(Escu) Five things I like about nuclear power

Five Best Things about Nuclear Energy

Suzanne Jaworowski recently asked for input on nuclear communications, specifically for ideas on the best things to communicate about nuclear energy. Jaworowski is Chief of Staff, Senior Advisor, Office of Nuclear Energy at the Department of Energy.

Dan Yurman posted her request at his blog, and I posted my Five Best and Howard Shaffer's Five Best at this blog. Today, Nick Escu (his pen name) contributes to the conversation.  Escu is a frequent guest blogger at this blog, often writing about natural gas prices.

Nick Escu: Five Things I Like About Nuclear Power

1) Baseload power.

Baseload power is the foundation that the grid depends upon. Nuclear, natural gas, and coal are the  three baseload power sources for the US grid.

2) Reliability.

Reliability is the function of being able to continually produce power. Factors include: fuel, fuel supplies, sustainability during severe weather.

Nuclear plants reliably out rank both natural gas and coal. Nuclear plants produce power over 92% of the time. Coal approximately 57% of the time, and natural gas only 53% of the time. As a baseload, nuclear power is more reliable.

3) Resilience

There are several factors involving resilience for grid operation. How much fuel does a plant have on hand? Do fuel supplies become unavailable? How does severe weather affect the plant itself?

Nuclear plants receive fuel either once every 18 months or once every 24 months. Nuclear plants strive to run breaker to breaker, 24 hours/day, 365 days a year, up to 2 years continuously. The nuclear equipment is extremely safety conscious, with redundancy built in, to order to continue running.

Both natural gas and coal have severe limitations on availability of fuel.

Homes receive natural gas ahead of natural gas power generators. When pipeline restrictions begin to be affected, such as in a severe cold period, like the 2014 polar vortex, or the recent winter blast, most natural gas plants don't have reserves. Some natural gas plants are now building oil storage tanks, and burning oil during severe weather.

Coal supplies in the open, FREEZE. So just because a coal plant has 90 days worth of reserves, doesn't mean those reserves are able to be used, because they're frozen. Many coal plants are now installing ice breaking equipment to break up the frozen coal, and transport it into their plants.

At present, nuclear power plants are much more resilient, and in fact, they care for the grid's needs during severe weather. For example, when hurricanes hit Texas, the nuclear power plant's twin units kept supplying power, when all other power sources had shut down.

4) Low Cost

Nuclear power plants are very expensive to build initially, due to the additional safety built into these plants. But the normal pay-off of the initial costs, is completed between 15 and 18 years. But then these nuclear plants run efficiently for the next 40 to 60 years.

The average life span of a natural gas plant is 19 years, before an entire re-build is necessary. Natural gas plants are smaller, power wise, than a nuclear plant. Natural gas plants are able to be licensed quicker than nuclear plants, so a 450 MWe natural gas plant, which costs $2.5 billion is able to be licensed and approved within a year, and constructed with 3 years, as compared to licensing and building for a nuclear plant within 10 years.

So where exactly are the lower costs?

• First, natural gas is a polluter of the air, and eventually, assessments will be required for the pollutants natural gas spews out every day. 
• Next, natural gas prices swing from as high as $14/MMBTU to as low as $1.72/MMBTU. Since the recent $1.73 in March, 2016, the steady natural gas prices have risen to $3.65/MMBTU, over a 100% climb in 2 years. That steady climb is partially due to the export of Liquefied Natural Gas (LNG) to foreign countries willing to buy nat gas at $17.00/MMBTU. Prices are rising. When natural gas reaches $4.75/MMBTU, nuclear power becomes cheaper than natural gas. 
• But for now, nuclear plants are less expensive, for several reasons. Fuel for nuclear plants have risen less than 7%/year since the 1990s. Additionally, power is continually produced by nuclear plants: their reliability and resilience far outdistances both natural gas and coal. Natural gas prices spike during severe weather to sometimes more than $500/MMBTU. Nuclear remains steady. 

Nuclear plants are operational for 60 to 80 years, at the same location. Natural gas plants effectively have to replace everything every 19 years. So megawatt vs. megawatt, nuclear power is built much stronger initially. It out lasts and out performs natural gas in a less expensive manner.

5) Community Friendly

Nuclear plants contribute massive amounts in taxes, in community involvement, in family and community building, because of so many exceptionally talented and experienced people, contributing to their local communities for their working and retirement lifetimes. When a nuclear plant is closed ahead of time, communities and people of those communities suffer tremendously.

The Northeast Grid and the Oil

ISO-NE Report on Cold Weather Grid Performance

It was dramatically cold here in the Northeast from late December through January 8.  Temperatures of ten below were common. The grid used amazing (30% or more) amounts of oil, as the power plants could not get gas. (I wrote a couple of blog posts about this, which I reference at the end of this post.)

On January 16, ISO-NE issued a report on the grid behavior during this period. Cold Weather Operations, December 24, 2017 through  January 8, 2018.  This document is worth reading.   Frankly, in my blog posts, I simply did not know how bad things were becoming on the grid. Let me quote viewgraph 11 of the ISO report:

"As gas became uneconomic, the entire season’s oil supply rapidly depleted"

Pictures speak louder than words

This is a story best told in graphics.

As I noted earlier, the generation mix on the grid shifted heavily to oil. On December 24, 2017, oil supplied 2% of grid electricity. On January 6, 2018, oil provided 36% of the electricity. ISO slide 14 shows this very effectively.

Slide 14
from ISO report
Double click to expand
Other illustrations are from the same report

Update:  Ed Pheil pointed something out to me: if I don't explain that demand on the grid was rising between 12/24 and 1/1/, the decline in nuclear's share of the grid electricity (from 39% to 27% etc.) is inexplicable.  Did the nuclear plants go off-line?  No. But there are only so many nuclear plants, and they can make only so much power.

The chart below shows a steady line of "daily generation" for the nuclear plants.  It is the green line near the top of the chart. There's one exception: Pilgrim went off line when a transmission line failed.   You can see the dip.

Thank you to Ed.  This was a necessary clarification.

Slide 13

Local natural gas prices soared, while Marcellus shale prices remained fairly steady.  Electricity prices followed the natural gas prices. However, generators that could switch to oil did the switch. Oil was was less expensive. Natural gas prices rose about 30 fold (from around $3 to around $90, as shown below)

Slide 30

Due to power plants using lower-priced oil, however, prices on the grid rose from around $50 to around to $450/MWh, only a ten-fold rise.

