Latest numbers from Sierra Club’s Beyond Coal campaign show Coal Plant Retirements continuing- Is Nevada a Good Model?

The Sierra Club’s signature campaign — the Beyond Coal Campaign — reports that coal retirements are on the rise. As of May 1st, some 472 coal-burning units in the United States had retired or announced their retirement. These included 165 entire power plants, and another 33 power plants with partial retirements. All told, the retirements — when completed — represent 67,144 MWs of power, or about 20% of all coal plants. The announced retirements include 2,580 MWs of announced retirements in 2014 alone. See here for a full account of the numbers.

While much of the work in Texas has focussed on stopping new proposed coal plants, three coal plants here have been scheduled for retirement. First, one of AEP’s three units at the Welsh Power Plant in northeast Texas is scheduled for retirement next year — in part due to its inability to economically reduce emissions — while CPS Energy in San Antonio is slated to retire its two Deely Units by the end of 2018. We continue to press for additional retirements, such as the 600 MW unit partially owned by Austin Energy, and the big three coal plants owned by Luminant, currently embroiled in its bankruptcy mess.

We might be able to take some inspiration from our Sierra Club colleagues in Nevada.  Guided in part by requirements under state law to reduce emissions, NV Energy is scheduled to retire its 553-MW Reid Gardner plant in Clark County, Nev. over the next three and a half years. By the end of 2019, the utility would also eliminate its 11.3% ownership interest in the coal-fired, 2,250-MW Navajo power plant in Coconino County, Ariz. One of the ways it would replace the Reid Gardner plant is to acquire the planned 200 MW Moapa Solar Energy Center for an estimated $438.1 million as part of its broad portfolio realignment away from coal-fired generation. Sierra Club was there, calling on the planned retirement to be accompanied by investments in new clean energy resources. Note to Texas: we have good sun and wind resources and plenty of development. Let’s get those old coal plants retired!

Sierra Club turns up the heat in February in Texas with lawsuits and rate interventions against coal plants, oil refineries

Sometimes one doesn’t realize how active Sierra Club is throughout the state — from Houston, to Waco to West Texas. One only need look at February 2013 as an example. First,  the Sierra Club and Environment Texas is taking Exxon Mobil’s Baytown refinery and chemical plant to federal court in Houston, calling on the court to intervene by ordering the Irving-based oil giant to comply with its permits and issuing stiff penalties. Under a provision of the Clean Air Act that allows citizens to go to court to enforce the law in the absence of government action, Sierra Club and Environment Texas are claiming that the  company over an eight-year period illegally released about 5,000 tons of toxic pollutants into the air from its Baytown site. Previous filed Clean Air Act lawsuits against Chevron and Shell led to negotiated agreements that have cleaned up the air, but Exxon Mobil preferred to go to court. 

Second, in Waco, Texas this week, Sierra Club’s lawyers are alleging that Luminant’s large coal plants in East Texas are illegally spewing out far more pollution than is authorized by state and federal law and their permits. Essentially, Sierra Club is taking this “enforcement” action because our own regulatory agency — the Texas Commission on Environmental Quality — and the EPA have refused to. A recent article in the New York Times makes mention of how groups like Environment Texas and Sierra Club are taking these legal steps because of the lack of transparency and enforcement activity by our regulators. 

Finally, just last week, Sierra Club filed to intervene in a rate case in West Texas, where Southwestern Public Service Company is asking the Public Utility Commission if it can raise its rates and tariffs by approximately 10%. One of the reasons they cite in raising rates in West Texas is the need to clean up their coal plant to meet environmental regulations. Sierra Club member –as our motion to intervene makes clear — “have a unique interest in avoiding imprudent expenditures on coal-burning power plants, and ensuring that lower-cost demand-side management and renewable energy resources are fully developed.” In other words, maybe efficiently retiring one or more of the coal plant units, while adding new resources would ultimately be cheaper and better for the customers of SPS. A copy of our motion can be found here. 

