In Wisconsin, solar ‘new math’ could equal big impacts

Solar panels on a home near Milwaukee. (Photo by mjmonty via Creative Commons)

Solar panels on a home near Milwaukee. (Photo by mjmonty via Creative Commons)

For tourists, the “shoulder seasons” in the spring and fall are times to get cheap deals in ski resorts or beach towns that cater to summer and winter crowds.

For people with solar power on their homes, these seasons are when their solar installations are most likely to be producing more energy than the home actually needs. These “shoulder months,” as RENEW Wisconsin Policy and Program Director Michael Vickerman frames it, are at the crux of one of the ways solar power is under attack in Wisconsin.

The Wisconsin Public Service Commission recently approved three controversial rate cases proposed by We Energies, Wisconsin Public Service Corporation (WPS) and Madison Gas & Electric, which all will make it much less favorable or feasible to install solar panels on a home or small business.

Chicago council committee moves to limit petcoke transport

The battle over storage of petcoke in Chicago continued Tuesday with the City Council’s zoning committee passing an ordinance that would order the city planning and development commissioner to set limits by the end of March on how much petcoke can be moved through KCBX Terminals’ facility on the Southeast Side.

Alderman John Pope, who represents the neighborhood, and environmental leaders and community activists testified in support of the ordinance, while KCBX’s president and two environmental consultants hired by the company testified that dust from the facility is not harming local residents and that stricter limits are not needed.

If the ordinance is passed by the full City Council, it remains to be seen how strict the limits will be, and how rigorously they will be enforced.

Exelon: Illinois nuclear report highlights need to help plants

Nuclear energy critics were encouraged by the release of a voluminous report by Illinois officials last week examining the possible impacts if three of Exelon’s financially troubled nuclear plants in Illinois were to shut down.

They pointed to report findings that electricity supplies would not be seriously affected by closures, and that clean energy investments could partially mitigate the job losses and economic impacts.

But Exelon also praised the findings in the report, and said it supports the company’s assertions about the need for state action to avoid plant closures.

“Several of Illinois’ nuclear facilities, including the Byron, Quad Cities and Clinton stations, have been experiencing major annual losses in the past few years, and continuing to operate them at a loss would defy common business sense,” said Exelon spokesman Paul Elsberg. “If we do not see a path to sustainable profitability emerge for them, we will consider all options, including unit shutdowns.”

Illinois report says Exelon nuclear straits not so dire

Exelon's Byron Generating Station in Illinois. (Photo by Michael Kappel via Creative Commons)

Exelon’s Byron Generating Station in Illinois. (Photo by Michael Kappel via Creative Commons)

Has Exelon been crying wolf?

Or should the state intervene to help the Chicago-based corporation’s nuclear plants prevent closures that could hurt the economy and endanger the electric supply?

A 269-page report created by four Illinois state agencies and released Wednesday sheds light on these questions. The multi-faceted findings defy clear conclusions, but they generally support the idea that Illinois can weather nuclear plant closures; and such shut-downs could even bolster clean energy generation and jobs.

Exelon critics say the report is vindication, showing the company is not in crisis or deserving of government “bailouts.”

RELATED: Exelon says report highlights need to help nuclear plants

Illinois is the country’s top producer of nuclear energy, with six nuclear plants housing 11 reactors run by Exelon, which had $25 billion in operating revenues in FY2013. Nuclear plants emit no carbon dioxide and are highly reliable, as made clear during the polar vortex a year ago when frigid temperatures meant disabled coal plants and interrupted natural gas supplies.

But in a deregulated competitive power market flooded with cheap natural gas, costly nuclear plants are much less profitable. Exelon has said their nuclear plants in Byron, Quad Cities and Clinton are unprofitable and could close soon without state policies that bolster their fortunes. Changes to energy market auctions and policies that put a price on carbon would help Exelon’s troubled plants, which have been operating for 28, 41 and 26 years, respectively.

In May 2014 the Illinois legislature adopted a resolution (HR 1146) outlining Exelon’s woes and calling for a study to examine the environmental, reliability, capacity and economic effects of the “premature closing” of those plants; and to explore “market-based solutions to ensure that premature closures do not occur.”

