2030, before rebounding in the following decade.

These regional trends fit into a broader national pattern. In the United States, electricity consumption has been characterized by flat electricity demand for the past decade. Increased energy efficiency efforts have contributed to this lack of consumption growth, even as the US economy has grown since the Great Recession. Recently, the US Energy Information Administration (EIA – a branch of the US Department of Energy) released data on US electricity consumption in 2016, finding that 2016 consumption was 0.3% below 2015 consumption, and other analysts reported a 1% slide in 2023 on milder weather.

 

Five scenarios for the Southeast

ACEEE’s new study focuses on the Southeast because it is very different from New England, with warmer weather, more economic growth, and less-aggressive energy efficiency and distributed energy policies than the Northeast. For the Southeast, we examined five scenarios: a business-as-usual scenario; two alternative scenarios with progressively higher levels of energy efficiency, photovoltaics informed by a solar strategy for the South that is emerging regionally, electric vehicles, heat pumps, and demand response; and two scenarios combining high numbers of electric vehicles and heat pumps with more modest levels of the other resources. This figure presents electricity demand for each of these scenarios:

Over the 2016-2040 period, we project that average annual growth will range from 0.1% to 1.0%, depending on the scenario, much slower than historic growth in the region. Energy efficiency is generally the biggest contributor to changes in projected 2040 electricity consumption relative to the business-as-usual scenario, as shown in the figure below, which presents our accelerated scenario that is based on levels of energy efficiency and other resources now targeted by leading states and utilities in the Southeast.

To date, Entergy Arkansas has achieved the annual efficiency savings as a percent of sales shown in the accelerated scenario and Progress Energy (a division of Duke Energy) has nearly achieved those savings in both North and South Carolina. Sixteen states outside the Southeast have also achieved these savings statewide.

The efficiency savings shown in the aggressive scenario have been proposed by the Arkansas PSC. This level of savings has already been achieved by Arizona as well as six other states. Likewise, the demand response savings we model have been achieved by more than 10 utilities, including four in the Southeast. The levels of photovoltaic, electric vehicle, and heat pump penetration are more speculative and are subject to significant uncertainty.

We also examined trends in summer and winter peak demand. Most utilities in the Southeast have historically had peak demand in the summer, often seeing heatwave-driven surges that stress operations across the Eastern U.S., but our analysis shows that winter peaks will be more likely in the region as photovoltaics and demand response reduce summer peaks and heat pumps increase winter peaks.

 

Why it’s vital to plan broadly

Our analysis illustrates the importance of incorporating energy efficiency, demand response, and photovoltaics into utility planning forecasts as utility trends to watch continue to evolve. Failing to include these resources leads to much higher forecasts, resulting in excess utility system investments, unnecessarily increasing customer electricity rates. Our analysis also illustrates the importance of including electric vehicles and heat pumps in long-term forecasts. While these technologies will have moderate impacts over the next 10 years, they could become increasingly important in the long run.

We are entering a dynamic period of substantial uncertainty for long-term electricity sales and system peaks, highlighted by COVID-19 demand shifts that upended typical patterns. We need to carefully observe and analyze developments in energy efficiency, photovoltaics, electric vehicles, heat pumps, and demand response over the next few years. As these technologies advance, we can create policies to reduce energy bills, system costs, and harmful emissions, drawing on grid reliability strategies tested in Texas, while growing the Southeast’s economy. Resource planners should be sure to incorporate these emerging trends and policies into their long-term forecasts and planning.

 

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Why power companies should be investing in carbon-free electricity

Noncarbon Electricity Investment Strategy helps utilities hedge policy uncertainty, carbon tax risks, and emissions limits by scaling wind, solar, and CCS, avoiding stranded assets while balancing costs, reliability, and climate policy over decades.

 

Key Points

A strategy for utilities to invest 20-30 percent of capacity in low carbon sources to hedge emissions and carbon risks.

