UCS Blog - Clean Energy (text only)

The Coal Bailout Nobody is Talking About

Photo: Mike Poresky/CC BY (Flickr)

If you are reading this blog, chances are you are either an energy economist, grid geek, or maybe my mother. Regardless, this administration seems intent on trying various coal bailout attempts. Hopefully, you’ve already read up on the high costs and low benefits to such bailouts, how the first attempt failed, and how they’re at it again. My latest research has uncovered that every month, millions of consumers are unwittingly bailing out coal-fired power plants to the tune of over a billion dollars a year.

Merchant vs monopoly

Before we dig into the numbers, let’s talk about the two types of utilities that own coal power plants.

Merchant utilities primarily rely on revenues from the competitive power markets to make money. Monopoly utilities, on the other hand, own power plants and directly serve retail customers. They are household names in the areas they operate, probably because they send those households a monthly bill; those bills are how those utilities make money.

The first part of this new research looked at how these two types of utilities operated in four large competitive power markets. These markets were designed such that power plants that are cheap to operate should run more often than plants that are expensive to operate.

My analysis looked at market prices for energy where every coal plant is located and calculated how often a plant would operate based on market prices alone. I then compared that “expected” value with the power plant’s actual operational data.

For the most part, the merchant power plants operated at or below the expected value. Power plants that were owned by monopolies, however, typically operated more than would be expected.

The expected vs actual value of several large utilities. You would expect the dots to fall along the diagonal line, but monopoly owned plants tend to overgenerate.

The stark difference begged for additional investigation, so I used hourly data to conduct a detailed analysis of each power plant to discover if power plants were operating at times when cheaper energy was available.

Billion-dollar bailout

Some utilities appear to be finding a way to undermine the competitive market structure that would have lower cost resource operate more and higher cost resources operate less. Expensive coal plants—which are objectively not competitive—are being operated in such a way that costs consumers money, reduces flexibility, and exacerbates existing pollution problems.

Based on my analysis, monopoly utilities appear to be running more expensive plants while depriving their customers of access to cheaper (and likely cleaner) sources of energy.

This new analysis builds on earlier work of mine that investigated this issue in the Southwest Power Pool, SPP, the market that covers several great plains states. My original analysis calculated that ratepayers were incurring a burden of $150 million a year from just a few power plants. The new analysis (which includes all coal units in SPP) indicates that the number is closer to $300 million a year, just for SPP.

I looked at four large electricity markets, SPP, ERCOT, MISO, and PJM. Together, these four markets span from New Jersey to North Dakota; from Texas to Virginia.

The latest results suggest that, across the four coal-heavy energy markets, coal-fired power plants incurred $4.6 billion in market losses over the past 3 years or $1.5 billion dollars in market losses each year. Most of these “losses” were incurred by power plants owned by monopoly utilities and are not absorbed by the investors or owners. Rather, those costs were likely covered by customers. Consequently, I estimate this practice places a least a $1 billion burden on utility ratepayers each year.

New spin on old news

The fact that so much coal-fired power is uneconomic is not new news. The financial woes of coal have been well documented by UCSRhodium Group and Columbia University, Bloomberg New Energy FinanceMoody’sBank of America Merrill LynchMJ BradlyRocky Mountain InstituteUBS, Synapse Energy Economics, IEEFA, and others.

My new research differs in two ways. First, it quantifies the financial impact on consumers when utilities opt for dirty and expensive fuel over cleaner and cheaper alternatives. And two, this work focuses on a very specific aspect of how these coal plants operate and draws a somewhat unintuitive conclusion:

Some coal-fired power plants might make more (or lose less) money by operating less. 

My analysis further suggests that, for at least some of the owners of these power plants, the current economic woes are self-inflicted.

Throwing good money after bad

If it costs $25 to produce a unit of energy and the market price is $30 per unit then it makes sense to operate that power plant and take that $5 margin and use it to pay down debt or other fixed costs.

If market prices stay at $30 the power plant keeps operating as much as it can and begins to pay down the fixed costs and eventually the revenues go to building up a profit. If the market price drops down to $20 and the unit keeps operating, then the owner’s profits begin to erode. The longer the owner does this the more the profits erode.

“Stop throwing away money,” is not something you’d expect to have to tell a corporation.

Some plants generate at a loss so often that they make it impossible for the power plant to make money.

If utilities allowed the market price to determine when to run, this wouldn’t happen. However, in the competitive markets I analyzed, power plant operators can choose to ignore price signals, and the owner can “self-commit” or “self-schedule,” effectively bypassing the market’s role as the independent system operator.

If a merchant-owned power plant does this, it does so at its own risk. But when monopoly utilities do this, customers bear the burden. Below is the list of the 15 power plants that each imposed a $100 million burden on rate-payers over the 3 year study period.

Power plants that imposed at least $100 million on rate payers. Note that many of the merchant-owned plants (highlighted in purple) burn waste coal and/or are “cogen” facilities.

The common excuses I hear

I’ve talked about this issue with advocates, economists, lawyers, engineers, market monitors, utility operators, and reporters. I like to take a moment to share some of the things I’ve heard in response to my analysis, and my response to them.

The most common: Aren’t these plants needed for reliability? 

Markets are designed to provide low-cost, reliable power. The idea that a power plant needs to bypass the market’s decision-making process and self-select (as opposed to market-select) is to presume that the markets are incapable of doing its job. Arguably, if the clearing price in a market is constantly below a power plant’s production costs, then, there were other resources available to reliably provide lower cost power. In some cases, the plants might be needed in some months but not others, like the municipal coal plant owner in Texas that realized it only made sense to operate in the summer months and decided to sit idle 8 months of the year. The municipality still provides electricity to their customers year-round, they just decided it didn’t make sense to burn $25/MWh coal in a $20/WMh market.

At the end of the day, this research was not designed to indicate or evaluate reliability and makes no judgment about the “need” for any of these plants for reliability purposes.

The most insulting: You just don’t understand how this works.

After the SPP report came out, SPP and utility officials challenged my conclusions (oddly, they did not contest my results). According to E&E news, that pushback included the specious argument that “[w]holesale electric rates do not directly correlate with retail electricity rates…” And, “[w]holesale electric rates also do not reflect other costs, like the price of ensuring the grid’s reliability, or utilities’ long-term fuel supply contracts”

Really? Retail and wholesale are different? Please, tell me more.

Of course retail rates are different, they include additional costs (for example, distribution system costs). Yes, regulated monopolies are allowed to recover prudent capital costs from the past, but we are only talking about operating costs.

None of these arguments changes the fact when wholesale prices are low, there is an opportunity for utilities to buy lower cost energy off the market and pass along savings to customers.

The silliest: I have the right to “self-supply.”  

When monopoly utilities joined competitive markets, they did so voluntarily. In fact, some had to jump through hoops to do it. These utilities often have a “least cost” obligation, meaning they are supposed to provide electricity to retail customers at the lowest reasonable cost. Now that there are resources available that are lower cost, utilities are desperate to retain their monopoly rights to supply their customers with resources they own. That’s just silly from any point of view other than the plant owner.

The most technical: Fuel contracts turn fuel costs into fixed costs.

This being the most technical excuse it is also the most complex; not easily handled in a few-hundred-word response. Maybe I’ll come back to this one in a future blog, but in the meantime…

Many coal-fired power plants enter into contracts for fuel which have “take-or-pay” provisions. Utilities claim this means there is effectively no cost to burning the fuel. First, most contracts can be re-negotiated. Fuel contracts I have reviewed are akin to a rental agreement: Yes, technically, you are locked in for a number of years, but typically there are ways to negotiate your way out. Second, the accounting logic they use to justify discounting the coal costs can produce sub-optimal results when companies fail to appropriately account for opportunity costs.

What’s next?

This research raises interesting questions, including:

  • Does this impact how we value energy efficiency and renewable energy?
  • Are power plants owned by monopoly utilities receiving de-facto ‘out of market’ subsidies?
  • When do fuel contracts and fuel cost accounting become imprudent?
  • Are inflexible coal units crowding out renewables on the transmission system?
  • Is coal partially to blame for negative energy market prices?

UCS wants allies, utilities, and decision makers to look at this question of operating uncompetitive coal plants without regard for the availability of lower priced energy. Utilities have the ability to stop engaging in this practice; if they don’t, regulators have agency to create (dis)incentives to help end it. If neither of those groups acts, consumer and environmental groups would seem well aligned to work together to stop it.

Sustainable FERC Project

Utilities Look Toward a Clean Energy Future, Yet the Administration Keeps Looking Back

Coal—and the president’s ill-conceived plan to bailout the industry—is taking up a lot of bandwidth in discussions around national energy policy. As the president and the coal industry continue to rely on dubious arguments to justify the idea of keeping economically struggling coal plants afloat, we began to wonder: what are electric utilities doing on the ground? How are they approaching the question of future investments in technology?

Today I’m handing my blog over to our 2018 UCS Schneider Fellow Eli Kahan, who has studied how utilities are planning for future electricity needs, what they are doing in terms of new investments in low-carbon generation sources, and how that compares to their stated goals.

Market pressures

In the past decade, due to advances in horizontal drilling technology and the fracking boom, domestic natural gas prices have plummeted, incentivizing many power plant owners to shift from coal to natural gas. Moreover, in the past few years, renewable energy such as wind and solar have continued to grow at record rates as these renewables have become highly economically competitive with traditional forms of electricity generation. A look at Lazard’s 2017 Unsubsidized Levelized Cost of Energy report shows wind as the world’s cheapest source of energy with utility scale solar not far behind.

As such, this rapid decline in coal generation has been driven primarily by market forces. While the administration’s proposed bailout might buoy a few coal plants destined for retirement in the next few years, this crutch is unlikely to keep coal afloat in a time of ever-falling costs of renewable energy, to say nothing of the urgent need to act on climate change.

Another key reason this bailout is unlikely to stick is due to a recent surge in announcements of utility goals to reduce CO2 emissions. Who is setting these targets? What is driving them? And how are utilities planning to meet these goals?

Utilities around the country have announced significant emissions reduction goals.

The targets

To begin answering these questions, I gathered data on more than 100 of the nation’s largest electric utilities and parent energy companies—more than 30 of which have set quantitative targets for reducing CO2 emissions, achieving higher percentages of renewable energy, and/or completely moving off of coal. Together, these companies, including 7 of the 10 largest electric utilities by market value in the country, account for nearly 40% of 2016 US electricity sales. These utilities are showing awareness of the science, costs, and their consumers’ concerns in setting sights on a lower carbon future.

While these goals come in many shapes and sizes, they all share one thing in common: additionality—all of them voluntarily exceed state goals and mandates. Moreover, the majority of these targets have been set in the past couple years—a time when the Clean Power Plan has been on the chopping block and during a fossil-fuel-friendly presidency.

Furthermore, as the map below shows, this is a national trend—these targets are not restricted to just a few leading states but rather can be found all around the country, even in places that rely heavily on coal.

Electric Utility Companies with targets deemed to provide additionality. Not shown: Avangrid, Engie, Great River Energy, MidAmerican Energy, Minnesota Power, NextEra Energy, NRG, Tennessee Valley Authority. Since the analysis done for project, California’s SB100 has nullified the additionality from PG&E’s and LADWDs’ goals.

What else is driving this trend?

There’s little doubt that falling prices for natural gas and renewables have aligned cutting emissions with cutting costs, and the success of state renewable portfolio standards (RPSs) and greenhouse gas (GHG) emissions reductions targets has played a role in breaking up the inertia on decarbonization. But according to the utilities themselves, there exists a whole host of additional motivating factors.

For AEP’s Appalachian Power President, Chris Beam, the motivation is customer preferences:

“At the end of the day, West Virginia may not require us to be clean, but our customers are”  –Chris Beam

For Berkshire Hathaway Energy’s vice president for government relations, Jonathan Weisgall, it’s customer input focusing on the role of corporate commitments:

“We don’t have a single customer saying, ‘Will you build us a 100 percent coal plant?’…Google, Microsoft, Kaiser Permanente — all want 100 percent renewable energy. We’re really transitioning from a push mandate on renewable energy, to more of a customer pull.” –Jonathan Weisgall

For DTE, it is a science-based response to the issue of climate change:

“Through our carbon reduction plan DTE Energy’s is committed to being a part of the solution to the global climate crisis. There is broad scientific consensus that achieving 80 percent carbon reduction by 2050 will be necessary to begin to limit the global temperature increase below two degrees Celsius over preindustrial levels” –DTE 2018 Environmental, Social, Governance, and Sustainability Report, p.3

Even coal-heavy American Electric Power (AEP) is moving toward a clean energy future, recognizing the value of investing in renewable energy. AEP serves customers in 11 states—including Ohio, Indiana, Kentucky, Virginia, and West Virginia. Nick Akins, AEP’s CEO, is skeptical of the administration’s plans to bailout certain coal and nuclear plants. Although his position is a bit more nuanced—claiming that coal remains important to the reliability and resiliency of the grid”—Akins is clear-eyed about the future, charting AEP’s path toward a 60 percent reduction in carbon emissions by 2030, and 80 percent by 2050:

“Our customers want us to partner with them to provide cleaner energy and new technologies, while continuing to provide reliable, affordable energy.” –Nick Akins

How are utilities meeting these goals?

For the past decade, utilities have been cutting GHG emissions and costs by shedding coal and transitioning onto natural gas. Natural gas is sometimes seen as a “transitional fuel” on the path to a clean energy future, as it is known for producing 50-60 percent less CO2 than coal does in combustion. Southern Company, shown below, provides a particularly illustrative example of this coal to natural gas switching.


However, natural gas is not particularly clean, especially when considering available renewable energy alternatives. And with the recent dramatic cost declines in wind and solar, companies like MidAmerican Energy, shown above have realized they can skip the “transition fuel” and get a head start on investing in a more long-term energy solution.

Over and over, it’s the same story:

“Retiring older, coal-fueled units. Building advanced technology natural gas units. Investing in cost-effective, zero-carbon, renewable generation” – WEC Energy Group

“The company expects to achieve the reductions through a variety of actions. These include replacing Kentucky coal-fired generation over time with a mix of renewables and natural gas” – PPL

“Traditionally, our generation portfolio has depended on coal, but we are transitioning our energy supply away from coal to rely more on renewable energy and natural gas generation as backup. From 2005 through 2026, we will retire more than 40 percent of the coal-fueled capacity we own under approved plans, and if regulators approve our proposed Colorado Energy Plan in 2018, we will retire even more.” – Xcel

In short, utilities around the country are retiring coal, and investing in natural gas and renewables. But it’s important to emphasize that there is a serious risk of an overreliance on natural gas. Natural gas is subject to price volatility (putting consumers at risk of higher prices) and is inconsistent with long-term deep decarbonization targets. Utilities prioritizing clean, cost-effective renewable energy instead are protecting their customers from gas-related risks.

Connecting the dots

We’ve seen a recent flurry of utility announcements of decarbonization goals and renewables targets. In the last decade, natural gas has steadily eaten away at coal’s market share of the nation’s electricity production. And the costs of renewables continue to fall dramatically, making them both clean and cost-effective. This trend shows no sign of changing. Some utilities such as Consumers Energy have even explicitly pledged to drop coal altogether.

In that context, how does the administration’s proposed bailout, which would cost billions to keep a few of the nation’s oldest, dirtiest, most expensive coal plants on line for another couple years, make sense? Grid operators and federal regulators have consistently said that near-term retirements pose no threat to grid reliability. Reserve margins—that is, how much extra electricity generating capacity is available beyond expected peak demand levels—are sufficient in most regions of the country. And besides, studies show renewables are diversifying the electricity mix, making the electricity grid more reliable and resilient.

We see that some utilities are making decisions prudent for their long-term planning: smart investments, achievable decarbonization targets, and a mix of energy sources in their portfolios. But a bailout of this nature will send utilities—along with their investors—scrambling to square established goals with the administration’s backward steps.

Even with the temporary crutch, coal has no long-term future, as it continues to be displaced by cheaper and cleaner forms of energy. Instead of propping up a dying industry, our collective interests would be better served by ensuring that the miners and coal plant workers—whose livelihoods will be threatened by this transition—have new opportunities to find good jobs with family-supporting wages. We can and should look to our nation’s utilities and their clean energy targets for a clearer vision forward.

Mass. Gas Explosions: What Can We Do About Home Fossil Fuels?

The calls and texts from my kids’ school started coming in at 5:11 p.m. last Thursday: “Evacuate campus buildings immediately.” Some of the messages included mention of a gas leak. The northern Massachusetts headlines about gas leaks, fires, and explosions were scary, and this was my own family potentially in harm’s way.

