Matthew Wald has a good piece in the NYT today, good in that it raises some of the issues, but these issues raised need some more digging, can you dig it?

Check this paragraph from the article:

In fact, energy experts say that simply building a better grid is not enough, because that would make the cheap electricity that comes from burning coal available in more parts of the country. That could squeeze out generators that are more expensive but cleaner, like those running on natural gas. The solution is to put a price on emissions from dirtier fuels and incorporate that into the price of electricity, or find some other way to limit power generation from coal, these experts say.

Not “could,” but WOULD “squeeze out generators that are more expensive but cleaner” and adding externalities to coal generation cost would only stop that, would only be a “solution” if it tacked on HUGE costs, far greater than those anticipated by those advocating either Cap & Trade or Tax.

But those of us in transmission are glad to see the driver for new construction exposed, as it was in the MISO Benefits Study by our good friends at ICF:

RTO operational benefits are largely associated with the improved ability to displace  generation with coal generation, more efficient use of coal generation, and better use of import potential.

Here’s that MISO study, the above quote comes from the conclusions, p. 83, and is also stated in the intro — THIS IS THE REASON FOR TRANSMISSION, THIS IS THE REASON FOR THE MIDWEST MISO MARKET.  Read the study:

ICF’s Independent Assessment of Midwest ISO Operational Benefits

For example, Jose Delgado whining about hwo long it took to get the permit for Arrowhead, what does he expect for a project that was an absurdly obvious ploy for a superhighway for bulk power portrayed as a “local load” need for WUMS?  They put together many options in the WRAO report, and selected one, Arrowhead, “3j,” as the be-all and end-all of transmission.  That was declared the ONE line that would fix Wisconsin.  Then, next thing you know, they still want to do “5” more commonly known as the Chisago project, they want to do “9” in SW Minnesota claiming “it’s for wind” when there’s only 213-302MVA coming off of Buffalo Ridge into the Nobles substation, they do them all because that’s what they want, they can ship bulk power.  It’s been so dishonest…  Utilities have been so dishonest…

And let’s look at the financing of these lines.  CapX 2020 testimony and a powerpoint demonstrate that they don’t have the financing lined up for that $2 billion dollar project.  They were working through Lehman Bros. so what does that say?  The “Cap” of CapX 2020 is “Capital” and they don’t have it.  But because they want it, they’ll make us pay for it.  Is something wrong with this picture?

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Hurdles (Not Financial Ones) Await Electric Grid Update

By MATTHEW L. WALD

WASHINGTON — Environmentalists dream of a bigger and “smarter” electric grid that could move vast amounts of clean electricity from windswept plains and sunny deserts to distant cities.

Such a grid, they argue, could help utilities match demand with supply on the hottest afternoons, allow customers to decide when to run their appliances and decrease the risk of blackouts, like the one that paralyzed much of the East in 2003.

The Obama administration has vowed to make the grid smarter and tougher, allocating $11 billion in grants and loan guarantees to the task in the economic stimulus package passed by the House last week.

But it will take a lot more than money to transform the grid from a form that served well in the last century, when electricity was produced mostly near the point of consumption, and when the imperative was meeting demand, no matter how high it grew.

Opposition to power lines from landowners and neighbors, local officials or environmental groups, especially in rural areas, makes expansion difficult — even when the money for it is available. And some experts argue that in the absence of a broader national effort to encourage cleaner fuels, even the smartest grid will do little to reduce consumption of fuels that contribute to climate change.

In fact, energy experts say that simply building a better grid is not enough, because that would make the cheap electricity that comes from burning coal available in more parts of the country. That could squeeze out generators that are more expensive but cleaner, like those running on natural gas. The solution is to put a price on emissions from dirtier fuels and incorporate that into the price of electricity, or find some other way to limit power generation from coal, these experts say.

The stimulus bill passed by the House includes $6.5 billion in credit to federal agencies for building power lines, presumably in remote areas where renewable energy sources are best placed, and $2 billion in loan guarantees to companies for power lines and renewable energy projects. The bill also includes $4.4 billion for the installation of smart meters — which, administration officials say, in combination with other investments in a smart grid, would cut energy use by 2 percent to 4 percent — and $100 million to train workers to maintain the grid.

