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Posts Tagged ‘carbon emissions’

Needed: Local Advocacy and Action on Climate Change

Sat ,08/07/2017

There were three great letters in the Wichita Eagle recently. The first describes how renewable energy is growing and may soon meet much of our energy needs; the second describes the advantage of using a Carbon Fee and Dividend system to reduce pollution; and the third describes how cities may use electric vehicles in their transit system to cut air pollution.  The letters are printed below with the authors’ permission.

Green energy (Wichita Eagle, June 28, 2017)

I read with interest the column by Ed Cross about energy and the need for American energy independence. I’m afraid I need some help defining his  “extreme environmental activist.” Is it a person who favors any type of energy besides fossil fuels? Is it a person who wishes to return the United States to using coal entirely to produce our electric power?

I would guess that Cross did not enjoy the latest statistics from the alternative energy sector: In the first three months of 2017 the entire United States derived 10 percent of its electric power from solar and wind energy.

If you look at the mathematical curve describing the growth of solar and wind power in the past 10 years, it is exponential. Naysayers regarding green energy have said for years it is a mere Boy Scout experiment, it will never produce significant power.

The power that was produced last year by green energy sources in the United States exceeds the total electric power consumed by the entire nation in the year 1950. The United States at that time was a highly developed industrial nation that was producing vast quantities of steel, and other high-value, energy-intensive products.

There is no question that if we stay on course with where we have begun, green energy sources will clearly surpass fossil fuels for every purpose within the next few years.

If Cross is so interested in American energy independence I am puzzled as to how he can be opposed to American green energy. By definition green energy must be produced here in our country and nowhere else.

PATRICK J PIROTTE, WICHITA

 

Coming together on an energy policy (Wichita Eagle, June 30, 2017)

The op-ed (June 25) by Edward Cross calls for energy policy discussions without the divisiveness of the past. I agree.

As a volunteer with non-partisan Citizens’ Climate Lobby, we bring Republicans and Democrats together to talk about energy and climate solutions. We have identified a market-based solution called Carbon Fee and Dividend that grows the economy, levels the field for foreign trade, and puts more money in the pockets of consumers. Four of the six largest oil companies signaled their support for this type of plan just last week.

I appreciated Mr. Cross reporting an improvement we can take comfort in, that from 2005 to 2016, 60 percent of carbon reductions in electric power production were due to fuel switching from coal to natural gas. Kansas wind helped reduce CO2 as well. Switching from coal to gas cuts emissions about 50 percent, but wind or solar cuts it to zero.

Americans want a common-sense energy policy like Carbon Fee and Dividend that sparks innovation that appeals to liberals and conservatives. No yelling needed, just respectful discussions.

DARREL HART, WICHITA

 

City’s emissions ( Wichita Eagle, July 2, 2017)

It is hard to believe that Wichita has a smog problem, but it does. Wichita’s Department of Public Works should be commended for its work in reducing ozone emissions, but more needs done.

Wichita could further reduce emissions by buying electric vehicles when its buses and vans need replacing. Park City, Utah, replaced its diesel buses and found that, though they cost more to purchase, they saved money over time. They reported an equivalent 21 mpg compared with 4 mpg for a standard diesel bus.

Large power plants produce about twice as much work for a given amount of fuel as an internal combustion engine. That means that using electric vehicles cuts fuel use and emissions by about 50 percent. By using electric vehicles, Wichita could save money on fuel and maintenance, cut ozone emissions within the city, and reduce carbon emissions overall by about 75 percent. That sounds like a good investment.

J.C. MOORE, KECHI

Note : This letter was shortened for printing so a bit more explanation is needed. Because of the efficiencies involved, using electrical vehicles cuts the emissions by about 50%, even if charged from a coal-fired power plant. Since Wichita uses Westar Energy which gets 51% of its electricity from non carbon sources, the emissions are cut in half again, giving an overall reduction of 75%.  And, the emissions are at the power plant rather than within Wichita.

The authors are members of the Citizens’ Climate Education and the  Citizens’ Climate Lobby  groups in Wichita. They are both strong advocates for a carbon fee and dividend system to ensure clean air, pure water, and a healthy future for our children.

Westar Energy’s Proposal to Increase Rates on Solar Customers

Tue ,16/05/2017

Westar Energy is proposing a rate increase for customers who install solar panels or other distributive energy sources. Those Net Energy Metering (NEM) customers would have to choose between an additional $50 a month energy charge, or a $15 fixed fee plus a per-kilowatt rate demand charge based on the previous month’s maximum usage. If approved, Westar’s rate proposal will increase the payback time for installing solar panels from 12 years to more than 20 years, greatly discouraging solar installations.

