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Stimulus or political business as normal?

By Kennedy Maize

“Stimulus” has become the universal political solvent in Washington since the advent of the Obama administration. No matter what narrow special interest, no matter what piece of local pork or advocacy policy preference, it all gets dissolved and incorporated into the administration’s stimulus package.

You call it “stimulus.” I call it “earmarks.” The stimulusificators are winning.

Unfortunately, this means that a lot of what is touted as stimulus is considerably less than what meets this jaundiced eye.

A classic example is a provision in the House-passed bill that mandates that state electricity regulators adopt “decoupling” of sales and revenues before the jurisdictional utilities can access new federal energy efficiency funds. This has nothing whatsoever to do with economic stimulus, but is a long-sought goal of some energy efficiency advocates.

The evangelists of decoupling – in a policy debate going back to the early 1990s – argue that traditional practices in most states, which set electric rates and profit levels and let the utility earn on sales, discriminate against conservation programs. The utilities, the case goes, have an incentive to sell more electricity under traditional regulation, not conserve, because the more they sell, the more than earn. By reversing the incentives – giving the utility a reason to encourage energy conservation over usage – the utilities will reduce existing generation, and slash the need for new generation.

It’s an argument that has won support from some utilities, most notably San Francisco-based Pacific Gas & Electric Co. In PG&E’s case, there is no way the utility is going to be able to build new generation anywhere anytime soon, so it must convince its customers to use less electricity. It will have to spend to accomplish that conservation. Under conventional ratemaking, that means PG&E would see revenues declining as its customers use less electricity as a result of its conservation spending.

So for PG&E, decoupling is the Big Rock Candy Mountain, complete with cigarette trees and soda-water fountains. Consumers buy less electricity, while revenues rise, costs are stable, and profits climb. The utility can spend to cut energy use, without paying the penalty of seeing its revenues fall when consumers use less electricity, and still earn a return on its capital investment. Yow!

How did the provision get into the House Appropriations Committee bill language? “It’s the hidden hand of (Democratic House Speaker Nancy) Pelosi,” a veteran energy lobbyist told POWER Blog. “PG&E likes it, the greens like it, Pelosi likes it. It’s in.”

But does that make sense for the rest of the nation? I think it’s a dangerous game, as it leads to underinvestment in new generation, declining reliability margins, and a beggar-your-neighbor attitude. California has already decided that it will not allow new coal-fired generation instate, and that it won’t buy power generated by coal anywhere in the universe. It’s a “greener-than-thou” approach that jeopardizes the Rocky Mountain west.

Does this make sense for the entire nation? Three important electric lobbying groups argued against the provision in the House bill, section 6001(a)(1)(A). They failed to highlight the issue in the House, but may get some traction in the Senate.

In a January 22 letter to House and Senate leaders in both parties, Chuck Gray, executive director of the National Association of Regulatory Utility Commissioners, wrote, “We respectfully submit that imposition of specific sets of regulatory requirements on 51 state commissions is inconsistent with Congress’s goal of promoting cost-effective energy efficiency and stimulating the economy.” The Gray letter, referencing the currently omnipotent political mantra, said that the provision could delay “delivery of stimulus funding into the economy.”

Subsequently, the Electricity Consumers Resource Council (ELCON), representing large industrial electric consumers, and the National Association of State Utility Consumer Advocates (NASUCA), champion of the little guys, also opposed the House language. NASUCA’s Charlie Acquard said, “A one-size-fits-all approach mandating that states adopt one specific regulatory approach to achieve energy efficiency simply does not recognize that different approaches may be more appropriate, depending on the state.”

ELCON’s John Anderson said, “revenue decoupling basically guarantees each utility a level of revenues ‘decoupled’ from its volumetric sales. Without revenue decoupling, large and small consumers can and will make energy efficient investments, and they will enjoy the savings. With revenue decoupling, a utility would manage the energy efficiency program and consumer savings could be reduced or eliminated in order to maintain the utility’s revenue level.”

There’s an interesting debate here, and I’d like to see it played out in public. But the way to resolve it isn’t to declare the winner and mandate the outcome in federal law. Decoupling sure as heck isn’t economic stimulus; that’s a major problem with the Obama stimulus package as it passed it House. It’s loaded with extraneous, non-stimulus provisions. These are the moral (and practical) equivalents of earmarks.

The administration and its congressional allies chose to engage in the traditional practice of log-rolling in order to get quick action on the legislation. Was that wise? We will see as time passes, but the process still has to odor of rancid bacon fat.

