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Another Glorious Achievement for Electricity Deregulation
This is classic.
The Public Utility Commission set an ambitious goal last year of keeping Texas electricity rates only 13 percent higher than the national average.
Remember, this is the same agency headed by Republicans absolutely in love (still) with the wonders of deregulation.
No other state has gone so deep into electricity deregulation. Yet here we are a full decade into this experiment and the agency charged with overseeing the system is boldly aspiring to keep prices just 13 ticks above the rest of the nation.
So, how'd they do?
This is from their recent self-evaluation report.
As you can see, electricity prices charged by deregulated Texas utilities were over 29 percent more expensive than the national average. The PUC blew their goal by a full 16 percentage points.
In other words, if you paid on average $200 a month for electricity, you were paying almost $60/month more than your friends and family out of state for the same amount of power. That's $700 more each year. Of course, if PUC had met its own goals, you'd be spending only an extra $312 extra.
Jake Dyer, a former reporter for the Fort Worth Star-Telegram and now a policy analyst with utility law firm Lloyd Gosselink, introduces a little history.
Recall that for years before deregulation, electric rates in Texas were below the national average. Recall also the famous words of former state Sen. David Sibley, co-author of the electric deregulation law, who said that the market change would be deemed a failure if it didn’t result in even lower rates.
Well it now appears that some within state government have changed their definitions of “success” and “failure” -- at least with regards to the deregulated electricity market.Texas CO2 Pollution: One Step Forward, Two Steps Back
Last week, a report showing a drop in Texas' carbon dioxide emissions attracted a lot of attention. The AP:
While Texas maintains a firm grip on the dubious title of the nation's most prolific industrial polluter, an environmental group's report Thursday found that wind power and other cleaner energy sources have helped cut emissions linked to global warming in the state.
Environment Texas analyzed the most recent U.S. Department of Energy statistics that show the state is still the leader in carbon-dioxide emissions but cut such pollution by 2 percent between 2004 and 2007. In that same four-year period, emissions around the country went up 0.7 percent and increased in 33 states, according to the report.
"We can drive the economy without driving up pollution," said Environment Texas Director Luke Metzger. "By moving to clean energy, we can cut pollution, help jump-start the economy and create millions of new clean energy jobs around the country."
A two percent drop isn't much but, coming before the recession and an attendant drop-off in carbon-related activities, it did signal that the world's seventh largest emitter of CO2 was perhaps moving, ever-so-slightly, in a more planet-friendly direction. To some extent, it also put the lie to Gov. Perry's fearmongering about greenhouse gas legislation.
Don't get too excited though. If built, the 12 proposed coal-fired power plants would wipe out the modest gains more than twice over. To illustrate this, I worked the Environment Texas data into a graph and added the estimated carbon dioxide emissions from the 12 coal plants, about 77 million tons.
The chart assumes that all 12 plants are in operation by 2014 and makes no assumptions or warranties about what effects a weak economy, greenhouse gas legislation, new wind power or any other factor may have on total greenhouse gas emissions.
Building new coal plants is a sure-fire way to quickly ramp up climate-changing gasses. Texas' seventeen existing coal plants are already responsible for roughly one-third of all CO2 emissions in Texas. With 12 more, coal would constitute 38 percent of the total.
As with so many things, we could be moving one step forward, two steps back.
This Week In Coal
In case you haven't seen it, I have the cover story in this issue of the Observer. The story, "Coal Star State," deals with the so-called "second wave" of coal plants underway in Texas. As I note in the article, not much attention is being paid to the air pollution, water, and climate consequences of building 12 new coal plants.
You'd think the biggest boom in new coal plants in any state in the Union would draw more attention from the state's dailies. But, alas, no.
I'm going to make an effort to keep up with developments in the Texas coal story and place periodic updates here. Let's kick it off with three news items.
1) The Texas coal rush continues unabated. The Texas Commission on Environmental Quality surprised no one this morning by advancing a permit for NRG Energy's new 800-megawatt coal-fired power plant near Jewett, Limestone County. The commissioners didn't actually issue the permit today, instead ordering the TCEQ staff to make some changes before they take it up again on December 9th.
The TCEQ commissioners have a perfect record of approving new coal plants even in cases where administrative law judges have recommended denial of the permit. By my count, this is the seventh coal plant (out of a total of 12 statewide) that has received an air permit. In other words, coal opponents only have five plants left to challenge in TCEQ's administrative process.
I couldn't make the hearing but Reuters reported that TCEQ "will require NRG to incorporate certain changes in the permit before considering a final order next month."
The administrative law judges had recommended that the permit be issued but suggested that NRG reduce emissions of nitrogen oxides (ozone precursor), particulate matter, and carbon monoxide.
