The “Powering America” Hearings (Part I)

[Editor note: Mark Krebs has been a leading advocate (see here) for free-market decision-making between natural gas and electricity in homes and places of business, challenging the ‘deep decarbonization’ push of energy interventionists to disciminate against fossil fuels at point of use. This is the first of a two-part post.]

“Grid reliability should not eclipse energy reliability; especially during weather emergencies. Yet, much of the discussion looks like more of the same rent-seeking by interests looking for rebuilding damaged electricity infrastructure with inherently unreliable wind and solar generation based ‘microgrids’.”

The House Energy and Commerce Committee is undertaking an in-depth review of the laws and regulations affecting electric energy. Much of that review is through a series of hearing that started last July. The objectives for this series of hearings were officially stated as follows:

Today, the nation’s electricity industry is undergoing a period of transformation due to technological innovation and market competition, creating tremendous benefits to American consumers. U.S. electricity prices are low, employment within the energy sector continues to rise, and advanced technologies are giving consumers more control over how they interact with the grid. With that said, the electricity system isn’t perfect and is facing dynamic changes and an uncertain future.

The Powering America series will explore electricity markets, electricity generation, distribution, consumption, and the resiliency of the electric grid. The committee has been proactively engaged with all stakeholders in meaningful discussion on how to strengthen the grid and how to provide greater value to American consumers both now and in the future. (emphasis added).

Well, more like “almost all” stakeholders.

These hearings consisted of the following segments:

The comments of all witnesses for these hearings are available through the above links, as are streaming video recordings of the proceedings.

My purpose for writing this article is to summarize the hearings and provide some reflections where appropriate.

Disclosure Statement

A few important notes before we get started, beginning with a disclosure statement.

I am not against electricity or renewable energies.

On summer weekends, if inside, I sometimes enjoy a frosty-cold beer (or two), while streaming my favorite music in my air-conditioned “man cave” lit with LED’s, all via the electric grid. I’m usually outside though, working with the assistance of solar energy in my garden. I even practice personal carbon capture and sequestration by way of composting.

Throughout the year, regardless of the weather, I’m usually using my self-built smoker (built with my electric arc welder) that is biofuel-powered (hickory wood) on my days-off. But I am also very much in favor of fossil fuels too, when that makes more sense. These include my natural gas–fueled appliances in my small house, my gasoline-powered truck (a 1994 Ford Ranger for the record) and propane for its overall transportable heating features.

My point? Having viable and diverse energy options is good. This article is about not limiting consumer choice through legislative, regulatory, or environmentalism-inspired fiat that unfairly restricts viable energy alternatives to electricity.

Hearing Review

Now we can resume the review.

  • Secretary Perry “stole the show” with the DOE-issued Notice of Proposed Rulemaking for the Grid Resiliency Pricing Rule on September 28, 2017. This “bombshell” event fundamentally redirected the course of the last two hearings. FERC responded on October 2, 2017, by issuing a Notice Inviting Comments on the DOE NOPR in Docket No. RM18-1-000. Pursuant to FERC’s Notice Inviting Comments, initial comments on the DOE NOPR are due on October 23, 2017, and reply comments are due on November 7, 2017. My company is considering filing comments pointing out, in part, the resiliency benefits of the direct use of natural gas. For more information on this docket, please go to FERC Online.
  • The witnesses and discussions did not venture beyond the previously listed objectives for these hearings. Q&A Discussions did include considerable non-traditional electricity alternatives, however. These alternatives included wind, solar, and CHP (combined heat and power; a.k.a., cogeneration) as well as how such systems can be integrated via “microgrids.” Understandably, overall hearing focus and discipline was maintained by not venturing outside of this context, but it inadvertently eliminated discussion of non-electric energy alternatives.

At some point in time, preferably sooner rather than later, such electricity alternatives should also be covered as they are critical to the broader subject of energy reliability, resiliency, and diversity of choice. To best serve American consumers overall in these regards, my company included written comments via a letter to the Energy and Commerce Committee, as did others. Some of these concepts are reiterated here. Central to the discussion of resiliency is the concept of diversity of delivery infrastructure. It benefits America little to have diverse generation if the delivery mechanism is limited to just one: Electric wires.

  • My “ask” of Congress, DOE, and FERC is to provide non-electric energy alternatives the opportunity to weigh-in so that Congress is better informed on how all energy resources can best contribute to affordable, reliable, and resilient American energy to consumers.