Schleede: Buy bulbs, not wind, for stimulus

By Kennedy Maize

Congress will make a big mistake if it provides money for accelerated wind power development as part of the Obama administration’s new economic stimulus program, according to veteran energy analyst Glenn Schleede. Instead, he says in a recent privately-published paper, “Investment in energy efficient light bulbs would save more than five times as much electricity in five years as an equal dollar investment in wind turbine would produce in 20 years.”

Here’s how Schleed makes his computation:

1. Calculate the potential output from a wind turbine. Schleede notes that wind machine with a capacity of a megawatt would cost about $2 million, based on a statement by former Clinton administration renewable energy guru Joe Romm in a Bloomberg News reprot on January 15. “If that turbine achieved a capacity factor of 35%,” writes Schleede, “it would produce 3,066,000 kilowatt-hours (KWh) of electricity in one year or 61,320,000 KWh over 20 years. (1,000 KW x 8760 hours per year x 35% capacity factor = 3,066,000 KWh and 20 x that = 61,320,000 KWh.)

2. Calculate the energy savings from energy-efficient light bulbs. “With energy-efficient light bulbs now selling for about $2 each, $2 million would buy one million light bulbs,” says Schleede. “Replacing a 50-Watt incandescent bulb with a 15-Watt energy efficient build providing similar light would save 45 Watt-hours in 1 hour. If used 4 hours per day year for around 5 years, saving from the one bulb would be 328.5 KWh. One million bulbs would save 328,500,000 KWh over 5 years.

On top of that, says Schleede, who has served over the years in the Atomic Energy Commission, the Ford White House, the National Coal Association, the Reagan White House (the third ranking official in the Office of Management and Budget), and as a key executive for the New England Electric System, electricity saved has advantages over electricity made. These are:

* Saved electricity doesn’t require new transmission lines.

* Transmission line losses mean that not all the electricity from a wind turbine reaches a customer’s electric meter.

* The $2 million price tag for a wind turbine “doesn’t include costs for 20 years of operations, maintenance, repair and replacement.”

Among other problems for wind, says Schleede, who has been campaigning against wind power for several years, is that the wind projects don’t create a lot of local jobs. Most of the gear is produced elsewhere and shipped to the site. Construction last only a few months, usually by workers from outside where the wind farm is located.

Also, says Schleede, “Electricity produced is high in cost and low in value because it is intermittent, volatile, unreliable, and unlikely to be available when electricity demand is highest. Wind turbines do not replace the need for reliable generating capacity.”

A recent study by the Electric Power Research Institute, reported in Energy Daily, found that improvements in commercial lighting have the greatest realistic potential for efficiency gains in the future. The industry research arm estimated that commercial lighting upgrades could trim annual U.S. electricity consumption by roughly 90 terawatt-hours by 2030.

Former Entergy exec Packer may get NRC post

By Kennedy Maize

A retired Entergy Co. executive, who has loads of hands-on operating experience at nuclear power plants, is a major contender for an open seat on the U.S. Nuclear Regulatory Commission.

Daniel F. Packer Jr., 61, who was the first African-American to manage a U.S. nuclear power plant (Entergy’s Waterford plant), confirmed to the New Orleans Times-Picayune newspaper last week that he had met with the Obama transition team to discuss a slot on the NRC. Under law, the five-member NRC has three members from the president’s party and two from the minority. The president appoints the chairman from among the commissioners. The commissioners serve five-year terms, so the partisan balance adjusts as the terms expire or commissioners retire.

The commission has a vacancy for a term expiring in 2010, which would likely be the seat for Packer, should the Obama administration choose him. A position now held by Republican Peter Lyons becomes vacant in June, giving the Obama administration another early selection, to set the partisan balance at three Democrats and two Republicans.

Most Washington speculation suggests that sitting Democratic NRC commissioner Greg Jaczko is likely to be elevated to the chairmanship, demoting current Republican chairman Dale Klein, a protégé of former Bush administration Defense Secretary Donald Rumsfeld, to a member of the commission until his term expires in June 2011. Before his appointment to the NRC, Jaczko, a physicist, had been the science advisor to Senate Democratic Majority Leader Harry Reid of Nevada.

Confirming his meetings with the Obama transition team, Packer told the New Orleans newspaper, “They were looking at me as a potential NRC commissioner and possibly its chairman. I don’t want to say anything more about it.”

