APCo’s Charles Patton Frames Legislative Session with Fearmongering

Don’t you wish you had a few thousand dollars to spend on a special luncheon to tell WV legislators about the problems your family faces, from your point of view?  Well, that’s what Appalachian Power Company did on Wednesday.

The State Journal’s Sarah Tincher reported on a speech given at a WV Business and Industry Council luncheon in Charleston by Charles Patton, Appalachian Power Company’s president and the guy who takes orders from the AEP big boys in Columbus, OH.

Mr. Patton is always a pretty straight shooter, and some of the things he said were not what WVBIC Chairman, and long time lobbyist for the WV Coal Association, Chris Hamilton, wanted to hear.

Additionally, he said, when looking at the forward curve on coal for 2015, Central Appalachian coal is the most expensive coal in the country for APCo to buy, largely because of regulations imposed on coal companies that have driven up their costs.

“I have to do the cheapest thing possible,” Patton said. “I point this out not because I want to use it as an excuse not to burn Central Appalachian coal, but I want to make it apparent to you, that if you want Central Appalachian coal to be competitive, it’s important for you from a policy perspective to be thinking about how you do it.”

It’s clear from the last sentence, that Mr. Patton saw coal industry legislators as his target audience.  WV coal operators can’t change geology, which is the real problem causing high mining costs.  Mr. Patton, who really doesn’t care where his coal comes from, as long as it is cheap, left the heavy lifting up to the politicians.

Central Appalachian coal operators have often talked about importing miners from Mexico and Central America to cut labor costs, the only costs that operators can really control.  Importing low wage immigrants was a time honored tradition in the WV coal fields, until miners organized in the 1930s stopped it.  Coal operators have already cut safety requirements to the bone so that miners continue to die on a regular basis and black lung has now surged among miners.  Mr. Patton didn’t suggest these “solutions” to the Central Appalachian coal industry’s problems, he left that up to the politicians in his audience.

The main thrust of Mr. Patton’s remarks, though, was fear.  Fear is now the main driver of political policy in the US, and fear never produces good policy.  But Mr. Patton doesn’t want good policy.  He wants higher profits for AEP shareholders and bigger bonuses for AEP executives.

So he trotted out the WV coal industry favorite propaganda memes: EPA air regulations and the new bogey man, the polar vortex.  Mr. Patton actually claimed that EPA’s goals to reduce carbon emissions were “set arbitrarily.”  Really?  If you have read anything about EPA’s 111d process, you will see that it is the result of extensive study and research, and includes an open comment process with heavy industry involvement.  And the goals are open to interpretation by states within their broad framework.  To claim that this process may not be perfect, but to claim it is “arbitrary” is simply not true.

It is also not surprising that Mr. Patton never mentioned the WVU/Downstream Strategies report showing how WV can meet its 111d goals.

You know the BS is getting deep when industry people trot out the scary polar vortex.  They gave it a name, because they want to make it scarier.  Industry people love words that end or start with “x” which makes it even better.  Mr. Patton lists all the WV coal burners that have closed recently, claiming that if it hadn’t been for them, we would have been plunged into darkness last January.

Let’s look at the facts.  In May 2014, FERC issued its preliminary report on the problems caused by three cold snaps last January.  Here is a quote from that report on the some of the causes:

During the early January event, the RTOs estimate generation on forced outages and derates ranged from about 7 to 30% of the load on the peak day. Significant portions of those outages were related to fuel issues including gas curtailments, no fuel, oil delivery and frozen coal. For example, PJM estimates that about one quarter of the forced generation outages on January 7 were fuel related. In addition, 5,000 MW of combustion turbines failed to start when called.  During the latter January events, gas curtailments declined in PJM as did start failures for combustion turbines. However lack of fuel, oil delivery and frozen coal persisted in causing forced outages of 5,000 MW and 8,000 MW in late January.

So problems with coal burners were some of the main drivers of the overall problems on the grid.  Far from being “the solution,” as Mr. Patton seems to claim, coal burners were clearly a big part of the problem.  Mr. Patton touts new natural gas plants as the wave of the future, but fuel problems at natural gas power plants were big contributors to grid managers’ headaches last January.