After events like that, it’s easy to imagine wanting to be done with fossil fuels. Not just because of their climate change, broader environmental, or public health impacts, but also because of the problems, even rare ones, that can arise from having those fuels right where we live.

But where might that fossil fuel reduction plan happen on the home front? Here are a few ideas.

Getting beyond fossils

Photo: Pixabay/Magnascan

Even with all the thinking I do about moving away from fossil fuels and toward clean energy, those messages from school brought an immediacy to the need for transition that I hadn’t felt before. When my family got past the emergency stage, I found that last week’s events were prompting me to rethink the role that fossil fuels play in my own life, knocking out of me the remnants of my that’s-the-way-it-is-because-that’s-the-way-it’s-always-been mindset.

The first part for addressing our home fossils is understanding where they are (in fuel form in this case—not, say, as plastic plates, polyester quick-dry clothing, or vinyl siding). The second part is understanding the options for dealing with them.

In my house, that first part comes down to space heating, water heating, cooking, and transportation. No small list. For the second part, though, the catalogue of options is definitely up to the challenge.

Here’s a look at the opportunities in each of those areas, and where my own journey stands.

Cutting fossil use in space heating

Our winters are cold, and in New England, space heating accounts for 60% of household energy use. While natural gas is the fuel for more than half, homes in these parts also use fuel oil in a big way; in Massachusetts, heating oil accounts for close to 30%.

Moving from oil to gas cuts down on carbon pollution, using high-efficiency gas furnaces and boilers takes it to the next level, and insulating homes better can cut down on any fuel. But none of those results in ditching on-site fossils altogether.

Fortunately, heat pumps do. The two options are ground-source/geothermal, which take advantage of the constant temperature underground, and air-source, which miraculously harvest heat from even really cold air (and have gotten good in recent years at handling frigid northern temperatures). And they both do it with electricity as the only input.



I haven’t gotten to that stage yet. After becoming a homeowner a while back, I upgraded my heating equipment to the highest-efficiency units I could find. But heat pumps weren’t really on my radar screen. So there’s room for progress there.

Cutting fossil use in water heating

The next big category for fossil use in our houses is water heating; it accounts for 16% of home energy use in Massachusetts. Efficiency is an opportunity here, too, but again, only a partial solution if it’s a natural gas- or oil-fired unit.

The options for fossil freedom lie in electricity and the sun. For our home, I put in a solar water heating system, with a backup to boost it as needed. That booster is gas-fired, but could have been electric.

Another option is electric with, again, heat pumps to the rescue. Like their space-heating brethren, heat-pump water heaters draw heat from their surroundings. In this case, that adds up to water getting heated two to three times as efficiently as it would with a conventional electric (resistance) water heater.

My solar heat as of Monday. No sense wasting all that sunshine.

Cutting fossil use in cooking

Most of the time these days, the choice for frying eggs or roasting potatoes is between gas and electricity. Gas devotees like its responsiveness (though electrics may often actually have the edge in performance).

When we updated our old kitchen a few years back, we switched from gas to electric, but not a standard one. Instead of a resistance (glowing coil) kind, we went with an induction cooktop—electric, efficient, and really responsive (and able to boil water in no time flat).

Cutting fossil use in transportation

Our transit of the house in search of fossil fuels shouldn’t ignore the garage, and gasoline. The obvious solution is electric vehicles, and it’s an option that’s so much more real than it was when I drove EVs back in the 1990s. Add in walking, biking, and electric buses, and you’re cruising without carbon (onsite).

My ride, when I’m not on my bike or a train, is efficient (a 2001 first-gen hybrid, still, at 196,000 miles, getting 45 miles to the gallon), but still gas-powered. My wife’s, though, is pure electric—not a gas gallon in sight.

Home fossil use beyond the home

There’s actually one more entry for this list: electricity. This might seem like an odd thing to discuss when we’re talking about fossil fuels in the home, but let’s face it: A lot of the approaches above involve switching to a plug, and we’re not necessarily interested in just exporting our fossil problem with the out-of-sight-out-of-mind approach.

Fortunately, there are options here, too. One is to make your own fossil-fuel power, particularly with solar electric (photovoltaic) panels. If you’ve got the wherewithal and the roof, for example, you can look into putting up a solar array (and maybe even adding batteries). Or you can see about joining in with neighbors in a community solar system.

A more broadly available fossil fix is to buy green power. If your utility gives you the option, you can choose a fossil-free mix in place of whatever default electric mix might otherwise supply you. Or you can buy an equivalent amount of renewable energy credits (RECs) to green up your power supply.

We went solar two years ago, and generate enough to cover all of our home electricity use and a portion of the car. For the rest of our usage, my utility had been offering a REC option, and I’d been a loyal customer till that program went away; I’ll be looking to find a successor option.

Continue the journey

Home sweet lower-fossil-fuel home (Photo: J. Rogers)

Not all of these opportunities are available to all of us (think renters, for example). Money, too, is a consideration, and not all the options above are cheap (though some can actually save you money). But times like these call for do-what-you-can and beyond-the-wallet thinking. (Including because of the expense of the investments that someone is going to have to make, in the case of these events, to improve safety even without nixing the fossil fuels.)

Last Thursday, many of us in my area were lucky. My boys and their schoolmates evacuated and waited it out in a field. We picked up our kids, and adopted for the night a couple of extra who were more affected by the gas fires. Our town is supplied by a different gas network from the gas-fire communities, and we have a different power company, so didn’t lose power when service got cut off in affected communities.

But fossil fuels are certainly a part of our lives as much as they were for those who got hit by last week’s events: We have natural gas in our home, gasoline in our garage, and neighbors who heat with oil. So the journey continues.

When it comes to fossil fuel use in our homes, we’ve got options, and plenty of reasons to exercise them. Fossil fuels’ days of fossil fuels are numbered. Accelerating that phase-out is in our hands… and looking better all the time.

Even More Than 100% Clean: California’s Audacious Net-Zero Carbon Challenge

Governor Brown signing SB-100 into law.Governor Brown signing SB-100 into law. Photo: Governor's Office

At the end of a summer that was marked by dramatically destructive natural disasters, including massive fires throughout the entire western U.S., killer heat waves, fires, and floods in Asia and Europe, and now Hurricane Florence landing on the Carolinas, California is offering a ray of hope for a planet that is facing increasingly terrible impacts from global warming.  Governor Jerry Brown has convened an international climate summit in San Francisco that demonstrates the huge number of jurisdictions both nationally and from around the world, in addition to businesses and industries, religious groups, climate justice advocates, and a lot of scientists, among many others, who are working hard for climate action.

Brown began the week by demonstrating that California is not resting on its impressive climate action laurels but significantly increasing its commitment to reducing emissions. I was lucky enough to attend the ceremony where Governor Brown signed SB 100, a bill that had taken its legislative author, State Senator Kevin de León (whose legislative tenure has been distinguished by successfully championing historic clean energy and climate action), a grueling two years to pass the state legislature.  SB 100 commits California to 60% renewable energy by 2030 (up from the current 50% requirement) and a goal of fully 100% clean electricity by 2045.  While we have much work to do to achieve this goal, we are now committed to a path toward a fully decarbonized electricity system.  I was proud to represent UCS’s incredible staff who made uniquely valuable contributions to this coalition effort to get the bill passed.

In a remarkable piece by NPR, UCS’s  energy analyst Laura Wisland talked about the many challenges that remain for California to achieve this goal, but it is clearly something we can do.  Thanks to over 15 years of previous renewable electricity and energy efficiency policies, electricity emissions now account for a relatively low 16% of California’s greenhouse gas (GHG) inventory. But the last emissions reductions will be the hardest to achieve. We will need to grapple with how to lower the vast amount of natural gas used to generate electricity and make room for cleaner, carbon-free sources of energy.  We also have a big challenge ahead to grapple with transportation and industrial emissions to meet ambitious state 2030  GHG reduction limits.  But in the last twelve years California has shown that it can succeed- ahead of schedule- in meeting carbon reduction goals while growing the state economy from the eighth to the fifth largest in the world, a feat that belies alarmists who say that reducing emissions will damage the  economy.

A surprise announcement of huge ambition

Coming at the end of Governor Brown’s remarkable 8-year tenure, the bill signing ceremony this week contained a surprise. With no fanfare or previous signaling of his intentions, Governor Brown included an additional action in this week’s bill signing – a new executive order, B-55-18, that creates an economy-wide carbon neutrality goal for California by 2045.  He is directing the state to strive for net zero carbon emissions in less than 30 years. This must be done using a combination of zero-emission technologies to power the electric grid, transportation, homes, buildings and industries,  with other practices and technologies that sequester carbon, or take it out of the atmosphere.

This will require an extraordinary effort that will affect every Californian. The state will not only have to meet its ambitious new 100% clean electricity goal on top of its very ambitious 2030 statewide GHG reduction limit, but also virtually halt nearly all emissions in a mere 15 years. Let’s take a moment to appreciate that goal.

For California to achieve net zero carbon emissions, it will require a staggering change to some of the basic elements driving our economy. California will need to eliminate the single biggest tranche of carbon emissions: those from the vehicles that transport people and goods across throughout the state.  This means electric vehicles powered by our clean electric grid for nearly everyone. It will require carbon-free fuels for industrial processes, hugely advanced efficiency in buildings and appliances, and likely the development of truly reliable forms of storing carbon in plants, soils, and geographic formations. As yet, no one has developed a real plan for how we could get to net zero emissions, and to do this successfully is a very tall order. David Roberts at Vox wrote this early analysis of the ins and outs of what could happen, including a warning that implementing net zero could include measures and policies that could be more symbolic than substantive.

But here’s the thing. Once the Governor of the nation’s most populous state, a serious and credible leader with a remarkably successful tenure over eight years, has made carbon neutrality the goal, then a lot of people may start take it seriously enough to figure out how to meet it. What Brown has done is to challenge us to think about what it would really take to get carbon emissions down fast enough and thoroughly enough to reduce the risks we are seeing multiply so rapidly, and help ensure a viable future, within three decades.  It is a huge undertaking.

A vision for the future, both audacious and necessary

A few cynics may argue that this is a non-binding announcement to help the Governor’s visibility for his San Francisco Global Climate Action Summit that is happening this week, but I believe that this order could have tremendous value. Executive Orders in California are part of state policy, even if they do not have the force of law. And whatever mix of reasons Brown had for doing this, he is sending a strong science-based message to the world –namely, that we need to reduce global warming pollution much further and faster than we previously thought to avoid the worst impacts of climate change. It will be up to the next governor and the legislature to carry out Brown’s order. Luckily, California has good examples of turning Executive Orders into law.

So here is my unsolicited advice to California’s next Governor and the Legislature starting in 2019: 1) do the hard work of ensuring we get  to 100% clean energy by 2045 ; 2) start now on fully implementing  new regulations and laws that will rapidly take the carbon out of our transportation and industrial sectors to ensure we meet our 2030 goals to reduce ghgs to 40% below 1990 levels; 3) get our best minds in science and technology to work together to produce an economically sound blueprint that would get us to net zero by 2045; and 4) start to implement the next generation of policies that would get us to net zero.

California has shown that a world-class economy can reduce its carbon emissions rapidly while growing its economy. While we can’t guarantee that further decarbonization will go as smoothly, the on-going, accelerating, costly, and deadly destabilization of our climate is much too urgent a matter to approach timidly because of our fears. We owe a great deal to the leadership of people like State Senator Kevin De León and Governor Jerry Brown who have shown what is possible.  Neither will be serving as leaders in Sacramento after this year. It is now up to us to take their bold leadership and ensure that we succeed in making their visions real, and help provide examples and lessons to the nation and the world on how it can be done.

The Price of Large-Scale Solar Keeps Dropping

Photo: NREL

The latest annual report on large-scale solar in the U.S. shows that prices continue to drop. Solar keeps becoming more irresistible.

The report, from Lawrence Berkeley National Laboratory (LBNL) and the US Department of Energy’s Solar Energy Technologies Office, is the sixth annual release about the progress of “utility-scale” solar. For these purposes, they generally define “utility-scale” as at least 5 megawatts (three orders of magnitude larger than a typical residential rooftop solar system). And “solar” means mostly photovoltaic (PV), not concentrating solar power (CSP), since PV is where most of the action is these days.

Here’s what the spread of large-scale solar looks like:

Source: Bolinger and Seel, LBNL, 2018

In all, 33 states had solar in the 5-MW-and-up range in 2017—four more than had it at the end of 2016. [For a cool look at how that map has changed over time, 2010 to 2017, check out this LBNL graphic on PV additions.]

Watch for falling prices

Fueling—and being fueled by—that growth are the reductions in costs for large-scale projects. Here’s a look at power purchase agreements (PPAs), long-term agreements for selling/buying power from particular projects, over the last dozen years:

Source: Bolinger and Seel, LBNL, 2018

And here’s a zoom-in on the last few years, broken out by region:

Source: Bolinger and Seel, LBNL, 2018

While those graphs show single, “levelized” prices, PPAs are long-term agreements, and what happens over the terms of the agreements is worth considering. One of the great things about solar and other fuel-free electricity options is that developers can have a really good long-term perspective on future costs: no fuel = no fuel-induced cost variability. That means they can offer steady prices out as far as the customer eye can see.

And, says LBNL, solar developers have indeed done that:

Roughly two-thirds of the contracts in the PPA sample feature pricing that does not escalate in nominal dollars over the life of the contract—which means that pricing actually declines over time in real dollar terms.

Imagine that: cheaper over time. Trying that with a natural gas power plant would be a good way to end up on the losing side of the contract—or to never get the project financed in the first place.

Here’s what that fuel-free solar steadiness can get you over time, in real terms:

Source: Bolinger and Seel, LBNL, 2018

What’s behind the PPA prices

So where might those PPA price trends be coming from? Here are some of the factors to consider:

Equipment costs. Solar equipment costs less than it used to—a lot less. PPAs are expressed in cost per unit of electricity (dollars per megawatt-hour, or MWh, say), but solar panels are sold based on cost per unit of capacity ($ per watt). And that particular measure for project prices as a whole also shows impressive progress. Prices dropped 15% just from 2016 to 2017, and were down 60% from 2010 levels.

Source: Bolinger and Seel, LBNL, 2018

The federal investment tax credit (30%) is a factor in how cheap solar is, and has helped propel the incredible increases in scale that have helped bring down costs. But since that ITC has been in the picture over that whole period, it’s not directly a factor in the price drop.

Project economies of scale. Bigger projects should be cheaper, right? Surprisingly, LBNL’s analysis suggests that, even if projects are getting larger (which isn’t clear from the data), economies of scale aren’t a big factor, once you get above a certain size. Permitting and other challenges at the larger scale, they suggest, “may outweigh any benefits from economies of scale in terms of the effect on the PPA price.”

Solar resource. Having more of the solar happen in sunnier places would explain the price drop—more sun means more electrons per solar panel—but sunnier climes are not where large-scale solar’s growth has taken it. While a lot of the growth has been in California and the Southwest, LBNL says, “large-scale PV projects have been increasingly deployed in less-sunny areas as well.” In fact:

In 2017, for the first time in the history of the U.S. market, the rest of the country (outside of California and the Southwest) accounted for the lion’s share—70%—of all new utility-scale PV capacity additions.

The Southeast, though late to the solar party, has embraced it in a big way, and accounted for 40% of new large-scale solar in 2017. Texas solar was another 17%.

But Idaho and Oregon were also notable, and Michigan was one of the four new states (along with Mississippi, Missouri, and Oklahoma) in the large-scale solar club. (And, as a former resident of the great state of Michigan, I can attest that the skies aren’t always blue there—even if it actually has more solar power ability than you might think.)

Capacity factors. More sun isn’t the only way to get more electrons. Projects these days are increasingly likely to use solar trackers, which let the solar panels tilt face the sun directly over the course of the day; 80% of the new capacity in 2017 used tracking, says LBNL. Thanks to those trackers, capacity factors themselves have remained steady in recent years even with the growth in less-sunny locales.

