Friday, March 09, 2007

Public Comments on Energy

It was wall to wall policy wonks last night at the PSC's hearing on energy options for Delaware.
And, as Aaron Nathan reports in the News Journal, most speakers (including this blogger) prefer wind power to coal or natural gas:
Most of the speakers instead said they liked a proposed wind farm that would feature 200 turbines in the Atlantic Ocean off Rehoboth Beach or Bethany Beach.
"The conventional wisdom is that the public's environmental interest is in conflict with the public's economic interest," said Tom Noyes, of Wilmington. "But my review of the record leads me to believe that the conventional wisdom has been turned on its head in this case. Burning more fossil fuels doesn't make economic or environmental sense for Delaware."
And Ellen Lebowitz of Newark said global climate change could wreak havoc on the state's coastline.
"Wind is here. It's free from nature. We can harvest it now," she said.
Several people spoke up for the NRG proposal. Robert Carl, business manager of Local 42 of the Heat & Frost Insulators & Asbestos Workers, praised the potential of "clean coal" to produce a "ripple effect" in the economy by creating good paying jobs.
"NRG's commitment to clean fuel seems to be on the right path," he said.
I was impressed by, and learned a great deal from, many of the speakers, many of whom had clearly done their homework.
Also writing in the News Journal, Jeff Montgomery reports that the PSC will release more details from the proposals:
Public Service Commission staffers are expected to call for the release of a substantial amount of information being withheld by companies vying to build a new power plant, a top commission official said Thursday.
The information -- including how the projects would be financed, costs of electricity they would generate, and the amount of pollution they would emit -- has been blacked-out from documents because the companies claim releasing it would put them at a competitive disadvantage.
Here are my prepared remarks from last night, presented with minimum redactions:
I’m Tom Noyes, and I speak as a private citizen. My views are informed by my experience in government negotiating environmentally complex, capital-intensive, long-term contracts, and also by the analytical tools I gained while earning an MBA in finance.
The conventional wisdom is that the public’s environmental interest is in conflict with the public’s economic interest. But my review of the record leads me to conclude that the conventional wisdom has been turned on its head in this case; burning more fossil fuels doesn’t make economic or environmental sense for Delaware. Simply put, 19th century technology is not suited to meet the environmental and economic needs of the 21st century.
This shift in the conventional wisdom is evidenced by the recent $45 billion private equity deal for TXU, which includes abandoning plans to build eight coal powered generating plants in Texas. Further evidence is provided by the rising chorus of business leaders, such as GE CEO Jeff Immelt, speaking out in support of a national policy to control carbon emissions.
The redactions of the proposals make it difficult for even the most informed citizen to evaluate the options. We don’t have all the data, but the PSC’s consultants do. The consultants’ evaluation of the economics of the proposals includes these revealing scores for price stability:
Bluewater 20.0
NRG 0.0
Conectiv 0.7
The result seems inescapable: The NRG and Conectiv proposals offer no meaningful price stability to ratepayers. In particular, NRG and Conectiv seek to place the entire economic burden of compliance with future controls on carbon emission squarely on the shoulders of consumers.
Conectiv is seeking recovery of possible future carbon taxes.
NRG has proposed an exception from provisions that it “absorb any additional environmental compliance costs caused by a change in law,” and its “proposed pricing for [carbon] sequestration is essentially a cost pass-through proposal that is inconsistent with the RFP requirements.”
In other words, Conectiv and NRG want to pass on the potentially large and uncertain costs of future controls on carbon emissions to ratepayers.
Two fundamental realities are driving these cost uncertainties: First, we don’t know what form these controls will take. Second, the technology of carbon sequestration is in its infancy. A forthcoming MIT study estimates that carbon sequestration is likely to increase the cost of electricity and reduce effective power generation by 10 to 30 percent.
Given the technical and economic uncertainties of carbon controls, we are led to the surprising conclusion that wind power is the one option that offers proven technology at a predictable cost.
This is why price stability is such a crucial consideration, in which we see the public’s environmental and economic aligned.
The lack of meaningful price protection in the Conectiv and NRG proposals leads me to conclude that building a fossil fuel plant in Delaware is not in the public interest.
If the PSC and the other agencies involved determine that Bluewater Wind’s proposal does not sufficiently meet the terms of the RFP, then my advice is to first, do no harm by opting for fossil fuels.
These facilities have a useful life well beyond the 25 years specified in the RFP. If our state government makes the wrong decision, we will be living with the economic and environmental consequences long after most of us have retired to the old ratepayers’ home.
The conventional wisdom no longer holds. Environmental and economic considerations are not in conflict, but are aligned; the time for fossil fuel power generation in Delaware has passed.
Thank you.
Citizens have another opportunity to speak on the energy proposals. The hearing scheduled for last Wednesday has been rescheduled for Monday, March 12, 2007 at 7:00 p.m. at Del Tech's Georgetown Campus.


