Category Archives: Utilities

New Analysis
 Begs The Question:
 Is Vogtle Project
 Too Costly To Complete?

Last week’s headlines focused on Georgia Power’s newly signed agreement with Toshiba committing (recommitting?) the Japanese parent of bankrupt Westinghouse to pony up $3.68 billion to fund the completion of the long-delayed Vogtle 3 & 4 nuclear power plants. While that is clearly good news (at least for the moment) for Georgia ratepayers, who could otherwise have been stuck with the bill, it has obscured the real news—that no one knows how much it is going to cost or how long it is going to take to complete the two reactors.

The day before Georgia Power’s headline stealing news, staff and the independent construction monitor filed testimony at the Georgia Public Service Commission covering the latest six months of activity at the site (from July 2016-December 2016, with rollover analysis through April 2017). Their conclusion? The project has been a mess since the beginning, and there are still no signs of improvement (although admittedly couched in far more diplomatic/technical language, to which we now turn).

At the macro level, much of the problem can be traced to the absence of a credible integrated project schedule or IPS, an absolute must in a project as complex as this, William Jacobs, Jr., and Steven Roetger told the commission. Jacobs has served as the project’s independent construction monitor since 2009; Roetger is the commission’s lead analyst for the project. They have been highly critical of the Southern/Westinghouse work at Vogtle for years and have warned consistently that the stated completion dates bore no relationship to reality; see my stories here and here.

Continue reading New Analysis
 Begs The Question:
 Is Vogtle Project
 Too Costly To Complete?

Trump Paris About-Face Likely To Hurt, Not Help Nuclear, Coal Sectors

President Trump, with his fossil fuel fantasists in tow, made it official Thursday, announcing that he would pull the United States from the Paris climate change accord in order to “make America great again.” The administration’s inability, as well as that of most of the Republican Party in general, to come to grips with climate change is sad, but that will have to wait for a future post. The issue at hand is the decision’s likely negative impact on the U.S.’ already-battered nuclear and coal industries.

For years the nuclear industry has been making the case that it was vital to the country’s climate change mitigation efforts because of its emissions-free generation profile. While accounting for just 20 percent of the nation’s annual electric generation, the industry noted ad infinitum, it was responsible for 60 percent of the carbon dioxide-free emissions (see chart below). In a carbon-constrained world, that would be a valuable attribute. But the Trump administration has now made it clear that it places no value on CO2-free generation sources.

That, in turn, could be a major problem for the industry, as the effort to secure nuclear subsidies—successful so far in Illinois and New York (although now tied up in court), still pending in Ohio, Connecticut and now Pennsylvania—has relied in large part on the sector’s glowing greenhouse gas attributes. In an interesting twist, just before the administration’s head-in-the-sand announcement, Chicago-based Exelon said it would close the 837-megawatt Three Mile Island nuclear reactor in late 2019 because the facility couldn’t compete in the PJM electricity market, which sprawls across 13 states and the District of Columbia. The company largely blamed the market’s structure, including its failure to reward the plant for its emissions-free generation, for its decision to shutter the plant.

Continue reading Trump Paris About-Face Likely To Hurt, Not Help Nuclear, Coal Sectors

Corporate Green Goals
 Playing A Key Role
 In Pushing Utilities
 Toward Renewables

The Trump administration’s budget proposal for the coming year threatens to do exactly what the president promised as a candidate: eviscerate federal funding for climate change programs. The Energy Department’s highly successful renewable energy office would be particularly hard hit, with the administration’s proposal calling for a roughly 70 percent cut in funding—from just over $2 billion currently to $639 million next year. While wrong-headed, the proposals won’t slow the nation’s renewable transition, which is now being powered, to a large extent, by the corporate sector.

This change, which I discussed here, was highlighted in an interview last month by Chris Beam, the new president of American Electric Power’s Appalachian Power subsidiary, which currently gets 60 percent of its electricity from not-so-clean coal. Speaking to editors and reporters at the Charleston Gazette-Mail, Beam said: “At the end of the day, West Virginia may not require us to be clean, but our customers are.”

And that is exactly what is happening across the country, corporate customers are forcing utilities to expand their renewable energy offerings, whether that is to keep existing customers or to attract new companies into their service territories. As Beam added, according to the Gazette-Mail’s Ken Ward Jr.: “So if we want to bring in those jobs, and those are good jobs,…they [corporate customers] have requirements now, and we have to be mindful of what our customers want.”

