Carbon taxes and the Fitzpatrick plant: a reason to sign the petition

The petition

There's a petition to save the Fitzpatrick plant.  The petition is addressed to Entergy.  I think it should be addressed to Governor Cuomo, as you can tell by my post on Governor Cuomo, Fitzpatrick and Money.  At any rate, I signed the petition.

http://www.savefitzpatrick.com

I encourage you to sign the petition to show support of Fitzpatrick.  More signatures will be a good thing, wherever the petition is addressed.

Carbon dioxide taxes?

Some of the people who signed the petition also left comments.  I was particularly struck by a comment that noted that many states are considering carbon taxes.  If carbon is taxed, that will increase people's electricity bills. If Fitzpatrick is not running, and most of its power is made by natural gas plants, there will be an increase in people's electricity bills.

I decided to do a quick and dirty calculation of the amount of money Fitzpatrick will save New Yorkers…if there is a carbon tax.  Here's my calculation, and my sources.  I invite comments and corrections.

Fitzpatrick and carbon taxes:

How much energy: 
Fitzpatrick makes 838 MW of dependable capability. Source, Entergy Nuclear.
There are 8760 hours in a year.
I assumed a 90% capacity factor, which is on the low side for the nuclear fleet.
At that point, we have 838 MW x 1000 kW per MW x 8760 hours per year x 0.9 hours operating per year, and we have

Fitzpatrick produces 6,606,792,000 kWh in a year of operation.

Saving how much carbon:
Okay, now, what if that power was produced by a gas-fired plant?

Gas plants make, on average, 1.21 lbs of carbon dioxide per kWh. Source: EIA

This number is an average for gas-fired plants, and no doubt someone will come up with a lower number, with the assumption that only bright shiny new combined cycle plants should be counted.  Since these shiny new plants would still only be part of the local fleet of gas plants, I will stick with my number.

carbon dioxide

So, now we have 7,994,218,000 lbs of carbon dioxide being produced if Fitzpatrick nuclear station is replaced by gas plants.  And now, a brief pause to realize that that Fitzpatrick save 7 billion pounds of carbon dioxide per year.

Next, let's look at money.

In terms of carbon taxes:
Carbon taxes. This is where it gets a little tricky. There are plenty of carbon tax bills introduced, often for as much as $40 per ton.  However, that feels a little theoretical for me.  I can't find a place where a carbon tax is really that high.

So I went to a website that compares carbon taxes, world-wide, and came to the conclusion that $20/ton, as in British Columbia, was a number that I was more comfortable with using.

 7,994,218,000 lbs of carbon dioxide x 1 ton/2000 lbs is 3,997,109 tons of carbon dioxide.

At $20/per ton, this would be $79,942,183 dollars paid in carbon taxes, by the citizens of New York, to support the natural gas power that would replace Fitzpatrick.

Call to Action!

Assuming only modest carbon tax is introduced, a tax at half the number ($40/ton) that is often bandied about, continued operation of Fitzpatrick will save the ratepayers of New York, about $80 million a year in carbon taxes. If the big number ($40/ton) is used, Fitzpatrick will save ratepayers $160 million a year in carbon taxes.

In short, if the state of New York is serious about reducing carbon dioxide and saving money for all ratepayers, a modest amount of support to Fitzpatrick is in the interest of everyone in the state.

(And that doesn't even count the well-known volatility of natural gas prices. Natural gas won't be cheap forever.)

So, your action is simple:

Sign the petition! 

And, if you live in New York, contact your state legislator and your congressman.

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.

SAFSTOR Matters video with Joe Lynch: The Spent Fuel Line of Credit

This is the first video in the SAFSTOR Matters Community TV series.  The monthly series, produced by Entergy as part of its outreach program, recently won the Best Series Award at Brattleboro Community TV.

This video includes Martin Cohn, Senior Communications Specialist at Entergy as the host. He interviews Joe Lynch,  Entergy Government Affairs Manager.  A very important part of this video is the description of Entergy's line-of-credit for spent fuel management.

This  first video was shown on Brattleboro Community TV on April 15, 2015, and includes a general overview of the decommissioning process at Vermont Yankee, including its effects on the community. You can see more videos in the series, and read more information about decommissioning, at Vermont Yankee's decommissioning web page http://vydecommissioning.com

 



A loan for spent fuel

In this video, there's a very important point made about spent fuel financing, which starts at about 19 minutes into the video.