Stakeholders line the hall at PUC to file comments on proposed changes to Texas’ s Energy Market

A variety of stakeholders lined the hall on Floor 8 of the Travis Building north of the Capitol in Austin today to file comments with the Public Utility Commission on what changes — if any — are needed in Texas’s energy market to help keep the lights on. With suggestions that electricity demand is growing, and supplies dwindling, and a couple of high-profile incidents in 2011 when Texas came close to brown-outs or black-outs, stakeholders have been discussing these issues at the PUC and ERCOT — which runs Texas’ electrical grid and market — for a couple of years. And there are at least two camps. On one side, are a majority of the generators — Luminant, NRG and Calpine, but also Austin Energy and Xcel — who argue that without a new Forward Capacity market to pay generators not only for the energy they produce when they produce it, but also for the capacity they have or promise to have, there will be no incentive to build new generation to meet demand. Many markets in the US have such a capacity market, and it does provide extra cash to generators (as well as to demand response to lower demand), though actual new construction has been limited in most markets. On the other, are environmental and consumer organizations like the Sierra Club, Public Citizen, EDF and AARP, large industrial and municipal  consumers like HEB,  Shell, the Texas Industrial  Energy Consumers and the Steering Committee of Cities Served by ONCOR — who are concerned about higher electricity prices and the potential that a capacity market will only help keep older generation units on longer, but not guarantee new generation. And perhaps another group — like CPS Energy, Golden Spread Electric Cooperative and GDF Suez Energy — who are not convinced a capacity market is needed, but are not opposed to some additional changes. Today was the deadline to respond to literally dozens of questions from Chairman Nelson and Commissioner Anderson — one a capacity booster the other a skeptic — on what we all thought.

The Sierra Club did file comments — some 25 pages long — that said: No capacity market needed — too expensive, too complicated and no guarantees. But we do think that some changes may be needed, and the best way is to do short-term competitive contracts through the Ancillary Service market at ERCOT. Since most of our “problem” is for a few hours a year on a cold winter morning or hot summer day, an extra Supplemental Reserve Service contracted a year in advance could help both those building peaking plants, or providing solar plus storage capabilities or those able to turn down demand could participate, helping to avert any issues before they arise. Other changes already occurring at ERCOT — such as allowing “loads” to bid into the energy market — and turn down demand when prices spike — should be allowed to move forward. The Comptroller of Public Accounts must begin rulemaking to adopt 2012 energy codes so that new buildings in Texas are energy efficient. PUC should adopt new rules on interconnection of distributed solar and require that excess energy be paid a fair market rate.

indeed, ERCOT is in the middle of redoing both their ancillary service market and their demand and supply forecasts and it may well turn out that there really is no big crisis at all. Actually the real crisis is that energy companies like luminant, NRG and Calpine are not making as much money as they would like!

Stay tuned for more in this ongoing saga. For a copy of our comments, see here..

Luminant Fined for Failure to Provide Power during Peak Demand in February 2011

FOR IMMEDIATE RELEASE:

Wednesday, November 27, 2013

 

CONTACT: Cyrus Reed, Sierra Club, (512) 740-4086, cyrus.reed@sierraclub.org

 

Luminant Fined for Failure to Provide Power during Peak Demand in February 2011

 

AUSTIN, TX – Luminant Energy Company, LLC has agreed to pay $750,000 to the state of Texas as part of a settlement agreement with the Staff of the state Public Utility Commission. The settlement stems from the alleged failure of several Luminant power generating units during peak demand on February 2, 2011, when record low temperatures caused a spike in power demand.

 

In response, Sierra Club Conservation Director and ERCOT member Cyrus Reed issued the following statement:

 

“Hopefully, this rather modest fine will send a message to Luminant and other coal and gas generators that when they are paid money by ERCOT to be available in times of emergency — such as the freeze of February 2011 — they must be available. This means utility companies like Luminant must properly maintain their generating units so that breakdowns and emergencies don’t take place when people need electricity the most, such as times of extreme temperatures.

