Tag Archives: Public utility

PUC Can Move Texas Clean Jobs Forward!

Blue Wing Solar Plant goes online in San Antonio

Sierra Club Asks Public Utility Commission to Move Solar, Smart Grid, and Clean Energy Jobs forward in Texas

Responding to an invitation to present to the Texas Public Utility Commission (PUC), the Lone Star Chapter of the Sierra Club is calling on the PUC to coordinate with other state agencies to fluidly implement new clean energy laws passed by the State Legislature.

“Texas’ coal plants will soon have increasing difficulty and significant costs complying with new health-based EPA regulations and Texas needs to plan for that future,” noted Cyrus Reed, Conservation Director of the Lone Star Chapter of the Sierra Club. “It will be cheaper and healthier for Texas to retire these old coal plants.  With its rule-making, the PUC can help open up Texas markets and create jobs for Texans by encouraging new technologies such as – roof-top and utility-scale solar, demand response also known as ‘smart grid’, energy efficiency measures, and energy storage.”

The PUC workshop tomorrow — “The Cost & Impacts  of New Environmental Regulations and the Opportunity for a New, Cleaner Electrical Grid” comes on the heels of yesterday’s announcement by San Antonio’s Mayor that the city’s publicly-owned utility, CPS Energy will close Deely, its oldest and dirtiest coal plant by 2018 and replace it with a combination of energy efficiency, and traditional and renewable resources.

Reed’s presentation points to a recent report “Review of the Potential Impacts of Proposed Environmental Regulations on the ERCOT System” by Texas’ grid operator, the Electric Reliability Council of Texas (ERCOT) on the impacts of four major, new environmental regulations being implemented by EPA.  Reed contends that the report is flawed saying, “it undercounts the costs of those regulations and ignores other important EPA regulations like the new standards for ozone pollution.”

Workers at Blue Wing Solar Plant

Reed’s presentation calls on the PUC to implement severally recently enacted pieces of legislation related to distributed renewable power, energy storage and energy efficiency.  He emphasizes that the PUC must finally implement the 500 megawatt, 2015 target for non-wind renewable resources like solar power, a target established by the Legislature back in 2005.

“The 500 megawatt solar rule should be adopted by the Commissioners at their next meeting on July 8 or their time runs out,” noted Reed. “There are already some 800 megawatts of solar power waiting for clarification from the PUC that there will be a market for their power.  These are Texas jobs waiting in the wings for their word.”

Reed also called on the PUC to start an 18-month process to produce a more comprehensive report on the impact of upcoming regulations on the Texas energy market.  This process will include:

  • Public participation;
  • An Advisory Committee; and
  • A set of recommendations to the 2013 Legislature.

The PUC meeting which is open to the public is scheduled to be held tomorrow, Wednesday, June 22 between 10:00 AM and 3:00 PM on the 7th Floor of the Travis Building at 1701 Congress Avenue in Austin.  The workshop will include presentations by utilities, think-tanks, energy consultants and other stakeholders.

Information about the meeting can be found at: http://www.puc.state.tx.us/agency/calendar/AppointmentDetail.aspx?ID=136 

A copy of the Sierra Club presentation can be found at: https://texasgreenreport.files.wordpress.com/2011/06/cyrus_reed_presentation_to_puc_2011-06-22.pptx

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Posted by Donna Hoffman

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Luminant’s Three Should be First to Go

Luminant’s Economic Problems Loom Large:

Martin Lake, Monticello and Big Brown Should Be Retired

Click here for a powerpoint presentation of the report released today.

Today, Sierra Club released a report entitled The Case to Retire Big Brown, Monticello and Martin Lake Coal Plants: Three Mismanaged, Unprofitable, Outmoded and Worthless Coal Plants in North Texas. The report details the economic realities for the three named coal plants owned by Luminant.  These plants were examined, in part, because they are three of the largest polluters in the state of Texas, have no modern pollution control equipment to manage their emissions, and are facing the worst economic reality of any privately-owned utility.  The report looked closely at:

  • The 2007 leveraged buyout of TXU Corporation;
  • The current prices of both coal and natural gas; and,
  • Power prices in the North Texas region of ERCOT, Texas’s electrical grid that encompasses most of the state.

The report concludes that with three basic economic facts—high fixed costs, low natural gas and power prices in Texas, and the need for large new investments to meet environmental requirements—these three Luminant plants should be retired.