As a Westar stockholder, I am opposed to additional fees or higher charges on Net Energy Metering customers. The NEM customers should be seen as a resource rather than a liability and should be encouraged. They should be treated just as any other customer when they draw energy from the grid, and just as any other supplier for the net energy they produce. Does it really matter if Westar buys energy from NEM customers or from the Southwest power pool?

Westar’s website  says it will “support public policies and initiatives to accelerate the development and use of environmentally beneficial and cost effective strategies for energy efficiency programs for both customers and Westar’s own operations, zero – or low – emissions generation technologies, and renewable energy resources.”  That is a good policy, but this proposal is inconsistent with it.

One of the biggest future costs to Westar would be to build additional power plants, so Westar encourages energy conservation.  If I cut my electricity usage by 50% by installing more insulation and storm windows, I am applauded for following Westar’s conservation guidelines. If I cut my electricity usage by 50% by installing solar panels, I would be charged a higher electric rate. That is irrational, as NEM customers would help reduce the need for new power plants just as energy conservation does.

Westar should not be concerned about losing revenue from solar customers. Residential customers pay a customer fee, an electricity fee, a fuel charge, a distribution fee, an environmental fee, an energy efficiency charge, and even Westar’s property taxes. Last June, our bill was $24.95 for electricity, but our total bill came out to be $53.27 after the fees were added. NEM customers will pay less for energy charges, but will still pay the other fees. If Westar makes it too expensive, then potential NEM customers may install extra battery  capacity such as a Powerwall, and withdraw from the grid entirely.

Distributive generation should be seen as a resource. Westar has been proactive in developing wind and solar energy and now gets 51% of its energy from noncarbon sources. In the future, Westar will need to replace some of its coal power plants and may need to reduce its use of natural gas to cut its greenhouse gas emissions. Distributed generation would help replace the energy they produce without requiring capital investment from Westar.

NEM customers will help reduce pollution and environmental degradation. Westar has three coal-fired power plants which operate without scrubbers. Those plants should be phased out immediately and Westar should begin phasing out its other coal-fired power plants to reduce its greenhouse gas emissions. Though natural gas is cheap now, that may not be true in the future. There is a link between fracking and earthquakes, and fracking activities are being curtailed. This will lead to higher gas prices. Though natural gas produces 2 ½ times as much energy per mole of carbon dioxide produced, it has a global warming potential 82 times that of carbon dioxide. If even 4% of the natural gas used for energy is leaked during production and transportation, then any advantage of using it for fuel will be lost

Coal-fired power plants release mercury, chromium, lead, cadmium, arsenic, sulfur oxides, nitrogen oxides, carbon dioxide,  particulates, and radioactive isotopes. Burning  coal releases millions of tons of pollutants into the air and leaves several hundred million tons behind in the coal ash. Some pollutants stay in the air and others eventually find their way into the water, the food chain, and into us. The heavy metals are carcinogenic and accumulate in tissue. Even exposure below the allowed levels increases the chance of cancer over time. The sulfur oxides, nitrogen oxides, and carbon dioxide released by coal combustion harm plants, produce acid rain, and increase the greenhouse gas concentrations. Switching to renewable energy would greatly reduce these pollutants and help preserve the environment for future generations.

Encouraging NEM will benefit Westar and its customers.  A study by Crossborder Energy in 2014 found NEM allows utilities to avoid costs of generation and fuel, maintenance and upgrade of transmission and distribution infrastructure, transmission losses (which account for 7% of losses), capacity purchases, and compliance with renewable energy standards. The study concluded,” The cost which utilities avoid when they accept NEM power exported to their grid shows that NEM does not produce a cost to nonparticipating ratepayers; instead it creates a small net benefit on average across the residential markets.” While it does cause power companies to have to adjust their loads accordingly, NEM reduces peak loads, transmission losses, and the need for new power plants.  In California, the study found NEM “delivers more than $92 million in annual benefits to non-solar customers”.

Similar research studies in Vermont, New York, California, Texas, and Nevada also concluded that net metering provided a net positive benefit for utility companies and their customers. A 2015 study done in Missouri is relevant to Kansas. A cost-benefit study of net metering in Missouri arrived at the same conclusion as the other studies, “ Net metering provides a net benefit. “ Missouri has 6000 net metering customers while Westar now has approximately 300. Westar certainly should encourage more.

