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April 11, 1999
FEDERAL ENERGY BUDGET
Budget Caps Threaten Energy Research Funding:
The "Washington Post" (April 6) reports that current federal budget caps will force congressional appropriators to "provide large increases to fund GOP priorities in defense and education, absorb huge military emergencies such as Kosovo and still hold overall spending at least $9 billion below last year. ... The spending caps apply to $536.3 billion of the $1.7 trillion federal budget, the so- called discretionary funds that pay for the vast government bureaucracy...including energy research. ... [A]ppropriators warn that they will have to make drastic, politically dangerous and, some say, unrealistic cuts in beloved projects ... Energy research may have to be abandoned." For example, House Interior Appropriations Subcommittee Chairman Ralph Regula (R-OH) notes that funding for fossil fuel research is at risk as well as DOE's $100 million joint project with automakers to develop an 80 mpg car. Not explicitly stated in the article but anticipated by at least some member groups of the Sustainable Energy Coalition are severe cuts and possible elimination of all funding for renewable energy and energy efficiency programs.
ELECTRIC UTILITY RESTRUCTURING
1.) New Restructuring Bills to be Introduced This Week:
Senator Jim Jeffords (R-VT) may hold a press conference on Tuesday, April 13 (although it may be delayed until April 22) to announce the introduction of his electricity restructuring bill. The bill will be quite similar to his bill from the last session except that it will include a net metering section. As such it will be the most environmentally friendly restructuring bill before Congress; it includes, for example, a Renewable Portfolio Standard of 10% by 2010 increasing by 1% per year through 2020. Furthermore, the Administration is reportedly planning to publicly unveil its own restructuring bill on Wednesday, April 14; however, the Administration has not yet lined up a congressional sponsor for its bill and many observers believe it faces an uphill battle in Congress.
2.) Stranded Costs Helping Nuclear Revival:
A 7-page opinion piece by the American Local Power Project suggests that stranded cost bailouts legislated in state deregulation laws have breathed new life into many reactors by reducing their nuclear debt. According to nuclear energy officials themselves, the stranded cost bailouts enacted by the California legislature ($28 billion) and other states passing electric restructuring laws have strengthened the "competitiveness" of many of the nation's nuclear power plants. "With their nuclear debt eliminated, utilities with strong operating records are getting a new lease on life," said Marvin Fertel, senior VP at the Nuclear Energy Institute. "It's a whole new world from a business standpoint." The full article can be found at https://www.local.org; follow link to "local power news."
3.) Massachusetts Community Aggregation - A First!:
The "Cape Cod Times" (April 1) reports that a power pool of towns in Massachusetts has succeeded in attracting four bidders who want to sell electricity and natural gas to all 180,000 customers on Cape Cod and Martha's Vineyard. This marks the first time in the U.S. that communities have formed a power-purchasing compact and could become a national model for municipalities to make sure their residents benefit, like major power users are, from the new competitive market for electricity. Let us know if you would like us to fax you a copy of the 3-page article.
CLIMATE CHANGE
College Campuses Organize on Climate Change:
Taking a lesson from the successful anti-apartheid battles on American college campuses in the 1980's, Ozone Action has launched a campaign at Stanford, Harvard, and the University of Washington, urging those institutions to stop investing in companies that contribute to global warming. According to the "San Jose Mercury News" (April 7), the student government associations at all three schools have passed strongly worded resolutions urging those universities' trustees to divest themselves of holdings. Let us know if you would like us to fax you a copy of the 2-page article.
MISCELLANEOUS
1.) Solar Businesses/Consolidation:
"Calstart News Notes" (March 29) reports that BP Amoco has announced it is buying the 50% stake it doesn't already own in Solarex, an action it says will make the largest solar company in the world. Previously, a 50-50 joint venture with Enron, Solarex will merge with BP Solar to become BP Solarex and produce 30 MW of solar products annually. BP Amoco is seeking solar sales of $1 billion annually within a decade. Meanwhile "The Olympian" (March 29) reports that Applied Power Corporation, a subsidiary of Idaho Power, has become one of the top two solar power companies in the United States after buying Applied Energy Engineering (Redway, CA), Solar Electric Specialties (Willits, CA), and Ascension Technology (Waltham, MA). Applied Power Corp., which has designed large scale solar projects, purchased companies that will give it a share of both smaller and even larger customers.
