"First they ignore you, then they ridicule you,
then they fight you, then you win."
-- Mohandas Gandhi
Here on The Power Line, I only like to deal in documentable facts. Occasionally, I come across rumors that are so outrageous, I have to comment on them.
In recent weeks, a rumor has circulated in Charleston that Gov. Tomblin is considering appointing a second lawyer from the Jackson Kelly law firm to replace Ryan Palmer on the WV PSC.
As I have noted many times in the past, current PSC Chairman Mike Albert worked for over thirty years at Jackson Kelly representing the largest out of state corporations that control WV’s water and electricity monopolies. Chairman Albert has just recused himself from the WV American Water General Investigation because he personally represented the water company for decades at Jackson Kelly. His recusal, along with Mr. Palmer’s departure, has paralyzed the investigation, because WV law requires to commissioners to act in any case.
Shortly after then Gov. Manchin appointed him in 2007, Chairman Albert had to step down from the TrAIL transmission line case, because he had actually written MD-based Allegheny Energy’s application to the PSC. Allegheny Enery was bought out by Akron-based Holding company FirstEnergy in 2012. FirstEnergy is to this day represented by Jackson Kelly in PSC cases.
If the rumor about Gov. Tomblin’s plan for the PSC is true, a majority on the Commission is about to be handed over to people from the corporate law firm a long history of representing the interests of out of state holding companies against WV utility customers.
If the rumor proves true, it will be an egregious act by the Governor against our state and our people.
I recently came across this interesting discussion of Wisconsin power company WE Energies and its application to the WI PSC to heavily penalize WI solar power producers with the elimination of net metering and extra charges, based on the Edison Electric Institute’s “free rider” propaganda.
The author of the Daily Kos post makes some excellent points about WE’s factless propaganda campaign to stir up resentment against solar power producers.
So what is “fair?” Said brochure: [solar customers] “still need to use the electric grid, yet pay less than their share for their use of the grid. This leaves more of the cost of the grid to be paid by customers who do not have or cannot afford their own systems.”
Please note that there are no actual dollars and cents numbers given to support any of these statements. I think that paying $108 a year more than regular customers, in spite of the fact that we’ll be supplying the grid with energy during peak use, is actually way more than fair, verging on unfair! I therefore went on a personal quest to find out exactly what solar customers are costing WE Energies when they send those little electrical particles zooming through the existing wires.
First, I called the guy at WE Energies I’d been dealing with about our application to connect to the grid (very nice guy, by the way; tough position to be in). Him: Well, we just have to be fair. Me: I want to be fair. How much will it cost you guys to run my solar energy through your system? Him: Well, that’s hard to say: Me: Is it more than the $9/month that everyone else pays? Him: Well, that $9/month doesn’t cover all of our costs. You have to also buy energy in the form of kilowatt hours…
…INTERLUDE: Doesn’t cover ALL of their costs? Their own brochure says it “covers the fixed costs to provide services.” It doesn’t say “almost covers.”…back to our regularly scheduled diary…
Me: How much energy does a customer have to buy to make up the difference? Him: That’s hard to say.
Let me summarize: WE Energies couldn’t tell me how much it will cost them to run my solar energy through their system.
Then, I called and spoke with the Distributive Energy staffer at the PSC. I shall paraphrase our conversation. I said that certainly WE Energies must have included in its proposal the actual amount that solar customers cost them. His response: No, they didn’t. Me: You’re kidding. Him: No. Me: Well, I do want to be fair. Do you know what it costs them to run solar energy back into their system? Him: It depends on who you talk to. There’s no fixed number. Me: What do you mean “there’s no fixed number? Him: Again, it depends on who you talk to.
Let me summarize: WE Energies did not include in their rate increase proposal a dollar amount for what solar customers cost them, and the Distributive Energy expert at the PSC doesn’t know either.
So, WE Energies has issued an official publication, essentially blasting renewables customers for not paying their “fair” share to use the grid, but they have no actual real numbers to back up their claim. Why go so far as to demonize solar customers?
The answer is on the back of the brochure. Now that they have their regular customers believing that they are victims of a massive photovoltaic plot, they provide information about how to contact the PSC with comments. They encourage customers to visit their website at Wisconsin Public Service Commission to learn about the hearing schedule for, or leave comments about, docket #5-UR-107.