Congressional hearings are supposed to present different sides of an issue and then debate them so that sound decisions can be reached. In regards to electric grid concerns, these qualities were evident most of the time. The exception was the September 14th hearing that focused on grid reliability. While the overwhelming majority of consumer outages are traced to transmission and distribution, no alternative delivery (of energy) options were discussed. To me at least, it was more of an infomercial, without much diversity of opinion or of options for consumers.

Consumer-Oriented Perspectives on Improving the Nation’s Electricity Markets (10/5/2017)

The last hearing, on October 5, on “Consumer-Oriented Perspectives on Improving the Nation’s Electricity Markets,” was the best by far.

Witness testimony and Committee dialogue was both informative and appropriately entertaining (to me at least). Highlights include:

Most of this material and subsequent Q&A discussion was directed at the appropriateness (or, more accurately, the lack thereof) of the previously discussed NOPR for the Grid Resiliency Pricing Rule.

Weather Resiliency: Beware of Rent-Seeking

And much of the debate rightly revolved around grid resilience and reliability during weather emergencies, given the recent spate of hurricanes. Here comes my diatribe.

Grid reliability (as important as the electric grid is) should not eclipse energy reliability; especially during weather emergencies. Yet, much of the discussion looks like more of the same rent-seeking by interests looking for rebuilding damaged electricity infrastructure with inherently unreliable wind and solar generation based “microgrids.” And despite the testimony of several witnesses, these are far from the least costly alternatives.

While this was an electric-centric hearing by design, and I accept that fact, it could have been worse. For example, the Regulatory Assistance Project (RAP) could have been invited to present their “beneficial electrification” propaganda. Or Rocky Mountain Institute (RMI) could have been invited to present this: The Importance of Distribution-Scale Solar for Grid Resilience.

I reviewed RMI’s grid resilience information and found nothing in it that indicated solar was up to the task of delivering power during the recent spate of hurricanes. While it’s probably safe to assume that not all the sail-like roof-mounted PV systems were blown off their owners’ roofs, that doesn’t mean they were reliably providing electricity to anyone either.

Probably the same situation goes for wind powered electricity generation, if not worse. At least it’s hard for me to envision wind turbines putting out reliable power during hurricane-force winds; most have “cut out” speeds of about 50 mph winds and less than Category 2 “survival speeds.”

From Wikipedia:

All wind turbines are designed for a maximum wind speed, called the survival speed, above which they will be damaged. The survival speed of commercial wind turbines is in the range of 40 m/s (144 km/h, 89 MPH) to 72 m/s (259 km/h, 161 MPH). The most common survival speed is 60 m/s (216 km/h, 134 MPH).[5]

But rather than assuming anything about wind or solar hurricane resiliency one way or the other, I’m looking for recent evidence for how these systems held up and provided electric power during these latest weather emergencies within the affected areas of these emergencies. If anyone has any evidence to show how such systems performed, please send it my way via responding to this article. So far, this is what I could locate and verify. It’s not encouraging for the emergency resiliency of renewables:

In comparison, at the end of this article are links to additional information that document how natural gas infrastructure survived these extreme weather events; These links (and excerpts) appear under the heading: Appendix: Assessment of Non-Grid Energy Reliability During Recent Hurricanes.

Regarding how the electric grid coped with these recent hurricanes, there is such an over-abundance of articles about damage to the wires that it would be futile trying to list it. So, I didn’t. But some informative indicators of grid damage are provided in some of the submitted comments for this hearing. Unfortunately, such comments may receive less than front-page attention, just as they did last year and reported via Master Resource via the following articles:

My company, submitted comments for the “Powering America” hearings. Our intent was to present the fact that energy diversity (including diversity of delivery mechanism) is especially important during weather emergencies. The American Public Gas Association (APGA) also commented this time around. In case Master Resource readers want to see these comments, APGA’s are available by clicking here and my company’s comments are available by clicking here.

Notwithstanding the electric focus of the “Powering America” series of hearings (as well as Secretary Perry’s hearing), a reoccurring them was “empowering consumer choices.” There is one important “but” caveat to this theme. It paraphrases Henry Ford’s famous statement about Model T color availability as follows: consumers are free to choose, as long as it’s electric. And there is one important element to this caveat. Limiting consumer energy choices to electricity is the energy equivalent of serfdom.

For further reading, about how this trend towards an all-electric monoculture has not changed much with a change in Administration (so far at least), please refer to the IER article of July 14, 2017, titled ‘‘Deep Decarbonization’ vs. Direct-Use Natural Gas.”

Bottom Line

The “bottom line” regarding consumer choice for energy reliability and resilience systems for emergencies is that they overwhelmingly choose fossil fuels and NOT renewables. What consumers need is something they can count on during such emergencies through systems fueled by highly concentrated energy that is affordable and capable of being stored (or delivered underground) in quantities sufficient to get them through the emergency and its immediate aftermath.

