EPA Clean Power Plan will drain the economy of U.S. and Nevada

The EPA is inviting states to their own hanging and telling them to bring a rope.

By next summer the states are being told by the EPA to submit plans for compliance with its Clean Power Plan to reduce carbon output from power plants or it will impose its own stringent orders.

According to the American Coalition for Clean Coal Electricity, the EPA proposal will increase the price of electricity in Nevada an average of 18 percent between 2020 and 2029. That’s money that can’t be spent elsewhere on goods and services and to create jobs.

It is unclear whether these calculations take into account the 2013 Legislature’s decision to prematurely shut down all coal-fired power plants in Nevada, a move that already will destroy 2,630 jobs by 2020 and cut real disposable income by $226 million per year, according to one study.

Reid Gardner coal-fired power plant. (Sun photo)

ACCCE says the EPA proposal would drive up the cost of electricity by about $335 billion. It also will increase the price of natural gas for non-generating purposes by $144 billion. The net cost to the economy would be $479 billion between 2017 and 2031.

Writing in The Wall Street Journal, Kenneth Hill, a director of the Tennessee Regulatory Authority, has called on states to ignore the EPA directive to create compliance plans and let it try to impose sanctions. He notes the agency is legally shaky ground. Remember, the court said the feds could not coerce states into expanding Medicaid by denying funds.

“But the problem for the EPA is that the federal government lacks the legal authority under either the Constitution or the Clean Air Act to enforce most of the regulation’s “building blocks” without states’ acquiescence,” Hill writes. “This severely limits the EPA’s ability to tailor a federal plan to a state’s unique needs.”

After all the spending and draining of the economy, what will be the benefit of these new restraints on carbon output? Nil.

There has been no global warming for 17 years, according to NASA data, and the world has warmed only 0.36 degrees Fahrenheit since they started keeping track in 1979. The bulk of that warming came between 1979 and 1998, and since then temperatures have actually dropped.






Do the math and find out who benefits from proposed Moapa solar panel project

NV Energy’s Southern Nevada division, Nevada Power, is asking the Public Utilities Commission to reconsider its rejection of a proposed $438 million, 200-megawatt solar panel project on the Moapa River Paiute Indian Reservation.

Approving the Moapa project “reduces the impact of retiring and replacing coal-fired generation on customers, provides value to customers through incremental fuel diversity, generates construction jobs in 2015, and yields a net positive impact on Nevada’s economy,” the Review-Journal account quotes the utility as arguing.

NV Energy says it needs more generating capacity to replace that lost due to the legislatively mandated shut down of its Reid Gardner coal-fired plant. According to NV Energy, that plant has a 557 megawatt capacity.

Though the PUC nixed the Moapa solar project, it did approve the utility buying two existing gas-generated plants in North Las Vegas that can produce up to 496 megawatts of electricity and the purchase of a 15-megawatt solar project at Nellis Air Force Base. That covers most of the lost capacity right there, leaving the company only 46 megawatts short, not 200 megawatts.

PUC documents say the shortage is actually 54 megawatts. No need to quibble. Besides the PUC says that shortfall, when it is needed, can be provided by spending on $85 million, not $438 million.

The PUC determined approval of the Moapa solar plant would have cost ratepayers $50 million in 2017 alone, which “may have a significant effect on the creation of jobs in Nevada.” So much for creating jobs, as NV Energy and Harry Reid claim.

PUC Commissioner David Noble said, “Paying for generating capacity that is not needed places unnecessary costs on ratepayers.”

But monopoly NV Energy, owned by billionaire Warren Buffett, earns its profits by being allowed about a 10 percent return on equity. The more equity, the more profits. The ratepayers shoulder all the risk and cost.

Obama and Reid look at solar panels at Nellis AFB.

As for that Nellis solar power, Harry Reid once bragged about how the solar array was saving the Air Force $1 million in power bills. He neglected to note that the installation cost $100 million. The return on investment would take 100 years for solar panels that have a life expectancy of 20 to 30 years.

Does NV Energy think its customers are this gullible?

Can I get all my power from the Reid Gardner coal-fired power plant in Moapa? (Photo by Kent Harper)

Here is the lede on an Associated Press story posted on several television station websites in northern Nevada:

“Northern Nevada customers of the state’s largest utility now have the option of getting all their electricity from renewable sources.”

The story goes on to say NV Energy has announced that customers can opt to get 50 percent or 100 percent of their electricity from renewable resources, though sadly this planet saving service is not yet available in southern Nevada.

But this “green” program will cost you some green because green energy costs more to generate. The AP tells us a typical residential customer using 746 kWh a month will have to pay an additional $15.70 a month to get half of the home’s power from renewables, while 100 percent will cost $31.40 more.

It turns out those new smart meters must be really, really smart. If a power line runs down my street, and I participate in this green program but my neighbor doesn’t, how does it know which clean electrons to deliver to my house and which dirty ones to deliver to my neighbor.

Will NV Energy come up with a billing system in which I can opt to buy only cheaper power from coal-fired plants while they last?

A press release on the NV Energy website perpetrates this hoax further.