What to watch for

This report looks at large-scale solar’s progress through the early part of 2018. But here are a few things to consider as we travel through the rest of 2018, and beyond:

  • The Trump solar tariffs, which could be expected to raise costs for solar developers, wouldn’t have kicked in in time to show up in this analysis (though anticipation of presidential action did stir things up even before the tariff hammer came down). Whether that signal will clearly show in later data will depend on how much solar product got into the U.S. ahead of the tariffs. Some changes in China’s solar policies are likely to depress panel prices, too.
  • The wholesale value of large-scale solar declines as more solar comes online in a given region (a lot of solar in the middle of the day means each MWh isn’t worth as much). That’s mostly an issue only in California at this point, but something to watch as other states get up to high levels of solar penetration.
  • The investment tax credit, because of a 2015 extension and some favorable IRS guidance, will be available to most projects that get installed by 2023 (even with a scheduled phase-down). Even then it’ll drop down to 10% for large-scale projects, not go away completely.
  • Then there’s energy storage. While the new report doesn’t focus on the solar+storage approach, that second graphic above handily points out the contracts that include batteries. And the authors note that adding batteries doesn’t knock things completely out of whack (“The incremental cost of storage does not seem prohibitive.”).

And, if my math is correct, having 33 states with large-scale solar leaves 17 without. So another thing to watch is who’s next, and where else growth will happen.

Many of the missing states are in the Great Plains, where the wind resource means customers have another fabulous renewable energy option to draw on. But solar makes a great complement to wind. And the wind-related tax credit is phasing out more quickly than the solar ITC, meaning the relative economics will shift in solar’s favor.

Meanwhile, play around with the visualizations connected with the new release (available at the bottom of the report’s landing page), on solar capacity, generation, prices, and more, and revel in solar’s progress.

Large-scale solar is an increasingly important piece of how we’re decarbonizing our economy, and the information in this new report is a solid testament to that piece of the clean energy revolution.

Photo: NREL

Hurricane Florence Threatens East Coast Electricity Infrastructure

Photo: NASA

Hurricane Florence is bearing down on the Mid Atlantic and by every measure it’s poised to be an extremely dangerous event—lashing winds, storm surge reaching 9 to 13 feet, and inland flooding from 20 to 30 inches of rain, and possibly even 40 inches in select locations. All this will be occurring in an area that has been experiencing above-average precipitation, meaning saturated soils less able to absorb incoming water and trees that are more likely to fall.

Evacuations have been ordered in Virginia and the Carolinas; Virginia, Maryland, Washington, D.C., and North and South Carolina have declared states of emergency; and the Navy has sent tens of vessels out of Norfolk to better weather the storm.

But not all people have the means to leave, and many more are bracing for the water and wind to come—as well as the inevitable power outages that will follow.

That’s because energy infrastructure is significantly at risk in an event such as this. Storm surge has the potential to inundate coastal assets like power plants and substations, and inland flooding from extreme precipitation threatens to submerge many more. In addition, heavy winds can topple trees and take down wires and poles.

These outages could be severe, triggering another and separate disaster long after the skies have cleared. Across the region people should heed warnings and be prepared for widespread, long-lasting blackouts, and stock up on food, water, medicines, and fuel.

Here are some electricity-related things to keep an eye on as the storm approaches, plus updates as needed as we learn more.

Power assets at risk

The U.S. Energy Information Administration provides data on energy infrastructure alongside real-time storm information. Here, coal and nuclear plants in the region are displayed, as of Wednesday morning. See more here.

Power outages can occur due to disruptions at any point in the system, from power plants, to transmission and distribution lines, to the many critical substations enabling power flow in between.

This map from the Energy Information Administration (EIA) displays energy infrastructure and real-time storm information. Here’s a clip from Wednesday morning, showing nuclear and coal plants in the region. The map has multiple data layers that can be toggled:

There are 7 nuclear reactors operating in South Carolina and 5 in North Carolina, plus 4 more in Virginia. There are an additional 32 coal generators in the Carolinas alone, plus many natural gas, biomass, and solar facilities, and even one large-scale wind farm.

One plant of immediate concern is Duke Energy’s Brunswick Nuclear Power Station, situated along the North Carolina coast and presently right in the line of the storm. Brunswick is a large, two-reactor nuclear plant. In the aftermath of Fukushima, the Nuclear Regulatory Commission (NRC) conducted a review and Brunswick found hundreds of missing, degraded, or unverifiable flood seals. The follow-up report is not publicly available, though the company states it has since installed more safety equipment at the plant. What’s more, the NRC recently concluded that reevaluated flood hazards exceed the plant’s current design basis; the stated near-term remedy is to install metal “cliff edge barriers” at targeted locations prior to hurricane landfall.

Nuclear plants must be shut down at least 2 hours before winds of 73-plus miles per hour are expected. EIA tracks nuclear outages here.

We have some further idea about the potential for electricity infrastructure exposure to storm surge in the area as three years ago, my colleagues and I conducted an analysis to examine this issue at five sites along the East and Gulf coasts—including Charleston and the South Carolina Lowcountry, and Norfolk and Southeastern Virginia. Our analysis focused on power plants and substations in particular, recognizing that many of these long-lived pieces of infrastructure, which are centrally important to the power grid, are already exposed to flood risks and will face increasing levels of exposure as seas rise.

In our analysis of the South Carolina Lowcountry, 54 major substations (representing more than 27 percent of the total) and seven power plants in the mapped region could be exposed to flooding from a major storm today, including nearly 90 percent of those (14 out of 16) in Charleston. Click to enlarge.

These maps are illustrative, intended to show possible points of exposure to a major storm, not a prediction of what will actually occur.

In our analysis of southeastern Virginia, 57 major substations (representing 43 percent of the total) and four power plants in the mapped region could be exposed to flooding from a major storm today, including more than 80 percent of the substations in Norfolk and Hampton. Click to enlarge.

Critically, although much of this infrastructure is fixed in location, utilities can take proactive measures to reduce vulnerability to exposure such as by elevating assets or equipping them with flood-protection safeguards. Even de-energizing a substation before it floods can make a big difference in repair times, given the comparative calamity of equipment that gets flooded while electricity is still coursing through.

But as we know from past storms, outages are not only related to infrastructure on the ground; they’re commonly caused by downed wires and poles from things like falling trees and flying debris. Vegetation management, select undergrounding, use of smart grid equipment, and grid hardening can all help to limit the scale and duration of outages.

Finally, when utilities anticipate storm damage, they call on others to help. For example, Duke Energy, bracing for outages worse than those sustained from 2016’s Hurricane Matthew, has called on trucks and crews from outside the region to help assist with their work. The addition of crews can substantially quicken repairs, and mutual aid is an increasingly important factor in successful outage response.

Outages and communications

But despite planning, investments, and proactive work, it’s still prudent to expect that outages will occur.

And as we’ve seen time after devastating time, the loss of electricity can cascade into a disaster all its own. Given its pivotal role in society—from supporting emergency services throughout disaster recovery and response, to enabling the most basic to the most advanced of our everyday needs—the loss of electricity can be crippling.

As a result, as power outages mount, communication with customers is key. In particular, emergency responders and other critical services must not only be kept aware of their own status, but also that of the facilities and populations most vulnerable should an outage occur. Such tightly coupled communications can help prevent loss of life.

Utilities should further strive to provide robust communications to general customers, including estimates of when power will be returned. In a recent review of Florida’s electric utility hurricane preparedness and restoration actions, the state’s Public Service Commission found that communication issues were a “notable source” of customer dissatisfaction and frustration in the aftermath of Hurricane Irma. Because so many decisions hinge on whether or not the power is on and when it will be coming back, that communication is key.

Tracking the storm

As Hurricane Florence churns closer, the likelihood of a severe event is growing ever higher.

We will be following the storm, and its aftermath. One key will be to ensure that across utilities and co-ops, data are recorded so lessons can be learned and policies and investments improved down the line. Some important issues to be tracking include:

  • Where outages occur, and for how long they endure
  • Who gets power back first, and who gets it last
  • Whether critical services and vulnerable populations are left without
  • Which parts of the grid performed well, and which did not (including plants, fuels, pipelines, substations, wires, and poles)
  • Whether recent resilience and storm-hardening investments—including microgrids—have led to improved outcomes

But first and foremost as the storm draws near, we hope for the safety of those on the ground and the many brave workers striving to mitigate damage and loss.

Photo: NASA U.S. Energy Information Administration UCS analysis

Community Choice Aggregation Puts Communities in Control of Their Electricity

Rebecca Behrens, 2018 UCS Schneider Fellow

Keep your eyes and ears open for Community Choice Aggregation, already a major player for consumer energy choice in California and spreading rapidly. In the post below, 2018 UCS Schneider Fellow Rebecca Behrens explains how CCAs work, where CCAs are forming, and what you should be on the look-out for as more communities get involved.

It’s late summer, which means ice cream season is coming to an end. A coworker and I have made it a habit of exploring the (many) ice cream shops around our office each week, and for something as simple as ice cream, it’s amazing how many choices we have. I can choose what ice cream I want based on price, proximity, flavor, or even the company’s business practices.

This got me thinking: if I have so many choices for something as simple as ice cream, what about bigger choices in my life—like where my electricity comes from? Like most of the US, I’m served by one utility. If I don’t like the way they’re sourcing electricity or setting rates, I have limited options.

But that story has been changing, in part due to the growth in Community Choice Aggregation (“CCA”). CCAs offer an alternative to traditional utilities and are designed to give communities a voice in where their electricity comes from. In California, many CCAs are striving to provide their customers with more renewable energy at lower costs than traditional utilities. Let’s break down the what, when, where, how and why of this new body.

What are CCAs?

Community Choice Aggregation allows local governments to purchase electricity on behalf of their residents, aggregating the electricity needs of everyone in the community to increase purchasing power.

The investor-owned utility (“utility” or “IOU”) that used to supply and deliver electricity is still there, but it plays a different role. Now, the utility is just in charge of delivering the electricity through its transmission and distribution lines (the utility still owns and maintains the “poles and wires”) and billing customers. This partnership distinguishes a CCA from a municipally-owned utility, which takes over both electricity procurement and electricity delivery (aka the poles and wires).

CCAs are in charge of procuring electricity while the utilities are in charge of delivering the electricity to you. (Source: Cal-CCA)

When and where have CCAs formed?

So far, CCAs are allowed in seven states: Massachusetts, Rhode Island, New Jersey, New York, Ohio, Illinois and California. Within a state, the decision to form a CCA is up to the community and local government. California has seen the most recent growth in CCAs, so I’ll be using it as an example here, but know that CCA formation and growth looks a bit different in each state.

Most of the seven states that allow Community Choice Aggregation passed bills legalizing CCAs in the early 2000s: California passed AB 117 in 2002. However, it wasn’t until years later, in 2010, that the first CCA in California launched in Marin County.

Since 2010, the number of CCAs in California has grown significantly. In 2016, there were five CCAs serving 915,000 customers. In 2017, there were nine CCAs. By the end of 2018, there will be 20 CCAs, serving over 2.5 million customers. And more local governments are considering the option.

The regions CCAs serve in California as of September 2018. Because CCAs are growing quickly in California, this map changes quickly, too. (Source: Cal-CCA)

Even if no more CCAs launch after 2018, CCAs are expected to serve 16% of the electrical load in California in 2020. But, it’s highly likely more CCAs will launch in the coming years, which could put this number at over 50% in 2020.

How do CCAs work?

In California, once the local government votes to form a CCA, a nonprofit agency is formed to carry out its duties. The agency goes through a rigorous planning process and once the CCA is ready to launch, they line up the customers.

And who are those customers? Anybody who wants to be. CCAs are “opt-out” in California, and in most other states, meaning that the default is for customers to be automatically served by the CCA. Customers have 60 days to opt-out for free and are notified about the change four times before this deadline. After 60 days, customers can opt-out for a fee to account for the power the CCA had bought in advance for them.

And that’s it! Customers are now served by the CCA. In California, if customers were receiving discounts because of particular circumstances, they will automatically continue receiving those discounts. This includes California Alternative Rates for Energy (“CARE”), Family Electric Rate Assistance Program (“FERA”) and Medical Baseline customers. Customers with rooftop solar systems who are on a net energy metering program are automatically enrolled to continue.

In terms of electricity service, as a CCA customer, nothing else changes. Your lights stay on, your TV still works, and your freezer stays cold.

The biggest difference is that the existence of CCAs allow customers to have more of a choice in the type of electricity they receive. Not only can customers choose between being served by the utility or the CCA, but if customers are unhappy with the electricity options or rates offered by their CCA, they can provide feedback to the CCA at its board meetings, which allow for public participation in California.

CCA communities can also benefit from the reinvestment of CCA profits, given that CCAs are nonprofits. CCAs can offer additional programs beyond what the utility offers. These could look like free energy efficiency audits, rebates for electric car charging stations, incentives for low-income customers to install solar, or really any program that helps customers better manage their electricity usage.

In some cases, customers could lose access to programs run by their utility by joining a CCA, although in California, most utility programming is still available to CCA customers. In any case, it’s smart to reach out to your local CCA and ask if you’ll still be eligible for programs you rely on.

Why do CCAs matter?

In California, every CCA (so far) has chosen to provide customers with more renewable energy than the competing utility and has done so at lower rates. However, how much new renewable energy CCAs are contributing to the grid varies a lot from community to community.

The devil is in the details here: A CCA that uses mostly short-term contracts to buy renewable energy or renewable energy credits (“RECs”) is likely buying from projects that already exist. Electricity purchases from existing renewable energy projects do not increase the supply of clean electricity on the grid, and customers that used to consume electricity from those renewable projects may now be consuming electricity from a dirtier source. This is called resource shuffling. On the other hand, a CCA that uses long-term contracts is helping new renewable projects develop, which means that more clean power is being added to the grid.

If you live in an area served by a CCA, it’s up to you to make sure your CCA is sourcing electricity in a way you support and providing programming you can use. Here are some questions you can ask to see how well a CCA is doing:

  1. Is the CCA providing more renewable energy than the competing utility, and are they sourcing their renewable energy from long-term contracts for energy and RECs? By buying “bundled” renewable energy through long-term contracts, CCAs can more directly support the development of additional renewable energy projects and add more clean electricity to the grid.
  2. Is the CCA making use of local resources and supporting the local community? Having a sustainable workforce policy and hiring locally and from unions can help bring the broader benefits of renewable energy to a community.
  3. Is the CCA leveraging grants and their revenue to provide programs designed to help customers reduce or better control their energy use? More renewable energy is just one piece of the puzzle; we need a host of solutions for a clean energy transition. Programs that invest in electric vehicle infrastructure and energy efficiency are equally important.
  4. Is the CCA proactively reaching out to its community? Programming needs to be accessible, useful and reach all members of the community—especially those that historically have not received the full benefits of energy programming and renewable energy.

CCAs have the potential to empower (and quite literally power) communities. But it’s up to residents to hold their CCAs accountable and ask them to provide equitable and fair climate solutions. By staying engaged and informed, you can make sure your CCA is providing your community with the best options.

CCAs are a growing movement in California but they aren’t the only way consumers are making choices about their electricity. While not every utility or state offers choices in electricity sourcing, it is worth seeing if yours does. You may even be surprised on what your options are: home in Vermont, through my utility I can choose to buy Cow Power! What sets CCAs apart from other choices is their ability to localize decision making and let communities invest in what is best for themselves, which has made them a powerful new player at the table.

Photo: Zbynek Burival

Department of Energy Walks Into a Fight About Subsidies

Offshore wind gets started where policy supports it. Photo: M. Jacobs

There is a fight over power plant costs that could threaten grid reliability, and it’s not as simple as the fight you have been hearing.  This wraps together three issues, each of which could cost billions of dollars. By throwing them together, policymakers are jeopardizing the electric grid reliability they say they are trying to protect. The three subjects in this fight are:

  1. Long-standing state policies for utility-owned generation in Kentucky, Ohio, Virginia, and West Virginia have been challenged as uneconomic;
  2. Renewable energy supports enacted by states are under attack;
  3. The federal government is pushing contradictory treatment for old coal plants.
A mess this big takes time

Presently, new political appointees in key agencies have tossed their respective agencies into a manufactured crisis that casts doubt on the basic means for paying power plants to keep the lights on. This uncertainty is a train-wreck of unacknowledged and uncoordinated policies verging on playing chicken with grid investments. In a hasty decision that invalidated the existing rules for reliability payments, a three-person majority at the Federal Energy Regulatory Commission, all appointed by President Trump, has made the continued operation of coal and nuclear plants less certain and new investment riskier. Meanwhile, DOE proposals to override the market, and over-pay coal plant owners threaten market investments.

Taxes on CO2 are a good idea for sorting out subsidies.

The owners of coal and nuclear plants opened this battle in 2013-2014 by arguing that the markets were paying too little, and despite all evidence that cheap natural gas had lowered prices across all U.S. energy markets, the fault lay in state policies that supported the gradual use of renewable energy. Soon, states began to rescue nuclear plants with additional payments and the fighting widened. Economists predicted that subsidies would lead to more subsidies, though this is already what we call U.S. energy policy. The Trump administration soon proposed subsidies for coal plants, and a national debate broke out.