“The Sierra Club commissioned this report to demonstrate that coal does not work in Texas.” said Jen Powis Senior Regional Representative for Sierra Club.  “After months of research, these plants epitomize why dirty coal shouldn’t have a seat at the Texas energy table. Coal is our largest polluter in the state, can’t be run economically, and these three plants are upside down on their mortgage.  Texas should be phasing coal out.”

The report briefly explains the history behind the highly-leveraged buy-out of TXU Corporation by a consortium of private equity investors and the assumptions they mistakenly made about the Texas electricity market. Because these plants were originally overvalued and the market did not expand as predicted, these three plants are ready for immediate retirement.

“These coal plants are and will continue to be a big financial burden to Texas. The 2007 TXU deal has failed, current markets work against coal plants and the future is bleak for Luminant’s Big Brown, Martin Lake, and Monticello,” said Tom Sanzillo, a financial and policy analyst for TR Rose Associates.. “Retire the plants. There are better, cleaner, financially stable and more efficient solutions that do not cover the Texas landscape in mountains of toxic debt.” Sanzillo has examined coal and energy issues in over ten states in the last four years and is the former First Deputy Comptroller for New York State.

A recent report by the Brattle Group, a utility industry consulting firm, reaches a similar conclusion but examined the economics of all merchant coal plants in Texas.  A merchant coal plant is one that sells into the grid at wholesale, meaning it is not part of a regulated utility.  Texas has 19 operating coal plants, only five of which are owned by regulated utilities.  All of Luminant’s five coal plants are merchant plants but these three thirty-year old plants are the oldest, coming on-line in Texas in the late 1970’s.  While the report demonstrates why these three plants fail for economic reasons, they also hold much of the blame for North Texas’s and Oklahoma’s problems with air pollution.

“Big Brown, Monticello, and Martin Lake are three of the worst polluters in Texas accounting for over 25% (over 400,000 tons a year) of all industrial factory air pollution in Texas.  That’s out of nearly 2,000 industrial plants.” Said Dr. Neil Carman, Air Quality Director for the Lone Star Chapter of the Sierra Club. “They also account for about 50% of all coal plant pollution.  These three coal plants alone emit almost 4,000 pounds of mercury into the air every year, over 180,000 tons of sulfur dioxide, over 30,000 tons of smog-forming nitrogen oxides, and millions of tons of carbon dioxide, the prinicipal greenhouse gas.   All of those emissions are carried into the Dallas/Ft. Worth area and then up into Oklahoma to Oklahoma City.”

According to EIA data from 2009, Texas is third in the nation in megawatt hours produced by coal plants but also leads the nation in installed wind power, with over 10,000 megawatts of wind mostly in West Texas.  By most accounts, Texas could immediately install another 10,000 megawatts of wind generation should additional transmission lines be built to bring wind power from West Texas into Texas’s main population centers in the East.

A national discussion is currently underway concerning how best to invest to improve our system of electricity for the next generation” said Jen Powis.  “Texas should be leading the way in that discussion, and frankly, we shouldn’t be including coal.  Why would Texas import coal from other states to burn for electricity when we haven’t even tapped our powerful wind and solar potential?  We can lead the way in job creation and economic development in these technologies.”

Click here for the Report or here for the Powerpoint presentation.

Ready to move Beyond Coal?  Get involved with Sierra Club!  Email lonestar.chapter@sierraclub.org

Explore, Enjoy, Protect

Posted by Donna Hoffman, 3-17-11

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Failure to Operate

Remember the rolling blackouts? Today, the Senate hauled up the public utilities and several commissions up to testify at the Capitol. We wonder how they’ll explain away our reliance on fossil fuels to carry us through the 21st century:

From the Austin American Statesman:

The storm knocked more than 80 of the state 550 generators offline, according to early explanations, primarily because of frozen or broken equipment, including safety instruments that shut down some of the state’s largest, newest coal-fired plants.

Luminant has reported that the blackouts cost the company $30 million when several of its generating plants broke down, forcing it to buy electricity on the open market, where prices rose from $50 per megawatt-hour to $3,000 .

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Business and Commerce Committee consider retail pricing, nodal and… Austin Energy’s Clean Energy Plan

Key is to give businesses and consumers tools to reduce energy demand – and save money – says Sierra Club

The Senate Business and Commerce Committee met earlier this week to discuss, among other interim charges, the competition in electric retail markets including the impact of the “nodal” transition on electric customers. On December 1, 2010, the Texas ERCOT electricity market will officially transform from a “zonal” system – based on five geographic zones – to a “nodal” system, based on hundreds of local areas. Thus, electricity pricing should be more varied, with local factors of generation, transmission and congestion impacting the wholesale and ultimately retail price.

