PSC should approve the settlement with We Energies

From an editorial in the Milwaukee Journal Sentinel:

The state Public Service Commission [PSC] appears to have taken a reasonable approach to We Energies' request for an increase in rates for electricity customers, granting some but not all of what the utility was asking. While any increase hurts consumers during a time of recession, the reality is that We Energies needs to cover costs related to building power plants, transmission lines costs and employee pensions.

Wisconsin needs reasonable power costs to attract and retain businesses, but it also needs reliable power. The PSC is striving to make sure the state has both.

But commissioners delayed making a decision on one aspect of the rate request. That delay could hurt Wisconsin consumers and the environment. Commissioners should reconsider, and grant the request without any delay.

At stake is a settlement We Energies reached in 2008 with environmental groups involving cooling methods for its new coal plants in Oak Creek. The settlement was a victory for all sides, allowing the utility and its partners to complete the plants in a timely manner, providing help for Lake Michigan in the form of funds for restoration initiatives and expanding renewable energy in Wisconsin.

The $105 million settlement will be paid for mostly by electric customers, but that price tag will be far less than it could have been under a protracted legal battle over the plant's cooling system. The utilities involved and the environmental groups who fought the plant worked hard to reach a compromise that serves everyone.

But that compromise could be put in jeopardy if the PSC rejects the portion of the rate hike request designed to cover the cost of the settlement. The environmental groups could decide that their work was wasted if there is a significant delay in getting the restoration money for Lake Michigan. And re-opening the lawsuit could mean more costs to ratepayers if the groups prevail.

Sec. Chu announces $620 million for smart grid demonstration and energy storage projects

From a news release issued by the U.S. Department of Energy:

COLUMBUS, OHIO – At an event in Columbus, Ohio this afternoon [November 24], Secretary Chu announced that the Department of Energy is awarding $620 million for projects around the country to demonstrate advanced Smart Grid technologies and integrated systems that will help build a smarter, more efficient, more resilient electrical grid. These 32 demonstration projects, which include large-scale energy storage, smart meters, distribution and transmission system monitoring devices, and a range of other smart technologies, will act as models for deploying integrated Smart Grid systems on a broader scale. This funding from the American Recovery and Reinvestment Act will be leveraged with $1 billion in funds from the private sector to support more than $1.6 billion in total Smart Grid projects nationally.

An Associated Press article posted on WKBT-TV (La Crosse):

Federal energy officials have handed Wisconsin $10 million to improve electrical grids.

The money is part of $620 million in stimulus money that will support 32 grid improvement projects across the country. Projects include large-scale energy storage, monitoring devices and other technological upgrades that will serve as models for the rest of the nation.

U.S. Department of Energy officials say Wisconsin's share of the stimulus money will go toward a $21 million effort by Waukesha Electric Systems to develop a smaller, more efficient utility substation transformer.

RENEW brief supports Glacier Hills Wind Park

From RENEW Wisconsin's brief filed with the Public Service Commission in support of the Glacier Hills Wind Park:

The design of the proposed Project is in the public interest first and foremost because it will be powered by wind rather than fossil fuels. Wind energy is a locally available, self-replenishing, emission-free electricity source. Fossil fuels, on the other hand, must be imported, are available in limited quantities, and emit pollutants. Moreover, using wind energy furthers the State’s policy goal that all new installed capacity for electric generation be based on renewable energy resources to the extent cost-effective and technically feasible. Wis. Stat. § 1.12(3)(b).

In his direct testimony, RENEW Wisconsin witness Michael Vickerman outlined a number of other public policy objectives that would be advanced by the construction of Glacier Hills. These include:
1. Helping Wisconsin Electric Power Company (“WEPCO”) meet its renewable energy requirements under Wis. Stat. § 196.378(2)(a)(2)d;
2. Securing adequate supplies of energy from sustainable sources;
3. Protecting ratepayers from rising fossil fuel prices;
4. Reducing air and water emissions from generation sources;
5. Preserving working farms and pasture land;
6. Generating additional revenues for host towns and counties;
7. Reducing the flow of capital out of Wisconsin for energy purchases; and
8. Investing Wisconsin capital in a wealth-producing energy generating facility within its borders. (Tr. D7.3-7.4.)

Report: Nuclear power will set back race against climate change

From a news release issued by Wisconsin Environment:

Madison, WI - Far from a solution to global warming, nuclear power will actually set America back in the race to reduce pollution, according to a new report by Wisconsin Environment. Leading environmental organizations, consumer groups and energy experts gathered today to release the report and call on state and federal leaders to focus on energy efficiency and renewable energy instead of nuclear power as the solution to global warming. . . .

