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Aggregating Energy Since 2006


Stories that have to do with legislation and policy

Is Pawlenty changing his mind about energy?

In an apparent policy reversal, Minnesota state agencies told legislators that further climate change action may be unnecessary. Data have shown a drop in emissions from 2005 to 2006, and the assistant commissioner for air quality at the Minnesota Pollution Control Agency, David Thornton, and the new head of the Office for Energy Security, Bill Glahn, suggest that if that trend continues, Minnesota will meet its emission reduction goals in 2015 with no new policy actions.

This seems highly unlikely to me, and I find the suggestion disturbing.

Furthermore, they are suggesting that Big Stone II will reduce carbon emissions because it could replace two older coal plants (which won't happen), and that the only new policy suggestions from the Minnesota Climate Change Advisory Group (MCCAG) they support are eliminating the ban on new nuclear plants (which the MCCAG suggested should be studied) and implementing appliance efficiency standards.


Thanks to Keith for the heads-up.

News Breeze


A drive-by look at interesting news stories just now...

Governor Pawlenty signed the omnibus ag bill. Mostly. Agri News covered the bill and its broad details.

As ethanol plants come off the state subsidy, other ag programs will receive that funding, Juhnke said. The money is going toward value-added research and NextGen ethanol now.

For whatever reason, Agri News does not talk about the Governor's two line-item vetos that eliminated spending on sustainable agriculture. Fortunately, Loon Commons covered it.

Nationally, the U.S. Senate is looking to improve fuel efficiency standards in cars.

Finally, on the West Coast, California has some problems with their solar industry. The L.A. Times covered the problem on May 8.

The problem appears to be that the rebate program requires customers to enroll in a variable pricing program. The program charges more for electricity during peak times than during periods of low demand. These higher prices means that people have to build a large enough system to cover all their electricity needs during those peak hours or risk making their investment uneconomical due to the increased cost of the electricity (though less is purchased overall).

Their electricity prices are stunningly high, with peak residential charges more 3 times higher than ours. Compare that with recent claims that businesses will flee MN if the cost of electricity rises by a few cents per kilowatt-hour (claimed during committee hearings around the climate change bill). Seems to me that California remains an economic powerhouse despite its high energy prices. It also conserves far more electricity than any other state.

I'm a supporter of time-of-day pricing. I think people should understand the impact of their energy usage - if they want to use lots of electricity during high demand, they should pay extra because that usage stresses the system far more than during periods of low-medium demand. The grid has a limited capacity and increasing that capacity is costly. Perhaps we can delay investments to increase the capacity of the grid by forcing people to pay for their usage.

However, pushing more usage to low demand periods will likely increased coal-based generation. That is why I think the variable pricing system should heavily encourage renewable energy with an artificial floor. Thus, the price of electricity would not drop below $.08 per kilowatt-hour regardless of demand unless there was a lot of wind on the grid at the time. As this floor would generate excess profits, that money could be diverted into conservation funds or revolving loan programs to encourage renewable development.

Omnibus Bill S.F. 2096


The Environment, Natural Resources, and Energy Omnibus Bill (S.F. 2096) is out of conference committee and will be signed by Governor Pawlenty, according to Minnesota Environmental Partnership's John Tuma.

This bill touches on nuclear, hydrogen, wind, and carbon sequestration - all toward the bottom of the bill if you are inclined to read the direct language. It also continued to fund the Initiative for Renewable Energy and the Environment (IREE) at the University of Minnesota.

On nuke stuff - Xcel Energy already has to contribute to the Renewable Development Fund (RDF). Groups can get money from this fund to develop or commercialize renewable energy projects. Xcel now has to pay an additional $350,000 per year for each dry cask of spent fuel it stores on-site at the Monticello plant.

Outside of this bill, some are apparently opposing Xcel's new storage out of safety concerns though some are accusing them of merely using an excuse to block nuclear power. I'm not sure where that is at currently, but I certainly hope Xcel is able to continue running Monticello as existing nuclear power plants strike me as a win-win compared to needing to build more coal baseload plants.

Interestingly, nuclear power plant troubles have negatively impacted Xcel's profits. Looks like the future of nuclear power might not be as bright green as some have suggested.

Back to S.F. 2096 - the bill also makes it clear that Xcel can apply for RDF money though it must be judged equally to other applications.

