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

Mon Nov 22 20:55:22 CST 2010

Ken and Merle

Here's another perspective on the issue of somebody spending our money on things we don't want.  This is specific to the PEC - and a highly relevant and current issue.

If the majority of PEC owners want to spend more of our PEC money on green power, I suspect most owners - even those who'd vote against the idea - would defer to the preference of the majority, so long as the spending stays within reasonable bounds.

What raises my ire, though, is the apparent intent of some green power advocates (probably including some Board members) to aggressively push their agendas 
·        Without bothering to find out how much support or objection there might be among the owners, 
·        Without any debate over whether this is an issue that might best be decided by the owners, and 
·        Without any open debate over costs v. benefits of green power specific to the PEC.

It may be that the philosophy of some of these advocates is that their cause is so noble, their means justify the ends,  "Noble" is not an apt description, though, of this philosophy or of the means being pursued, or of anyone supporting this philosophy or these means.

Carlos Higgins
Austin, TX
512 258 3564 CarlosTX at sbcglobal.net

--- On Mon, 11/22/10, TEXAS66 at aol.com <TEXAS66 at aol.com> wrote:

From: TEXAS66 at aol.com <TEXAS66 at aol.com>
Subject: Re: [Watchdogs] Note the "Cost Factor": "Local solar farm gets powered up" [S...
To: mlmoden at gmail.com
Cc: watchdogs at pec4u.org
Date: Monday, November 22, 2010, 7:46 PM

Merle:  I don't think I thought enough about my comment.  Upon reflection, it isn't an "ism" - instead it's a "gritch".  My gritch is somebody else taking my money and spending it on something I don't support which is beyond the scope of the job I paid my money to accomplish.  I can't put that into a definitive category, unless it's theft.  I cannot and should not argue the relative merits of capitalism versus any of the other "isms" here, and I think you're observation that socialism doesn't fit here is correct.

Thanks for your observation, 

Ken Rigsbee

In a message dated 11/22/2010 7:08:24 P.M. Central Standard Time, mlmoden at gmail.com writes:
Ken:

The basic definition of socialism is government ownership of the means of production and distribution.  Are you implying that there must be socialism to ensure responsible behavior by business?  Are capitalists allowed to harm public health by poisoning the air, land, and water (read annual deposition of millions of tons of methyl mercury, sulfur dioxide, oxides of nitrogen, etc.) in order the provide cheap power?  Each year, there are thousands of premature deaths and many thousands more who suffer from power plant pollution.  I prefer responsible capitalism, you know, where you do your thing without causing harm to others.  I do not see where socialism fits into this discussion.

Merle

On 11/11/2010 10:16 AM, TEXAS66 at aol.com wrote: 

Well, I certainly didn’t intend to be intellectually dishonest and morally scurrilous.  I simply looked at the quoted 16 cents/Kwh (per the San Antonio Express article) and compared it with the also quoted 2 cents/Kwh.  That seems to me to be eight-times as much.  
I’m not into “hidden costs”, and I respectfully don’t think the PEC should be, either.
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.
I always thought the “social responsibility” of a cooperative related to their task of providing electricity to their members at the lowest cost possible.  I know community responsibility also spreads over to supporting the community activities of the Co Op’s members.
Maybe I’m just not enlightened enough to recognize all of the implied and imposed social responsibilities of a business.  I guess that illustrates the difference between capitalism and socialism.
  Ken Rigsbee

In a message dated 11/11/2010 1:41:00 A.M. Central Standard Time, andy.citizen at gmail.com writes:
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

>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.”
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-- 
Mr. Merle L. Moden
1111 Thompson Ranch Road
Wimberley, Texas 78676-6129
512 847-1335
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