"First they ignore you, then they ridicule you,
then they fight you, then you win."
-- Mohandas Gandhi
Here is a story from The Financial Times about how solar and wind power generation has rejuvenated farming communities in Germany. Unlike in the US, where speculators and merchant generators control grid scale solar and wind development, in Germany, farmers and local communities have built new projects themselves.
Laws passed in the 1990s, known collectively as the Renewable Energy Act or EEG in German, encourage the creation of locally managed cooperatives that manage development and retail distribution of electricity from renewable projects. These laws are now under assault by the big electric companies whose business has been undermined by real competition.
The big companies such as E.on complain about subsidies to farmers and citizens, saying that they place an unfair burden on other rate payers. This, of course, is the same propaganda that is beginning to pop up in the US, and renewables are nowhere near as widespread as in Germany.
The Financial Times buys right into the propaganda by pointing to the fact that farmers can now make decent income from selling renewable power. The FT reporter dwells on a farmer who has sold much of his livestock and now runs a local power consulting firm and tries to portray him as getting rich from subsidies imposed on urban residential customers.
The FT article never mentions the real unfairness of Germany’s electric rate structure. All of the renewable power surcharges fall on residential customers because all of Germany’s industrial customers are exempt from paying those charges. The problem is not the farmers, it is the big corporations who don’t pay their fair share. No surprise there. THAT is Germany’s problem, not renewable power.
Larger capacity, less expensive battery storage is the key to building more microgrids in the US. Here is a story about one new company, Solar Grid Storage, that is developing new grid storage systems. The article also gives you a good overview of new microgrid systems that are popping up on the East Coast.
Solar Grid’s primary focus is commercial customers, but it also works with utilities and municipal governments. Among its customers are a school system in New Jersey and a utility in North Carolina. It partnered with Standard Solar Inc. on the installation of a solar system at the Konterra Realty Corporation that opened last month.
He says grid operators like PJM, a regional transmission organization, pay Solar Grid an installation fee and a monthly fee based on the hourly market rate of access to its battery system.
Leyden says the company is currently in talks with utilities in the Maryland-Washington, D.C. area on solar storage. He declined to identify them but the major operators in the District are Pepco and Washington Gas.
FirstEnergy announced on Nov. 20 that its shell subsidiary Monongahela Power is issuing $1 billion in first mortgage bonds. Proceeds from these bonds will be used as follows:
(i) repay at maturity $300 million of its First Mortgage Bonds, 7.95% Series due December 15, 2013,
(ii) redeem $120 million of its First Mortgage Bonds, 6.70% Series due June 15, 2014 (2014 Bonds),
(iii) repay a $572.7 million short-term promissory note originally issued on October 9, 2013 to its affiliate, Allegheny Energy Supply Company, LLC in connection with MP’s acquisition of the remaining ownership of the Harrison Power Station, and
(iv) for working capital needs and other general corporate purposes. [emphasis mine]
Here’s what FirstEnergy told the Securities and Exchange Commission about how it financed the Harrison Power Station deal:
The transaction resulted in AE Supply receiving net consideration of $1.1 billion and MP’s assumption of a $73.5 million pollution control note. Currently, the $1.1 billion net consideration was financed by MP through an equity infusion from FE of approximately $527 million and a note payable to AE Supply of approximately $573 million.
It is the note to AE Supply described in the SEC filing that Mon Power will pay off with the newly issued bonds. We also find out that Mon Power will be assuming $73.5 million of the debt for Harrison’s scrubbers. That’s even more interest that will show up on our electric bills.
FirstEnergy has already tried to bust the Utility Workers Local 304 at the Harrison Power Station. Despite a ruling by the NLRB that FirstEnergy was engaged in unfair labor practices, workers there are continuing to work without a contract.
Now comes news from PA that FirstEnergy is refusing to negotiate with another UWA local and has locked out 140 linemen, meter readers, substation electricians and clerks at Penelec, another FirstEnergy subsidiary.