About 527,000 miles of high-voltage transmission lines stretch across the United States, most installed many decades ago.

Everyone agrees that more lines are needed. But some industry experts argue that the problem of making the grid greener goes well beyond upgrading and expanding the existing power lines. The grid, they say, was set up primarily to draw energy from nearby plants and to provide a steady flow of electricity to customers. It was not intended to incorporate power from remote sources like solar panels and windmills, whose output fluctuates with weather conditions — variability that demands a far more flexible operation.

The experts say that the grid must therefore be designed to moderate demand at times when there is less wind or sun available — for example, by allowing businesses or residential customers to volunteer to let the local utility turn down air-conditioners in office buildings or houses, when hourly prices rise.

An even more significant problem is that utilities increasingly face opposition to expansion and must fight for years for permits.

José M. Delgado, president and chief executive of the American Transmission Company, which operates in four Midwestern states, said his firm’s last major project, a line of about 220 miles from Duluth, Minn., to Wausau, Wis., took two years to build but eight years before that to win the permits. The federal Interior Department took a year to approve the line crossing a wild river and required a $5 million contribution to a national park, but the one-year delay raised costs by an additional $12 million, for a total of $440 million, Mr. Delgado said.

Loan guarantees will not help this problem, he said. “We have had wonderful access to the private bond market,” he added.

The International Transmission Company, a Michigan company, is trying to build a 26-mile line that, had it been in place, would have prevented the great Eastern blackout of 2003, said Joseph L. Welch, president and chief executive. The State of Michigan has approved it, but a homeowner is challenging it in court, Mr. Welch said.

“We burn up three years on a line that will take two months to build,” he said.

But, he added, “We absolutely have no problem — underscore, no problem — financing our transmission grid.”

Other companies said the same, although a few said the loan guarantees in the House bill would be helpful.

As power lines lengthen, the number of approvals they require increases, the complications of dividing the costs become greater and the difference among national interests and local interests becomes starker, said Dan W. Reicher, a former assistant secretary of energy who was a member of President Obama’s transition team.

Policy makers have looked at various models to resolve the conflicting interests in power-line disputes. In the 1930s, the federal government assumed sole responsibility for approving natural gas pipelines, and as a result, gas moves freely from wells in the Gulf Coast states to other areas of the country, with much of it used to make electricity. Gas pipelines are somewhat less objectionable, though, because they are buried.

Another model is the one used to build the Interstate Highway System, with the states using their powers of eminent domain in a system that was centrally planned with state input. But highways were more attractive to many states than power lines would be, electricity officials say, especially if the lines are simply crossing a state without adding much local benefit. A third possibility is a national commission that would present a master plan for thousands of miles of new transmission lines that Congress could approve for the whole country in spite of local objections for individual pieces.

Congress tried to solve the problem in 2005 with a law that gave the Energy Department authority to intervene if states did not approve new lines deemed to be in the national interest, but that has not worked well, said Representative Henry A. Waxman, Democrat of California and chairman of the House Energy Committee. It was criticized as an assault on the traditional control by the states of land-use decisions.

The electric industry is at least planning to better integrate different parts of the grid so that if power is needed in Baltimore it can be imported from Chicago. A group of technical experts, mostly from the Midwest, have been meeting for months to map out new lines, in an effort that industry veterans say is unprecedented in its breadth. But the group’s aim is simply a map of what such a system would look like; it will not seek permission for such lines, or try to finance them or actually build them. The group is scheduled to make an announcement next week.

“We’ve got a real political confrontation that’s going to take place,” said Glenn L. English Jr., chief executive of the National Rural Electric Cooperative Association, who had served as a congressman from Oklahoma for 20 years. “It basically comes down to the question of prioritization. What’s more important to you? Do you truly want to maximize the use of renewable energy?”

Transmission lies

Against the so-called ‘need’ for new long-distance, high-voltage transmission lines

Posted by Guest author (Guest Contributor) at 10:31 AM on 03 Feb 2009

The following is a guest post from Carol A. Overland, a utility regulatory attorney and electrical consultant based in Minnesota and Delaware, representing clients in energy dockets including transmission projects, wind, gas and coal gasification generation, and nuclear waste.