Electricity doesn’t do any of that very well, at least not during hurricanes. This especially applies to wind and solar electric generation. And battery storage of renewables has its own problem that should not be ignored. In addition to initial cost and longevity issues, these problems also include horrendous externalities in raw materials processing as well as battery disposal issues. Disposal problems also apply to solar panels. Examples:

Regardless, it matters little how diverse or reliable generation facilities are in the face of disaster if the delivery mechanism—the electricity transmission and distribution system—is susceptible to failure. Per a statement in NRDC’s testimony for the October 3rd hearing: “electrical distribution systems are responsible for over 90 percent of total electric power interruptions5 (citing DOE Quadrennial Energy Review, 2nd Installment, at 4-2).

Since more than 90 percent of electrical outages are from the wires, and not the power plants, having another delivery mechanism in the form of natural gas pipelines and distribution systems ensures resiliency better than having many generators. For example, in Puerto Rico, the power plants were reportedly still operable after hurricane Maria struck, but the utility couldn’t deliver the power because the electric lines were down.

Again, what best fits the bill for emergency power are old-fashioned reciprocating engine-driven generators and the fossil fuels that power them. Follow Publix’s lead as recommended by the Federal Emergency Management Agency’s PDF titled Publix Powers Up When the Power Goes Down; Full Mitigation Best Practice Story (emphasis added). Note the following excerpt:

Publix decided to install 500-kilowatt generators at 360 store locations. Each generator has a 1,000-gallon diesel fuel tank, and the majority includes a bi-fuel option using natural gas. With full tanks and the bi-fuel connection, the generators have the capacity to power an entire store, including all needed refrigeration and air conditioning. The generators were designed to operate for a minimum of 72 hours, far exceeding the 23-hour average of the current 65-kilowatt backup generators.

Obviously, hurricanes are not the only weather-related emergencies that can and do significantly impact modern energy delivery systems. On August 23rd, the Department of Energy (DOE) released a report titled Staff Report to the Secretary on Electricity Markets and Reliability. The term “polar vortex” was mentioned 21 times. This type of weather related emergency is one that it would be very unwise to trust solely to the electric grid, and the House hearings should take particular notice of these facts.

Transitioning to an all-electric energy monoculture capable of handling a “polar vortex” via “clean” electric energy may be technically feasible, but it would also be economically devastating and probably deadly. Cold weather is reported to kill twenty times the number of people killed by hot weather.[1]

As just one example, in the case of peak winter send-out for the local gas company in the St. Louis region, analyses indicate that it would take about 50,000 MW of new generation to replace natural gas peak use during such events. Given that Ameren Missouri’s (the electric utility with a service territory overlapping that of my company’s natural gas territory) current total electrical generation is 10,200 MW; replacing this peak natural gas send-out with electricity would require about 5 times Ameren’s existing capacity, with that huge capital investment relied on only during such short events.

On top of that, Ameren’s electric transmission & distribution systems would need to be proportionately increased to handle such capacity additions. These combined costs would need to be recovered by massive electric rate increases. And then on top of that resulting consumer onslaught would come even more consumer costs for replacing their gas appliances with electric alternatives. And to do that, they would likely need to upgrade their electrical service panels and probably their wiring too.

Assuming such events come to pass, a mass consumer revolt could result. Per a recent Forbes article, approximately 63% of “average” Americans do not have sufficient resources on hand to cover even a $500 emergency.[2] If so, over-electrification will more than likely add to already burdened consumer financial security.

Already, it is being reported that electric utility “cut-offs” are on the rise. The following is from an E&E News article from October 16 of this year, titled ELECTRICITY Utilities turning off power to struggling customers (subscription required):

As the average price of residential power has grown — about 18 percent from 2007 to 2016, according to the Department of Energy — many Americans are struggling to come up with the money to keep the lights on.

The article went on to say:

About 2.9 million households were disconnected for nonpayment in 2016, according to the San Francisco-based consumer group TURN (the Utility Reform Network). That includes over 900,000 households in Texas last summer and 714,000 last year in California, the highest tally on record. In states that track the problem, disconnections are rising.

The article referenced the following Bloomberg article titled More Americans Are Getting Their Electricity Cut Off. Surprisingly, Secretary Perry’s home state of Texas came in first over California (whose ISO just announced plans to phase out gas-fueled electric generation[3]).