It's important to note that environmental groups got NRG to commit to some major pollution offsets. Last year, for example, the company agreed to offset 50% of the plant's carbon dioxide, the main greenhouse gas, at least until federal climate legislation kicks in.
2) The Obama EPA is tightening up air quality standards, pollutant by pollutant. Between now and 2011, EPA is expected to revisit six major pollutants.
Individually, the new rules may not have a huge effect on Texas industries. But, collectively, the stricter standards could spell trouble a few years down the road, particularly for coal plants, increasing construction and operating costs and presenting additional regulatory hurdles.
This week, EPA proposed to tighten the limits on short-term sulfur dioxide, which can cause breathing problems, especially in children, the elderly, and people with respiratory problems.
Currently, polluters only have to comply with limits based on a 24-hour period even though health problems arise primarily from short-term exposures.
The 17 existing coal plants in Texas are responsible for around 77 percent of all SO2 emissions in the state, so you can imagine where the cuts are going to come from.
Next up: ozone. In December, EPA will probably propose to lower the ozone standard from 75ppb to 70ppb, a level that's more in-line with the recommendations of the agency's scientific advisors. The new standard would probably put more Texas cities, such as Waco, Austin and San Antonio, in noncompliance.
Dallas-Forth Worth, already struggling with the current smog standard, "might have to cut ozone 16 percent to 25 percent from current levels," according to an analysis by the Dallas Morning News.
Also coming down the pike are new rules for particulate matter, nitrogen oxides (an ozone precursor), coal ash, and mercury as well as implementation of a new lead rule passed in January.
"Few folks are aware of all that's going on but a tidal wave of new regs are coming down the federal pipeline and will hit coal plants over the head pretty hard," wrote Neil Carman, an air scientist with the Lone Star Chapter of the Sierra Club, in an email.
"Right now, only 1 of 7 of these looming EPA regs are in effect yet and have no impact yet on the TCEQ's permitting process but that's about to start changing soon."
3) The LCRA board decided today to not put a moratorium on new water contracts, even though the Highland Lakes are still at half capacity and there is no guarantee that the drought will come to an end.
That's good news, though, for the developers of the White Stallion Energy Center, a proposed 800-megawatt coal plant near Bay City. If built, White Stallion will consume about 36,000 acre-feet of water from the Colorado River each year. Opponents of the plant argue that that water, if even available during severe drought periods, should be reserved for cities or rice farmers.
Just a few years ago, water wasn't really a hot topic in the coal debate. But this drought and increasing awareness of how overstretched river basins are has put the water issue on an almost equal footing with air pollution concerns. The Tenaska coal plant slated for a site near Abilene, for example, has run into intense opposition from locals who say the arid region can't afford to pony up any additional water.
Boone Pickens Hates Water Conservation
For all the black ink Boone Pickens has garnered for his green energy plan, I wish he would get an equal amount of press for his blue devilry. What I'm referring to is Pickens' long-brewing scheme to amass an ocean of groundwater in the Panhandle and then sell it to cities when they get desperate enough.
Pickens' water company, Mesa Water, already has an estimated 210,000 acre-feet of Ogallala Aquifer water rights, potentially worth hundreds of millions. That's a lot of water. An acre-foot is enough to cover one acre with one foot of water. Austin uses about 170,000 acre-feet each year.
Pickens has made no secret of his views on water: It's a commodity to be owned, bought and sold. "There are people who will buy the water when they need it," he told BusinessWeek last year. "And the people who have the water want to sell it. That's the blood, guts, and feathers of the thing."
That's a nice purist, free market approach but a lot of folks in the Panhandle aren't buying it. One of the problems Mesa is running into is that some groundwater conservation districts, locally-controlled entities that manage pumping, want to leave a lot of the Ogallala in the ground.
Right now, the state's 16 groundwater management areas – consortiums of groundwater districts that roughly follow the boundaries of major aquifers – are working on 50-year groundwater plans that will ultimately result in pumping limits. (To simplify a ridiculously arcane process.)
Groundwater Management Area 1, which oversees much of the Panhandle and the Ogallala, is faced with an especially difficult task. The Ogallala Aquifer is being depleted, slowly but surely. The question before water planners is simply how quickly they want to draw the aquifer down.
Most of GMA 1 has settled on allowing 50-60% of the groundwater to be pumped over the next half-century.
In contrast, the Hemphill County Underwater Water Conservation District, which oversees an ecologically-interesting area of the Panhandle with many seeps, springs, creeks and river, has decided to take an aggressive conservation approach. That district has proposed to leave 80 percent of its portion of the aquifer intact in 2060.
Pickens is pissed.
The Amarillo Globe-News reports on a meeting this week in Amarillo in which Mesa Water and another water rancher complained about any efforts to limit withdrawals:
Staff members of the Texas Water Development Board listened to representatives of Mesa Water and G&J Ranch explain why they think recent water plans for the region are unreasonable.
