Legalectric

As I work on this energy mess we’re in, I’m struck by the force of an industry push to construct despite no need, to build billions of dollars of generation and transmission that we don’t need to facilitate their unregulated wholesale market transactions, and of course that transmission will also facilitate all those new coal plants:

As if that wasn’t enough, there are all these folks promoting coal gasification when they haven’t a clue what it’s about, saying it has superior environmental performance, and pretending as if carbon capture and storage is feasible! What are they thinking?

And then I remember this meeting at Commerce, October 2000, I believe, back in the days when the enviros were ready and willing to acquiesce to “restructuring” or deregulation, which was a position utterly without gonads. This was in the … sigh… Ventura days, and although the “Department of Public Service” had been disappeared and Commerce took over, it was a time when people could easily meet with staff, a time when Commissioner Bernstein held the monthly breakfasts, when service lists were honored because the public mattered, where energy planning was a happenin’ thang and where the state’s preferences for distributed and renewable generation meant something. Anyway, recently I was jolted back by Charles Komanoff’s review and characterization of the overbuilding of the 70s, and remembered that back in October 2000, I’d copied parts of Kahn’s “The Economics of Regulation” to show the parallels, where we were going, and then Komanoff reminded me that we’re there, doing the same damn stupid human tricks all over again.

Kahn noted that utility regulation that levies current ratepayers provides, in the form of” increased cash flow to finance capacity additions,” incentive to build more generation than what’s needed. He also raised an interesting thought — that the way it’s foisted on current ratepayers, there’s inherent generational inequity. Hmmmm…  Anyway, as the 70s “progressed” and so many nuclear plants were built, costs escalated astronomically, some were never completed, and those that were often left those utilities with grossly excessive and unneeded capacity.  Ratepayers got hit hard.  From there, go to my previously blogged description by Komanoff, in Power Plant Cost Escalation, of construction of nuclear plants that required extensive design and engineering for each plant, incorporating lessons learned and addressing problems that became apparent during design and construction, which lead to the high costs, both in construction and through abandonment of projects that weren’t economically and/or operationally feasible to build.

Coal gasification (IGCC) is our 70s nuclear. Too many yahoos are advocating construction of coal gasification plants without knowledge of the state of IGCC technology, the serious technological problems (such as gasifier problems so severe that they don’t solve it, they instead design in a “spare gasifier.” Oh, great…), and the massive cost increases — in the case of Mesaba, increasing from $500-600/kW when first proposed to legislature in January, 2002, to $3,593/kW, or $2,155,680,783 in May, 2006, and bound to go up further.

The rate structure would allow immediate inclusion in the rates, both for these IGCC plants and for the billions of dollars in unneeded transmission infrastructure of CapX2020 (Check the “Transmission cost adjustment” that lets them get it more quickly).

OK, once more with feeling. In Minnesota, our biggest utility doesn’t “need” new baseload power until 2015, and at that time, it’s only 375MW, which they’re fulfilling with wind and hydro. The Dept. of Commerce, in the Big Stone II plant in SD’s transmission docket here in MN, says that the many utilities that banded together to build BSII did not prove up need. There was no need for Mesaba so it was legislatively exempted from Certificate of Need. And Renewable Electricity Standard now before the MN legislature is a mandate, again, because there is no need (if we needed it, we wouldn’t require mandates). Yahoos claim “we’re going to freeze in the dark” NEED, growth of 2-2.49% annually but the Long Term Reliability Reports of the industry’s North American ElectriclReliability Council say otherwise — look at the lower rates of increase for demand and energy, high reserve margins, and high levels of new construction.  The Wind Integration Study demonstrates that we can integrate 5,000-6,000MW into the Minnesota grid with only nominal transmission additions — we “need” 375MW and can integrate in thousands of MW!  It’s really that simple!
And as we know, CapX2020 (aka Xcel, et al) is driving the construction and of course they don’t look at their own map on p. 7, nor, it seems, is anyone else:

Why are legislators and policy wonks who have access to all this information buying this crap?  Why would anyone think we need coal, much less that we can’t do without it? Why would anyone think we need over a billion dollars of transmission?  It’s against evidence and we’ve been there, done that and we don’t need to do it again. Is it that we’re experiencing the limitations of our educational system and its inability to produce critical thinkers? Are we experiencing the impacts of mercury? Are we experiencing the impacts of the power of $$$$$$$?   Why do you thihnk they call them “power companies?”