While the causes are debatable, the rush of electric utilities to renewables should be considered. For example, Ameren Missouri might be heading in that direction. They just issued an Integrated Resource Plan (IRP) that adopts “deep decarbonization” policies that (unwittingly or otherwise) call for “Paris Accord” level reductions of carbon emissions by 80 percent. In an E&E News article dated September 26, 2017, and titled “Ameren joins Midwest peers in adding wind, cutting carbon (subscription required),” Ameren’s Vice President Arora is quoted as follows:

Arora said the renewable energy capacity additions, and continuation of energy efficiency programs, will enable Ameren to meet the state’s 15 percent renewable portfolio standard by 2021 and do so with a rate impact of less than 1 percent. (emphasis added)

It seems that similar impact statements were made in Jefferson City when The Missouri Clean Energy Act (a.k.a., Proposition C) was enacted in 2008. Per the website Ballotpedia: “The initiative also required that energy rates not increase by more than one percent annually.” As a customer of Ameren in Missouri, I can personally attest this hasn’t worked out as planned. Ameren Missouri electric rates have increased by about 50 percent in the last 10 years; and by 42 percent in the last 5 years. For a look at how much electric rates have escalated in all 50 States since 2007 can be found here (at page 5): Missouri Senate Interim Committee on Utility Regulation and Infrastructure Investment.

Such electric rate increases may be good news for local natural gas utilities who compete against electric utilities. But it’s bad news for local economies and consumers who pay electric bills. Legislators and regulators shouldn’t be shortsighted about these issues because they can have an adverse effect on rate-payers, employment, and economic growth prospects.

Beware ‘Deep Decarbonization’

Given that Trump won and Hillary lost, the “green inquisition” has shifted some of its focus and resources from federal to state advocacy. And the mainstream environmentalists appear to be in league with the electric utility industry in pursuit of deep decarbonization. Travis Kavulla, a commissioner with the Montana Public Service Commission, recently wrote an article about this pact titled: How Utilities Team Up With Greens Against Consumers.

While crony environmentalists are making progress in their attempt to further monopolize energy at the state level, their efforts at the federal level have not subsided. EERE is still EERE and efforts have spread to FERC (more on this in tomorrow’s post). Put as simply as possible (but no simpler), “follow the money” to EEI 2017: The utility sector’s business case for deep decarbonization. Here’s two excerpts that summarize it:

All this carbon cutting could result in a windfall for the power sector, said Sue Tierney, a principal at the Analysis Group. In her analysis of more than four dozen studies on deep decarbonization, she found that some anticipate that “electricity demand will have essentially doubled compared to where it is today as a result of those changes.”

“Energy efficiency is considered a key ingredient in every one of these studies, and that means … a profile of continued flat demand that is offset by the increased electrification of the economy,” she said.

Maybe electricity demand will merely double for the deep South, but such estimates are seriously low, especially when factoring-in “polar vortex” events. In the Midwest, as previously discussed, electric generation would need closer to a 5X increase in capacity.

In places like Minneapolis, its likely to be proportionally higher due to colder weather extremes. But all that capacity would be used only during emergencies; thus, this added capacity would be idle almost all the time. This would further drive down electric utility capacity factors and drive up costs, which would be passed on to consumers (in one form or another).

It’s reasonable to predict that if electricity does monopolize energy, as envisioned by some, legislators and regulators should not be surprised if people subsequently die as a direct result. At a bare minimum, the growing American “underclass” will increasingly and substantially suffer as a direct consequence of over-electrification in the false pursuit of “deep decarbonization” despite biased Levelized Cost of Energy (LCOE) predictions that renewables are quickly becoming the cheapest thing going.

The direct use of natural gas (and other fossil fuels) should not be sacrificed for the supposed “greater good” of “deep decarbonization” and (electric) “clean energy” without clear and convincing proof that doing so would not be tantamount to the economic equivalent of “betting the farm.”

The legislative and regulatory enabling of such policies would also be capitulating to foreign interests within the UN (and their US front) with their cult-like war against fossil fuels, which, as everybody should know, is the “Master Resource” of our economy. Subsequently, this is a war against the American economy. I took an oath as an Army officer to “defend against all enemies, foreign and domestic.” This could qualify as both.

Tomorrow we’ll focus on Secretary Perry’s hearing.

———————

[1] Dr Antonio Gasparrini from the London School of Hygiene & Tropical Medicine in the UK., in The Lancet, May 20, 2015

[2]http://ift.tt/2zVvgKT

[3] Calif. ISO eyes natural gas ‘exit strategy’ in decentralized, decarbonized grid (subscription required)

 

The post The “Powering America” Hearings (Part I) appeared first on Master Resource.

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November 14, 2017 at 01:23AM

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