U.S. Climate Report Warns of Damaged Environment and Shrinking Economy

November 23

November 23, 2018 – by  Coral Davenport and Kedra Pierre-Louis in the New York Times

Fighting the Camp Fire this month in Magalia, Calif.CreditCredit:Justin Sullivan/Getty Images

WASHINGTON — A major scientific report issued by 13 federal agencies on Friday presents the starkest warnings to date of the consequences of climate change for the United States, predicting that if significant steps are not taken to rein in global warming, the damage will knock as much as 10 percent off the size of the American economy by century’s end.

The report, which was mandated by Congress and made public by the White House, is notable not only for the precision of its calculations and bluntness of its conclusions, but also because its findings are directly at odds with President Trump’s agenda of environmental deregulation, which he asserts will spur economic growth.

Mr. Trump has taken aggressive steps to allow more planet-warming pollution from vehicle tailpipes and power plant smokestacks, and has vowed to pull the United States out of the Paris Agreement, under which nearly every country in the world pledged to cut carbon emissions. Just this week, he mocked the science of climate change because of a cold snap in the Northeast, tweeting, “Whatever happened to Global Warming?”

But in direct language, the 1,656-page assessment lays out the devastating effects of a changing climate on the economy, health and environment, including record wildfires in California, crop failures in the Midwest and crumbling infrastructure in the South. Going forward, American exports and supply chains could be disrupted, agricultural yields could fall to 1980s levels by midcentury and fire season could spread to the Southeast, the report finds.

“There is a bizarre contrast between this report, which is being released by this administration, and this administration’s own policies,” said Philip B. Duffy, president of the Woods Hole Research Center.

All told, the report says, climate change could slash up to a tenth of gross domestic product by 2100, more than double the losses of the Great Recession a decade ago.

Scientists who worked on the report said it did not appear that administration officials had tried to alter or suppress its findings. However, several noted that the timing of its release, at 2 p.m. the day after Thanksgiving, appeared designed to minimize its public impact.

Still, the report could become a powerful legal tool for opponents of Mr. Trump’s efforts to dismantle climate change policy, experts said.

“This report will weaken the Trump administration’s legal case for undoing climate change regulations, and it strengthens the hands of those who go to court to fight them,” said Michael Oppenheimer, a professor of geosciences and international affairs at Princeton.

The report is the second volume of the National Climate Assessment, which the federal government is required by law to produce every four years. The first volume was issued by the White House last year.

The previous report, issued in May 2014, concluded with nearly as much scientific certainty, but not as much precision on the economic costs, that the tangible impacts of climate change had already started to cause damage across the country. It cited increasing water scarcity in dry regions, torrential downpours in wet regions and more severe heat waves and wildfires.

The results of the 2014 report helped inform the Obama administration as it wrote a set of landmark climate change regulations. The following year, the E.P.A. finalized President Barack Obama’s signature climate change policy, known as the Clean Power Plan, which aimed to slash planet-warming emissions from coal-fired power plants. At the end of the 2015, Mr. Obama played a lead role in brokering the Paris Agreement.

But in 2016, Republicans in general and Mr. Trump in particular campaigned against those regulations. In rallies before cheering coal miners, Mr. Trump vowed to end what he called Mr. Obama’s “war on coal” and to withdraw from the Paris deal. Since winning the election, his administration has moved decisively to roll back environmental regulations.

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IEEFA report: ‘Holy Grail’ of carbon capture continues to elude coal industry; ‘cautionary tale’ applies to domestic and foreign projects alike

November 23, 2018 – by IEEFA – Editor’s note, Valley Watch has long been opposed to the use of carbon capture and sequestration (CCS) due to its deleterious economics.  

Study details lack of economic feasibility around North American initiatives; costly and/or failed efforts at Duke’s Edwardsport, NRG’s Petra Nova, SaskPower’s Boundary Dam, and Southern Co.’s Kemper plant; technology seen as unworkable and too expensive for fast-changing electricity-generation markets

A study published today by the Institute for Energy Economics and Financial Analysis concludes that costly efforts undertaken in North America to develop workable, economic technology to capture carbon from coal-fired generation have come up short

Further, the study concludes that technology developments in the renewable energy and natural gas sectors have obviated the need for continued efforts to retrofit carbon capture technology on the nation’s shrinking coal fleet.

The report— “Holy Grail of Carbon Capture Continues to Elude Coal Industry”—tracks the history and performance of four highly touted projects: Saskatchewan Power’s Boundary Dam Power Station in Canada, NRG’s Petra Nova project in Texas, Southern Co.’s Kemper plant in Mississippi, and Duke Energy’s Edwardsport plant in Indiana.

“What all four of these projects have in common is their dismal performance,” said David Schlissel, IEEFA’s director of resource planning development and lead author of the report. “While Petra Nova and Boundary Dam are both operational, neither in truth can be considered anything other than demonstration units, the integrated gasification combined cycle project at Edwardsport has performed abysmally, and the Kemper clean coal project was essentially abandoned.”

While the report focuses on North American initiatives, it speaks as well to long-standing U.S. coal industry plans to sell carbon-capture technology abroad.

