Clean Air versus Efficiency Charges. Clean Air Wins.

The Clean Energy Standard

New York State recently enacted the Clean Energy Standard, which has supportive subsidies for clean energy producers, including nuclear energy.

Yes, this was a huge change. The number of people who welcomed it was also huge.  You can see pictures of the rally in Albany at this blog post at Environmental Progress: Big New York Victory Shows How Far Nuclear Still Has to Go.  You can see Al Gore and Governor Cuomo congratulating the state in this Twitter stream, which was Storified by Nuclear Energy Institute.

August 1 Albany CES Rally
Michael Shellenberger at center
photograph by Stephen Whiting

 The Price of the Clean Energy Standard

In the Environmental Progress blog post, there's a graph of the amount of the clean energy subsidy for nuclear and renewables.

The current subsidy for New York state renewables is 4.6 cents per kWh.  This is the federal 2.2 cents  per kWh subsidy (the production tax credit), plus the Tier 10 subsidy by New York State of approximately 2.45 cents per kWh.   Over the various years, the New York Tier subsidy has varied between 1.5 and 3.5 cents per kWh, with most of the recent year New York subsidies being close to the current 2.45 cent subsidy.  These subsidies are set by an auction process.

The Clean Energy Standard price supports for nuclear are set depending on the price on the grid and the credit given by the Greenhouse Gas initiative, and so forth.    For Indian Point, the subsidy is zero. It sells into a high-price grid.  For the upstate plants, the subsidy is currently 1.7 cents per kWh.  If the price on the grid goes up, the nuclear subsidies go down.  In contrast, the 4.6 cents per kWh for renewables continue, no matter what the price on the grid might be.

The Price of Efficiency

A question I often get asked is:  why can't we just fund efficiency? Wouldn't that be better?

Well, no.  I will leave out the problem that you can only push efficiency so far, before we go back to candlelight.  Instead, I will look at Vermont's full-speed-ahead attempt to support efficiency.

Vermont has an entire agency, Efficiency Vermont, to promote efficiency. According to a government renewables and efficiency energy website, the funding for this agency has grown from $19 million in 2006 to over $35 million in 2010.

Efficiency Vermont is supported by a surcharge on everyone's electric bill, and that surcharge has been growing.  According to recent newspaper articles, linked below, the agency now has a budget of $50 million per year. There are 600,000 people in Vermont, so that is about $80 per person per year. Most households (one electricity bill) have more than one person, so their "fair share" could be hundreds of dollars a year (say, four times $80 or $320).  On the other hand, commercial and industrial users pay these charges, and this lowers the household cost.  I think the average residential bill for Efficiency Vermont is less than $200 a year.

As you can see, this per-person charge for Efficiency Vermont  dwarfs the charges expected from the New York State Clean Energy Standard.  The Governor's office in New York estimated the Clean Energy Standard cost at  $2 per household per month ($24 per year)   In contrast, Vermont efficiency costs approximately $80 per person per year.

Efficiency for Whom?

I spent a few years serving on my town's Energy Commission.   I am no longer on the commission, but I still appreciate energy efficiency.

Efficiency is getting a bad reputation, though.  In recent years in Vermont, there has been a rebellion against Efficiency Vermont charges,  A typical article from VPR is titled: House Brings Down Budget Axe on Efficiency Vermont.  Or in VTDigger: Amendment to H.40 freezes energy efficiency charge.  These articles state that Efficiency Vermont has a budget of about $50 million per year.

If you read the comments on these articles, you will read notes from people who wanted Efficiency Vermont to help them with the costs of energy improvements to their homes.  Many of them didn't get funded, and they were not happy about it. Many people did not qualify for the grants, for various reasons.  Some could not afford the blower-door tests that Efficiency Vermont required to start the efficiency process.  All in all, an efficiency grant helps me but not you, or you but not me.  If my neighbor has new insulation,  that helps him directly, but all I see of the insulation is a surcharge on my electricity bill.

It is no wonder that at $80 per person per year and only some people benefit--there was going to be pushback from Vermonters.

Clean Energy versus Efficiency

For some people, it's a no-brainer to fund efficiency instead of funding any kind of big nasty power plant.  However, when taxes and surcharges fund a clean energy source, everybody benefits from the clean air.  When efficiency is funded, only some people benefit.

Let's be honest. I  benefited.  I could afford a blower door test.  I could afford to work with a certified contractor.  Yes.  I have new insulation.  Every now and again, I want to thank my neighbors for donating the money (through their electricity bills) for my new insulation.  Well.  Maybe that "thank-you" would not be a good idea. ;-)

In contrast, clean energy benefits everyone. The benefits are as clean and clear as the air we breathe.

The New York State Clean Energy Standard is a great bargain for the people of New York.

Save Fitzpatrick: An Opportunity to Help

Fitzpatrick Nuclear plant is now the subject of a hard-hitting website, Upstate Energy Jobs.  The name of the site's video expresses why Fitzpatrick should be saved: This is What Closing a Power Plant Looks Like. (Video is also embedded below.)

You can take action to save the plant. On the home page, there are links to Sign the Petition and a link to Contact the Governor.   I urge you to follow both links.  Also, I encourage you to explore the website, which includes links to news about Fitzpatrick.

From the About page of the website:  Upstate Energy Jobs is funded by the County of Oswego Industrial Development Agency.  All hail to the sensible people of Upstate New York!  (My husband was born and raised in Upstate New York.)