Becky Stanfield, deputy director for policy for the Natural Resources Defense Council Midwest program, said she appreciated that the state agencies involved in the report describe multiple scenarios and don’t make any explicit recommendations.

“It does say something about the influence of Exelon on the legislative process that the resolution requiring these reports passed overwhelmingly,” she said. “But if lawmakers read the reports required by the resolution, it gives them a lot of reason to slow down and think through the right policies for our clean energy future. What role nuclear power should have in that future, how to create the future we want, as opposed to ‘Oh my god, there’s an urgency, we need to open our wallets.’”

Tim Judson, executive director of the Nuclear Information and Resource Service, a national advocacy group that is critical of nuclear power, said that while he found the House resolution “inordinately biased” in Exelon’s favor, the state report was “remarkable” for its balance.

“Exelon has to be very disappointed at how little the agencies found to support the company’s demands,” he said. “If this is any indication, Exelon is overplaying its hand and people are catching on. About a quarter of Exelon’s nuclear plants (nationally) just aren’t needed, and we are better off phasing them out and ramping up carbon-free, sustainable energy sources.”

Nuclear Illinois

Nuclear plants make up about a quarter of the state’s capacity and about half the electricity generated and sold in the state each year.

For comparison, coal and natural gas each make up about a third of the state’s capacity, though coal is used for more than 40 percent of actual generation whereas natural gas – used at times of peak need – accounted for three to five percent of generation in 2012 and 2013, roughly the same amount as wind.

Deregulation in 1997 created competitive markets for electricity, and dismantled the system where utilities charge customers directly for the cost and upkeep of power plants. Since nuclear power plants are expensive to operate and maintain, that made the industry less competitive. Hydraulic fracturing that led to plummeting natural gas prices just as the economic crisis was slashing overall power demand exacerbated the situation.

The spot market prices for electricity garnered by the Exelon plants fell sharply between 2008 and 2012. Prices have since rebounded, though not to previous levels. Exelon’s plants in Illinois make considerably less revenue than its plants outside Illinois, the report shows.

Quad Cities and Dresden are the most expensive of the Exelon plants to operate, costing $29 and $31 per megawatt hour of energy produced in 2011, compared to $23 and $24 for Byron and Clinton. That’s not counting fuel costs, which were a constant $9.26 per megawatt hour for all the plants. (Dresden is not slated for closure, though one reactor previously closed).

Modeling was used to estimate how much power prices would have to rise to make the nuclear plants profitable. Some of them could be profitable even without rising power prices, the Illinois Commerce Commission found. But Quad Cities would need power prices to go up almost 50 percent. Power prices are expected to go up 10 to 20 percent in Illinois to comply with carbon reduction plans, the study noted.

Risking reliability?

During the infamous January 2014 cold snap in Illinois, nuclear plants accounted for only three percent of the widespread power outages. Problems at coal plants accounted for a third of the outages and natural gas accounted for almost half, because of issues at plants and disruption of pipeline availability.

Nuclear proponents point to this reliability as a reason to keep nuclear energy online, an especially compelling argument as the state suffers another round of frigid temperatures.

The Illinois Commerce Commission and the Illinois Power Agency looked at how electricity reliability and generation capacity would be impacted by retirement of the Clinton, Quad Cities and Byron plants. The Illinois Power Agency, which procures power for the state’s utilities, modeled several possible scenarios: business as usual, a polar vortex, or a hot summer with high energy demand coming after coal plants have been shut down.

The agency found that there would be some impact on generation capacity if the nuclear plants retired. But it would be below industry levels of concern, and less than impacts of plant closures in other states.

The report also found that demand response – reducing the demand for energy especially during peak times – could offset much of the impact. “There may not be sufficient concern regarding reliability and capacity to warrant the institution of new Illinois-specific market-based solutions to prevent premature closure of nuclear plants,” the Illinois Power Agency opined.

MISO and PJM, the regional transmission organizations which oversee the electricity markets and transmission systems covering Illinois, worked with the state in evaluating the nuclear plant closures. MISO found that if the Exelon plants were closed, their capacity would be replaced with natural gas-fired power, and electricity prices would go up between 0.4 to 1.1 percent, depending on the price of natural gas.