“Our findings serve as a cautionary tale for any country considering broad adoption of CCS for coal,” Schlissel said. “The technology remains unproven at full commercial scale, it is wildly expensive, there are serious questions regarding after-capture transport, injection and storage of the captured CO2 and—most important—more reliable and far cheaper power-generation options exist.”

The report traces a legacy of costly experimentation that began over a decade ago under the direction of the U.S. Department of Energy, which began in the early 2000s to seek ways to capture coal-generated carbon emissions to address climate change. American electricity markets relied on coal for more than 50 percent of power generation nationally at the time, a figure that has dropped to less than 30 percent and is continuing to shrink as natural gas and renewables gain market share.

“Electricity produced by renewable energy, particularly wind and solar, amounted to little more than a rounding error in the Energy Information Administration’s 2003 edition of its Annual Energy Review,” the report notes. “Today they account for more than 10% of the nation’s electricity generation, and both continue to gain market share fast.”

Meanwhile, technology-driven advances in natural gas production have given the energy sector a huge lift: “Supplies have soared and costs have been cut to the point that gas is now the only viable option for developers looking to build new fossil-fuel generation. Further, the utility industry itself, long a source of support for coal in general and specifically for CCS development financing, is now moving quickly away from coal.”

The report describes further how market forces have undercut the economics of retrofitting carbon-capture technology on the aging American coal fleet.: “High-risk, high-cost CCS investments looked potentially viable a decade ago but are being eclipsed today by less-costly ways to produce electricity while curbing carbon emissions,” it states.

Full report: “Holy Grail of Carbon Capture Continues to Elude Coal Industry”

Media Contact:
Karl Cates kcates@ieefa.org 917 439 8225

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Breathe easier in February. Henderson Muni to retire two Sebree units.

October 26, 2018-By Robert Walton, in UtilityDive.

Henderson Municipal Utilities operates two units in this complex that also hosts the Louisville Gas and Electric Company ‘s Reid Station. File Photo © 2018 BlairPhotoEVV.

Dive Brief:

  • Henderson Municipal Power and Light in Kentucky will close its coal plant early next year and turn to the open market for its power needs, as the aging plant’s energy production is consistently more expensive than available supplies.
  • Henderson’s 300 MW coal plant, Station 2, is operated by Big River which sells the excess energy. However, power from the plant costs approximately 33 times more than alternative generation and it ran infrequently, local news station WFPL reported earlier this year.
  • In a letter earlier this month, the Midcontinent ISO (MISO) approved the shutdown of Units 1 and 2 effective Feb. 1, 2019, after determining the generation was not necessary as a system support resource.

    Dive Insight:

    Coal-fired generators continue to close down, and Henderson’s power plant is only the most recent example. According to the Sierra Club, the plant is the 277th coal generator that has shut down or announced plans to do so since 2010. And new research finds closures are accelerating.

    The Institute for Energy Economics and Financial Analysis (IEEFA) on Thursday released an analysis estimating 15.4 GW of coal-fired capacity will close this year, including 44 units at 22 plants. This year at least 11 GW have retired and the final tally is predicted to eclipse the previous record of 14.7 GW retired in 2015. IEEFA estimates another 21.4GW of coal-fired capacity will close over the next six years.

    A literal “mountain” of coal ash sits along the Green river just south of the Big Rivers/Henderson Municipal coal plant near Sebree, KY. © 2010  BlairPhotoEVV

    “The competitive environment for coal-fired power in the generation marketplace is becoming ever more challenging,” Seth Feaster, IEEFA data analyst and author of the report, said in a statement. He pointed to the declining cost of renewables and natural gas prices that “are expected to remain low for the foreseeable future.”

    There have been exceptions. Just last week, FirstEnergy announced it would delay closing its 1,300 MW coal-fired Pleasants Power Station in West Virginia. The plant had been slated to close next year, but will instead continue operating into 2022. That decision, however, had less to do with coal’s long-term viability and more with the bankruptcy proceeding of FirstEnergy Solutions. 

    IEEFA estimates that in July the U.S. coal fleet stood at about 246 GW, but by the end of 2024 that capacity could be reduced 15%.

    “Cost is the biggest force in the decline of coal, as renewables and gas-fired generation are proving cheaper and more flexible,” the analysis said, also warning the electric generation industry is “well into a fundamental transition that is gaining momentum and will probably accelerate as technology disruptions occur.”

    As for the Henderson plant, MISO informed Big River three weeks ago that “the decision to retire is considered final and the existing interconnection rights for the generators will be terminated as of the retirement date.”

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Barbra Streisand releases “Don’t Lie to Me” video attacking Trump

October 13, 2018 – By Barbra Streisand

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A layman’s utility primer

October 8, 2018-Now You Know with Zac and Jesse 

On today’s episode of “In Depth” Zac & Jesse talk about the overwhelming support by the public for going 100% renewable, and the what your utility isn’t telling you. Please consider supporting us on Patreon. We have some pledge rewards you may be interested in, so go check that out. Now You Know! #nowyouknow #renewableenergy #tesla

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Air pollution causes ‘huge’ reduction in intelligence, study reveals

August 28, 2108 – by Damian Carrington and Lily Kuo in the Guardian

Impact of high levels of toxic air ‘is equivalent to having lost a year of education’

Air pollution causes a “huge” reduction in intelligence, according to new research, indicating that the damage to society of toxic air is far deeper than the well-known impacts on physical health.