Public Utilities must make monthly reports to to the PUC that show a bunch of stats, including number of customers, number and amount of accounts past due, average monthly bill, total sales revenue, and a bunch of stats relating to low-income energy programs. All this will be made publicly available. The bill has a bunch of language about the cold weather rule - detailing when utilities can cut power/fuel to customers for nonpayment and the rules for reconnecting. I'm not sure how this differs from current law.

On Hydrogen, the bill gets more specific than current law. Hydrogen fuel is to come from renewable sources and several Minnesota Agencies are to move beyond "identifying opportunities" to demonstrate the technology to identifying opportunities to deploy the technology. In other areas, it strengthens the language to force agencies to push harder for Hydrogen applications as it becomes feasible.

It creates the Minnesota Renewable Hydrogen Initiative:

The Department of Commerce shall coordinate and administer directly or by contract the Minnesota renewable hydrogen initiative. If the department decides to contract for its duties under this section, it must contract with a nonpartisan, nonprofit organization within the state to develop the road map. The initiative may be run as a public-private partnership representing business, academic, governmental, and nongovernmental organizations. The initiative must oversee the development and implementation of a renewable hydrogen road map, including appropriate technology deployments, that achieve the hydrogen goal of section 216B.013. ... The road map should describe how renewable hydrogen and fuel cells fit in Minnesota's overall energy system, and should help foster a consistent, predictable, and prudent investment environment. The department must report to the legislature on the progress in implementing the road map by November 1 of each odd-numbered year.

The DoC will be awarding grants to help meet renewable hydrogen energy goals. By the end of next year, the Labor and Industry Commissioner will have recommendations for the Legislature to unify codes and standards for a hydrogen infrastructure. It will also deal with saftey standards for the "production, storage, transportation, distribution, and use of hydrogen, fuel cells, and related technologies.

On Manitoba Hydro - it specifies a task force that will collect information about who is employed by the project and the status of lawsuits against the project as well as its environmental impacts.

On Clean Energy Resource Teams (CERTS), the bill says that they are great and says the commissioner may use the teams to "provide professional, technical, organizational, and financial assistance to regions and communities to develop and implement community energy programs and projects, within available resources."

Section 28 creates a Rural Energy Development Revolving Loan Fund. The fund is limited to loans less than $100,000 and has a max interest rate of 1.5%. It will assist in funding wind studies and transmission interconnection studies.

By Feb 1, 2008, the DoC will have issued recommendations based upon a stakeholder group's evaluation of designing a system to allow off-site renewable distributed generation. This would essentially allow some groups to invest in wind turbines while keeping the renewable energy credits that currently tend to go to utilities. The utilities are opposed to it, so we'll see what this stakeholder group does.

When it comes to Carbon Sequestration, the bill deals with both terrestrial (storing carbon in soil and vegetation) and geologic (injecting it underground). The University of Minnesota is going to assess Minnesota's terrestrial sequestration potential and impacts. The Minnesota Geologic Survey will study the possibilities and impacts of sequesting carbon geologically in the Midcontinent Rift system.

Finally, there was a question about whether county governments may own wind projects or not. Winona County now can. Rather than clarify whether all counties can do this, it just says that Winona County can use certain powers granted to municipal power agencies.

C-BED and Global Warming Bill

As noted at the bottom of this Loon Commons post, the Senate Energy Committee has moved a bill, S.F. 145 out of committee that deals with global warming.

It is mostly about C-BED, a great set of rules that we have barely touched upon here. However, Article 2 deals with greenhouse gases and sets up a goal to reduce greenhouse gas reductions in MN by 80% by 2050. Nothing binding mind you, but it would be nice to reduce those pesky emissions.

Also, we need a plan.

By February 1, 2008, the commissioner of commerce, in consultation with the commissioners of the Pollution Control Agency, the Housing Finance Agency, and the Departments of Natural Resources, Agriculture, Employment and Economic Development, and Transportation, and the chair of the Metropolitan Council, shall submit to the legislature a climate change action plan that meets the requirements of this section.

The plan must consider a cap and trade approach.

I cannot hide my disappointment over this bill. We have a Republican Governor who proposed requiring offsets for new large sources of greenhouse gases. We have a DFL in charge of the legislature. We don't have a bill that will actually force us to stop digging a deeper hole.