No one expects markets to function when subsidies keep uneconomic plants online and force the supply to be greater than demand.  While the arguments to straighten this out will continue at the federal agencies and courts, here’s an explanation that should get you up to speed on how the economics and regulation are meant to provide grid reliability are complicated by old policies colliding with market prices driven down by innovation.

The focus is on FERC. What is FERC?

The Federal Energy Regulatory Commission (FERC) is center stage for this drama. For over 20 years, FERC has championed competition between power plants as the best way to determine how much should be paid to plant owners. The fundamental role for FERC is to ensure that rates for buyers and sellers of energy are just and reasonable. FERC was created in the 1930’s after financial manipulation by an interstate electric company demonstrated the need for a federal system to regulate in conjunction with the long-standing state authority over power plant construction and electric company service to consumers.

FERC’s role in electricity markets addresses the interstate commerce of power plants once they are built. With considerable reliance on competition to sort out winners and losers, as well as set prices, FERC looks to ensure open access to the transmission system and the administration of fair markets. This assignment has been accepted in much of the U.S. by independent system operators, with names like ISO-New England, Southwest Power Pool, California ISO and PJM. In addition to markets, these organizations are key to maintaining the reliability of the power system.

Role of grid operators getting into politics

PJM and the other grid operators are utilities and regulated by FERC. Unlike most utilities, the grid operators own no power plants or wires. Instead, they have rule-making and stakeholder processes where policies are made that shape competition. These stakeholder and governance processes are not perfect. Where a grid operator covers multiple states, grid operators in New England and PJM have entered a dramatic policy battle between state policies and the grid operators’ perception of economic subsidies for certain power plants. PJM accepted the idea that state policies are subsidies in these rule-making and stakeholder processes.

PJM functions for reliability and adequacy of the power supply involve consumers and utilities in 13 states and the District of Columbia. All grid operators create a demand forecast and projection of needed future electricity supply. This is key to signaling the need for new investment in power plants or alternatives, which would help ensure reliability. PJM’s approach to ensuring adequate supply also addresses the challenges related to power plant utilization and revenues from energy sales that vary by hour and season.  PJM calls this the Reliability Pricing Model or RPM. This operates through a series of auctions that are expected to determine what existing plants remain operating in future years or close, and what new plants will be built.

Take a deep breath- we are diving in deep

There is so much investment in our electricity supply, it is unrealistic to think there are some fuels and power plants that have no subsidies. PJM got into trouble by trying to pick sides and pretend that it wasn’t doing so. In practice, the folks with subsidies from “the old days” are unhappy that there are new subsidies. What might have been a principled stand by PJM about the new subsidies and their impacts on a market has to address many layers of subsidies and protections. We debated specific fuel subsidies and tax breaks, only to discover the very basics of old utility monopolies would be put on the table by FERC.

Since RPM pays for capacity that can produce energy (or reduce demand) separate from how many days or hours it actually runs, the debate over retiring coal plants, maintaining nuclear plants and how to recognize subsidies all focus on the RPM market. (In the midst of these debates, many observers say all the tweaking and adjustments PJM makes prove the RPM is not actually a market…but that is another debate.) PJM started the debate over state actions in 2016 when legislatures in Illinois and New Jersey took steps to provide nuclear plants with additional revenues. This, along with earlier action by the Ohio Public Utilities Commission and the West Virginia Public Service Commission to protect coal plant owners from losing money in the energy market led PJM to the position that state policies supporting existing plants could be suppressing the RPM auction prices. At this stage, PJM is saying it has a problem with every state it serves (except Kentucky, but that may not last), as each has either a renewable portfolio standard in its laws, a nuclear support in its laws, or a recent regulatory decision bailing out a coal plant.

The auction clearing prices are applied to all generators in the auction, so PJM says it is keenly interested in preventing available out-of-market revenues supplementing the auction prices bid by generators, thus hiding the true costs of the generators and suppressing auction prices. However, there is a spectacular hidden exception to this pursuit of accuracy and fairness of auction bids and results. (Sorry Kentucky.)

“Guaranteed revenues” sounds like a subsidy

PJM has long accepted the presence in its markets a category of old plants (mostly coal) that receive state support through consumer bills and are protected from competition. These old plants are a legacy of monopoly utilities that have their costs repaid through state-approved rates that are paid in consumer electric bills. This remnant allows old generation that is owned by utilities and still paid through cost-recovery rules to automatically succeed in the capacity auction (i.e. PJM rules say this is “a mechanism to guarantee that the resource will clear in the Base Residual Auction”).  The effect of this provision in PJM’s rules is it allows state-supported generation to bid low in the auction while receiving out-of-market revenues from state-sponsored payments made by consumers.

A rough estimate of the old plants protected in Kentucky, Ohio, Virginia and West Virginia is approximately 40,000 MW. Another measure is that over 100 power plants in PJM bid zero in the most recent capacity auction.

In its stakeholder process, PJM pushed to decide what kinds of subsidies it would tolerate, and which it needed to “correct” or “adjust” so that the RPM auction would have correct prices. This all got out of hand when PJM requested permission from FERC to adjust bid prices for nuclear and renewable generation that receive out of market payments. The industry was not prepared for what happened next.  The proposed “minimum offer price rules” were rejected by a split decision that declared PJM did not go far enough to root out all out-of-market payments to generators of all kinds. The three Trump-appointed commissioners voting to reject PJM proposal also found PJM could not rely on existing rules, as those would result in rates that are not just and reasonable.

FERC makes a big splash

FERC instructed PJM to make several changes not proposed by any party to the case, and to do so quickly. In effect, FERC ordered PJM to reshape the market that distributes $6-10 B a year, maintains reliability and determines coal plant closing.  Acknowledging this would be difficult, FERC nonetheless ordered this be done in 90 days. (FERC has since granted an extension of 6 weeks.)

Does anyone know what happens next?

As of late August, PJM discussion with stakeholders have not been promising. No clarity on what counts as a subsidy. Is a municipal- or cooperative-owned electric plant “subsidized”? Consumer-owned utilities see no overlap between their business model and the issues in this debate.  If the U.S. Department of Energy orders payments to uneconomic old coal plants to keep them open, is that a subsidy that should be “corrected”? PJM has said yes, and they intend to include any DOE-directed support to coal or nuclear plants with the bid price re-setting to protect the PJM auction from interference by subsidized bids. PJM has said things like “if the reason is national defense, then the payments should be made from a nation-wide fund.” Also, PJM showed stakeholders on August 15 “Out-of-market payments from any federal program adopted [after 3/21/16] will be subject to [adjustment through] Minimum Offer Price Rules, unless there is a clear statement of congressional intent indicating otherwise in the law creating the subsidy.”

In other words, PJM still believes that as the regulated utility responsible for the process, they should decide which subsidies are OK and which are not. PJM wants to stick with their plan:

  • State payments from state laws establishing renewable portfolio standards are bad,
  • State payments for old coal plants that are paid for in rates are OK, because that’s the way we have always done it, and
  • New federal subsidies are bad, but old federal subsidies are OK.

FERC, the regulator, has said all the subsidies are bad. And of course DOE has said once and will soon say again, a new subsidy is good.

Now you are up to speed.

Photo: EarthCareNM

One Year after Maria, Puerto Rico Deserves a Solid, Resilient, and Healthy Power System

Lights in San Juan. Puerto Rico Photo: Paula García

Hurricane Maria, one of the most extreme climate events to devastate the island of Puerto Rico (PR), left tragic statistics in its wake: thousands of people killed, material damages of more than $90 billion from which many people are still struggling to recover, hundreds of animals (abandoned, lost, and hurt) that are still looking for a home—and the largest power outage in US history, one that for a large swath of the population lasted even for months.

While the lights have come back on for the majority of Puerto Ricans, the hurricane and the distraction it caused shined a spotlight on an electric power system that was on the edge of collapse and that today demands urgent investment. Today’s decisions about investment and management will define whether the system can survive, recover, and be resilient for the long term.

Earlier this month, Ciencia PR, the Caribbean division of the American Association for the Advancement of Science (AAAS-CD), and the Union of Concerned Scientists organized a “Science in Action” symposium, in which one of the questions explored focused on that very issue: What can we do to make sure that the island’s power system emerges solid, resilient, and healthy?

Here I share some of the key issues that emerged in a panel discussion between Lionel Orama of the National Institute of Island Energy and Sustainability (INESI, in Spanish), Agustín Carbó Lugo of ClimaTHINK, former commissioner of the Puerto Rican Energy Commission (CEPR), and me.

Science, innovation and energy panel. From left to right: Lionel Orama, Agustín Carbó and Paula García

A critical moment for the power sector
  • Maria was the straw that broke the camel’s back of an electricity sector that was already on the verge of collapse. Puerto Rico Electric Power Authority (PREPA, or AEE in Spanish) was already in an extreme fiscal crisis with a debt of $9 billion dollars. This contributed to PREPA underinvesting in the infrastructure and maintenance of facilities and equipment. On arriving, the hurricane knocked down 80% of the power poles and all of the transmission lines, leaving the island’s 3.4 million inhabitants in the dark.
  • For years, PREPA has clung to the use of fossil fuels, forcing Puerto Ricans to depend on fuel imports, exposing them to swings in fuel prices, and subjecting them to the financial stress associated with operating power plants dependent on oil, coal and natural gas. The lack of an energy mix that was diversified, decentralized, and free of the dependence on imported fossil fuels has prolonged even more the recovery of—and confidence in—the energy services provided by PREPA.
  • The privatization of PREPA is adding to the fiscal and operational uncertainty. At the beginning of the year, Governor Ricardo Roselló signed into law the privatization of PREPA. This privatization will define who generates the electricity, from what sources, and at what prices; so far there’s total uncertainty about the answers to these questions and the impact that they’ll have on island residents.
  • Likewise, the island for years lacked a control entity to ensure transparency and optimal functioning of PREPA until the CEPR was created in 2014. Despite its importance, its work has been threatened with a new law signed recently by Gov. Roselló.
The transformation that Puerto Ricans deserve
  • The voices of the scientific community and civil society need to be reflected in the development of the utility’s “integrated resource plan” (IRP). Having them at the table is key for making sure that decisions made are informed by solid technical analyses that respond to the needs of the communities. INESI is one of the organizations contributing to this effort.
  • A solid system needs to consider diversification and resilience. It’s crucial to reduce dependence on fossil fuel imports, diversify generation to incorporate local sources of energy (like solar and wind), upgrade electrical distribution systems, and integrate microgrids and energy storage systems to increase confidence in the grid and meet critical needs (at health centers, in emergency shelters, and for water pumping systems, for example). Reducing energy consumption through energy efficiency programs is also crucial. All of this should be guided by principals of transparency and affordability.
  • A healthy system should benefit us all. Emissions of heat-trapping gases (like carbon dioxide and methane) from power plants based on fossil fuels (like oil, coal and natural gas) just worsen the effects of climate change, like hurricanes, floods, and droughts that become ever more devastating. Burning fossil fuels also emits a number of air pollutants (like sulfur dioxide, nitrogen oxides and particulate matter) that can have big impacts on our health. It’s vital that we make the transition to clean energy as quickly as possible.
Energy, climate, and health: An equation that affects us all

My visit to the Isla del Encanto affected me deeply. Interacting with some of the island’s experts on energy, environment, and health reconfirmed for me that these variables are intrinsically linked at the local level. I return to Boston inspired by all of the work led by the symposium’s organizers and participants, and motivated to collaborate with them on these themes, which have an impact not just locally but globally.

While climate change affects us all, some communities are more vulnerable to the bad decisions that others have taken for them. Hopefully the power that comes from working together can help us to have an increasingly strong voice for urgent action to address climate change, for the sake of our fellow humans, for our fellow living beings, and for our one planet, Earth.

 

Grace. Brought from a shelter in PR to one in MA for adoption.

*NOTE: As the beginning of this post mentions, the hurricane left hundreds of animals (abandoned, lost, and hurt) in need of homes. The island’s shelters have limited capacity (both physical and financial) and need volunteers that can take animals to shelters in different parts of the US. For those who travel to Puerto Rico and are interested in helping out, All Sato Rescue can fill you in. I brought home Grace, an adorable puppy that will soon be up for adoption via Buddy Dog.

This blog is available in Spanish here.

 

Audrey Eyring Paula García

A un año de María, Puerto Rico merece un sistema eléctrico sólido, resiliente y saludable

Luces en San Juan desde la playa. Puerto Rico

El huracán María, uno de los eventos climáticos más extremos que ha devastado la isla de Puerto Rico (PR), dejó trágicas cifras: miles de personas muertas, daños materiales por más de 90.000 millones de dólares de los que muchas personas aún luchan por recuperarse, cientos de animales (abandonados, perdidos y heridos) que aún buscan un hogar, así como el mayor apagón estatal en la historia de los EE.UU. que para un amplio sector de la población duró incluso por meses.

Aunque la luz ha vuelto para la mayoría de puertorriqueños, el huracán y la destrucción por su paso, puso en evidencia un sistema eléctrico que se encontraba al borde del colapso y que hoy en día requiere una inversión urgente en infraestructura. Estas decisiones de inversión y manejo definirán si el sistema podrá sobrevivir, recuperarse y ser resiliente en el largo plazo.

Ciencia PR, la División del Caribe de la Asociación Americana para el Avance de la Ciencia (AAAS-CD, por sus siglas en inglés), y la Union of Concerned Scientists organizaron el primer  fin de semana de septiembre un simposio llamado “Ciencia en Acción” en el que una de las preguntas exploradas giró en torno a ¿qué podemos hacer para que el sistema energético emerja sólido, resiliente y saludable?

Acá les comparto algunos de los temas claves que discutimos con Lionel Orama del Instituto Nacional de Energía y Sostenibilidad Isleña (INESI) y Agustín Carbó Lugo de ClimaTHINK y ex comisionado de la Comisión de Energía de PR (CEPR), en el panel donde abordamos esta pregunta.

Panel sobre ciencia, innovación y energía. De izquiera a derecha: Lionel Orama, Agustín Carbó y Paula García

Un momento crítico para el sector eléctrico
  • La llegada de María fue la gota que derramó la copa de un sector eléctrico que estaba ya al borde del colapso. La Autoridad de Energía Eléctrica (AEE) de Puerto Rico se encontraba ya en una crisis fiscal extrema con una deuda en bonos por $9.000 millones de dólares. Esto contribuyó a que la AEE realizara una precaria inversión en infraestructura y un escaso mantenimiento de instalaciones y equipos. A su llegada, el huracán derribó el 80% de los postes de energía y todas las líneas de transmisión dejando a oscuras a los 3,4 millones de habitantes de la isla.
  • Por años, la AEE se ha adherido de forma sorda al uso de combustibles fósiles, sometiendo a los puertorriqueños a depender de la importación de estos combustibles, de los vaivenes en sus precios, y al estrés financiero asociado con la operación de sus plantas que funcionan con petróleo, carbón y gas natural. La falta de una matriz energética diversificada, descentralizada y que no dependa de la importación de combustibles fósiles sólo ha dilatado aún más la recuperación y confiabilidad del servicio energético prestado por la AEE (también conocida como PREPA por sus siglas en inglés).
  • La privatización de la AEE solo contribuye a generar más incertidumbre fiscal y operacional. Al inicio de este año, el Gobernador Ricardo Roselló firmó una ley mediante la cual privatizará la AEE. Esta privatización conlleva preguntas claves en cuanto a ¿quién genera la electricidad?, ¿de qué fuentes? y ¿a qué precio?; a la fecha se tiene total incertidumbre sobre las respuestas a estas preguntas y el impacto que tendrán en los residentes de la isla.
  • Así mismo, la isla careció por años de un ente de control que regulara la transparencia y el óptimo funcionamiento de la AEE hasta que se creó la CEPR en el 2014. A pesar de su importancia, su función se está viendo amenazada con la nueva ley recientemente firmada por el Gobernador Roselló.
La transformación que los puertorriqueños merecen
  • Las voces de la comunidad científica y de la sociedad civil deben verse reflejadas en la actualización del Plan Integrado de Recursos (IRP, por sus siglas en inglés). Su puesto en la mesa es fundamental para que las decisiones que se tomen estén informadas por análisis técnicos sólidos que respondan a las necesidades de las comunidades. El INESI es una de las organizaciones que está contribuyendo con esta tarea.
  • Un sistema sólido debe contemplar diversificación y resiliencia. Es necesario reducir la dependencia en importaciones de combustibles fósiles, diversificar la generación a fuentes locales de energía (por ejemplo, solar y eólica), actualizar las redes de distribución e integrar micro redes y sistemas de almacenamiento energético para incrementar la confiabilidad de la red y brindar servicios críticos (por ejemplo, para centros de salud, refugios y sistemas de bombeo de agua), así como reducir el consumo energético por medio de programas de eficiencia energética. Todo esto debe estar guiado por principios de transparencia y asequibilidad.
  • Un sistema saludable debe beneficiarnos a todos. Las emisiones de gases de efecto invernadero (como el dióxido de carbono y el gas metano) provenientes de plantas termoeléctricas que funcionan con combustibles fósiles (como el petróleo, carbón y el gas natural) sólo harán que los efectos del cambio climático como la intensificación de huracanes, inundaciones y sequías sean cada vez más devastadores. Adicionalmente, la quema de combustibles fósiles emite un número de contaminantes del aire (como dióxido de carbono, óxido de nitrógeno y material particulado) que son altamente nocivos para nuestra salud. Es vital que la transición a fuentes de energía limpia se haga a la mayor celeridad posible.
Energía, clima y salud. Una ecuación que nos afecta a todos

Esta visita a la Isla del Encanto me impactó profundamente. Interactuar con algunos de sus expertos en temas energéticos, ambientales y de salud reconfirmó cómo estas variables están intrínsecamente ligadas a nivel local. Regreso a Boston inspirada por todo el trabajo liderado por los organizadores y asistentes del simposio, y motivada a colaborar con ellos en estos temas que tienen un impacto tanto local como global. A pesar de que el cambio climático nos afecta a todos, hay comunidades más vulnerables a las malas decisiones que otros han tomado antes que ellos. Ojalá el poder de la unión nos ayude a tener una voz cada vez más fuerte para tomar acción urgente frente al cambio climático, por nuestros hermanos humanos, por nuestros otros hermanos vivientes, por nuestro único planeta Tierra.