Illinois is a net exporter of power, with a capacity of 45,000 megawatts at more than 60 facilities. The closures would likely reduce electricity exports out of the state, especially from the Clinton plant, the report found. But that would not necessarily have an impact on in-state consumers.

Good for the environment?

Nuclear energy can pose a conundrum for environmentalists, since it provides power with zero carbon emissions, yet it also raises serious concerns regarding disposal of nuclear waste and uranium mining. The Illinois report did not analyze these upstream and downstream facets of nuclear energy, but focused on the carbon emission impacts if the nuclear plants were closed.

The Illinois EPA estimated the “social cost” of a ton of carbon emissions going into the future. That cost ranged widely from $12 to $235 per ton depending on the year and other factors. The agency estimated that if nuclear plants closed, their generation capacity would be replaced by 80 percent coal-fired power, 12 percent natural gas and 8 percent renewables.

Calculating the social cost of emissions at around $50 a ton, this analysis showed that an extra $3.7 billion would be spent because of new carbon emissions between 2020 and 2029, if coal and gas were ramped up to replace one closed nuclear plant.

However if new generation complies with the state’s Clean Power Plan, to implement the U.S. EPA’s mandated emissions reductions from power plants, cleaner coal plants and more renewables would be used. That would mean less cost – an estimated $2.5 billion over a decade – from emissions increased because of the closure of one nuclear plant.

Killing or creating jobs?

The Illinois Department of Commerce and Economic Opportunity estimated the closure of the three troubled Exelon plants would mean the loss of 2,500 “good jobs” at the plants, paying over $100,000 on average for a total annual payroll of $350 million. The closures would also mean the loss of 4,431 indirect jobs including at Illinois businesses that sell the plants $193 million worth of goods and services per year.

The department estimated a 10 to 16 percent rise in wholesale power prices if the plants closed, which it said would cause the loss of 896 more jobs as electricity costs pushed businesses to tighten their belts. More than $1.8 billion worth of economic activity would be sacrificed because of the closings, the department found.

However, these impacts could be “largely mitigated” by investment in clean energy. The nuclear capacity could be replaced by the addition of more than 7,000 MW of wind and 1,500 MW of solar by 2020, the model suggested. However, wind energy jobs would taper off drastically as wind farm construction was completed, by 2020 equating to a net loss of more than 5,000 jobs compared to the nuclear plants.

Extra investment in energy efficiency would also create jobs, though the energy efficiency sector creates significantly fewer jobs per dollar invested than most industries, the department noted.

Decommissioning nuclear plants – like the Zion, Illinois plant already closed by Exelon – is a costly and lengthy process that employs people and also creates economic stimulus.

The department also noted the complicated ripple effects of plant closures. Many people might migrate out of the area if plants close, for example, meaning lower costs for governments providing public services. The loss of thousands of well-paying plant jobs would also slash prevailing local wage rates, which could make the area more attractive for new businesses looking to build a factory or warehouse.

“It’s only as bad as the state losing any other large employer,” said Dave Kraft, director of the Nuclear Energy Information Service. “With proper response and planning, Illinois can get through this, and be stronger and further ahead in developing a true long-term energy plan than it otherwise would have done.”

Market solutions?

Though the individual agencies’ chapters did not make a clear case that state intervention was warranted, the report also explored market-based solutions that the state could undertake to give low-carbon or carbon-free energy sources like nuclear an advantage.

Proposals included a carbon tax, a carbon cap and trade program, a sustainable power planning standard and a low-carbon portfolio standard, similar in structure to the state’s renewable portfolio standard. The report also considered “reliance purely on the market and external initiatives,” without state interference.

The report noted that policies and initiatives to limit carbon are typically more viable on a federal or regional rather than state level, though states can take action to limit carbon emissions.

By 2016 or 2017 states must submit their plans for reducing carbon emissions from coal plants in keeping with the U.S. EPA’s mandate. Illinois’ Clean Power Plan could incorporate solutions that, intentionally or not, would help the struggling nuclear plants. However Exelon’s warnings indicate the plants could close before such programs would have an effect.

