[Watchdogs] Note the "Cost Factor": "Local solar farm gets powered up" [S...

Fri Nov 12 01:30:14 CST 2010

Let me make a MAJOR correction.  I said something that was patently false,
and I apologize.  I was looking for a figure for annual subsidies to fossil
fuels, and found the $2 trillion number, which was NOT annual-- it was an
estimate of cumulative subsidies since the energy crisis of the 70's, but
did not correct what I had already typed.  I apologize and thanks for
catching that incredibly glaring error.

On Thu, Nov 11, 2010 at 11:47 AM, Andy Wilson <andy.citizen at gmail.com>wrote:

> Ah yes, PTC's-- as opposed to the 6:1 ratio of subsidies governments spend
> on fossil fuels compared to renewable energy.  Coal and oil combined in the
> US are subsidized to the tune of almost $2 trillion a year. Or the 1.8 cent
> / kWh PTC nuclear receives compared to 2.1 cents for wind.  Nuclear which
> has been around as an industry since WWII and still can't exist without
> massive government subsidies, while the wind PTC is set to expire in 2012.
>
> Was it planned maintenance that cause STP 1 and 2 to go down this last
> week?  Or Indian Point in New York?  No, transformer fires and explosions.
> LCRA doesn't disclose when their plants go down unexpectedly, but it
> occurs.  And for wind, patterns are fairly predictable and they have good
> idea of when wind will and won't blow.  Same for sun.  Hurricanes disrupt
> oil and gas production in the Gulf. None of these resources exist without
> some form of intermittency-- but it's only about wind and solar that the
> standard is ever applied.
>
> I forgot-- subsidies for coal, oil, gas, and nukes are fine, but not for
> that evil, socialist wind. And intermittency for fossil fuels is fine and
> the market picks up the slack, but puts us all at risk when the wind doesn't
> blow.
>
> On Thu, Nov 11, 2010 at 11:16 AM, Williams, Mark (San Antonio) <
> Mark.Williams at valero.com> wrote:
>
>>  Coal, natural gas and nuclear plants down for maintenance is planned.
>> The lack of wind and cloudy days are not.
>>
>>
>>
>> Coastal wind may be, but the wind farms in Texas have been built out west.
>>
>>
>>
>> “If you, instead, build some natural gas but hedged with renewables so
>> you don't have to pay the commodity prices when the wind blows and sun
>> shines.”  My point exactly – you have to figure in the cost of wind or
>> solar the cost of fossil fuel as a backup.
>>
>>
>>
>> “And if wind is so expensive compared to conventional power, why are
>> electrical rates in the ERCOT West zone consistently cheaper than elsewhere
>> in the state? “ Production tax credits and stranded power make the West
>> zone cheaper.
>>
>>
>>
>> Mark
>>
>>
>>
>> *From:* watchdogs-bounces at pec4u.org [mailto:watchdogs-bounces at pec4u.org]
>> *On Behalf Of *Andy Wilson
>> *Sent:* Thursday, November 11, 2010 10:59 AM
>> *To:* watchdogs at pec4u.org
>>
>> *Subject:* Re: [Watchdogs] Note the "Cost Factor": "Local solar farm gets
>> powered up" [S...
>>
>>
>>
>> If there is to be a renewables policy of PEC, it will have to be passed by
>> the board.  We do not have one yet, so any discussion is largely a
>> hypothetical exercise on our part.
>>
>> I don't think the board has indicated it will be voted on by members, but
>> they will vote on it in public in an open meeting as our duly designated
>> representatives.
>>
>> As for needing backup, I ask you about backup to conventional generation.
>> Compare how often wind farms are down due to lack of wind to how often coal,
>> natural gas, and nuclear plants are off for maintenance or breakdown.
>> They're very similar, so you're talking about something that is equal across
>> classes of power production. Also, wind is a different kind of power--
>> especially talking about coastal wind which blows especially during peak--
>> it is balancing load rather than baseload.
>>
>> But this is why efficiency is the greatest renewable resource-- it never
>> goes down, it never depends on weather, it is always saving power,
>> generating NegaWatts, so thank you for making my point for me about why a
>> robust retrofit and efficiency program is even more important and
>> complimentary to a smart renewables program.
