What the 2013 State of the Union said about energy

Tuesday, February 12, 2013

Tonight President Obama delivered the 2013 State of the Union address.  Energy figured heavily in his remarks, with emphasis on energy efficiency, natural gas production, and renewable energy.  His newly proposed policies, some of which require congressional approval, aim to boost the economy while protecting the environment.  Here's a look at what he said, relying on the text released online by the New York Times as text as prepared for delivery, as provided by the White House.

The State of the Union is a key opportunity for a president to speak his mind to the public and to Congress.  Article II, Section 3 of the U.S. Constitution directs the president to "from time to time give to Congress information of the State of the Union and recommend to their Consideration such measures as he shall judge necessary and expedient."  Presidents since Woodrow Wilson have delivered oral addresses to Congress.

President Obama's 2013 State of the Union address presented a number of energy issues and policies.  He criticized federal budget sequestration orders as disrupting priority programs including the energy sector:
In 2011, Congress passed a law saying that if both parties couldn’t agree on a plan to reach our deficit goal, about a trillion dollars’ worth of budget cuts would automatically go into effect this year. These sudden, harsh, arbitrary cuts would jeopardize our military readiness. They’d devastate priorities like education, energy, and medical research. They would certainly slow our recovery, and cost us hundreds of thousands of jobs. That’s why Democrats, Republicans, business leaders, and economists have already said that these cuts, known here in Washington as “the sequester,” are a really bad idea.
Energy security and sovereignty also figured prominently.  He cited advances in transportation fuel economy, renewable energy, natural gas, and reductions in carbon emissions:
After years of talking about it, we are finally poised to control our own energy future. We produce more oil at home than we have in 15 years. We have doubled the distance our cars will go on a gallon of gas, and the amount of renewable energy we generate from sources like wind and solar – with tens of thousands of good, American jobs to show for it. We produce more natural gas than ever before – and nearly everyone’s energy bill is lower because of it. And over the last four years, our emissions of the dangerous carbon pollution that threatens our planet have actually fallen.
Climate change also returned as a key area of focus, as it had in President Obama's second inaugural speech last month:
But for the sake of our children and our future, we must do more to combat climate change. Yes, it’s true that no single event makes a trend. But the fact is, the 12 hottest years on record have all come in the last 15. Heat waves, droughts, wildfires, and floods – all are now more frequent and intense. We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence. Or we can choose to believe in the overwhelming judgment of science – and act before it’s too late.
To address climate change, President Obama asked Congress to develop a market-based solution, but vowed to take executive action if necessary:
The good news is, we can make meaningful progress on this issue while driving strong economic growth. I urge this Congress to pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago. But if Congress won’t act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.
Clean energy continues to draw attention, while the development of economically-recoverable natural gas supplies is the latest energy revolution:
Four years ago, other countries dominated the clean energy market and the jobs that came with it. We’ve begun to change that. Last year, wind energy added nearly half of all new power capacity in America. So let’s generate even more. Solar energy gets cheaper by the year – so let’s drive costs down even further. As long as countries like China keep going all-in on clean energy, so must we.
In the meantime, the natural gas boom has led to cleaner power and greater energy independence. That’s why my Administration will keep cutting red tape and speeding up new oil and gas permits. But I also want to work with this Congress to encourage the research and technology that helps natural gas burn even cleaner and protects our air and water.
President Obama also promoted energy efficiency, from getting the transportation sector off oil to improving residential, business and industrial energy efficiency.  He proposed to create a trust funded by oil and gas leases and royalties to help fund some of these shifts:
Indeed, much of our new-found energy is drawn from lands and waters that we, the public, own together. So tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good. If a non-partisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we. Let’s take their advice and free our families and businesses from the painful spikes in gas prices we’ve put up with for far too long. I’m also issuing a new goal for America: let’s cut in half the energy wasted by our homes and businesses over the next twenty years. The states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make it happen.
Infrastructure investment was another point, including the electric power grid and pipeline networks:
America’s energy sector is just one part of an aging infrastructure badly in need of repair. Ask any CEO where they’d rather locate and hire: a country with deteriorating roads and bridges, or one with high-speed rail and internet; high-tech schools and self-healing power grids. The CEO of Siemens America – a company that brought hundreds of new jobs to North Carolina – has said that if we upgrade our infrastructure, they’ll bring even more jobs. And I know that you want these job-creating projects in your districts. I’ve seen you all at the ribbon-cuttings.
Tonight, I propose a “Fix-It-First” program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country. And to make sure taxpayers don’t shoulder the whole burden, I’m also proposing a Partnership to Rebuild America that attracts private capital to upgrade what our businesses need most: modern ports to move our goods; modern pipelines to withstand a storm; modern schools worthy of our children. Let’s prove that there is no better place to do business than the United States of America. And let’s start right away.
The 2013 State of the Union address suggests continued growth in U.S. sectors such as energy efficiency, alternative transportation fuels, renewable energy, and infrastructure development and maintenance.  Carbon emissions may also be examined, with a national market-based carbon cap and trade program possible such as now exists in California and the northeastern Regional Greenhouse Gas Initiative member states.  How Congress and the public react to these remarks remains to be seen, as does how and to what extent President Obama's proposed policy shifts are implemented.

