by jboullion | Dec 1, 2010 | Uncategorized
For immediate release
December 1, 2010
More information
RENEW Wisconsin
Michael Vickerman
608.255.4044
mvickerman@renewwisconsin.org
Wisconsin Cannot Afford to Ignore Rising Coal Prices
Long-considered an inexpensive and reliable fuel source, coal has become subject to market and regulatory pressures that threaten to make it an expensive and risky way to generate electricity, according to national news reports and pertinent utility filings with the Wisconsin Public Service Commission (PSC).
“The expectation of continued increases in coal prices reinforces the value of relying on Wisconsin’s own energy resources. If there’s an effort to find savings for utility customers, the logical move would be to shutter antiquated coal plants before they become more of a liability,” said Michael Vickerman, Executive Director of RENEW Wisconsin, a statewide, nonprofit renewable energy advocacy organization.
A key driver behind coal’s rising cost is China, which has moved from an exporter to an importer of coal. The New York Times (NYT) reported last week that Chinese coal imports will hit all-time highs for November and December of this year. Some of this coal is coming from Wyoming’s Powder River Basin, the coal field that also supplies many Wisconsin power plants.1
In the New York Times story, an executive from Peabody Energy, the world’s largest private coal company, predicted that his company will send larger and larger quantities of coal to China in the coming years.
Further adding to the upward price pressure on coal is the rising cost of diesel fuel. The PSC has estimated that half of the delivered cost of coal in Wisconsin is attributable to rail shipment, that is highly sensitive to the price of diesel fuel, which sells for 38 cents more per gallon than it did a year ago, according to the U.S. Energy Information Administration.2 Tom Whipple, editor of the Peak Oil Review, expects diesel fuel supplies to tighten in 2011 as a consequence of flat production volumes and increasing demand from Asia.3 This phenomenon could affect Wisconsin electric utility rates as early as January 2011, according to Vickerman.
We Energies’ coal costs have escalated by $57 million, of which transportation costs account for almost $33 million, according to the utility’s most recent rate filing with the PSC. On top of that, We Energies expects to pay an additional $8 million in oil surcharge costs.4
Regulatory costs add pressure
Additionally, compliance with coming federal clean air regulations is certain to propel the cost of coal generation higher, especially if utilities install expensive pollution control equipment on their aging and increasingly costly generators.
Several U.S. utilities, including Minneapolis-based Xcel Energy, have decided to meet that upcoming regulatory challenge by shutting down old coal-fired units and replacing them with a combination of gas-fired and renewable generation. An Xcel executive told the Denver Post that it’s often more cost effective to shutter these plants than to retrofit them.5
“The only thing that keeps these clunkers going is the belief that coal will always be the cheapest resource available to utilities,” said Vickerman. “But it is now quite apparent that coal is no longer dirt cheap, and it’s time we in Wisconsin face that reality. When you add up the costs of mining, transportation, and cleaning up old power plants to meet new clean air standards, coal shapes up as an expensive anachronism, not the bargain fuel that it once was. Of course, the premium that utilities pay to keep burning coal will be passed along directly to utility customers.”
Wisconsin’s energy policies, which expressly favor conservation and renewable resources, have been exceptionally effective at diversifying and localizing the state’s energy mix, as well as generating thousands of family-supporting jobs here, said Vickerman.
1. Breaking Away From Coal, New York Times, November 30, 2010
http://www.nytimes.com/2010/11/30/business/energy-environment/30utilities.html?_r=1&scp=1&sq=breaking%20away%20from%20coal&st=cse
2. Weekly Petroleum State Report
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/pdf/highlights.pdf
3. Peak Oil Review
http://www.aspousa.org/index.php/2010/11/review-november-29-2010
4. We Energies’ Application for Reopening rate request docket
http://psc.wi.gov/apps35/ERF_view/viewdoc.aspx?docid=137970
5. Rising coal costs will be felt in electric bills, Denver Post, October 24, 2010
http://www.denverpost.com/search/ci_16412425
END
by jboullion | Dec 1, 2010 | Uncategorized
From an article by Jake Miller in the Wausau Daily Herald:
ROTHSCHILD — Union leaders, village officials and small business owners were among the overwhelming majority who spoke Tuesday in favor of a proposed — and highly debated — biomass plant.
Only four of the 43 speakers opposed the plant during the first of two public hearings held by the Wisconsin Public Service Commission, which will assess the comments when deciding whether it will approve the project in mid-January, said Administrative Law Judge Michael Newmark.
We Energies and Domtar first proposed the plant, which will burn a woody biomass as fuel, in September 2009. It has been at the center of public debate for nearly as long.
At the afternoon hearing attended by about 200 people — another hearing was held Tuesday evening — supporters continued to argue that the biomass plant is critical to keep Domtar competitive and that it will create both temporary and permanent jobs.
Opponents stood strong, saying the plant, which is expected to burn 500,000 tons of biomass each year, will adversely affect air quality despite We Energies data that say emissions would be cut by 30 percent.
Jeff Morzenti, an employee at the Domtar Mill in Rothschild for more than 25 years, said he is one of those responsible for monitoring what exits the mill’s smoke stacks.
Not just as an employee, but as a longtime resident of Weston, the 51-year-old Morzenti said he wouldn’t support the plant if he didn’t believe it was safe.
by jboullion | Nov 30, 2010 | Uncategorized
From a column by Francisco Enriquez in the Milwaukee Journal Sentinel:
A cloud of soot engulfed Milwaukee recently, with particle pollution levels so high that the Department of Natural Resources issued four days of advisories and watches that warned children, older adults and people with asthma, bronchitis and heart or lung disease to pay close attention to their symptoms. On days when air pollution levels are high, more people suffer from more frequent, more severe and more deadly asthma attacks, heart attacks and strokes.