What he have is a bill to start studying how to stop digging. The utilities claim that Big Stone II will be a viable source of electricity even under a nationwide cap-and-trade system. Simultaneously, they claim that putting any price on their greenhouse gas emissions will prevent it from being built. I wonder if I am the only one who doesn't get that.

Fortunately for them, both parties in the Legislature appear to have understood their logic because the Senate stripped out offset language from the climate change bills. Odd that they claim people listening to all the worlds' scientists about global warming are alarmists while they decry that Minnesota will be without any electricity if they do not build a coal plant in South Dakota in 6 years.

MN Leg Update


Energista has been sagging in its MN Legislature coverage over the past two weeks, but Loon Commons has continued with great weekly updates. The Leg has the week off and I hope to catch up with their antics over the next couple of days. I have no clue what is happening in the Leg in relation to biofuels and would be thrilled if someone else can help us out with that.

Looks like the Global Warming Mitigation Act is pretty much dead in the Senate. At this point, I can do little more than quote the Loon Commons story:

The final curveball from the Senate this week was some significant struggles around passage of the Global Warming Mitigation Act we have been promoting. We were informed by Sen. Yvonne Prettner-Solon (DFL-Duluth), chair of the Energy, Utilities, Technology and Communications Policy Committee that the Global Warming Mitigation Act (SF192 authored by Sen. Ellen Anderson) would not be receiving a vote in her committee. The most significant power a committee chair holds is setting the agenda for the committee. She indicated that any global warming provisions would be in her omnibus bill, but the language we were initially provided this week was a far cry from anything in the Sen. Anderson legislation we support.

The little more I can add is that I have heard that Chair Prettner-Solon is herself the stumbling block in her desire to forge consensus on this issue. She appears poised to move a do-nothing climate change bill through rather than proceed with a close vote (though I don't know that there are enough votes for the Global Warming Mitigation Act to survive). As someone who applauded her efforts to create consensus on the RES issue, I am disappointed that she feels consensus is needed on this bill as well. I'm tired of rhetoric suggesting Minnesota will be in the dark if new coal plants are forced to pay to offset their greenhouse gas emissions. The reality is that a worst-case scenario involves higher prices, not rolling blackouts. This is not trivial, but neither are massive investments into long-lived power plants that may not be economical in a carbon-constrained future.

How many states have Republican governors who will sign a bill requiring new large sources of GHGs to offset their emissions? That our Senate Energy Committee cannot move a strong bill out of committee is hugely disappointing.

The news is not all bad as the energy conservation bill pushed by Dibble in the Senate and Kalin in the House has passed the whole Senate and made it out of the House Finance Committee. The bill is not as aggressive as proposed, but should still encourage more conservation that we currently have. The switch from a spending mandate to a savings mandate should help and the decoupling part should provide better incentives for utilities to conserve. All in all, these are significant steps - ratcheting up the conservation requirement can be done overtime if there is evidence the utilities are capable of reaching higher targets.

I'm curious to see what I have been missing over the last two weeks of House Energy Finance Committee hearings. Chair Hilty has moved his (really the Governor's) Next Generation Energy Act of 2007 out of committee but Magnus (climate-change denier) has been stricken as an author. I'm curious to learn what happened there and what purpose the bill serves at this point (several pieces of it having already been passed in the RES and conservation piece I just mentioned).

Finally, the omnibus energy bills are hitting the committees soon. The House Energy Finance & Policy (H.F. 1392) is available for energy-obsessed masochists everywhere. The Senate Energy & Utilities Committee appears to have turned the Governor's Next Generation Energy Act of 2007 (S.F. 145) into their omnibus bill.

Crunch Time

One of the problems with running a project like Energista while in graduate school is that graduate school has deadlines and big papers. For me, this week is a difficult one as I try to finish a draft of my final project before I am ejected into the market to seek employment.

As I will not be writing much of anything for pleasure this week, I wanted to suggest that people looking for something to read continue to follow the RES hearings in Oregon which are being covered by Watthead.

Alternative Fuel Vehicles

Saint Paul Capitol

The Duluth News Tribune reports on efforts by some to establish a state tax credit for alternative fueled vehicles. It references H.F. 1002.

Although we clearly need policies that make alternative fuel vehicles cheaper and more accessible to consumers, I do not think this will be an effective means to that end. We should know by now that people who buy dual-fuel vehicles will not necessarily use the E85 unless that is effectively cheaper than the alternative.