Some background: The money that nuclear plants use in dealing with spent fuel can be recaptured from the federal government. The nuclear plants have paid billions of dollars to the federal government for spent fuel handling and storage.  The federal government has done nothing about spent fuel (except build and abandon Yucca Mountain, an activity that has not helped any nuclear plant). The government is basically in a breach-of-contract situation.

So the plants routinely sue the federal government for breach of contract about spent fuel management, and routinely win the suits, and routinely obtain funds from the federal government after the lawsuit.

Plants who are decommissioning usually obtain a waiver from the NRC, to use decommissioning funds for spent fuel management. The plants replace that money into the decommissioning fund when they have collected from the government after a lawsuit.

But as Dickens and others have pointed out, lawsuits take time. Meanwhile, the spent-fuel-management money withdrawn from the decommissioning fund is not accumulating interest.

The line of credit: At the nineteen minute mark in this video, Joe Lynch explains that Entergy has arranged private lines of credit for spent fuel management-- these lines of credit total $145 million. The lines of credit provide the money that will be used for the initial stages of spent fuel management, and that money will be replaced by the money obtained in successful lawsuits against the government.  Meanwhile, the Vermont Yankee decommissioning fund itself will not be tapped for spent fuel management.  The fund will accumulate interest and grow without suffering spent-fuel-management withdrawals.

As far as I know, Entergy is the only nuclear owner that has arranged a line of credit for spent fuel management.  Entergy should be given credit for their foresight.

SAFSTOR MATTERS wins Best Series of Year on Brattleboro Community Television

 (l-r) Karen Wilson, show producer, Marty Cohn, show host, Sarah Burnap, show producer, and Deniz Cordell, music composer.

Vermont Yankee’s SAFSTOR MATTERS named 2015 Best Series of Year by Brattleboro Community Television

BRATTLEBORO, VT ---(October 9, 2015) --- At its annual meeting held on October 8, 2015, Brattleboro Community Television awarded Vermont Yankee’s show, SAFSTOR MATTERS, the 2015 Best Series of the Year. The program takes its name from the federal term for an extended period of dormancy that precedes actual decommissioning work.

The monthly cable television show  is not only seen on BCTV but also on the Internet through the station’s YOUTUBE channel.  It is also seen on all the cable television stations in the facility’s emergency planning zone.

“It’s something that we developed to communicate information about what’s going on with the decommissioning at Vermont Yankee to the public,” said Entergy Vermont Yankee company spokesman Marty Cohn, “And, to the best of our knowledge, is a first in the nation for Entergy.”

Cohn said, “Each month a different topic is explored with experts; from spent fuel management to the economic impact of the plant closing to emergency planning. We have repeatedly promised transparency as we shut down Vermont Yankee and work toward eventual decommissioning. The show is aimed at fulfilling that promise, and is also a venue in which Entergy can communicate directly with viewers without the opposition the company encounters in public forums.”

“From the moment the original theme music composed by Deniz Cordell plays to the rolling credits 27 minutes later, the staff at BCTV has been instrumental to the high production value of the show,” Cohn added, “We are very proud and honored to receive this award.”

Episodes of SAFSTOR MATTERS can be seen on Vermont Yankee’s web site, www.vydecommissioning.com.


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I plan to post episodes of SAFSTOR MATTERS at this blog in the near future.  For now, you can see the show at the VY site linked above.

Overselling Renewables: The Northwest and Here

Visiting the wind turbines
Lempster NH

Overselling Renewables: Northwest Version

I also blog at Northwest Clean Energy. Many of my posts are in support of Columbia Generating Station, the nuclear plant owned by Energy Northwest.

A professor at Stanford, Mark Z. Jacobson, promulgated an untested vision for using wind, water and solar (not even any biomass) for ALL the energy requirements of the entire country, by 2050. Yes, electricity, transportation, heating, industrial energy…all by wind, water, and solar.

Jacobson's SolutionsProject promotes this untested vision.  The project team is headed by an Executive Director, as most not-for-profits include. The other team members are a Creative Director, a Producer and a State Program director.  Creative Director? Producer? Well, I suppose, if  you haven't got facts, you need showmanship.

Jacobson writes his (basically fictional) report on a state by state basis.  My most recent post at Energy Northwest blog examines his ideas for Washington State: If more wind is the answer, what was the question? There are some nice comments on the post. I hope you will read it.

