While Ohio regulators last week rejected one utility’s plan to guarantee income for its power plants – characterized by critics as a “bailout” – the decision left the door open for similar proposals in the future.
Meanwhile, protective orders will continue to prevent public disclosure of all the facts and figures behind the plans proposed by utilities.
Last Wednesday the Public Utilities Commission of Ohio (PUCO) rejected a proposal by American Electric Power (AEP) that would have guaranteed sales for AEP’s share of all electricity from two coal plants owned by the Ohio Valley Electric Corporation. All ratepayers would have had to cover the costs of that plan, whether they chose AEP for their electricity generation company or not.
AEP claimed the plan would give ratepayers a hedge against long-term inflation. It described its plan as a Power Purchase Agreement (PPA).
Environmental and consumer advocates have said the plans would impose huge immediate costs on ratepayers with the likelihood of large long-term net losses as well.
The Walter C. Beckjord power plant in Ohio is one of many that have shut down rather than meet pollution rules. (Photo by Brett Ciccotelli via Creative Commons)
A case currently before the Supreme Court could decide whether coal-fired power plants can escape federal rules for mercury and other hazardous air emissions. The case has important consequences for Ohio and other parts of the Midwest.
On the one hand, utilities and other challengers argue that the U.S. Environmental Protection Agency unreasonably failed to consider costs in determining whether the regulations are appropriate.
On the other hand, the U.S. Environmental Protection Agency says the new rules can save tens of billions of dollars in human health costs each year.
Advocates say those amounts and other costs shifted to society are essentially a subsidy for coal-powered electricity.
Transmission lines near Canton, Michigan. (Photo by Fred Locklear via Creative Commons)
Michigan’s Lower Peninsula faces a 3 GW electric capacity shortfall next year. But energy experts say that doesn’t mean the state needs to rush into building 3 GW worth of new generation.
Doing so, some argue, could actually put Michigan in an even worse position in the future.
The capacity shortfall — which is projected by the Midcontinent Independent System Operator (MISO) to grow as coal plants are retired to meet federal emission rules — may also present opportunities for the state to restructure its energy system to encourage demand-side solutions, driving down the need for new generation.
While details about energy supply and demand may sound esoteric to average ratepayers, the issue is on the radar of lawmakers in Lansing this year. State officials say that reliability concerns in the Upper Peninsula due to uncertainty over an aging coal plant serve as a warning to the rest of the state about how average ratepayers could be impacted without proper planning for the future.
Editor’s note: This story was updated to include comments from MISO and Gov. Rick Snyder.
Wisconsin-based utility We Energies and its major mining company customer in the Upper Peninsula reached an agreement today that effectively ends the need for ratepayer subsidies to keep an aging coal plant open in Marquette.
Cliffs Natural Resources announced today that it will stay on as a We Energies customer until the Presque Isle Power Plant is sold, allaying the utility’s concern that Cliffs would leave for an alternative energy supplier before that happened.
Out of that concern, We Energies said it needed to keep collecting System Support Resource payments to keep Presque Isle open, despite claims last week by top Michigan officials that We Energies was “double dipping” by doing so.
We Energies says it has made an offer to one of its large industrial customers in the Upper Peninsula that, if agreed to, would end the latest dispute over ratepayer subsidies keeping the utility’s aging coal plant open in Marquette.
The most recent dispute over System Support Resource (SSR) payments keeping the Presque Isle Power Plant open surfaced when Cliffs Natural Resources — which left We Energies for an alternative energy supplier in 2013 because of steadily increasing rates — returned to We Energies as a customer on Feb. 1.
However, the utility has continued to collect SSR payments in escrow out of fear that Cliffs would leave for a different supplier again.
©2015 E&E Publishing, LLC
Republished with permission
By Manuel Quiñones
Numerous industry and environmental interests are weighing in on high-profile federal litigation over the legality of what is widely known as Minnesota’s anti-coal law.
Last year, a federal judge said the Next Generation Energy Act ran afoul of the U.S. Constitution’s Commerce Clause — which gives the federal government power to regulate interstate commerce — by restricting the purchase of carbon-intensive energy from other states.
Neighboring North Dakota, which mines coal and is reliant on the fuel for power generation, sued Minnesota in 2011 over the law. It said Minnesota’s law would, in effect, regulate its own generating portfolio (Greenwire, April 21, 2014).
©2015 E&E Publishing, LLC
Republished with permission
By Manuel Quiñones
The Department of Energy is pulling the plug on its involvement in the FutureGen 2.0 carbon capture and sequestration project — a significant blow to the Obama administration’s efforts aimed at boosting the technology.
FutureGen is aimed to retrofit a coal-fired power-generating unit in Meredosia, Ill., to capture 90 percent of its greenhouse gas emissions. DOE last year approved providing $1.1 billion of the project’s estimated $1.6 billion price tag.
But yesterday, DOE, after spending more than $200 million, said it could no longer back the effort. For one thing, delays would make it difficult to spend the remaining amount by a September deadline.
Barkcamp State Park is one of several in Ohio that have been eyed for coal mining. (Photo by jcsullivan24 via Creative Commons)
Coal mining could still proceed at Ohio park and conservation lands, even after a subsidiary of Murray Energy Corporation withdrew its application to mine under part of Barkcamp State Park.
Trial is slated to start in July over a proposal to strip mine 65 acres of Brush Creek Wildlife Area in Jefferson County. That’s the equivalent of about 49 football fields.
The Ohio Department of Natural Resources (ODNR) also reports that it has issued or received other permit applications for coal mining on state-owned property. Burr Oak State Park, Harrison State Forest, Egypt Valley Wildlife Area and other parcels are among the potentially affected properties.
Crews install a natural gas pipeline for Consumers Energy near Coldwater, Michigan in July. (Photo by Consumers Energy via Creative Commons)
In March, Michigan Gov. Rick Snyder plans to make a major statewide energy policy announcement. While he has not publicly disclosed details of his plan, some lawmakers and clean-energy advocates are concerned about the Republican governor’s over-commitment to natural gas as aging coal plants close.
Snyder spent roughly one minute during his 49-minute State of the State speech Tuesday night talking about the “need for a long-term policy.”
“It needs to be an adaptable policy because of the lack of federal policy and the challenges of a global marketplace. It needs to focus on important things such as eliminating energy waste and the conversion of coal to natural gas — an asset of the state of Michigan — and renewables.”
Snyder reportedly said at a conference last week that Michigan is “well positioned to actually have a fair amount of that coal demand go to natural gas.” He said his plan is based on three pillars of “affordability, reliability and environmental protection.”
Great River Energy’s headquarters northwest of Minneapolis has a solar array and wind turbine, but the co-op remains more coal-dependent than other utilities. (Photo courtesy Great River Energy)
More than a year after being criticized by state regulators for being too coal-dependent, a Minnesota energy provider is taking another run at planning for a lower-carbon future.
In July 2013 the five-member Minnesota Public Utilities Commission took the unprecedented move of rejecting a long-range integrated resource plan submitted by Great River Energy due to its reliance on coal-fired energy generation.
The 3-2 vote led GRE to formulate some new strategies in a second version of the resource plan — that details energy consumption and generation for the next 15 years — that was submitted last October. The new plan calls for faster depreciation of two coal-fired plants, an end to a contract with an aging Wisconsin coal-based facility, increased conservation measures and more renewable energy.
“We looked carefully at the language of the order, and we think the commission will find it very acceptable this year,” said David Saggau, chief executive officer and president. “This is a plan our members feel comfortable with and they like the balance we’re striking. They’re very realistic about the transition that’s occurring in our industry and they like the steps that we are taking to address future resource needs.”