WV legislators in the audience at the WVBIC luncheon wouldn’t have known how wildly Mr. Patton was misrepresenting the polar vortex situation, because few, if any, of them have read PJM or FERC assessments of the situation.  If they had, they would have realized that what Mr. Patton, like his coal burners, was just blowing smoke.

 

NY State Making Good Investments

New York is investing tax dollars in the future.  Here is a story about a $1.8 million grant awarded by the state to fund solar purchasing co-ops, energy efficiency projects and job training in the southern part of the state.

“Renewable NY Southeast” is a three-year, multifaceted, flagship project and bi-regional partnership between the four anchor community organizations, and is intended to raise public awareness about the benefits of and opportunities for solar, as well as to remove market barriers to increased solar installation.  By aggregating hundreds of sign-ups for of solar installations in a short time-frame, a campaign of this sort can bring the cost per installation down from $20,000 to $4,000.

The project’s main components will include an education and awareness campaign, a group purchasing program, and a work force development partnership with local educational and training institutions. Each of these initiatives is envisioned as a scalable and replicable model that can be implemented in other regions of New York going forward.

Instead of doubling down on obsolete technology to please out of state holding companies, as in WV, the people of New York are making real investments in their future.

Yeager Airport Moving Forward on Big PV Project

Charleston Gazette reporter Caitlin Cook has a story this morning on Yeager Airport’s steady progress in creating real reliable power for itself.

Yeager Airport officials are moving forward with a project they said could make the airport the first in the nation to run entirely on electricity it generates from solar panels.

The project stems from the Federal Aviation Administration urging airports across the nation to become more sustainable. The move would lower the airport’s energy costs and carbon footprint.

On Wednesday, board members decided to take the six bids they received earlier in that day to the FAA next week.

“It has become a good time to [install solar panels],” Yeager Airport Director Rick Atkinson said. “Airports have the property and they are large consumers of energy.”

While Yeager isn’t your typical airport because of the region’s terrain, most airports have a lot of unused land because the necessary separations between runways, Atkinson said. He added the cost of installing solar panels decreasing coupled with the panels efficiency increasing, makes the project more enticing.

If Ms. Cook is going to continue to write about renewable power and the emerging electrical system, she will have to have a better understanding of generating capacity and energy output.  In her article, she describes Yeager’s proposed system this way:

If the project comes to fruition, Yeager would produce about 4 megawatts of energy annually feeding directly into the power grid, Atkinson said.

The mistake may have been Mr. Atkinson’s, but Ms. Cook should have corrected it.  The correct statement should have been that the Yeager system will have a rated capacity of 4 megawatts (4 million watts).  Rated capacity is essentially the total amount of electricity that the system is capable of producing at any one time.  For comparison, my home system has a rated capacity of 3.54 kilowatts (3540 watts).

The quoted statement from Mr. Atkinson also includes the dimension of time by using the word “annually.”  The annual output of the system should be expressed not in megawatts, but in megawatt hours (or kilowatt hours).  This would be far less than simply multiplying rated capacity by the number of hours in a year, because the sun does not shine all the time.  When the sun does shine, PV panels only produce at their maximum capacity for a short time during the day, because panels only produce at their maximum when the sun’s rays strike them at near perpendicular angles.  My home PV system, with rated capacity of 3.54 kW produced a little over 4000 kwh in the past year, about 13% of the total possible generation if the system were running at maximum capacity 24 hours a day for a year.  This percentage would be higher in a sunnier climate, and lower in a cloudier one.

The first step in taking responsibility for our own electricity is understanding how electricity works.  Journalists should be taking a more active role in providing real public education about what electricity numbers mean.

Hats off to officials at Yeager Airport.  Things are moving forward rapidly in the construction of WV’s new electrical grid.

 

PJM Cartel Getting Cartelier

Remember this post, What Is PJM, back in 2009?  Here is the dictionary definition of a cartel that I provided in that post:

cartel -2 : a combination of independent commercial or industrial enterprises designed to limit competition or fix prices

Now, click on this link to RTO Insider’s new post “DOJ Probing Interconnection Process in Exelon-Pepco Merger”.  This story is about the US Justice Department’s anti-trust investigation of PJM.