The state report cites the “old adage” that “a rising tide lifts all boats,” and calls for addressing the risk of premature nuclear plant closures with “holistic solutions” that also minimize electricity rate increases and position Illinois as a leader in clean energy.

Environmental Law & Policy Center executive director Howard Learner said in a statement that the report confirms his long-held opinion that the Exelon plantsaren’t economically competitive and can be retired without added costs to Illinois consumers, without hurting reliability, and with more job creation, by growing clean renewable energy and energy efficiency.”

“This report confirms that the competitive power market is working to hold down Illinois energy costs,” he added. “We shouldn’t bail out Exelon’s old, uncompetitive nuclear plants. Instead, we should invest in new renewable energy, like wind and solar, and energy efficiency to grow a cleaner Illinois energy future.”

Kraft said nuclear critics are still furious about the process resulting from the House resolution, which he characterized as “panic-peddling” driven by “half-truths.” He was upset there was no public input or oversight involved in the agencies’ report, but he is encouraged by the result nonetheless.

“Even though Exelon did their best to convince everyone that the sky is falling here in Illinois,” he said, “Even a poorly mandated, non-funded, abstract-model-heavy analysis could not reach that conclusion.”

The NRDC and ELPC are members of RE-AMP, which publishes Midwest Energy News.

Chicago health commissioner blasts KCBX over petcoke

On Tuesday, the Koch Industries subsidiary KCBX announced its plans to enclose the controversial piles of petcoke it has been storing on Chicago’s Southeast Side, releasing colorful drawings and an animated video — and saying it needs an extra 14 months beyond a city deadline to build the enclosure.

On Wednesday, the city’s public health commissioner sent KCBX president Dave Severson a scathing letter, denouncing the company for releasing the plans “via press release” without filing formal building plans or a variance request for an extension, under the city rules that require the enclosure be done by June 2016.

KCBX says there is no way the enclosure can be finished before late summer or fall 2017.

“Prior to your announcement, KCBX had applied for no permits and shared no formal plans or architectural drawings for this facility, despite the fact that the clock on your two-year timeline for building the facility started running more than six months ago,” said the December 17 letter from Chicago Department of Public Health (CDPH) Commissioner Bechara Choucair.

Advocates: Chicago ‘being played’ by petcoke company

KCBX paved roads to reduce pollution. Photo by Kari Lydersen

KCBX paved roads to reduce pollution at its Chicago petcoke facility. (Photo by Kari Lydersen / Midwest Energy News)

The piles of petroleum coke, or petcoke, on Chicago’s Southeast Side that have created a furor over the past year and a half would become invisible under a plan that the Koch Industries subsidiary KCBX Terminals unveiled on Tuesday.

The piles would be enclosed in a roughly 10-story-high, 1,000-foot-long building. The rest of the company’s 82-acre footprint alongside the Calumet River would be planted with grass and trees, as shown in the company’s newly released renderings and 30-second animated video.

KCBX says the plan shows their commitment to remaining in Chicago, investing in a “state-of-the-art facility” and working to mollify local residents upset about pollution. Local opponents say the release of the enclosure plan is just a public relations move, given that the company doesn’t plan to complete it until more than a year after a city deadline.

What will Republican victories mean for energy efficiency?

Illinois Gov.-elect Bruce Rauner visits the statehouse on Dec. 2. (AP Photo / Seth Perlman)

Illinois Gov.-elect Bruce Rauner visits the statehouse on Dec. 2. (AP Photo / Seth Perlman)

Following recent GOP election gains, efficiency advocates are taking a glass-half-full approach, emphasizing bipartisan support for efficiency mandates and missions, including among Republicans like Illinois Gov.-elect Bruce Rauner.

That was the message of the Midwest Energy Efficiency Alliance in a teleconference on Wednesday analyzing the effect of the November elections for governor and state legislature in 13 states where Republicans were generally victorious.

But there is also uncertainty ahead in the energy efficiency landscape, namely in three states – all with Republican governors and legislative majorities – where rollbacks of energy efficiency mandates have occurred.