Slide 55

Oil Depletion

The region was burning oil far faster than it was replenishing it.  On December 1, we had 68% (of the maximum oil) available to power plants.   On January 8, we had 19%.

Slide 21

For a more dramatic picture, ISO shows a single power plant's oil supply, which went from an eight-day supply to a one-day supply over the same period.

Slide 22

There are many important slides.  For example, slide 17 shows how the generators that were enrolled in the ISO-NE Winter Reliability Program really picked up the slack, and slide 18 compares the amount of oil burned in the two weeks of cold with the amount of oil burned the previous two years.  (More was burned in the two weeks of cold.)  

And then there was all the scrambling to keep things going. Slides 35 and 36 show that there were emergency conference calls about the grid---pretty much every day.  

What have we learned?

Much as I dislike burning oil for power, I dislike widespread outages even more.  I give ISO-NE tremendous credit for the Winter Reliability Program, and for keeping the lights on.

According to the last slide in the ISO program, replenishment of oil is the key issue for reliable operation during cold weather in New England.  ISO-NE is correct,  according to their charter.

slide 62

However, the ISO-NE charter is limited.  For me, the important thing is to keep Northeastern nuclear plants operating. Nuclear plants are thoroughly reliable.  (Yes, Pilgrim went offline due to a transmission line failure.) Nuclear plants keep making electricity, no matter what the weather might be, as long as there is a transmission line to send out their power. 

In cold weather, we need reliability. In cold weather, we need nuclear. 

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Earlier blog posts:

Successful encouragement of oil on the New England grid, December 27.

More cold and more oil on the New England grid, December 29

Vermont, Hot Air, and Puerto Rico, January 7

A Perfect Storm for Natural Gas Prices. Nick Escu Guest Post

Recreated Rembrandt: Christ in the Storm
Art by Ankur Patar: Original was stolen

The  Three Storms 

The movie  The Perfect Storm was about two monstrous storms which come together, out in the ocean, and destroy a very solid fishing vessel.

Today, three storms have come together as a Perfect Storm for nuclear energy.

The Westinghouse Storm.

Toshiba’s $4 billion dollar purchase of Westinghouse, in 2006, was hit with

• the March, 2011 tsumani in Japan.  
• the  2012/2013 Toshiba accounting problems, and 
• the merger of Westinghouse with CB&I, while building 4 new AP1000s in the US and 4 new AP1000s in China.  

This perfect storm is forcing Toshiba to possibly auction off Westinghouse.

The Areva Storm

AREVA's headaches as the step child of EDF were initially looked at as a “Begging Session.” Areva wanted to keep operating under French direction. However, French leadership wants to reduce nuclear power by 50%. This is very strange since almost 80% of all France’s power comes from nuclear energy.

But unquestionably, AREVA Nuclear Fuel is now being used by more and more operating companies.  So the stepchild is doing better than expected.

The Henry Hub Storm

Finally, the Henry Hub natural gas price in February, 2016, went from $1.71/MMBTU to $3.44/MMBTU yesterday. That is just over 100% increase in 11 months. But why? Because the Cheniere Liquid Natural Gas plant came on line and exported the first LNG ship overseas. But Cheniere is only the first of the 17 Approved LNG Permits. The others will be coming online this year, next year, and thru 2020.

The world prices at $20/MMBTU clearly show the profits to be made. So what does this have to do with nuclear energy? When nat gas reaches $4.75/MMBTU, nuclear power becomes standalone profitable. AND when nat gas reaches $6.10/MMBTU, even coal power becomes profitable.

My two previous posts on the subject were:
Nuclear vs Gas Economics, a Three Year Projection
Nuclear vs Gas Economics Part 2

After the Storm?

So here we are. With the ability to buy or merge Westinghouse and AREVA, at rock bottom merger prices, while the world hasn’t woken up yet to the natural gas prices climbing to new heights.

But the opposite is also possible.

Westinghouse could be broken up into saleable divisions. Same for AREVA, and then only GE would have their ESBWR or their ABWR to sell throughout the world.

For American nuclear exports, many 123 Agreements are in place, but the  Ex-Im Bank also needs to be funded for foreign sales to increase.

This year will decide the fate of many companies, as well as determining whether existing US plants have a lifeline.

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Nick Escu is the pen name of a person with long experience in the power industry.  He is a frequent guest blogger at this blog.

Nuclear vs Gas Economics Part 2: Guest post by Nick Escu

Nuclear Power vs. Natural Gas Power 3 Year Projection (Part 2)

By Nick Escu

LNG unloading arm in Japan

Part 1  of this post basically explained a few facts from historical data:

• Nuclear plants today are not as economical as natural gas generation plants are today.
• Natural gas prices have consistently had ups and downs. When natural gas prices are high, nuclear plants become very profitable. When natural gas prices are very low, nuclear plants become unprofitable.

Changing times and LNG

There are new kids on the block. Seventeen  new liquid natural gas export permits granted, and an additional  29 LNG permits partially approved (Energy.Gov-August17, 2016). This has changed the dynamic of the amount and pricing of natural gas leaving the US. There's a huge difference between U.S. prices and worldwide prices.

There is now a very positive indication that natural gas prices are rising, as in the case of the Henry Hub price for MMBtu in February, 2016 moved from $1.71/MMBtu to $2.98/MMBtu in October, 2016. A 75% increase in 8 months.

Will changes like this continue? Will there continue to be a such price changes?

EIA stats (November 14th, 2016) for November and December (Drilling Productivity Report) clearly show an increase production rate of 4% to 5%.

Why is this increase important?

Because as more of those 17 approved permits begin liquefying natural gas and exporting natural gas, the natural gas prices will continue to climb. More LNG (Liquid Natural Gas) produced and sold will increase the base US price for nat gas.

Natural gas producers will want to maintain their huge markups in the world. The world prices for nat gas, begin at the $17.50/MMBtu. Our prices here in the US are at $3.00/MMBtu, or an almost 600% markup value for natural gas. Huge profits from exporting gas from in the US.

LNG export abilities set to grow

A portion of the first LNG permit, licensed to Cheniere in Louisiana, has come on line, February, 2016.
Cheniere, in Louisiana, will produce 2.1 Bcf/day of LNG. But the total for all 17 approved permits, and the 29 partially approved permits will equal 53.8 Bcf/day of LNG for the world.

So now we clearly see why production of new wells and output has increased for the following 2 reasons.