Blogger karmic said...

Tom, way to go man! I loved that you were able to get out there and do your bit.

Thank you!

I was polled by the Univ of Delaware a few months back with a survey re offshore wind power for Delaware.

Needless to say, its obvious which direction I swayed in. :-)

10:17 AM, March 09, 2007  
Anonymous Anonymous said...

In my view wind power, tidal power and solar power are environmentally benign, and desirable. After construction the only costs are for maintenance. My problem arises from the fact that each of these sources are cyclical in their power output. There must be some ready alternative to supply power during the periods of low output from them. Power generation is regulated to match demand. There is no practical means that I am aware of to store power on the necessary scale to supplement low output periods. Utilities usually have a base of generating facilites. In the event of a surge in demand, they have quick start units, usually of gas fired equipment. These are usually more expensive to run and are taken off-line as soon as possible. (Cuts into to the profits.) Gas is a fuel that can only increase in price as supplies dwindle. While coal supplies are considered adequate for centuries, there are the environmental effects of the mining processes and the off-gassing.

There is a system for nuclear based power generation that is environmentally friendly. It is called a fast neutron reactor. With on-site fuel reprocessing, it can utilize 95% of the available energy of the uranium, as opposed to the 5% of present plants. The unusable residue depleted in radioactivity and in a form that has a half-life measured in decades rather than the millenia of current spent fuel rods. Much of what is now stored as waste can be utilized in the process of this kind of plant. While expensive to build, this kind of reactor does not put out green house gasses. It utilizes current waste material cutting the cost of storage facilities. As a self contained facility, built to modern standards, this has to be winning long term solution.

12:01 PM, March 09, 2007  
Anonymous Anonymous said...

"the old ratepayers home"

a classic.

The entire presentation was well written.

And Tomahawk, thanks for the heads up on fast neutron reactors.

2:33 PM, March 09, 2007  
Blogger Tom Noyes said...

Thanks all. I did get a chuckle from the line "old ratepayers' home" even though I was rushing to present my comments within the three minute limit.

As for making use of variable power sources, I have read that there is room for improvement on this score. In some respects, technology for managing the power grid has not advanced as much as it could.

I am aware that some are calling for a fresh look at nuclear power, Jeff Immelt of GE for instance. I am not convinced that the externalities problem--what to do with the waste--has been solved to the point of making it an attractive option in environmental or economic terms.

5:58 PM, March 09, 2007  
Anonymous Anonymous said...

Nuclear waste is that energy source's Achilles' heel. That is why I was intrigued to hear of a half-life only decades long.

I know too little about this new technology to comment at this time. But it could hold promise as more and more Americans start to realize the real cost of transferring carbon, which has lain safely under the earth's surface, to full exposure among the atmosphere.

7:07 PM, March 09, 2007  
Anonymous Anonymous said...

Info on fast neutron reactors was presented in an issue of Scientific American magazine sometime in the past year to year and a half. I can't be more specific than that. I don't have space to save the back issues myself. It should be in the archives of one of the local libraries. It is the onsite recycling of fuel rods and the effects of the fast neutrons that help to extract the maximum energy from the fuel, leaving elements, in the chemical sense, with low radioactive half lives. There are none of these plants in operation as generators. The technique is used in breeder reactors to change the elemental composition to the uranium isotopes best suited to produce bombs and fuel.

11:10 PM, March 09, 2007  

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