2.) Renewables-Have They Performed As Expected?:
The Renewable Energy Policy Project has issued a new 20-page study, "Winner, Loser, or Innocent Victim: Has Renewable Energy Performed As Expected?" It concludes that renewable energy technologies have failed to meet expectations of market penetration; two exceptions are wind and biomass applications. For four of five of the technologies reviewed, projections of installed capacity and generation have generally been revised downward over the past three decades. Finally, renewable energy has met or exceeded past price projections, but cheap conventional energy generation has blocked renewables from gaining greater market share. The report can be found at https://www.repp.org.
3.) Colorado Wind Facilities Expanding:
"Wind Energy Weekly" (April 6) reports that Public Service Company of Colorado has announced plans to develop 25 MW of new wind energy capacity in Foote Creek Rim, Wyoming. The goal is to bring the 33 NEG Micon 750-kW turbines on line by the end of June, thus ensuring eligibility for the federal production tax credit for wind-generated electricity. Rather than offering the power generated from the windfarm through its green pricing program, PSCo will be including the new wind power in its standard rate-based electricity supply mix; the typical PSCo customer will see an increase of less than one dollar annually.
4.) Britain - 10% Renewables by 2010:
Bridge News (April 1) reports that Britain's Department of Trade & Industry is committed to providing 10% of the UK's electricity needs through renewable resources by 2010. It envisions requiring public electricity suppliers to enter into contracts to buy a defined amount of electricity generated by renewable sources. However, the article notes that about 40% of renewable energy projects -- primarily wind power -- have failed at the planning stages due to opposition from local communities although waste and landfill gas projects are actually on the increase. UK renewable energy firms currently employ 3,500 people but the nation could boost that total to 45,000 with export and market development efforts. Let us know if you would like us to fax you a copy of the 2-page article.
5.) Geothermal Potential Assessed:
Reuters (April 8) reports that research conducted by the U.S. Geothermal Energy Association, the U.S. Department of Energy, and international academics concludes that geothermal energy has the potential to meet 8.3 percent of the world demand for electricity, if new technologies for harnessing the earth's heated water reservoirs are deployed. Current U.S. geothermal production is around 2,800 MW but that level could rise to a potential 18,800 MW in the next decade with the use of new technologies. By 2010, the state of California could see 30 percent of its electricity needs provided by tapping geothermal reserves. Geothermal is currently priced around 5-6 cents per kWh offering competition to coal but not for cheaper natural gas.
6.) Nuclear Waste Legislation Moving:
"Environment & Energy Update" (April 5) reports that the House Commerce Energy & Power Subcommittee plans to vote on H.R.45 on April 14 to build an interim high-level nuclear waste facility in Nevada. However, provisions in the bill have raised questions on whether there would be enough funds for building an interim storage facility in addition to the permanent disposal facility being tested at Yucca Mountain now. One option under consideration is to take the funding totally off budget but this option may be opposed by a number of subcommittee members. Earlier the "Update" (March 29) reported that Senator Pete Domenici (R-NM), chairman of the Senate Appropriations Energy & Water Development Subcommittee, is considering eliminating funding for Yucca Mountain. Domenici is suggesting a shift to accelerated transmutation of nuclear waste (ATW) instead of permanent disposal. Under his plan, there would be a need for two interim storage sites - one in Nevada and one at a new site where the waste transmutation occurred.
7.) Energy Outlook:
The April issue of the Energy Information Administration's "Short-Term Energy Outlook" projects electricity demand to grow 1.4 percent in 1999 but increase to 2.1% in 2000 which is still below the 2.4 percent annual growth that occurred between 1990 and 1998. Furthermore, oil import dependence is projected to reach 54 percent in 2000 if domestic oil production continues to decline, if weather conditions are normal, and if modest economic growth continues. The report can be found at https://www.eia.doe.gov/steo.