• First, the need to maintain the profit margin between US nat gas production and world nat gas demand. 
• Second,  to have sufficient stock available for all 46 LNG exporters.

Nuclear power becomes profitable at about $4.75/MMBtu spot nat gas.

So Cheniere was the first test, with just their first unit out of 6 units.  Their first unit caused a gas price increase of 75% increase in 8 months. Now the market has balanced. But it will not be balanced for long!

The LNG exporters will need over 25 times the amount of nat gas and what we will see are nat gas prices following each new LNG exporter when they come online.

By the end of 2016, Cheniere’s Sabine Pass Trains 1 & 2 will be in operation.  In 2017, another three trains will probably start, some from Cheniere and others from Dominion’s Cove Point. By the end of 2018, five more new trains* may come online from Cameron, Freeport and Corpus Christi. Another four trains are due online in 2019 from Freeport, Corpus Christi and Sabine Pass. US LNG exports have only just begun.

We will see the nat gas prices rising in 2017. By the end of 2017, that $4.75/MMBtu price will be reached and every nuclear plant will again be competitive.

Think about the zero pollution from nuclear power plants versus all the pollution that the new natural gas power plants the world will produce.

Enough for now.

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Nick Escu is the pen name of a person with long experience in the power industry.

* A natural gas liquefaction facility consists of separate units, called "trains," each of which is set up to purify and condense natural gas.  So a facility can have one train or several.  Cheniere will have six trains.

Nuclear vs. Gas Economics, a Three Year Projection. Guest post by Nick Escu

Nuclear Power vs. Natural Gas Power 

A Three Year Projection

By Nick Escu

The power industry continually looks for a stabilized grid demand to operate profitably, economically and reliably.

There are several key factors the power industry looks at to determine these needs are met.

Profitability is determined by how much generation costs, plus outstanding production and grid costs are entailed. Factors affecting generation are fuel costs, labor costs, parts costs, plus new regulations, plus changes in overall demand.

Costs

We’re going to look at current nuclear power costs and three-year projected nuclear power costs, as well as current natural gas power costs and three-year projected natural gas costs.

We are not going to look at the huge increase in air pollution and power production costs caused by natural gas versus nuclear. These facts are readily seen in Germany which eliminated nine of its nuclear plants in favor of natural gas and a little wind and solar.  It has shown a 25% increase in power costs. Similarly,  Japan has at present, shut down all of its nuclear plants, with a huge increase of air pollution and power costs. Similarly in California which shut down two nuclear plants with subsequent air pollution increases and rising power costs. Enough has been written  about these examples, and will continue to be written in the future.

Let’s begin our analysis.

Selling price

We will first look at basic selling price of nuclear power per megawatt hour versus natural gas power per megawatt hour.

The EIA actual selling prices as of January 2013 for Mid-Atlantic generators were $32.00/ megawatt hour, and for the Midwest were $25.00/ megawatt hour.

Nuclear power plants are base load plants. They operate at 100% of their capacity for over 90% of their operating time. So when a nuclear plant is contracted to produce power to maintain the electricity grid in their region, they must operate. For most nuclear plants, the breakeven costs for power production are between $32.00 and $35.00 per megawatt hour. Anything less and that plant is losing money. And most businesses, unlike the federal government, do not operate on a loss revenue basis. They are in business to make money.

Natural gas

Now let’s look at natural gas power production costs.

In February of 2003, according EnergyOnline  the electric production costs were $990 per megawatt hour in Texas and New York City costs were $175 per megawatt hour.

But because of the tremendous fracking, current natural gas electric power production costs have dropped to $28.50 per megawatt hour in November, 2013, according to 4 Traders.

So we can see that if you have a nuclear plant that runs very economically producing power at $32.00 per megawatt hour and you also have a natural plant that generates power at $28.50, the logical choice would be to turn off the nuclear plant and make $3.50 for every megawatt hour.

Let’s put it in simpler terms. A 1000 megawatt power plant should run 8760 hours per year (the total hours in a year 365 X 24 =8760). Normal maintenance is about 10% of that time, so let’s subtract 876 hours for a net total of 7884 operating hours. Now let’s multiply that $3.50 more money the gas plant makes over the nuclear plant, times those hours, and those megawatts.

$3.50 X 7884 X 1000 =$27,594,000. This is the yearly gross profit a natural gas plant has over the nuclear plant.

If that was all we had to determine profitability and future projection, it would be a No Brainer. We’d shut down the nukes today, as long as we had plenty of natural gas plants.

But there another factor we must consider for the bottom line.  Short term versus long term.

Short term and long term

I’m an electrical contractor working in the power industry. A few years ago someone came to me and offered me $100 per hour to work, and the work involved 80 hours per week. Since I was between contracts, I took the assignment for a 2 month period of time, and made a nice chunk of change.

Shortly thereafter I took a 2 year assignment at $65 per hour, for a 60 hour work week. In the middle of that assignment the contracting group I’d previously worked at attempted to get me to go on an assignment to the same place, for a 3 week assignment. If I had known they were going to call me back, I could have let the new group know I’d be away for 3 weeks.

My decision was simple. I stayed with the 2 year assignment. Why? Because for the long haul, it was more profitable.

Sometimes short term profits cloud our judgment over the long haul.

Fuel cost trends

Back to natural gas.  I began this section by stating that in 2003 natural gas production costs were between $175 to $990 per megawatt hour.

So now let’s look at the consistent biggest cost to nuclear plants, the cost of nuclear fuel.

In 2003 nuclear fuel costs averaged $57,000,000 for a 2 year fuel cycle for a 1000 megawatt power plant. 2013 average cost for the same fuel is $60,000,000, or a 5% increase over the past 10 years or an average of 0.5% per year increase for nuclear fuel.

Natural gas prices decreased from $990 to $28.50 or a 97.2% decrease in power production cost.

But is that price of $28.50 per megawatt stable or is it changing?

The World and Us

Let’s look at the world prices. The prices vary from $57.00 per megawatt hour in Europe to $116.00 per megawatt hour in Asia. Why? Because of fracking here in the US, our prices are so low. That guy on TV says “We have enough natural gas for 100 years” remember him?

But a new factor has risen, LNG exporters. The President has signed 17 permits to now export liquid natural gas to all those places willing to pay a little less than what they have now. So what will that do to our US prices of natural gas??? Do you really believe our gas prices will decrease?

No, all of you are realistic. Our prices will increase.