Gov. John Kasich was re-elected in Ohio, and Gov. Mike Pence is still in office in Indiana, up for re-election in 2016. In those states, majority Republican legislatures this year passed bills freezing and ending, respectively, the states’ mandates for increased energy efficiency.

Coal plants, petcoke remain hot issues in Chicago elections

Chicago neighborhood activists say Mayor Rahm Emanuel is taking too much credit for the closure of the Fisk and Crawford coal plants. (Photo by Daniel X. O'Neill via Creative Commons)

Chicago neighborhood activists say Mayor Rahm Emanuel is taking too much credit for the closure of the Fisk and Crawford coal plants. (Photo by Daniel X. O’Neill via Creative Commons)

Even though they closed in 2012, Chicago’s controversial Fisk and Crawford coal plants are making an encore appearance in this year’s municipal elections, to be held Feb. 24.

Chicago Mayor Rahm Emanuel’s first televised campaign ad featured the mayor on a park bench talking with Kim Wasserman, one of the community leaders who worked for more than a decade to try to force the coal plants to clean up or shut down.

The ad portrays Wasserman giving Emanuel credit for brokering a deal that shut down the Chicago plants, which immediately sparked outcry from many of the community activists who had been working on the issue since the early 2000s. They said they resented Emanuel taking credit for the plants’ closing. And they pointed out that the plants were likely to close anyway – and did close well before Emanuel’s deadline – because of competition from cheap natural gas. Additionally, the deal Emanuel brokered included the dropping of a lawsuit against the company Midwest Generation’s other Illinois coal plants.

On utilities and solar, Wisconsin goes its own way

(Photo by Ronnica Rothe via Creative Commons)

(Photo by Ronnica Rothe via Creative Commons)

What’s the matter with Wisconsin?

That’s what many clean energy proponents are asking, in the wake of the Wisconsin Public Service Commission (PSC)’s decisions in favor of rate restructuring that could virtually kill solar and other types of distributed generation across much of the state.

Despite significant public opposition, the PSC in November decided to approve rate cases filed by utilities We Energies, Madison Gas & Electric (MGE) and the Wisconsin Public Service Corporation, which could drastically reduce the feasibility of installing solar or other types of renewable energy for consumers in the Milwaukee, Madison and Green Bay areas.

The approvals are not final until written decisions are issued; PSC spokesman Nathan Conrad said that will likely happen in mid-December.

Similar rate restructuring proposals have been made by utilities around the country. But public service commissions have overwhelmingly not supported them, either turning down the requests or delaying a decision while demanding more study.

Wisconsin is the lone exception, according to a tally kept by the Alliance for Solar Choice (TASC).

Study: Wisconsin groundwater contaminated by coal ash

The Oak Creek Power Plant near Milwaukee is a significant source of coal ash that a new report says is contaminating nearby groundwater. (Photo by JanetandPhil via Creative Commons)

The Oak Creek Power Plant near Milwaukee is a significant source of coal ash that a new report says is contaminating nearby groundwater. (Photo by JanetandPhil via Creative Commons)

The “beneficial reuse” of coal ash, often touted as a way to keep the material out of landfills, is potentially causing serious contamination of drinking water in southeast Wisconsin and possibly across the state, according to a report released Tuesday by Clean Wisconsin.

By classifying coal ash as an “industrial byproduct,” as report author Tyson Cook says, companies are able to place contaminant-laden coal ash in the ground — as structural fill in and below roads, trails, parking lots, buildings, and bridges — with no lining or monitoring.

About 85 percent of Wisconsin’s coal ash is reused, compared to about 50 percent nationwide. Congress has even called Wisconsin the “gold standard” on this front.

Clean Wisconsin’s study of test results from almost 1,000 wells found that there is evidence such coal ash is contaminating groundwater that provides drinking water for thousands of residents.

At a Racine area elementary school, Clean Wisconsin’s own testing found molybdenum levels at more than twice the state’s enforcement standard.

Clean Wisconsin’s analysis of state test results also found that molybdenum contamination is significantly higher in close proximity to coal ash structural fill sites — ash layered below roads, buildings and the like to create level ground and fill spaces. Higher molybdenum levels also corresponded to the flow of groundwater in relation to known coal ash reuse sites, the study found.