Having been to the PSC Public Comments section, I can tell you I haven’t seen a single comment in favor of the rate hikes. My guess is that WE Energies is trying to change that. Oh, and the brochure says that you can also contact WE Energies for more information at WE Energies email.
Windtalker, the author of the Daily Kos piece, also does a good job of running the numbers on the cost of WE Enegies’ proposed new fees. Windtalker does not do such a good job of explaining why WE Energies is pursuing this changes that will hurt Wisconsin’s electrical reliability and overall cost to customers.
Readers of The Power Line know exactly what is behind WE Energies’ tactics – fear. Back in January 2013, the Edison Electric Institute warned the US electrical industry that the whole system of massive investment in centralized generation and big transmission was about to be swallowed by the new wave of decentralized generation, mainly solar and wind power. That fear is what is driving WE Energies and most other US power companies now.
For 100 years, US power companies have been able to built power plants and transmission lines with the assurance from regulators and politicians that they will be able to recover all of those costs, plus profit, from rate payers. Now many rate payers are rebelling against this regime. They are investing in new technologies that either allow them to reduce electricity use, or produce their own.
WE Energies depends on selling kwh to pay for their investments that they thought would be subsidized by rate payers for decades. That world may be gone forever.
As Scott Sklar points out in his recent article, customer based electricity investments improve the overall efficiency of our electrical system by increasing systems’ load factors. The problem, according to Sklar, is that our current way of rewarding investment by power companies in obsolete technologies is causing high rates and stagnation in the industry. WE Energies, following the EEI playbook, is using that destructive old subsidy system to crush new ways of doing things in the world of electricity.
This nihilistic lashing out by scared power companies is something none of can afford any longer. And we should not stand for it.
The Charleston Gazette published my op-ed piece this morning. In late August, the WV PSC announced that Commissioner Ryan Palmer was leaving the Commission to take a job with the Federal Communications Commission in Washington, DC. In his five years on the PSC, Mr. Palmer has served with independence and distinction, defending our state and our people. I am very sorry to see him go. His departure is a distressing sign of the brain drain that afflicts the backward and stagnant state of WV’s state government. We need more regulators like Mr. Palmer, and we need them now.
Because Mr. Palmer was appointed by then-Gov. Manchin from the governor’s staff, I was initially skeptical of Commissioner Palmer’s independence from the paralyzed Manchin mindset. During his tenure, Mr. Palmer proved me wrong.
He was hard working, smart and embraced reality, unlike his corporate-backed colleagues on the Commission. Mr. Palmer reached the height of his work on the PSC with his incisive dissent in the FirstEnergy Harrison power plant fiasco. For the last several years, I have worked for passage of legislation ordering the PSC to begin using strong integrated resource planning in managing our state’s electric utility practices. Every year, at the Legislature’s sessions, I also ran into Mr. Palmer speaking about IRP with legislators, educating them about how other states did it and informing them about how the WV PSC works.
Over time, Ryan Palmer showed us what a really independent PSC Commissioner looks like.
Now it is up to Gov. Tomblin to appoint a replacement for Mr. Palmer. West Virginians need to step up and let the Governor know that we want a Commissioner who will stand up for our state against out-of-state holding companies like AEP, FirstEnergy and American Waterworks (the NJ company that controls WV American Water). We need a new Commissioner who is not beholden to corporate law firms like Jackson Kelly which regularly represent these holding companies before the PSC.
If you think independence and competence are more important than corporate cronyism on the WV PSC, let Gov. Tomblin’s office know right now. There are rumors circulating in Charleston that Gov. Tomblin is closing in on his nomination. Let him know how you feel today. As I say in my op-ed piece:
In the past, governors made PSC appointments without public involvement or explanation. Now, and in the future, we need to have open, public discussion of candidates and their qualifications. West Virginia deserves better than back-room deals for a regulatory commission that reaches so deeply into the lives (and pockets) of the people of our state.