A good example is that gasoline in the Emirates was a few years ago $0.25 per gallon, but today it’s about $0.70 per gallon. Why? Exporting your home product raises your costs locally. In the Emirate’s case, almost 300% increase.

Let’s be conservative and say our natural gas prices will only double here in the US after we start exporting. How long will that be?

The LNG export sites are even as we speak, running new power lines for the 11,000 and 12,000 horsepower compressors that turn the gas into a liquid. Estimates at present are 3 years (or 2020) for the last permit construction completion and production beginning and exporting.

Cheniere began production and first export happened in mid-February, 2016. Natural gas price in late February, 2016, was $1.71/MMbtu (Henry Hub). As of the end of September, 2016, the price for nat gas had risen to $2.99/MMbtu, a 75% increase in less than 9 month.

So do we really want to completely shut down a minimum producer like a nuclear plant today, when in 2 years it will be worth twice its value?  It’s a penny wise pound foolish decision.

Nuclear and Us

The optimum plan would be, pay for, build and use the gas generation now, and temporarily place the minimal nuclear plants in a hold status, much like had been down at Brown’s Ferry and Bellefonte. The stability we’ve seen with nuclear power far outmatches in price fluctuations what we’ve seen in natural gas.

Let’s see how a closed nuclear plant power production has been supplied.

Vermont Yankee closed December, 2014. VY was a 620 MWe plant supplying most of the electricity generated in Vermont (72%). Gets a little tricky here. So what replaced the nuclear baseload power?

Right, natural gas.  The rise of gas on the grid almost exactly replaced the fall of nuclear on the grid.  Green Mountain Power distributes most of the power in Vermont, and they are wholly owned by Gaz Metro of Quebec.  Gaz also distributes nat gas through Vermont Gas Systems.  This is a company that is always happy to see more gas on the grid, and more energy imports from Canada.

Additionally, the Vermont government and Green Mountain continue to purchase power produced by YES, You Guessed It, Seabrook Nuclear Plant.

Now most all of Vermont is dependent on nat gas. And everyone is begging for larger natural gas pipelines, because no nat gas, NO POWER! Great move ecologically minded Vermont. 200,000 Vermont homes using electricity from natural gas instead of nuclear produce the following: 38,000 tons of NOx, 78,000 tons of SO2, 96,000 tons of CO2, and 104,000 tons of particulates. But all those numbers were at or near ZERO tons with Vermont Yankee Nuclear plant????

How about Connecticut? What’s their gas situation like? Legislators were just denied new nat gas lines, because under FERC guidelines, all required consumption must be contracted prior to build out of pipelines. Sorry Connecticut. No contracts, no new nat gas pipelines.

To be continued

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Nick Escu is the pen name of a person with long experience in the power industry.

Payments on the Grid: What Every Citizen Should Know

Payments on the Grid

In my opinion, payments and policy on the grid will determine our future energy mix.

Most people believe that they know about power sources: gas, nuclear, hydro, coal, solar, wind.  We know what the plants look like, and we have opinions.

In contrast, most people know almost nothing about the grid: how plants are dispatched, how plants are paid, what the controversies are.  Yet these grid-level decisions will determine our power mix in the future.


Update 2018: The video still exists, but its URL has changed.
Here's the new URL.
http://reflect-catv.cablecast.tv/vod/4853-OSHER-Grid-Class-2-April-2016-Medium-v1.mp4

I think that most people will learn something from watching this video, and pro-nuclear people will find it especially interesting.

(The first class session consisted of an introduction to the course, followed by an introduction to the physical  grid. Howard Shaffer gave the guest lecture on the physical grid. The entire first class session is posted at The Grid: Power and Policy Introduction and Shaffer on the Physical Grid.)

Electricity Prices Soar in New England. And Soon in Vermont.

 Neighboring States

Yesterday and today, two New England electricity distribution companies announced the rate increases that they require for winter.  Vermont can expect similar price rises.  Let's start with the neighboring states.

Massachusetts 37%: National Grid says that its customers in western Massachusetts can expect a 37% rate hike on November first, due to the retirement of Vermont Yankee nuclear plant and Salem coal plants. Other factors were also cited, including the fact that there are no new gas pipelines, expensive replacement fuels are used in winter, and natural gas prices are rising.  The higher electricity prices in Massachusetts will be in effect until April.  The video clip about the price rise finishes with a recommendation: people should think about replacing their older energy-hog refrigerators with a newer model.

New Hampshire 50%: Meanwhile, in New Hampshire, a small utility expects to double the "energy charge" portion of customer's bills in November.  The company, Liberty Utilities, explains that this will lead to an increase of about 50% in the customer's bills. A spokesman for Liberty Utilities explains that when demand for natural gas exceeds the supply, electric generators must use more expensive fuels to generate electricity, therefore driving up prices for the whole electricity market. This utility is located very close to my home in Vermont.

Is Vermont Different?  Well, no.

The latest we heard, the major Vermont utility, Gaz Metro (aka Green Mountain Power) was lowering rates by 2.5%, largely due to revenue sharing from Vermont Yankee.   Maybe we're good, here in Vermont? Too bad about the other states, but we're good?

Vermont: Yeah, we have grid power.  Nope.  Not really.  We're not good. None of our major utilities agreed to buy power from Vermont Yankee after the 2012 end of the plant's NRC license. Instead of buying Vermont Yankee power, they basically bought grid power. They bought one million megawatt-hours more grid power per year than they had purchased when they had contracts with Vermont Yankee.  Guy Page of Vermont Energy Partnership wrote Vermont Electricity At A Glance in March 2013, showing how much grid power Vermont utilities now purchase.

The Vermont Yankee license was renewed for another 20 years, but still, our utilities shunned  the plant.  They buy a lot of grid power, and  they are partially vulnerable to the same wholesale electricity market prices that affect the utilities in New Hampshire and Massachusetts.

Vermont: Yeah, we have Hydro Quebec Power. Partially vulnerable?  Did I say partially vulnerable? I meant mostly vulnerable!

Spillway in Hydro Quebec system

The jewel-in-the-crown of Vermont power purchases are the utility contracts with Hydro-Quebec.  See, it's not all grid power in this state.