Overselling Renewables: Local Version

All over the country,  anti-nuclear people adore Jacobson's fictions.  For example, one of the commentators on this Boston Globe article about Pilgrim closing refers to Jacobson's words on renewables-for-Massachusetts as the reason we don't need Pilgrim.  (Alas, I can't find the comment now, but I read it yesterday. There are 98 comments as I write this post.)

Meanwhile, Vermont has a 90% percent renewables-for-everything "plan" that is only slightly less aggressive than Jacobson's ideas. Vermont only goes to 90% renewables, not 100%. Also, Vermont allows biomass. For an up-to-date look at how this plan is being accepted by the people of Vermont (it's pretty much hated), read Bruce Parker at Vermont Watchdog.

Parker went to a review meeting about the Vermont green energy plan. At that meeting, the Vermont Department of Public Service spokesman admitted the Vermont plan would have no effect on global warming, and also said that the Vermont plan was not aimed at setting an example to the world.

The spokesman faced angry Vermonters who don't know why we are covering our ridges with big roads and wind turbines, if it isn't going to do any good anyway.  Read Parker's report Vermont's green energy plan to have no impact on global warming. (The report has 198 comments as I write this post).

Note: Parker has had several guest posts at this blog, for example: Vermont town protests renewable energy credits for MA and CT

Overselling Renewables, National Version

Renewables are being oversold all over.

Meanwhile, nuclear power is demonized. Nuclear is the largest provider of low-carbon electricity in the United States.

Perhaps some day, we will wake up.  I hope so.

Pilgrim will close by 2019 UPDATE

Pilgrim

Pilgrim to close

Entergy announced today that Pilgrim will close by 2019.  Here are two links:

The Entergy announcement includes many subsidiary links

The Boston Globe has a good article on this breaking news.

Entergy is going to have a press conference today at noon Eastern Time.  There will be more information at that time.

Some Thoughts on Pilgrim and on the Grid

There is some question about exactly when Pilgrim will close.  Entergy has "contracted with ISO-NE" to supply power from Pilgrim until 2019 (Boston Globe article).  This means that Pilgrim will refuel again…unless they can cut a deal with another power plant to supply power after 2017.  Pilgrim's latest refueling outage started in April of this year, and it is roughly on a biennial cycle.  So Pilgrim is fairly sure to keep running until 2017, but may or may not refuel at that time, depending on factors such as whether it can find another power plant to take over its obligations to ISO-NE.

Well, all the stories say "supply power" but it is really about the capacity markets, not the power markets.  Plants bid in years ahead to supply "capacity"…that is, to be available to supply power when needed.  Plants are paid two ways: power payments and capacity payments.

• A plant that supplies power most of the time (base load plants) gets most of its revenue from selling power (MWh sold). This would be the case with Pilgrim.
• A plant that supplies power only part of the time (a peaker plant) gets a much higher proportion of its revenue from capacity payments (MW available when called upon).   This would be the case with most gas plants.

With so many plants retiring (Vermont Yankee, coal plants), available capacity has fallen and (supply and demand) capacity payments have soared. I encourage you to look at a recent chart on Capacity Payments in the Forward Capacity Market, from James Bride's keynote presentation at an ISO-NE meeting in New Hampshire last week.   The chart, on page 12 of the presentation, shows capacity payments going from $3.21 per kWmonth in 2014/2015 to $9.55 per kWmonth in 2019.

Thoughts on the ISO-NE meeting

I was at the Consumer Liaison Group meeting of ISO-NE last Friday, October 9.  I am  (currently) the only Vermont representative to the Coordinating Committee for that group. (Yeah. I need to do a geeky blog post on this.)

For right now, however, please look through the rest of the Bride presentation, especially the section on "missing money."

Intermittent renewables get much of their money from subsidies of various types, not from the grid. Therefore, they can bid into the grid at artificially low costs for their power, even bid in at negative numbers (we will PAY you to take our power!).   This lowers the power price on the grid, and particularly hurts plants that make a lot of power, like base load plants.  As base load plants retire because they can't make enough money to keep operating, the amount of capacity available diminishes, capacity payments go up, and peaker plants get proportionately more money.  Peaker plants always get a higher percentage of their money from capacity payments, but when base load plants retire, they get even more money from capacity payments.

There were several presentations on the role of intermittents on the grid.  Robert Ethier of ISO-NE was on the panel, and the Ethier presentation struck me as surprisingly cheery about predicting more base load plants will retire.  He claimed that: power prices will go down, capacity prices will go up, but the market will take care of everything.  That is my interpretation of his talk. I didn't ask him a question, but I did ask a question of Anne George of ISO-NE after her presentation. ISO-NE supposedly has some concerns with a one-fuel-source grid (natural gas) but they don't seem to be worried overmuch.