The research was conducted in China but is relevant across the world, with 95% of the global population breathing unsafe air. It found that high pollution levels led to significant drops in test scores in language and arithmetic, with the average impact equivalent to having lost a year of the person’s education.

“Polluted air can cause everyone to reduce their level of education by one year, which is huge,” said Xi Chen at Yale School of Public Health in the US, a member of the research team. “But we know the effect is worse for the elderly, especially those over 64, and for men, and for those with low education. If we calculate [the loss] for those, it may be a few years of education.

Previous research has found that air pollution harms cognitive performance in students, but this is the first to examine people of all ages and the difference between men and women.

The damage in intelligence was worst for those over 64 years old, with serious consequences, said Chen: “We usually make the most critical financial decisions in old age.” Rebecca Daniels, from the UK public health charity Medact, said: “This report’s findings are extremely worrying.”

Air pollution causes seven million premature deaths a year but the harm to people’s mental abilities is less well known. A recent study found toxic air was linked to “extremely high mortality” in people with mental disordersand earlier work linked it to increased mental illness in children, while another analysis found those living near busy roads had an increased risk of dementia.

The new work, published in the journal Proceedings of the National Academy of Sciences, analysed language and arithmetic tests conducted as part of the China Family Panel Studies on 20,000 people across the nation between 2010 and 2014. The scientists compared the test results with records of nitrogen dioxide and sulphur dioxide pollution.

They found the longer people were exposed to dirty air, the bigger the damage to intelligence, with language ability more harmed than mathematical ability and men more harmed than women. The researchers said this may result from differences in how male and female brains work.

Derrick Ho, at the Hong Kong Polytechnic University, said the impact of air pollution on cognition was important and his group had similar preliminary findings in their work. “It is because high air pollution can potentially be associated with oxidative stress, neuroinflammation, and neurodegeneration of humans,” he said.

Chen said air pollution was most likely to be the cause of the loss of intelligence, rather than simply being a correlation. The study followed the same individuals as air pollution varied from one year to the next, meaning that many other possible causal factors such as genetic differences are automatically accounted for. Continue reading

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Billions At Stake: Should We Invest In Struggling Power Plants Or Communities Facing Closures?

August 23, 2018 – by Sonia Aggarwal  in Forbes. Editor’s note: Coal-fired power plants in the Tri-State are experiencing similar issues in that they cannot compete in the marketplace of producing electricity due to a variety of economic and physical factors. None are less than 30 years old (Rockport 2 came online in 1988) and none were projected to have life over 40 years when built. Duke, Vectren, AEP, Big Rivers, IPL, Alcoa and TVA are all facing the same problem. 

FirstEnergy Solutions’ coal and nuclear power plants are facing serious economic challenges, along with the workers and communities that depend on them, and are hoping for a billion-dollar annual bailout from the Trump Administration.

The company filed a deactivation notice for three of their power plants in March, just submitted closure plans for those plants to the federal government, and filed for bankruptcy this spring – calling into question the future of at least three more power plants that are exposed to the competitive market.

New research shows  FirstEnergy would be the recipient of an estimated $2 billion in subsidies over just two years if the Trump Administration’s coal and nuclear bailout becomes reality . They’d be kept online through payments that contradict market economics, but the fundamental economics causing their distress won’t change. And when these funds do dry up, the power plant workers and host communities facing economic distress would be right back where they are today – wondering what comes next after power plants close.

Perry Nuclear Power Plant, Unit 1, one of the FirstEnergy nuclear plants in danger of closingNUCLEAR REGULATORY COMMISSION ON FLICKR

So what if instead of using billions to bail out FirstEnergy and other big power plant owners for a couple of years, funds were redirected to help communities with power plants that can no longer compete in power markets?  What if those funds went to communities—rather than a few power plant owners —to support the inevitable transition, diversifying local economies and creating a longer-lasting solution?

The new reality of energy economics means coal and nuclear can’t compete

Fast-falling clean energy costs are making many old power plants around the country unable to compete. Coal and nuclear are now more expensive than alternatives like natural gas, wind energy, and solar power in regional power markets designed to avoid expensive options and cut customer costs.

Natural gas prices are near the lowest they’ve been in 15 years, solar and wind power costs dropped below those of building coal and nuclear power in 2017, renewable energy costs are forecast to keep falling through 2050 while the cost of operating coal and nuclear plants keeps climbing due to needed upgrades as plants age.
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UPDATE: Bucolic Indiana town to become mega industrial center

August 22, 2019 – by John Blair, Valley Watch president and editor of valleywatch.net 

The State of Indiana did issue an air pollution and construction permit for the facility in the Spring. Valley Watch and Southwestern Indiana Citizens for Quality of Life have formally challenged the  permit using the national environmental law firm, EarthJustice to represent us.

We remain confident that this plant will never be built due to its questionable economics and the fact that the sponsors seem not to understand exactly how to finance it, let alone build and operate it. In fact, Riverview Energy and LincolnLand Economic Development Corp both have failed to have any public forums where citizens can attend for free to ask questions of the sponsors.

A hearing was held at Heritage Hills High School last December where 47 people spoke in opposition to the proposal while only seven people, mostly those who promote economic development, spoke in favor. That did not deter the Indiana Department of Environmental Management from issuing a permit. 

