Editorial: Question 6 would cost money and provide no benefits

Current Nevada law requires 25 percent of the state’s electric power to come from renewable energy sources — such as solar, wind and geothermal — by 2025, but Question 6 on the November ballot asks voters to raise the requirement to 50 percent by 2030.

The initiative claims this will reduce the state’s reliance on fossil-fuel power plants and clean up the air.

But recent reports out of Europe note that carbon emission actually grew by 1.8 percent in 2017 despite a 25 percent increase in wind power and 6 percent growth in solar. Part of this is explained by the fact idling fossil fuel plants must be quickly brought online when the wind doesn’t blow and the sun doesn’t shine, and, just like cars in traffic, idling engines produce more carbon emissions. Also, maintaining both power sources increases infrastructure costs. The cost of electricity in Europe has increased 23 percent in the past decade.

So, Europeans are paying more and getting no emission decrease.

Nevada is already getting 20 percent of its electricity from renewables as each year the requirement ratchets up toward the current 25 percent goal, while over the past five years the cost per kilowatt-hour of power across all sectors has increased 11 percent in Nevada, though nationally rates fell 1 percent, according to figures from the U.S. Energy Information Administration. Meanwhile, carbon emissions due to power generation have largely flatlined, according to the Nevada Division of Environmental Protection.

Arizona also has on the ballot a proposal to increase renewables to 50 percent by 2030. Both measures are being bankrolled by San Francisco billionaire Tom Steyer.

Heartland Institute analyst James Taylor took a look at what impact the Arizona proposal would have on electricity bills there if the initiative passes. Taylor estimated that Arizona’s current 7 percent renewable power costs consumers $304 a year in higher rates and extrapolated that the 50 percent requirement could increase bills by more than $2,000 a year.

In 2013 Nevada Policy Research Institute commissioned Beacon Hill Institute of Suffolk University to analyze the impact of the current 25 percent renewable power portfolio (RPS) requirement. The report was titled “RPS: A Recipe for Economic Decline.”

Using a range of estimates from low to high, Beacon Hill estimated power bills could increase anywhere from less than 2 percent to nearly 11 percent. That high end estimate has been reached seven years early.

The study also said the 25 percent standard could cost Nevada between 590 and 3,070 jobs by 2025. Image the impact in doubling renewables in the next five years.

But those costs are outweighed when you calculate all the pollutants and greenhouse gases that won’t be poured into the air and cause the planet to overheat, some still argue.

“One could justify the higher electricity costs if the environmental benefits — in terms of reduced greenhouse gases (GHGs) and other emissions — outweighed the costs,” Beacon Hill reports. “However, it is unclear that the use of renewable energy resources — especially wind and solar — significantly reduces GHG emissions. Due to their intermittency, wind and solar require significant conventional backup power sources that are cycled up and down to accommodate the variability in the production of wind and solar power. A 2010 study found that wind power actually increases pollution and greenhouse gas emissions. Thus, there appear to be few, if any, benefits to implementing RPS policies based on heavy uses of wind.”

Since Question 6 will likely cost Nevadans money and jobs while producing no discernible benefit, we encourage a no vote this November.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

BLM pix

 

Newspaper column: EPA carbon rule is senseless, futile and masochistic

Those onerous and costly Environmental Protection Agency rules requiring power plants in each state to cut carbon output by 30 percent from its 2005 level by 2030 should not be so onerous and costly for Nevadans after all. We’ve already done so.

According to the U.S. Energy Information Administration (USEIA), between 2005 and 2011 Nevada electric power plants cut carbon output by 33 percent. That was the most by any state, as reported in this week’s newspaper column, available online at The Ely Times or the Elko Daily Free Press.

Declare victory, hold a parade and tell our lawmakers they can repeal Senate Bill 123, the 2013 legislation that requires NV Energy to shut down all its coal-fired plants that produce electricity cheaply and replace them with natural gas-fired plants and renewable energy generation that costs three or four times more per kilowatt-hour than coal-fired generation.

Coal-fired power plant (AP photo)

Somehow I don’t think that’s going to happen. The 645-page set of EPA rules put out earlier this month are so confusing that hardly anyone can interpret them.

In fact, all the major Nevada news media reported practically verbatim: “Nevada’s power plants pumped out more than 14 million metric tons of carbon dioxide pollution in 2012, about the same as 3 million cars produce annually. Figuring the amount of power produced, the 2012 emission rate was 988 pounds per megawatt hour. That would be cut to 647 by 2030 if Nevada meets its EPA goal.”

Of course, the carbon output in 2012 is irrelevant, since the rules set the base year for 30 percent reduction as 2005.

The obfuscation begins.

Whatever the EPA regs dictate, Nevada’s lawmakers in their infinite wisdom and utter disregard for Nevadan’s wallets have established a renewable energy portfolio standard that requires 25 percent of all electricity generated in the state by 2025 must come from renewable sources, such as wind, solar, geothermal, biomass and hydroelectric. (One study estimates this renewable portfolio will cost residential power users up to $130 a year and industrial power users up to $47,000 a year and cost up to 3,000 jobs.) In 2013, the state was already producing 18 percent of its power from these sources.

Also, we apparently are to pay no heed to the fact U.S. fossil-fueled power plants account for only 6 percent of global carbon dioxide emissions. So, cutting 30 percent of U.S. output from power plants would reduce global output by only 2 percent by 2030. Total global carbon output in 2012 alone increased 2.1 percent. The U.S. decreased its emissions 3.7 percent that year, while China increased by 5.9 percent and India by 7.7 percent.

Those EPA rules amount to a senseless and futile and masochistic gesture.

Read the entire column at the Ely or Elko site.

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.”