This proposal to impose a fee or higher rates on NEM customers is the result of short-term thinking. It will harm Westar and its stakeholders in the long run. Investing in clean energy protects the environment, reduces deaths and disease from air pollution, and creates good, local jobs. Westar  must develop policies to encourage the development of renewable energy investments and energy conservation. Our energy needs will best be served by a mixture of traditional and alternate energy sources, but we must be proactive in developing our renewable energy resources as quickly as possible.

 

(c) 2017 – J.C Moore

We Should Not Weaken the EPA

Sat ,06/05/2017

 

Opponents of the EPA are now seeking comments on regulations that need to be eliminated by the EPA. They are, of course, focusing on the regulations that save businesses money by allowing them to pollute the environment. Please submit a comment at the link above asking that  no steps be taken to weaken the EPA.

It is our birthright that we and future Americans have clean air, pure water, and a livable Earth. The EPA has done a great job in limiting pollution to our environment and to remove the regulations that protect us would be a grave mistake.
Though many would like to see the EPA stop limiting carbon emissions, there is well-documented scientific evidence, supported by 97+ percent of climate scientists who are members of the American Geophysical Union, that carbon emissions are making undesirable changes in the Earth and its eco systems. The U.S. is second only to China in emissions but emits six times as much CO2 on a per capita basis. If the U.S. is not willing to reduce its emissions, why should other countries?

If anything, the EPA should strengthen the Clean Power Plan and reduce the amount of coal burned. Coal contains small amounts of mercury, chromium, lead, cadmium, arsenic, sulfur, particulates, and radioactive isotopes. Man burns 6 billion tons of coal each year, releasing millions of tons of pollutants into the air and leaving several hundred million tons behind in the coal ash. Some pollutants eventually find their way into the water, the food chain, and into us. For comparison, mercury is 100 times as toxic as cyanide, arsenic is 20 times as toxic, and chromium(VI) is 4 times as toxic. These three are also are carcinogenic and accumulate in tissue. Even exposure below the allowed levels increases the chance of cancer over time. The sulfur and nitrogen oxides released by coal combustion harm plants and produce acid rain.

Polls show that the public does not support weakening the Clean Power Plan. The EPA’s plan may lead to increased electricity costs in the short term, but will lead to lower electric rates in the future. Coal and transportation prices are certain to increase in the future while the cost of renewable energy is falling. It costs upfront to build wind turbines and solar installations but, once they are in place, they are expected to function for 30 years or longer without any need for fuel.The EPA projects the Clean Power Plan’s proposed guidelines for particulates alone could prevent up to 3,600 deaths, 1,700 heart attacks, 90,000 asthma attacks, and 300,000 missed work and school days per year. As a result, for every dollar Americans spend on the Clean Power Plan, we will gain up to $4 worth of health benefits. So in terms of future energy costs, environmental benefits, and health benefits, the EPA Clean Power Plan is good policy for our citizens.

You may submit a comment up until May 15 at https://www.regulations.gov/document?D=EPA-HQ-OA-2017-0190-0042.

(C)  2017 J.C. Moore

Wichita: Doubling Down on Air Pollution

Sun ,05/03/2017

Fossil Fuel Subsidies: The True Cost of Energy

Tue ,03/05/2016

The Wichita Eagle recently published an interesting  letter from Darrel Hart, president of the Wichita chapter the Citizens Climate Lobby. He pointed out that the House energy and water development bill , as it stands, provides subsidies of $95 million for wind, $632 million for fossil fuel and $1 billion for nuclear.

The letter goes on, “Clearly when it comes to winning subsidies, wind falls short. Legislators favoring carbon-based fuel spin the idea that if wind were economical, it could compete without government help. Well, what does that say about fossil fuel? It has been receiving billions in subsidies for decades.

Lopsided subsidies and favored treatment reveal the intent to pick winners and losers. A better solution is carbon fee and dividend legislation that cuts greenhouse gas emissions and corrects the artificially low price of fossil fuel created by tax dollars rigging the system against clean energy. Let markets reveal the true price of energy, and it will be the consumer who chooses the winner.”

Mr. Hart certainly has a good point, as carbon fuels are not paying their true cost.  windmill4Besides the $632 million subsidies to fossil fuels, we are also providing an even greater subsidy by allowing them to release their waste products into the air without paying the external costs, i.e., the costs indirectly borne by society.