But...those contracts don't matter.  As I wrote in two posts in 2010 (March 2010 and   December 2010) Vermont contracts with Hydro Quebec are market-follow contracts.  If the grid price goes up, the rate that Hydro Quebec charges Vermont also goes up. As I wrote in the December post, A Bad Deal with Hydro-Quebec,  these contracts will NOT protect us against major rises in grid prices.  The contracts have a little price-smoothing. Prices will not bounce around with the daily market changes. But those 35-50% price rises in other states aren't because of the volatility of the grid prices.  The price rises in other states are because of the total electricity cost raises on the grid.

I expect a similar price rise for Vermont.

Watch for it.

I suspect, however, that Green Mountain Power will probably not announce the price rise until after the election in November.

Is Fracking All It's Fracked Up to Be? Jones Seminar and Video

Jones Seminar at Dartmouth

Once a week, Dartmouth Engineering School hosts the Jones Seminar, covering a topic of general interest.  Last week's seminar was Limits to Growth of Energy: Facts About Fracking in the US, presented by Dr. Dennis Meadows, University of New Hampshire.  I would summarize the lecture as below (my summary, not a direct quote):

"There's a great deal of unreasonable exuberance about fracking. However, shale gas is not going to be cheap and abundant. It is not going to save the U.S. economy."

About Dr. Meadows and about the video

Meadows is co-author of the book Limits to Growth, and was active in the Club of Rome project at MIT in 1970-1972. (Information from Wikipedia.)  However, this seminar was supposed to be mostly about fracking, and that was why I attended it.    

I have embedded the video of the talk below. Since the video is almost an hour and a half long, I will give a brief summary here:

• In the first half hour, he says that fracking is oversold, but spend most of his time on models and limits-to-growth.  At around 29 minutes, he gives some numbers about coal and nuclear which do not jibe with my experience of those two technologies. 
• Starting around 30 minutes, he discusses fracking.  He provides slides of typical well profiles and field profiles. The wells have lousy profiles, and the fields become "middle-aged" (best areas have been drilled and are declining) within a short time, maybe ten years or so.This isn't a century worth of cheap gas.
• Zinger in the video: There's a very interesting section at the fifty-five minute mark. Meadows asks a rhetorical question: "If fracked gas is so bad, why is everyone so enthusiastic about it?"  His answer is that the enthusiasm is based on the idea that everyone in the gas industry has an incentive to lie about the situation.  Quite a strong statement!

A Credibility Gap Resolved

By the end of the talk, I actually hoped that shale gas would be a better resource than Dr. Meadows predicted.  I was also having some problems with his assessment of nuclear and coal. (I write more about that in a section below the video.)

Therefore, the question arises: if I didn't believe Meadows assessment of nuclear or coal, why was I believing him on the future of fracked gas?  Was I just a victim of confirmation bias: "He's finally saying something I agree with, so he must be right"?  I try to check my biases at the door, when possible.  Therefore, I emailed Meadows and asked him for the source of his slides on fracking.

Meadows was kind enough to send me the major source that he used for fracking information. This was a set of slides on The Shale Revolution (I link to it there...it is a long pdf of slides) by J. David Hughes of the Post Carbon Institute.  Hughes article of the same title was published in Nature Magazine, which is a very reputable source. 

Now, the Post Carbon Institute is pretty much what you would expect it to be, including Bill McKibben as a member. Still, what I wanted to do was simple: I wanted to judge the credibility of Hughes fracking slides. I judged them to be completely credible.

In the Hughes slides, I saw well profiles of the type I have seen in many articles about fracking: 80% decline in well productivity within about three years.  I also saw whole-field profiles about well-drilling and production: these slides matched what I have read about drill counts, etc. According to the notes on his slides, Hughes slides were assembled from data that came from a very reputable source, DrillingInfo (data at this site is behind paywalls).

So, for me, this was a credibility gap resolved.  Whatever Dr. Meadows said in the rest of his talk, his section on the future of fracking was well-researched and credible.

There isn't a century of cheap abundant shale gas.  It's a bubble.

Supplementary Information on the Big Energy Picture

Meadows on Nuclear and Coal

 I had real questions on Meadows views of nuclear and coal. Meadows dismisses nuclear energy by saying we can't build it fast enough.  (He doesn't say how fast we are going to build renewables, but I suppose they will be built "fast enough"?)

Meadows talks more about coal, but I disagree with him. For example, around  the 29 minute mark Meadows says (or implies, his words are not clear) that we pulverize coal as part of pollution control for coal.  That if we just shoved it in the furnace we would have a better energy-return-on-investment.  Not really.  We pulverize coal for a very practical reason: pulverization allows us burn it hotter and get more thermodynamic efficiency out of the system.  Stoker systems just don't burn as hot, and that old efficiency equation still holds. 

Meadows also claims that coal clean-up brings the energy-return-on-investment for coal down from 80 to 10. (His slide 12) As someone who worked in coal clean-up and taught the All Around the Coal Boiler Course...this is just not right, in my opinion.  There is a significant parasitic load of various types with coal cleanup, but it doesn't cut the coal energy output to 1/8 of what it would otherwise be.    

Meadows has been good about answering questions, so I should probably ask him about his basis for the coal numbers.  But my interest was the future of fracking, not about  his assessment of coal, nuclear, wind, Malthus etc.  So I only asked him about the sources for his fracking information.  He was good about sharing this information, and I am pleased to share it with my readers.

My ideas about fracking 

Meadows seminar confirmed much of what I have been predicting about fracking.

When I first started at EPRI, I was in the geothermal group, which was part of the Renewable Resources division. I often found myself in a small group of people attempting to evaluate a "new" type of geothermal resource.  Our group looked at the Los Alamos Hot Dry Rock Project and at the geopressured zones near the Gulf of Mexico, among other areas.

Some general conclusions:

• All things otherwise being equal, a more expensive well produces more expensive fluid.
• A well with poor permeability can be fracked to produce more fluid, but you will have a better well (producing more fluid overall) if the well itself has good permeability. 

How does this relate to fracking?  Well, drilling a horizontal shale gas well is more expensive than drilling a conventional gas well. Also, the need to frack the shale shows the original permeability is low. So I expect shale gas to be basically more expensive than "regular" gas.

Imagine my surprise to find people who are convinced that shale gas is cheap now, and going to be cheap and abundant forever!  Whenever I objected to this scenario for the future of gas prices, people looked at me as if I were crazy. Some said that I just want nuclear to be the low-cost provider so I'm hating on shale gas.

No.  Expensive wells with poor production profiles (shale gas wells) make expensive gas.  We're in a low-price gas bubble now, but the bubble and the low prices are unlikely to last.  