Packer would bring more hands-on nuclear power plant operating experience to the NRC than it has ever had. The general trend of NRC commissioners over the years since 1976 (and at the Atomic Energy Commission from 1946-1976) has been attorneys and academics, with little experience at the controls of a nuclear reactor.

Packer, a native of Alabama, born in the days of intense racial segregation, is the son of a father who worked at a nearby Air Force base and mother who was a caterer, according to a 2003 profile in New Orleans City Business magazine. He was an outstanding high-school student in science and mathematics, and was able to enroll in the prestigious Tuskegee Institute engineering program.

But Packer’s father got sick while he was in college and Packer had to drop out of Tuskegee for financial reasons in 1969. He enlisted in the U.S. Navy. His high grades and engineering credentials got him into the elite Navy nuclear program, then run by the legendary Adm. Hyman Rickover. Packer became a Navy reactor operator, and left the service in 1975.

Packer then held a number of jobs as a licensed civilian reactor operator, landing at Entergy’s Waterford plant. In 1990, he became Waterford’s general manager. As he worked at reactor operations, he also earned a bachelor’s degree in business and an MBA. He continued to impress Entergy’s management as a high-energy performer who produced quality results.

During the 1980s and the early 1990s, the City of New Orleans and Entergy fought a nasty, expensive, and protracted battle over whether the city would take over the utility’s operations. Ultimately, the city dropped its plans to turn the local investor-owned utility into a municipal utility.

But much bad blood remained between the city and Entergy. In the mid-1990s, the utility brought in Packer to work to improve relations between the city and the company. According to sources for the city, he did a splendid job, representing what had once been an entirely white utility power structure dealing with a mostly black city government.

As a result, Packer was named Entergy New Orleans CEO in 1998. He was in charge of the utility when Hurricane Katrina struck in 2005. He won widespread praise for his work in the recovery, at a time when most other officials, including the Bush White House, the Federal Emergency Management Agency, the state government, and the city government were trashed for their performance.

If Packer were named to the NRC, he would become the first NRC licensed reactor operator to join the commission, offering a new perspective. He would understand the excitement of the job (which one hopes is rare) and the boredom (which is the norm). He would also become the first hands-on nuclear utility executive to serve as an NRC commissioner.

A well-connected Entergy source told PowerBlog that Packer is a “good, smart guy who would be a great commissioner. The fact that he knows something about the industry he would be regulating will probably disqualify him.”

Electric car vaporware

By Kennedy Maize

Spare me the hype about electric cars. Allegedly “green” technology was a theme at the latest Detroit auto show, as chronicled by the New York Times last Sunday.

Sorry, I don’t buy it. Been there, done that, didn’t work. In the early 1980s, electric cars were going to be the way to break OPEC’s back. Didn’t happen. In the early 1990s, electric cars were going to suck pollution out of the sky. Nope. Today, electric cars are going to stop global warming in its tracks. Fuggedaboud it.

I pass on this link to a wonderfully funny YouTube video spoof on Congressionally-designed electric cars. It’s at http://www.youtube.com/watch?v=rAqPMJFaEdY. It reminds me a series of Lil Abner comic strips in the late 1950s (this dates me), where Al Capp invented cars that ran on the energy generated by inhaling and exhaling, through a chest strap. This was when the first Volkswagens and Renault Dauphines were appearing in American markets in response to rising gasoline prices. My father, an engineer, bought a totally funky 1960 Saab that had a two-stroke, three cylinder engine (you had to add oil when you filled up with gasoline, one quart to eight gallons) and a terrifying freewheeling feature that I loved. Those cars, as crappy as they were, were real.

Hype far exceeds production when it comes to electric cars. Seen any Tesla Roadsters on the interstate? I haven’t (but I don’t live in Hollywood). At the Detroit show, Tesla Motors unveiled a newer, faster electric sports car, the Roadster Sport. The new machine goes from 0 to 60 mph in 3.7 seconds, compared to 3.9 seconds in the original version.

The new roadster is $128,500 per vehicle versus a $109,000 price tag for the pokey version 1.0.

This is, to my mind, what we used to call “vaporware” in the early days of personal computers.

Then there’s the Chevy Volt, which GM plans to roll out in 2010 (if there still is a GM in 2010). $40,000 for a downsized sedan that will go 40 miles on a six-hour battery charge. I’m not going to be looking to trade in my 2004 Toyota Highlander for that performance. No thanks.