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Transition … transmission … transition … transmission …

That old Bowie hook is on my mind as I represent individuals, community organizations, and local governments opposing high-voltage transmission lines. Today we’re at a crossroads in energy, a transition point where the decisions we make, like electricity itself, are binary. What we choose will determine how we use electricity in the future. The first step is to carefully define “need.”

Transmission doesn’t produce electricity. It is passive infrastructure that just sits there, conducting energy from one place to another. At its worst, though, it’s an enabler of dysfunctional energy planning and profit-driven projects that are against the public interest. Claims that we “need” transmission are end-stage conclusions of a many-step planning process that we as a society have not yet consciously begun.

“Need” is a term of art, and the crucial task for energy planners is to define the need. We need energy when we flick the switch, and when we do, that’s a utility’s need for service of local electrical load. We also need renewable generation, and we have an equally compelling need to reduce the CO2 emissions, pollutants, and toxic waste of electrical generation (a need not readily recognized in energy planning). Energy planners plan for peak “flick of the switch” need, those few very hot summer days or very cold winter nights. How much “flick of the switch” energy do we need? It depends.

Prior to assessing local load-serving need and making demand projections — before “need” is considered — the first and unarguably least-cost step is conservation. We can easily make up for an annual projected increase in demand of 1.5 percent through conservation, and can probably cut today’s “need” by 10 percent or more, though compound conservation gets more difficult as we cherry pick the easy stuff. The next step before analyzing need is to enact energy efficiency, demand-side management, and load-shifting to cut the peaks and level out the dips. This is also a comparatively least-cost means of meeting demand.

When that’s done, and not before, it’s time to assess our need for electricity — the supply side. Utilities, which are in the business of selling electricity and building their infrastructure — for which we pay, routinely promote sales and exaggerate growth in demand. Because of their overstatements of need in similarly recessionary times, we overbuilt in the 1970s, to the extent that many proposed plants were ultimately canceled. Still so much was built that we haven’t needed much utility infrastructure since. We’ve been through this before, and should be mindful in making investments.

Because of the recent utility industry shift to market-based dispatch, whereby generation is no longer strictly for service of local load but for wider regional or national electricity markets, market expansion has become the driver for the utility “need” for transmission. This is the key difference: how much transmission utilities need to serve their local load (the public good) vs. how much they need to participate in markets (greater profits). North American Electric Reliability Corporation (NERC), the private overseer of all things transmission, admits in Reliability Assessments that there is a lot of new electrical generation planned and that the transmission system is sufficient to meet local load-serving needs. The confounding factor: NERC notes that the transmission grid is constrained in places and is not sufficient for market purposes, for market expansion.

The short explanation of the shift to market focus is that, in theory, it makes generation available to all who want it, based on price rather than location. The cheapest is sold first, and buyers queue up in line. But the sale price is busbar price at the generator or seller, and does not take into account the costs of getting it from here to there — notably transmission construction, transmission service, and line loss. These costs are tacked on and billed to the purchasing utility, and will be added to the customer’s bill. The market “price” thus appears misleadingly low. Cheap coal-generated electricity from West Virginia looks awfully good to buyers in New Jersey when all the costs aren’t factored in to the sale price.

This is the crucial point: The divergence between traditional “local load-serving need” and the desire of utilities to beef up need claims, to build generation and transmission at ratepayer expense, in order play the market. State regulatory proceedings are couched in traditional “local load-serving need” terms, and utilities must prove up need before they are granted Certificates and proceed with construction. Investments must be “reasonable and prudent.” Opportunity to play the market is not reasonable and prudent, so it’s not a reason to build a transmission line — utility desire to increase market transactions is not recognized as “need” in a Certificate of Need or Certificate of Public Convenience and Necessity proceeding. This is where transmission lines become transmission lies: Transmission projects for market trading are couched in terms recognized by regulators.

