The Great Transmission Heist ..The latest scheme to subsidize solar and wind power to the detriment of rate payers.
How would you like to pay higher utility bills to finance expensive electricity from solar and wind power, which you would never use?
That's the issue now before the Federal Energy Regulatory Commission (FERC), and it deserves more public and political scrutiny before it becomes a reality.
FERC has a draft rule that could effectively socialize the costs of paying for multi-billion dollar transmission lines to connect remote wind and solar projects to the nation's electric power grid. If FERC rules in favor of Big Wind and Big Solar, the new policy would add billions of dollars onto the utility bills of residents of at least a dozen states—including California, Michigan, Oregon and New York—that will receive little or no benefit from the new power lines.
Transmission lines connect coal, natural gas and nuclear plants to the electric grid so that power can be delivered to homes and businesses. The costs of building this infrastructure, hooking up to the national electric grid and transporting electricity to the end users has traditionally been paid by the industries and passed on to rate payers. This long-standing user-pays policy would be replaced with a policy of everyone pays under FERC's plan.
As FERC chairman Jon Wellinghoff has put it: "This is a country where transmission lines have traditionally been built by the incumbents who serve that area; the question is whether we should continue that policy in the future." He told Congress that we should steer away from pricing that would "calculate the precise monetary benefits expected to accrue from a new transmission facility." But that's exactly what investors try to do in assessing the economic viability of any new project.
The big winners from socializing transmission costs would be wind and solar projects that tend to be in remote areas, like the desert or offshore. In many cases, thousands of miles of new transmission lines would have to be built to get the power to the end user. Google recently announced it will be a major investor in a $5 billion wind farm off the coasts of New Jersey, Delaware and Virginia that will require hundreds of miles of underwater transmission lines. No one is saying who will pay for those transmission costs, but it's a safe guess the investors are betting that FERC will decide to socialize them.
Very big dollars are at stake in this fight. By some estimates the cost of building out new transmission lines to accommodate renewable energy and other new electric power sources could exceed $160 billion. Wind and solar proponents insist that renewable energy standards can only be reached if transmission costs are shared by everybody. This sounds like an admission that these energy sources are inefficient sources of power that can't compete in the marketplace without subsidies. The policy the renewables are pushing would be analogous to taxpayers underwriting the cost of tankers and truckers that transport oil to service stations.
Senators Harry Reid of Nevada and Jeff Bingaman of New Mexico, both of whom have big wind and solar projects in their states, pushed a Senate energy bill this summer that would have socialized these transmission costs. That bill has stalled, so FERC—supported by the White House and Democratic leaders—may move on its own.
Fortunately, the "loser" states are finally catching on to how much this cost-shifting would add to their utility bills. Last year Governors Jan Brewer of Arizona, Jim Gibbons of Nevada, Christine Gregoire of Washington, Ted Kulongoski of Oregon and Arnold Schwarzenegger of California opposed the plan as "inappropriate to assess the cost of transmission build-out to customers that cannot make use of the facilities, or who elect not to because they can access more cost effective options that do not rely on large, new transmission investments to meet environmental goals."
Eleven eastern governors have raised similar objections, arguing that this policy would "undermine the significant renewable energy potential along the East Coast by subsidizing distant terrestrial wind resources which would stifle economic recovery in the east by destabilizing competitive electricity market structures and increasing energy prices in regulated markets." Massachusetts Secretary of Energy and Environmental Affairs Ian Bowles, hardly a Milton Friedman apostle, describes cost-sharing as "a radical Soviet-style approach to transmission planning."
One of the biggest losers would be Michigan. One economic analysis sponsored by Michigan utilities found that, despite some initial gains for certain wind projects in the northern part of the state, under a proposed regional payment scheme, "Michigan will be sending hundreds of millions of dollars annually outside the state to fund transmission projects which not only provide little value to the State, but will actually harm our ability to develop our own renewable energy market." Michigan rate payers would have to subsidize 20% of the cost of some $16 billion of transmission projects outside the state. Talk about outsourcing.
This is all the more maddening given that renewable energy projects already receive tens of billions of dollars of loans, grants, tax credits, earmarks, renewable energy mandates, stimulus money, and on and on. According to a 2007 U.S. Department of Energy study, wind and solar already receive subsidies that are more than 20 times greater per kilowatt of electricity than conventional power sources. But as with ethanol, even these subsidies are never enough.
Senator Bob Corker of Tennessee has sponsored legislative language that would instruct FERC to allocate transmission line costs in a way that is "reasonably proportionate to measurable economic and reliability benefits." In other words, no charging rate payers in New Jersey for the costs of a wind farm in Texas based on vague benefits of reduced planetary carbon emissions.