While several invited panelists expressed some concern about the potential for problems at least as the system is rolled out, Trip Doggett, President and CEO of the Electric Reliability Council of Texas, the operators of the electric grid that covers roughly 80% of the Texas market, expressed confidence that testing had worked out must of the bugs in the system. Public Utility Commissioner Donna Nelson emphasized that the nodal system was already being paid for through a surcharge and that prices would not increase as a result of the software and infrastructure needed to change to nodal. In addition, she noted that PUC had passed rules to establish some ceiling prices during the transition to prevent any runups.

Much of the morning’s testimony centered on whether the deregulation of the wholesale, generation and retail markets of much of Texas had actually led to lower prices for consumers. While all admitted that today’s current low prices were heavily influenced by the historically low natural gas prices, Nelson, Phillip Oldham with the Texas Association of Manufacturers, John Fainter with the Association of Energy Companies of Texas, Marcie Zlotnik with StarTex Power, an electric retail provider, and Brad Jones, with Luminant Energy, for the most part felt that competition had led to more efficient generation and lower prices and felt that companies that had done their homework would be able to thrive in the “nodal” market. Taking a different tact, Jake Dyer, representing the Cities Aggregation Power Project, argued strenuously that “public” power provided by municipal utilities and electric cooperatives had represented a better deal for most residents, and presented information based upon prices reported by the Energy Information Administration to prove up his case. However, when asked by Chairman Corona (R-Dallas) whether his group would favor re-regulation of the electric market, he said it wanted reform, not re-regulation. Similarly, Bee Morehead with the interreligious non-profit organization Texas Impact said the market was not working for most people – particularly Texans with lower and moderate incomes — and suggested a major overhaul of the “Power to Choose” website which people rely upon to choose their electric provider among other fixes. Similarly, Tim Morestead with AARP said a workshop of some 140 older Texans given the chance to compare and choose contracts from different providers resulted in mass confusion among many.

Testifying that Sierra Club did not actually know what the impact of the nodal market would have on retail electric prices – except it would lead to more local variability – Lone Star Chapter Conservation Director Cyrus Reed instead called for a series of legislative changes to promote energy efficiency, demand side management and onsite renewable energy. As Reed pointed out, while we can’t know how the nodal market will impact retail rates, we can reduce bills through promotion of such efforts.

Among Sierra Club’s suggested fixes were:

  • Creation of a Texas Energy Efficiency Coordinating Council which would oversee and coordinate the different energy efficiency program offered or overseen by the Texas Department of Housing and Community Affairs, the State Energy Conservation Office and the Public Utility Commission, among others;
  • Raising the energy efficiency goals that investor-owned utilities must meet, but allowing such utilities to more directly interact with customers;
  • Allowing retail electric providers, investor-owned utilities, municipal utilities and electric cooperatives to provide on-bill financing for energy efficiency and solar projects;
  • Allowing aggregators and others to “bid-in” demand-side management – where individuals and companies voluntarily turn down their power use for payment – into the ERCOT nodal market;
  • Establishing a statewide fair market price on the sale of surplus electricity from solar rooftops;
  • Clarifying the rules for when Homeowner Associations can prevent – if at all — a homeowner from putting up solar panels.

To see Cyrus Reed’s testimony on video, click here. Then Click on the Video Feed for October 25th. Testimony starts at 3 hours and 1 minute.

A side-note that was not officially on the agenda were a number of individuals who came to speak against Austin Energy’s Generation Plan and Climate Protection Plan – which calls for Austin Energy to increase its renewable resources up to some 35 percent of total generation —  as having the potential to add huge costs to consumer’s bills and lead to great uncertainty on reliability and costs. Data Foundry’s Andrew McFarlane, called for municipal utilities to be opened up to competition from other utilities so that businesses could choose another provider, a proposal that led Chairman Corona to suggest such advice would be sent to a subcommittee chaired by Austin Senator Kirk Watson, a former mayor and board member of Austin Energy. Some other suggestions by McFarlane and others, however, drew more favorable responses, such as the idea for greater transparency of municipal cost data. The Lone Star Chapter of the Sierra Club has officially endorsed the Austin Energy 2020 Generation Plan, with the understanding that each decision on additional purchases of generation would have to go through a public process to assess all the costs and benefits of such additions.

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