Planning for “peak load” is a transmission lie. Utilities have incentive to overstate “need” when they build for peaks. The higher the peak they build for (with peak occurring only several times annually), the deeper the off-peak valley and the more electricity they can sell on the market when generation is available but not “needed.” Conservation and peak-shaving is against their interest because it lowers peak and lessens the valley of market sales.

“We’ll have blackouts” and “we’re going to freeze in the dark” are transmission lies. A review of recent blackouts — the ones used to justify transmission projects — shows that they occurred during off-peak times where utilities were overloading the lines, pushing more electricity than the system could handle. Despite warnings that the system was at risk, operators did not cut back on loading. An industry report on one blackout during “light load condition and low cost Mid-Continent Area Power Pool (MAPP) generation,” while “there were high simultaneous exports,” concluded:

This event should not be filed away as just another close call. We need to recognize just how close we were to collapsing portions of the Eastern Interconnection and adjust operating guides and reporting practices to avoid recurrence. There are real limits to the transfer capability out of the MAPP region and those limits are interdependent. This event is an alarming representation of how the MAPP regional interconnected system is being operated at and even beyond its capabilities.1

Utility “forecasts” are a lie. Despite their propensity to overstate need, several utility CEOs recently admitted that use has decreased from 3-9 percent, and that future infrastructure projects should be reconsidered. If we’ve moved from 1.5-2 percent projected growth to 3-9 percent decrease — with no increase in sight — that 4.5-11 percent drop in forecasted demand will substantially alter projections for years to come. The longer that drop continues, the further out it will affect projections. Despite this change in use and extension of “need” out in time, utilities are holding on to outdated projections. They still want to build infrastructure based on inflated “need,” infrastructure that we will pay for — and pay them a percentage return on investment. If approved, utilities will cover costs and make a return whether it is needed or not.

“It’s for renewable generation” is a lie. The massive transmission infrastructure expansion proposed is not “for renewables” because transmission may not discriminate by generation type. Federal regulations prohibit discrimination among generators — it’s first come, first ready, first served. There are tens of thousands of megawatts of coal projects, with transmission studies complete or in progress, waiting for interconnection, and whatever generation is ready will be connected. Another side of this lie is when wind advocates support transmission, claiming “it’s for renewables,” and ignore the impacts of transmission on the communities it traverses. Rather than make this convoluted “it’s for renewables” claim, there’s a better way: if renewable energy mandates were directly linked with shut down of fossil generation, and if renewable generators were thoughtfully sited, both the electricity market and transmission infrastructure would be open and available.

“Long distance transmission” is a lie. Transmission is inherently inefficient over long distances. Transmission physics entails high levels of line loss, and the longer the line, the higher the line loss. To avoid this fact of physics, the electric industry has shifted its line loss analysis for new projects to a “system wide” loss, so the numbers look low. But consider actual numbers of megawatts of line loss, and look at “coal plant equivalents” to make up that loss — for every 500-600 MW of line loss, a coal plant or more would have to be built! Line losses are charged in Federal Energy Regulatory Commission rates, but this is not considered directly in the market transactions. Line loss is an afterthought add-on to the customer’s bill after transmission service is provided. Consider too the capital cost of transmission, starting at about $1.5 million per mile for 345kV lines and upward from there.

Utilities’ frame of “need” for “public purpose” is a lie. Most transmission regions of the country are now planning transmission expansion to make their markets workable — to be able, theoretically, to ship power across the country. For example, in the Midwest, it’s the Midwest Transmission Expansion Plan. In PJM on the east coast, it’s the Regional Transmission Expansion Plan. These plans are all market-based, but for those transmission projects in states that regulate transmission, they’ll couch “need” in terms recognized by the state to get the approvals they need.

For example, CapX 2020 in the Midwest is framed for Minnesota regulators as needed for “local load-serving,” “regional reliability,” and “generation interconnection” — despite being an obvious expansion for coal through Minnesota to points east. The Mid-Atlantic Power Pathway is framed as necessary to serve local load in the Delmarva peninsula, despite being an obvious pass-through from West Virginia coal to New Jersey, connecting major power plants for export to the Northeast. Utility framing of this market-based, profit-based purpose as public purpose “need” also serves as their basis for taking land through eminent domain, because a corporation’s private purpose is expressly prohibited as justification for a taking.