The courts have also generally ruled that pricing for electric projects must be commensurate with benefits derived by rate payers. If Congress or FERC mandate a cost-spreading scheme for transmission projects, then the highest subsidies will go to the least efficient projects. That wastes money and energy, which doesn't sound too green to us.
http://online.wsj.com/article/SB10001424052702304772804575558400606...
That's the issue now before the Federal Energy Regulatory Commission (FERC), and it deserves more public and political scrutiny before it becomes a reality.
FERC has a draft rule that could effectively socialize the costs of paying for multi-billion dollar transmission lines to connect remote wind and solar projects to the nation's electric power grid. If FERC rules in favor of Big Wind and Big Solar, the new policy would add billions of dollars onto the utility bills of residents of at least a dozen states—including California, Michigan, Oregon and New York—that will receive little or no benefit from the new power lines.
Transmission lines connect coal, natural gas and nuclear plants to the electric grid so that power can be delivered to homes and businesses. The costs of building this infrastructure, hooking up to the national electric grid and transporting electricity to the end users has traditionally been paid by the industries and passed on to rate payers. This long-standing user-pays policy would be replaced with a policy of everyone pays under FERC's plan.
As FERC chairman Jon Wellinghoff has put it: "This is a country where transmission lines have traditionally been built by the incumbents who serve that area; the question is whether we should continue that policy in the future." He told Congress that we should steer away from pricing that would "calculate the precise monetary benefits expected to accrue from a new transmission facility." But that's exactly what investors try to do in assessing the economic viability of any new project.
The big winners from socializing transmission costs would be wind and solar projects that tend to be in remote areas, like the desert or offshore. In many cases, thousands of miles of new transmission lines would have to be built to get the power to the end user. Google recently announced it will be a major investor in a $5 billion wind farm off the coasts of New Jersey, Delaware and Virginia that will require hundreds of miles of underwater transmission lines. No one is saying who will pay for those transmission costs, but it's a safe guess the investors are betting that FERC will decide to socialize them.
Very big dollars are at stake in this fight. By some estimates the cost of building out new transmission lines to accommodate renewable energy and other new electric power sources could exceed $160 billion. Wind and solar proponents insist that renewable energy standards can only be reached if transmission costs are shared by everybody. This sounds like an admission that these energy sources are inefficient sources of power that can't compete in the marketplace without subsidies. The policy the renewables are pushing would be analogous to taxpayers underwriting the cost of tankers and truckers that transport oil to service stations.
Senators Harry Reid of Nevada and Jeff Bingaman of New Mexico, both of whom have big wind and solar projects in their states, pushed a Senate energy bill this summer that would have socialized these transmission costs. That bill has stalled, so FERC—supported by the White House and Democratic leaders—may move on its own.
Fortunately, the "loser" states are finally catching on to how much this cost-shifting would add to their utility bills. Last year Governors Jan Brewer of Arizona, Jim Gibbons of Nevada, Christine Gregoire of Washington, Ted Kulongoski of Oregon and Arnold Schwarzenegger of California opposed the plan as "inappropriate to assess the cost of transmission build-out to customers that cannot make use of the facilities, or who elect not to because they can access more cost effective options that do not rely on large, new transmission investments to meet environmental goals."
Eleven eastern governors have raised similar objections, arguing that this policy would "undermine the significant renewable energy potential along the East Coast by subsidizing distant terrestrial wind resources which would stifle economic recovery in the east by destabilizing competitive electricity market structures and increasing energy prices in regulated markets." Massachusetts Secretary of Energy and Environmental Affairs Ian Bowles, hardly a Milton Friedman apostle, describes cost-sharing as "a radical Soviet-style approach to transmission planning."
One of the biggest losers would be Michigan. One economic analysis sponsored by Michigan utilities found that, despite some initial gains for certain wind projects in the northern part of the state, under a proposed regional payment scheme, "Michigan will be sending hundreds of millions of dollars annually outside the state to fund transmission projects which not only provide little value to the State, but will actually harm our ability to develop our own renewable energy market." Michigan rate payers would have to subsidize 20% of the cost of some $16 billion of transmission projects outside the state. Talk about outsourcing.
This is all the more maddening given that renewable energy projects already receive tens of billions of dollars of loans, grants, tax credits, earmarks, renewable energy mandates, stimulus money, and on and on. According to a 2007 U.S. Department of Energy study, wind and solar already receive subsidies that are more than 20 times greater per kilowatt of electricity than conventional power sources. But as with ethanol, even these subsidies are never enough.
Senator Bob Corker of Tennessee has sponsored legislative language that would instruct FERC to allocate transmission line costs in a way that is "reasonably proportionate to measurable economic and reliability benefits." In other words, no charging rate payers in New Jersey for the costs of a wind farm in Texas based on vague benefits of reduced planetary carbon emissions.