Yesterday, I came across this interesting book review in the Charleston Gazette. It is a review of Chasing the Wind: Inside the Alternative Energy Battle by Rody Johnson, a retired engineer from Lewisburg. Johnson apparently carried out extensive research, including interviews of participants, into the five year development of the Beech Ridge wind farm near Rupert. The reviewer, Joe Morris, is a former business editor for the Gazette who has also worked as a reporter for a “a wind industry trade publication.”
In his review, Mr. Morris points to a number of facts about land-based wind power in WV.
- “More wind power generation is under construction today than ever before, but none of it is in West Virginia. No industrial-scale project has come online in two years, and no developers have disclosed plans for new installations since 2009. Those who have built here swear they never will again, and those with permits are trying to sell off their rights.”
- “The settlement talks never panned out, and MCRE [the Greenbrier County citizens group opposed to Beech Ridge] subsequently filed suit in state court to override Beech Ridge’s permit, lost, then joined with a Washington-based animal welfare advocacy to sue in federal court, claiming Invenergy [Beech Ridge's developer] had done too little to ensure no Indiana bats would be killed. This time, Invenergy lost. The ruling found Beech Ridge was “virtually certain” to kill Indiana bats and must take steps to avoid doing so.
Invenergy had itself to blame, since early on it chose to disregard bat protections recommended by the federal Fish and Wildlife Service. Ultimately, in 2010, it commissioned 67 turbines, which must be stilled half the day during the bats’ non-hibernation season, and it wants to add 33 more, the maximum allowed under the lawsuit settlement. Invenergy is required to monitor the site regularly for bat carcasses, and no Indiana bats have ever been found.”
“He [author Johnson] might have mentioned that while most states now pledge their utilities to drawing at least some power from renewables, Joe Manchin as governor effectively banned such a mandate in West Virginia, steering through legislation in 2009 that perversely declares coal and natural gas to be “alternative” energy sources, alongside wind and solar.
Nothing has changed under Manchin’s successor. In a July interview, Division of Energy director Jeff Herholdt said West Virginia should export wind power but has no interest in developing it for the state’s own use.”
“The state’s own use is, in fact, where wind could prove the most useful. As Johnson rightly notes, wind’s fuller integration into regional electric grids would entail nothing less than a coordinated national energy policy and Sputnik-speed advances in backup battery technology, the impetus for which would entail nothing less than a climate change disaster. Less rightly, however, he overlooks wind’s enormous potential in localized “distributed” generation systems, where turbines produce power near the point of consumption.
Because smaller in scale, distributed energy is more easily backed up with current battery technology, and since it bypasses the dysfunctional regional grid network, it bypasses the dysfunction of national energy policy. Only state policy stands in the way, if for no other reason than that no one is ever going to get rich off of distributed wind energy, while coal continues to mint West Virginia millionaires.”
“One realm left underexplored, however, is West Virginia politics. A spokeswoman for NextEra Energy, the country’s biggest wind power developer, told Johnson that the company would never build in West Virginia again, saying it couldn’t “cope with the politics and the coal influence.” Johnson leaves it at that, as if one need hardly say more.
Mr. Morris ends his review with the following:
Which brings me to our story’s ironic twist. Toward the end of “Chasing the Wind,” Johnson pays a follow-up visit to John Stroud, the MCRE co-chairman. Not long after Stroud’s victory over Beech Ridge, the harrowing sounds of mountaintop removal blasting began reverberating through his Williamsburg Valley farm. No one had ever dreamed coal companies were interested in the area, but now the timberland above the farm, because spared from the blight of wind turbines, had become appallingly available for surface mining.
Speaking for more than just himself, Stroud admits: “I may have shot myself in the foot.”
Today, the NY Times ran a major feature story on renewable power’s impact on the obsolete electric power model. The story itself is kind of all over the place, without a really clear focus. It does touch on a number of important developments, mainly in the US and Germany.
Electric utility executives all over the world are watching nervously as technologies they once dismissed as irrelevant begin to threaten their long-established business plans. Fights are erupting across the United States over the future rules for renewable power. Many poor countries, once intent on building coal-fired power plants to bring electricity to their people, are discussing whether they might leapfrog the fossil age and build clean grids from the outset.
