2.) Senate Interior:
The Senate Interior Appropriations bill (S.2237) may go to the floor this coming week (i.e., July 27-31) or even after the August recess. Sen. Jim Jeffords (R-VT) and other members of the Northeastern congressional delegation have released a survey that showed that eight out of ten Americans support the low-income energy assistance program.
ELECTRIC UTILITY RESTRUCTURING
1.) No Federal Deregulation in '98:
CongressDaily reports that House Commerce Committee Chairman Tom Bliley (R-VA) made it official on July 22, saying that neither his committee nor the Energy & Power Subcommittee will mark up an electricity restructuring bill this year. Bliley blamed the short time left in the session as well as the lack of support for the bill by House Commerce Democrats -- although at least four committee Republicans said they would refuse to support any restructuring legislation this year.
2.) DOE/Utility Disclosure:
On July 17, DOE's Energy Information Administration announced proposed revisions to its procedure for the confidential treatment of electric power data collected from the electric power industry. The new procedures are designed to provide equal treatment for data from utilities and nonutilities. Data that would be exempt from disclosure are future generating capacity, heat rates (which is now disclosed information), fuel stocks, environmental equipment financial data, and contract information of wholesale and retail sales. Certain data elements that would become or remain available to the public are information about existing units (except their full load heat rate), net or gross generation, fuel consumption, environmental data, sales and revenue, and financial reports from publicly owned utilities. Significantly, EIA cites the public interest served by disclosure and places the burden on respondents to make the case for confidential treatment. Comments are due by August 31. The full text of the Federal Register notice can be found in Vol. 63, No.137, p.38,620 or at www.eia.doe.gov/cneaf/electricity/forms/confidentiality/fr_notice98_7.html.
3.) TMI Sold:
On July 17, Peco Energy Co. and British Energy PLC announced they will purchase the undamaged Three Mile Island Unit 1 reactor from General Public Utilities Inc. This would be the first time that a U.S. nuclear power plant had changed hands. They will pay GPU $100 million -- only one-sixth of the plant's $600 million book value; by comparison, recent sales of fossil fuel-powered generating plants have gone for up to twice their book value. GPU is selling all its generating plants to focus on distribution -- the "wires" end of the business, which will remain a regulated monopoly. The sale allows GPU to limit its liability to $320 million for decommissioning costs. Peco Energy already owns the Limerick and Peach Bottom nuclear plants.
4.) Massachusetts Referendum:
Megawatt Daily reports that the Massachusetts Supreme Judicial Court last week rejected an effort by a business and industry group to disallow an initiative to repeal the state's electric industry restructuring law and have permitted it to stay on the November ballot. Opponents are still hoping to disqualify the initiative saying that it illegally creates an appropriation of state funds. A court decision on this latter issue could come at any time and is expected soon because state elections officials have to meet a deadline for printing voter guides.
5.) California/Renewables:
The July 20 issue of Wind Energy Weekly reports that some 300 MW of new wind energy projects have won the opportunity to receive California Energy Commission (CEC) financial incentives funds. Wind projects were followed by geothermal (157 MW), landfill gas (70 MW), biomass (12 MW), digester gas (1 MW), and small hydro (1 MW). The CEC program is funded by a small charge that will be levied on every kilowatt-hour of electricity sold in California over the next four years as the state makes the transition to a restructured electricity market. That charge is expected to raise $540 million for renewables, of which $162 million is allocated to funding incentives for new renewable energy projects. Companies whose bids were accepted will receive production incentive payments of up to 1.5 cents per kWh generated during the first five years of their projects' operation. The CEC said, however, that winning bidders offered proposals for payments averaging only 1.2 cents/kWh, indicating that renewable energy projects are becoming increasingly economic.
CLIMATE CHANGE
1.) EPA Climate Gag Rule Overturned:
As of July 20 Rep. Waxman (D-CA) was expected to offer an amendment to the House HUD/VA appropriations bill to clean up the bill's anti-environmental riders including Rep. Knollenberg's anti-Kyoto language; the amendment read, in part: "Any limitation on funds in this Act for the Environmental Protection Agency or the Council on Environmental Quality shall not apply to: (a) conducting education outreach or informational seminars; (b) developing rules, regulations, decrees, or orders prior to proposal or issuance; ..." By July 21, Rep. Jim Greenwood (R-PA) had decided to offer an amendment that would add to the Knollenberg amendment the following language: "Except that this provision shall not apply to any action authorized by law." Waxman therefore decided to narrow his amendment to eliminate the reference to the "development of rules, etc." in (b) and possibly also the reference to public education in "(a)". However, in the actual vote on the VA/HUD bill on July 23, Rep. Dave Obey (D-WI) offered an amendment to allow EPA to continue education on climate change which passed 226-198. As a consequence, Rep. Greenwood did not go forward with his broader attack on the climate rider. Environmental groups defined this as "our first global warming test on the House floor" and noted that "we gained 50 Republicans on the vote and lost only 23 Democrats."