The courts have also generally ruled that pricing for electric projects must be commensurate with benefits derived by rate payers. If Congress or FERC mandate a cost-spreading scheme for transmission projects, then the highest subsidies will go to the least efficient projects. That wastes money and energy, which doesn't sound too green to us.
http://online.wsj.com/article/SB10001424052702304772804575558400606...
Views: 49
Replies to This Discussion
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Permalink Reply by P.G. on -
Folks ought to be accustomed to having things rammed up their......by now by the government, huh?
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Permalink Reply by Stevew on
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Here are two recent articles from the Portland Oregonian on the political controversy over wind power. I have HOPED that wind energy would become power source for us. However, as these articles express, it's not as easy as it looked - or as cheap - or as safe - or as green.
I still HOPE that wind power will succeed on some scale, but the other back door problem is lack of storage of the juice. Imagine huge gusts of wind hitting all the turbines at the same time (like 3:AM) It over amps the wires because it's sent all at once. That seems like a big problem to me and it should have been foreseen.
This is one another reason why more NG electric plants should be built. NG is the safest, cleanest, cheapest alternative way we have to make electricity. I've wanted to see wind power developed for 30+ years, since the OPEC oil embargo. I still want to see R&D on wind energy - but if you read these articles you will be shocked at how much tax money is being spent on huge wind farms that might may only be green because they cost so much.
Anyone know what T-Boone's wind farms are doing? Is he still pursing that?
http://www.oregonlive.com/pacific-northwest-news/index.ssf/2010/11/...
http://www.oregonlive.com/environment/index.ssf/2009/10/wind_powers...
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Permalink Reply by Bettie (Arnold) Rozell on
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Just returned from the Alphine countries in Europe, seen many wind farms and was told that they are no longer building more wind farms. This was done by a previous government and now they are moving away from this source as it has not proven to be cost beneficial, so now they will move to another form - possible nuclear,which will also be expensive. When will they ever learn.
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Permalink Reply by Mac Davis on
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There will be no problem with "power gusts." The windmills already have to have rather complicated control systems just to connect to the electric grid at all. The control system will throttle back or shut down entirely if it's producing more power than the grid can handle.
The electric grid is 60 cycles per second. Windmills don't spin at a constant speed or produce a constant voltage. Each windmill has to have voltage and frequency conversion equipment and control systems. They also have communication with central control systems and are "told" when to deliver power, how much power, etc. If they need to shut down or produce a smaller level of power, the blades rotate (or feather) such that they generate more or less drag from the wind. They have separate wind speed gauges that tell their computers what the wind speed is so that they can quickly adjust their control systems to control power output.
Wind "gusts" won't hit all the turbines at the same time, even in one wind farm. Wind farms are tens of miles across. A gust or front of some kind will take several minutes to go from one end to the other of a wind farm. Even if each windmill did put a "surge" on the electrical grid as it adjusts to the change in the wind, the next windmill in the change would get the wind change at a different time.
There is also an enormous amount of mechanical inertia in the spinning blades of a windmill. The blades are 100 feet long or so and turn 20 RPM or so. Even if a sudden gust hits the windmill, it will take it a while to speed up and start generating more power, giving the control system time to adjust.
Strangely enough, if the wind speed gets high, the windmills go into an idle mode, feather their blades, stop generating power, and stop spinning. I'm not talking hurricane force winds, either. The windmills are designed to work at the average wind speed, and may not be able to handle the stress of running at what seems merely like a stiff breeze to us.
The more serious problem is when a large group of windmills have "brownouts," not surges. Either the wind speed drops over a large area or gets too high over a large area and the windmills have to shut down or reduce power. Then you have to ramp up production from other power sources. You have to have enough capacity from gas/coal/nuclear etc. power plants to run everything when the wind generation is at its lowest capacity. You also have to have transmission line capacity to allow the power from one area of the country with excess generating capability to fill in for areas that are running low on power.
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Permalink Reply by Mac Davis on
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We really need improvements to our electrical grid. Even without wind or solar power farms. We all benefit from being able to bring power from areas with surplus capacity to areas with shortages. Or being able to throttle back a more expensive power plant and draw cheaper power from a source some distance away. It also means we have to build fewer power plants. Or we can build power plants in areas where land is cheaper, fuel is more readily available, cooling water is available, etc.
While there are both costs and benefits, all electrical power consumers get some of the benefits from wind or solar power. Every kWh generated by windmills or solar means less gas, uranium or other fuel burned. This lowers fuel cost and delays the day when we run out of other fuels. There's less CO2 produced.
Of course, those of us who have natgas to sell don't want the price of fuel to go down. 8-)
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Permalink Reply by P.G. on
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I wonder if there are those who are getting royalties from Oil wells who are hoping NG never catches on with transportation?
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Permalink Reply by Mac Davis on
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If you look carefully, there's an old guy with a lance on a skinny horse charging towards the windmill just before it explodes.
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