A reckoning is at hand, and nowhere is that clearer than in Germany. Even as the country sets records nearly every month for renewable power production, the changes have devastated its utility companies, whose profits from power generation have collapsed.
A similar pattern may well play out in other countries that are pursuing ambitious plans for renewable energy. Some American states, impatient with legislative gridlock in Washington, have set aggressive goals of their own, aiming for 20 or 30 percent renewable energy as soon as 2020.
The word the Germans use for their plan is starting to make its way into conversations elsewhere: energiewende, the energy transition. Worldwide, Germany is being held up as a model, cited by environmental activists as proof that a transformation of the global energy system is possible.
But it is becoming clear that the transformation, if plausible, will be wrenching. Some experts say the electricity business is entering a period of turmoil beyond anything in its 130-year history, a disruption potentially as great as those that have remade the airlines, the music industry and the telephone business.
None of this will be new to readers of The Power Line, but it is nice that the editorial board of the NYT has finally decided to report the news.
There is an interesting anecdote about Lennar Corporation, the second largest home construction company in the US:
One recent day, under a brilliant California sun, saws buzzed as workers put the finishing touches on spacious new homes. They looked like many others going up in Orange County, south of Los Angeles, but with an extra feature: Lennar Corporation was putting solar panels on every house it built.
The prices of the panels have plunged 70 percent in the past five years. That huge decline means solar power is starting to make more economic sense, especially in parts of the United States with high electricity prices.
At about 100 Lennar subdivisions in California, buyers who move into a new home automatically get solar panels on the roof. Lennar, the nation’s second-largest homebuilder, recently decided to expand that policy to several more states, starting with Colorado. The company typically retains ownership of the panels and signs 20-year deals to sell homeowners the power from their own roofs, at a 20 percent discount from the local utility’s prices. [emphasis mine]
“It’s so simple when we tell a customer, ‘You’re guaranteed to save money,’ ” said David J. Kaiserman, president of Lennar Ventures, the division overseeing the solar plan.
The article also has an interesting account of how ordinary Germans are fighting back against the effort by the German government to protect the big international corporations that used to sell a lot of electricity in the country from the rising renewable wave. The Times story includes a video about public resistance. It’s worth a look. Working people in Germany have learned how locally based solar power, biogas and wind power generate jobs in local farms and businesses. They aren’t about to turn back now.
All across the US, city-owned electric companies are moving rapidly to use as much renewable power as they can. The New York Times posted an article today about Burlington, VT becoming 100% renewable.
BURLINGTON, Vt. — Vermont’s largest city has a new success to add to its list of socially conscious achievements: 100 percent of its electricity now comes from renewable sources such as wind, water and biomass.
With little fanfare, the Burlington Electric Department crossed the threshold this month with the purchase of the 7.4-megawatt Winooski 1 hydroelectric project on the Winooski River at the city’s edge.
When it did, Burlington joined the Washington Electric Co-operative, which has about 11,000 customers across central and northern Vermont, which reached 100 percent earlier this year.
“It shows that we’re able to do it, and we’re able to do it cost effectively in a way that makes Vermonters really positioned well for the future,” said Christopher Recchia, the commissioner of the Vermont Department of Public Service.
It’s part of a broader movement that includes a statewide goal of getting 90 percent of Vermont’s energy from renewable resources by 2050, including electricity, heating and transportation. Across the state, Vermonters are urging their electric utilities to provide them with renewable sources of power, and the utilities are listening, Recchia said.
The citizens of Boulder, CO are fighting to wrest control of their electrical system from Xcel Energy, because they want to invest heavily in renewable power and energy efficiency, and Xcel won’t cooperate. The main way that a city can take over a privately owned power system is to condemn the electricity infrastructure within city limits using the city’s eminent domain powers granted in state law. The city and the electric company go to court in a condemnation suit, and the court determines the value of the electric company’s property to be conveyed to the city. The city then issues bonds to finance the purchase. The bonds are paid back from customers’ electric bills. And the city is then free to make the kind of electric bill lowering investments that don’t involve fossil fueled power plants.