Wisconsin Environment’s new report, Generating Failure: How Building Nuclear Power Plants Would Set America Back in the Race Against Global Warming, analyzes the role, under a best-case scenario, that nuclear power could play in reducing global warming pollution. Some key findings of the report include:

• To avoid the most catastrophic impacts of global warming, America must cut power plant emissions roughly in half over the next 10 years.
• Nuclear power is too slow to contribute to this effort. No new reactors are now under construction in the United States. Building a single reactor could take 10 years or longer. As a result, it is quite possible that nuclear power could deliver no progress in the critical next decade, despite spending billions on reactor construction.
• Even if the nuclear industry somehow managed to build 100 new nuclear reactors by 2030, nuclear power could reduce total U.S. emissions of global warming pollution over the next 20 years by only 12 percent -- far too little, too late.
• In contrast, energy efficiency and renewable energy can immediately reduce global warming pollution. Energy efficiency programs are already cutting electricity consumption by 1-2 percent annually in leading states, and the U.S. wind industry is already building the equivalent of three nuclear reactors per year in wind farms. America has vast potential to do more.
• Building 100 new reactors would require an up-front investment on the order of $600 billion dollars – money which could cut at least twice as much carbon pollution by 2030 if invested in clean energy. Taking into account the ongoing costs of running the nuclear plants, clean energy could deliver 5 times more pollution-cutting progress per dollar.
• Nuclear power is not necessary to provide clean, carbon-free electricity for the long haul. The need for base-load power is exaggerated and small-scale clean energy solutions can actually enhance the reliability of the electric grid.

To address global warming, state and federal policy makers should focus on improving energy efficiency and generating electricity from clean sources that never run out – such as wind, solar, biomass and geothermal power, according to Wisconsin Environment and the coalition groups that attended today’s event.

Homegrown Renewable Energy Campaign touts renewable energy buyback rates

From a fact sheet issued by the Homegrown Renewable Energy Campaign:

An innovative way to encourage more smaller-scale renewable energy systems by paying premiums to customers for wind, solar, biogas or biomass electric generation.

How are they different from standard utility buyback rates?
Unlike standard buyback rates, Renewable Energy Buyback Rates provide a fixed purchase price for the electricity produced over a period of 10 to 20 years. They are set at levels sufficient to fully recover installation costs along with a modest profit. Because the purchase price is guaranteed over a long period, Renewable Energy Buyback Rates make it easy for customers to obtain financing for their generation projects.

Why don’t utilities pursue these small-scale renewable projects themselves?
In general, the smaller the generating facility, the less likely it is owned by a utility. Utilities tend to favor bulk generation facilities that employ economies of scale to produce electricity at a lower cost. Renewable power plants owned by
utilities—such as large wind projects—are sized to serve their entire territory, not just a particular distribution area. For that reason utilities have shown little appetite for owning and operating distributed generation facilities powered with
solar, biogas, wind, and hydro.

If utilities won’t invest in small-scale renewable projects, how will they get built?
Clearly, the capital needed to build smaller-scale renewable projects has to come from independent sources—either customers or third parties. There is no shortage of investor interest in these systems, and sufficient capital is available. What’s needed to finance these projects is a predictable, long-term purchasing arrangement that assures full capital recovery if the project performs according to expectations. That’s where Renewable Energy Payments come into play.

The staggering cost of new nuclear power

From an article by Joseph Room on Center for American Progress:

A new study puts the generation costs for power from new nuclear plants at 25 to 30 cents per kilowatt-hour—triple current U.S. electricity rates!

This staggering price is far higher than the cost of a variety of carbon-free renewable power sources available today—and 10 times the cost of energy efficiency (see “Is 450 ppm possible? Part 5: Old coal’s out, can’t wait for new nukes, so what do we do NOW?”

The new study, “Business Risks and Costs of New Nuclear Power,” is one of the most detailed cost analyses publically available on the current generation of nuclear power plants being considered in this country. It is by a leading expert in power plant costs, Craig A. Severance. A practicing CPA, Severance is co-author of The Economics of Nuclear and Coal Power (Praeger 1976), and former assistant to the chairman and to commerce counsel, Iowa State Commerce Commission.

This important new analysis is being published by Climate Progress because it fills a critical gap in the current debate over nuclear power—transparency. Severance explains:

All assumptions, and methods of calculation are clearly stated. The piece is a deliberate effort to demystify the entire process, so that anyone reading it (including non-technical readers) can develop a clear understanding of how total generation costs per kWh come together.

As stunning as this new, detailed cost estimate is, it should not come as a total surprise. I detailed the escalating capital costs of nuclear power in my May 2008 report, “The Self-Limiting Future of Nuclear Power.” And in a story last week on nuclear power’s supposed comeback, Time magazine notes that nuclear plants’ capital costs are “out of control,” concluding:

Most efficiency improvements have been priced at 1¢ to 3¢ per kilowatt-hour, while new nuclear energy is on track to cost 15¢ to 20¢ per kilowatt-hour. And no nuclear plant has ever been completed on budget.

Time buried that in the penultimate paragraph of the story!

ZBB gets order for renewable energy project in Canada

From a story in Business Times:

Menomonee Falls-based ZBB Energy Corp. today announced that it has received an order for four standard, modular ZESS 50 energy storage systems from Powertech Labs, a subsidiary of BC Hydro, for the Bella Coola Hydrogen Assisted Renewable Power (HARP) project in Bella Coola, British Columbia.

The ZESS energy storage systems will be used as part of a demonstration project that uses multiple components (power generation, utilization, storage, and dispatch optimization) to provide electrical power to an isolated remote area grid with the goal of reducing reliance on diesel generation and the reduction of greenhouse gas emissions in remote communities in British Columbia.

The project objective is to increase the utilization of BC Hydro’s Clayton Falls small hydro plant and reduce the reliance on diesel generators at its Ah Sin Heek generating facility. The ZESS units will be used to store excess power from Clayton Falls, to be later dispatched during periods when Clayton Falls is unable to supply sufficient power to the community.