“Many customers, big and small, have expressed an interest in buying more renewable energy. This gives them a new way to do that. This option will be especially helpful for those who want to be greener, but did not have easy options that suited their circumstances, such as renters and students. This new program is as simple as going to the NV Energy website and signing up,” declares Bobby Hollis, the executive in charge of NV Energy’s renewable energy programs with an apparently straight face.

The upcharge amounts to an additional 4.2 cents per kWh.

The press release then switches from saying customers would be “buying” green energy to saying they would be “investing” in it — perhaps a bit more accurate term. NV Energy’s current green energy mix in northern Nevada is 85 percent geothermal, 10 percent solar and 5 percent hydroelectric energy. The company was required to “invest” in this green power by law.

The press release continues:

“Hollis said that customers who select one of the NV Green Energy options will be helping develop new renewable energy projects in Nevada sooner than would occur if renewable energy was only being used to meet the minimum requirements of Nevada’s renewable energy law. At present, 18 percent of the electricity produced in Nevada is required to come from renewable energy. Nevada law requires that 25 percent of the total must be from renewable energy sources by 2025.  Renewable energy purchased by customers participating in the NV Green Energy rate will add to that amount and require more renewable energy use in Nevada.”

So if you would like to make a donation to NV Energy’s future owner, Warren Buffett, go to NV Green Energy Choice and sign up.

Be cautious with plan to scrap coal and generate electricity with natural gas and ‘green’ energy

Calculating that Obama administration bureaucrats and Washington elected officials will sooner or later ratchet up regulations and legislation that will make the operation of coal-fired power plants prohibitively expensive, executives at NV Energy have decided to bailout early on its remaining coal operations.

This would entail shutting down generating units years ahead of schedule at the Reid Gardner power plant near the Moapa Indian reservation in northern Clark County and the North Valmy power plant between Winnemucca and Battle Mountain. The company also would end some power purchase contracts.

To replace these, the company plans to build 2,000 megawatts of natural gas-fired power plants as well as 150 megawatts of renewable energy — which could include wind, solar, geothermal or biomass — and contract out for another 450 megawatts of “green” power.

Reid Gardner power plant. (Sun photo)

To cut its risks and cover its assets the company has submitted Senate Bill 123 to the state Legislature. The bill would saddle the ratepayers with every dime of the cost of the decision to mothball the coal plants early — including any undepreciated balance, decommissioning and remediation, contract termination costs and even the value of any unused coal left lying around.

In testimony to a state Senate committee, company spokesman Pete Ernaut estimated the plan, which carries the cute title of NVision, would add no more than 4 percent to power bills over the next 20 years. Instead of rising by 32 percent in that timeframe, as current cost projections indicate, rates would climb 36 percent, plus inflation. Such long-term projections are tenuous at best and rely on myriad assumptions.

All those new power plants would result in 4,800 construction jobs at one time or the other over the coming years and a couple of hundred permanent jobs, Ernaut said. That hardly puts a dent in Nevada’s 132,000 unemployed workers.

You could almost hear the patriotic Sousa music in the background as Ernaut evangelized, “The plan represents a significant environmental statement. It creates a robust industry of renewable energy. It makes available renewable energy built in Nevada for Nevadans and by Nevadans. And, again, it’s hopefully a very bold step in the total energy independence for our state.”

One small improvement to SB123 from the way it was originally introduced is that a section that would have made “green” energy contract pricing information a trade secret has been deleted.

While the impact on ratepayers appears relatively minor, left unsaid was what the impact of adding 600 megawatts of renewable power might have on federal, state and local taxes.

SB123 takes nearly $300 million of ratepayer money and gives it those who build solar and wind generating facilities at homes, businesses and government agencies, covering as much as 50 percent of the cost of construction. In some cases a federal grant would cover about 30 percent of cost of such solar panel installations. It is unclear whether one could qualify for both handouts.

Additionally, smaller solar panel projects are exempt from both sales and property taxes.

Larger facilities are eligible for various tax abatements, too, as well as millions in federal Energy Department grants and production tax credits. Larger utility-scale wind and solar projects are slated to be built on federally controlled public land that will be provided to the builders at pennies on the dollar instead of being sold at market value, another cost to the taxpayers.

Such hidden costs are not so easily rounded up and quantified.

Additionally, some are already warning that California, which also relies heavily on renewable energy for its power supply, could face spiking electricity prices and rolling “green-outs” when the summer heat arrives this year.

Once these renewable energy projects are built the price per kilowatt-hour of electricity will be locked in with 20-year contracts with annual price increases, no matter what happens to the price of natural gas or coal or even whether someone actually builds John Galt’s engine that runs off static electricity, as envisioned (pun intended) in Ayn Rand’s novel “Atlas Shrugged.”

The “levelized” cost of power, which includes penalizing fossil-fuel sources for greenhouse gas output, of different sources of electricity in the year 2016, predicts the U.S. Energy Information Administration, should be: coal 10 cents a kilowatt-hour, gas 6.5 cents, nuclear 11 cents, wind 10 cents, solar photovoltaic 21 cents, solar thermal 32 cents, geothermal 10 cents and biomass 11 cents.