Go to the Home Page, sign the petition, write an email to the Governor. I am grateful to Oswego Industrial Development Agency for building a page with convenient links--to help us make a difference.




Sad side note: Can you imagine any official Windham County governmental organization doing anything to save the jobs at Vermont Yankee?  I can't.  Looking back at everything, I am amazed by the lack of community feeling in greater Windham County.  End note.

Since upstate New York has a local movement that is trying to save the plant, let's help them.

Governor Cuomo, Fitzpatrick, and Money

Fitzpatrick Plant

James A Fitzpatrick Nuclear Power Plant

 Early this fall, Entergy announced that both the Pilgrim plant and Fitzpatrick plant were losing money, and that Entergy would soon decide whether to continue operating those plants. Entergy said they would make the decision by the end of October.

The Pilgrim plant has been decided: Vice President Bill Mohl of Entergy announced that the Pilgrim plant in Massachusetts would close by 2019.  At the same press conference, Mohl said that Entergy has not yet made a decision about whether it would to continue to operate the James A. Fitzpatrick plant in New York State. (You can read about the press conference here, and even see the video of the whole conference.)

Entergy has not made the decision about Fitzpatrick.  However, on October 16, Entergy took a $965 million charge against earnings, writing down the value of the Fitzpatrick plant by that amount.  (Yes, that's about a billion-dollar write-down.)

The people in the Fitzpatrick area do not want the plant to close. Hundreds  of people in upstate New York rallied in favor the plant. You can see a short video of the rally here; the video includes interviews with local legislators who support the plant. The Syracuse.com article that describes the write-down also has more than thirty pictures of the rally.

Negotiating with the Governor

Andrew Cuomo

Entergy is attempting to negotiate a deal with New York State that would keep Fitzpatrick open.  As quoted in the Time-Warner article and video about the rally, State Sen. Patty Ritchie said: "I've been in a number of conversations with the governor's staff and also had an opportunity to talk to the governor, he's engaged in the issue."

However, Governor Cuomo's engagement is something that is rather hard to define.  Despite the fact that Entergy closed Pilgrim and despite the fact that Entergy took almost a billion-dollar write-down on the Fitzpatrick plant, Cuomo is treating the situation as if it is all about….well, all about him.

Cuomo's view is that Entergy is threatening the state with "job losses" and Entergy won't get away with this. Yes, Cuomo himself plans to stand up to Entergy, despite their "threats." What a guy! (sarcasm alert)

A quote from a letter Cuomo sent to Entergy, as reported by Tim Knauss in Syracuse.com:

I strongly caution Entergy not to use the threat of job losses as a means of prodding economic relief to help their bottom line. This tactic has been attempted by others i‎n the past and has been unsuccessful. In this state, an entity called the Public Service Commission has oversight over services deemed to be in the statewide public's best interests.

Entergy should keep that in mind. Any decisions will be made on the merits 

Entergy didn't write an answer to Cuomo directly. Instead, Vice President Bill Mohl wrote a note to the employees which indirectly referenced the Cuomo's accusations of "threatening job losses."  Once again,  Knauss has the story in Syracuse.com.  Here's a quote from the Mohl letter to the employees:

While we have been unsuccessful to date, our discussions [with the state] are continuing as we approach a final decision. Quite frankly, our desire has been to engage in meaningful discussions regarding continued operations of Fitzpatrick without first having to provide formal notification of a Fitzpatrick shutdown decision to the State of New York, as some have indicated is necessary. Most recently, we have heard inaccurate claims that we are "holding employees hostage" or "only seeking to improve our bottom line." That is simply not the truth. We are facing substantial financial challenges at Fitzpatrick and have been negotiating in good faith with New York State over the last several months to obtain certainty for this facility.

I am Shocked, Shocked

Governor Cuomo acts as if New York State has never made any kind of concession to attract or keep a business. He is shocked that a business would ask for such a thing, in order to continue to employ people in New York. He is shocked, shocked!

Meanwhile, here in Vermont, we can only envy the deep pockets and major financial concessions that New York gives to businesses.

New York basically outbid Vermont to have a new wafer fabrication plant placed in their state.  New York was able to offer $1.865 billion dollars in concessions to the plant owners, the emirate of Abu Dhabi. Poor little Vermont could offer---a $4.5 million dollar "Enterprise Incentive Fund." (An existing plant in Vermont will continue operating, however.)  It's a long story, and well told in this VTDigger article Global Foundries to Keep IBM Plant in Essex Going. Some quotes:

GlobalFoundries’ footprint in New York vastly outstrips that of Vermont. The company…is wholly owned by the emirate of Abu Dhabi…..

New York state has offered GlobalFoundries about $1.865 billion in financial incentives to establish itself in the state, according to a recent situational analysis of IBM’s plant in Essex Junction by the Greater Burlington Industrial Corp.

In May, the Vermont Legislature budgeted for a $4.5 million Enterprise Incentive Fund, which Gov. Peter Shumlin can tap at his discretion with limited legislative oversight….

Perhaps when Governor Cuomo gets over his advanced state of shock, he can think about agreeing to some small concessions to keep a steady, reliable electricity supplier, with a steady, reliable payroll, operating in his state.  He won't even have to figure out how to explain why he is sending almost $2 billion dollars of New York taxpayer money to Abu Dhabi.  Because he won't be sending any money to Abu Dhabi!

By keeping Fitzpatrick operating, Cuomo will be taking care of his own people.  I think that is what a governor is supposed to do. I urge him to do so.