2.) Senate HUD/VA:
In the Senate bill, Sen. Chuck Hagel (R-NE) has apparently included the following text: "Funds made available in this Act to support programs or activities promoting country participation in the Framework Convention on Climate Change or climate change activities in the energy, industry, urban, land use (particularly forestry, biodiversity and agriculture) sectors and activities that reduce vulnerability to climate change shall only be made available subject to the regular notification procedures of the Committee on Appropriations."
3.) Senate Interior/Climate:
EESI's Environment & Energy Update says that Senate action on its bill "has been postponed to possibly next week." The 2-pages of the Byrd-Craig report language accompanying the bill reads, in part: "To the extent future funding request may be submitted which would increase funding for climate change activities prior to Senate consideration of the Kyoto protocol, the administration must do a better job of explaining the components of the programs, their anticipated goals and objectives, the justification for any funding increases, a discussion of how success will be measured, and a clear definition of how these programs are justified by goals and objectives independent of implementation of the Kyoto protocol." Let us know if you would like us to fax you a copy.
4.) Kyoto Costs:
The White House' Council of Economic Advisors (CEA) is due to release its economic analysis of compliance with the provisions of the Kyoto protocol shortly. It is expected to say that the Kyoto protocol is affordable and may cost the U.S. economy no more than a few tenths of one percent of GNP in 2010 by which time the GNP will have increased by more than 25% from current levels. However, the CEA analysis says that roughly 85% of the needed U.S. emissions reductions envisioned by the Kyoto protocol would have to be obtained overseas (e.g., through joint implementation and emissions trading). CEA is consequently overlooking the potential of emissions reductions through technology innovation and the broader application of energy efficiency and renewable energy technologies. Environmental groups warn that an "innovation-led strategy should be at the heart of any scenario" otherwise the CEA approach "could paint the Administration into a lose-lose corner."
4.) Climate Rage:
In his July 20 column in the Washington Post, Al Kamen quotes the July issue of Self Magazine noting that "researchers at the University of Missouri at Columbia and Iowa State University say global warming actually threatens to raise the violent crime rate. Experts estimate that for every one-degree- Fahrenheit increase in the average temperature, there will be 9,900 more murders and assaults per year in the U.S."
MISCELLANEOUS
1.) Solar Is No. 1:
A new, untitled report from the Worldwatch Institute, which will appear in the September issue of the organization's magazine, reports that solar energy has surpassed wind power generation to become the world's fastest-growing energy source. The report shows that sales of solar cells increased more than 40% last year, compared to wind power's growth of 25%. However, while there is a total of about 800 MW of solar power capacity in place around the world (enough to meet the yearly energy needs of 200,000 U.S. homes), wind power capacity totals about 7,630 MW (enough to fuel 1.9 million homes). Perhaps more importantly, world solar markets are growing at ten times the rate of the oil industry, whose sales have expanded at just 1.4% per year since 1990. Worldwatch predicts that "solar energy may now join computers and telecommunications as a leading growth industry in the 21st century." For further details, see the July 16 news release at www.worldwatch.org.
2.) Co-Releasers Wanted:
The Sustainable Energy Coalition is looking for organizations around the country interested in sponsoring news conferences in mid-October (exact date to be determined) to help co-release a public opinion survey the Coalition is commissioning on climate change, U.S. dependency on oil imports, and electric utility restructuring. Let us know if you are interested or would like further details.
July 20, 98
FEDERAL ENERGY BUDGET
1.) House Interior:
H.R.4193, the FY'99 Interior Appropriations bill is now expected to come to the floor of the House as soon as Monday, July 20 but possibly not until Wednesday, July 22 or later. The Fox-Skaggs amendment, to be introduced then, would add up to $70 million for energy efficiency R&D and low-income weatherization programs; DOE fossil energy programs are the likely source for the offsets. The Senate has no definite schedule yet for its $13.4 billion Interior appropriations bill. Sources from both chambers say rapidly shifting schedules may hold up votes on the Interior bills even further.
2.) HUD/VA:
Rep. Henry Waxman (D-CA) is expected to take the lead on an amendment to strip the anti-Kyoto language in the HUD/VA bill and report. The amendment may not be offered, however, until as late as next Tuesday (July 21).
3.) Environmental Poll:
A 4-page summary of a new public opinion survey commissioned by the Wilderness Society "reveals strong public opposition to the stealth tactics currently being utilized by Congress which threaten the environmental integrity of natural places." The survey found 7% of voters are bothered (42% strongly; 33% somewhat) to learn that Congress is considering attaching "rider which relax environmental regulations to necessary legislation such as bills which authorize spending for the government." Further, 69% believe that President Clinton should use his veto pen if "Congress attaches riders which relax environmental regulations to legislation." Let us know if you would like us to fax you a copy (warning: the small print may not fax well).