✅ Hedges future carbon tax and emissions limits

✅ Targets 20-30 percent of new generation from clean sources

✅ Reduces stranded asset risk and builds renewables capacity

 

When utility executives make decisions about building new power plants, a lot rides on their choices. Depending on their size and type, new generating facilities cost hundreds of millions or even billions of dollars. They typically will run for 40 or more years — 10 U.S. presidential terms. Much can change during that time.

Today one of the biggest dilemmas that regulators and electricity industry planners face is predicting how strict future limits on greenhouse gas emissions will be. Future policies will affect the profitability of today’s investments. For example, if the United States adopts a carbon tax 10 years from now, it could make power plants that burn fossil fuels less profitable, or even insolvent.

These investment choices also affect consumers. In South Carolina, utilities were allowed to charge their customers higher rates to cover construction costs for two new nuclear reactors, which have now been abandoned because of construction delays and weak electricity demand. Looking forward, if utilities are reliant on coal plants instead of solar and wind, it will be much harder and more expensive for them to meet future emissions targets, even as New Zealand's electrification push accelerates abroad. They will pass the costs of complying with these targets on to customers in the form of higher electricity prices.

With so much uncertainty about future policy, how much should we be investing in noncarbon electricity generation in the next decade? In a recent study, we proposed optimal near-term electricity investment strategies to hedge against risks and manage inherent uncertainties about the future.

We found that for a broad range of assumptions, 20 to 30 percent of new generation in the coming decade should be from noncarbon sources such as wind and solar energy across markets. For most U.S. electricity providers, this strategy would mean increasing their investments in noncarbon power sources, regardless of the current administration’s position on climate change.

Many noncarbon electricity sources — including wind, solar, nuclear power and coal or natural gas with carbon capture and storage — are more expensive than conventional coal and natural gas plants. Even wind power, which is often mentioned as competitive, is actually more costly when accounting for costs such as backup generation and energy storage to ensure that power is available when wind output is low.

Over the past decade, federal tax incentives and state policies designed to promote clean electricity sources spurred many utilities to invest in noncarbon sources. Now the Trump administration is shifting federal policy back toward promoting fossil fuels. But it can still make economic sense for power companies to invest in more expensive noncarbon technologies if we consider the potential impact of future policies.

How much should companies invest to hedge against the possibility of future greenhouse gas limits? On one hand, if they invest too much in noncarbon generation and the federal government adopts only weak climate policies throughout the investment period, utilities will overspend on expensive energy sources.

On the other hand, if they invest too little in noncarbon generation and future administrations adopt stringent emissions targets, utilities will have to replace high-carbon energy sources with cleaner substitutes, which could be extremely costly.

 

Economic modeling with uncertainty

We conducted a quantitative analysis to determine how to balance these two concerns and find an optimal investment strategy given uncertainty about future emissions limits. This is a core choice that power companies have to make when they decide what kinds of plants to build.

First we developed a computational model that represents the sectors of the U.S. economy, including electric power. Then we embedded it within a computer program that evaluates decisions in the electric power sector under policy uncertainty.

The model explores different electric power investment decisions under a wide range of future emissions limits with different probabilities of being implemented. For each decision/policy combination, it computes and compares economy-wide costs over two investment periods extending from 2015 to 2030.

We looked at costs across the economy because emissions policies impose costs on consumers and producers as well as power companies. For example, they may lead to higher electricity, fuel or product prices. By seeking to minimize economy-wide costs, our model identifies the investment decision that produces the greatest overall benefits to society.

 

More investments in clean generation make economic sense

We found that for a broad range of assumptions, the optimal investment strategy for the coming decade is for 20 to 30 percent of new generation to be from noncarbon sources. Our model identified this as the best level because it best positions the United States to meet a wide range of possible future policies at a low cost to the economy.

From 2005-2015, we calculated that about 19 percent of the new generation that came online was from noncarbon sources. Our findings indicate that power companies should put a larger share of their money into noncarbon investments in the coming decade.

While increasing noncarbon investments from a 19 percent share to a 20 to 30 percent share of new generation may seem like a modest change, it actually requires a considerable increase in noncarbon investment dollars. This is especially true since power companies will need to replace dozens of aging coal-fired power plants that are expected to be retired.