The external costs for fossil fuels include health and environmental damage from particulates, nitrogen oxides, sulfur oxides, chromium, mercury, arsenic, and carbon emissions. An EU funded research study, Externalities of Energys ,  found that including external costs would increase the cost of producing electricity from fossil fuels by 30% for natural gas to 90% for coal, if costs to the environment and to human health were included.

The carbon fee and dividend system Mr. Hart is recommending would put a fee on carbon at the source, which would require the fossil fuels to include their external costs.This would allow renewable energy sources to compete with fossil fuels on an even basis, and would greatly favor a switch to renewable energy.

(c) 2016 J.C. Moore

Carbon Fee and Dividend: How Much Fuel Makes a Ton of Carbon Dioxide?

Mon ,11/01/2016

In Paris, 196 countries agreed to develop plans to reduce their carbon emissions in such a way as to keep global warming below 1.5°C.  Although each country will develop its own plan,  the best plan for the US, and many other countries, would be a carbon fee and dividend system such as that developed by the  Citizens’ Climate Lobby (CCL), which has broad bipartisan support.  CCL’s proposal would place a fee on carbon at the source, and market forces would then encourage reduced emissions, energy conservation and investments in renewable energy.  The fee collected is not a tax as it would be distributed equally to every household as a monthly energy dividend.

CO2 equivalent emissions: CCL’s legislative proposal would set an initial fee on carbon at $15 per ton of CO2 emission or CO2 equivalent emissions with the fee increasing by $10 each year until the US emissions drop to 1990 levels. The main contributors to CO2 are combustion of coal, natural gas, and gasoline, with minor equivalent emissions coming from other industrial chemicals.  A little chemistry allows us to calculate the tons of CO2 that a ton of each fuel produces.

Coal: It is hard to calculate coal’s contribution exactly as it has from 65% to 95% carbon and the rest is impurities. Those include mercury, cadmium, lead, manganese, selenium, sulfur, nitrogen, and some radioactive elements. Much of the environmental damage and many cases of lung disease can be traced to the impurities and to the mining of coal. For calculation purposes we will assume that coal is all carbon as graphite, but keep in mind that each source of coal is different.

The chemically equation for the reaction of carbon with oxygen is:

co22

 

 

 

 

Carbon       +     Oxygen    =>        Carbon Dioxide

The mass of each atom or molecule in atomic mass units (MU) is written on the atom. The equation says that 12 mass units of carbon react with 32 mass units of oxygen to produce 44 mass units of carbon dioxide. The equation is like a recipe and once you establish the basic relationship, it can be scaled up to tons quite easily, i.e. :

C            +          O2               =>                 CO2

12 MU Carbon + 32 MU Oxygen  =>   44 MU Carbon Dioxide    – or –

12 Tons Carbon + 32 Tons Oxygen    =>  44 Tons Carbon Dioxide

Thus, each ton of carbon produces 3.6 tons of carbon dioxide.

Natural gas: Natural gas is composed mostly of methane, CH4 , with small impurities of other hydrocarbon gases. Following the method above:

Rx

 

 

 

 

 

CH4            +         2O2                =>                 CO2                  +          2H2O

16 MU Methane + 64 MU Oxygen   =>  44 MU Carbon Dioxide  +36 MU of Water

16 Tons Methane + 64 Tons Oxygen    =>   44 tons Carbon Dioxide  +36 tons of Water

Each ton of methane produces 2.8 tons of carbon dioxide.

Gasoline: Gasoline is composed of many volatile liquid compounds, but it can best be represented as octane, which has eight carbon atoms and 18 hydrogen atoms, C8H18. (The model for Octane is large so here we will just work from the equation. )

C8H18     +         25/2 O2   =>        8CO2        +         9 H2O

114 AMU  Octane +   Oxygen  =>  352 AMU  Carbon Dioxide  +   Water

114 Tons Octane +   Oxygen  =>  44 tons Carbon Dioxide  +  Water

Each ton of octane produces 3.1 tons of carbon dioxide.

Note: This means that the initial carbon fee on fossil fuels would be around $40-$50 per ton of fuel. This would pay part of the external costs of using the fuel as well as encourage conservation and a shift to renewable energy. One gallon of gasoline is about 7 pounds and it produces about 21 pounds of CO2. That means that 95 gallons of gasoline will produce 1 ton of carbon dioxide. The $15 per ton carbon fee would increase the cost of 95 gallons of gas from about $200 to about $215, or about 7%.

