Energy Market Update - Sustainability Corner

LevelTen Energy’s snapshot on U.S. and EU Power Purchasing Agreement (PPA) pricing is below. For more information on LevelTen please visit www.leveltenenergy.com.

Federal and State Policy Landscape

PJM: New Jersey Governor Signs Energy Storage Expansion Bill

• PJM Board responded (3/30 and 4/01) to letters from the IL and NJ Governors and National Caucus of Environmental Legislators NCEL about PJM resource adequacy initiatives.
• Governors’ concerns: the MW threshold for Expedited Interconnection Track (EIT) eligibility (and potential impacts on new storage) and the definition of “state-sponsored” projects for siting/permitting.
• Board on MW threshold: intended to limit projects studied to reduce delays in current/upcoming interconnection cluster studies; resource-agnostic and solar+storage hybrids should be able to meet it.
• Board on siting definition: PJM clarified “primary siting authority” in the final filing to distinguish siting from permitting and focus on authority relevant to EIT; siting authority may be exercised by any governmental subdivision of a state.
• NCEL position/concerns: supported extending the capacity market price collar; raised concerns about EIT eligibility and aspects of backstop procurement (eligible supply; potential exclusion of large loads from future Base Residual Auctions).
• Board to NCEL: pointed to recent PJM filings (price collar and EIT extensions) and stakeholder work on backstop procurement; said it would consider NCEL concerns as it develops a proposal; noted prior capacity auction delays were partly due to efforts to reform the Minimum Offer Price Rule.

NYISO: New York Budget Still Under Development

• Gov. Kathy Hochul and state lawmakers missed the 4/1 deadline to finalize New York’s state budget.
• The delay is due to disagreements over taxes, scaling back provisions of the state’s existing climate law, and reforming car insurance regulations.
• Hochul is seeking to revise New York’s climate law by softening near-term 2030 GHG emission-reduction requirements.
• Hochul is proposing a new interim 2040 emissions-reduction target that is non-binding.
• The Hochul Administration cites the high projected price tag of the proposed cap and invest program as rationale for adjusting the law, while signaling talks may include potential new funding for climate action.
• Hochul is also advancing changes to the state’s emissions “accounting” approach, favoring a 100-year methodology over New York’s adopted 20-year methodology.

ERCOT: Applications Open for New Nuclear Reimbursement Grants

• 4/1: Texas Advanced Nuclear Energy Office (TANEO) launched two reimbursement programs: PDSCRP and ANCRP.
• Who can apply: Businesses, nonprofit organizations, and governmental entities, including institutions of higher education.
• PDSCRP (Project Development and Supply Chain Reimbursement Program): 
  • Up to $12.5 million total, reimbursement-based, covering 50% of applicant costs.
  • Eligible expenses include technology development (including university research); feasibility studies; site planning/engineering studies; front-end engineering design; site & environmental characterization; NRC early site permit work; preparation of NRC construction permits/license applications; manufacturing capacity development; fuel processing & fabrication; local/state/non‑NRC federal permits; and NRC licensing fees.
• ANCRP (Advanced Nuclear Construction Reimbursement Program):
  • Up to $120 million total, reimbursement-based, covering 50% of applicant costs.
  • Eligible expenses include NRC review of construction permits/license applications, procurement/development of long-lead components, and construction activities.

EPA New Source Performance Standards (NSPS)for Stationary Combustion Turbines: Final Rule

(40 CFR Part 60, Subpart KKKKa | Final: Jan 15, 2026)

What EPA Finalized

• EPA finalized amendments to the New Source Performance Standards (NSPS) for stationary combustion and gas turbines under the Clean Air Act
• Establishes a new subpart (KKKKa) replacing prior requirements under Subparts GG and KKKK for covered units
• Regulates NOₓ and SO₂ emissions only; no new standards for PM or CO

Who Is Affected

• New, modified, or reconstructed stationary combustion turbines that commenced construction after Dec 13, 2024
• Applies across power generation and industrial uses
• Turbines subject to Subpart KKKKa are no longer subject to GG or KKKK

Key Requirements & Impacts

How Standards Are Structured

•  EPA created new subcategories based on:
  • Turbine size (heat input)
  • Utilization rate (12‑month capacity factor; 45% threshold)
  • Design efficiency (for certain large, low‑utilization turbines)            
• Added a new subcategory for stationary temporary turbines NOₓ & SO₂ Standards
  • NOₓ:
    • Combustion controls = BSER for most turbine subcategories
    • Combustion controls + SCR required only for new, large, high‑utilization turbines (>45%)
  • SO₂:
    • EPA retained existing SO₂ limits (no change from prior NSPS)
    • Allows fuel sulfur records to demonstrate compliance

EPA‑Reported Outcomes

• Estimated NOₓ reductions of up to 296 tons per year by 2032
• Estimated industry cost savings up to $87M over 8 years compared to the proposal
• EPA did not monetize public‑health benefits for this final rule

For questions on these items and more please reach out to SustainabilityTeam@Constellation.com and your inquiry will be directed to an inhouse expert.