RTO Insider starts with this great graphic:

And-Then-There-Were-Four-Source-Monitoring-Analytics

So we see that if the Exelon/Pepco merger goes through, the holding companies that control the big generators in the MAAC interconnection queue will fall from five to four.

The Justice Department is investigating how holding companies in PJM’s MAAC sub-region (essentially the Mid-Atlantic states from NJ to MD) use their ownership of both transmission systems and generating plants to create difficulties for their competitors who are seeking to build new generation in the MAAC sub-region.  Transmission owners control the requirements for interconnection with new plants.  The big five (maybe soon to be big four) use this power to limit competition in the MAAC sub-region.

RTO Insider points to PJM Market Monitor Joe Bowring’s past objections to this situation:

Market Monitor Joe Bowring declined to comment yesterday on the department’s inquiry. But the Monitor has been recommending since 2013 that PJM outsource interconnection studies to an independent party to avoid potential conflicts of interest.

“Currently, these studies are performed by incumbent transmission owners under PJM’s direction. This creates potential conflicts of interest, particularly when transmission owners are vertically integrated and the owner of transmission also owns generation,” the Monitor said in the third-quarter report.

“There is also a potential conflict of interest when the transmission owner evaluates the interconnection requirements of new generation which is part of the same company,” the report added.

Go back and look at that definition of “cartel.” Did you catch the phrase “designed to limit competition”?  That’s what this is all about.

I think it is hilarious that Joe Bowring refers to these practices as “potential” conflicts of interest.  Potential?  They have been going on for years, ever since PJM and other regional transmission organizations arose from the ashes of deregulation, with FERC’s blessing.

Speaking of FERC, the Justice Department’s investigation began just five days after FERC announced that it approved the Exelon/Pepco merger.

In its Nov. 20 order, FERC indicated it did not have any anticompetitive concerns with the Pepco acquisition. (See FERC Approves Exelon-Pepco Merger.)

Dismissing concerns of market power, possible rate climbs and suppressed competition, the commission approved the pending acquisition without discussion. Its written decision made clear it didn’t see any market issues with the acquisition, in part because Pepco holds only a negligible amount of generation. “While the commission is aware that Exelon will be a member with more assets after the merger, there is nothing in the record of this proceeding to indicate Exelon will have excessive influence over the stakeholder process or the independence of PJM.”

In other words, FERC said, “Nothing to see here, just keep moving.”  The Justice Department apparently thought otherwise.

The Justice Department investigation is a big deal, and could throw a real monkey wrench in Exelon’s attempt to swallow Pepco.

This situation is the flip side of what happened in the PJM transmission line fiascos like PATH and TrAIL: PJM’s transmission planners colluded with big generators (AEP and FirstEnergy) to rig new transmission projects to serve those generators existing power plants.  Cartels are truly wonderful things, if you are a member of one.

Hats off to RTO Insider’s great coverage of more PJM fakery.

German Power Giant E.on Shedding Coal Burners

Here’s the story from Reuters.

Germany’s top utility E.ON (EONGn.DE) said it would split in two, spinning off power plants to focus on renewable energy and power grids, in a dramatic response to industry changes that could trigger similar moves at European peers.

Europe’s power sector has been hit by weak energy demand in a sluggish economy, low wholesale power prices and a surge in demand for cleaner renewable energy which is replacing gas and coal-fired power plants.

 

No, NY Times, It Is Never Too Early to “Be Sustainable”

On the same day the Solnit op-ed ran, the NY Times ran another story that spent hundreds of words to tell us that renewable power is just too hard – especially if you are older.  The story in the Homes and Gardens section, where the time usually runs story about exciting, sexy, expensive houses, was titled “Exhausted by a House That Saves Energy.”  Here’s the tag line at the end of the opening section of the story:

“I was an idiot and built a house that was way too complicated and labor-intensive,” said Mr. Brattstrom, also 78. “Only a masochist could enjoy it.”

The Times writer, Sandy Keenan, does state that the house is inexpensive to operate.  But, of course, anyone familiar with renewable power knows this.  More and more people are learning that renewable is less expensive than purchased fossil fuel power.  Ms. Keenan, knowing that the argument is no longer valid that renewable power is “too expensive” seems bent on shifting the story to “it’s just too hard.”