The larger problem with this legislation is that dual-fuel vehicles are not necessarily more efficient than those powered only by petroleum. Is society better served by consumers purchasing a 30 mile-per-gallon (mpg) vehicle because it can run on batteries or E85 when 40+ mpg vehicles are available that run on gasoline.

Any bill like developing tax credits should have a cutoff so that cars that achieve 40mpg or less are not eligible and SUVs/light trucks that achieve less than 30mpg are not eligible. We should not be giving tax credits to people who buy a 19mpg truck instead of 15mpg truck.

Global Warming Warmup

Climate Change Graphic

I have nearly listened to all the MN House hearings on the Global Warming Mitigation Act of 2007 (H.F. 375). By the end of the week, I hope to have a post that offers more detailed discussion of the hearings around that bill. As of now, the fate of the Mitigation Act looks uncertain but is leaning toward death from what I can tell.

I have had some thoughts and concerns over the course of the 12-15 hours of testimony and debate over this bill that I have been dying to express. They follow.

Much of the testimony on the bill is on section 5 (I'll explain the bill in greater detail in a future post) which requires any new large generation source to offset its GHG emissions. This has a major impact on the proposed Big Stone II plant in South Dakota (to supply electricity to Minnesota) and has therefore drawn a lot of ire from the utilities who have invested in Big Stone II and plan on it to supply future baseload power.

After listening to the same people offer the same testimony in front of two MN House committees (Energy Cmte and the Enviro and Natural Resources Cmte) as well as the Senate, I get testy. The utility testimony from Otter Tail Power offered the same flawed analogy 3 times in exactly the same wording without comment from anyone.

Big Stone II will be the most efficient plant for its time (a super critical pulverized coal), creating just less than 1 ton of carbon dioxide per megawatt hour produced. Otter Tail Power notes that it will be considerably more efficient than existing coal plants and should therefore be considered similiar to a hybrid vehicle. In this analogy their existing plants are essentially less efficient vehicles with greater pollution. They argue that not building Big Stone II, Otter Tail Power will be giving up a hybrid vehicle while it is forced to wait for some future zero emission vehicle. The lesson of the analogy is that such a wait is nonsensical.

This analogy is flawed in several ways. For one thing, Otter Tail gives the impression that they are replacing the old vehicle with the new hybrid, but they are in fact, continuing to run the old vehicles constantly while adding a new hybrid which pollutes a little bit less than the old vehicles, but still greatly adds to emissions. They have suggested that they might be able to retire one of the older plants five years after Big Stone II goes online, but have no obligation to do so.

The Mitigation Act legislation emphatically allows Otter Tail to do what their analogy suggests. They can offset their emissions from Big Stone II by reducing emissions from their older, dirtier, less efficient plants. This would be a tremendous benefit for the environment although such a trade certainly would not help Otter Tail add more baseload to their portfolio.

Otter Tail was not the only to note that plants like Big Stone II are good because they allow us to use coal more efficiently but they never noted that they are really proposing to continue using coal less inefficiently even after building these new facilities. No legislation is preventing them from making their older units more efficient.

Another concern of mine centers from that cold weekend in February when MISO asked everyone to conserve electricity because the grid had very little reserve capacity. This was brought on both due to extremely low wind speeds during high demand and the unplanned outage of a large coal generator (at the Sherco plant). Some Representatives (shockingly, only those who deny climate change science) have hammered on this issue by saying we need more coal generation to back up wind generation.

This is indeed one lesson that can be learned from that weekend. However, distributed generation advocates could also claim that by building massive centralized coal plants, we are setting ourselves up for a fall when one too many of the generators have an unplanned outage. This would also be a flawed lesson but seems just as valid as ignoring that component of the low reserve capacity in order to make a point.

What it comes down to is that a strong grid must have different technologies that compliment each other. As Chairman Hilty brilliantly reminded everyone, no utility is required to build that much wind to satisfy the renewable energy standard (although Xcel is - for reasons that I don't think were every justified). Utilities are required to build generation from a selection of eligible technologies. They have overwhelmingly chosen wind, despite its shortcomings, because it is cheaper. A stronger grid may not come cheap, but can be done by increased reliance on other eligible technologies like solar (though intermittent, tends to peak when needed) and biomass.

My last concern is about the rules of the Chicago Climate Exchange (CCX - wikipedia has the basics). While I like the idea of the climate exchange, I am concerned about what would happen if Minnesota joined it.