The Closing of Pilgrim Nuclear Plant is a Clear Victory for Fossil Fuels. 


Update: Graphic from Bill Mohl (Entergy) press conference this morning, showing where different types of plants get their revenue. Thank you to Entergy for sharing this graphic.

Nuclear gets a small percentage from capacity payments,  and most of their revenue from selling power (energy payments.) 

Gas turbines get a large percentage from capacity payments.

 Renewables get a big percentage from PTC (production tax credits) and RECs (selling Renewable Energy Certificates) which allows renewables to bid into the grid at a very low price, because those two sources of income remain intact, even with little revenue from power production.

I believe A.S. payments are payments as part of the ISO-NE winter reliability program, but I am not sure.  These payments are highest for dual fuel systems in this graph, which is correct for winter reliability payments.  The winter reliability program basically makes payments for keeping fuel on site.  In general, a gas turbine that can  also be fired with oil will keep oil on site, or keep CNG on site, and get the reliability payment.  

Vermont Yankee closed: the consequences were completely predictable

Vermont Yankee Closed: The Consequences were 100% Predictable

Last Monday, American Nuclear Society's blog, ANS Nuclear Cafe, featured my post  Vermont Yankee Closes: the Consequences Were 100% Predictable  The consequences were not only predictable, they were indeed, predicted.

In this blog post, I give a historical summary of many predictions, over many years. They all calculated that closing Vermont Yankee would have cause huge economic effects on the region.  They predicted the economic losses in the region would be in the multi-hundred-million-dollar per year range.

Yes. All the economists predicted hundreds of millions in losses for the local area. Nine figures. Their economic-loss predictions range from  $100,000,000 per year to over $400,000,000 per year.  Some of the differences depend on whether the economists were looking at just-Vermont, or at the tri-state region.

In other words, huge.  And these predictions are coming true.

I ask the question: why were all these economic predictions ignored?  Why was the state of Vermont so eager to close Vermont Yankee down?

Please visit my ANS post and write some comments.  Share your thoughts and share the article.

More Press for Vermont and Vermont Yankee

Okay.  I am blushing furiously.  But here are some more links….

Besides writing the article for ANS Nuclear Cafe,  I was on Pat McDonald's TV show, Vote for Vermont: Beyond the Sound Bite.  I link to the video of my interview in this blog post: Vermont Energy with Pat McDonald.

Rod Adams

But wait, there's more!  Rod Adams embedded the video on his blog, Atomic Insights.  The blog post is titled: Meredith Angwin with Pat McDonald on Vote for Vermont.  But Adams didn't just embed it: he also summarized the conversation. He especially noted McDonald's shock about the source of New England renewables.

The morning of the show, I went to the New England grid operator site and took a screen shot of the percentage renewables and the percentage-what-type-of-renewable, and brought the screen shots to the show. They were very typical screen shots, though the low demand on the grid showed a higher percentage of nuclear than might be seen at other times.  But the shocker was the renewables.  McDonald didn't expect to learn that almost half of our vaunted New England "renewable" electricity consists of burning refuse, and most of the rest of our renewable mix consists of burning wood.  (See graphics below.)

If you don't have time to watch the half-hour video, read the summary at Adams blog.

But Wait, There's More!

The ANS Nuclear Cafe blog has a feature called "Friday Matinee."  Most Fridays, they embed a video on the blog.  Yes….this Friday…the video was the Pat McDonald show featuring me.  Video: ANS Member Meredith Angwin on Vote for Vermont.

You have SO many opportunities to watch the show. You can watch the video at my blog, Adam's blog, ANS Nuclear Cafe blog.  I do hope you will watch it….

There is still more.  The ANS post about economic predictability was reprinted in the Ethan Allen Institute newsletter (I am director of their Energy Education Project).  I was on Rod Adam's panel in a recent podcast: Atomic Update.  I will be on the Common Sense radio show this coming Tuesday, October 6 on WDEV.  The show is between 11 and noon, and you can listen on line and even call in, toll-free. (The date of the WDEV show is now correct.  An earlier version of this post had an incorrect date.)

Okay. That's enough for now.  I can't blush any redder, so I will quit writing.

Monday morning fuel mix on the grid
Renewables are 7%

And here are the renewables, the 7% above
 Consists of 48% wood, 45% refuse