Heat of Combustion: Each fuel releases a different amount of energy when burned, measured in kilojoules  of energy per  mole of fuel burned. Those are listed below along with another important quantity, the amount of heat released per mole of carbon dioxide released.

Fuel

 

 

 

 

Note that Methane releases more than twice as much energy as coal for each mole of carbon dioxide produced. This was the impetus to convert coal-fired power plants to natural gas-fired plants. That would help in the short term as natural gas has fewer impurities and produces more energy per mole of CO2 released.  However, there is another factor to be considered which is the Global Warming Potential of each greenhouse gas.

Global Warming Potential (GWP):   The amount that each greenhouse gas contributes to global warming depends upon its concentration in the atmosphere, it’s effectiveness at trapping heat, and its lifetime in the atmosphere. The focus is on carbon dioxide as it is the greenhouse gas whose concentration has increased the most by burning fossil fuels. Methane is very efficient at trapping heat and has a GWP 28 times that of CO2. Though methane’s concentration is low, it has more than doubled since pre-industrial times. There are other greenhouse gases which are more effective at trapping heat and have longer lifetimes, such as N2O, but their contributions are small because they have such low concentrations. Below is a table comparing those. Source.

co2 table

 

 

 

 

Although converting coal-fired power plants to natural gas might be advantageous in the short term, we should be concerned about methane’s volatile prices, the link between fracking and earthquakes, and its GWP. Large amounts of methane are lost from fracking operations, leaking gas wells, and pipeline leaks.  If even 4% of the methane produced is lost to leaks, then any advantage of converting to methane will be lost.  The EPA has taken steps to reduce methane loss to the air, but is a very difficult thing to measure. One study found that infrastructure leaks in the Boston area accounted for about 2.6% of the methane transmitted. And methane, when burned, still ends up as CO2 in the atmosphere. You can see from the table that the amount of methane in the air is growing, and rather than count on it for the future, we should focus on converting to renewable energy sources as quickly as possible.

(C) 2016  –  J.C. Moore

Note: Here is a model of octane for the curious:

octane

 

Sue the EPA over Clean Power Plan? The Public Does Not Support It

Thu ,05/11/2015

The leaders of the Republican Party in 26 states plan to sue the EPA to stop the Clean Power Plan. Those same leaders often justify what they want to do by claiming it is what the people want. But in this case, they are doing more what the fossil fuel companies want. The public in 23 of the states does not support the lawsuits, as in the chart below.

00support

The governors and attorney generals of the states want to make a name for themselves as “conservatives”, but it is a losing proposition for a number of reasons. The lawsuits do not actually represent a conservative position, as the EPA’s plan will lead to a shift to renewable energy which will keep billions of tons of carbon dioxide out of the atmosphere. In that respect, the EPA has the more conservative position.

The reason often given for the lawsuits is saving money on energy, but the politicians seem more interested in campaign money than saving money for their citizens. The EPA’s plan may lead to increased electricity costs in the present, but will lead to lower electric rates in the future. Coal and transportation prices are certain to increase in the future while the cost of renewable energy is falling. It costs upfront to build wind turbines and solar installations but, once they are in place, they are expected to function for 30 years or longer without any need for fuel.

It will cost the states lots of money for the lawsuits, and their chances successes is slim.   And, it will likely harm a number of citizens of the states if the lawsuit succeeds. There are many coal burning power plants in the US which operate without scrubbers to remove particulates, because coal is cheap and  scrubbers are expensive. The EPA projects the Clean Power Plan’s  proposed guidelines for particulates alone could  prevent up to 3,600 deaths, 1,700 heart attacks, 90,000 asthma attacks, and 300,000 missed work and school days per year. As a result, for every dollar Americans spend on the Clean Power Plan, we will gain up to $4 worth of health benefits.

So in terms of future energy costs, environmental benefits, and health benefits the EPA Clean Power Plan is a winner for the citizens. Perhaps the Republican Attorney Generals clamoring to sue the EPA should reconsider.

(c) 2015 J.C. Moore

 

Paris Climate Conference: Pope Francis and CEOs Urge Action

Fri ,23/10/2015

On his world tour, Pope Francis called on world leaders to address climate change in November at the Paris Climate Conference. eiffelIt is not just religious leaders and climate scientist who are concerned, but business leaders who are aware that climate change will hurt the world’s economy. A recent study, published in the journal Nature, found that temperature change due to unmitigated global warming will leave global GDP per capita 23% lower in 2100 than it would be without any warming.