In other words, in the shale gas overview, Dr. Meadows and I agree.

Vermont Yankee's Closing Will Hurt Vermont

The Plant Will Close

On Aug. 27, Entergy announced that Vermont Yankee would be shuttered in the fall or 2014, when its current fuel load is finished producing power.

Entergy’s decision elicited a variety of reactions. Some regarded this as a great victory and were practically dancing in the streets. I was among those who were upset and depressed by the news. But I suspect that most people were somewhere in the middle. They thought, well, Vermont isn’t using Vermont Yankee power anyway, so it shouldn’t make much of a difference.

It does. Vermont Yankee’s closing will affect everyone in Vermont. It will make our electricity more expensive, more fossil-fuel based and less reliable.

Vermont utilities are using Vermont Yankee power now. They’re not officially buying Vermont Yankee power, but “using” power and “buying” power are different. Power use has to do with physical structure — where power plants, transmission lines and users are located. “Buying” power is about power contracts. A utility can choose to “buy” power from far away, but it will continue to use the power from the local generators. For example, when Green Mountain Power bought power from Seabrook instead of from Vermont Yankee, no power lines needed to be constructed. When a major supplier of regional power is lost, it must be replaced, regardless of who’s buying it.

So when Vermont Yankee closes, people in Vermont will have to get actual power from other sources. Can they get this power? The short answer is yes. Vermont Electric Power Co. (VELCO) manages the state transmission systems. VELCO was concerned that Vermont Yankee might close. Between 2010 and 2013, it invested $30 million in new lines and substations to bring replacement electricity to Vermont.

The Replacement Power

What will the new power sources be? Despite the Vermont Comprehensive Plan, very little will come from renewable sources. Building renewables is a slow, expensive, land-intensive job. Vermont Yankee generates 620 megawatts of power and is well-connected to the grid. In contrast, the Lowell Mountain wind project produces 64 MW and has difficulty getting on the grid. Rep. Tony Klein, a strong advocate of wind energy, said recently that he expects no more wind farms to be built in Vermont for another 10 to 15 years.

When Vermont Yankee goes off-line, Vermont will get its power from outside Vermont: either power supplied by the regional grid, ISO-NE, or hydro-power from Canada. With Yankee closing, much of the power on the grid, especially the spot market power, will be gas-fired and its price is due to go up. Power supplied under contract by HydroQuebec follows that spot price. Before, when gas prices went up, Vermont Yankee could underbid the gas prices, and supply many megawatt-hours at a lower price than gas. But without Vermont Yankee, gas prices will determine the price of almost everything on the grid.

Natural Gas and Some Oil

Industrial Gas Turbine

Our local grid power is already overdependent on natural gas. Right now, 52 percent of the power on the grid is produced from natural gas, and it will be a higher percentage when Vermont Yankee closes. ISO-NE considers gas dependence a “key strategic risk” for New England. The area is vulnerable to supply disruptions and price changes for this commodity.

Let’s start with supply disruptions. We had a natural gas supply crisis during the January 2013 cold snap. Although many in New England heat their homes with natural gas, the limited gas lines serving the region make for an inadequate supply. In cold weather, when domestic demand for gas spikes, those customers receive priority, and the power plants can’t get enough gas. During that cold snap, the grid would attempt to summon the help of a gas-burning power plant, and the plant would answer: “Sorry. Can’t go online. No gas.”

This year, ISO-NE started a “Winter Reliability Program” to address this problem — by using oil. ISO-NE has set aside $75 million to keep (mostly) oil-burning plants at the ready. That’s right, the grid is paying $75 million to have oil-burning plants keep oil onsite. (This is a “capacity” payment; the plants will be paid separately when they actual make power.) ISO-NE is ensuring reliability, but at a high dollar cost and a high cost in fossil-fuel use.

Without Vermont Yankee, more power will come from gas plants, but they will still be supplied by the same set of pipelines. Unless new pipelines are built quickly, an unlikely event, it will take less of a cold snap to activate the “we can’t get gas for our power plant” situation. In that case, more oil will be needed for back-up.

Price also matters, and once again, the problem is a lack of pipelines. Fracking has made a lot of gas available, but New England’s access to it is limited. The Federal Energy Regulatory Commission, which tracks national supply and demand, published a market assessment in October that reported that gas prices are relatively stable in most of the country, except in New England. In other regions, gas prices charged last winter and for futures contracts written on the coming winter are around $4 per MMBTU (1 million BTUs). In New England, natural gas prices last year were $6.60 MMBTU, but the futures price for the winter of 2014 is soaring to $11.75. Electricity prices in this area are also expected to rise, since electricity prices customarily track gas prices.

Canadian Hydro--only a very partial solution

What about getting more power from hydro plants in Canada? This will work … partially. Depending on how much electricity we import, new transmission lines may well be needed. Some of these lines are already being planned. We should also note that Canadian power is unlikely to shield us from price rises on the grid. Under the new HydroQuebec contracts signed around 2012, the price HydroQuebec charges will fluctuate; it will move according to the market price on the grid, which itself follows natural gas prices.

Ice Storm of 1998

In this case, we will be actually moving more electricity from Canada, not just writing contracts. Electricity carried long distances is also liable to disruptions. In 1998, an ice storm devastated HydroQuebec’s power lines, causing widespread, lengthy power outages. This could happen again, but let’s look at a more recent and more mundane supply disruption.

During that same cold snap last January, HydroQuebec exported only about half of the usual amount of electricity to the U.S. Why did it cut back just when the power was most needed?

Quebec law requires HydroQuebec to supply inexpensive electricity to “legacy” customers within the province. The needs of those customers must be met, and at a retail price of around 3 cents per kWh. Therefore, many people in Quebec heat with electricity. In a cold snap, the Quebec heaters go on, and HydroQuebec has less power to send to us. HydroQuebec hates this, but has no choice.

Cold Weather and Reliability

Even with Vermont Yankee running, Vermont and New England were overly dependent on natural gas. Without Vermont Yankee, the problems will get worse,. Our dependence on natural gas and on Canada sets us up for a perfect storm of increased power prices — and it won’t take a monster storm to trigger it. Cold weather itself will do a fine job.

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This op-ed originally appeared in the Valley News on November 17, and appeared in the Ethan Allen Institute newsletter in December.

A reference list for this post is Reference list for effects of closing Vermont Yankee.

Economics and the Public Service Board Hearings.