The way I understand it, CCX creates a baseline of greenhouse gas (GHG) emissions based on the client's emissions over base years 1998-2003 (or something close to that). It then requires (through force of binding contract) reductions from that baseline by certain percentages each year. Any upward deviation from those reductions requires credits from the exchange (currently selling around $4 per ton of carbon dioxide).

My main concern is with the accounting. If the Metropolitan Council joins CCX, its baseline will include the years before the Hiawatha light rail line began operation. LRT requires massive amounts of electricity, which is especially carbon intensive in this region. How is the Met Council expected to reduce its baseline with a spike on that magnitude?

LRT is a net reducer of GHGs but the Met Council does not get credit for the thousands of cars not driving when people take the train instead. This seems a fundamental flaw in CCX (unless I have misunderstood how it works) because it effectively penalizes the Met Council for reducing emissions via the LRT because the Met Council's baseline does not include emissions from all the private vehicles which are taken off the road.

RES in Oregon, Other Updates

Climate Change Graphic

Jesse, from Watthead, has a detailed post about the proposed RES in Oregon and other clean energy legislation that is currently being discussed in their legislature.

They appear to be heading for a 25% by 2025 standard with strong support from the Governor. Jesse's post explains how you can listen to the hearings directly; alternatively, Jesse will be offering updates on Watthead as the process moves forward.

Locally, our Global Warming Mitigation Act has passed out of the Committee and will soon be on the floor of the House. I believe it is still in committee in the Senate. I hope to have a roundup of what has been going on there after I finish listening to the hearings from the House. Clean Energy Minnesota describes the components of the bill as drafted. I believe the House has modified it, but I'm not sure how.

Nationally, I was just made aware of the National Wildlife Federation's comprehensive guide to global warming legislation. I think many of us have been too busy working on local stuff to follow the national scene but NWF has done the grunt work for us! They are keeping that site updated as things change.


Light bulb

The House Energy and Finance Committee had several discussions centering around decoupling sales from revenues for gas and electric utilities. Decoupling enables removes the disincentives for energy efficiency and conservation that utilities currently face.

Wayne Shirley from the Regulatory Assistance Project testified in front of both this House Committee (on February 28) and in front of the Senate Energy Committee (on February 27 I think).

Decoupling is a feature that Governor Pawlenty has mentioned and one that Representative Kalin has included in his bill on the conservation improvement programs (CIPs). House Research has a summary of that whole bill - but I am focusing on the decoupling aspect here. If I understand it correctly, H.F. 1221 requires the Public Utility Commission to establish standards for decoupling. Utilities may then enter into pilot projects to see what happens when revenues are decoupled.

So what does decoupling mean? That summary has a good definition of decoupling:

"Decoupling" means separating a utility's revenues from its fluctuations in sales in order to remove utility disincentives to promote energy efficiency.

I'll explore what this means by summarizing Shirley's testimony. If you want to hear his words, I have isolated his audio presentation (6 MB mp3, 36 minutes long) to the House as well as a 15 minute clarification from discussion in the Senate Committee (6 MB mp3).

Currently, the ratemaking process for utilities involves the utility (Xcel for instance) and the Public Utilities Commission determining the appropriate rates for selling electricity (or gas) based on "cost of service regulation." All operating expenses are summed with the necessary returns on capital investments to get the revenue requirement. This is divided by the sales to get the price that at which electricity will be sold.

In the real world, sales will be different from what is expected based on many factors. This may mean higher or lower sales than expected. If the sales are insufficient (over time, perhaps several years later) to recover costs and the needed rate of return, it starts the process over.

As the utilities generally have high fixed costs, it cannot lower costs to make more money. They make more money based upon sales. Higher sales than expected during the ratemaking mean more profits (or higher dividends for cooperatives). This a significant disincentive to encouraging customers to lower consumption.

Decoupling changes the ratecase procedure by adding another step. After the revenue requirement is divided by the expected sales, they compute the average revenue per customer in each class (industrial, commercial, and residential). This is done more frequently (somewhat automatically) than traditional ratecases. For instance, the rate might be adjusted based upon actual consumption every month.

He uses this example:

A utility is determined to require $1 million from a given rate class. They are selling 25 million kilowatt hours of energy over that period. Under the existing system, this means the utility will charge $.04 per kilowatt hour. ($1,000,000/25,000,000 kWhrs).