"It is my desire to do what I want to with my property," said George Arrington, co-owner of G&J Ranch and an independent oil and gas producer. "I really wanted to be treated like everybody else in (Groundwater Management Area 1)."
[...]
Mesa Water representative Steve Stevens said the company, owned by T. Boone Pickens, owns water in restrictive Hemphill County and wants to make money on it by selling it to thirsty cities. With about 210,000 acres of water rights at $400 an acre, there's a lot of money riding on producing at least as much as most of the Panhandle.
"With groundwater rights and other costs, it's right at $100 million," Stevens said.
The goal of maintaining 80 percent of water "makes the water in Hemphill County worthless," he said.
The Hemphill Underground Water Conservation District has more than 100 affidavits from people supporting the 80 percent goal, said Janet Guthrie, general manager.
"Their rights and interests should not be pushed aside or trampled on," she said.
This is a battle about competing notions of rights. Pickens thinks he has an absolute right to do what he pleases with "his" water. Hemphill County believes they have the right to manage their water based on the community's desires, in this case to keep the springs and streams flowing.
Based on the best science to date, if the aquifer was drawn down by 50%, much of the surface water in and around Canadian ("The Oasis of the Panhandle" and the Hemphill seat) would simply disappear, a fact that doesn't seem to have ruffled Mesa.
« Older PostsLCRA Wrestles With Drought
The Lower Colorado River Authority, the state's most powerful river agency and one of its most controversial, met today in a special meeting to discuss a plan to deal with the drought next year. A board decision won't be made until next week; today, staff simply went over the plan and allowed the public to weigh in.
As General Manager Tom Mason pointed out, the decisions the agency are faced with are unprecedented. The drought that began in late 2007 and, although diminished, still lingers on today has been the most intense in recorded history, worse even than the '50s drought.
Despite a wet September and October, the Highland Lakes are still only at half capacity. Mason acknowledged that El Niño-driven rainfall may very well overcome the deficit, but said, "Hope is not a good water planning strategy. We simply can't rely on that."
In a sense, this is a long-anticipated Day of Reckoning for the Colorado River basin and the businesses, farmers, power plants, and the 1 million people that rely on it.
Something has to give because, if the drought persists, there's just not enough water to balance all the needs.
But the LCRA staff, after pressure from various interests and some decent rainfall, has softened its position from last month.
Instead of asking for an emergency declaration from TCEQ, the staff has come up with a one-year plan that, vis-a-vis some creative accounting, diminishes the impacts on the river's various users. Without boring y'all to tears, the plan has four main components, which I'll try to boil down into plain English as best I can:
1) Rice farmers along the coast will receive sufficient water to plant their first crop. If LCRA projects that the Highland Lakes will rise to 70% capacity, then the farmers could receive water for a second crop. For the farmers, this is an improvement over what LCRA was looking at just last month – a declaration that could have curtailed all flows in 2010, wiping out any chance of a rice crop.
2) LCRA will ask the Texas Commission on Environmental Quality for permission to allocate water that coastal irrigators don't use to other downstream customers, such as the South Texas (Nuclear) Power Project, rather than flushing the water into Matagorda Bay. This would, of course, have a negative impact on the bays and estuaries, which rely on freshwater inflows to sustain shrimp, crabs and game-fish. But LCRA says it will still meet its legal obligations to provide "environmental flows" to the coast.
3) Temporarily suspension of all new water contracts until the Highland Lakes reach 70% capacity. A moratorium could call into question the viability of the White Stallion Energy Center, a proposed 800-megawatt coal-fired power plant near Bay City. White Stallion has applied to the LCRA for about 36,000 acre-feet of water. (To put that into perspective, the entire city of Austin uses about 170,000 acre-feet per year.)
4) Lift mandatory watering restrictions for cities that rely on LCRA for water but continue to urge conservation.
At the meeting, Austin Mayor Lee Leffingwell bluntly reminded LCRA that Austin is the river authority's biggest customer, one that ponied up $100 million in 1999 to guarantee water rights for the next century.
Leffingwell told the LCRA that city staff have calculated that if the drought were to persist for another two years, there would be only enough water left in the Highland Lakes to provide Austin with water for one year. Given that, the mayor urged the agency to quickly incorporate the lessons of the current drought into their water management plan.
Like other speakers, Leffingwell not-so-subtly reminded the LCRA board that the rice farmers, unlike cities, are "interruptible" customers that by definition can be cut off when water supplies get low.
Ryan Rittenhouse of Public Citizen brought up the likelihood that severe droughts could become a permanent fixture in Texas over the next few decades, due to climate change. It seems unlikely that the Gov. Perry-appointed board, including reactionaries like former TCEQ chairwoman Kathleen Hartnett White, are ready to hear that alarming message.
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