Every few years someone pursuing a “get rich quick” scheme comes up with an idea to use coal as a feedstock for other forms of energy like liquid or gaseous fuels. In my forty some years as an Evansville resident, there have been more than a dozen of these ploys proposed for using coal in the Illinois Basin.

Only one has been built.

That was the financial disaster at Edwardsport proposed in 2004 by Duke Energy to cost $1.4 Billion and would be “Carbon Capture Ready.”  Yes, today that plant is operating but at a level no where near what Duke claimed it would when they persuaded a proven corrupt Indiana Utility Regulatory Commission in 2007 to give them authority to spend $1.985 Billion to build a 630 Megawatt “Integrated Gasification Combined Cycle (IGCC) plant they promised would operate at greater than 80% efficiency. Duke, not only had their hands in ratepayer pockets, they also had $133 million in Federal Income Tax Credits.

Today, that plant has failed using nearly every criteria, especially regarding its cost which the IURC has allowed to increase to a whopping $4.5+ Billion lemon, that leaves Duke’s ratepayers holding the bag for at least $3.65 Billion.  And it is nowhere near capturing any of the voluminous Carbon Dioxide that is contributing to climate change. If Duke had captured CO2, that would have raised the capital cost for the plant by an additional 50% and also cut the efficiency of the plant another 25-40% by consuming that much of the power the plant was designed to produce.

At about the same time Duke was making its pitch, calling Edwardsport, “clean coal,” another proposal was announced by then Governor, Mitch Daniels for Rockport, a town that was already one of the dirtiest communities on Earth for Toxic Emissions (approximately 30,000,000 pounds, according to USEPA’s Toxic Release Inventory at that time).

It was called Indiana Gasification (IGLLC) and sponsored by a financial holding company named Leucadia National. Like Duke, they hoped to cash in on the generosity of Federal and State governments. The Feds were ready to give them a Department of Energy Loan Guarantee of $2.8 Billion to pursue their dream of riches. And the State of Indiana gave them their biggest plum, legislation that made the State of Indiana their only customer buying all the syngas produced by the plant but then would force Indiana residential and commercial customers (not industrial customers, of course) to buy the syngas from the state at a massive premium just for the honor of getting our home heating gas from coal.

Then indiana governor, Mitch Daniels gestures as he tries to explain why Hoosier residential gas consumers should pay a premium for the privilege of heating their homes from coal derived gas shortly after he signed a bill forcing them to do so. Looking on is the late Rockport Mayor, Nedra Groves. © 2009 John Blair

After following what I called the Communist Chinese “model of business,” that plant was never able to reach financial and economic viability due to a variety of factors including cheap natural gas and loud protests from opponents like Valley Watch and the Citizens Action Coalition.

Finally, in 2014, Leucadia abandoned the project after I personally met with their CEO to discuss the enormous risks the company was taking even with all that taxpayer assistance.

But sadly, there is no shortage of stupid enrichment schemes for people when it comes to coal, especially around here, where in some circles, coal is God.

In 2010, a company of Connecticut carpetbaggers calling themselves Clean Coal Refining Corp. decided to exploit the hopes and dreams of economic development officials of Vermillion County, just north of Terre Haute. They promised a $3 Billion coal to diesel plant at the former US Army Newport Chemical Depot where deadly nerve gas had been stored since early in the 20thCentury for possible use in chemical warfare. Remote and secure, Clean Coal Refining took on another name Riverview Energy Corp. when it became apparent that coal refining was not the way to market a new project, even in coal friendly Indiana.

Once the name was changed sponsors promised Vermillion County officials the moon and more. After all, their project would be an economic panacea for the area, revitalizing a depressed section of the state. It gained full support of then Governor Daniels and his Lt. Governor, Becky Skillman who directed the State Center for Coal Technology Research at Purdue to provide support for the project.

But then, something went very wrong. Clean Coal Refining had optioned 1,500 acres of the Depot’s 8,800 acre facility, promising a “feasibility study” of the process and proposal that would make financing of the project easy. But, the study was never made public and financing never materialized.

After six long years, in October 2015, the Depot’s Reuse Authority decided they had had enough of the Connecticut’s firm’s empty promises and officially refused to renew Riverview Energy’s option on the land, effectively shutting the project down.

Like most people hoping for large profit on small investment, Riverview went to the State of Indiana asking where else they might go to develop their ill-fated project. They were told to check out Spencer County that was already a heavily polluted venue that had a reputation for taking anything that promised jobs, big investment and lots of chemical emissions. They talked to LincolnLand Economic Development Corporation, which had sought not only the failed Indiana Gasification project, but also a more recently failed Ohio Valley Resources mega fertilizer plant.

In almost total secrecy, Riverview and LincolnLand set the stage for 512 acres of prime farmland to be annexed into the bucolic town of Dale for use in a scaled down $2.5 Billion project, that would nearly double the physical area of the town. Again, nearly secret meetings were held to negotiate the sale and annexation of the land for use by Riverview. But secrets are fairly hard to keep in a small town and as word filtered out about the secret meetings, town residents were skeptical of becoming home to a experimental project that had never been used commercially anywhere in the world using coal as a feedstock.

When the annexation was passed in August 2017, one of the town board members told a local resident that he voted on it even though he knew nothing about it or the process it would use.