>>
>> But all other things being equal, if you need peak, balancing power, and
>> you build a natural gas plant, then you just burn that gas whenever you need
>> it and are stuck paying whatever the market dictates you pay for natural
>> gas.  Guess what?  California did this in the 90s and experience some of the
>> most volatile electric prices and reliability issues in the country: Henry
>> Hub historical price trends:
>> http://en.wikipedia.org/wiki/File:Henry_hub_NG_prices.svg  I think we
>> should learn from their mistakes rather than be doomed to repeat their
>> failure.  If you, instead, build some natural gas but hedged with renewables
>> so you don't have to pay the commodity prices when the wind blows and sun
>> shines.
>>
>> And if wind is so expensive compared to conventional power, why are
>> electrical rates in the ERCOT West zone consistently cheaper than elsewhere
>> in the state?   WIND. Wind that will soon flow into our zones thanks to CREZ
>> lines, cutting our power costs, too.  I really don't understand the
>> knee-jerk reaction to renewables.  It makes power cheaper.  If you can't
>> understand that, then I don't know how to explain it any more simply.
>>
>> To date, I have never heard articulated a plan for how to deal with the
>> explosive growth in electrical demands from the co-op other than keep doing
>> what we're doing and expecting different results.
>>
>> As for Ken's argument, "Seems to me that no plant I ever had anything to
>> do with was ever fully depreciated.  Seems to me that the capital
>> investments required for the necessary enhanced environmental protections
>> often approached the total capital investment for the original plants, and
>> the relative economics were often pretty much unchanged over time per unit
>> of output."  Then, by that argument, there simply is no such plant that
>> produces power at 2 cents a kWh.  Regardless, you still have two distinct
>> classes of resources: old generation and new generation. Old is cheaper, but
>> can't be compared to new generation.  Only different types of new generation
>> can be compared to one another as opportunity costs for one another.  This
>> is Economics 101-- and so is this:
>>
>> Just because you're not "into" hidden costs doesn't mean they don't exist
>> and aren't worth considering. Here's a more technical term for you if you
>> don't like "hidden costs"-- externalities. That's like me saying I'm not
>> "into" capital depreciation or "into" marginal fuel costs.  Externalities
>> exist, and just because you exclude them from your accounting doesn't make
>> them go away, and if you fail to take them into account you are not being
>> honest about the true cost of energy and the market in which it operates.
>>
>> As for comparing this kind of rational economic analysis that take into
>> account all externalities to socialism, give me a break.  I presented a
>> rationalized accounting of all aspect of power generation, making an
>> argument for why it is fiscally responsible to our members to pursue
>> efficiency and renewables.  If that makes me a socialist, then someone
>> please alert the economists.
>>
>> As for whether the social responsibility element of the co-op should only
>> be relegated to providing low cost power, then that is a question up for
>> democratic vote, another hallmark of cooperatives over traditional IOUs.
>> Co-op owner members have elected their board, and they are making those
>> determinations.  If owner-members disagree with those expressions, then they
>> are free to vote for candidates of their choice.  As of now, they have
>> elected this board.
>>
>> What I hear more and more from this Watchdog group is the following, and
>> it seems extremely short-sighted and contradictory:  We disapprove of the
>> economic stewardship of the co-op under the Fuelberg days, but support
>> completely his vision for how we get our power.  If you wanted fossil fuels
>> and the risk associated with it, Bernie (his high paid lobbyists, his
>> cohorts at TEC, TAM, TxOGA, etc,) was your guy.
>>
>> On Thu, Nov 11, 2010 at 8:47 AM, Milton Hawkins <milton.hawkins at gmail.com>
>> wrote:
>>
>> Friends,
>>
>> Andy writes: "So what is the job and mission of PEC? Co-ops can differ
>> from profit-driven utilities in being more socially responsible, based on
>> *a democratic vote of our members, which is what we will have once we
>> have a proposal from the board and a free and fair vote in public*."  (my
>> emphasis)
>>
>> This is news to me!  Are we getting a proposal from the Board regarding
>> renewables that we are going to be allowed to vote on?  When is this to
>> happen, and in what form?  (This Board hadn't even gotten the proposed
>> Bylaws on the web site as part of the November Board Packet the last time I
>> looked, which was five minutes ago.)
>>
>> Milton
>>
>>
>>
>> On Thu, Nov 11, 2010 at 7:49 AM, Williams, Mark (San Antonio) <
>> Mark.Williams at valero.com> wrote:
>>
>> For full disclosure,  I am the one preaching about generational theft.
>>
>>
>>
>> Talking about hidden costs, wind power and solar need fossil fuel to back
>> them up with the wind stops blowing and the sun is blocked by clouds.  So
>> you cannot look at just the cost for building a wind or solar farm.  You
>> need to include the backup power source.
>>
>>
>>
>> It does not matter if it is a cloudy or windless day, fossil fuel can
>> produce the lowest full cost electricity.