Joining the call for action on climate change are companies such as Nike, Walmart, Goldman Sachs, Johnson & Johnson, Proctor & Gamble, Salesforce, Starbucks, Steelcase, and Voya Financial, all who have adopted a goal of 100 %  renewable energy.  Food Companies are concerned that climate change is threatening our food supply. CEOs of Kellogg’s, Mars, Dannon, Ben & Jerry’s, Stonyfield Farms, and Nestlé have signed a letter urging US and global leaders to “meaningfully address the reality of climate change.”

By this week, 81 big-name corporations representing 9 million employees and $5 trillion in market capitalization have signed on to the President’s “Act on Climate” pledge.

 

THE AMERICAN BUSINESS “ACT ON CLIMATE PLEDGE”

 “We applaud the growing number of countries that have already set ambitious targets for climate action. In this context, we support the conclusion of a climate change agreement in Paris that takes a strong step forward toward a low-carbon, sustainable future.

We recognize that delaying action on climate change will be costly in economic and human terms, while accelerating the transition to a low-carbon economy will produce multiple benefits with regard to sustainable economic growth, public health, resilience to natural disasters, and the health of the global environment.”

 

The list of the corporations taking the pledge and a summary of their pledges are listed in this White House fact sheet. Their pledges set ambitious, company-specific goals such as:

Reducing emissions by as much as 50 percent,

Reducing water usage by as much as 80 percent,

Achieving zero waste-to-landfill,

Purchasing 100 percent renewable energy, and

Pursuing zero net deforestation in supply chains.

Most importantly, these companies set an example to their peers who will be asked to sign onto the pledge before the Paris Conference.

The plan to reduce emissions with broad bipartisan support in the US is the carbon fee and dividend as proposed by the Citizens’ ccl1Climate Lobby. Their proposal would place a fee on carbon at the source and allow market forces to encourage reduced emissions, energy conservation, and investments in renewable energy. The carbon fee is not a tax as proceeds would be distributed equally to every household as a monthly energy dividend. It would effectively stimulate the economy and add an estimated 2.8 million jobs over the next 20 years. What could be a better plan?

 

(c) 2015 J.C. Moore

Westar Energy's Rate Request: A Study in Short-Term Thinking

Sun ,23/08/2015

Many of America’s power companies have put their profits before the health of our citizens and the 6coalprotection of the environment. The American Lung Association estimates that the EPA’s proposed guidelines for particulates could prevent 38,000 heart attacks and premature deaths, 1.5 million cases of acute bronchitis and aggravated asthma, and 2.7 million days of missed work or school.  Yet, there are many coal burning power plants in the US which operate without scrubbers to remove particulates, because coal is cheap and  scrubbers are expensive.

Scientists have known since 1980 that our increasing CO2 levels were endangering our environment. All the world’s major scientific organizations are now saying that we must take immediate action to avoid environmental disasters.   There is really no effective way to remove carbon emissions from fossil fuel   plants, yet our power companies have fought a shift to renewable energy. Many power companies are now being required  to install costly upgrades to their coal-fired  plants, and  are trying to recoup the cost of their short-term thinking by raising their customer’s rates. Westar energy is a good example, and it is likely  that your electric company may  soon follow suit.

Westar Energy has requested a rate increase by $152 million a year, about 8% over its current rates. Most of the increase will go to upgrade its Wolf Creek nuclear plant, to install scrubbers at some of its coal-fired power plants, and to remove mercury from its La Cynge coal-fired power plant. Westar’s proposed rate design would shift more of its costs  from businesses to residential customers and increase the basic charge for residential service by $3 a month each year for the next five years. That means the cost to just keep the power on would increase from the current $12 a month to $27 a month. Customers who want to install their own solar or wind power would be required to pay a $50 customer charge or pay for power at the peak rate, effectively killing private investments in solar energy. Westar’s customers are understandably unhappy about this.

CEO pay and profits : As a Westar stockholder, I felt bad about the recent rate hearing in Wichita. Speaker after speaker, including several ministers and AARP representatives, testified about how the proposed increase in rates would affect the poor and elderly. The timing of the rate increase seems inappropriate. Morningstar moneyreported that last year the company’s top five executives received 23.5% in salary increases. Westar’s CEO now receives $3 million in compensation, more than 30 times that of our governor. A large portion of the compensation is in stock, which tends to encourage short-term decisions to increase stock value.