 

Grace. Traída de un refugio en PR a uno en MA para adopción

*NOTA. Como mencioné al inicio del blog, el huracán dejó cientos de animales (abandonados, perdidos y heridos) que aún buscan un hogar. Los refugios de la isla se encuentran con limitada capacidad (de espacio y económica) y necesitan voluntarios que puedan llevar consigo animalitos a refugios en diferentes partes de EE.UU. Para quienes viajen a Puerto Rico y estén interesados en colaborar, All Sato Rescue puede brindarles más información. Yo traje conmigo a Grace, una perrita adorable que pronto podrá ser adoptada en Buddy Dog.

 

 

 

 

 

 

 

 

Paula García Audrey Eyring Paula García

Why is ExxonMobil Still Funding Climate Science Denier Groups?

Photo: Mike Mozart/Flickr

A decade after pledging to end its support for climate science deniers, ExxonMobil gave $1.5 million last year to 11 think tanks and lobby groups that reject established climate science and openly oppose the oil and gas giant’s professed climate policy preferences, according to the company’s annual charitable giving report released this week.

Nearly 90 percent of ExxonMobil’s 2017 donations to climate science denier groups went to the US Chamber of Commerce and three organizations that have been receiving funds from the company since it started bankrolling climate disinformation 20 years ago: the American Enterprise Institute, Manhattan Institute and American Legislative Exchange Council, which — in a surprise move — ExxonMobil recently quit. (More on that later.)

The other ExxonMobil denier grantees last year were the Center for American and International Law ($23,000), Federalist Society ($10,000), Hoover Institution ($15,000), Mountain States Legal Foundation ($5,000), National Black Chamber of Commerce ($30,000), National Taxpayers Union Foundation ($40,000), and Washington Legal Foundation ($40,000).

ExxonMobil’s funding priorities belie the company’s purported support for a carbon tax, the Paris climate agreement and other related policies, which it reaffirmed in a January blog post by its public affairs director, Suzanne McCarron. If, as McCarron claims, ExxonMobil is “committed to being part of the solution,” why is the company still spending millions of dollars a year on groups that are a major part of the problem?

ExxonMobil’s history of deceit

There is ample evidence that Exxon was fully aware of the danger its products pose to the planet since the 1980s and likely even earlier. Nonetheless, the company helped initiate a fossil fuel industry-backed climate disinformation campaign in 1998, a year before it merged with Mobil.

The company’s behind-the-scenes role went largely unnoticed for nearly a decade, but in early 2007, a report by the Union of Concerned Scientists revealed that it had spent at least $16 million between 1998 and 2005 to fund a network of more than 40 think tanks and advocacy groups to manufacture doubt about climate science under the guise of being neutral, independent analysts.

In response to the negative press generated by the UCS report, ExxonMobil vowed in its “2007 Corporate Citizenship Report” to “discontinue contributions [in 2008] to several public policy research groups whose positions on climate change could divert attention from the important discussion on how the world will secure the energy required for economic growth in an environmentally responsible manner.”

Note that the company only promised to stop funding several policy groups, not all, and it did in fact drop some high-profile grantees, including the Cato Institute, Competitive Enterprise Institute, Heartland Institute and Institute for Energy Research. But it never completely ended its support for the disinformation network. From 1998 to 2007 — the year of the pledge — it spent nearly $23 million on it. From 2008 through last year, it spent another $13.17 million, for a total of $36.13 million over the last 20 years. As far an anyone has been able to determine from publicly available data, only Charles and David Koch, the multibillionaire owners of Koch Industries, have spent more to deceive the public about climate science and block government action on climate change.

Last year, $1.35 million of the $1.5 million ExxonMobil spent went to the following four organizations:

US Chamber of Commerce: Sponsoring slanted studies

In 2014, ExxonMobil committed to give $5 million to the US Chamber of Commerce’s Capital Campaign in $1 million-a-year increments on top of its annual dues, despite the lobby group’s history of misrepresenting climate science and the economics of transitioning to clean energy. Last year, the company kicked in another $15,000 for the Chamber’s Corporate Citizenship Center, bringing its total donation to $1,015,000.

If one takes ExxonMobil’s climate policy claims at face value, the Chamber’s positions are polar opposite.

ExxonMobil has been very vocal about its support for the Paris climate agreement, for example, and during its former CEO Rex Tillerson’s brief stint as US secretary of state, he reportedly implored President Trump to keep the United States in it. What did Trump cite last year when he announced he was pulling out of the accord? A widely debunked report from the US Chamber of Commerce.

Cosponsored by a former ExxonMobil grantee — the American Council for Capital Formation (ACCF) — the report maintained that the Paris accord would cost the US economy nearly $3 trillion over the next several decades and eliminate 6.5 million industrial sector jobs by 2040.

According to analyses by the Associated Press (AP), Politifact and The Washington Post, however, the Chamber and ACCF cooked the books. As the AP put it: “The study makes worst-case assumptions that may inflate the cost of meeting US targets under the Paris accord while largely ignoring the economic benefits to US businesses from building and operating renewable energy projects.”

American Enterprise Institute: Undue faith in the market

The American Enterprise Institute (AEI), an 80-year-old free-market think tank in Washington, D.C., has received more from ExxonMobil than any other climate science denier organization. In 2017, ExxonMobil gave AEI $160,000, bringing its total to $4.49 million since 1998.

Economist Benjamin Zycher, the only AEI staff member who writes regularly about climate issues, rejects mainstream climate science, insists a carbon tax would be “ineffective,” and has called the Paris agreement an “absurdity.” He not only disagrees with ExxonMobil’s professed climate policy positions, he has attacked the company for taking them.

Zycher’s colleague Mark Thiessen, a regular contributor to The Washington Post, also dismisses the Paris accord, maintaining that “free enterprise, technology, and innovation—not pieces of parchment signed in Paris and Kyoto — will revolutionize how we produce and consume energy.” Never mind that it often takes regulations to drive innovation and force corporations to adopt cleaner technology. Without federally mandated air pollution controls, for example, power plants and other industrial facilities would be emitting considerably more toxic pollution than they do today.

Manhattan Institute: Propaganda masquerading as news

Another free-market think tank, the Manhattan Institute, received $115,200 from ExxonMobil last year for its Center for Energy Policy. Since 1998, it has received $1.25 million. Like Zycher and Thiessen at AEI, Manhattan Institute fellows oppose a carbon tax and the Paris accord.

Earlier this year, the New York City-based organization hired longtime TV newsman John Stossel, former host of Fox Business Network’s “Stossel” and ABC’s “20/20,” to interview Manhattan Institute Senior Fellow Oren Cass for a slickly produced, 4-minute YouTube segment titled “The Overheated Costs of Climate Change.”

Cass, who regularly testified before Congress against Obama administration climate efforts, told Stossel that the Paris climate agreement “was somewhere between a farce and a fraud.” Stossel wholeheartedly agreed. “The Earth is warming,” Stossel intoned in his wrap-up. “Man may well be increasing that. But the solution isn’t to waste billions by forcing emissions cuts here while other countries do nothing. Well, pretend to make cuts. Trump was right to repudiate this phony treaty.”

Waste billions while other countries do nothing? Besides the fact that it is now cheaper to produce electricity from utility-scale solar and wind energy in the United States than nuclear, coal and even natural gas, as of last November — a year after the Paris agreement officially went into effect — China, India and other major carbon emitters were already making significant progress in meeting their Paris accord commitments.

The other glaring problem with the segment is it’s a prime example of fake news. With a former network news show host playing anchor, viewers could easily mistake the piece as a clip from of a legitimate newscast. At least one member of the conservative echo chamber treated it that way. The Washington Free Beacon, an online news organization funded by GOP megadonor Paul Singer, ran a news story about the Stossel-Cass interview on March 19.

American Legislative Exchange Council: Fossil fuel industry ‘bill mill’

On July 12, ExxonMobil announced it had ended its longtime membership in the American Legislative Exchange Council after a disagreement over the corporate lobby group’s climate policy. From 1998 through last year — when Exxon Mobil reported it gave the group $60,000 — ALEC received a $1.93 million from the oil company.

Over the last two decades, ALEC has routinely featured climate science deniers at its conferences and supplied state lawmakers with a range of fossil fuel industry-drafted sample legislation, including bills that would restrict investment in renewables, eliminate incentives for electric vehicles, and hamper the solar industry from selling electricity directly to residential and business customers.

Since 2012, more than 100 corporations, including BP, ConocoPhillips, Royal Dutch Shell and electric utilities Entergy, Pacific Gas & Electric and Xcel Energy, have severed ties with ALEC, in many cases because of its regressive policy positions.

ExxonMobil’s exit from ALEC came just months after the company fought to defeat a draft resolution sponsored by the Heartland Institute — an ExxonMobil grantee from 1998 through 2006 — calling on the Environmental Protection Agency to “reopen and review” its “flawed” conclusion that climate change poses a threat to human health. The EPA’s “endangerment finding” requires the agency to regulate carbon dioxide and other global warming emissions as hazardous pollutants under the Clean Air Act.

After ExxonMobil and the Edison Electric Institute (EEI), a utility trade group, objected to the resolution, the Heartland Institute withdrew it and accused the two of being in league with the likes of Greenpeace and the Sierra Club.

“Big corporations like ExxonMobil and trade groups like EEI have long been members of the discredited and anti-energy global warming movement,” Heartland’s president, Tim Huelskamp, said in a December 7 press release. “They’ve put their profits and ‘green’ virtue signaling above sound science and the interests of their customers.”

Huelskamp’s ludicrous assertion notwithstanding, some might construe ExxonMobil’s exit from ALEC as a welcome change in direction. The company’s money trail, however, clearly shows that it is still financing climate science denier groups that denigrate any and all climate policy options and provide cover for Congress and the current administration to do nothing. Until ExxonMobil stops funding these groups, its avowed support for a carbon tax, the Paris agreement and other climate initiatives can’t be seen as anything more than a cynical PR ploy.

Photo: Mike Mozart/Flickr

Trump Administration’s “Affordable Clean Energy” Rule Is Anything But

Photo: Wigwam/Flickr

If there’s one thing you need to know about the Affordable Clean Energy (ACE) rule, the Trump Administration’s new proposal for limiting carbon emissions from power plants, it’s this: ACE was not designed to reduce emissions; ACE was designed to boost generation from coal plants.

Which is audacious! A clean air standard that somehow manages to increase the nation’s use of its dirtiest power source, even when compared against a scenario with no carbon standards at all?

Remarkably, yes.

Because under the cover of establishing emissions guidelines, ACE is actually peddling regulatory work-arounds that aim to increase coal generation, a brazen attempt at stalling the industry’s precipitous decline.

How could something like this possibly come to pass from an agency whose core mission is to protect human health and the environment? A proposal that not only manages to increase emissions, but also worsens public health and raises costs?

Here, we’ll take a look.

With ACE, something is worse than nothing

ACE is the Trump Administration’s proposed replacement to the Clean Power Plan (CPP), a standard developed by the Obama Administration’s Environmental Protection Agency (EPA) to cut carbon pollution from power plants. Both ACE and the CPP are underpinned by the agency’s Endangerment and Cause or Contribute Findings, which necessitate that EPA regulate carbon emissions to protect human health and welfare.

Importantly, ACE doesn’t question the Endangerment Finding, nor EPA’s responsibility to act. Instead, this replacement reflects the fact that EPA’s current leadership believes—though will not allow the courts to decide—that the CPP exceeded the agency’s statutory authority, and thus that a far narrower approach to standard setting is appropriate instead.

Consequently, whereas the CPP had allowed achieving emissions reductions by letting cleaner plants run more—an efficiency made possible by the interconnected nature of the power system—the new proposal only considers emissions improvements from upgrades at individual coal plants.

Specifically, EPA’s new analysis concludes that the only viable carbon emissions reductions from the power sector are heat-rate improvements (HRI) at select coal-fired power plants, resulting in emissions efficiency gains on the order of <1 to a few percent on a unit-by-unit basis. EPA projects that this approach would lead to total additional carbon dioxide emissions reductions of 0 to 1-2 percent compared to no policy at all.

But if only this proposal stopped at the point of being shamefully unambitious! At excluding improvements viable even within its unreasonably narrow approach, like co-firing cleaner fuels alongside coal, or deploying carbon capture and sequestration (CCS). At concluding that no reductions are viable at natural gas plants, even though their emissions present a major and growing challenge. At trying to do the absolute bare minimum to meet the agency’s statutory obligation to act.

If only, if only. But in fact, this feeble designation of the “best system of emissions reduction” (BSER) is only just the start.

Easing protections to boost coal

Alongside a dramatic weakening of the BSER, EPA advances two additional modifications that—though obscure—have the net effect of shifting ACE from impotent to unfortunately significant.

First, EPA proposes affording states wide latitude in determining whether their individual coal plants should pursue HRI, emphasizing extreme deference to states in the face of “source-specific factors.” As a result, even though EPA’s modeling allowed for coal plants to either make improvements or retire, almost certainly many units would choose the third option instead: keep running and change nothing. Which casts EPA’s projections of nearly negligible carbon emissions reductions from ACE into even more doubt.

But the stunning truth for the coal industry is that protecting plants from the costs of new regulations is still not enough to overcome its true existential threat: dismal economics compared to other energy sources.

And thus the second proposed change: an amendment to an EPA program called New Source Review (NSR).

NSR exists to protect the public from potentially significant increases in pollution from sites undertaking major construction projects, requiring those emitters that could trigger such increases to simultaneously upgrade their pollution controls.

Industry has repeatedly worked to eliminate NSR, balking at the potential costs of implementing new public health safeguards; however, these efforts have been repeatedly struck down by the courts. Now, EPA air chief Bill Wehrum is trying again.

The agency is proposing that if the hourly emissions rate of a plant doesn’t increase, it should be excused from NSR requirements. And the hourly rate won’t increase, because upgrades are specifically intended to improve them. But at an annual level? Well, if a plant incorporates a major efficiency upgrade, it’s likely to run a whole lot more as a result. Therefore, even though the hourly emissions will not increase, the annual emissions will.

The result is a green light from EPA to sink major investment dollars into plants—regardless of pollution, regardless of payoff, and regardless of public health costs.

In ACE proposal, costs are high and benefits are low

And the upshot?

When the three tactics come together—an appallingly weak BSER, wide latitude afforded states to excuse plants from compliance, and work-arounds for NSR—we’re left with an emissions standard that is projected to increase coal generation even beyond that expected in a future with no carbon standard at all.

Generation Mix (thousand GWh). EPA’s analysis projects more generation from coal plants in the ACE scenarios (HRI options) than in the scenarios for CPP or full CPP repeal (RIA Figure 3-1).