In general, society will bear greater costs if power companies underinvest in noncarbon technologies than if they overinvest. If utilities build too much noncarbon generation but end up not needing it to meet emissions limits, they can and will still use it fully. Sunshine and wind are free, so generators can produce electricity from these sources with low operating costs.

In contrast, if the United States adopts strict emissions limits within a decade or two, they could prevent carbon-intensive generation built today from being used. Those plants would become “stranded assets” — investments that are obsolete far earlier than expected, and are a drain on the economy.

Investing early in noncarbon technologies has another benefit: It helps develop the capacity and infrastructure needed to quickly expand noncarbon generation. This would allow energy companies to comply with future emissions policies at lower costs.

 

Seeing beyond one president

The Trump administration is working to roll back Obama-era climate policies such as the Clean Power Plan, and to implement policies that favor fossil generation. But these initiatives should alter the optimal strategy that we have proposed for power companies only if corporate leaders expect Trump’s policies to persist over the 40 years or more that these new generating plants can be expected to run.

Energy executives would need to be extremely confident that, despite investor pressure from shareholders, the United States will adopt only weak climate policies, or none at all, into future decades in order to see cutting investments in noncarbon generation as an optimal near-term strategy. Instead, they may well expect that the United States will eventually rejoin worldwide efforts to slow the pace of climate change and adopt strict emissions limits.

In that case, they should allocate their investments so that at least 20 to 30 percent of new generation over the next decade comes from noncarbon sources. Sustaining and increasing noncarbon investments in the coming decade is not just good for the environment — it’s also a smart business strategy that is good for the economy.

 

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Hong Kong to expect electricity bills to rise 1 or 2 per cent

Hong Kong Electricity Tariff Increase reflects a projected 1-2% rise as HK Electric and CLP Power shift to cleaner fuel and natural gas, expand gas-fired units and LNG terminals, and adjust the fuel clause charge.

 

Key Points

An expected 1-2% 2018 rise from cleaner fuel, natural gas projects, asset growth, and shrinking fuel cost surpluses.

✅ Expected 1-2% rise amid cleaner fuel and gas shift

✅ Fuel clause charge and asset expansion pressure prices

✅ HK Electric and CLP Power urged to use surpluses prudently

 

Hong Kong customers have been asked to expect higher electricity bills next year, as seen with BC Hydro rate increases in Canada, with a member of a government panel on energy policy anticipating an increase in tariffs of one or two per cent.

The environment minister, Wong Kam-sing, also hinted they should be prepared to dig deeper into their pockets for electricity, as debates over California electric bills illustrate, in the wake of power companies needing to use more expensive but cleaner fuel to generate power in the future.

HK Electric supplies power to Hong Kong Island, Lamma Island and Ap Lei Chau. Photo: David Wong

The city’s two power companies, HK Electric and CLP Power, are to brief lawmakers on their respective annual tariff adjustments for 2018, amid Ontario electricity price pressures drawing international attention, at a Legislative Council economic development panel meeting on Tuesday.

HK Electric supplies electricity to Hong Kong Island and neighbouring Lamma Island and Ap Lei Chau, while CLP Power serves Kowloon and the New Territories, including Lantau Island.

Wong said on Monday: “We have to appreciate that when we use cleaner fuel, there is a need for electricity tariffs to keep pace. I believe it is the hope of mainstream society to see a low-carbon and healthier environment.”

Secretary for the Environment Wong Kam-sing believes most people desire a low-carbon environment. Photo: Sam Tsang

But he declined to comment on how much the tariffs might rise.

World Green Organisation chief executive William Yu Yuen-ping, also a member of the Energy Advisory Committee, urged the companies to better use their “overflowing” surpluses in their fuel cost recovery accounts.

Tariffs are comprised of two components: a basic amount reflecting a company’s operating costs and investments, and the fuel clause charge, which is based on what the company projects it will pay for fuel for the year.