>>
>>
>>
>> Mark “Preacher of Generational Theft” Williams
>>
>>
>>
>>
>>
>>
>>
>> *From:* watchdogs-bounces at pec4u.org [mailto:watchdogs-bounces at pec4u.org]
>> *On Behalf Of *Andy Wilson
>> *Sent:* Thursday, November 11, 2010 1:41 AM
>> *To:* TEXAS66 at aol.com
>> *Cc:* watchdogs at pec4u.org
>> *Subject:* Re: [Watchdogs] Note the "Cost Factor": "Local solar farm gets
>> powered up" [S...
>>
>>
>>
>> 8 times the cost?  You're comparing apples and oranges:  new generation to
>> plants that are already paid off.   They're completely different animals and
>> it's intellectually dishonest and morally scurrilous to conflate the two.
>> If you want to make a real comparison, then you're comparing cost estimates
>> for Sun Edison (16 cents) to cost estimates for new coal, such as Spruce II,
>> at 12-14 cents.  There, the difference IS marginal.  And with the responses
>> to RFP's I saw promising to deliver solar for 12-14 cents, the cost is THE
>> SAME.
>>
>> But you're right-- what is the job and mission of PEC?  According to the
>> principles of co-operatives, it is not only to provide power for lowest
>> possible cost but also to consider the sustainable development of the
>> communities whom they serve. http://www.ica.coop/coop/principles.html
>>
>> And so I ask, at what price "lowest cost"? In fact, lowest cost is a
>> misnomer: by some calculations, the hidden costs of coal due to health
>> impacts alone would increase its price 3-5 cents / kWh.  So should we buy
>> more of our power from a coal plant like Fayette, which, while cheap on
>> paper now, faces major cost increases in the next 1-3 years, and has been
>> linked to increased asthma in our communities, the Fayette plant alone being
>> linked to over 60 early deaths annually by Physicians for Social
>> Responsibility:  http://www.nap.edu/openbook.php?record_id=12794&page=1
>> http://www.ucsusa.org/clean_energy/technology_and_impacts/impacts/the-hidden-cost-of-fossil.html
>> So coal is not only rife with hidden costs, ts actual costs are too high.
>>
>> And natural gas is no picnic either, with our friends who live up over the
>> Barnett Shale being able to light their tap water on fire, and emissions
>> being linked to not only asthma, but also a cancer cluster.  All of these
>> hidden costs add up, some of which are born by us directly, and others which
>> affect our neighbors.
>>
>> A few weeks back, someone was preaching about how "immoral" it was to
>> burden a future generation with debt.  How much more immoral is it to ask
>> not only our own co-op members but our neighbors around the state to bear
>> these huge hidden costs, all in the name of "cheap" electric bills?
>>
>> So what is the job and mission of PEC? Co-ops can differ from
>> profit-driven utilities in being more socially responsible, based on a
>> democratic vote of our members, which is what we will have once we have a
>> proposal from the board and a free and fair vote in public.  We have a
>> different business model from an investor owned utility, and far from being
>> "a research facility", we can learn from other co-ops that have adopted
>> wildly successful programs and merely do the same. I support that as an
>> owner-member, as do most of my neighbors, which is what we voted for when we
>> voted for these current board members.
>>
>> On Wed, Nov 10, 2010 at 11:53 PM, <TEXAS66 at aol.com> wrote:
>>
>> Thank you Andy.  I don't consider eight-times the cost to be "marginal".
>> Nonetheless, the issue here is what is the job and mission of the PEC?
>> Frankly, I really don't care what political spin is on anybody's mind, the
>> PEC which we own to whom we pay for electricity is supposed to deliver (not
>> generate) electricity to us members for the lowest-possible cost.  The PEC
>> is not a research facility.  The PEC can't do job 1 efficiently now.  Unless
>> and until they can, don't count on my support or endorsement of so-called
>> renewables.
>>
>>
>>
>> -- Ken Rigsbee
>>
>>
>>
>> In a message dated 11/10/2010 11:09:39 P.M. Central Standard Time,
>> andy.citizen at gmail.com writes:
>>
>> Just FYI, we did a series of TPIA requests on the responses to this RFP--
>> CPS paid a premium and there were SEVERAL companies that came in with much
>> lower bids.  And if you want to listen to what the guys at TAM have to say
>> about how to run our co-op, those are the exact same guys in bed with TEC,
>> Feulberg, etc.  Their spin does not have the actual best interests of co-op
>> members in mind.