That set off alarms for several residents who were already concerned with high levels of various diseases in the area, especially since this was an experimental technology at the proposed size not far from an elementary school.

It did not take long for Dale residents to organize a new grassroots group using the moniker NOC2D or No Coal to Diesel. They sponsored public forums and started posting yard signs all over the small community in direct defiance of the Town Board which still acts as if the plant’s proposal is something that should remain as secret as possible.

LincolnLand and the sponsors  pledged to hold their own public information forums in April but four months later have, at best, offered private, invitation only affairs where they control who attends and who asks questions. Continue reading

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Indiana Office of Utility Consumer Counselor joins Valley Watch in opposing huge Vectren rate increasing proposal

August 13, 2018- by John Blair, valley watch.net editor 

Today, for perhaps the first time ever, the Indiana Office of Utility Consumer Counselor came out against a proposal by Vectren Corporation that if approved by the Indiana Utility Regulatory Commission would ultimately increase electric rates for southwest Indiana residential and commercial electric customers bills by nearly $1 billion.

While Valley Watch has fought for years for reduced usage of coal as an energy source, and was pleased when Vectren announced their intention to retire three coal units in the 2016 Integrated Resource Plan, we have had serious reservations about the sheer size and cost of their proposal build a giant natural gas facility at the AB Brown site in southeast Posey County at a cost to could cause significant economic harm to most of the residential and commercial customers.

Today’s announcement by the OUCC sill surely set in motion a clash between Vectren, Valley Watch Citizen’s Action Coalition and other intervenors as to the future of that plan. 

OUCC Counselor, Bill Fine said in their announcement, “Any electric utility that seeks to overhaul its generation fleet today must evaluate all possible options. It must also carefully examine the ways its options would impact its customers in terms of both money and electric reliability. In this case Vectren has not evaluated all options or shown that that it is proceeding on the most prudent manner.”

Source: Citizens Action Coalition

Earlier today, in a release sent out by the consumer watchdog, Citizens Action Coalition, Valley Watch president, John Blair asserted, “It is time for the IURC to finally step up, say no to Vectren, and deny this nearly one billion-dollar ratepayer rip-off. Vectren residential customers already pay the highest rates in Indiana. Ratepayers shouldn’t be forced to subsidize alleged Vectren growth in the industrial sector. Why should residential customers subsidize industrial customers at all?”

Valley Watch, whose purpose is to “protect the public health and environment of the lower Ohio River Valley, is committed to fair, just rates for clean, safe energy. Currently, southwest Indiana and western Kentucky  is home to nearly 15,000 megawatts off coal fired electric generating capacity that for decades has impacted the health of citizens of the region in very negative ways. All but around 4,000 of those megawatts are sent out of the region and that 4,000 serves to run the enormous electric needs of three of the USA’s remaining eight aluminum smelters.

Alcoa Warrick Operations is the largest aluminum smelter in the US. It emitted more than 4 million pounds of toxic chemicals into the SW Indiana environment in 2009. © 2011 John Blair

Air pollution, water pollution and land pollution from these giant facilities permeate our environment and will have negative impacts for the region for years after they cease operation.

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IEEFA update: Duke Energy’s costly Edwardsport coal-gasification project continues to underperform

August 1, 2018-by David Schlissel in IEEFA News Editor’s Note: Valley Watch has  steadfastly opposed this plant since it’s conception offering sage testimony at the original CPCN hearing in Bloomington in 2007.

Duke Energy’s 5-year-old gasified coal power experiment in Edwardsport, Ind., has turned out to be a catastrophe for ratepayers.

Duke Energy’s Edwardsport plant has been a financial disaster for Hoosier ratepayers.

That’s the main conclusion of the testimony I submitted yesterday to the Indiana Utility Regulatory Commission on the plant, which was sold at the outset as a cost-effective integrated gasification combined cycle (IGCC) project that burns gasified coal, or syngas.

The all-in cost of power from the plant, including financing costs and profits for Duke, averaged $145 per megawatt-hour (MWh) over the 55 months from its opening in June 2013 through December 2017, according to the latest available data. And that doesn’t include the $397 million Duke collected from Indiana ratepayers for the plant even before it went into service.

Market prices, by comparison, averaged $32 per MWh over the same period.

This means that Duke’s ratepayers paid in excess of $1.4 billion more for power from Edwardsport than they would have spent to purchase the same energy and capacity from the competitive wholesale markets in the 15-state region encompassing the grid managed by Midcontinent Independent System Operator (MISO).

Edwardsport will continue to burden ratepayers unless the commission takes some strong action.

A plant that by any empirical measure has fallen well short of expectations—and will most likely continue to do so.

My testimony explains how it is unreasonable—given Edwardsport’s high O&M expenses—to expect that the plant will produce a net economic benefit for ratepayers at any time in the foreseeable future. Indeed, Edwardsport is likely to become even more of an economic problem for Duke’s Indiana ratepayers as now-entrenched market trends persist.

Natural gas prices are expected to remain low, and design and technological improvements are driving down the costs of competing wind and solar resources. As more natural gas-fired generators and more wind and solar renewable resources are added to the MISO grid, Edwardsport will become even less economically viable. Two forces in particular are working against the plant: The fact that market prices can be expected to remain low, if not decline over time, and the likelihood that generation from Edwardsport will be displaced by lower-cost wind and solar energy.