Public Service Board Members
David C. Coen, Chairman James Volz,  John Burke
Photo from PSB Board Member Biography web page

The Hearings

The Vermont Public Service Board has finished its hearings on the docket for the state license (Certificate of Public Good) for the power plant.

This last set of hearings were technical hearings: parties to the process testified and cross-examined each other.  The public could attend, but not comment.  One major issue was economics.

Vermont Economics

One might expect the Board to focus on Vermont's interest in jobs or inexpensive power or whatever.  That is, the Board could be expected to focus on how the plant operation will affect the state.  After all, the Board is a state quasi-judicial regulatory panel.

However, the Board's focus seems to be on whether the plant is profitable for Entergy.  In my opinion, that is more Entergy's business than the Board's business. If Vermont Yankee isn't profitable, it is still only a part of a company.  Vermont Yankee is part of Entergy, and the chances that "the company" would have financial issues is very slight.  (And by the way, the Board doesn't have a particularly good track record at seeing problems coming: think Burlington Telecom). 

Actually, the Board's economic concern with Vermont Yankee profitability is a very thinly veiled nuclear safety concern, in my opinion. Is Entergy making enough money to operate the plant safely? (I am shocked, of course, that the Board is treading so close to federally pre-empted issues.  Shocked, shocked....)

As reported by WCAX, Peter Bradford of Vermont Law School said that: "Most nuclear plant owners are responsible and in any case recognize there is nothing more against their self-interest than an accident, but there's always the possibility somebody will cut a corner..." Commenting on the hearings, WCAX states that: "State officials say the continued economic health of Entergy is vital." 

WCAX.COM Local Vermont News, Weather and Sports-

National Economics

The next step for our local activists was to sue the NRC about Entergy finances.  A group is suing the NRC: it  claims that emergency NRC action is required because Entergy is not "financially qualified" to operate the plants. The suit asks that the NRC take emergency enforcement actions against Vermont Yankee's license (and Pilgrim's license, and Fitzpatrick's license) on the basis that Entergy is operating these plants at a loss. 

Nuclear plants and coal plants are currently struggling because of the low price of natural gas. Still the price of natural gas is about twice as high as it was a year ago, and nobody expects it to go down to the $2 level again.  Nuclear and coal are doing better than they did last year, but it is still not a great situation for merchant plants.  I discussed this at some length in my recent ANS blog post: Philosophy, Shale Gas and the NRC National Meeting.

The NRC inspects plants for safety, not economics.  If a plant cannot meet the safety criteria, the NRC will shut it down until it meets the criteria.  If the plant cannot afford to economically meet the criteria, it will close permanently for economic reasons.  But it will not be closing because the NRC inspected its balance sheet!  The NRC would be concerned if an entire company were about to file for bankruptcy.  How profit and loss are divided within a large company is not something that the NRC would try to regulate. (Note: the NRC does track the adequacy of decommissioning funds.)

Entergy Economics

And what about Entergy itself?  How's the company doing?  Everyone read the UBS report predicting Entergy would close Vermont Yankee: I discussed this report in my blog post: Vermont Yankee is Refueling, and I Sort of Told You So. (Well, actually I sort of trashed the UBS report in that post, by doing a careful analysis of the places where their conclusions didn't match their data.  Hint: always look at the data.)

For further reading about Entergy, I suggest the Seeking Alpha report from last August:  Entergy Corporation: Inside The Numbers.  It reviews Entergy results in several ways, and concludes: This shows that Entergy Corporation is very profitable, and very efficient. Based on the nine tests, overall, the company is showing very strong results.

And that report was written when natural gas prices were  lower than they are today!

Or you can look up Entergy prospects any place on the web.  Any particular plant may operate at a loss or a profit, but the company is a financial powerhouse.

How Thin Was Their Veil

The concentration on Entergy's economics (rather than the effect of Vermont Yankee on the state's economics) is a thinly veiled attempt, once again, to regulate nuclear safety.

Sigh.  I am shocked, shocked....

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Coming Attractions in this blog:

In recent days, three main issues were discussed before the Board:

• Plant economics 
• River water quality (especially thermal discharge) 
• Entergy and trust

I plan to cover each issue in a separate post over the next  few days.

Guest Post: Hallquist on Wind and the Grid

David Hallquist is the Chief Executive Officer of the Vermont Electric Cooperative (VEC).  Like most co-operatives, VEC is owned by its rate-payers.

Once upon a time, VEC was the third-largest utility in Vermont.

But then the two largest utilities, Green Mountain Power and Central Vermont Public Service, merged.  The new utility (Green Mountain Power) is a wholly-owned subsidiary of Gaz Metro of Quebec.  So now VEC is the second-largest utility in Vermont.

This afternoon, David Hallquist sent me an email including some VEC talking points.  I asked if I could use them as a guest post on my blog. He graciously agreed.

But first, a few words about VEC.  VEC takes its responsibilities quite seriously, including:

• The requirement to use intermittent renewable power
• The requirement to provide reliable, reasonably-priced power to its owner/ratepayers.

A recent VEC blog post Adoption of Renewable Energy Requires Realistic Timeline, shows the utility's thoughtful approach.  Late last year, the VEC Board of Directors asked the legislature to put a hold on requiring new renewable mandates in the state.

This afternoon, Hallquist sent me two documents that were very interesting.  One I already had: Matt Wald of the New York Times on the soaring prices of natural gas In New England: A Natural Gas Trap.  Hallquist also sent me the talking points below, which expand on the Wald article and look further toward the future.

These talking points are the way VEC sees the grid situation, right now.

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Concerns about the Effect of Natural Gas prices on Electric Rates

Vermont Electric Cooperative’s power supply portfolio is designed to provide stability and predictability of short and long-term power supply costs. VEC keeps a small portion of the portfolio open so that some power can be purchased on the open market.  Recent unexpected and prolonged high price levels in the wholesale energy markets has caused concern that underlying issues may cause future market volatility that could ultimately have a negative impact on consumer electric rates.

Wholesale electricity prices skyrocketed in mid-January through the end of February:

• Prices are normally around $36/megawatt-hour ,
• Prices spiked at about  $1000/megawatt-hour, and 
• Prices hovered much of the time around $200/megawatt-hour.  

This made sense in late-January as the Northeast was experiencing its worst cold snap since 2009.  What did not make sense is that the prices did not come back down when the weather moderated.  The prices finally came back down on February 24.