Feds pay damages in Yankee Atomic Power lawsuit

Wednesday, February 6, 2013

The Portland Press Herald reports that the federal government has partially paid damages awarded under a lawsuit filed by the owners of three former nuclear power plants for about $160 million in damages.  While final regulatory approvals remain pending, the companies plan to use the award to benefit ratepayers.

The nuclear plants -- Maine Yankee, Connecticut Yankee, and Yankee Rowe -- closed in the 1990s.  Federal law requires the federal government to develop a plan for long-term storage and disposal of radioactive waste.  While waste removal was supposed to start in 1998, the federal government has yet to designate a permanent waste repository or to remove the spent fuel.  As a result, the radioactive waste is stored in concrete casks at the sites of the former plants, at the plant owners' expense.  For Maine Yankee, those storage and maintenance costs range from $7 million to $11 million annually, with similar expenses for the other two plants.

The plant owners filed a lawsuit against the federal government in 1998, seeking damages for the cost of maintaining the spent fuel onsite.  After a series of awards and appeals,  a 2012 U.S. Court of Appeals decision upheld the award of $39,667,243 to Connecticut Yankee and $81,690,866 to Maine Yankee, and increased Yankee Atomic's damages award from $21,246,912.55 to $38,268,654.55.

These amount have reportedly now been paid, and the power companies are proposing how they will use the proceeds to benefit ratepayers.  Meanwhile, because the U.S. Court of Claims ruled that utility companies cannot receive damage awards for storage costs that have not yet been incurred, the Yankee Companies have filed a second round of damages claims for approximately $247 million, and anticipate filing a third round of damage claims before the end of 2013.

From 1972 until permanent shutdown in 1997, Maine Yankee operated a 900 megawatt pressurized water reactor in Wiscasset, Maine.  During its operations, Maine Yankee was the largest generating station in Maine.  The plant closed after its owners received a report by the Nuclear Regulatory Commission staff identifying safety problems that were deemed too costly to fix.  Even after closure, the unexpected costs of storing the spent fuel onsite only worsened the plants' economics.  The lawsuit judgment is designed to compensate the plant owners for these costs, although the litigation itself carries a price tag for both the companies and the U.S. taxpayer.

What role will nuclear power play in our energy mix in the coming years?  For now, no federal waste repository is planned.  Safety is paramount, particularly following the 2011 Fukushima disaster in Japan.  Nuclear power plants can produce cost-effective baseload electricity, but face the risk of surprise costs such as those faced by Maine Yankee.  Can a holistic legal and business solution enable the safe operation of nuclear power plants?

Super Bowl 2013 power outage

Monday, February 4, 2013

The National Football League held Super Bowl XLVII last night at the Mercedes-Benz Superdome in New Orleans, Louisiana.  The game was interrupted by a power outage just after the second half started, which caused many of the stadium lights and systems to go dark.  Play was delayed for 34 minutes as workers scrambled to resolve the problem.  What happened to the lights at the Super Bowl?

Electric utility Entergy supplies electricity to the Superdome.  According to a statement issued jointly with Superdome manager SMG, load-monitoring equipment sensed "an abnormality in the system".  To protect systems and isolate the issue, that equipment opened a breaker and partially cut the power feed to the facility.  While backup generators kicked in, the backup supply was insufficient to fully power the Superdome's lights and systems.

The Mercedes-Benz Superdome is a significant consumer of electricity.  Statements issued by the Super Bowl New Orleans Host Committee suggest that energy usage for major Super Bowl venues including the Mercedes Superdome, Morial Convention Center, Team and NFL hotels, will consume up to 4,600 megawatts of electricity.  (Note that this statement is improbable - it should likely read 4,600 kilowatts or 4,600 megawatt-hours.  4,600 megawatts would be about 15% of Entergy's 30,000 MW total generating capacity, and represents more power than 4 typical nuclear power plants can produce.  In any event, the Superdome clearly drew a lot of power from the grid.)

The Super Bowl power outage will focus attention on professional sports' approach to energy.  NFL teams and stadium owners have been exploring alternative energy for some time; for example, last year the Philadelphia Eagles considered developing solar panels and wind turbines on their stadium.  Even the Superdome has invested in energy efficiency, developing an efficient exterior LED lighting system in 2011. 

While alternative energy efforts can reduce operating costs and environmental impacts, they are unlikely to completely displace reliance on the utility electric grid.  Stadiums' significant power demands during games far outstrip their electricity consumption at other times.  This means that stadiums would need to install sizable distributed generation to be self-reliant, but would only need to run that generation for a limited number of hours per year -- making the economics of a distributed generation project challenging.

Traditional, utility-supplied power may remain the most cost-effective basis for large stadium electricity supply for now -- but leaves stadiums, players and fans reliant on their public utilities to keep the lights on.  Team and stadium owners eager to avoid the embarrassment and cost of an outage will continue to look for solutions, including more backup generation and more robust grid connections.