ELECTRIC UTILITY RESTRUCTURING
1.) Murkowski/Restructuring:
Senate Energy Committee Chairman Frank Murkowski (R-AK) has agreed to introduce legislation to implement the Clinton administration's plan to deregulate the U.S. electricity industry. Murkowski said he doesn't agree with the plan but is introducing the legislation as a courtesy to the President. The senator said he's against government-managed competition as called for under the administration's bill. He also concerned with the $3 billion systems benefit charge for energy efficiency, renewable energy, and other public benefit programs, and the exclusion of hydropower in the definition of renewable energy.
2.) Deregulation Bill:
The July 10 CongressDaily says that Republican and Democratic staff on the House Commerce Committee are no closer to reaching a consensus on electric utility restructuring than they were at the beginning of this year's session. Following a meeting July 8 to review the new Schaefer-Bliley bill, it was clear that the markup vehicle is still not a bill any of the Democratic members of the committee would be willing to support. In addition, at least three Republican subcommittee members have publicly said they will not support any restructuring legislation this year. Finally, it now seems clear that Senate Energy & Natural Resources Chairman Frank Murkowski (R-AK) will not report a restructuring bill out of his committee this year.
3.) California/Utility Bill:
Wenonah Hauter (Public Citizen: 202-546-4996) sent us a copy of an actual electric bill of a California resident under the state's new electricity restructuring program. The bill included the following itemized information:
Electric Energy Charge $14.56 Transmission $ 4.73 Distribution $41.89 Public Purpose Programs $ 4.96 Nuclear Decommissioning $ 0.65 Competition Transition Chrg. $44.97 Trust Transfer Amount $17.96 Total Charges $144.13 Legislated 10% Reduction - 14.72 Net Charges $129.72
Note that the price for electricity (i.e., the "energy charge") in the "market" is extremely low making it even more difficult for renewable energy and other independent generators to compete. On the other hand, note the high costs for distribution which is where utilities are beginning to load costs as they move away from generation to become distribution companies. Similarly, the stranded cost bailout totals $44.97. Moreover, the cost to pay the principle and interest on refinancing or securitization ($17.96) is more than the 10% reduction ($14.72) mandated by the restructuring law.
4.) California Referendum:
Californians for Affordable and Reliable Electric Service (CARES) petitioned the California Supreme Court on July 7 to keep off the November ballot the initiative to repeal the state's electricity deregulation law. CARES is a coalition of business and industrial groups; its chair, Allan Zaremberg, is the president of the California Chamber of Commerce. The California School Boards Association also joined the opposition to the initiative with the conclusion that "This initiative will have serious economic consequences for California's school children by cutting future education funding." The association estimated that schools would lose $62.5 million if the referendum were approved.
5.) California Price Increases:
Articles from Reuters (July 9), the San Jose Mercury News (July 10), and CongressDaily (July 13) report that the price of backup power needed to keep California's electric grid stable spiked to $5,000 a megawatt for a three-hour period last Thursday -- roughly 1,000 times the normal price -- only days after federal regulators lifted a price cap. A handful of power plant operators had been given permission by FERC to set market-based rates for so-called "replacement reserve" power. Some speculated that the $5,000 price may have been the result of a bidding error. Nonetheless, the bid had to be accepted. The price hike cost the Independent System Operator, which runs California's electricity system, $9 million, which it passes on to power companies, which pass it along, albeit indirectly, to the consumer.
6.) Durbin/Investigation:
The July 14 CongressDaily reports that Senator Richard Durbin (D-IL) has called for an investigation by the Federal Energy Regulatory Commission into alleged price gouging by energy brokers that forced some utilities to pay high rates during the June heat wave. Energy companies in the Midwest could not meet increased demand on June 25 caused by temperatures that reached the 90s. The utilities bought electricity on the open market from wholesale energy companies for as much as $4,000 per megawatt hour; prices usually range between $30 an $50.
7.) Massachusetts Referendum:
The July 7 Boston Globe reports that a University of Massachusetts poll on the state's deregulation repeal referendum finds that only 21% favor repeal, while 36% are opposed and 40% are undecided. Alan Nogee (Union of Concerned Scientists: 617-547-5552) notes that conventional wisdom is that for ballot initiatives facing large corporate ad campaigns, one needs initial support in the 70s to have a chance to win.