Many people also testified that the proposed rate structure would discourage private investments in energy efficiency, energy conservation, and solar panels. A poll by Magellan found that 76% of Westar’s customers oppose the tariff on solar panels, agreeing that Westar’s position was based on increasing its profit. Westar is also requesting a 10% return on investments which seems high for a company which has just invested several million dollars in executive raises.

A misleading process: Although Westar says it is committed to renewable energy and reduced carbon emissions,  their proposal would have just the opposite effect. There are number of red flags for investors evident in the rate proposal and in Westar’s actions over the last several years.  Many investors are now looking for long-term investments in environmentally and socially responsible companies. Westar may no longer fall into that category.  AARP ran a full-page ad in the local newspaper protesting the rate increase.  About 73% of Westar stock is held by  institutional investors and many of those are retirement funds.  If some of those retirement funds  decide to divest of  Westar’s stock,  the effect will certainly not be what the  CEO intended.

There was also concern about the integrity of the process, which was unnecessarily secretive and sometimes misleading. A local newspaper article pointed out that, ”Westar’s public notice fails to detail changes in billing, solar rates”.   And, the CEO’s letter to stockholders claimed that outside agitators were responsible for opposition to the solar fee – which was not what the Magellan study found.  His idea that solar customers were “free riders”  who didn’t  pay their fair share came from an ALEC meeting in Chicago.  Chicago?  It was propaganda created by power companies  worried about solar cutting into their market share.  His letter claimed that solar customers  who hooked to the  grid using net metering agreements were being subsidized by other ratepayers, though research has found just the opposite.  I would expect such a well-paid CEO to know about the research.

Solar Research: Studies in Vermont, New York, California, Texas, and Nevada concluded that net metering provided a net positive benefit for utility companies and their customers. A 2015 study done in Missouri is even more relevant to Kansas. A cost-benefit study of net metering in Missouri arrived at the same conclusion as the other studies, “ Net metering provides a net benefit. “ Missouri has 6000 net metering customers while Westar now has approximately 300. It is unlikely that a study done in Kansas would come up with a different result,  but the Westar executives claim differently.

Why should customers who cut their energy use in half by installing solar panels be charged an extra fee, while those who cut their use in half by installing extra insulation be considered differently? Westar claims they should be, but that seems unreasonable. Net metering customers are charged a fee to set up the system and for a safety inspection, but otherwise net energy metering customers should be treated just as any other customer when they use electricity and be reimbursed as any other supplier when they supply excess power. Charging solar customers an extra fee may actually cause an increase in electric rates.

Gaming the system: My son, who worked for a gas company, observed that in gas company rate cases they always asked for about twice what they wanted and settled for half of that.  Other than the money to have Wolf Creek comply with federal regulations, much of the other requests are unjustified. Residential customers are already paying a customer fee, an electricity fee, a fuel charge, a distribution fee, an environmental fee, an energy efficiency charge, and even Westar’s property taxes. Last June, our bill was $24.95 for electricity, but our total bill came out to be $53.27 after all those things were added in. The $12 customer charge is already greater than most other companies charge and Westar’s rates are second highest in our region. Westar has implied that residential customers are not paying their fair share of the cost. However, residential customers use about a third of the energy, but it seems they are being asked to pick up much more than a third of the cost of upgrades and pollution controls.

Westar owes a better accounting of the money it collects. There have been over 20 rate cases in the last six years. Too much time and resources have been devoted to rate cases designed to increase the company’s profits. The executive compensation seems excessive and much of it is in stock, which means a rise in profits will greatly benefit the executives. That tends to lead to short-term thinking, which is evident in this rate proposal. It does not take into account the increasing future regulations of carbon emissions and the need to reduce dependence on coal-fired power plants.

Settlement?  Just before the rate case was to go to the  Kansas Corporation Commission,  Westar cut  its rate request  in half. My  son said, ” See there”.   Westar also asked to postpone its request for a tariff  on solar panels to a later hearing.   Westar is now proposing a reduction in the subscription fee for wind energy customers, building its own solar plant, and selling solar power to customers. That is a big improvement, but Westar is  still relying too heavily on its coal-fired power plants. Three of its smaller plants have no scrubbers and they should be phased out as soon as possible.  Earlier,  $600 million was budgeted for upgrading the LaCynge plant.  I’m not sure how much of that has already been spent , but pouring more money into it to remove mercury may be a bad investment. It is expensive to remove mercury, but it is impossible to remove carbon emissions.