MonPower’s linemen and meter readers in WV are represented by the International Brotherhood of Electrical Workers. FirstEnergy is moving ahead with closing at least one Mon Power service center in WV. How long will it be before FirstEnergy goes after these union workers’ livelihood?
Thanks to the efforts of our friends in the Eastern Panhandle, we know FirstEnergy has a long term plan to reduce customer services and meter reading for Mon Power and Potomac Edison. FirstEnergy started cutting jobs in PA back in 2011, shortly after the merger with Allegheny Energy was approved. FirstEnergy clearly played the WV PSC for chumps when they told the Commission back in 2010 that the merger would be good for everyone.
The PATH fight has connected many of us to people fighting other transmission projects across the US and across the world. Keryn has an account of a recent visit she and her Eastern Panhandle neighbors got from Hyosil Kim, a reporter for the Korean newspaper The Hankyoreh.
Ms. Kim has covered the continuing fight against a Korean Electric Power Company 765 kV line in southeastern South Korea and came to WV to learn about our experience here.
The Korean fight has a lot of parallels to the PATH fight. One of the most striking connections is that the fight in Korea is being led by farmers who are protecting their land and their communities from an industrial project. I spoke with farmers and land owners across central WV between 2009 and 2011, and I see a lot of the same themes in Korea.
This is from the NYT story linked above:
Now, a more modern Korea — in the form of imposing electrical power lines — is encroaching on the villages, including their burial grounds. The villages lie in the path of a major transmission route expected to distribute nuclear-generated electricity. Already towers are built along the spines of some nearby mountains, and 50 more are scheduled to be built in Miryang, some of them in the mountains.
But not if some of the villagers have anything to say about it. For the past two years, the villagers have staged protests that included a rare self-immolation, demonstrations in Seoul and a two-year sleep-in by older women who have built tents on the tops of mountains on the plots the utility company cleared for some of the towers. The women take breaks to go back to their homes, but most of the women sleep there in rotations, warmed in the winter by kerosene heaters. They fly Korean flags from their plastic-covered shelters.
“My family has lived here for 500 years, and all our ancestors are buried in these mountains,” said Sohn Hee-kyong, a 78-year-old rice farmer whose husband’s grave is nearby and who stays in the encampment. “I can’t let those steel monstrosities pass over here. Over my dead body.”
The other connection is that the Korean 765 kV line is about saving a dying nuclear industry in Korea, in the same way PATH was designed to save a dying coal industry.
The US media, including reporters in WV, try to characterize rural West Virginians as isolated and insular, just as the Korean media portrays farmers there as backward and stubborn. Our connections to the fight in Miryang, South Korea makes it clear that we are connected on many, many levels.
My great blogging colleague over in East Virginia, Ivy Main, has posted a great assessment of the Edison Electric Institute’s attack on solar power generation over at her blog Power for the People VA.
I have been covering the Edison Electric Institute’s creeping attack on solar producers in Arizona and other states. While the attack is expanding across the country, Ms. Main points out that the East VA SCC and Dominion Power, the state’s biggest electric company, have already teamed up to stifle new solar power investments with a $30 to $60 per month “standby fee” imposed on large East VA solar producers.
The latest effort to squelch solar is through standby charges: fees imposed on net metering customers that compensate the utility for “standing by,” ready to sell grid-produced energy at night and on cloudy days. In 2012 in Virginia, Dominion Virginia Power won the right to charge customers with large residential systems (10-20 kilowatts) up to $60 per month—a charge that destroyed this market segment. This summer Dominion pressed its advantage, indicating in a submission to regulators that it will likely seek more standby charges on a broader class of solar customers.
Note that Virginia has less than 15 megawatts (MW) of solar installed across the state. Dominion Power alone has around 19,000 MW of coal, gas and nuclear. So the notion that net metering by solar customers has any perceptible effect on the grid or other customers is silly. The point of Dominion’s stand-by charges is to stifle the solar market, not cover costs.