It’s unsurprising, then, that when compared against the CPP, ACE is projected to result in increased emissions and worse pollution, leading to more illnesses and even more premature deaths. EPA’s own analysis projects annual increases on the order of tens of thousands of asthma attacks and lost works days, and hundreds to up to 1,500 more deaths annually from changes in fine particulate matter and ozone alone.*

EPA’s analysis projects annual increases in premature deaths from higher levels of fine particulate matter and ozone in the ACE scenarios (HRI options) relative to the CPP (RIA Table 4-6).

What’s more surprising, though, is that despite this administration’s continued rhetoric about the extreme burden of the CPP, the ACE proposal could—wait for it—actually cost more.

EPA’s analysis projects higher compliance costs in multiple years for ACE scenarios (HRI option) compared to the base case of the CPP (RIA Table 3-11). When foregone climate and health benefits are included, the value of the CPP vastly exceeds ACE across all years (RIA Tables 6-9 – 6-11).

Because unlike the CPP, this proposal forces compliance on a plant-by-plant basis, meaning operators don’t have the option of turning to other resources to achieve far greater reductions at far lower costs. That myopic view of our integrated power sector is extremely economically inefficient.

Further, these cost comparisons are even less favorable for ACE than at first glance, because when EPA compared ACE against the CPP, it did not include energy efficiency as a possible CPP compliance mechanism and it did not include trading between states—two major opportunities for cost reductions. This means that in reality, the CPP likely would have cost even less, even though it would have achieved far more.

ACE deals the nation a losing hand

In releasing this proposal, Acting EPA Administrator Andrew Wheeler triumphantly declared that the agency would no longer be “picking winners and losers.”

Unfortunately, it appears his strategy is to just pick losers instead.

And that deals us all a losing hand. For our health, our environment, our savings, our future.

Because it’s hard to imagine a worse long-term investment than pumping hundreds of millions of dollars into old coal plants for net societal losses in the face of inevitable industry decline. But that’s the exact course that the Trump Administration’s EPA is trying to force our nation to take.

Indeed, the administration willfully ignores the fact that for effectively no upside, real communities will be left in the lurch for a long time to come, paying for misplaced investments with their wallets, and paying for worsened pollution with their lives.

 

* NOTE: In parallel rulemakings, EPA is working to: 1) restrict the use of scientific studies that let us ascertain such impacts, and 2) limit the degree to which such impacts will factor into future decision-making.

Photo: Wigwam/Flickr

Brett Kavanaugh: Enemy of Innovation

The Supreme Court at night. Photo: Wikimedia

The confirmation fight over Supreme Court nominee Brett Kavanaugh begins next week with a hearing on Tuesday. Supporters and opponents are drawing battle lines over crucial issues such as abortion, health care, immigration, and whether the President is subject to criminal processes. But, as I wrote in an earlier blog, the nominee’s views on the role of federal agencies in protecting public health, safety and the environment deserve our attention as well.

Unlike others before him, Brett Kavanaugh is no “stealth nominee.” As a judge on the DC Circuit Court of Appeals, Judge Kavanaugh authored many opinions on the role of federal agencies, and these opinions provide an unusually expansive window into his thinking.

Unfortunately, a careful review of his opinions reveals a disturbing pattern:

Judge Kavanaugh is hostile to innovation by executive branch agencies. He has such rigid and antiquated views of the respective roles of congress and executive agencies that he leaves little room for federal agencies to try new approaches to existing problems or to take on new challenges. This should alarm not just those on the left who would like to see more robust federal response to threats to public health, the environment, worker safety and the like, but conservatives as well, who should also want government to be nimble and able to adjust to new circumstances.

To see this pattern, follow me on a guided tour of his thinking in three key cases.

Interstate air pollution and the “Good Neighbor Rule.”

Air pollution crosses state boundaries, and many states are in the unenviable position of having dirty air even though they are effectively controlling pollution sources within their state. For example, even if Maryland were to shut down every business in its state that emits ozone-causing pollutants, portions of the state would still be in violation of federal ozone standards due to pollution from neighboring upwind states. There is a provision in the federal Clean Air Act, colloquially called “the Good Neighbor” rule, that prevents one state from causing or significantly contributing to another state’s violation of federal air quality standards.

The problem is that it is fiendishly complex to implement the good neighbor rule. Many “upwind” states emit multiple pollutants to many downwind states, many downwind states receive multiple pollutants from multiple upwind states, and some states are both upwind and downwind states. Thus, it is exceedingly difficult to point a finger at any one particular upwind state and say that it is “responsible” for any downwind’s state air quality, and even more difficult to devise a formula to fairly and effectively apportion responsibility.

In 2011, after many false starts, the Environmental Protection Agency (EPA) crafted an ingenious “Transport Rule” to address the problem. The EPA conducted extensive analysis of the costs of pollution control to determine how expensive it would be, per ton of pollutant reduction, to ensure that upwind states in the aggregate do not cause downwind states’ air quality in the aggregate to exceed federal standards. The EPA then gave each upwind state a pollution “budget” for the state to use to reduce the pollutants that were wafting beyond their borders, based on this “cost per ton” reduction benchmark. In this way, just enough pollution would be reduced so that upwind states would not tip a downwind state into non-compliance, and the amount of each state’s pollution reduction would be based on a common yardstick of cost-effectiveness.

But Judge Kavanaugh struck this plan down. In his view, Congress had not expressly embraced this particular approach, and therefore the EPA was not allowed to implement it. His decision instead required EPA to determine each upwind state’s “proportionate responsibility” for pollution in downwind states and base the required reductions on that (even though the statute does not explicitly require that approach). Judge Kavanaugh’s decision largely ignored the compelling practical difficulty of assigning proportionate responsibility, or the many economic benefits of the EPA’s proposed approach.

As a result, his ruling would have consigned downwind states to many more years of air pollution while the EPA grappled with how to implement it.

Had Judge Kavanaugh’s “proportionate” responsibility approach been required by the law, that would be one thing. But it wasn’t. The Supreme Court, on a 6-2 vote that included Justices Kennedy and Roberts, found that that the statute did not require a proportionate responsibility approach (even assuming one could be fashioned). Instead, they ruled that Congress had vested the EPA with broad discretion to devise an appropriate remedy, and the Transport Rule was both fair and cost effective.

The Clean Power Plan oral argument

This same apparent hostility to agency innovation was on display in Judge Kavanaugh’s comments on the Clean Power Plan during a court hearing. That case involved a challenge to the Obama Administration’s Clean Power Plan, the nation’s first-ever rules to limit carbon pollution from coal and gas fired power plants, one of the largest sources of greenhouse gases in the United States. The Clean Power plan, a measure that received extensive input from UCS and many others, relied on an infrequently used provision of the Clean Air Act that allows the EPA to require polluters to use the “best system of emissions reduction” to address pollutants such as greenhouse gases.

After years of review and receipt of over 4 million comments, the EPA issued a final rule in October 2015. The EPA determined that the “best system of emissions reduction” for carbon pollution from power plants included three strategies that are in widespread use today—improving the efficiency of coal plants, switching from coal to gas, and substituting low or no carbon generation, such as wind, solar and nuclear. The EPA quantified the emissions reduction that would be possible using these strategies, and devised a national standard based on this quantification. The rule was intended to cut carbon emissions from power plants by approximately 30 percent by 2030, and formed a key component of the United States’ pledge to reduce its overall emissions as part of the Paris Climate agreement.

Industry and states filed suit to challenge the Clean Power Plan, and the case was heard by the DC Circuit court of appeals. No decision was ever issued on the case, but the court held an all-day oral argument in which Judge Kavanaugh participated. His questions and comments were revealing.

A major point of debate focused on the unusual nature of the regulation. When regulating conventional air pollutants, EPA often sets pollution control standards by focusing on what each plant can do with pollution controls at the source to cut pollution, e.g. a scrubber to lower sulfur dioxide emissions, or a baghouse to collect soot. In the Clean Power Plan, in contrast, EPA established CO2 limits by focusing not on what each individual plant could do to cut CO2, but rather what the system as a whole could do by shifting away from coal-based generation towards gas and renewables.

The opponents contended that this “beyond the fenceline” approach rendered it illegal, because Congress had not specifically authorized it.

Judge Kavanaugh’s questioning at the hearing demonstrated that he bought into this line of thinking. Judge Kavanaugh stressed repeatedly that the rule would have significant economic consequences, that the EPA was using a previously unused provision of the Clean Air Act to implement this approach, and that Congress had not specifically embraced the policy of shifting to low or no carbon generation. Judge Kavanaugh seemed unmoved by the strong counterarguments that: 1) EPA had a mandatory duty under the act to lower carbon pollution from power plants; 2) this was the most cost-effective and tested method of doing so; and 3) it fit the statutory command to deploy “the best system of emissions reduction.”

While the court never issued a ruling, it seemed clear that Judge Kavanaugh was prepared to strike down the rule on this basis, leaving behind no remedy for carbon pollution from power plants.

The Case of the Killer Whale

In 2010, an employee of Sea World was lying on a platform above a pool during a whale training show when a killer whale dragged her into the water, maiming and drowning her. This marked the third death by killer whales in a roughly 30-year period.

The Occupational Health and Safety Administration (OSHA) responded by requiring the company to ensure minimum distances and physical barriers between a trainer and a whale.

Sea World challenged this order, claiming that OSHA impermissibly extended its authority to regulate the risks of sporting events. Two of the three judges, including Merrick Garland, President Obama’s ill-fated Supreme Court nominee, dispensed with the challenge, ruling that OSHA had the authority to require these commonsense safeguards for workers.

Not so Judge Kavanaugh. His dissenting opinion begins as an elaborate paean to the thrill of sporting events in which physical risks are present. He never actually critiques the solution that OSHA devised on the merits, but rather deploys the familiar lawyer’s trick of a “parade of horribles,” claiming, e.g. that if OSHA can regulate killer whale shows, it can prohibit tackling in football or set speed limits on NASCAR racing (things that OSHA has never done). All of this, according to Kavanaugh, would go well beyond the authority that Congress intended OSHA to have.

As for the physical safety of employees who work with whales—according to Kavanaugh’s logic, that would be up to Congress to legislate.

Common threads

What unites these opinions—and others like them—is that, in each of these cases, Judge Kavanaugh struck down solutions (or appeared poised to do so), when a federal agency responded to an existing problem with a novel approach or sought to address a new problem in a manner we should all value—with creativity, scientific evidence, consideration of costs and benefits, and an eye towards feasibility and practicality. In none of these cases did the agency violate any specific provision of its authorizing statute. But, in all of these cases, Judge Kavanaugh opposed these solutions under the theory that Congress had not specifically blessed the choice the agency had made.

Judge Kavanaugh and his defenders claim that curbing the power of agencies is essential to ensuring that elected leaders in Congress, rather than unelected bureaucrats, make the fundamental policy choices. This seemingly benign principal is either naïve, malevolent, or both.

The fact of the matter is that Congress is largely paralyzed and incapable of passing legislation on virtually any important issue—witness the stalemates on immigration, gun control, climate, health care, and many others. And even when Congress manages to overcome gridlock, as a necessity it legislates in broad generalities, not specifics. This is because Congress does not have a crystal ball to foresee all the possible variations of a problem or all the best solutions to it. That is why Congress wisely delegates implementation to agencies staffed with experts, and why we use a process of notice and comment to ensure that all views are heard before a regulation becomes final.

There is an important role for the courts in this rulemaking process judges must make sure that agencies do not violate the law or disregard sound reasoning and evidence. But Judge Kavanaugh takes the judicial role too far. His insistence that Congress specifically endorse an agency plan that is otherwise scientifically sound and legally within its discretion is a formula for paralysis, and the maintenance of the status quo (which helps explain his appeal to groups such as the Koch Brothers and the US Chamber of Commerce).

All of us will regret it if Judge Kavanagh’s reactionary view becomes the guiding principle of a new Supreme Court majority. With Congress already deadlocked and demonstrating almost daily basis its inability to respond to pressing challenges, we cannot thrive if executive branch agencies are paralyzed as well.

Photo: Wikimedia

Ante la crisis fiscal, climática, y humanitaria, la comunidad científica boricua se moviliza para informar la política pública post-María

Puerto Rico atraviesa por el momento más crítico de su historia ante el embate de la grave crisis fiscal y climática que devastó a la Isla hace un año tras el paso del Huracán María. De cara a la reconstrucción del territorio no incorporado de los Estados Unidos, los puertorriqueños dentro y fuera de la Isla exigen un lugar en la mesa donde se tomarán las decisiones que definirán el tipo de país en que les tocará vivir y al que ansiamos regresar. ¿Están los boricuas dispuestos a permitir que se repitan los errores del pasado que nos pusieron en el camino de la ruina fiscal y la vulnerabilidad climática? O, por el contrario, ¿exigirán los puertorriqueños el diseño de una infraestructura energética, de vivienda, de educación y económica que responda tanto a las necesidades presentes como a las que se vaticinan ya debido al cambio climático?

El desarrollo de la infraestructura energética, industrial, urbana y económica en la Isla desde la invasión de 1898 ha respondido más a las necesidades geopolíticas de los Estados Unidos que a las propias de Puerto Rico, y no se ha tomado en cuenta la geografía, la localización en el Caribe, ni las necesidades y aspiraciones de la población puertorriqueña. Puerto Rico fue insertado violentamente—“a la brava”—dentro del esquema constitucional y de desarrollo de los Estados Unidos, y no han tenido los boricuas una sola oportunidad a lo largo de 120 años de colonización de hacer oír su voz en el proceso de toma de decisiones y formulación de políticas públicas federales que afectan sus vidas y que determinan temas tan fundamentales como el costo de vida (por ejemplo el alza en el costo de bienes de consumo debido a la Ley Jones), y el desarrollo económico (por ejemplo el impuesto a manufactureras estadounidenses en la Isla). En la esfera local, la intervención política en el Fideicomiso para Ciencia, Tecnología e Investigación mediante una votación de la Cámara tarde en la noche y a espaldas del pueblo, y la intentona de eliminar el Instituto de Estadísticas de Puerto Rico ponen de manifiesto el pobre ejercicio de los derechos democráticos en Puerto Rico en materia de política pública científica.

Esto, combinado con una maquinaria partidista criolla más interesada en adelantar ideologías políticas que en mejorar las condiciones de vida de los puertorriqueños, finalmente nos ha pasado la factura: una red eléctrica en ruinas y susceptible a colapsar ante la menor presión; una fuga masiva de población a los Estados Unidos; cierres masivos de escuelas públicas. La sociedad civil boricua, mientras tanto, exige condiciones de vida decentes y una recuperación equitativa; el gobierno del Dr. Rosselló responde con gas pimienta tras ya haber criminalizado el derecho a protestar antes de María.

La comunidad científica boricua presenta la conferencia “Ciencia en Acción: Política Pública Puertorriqueña Apoyada por Evidencia”

Ante este cuadro, la comunidad cientÍfica en Puerto Rico y en la diáspora se moviliza para servir como puente entre el gobierno y la sociedad civil. Union of Concerned Scientists, en cumplimiento de su compromiso con la justicia ambiental y climática, y el apoyo a políticas públicas basadas en evidencia científica para el beneficio de todos, se ha unido al liderato de la División del Caribe de la Asociación Americana para el Avance de la Ciencia (AAAS-CD) y Ciencia Puerto Rico (CienciaPR) para presentar la conferencia titulada Ciencia en Acción: Política Pública Puertorriqueña Apoyada por Evidencia, a celebrarse el sábado primero de septiembre del 2018 en el Centro Criollo de Ciencia y Tecnología (C3Tec) en Caguas, Puerto Rico. Además, se estará lanzando la Red de Acción de Política Científica de Puerto Rico (Puerto Rico-Science Policy Action Network o PR-SPAN), una red de científicos comprometidos a actuar como expertos en materias de ciencia y tecnología, y servir como enlaces en sus respectivos campos para asegurar la participación de la comunidad científica en la elaboración de políticas públicas relevantes para Puerto Rico.

UCS se enorgullece en apoyar el liderato de la Dra. Zulmarie Pérez Horta (AAAS), la Dra. Giovanna Guerrero Medina (CienciaPR), y el Dr. Juan Ramírez Lugo (AAAS-CD) en convocar la conferencia y el lanzamiento de PR-SPAN. Esperamos que el evento sirva para enlazar a la comunidad científica del Caribe y Puerto Rico en la gestión de política pública basada en la ciencia que tanto necesita la región y la Isla para una recuperación sostenible y equitativa a futuro.