Will we fall for transmission lies? Is new transmission a public purpose, a public need, provision of an essential service for a utility’s service area? Or is it an industry grab for market opportunities and profits at the public’s expense?

In my years of practice, I’ve yet to see a transmission line actually meant for the “need” proposed. We must take a critical look at these projects’ claims, because we’re the ones who will pay, and the lines will go over our land. Odds are, it’s private-purpose infrastructure that commits us to 50 or more years of wrongheaded, inefficient, and polluting central-station generation.

Electricity is binary, as is our situation now — we’re at a point where we must choose our path.

(Special thanks to electrical engineers Art Hughes, David Blecker, and Rick Gonzalez for making me learn about losses, planning, need, and powerflows.)

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1 Nebraska Public Power District, Report on June 10-11, 1997 Disturbance. See also Northern MAPP/Northwestern Ontario Disturbance — June 25, 1998 — Final Report; NERC Investigation of August 14, 2003 blackout.

EEEEEEE-HAAAAAAAA!  A big stake in its slimy little heart…

Hot off the press from Sierra Club and Clean Water Action, who have been working tirelessly against Otter Tail Power’s Big Stone II coal plant, the Big Stone II air permit is upende

Big Stone II – EPA Objection to Air Permit

Here’s their press release in toto:

FOR IMMEDIATE RELEASE:

CONTACT:

Virginia Cramer, Sierra Club 804-519-8449
Darrell Gerber, Clean Water Action 612-802-5372

Date: January 23, 2009

Big Stone II Sent Back to the Drawing Board
U.S. Environmental Protection Agency Concerned About Pollution, Global Warming

Washington, DC – Less than three days after the Bush Administration left office, the Environmental Protection Agency (EPA) has overturned the State of South Dakota’s approval of the massive Big Stone II coal-fired power plant.  The EPA’s decision comes after the state failed to require state-of-the-art pollution controls for the coal plant that would address concerns about harmful soot, smog and global warming pollution.

“This is a great day not only for clean energy and people’s health, it’s a victory for the rule of law,” said Bruce Nilles, Director of the Sierra Club’s Move Beyond Coal Campaign. “EPA is signaling that it is back to enforcing longstanding legal requirements fairly and consistently nationwide,” added Nilles.

As the first major coal plant decision by the EPA since President Obama took office, this decision signals that the dozens of other coal plant proposals currently in permitting processes nationwide will face a new level of federal scrutiny. Sierra Club and Clean Water Action have been working to stop the Big Stone II project and ramp up clean energy investments in for more than three years.

“Today EPA took the first step toward restoring science and integrity to its work and recognizing the very real need to reduce air pollution from coal-fired power plants,” said Darrell Gerber, Clean Water Action Program Coordinator.  “Downwind residents and the region’s natural resources will be better protected.”

This decision likely spells the end of Otter Tail Power’s Big Stone II coal plant.  While for the past eight years the Bush Administration has refused to regulate global warming pollution, even after being ordered to do so by the US Supreme Court, President Obama has pledged that the US will cut global warming pollution and do its part to avoid the worst consequences of climate change. With coal-fired power plants accounting for almost 30% of our nation’s carbon dioxide emissions, burning less coal and investing in clean energy such as wind and solar instead is a common sense approach to helping meet global warming pollution reduction goals. The proposed Big Stone II 500-megawatt coal plant would have emitted more than 4 million tons of global pollution annually.

At a minimum, Otter Tail Power will have to go back to the drawing board and redesign the project to incorporate the best and maximum available control technology for pollution like soot and smog.  Sierra Club and Clean Water Action will be pushing for EPA to set limits also for carbon dioxide, the main contributor to global warming.

“Otter Tail Power will now have to be responsible for the cost of its pollution,” said Nilles. “We hope that this increasing cost of coal will encourage Otter Tail Power, along with Governors Pawlenty and Rounds, to harness the clean and affordable wind resources available in the region. Minnesota and South Dakota should be leaders on the path to renewable energy independence, not laggards proposing 19th century coal plants.”

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Now, can we get them to end Excelsior Energy’s Mesaba Project?