UPCOMING EVENTS
1.) Earth Day 2000:
The Earth Day Network is launching "a global campaign to bring about a swift transition to clean, renewable energy sources and a giant leap forward in energy efficiency." A focus of the campaign will be on activities leading up to Earth Day 2000 (i.e., April 22, 2000). To launch the campaign, the group has released an Earth Day Clean Energy Agenda for which it is seeking endorsements. The agenda's four goals are: (1) provide at least 12% of U.S. energy needs from renewable energy sources by 2010 and 25% by 2020, increasing the percentage of renewable energy by at least 2% per year thereafter through 2050; (2) stabilize U.S. energy use at 1990 levels by 2010, then reduce it by at least 10% from those levels by 2020, and by 1% per year thereafter through 2050; (3) phase out fossil fuels by 2050 -- first coal, then oil, and ultimately natural gas; phase out nuclear power by no later than 2020; and (4) reduce U.S. heat-trapping pollution by at least 10% below 1990 levels by 2010, and continue to reduce it by at least 2% per year thereafter. Let us know if you would like us to e-mail or fax you a 9-page packet of more detailed information.
2.) Earth Day Energy Fast:
The annual Earth Day Energy Fast asks all persons to reduce or eliminate their energy use on Earth Day, April 22, 1999. The campaign, begun in 1991, seeks to evolve the awareness-raising message of Earth Day to one of action, with direct and immediate benefits to nature in the form of less pollution and decreased resource destruction. The campaign's slogan is "We pay for energy not only when we get the bill, but nature pays every time we use it." For more information, visit the campaign's new website at www.earthdayenergyfast.org.
3.) Sustainable America:
The National Town Meeting (NTM) for a Sustainable America is scheduled to be held in Detroit, MI on May 2-5. The NTM, and affiliated events occurring in communities all across the nation throughout 1999, will provide a focus for showcasing ideas, best practices, cutting edge 21st Century technologies, goods and services essential to sensible use of resources that will ensure a robust economy and a quality lifestyle of all people. For information or to register, see www.sustainableamerica.org .
FEDERAL ENERGY BUDGET
Congressional Budget Resolution - Problems Ahead:
The House and Senate budget resolutions could have a devastating impact on domestic programs including the energy efficiency and renewable energy budgets. Under the terms of the resolution, the existing budget caps would stay in place while proposed tax cuts would explode in the out years and a proposed "lockbox" would be created to safeguard the a portion of the surplus for Social Security. Combined, this will place ever greater pressure on domestic discretionary programs. The problem is made worse by the fact that the resolution seeks to increase funding for both education and defense programs. Moreover, certain programs, such as transportation, will be protected necessitating even deeper cuts in other domestic programs. Finally, the traditional "firewall" in the energy & water appropriations account has been removed making it possible -- and likely -- that defense programs will be able to raid funds formerly earmarked for renewable energy and other energy programs. If there is a bright side, it is that Congress will likely wait to act on its appropriation bills until the Congressional Budget Office provides its mid-year review which will probably have more optimistic estimates of the surplus. This, in turn, may set the stage for Congress and the Administration to agree to break the budget caps.
ELECTRIC UTILITY RESTRUCTURING
1.) Murkowski Opposes Renewable Portfolio Standard:
According to "Inside Energy" (March 22), Senator Frank Murkowski (R-AK) recently told a meeting of the National Association of State Utility Consumer Advocates that if DOE includes a Renewable Portfolio Standard in its restructuring bill, "it's not only dead on arrival, it's buried, because the technology is not available. To set this kind of goal is unrealistic. It just isn't achievable."
2.) Delaware Approves Restructuring Bill:
Reuters (March 26) reports that Delaware has become the 17th state to adopt some form of utility restructuring legislation. Residential customers will receive a 7.5% rate cut, to be kept in place for four years, and the right to choose their power company by 2001. Large industrial customers will be able to choose their supplier beginning October 1999. The bill reportedly also contains provisions for environmental and low-income assistance funds, and provisions for state-wide customer-education programs.
3.) California Restructuring/One-Year Critique:
On March 25, The Utility Reform Network issued a 1-page assessment critical of California's utility restructuring program at the end of one year's time. It notes that "despite the 'legislated 10% rate reduction' appearing on their bills, that rate reduction ... is actually only about 2%, far less savings than consumers would have seen had regulation of electric generation remained in place." Furthermore, "less than 1% of California's residential customers have switched electric companies, despite the $80 million the PUC awarded to the monopolies to explain deregulation to their customers." On the other hand, "the utilities [have] collected billions in accelerated recovery on their unprofitable investments, diminishing the financial risks they'll face should competition ever develop." Let us know if you would like us to fax you a copy.