William Yu of World Green Organisation says the companies should use their surpluses more carefully. Photo: May Tse

Critics have claimed the local power suppliers routinely overestimate their fuel costs and amass huge surpluses.

In recent years, the two managed to freeze or cut their tariffs thanks to savings from lower fuel costs. Last year, HK Electric offered special rebates to its customers, which saw its tariff drop by 17.2 per cent. CLP Power froze its own charge for 2017.

Yu said the two companies should use the surpluses “more carefully” to stabilise tariffs.

Rise after fall in Hong Kong electricity use linked to subsidies

“We estimate a big share of the surplus has been used up and so the honeymoon period is over.”

Based on his group’s research, Yu believed the tariffs would increase by one or two per cent.

Economist and fellow committee member Billy Mak Sui-choi said the expansion of the power companies’ fixed asset bases, such as building new gas-fired units and offshore liquefied natural gas terminals, a pattern reflected in Nova Scotia's 14% rate hike recently approved by regulators, would also cause tariffs to rise.

To fight climate change and improve air quality, the government has pledged to cut carbon intensity by between 50 and 60 per cent by 2020. Officials set a target of boosting the use of natural gas for electricity generation to half the total fuel mix from 2020.

Both power companies are privately owned and monitored by the government through a mutually agreed scheme of control agreements, akin to oversight seen under the UK energy price cap in other jurisdictions. These require the firms to seek government approval for their development plans, including their projected basic tariff levels.

At present, the permitted rate of return on their net fixed assets is 9.99 per cent. The deals are due to expire late next year.

Earlier this year, officials reached a deal with the two companies on the post-2018 scheme, settling on a 15-year term. The new agreements slash their permitted rate of return to 8 per cent.

 

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PG&E Supports Local Communities as It Pays More Than $230 Million in Property Taxes to 50 California Counties

PG&E property tax payments bolster counties, education, public safety, and infrastructure across Northern and Central California, reflecting semi-annual levies tied to utility assets, capital investments, and economic development that serve 16 million customers.

 

Key Points

PG&E property tax payments are semi-annual county taxes funding public services and linked to utility infrastructure.

✅ $230M paid for Jul-Dec 2017 across 50 California counties

✅ Estimated $461M for FY 2017-2018, up 12% year over year

✅ Investments: $5.9B in grid, Gas Safety Academy, control center

 

Pacific Gas and Electric Company (PG&E) paid property taxes of more than $230 million this fall to the 50 counties where the energy company owns property and operates gas and electric infrastructure that serves 16 million Californians. The tax payments help support essential public services like education and public health and safety actions across the region.

The semi-annual property tax payments made today cover the period from July 1 to December 31, 2017.

Total payments for the full tax year of July 1, 2017 to June 30, 2018 are estimated to total more than $461 million—an increase of $50 million, or 12 percent, compared with the prior fiscal year, even as customer rates are expected to stabilize in the years ahead.

“Property tax payments provide crucial resources to the many communities where we live and work, supporting everything from education to public safety. By continuing to make local investments in gas and electric infrastructure, we are not only creating one of the safest and most reliable energy systems in the country, including wildfire risk reduction programs and related efforts, we’re investing in the local economy and helping our communities thrive,” said Jason Wells, senior vice president and chief financial officer for PG&E.

PG&E invested more than $5.7 billion last year and expects to invest $5.9 billion this year to enhance and upgrade its gas and electrical infrastructure amid power line fire risks across Northern and Central California.

Some recent investments include the construction of PG&E’s $75 millionGas Safety Academy in Winters in Yolo County, which opened in September. Last year, PG&E opened a $36 million, state-of-the-art electric distribution control center in Rocklin.

PG&E supports the communities it serves in a variety of ways. In 2016, PG&E provided more than $28 million in charitable contributions to enrich local educational opportunities, preserve the environment, and support economic vitality and emergency preparedness and safety, including its Wildfire Assistance Program for impacted residents. PG&E employees provide thousands of hours of volunteer service in their local communities. The company also offers a broad spectrum of economic development services to help local businesses grow.

 

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