BY ANY EMPIRICAL MEASURE, EDWARDSPORT’S OPERATING PERFORMANCE HAS FALLEN WELL SHORT of what Duke promised the Indiana commission it would be when the company sought permission to build it.  Those metrics include heat rate, capacity factor, equivalent forced outage rate and availability of syngas.

And by any forward-looking empirical measure, the plant’s performance, especially on syngas, should not be expected to improve significantly at any time in the foreseeable future.

Edwardsport is faltering persistently on several fronts:

  • The plant continues to lose a significant portion of its potential generation due to gasifier equipment problems, which explain its extremely poor 40% capacity factor on syngas during its first 55 months of operations, far below the 79 percent average capacity factor projected by Duke.
  • The plant continues to consume large amounts of power just to operate onsite equipment (known as “parasitic loads”) and is often shut down due to unanticipated problems or forced to operate at less than full power.
  • The plant’s heat rate, a measure of the efficiency with which it burns fuel, continues to be extremely high, meaning the plant must burn more fuel to produce the same power. This increases the fuel costs that ratepayers must bear.
  • The plant has had to be shut down for extended maintenance outages in the spring and fall of each of the last few years, a pattern that is expected to continue.
  • Duke has been unable to offer into the MISO markets the plant’s maximum output of either 618 MW during the non-summer months or 595 MW during the summer months.

EDWARDSPORT, IN SHORT, HAS OPERATED UNRELIABLY AND IS ENORMOUSLY EXPENSIVE TO RUN, with total operating and maintenance costs alone averaging $60 per MWh since it opened.

Its core problem, in technical terms, is that it is uneconomical unless both trains of its gasification plant operate as intended, in tandem, with both of its combustion turbines and its steam turbine producing electricity at a net capacity factor averaging 82% or more when operating on syngas. It is operating at barely half that factor.

By common regulatory standards, the plant simply cannot be considered fully “used and useful” as an integrated gasification combined cycle power plant due to its poor performance and excessive costs. The Indiana Utility Regulatory Commission, as a result, should strictly limit the plant’s operating and maintenance costs that Duke can pass along to ratepayers, thereby assuring that they pay only reasonable prices for the electricity, and only for power they actually receive from Edwardsport.

David Schlissel is IEEFA’s director of resource planning development.

Full testimony to Indiana Utility Regulatory Commission

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Should a Cincinnati-based, multi-state commission eliminate its standards for Ohio River pollution?

July 11, 2018, by Nick Swartsell in (Cincinnati) City BeatFor seven decades, the Ohio River Water Sanitation Commission has overseen the health of the roughly 1,000-mile-long waterway that provides drinking water to more than 5 million people. But it may soon shed many of its pollution standards.

Recreational use of the Ohio River is often overlooked by decision makers when it comes to water quality. Now, some fundamental protections for recreational users may be taken away by the very multi-state Commission that is supposed to protect us. Photo © 2014 BlairPhotoEVV

Two decades before the Environmental Protection Agency, an eight-state commission looked out for the health of the nearly 1,000-mile stretch of water that defines Cincinnati and provides more than five million people with drinking water. But it could soon walk back from a key part of that role.

Residents of Greater Cincinnati and elsewhere will get to weigh in later this month as the Ohio River Valley Sanitation Commission, or ORSANCO, takes final steps to back away from many of its pollution control standards it has provided states along the river.

A majority of the commission says many of the standards are redundant — rules from federal and state agencies are currently keeping water quality in the river at the level ORSANCO wants to see independent of its criteria. But critics of the proposal say a significant number of the standards aren’t duplicated by federal or state agencies and that the commission needs to continue doing everything it can to ensure water quality, especially as the Trump administration works to roll back environmental regulations.

The commission began a regular review process of its standards back in January with an ad-hoc committee and calls for public input. Now, before the commission formally adopts its rollback on pollution standards, it is holding another round of public input, including a public hearing July 26 at the Holiday Inn near Cincinnati International Airport in Erlanger, Kentucky.

Formed in 1948, Cincinnati-based ORSANCO has worked to make the Ohio River clean and safe in part by setting standards for the maximum levels of various pollutants in the river. The commission’s standards have long been used by states to ensure that the Ohio River is clean enough for recreation, drinking and other uses.

But now commissioners say that the federal EPA, founded in 1970, the 1972 federal Clean Water Act and state environmental agencies have made those standards redundant.

“The commission is considering this because, the thought is, with the robust state programs and the U.S. EPA’s program, there are better uses of our resources than really having a potentially redundant third layer of standards,” ORSANCO Executive Director Richard Harrison told WVXU earlier this year.  “Our compact is not changing. I’m confident that our commission is not going to move forward with something that will harm the water quality of the Ohio River.”

Some environmental groups, and a minority of the commission, however, strongly disagree. Some commissioners with ORSANCO have expressed “grave concern” with the move and argue that eliminating the body’s standards when it comes to ambient levels of various pollutants can only hinder efforts to maintain and improve the river’s health.