Expense and inconvenience are the two themes that the electric power industry has used against decentralized renewable power.  The holding companies’ marketing people used these themes for a particular reason: they are the two themes that all marketing people in the US use against their competition.  Ms. Keenan has been conditioned to focus on these two themes as well, because these themes are now second nature in the US media.

For this reason, Ms. Keenan seems to miss the real core of her story.  She does mention it, but it is buried among the complaints about how hard the system is to maintain:

But they didn’t want to scrimp on luxury or size, so against their architect’s advice they insisted on 5,000 square feet, enough space to accommodate all their children and grandchildren at the same time.

and

If they had it to do over, the couple agreed, their house would be much smaller — no more than 2,000 square feet.

That’s the real story here.  The couple in the story failed to focus on reducing their electricity use before they designed their systems.  They were thinking like consumers, not producers of electricity.  If you are a producer of electricity, your goals are to minimize initial capital investment and to reduce maintenance labor and expense.  If you read some of the comments to the article, you will see a lot of similar observations by engineers, most of whom focus on minimizing electricity use.

This is an important lesson, because it illustrates how all of us who have been raised in the world of fossil fuels need to change our behavior as we move to investing in renewable power.  As we move into the world of decentralized power, made by ourselves, we have to focus on reducing our use first, before we create our new production machinery.

I’m sure Ms. Keenan did not deliberately set out to write an attack on decentralized renewable power, but her article ends up implying that maybe producing your own power isn’t really worth it.

The US media is full of these kinds of unintended, but effective, messages about renewable power.  They reinforce a cloud of doubt created by other media messages, contributing to an overall belief that we are stuck with fossil fuels because nothing else works.  And this belief fits nicely into the marketing goals of the current electric power industry.

Facts and Renewable Power

From the beginning, The Power Line has been about ensuring that our readers have all the facts about the electrical system in WV and the US.  The large holding companies and speculators that run the US electrical system have a strong influence over what is presented in the media.  This influence shapes what facts are allowed into public discussion.  Here on The Power Line, we talk about facts and perspectives we don’t hear much about in the popular media.

Yesterday, the New York Times printed a piece by writer Rebecca Solnit that connects with our mission here at The Power Line.  Ms. Solnit compares the factual impacts on birds of concentrated solar plants in the US Southwest with the overall impacts of fossil fuel generation.  This approach is similar to my last post that looks closely at the facts of bird deaths from various causes, including wind farms.

Here is Ms. Solnit’s conclusion:

Climate change is everything, a story and a calamity bigger than any other. It’s the whole planet for the whole foreseeable future, the entire atmosphere, all the oceans, the poles; it’s weather and crop failure and famine and tropical diseases heading north and desertification and the uncertain fate of a great majority of species on earth. The stories about individual birds can distract us from the slow-motion calamity that will eventually threaten every bird.

I would go further than Ms. Solnit in one respect.  I would point out that stories about environmental impacts of renewable power, and the downplaying or ignoring of the impacts of fossil fuel power “distract us” because the corporate interests that control the US media have an interest in distracting “us.”  The ownership of NBC by General Electric comes immediately to mind.

As Ms. Solnit has done, I often look beyond media claims to include all the facts.  For example, I have posted repeatedly about how subsidies for renewable power are dwarfed by the direct and indirect subsidies the US government gives to fossil fuels.  These subsidies extend to the war against WV, KY and VA mountains waged by the coal industry and the failure to provide a safe workplace for US coal miners so that people in the US can have “cheap” electricity.  My electricity is not cheap if people have to die by the dozens every year to produce it.

Look again at the title of Ms. Solnit’s piece: “Are We Missing the Big Picture on Climate Change?”  Editorial page editors usually reserve the right to put their own titles on writers’ op-ed pieces.  If you read Ms. Solnit’s piece, you will see that there is no question in her mind that “we are missing the big picture on climate change.”  Yet the title of her piece is stated as a question.  Was this question posed by Ms. Solnit, or the editors at the New York Times?