Continue reading Corporate Green Goals
 Playing A Key Role
 In Pushing Utilities
 Toward Renewables

Trump Coal Obsession
 Largely Irrelevant
 To Electric Utility CEOs

The Trump administration’s obsession with the coal industry has driven many of its early energy and environmental policy initiatives—with the Energy Department’s thinly veiled baseload power plant review just the latest in a string of efforts to buttress the troubled sector. But none of these policies are going to change coal’s central problem: The utility industry, far and away its largest customer, is steadily moving away from the black rock. This transition won’t happen overnight, but the direction is clear, as a close review of recent utility executive statements and company publications clearly demonstrates.

Consider the message delivered by Allen Leverett, president and CEO of Milwaukee-based WEC Energy Group, in the company’s latest annual report:

                “I also believe that some form of carbon emission regulation is ultimately inevitable. As the regulation of carbon emissions takes shape, our plan is to work with our industry partners, environmental groups and the state of Wisconsin to reduce carbon dioxide emissions by approximately 40 percent below 2005 levels by 2030.

                “In 2016, about half of the electricity we delivered to our customers was derived from low- or no-carbon sources such as natural gas, nuclear fuel, wind farms and hydroelectric facilities. However, we want to continue to make progress in this area. Relatively flat electricity demand growth, coupled with natural gas and coal economics, has driven us to re-evaluate our generation portfolio. Taken as a group, I want any changes that we make to reduce costs, preserve fuel diversity and keep us on a path to reducing our carbon emissions.”

In other words, there will be no new coal generation in the WEC fleet, and the company’s reliance on the fuel, currently around 50 percent of its needs, is going to drop. In particular, the company has plans to build new natural gas-fired generation in the Upper Peninsula of Michigan and close its five-unit, 359 megawatt Presque Isle facility there, which now burns roughly 1.2 million tons of coal annually according to the company, whose two electric utility subsidiaries serve more than 1.5 million customers in Wisconsin and the UP of Michigan.

Or consider the comments made by Lynn Good, chairman, president and CEO of Duke Energy, during the Charlotte, N.C.-based company’s annual meeting earlier this month:

                “By retiring coal plants and bringing on more natural gas and renewables, we have already reduced our carbon emissions by nearly 30 percent since 2005. Today, we are among the top five companies in terms of renewable capacity, and we are committed to doing more.

                “We have set a new goal to reduce our carbon emissions by 40 percent from the 2005 level by 2030.”

Continue reading Trump Coal Obsession
 Largely Irrelevant
 To Electric Utility CEOs

Energy Secretary Perry
 Badly Misses Mark
 In Grid Study Memo

Energy Secretary Rick Perry clearly has bought into the fact-challenged approach to governing perfected by President Trump and now practiced almost daily by White House spokesman Sean Spicer: In a speech last week to the National Coal Council, Perry told the group that one of key problems from the Obama administration’s energy policies is “that we’re seeing this decreased diversity in our nation’s electric generation mix.”

Unfortunately for Perry, the fact is that the nation’s electric generation mix actually is much more diverse today than it was eight years ago. According to data from EIA, the independent statistics arm of his new agency (the same one, of course, that he forgot he wanted to eliminate back in the 2012 presidential campaign), the U.S. grid is demonstrably, provably and irrefutably more diverse now, as the chart below demonstrates.

Coal’s share of the market, as everyone knows, has fallen, dropping from roughly 50 percent of the total in 2008 to just under a third today. In its place, the amount of gas generation has shot up, and now accounts for about a third of the nation’s generation total as well. The rest of coal’s lost market share has been gobbled up by the wind and solar industries, with nuclear largely unchanged. Objectively, a system where two sources account for roughly 33 percent of the total, a third 20 percent and a fourth 15 percent is significantly more diverse than one with a single resource accounting for almost 50 percent of the total, and the next two at roughly 20 percent each.

Secretary Perry may not like the changes, but to say that something is not what it is, indeed, to say that it is the opposite of what it is, borders on the irresponsible. Worse, the secretary is using this and a number of other questionable assumptions as the basis for a department study looking into issues surrounding the “long-term reliability of the electric grid.”

Continue reading Energy Secretary Perry
 Badly Misses Mark
 In Grid Study Memo