Here in West Virginia, cities cannot use their eminent domain power to buy out privately owned electric companies. State law specifically protects WV’s Ohio-based power companies from condemnation of their systems for public use. While the WV Legislature grants all kinds of condemnation powers to coal companies for transporting coal and electric companies that want to build high voltage transmission lines, here is what the WV Code says about city buyouts of electric companies:
PART III. RIGHT OF EMINENT DOMAIN.
§8-19-3. Right of eminent domain; limitations.
For the purpose of acquiring, constructing, establishing or extending any waterworks system or electric power system, or for the purpose of constructing any additions, betterments or improvements to any waterworks or electric power system, or for the purpose of acquiring any property necessary, appropriate, useful, convenient or incidental for or to any waterworks or electric power system, under the provisions of this article, the municipality or county commission shall have the right of eminent domain as provided in chapter fifty-four of this code: Provided, That such right of eminent domain for the acquisition of a privately owned waterworks system, or electric power system, or any part thereof, shall not be exercised without prior approval of the public service commission, and in no event shall any municipality or county commission construct, establish or extend beyond the corporate limits of said municipality or county line a municipal or county waterworks or electric power system under the provisions of this article to supply service in competition with an existing privately or municipally or county owned waterworks or electric power system in such municipality or county or within the proposed extension of such system, unless a certificate of public convenience and necessity therefor shall have been issued by the public service commission: Provided, however, That a municipality or county commission may not exercise such right of eminent domain over a privately owned electric power system or any part thereof for the purpose of acquiring, constructing, establishing or extending an electric power system.
Subject to the provisions of this article and notwithstanding the provisions of section nineteen, article twelve of this chapter to the contrary, a municipality or county commission may acquire, construct, establish, extend, equip, repair, maintain and operate, or lease to others for operation, electric generators or electric generating systems or electric transmission systems more than one mile beyond the corporate limits of such municipality or county line and said electric generation systems shall not be under the jurisdiction of the public service commission.
So if a city already owns its electrical system (in WV that means only New Martinsville and Philippi), it can use its eminent domain powers. If a city does not currently have a city owned electric utility, and wants to purchase the existing infrastructure from either AEP or FirstEnergy, the city is specifically barred from using its condemnation powers to do so. Hmmm, I wonder how that statute was “put in place?”
So while cities like Austin, TX and Burlington, VT are innovating, cutting electric bills and investing in the future, WV cities are held hostage to Ohio-based electric holding companies.
Scott Sklar is one of the most expert of US experts on decentralized power. Here is a very informative article he posted recently on Renewable Energy World. Mr. Sklar takes apart power company claims that by using modern decentralized power technologies, small scale electricity producers are getting a free ride from consumers stuck in the clutches of obsolete generation and distribution.
Or, as he puts it:
In 2012, the Virginia Governor proposed a tax for the sales of energy efficient cars because they use less gasoline, which means less money goes into the highway trust fund to repair roads. Hybrid and electric car owners, like myself, went nuts — why should those saving gasoline and significantly reducing pollution be penalized? By the end of 2013, a bipartisan coalition abolished the law.
Now the same movement is underway regarding energy efficiency, renewable energy and the electric grid — and it’s as misguided as the reasoning above.
The State of Ohio abolished its energy efficiency programs and delayed its Renewable Portfolio Standard (RPS) for two years on the guise it will raise electric rates. According to Electric Choice, in 2013 Ohio’s average electric rate for all sectors was 9.49 cents per kWh with the energy efficiency and RPS in effect. Ohio’s electric rates are slightly higher than Illinois, which has the lowest electric rates in the region and also has an aggressive energy efficiency program and an RPS. But somehow the electric utilities continue to bang their drums of fear and make headway without any independent analysis.
A purported consumer group has just published “The Unintended Consequences of Net Metering,” which claims:
On the surface, the concept of promoting rooftop solar energy seems like a good idea: homeowners are incentivized to buy or lease solar panels; they benefit from reduced reliance on the local utility for electricity; they benefit directly from clean solar energy; and they sell any excess power to the electric utility for credit or payment. The subsidies, in theory, make solar energy an affordable alternative for consumers. But, that is not the whole story…net metering can produce many unintended consequences that lead to higher costs for consumers.
Of course it has the same theme of the VA electric and hybrid vehicle tax — net metering causes higher rates for all other consumers who are not net metering.