El otro día un colega decía que a Puerto Rico no lo destruyó el Huracán María, sino que la crisis fiscal que arrastramos hace décadas ya había destruido la Isla. De esa manera me imaginé a María como una suerte de escoba climatológica que barrió los escombros de lo que la crisis fiscal destruyó. Ya que hemos visto que mucha de la infraestructura de Puerto Rico está en escombros, las y los científicos tenemos la obligación de movilizar nuestro conocimiento y poder colectivo para crear un futuro resiliente a crisis fiscales, energéticas, sociales, y climáticas. El país lo exige y los científicos han contestado el llamado.

El evento está abierto al público – regístrate aquí: Ciencia en Acción: Política Pública Puertorriqueña Apoyada por Evidencia

 

 

Trump Twists the Law to Bail Out Coal

Photo: Tammy Anthony Baker/Wikimedia Commons

As you may have heard, President Trump has a new toy – national security – that he’s using to sidestep congressional oversight and funnel taxpayer dollars to his fossil fuel buddies.

First, he weaponized “national security” to impose tariffs designed to stifle the economic competitiveness of solar power (it didn’t work). Now, he’s using it as misguided rationale for ordering the Department of Energy (DOE) to bail out uneconomic coal plants on our dime to the tune of billions of dollars, according to estimates. His hiding behind national security is like me hiding behind a lunchbox – it doesn’t work.

Unfortunately, if the Trump Administration gets away with it, there are profound consequences for our wallets, our environment, and yes – our national security.

an old coal-fired power plant in Chicago

President Trump’s efforts to bailout uneconomic coal plants could have profound consequences for our wallets, our environment, and our national security.

A leaked memo first reported by Bloomberg News details a plan by the DOE – officially ordered by President Trump on June 1st – to artificially prop up uneconomic coal and nuclear plants. “But wait,” you may be thinking, “hasn’t this administration already tried this and failed?” Yes, they have, and it did.

What’s different this time is the President’s inappropriate use of the federal government’s authority under two laws, the Federal Power Act and the Defense Production Act, to keep uneconomic plants operating based on the uninformed (and purposely misleading) contention that bailing out these plants improves the resiliency of America’s electricity supply and protects against theoretical cyber attacks on our energy infrastructure.

Where to begin on the many ways this proposal falls flat?

Before we dig into how these two laws are actually meant to be used, just for a moment consider the facts that:

This constitutes almost sector-wide agreement that there is no specific crisis that would warrant emergency orders under the guise of national security.

Outgoing FERC Commissioner, Robert Powelson, described Trump’s proposal as “the greatest federal moral hazard we’ve seen in years and something that would be the wrong direction for us to venture down.” In sum, when considered in the context of what the electric industry is saying, President Trump’s and DOE’s claim of a national security crisis falls flat.

Our president – charged with enforcing the law – is abusing the law (again)

What it all boils down to is the distinction between:

  • Appropriately using the law to solve a specific, identified problem with a specific, targeted solution, as opposed to
  • Stoking fear over broad, generalized claims of risk, then offering half-baked solutions that are poorly-disguised handouts to your political cronies.

Both the Federal Power Act and the Defense Production Act give authority to the DOE and President respectively to order power plants to continue operating when the nation’s electricity supply is truly threatened or to address a well-defined national security threat. But neither has ever been used in as broad and sweeping way, or under such flimsy rationale, as President Trump envisions.

The two laws at the center of it all

 The Federal Power Act has been used to enable DOE order specific power plants to continue operating when their shutdown threatens reliability. But it’s historically been used as a scalpel, not a sledgehammer – applying to a very select group of power plants for a short period of time in response to a well-defined, specific reliability issue. By “well-defined,” I mean based on analysis, input from experts, and initiated by those responsible for keeping the lights on. DOE pointed to the Federal Power Act in last year’s similar, failed proposal from DOE that was unanimously struck down by FERC.

Forcing consumers to bail out coal plants in the name of grid resilience is akin to forcing us to buy rotary phones to protect against cyberattacks on our communications system.

What’s new this time is the Defense Production Act that has been thrown into the mix. This law was passed in 1950 at the beginning of the Korean War. For over fifty years, this law has stood to ensure the nation’s industries are responsive to the needs of the U.S. during times of legitimate crisis, such as when a hostile force invades the U.S. or one of our allies, or when materials are needed to respond to a national disaster. These are actual events that require immediate and effective responses, not hypothetical and wildly broad threats dreamed up to push a political agenda. By twisting the law into this broad authority to interfere with the nation’s free markets, President Trump is abusing his authority and throwing out decades of precedent.

Take, for example, America’s communications network. Obviously, maintaining channels of communication is of a national security interest and faces its own cybersecurity threats. But does that mean we should all be required to install rotary phones in our homes because the CEO of a rotary phone company sat next to President Trump at a fundraiser, wrote him a check, and over their steak dinner lamented how the rotary phone business isn’t what it used to be? I hope not.

That’s exactly the type of scheme President Trump is trying to force on American consumers.

How about real solutions that build resilience?

To be clear, cybersecurity threats are a real issue and we need to be vigilant about addressing them. And there are agencies and organizations working together to assess and respond to real, identified threats to our electricity system. Recommendations are on the table to improve coordination and communication, strengthen investments, and harden our energy infrastructure against cyberattack. None of them that I’ve seen mention paying billions of dollars to outdated, inefficient, and dirty coal plants. In fact, a number of cyber experts have decried this bailout plan’s ability to keep us safe from cyberattacks.

The question in my mind is: if we’re spending billions to bail out coal and nuclear plants on the premise of national security, what real solutions aren’t we spending that money on? By diverting attention from real solutions, President Trump’s proposal actually makes us less safe. Further, keeping uneconomic coal plants operating on the consumer’s dime only exacerbates the real national security threat –  both here and abroad – that is climate change.

Photo: Tammy Anthony Baker/Wikimedia Commons Photo: swanksalot/Flickr  Photo: Nition1 [CC BY-SA 3.0]/Wikimedia Commons

A Power Plan No More: Trump Team Slaps Down Progress, Clears Way for Dirty Air

Photo: Steve Tatum/Flickr

Today, with the legal system pinning its back on the ropes, the Trump Administration’s Environmental Protection Agency (EPA) released a new proposed rule for power plant carbon pollution standards.

Or perhaps more accurately, EPA proposed a new version of an old rule, as the content retreads that which the agency already finalized three years ago, previewed four years ago, was directed to pursue five years ago, and solidified the obligation to create nearly ten years ago.

But history, learning, progress—what’s that? For this administration, the opportunity to stand on the shoulders of those who came before; to reach higher, stretch further; to learn and evolve and grow—to all of that, the Trump Administration spat out a surly no.

And so today what we get instead are our public health protectors turning their backs on the future, on science, on us. Craven in the face of the real and true climate crisis at hand, these leaders took an opportunity to deliver forward progress and delivered a postcard from the past instead, full of old assumptions, shameless exemptions, and out-and-out deceit.

Be incredulous.

Get upset.

Then, demand more.

Because these are our purported leaders yanking us right in reverse, exactly at a time when the real path forward could not be clearer—we’ve gathered all the tools around us needed to succeed, and heard all the devastating calls to action we can bear.

We had a plan. It wasn’t enough, but it was a start. Today, we have a power plan no more.

From landmark to off the mark in ½ an administration flat

In August 2015, following years of robust rulemaking on top of years of painstakingly constructed motivating frameworks, the Obama Administration’s EPA finalized the Clean Power Plan.

This was a landmark rule by all accounts. It carefully navigated the particularities of the nation’s integrated power system, giving states wide flexibility to achieve gains where best they could, while balancing that latitude against the guiding hand of public health protections. The rule underwent record levels of stakeholder engagement, evolving and improving over time as it incorporated diverse input, and its underlying framework allowed room to be improved further still in the face of future change.

What’s more, contrary to polluter cries of  “unachievable” and “a threat to grid reliability,” the Clean Power Plan was in fact conservative in the face of historic power sector change, rendered nearly out of date before it ever went live.

Because by the close of 2017—years before the first compliance deadline ever came to pass; before, even, the rule ever actually got underway—the nation’s power sector had already reduced its carbon dioxide emissions 28 percent compared to 2005 levels—well along the way to the 32 percent by 2030 requirement the Clean Power Plan had originally had in store.

Of course, that’s at the national level. Across the country, different states are at different points in the transition, and that’s where the Clean Power Plan’s true value came in: charting a course forward for laggards, too, to ensure cleaner air would be available to all.

But the Clean Power Plan is not our nation’s power plan anymore.

Even though it was eminently achievable.

Even though people, real people, will be hurt because of this public health rollback.

Even though the only way to justify this change was for the agency’s new analysis to farcically rule out large swaths of what can be counted as a benefit, and amp up what gets considered as a cost. And even then still only because the agency recognized that coal plants would need a further boost, so gave them permission to pollute far more by amending requirements for New Source Review.

And still beyond that, beyond all of that, what’s most jarring is the fact that in issuing this proposed rule, the Trump Administration is tacitly acknowledging that climate change is real and human-caused, as it’s still abiding by the agency’s 2009 Endangerment and Cause or Contribute Findings, the foundational framework that ultimately resulted in the Clean Power Plan. And that means that EPA acknowledges it has a responsibility to act.

Which brings us to this: If you acknowledge a responsibility to act, and you deliver a proposal that could increase emissions instead, then just who is it you’re working to protect?

Because stunningly few will be better off under this rule, and heaven help the rest.

We’ll win—But that’s not good enough

The Union of Concerned Scientists will be actively engaged in this rulemaking process, joining with others to issue a deep and forceful rejection of the cynical and capricious proposal at hand. And when the inevitable day in court arrives, the law will be on our side.

But that doesn’t help people struggling today:

  • Coal plants are closing today. New coal plants are not being built. What coal workers and coal communities need is real and true support; a committed path to the future, not dangling distractions in the face of wholesale change.
  • Coal-fired power plant pollution is devastating public health today. Public health and environmental wreckage do not improve simply because you’ve stopped counting or considering all that they are forced to bear.
  • Climate change impacts are being felt today, and growing worse every day. Heat illness, wildfires, flooding—it’s happening, and communities are paying the price. Acknowledging the responsibility to act and then doing anything but is as gutless as it gets.

What we need is a plan. We need leaders willing to lead, and we need a plan.

But with this new proposal, we did not get leaders, and we lost our power plan.

Photo: Steve Tatum/Flickr

Will California Continue its Progress on Clean Electricity?

Source: geniusksy/Adobe Stock

With two weeks left in the California legislative session, the fate of several proposals that would make big changes to California electricity policy are still up in the air.

There’s Senate Bill 100 (De León) which would raise the Renewables Portfolio Standard to 60% by 2030 and create a longer-term goal to reach 100% carbon-free electricity by 2045.  Assembly Bill 813 (Holden) would lay the groundwork for the California Independent System Operator (the grid manager for most of the state) to transition to a regional electricity market. Senate Bill 64 (Wieckowski) would improve energy agencies and air regulators’ understanding of how natural gas power plant operations are changing over time and how those changes may impact air quality.

Swirling around all these issues is whether and how the Legislature is going to weigh in this year on utility wildfire liability.

No matter what happens in Sacramento this August, it seems clear to me that California will need to make some big decisions in the coming years. Will we continue our clean energy progress? Will we seek more ambitious solutions as climate change impacts worsen?

Creating a robust, resilient, and low-cost supply of carbon-free electricity is critical to reducing the global warming and air pollution that results from consuming fossil-based sources of energy across many sectors of our economy. Here are 7 issues (in no order of importance) at the top of my mind that I think need to be addressed in the near future:

  1. Set a long-term clean electricity goal, but don’t take our eyes off 2030: it takes time to make the necessary investments in carbon-free generation and other supporting infrastructure like transmission lines and the distribution grid. We’ll need long-term signals—like SB 100—to help guide the research and investment that will be needed to make this transition a reality. At the same time, we need to make sure our nearer-term (2020 and 2030) clean energy goals are met in ways that allow Californians to experience the environmental and economic benefits of these early actions.
  2. Plan to transition away from natural gas: coal is used less and less in California and by 2020 all direct imports of coal power will be phased out. But we still depend on natural gas generation to meet about a third of our electricity needs and that number will not decline enough without a concerted effort. If Californians truly want to take the carbon out of our electricity sector, we need a plan for how to wean ourselves off this fossil fuel. UCS just released an analysis that we hope begins a longer conversation about how to transition away from gas and how to make sure we go about reducing natural gas generation in the most cost-effective and socially equitable way possible.
  3. Make the grid more flexible with clean technology: wind and solar generation vary with weather patterns, which means the clean grid of the future must be flexible enough to adapt to greater variability in electricity supplies. This flexibility needs to come from clean technologies like energy storage, that can control their power output. We also need more strategies, like time varying electricity rates, to shift our electricity use towards times of the day when renewables are most abundant. The debate over AB 813 may be fierce, but regardless of this year’s choice to launch a Western regional grid or not, grid operators in the future need to be able to share resources and access renewables throughout a wider geographic footprint. It’s just more efficient and the grid will be more flexible and able to accommodate more carbon-free electricity if California can sell its excess solar power to other states during the day, and buy excess wind power from its neighbors at night.
  4. Unlock the value of distributed energy resources: there are unique and valuable localized benefits to clean energy investments like rooftop solar and small-scale storage that, when installed in the right locations, save us money by postponing or avoiding upgrades to the distribution system. Smaller, more local clean energy resources can make the grid more resilient when a big power plant or transmission line goes down because of extreme weather or some other type of grid emergency. We need a better way to quantify the value of these resources to make paths to market clearer for technology innovators.
  5. Do more to reduce carbon in the building sector: heating water and space in California’s homes and buildings with natural gas emits as much global warming pollution as all in-state power plants. And, this doesn’t count methane that leaks from gas pipelines. California’s policies and programs to reduce natural gas usage in buildings lag behind other clean energy efforts. In the next few years, decision makers need to identify ways to lower the cost of technology that can reduce energy use in buildings, and transition away from fossil fuels for the energy we need.
  6. Use renewables to charge electric cars: millions of electric vehicles on the road are a key part of the state’s vision for clean energy in the next decade. We need to make sure we charge all these electric cars when renewables are most abundant. This means building new charging infrastructure and creating consumer habits that will maximize daytime charging and staggering when cars draw power from the grid to minimize surges in electricity demand.
  7. Make the clean energy transition equitable: Talented and skilled workers will be needed to create California’s clean energy future – in infrastructure, manufacturing, software, construction, maintenance, and more. The public, private, and non-profit sectors, including educational institutions, should collaborate to train and develop the workforce needed to fuel this growth. As new business models for the clean energy grid are developed and tested, workers should benefit from the industry’s growth and be paid fairly.

Advancing all this good stuff will require robust and cross-sectoral communication, information sharing, investment planning, and risk-management processes that engage all stakeholders. This is especially important as California’s electricity and transportation sectors have grown and become more diverse, and as California strives to make deeper cuts to global warming emissions throughout all sectors of its economy, including the goods and services we use.

Legislators and advocates are busy working on the future laws and regulations that will make a clean energy future a reality. But all of us have a part to play in this transition if we want California to be a global leader. All eyes are on California to show the world how to wean millions of people and an enormous economy off fossil fuels. It’s imperative we get this right.

Why Would Illinois Want More Pollution from Coal Power?

Old coal-burning power plants have the greatest emissions per energy delivered. Photo: snowpeak/Wikimedia Commons

Changes to an important state air pollution standard are being considered by the Illinois Pollution Control Board this summer. To assess the potential effects of changing the rule, my colleagues and I collaborated with the Clean Air Task Force to analyze the public health impacts of coal-fired power plants in Illinois. We found striking differences among the Dynegy plants that would be affected by the proposed rule change to be decided on as soon as Thursday August 23.

Under the current Illinois Multi-Pollutant Standard (MPS), the Dynegy coal plants that cause the most harm to Illinois residents are the ones more likely to be closed or be upgraded with air pollution control technology. But if the Pollution Control Board adopts Dynegy’s proposal to change how state air pollution limits are calculated, it could result in the company closing its cleaner plants and keeping its dirtiest plants open because it would no longer need the cleanest plants in its fleet to comply with the state requirements.

My colleague James Gignac, lead analyst in the Midwest Climate and Energy Program at the Union of Concerned Scientists (UCS), further reflects on the impacts of the proposed change to the MPS, below.