If many customers became more efficient and reduced overall consumption in that rateclass by 1.5%, the utilities revenues would decline by $15,000.

Under a decoupling arrangement, the rate is adjusted for the next time period so that all ratepayers in that class are now paying $.0406 per kWhr.

At this point, you may be thinking, "Whaaaaa? How is it that the rates go up because people are conserving?" The utilities have to cover their costs and necessary returns on investments. If they are selling less power, they need to price it higher. Bear in mind that those who conserve power and use less of it will see smaller bills even if the rate increases slightly. In the example above, that was a fairly major (and unlikely) sudden reduction in consumption. In real life, the reduction would be smaller and also balanced partially by a growing customer base.

The important part about all of this is that utilities no longer have an incentive to increase their sales. If they increase their sales, the rates will drop in the next period (again, perhaps monthly or quarterly) and they will not profit from those increases (because their rate of return remains fixed). When combined with other aspects of Representative Kalin's improved CIP bill, the utilities have a strong incentive to encourage conservation and efficiency.

Decoupling has the effect of stabilizing the revenue stream of the utilities because its revenues are no longer dependent on sales. Thus, a mild winter will no longer hurt the profits of energy companies whereas a cold winter will no longer boost profits (due to higher than expected sales).

MN Leads

Executive Director of the Sierra Club, Carl Pope, recently used Minnesota as an example of a state which is leading on climate change legislation.

The US is actually beginning to show some leadership, based on innovative state policies.

The rest of piece discusses his fear that Congress will move in and create federal policies that preempt stronger state policies.

Week Wrapup

SI Cover Photo

MEP's lobbyist, John Tuma explained what happened to climate change legislation in the Minnesota House this week. He also mentions progress on the conservation legislation.

In other interesting news this week, Sports Illustrated has a cover story this week on sports and global climate change.

As global warming changes the planet, it is changing the sports world. To counter the looming environmental crisis, surprising and innovative ideas are already helping sports adapt

I'm looking forward to reader reactions in the next couple of issues.

Climate Change Testimony

I listened to the Feb 22 Minnesota Senate Energy Committee meeting (audio available here, scroll down for the day) and had some thoughts about the testimony on the climate change legislation before the committee.

Otter Tail Power (OTP) started by bragging about decreasing its carbon intensity since 1990 and said it has plans to continue decreasing it. This is the same language that the Bush Administration uses when trying to obfuscate its energy policy with a policy that actually does something. Business as usual means Otter Tail Power will decrease its carbon intensity. It is called being more efficient. If Otter Tail Power decided to stop being more efficient, that would be dumb for its investors because they would be wasting money.

Thus, OTP essentially begins its presentation by bragging about something it must do. This is not action. Though future reductions of carbon intensity for OTP seems like a course of action, it is not. It is business as usual. Well, business as usual and a strong RES (renewable electricity standard). Business as usual will not mitigate greenhouse gases (GHGs) and commits everyone to a rapidly changing climate.

The testifier next discussed what Minnesota should do. OTP wants a stakeholder process to recommend policies on GHGs and to inventory MN GHG emissions. Other actions supported by OTP are to make plans to eventually do something. Notice that they do not want to do anything, they want to contemplate doing something.

They continue to characterize a Minnesota cap-and-trade program as being "unilateral" despite the fact that many other states have done so and offer a market for us to tap into. Though this market will work better with all states involved, we have to start somewhere.

I think he seriously stretched the truth about the growing electricity load in Minnesota. To hear him tell it, electricity demand must rise. Keep in mind that California has nearly flat-lined its per capita load growth over the last 30 years. Given proper incentives and investment, Minnesota could also keep load growth quite low despite a growing population.

A major question for future electricity demand rests with plug-in hybrid vehicles. The mass adoption of those vehicles over the next 10 years will certainly add substantially to electricity demand. As someone who is pushing for no new coal plants right now, I don't actually have a good solution for how to deal with rising demand for power aside from policies to encourage efficiency. This seems to fall apart when plug-in cars are introduced due to the large amounts of electricity they will require.

OTP apparently does not appreciate the potential for such policies - the testifier believes that all appliances purchased from Target and plugged into the wall will increase electrical demand. However, many of those appliances will be replacing existing appliances. In a perfect world, each new appliance would be more efficient than the one it replaces.