Natural gas prices drive wholesale electricity prices:

• Natural gas prices in New England in mid-February were five times the prices in early January.

Natural gas prices have been high due to an increase in demand, at a time when New England’s supply is constrained:

• New England has become more dependent on natural gas for its energy supply in the transportation, heating and electricity generation sectors.
• Winter Storm Nemo caused a key nuclear generator, along with other smaller electricity generators, to go off- line, causing an even greater demand for natural gas.
• Transmission infrastructure to New England spans a very long supply line starting in the Gulf of Mexico and is not adequate for current regional demand.
• By contrast, in neighboring New York where transmission is less constrained, natural gas prices remained low in early 2013.

Natural gas and wholesale electricity prices have returned to normal levels, but future volatility is expected:

• While the problem has gone away for the short term, this issue needs to be addressed as we continue to move to more and more natural gas as an energy source.
• New England has traditionally seen some volatile price spikes, but this last event shows we are in a critical situation.  
• According to ISO-NE, “the fuel supply uncertainty is escalating rapidly and is unsustainable.”

Further exacerbating the problem are the ISO operating procedures that are curtailing the production of lower cost, intermittent renewable energy generators:

• Several times during these past few weeks, the Kingdom Community Wind project was capable of full production, yet the ISO-NE was only allowing 1/6 of the output.  
• At one point, ISO-NE shut down Kingdom Community Wind to allow the oil peaking unit in Swanton to be run.
• Wind curtailment is an issue across the country, and needs a national focus on ISO rules about how intermittent resources (wind and solar) are handled.  

For more information, please contact:

Dave Hallquist, CEO
dhallquist@vermontelectric.coop
1.802.730.1138

or

Randy Pratt, Manager of Programs and Policy
rpratt@vermontelectric.coop
1.802.730.1108

Vermont Yankee is Refueling and I Sort of Told You So

Carla Heath holds sign about Vermont Yankee's future
March 2012 rally for Vermont Yankee, at the plant gates

Vermont Yankee will refuel this spring.  An article Wednesday in the Burlington Free Press was headlined: Vermont Yankee plans refueling with eye on 20 more years.  This article by Terri Hallenbeck includes the following quote from Vermont Yankee spokesman Rob Williams:

“We’re proceeding business as usual and making upgrades where necessary,” Williams said. “As we plan this outage our assumption is we’re operating until 2032."

A more complete list of planned upgrades can be found in the Vermont Business Magazine article by Timothy McQuiston: Vermont Yankee Will Refuel This Spring.  According to that article: Among the operations planned for the outage to keep the plant up-to-date are: replacing and refurbishing some components; general preventative maintenance; replacing a large transformer; overhauling one of the three feed-water pumps; and replacing a recirculation-pump motor.

So why am I saying "I sort of told you so"?  These articles were posted on February 20, and this blog post is February 22.  I am just catching up with the news, right?

Not completely.  The background for this story always includes a recent financial analysis report by UBS.  The report claims that Vermont Yankee is uneconomical and may well be closed by Entergy.  Andrew Stein at Vermont Digger reports on this analysis. An earlier article by Stein provides a link directly to the UBS report.

I was interviewed about the UBS report last week.  I felt its conclusions were umm...overstated. In other words, I am not surprised that Vermont Yankee is refueling instead of closing down.

To some extent, I told you so. I told you last week.

Is Vermont Yankee Uneconomical?

Last week, Pat Bradley of WAMC interviewed three people about the UBS report.  I was one of the interviewees.  Bradley does a great job of summarizing the arguments in about three minutes.

As you might guess, I was the only interviewee who said Vermont Yankee was probably not going to close.  This was not just Meredith-being-optimistic. My reason was that natural gas prices set the price on the grid, and natural gas prices are high in the Northeast. So grid prices are higher here than other places.  Therefore,  merchant nuclear plants in this area can probably make money, especially since gas prices are very likely to rise in the future.

 You can listen to three people (including me) interviewed by Bradley at this link: Financial Firm Predicts Closure of Vermont Yankee.    About a day later,  Matt Wald of the New York Times wrote an article about gas and electricity prices: In New England, a Natural Gas Trap. His article confirmed what I said on the radio about gas and electricity prices in this region.  I also suggest reading Jim Hopf's ANS Nuclear Cafe post on Potential nuclear plant closures and what could be done to stop them.  The early section on natural gas prices is most relevant to Vermont Yankee.

In my opinion, the UBS report assumes natural gas prices are going to stay low for a long time.  There are many reasons to think the opposite.  I think:

• natural gas prices will be highest in the Northeast (due to pipeline constraints)
• prices will rise all over the country (as the gas glut diminishes over time).  

This means grid prices will be higher in the Northeast and merchant nuclear plants in this area will be in a good situation in the near future.

I think Entergy probably came to a conclusion similar to mine.

Vermont Yankee is refueling.

The Price of Power in the Northeast

I wrote an op-ed for the Valley News (my local paper) on price of power in the Northeast.  Nuclear plants are providing the backstop against electricity price rises due to the rising price of natural gas.  I am proud that my op-ed is on the front page of the Valley News Perspective section. Vermont's Surplus of Power Uncertainty

The paper came late to my doorstep today.  Before it had even arrived, I had an email from a member of my town selectboard thanking me for the informative article.  That sort of thing just makes me glow!

A hearty thank you to Martin Frank, editor of the Valley News.  He helped me achieve clarity as well as brevity on this subject.  That is what a good editor can do.  I am grateful.

Let me also encourage you to read the 135th Carnival of Nuclear Bloggers, now posted at ANS Nuclear Cafe.  As usual, the best of the nuclear blog scene, and all in one place for easy reading.

The Gap in Energy Supply

From Green Mountain Power web page on Fuel Mix

Once upon a time (last year as a matter of fact,) Vermont utilities bought 30% of their power from Vermont Yankee.  Now, in this power supply projection from Green Mountain Power, you can see a dark gray area called "other" at thirty percent of its generating mix.

Green Mountain Power supplies about 70% of Vermont's power.  Green Mountain Power is wholly owned by Gaz Metro of Quebec.

What does this gap mean for Vermont? What does it mean for Vermont electricity prices?  Where is the price of natural gas headed?

I answer all these questions in today's post at ANS Nuclear Cafe: Mind the Gap: Vermont's Electricity Supply.  

Read it!  You'll laugh, you'll cry, you might even argue with me about gas prices.

However, I warn you:  Pay no attention to the power plant behind the curtain.