Recreational use of the Ohio River could be jeopardized if all pollution standards for the River are given to the various states. Indiana and Kentucky have both shown lax enforcement of standards in the past and ORTSANCO currently provides an extra layer of protection for water quality standards. Photo© 2016 BlairPhotoEVV

“ORSANCO, as a federally-sanctioned compact among several signatory states, possesses a degree of insulation from the vagaries of the political process, and is able to research, develop, propose and adopt standards tailored to the specific needs of the river in an atmosphere that stresses sound science and data-driven policy,” dissenting commissioners said in their minority report opposing the elimination of the rules.

The minority cited recent moves by Congress and the Trump administration that they say raise concerns about commitment to environmental protection. The elimination of the federal Stream Protection Rule and proposals by the EPA to revise guidelines for what counts as protected bodies of water, they say, “reflect that the standards and scope of the Clean Water Act and regulations adopted pursuant to that Act are neither static, nor necessarily as broad or protective, as might be needed to address the specific needs of the Ohio River Basin.”

There are roughly 600 permitted companies and other groups discharging into the Ohio River. The federal Clean Water Act, administered by the EPA, recommends maximum levels of pollutants these entities are allowed to discharge. States, however, make their own standards, which the EPA then approves. Continue reading

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Offshore Wind opposed by Trump begins producing power

July 3, 2018 – by Climate Action

A major offshore wind farm has generated its first units of electricity, despite the best efforts of the President of the United States.

The wind farm, located 1.5 miles off the Aberdeenshire coast, is fully visible from a golf course owned by Donald Trump

The US President fought the wind farm’s construction for years, complaining that it would ruin the views from his luxury development. After losing every court case, including at both Scotland and the UK’s highest courts, the President accepted defeat in December 2015.

Since then the wind farm has been constructed in double-quick time, with developers Vattenfall reportedly overcoming major engineering challenges to reach first power last week.

The project, officially called the European Offshore Wind Deployment Centre (EOWDC), is designed to test innovations in the offshore wind sector, and is part funded by the European Union. The wind farm consists of 11 huge turbines with a maximum height of 190 metres, more than twice the size of the Statue of Liberty. Two of the machines are rated at 8.8 megawatts, making them the world’s most powerful turbines at the moment.

Scottish Government Energy Minister, Paul Wheelhouse, said: “This is a very significant milestone…I congratulate the project team at Vattenfall for not only a successful installation but also their achievement in generating electricity from the world’s most powerful offshore wind turbines which, with each rotation, will generate enough energy to power a home for 24 hours.”

Jean Morrison, chair of Aberdeen Renewable Energy Group added: “The timescale between the first installation and first power is remarkable. The techniques and innovations developed at the EOWDC will be hugely significant for the industry and should help to reduce the future costs of offshore wind. As energy demand grows, we need to maximise the returns from our natural resources and offshore wind can help us do that.” 

Photo Credit: Vattenfall

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Trump Prepares Lifeline for Money-Losing Coal Plants

May 31, 2018 – By Jennifer Dlouhy in Bloomberg News 

AEP’s Rockport power plant has become uneconomic to operate of late but since it uses coal, a plan by the Energy Department is designed to use a World War 2 era regulation to make sure that it keeps operating even if it requires higher rates for customers just so Trump can keep his campaign promise to revive the coal industry. Photo © 2003 BlairPhotoEVV.

Trump administration officials are making plans to order grid operators to buy electricity from struggling coal and nuclear plants in an effort to extend their life, a move that could represent an unprecedented intervention into U.S. energy markets.

The Energy Department would exercise emergency authority under a pair of federal laws to direct the operators to purchase electricity or electric generation capacity from at-risk facilities, according to a memo obtained by Bloomberg News. The agency also is making plans to establish a “Strategic Electric Generation Reserve” with the aim of promoting the national defense and maximizing domestic energy supplies.

[Read the memo here]

“Federal action is necessary to stop the further premature retirements of fuel-secure generation capacity,” says a 41-page draft memo circulated before a National Security Council meeting on the subject Friday.

The plan cuts to the heart of a debate over the reliability and resiliency of a rapidly evolving U.S. electricity grid. Nuclear and coal-fired power plants are struggling to compete against cheap natural gas and renewable electricity. As nuclear and coal plants are decommissioned, regulators have been grappling with how to ensure that the nation’s power system can withstand extreme weather events and cyber-attacks

Although the memo describes a planned Energy Department directive, there was no indication President Donald Trump had signed off on the action nor when any order might be issued. The document, dated May 29 and distributed Thursday, is marked as a “draft,” which is “not for further distribution,” and could be used by administration officials to justify the intervention.

While administration officials are still deciding on their final strategy — and may yet decide against aggressive action — the memo represents the Energy Department’s latest, most fully developed plan to intervene on behalf of coal and nuclear power plants, pitched to the president’s top security advisers.

Energy Department representatives did not respond to an emailed request for comment.


Trump administration officials who advocate taking action say they want to preserve nuclear and coal-fired plants that have fuel on site and provide reliable, always-on power capable of snapping back after intense storms and emergencies.

“Too many of these fuel-secure plants have retired prematurely and many more have recently announced retirement,” only to be replaced by less-secure, less-resilient natural gas and renewable power sources, the memo said.