CLIMATE CHANGE
1.) Clinton/Florida/CO2:
In remarks to firefighters and relief workers in Florida on July 9, President Clinton stated: "[T]his fire was made worse because you had, first, the wettest few months you'd ever had, followed by the driest few months you'd ever had, and then June was the hottest month ever recorded -- even hotter than any July or August ever recorded in Florida. No one entirely understands what is bringing about this extreme weather. But I can tell you this -- and I've got it on my mind since I just got back from China, and they've been keeping weather records there for 500 years and more. Since the 1400s, the five hottest years ever recorded all occurred in this 1990s -- 1997 was the hottest year ever recorded. If present temperature trends continue, 1998 will be warmer than 1997 was. Now, you'll hear a lot of political debate and the Vice President and I believe that the climate is warming and that we ought to take steps to cool it off and that we can do it without hurting economic growth. Others may disagree. ... [But] we have to believe, based on the evidence of the last decade, that if we get hotter and hotter, and we have periods of more extreme wet, followed by periods of more extreme drought, we're going to have more things like this happen."
2.) Gore/Climate:
On July 15, Vice President Gore announced new data showing that last month was the warmest June on record; this means that the first six months of this year have set a new global temperature record -- following 1997, which was the warmest year on record. Furthermore, scientists of the National Oceanic and Atmospheric Administration, which tracks global temperatures, said July is on track for setting yet another record -- perhaps as the hottest month in recorded history. Gore noted that additional heat in the climate system can lead to more extreme weather of all kinds -- more floods, more drought, and more powerful storms such as the devastating fires in Florida that were the result of record rainfall followed by record heat and drought. He called on Congress to abandon efforts to block any educational discussion of climate change. "The evidence of global warming keeps piling up, month after month, week after week. ... [However], Congress' approach to global warming is: know nothing, do nothing, say nothing. ... How long is it going to take before these people in the Congress get the message? People are sweltering out there. ... We owe it to our children and grandchildren to listen to what the scientists tell us about global climate change, to speak out forcefully, and to act decisively. Numerous disasters and tragedies around the country tell us that we cannot wait."
3.) Florida/Radio Ads:
This past week, the Natural Resources Defense Council and Florida PIRG aired radio ads targeting Reps. Dan Miller (R-FL) and Bill Young (R-FL) which state, in part: "The world's leading scientists tell us that global warming, fueled by pollution will bring more droughts and uncontrollable fires like the ones that have ravaged our state this summer. ... But rather than working to prevent such disasters, Young and Miller did the opposite. While our state was burning, they voted to silence government experts and to prevent them from even THINKING about steps to reduce global warming. ... Florida's climate is too important to risk. It's time to stop fiddling around." Let us know if you would like to see two articles from the July 15 Tampa Tribune reporting on the ads.
4.) Climate/Texas:
Public Citizen/Texas (512-477-1155) hosted a climate change panel on July 8 at which it was noted that through the month of June, 70 daily temperature records unofficially were broken in 17 Texas cities. So far this year, farmers are estimated to have lost more than $500 million, and the state has lost more than $1.8 billion in agricultural economic activity due to the resulting drought. It was also pointed out that because of the industrial and petrochemical industries in Texas, the state contributes as much of the human-generated greenhouse gases as do Italy and Great Britain.
5.) Climate/Ocean Warming:
The Associated Press (July 10) reports that a new study co-authored by John McGowan of the Scripps Institution of Oceanography says that a rise in ocean water temperatures may be causing a decline in fish, birds, seaweed, and some mammals along the West Coast. These include a 70% decline in zooplankton and a 90% decline in an important sea bird called the sooty shearwater. Fish populations have declined about 5% per year since 1986. A surge of warm weather in the 1980's is linked to the wholesale death of young among fur seals, sea lions, and related animals in Alaska. However, warmer water fishes and other animals such as the short-beaked dolphin have migrated northward and are now common in places that they once shunned. McGowan notes that the trend "is consistent with global warming, but we can't attribute it to that; if global warming occurs, it would probably look something like this." Let us know if you would like us to fax you a copy of the 3-page article.
6.) Climate Views Worldwide:
Reportedly, the June 10 issue of Chemical Week states that support for action to curb global warming is growing internationally, according to a consortium of pollsters that surveyed at least 1,000 people in each of 30 countries this spring. Support rose in 15 or the 20 countries for which 1997 data was available. U.S, support for immediate action rose from 45% to 51%.
MISCELLANEOUS
1.) Electricity Data:
A new report, "Electric Power Annual 1997-Volume I," from the Energy Information Administration reports that conventional hydroelectric facilities operated by U.S. electric utilities generated 341 billion kilowatt-hours of electricity in 1997 -- an all-time high, surpassing the prior record of 332 billion kWh in 1983. (Utility-operated, non-hydro renewables provided 7.5 billion kWh.) In contrast, nuclear-powered generation fell 7%, or 46 billion kWh, from 1996 due primarily to units being out of service or retired in New England, the Middle Atlantic, and East North Central Census Divisions. The report can be found at: www.eia.doe.gov.
2.) UCS Internship:
3.) OPEC Anniversary:
Reminder -- October 25 is the 25th anniversary of the OPEC oil embargo.
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