The final point of OTP's representative was that pushing a cap-and-trade program or other programs that require offsets will cause OTP to rely on older, less efficient coal generation than if Big Stone II is built. Big Stone II will be very efficient and comparatively clean (thanks to strong environmental laws that utilities like OTP tend to challenge legally at every opportunity). The testifier suggested that if BSII is built, they will retire their 50+ year old generators in Fergus Falls. This strikes me as being a bit of wishful thinking and bluster built into one.

Regardless, it strikes me that a policy that punishes new coal generation (via offsets as in both Anderson and Pawlenty's plans) while not at least dealing with the grandfather issue is lacking. Ultimately, it seems to me that we want to cap emissions - not coal. Ideally, we would want Big Stone II built and older plants decommissioned in such a manner as to keep emissions flat-lined or begin decreases.

I find it ironic that these utilities and other interests opposed to GHG regulation are pushing for more studies like the wind integration study. Many of them actually cite that study as being a good example. This comes mere weeks after they attacked the study in committee testimony as being wrong, based on erroneous assumptions, and generally unhelpful when it comes to putting more wind on the grid. Now they want to do the same thing with GHG emissions?

Before ending this rant, I do want to note that utilities such as OTP resist this legislation for a reason - they are committed to providing cheap, reliable electricity. If rates suddenly rise or electricity becomes less reliable due to legislation (however necessary it may be), most people will get angry with them, not with the legislature. Nonetheless, I do believe that utilities like OTP must be compelled to invest carefully for the future given what we know and what technologies are available.

Senate Energy Committee Clip

Last week, Elizabeth Wilson from the Humphrey Institute of Public Affairs and Brenda Ekwurzel from the Union of Concerned Scientists gave testimony to the Minnesota Senate Energy Committee on S.F. 192 - Senator Anderson's global climate change bill. The bill institutes a greenhouse gas (GHG) cap-and-trade program on the electricity generation sector. Full disclosure: Wilson is my advisor at the HHH Institute.

There is a 20 minute audio segment (18 MB MP3) that I found particularly interesting. It starts with Wilson's comments about energy issues - slides are available here - and continues during some questions posed by the Senators.

This discussion deals with many of the issues that have come up over the hours of discussion about climate change legislation. Currently, the committee is moving beyond the climate change bills while it convenes stakeholder groups to discuss potential compromises.

Ban Bulb Bans

After recent announcements that both California and Australia are considering bans of incandescent light bulbs, a Slashdot post suggests GE has made them more efficient. The press release has more information.

The new high efficiency incandescent (HEI™) lamp, which incorporates innovative new materials being developed in partnership by GE’s Lighting division, headquartered in Cleveland, Ohio, and GE’s Global Research Center, headquartered in Niskayuna, NY, would replace traditional 40- to 100-Watt household incandescent light bulbs, the most popular lamp type used by consumers today. The new technology could be expanded to all other incandescent types as well. The target for these bulbs at initial production is to be nearly twice as efficient, at 30 lumens-per-Watt, as current incandescent bulbs. Ultimately the high efficiency lamp (HEI) technology is expected to be about four times as efficient as current incandescent bulbs and comparable to CFL bulbs. Adoption of new technology could lead to greenhouse gas emission reductions of up to 40 million tons of CO2 in the U.S. and up to 50 million tons in the EU if the entire installed base of traditional incandescent bulbs was replaced with HEI lamps.

Kevin Nolan, Vice President of Technology for GE Consumer & Industrial, said: "In addition to offering significant energy savings comparable to CFLs, the 21st century version of Edison’s bulb provides all the desirable benefits including light quality and instant-on convenience as incandescent lamps currently provide at a price that will be less than CFLs. We and other lighting manufacturers have been aggressive in developing and marketing CFLs. But consumers want more options and we plan to respond to their needs and deliver environmental benefits, too. It’s important that we offer consumers a full range of products that meet their personal desire to reduce their negative impact on the environment while preserving their ability to pick the best lighting product for their needs. That’s why we are moving aggressively to commercialize these new lamps."

Notice that the new bulbs are still not as efficient as CFLs but may be if GE's predictions are accurate. This is yet another sign that outright bans of incandescents are a poor policy choice. A good policy choice would likely be regulating an efficiency in light bulbs - perhaps a minimum of x lumens per Watt. Another possibility is taxing bulbs that fall below some line.

Outlawing such lights outright is foolish because it is not the most efficient way to reduce GHG emissions without dampening the public's enthusiasm for positive changes.

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