Over dozens of pages, the memo makes the case for action, arguing that the decommissioning of power plants must be managed for national security reasons and that federal intervention is necessary before the U.S. reaches a tipping point in the loss of essential, secure electric generation resources. U.S. Defense Department installations are 99 percent dependent on the commercial power grid, one reason that electric system reliability is vitally important to national defense and homeland security, the memo asserts.

For two years, the Energy Department would direct the purchase of power or electric generation capacity from a designated list of facilities “to forestall any future actions toward retirement, decommissioning or deactivation,” according to the memo. The proposed Energy Department directive also would tell some of those facilities to continue generating and delivering electric power according to their existing or recent contracts with utilities. Continue reading

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Money pit or fuel hedge? In Midwest, it depends on who is paying

May 25, 2018 – by Jeffrey Tomich, E&E News. Editors note: Valley Watch, along with the Citizens Action Coalition, Save the Valley and the Hoosier Environmental Council, collaborating as the Indiana Clean Energy campaign worked tirelessly in the early years of this century to shut down the Clifty Creek facility that sits on the western edge of Madison, IN. We knew they were going to have to place controls for both Nitrogen Oxides and Sulfur Dioxide which would cost billions and it was our position then that this was money being wasted. But because  all the owners, Including Vectren and Duke had their hands in ratepayer pockets, both Democrat and Republican Administrations in Indiana allowed them to go forth. This story shows how our predictions were, once again, correct. 

When FirstEnergy Solutions Corp. sought bankruptcy protection this spring, included in the avalanche of legal filings was a motion to exit a partnership that runs a pair of 1950s-era coal plants on the Ohio River.

Clifty Creek power plant sits adjacent to Clifty Falls State Park, just outside Madison, IN. It serves no current useful purpose except to keep rates its owners charge higher than they need to be. File Photo © 2009 BlairPhotoEVV

The reason was clear: The 1,304-megawatt Clifty Creek plant in Indiana and the 1,086-MW Kyger Creek plant in Ohio are bleeding red ink and are a barrier to the financial turnaround of FES. Backing the plea was analysis from an expert, ICF International Inc. Managing Director Judah Rose, who forecast the company’s tiny stake in the venture would produce a $268 million loss over the life of an agreement to keep the plants running.A year earlier, Duke Energy Ohio submitted very different testimony concerning the same coal plants in another proceeding, this one before the Public Utilities Commission of Ohio.

In that case, Duke asked regulators to require the utility’s 700,000 electric customers in southwest Ohio to subsidize the plants on the basis that they provided a hedge against volatile, rising natural gas prices.

Backing up Duke’s request was testimony from an industry expert: ICF’s Judah Rose.

How can two companies tell a federal judge that the 60-year-old coal plants are a financial albatross and simultaneously argue to utility regulators that the plants are a good investment for consumers? And rely on the work of the same consultant? The answer depends on who’s paying the bill.

Unlike industries vulnerable to disruptors such as Amazon.com Inc. and Uber Technologies Inc., electric utilities — even those in deregulated markets like Ohio — continue to press lawmakers and regulators to shield them from competition. And they’re doing so by playing on fears that letting plants shut down will lead to a shortage that will result in a price shock — or, worse yet, the lights going out.

Ezra Hausman, an electric industry consultant who has analyzed the plants’ economics, has a simpler explanation.

“They made a bad bet and they don’t want to live with the consequences,” said Hausman, a former vice president at Synapse Energy Economics Inc., who prepared a report on the plants for the Sierra Club last year.

So far, two Ohio utilities, American Electric Power Co.’s Ohio utility and Dayton Power and Light Co., have gotten approval from Ohio regulators to subsidize the plants in the name of stabilizing consumer rates until at least 2024.

Those decisions are being appealed. The Office of the Ohio Consumers’ Counsel is challenging the AEP order at the Ohio Supreme Court, and environmental groups have asked PUCO to reopen the Dayton Power and Light case. The Duke request is still pending.

Other disputes involving the same troubled plants are playing out before the Ohio Legislature and state Supreme Court, the Federal Energy Regulatory Commission, and the U.S. bankruptcy court.

Meanwhile, the group of seven Midwest utilities and electric cooperatives say they are contractually bound to run the money-losing plants for another two decades, until 2040, when each will be 85 years old.

Patriotic origin

The two plants weren’t always controversial. In fact, they were built to support the federal government during the Cold War — a bit of history that utilities continue to play up a half-century later.

The plants are operated by a utility consortium known as OVEC, or the Ohio Valley Electric Corp. The group includes a handful of investor-owned utilities as well as two generating and transmission cooperatives.

The companies run the plants according to terms of an intercompany power agreement, under which each “sponsor” company shares in the plants’ output and costs according to their ownership interest. The largest owner is Columbus-based AEP, which has about 40 percent interest through three utilities.

OVEC was founded in the early 1950s to supply power to the Atomic Energy Commission’s uranium enrichment plant in Piketon, Ohio. For 50 years, they quietly served that purpose until the plant closed and the contract with the AEC’s successor agency, the Department of Energy, ended in 2003.

The end of the relationship included a $97.5 million “termination payment” by DOE to OVEC to cover uncollected post-retirement and plant closure costs. Continue reading

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Mad as Hell

May 23, 2018 – Peter Finch in the MGM movie Network, 1976

42 years after the movie Network ran in theaters across America, we are now living its reality. Just watch and see how prophetic this movie was.

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