>>
>> Yes, renewables are marginally more expensive-- for now.
>>
>> As I've previously said, the costs of coal are going up.  Even without a
>> price on carbon, new standards for smog and acid rain will cause coal to
>> become more expensive.  I've previously said prices for natural gas are
>> going up-- let me correct myself:  the price for NG now are at almost
>> historical lows.  While they are not going up now, they have no place to go
>> BUT up.  And given the volatility NG prices showed, say, in 2008, it is not
>> something we want to build the fiscal soundness of the co-op on.  Continuing
>> to back only coal and gas for our electrical production may mean low rates
>> for you today but serious problems for rates in the future.
>>
>> Renewables provide a hedge against rising prices, volatility, and future
>> regulation.  We can look at the market forecasts and see that renewable
>> energy is the future.  Even Barry Smitherman, conservative chair of the PUC,
>> has said he doesn't want to be a coal plant in East Texas when the CREZ
>> transmission lines are finished in the next two years.  Why?  Because wind
>> is already cost-competitive with standard generation and solar has just
>> become competitive with nuclear.  This is why Golden Spread Co-op just
>> purchased a portion of wind farm outside Amarillo:
>> http://amarillo.com/news/local-news/2010-10-02/co-op-buys-wind-project
>>
>> The purchase and construction come at a good time, said Hornaday.
>>
>> "There's a lull in the industry, so they got good terms," he said. "It's a
>> smart move in the long run to do this now."
>>
>> The Golden Spread facility will complement the 168 megawatt Antelope
>> Station natural gas project the company is building near Abernathy. The
>> generators at that plant will provide power much of the time, but will also
>> be able to start in less than 10 minutes, are energy efficient and use
>> virtually no water, providing a supplement to the intermittent generation
>> from the wind ranch, Schwirtz said.
>>
>> Besides providing renewable energy, the wind farm should benefit Golden
>> Spread members by hedging against potentially high natural gas costs and
>> future carbon and renewable energy legislation and regulation, according to
>> a news release.
>>
>>
>> And if you would all bother to read the stuff Mike Sloan writes rather
>> than just reference it, you would know that renewables and efficiency have
>> been the downward cost drivers in Austin while coal and traditional
>> generation have been the things busting their budgets.
>>
>> Rather than engaging in meaningless speculation, let's wait and see what
>> the proposals are for efficiency and renewables program so we can discuss
>> those actual proposals rather than the straw man of what is going on in
>> other places, like, say, Virginia, where they have neither the wind nor sun
>> resources that we do.  That's comparing apples and oranges.
>>
>> ~~Andy Wilson
>>
>> On Wed, Nov 10, 2010 at 9:01 PM, Milton Hawkins <milton.hawkins at gmail.com>
>> wrote:
>>
>> Local solar farm gets powered up<http://www.mysanantonio.com/livinggreensa/local_solar_farm_gets_powered_up_107014183.html?showFullArticle=y>
>>
>> From the article:
>>
>> *The cost factor*
>>
>> Electricity generated by solar-photovoltaic technology today costs five
>> times as much to produce as coal-fired energy, according to Bloomberg New
>> Energy Finance.
>>
>> While CPS won't release the price it will pay for Blue Wing power, sources
>> say the utility will pay about 16 cents per kilowatt hour under the deal
>> with SunEdison. Coal power costs the utility 1 to 2 cents per kilowatt hour
>> for plants that are paid off; that jumps to between 7 and 11 cents if the
>> cost of the plant is included.
>>
>> Solar is costly even compared with other renewable sources, especially
>> wind, which is narrowing the price gap with fossil fuels. The Energy
>> Information Administration predicts that by 2016, photovoltaic power on
>> average will remain more than twice as expensive as wind-generated. . . .
>>
>> *Some still wary*
>>
>> The Texas Association of Manufacturers, which opposed another 2009 bill to
>> establish minimum levels of energy from renewable sources, says it supports
>> “properly structured incentives.” But the group remains wary.
>>
>> “We have concerns with energy projects that are based on government
>> mandates and are ultimately funded by captive ratepayers,” executive
>> director Luke Bellsnyder said in a statement. *“Projects that are only
>> financially possible because the costs will be passed on to customers —
>> through above-market rates — are not a good deal for consumers and
>> businesses.”*
>>
>> - Sent using Google Toolbar
>>
>>
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>>
>>   --
>>
>> Milton Hawkins  milton.hawkins at gmail.com
>>
>> P.O. Box 1502
>> Johnson City, Texas 78636-1502
>> 830-868-9075
>>
>>
>>
>
>
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