 

As ERCOT and the PUC consider further changes to ancillary services and potentially to the wholesale energy market, they must make sure that those paid for performance can realistically perform, or face stiff penalties. Texas doesn’t need new, expensive power plants to meet our needs and power our economy, but we do need responsible utilities following the letter of the law and taking responsibility for its assets.

 

What did perform well in both in February and August 2011 was demand response, a method of reducing electricity demand, by large and small industrial and commercial entities.  As Texas consider changes to our market we should prioritize resources like demand response that we can depend on.”

 

 

 

 

Senate Natural Resource Committee and Witnesses Grill Utility Commission for decision to consider “Capacity Markets”

Yesterday, November 25th, in a fairly contentious day at the Capitol, Senate Committee on Natural Resources Chair Troy Fraser grilled the two Public Utility Commissioners that made a decision earlier this year to require a mandated reserve margin which could lead to the implementation of a “capacity” market in Texas. He was joined both by conservative Senators like San Antonio Senator Donna Campbell and more liberal senators like Senator Rodney Ellis and Senator and Lt. Governor candidate Leticia Van De Putte (D-San Antonio), who all questioned the wisdom and authority of the PUC to consider major changes to the wholesale energy market.

For a pretty good report on the days events courtesy of  the Texas Tribune, see here.

So what is it exactly that had the Senators — conservative and less-so — so riled up, as well as one of the three PUC commissioners, and many of the invited witnesses, including the American Natural Gas Alliance, Valero, the Texas Association of Manufacturers, the Cities served by ONCOR, Walmart and the Texas Public Policy Foundation, among others? A preliminary decision by two of the three PUC commissioners — Chair Donna Nelson and newbie Brandy Marty — to declare in a non-binding vote that they were in favor of a required reserve margin, and the suggestion by Nelson and many electric generators that the best way to get there is by the imposition of a forward capacity market — which pays generators (and also potentially companies reducing energy demand through demand response) money for having the capacity to deliver energy as well as paying them for any energy they actually produce. This is common in some other markets in the United States. Analysis shows that such a market could be very costly — upwards of $4 billion per year — with no actual guarantee that it would lead, as Fraser put it, to “new steel in the ground.” Instead, existing resources like large inefficient dirty coal plants could get paid for just hanging around.

In addition to the cost and effectiveness of a capacity market, Fraser and even PUC Commissioner Ken Anderson — a capacity market critic — questioned whether PUC had the authority in statutes to change the market structure without legislative direction to do so. Both Marty and Nelson argued they did since they were charged with protecting consumers and insuring reliability, but Fraser stated that previous discussions on the subject had led to an understanding that the Energy-only Texas market decision was made in 1999, and only legislative action could change it. All Senators who spoke told the PUC to tread carefully and seek legislative guidance before adopting changes. Fraser in particular admonished Nelson and Marty for not “picking up the phone” before their vote to require a reserve margin. (Note; The vote was really an indication of their preference and no actual changes have been made to create a required reserve margin — still it was an indication of their preferences.)

In the meantime, the Commission has asked stakeholders for public input on a variety of questions, and will be holding a workshop on January 29 and 30th. The Sierra Club has been involved in the discussion, and has argued that a capacity market is not needed and that relatively minor changes to the energy-only market can help move Texas toward a clean energy future. One of our main efforts has been to change the way ERCOT – the Electric Reliability Council of Texas — projects our supply and demand of energy. We argue that ERCOT often overestimates demand — in part because they have not incorporated the gains made through energy efficiency and demand response — and underestimates supply — the amount of energy produced by wind and distributed solar to the grid during peak times of use. ERCOT is slowly changing its projections because of our and other efforts and it could be Texas discovers our supposed crisis in reliability has more to do with the amount of money big companies like Luminant want to make to pay down their debts, and less about ensuring the reliability of our energy markets. In the meantime, development of new rules and protocols to help loads, demand response, energy efficiency, solar and energy storage to participate more actively in our energy-only market can help meet our demand.