Ms. Main goes on to blow apart the argument made by EEI and their dark money friends at ALEC that solar producers don’t pay their “fair share” of electricity costs:
Meanwhile the conservative American Legislative Exchange Council (ALEC) has gotten into the act, drafting a model resolution insisting that net metering customers should have to pay their “fair share” of utility costs through measures like standby charges. Not incidentally, Dominion Power is a member of ALEC and sits on the energy and environment task force next to the fossil fuel shills from Heartland Institute.
But the “fair share” argument is bogus. Utilities weren’t set up to ensure Americans all paid their “fair share” of the costs of the electric grid. If they were, there would still be mountain communities without power today. Residents of cities and towns subsidized the cost of running power lines to far-flung rural homes inhabited by people who could never have afforded their “fair share” of this infrastructure.
Even today, city dwellers pay more than their “fair share” of transmission costs to subsidize people like me who live in leafy, sprawling suburbs and less-populated parts of the state. Anybody voting for an ALEC-style resolution about “fair shares” had better be willing to stick it to suburban and rural consumers.
There are other ways electricity rates aren’t “fair.” Dominion’s residential rates are structured so people who use less electricity pay more per kilowatt hour than those who use more—again, making it roughly a transfer of wealth from urban apartment dwellers to those with larger or less efficient homes elsewhere. The utility’s goal is to encourage the use of electricity, and compete more effectively with the gas company for heating. People paying their “fair share” just doesn’t enter into it.
And while we’re at it, if we were serious about subsidies we’d slap a tax on electricity made from fossil fuels to reflect the costs they impose on society. Asthma, heart disease, mercury poisoning, groundwater contamination, and of course, the dumping of carbon into the atmosphere—these are all costs of fossil fuel that ought to be included in power bills to make sure everyone is paying their “fair share.” People who install solar panels deserve a thank-you for their service to society, not standby charges based on bogus “fair share” claims.
The argument for standby charges is, pure and simple, an attempt by entrenched monopolies to block competition. The “fair share” argument is a red herring from utilities that don’t want a fair fight. And with good reason: they’re going to lose.
This is exactly right. There is nothing about the “fair share” argument that can’t be applied to hundreds of other costs involved with providing electricity across the US. And, of course, readers of The Power Line are well aware of the uncounted costs imposed on all of us by coal and nuclear power in particular.
Thank you Ms. Main for your clear and thorough debunking of the real reasons behind the “standby charge” and “fair share” propaganda. And, as you say “they’re going to lose.”
RTO Insider reports that PJM Interconnection is placing a limit on the amount of capacity from generators outside the PJM region that can clear PJM’s RPM auction next May. This is bad news for Midwest transmission hustlers like Clean Line with all their talk of exporting wind power to the East Coast.
According to RTO Insider, the new limits will reduce the amount of imported capacity that clears next year’s RPM by 17% compared with the May 2013 auction.
The change will put upward pressure on capacity prices. How much it will help generators inside PJM, who have been hurt by the fall in capacity prices resulting from competition from both imports and demand response, is unclear.
In response to a question from Susan Bruce, representing the PJM Industrial Customer Coalition, PJM Executive Vice President for Markets Andy Ott said he believed the import limit will be “smaller magnitude in dollars” than a demand response proposal that members rejected yesterday. The DR proposal would add about $1 billion a year in capacity costs according to PJM’s simulations. (See related story PJM Wins One, Loses One on Capacity Market Changes)
In response to a later question from the Maryland Public Service Commission’s Walter Hall, Ott gave a response that seemed to undercut that certitude, saying “We do not have an estimate, nor could we get an estimate, as to the import limit” impact.
There are a number of variables that could affect future clearing prices, including the strength of the economy and the volume of demand response. DR offers dropped 27% in May from the 2012 auction. A rebound in DR offers next year could at least partially offset the import restriction.
It is good to see PJM taking steps that will help encourage new generation and demand resources in PJM instead of building new transmission capacity to handle more imported power.