Mr. Sklar then goes on to cite two actual studies about what happens to the cost of electricity when advanced generation and load reduction are instituted:
Alden Hathaway, PECEM, of Sterling planet In Georgia explains it most succinctly in his Februrary 2013 article in NAClean Energy.
Over the course of almost a quarter of a century of focusing on load management strategies in Vermont to meet load growth, the Central Vermont Public Service Company successfully increased the average (electric) system load factor from 55 percent to 70 percent…and a reduction in costs to the electric system of 4 percent…and they met additional load growth with energy efficiency and renewable energy…Unfortunately regulators tend to place little emphasis on improving grid efficiency by requiring increases in system load factor. Instead, regulated utilities are rewarded by additional power plant capacity to meet electric system peak increases. Since they are allowed to recover their costs, plus get a return on their facilities built for (generating) electricity, incentives are tilted toward adding new facilities — which is, in fact, where utilities are currently investing.
This conventional practice, or “old” set of incentives, does not add up to more electric grid efficiency, and electric rates actually go up for all ratepayers.
In National Geographic’s December 2013 article on this issue, solar leaders in California “scoff” at the notion that on site renewable energy production increases electric rates.
Adam Browning, executive director of the nonprofit Vote Solar Initiative, scoffs at the higher figure, which includes not only energy the solar households send to the grid, but the power they keep for their own use — energy that never touches the grid and has no impact on other ratepayers. ‘It’s the functional equivalent of you turning off your lights and getting accused of raising everyone else’s rates,’ Browning said. CALSEIA’s Del Chiaro agreed. ‘If you were to put an energy-efficient refrigerator in your home, and you cut down your refrigerators’ electricity usage in half, would that be a cost to your neighbor? Of course not,’ she said.
Mr. Sklar points to the real reason why power companies are screaming. It’s because of the distorted rate payer subsidies to old technologies in generation, transmission and distribution. As readers of The Power Line know, there are significant rate payer subsidies built into all regulatory schemes in the US that reward the construction of large, centralized power plants and huge transmission projects.
Frankly, on-site battery storage with on-site renewable energy will be the trend if electric utilities and regulators put up net metering barriers. While the consumer will not be “credited” for any excess electric power they produce, they will have back-up electric power (much more reliable than the electric grid) and electric power quality (no surges, sags and transients) that are becoming more severe in this country’s aging distribution grid — saving customer losses of digital equipment including appliances, office machines, computers, web routers, and microprocessors.
Actual substantive studies basically confirm what Hathaway and Browning stated. Crossborder Energy’s CA Energy Net Metering Study published in January 2013 states:
The economic impacts of net metering on non-participating ratepayers are highly dependent on underlying electric rate design. We show that modification to existing residential rates — including 1) the gradual narrowing of rate differences between tiers of today’s block rate structure under which most of the residential customers of the IOU (independently owned utilities) take service, 2)a move to greater adoption of current time of use rates among net-metered customers, and 3) increased use in an increase of simpler non-tiered time-of-use rate structures available today — will result in an increase of net benefits to non-participating ratepayers from residential net-metering.
There have been eleven substantive studies on the benefits of net metering for both net-metering customers and electric ratepayers. And virtually all show cost reductions for both electric customers and electric utilities on frequency control and electric power quality (less surges, sages and transients), lower distribution grid bottlenecks and transformer blow-outs that are precursors for outages, and less need to build electric power peaking plants that sit idle most of the time.
Through their public service commissions, state governments control electric rates and the rules. These rules favor and reward more electric generation and less conservation and on-site energy generation. This practice drives huge amounts of investments into less efficient electric systems rather than focusing on the customers’ requirements of less outages, improved electric power quality, less swings in electric rates due to increases in global energy commodities (uranium, oil, coal, and soon, natural gas), and more precise matching of electric generation to electric load by improving electric system efficiencies.
Scott Sklar does not depend on wild rhetoric and unsupported claims. The studies he cites are some of the most up-to-date on the issues of the costs of our new technology transition. They are also based on real experience on the US electrical grid.
If you are confused by the power companies’ “free rider” BS, Mr. Sklar has the facts.