4.) Maryland Restructuring Bill Nears Completion:
On March 26, the Maryland House and Senate approved similar, though not identical, restructuring bills which will now go to a conference committee to work out differences. The bills include about $2 billion in stranded costs for the state's utilities as well as projected savings of $100-$200 in utility bills for big businesses. However, it provides only $24-$30 million for three years for low-income programs and includes no funding or other provisions for either energy efficiency or renewable energy programs. Accordingly Maryland would be the first state of "zero out" the energy efficiency programs in place with the utilities as part of restructuring. Consequently, several environmental groups have signaled that this would be the worst restructuring bill in the country (in terms of sustainable energy) and they are pressuring for a gubernatorial veto.
CLIMATE CHANGE
1.) Projected CO2 Emissions Lowered:
In its new "International Energy Outlook 1999," the Energy Information Administration projects that, due to lower projections for economic growth, worldwide carbon emissions in 2010 are expected to be 4% lower than in last year's "Outlook" but still 39% above 1990 levels. While emissions per person in China and India are expected to triple between 1990 and 2010, U.S. and Canadian per capita emission levels, while being the highest over the period, are expected to flatten after the year 2000. Asian energy use is expected to surpass that or North America by 2005 instead of 2000 as earlier projected. Delays in the recovery of the Russian economy caused estimates for emissions in Eastern Europe, former Soviet zone to drop 13% from last year's forecast. This means that 374 million metric tons of carbon emission credits could be available in 2010 for trading with industrialized nations. The report is available at https://www.eia.doe.gov/oiaf/ieo99/home.html.
2.) EIA Climate Analysis Pending:
The Energy Information Administration is about to release a 70-page analysis of the Climate Change Technology Initiative that was requested by Reps. Sensenbrenner and Brown on the House Science Committee. One government reviewer says EIA "low balls" the benefits related to the Initiative, and does not provide a medium and/or high range for technology benefits, and uses '...overly pessimistic assumptions about technology costs and market penetration. ...the report basically minimizes technology policy in general to the detriment of energy efficient and renewable energy technologies."
3.) Cars/Climate Alert:
The Union of Concerned Scientists has issued a 3-page action alert urging people to encourage their senators to sign on to a letter authored by Sens. Dianne Feinstein (D-CA), Slade Gorton (R-WA), and Richard Bryan (D-NV). The letter asks President Clinton to work with Congress to increase automobile fuel efficiency standards. Let us know if you want us to fax you a copy.
MISCELLANEOUS
1.) Web - Wind Sites:
The American Wind Energy Association's web site now includes a map outlining all major wind energy projects in the U.S. It can be found at https://www.awea.org scroll down the home page to the title "NEW! Wind Energy Projects."
2.) British Petroleum/Arco Merger:
The "Wall Street Journal" (March 29-30) reports that BP Amoco PLC is in serious talks with Atlantic Richfield Co. "concerning a possible combination transaction;" that is, BP would like to acquire Arco in a stock deal valued at $25 billion. The merged company would be about equal in oil production to a merged Exxon/Mobil and could pave the way for the development of Alaska's vast natural gas reserves. Public Citizen and other consumer groups are warning that a BP/Arco merger is a further warning of a pending flood of oil sector takeovers that will degrade environmental standards, reduce tax revenues and cost retail consumers. Let us know if you would like us to fax you three articles (9 pages).
3.) Hydro Reform Bill Introduced:
The National Hydropower Association has issued a 2-page release applauding the introduction of S.740 by Sen. Larry Craig (R-ID) to amend the Federal Power Act and reform the hydropower licensing process. According to NHA, the bill "gives federal resource agencies the responsibility to consider the full effects of the conditions on a hydro license; currently, resource agencies can impose mandatory conditions on licenses without regard to air quality, electrical reliability, economics, or values such as drinking water, flood management, irrigation, or recreation." Rep. Edolphus Towns (D-NY) will introduce a House companion bill after the spring recess. For details, call David Tuft (NHA) at 202-383-2537.
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