But no one predicted the price of natural gas sold to power plants would fall from $9.26 per thousand cubic feet in 2008 to $3.52 in 2012.

According to calculations provided to Public Utilities Commission commissioners at a recent meeting, various renewable energy and power efficiency programs dictated by law already account for nearly 12 percent of the cost of electricity in northern Nevada and about 8 percent in southern Nevada. The company also projects that it will sell 2.1 percent less power in 2013 than in 2012.

Another concern was expressed to the Senate committee by Dan Jacobsen of the attorney general’s Bureau of Consumer Protection, which represents ratepayer interests at the PUC, which regulates NV Energy’s rates and energy planning. He said, “In addition to replacing about 1,000 megawatts of coal capacity, the bill also would be replacing a very large amount of power purchase agreements right now that ratepayers don’t have to provide a return on.”

NV Energy’s profits come from a rate of return on equity, which is currently about 10 percent, but the more equity in power plants, power lines and gas pipelines the greater the return.

“There are power purchase agreements that are pretty helpful in covering peak load but not having to be purchased at times when there isn’t a peak load,” Jacobsen noted. “That’s a pretty good mix at times for Nevada with extreme heat in the summer that doesn’t last more than about three months.”

Then Jacobsen addressed the most glaring flaw in the bill: It’s decades-long, Soviet-style central planning. “I hope you have an appreciation for the difficult, long-range  decision you are being asked to make in this bill,” Jacobsen said. “Step back and think about it for a minute, you’re being asked right now, based on information you have right now, to make a decision that, for example, in the year 2025 the right thing to do is to build a 500-megawatt natural gas plant.

“That’s 12 years from now. Technology can change a lot in 12 years. The demand projection can change a lot. The wholesale market can change a lot. Efficiency options can change a lot. But this bill says to you: Please mandate the right thing to do 12 years from now is to build a 500-megawatt natural gas plant. That’s quite a challenge for you as a policy makers to make.”

The consumer advocate also noted that some of the language in the bill would tie the hands of the PUC commissioners. One part dictates the “Commission shall approve” costs and emissions reduction “shall be deemed to be a prudent investment. The electric utility may recover all just and reasonable costs …”

Jacobsen commented, “That phrase ‘deemed prudent’ carries a lot of legal weight with it.”

The bill also would allow NV Energy to immediately increase rates once a new power plant goes online, and the PUC could later review the rates and could roll them back if excessive.

The last time the power company was given carte blanche to build power plants and begin to recover costs immediately, even before any review by state regulators, was in the 1980s. That was because the company needed new power supplies — from coal-fired plants.

F.A. Hayek wrote in “Fatal Conceit”:

“At least before the obvious economic failure of Eastern European socialism, it was widely thought by such rationalists that a centrally planned economy would deliver not only `social justice,’ but also a more efficient use of economic resources. This notion appears eminently sensible at first glance. But it proves to overlook the facts …: that the totality of resources that one could employ in such a plan is simply not knowable to anybody, and therefore can hardly be centrally controlled.”

Does news story leave wrong impression about source of pollutants at power plant?

According to accounts in the online Las Vegas Review-Journal that are being updated throughout the day, the Moapa Band of Paiute Indians have released documents showing five years of air monitoring data from the Reid Gardner coal-fired power plant “likely had been faked by a contractor hired by the utility to monitor for dust pollution around the plant.”

The first paragraph of the story reports that residents of the nearby Moapa Indian Reservation have complained for years that smoke and blowing coal ash from the NV Energy power plant are making them ill.

The Reid Gardner Generating Station is shown in July 2004 filed photo by R-J photog Gary Thompson.

The story quotes tribal Chairman William Anderson as saying in a written statement: “So many days when coal dust and ash has whipped into homes in our community it turns out NV Energy wasn’t even measuring the pollution, so we have no gauge on the extent of the threat families here have been exposed to.”

NV Energy CEO Michael Yackira issued a statement that included this: “It is essential to note that the data in question is utilized for air shed modeling and is not relied upon for compliance purposes.”

Wait a minute, that sounds like the data in question was about dust kicked up in the air at the plant and surrounding farming activities and not coming from the smokestack at all.

In fact when the Nevada Division of Environmental Protection released a statement about the R-J story, it noted that the false reports were about meteorological and ambient air quality monitoring for large particulates called PM10.

NDEP went on to add: “Stack emissions monitoring was conducted as required on a continuous basis on all four units between 2006 and 2010. Based on this direct and continuous measurement of emissions and process parameters, as required in the Air Quality permit, the facility is in compliance with all state and federal air quality standards and permit limitations and conditions.”

Just to be sure, I asked an NV Energy spokesman whether dust in question might include coal dust from stockpiles on the ground or from coal being moved via conveyor belts. He replied that in theory it could be, but that the distance between the monitoring station and the coal piles makes it very unlikely.

Apparently, the dust in the air is no different from that kicked up at any outdoor work site — construction, warehouse, solar panels, plowing fields, etc. The fact that it is a coal-fired power plant may be of no relevance.

But you can count on Harry Reid to try to make hay out of this dust in the wind.