The problem here – it’s been the problem for a century – is the battery. The big new thing is lithium ion batteries, which power the laptop I’m using to write this story and my cell phone. Not good enough, not nearly good enough.

North America is a big place, and Americans expect cars that can take them to distant destinations. Sure, most trips are short, but what happens when you live in Maryland and want to visit relatives in rural Georgia and don’t want to fly? You want a car that will get you there without the need to stop every 40 miles or so for a multi-hour recharge.

With gasoline at well under $2/gallon, electric cars are an even harder sell. GM is betting that gasoline prices will return to the levels of mid-2008, but that strikes me as a sucker’s gamble. Over the past 30-some years, gasoline prices have spiked from time-to-time, but overall remained low and fairly predictable.

The auto industry, wooing Congressional bailout money, has been giving lip service to the politically-correct concept that Detroit isn’t building cars that consumers want (meaning hybrids, compacts, and, ultimately, electrics). That’s nonsense.

People aren’t buying the cars they want because they can’t get credit and they are fearful that the economy is collapsing around them. The foreign carmakers that sell into the U.S. market can’t sell cars here, either. And they aren’t selling cars in their own domestic markets.

Clearly, Toyota and Honda are more efficient carmakers than GM, Chrysler, and Ford. That’s a management failure on Detroit’s part. But that doesn’t begin to explain what’s happened to the worldwide auto market. Electric vehicles – much desired for many years by the utility industry to smooth out load – aren’t the answer to the auto market woes.

New congressman defines ‘poser’ and ‘poseur’

By Kennedy Maize

Can you spell “poser?” Here’s my offering: “Eric Massa (D-N.Y.)”

Massa, newly elected Congressman from New York’s 29^th district (that’s Corning, the glass folks), showed up in Washington earlier this week to be sworn in as a member of the House of Representatives in the 111^th Congress, having arrived in the city driving a Chevy Equinox, an experimental fuel-cell vehicle fueled by hydrogen.

Nice. No emissions. Not exactly.

GM builds the fuel cell stacks in Massa’s district, and he was determined to show off the pride of his homeland at the Capitol. Photo op resulted: Massa and GM executive Monica Murphy refueling the car in D.C. Massa told the New York Times, “I have asked to drive this vehicle to Washington to demonstrate that this technology is real, it’s here and we are going to work to make sure it’s ready for the American people within a decade.”

But Massa didn’t drive the vehicle from Corning, N.Y., to the District of Columbia, a distance of about 280 miles. Rather, he drove two different vehicles on his magical hydrogen trip.

It seems that the Equinox can only get about 200 miles on a tank of H. And it also seems that there are no hydrogen refueling stations between Corning and D.C. A GM spokeswoman told the Times that the answer to how to get from Corning to Washington on hydrogen was two vehicles, with a second car waiting for the congressman-elect in Harrisburg, Pa., somewhat more than halfway.

GM’s Markey told the newspaper that GM used two Chevy Tahoe hybrid pickups as towing vehicles. One towed the first H-mobile from the New York plant in Honeoye Falls some 90 miles to the launch site in Corning. The other towed a second Equinox from D.C. to Harrisburg, another 120-some miles. So the pickup trucks put at least 210 miles on their odometers staging a 280-mile, two-vehicle gasoline-free hydrogen trip.

According to GM, the Tahoe hybrids get about 20 miles per gallon, and less when towing a load. That works out to at least 10.5 gallons of gasoline for the trucks (not counting any kind of return trip) or about $21 dollars (with gasoline at $2/gallon).

So Massa’s green hydrogen trip probably would have been greener had he simply driven a new Chevy Cobalt XFE from Corning to the Capitol. According to U.S. government calculations, that Cobalt gets about 36 mpg in highway driving, meaning Massa would have spent less than $16 dollars to fuel up for the trip, and wouldn’t have had to stop to refuel.

For those troubled about global warming, Massa’s political stunt produced more, not less, carbon emissions, because of the tow trucks. The headline on the NYT blog was on the money: “At Least He Didn’t Take a Private Jet.”

My ancient Webster’s dictionary defines “poser” as “one who poses.” Another identifier also applies to Massa: “poseur.” My dictionary says this is “an affected or insincere person.” If the shoes fit….

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Stimulus or political business as normal?

Schleede: Buy bulbs, not wind, for stimulus

Former Entergy exec Packer may get NRC post

Electric car vaporware

New congressman defines ‘poser’ and ‘poseur’

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