The Supreme Court, in Massachusetts v. EPA, ordered the EPA to make a determination as to whether carbon dioxide is a pollutant. The EPA found, based on the best scientific evidence, that CO2 is an endangerment to public health and has moved forward with regulations to reduce the carbon emissions from power plants. There will be future environmental regulations which will be costly to the coal plants. Why waste million of dollars in emission control equipment and spend millions importing coal from Wyoming when we could be transitioning to Kansas-based renewable energy?

The future: The Kansas Corporation Commission should approve upgrading the Wolf Creek plant, but carefully consider the amount of money requested. Moving forward with plans to provide customers with wind and solar energy subscriptions is in the right direction and should be encouraged. Other than that, there are better options for Kansas. The Kansas Corporation Commission should send the rest of Westar’s plan back to the drawing board.

(C)   2015 – J.C. Moore

 

The Citizens' Climate Lobby: A Better Way to Reduce Carbon Emissions

Fri ,21/08/2015

The article “Obama orders steeper cuts from power 6coalplants” described how the EPA’s proposed limits on carbon pollution could cost $8.4 billion annually by 2030. The Citizens’ Climate Lobby (CCL) has a better way, a Carbon Fee and Dividend,  which would produce  deeper cuts in pollution in a shorter time.  CCL’s proposal would place a fee on carbon at the source, and market forces would then encourage reduced emissions, energy conservation and investments in renewable energy.  The carbon fee is not a tax and it would not raise taxes. The money collected would be distributed equally to every household as a monthly energy dividend.

CCL’s legislative proposal would set an initial fee on carbon at $15 per ton of CO2 or CO2 equivalent emissions.  The fee would increase by $10 each year until the CO2 emissions were reduced to 10% of the 1990 US levels. To protect American businesses and agriculture, adjustments at the  borders would be made on exports and imports by the US State Department to ensure fairness. The carbon fees would be collected by the US Treasury Department and rebated 100% to American households, with each adult receiving a dividend and each child one half dividend up to a limit of two children per household.

A similar Fee and Dividend policy is successfully working in Canadian British Columbia. In 2008, BC enacted a revenue neutral carbon tax which set an initial rate of $10 per metric ton of CO2 equivalent emissions, increasing by $5 per year until it reached $30, which it did in 2012. The revenue went straight back to taxpayers as tax reductions with a tax credit paid to low income households of $115.50 for each parent and $34.50 per child annually. The tax raised the price of gasoline by about $0.25 per gallon and the price of coal by about $60 per ton. Though there were winners and losers under the BC plan,  it’s GDP grew in relation to the rest of Canada’s.

bc

British Columbia gets most of its electricity from hydroelectric power, so it is difficult to estimate the effect it had on the price of electricity. There are now no coal-fired plants in British Columbia and the consumption of fuel there is now 19% below that of the rest of Canada.

In the US, all the money collected from the carbon fee would be distributed to US households as a dividend – which would effectively stimulate the economy. President Bush’s Economic Stimulus Act of 2008 provided a $600 rebate to each household. A 2012 study by Christian Broda found the increase in disposable income was an effective stimulus to the economy. President Bush’s stimulus, however, was only for one year and the money came from taxes. CCL’s proposal does not come from taxes, and a $30 per metric ton fee on CO2 is estimated to provide about $876 annually per person in the US. Though the price of gasoline and fossil fuel generated electricity will certainly go up, it will be offset by the dividend. People who reduce their energy consumption, or choose lower cost renewables, will be able to  increase their disposable income by saving more of their dividend.

The CCL Fee and Dividend proposal has a wide range of supporters such as notable climate scientists James Hansen, Katharine Hayhoe, and Daniel Kammit.  It has the support of both conservative and liberal economists such as Gary Becker, Gregory Mankiw, Art Laffer, Nicholas Stern, and Shi-Ling Hsu. CCL’s advisory board is bipartisan as it includes George Shultz, former Secretary of State under Ronald Reagan, conservative former US Representative Bob Inglis (R-SC), and RESULTS founder Sam Daley-Harris, who is an advocate for solutions to poverty.

A study by Regional Economic Models Inc. found CCL’s proposed carbon fee and dividend would achieve better pollution reduction than regulations while adding 2.8 million jobs to the economy over 20 years. Ccl

What could be a better way to reduce carbon emissions?

 

(c) 2015  J.C.Moore                   

Credit: Darrel Hart, Wichita CCL leader, who helped greatly withthe editing.