As a pediatrician on the near south side of Milwaukee, I am deeply concerned about the effects of breathing polluted air. Some of my patients’ medical conditions get much worse when they are exposed to an environment that is loaded with irritants and noxious chemicals. Access to health care and medication can lead to improvement, but if they are to heal, then cleaning our polluted environment is paramount.
Where does this pollution come from? In Milwaukee, We Energies’ Valley power plant, operating without modern pollution controls, is the single largest source of particle pollutants. Sitting in the Menomonee Valley among some of the most densely populated communities in the state, the stacks are neighbors to some 24,000 people who live within a mile of the plant. The pollution from the plant contributes to violations of health standards that are set to protect public health. Cleanup of the Valley coal plant is long overdue.
by jboullion | Nov 30, 2010 | Uncategorized
From an article by Tom Content in the Milwaukee Journal Sentinel:
Xcel Energy Inc. on Monday halted plans to build a biomass power plant on Lake Superior in Ashland.
The utility holding company’s Eau Claire-based utility informed the state Public Service Commission of its decision in a letter Monday.
Xcel had planned to build a biomass gasification plant that would have made the Ashland power plant the largest wood-burning power plant in the Midwest.
The decision came as a result of a significant increase in the cost of the project, as well as declining costs for other generation options. The utility also cited “considerable regulatory uncertainty at the state and federal level.”
The announcement was made one day before the start of Public Service Commission hearings on a separate biomass power plant, proposed by Milwaukee-based We Energies to be built at the Domtar paper mill in Rothschild.
The timing of the announcement was coincidental and not linked to the We Energies proposal, said David Donovan, Xcel manager of regulatory policy.
“Although we are disappointed with the outcome, we have gained considerable value from the evaluation that we have completed,” said Mike Swenson, president and chief executive of NSP-Wisconsin, a unit of Xcel Energy, in a statement.
“The engineering studies will advance gasifier technologies for utility applications and our efforts to procure sustainable biomass supplies have resulted in a model that can be adopted in future projects,” Swenson said. “In addition, as part of this project we helped fund the development of two biomass energy plantations in northern Wisconsin, which will provide valuable research and study opportunities for decades to come.”
Those plantations are testing the development of hybrid poplar and black willow trees for harvesting and burning at the power plant.
by jboullion | Nov 29, 2010 | Uncategorized
From an article by Steve Schultze of the Milwaukee Journal Sentinel:
$800,000 in energy saving has been realized from efficiency program
Milwaukee County has reaped some $800,000 in energy saving from its “green print” environmental program, as well as millions of gallons of water and gasoline saved through more efficient plumbing, cars and trucks.
Though slow to adopt “green” efficiencies, the county jump-started its efforts once a half-time sustainability director was assigned to monitor the program in early 2009. Since then, the courthouse complex and more than 50 other county buildings either have undergone energy audits or soon will.
Lighting, heating, cooling and other upgrades enabled the saving, though it’s applied to upfront costs of some $10 million. In theory, after eight years the costs through contracts with private vendors will be covered, and savings will go to the county’s bottom line.
“I’m happy with the successes we’ve had with the resources we’ve been given,” said Supervisor Marina Dimitrijevic, who pushed for the program’s creation in 2007. She said more could be done if the county would add more staff time to the effort.
It took more than a year to designate a green print coordinator, with the county’s budget problems hindering the initiative.
“By having small changes all over the place, we’ll have a very huge result,” said Dimitrijevic.
by jboullion | Nov 29, 2010 | Uncategorized
From an article by Tom Content in the Milwaukee Journal Sentinel:
As a new administration prepares to take office in Madison, with a different attitude toward renewable energy than the Doyle administration, We Energies is pressing forward with plans to build a wood-burning power plant in north-central Wisconsin.
The state Public Service Commission will hold a hearing on the project this week, with a decision expected early in 2011.
Concerns about greenhouse gas emissions, the cost of the project and even competition for biomass are all being reviewed as the proposal makes its way through the state approval process.
We Energies is optimistic, as it has won all the local approvals it needs from officials for the Village of Rothschild and the Village of Weston, utility spokesman Brian Manthey said.
“We believe we’ve answered every question that has come up, and we are pleased that we’ve gotten unanimous support from the municipal boards for the project,” he said. “We’ll continue to supply the information needed to move the project forward at the state level.”
The $255 million project at the Domtar Corp. paper mill in Rothschild, south of Wausau, would generate 50 megawatts of electricity, enough to power about 40,000 typical homes. It also would provide steam for the Domtar mill. . . .
The $255 million cost of the Domtar project is also raising concerns.
An analysis by auditors at the PSC found that building a wind farm would be less expensive for customers than building this project. The commission suggested that We Energies explore the possibility of burning wood in conjunction with coal at some of its existing coal-fired power plants, such as its older coal plant in Oak Creek.
An estimate by the customer group Citizens’ Utility Board found the plant would be twice as expensive as a similar-sized wind farm, executive director Charlie Higley said.
While the cost may be higher, We Energies said the utility wants to diversify its renewable energy sources beyond wind. And unlike wind and solar projects, biomass power plants have the added benefit of being able to run round the clock.
In addition, Allan Mihm, We Energies director of generation projects, said the project is more efficient because it’s supplying electricity and steam. It would cost the utility $20 million more to build a power plant separate from the paper mill, he said.