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Recently acquired by Vistra, Dynegy is a Texas-based company that owns 11 power stations in Illinois with a total generating capacity of 8,200 megawatts. Eight of these stations are coal-fired power plants connected to the grid operator MISO. Dynegy is not a regulated utility (it is an independent power producer or merchant generator), yet has sought to force ratepayers to subsidize its power plants. In addition to its legislative efforts, Dynegy has been working with the Illinois EPA to change the Illinois MPS, a 2006 clean air standard that applies to the eight coal plants in MISO territory.

The proposed changes to the standard would create annual caps on tons of sulfur dioxide and nitrogen oxides emitted by the company’s entire coal fleet rather than maintaining the existing standards that require small groups of plants to meet stringent rates of pollution (in pounds per the amount of coal burned). If approved, the new limit on sulfur dioxide would be nearly double what Dynegy emitted last year and the cap on nitrogen oxide emissions would be 79 percent higher than 2016 emissions. Sulfur dioxide leads to formation of particulate matter, and nitrogen oxides create ozone, both of which lead to many serious respiratory and cardiovascular health effects. Illinois EPA and Dynegy argue that emissions theoretically could have been higher under the existing standard and therefore the new caps should be considered an improvement that also provides operational flexibility to the industry.

What’s at stake?

As part of an upcoming report, UCS partnered with the Clean Air Task Force which has developed a methodology and software application to estimate the health impacts of individual coal plants. Below is a chart showing key annual public health impacts caused by the eight Dynegy plants subject to the MPS based on their 2016 operations:

Estimated 2016 Health Effect Incidents of Eight Dynegy Coal Plants

Note: Because Newton Unit 2 was permanently retired in September 2016, we have adjusted the plant-level data provided to us by CATF in proportion to the megawatt-hours generated by Newton Unit 1 in 2016. Coal Plant Location Megawatt-hours (2016) Premature Deaths Heart Attacks Asthma Attacks Asthma ER Visits Acute Bronchitis Hospital Admins Baldwin Baldwin, IL 9,793,431 26.1 15.7 171.8 11 14.9 7.3 Coffeen Coffeen, IL 4,606,098 4.4 2.6 29.1 1.9 2.5 1.2 Duck Creek Canton, IL 2,108,062 1.5 0.9 10.3 0.7 0.9 0.4 E.D. Edwards Bartonville, IL 2,811,862 36 21.9 237.6 15 20.7 10.2 Joppa Joppa, IL 3,162,666 38.6 22.8 248.1 15.5 21.6 10.8 Havana Havana, IL 2,353,449 9.2 5.6 61.0 3.9 5.3 2.6 Hennepin Hennepin, IL 1,436,468 24.5 14.9 161.6 10.2 14.1 7.0 Newton Unit 1 Newton, IL 2,157,885 25.5 15.3 165.7 10.4 14.4 7.1

 

Coal plants emit various types of air pollutants but can reduce the harmful impacts by installing pollution controls such as scrubbers. This technology can be a major long-term investment and many plants do not have the full suite of equipment. In addition to pollution controls and emission levels, the health effects of coal plants are influenced by their downwind population levels.

We can see from the data above that Coffeen and Joppa both produced over 3 million megawatt-hours in 2016, yet the health impacts from Joppa were dramatically higher despite having a lower power output. Similarly, Duck Creek and Newton Unit 1 produced roughly equal megawatt-hours in 2016 but the harm caused by Newton Unit 1 was far greater.

In other words, the dirtiest plants in Dynegy’s Illinois fleet cause approximately 9 to 17 times more premature deaths compared to Coffeen and Duck Creek, respectively.

The concern of environmental and public health advocates is that Dynegy’s proposed change to the MPS would allow it to close cleaner plants like Coffeen and Duck Creek, which are more expensive to operate, because the company will no longer need them to offset pollution from the dirtier units. Dynegy could then run plants like Joppa and Newton Unit 1 to generate the same amount of electricity but result in greater health impacts like those listed above. Closing plants reduces the amount of available electrical generating capacity in the region which tends to increase power prices paid to companies like Dynegy. Closing cleaner plants that are more expensive to operate results in greater profits for Dynegy.

If the MPS is not changed, Dynegy would more likely retire the dirtier and more harmful plants instead. Less air pollution is a good thing for the health of Illinois residents, and continued progress toward cleaner air was the intent of the rule when it was originally adopted.

The Illinois Pollution Control Board held hearings on the proposed rule change this past winter and spring.  A decision is expected soon.

***

James’ reflections highlight the need for the Illinois Pollution Control Board to reject the proposed rule change because it will not benefit the environment and public health of Illinois residents. The operational flexibility that Dynegy and Vistra desires should not outweigh the public health benefits of the existing rule.

Profitable companies who knowingly purchase aging, polluting coal plants should expect to comply with existing law and responsibly install modern pollution controls or invest in cleaner, more competitive sources of generation. The Dynegy plants can be reliably replaced with other resources and doing so with renewable energy and energy efficiency can deliver significant economic benefits and bill savings to electric customers in central and southern Illinois. Vistra and Dynegy’s efforts to keep their coal plants open at the same time they attempt to roll back air quality standards is contrary to the clean energy transition underway in Illinois and should be rejected.

Our upcoming report, available in October, will further explore the many benefits of replacing Illinois coal plants with clean energy technologies.

Photo: snowpeak/Wikimedia Commons Photo: Wavebreakmedia/Shutterstock

For Washington Voters, I-1631 is a Chance to Tackle Climate Change Head On

Photo: Troye Owens/Flickr

The magnitude of the climate challenge is daunting; a constellation of causes and impacts, promising no simple fix.

But a new proposal in Washington state has identified a powerful place to start.

I-1631, on the ballot this November, is grounded in the reality that to truly address climate change today, it’s simply no longer enough to drive down carbon emissions—communities must now also be readied for climate impacts, including those already at hand, and all those still to come.

As a result, this community-oriented, solutions-driven carbon pricing proposal is generating enthusiastic support from a broad and growing coalition across the state.

No single policy can solve all climate challenges, but I-1631 presents a critically important start. And, because it was specifically designed to prioritize those most vulnerable to climate change and the inevitable transitions to come—through intersections with jobs, health, geography, and historical social and economic inequities—the policy stands to be a powerful change for good, and that is the very best metric we’ve got.

Here, a summary of what it’s all about.

Overarching framework

I-1631 is organized around a commonsense framework: charge a fee for carbon pollution to encourage the shift toward a cleaner economy, then accelerate that transition by investing the revenues in clean energy and climate resilience.

The Clean Air, Clean Energy Initiative states:

Investments in clean air, clean energy, clean water, healthy forests, and healthy communities will facilitate the transition away from fossil fuels, reduce pollution, and create an environment that protects our children, families, and neighbors from the adverse impacts of pollution.

Funding these investments through a fee on large emitters of pollution based on the amount of pollution they contribute is fair and makes sense.

I-1631 emerged as the result of a years-long collaboration between diverse stakeholders—including labor, tribal, faith, health, environmental justice, and conservation groups—leading to a proposal that’s deeply considerate of the many and varied needs of the peoples and communities caught in the climate crossfire. The Union of Concerned Scientists is proud to have been a part of this alliance and to now support I-1631.

How it works

There are two main components to I-1631—the investments and the fee. Let’s take them in turn.

Investing in a cleaner, healthier, and more climate-resilient world.

I-1631 prioritizes climate solutions by investing in the communities, workforces, and technologies that the state will need to thrive moving forward. This means identifying and overcoming the vulnerabilities these groups face, and re-positioning the state’s economic, health, and environmental priorities to achieve a resilient and robust future.

The policy proactively approaches this by assigning collected fees to one of three investment areas, guided by a public oversight board and content-specific panels:

  • Clean Air and Clean Energy (70 percent): Projects that can deliver tens of millions of tons of emissions reductions over time, including through renewables, energy efficiency, and transportation support. Within four years, would also create a $50 million fund to support workers affected by the transition away from fossil fuels, to be replenished as needed thereafter.
  • Clean Water and Healthy Forests (25 percent): Projects that can increase the resiliency of the state’s waters and forests to climate change, like reducing flood and wildfire risks and boosting forest health.
  • Healthy Communities (5 percent): Projects that can prepare communities for the challenges caused by climate change—including by developing their capacity to directly participate in the process—and to ensure that none are disproportionately affected.

Of these investments, the initiative further specifies a need to target well over a third of all funds to projects that benefit areas facing particularly high environmental burdens and population vulnerabilities, as well as projects supported by Indian tribes. This works to ensure that those who are most vulnerable are not left behind, but instead positioned to thrive in a changing world.

Another vital part of the proposal is that at least 15 percent of Clean Air and Clean Energy funds must be dedicated to alleviating increases in energy costs for low-income customers that result from pollution reduction initiatives. Without such a stipulation, the policy could lead lower-income households to feel its effects more. But instead, I-1631 directs funds to eliminate such cost increases. This could be through energy-saving investments, such as weatherizing a home, or by directly limiting costs, such as through bill assistance programs.

Qualifying light and power businesses and gas distribution businesses can, instead of paying a fee, claim an equivalent amount of credits and then directly invest in projects according to an approved clean energy investment plan.

Charging a fee for carbon pollution.

To pay for these investments, I-1631 would charge large emitters for the carbon emissions they release. In turn, the policy would send a signal to the market to spur innovation and investments in lower-carbon, less polluting alternatives.

The proposed fee begins at $15 per metric ton of carbon content in 2020 and proceeds to increase by $2 per metric ton each year thereafter, plus any necessary adjustments for inflation. This is estimated to generate hundreds of millions of dollars annually.

Notably, the price does not go up indefinitely. Instead, as a reflection of the intention of the price—to achieve a climate-relevant reduction in carbon emissions—once the state’s 2035 greenhouse gas reduction goal of 25 percent below 1990 levels is met, and the state’s emissions are on a trajectory that indicates compliance with the state’s 2050 goal of 50 percent below 1990 levels, the fee is to be fixed.

And just who is it that pays? Generally, the largest emitters in the state—fossil-fuel fired power plants, oil companies, and large industrial facilities.

However, the proposal also recognizes that Washington has some industries in direct competition with others in places without a comparable carbon fee, and thus a price on carbon could make them less competitive. As a result, the policy specifically provides select exemptions to these entities, including agriculture, pulp and paper mills, and others. The proposal also excludes coal-fired power plants that have committed to shutting down by 2025, in recognition of existing legal settlements and constraints.

Ultimately, the policy seeks to spur the state’s economy towards a forward-looking, carbon-considerate model, but to do it in such a way that workers and vulnerable communities do not end up bearing a disproportionate share of the costs.

Where it stands

Following months of organizing and signature gathering, on top of years of stakeholder engagement and collaboration, I-1631 will officially be put to vote in Washington this November.

This is not the first time carbon pricing has come up in the state; I-1631 builds from previous measures attempted in the legislature and on the ballot.

And this policy has the advantage of being designed from the ground up. It unites diverse stakeholders in common cause, and proactively addresses the fact that vulnerable communities are at risk of being hit first and worst.

What’s more, I-1631’s method of tackling the problem from both sides—charging a fee for pollution and investing funds in that which it aims to change—is an effective policy design, and a popular one at that. It wouldn’t be the first carbon pricing policy in the US, with cap-and-trade programs running in California and the Northeast, though it would be the first to employ an explicit price.

In the face of all this positive momentum, fossil fuel interests have been mounting an aggressive opposition campaign. But their desperate attempts at finding an objection that will stick—calling out threats to jobs and undue burdens on the poor—are undercut by the policy’s careful exemptions, sustained support for worker transitions, and significant direct attention paid to those who need it most.

The fact is, climate change is here, now, and communities are suffering the costs. I-1631 points a way forward, for all.

With this proposal, Washington is demonstrating that climate and community leadership can still be found if you let the people speak—heartening at a time when evidence of such leadership from the nation’s capital is itself sorely missed.

Trump Administration Takes Aim at Public Health Protections

Photo: Daniels, Gene/ The U.S. National Archives

In a new regulatory effort, the Trump Administration’s Environmental Protection Agency (EPA) claims to be working to increase consistency and transparency in how it considers costs and benefits in the rulemaking process.

Don’t be fooled.

Under the cover of these anodyne goals, the agency is in fact trying to pursue something far more nefarious. Indeed, what the EPA is actually working to do is formalize a process whereby the decision of whether or not to go ahead with a rule is permanently tilted in industry’s favor. How? By slashing away at what the agency can count as “benefits,” resulting in a full-on broadside to public health.

EPA handcuffs itself to let industry roam free

Though it may seem obscure, the implications of this fiddling are anything but.

That’s because EPA regularly engages in what’s known as “cost-benefit analysis,” or a comparison of the costs of implementing a rule to the benefits that are expected to result. This doesn’t always shape how a standard gets set—for some air pollutants, for example, Congress actually requires the agency to specifically not develop standards based on cost, but rather based on health, to ensure that the public stays sufficiently protected. Other regulations weigh costs at varying levels of import, related to the specifics of the issue at hand.

Still, cost-benefit analysis is widely used, even when it describes rather than informs. The process lends context to rulemaking efforts, though it certainly isn’t perfect: cost-benefit analysis faces challenges, especially in quantifying those impacts that don’t lend themselves well to quantitative reductions. But on either side serious practitioners agree: this new effort by EPA is ill-conceived.

And the consequence of EPA’s proposed manipulations? Well, when the agency next goes to tally up the impacts of a rule, the traditionally towering benefits of its regulations could suddenly be cut way down in size. Not because public health is suddenly fixed, but just because it’s the only way to get the equation to solve in favor of industry time after time.

What’s more, alongside this effort EPA is simultaneously endeavoring to place untenable restrictions on the data and research the agency can consider in its rulemaking process, effectively hamstringing its own ability to fully and adequately evaluate impacts to public health.

Together, the net result would be a regulatory framework aggressively biased in industry’s favor, and a Trump Administration suddenly able to claim that public health protections are just not worth the cost.

To industry, with love

The good news is that this nascent proposal is incredibly hard to defend—on morals, and on merits.

The bad news is that the Trump Administration is highly motivated to do everything it can to find in favor of industry, so it’s still sure to be a fight.

Here, three key points to note:

  1. Ignoring co-benefits would permanently tilt the scales—and just does not make sense. One of the primary ways EPA is looking to shirk its regulatory responsibilities is by attempting to exclude the consideration of “co-benefits,” or those that arise as a result of a rule but not from the target pollutant itself, during its cost-benefit evaluations. Absurd. Although these indirect benefits—the avoided ER visits, the precluded asthma attacks, the workdays still in play—are just as real as indirect costs, under this proposal only the latter would continue to stay in the ledger.

 

  1. Requiring consistency across agency actions goes against EPA’s statutory requirements. The EPA is suggesting that cost-benefit methodologies should be applied uniformly across rulemaking efforts. This not only fails to recognize that not all protections should be evaluated in the same ways, but also that Congress itself outlined differences in how the agency should evaluate proposals depending on specific circumstances. As a result, the agency isn’t even allowed to do what it’s trying to do. And even worse than this nonsense standardization? The fact that the agency is trying to implement the requirement at the level least protective of public health.

 

  1. EPA already tried this out, and those efforts were roundly denounced. Prior to this proposal, EPA actually made a preliminary attempt at using a co-benefits-limited approach in its proposed repeal of the Clean Power Plan. There, it attempted to separate out and consider only the benefits that accrued from carbon dioxide emissions reductions, despite the billions of dollars of additional health benefits anticipated to come from indirect benefits of the rule. This action was taken alongside a slew of other discriminatory accounting maneuvers, revealing an agency desperately doing anything it could to deliver for industry, including by tipping the scales.

This regulatory effort was carefully constructed to conceal intentions and motivations, but it’s clear from the agency’s surrounding narrative and parallel policy initiatives that it is being advanced in strict pursuit of an industry-favored finding.

Where to next?

Let’s not forget the mission of the EPA: to protect human health and the environment.

From that frame, it’s hard to see what good this effort would do. It doesn’t bring EPA closer to an objective analytical truth, it doesn’t elevate and further that which is in the public’s interest, and it certainly doesn’t suggest an agency doing everything it can to advance its one core mission.

Instead, what we see is EPA displaying shockingly overt piety to industry over public, and in the process, failing to defend the very thing the agency was created to protect.

We’ve filed comments with EPA to call this rigged process out, and we’ll continue to stand up for the mission of the agency even when EPA lets it slide.

Because this demands a fight.

A fight for an agency that fights for the public, and a fight for a ledger that pulls people and places out of the red, not permanently cements them in it.

Photo: Daniels, Gene/ The U.S. National Archives

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